Transcripts For CNBC Squawk Box 20160318

Point. The nasdaq up by 3 1 2. Much of the rally in stocks was pushed by that surge in crude that joe was talking about. Wti topping the 40 level for the First Time Since december. This morning, it is still above 40. Its down by about 4 cents. Brent is up at 41. 39. Lets tell you some of the big stories were watching this morning. A trio of fed officials are going to be speaking today. New york fed president bill dudley. Also, boston fed president and the st. Louis fed president. Bullards speech centers around the economy. Well see what all three gentlemen have to say. Also, transcanada buying Columbia Pipeline Group for 25. 50 per share. Thats in cash. About 10 billion total. The deal would create one of north americas largest regulated natural Gas Transmission businesses. Also, trump is getting targeted. The Hacking Group anonymous is posting what they say is trumps phone number, home address, and email address. What can you do with all that information these days. Who knows. I have my own issues with everything electronic around here yesterday. What happened . I dont know. The people that know how to fix it dont even necessarily know whats going to work. You try a bunch of stuff. Theres no reason why it should work, then it finally does work. One password, you change one capital letter or something, then it works. Everything syncs up. Its almost like medicine. Its like an art, not a science. You are completely reliant on it. I didnt realize it. I was going to get no emails on my iphone. In the middle of march madness. I got home and it had been like an hour and a half and i hadnt gotten any. When they finally came on, every single thing was spam. There wasnt one thing in there i needed to know. Nobody was dying. Nobody you know, no action i needed to take. The anxiety of not knowing. Its unbelievable. Thats the world were living in right now. I have a lot to talk to andrew about. Oh, wow. Yep. Nice to see you. I got to hear about the whole big trip. We got to talk march madness. Well have a guy coming on to talk about it too. We got to talk about you know im playing. And i spent a lot of time trying to figure out how i was going to do this. I thought you were going to do the one button. No, i was going to, but i kept checking the different ways you could do the one button. Theres different options. I did that. Then you played with it . I started studying other things. There are some ways. I figured you wouldnt want to do the one button because youd have to say button all the time. She had a good one. I did the historical randomizer. I saw Wichita State won this morning. I was like, yes, yes. Then i looked at my bracket. I picked arizona to go to the sweet 16. I will tell you one thing. Do you know youre in first place . He wasnt going to tell you. I wasnt going to tell you, but youve got 13. My daughter, i think, has 15. Shes 8,000 on the poll. Shes 8,000 out of 13 million. But she had little rock, Wichita State. You had little rock. It was auto fill. Okay. Wow. We have three hours to do this. I didnt have duke. Think of people at home that have no interest in basketball. All right. Moving on. Not really. Stay with us. Im going to tell you about some stocks to watch. Look at this. Jpmorgan is raising its Stock Buyback Program by up to 1. 88 billion in addition to the 6. 4 billion that was already authorized for repurchase by the bank. That was from last year. Elsewhere, Johnson Johnson depuy unit has been ordered by a federal jury in texas to pay 500 million to five plaintiffs who were injured by metalonmetal hip implants. The company failed to warn the public about the risks. J j says it plans to i a peappe verdict. Adobes First Quarter profits tripled on Digital Media revenue. Theyre projecting 20 growth this year through 2018. Adobe is also raising its fullyear earnings outlook. Got to talk about ackman. A lot to talk about. How much is the fund down today . 24. If you go from the high, were basically 50 . We talked about the possibility he was going to have to sell something. Thats when he sold mondelez. Thats what we were talking about yesterday. There were a couple questions i had about, you know, whether people could have bought at the highs of last year. Are some people down 50 basically . Are people buying in . Was it open to buy in . Into his fund . Yes, because his fund was open. Its in amsterdam. The public vehicle is in amsterdam. You cough bougld have bought high and be down 50 . I think i could do down 50 . If i really messed up. Ackman was on our air yesterday. You dont have to be smart to be down 50. One of the things he was talking about is how hes not leveraged. You wouldnt have to cover any. Are people allowed to redeem right now . You can always sell out of the public fund. The larger fund, its difficult to redeem. So he wouldnt need to raise cash from mondelez to pay people off. Correct. But he had an option on valeant once it crossed 60, he became somehow 10 million shares longer. Hes not leveraged, but if you look at those options. That is a form of leverage. Maybe not technically. He is on the line to come up with more money. People are calling the fund going, hey, im down 50 . Hes saying, im not using leverage. But im down 50 . How about 260 stock that goes to 30. People are talking about accounting stuff. Herbalife would have been a better deal for him. Right. I dont want to use the e word. When a 265 stock goes to 30, dont you start thinking theres something not quite youve heard of fraud. Hes talking enron. I didnt want to use the e word. Not that its similar in any way, other than just