Transcripts For CNBC Squawk Box 20150521

Markets slightly weaker yesterday. A couple of big stories this morning. The big one is hp reportedly planning to sell a majority stake in its chinese data networking operation for about 2. 3 billion. Heres whats going on. The wall street journal saying it comes after revelation that u. S. Spying for demand for tech products. Sis coe and others have had issues about this. Also in Economic News new numbers overnight showing chinese factory activity contracted for a Third Straight month. Chinese output shrinking at the fastest rates in more than a year. This is going to reinforce expectations for more policy stimulus. Geo political headlines this morning, isis saying its in full control of the ancient sere juan city of palmyra. Heres todays squawk planl. Key economic reports. Weekly jobless claims later in the morning. Manufacturing pmi. Existing home sales. Leading Economic Indicators in the Kansas City Fed survey. On the earnings front best buy will report Quarterly Results before the bell anything from january to april i guess. This afternoon well hear from hewitt and gap. Mcdonalds is holding a meeting. It will make it easier to nominate directors to the board. A couple of stocks to watch this morning. Data storage equipment missing the market also sales force beating the street and raising its revenue forecast for the full year. Company of course in the middle of all kinds of speculation on a takeover and well talk to an analyst in about 15 minutes from now. Also victoria secrets parent call posting better than expected earnings but revenue did fall a bit short and we should tell you that William Sonoma reported earnings and revenue ahead of estimates but its current guidance is cautious but its in part because of the west coast sport slow down. Lets take a look at the markets this morning. The future is under a little bit of pressure this morning. The dow futures down by 33. S p down by 5 and nasdaq down by 14. At this hour youre going to see not significant moves but theyre both down by one third of a percent. In asia overnight we saw what happened following tight and narrow trading ranges here for the fourth day in a row. You can see that well take a look at asia in just a bit. In the meantime lets take a look at oil prices. Yesterday you actually saw oil snapping a five day losing streak. It settled up by about 1. 7 . This morning its up another 67 cents to 5965. So getting close again. Check out whats been happening in the bond market. The ten year note yielding 2. 237 in the currency markets. Right now the dollar is down across the board. Euro trading at 1. 1143. Sorry, joe. Dollar yen at 121. 02. Its headed to 105. On its way to 95. Well in the next six weeks, correct . Finally lets take a look at whats been happening in gold market yeah gold prices barely budge. The chances of an Interest Rate hike in june are looking slimmer and slimmer after the latest fed minutes. The markets responding with a short spike before settling mixed for the day. Now that the june question is mostly behind us are we looking at september or even december for the fed to make a move . Hes the director of global macro at fidelity investments. Hes the cio. What did you think of what the fed said yesterday. Good morning. Good morning. No surprise. June was off the table stars the markets were concerned. They would have signalled something if they were away from where the market priced things in. September, december its looking more like december. So really no surprise there. No surprise there. The Immediate Reaction was a slight sell off for stocks at least. Why . What did the market see it didnt like . I didnt see anything surprising. So i think its just noise. Michael how about you. If the fed is looking like its standing at this point there was a little bit of perhaps tougher talk in there just to appease some of the hawks. What did you think . The fed is in no hurry because they dont need to be. The things they look at are still problematic. At least at the macrolevel. Corporate america is doing well. The overall sense of the economy is doing well but the problems are some what transitory in the First Quarter. The fed wants to see consistency in the economy and so far they havent. Theyre going to continue to be patient. Do you think they will get consistency to the point where they feel comfortable with this . Its starting to feel like a broken record. It does. This is the same as we saw last year and well see a surprisingly strong Second Quarter rebound. Particularly as the supply trains gets straightened out from the port issue in the west coast and well see Third Quarter and Fourth Quarter start to stabilize. Unless we have surprising disruptions toward the end of the year we should see the stability and consistency that the fed wants. The one difference is this time around the jobs market looks a lot stronger s. That enough to give the fed the confidence to do this even while youre watching other Central Banks get into quantitative easing at this point. Yeah the u. S. Economy remains in mid cycle expansion territory. Hasnt been overly robust but thats not a bad thing. It keeps the fed at bay, keeps them in no hurry to do anything drastic. What do you do as an investor . Is the u. S. The place to be or are these overseas market looking better because of what the Central Banks are doing . We have a global reinflation. Even with the fed not doing qe but now holding off on the lift off. We have a pretty Global Environment of reinflation going on. Its interesting the s p is making steady new highs. Not in a dramatic way but steady new all time highs and we dont hear much fanfare about it. You were really a money manager. You said were in this mid cycle recovery which is pretty tepid which is a good thing because it keeps the fed out. If we could just stay here forever youd be fine but lets just say sub 2 keep the fed at zero and never grow again in this country and youd be okay with that . Look we can grow at 5 and have the fed raise rates. Oh, no, 5 and the fed raise rates. Then you get to the end of the cycle quicker or you can grow 2. 5 . That is proverse. Its proverse logic to say thank god were not growing much in this country so that the fed can stay at zero. Ultimately the cycle ends with successes the fed has to respond to. I hope they come in my lifetime and im getting up there and so are you. If we stay in the sweet spot longer it gives the economy a longer time sweet for you. Its not sweet for most americans. Well it is what it is but the economy has been growing about 2. 2 since 09 and its better than the alternative. Its not going to be 5 but its better than zero. The question comes back to is there any down side for the fed keeping rates so low . Theres people skeptical of this and none of the bad stuff happened yet but does that mean it wont . They have to be prepared for what happens when the cycle ends and right now they arent. That is one issue but the other issue is that in fact if the rest of the world is continuing to ease they do run the risk of if they tighten too quickly the dollar gets too strong and that does put the breaks on the economy at a time when frankly although the jobs headline numbers are pretty good you get into the details were not doing too well. We have too many low skilled jobs and not enough high skilled jobs coming through. How long people are out of work so the economy is not completely fixed yet although the market is still far along in that. You would still be telling people to invest in u. S. Equities . Theres nothing wrong with the stock market right now but having said that there may have been more opportunities outside the u. S. Where the monetary authorities are finally beginning to do the things the fed did several years ago and that is helping a global inflation and european and japanese and other economies finally get going. If you were to tell someone where you thought they were best positioned to place their money, if its in the United States which sectors would you be focused on . Well, sort of the yield sectors were really big last year. Rates, utilities, those have taken a backseat now with yields rising. The ten year went to 2. 3 now. We all know the story in germany where bunds rose from 5 basis points to 75. So yields backed it up and maybe theres an opportunity now that we have a flash crash in the bond market and it tends to effect the yield oriented place in the bond market as well. Theres an opportunity to grab on to some yield that wasnt available a few months ago. Okay. Great. I want to thank you both for joining us this morning. Thank you. Almost as if the stock market has gone up a lot. I like it when it goes up. But if you knew that it wasnt going to help the economy, and people feel more confident and actually boost the middle like its supposed to if all you knew is that wealthy people were going to continue to get wealthier and wealthier youd have to say enough is enough. The people that own stocks have benefitted enough. Ive been quite. Hes doing the work for me. The inequality is a huge issue but this is the hand we have been dealt. That may not be true. That may not be true that thats the hand we have been dealt. But the fed cant solve it. The fed isnt going to be able to resolve it. You need to get into fiscal policy, highway bills things like that. I dont, i think you need to get into growth policies. But in either event its not the fed that controls that. Were not saying we need to dig holes and fill them back up. At 5. 5 unemployment were probably nearing the point where is that a real number though with 60 . Its higher. 30 hour work weeks. But were inching aalong to the point where the fed has to start looking at the inflation component of the unemployment sector and if we start growing by laeps and bounds thats great but it also brings us closer to the end points. I dont like fridays because theyre too close to monday. I like thursday best. So we don want any growth because it may be close to the end of the growth. So lets not have growth so we dont have to look at the end of it. We want growth but we dont want overheating. But 5 might be overheating. 3 is not. I mentioned 5 . I didnt mention 3. So ill take 3. I think the fed will take three happily. Id take 5 for a couple of years i think. I dont know. Thank you for being here. Coming up a rand paul filibuster on the patriot act. Plus David Letterman bringing the jokes. But first, heres a look back at this date in history. Its part adrenaline and part adventure. Its part geek and part chic. Its part relaxation and part exhilaration. Its part sports car and part suv. And the best part . The 2015 gla. Its 100 mercedesbenz. In washington today the senate is expected to Start Talking about a bill to replace the patriot act despite a marathon speech that almost lasted all night. Nbcs tracie potts is live on capitol hill this morning where senator rand paul just stopped talking just a few hours ago. Hopefully tracy, you din have to listen and watch the entire time did you . No i did not have to sit through the whole speech and neither did a lot of people on capital hill actually. We thought it was going to go through this morning. Turns out it didnt but the situation now the house has passed the usa freedom act to replace the patriot act. Theyre supposed to be leaving today so its up to the senate to do something. Were expecting debate on that to start later today after that very long speech overnight. I will not let the patriot act, the most unpatriotic of acts go unchallenged. It went on. I think we can obey the constitution and catch terrorists at the same time. And on and on and on. My voice is rapidly leaving. My bedtime has long since passed. With demonstrations outside and help from conservative republicans and liberal democrats inside senator rand paul spoke for 10. 5 hours finishing just before midnight. I relinquish the floor. Not technically a filibuster and not long enough to postpone what is expected to be todays debate on the usa freedom act. It will make it look more like the courts that americans deal with in other walks of life. What done make sense is to be pursuing approaches that dont make us safer and compromise our liberties. The house passed the freedom act as an alternative allowing phone companies not the government to keep your records. But some senators want to hold on to the patriot act. The patriot act expires june 1st. Now, heres the thing. If it expires and congress isnt here and they havent made a decision nsa may have to shut the program down quickly which they cant necessarily do overnight. So the guidance from the Justice Department to the nsa is that they stop collecting those phone records pretty soon after tomorrow in case theres no resolution here on capital hill and they have to shut it down within the next week. Okay tracy, thank you. I remember we remember two guys that have used that recently right . Recently . I was going to go back to mr. Smith. And im not even saying that because i think he lizelizabeth sanders and warren watched and they saw Jimmy Stewart and he finally collapses and its like hes a hero and, you know what i mean. And then its a wonderful life. Who done like him in its a wonderful life . So they saw that and given the opportunity i think they both wanted my voice is gone. Its past my bedtime. Exactly and the flag of mr. Smith. Its weird again. You have cruz and rand paul and then far left on the patriot act. Thats how it is. And then in the middle very weird. That shows you time space continuum. It does wrap around. You go far enough on each side and you end upcoming here. Well ask Chris Christie about that. He talked about the patriot act. See i worry about what youre doing with some of your personal information. I wouldnt want that getting out either but im an open book. If you can stop a terrorist, look at everything. Im open. What are you crazy. Nobody wants all of their emails read. Ive always said read it all. Read it all. What about the emails coming directly from paul telling you the talking points and all. You already exposed me. Not a lot to do there. In media news some of the biggest names in sports gathering for the sports business Journalism Award last night. Among the issues the ever changing media landscape so we asked these power players about the rise of Live Streaming apps like merecat and periscope. To me its robbery. To me its theft. Its a free market and the free market is going to work itself out in the way it does but the more people able to access the content of the sports in my opinion as an athlete the better. Theres a difference between Fan Engagement and commercial exploitation and while some people may think thats a fine line