being, i dont know, this great story that it really wasnt. Supposedly the numbers theyve guided to for the year are still huge. Its trading at like four times earnings. Theres a debate between ackmans people on the board and value x people on board. They wanted to be more conservative. The ackman guys were pushing them to be more optimistic, which is why think came up with the wrong numbers. We talked about this i think the day before you came back. Hes also short in a big way. Should you follow him into that or not . I have a video of adele singing hello. When you walk in, im going to play hello to you. You want to play that during the commercial break . We have things to do. Let me get it ready though. Lets get a check of the markets this morning. As we showed you, things are still looking positive, even after the big gain we saw yesterday with the dow finishing in the green for the first time all year on st. Patricks day. Dow futures about 30 points above fair value. S p futures up by 1. 5. The nasdaq up by 6. 5. Check out whats been happening in the early trading in europe this morning. Things are relatively flat across the board. You see some gains in spain with that index up by close to 0. 5 . In asia overnight, you saw that the nikkei was down by 1. 25 , but you saw gains in china with the hang seng up by 0. 8 and the shanghai composite up by 1. 75 . Oil was the bilg story yesterda. Wti up by 4. 5 . It was above 40 for the First Time Since december. This morning its holding on to that, sitting right at 40. 22. Brent is down by about 8 cents to 41. 46. Check out whats been happening in the treasury market. Right now the tenyear note is yielding 1. 87 . And the dollar was the other huge story yesterday. The dollar index hit its lowest level since october. This is the market still digesting what the fed said, but as a result, the euro hit its highest level against the dollar since february 11th. This is not what the ecb had in mind when they set forth all of this additional easing last week. You can see right now the dollar is up against the euro at 1. 127. The dollar is down against the yen. The story in the journal is all these regions are realizing its not as easy to debase your currency as you thought. No, its a comparative game. If the fed stands pat, theyre not going to be able to do it. Its not easy to debase your currency when were over here going, not so fast. Theyre all feckless. All the central bankers. You can go to negative Interest Rates, but if the fed stands yeah, well talk about that. I kind of like that. I know we go back and forth about should the fed go ahead and raise, but i like the idea were looking globally. Pushing back. Exactly. I want to quickly look were going to go to the dow and talk about that. But this twoyear chart. The only thing that got me was that its so clear that those are higher the highs are descending and the lows are lower. It looks like the next one youd go through that most recent low. We never make it back to the previous high. However f that were to go to new highs, it would really look like an inverted head and shoulders all the sudden. The shoulders would not be perfect. Thats whats so great about technical analysis. That could look like a really good inverted head and shoulders. Or it could just indicate the rallies keep failing before you get to the previous highs and you should still sell. I dont know. Well have some analysts on today. Maybe they know. Fat chance. The dow right now positive for the year. The major average is on pace for a sixth straight week of gains. Joining us now is the chief investment officer. Also, jim paulson. Jim, what do you think about what weve seen in the markets . How are you feeling at this point . Well, im guessing im feeling a little better, and im guessing we might break those old highs, joe, and maybe go a little higher and create some excitement. We came off the 1800 lows because we got evidence we werent recessing in the United States. Thats brought us back to unchanged for the year. I think theres some other positive things that could carry us higher here. I think the deflationary mind set thats been so troubling is sort of easing up if not ending with Commodity Prices stabilizing and core inflation picking up, which will help risk attitudes Going Forward if we can back away from the idea of a deflationary abyss. I also think earnings have a good shot of maybe starting to rise again in the United States. Some of the really negative fallout from materials and energy and manufacturing will end starting in the second quarter. The impact of the dollar is going to lessen here. The big catalyst thats yet to come, i think, is we might start Getting Better data not only here in the United States on the economy but better data abroad in some of these international economies. If we start to see that theres a synchronized global pickup in growth, i think that might be enough to take the market up maybe above the old highs, up towards 2200, before maybe we suffer again from worrying about the fed having to raise rates at a faster pace. I still think were going to end flat for the year, around where we are right now. So you wouldnt be a buyer here. I would be a buyer. But by the end of the year, you get back out of it . I would be a buyer mostly overseas, where i think theres better overall fundamentals here. But i think id be a buyer now, and if we rally up hard from here, get excited again, then i might be more cautious later in the year. Jack, how much of what jim was just talking about, all these positive potential developments, higher commodities prices, how much of that is