its one were going to have to be prepared to draw. For the leagues that do it right theyll be able to capitalize on that but if thats cutting into your television profit you have a problem. For football are you really willing to just watch it on one guys cell phone . I think thats a little bit of a reach. We talk all the time about the value of sports and there are just a few people that have seen it firsthand. After 33 years in late night David Letterman signed off for the last time. The night was a star studded event complete with appearances from four president s. The final show included a top ten list read by some of daves most memorable guests from alec baldwin to tina fey to bill murray. They said when did you know it was time to retire . Theres signs. There were always signs along the way. One of the signs was todd came up to me and said for the love of god dave i cant write the words any bigger. Do you remember remember that . Okay. All right. Fine. All right. Lettermans final sign off was simple. Thank you and good night. Well talk to long time letterman executive producer rob burnett. He will be in studio at 8 30 a. M. Eastern time. Salesforce beating the street raising its full year guidance. Is the buzz dying that the Cloud Computing company is up for. Acquisition ceo joined jim cramer yesterday to address the companys future. Dont you find it ironic that your stock is traded within a dollar of when oracle, microsoft, ibm were supposed to be buying you . Id be a lot more excited when we announce with you on the show that were the fastest to 10 billion. Today im saying were the fastest to 6 billion. For me thats the past. Im all about the future. Lets speak with kirk the managing director of equity research. Has a buy rating and raised his price target and looks complete completely different than who we just saw. Weird. Weird. I know that other guy. Its like theres two universes. Thats the one. Were close because hes here. Right. Anyway, are you going to tell us anything andrew hasnt told us about salesforce . I think we have been pretty consistent that the odds of it happening are low. The complexity of growth based mna and software is challenging. This is a huge deal. Theres a few buyers that could afford it financially and the number of buyers that koul culturally could culturely fit them is challenging. You look at google if they wanted to bring on an enterprise arm of its business thats a huge undertaking. If you cant keep the people youre acquiring it doesnt make sense to go out and do this kind of deal. You think fundamentals can continue to push the stock higher and you look at price to sales or anything . Is it just me . Hasnt it run up on acquisition stuff. The price to sales is now like six times. But its not a cheap stock. Theres very few large Cap Growth Companies growing at 25 in Constant Currency with expanding margins and theres very few companies out there that has the breath of Product Portfolio that salesforce does so i think theres still reasons. This is what the quarter told us last night. Theres a reason on the fundamental basis. We keep bringing up uber evaluations and its not just private companies. Tech is really hot again. But arguably sales force makes real money. Whats your number for the quarter . 16 cents . 17 cents. And they put up you know 730 million in operating cash flow last year. That was up 54 so now you have a company thats not only growing very quickly. Less than a dollar a year and selling at 7. But its cash flow because its subscription models well ahead of its earnings power. Most are looking at the cash flow generation capabilities and what you saw was operating margins up 200 basis points. Cash flow up 54 year over year. Youre seeing a company not only growing its top line very quickly but youre seeing leverage in terms of driving more cash flow in the bottom line. Can can we just talk briefly to the extent we want to talk about the speculation around mna on this. This company has been up for grabs for like five years. Sort of every six months to a year, this has probably been the most in terms of noise around it but to the extent somebody does take it out do you think there will be a time do you think in the next five years this is still an independent company . I think the path to those guys getting to 10 billion as an independent company is pretty clear. Mark was very clear on the Conference Call and on the show. When growth starts to come down and you see the culture so it wouldnt be as much at odds with one another you can see that. What youve seen in technology is theres been a lot of Mature Companies a inquired. You squeeze out the cost. Those deals can work. Theyve done an incredible job with that. The bar is high on both but the buyer and the seller he wont want to sell and someone wont want to inquire them. Its very complicated to bring a Growth Business into a tech business. They work there for a reason. They want to be in a fast moving, fast based company. The buyers of sales force or outside of google would be more mature at this point in time. The stages of maturation of the buyer would a microsoft or ibm or oracle be rewarded for buying a company like this or do you think they would get dinged . I think dinged. If you think strategically about microsoft and salesforce theres a pretty interesting scenario you can put together with the office productive tools with the success platform. Theres interesting scenarios around that but i think in the near term the Investor Base are very differ investors. You have a value based investor in microsoft and more growth base investor in sales force. Thank you. Thank you. Appreciate it. All right. When we come back if you are like most of us you spend a lot of time checking email outside the office but now some are asking if you can sue your employer for making you answer late night notes. Well get tho that next. But first a look at yesterdays s p 500 winners and losers. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. Welcome back. Were in the shares looking at stories fascinating us this morning and the one fascinating me is one about email. So many of us get emails from all times of the day from bosses even late at night. Should we be paid for or get overtime or maybe comp time for responding to these emails late in the evening or in this case should we sue because were not getting overtime. One of the cnbc suits sent me one at 6 45. Yeah pm. The nerve. So late. And i was brushing my teeth. You had to respond. I had the night shirt on. Im not responding at 6 45. Are you out of your mind. Past your bedtime. Did you call your lawyers . I kaul calledcalled him this morning. What do you make of this. Late at night is different for us. I understand the constraints of people feeling like theyre working all the time. But i also think these tools are the things that allow us to have more flextime. If you get flextime at work. If you can walk out early. If you can come in a little later, if you get the chance to be away i think they have been great tools because yeah i can leave early because i will respond to those emails later. Not everyone is in the same position. If youre in a regiment and you must be here for nine or ten hours during the day and youre going to work the rest of the time i can understand the concerns. Most of us are salary dealing with this. But this is an hourly issue. Couldnt you say i didnt get it. I didnt get the email. Just give you a heads up but if youre already asleep you got in trouble for not respond responding. Most of these are about hourly workers. Some of these are about people that are salaried. If youre an hourly worker you do understand. If you have to put in face time where you have to be in an office from 9 to 5 or 9 to 6, whatever the time is and you dont get the flextime during the day. 6 to 9. 6 to 9 in the morning like we do its a long three hours. No if youre getting flextime for it it should be understandable. We should just recognize i think, compared to i talked to my dad about this stuff in the old days. So you talked to a lawyer about this. I have talked to a lawyer. And he will you know 20 years ago people western talking to people after 6 or 7 or 8 00. But we did lement the idea that he would send something to a client and you have two days of waiting time and now youre back a half hour later with their comments. I think it depends if you get the flexibility its a fair trade off. If you don, then its not. I took a look at zappos. Did you know they have always been known for running things a little bit differently than other companies. They have taken big steps that have shaken up the corporate culture. They were saying they really only wanted people that really wanted to work here. So they were offering buyout proposals. They make they sell shoes. This is really cool. Im thinking of zippo. Zappos is a shoe company. Who buys shoes online. I do. Once you know your size. You should see my closet. Im afraid to think about it. We have to buy the things. I have those too. The raxcks for your shoes. They have also rekrenlycently gotten rid of all managers which is stunning for those in the work place. Particularly those promoted to manager. They had done a good job and now theyre expecting all workers to manage themselves and for the people that had been there and move tludd through the ranks and gotten promoted theyre struggling with getting knocked back down. Zappo is owned by amazon right . I know theres a connection but i dont know. I want to know what jeff besos thinks. No one smokes anymore. Youre back on zippo. Zappos. Can i just tell you really quickly that before youve all seen except for you, 2001 where the monolith or whatever it is. Years ago. Gives them the ability to make a tool in a fight so theres ways to do carbon dating exactly when the first tools were found. So there were some found now in kenya in volcano settlement which is really active in terms of dating and we can know they actually looks like they were others which are the prehuman theyre what are you talking about . Promagnum. No, thats a man. This is prior to that and they found dating it back to 3. 3 million years. The thing is its 700,000 years earlier than they thought the stone age actually began. We were using tools. And they looked at them and doesnt look like the scraps of rock were broken by accident. When they say tools. Theyre rudimentary. Theyre not use what they were used for. These were more sophisticated and they were discarded but lucy is the one were most familiar with that was found. But then i just think, you know we think about our life and how important events happening in our lifetime are, not necessarily talking about Global Warming. But 700,000 years is the blink of an eye in recalibrating when man either did or didnt use tools. 700,000 years is the blink of an eye. Thank you for making us all feel so incigsignificant. Its the blink of an eye. Especially when you look at trends based on 500 or 1,000 years. I love this stuff though. Dont you. Going back 3. 3 million years. Although thats not that long ago either based on it. Long in our lifetime. In our memories. Its as long as this show seems sometimes on that note. When we return this morning, jordans King Abdullah. While some in the west see chaos he says business as usual in the middle east. A first on cnbc interview right after this. Financial noise financial noise financial noise in the us, three in ten College Students drop out. But how can you spot whos at risk . The one who lives far from campus . The one who works the night shift . The one with new responsibilities . One thing cant tell you, but the right combination can. Universities are using ibm analytics to understand pressures in and out of the classroom some expect to cut dropout rates by twentyfive percent. Ibm analytics is working to make education smarter every day. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Welcome back to squawk box this morning, the king of jordan sitting down with hadley gamble in a rare interview. She joins us this morning from the dead sea in jordan. Hadley. Good morning. So essentially what we have seen over the last few days the Islamic State gaining ground in iraq and gaining ground in syria and the Obama Administration now sending much needed weapons to that country. Theyre finally playing ball but the question now remains how effective is that really going to be. One man that may have the answer to that is King Abdullah of jordan. I asked him is jordan safe and are we going to see an end to those conflicts any time soon . Take a listen. We have a history over many decades of jordan always being stable throughout the region whatever the crises are and you have to remember with everything going on around us jordan has done extremely well. Weve had growth of 3 over the last couple of years. Were expecting 4 over the next two or three. Our reserves are the highest they have ever been and when we look at the region you mention syria and iraq. Iraq has always been a strong market for us and i believe that the Iraqi Government and Coalition Forces are going to open the route this summer so thats again sort of a very strong market thats going to be reopened. In terms of the challenges here at home 20 of your population are refugees right now. You also have a water crisis and youre dealing with the fact that you are a net energy importer. How are you tackling those problems . Definitely you know the challenge for 20 of the population being refugees 85 are actually outside so thats a burden on the jordanian economy. Almost 25 of the gdp is then a burden that we have to take care of when looking after the refugees and that does create a bit more of a challenge. However how do we offset that with the energy needs that we need . Because of the lack of gas from egypt we had to move quickly. This is always being able to adapt to all the challenges that we had. Thats why youre seeing a major investment in alternative energy. So talk about jordans ability to adapt. This country reports 97 of its energy needs. Thats quite a challenge for jordan and the king is looking at all options. Renewables wind solar and electric cars. He likes his tesla. Hes saying im a soldier, i like gadgets and i love innovation. On the way to the dead sea we were seeing the stations for powering your tesla car. Its exciting times here in jordan and they seem to be going green. Okay. Hadley thank you for that interview. Great to see you again. When we come back this is traditionally one of the busiest months of the year to climb everest but a massive deadly earthquake shutdown the mountain. Well talk to a California Based Company that organizes climbs, when we return. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. 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And we take it very seriously. Because we love them. And we know you love them too. Welcome back to squawk box. Hundreds offed a ed aadventure. Ists could be in danger and avalanche last spring that killed 19 sherpas on the mountain. Adrian has led over 100 international chimeb lal climbing expeditions. He is the founder of the expeditions and his team was on the north side of everest in april when the quake hit. Were glad youre here. Thank you very much. In one piece. How scary was that . Super intense earthquake. Ive been in a couple earthquakes over the years in the mountains, but this was so much more violent. You actually could see the ripples moving through the ground and then hitting the camp. It was really scary. Could you see trees . We were at 17,000 feet so there were no trees, but a lot of rock fallen avalanches. You start to wonder if the ground will open or how bad it will get. From beginning to end. That first shot i think, went for over a minute and then a series of after shocks after that. How many people were you with . My team itself were 12 westerners and 12 sherpa. What did you do at that point . We immediately stopped and made sure the team was safe and we heard everybody on our side the north side were uninjured. But the south side the devastation was just terrible. We were trying to find out about friends and family members and how they were. But youre going back for more. Going back in 2016. I think everest is a magical and very important experience and, so im excited to try to offer it, again, as safely as possible. Is one side safer than the other. The north side in teibet is safer. Ultimately in 2014 decided that side of the mountain was too dangerous and too many avalanches and the ice fall where 16 people were killed in 2014 and we really wanted to get away from that part of the mountain. Why does anyone go to that side of the mountain . I think tradition is a big part of it. So much history around that route. And then also the route is easier even though its much more dangerous. So, people are looking for the easiest way up the mountain and hope that they wont get killed and try it. Is that the way Edmund Hillary went . It is. How much of it do you need ropes for . We set ropes at 17,000 feet all the way to the summit at 29,000 feet. You have 12,000. How technical. Could we do it . You could certainly do it with two to three years of training. Two to three years of training. Thats not full time. So building both Technical Skills and comfort on the mountains and also experience at altitude. So youll be on the side of a face if you didnt have ropes, you could fall how far . You could fall thousands of feet. Never vertical, but the angle is steep enough when its ice. My only experience with the flat irons in boulder where we would go up and go out and have the same kind of experience. Its not falling vertical but youre going to die. Thats a great similarity. What happened to the economy there . The sherpas and the whole apparatus . I think theres so much fear right now that tourism will not return to nepal or that it will be very slow. Tourism is the most important industry to the country and, you know no one knows whether people will come back especially with after shocks and the earthquakes still being in the news and things like that. Theyre working so hard to rebuild their infrastructure for people to come again. The next climbing season next october and november. Were encourageing people to come with you. How much does it cost you . 79,000. 79 grand what do i get . Having the most safety you possibly can have. Our clients have chosen not to be experienced climbers. They may be athletes and strong Business People and strong minds and the ability to achieve whatever they want but they want a high degree of safety. You get a tshirt. I climbed mt. Everest but all i got was this tshirt. You definitely need oxygen tanks . Everyone we guide uses oxygen. It has been climbed without oxygen. What about killimanjarokilimanjaro. You would not use oxygen. Total people who made it to the summit at everest to the people who lost their lives. Is it less than 1 . 4,000 people and right around 400 has been killed. Back in the 60s and 70s that fatality was 20 and now its less than 1. But its 10 . 400 of 4,000. Sorry, i must be getting my numbers wrong. Its down to under 1 . So it must be 40,000 400. Of the number of people you take up very quickly, how many make it to the top and dont make it . Success rate over the past seven years has been about 70 . Pretty good. What do you do if im in the midst and i cant do it . Of course a guide or sherpa would always go down with anyone descending and its what is your sherpa or guide to tourist ratio . Two sherpa for every one member. That gives us a lot of human power on the mountain when accidents happen or just to give you the best chance of being successful. Thank you for coming in. Thank you so much. Good luck with the climbs. Do not turn dont think youre coming back here on the show if you turn back. Thats like the entry point. You need to be in good physical fitness. Coming up this mornings top story and why new york is at risk of overbuilding. If you want to succeed in business, mistakes are a luxury you cant afford. Thats why i recommend fast reliable comcast Business Internet. They know what businesses need. And theres a nomistake guarantee. If you dont like it, you have thirty days to call and get your money back. With comcast Business Internet you literally cant mook a mistick. I meant to say that. Switch today and get the no mistake guarantee. Comcast business. Built for business. A squawk newsmaker on set. New jersey governor Chris Christie is here and no topic is off limits from Social Security to his chances at winning the gop nomination. Its an interview that you dont want to miss. Squawk box checking in. There is a room available. It is a sweet. Well only charge you the single room rates. What is the rate . Loews hotel chairman Jonathan Tisch is here and why highend hotel rooms are getting more expensive. Retailer best buy expected to report. We will bring you the numbers and the reaction on wall street. The second hour of squawk box begins right now. Announcer live from the beating heart of business, new york city. This is squawk box. Welcome back to squawk box here on cnbc. First in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin. Someone wrote in about that already. Im supporting the program. You were thinking about going, right . I would go. Snows of kilimanjaro. U. S. Future equities are indicated weak and 27 is not that much so far. The s p is called down 4. The nasdaq weaker on a relative basis, at least in premarket and down about 12 points. Yesterday was interesting to watch. Directionless, really. Here we are at the upper end of the range. We hit some new highs, but well see. Well see whether the dow averages finally push through with some conviction. Its been tough sledding in 2015 so far, obviously. Tough sledding. Okay. Youre using some tough climbing. Lets tell you about some of the other stories were watching this hour. The u. S. Is sending 1,000 antitank rockets to the iraq military to help fight isis. The rockets are expected to help against suicide vehicle bombs used by the Islamic State militants to capture the city of ramadi. Meantime in syria isis is in full control of the ancient city. This comes after a bloody battle with syrian progovernment forces. Also in Corporate News this morning, genology website ancestry. Com exploring a sale thats according to reports from reuters. Premeria is looking at the largest Family History website. Private back in 2012. It went private for 1. 6 billion and the sale could value the company at between 2. 5 and 3 billion. You ever go on that website . Ive never been on that website. Also apple reportedly changing the font on its iphones, ipads and mac computers. It says its going to start using a font it created for the apple watch on other devices. The font is called San Francisco. It was reportedly designed to improve edgeability. We also have some earnings that are coming out now. Lets look at best buy. The company came in with an adjusted number of 37 cents a share. That is better than the 29 cents that the street had been expecting. Revenue came right in line. 8. 5 billion. Right above what the street was looking for. If you look at the samestore sales. Something interesting here. In the samestore sales it looks like they are taking out the canadian operations. If youre looking that comps. Theyre citing a comp number of up 0. 6 . That is better than the street had been expecting, too. Take a look at that stock. Actually up about 6. 5 on this news. Part of that might also be just quickly looking through some of the stuff. Looks like the online Comp Store Sales online. Online comps up 5. 3 and thats important, too because you know amazon is a huge competitor and taking a lot from best buy. It does look like their comp sales were up for online. Just trying to read through some of what the best buy president and ceo is saying. And i just havent had time to read through all of this yet. This is the quarter where they, this is always the lowest of the year. The fourth quartser the important one. They make, for example, this year theyre expected to earn 1. 49. What did you say, they earned 30 cents this quarter. Out of the fullyear number. It usually comes in the Fourth Quarter. But it doesnt mean its not going to move itself nicely. We should also tell you real briefly because just crossing the wires cvs healthcare buying omni omnicare. Total value 12. 7 billion. But in the meantime, another deal to talk about. Different type of deal. Hewlettpackard announcing this morning it would sell a 51 stake in its china data networking business for 2. 3 billion. And our own david is here to break down the details. Nice to tosee you. Hp but now theyre also putting into that business their China Services business. You have a Company Called h3c that has already existed. Now they put in those businesses that they also have in china and then they say 51 of this for 2. 3 billion. Giving the thing roughly a value of 4. 5 billion. The deal itself perhaps something of not great importance or wouldnt seenlm to rise to a level of a mega deal. What is interesting, of course the reasons behind it. They will leave behind in china some businesses theyll operate. Their Enterprise Services business and networks and printing and personal systems. Of course, the split of hp is coming as well. Those will go with respective companies. Theyre dealing on companies that are not chinese controlled because of this continued back and forth between the u. S. And china about spying. For example, the big Telecom Equipment provider not allowed in this country. They are becoming more and more strict on what theyre allowing u. S. Controlled companies to do there and impinging on their business. Like quid pro quo. Theyre much worse than we are. Arent they . I think when it comes to the stealing of intellectual property and i reported a number of years ago, much worse. But the revelations gave them the cover to come back. Cover. Im telling you say, hey, you do it too. We would argue we would do it largely for National Security reasons and what they do is steal intellectual property. All that saying listen if youre doing business in china, you may want to have a chinese chinesecontrolled company from which to do it. Which really comprises all its main businesses in china. We prefer that for everything. Its just free c3 com. Used to be the cisco competitor. Now, cisco, by the way, not been having a good go of it in china. In fact we had ciscos cfo on yesterday talking about that. Is this just a china problem. When you hear about some of the nsa taps out there. You heard germanys been upset with some of these things. France has gotten upset. Shocked. Is this the way of the future . If youre a Technology Company you cant operate one company that goes throughout or is this just a china problem . I think china is in the lead here in terms of at least making it more and more difficult to do business there particularly as they champion their national champions, so to speak. If they have them in a particular business. But its not something that people should ignore in other countries, too becky, as these revelations continue. I thought ignoring this. A complete and other joke by the way. I think its nonmaterial. I think its an excuse. I think its an excuse. You think what is nonmaterial. That there is three years later that there is a snowden fallout. Cisco, companies when they need to say, wow, it was a little weaker here. I think, i dont think its material. I dont think there are people saying were not going to buy a cisco router. She said it yesterday. She said it was a problem. Hp getting out of the business today. Theyre not getting out of the business basically giving up control. By the way, only in china. A university that also happens to own Holding Company that has, so theyre going to take control of this thing. I get it. They would say, no, youre spying on us. Youre going to do this. Im sure number one, they knew all this. Theyre doing more of it than were doing. The. Point is every Technology Company theyre a company that has to deal with an International Partner or International Clients worry about this issue. We raised questions on chinesemade products, as well. More protection. If you want to do business in china, joe. You have to deal. 149. Otherwise they cant steal your technology, right . They probably could anyway. Yeah. Its easier that way. David, great to see you. Good to stop by. You see how its really done here. Is that what you said earlier . We have a great staff down there. I love to see our old, we still have some of the same people. Its nice. From our studio. Remember those days . Are you going to be around for 2020. You going it be around for 2020 . I just want to wake up tomorrow morning. The 20th anniversary of squawk in september. You were there. Wow, 20 years. This september, 20 years . Is this the first youre hearing of this . Yes, of course, are you kidding . 20 years. 20 years. Ill be there. Darn right ill be there. Well see you before then. See you in just a couple hours. When we come back this morning, Steve Liesman told us last month about the problems the way the government calculates gdp. Now the government says hes right. Steve will explain all that right after this. Then checking in with ololoews hotel chairman and the effect of the dollar. New jersey governor Chris Christie will be here. We will cover everything from his plan for Social Security to his prospects as a president ial candidate. Stick around, squawk box will be right back. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Welcome back to squawk box. Cvs is buying omnicare for 98 a share. It will allow cvs to go under assisted living and longterm care prescription dispensing business into that sector. I think omnicare is a cincinnati based. Well talk more about this a little later. Acknowledging problems with the way it calculates gdp. This is a story that Steve Liesman first reported back in april and he joins us right now with more. Steve, you were right. Becky, thanks very much. The Government Agency charged with calculating the nations growth rate acknowledging problems with its numbers and pledging a series of fixes over the next several months. The bureau of Economic Analysis says its aware of issues in the Gross Domestic Product and developing methods to address what it found. Comes after cnbc in a detailed report in april shows First Quarter gdp has been meaningful weaker for just the past 30 years. Several economists including researchers in San Francisco and philadelphia feds and wall street economists have confirmed the findings. First quarter growth could really be as high as 1. 8 . The chief of National Wealth division oversee the gdp report said in a statement the agency has identified several sources of trouble in the data including one that we identified, federal defense spending. Changes coming by july 30th in time to be included in the annual gdp revisions. Only going back three years to start with to the beginning of 2012. I dont know if we can correct all of this over time though. Such a significant change that you go from 0. 2 growth to 1. 8 growth it will mess up every data point that you how can you ever . I think what is going to happen and this is important for people to understand. I dont think and we have a guess and his thoughts and higher growth. Were talking about the distribution of growth. Was it in the First Quarter, Third Quarter, Second Quarter . Will even. It should even out. That is the whole point. When you go back and when i showed all these economists my work. No thats not supposed to happen. When you seasonally adjust the data correctly it should show relatively even growth and by the way justin did it over the jobs report. The jobs data doesnt show any season on it all. 30 years ago did they assume no winner in the First Quarter . Did they incorporate the global winter is included. Oh you mean the Global Warming thing . Oh o, i dont know. Thats a good question. I could go back. There is winter and even worse winters. Not for long. You saw the speech yesterday at the coast guard. I did. What was the name of the season . Ramadi. Anyway we saw the real threat. Guys unhinged. Go ahead. Steve here we want to talk more about that. John is our guest today and chief economist and, john what do you think of all these . It shocked me reading the same thing arguing this point that gdp is a very poor measure of Overall Economic activity for a long time. For example, an unrelated to the seasonal issue, back in the Second Quarter of 2008 which was really the Great Recession was beginning to unfold gdp was recorded at above 3 for the quarter. And, so you know tie this back into the fed. When you see the fed debating the Economic Data and fussing about the last data point. It sort of a little crazy. We should be looking at the cumulative improvement in the economy. And, steves right, its about the distribution of growth. So if you look at the yearoveryear growth rates. Theyre not distorted by this. And yearoveryear growth went up in the First Quarter of this year. Does this mean a broader point, though . We are growing more strongly than we think . No i think we have i think we have, but thats a separate issue from how the distribution of the growth that is measured is through the year. I think we have been growing more strongly because another thing steve and i were chatting about before coming on set was the productivity data. If you look at the data now over the last ten years we have the weakest productivity growth recorded apart from the very deep recession of 1981 82. That cant be. You look at all the technology. This doesnt make sense. Why are we investing . You wouldnt bring all these workers on at this time. Jobs numbers are on or about real and you would bring all the workers on for negative productivity outcomes. You wouldnt do. All these employers would be. But let me say the next step here and ill work on this over the next several weeks. Finding better ways to think about how the economy is going and this has implications for investment. As john suggested. Serious investment for policy. And probablywouldnt make such a big deal if they werent on the cusp of the first Interest Rate in nine years. Now you have this distorted data. Important to get it right. Great to see both of you. See you, again. Coming up occupancy rates at Highend Hotels expected to reach an alltime high this year. That means higher prices at checkin. Well check in with Jonathan Tisch, next. Dont go anywhere, Chris Christie joins us on set. Time now for todays aflac trivia question. Which state was home to the very first duncan dok Dunkin Donuts shop . The answer when cnbc squawk box continues. Aflac . Aflac i thought you said this guy was the best . Oh, hes a horrible stylist. Gah . But hes the best at paying claims fast really. Mmhmm. Paid mine in just one day. One day . Yea. Aaaflaaaac in just one day, we approve and pay. One day pay, only from aflac. Automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. E financial noise financial noise financial noise financial noise excellent. Researching a hunch, and making a decision. Time for a change of menu. Research and invest with e trades browser trading. E trade. Now the answer to todays aflac trivia question. Which state was home to the very first Dunkin Donuts shop . The answer, massachusetts. Getting ready for memorial day weekend and aaa predicting the heaviest traffic in a decade. What the summer can hold for the hotel industry. Jonathan tisch is here coowner of new york giants. He joins us now with more. Good morning. Good morning, guys. Things are looking good sounds like in your world. If you look at the summer ahead, economy is Holding Steady businesses feel good about sending their men and women on the road. Group business is up a little bit. Gas prices are down. So, all signs are that it is going to be a strong summer. But that said there are some dark clouds on the horizon. The stronger dollar, which means potentially Less International travelers coming to the states. It could be an issue. Advance bookings are down . No advance bookings are up. International advance bookings are down . Its now pretty steady. If the dollar continues to strengthen, especially against the euro. Also youre going to have the opportunity for americans now to go overseas because its less expensive. Joe over there trying to take advantage of the euro situation. They are lowering fares to europe. Because they know that more americans now have the ability to spend more when they get to europe. Earlier in the hour when we teased you coming up we said youre worried about overbuilding in new york. One of the things i mean prices in new york have gone sky high in terms of hotel actually the number that we use. It is fairly flat in new york. That occupancy is still high. Right. Average rates are high. But the rev part which translates down to the bottom line is fairly flat. There are currently about 102,000 rooms in new york. Thats 30,000 more than ten years ago. There are 9,000 under construction and potentially we could be with another 20,000 rooms in the next couple of years. So people continue to build. Now, as the former head of tourism for new york city, im thrilled because its now happening in all five boroughs. Hotels get built in brooklyn and queens and its spreading the Tourism Infrastructure throughout the entire city. But is tourism getting hurt here by the stronger dollar . Not quite yet. But certainly that potential exists. And that International Traveler is so important to us. Especially here in new york city. They stay longer. They spend more money. The numbers are really compelling about how much the International Travelers what about the Business Traveler . The Business Traveler is on the road. Theyre free to go about and do their business. As i said group business, which was always a concern since the downturn of 08. Group business is also fairly strong, also. Forward projections for the industry through the summer and the fall were optimistic about that. Branding question. Youre rebranding. Taking the brand and creating this loews regency brand. We recently bought the Mandarin Oriental which is one of the finest properties in San Francisco and weve been using the renalancy regency name on park avenue and we said this is an opportunity for us to take a flag that we already control and look for other properties. So the second Loews Regency Hotel is the oriental in San Francisco and we continue to add to our portfolio. In joint venture with comcast. We are growing our product and another 1,000 rooms that will open at a room. 5,200 rooms in orlando. Were optimistic. How many more hotels do you think youd put that name on . The regency name . Yep. Three or four others. Wed love to grow it to 15 or 20. Its very specific. Smaller. Doesnt have that much meeting space. We want to have a Power Breakfast there like we do on park avenue as joe knows because ive seen him there. I like the eggs benedict. I cant eat eggs benedict at 8 00 in the morning. Deflate gate. Ive heard of it. What do you think . The patriots will do what they think is appropriate. What would you have done if you were the league . In terms of the thats up to roger. Do you think it was right . Is a Million Dollars right . Would you kick brady out for four games. I think the commissioner made a decision based on the facts that he has with his colleagues. More likely than not. I dont know. Does it upset you that they dont know that was really conclusive . Thats the thing that is hard for me. I understand. Two different measurements. Indianapolis has one measure. Thats a different question. Whether the league should be controlling the balls prior to the game starting. We still dont know whether i still dont know whether its a huge event. Almost just like superstition with guys how they want the ball. Athletes get crazed about pregame prep and its not vaseline on a baseball and certainly not juice in your veins, right . I dont know. All right, we have to go. Jonathan great to see you. Nice to see you guys. The wifi, you still charging for the wifi at the hotels . Wifi is free. Eggs benedict is not free. Have we ever looked too rich for you in the morning . Ive been up since 3 00. Have you ever checked the ip addresses of all the wireless at your hotels . I dont think so. Okay. I always thought if you looked. Do you think im borrowing your if you could see where everyone is going. In their rooms . Youre bringing that up . I am just saying that we have the personnel. I just. I didnt say it. Im at a loss. Im at a loss. Coming up our new jersey our newsmaker of the hour Chris Christie joins us on set. music boys . music stop less, go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Hurry in, and you can get 0 apr for 72 months on 2015 passat tdi models plus a total of 1500 in available bonuses. Welcome back to squawk box, everyone. Among the stories front and center this morning, hp is selling a majority stake in its chinese data operations. The price tag 2. 3 billion. Retailer best buy beating the street. Earnings revenue and samestore sales all beating expectations. And cvs health is buying omnicare and that deal is valued at 10. 4 billion when you exclude debt. You come through the tunnel or the tunnel. Bad right now. Lets get to our newsmaker of the morning. Some rebs are troubled. Troubled that there is no clear frontrunner in the gop as the democrats seem to be involved in a coronation of Hillary Clinton. In fact in wall street journal today some republicans saying its unseemly what people are doing. Its democracy in action is what it looks like. He said some people say it looks like a darwinian selection where it will be survival of the fittest and he points out maybe that is a good thing. He goes on to say Chris Christie, the governor of new jersey who is declared back in february is back after delivering three detailed speeches on entitlements tax reform and National Security. The governor of new jersey and potential president ial contender, Chris Christie is us with this morning. Governor, i ask you, what is better . Being where everybody was begging you or being written off and coming up and, youre talking the same stuff. You havent really changed. Theyre both fake. Theyre both fake. Theyre both fake. No way i was a sho in four years ago and as you can tell this morning, im here and breathing. Both of them are fake. In this business if you respond to what you hear on television and, you know on the internet and in newspaper columns, youre dead. Youre dead then. So you just have to be yourself and see what happens. Its totally different the way that the democrats, Hillary Clinton is approaching in terms of talking about policy. I dont hear her really talking about policy except being a champion of the middle class and hedge fund compensation. First of all, you did Social Security. That got people talking about Chris Christie again. But more recently the oped on how to reinstill growth was almost a playbook of what some people think are old guideideas. But you want to talk about Social Security . Sure. I mean first off, 71 of the federal budget is now consumed by entitlements. So Social Security Medicare Medicaid and Social Security disability insurance. If you dont deal with those and you want to be in the National Conversation, in my view then you have no business talking about the other 29 . Although it may not be popular and may not get you, you know people dont all of a sudden say this is new. This guy is really hot. This guy is someone we need to look at from Social Security. Its your job. If youre someone out there in the National Conversation, you want to move folks. You dont react to polls, you try to move polls. The way you move polls is by leaning and putting ideas out there that are necessary, even if theyre not popular. Your job as a leader is to try to make them popular and understandable. One thing i have always been able to do in my public life is make things understandable to people. Thats what im trying to do on the entitlement area and economic policy. Economic policy. I dont know how that was received. I assume it was received well by the right. Youre talking about three different tax codes. Right . But revenue neutral. You talk about bringing down the Corporate Tax rate. You talk about ways that growth can solve income inequality, instead of oworking around the edges with minimum wages and redistribution and things the president talks about income inequality. And income inequality has gotten worse. You know, the middle class is still running on a treadmill and getting no where. Wages are stag nent really for the next 15 years for the middle class and the wealthy have gotten significantly wealthier during this president s time i think in large part because of a lot of his policies. You know easy money at the fed. Very low Interest Rates. I mean its inducing a stock market rise that weve all seen and that helps folks who are in the investor class. I dont have any problem with the investor class doing well but i dont think that is who needs to be protected that moment. The folks who need to be protected by growth coming back are the middle class. Because when growth comes back opportunity comes back and then they are not working just two or three jobs. The president talks about creating jobs and the president knows that because many are working three or four of them to make ends meet. This is a big parttime employment area now. It helps with everything. Goes back to the entitlement issue and you get some growth and suddenly those numbers. The debt and deficit problems. Redistribution solves number. The debt and deficit numbers become more manageable. Its true. It may be old. But its true. Governor, on the entitlements, we hear from people who have studied the issue who absolutely will agree with everything youve said. These are people who have done the studies and dug into all of it. What is the response youve gotten from just average voters and average people on the street . Its interesting. Ive done four or five town Hall Meetings in New Hampshire this month and the reaction has been really good among people in New Hampshire. They nod and they understand it. They understand that we have to deal with this problem. And, so well see over the long haul, you know becky, if i get into this how it will play out politically. I cant predict that for you. But i did not feel like you could enter a National Conversation and not deal with this first. If we dont deal with this issue, its going to eat us alive. We see it at the state level. And were going to see it at the federal level. Speak to the state level issue and in your own experience in new jersey. I think all these ideas are Brilliant Ideas and you want to see job growth. But in new jersey job growth has not been nearly as robust as the rest of the country. Last year they said the second worse job growth among all states in the country. So, how do you square that . They wont follow my plan in new jersey. You know ive been able to get a lot of things done in new jersey where we capped taxes and Discretionary Spending of where it was eight years ago and we started a reform pension and benefits. But the problem is they have not cut taxes in new jersey. We have one tax cut of 2. 3 billion that were purely focused on business and i proposed lowering rates and i have a democratic legislature. They simply wont do it. I guarantee you, this may or june theyll send me another tax increase that ill veto. So theres certain things as governor and a blue state going to be able to get done. Other things tax cuts are absolutely, you know to democrats. They dont want to do it. So, i think thegrowth would be much better in new jersey. If we lowered our rates. If we lowered our rates below new york jobs would rush from new york to new jersey. They always have when we done that. When were higher like we are now, the jobs stay here. Its the way it goes. Okay. Just quickly switching, youve given National Security too. Or written about National Security. Did you see the coast guard speech yesterday . Yes. What was your response . I mean listen. I stood in portsmith, New Hampshire, on monday and talked about the three pillars of restoring americas role in the world. Weve shorted National Defense in a significant way in this country. Were on our way to a 260ship navy. Were on our way to having 100,000 fewer soldiers in the army and 50 reduction in our air force. And no wonder Vladimir Putin is doing what hes doing in Eastern Europe and what the chinese are doing what theyre doing in the south china sea. Theyre not intimidated by the United States any longer and for good reason. Secondly, were not investing in intelligence the way we should be and this debate in my view that were having down in washington, d. C. , is not only wrong, but its dangerous. Dangerous for americas safety and security. We have to work our building alliances around the world. Our friend dont know if they can count on us any longer. If the president drew a red line in syria and said no never mind. They dont know if they can count us any more. Our adversaryies are acting in a way they no longer take us seriously. What do you think about simpson bowles. They also said defense spending needs to come down. The entitlement reform i put out there saves over 1 trillion over ten years and i think some portion of that needs to be reinvested in National Defense. But, you know at least unlike anybody else in the National Conversation putting out the way we can actually do it. And i think one of the things were really missing right now is other people are not talking about specifics. You need to be specific. The American People after this administration theyre taking nothing more on faith. They bought into hope and change, you know seven years ago. And with great, with great enthusiasm. But when you dont give specifics, the American People are going to get smart about it this time. Theyre not going to go with someone who doesnt give them specifics. When we hear, i saw a lot of republicans yesterday after the coast guard speech talking about ramadi and talking about isis and, you know the acts that had been purperated that weve all seen recently. How do you go and give a speech about Climate Change the day after ramadi falls and then the city in syria and weve lost gains there. The isis tratgy doesnt seem to be working and then you throw in some of the osama bin laden, the transcripts that have come out about iran working with al qaeda. Working closely with al qaeda. It just all seems. I feel like im in some surreal alice in wonderland almost. It depends on if you want a Foreign Policy where you care about america being successful and a leader in the world. If you think thats what success looks like. I just dont believe that this administration has believed that america being a leader in the world is their goal. You know, the president said seven years ago that we were essentially the cause of violence in the world. If we pulled back from iraq and afghanistan and we gave some nice speeches and went around the world and held hands with people the world was going to be better. The world is much more dangerous than when he became president. The reason is what the world wants is america to leave. The reason they want us to leave is because they know we dont have any aul tearlterier motive to our leader. Were not looking to be conquerors. The people who fill that vacuum want to be conqueror. Russia wants to be a conqueror. Iran wants to be a conqueror and they say, geez we had some problems with america, but, heck, a lot better having america leave than these other folks. This president doesnt understand that and i dont know if he believes it. I want to get in a media bashing mode but i look at the way things are phrased sometimes. Weve spent more talking about hindsight and what should have been done 12 years, whenever it was. The jeb bush situation and everybody has to answer the question now what would you have done . Nobody in the media asking the question of whether we pulled out too quickly and gave up all these hardfought gains. Does the Obama Administration need to answer that . Do democrats need to answer that question . They should have to but thats not the liberal conventional wisdom its not going to be asked. Listen, the media, unfortunately, in my mind ive seen this acutely in the last couple of years. Whatever is on the front page of New York Times is what they talk about. Thats what they talk about. Thats who they go to cocktail parties with. Thats what they do. If youre frustrated by that i apologize to you. But welcome to the real world. This is the way it goes. When you think about bridgegate and the Media Coverage of bridgegate and then go back the last three months after Hillary Clinton, secretary of state Hillary Clinton announced her candidacy and look at the disclosures that came out in reference to that. In the amount of time spent on bridgegate. Its absurd. Clinton foundation or prior to that it was the server. Prior to that it was you tell me. Im sure if you looked that covers over the past three months relative to bridge gate at the time, do you think bridge gate was that much more covered . That much more covered. At the time bridge gate was out gunning six or seven to one the coverage of the irs scandal. Now, do we really think, and especially now 15 months later when we see that everything i said the day after that story broke, everything i said. Has proven out to be true after three different investigations. The internal investigation which everybody in the media mocked which, by the way, wind up coming to the exact same conclusion that the legislative investigation run by democrats was and that the u. S. Attorneys investigation came to. You dont think there has been terrible coverage of Hillary Clinton and the Clinton Foundation for the past couple months . Andrew all i ask you is this. If i came out the day after the bridge gate thing was announced and said, by the way, all my emails are on toa private server and i deleted a whole bunch of them. You have to take my word for it. The email husband nothing to do with the bridge stuff. Can you only imagine what the reaction would be. Today we dont talk about the email situation withany more. I do believe there is an absolute bias and a rush to judgment. You all know this. You saw the coverage of me 15 months ago. I was guilty. Guilty. I had done it. Now were 15 months later, where are the apologies pouring in that not one thing i said on the day after the bridge situation has been proven to be wrong. So, all im saying to you is has there been coverage of the email situation with the secretary . Absolutely. But the intensity of the coverage and the relentlessness of the coverage is different and thats where the bias is revealed. At this point people that were i saw secretary clinton with one of our guest hosts yesterday introducing her. If you like hillary, warren buffett. I asked him on the air. Is there anything even after all of this anything ever that would cause you to maybe doubt your faith in her whether she would make a good president . I dont know if there is anything. Nothing has changed based on all of this. Her numbers probably havent dipped at all. You add in immigration. You add in whether the republicans decide once again, to talk about marriage equality. I can build you a coalition where shes going to win, again. But her negatives are very high. But theyre not 50 . I dont know if theyve changed. She can put together a coalition to win and its not going to matter. This is what campaigns are all about, joe. I mean in the end, if my party nominates someone who can connect emotionally with the American People and make a compelling case for why our set of philosophies and approaches are better than hers well win. Do you think youre the best person for that . Listen if i, this is what you include, becky. If i decide to run, then you can conclude that i think im the best person to do it. One thing i will say is this you know we shouldnt take it on faith this time. We should nominate someone who has actually won. Who has actually won in a difficult situation. One of the things that i think recommends a candidacy by me is having won twice in new jersey. You know we look at what the political situation is like over there. And it is it is a brutally difficult one for a republican yet i got 61 of the vote for reelection. So, you know and what matters is when youre campaigning. Your polls will go up and down based upon other events and mine have and theyre down at the moment and theyll go back up again based on events. When youre in a Campaign Mode and selling yourself to the people who youre asking to vote for. Thats when you can best determine what that persons ability is to appeal. The very first debate is in august and theyre already saying theyre going to look at ten candidates. They have to be polling well. Thats the criteria thaleyll use. When will you decide . I said probably next month ill decide. Ill have a day job and i have to get a budget done by ojune 30th. I dont want any more distractions. But i have been going through the thought process and made it clear to folks. What is the threshold for you . What is going to be the turning point . One way or the other. Its all internal. Nothing that happens externally. Its not about poll numbers or fundraising or feel or any of that. Its three questions. Is it right for me . Is it right for my family . Is it right for the country . If you answer yes to all three, you run. If you answer no to any one of those, you dont. Where is the family right now . Family is pretty good. Listen, two of my kids are off at college. So theyre just like listen good luck. Send the tuition check. Theyll be fine. And the two younger ones were having a lot of conversations. Theyre 14 and 11. Its not like theyre going to be making the decision. They need to understand what this is going to be like. Mary pat recently decided to leave her career in this business to provide, i think, a sense of stability to the kids that if we decide to do this that were going to be involved in their lives still. Thats the hardest part of it andrew. 14 and 11. I mean its a lot of time away and you dont want to mess up your kids. And thats the hardest part of it. Governor how do you, i dont know how you walk the tight rope between not alienating what people im not even sure its a Republican Base any more but still worry about alienating that base by being more inclusive on social issues and i said this a lot in the last election. I heard people on the radio. They could have recited your growth but then they said i dont have the same rights as other people. When does it become look if you want to govern you need to get elected. Why not be einclusive . Why not focus on the economy and is there a republican candidate that will see that and say, look, i want everyone to be happy. We include everyone. I dont care what your personal preference is anywhere. First off, as a candidate, you have to be disciplined and not fall into the trap. The trap is that there are certain elements of the media who want you to talk about that. Who only want you to talk about that because theyre goal oriented and their goal is to get the democrat elected. They want you to do it. The worst part from my party, my perspective, not necessarily the positions. These are divisive issues because the country is divided. So its your tone and how you talk about it. If you talk about these issues in a way that you are absolutely critical of a person who has a different view than you. And dismissive of them. Then they are dismissive of you as a candidate. If you are talking to a person who is pro choice and youre pro life and you say, listen im pro life and that means im going to heaven and youre prochoice and youre going to hell. If thats your tone they dont care what you have to say about progrowth policies. They care that you seem intolerant to them. Thats tone. Thats not position. Im pro life and i had that position as a twoterm governor of new jersey. The first person who was elected a as pro life person to a state office in new jersey. My state is predominantly a pro choice state. But the folks in my state know that i believe its a difficult issue and they know where my heart is. But they dont think that i dismiss them. Thats the difference. The tougher issue because if youre the president , you get to actually nominate the justices on the Supreme Court. And you might be we get to do that in new jersey, too. You might be open to that issue but on the other side when it becomes a court issue, it becomes much more complicated. Any president that believes they can absolutely figure out or any governor that nominate a justs to the Supreme Court. Weve seen that over and over again in our history. As a president , would you try, what i would try to do is pick conservative judges who believe that their job is to the trpinterpret the law, not to make it. Once you put somebody in the court, you never know what is going to happen. It is a more difficult issue, andrew. His tone is about electability. Its how you present yourself. I feel strongly about the things i feel strongly about. I dont have topart of our problem is tone over time and if the republican candidate for president is tone and better and more inclusive than you can get to the other issues that the media doesnt want you to get to. When it comes to samesex marriage, its a little different. If your idea is that i cant get married to someone of the same sex, thats almost saying it offends you and youre stepping into my life with that. No, it could mean something very different becky. Folks should have exactly the same legal rights but that marriage is a 2,000year institution has a particular meaning. That its been between a man and a woman. Now, you can absolutely whole heartedly believe that and say to someone who is gay, you should have every legal right that everybody else has. We are now arguing over the meaning of a term and thats a different argument. Now, the the word marriage is so precious to certain people that it cant be used. Words have meaning. Words do have meaning. If they have a 2,000yearold meaning, then you know, the movement of those. Like i said in new jersey. If we wanted to have samesex marriage my view was put it up to a referendum. If the people in new jersey voted they wanted samesex marriage thats fine with me. Its not my position i dont agree with it. But put it up to referendum because the changing of something thats 2,000 years old at its core is a major societial shift. Now, we seem to be in the midst of that kind of societial shift. 60 . But the fact is let the shift happen where the people get to speak to it. Now in my state, they went to court. The groups that favor this. They sued. Our Supreme Court said samesex marriage is constitutional in new jersey. Well then the argument is over in my state and my job as governor since i took an oath is to enforce the law and ive done that with samesex marriage. Even though on a personal level i disagree with it. Once your Supreme Court speaks and the constitution requires it, then you have a legal obligation to do what the Supreme Court has told you to do even if you disagree with it. My view was we shouldnt be allowed to be seven justices and let the people vote. Not in a negative way. Not to ban it. But say coo you want to permit it . The legislature in my state wouldnt permit that. Thats interesting that they didnt trust the people enough to put a vote on it. Even looking that polling knowing that my position was not necessarily the popular one in new jersey i said let people vote. And then that way no one could argue that a group of seven elite judges made this decision or a group of 120 legislatures and a governor did it. The people in new jersey did it and they raised minimum wage in my state. Imagine that the minimum wage got raised by constitutional amendment on the ballot. Thats okay to put on the ballot. Its not okay to put samesex marriage on the ballot. Im okay with people being hypocrites, just admit youre one. Governor thank you. Were out of time. Hopefully youll come back again. I have to come back. Heres why. My wife watches you every morning and she, i am here this morning in large part because mary pat said you havent been on there in a long time and you need to get on there. Give mary pat our best. I will. It is going to be fun to watch. At least. Im glad to know im alive. Its really good. Great reading the newspaper this morning. I was breathing and i read that. Pthat. Well look forward to your decision. Coming up, when we return mcdonalds holding a Shareholder Meeting this morning. A look at the fast food giants new menu strategy. Performing against the s p index over the next year when squawk box returns. Fixing the golden arches. Faces shareholders for the First Time Since taking the helm at mcdonalds. Minimum wage workers set to protest. Well ask a top analyst what he can do it turn around the clown frown to turn it upside down and get the stock sizzling again. Rocky Mountain Home prices are sky high. A look at the real estate boom in denver and what some folks are doing to try to win over sellers in order to get that perfect house. Heres a hint. Bring cash. And lettermans last stand. The only thing i have left to do for the last time on a television program, thank you and good night. Ceo and executive producer of late show with david letter is our special guest. A trip down memory lane. How is mummy . Good. What is mommys name . I dont know. A look at life after letterman. The fineal hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with Andrew Ross Sorkin and joe kernen. 90 minutes away from the bell on wall street. Watching the futures this morning. Check it out. Dow futures down by about 17 points and s p futures off by three and nasdaq down pie about eight. If you look at what is happening in europe at this hour. You see the dax is also down. And in terms of the bond market this morning. That yield still sitting right around 2. 2 . Even after the fed minutes 2. 28 and oil prices have been creeping back up. Yesterday they rose breaking a fiveday losing streak. This morning theyre up once again, getting close to 60 a barrel at 59. 58. Lets talk about some of the stories that investors talk about this morning. Hp selling a majority stake in its marketing operation. The price tag for that deal 2. 3 billion. Also cvs Health Buying omnicare for 89 a share in cash this morning. That excludes debt goes up to about 12 billion if you put it in and then political news this morning, as well. Only the top ten republican candidates will be participating in the gop first president ial primary debate. The decision announced by the organizers and that showdown set for august 6th in cleveland. Among the possible candidates Chris Christie who talked about his economic plan including talking about income inequality. The president talks about income inequality and it has gotten worse during his period of time. The middle class still running on a treadmill and getting no where. Wages stagnant for the past 15 years. And the wealthy have gotten significantly wealthier during this president s time i think, in large part because of a lot of his policies. Easing money at the fed and very low Interest Rates. I mean its inducing a stock market rise that weve all seen and that helps folks who are in the investor class. I dont have a problem with the investor class doing well. I dont think that is who needs to be protected a that moment. I was thinking about everything last night. You dont even know how to handicap anything and then i was thinking about recently. Remember when mccain was the nominee. It started out mccain and then he disappeared and they looked at the alternatives and they said, bring mccain back here and then i remembered howard dean. He was winning state after state after state. I am not convinced. I dont know if that was it. And then kerry was hot for a while and then they finally said oh, we have to bring. Lets go with kerry. Very strange the way it works. Youre in favor, out of favor. Were still in the first half of 2015. The election is 2016. Chris christie is in favor, out of favor. You look at the crazy polls. It looks like rubio is leading the poll at 13 and then next its 12 and then you have 3 at 11 and then you have six or seven of them down at five or six percent. So, 13 is winning and last place is 6 . Is there really a difference between 13 and 6 . Very close run to see who gets the republican nomination. Is there any chance andrew you would be the one, i mean omalley is talking about youthfulness and showing bill clinton talking about how hed make a great president some day supposedly. Bill clinton said that about omalley in the past. President some day. Going to come out of no where . Im saying is there any way its not a coronation . Perhaps, perhaps. Look, we thought she was going to be the candidate eight years ago e. Shes going to be the candidate. That doesnt mean shes going to win, though. Shes going to win the nomination is what im asking. I think she wins the nomination. Anything that could come out at this point that would derail that . Nothing. Anything could happen on either side. The problem is that there is nobody else. Thats the problem. It would be great if there were more. You think democrats are nervous that at this point they have their candidate. No but, look the problem with Hillary Clinton is that a lot of democrats dont really want to vote for her. They feel stuck with her. Thats the issue. Thats what im asking. When it comes to like i pointed out, she has high negatives and high positive positives within the democratic party. Unshakable. But when it comes to people who actually want to go to the polls. You have to actually want to wake up in the morning and decide affirmatively that this is the person you want as opposed to deciding and then you have people who just dont go to the polls. I think she has very strong support from within the party. Well see. But, lets tell you, shareholders and protesters gathering in oak brook, illinois, today for the mcdonald Shareholder Meeting. Steve easterbrook will address the crowd for the first time as the companys ceo. Earlier this week, the ceo of Andrew Pudzner had advice for the golden arches. They seem to be confused about who they are and what they want to be. You cant be everything to everybody. You cant be the place that is for women and kids and old people and young people. You have to pick who your target is. I think theyve had, theyve gone everything from coffee eto frappes and burgers. You dont really know who mcdonalds is any more. Well try to figure out what that identity is. Here to talk about what mcdonalds needs to do. Retail analyst at morning star. What should the identity be . They really are all things to all people and how do you narrow that down . I think thats a verypoint. It seems like a lot of emphasis on millennials and minority groups at this point while still catering to the family audience. I think it kind of depends on what the company things longer term here. The family space that could be a big opportunity with so many of the other groups focusing on millennial groups and that could be the core confidentacy for this group. What do you think were going to learn today . He put out that video two weeks ago and sort of laid out a vision, but not much detail. Yeah. I dont think were going to learn anything that we havent heard at the video that we saw on the analyst Conference Call a few weeks ago. He was also in front of franchisees last week talking about certain plans. I dont think well learn anything more about product platforms and anything beyond the cost cutting measures. Just reiterating what has been out there in the market at this point. Hopefully shareholders and their views, too. R. J. Do you think that mcdonalds shareholders and mcdonalds franchisees are aligned these days . When you listen to easterbrook. You realize hes talking to two different groups at the same time. At the end of the day, i think both shareholders and franchisees are looking for the same thing. Turn around in samestore sales and more profits for the franchisees themselves which will keep both groups happy here. Again, the message right now is theres not a lot of visibility about what Additional Capital costs and now Capital Investments and then when you start thinking about what the changes are on the menu and what that is going to mean. Thats where we need the clarity. At the heart of the turn around right now. We havent heard that new exciting platform and that product news that is excited about the brand, again. With that, a lot of uncertainty that franchisees have to deal with. This will require new Capital Requirements and see a lot of instore improvements and external internal renovations. Those are things that we need to answer. Do you think that the stores will have to end up looking like the stores in europe for example . That was a very expensive to do. That was. And it did have a meaningful lift in samestore sales at the time. Although weve seen a little bit of that taken away with some of the issues over there. I think they need a modern approach to restaurants. I think certainly going to be a lot of capital required on that. Certainly youre looking for a better instore experience and a lot of that comes with the look and feel of the restaurants. At the same time too. Some labor improvements that need to be done and Technology Upgrade that need to be put in place, too. Thats unclear. They talked abouta big mobile platform and we havent heard more details other than it is a big platform. Would you buy this stock . At this point, i think its probably fairly valued. A lot of interesting things that the company is doing. The things like the cost cutting and the refranchising and simpler menu. I think those are all practical but they need to take it to the next level. For better or worse, this company is lined up with what 3g did to burger king and going to 99 franchise and doing a lot more cost cutting and other things, too. But they had things too, like real estate transactions and potentially looking at you know other shareholder returns that they could look at. Thats something that the company just comes out and says hey, if were looking at these things and were taking all options. This is what we explored and give hard evidence to these turn around efforts. R. J. Thanks for joining us this morning. Appreciate it. Coming up it looks like june may be off the table when it comes to a rate hike. So, could september be the month and how will the markets act between now and then . Well try to shed some light on that next. Coming up later, David Lettermans executive producer rob burnett will be our special guest. If you went to bed early, heres a clip from last nights letterman sendoff. Dave, you are to comedy what i am to comedy. Thanks for finally proving men can be funny. Dave ill never have the money i owe you. Why pause a spontaneous moment to take a pill . Or stop to find a bathroom . Cialis for daily use, is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Welcome back to squawk box, everyone. Retailer best buy beating the street. Earnings revenue and samestore sales all topping estimates. Data storage equipmentmaker missing the mark on its latest quarter. Results hurt by lower sales to equipment manufacturers. Joe . Is the market right about the fed and the possible rate hike later this year . Here with us Barbara Rinehart for the americas. Becky doesnt think it will be this year at all. Well few schools of thought. Maybe its not. You think it will be this year . I dont know. Not sure. Maybe it was you i think it might not be this year. There are people saying no. Im sorry. Michelle. Yeah. My other tv wife. We all lookalike. Someone i with three names. But not Andrew Ross Sorkin. She was here wow. Wow. She was here last week and i just remember someone saying definitely. Im not sure. It wasnt insulting. He just called me his wife i dont know how i feel about that. Because were together a lot. A bromance. The first school of thought is that the fed cannot lift rates until there is an unambiguous acceleration of the u. S. Data. That could cause a wobble to the equity market. In 1999 when the fed hiked Interest Rates in june equity market was down three and a half months later. The other school of thought is this kind of weakness you had in the First Quarter continues. Even though it came off of overy strong data at the end of 2014 it continues. The fed cant hike. Eps revisions come down risk assets get dragged down with it. Those are the two schools of thought that are really in the Financial Markets at this point. At Credit Suisse we feel there is a better chance that the fed does hike in september. We do have some positive data. Nonretail sales and you see bank lending is growing at 7. 9 . There are some signs youll get the long waited reacceleration and that will put september on the table. But it is a kind of a real guess at this point. Its crazy, though. There is an election we just found out there is an election coming coming. It is so hard to take away the punch bowl as the election is approaching. Cant they just do a quarter. If they dont want to do more cant they just stop . Just do a quarter. Theres two things also that you have to answer joe. The fed has spent a tremendous amount of time priming the markets they want to raise Interest Rates. If they dont, they have to worry about a credibility issue. The second thing that is very important that were telling our clients. A tightening of monetary conditions are not the same thing as tight monetary conditions. As you said, a quarter of a point. The market wont know what theyre doing unless they say were raising a quarter point and they put us back on some calendar and say were not coming back for six months. The problem is a lot of people said maybe what they will do is raise a quarter point and go away for a while. The market wont know that. Thats why everybody what janet yellin says in her q and as. Were in an age where the fed is far more open with communication and its a good thing, but it also has consequences of raising volatility around any nuance message of the fed. Maybe your st. Looks a whole lot better too. We dont need the dollar any stronger. If your rebound is better and then we wont worry so much about what that does to our trade situation. Well europe certainly going along with the growing Global Economy at this point. Last year europe was really feeling in tough shape just about 12 months ago. Youre starting to see it. Better retail sales out of europe and bank lending growing and every low levels but, still, fundamental change at the margin tells us that europe should be doing a bit better which only contributes to the case that u. S. Growth should be picking up in the second and Third Quarters of this year. Its a watch, wait and worry time. Its a reason to have a little bit more cash and little bit more defensive in your portfolios. Watching them wait for a long time. Worrying is the other part too. Its this kind of outcome if we can get the reacceleration. We do see tentative signs of it though. You have thought, wont be a rate hike in nine years. This is the first rate hike in nine years. Might not be nine years. Might be ten years when its all said and done. If im right. If beckys right. If were right, its going to be september. But either way. Fw itif it happens that way. Thats what i fully intend to do. I feel a wager coming on here. I would have done it. I would do it in june. Go a quarter in june. I think that what would, you think it would shock the system . No i dont think it would at all. I think it would be good. The bond market has priced it in. For june . No. The bond market was overshot territory earlier this year with worries about deflation. Its kind of up come up over those lows. It wouldnt be a shock to the bond market. All right barbara, well get im not going to remember what you said either. We have you know they all lookalike. At least seven of us women. Well remind you. No what it is take to our advantage. Were right, it was us if we were right. Im going to write it down. Market that one. Thank you for coming in. Its great to see you. Thank you for having me. When ewe come back is denver the hottest Housing Market in the country . A look at whats driving demand and what it takes to win a bidding war there. The data point of the day, jobless claims numbers will be out. The Market Reaction is just ahead and squawk box will be right back. The Technology Changes the design evolves the engineering advances. But the passion to drive a mercedesbenz is something that is common. To every generation of enthusiast. The 2015 dream machines, from mercedesbenz. Todays icons. Tomorrows legends. Visit the dream machine event today for up to 3,500 towards purchase. When youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. With Innovative Solutions that connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. Ideas come into this world ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary and messy and fragile. But under the proper care, they become something beautiful. Theres been a real estate boom in pockets of the country and existing home data is going to be released. Last month existing sales hit their highest rate in a year and one area of the country seeing a big sales boom is denver. Diana joins us now from there on why there and why now. Diana . Well, denver is red hot and the reason is, apple and google are bringing jobs here. Home construction is very weak and all the Real Estate Agents tell me millennials love this market. So, what is the result . Supply of listings down over 15 from a year ago. Home prices up 11 . And days on market down over 30 . Homes are just flying off the shelves and bidding wars are the new normal. Prices are going crazy. Multiple offers love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the other offers. Now, schaefers client Chris Simmons has been shopping for a home for six months. He lost out on eight houses because each one of them went in one weekend. And then he lost two other bidding wars. One of those had 18 bidders. Now, he is finally under contract but he had to beat out five others. I waived inspection and the appraisal contingencies on all the offers i made on this one, as well. Now, those tactics are pretty risky. You have to ask, where are the homebuilders . The land prices around here right now are at an alltime high. The only available land is out by the airport. So builders margins are being squeezed and also an issue with condominiums. A recent law passed makes Condominium Developers responsible for the tiniest flaws in construction and that basically brought construction of condos to a halt. Well talk about that coming up later today on power lunch. Back to you guys. Okay diana. Thank you. We just had barbara on the show and she pointed out, too, rent in denver have gotten very expensive. Relatively speaking. She was talking about a one bedroom being 1,400. That doesnt sound like much in manhattan. The millennials are getting priced out of the market too. Another reason youve seen such a huge drive for sales, diana. Weve seen a lot of construction in the apartment sector. But the question is how high can they go so there is enough demand. If millennials cant afford them, who are coming in . Denver. All right, dianeau thank you. Appreciate it. Coming up an intern executive, producer. Robert burnett talks about working with David Letterman and whats next now that letterman has retired. As we head into break, look at u. S. Market equity futures. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Couple stocks to watch this morning. Sales force peting the street on the top and bottom lines and raising revenue forecast for the full year. Dollar tree shares down right now. Earnings revenue and samestore sales falling short of consensus and outlook is also mute. Then l. Brands better than expected earns and revenue fell short. Williams sonoma Current Quarter guidance is cautious in part because of the west coast show down. We are a few seconds away from the jobless claims. Again, this morning the futures have been under just a little bit of pressure. Rick santelli is standing by at in chicago. Take it away. Were expecting a number close to 270 and we got 4,000 more than we desired. 274,000, an increase of a very neat 10,000 from an unchanged, unrevised 264. 2. 21 million on continuing claims. Little bit different timeline but still showing roughly the same correlations to history in terms of the drops that weve seen over the last several years. Preopening equities have improved a bit, but theyre still negative. Interest rates you know 223. We settle at 225. The high yield close since december 229. Well continue to monitor. Of course, existing home sales at the top of the ten may give us more clues. You heard diana olick. Pockets of strength and pockets of weakness and housing and the existing market of course is bigger than the new home and starts market. That number was pretty good. So, we will continue to monitor and digest the minutes of the fed meeting, which really didnt have a huge influence, but, again, the debate goes on as to exactly whats going on in the Federal Reserve and the committees minds regarding normalization of rates. Becky, back to you. All right rick thank you. Steve liesman is back with us with more on the numbers. So this is a good what were you looking at . Just look at what youre doing. Is that where youre getting your information . Thats where im getting my information from. The real chart. Just looking at the number and thinking how economists will factor that into the jobs picture and, again, were in that very nice zone. Down well below 300,000. And a number that people think are going to lead to 250,000 job growth right in there. So theyre going to think the employment numbers are going to continue and continue to be strong. What was interesting yesterday i thought about the fed minutes was i thought there was a contradiction. They told specifically that they were not going to tell us specifically when they were going to raise rates. There was a line. But that wasnt the contradiction. Then they told us it wasnt going to happen in june. So they are telling you. They are telling you it aint happening. Its a bit of a contradiction and i think the fed wants to move away from this calendarbased guidance thing. Moving away from calendar guidance, a lot of people on wall street are saying theyll raise by a quarter point and then theyre going to go away. The one and done thing. The only way wall street knows that is if you raise rates and then tell everybody were not going to raise again for the next three months or six months and youre back on being tied to the calendar and otherwise wall street may think its off to the races. I dont think thats going to happen and i disagree that theyre going to do a one and done thing. Everybody is so sure. What the fed is going to do you know, i want to know what their Economic Forecasts are because if theyre so sure about their Economic Forecast i have a basic framework and my framework is that the fed doesnt need a lot to hike. I think where we are right now more or less if this idea of something of a modest set back happens in the Second Quarter and even if we remain at this 2. 25 or 2. 5 growth rate that is enough for the Federal Reserve. I think some people think that we have to have this massive snap back and quickly i think the bar is low for the fed to do this. They want to do this. I think theyre going to do it this year. We have to jump in right now because Lumber Liquidators have some news. The stock down in the premarket and the companys ceo robert lynch unexpectedly announcing that he is notified the company of his resignation as the companys president and chief executive officer. The company in a statement says it intends for a National Search and the companys founder will serve as the acting chief executive officer. Bu, of course, chis this comes amid, the story start would 60 minutes. Theyre in the midst of a crisis and then, of course you have to wonder what he knows or doesnt know. The one thing he has done is stand very firmly. Hes been very adamant in all of his statements to date saying none of these charges were true and none of this had any backing or fact behind it. This company in the press release looking very quickly does not say why he is stepping down. He says that he unexpectedly notified the company automatically that is leading people. The word unexpectedly is the, Companies Just dont do that. I think when you say unexpectedly, i dont want to say youre indicting the company. There is something amiss in a very bad way. Were in the 5s. 500 range right now at 19. Its going to be a microcap by the end of the day, maybe. We should also say that the company is announcing john pressly, the companys lead independent director will become the nonexecutive chairman and the board of directors accepted mr. Lynchs resignation as a director of the company. And mr. Sullivan saying im really proud of the team and i look forward to working with them and providing our customers with the best Hardwood Floors and the best prices. Its a very brief, three paragraph press release. Leaves a lot of questions to be answered and of course that is a huge reflection on whats happening. I dont remember the company saying its unexpected. We can say its unexpected. But when the company says its unexpected. Possibly youre watching something play out that you look back at it and say we should have done probably after the 60 minute thing. Maybe. I dont want to get sued for saying that. That is what is in the back of everybodys mind. Thats what is reflected. Its down from 85 and its at 25 and going to open at 19. I mean how much can shareholders lose now . Thats the only good thing. They can only lose 500 million more. What is that an eighth of a point on apple. Its like well look the problem that comes with this. 500 million. You know. Obviously, people will be waiting to hear from thomas sullivan, the founder to see what he has to say and what his plans are to leave the company. It wouldnt be possible if there was possible misconduct. Malfesance. Remember potter . Mr. Potter. The ceo is gone. Well watch that stock ahead of the market open and also try to dig into this and see if we can understand what is taking place behind the scenes though. When we return from a latenight writer in the late 80s to taking charge of lettermans worldwide pants production rob burnett has produced critically acclaimed programs and worked on the longest running show in history. Take a look at letterman by the numbers. Squawk box returns in just a moment. music boys . music stop less, go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Hurry in, and you can get 0 apr for 72 months on 2015 passat tdi models plus a total of 1500 in available bonuses. The last six weeks its been crazy. People have been saying lovely things about us. And its really been over the top. And i cant tell you how flattering, embarrassing and gratifying it has all been. In light of all of this praise merited or not, do me a favor. Save a little for my funeral, all right. Id appreciate it. That is all i got. The only thing i have left to do for the last time on a television program, thank you and good night. That was a clip from last nights final episode of late show the now retired David Letterman has hosted 6,000 show os featuring 19,000 plus guests and no less than 4,605 top ten list and the man by his side for most of this late show executive producer since 1996 rob burnett. Great to have you here. Thanks for having me. This is fantastic. Its okay. Very nice. Let me just start because our show is off the air. Well get to that. But we all know what the best show on television is right here. And you know why. You know why. Because its not about the finances. Its a soap opera. Thats how you have to watch this show. Its simple. And heres what you, yes, last time i was on i said you were just watching to see if he punches you. Its arer be erbeyond that. Shes not going to break it up. We may do the she wants this to happen. We may do the boxing match. Heres whats going on here. Its deeper than that. This is a successful man. Look at him. Look at him. Theres one thing. You know whats missing . He just wants you to love him, joe. Dont you know there is a fine line between love and hate. I dont think it will ever happen. Once you admit the love then sometimes hes looking at me and im looking at him. Who knows what happens at that point. I worry about the universe ending when that happens. How are you a faithful viewer of this show when you get done so late . They tape it. Thats right. But then he goes out with the after party. Were out every night to 2 00 a. M. Me and clooney. Every night. Thanks for having me. Its a pleasure to be here. Thank you for being here. And this has to be strange because we know youve been the executive producer since 1996 but you were an intern in 1985. 29 years, august would have been 30. But whats amazing about it is you look on the credits and im like i think, 16th in tenure there and everywhere you turn. So it was a very odd day yesterday for all of us because you look and this person has been there 20 years and this person 30 years and on and on and on. So, it was, it was a strange, surreal and emotional day for us yesterday. What do you do on tuesday after memorial day . Do you have yard work that you need done . Im available. Well, the funny thing about the ironic thing is everyone said what are you going to do on the thursday and i said, i dont know what ill be doing but i know ill be sleeping in. Thanks a lot. You guys ruined that. Go back to bed after this. Thank you. I want to know what you think about 30 years and late night television. What was it like when you started . Whats happened since then . What do you think about the changes that have come . Its changed tremendous since i began. The biggest television of course, is changing in general. But late night, in particular, has changed because of the technology more than anything. Because late night, it used to be when i was a kid youd watch Johnny Carson and spend an hour with johnny eandand then dave came on and spend an hour and now its not about spending that hour. Now it is about go on youtube and its about the highlights. Its not about the full hour. And its its different. I think as all the guys now are great. Fallon steven colberf,t, i dont think i dont think these shows will ever quite be the same. Has the industry become so fragmented that you could never reproduce another carson or letterman . I dont think so. Johnnys show routinely used to get numbers that were you know 60 or 65 , 70 of the people watching television were watching Johnny Carson. I dont care how good you are, that will never happen again. So its different. And i think with dave leaving, it really is the end of an era of othat kind of show. That was our goal for the mornings. 60 to 70. We need to ratchet that down i think. Our expectations. 60 to 70 . Were still scrambling to get that. Were not, you dont see that. Its not impossible. Its not impossible. You think the day we finally we have to hug it out. I would take my shot with the punch. If youre going for a 70 share. Yeah. But hes got a point. Once you hug, then the next day, its over. But no one is watching any more. We have to continue this. Do we have any liberal here we go. Here we go. Nice. Any New York Times talking points from the meeting . You want me to comment on mr. Letterman. I like that Chris Matthews said he had no idea what daves politics were. That were how would chris know. Pp. No one has any idea what his politics are. Thats an interesting thing. I can tell you when i was head writer. There was a long time when i never, i never talked politics with dave. He says hes an independent. And ill take him at his word for that. There was a time legitimately when i was the head writer of the show that i really did not know which side he was on. If there was a republican in the white house, wed also get letters, oh, youre doing the jokes and then same in reverse. I think as dave has gotten older, hes been more vocal about issues that he cares about. That, again, we havent spoken about. They clearly seem to lineup with, you know a little bit more towards the left. Well see. Colbert. What do you think . Dwl i think hes great. I know steven personally and i think hes a very very funny smart guy. I think hell do fantastically well. Hes got, we dont know him. We dont know him. You know its not a far walk away from the character. You know how long it took al bundy to become the guy on modern family. It took him like 30 years. He was a detective for a while and hes al bundy. Yeah. Until, it took 30 years to get out of that. Steven if youre looking, joe called you al bundy. Im going to need tick toots that to that show. Can you tell us some of the inside dirt. Who was your favorite guest that you ever had . My favorites probably were becky, of course. Thank you, thank you. Bingo. I saw you flailing for a second. I thought you were having chest pains. There she is. Isnt that a moment. There is a moment. You were a great guest. You know Julia Roberts is one of my favorites. Tom hanks, bill Murray Howard stern. Steve martin. Generally the people that come to play ball with us are fantastic. What about the moments. The Drew Barrymore moment or a madonna moment. One of my favorite. One of my favorites was when Farrah Fawcett was on. Did you ever see that . She completely kind of was in her own world. Lets just say that. I remember that. But heres the thing that no one knows. So she came on and she came late. And the show was going on while she wasnt there. So i had no particular insight into her performance because i was watching it like everyone else and then i was asked about it and i thought, well ill do the chivalrous thing and people say, was she on drugs . The next day i was in my office at 11 00 at night and the phone rang and it was farrah and i thought she was calling to thank me. She was calling to explain what it was she was doing on the air. And i can tell you, that hour that i was on the phone with farrah was more confusing than whatever was on the air. The only thing i can recall is she kept saying im going to al pacinos castle. That was the phrase she kept saying. Heres the part you realize your life has changed. Im 52. You do the math. I was, i dont know 14 15 16 when the big farrah poster with the two, right. Right. Enough said. And if i ever could have looked in a crystal ball and thought, im going to be in my office at 11 30 at night talking to Farrah Fawcett alone and all im going to want to do is get off the phone. I would have thought, what happened to me . Its sad. But, anyway. Its been a great run. A lot of fun stuff. I feel very lucky to have worked with dave. He is the funniest guy alive. If youre a comedy guy and you like all of that stuff, you feel yourself Getting Better every second youre with him. Will you guys do anything in the future . Not on the air but produce other stuff together . Were talking about it. I actually wrote and directed a movie that im editing now which is a worldwide production. Dave and i have not had a lot of conversations about what it is he wants to do next. I think the world is his oyster. Hes a brand. I think hes got to figure it out. Do you think he wants to do something or does he want to hang out . I dont know. I think hell probably take a little time. All of us. Weve been running in a little hamster wheel. I think we all need a moment to figure it out. Then he has a very active mind with a lot to say. Whatever he decides will be interesting, i think. Whats the film . I knew you were working on it last summer. Its based on a small book called the revised fundamentals of caregiving. It stars paul rudd. We shot in atlanta. Well see. Its still early. If youll have me on ill come back. Come back and talk about it. I must say financially i have nothing to worry about. I put everything i had six months ago into lumber liquidit aors. Im relaxed. Nothing to worry about for me. He had great guests. Who is our great guest . You know what i come up with . Robert burnett. This is how show business works. We lie about each other. Im going to miss the lying more than anything else. I struggle when people ask me. Richard simmons was hilarious and fabio was so freaking good looking, they may be right up there. I may have a meeting with your bookers. Best show on tv. You can stop lying now. No. I love it. Its a family. Then youve got that crazy, the other guy . Rick . Hes nuts. You know how many people you could have been talking about when you said the other guy thats crazy. I love that. It looks like hes eaten expired yogurt. I never understand anything he says but i listen. The five and ten year doing the tango. I call my guy, sell everything. I dont know what it means. Rob, come back. I love it here. Thanks for having me. When we return jim cramer i thought you meant is crazy, from the New York Stock Exchange. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Mcdonalds holding a Shareholder Meeting today. Investors are going to be voting on a proposal to make it easier to nominate directors to the board. These are live pictures outside that meeting where protesters are gathering. They want the restaurant chain to increase wages for front line workers to 15. We go to New York Stock Exchange and jim cramer. We got this lumber liquidator news. Mcdonalds has to win over the franchisees. Lumber, how could that guy stay in his job . This thing is falling apart. Everyone thinks this company could literally, i dont want to say disappear, but fade. Salesforce, this is the most combative i ever heard. He showed you the company can be amazingly profitable. He buries sap. This was how they would kill sap, grow 10 billion in revenues and making a lot of money. It was the feistiest i ever heard him. Bill mcdermott. Mark said until we get to 10 billion, until we get to where we want to in terms of passing sap, he doesnt want to sell. Well see you in a couple of minutes. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Welcome back. Lets take a look at whats happening. Yesterday you saw the stock market down slightly. This morning that trend continues. Dow futures down 20 points. S p down by three and nasdaq down by nine. At the bond market its yielding for the 10 year 2. 246 . You see the dollar is down across the board. Dollar at 1. 11 to the euro. That does it for us today. Join us tomorrow. Right now its time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the New York Stock Exchange. A big diet of news. Earnings from best buy, salesforce, 12 Million Health care deal. Bullish calls on netflix and apple. Oil steady around 60. Ten year steady around 2. 25. Claims continue to come in low. A lot of global pmis were mixed