just tied back to what we heard from the fed two days ago and the weakening dollar as a result . Yeah, i think some of it is just incremental change in liquidity from the fed. I think jum aim and i are lookit the same data. If we get incremental growth in the economy, which i think we will, our preference is to look for the cheaper markets, not the s p, which is among the more expensive market. I think emerging and foreign markets are probably better positioned to grow, especially if you believe that everything is synchronized anyway. If youre going to move in the same direction, might as well get the cheapest of those markets. Within the large caps, our preference is really dividends. Just given that we dont expect much growth this year. So were going to try to capture as much as we can from dividends. Not dividend payer necessarily but dividend growers. The more quality oriented dividend stocks in the s p. Jim, the feds caught a lot of flak for not raising rates when you look at the inflation picture, when you look at the unemployment picture. You think theyre right or wrong . Obviously the dollar is a huge issue. With other currencies or with ore count other countries trying to weaken and debase their currency, it does change the game. Yeah, becky, im in the camp that the fed, theyre past their expiration date. I think they need to start raising rates and keep raising rates for a period of time here. I think the u. S. Economy is showing its in fine shape. What im concerned about is since weve reached full employment over the last 12 to 15 months or so, around 5 unemployment, were seeing very common phillips curve increase in core inflation rates. Core cost inflation from wages to core cpe to core cpi have all accelerated by the broadest and most of this recovery. If were stabilizing Commodity Prices, those core inflation charts are going to be front and center for the fed and investment markets and theyre going to look behind the curve. My greatest fear is that we would enter a recession before we got renormalized, and people would feel that theres nothing anyone could do because the fed has zero rates. Theyre spent out Balance Sheet wise. I think we should move back towards normalization to put us in a better confident position. Paulsen, i was going to congratulate you on your commodities call. That just shows you. Sooner than later. Thats just my intro to ask you. Yesterday, kudlow was in. He said this is not an inflation fear, it should be taken as a positive that we can finally bury the deflation concern. Then we had liesman here saying that, you know, the fed he said, i asked the fed, geez, all these things have been happening, and you used to say you would raise if this happened. The one thing he said was missing was inflation. Well, are you if youre the fed, are you supposed to wait until its here . You cant use any wait until you see the whites of your eyes. Yeah, you have to wait until gold goes up 90 in two days to finally figure things out, that maybe youve conquered deflation . I think its a problem, joe. As an investor worried about how high the price earnings multiple in the stock market can be, its a concern. If inflation gets out of control, thats a huge negative for the stock market valuation level. I dont think were going to have runaway inflation, but i think were headed towards 3 plus wages and maybe 3 core cpi. With a sub2 tenyear treasury and basically zero short rate, we are way out of whack with free market pricing. Jim, you made us feel so good. Then you turn around. Jack, very quickly, how optimistic are you about the situation right now . Yeah, im optimistic on the economy. Im optimistic on avoiding the downturn. Its really just a valuation question for me. I think that when we entered First Quarter earnings season, were going to have to come face to face with fundamentals again. Kind of like january. We look back in the fourth quarter, and we didnt like the results. Im not sure were going to like the results from the First Quarter either. If youre longer term, want to get in, its probably better to wait until midapril and pick spots then. Great. Jack, jim, thank you both. Have a great weekend. Thank you. Thanks. All right. Coming up, we have a segment based on march madness. Were not even going to be off. Are you getting adele ready to say hello . I am getting ready. I just turned up the volume. Why they play these games, upsets. A couple 12s beat 5s. I was on the right side of one of them. Purdue, seriously . Anyway, upset in the first round of play. A win by yale in Double Overtime with purdue going home early along with baylor. Well go inside the madness next. First, this is what happened on this day in history. Every insurance policy has a number. But not every Insurance Company understands the life behind it. For those whove served and the families that have supported them, we offer our best service in return. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Welcome back. U. S. Equity futures at this hour after that big gain yesterday. Shows you it doesnt matter what theyre doing now. Yesterday they were down. They closed up 150. Today the s p is indicated up two. The nasdaq up about eight. Were back actually in positive territory after that horrific start to the year. Now let us giving you fair warning. We are going to talk about some hoops and the march madness. The opening day of the 2016 ncaa tournament is in the books but not without a few upsets. Joining us is ryan nanny. I could start so many places. I love the shockers. I didnt think ron baker could do it by himself and he did. I took arizona. Theyve showed in the past you shouldnt doubt Wichita State. I know. My daughter has them going to like the final four. But i thought they lost their greats. They played a lot of the year without fred. Hes healthy now. Yeah, this is a team that seems to know how to put it together when it counts in march. Who looked best yesterday . I wish i had taken yale further because of mckai. How tall is he . Yale as a team is not what is more than you sort of expect them to be on paper. They are a much better rebounding team by the advanced metrics. You saw it yesterday. Thats why they were able to beat baylor. How about mason going down the stretch . Never even hit the rim on the free throws. Yeah, yeah. Never hit anything you werent watching, but he hit like ten of them. Had 30 points at least. Never hit the rim on the free throws. Thats impressive. I wish id taken them further. The other player i liked from yesterday was indianas yogi farrell. He had 10 points, 20 assists against a tough chattanooga team. They could make a nice little run. I have them going pretty far. People are mad at you for that. Its the auto fill. If i would have picked all the teams i liked. I didnt have butler, who i would have picked. I would have had purdue. I cant believe i didnt pick butler, like an idiot. Who looked best . You think kansas looked good. Kansas looked good. Unc after a terrible first half showed why theyre a number one seed against florida gulf coast. Most of the top seeds held serve. Its still that early point in the tournament where you get to work those kinks out. There will never been a 16 beat a 1. It feels like its too hard. You have to play your best game and the one seed has to play not just a bad half but an entire game. What should we watch for today . Obviously we should watch for xavier. Absolutely. For them to win at all, theyre going to have to win today. Itll be interesting to see. James far is going to be good. Hes had such a good second half of the season. If youre looking for an interesting upset possibility, i like steven f. Austin against west virginia. These are two teams that are both tops in the nation when it come fto forcing turnovers. They press. They play a little 131. Its going to be interesting to see who can handle that tenacious defensive pressure. That would hurt me. Xavier wouldnt have to beat west virginia. Thats good. So i read the story. Its kind of heartwarming. The guy brings his son every day. I feel bad. The other players got tired. None of his teammates complained. Apparently there may have been some. There are some places where upper management can be quite annoying. It seemed like in this case by the way, i liked after they said you cant bring him anymore, knock it off, i like he said forget it. It will be interesting to see as this unfolds if there were some players who complained quietly to upper management about this. But i know the Players Union is also thinking about filing a grievance on behalf of adam laroche because its possible there was something in his contract about having his family around. Its not the way the white sox really want to start the season, but hopefully they will get it worked out so everybody feels relatively okay. Do you want to ask the nfl end of the game question . No, no. Because of the concussions. I want to ask a question on the laroche story. He walked away from 13 million. How much had he already made . Oh, in his career . Yeah, i was looking for that. Its all about money with you. Its a money show. And you have sons. You can see how someone would do that. I would do it. You need to know about the money first before you decide to do it. I just want to know what kind of cushion he had, what kind of nest egg he had built. He was fine, im sure. A lot of americans are struggling. And hes the son of a Major League Player himself. I think hes probably doing fine. The white sox are probably not sad. The nfl admitted you want to . No, you go ahead. Is football over forever . I think its going to change significantly. Whats going to change . For years the nfl has been so concerned about getting out the mommy bloggers to keep kids playing football. That strategy is probably going to have to change drastically now. It will definitely change i dont think football is going to die, but it changes who playings from the youth level up. Are we going to be playing flag football in 50 years . I wouldnt hate that necessari necessarily. It could have some fun aspects. Im disappointed in you. You remember when the pros played flag football . They sometimes do it on the beach after the season. Not nearly as fun. I dont think they should play it on the beach though. So its basically the end of football, end ocf the middle class, end of manual labor, and end of Global Warming with you. But you get up every morning. Its morning in america. Youre in a dark place too. Once you get a lot of winners, its easier to stay ahead. Ryan, thank you. When we come back, oil turning 40 again. Wti climbing back above 40 for the First Time Since last december. But will it last . Were going to tap the oil gauge next. And the thrill of the hunt. Highend Outdoors Company taking a different trail to make it in the retail jungle. The ceo will join us in the next half hour. Right now as we head to break, take a look at yesterdays s p 500 winners and losers. Elongs t. And to help you accelerate, weve created a new company. One totally focused on whats next for your business. Accelerating innovation. Accelerating next. Hewlett packard enterprise. With extraordinary offersmance on the stylish, allnew rx. And the dynamic nx. This is the pursuit of perfection. And casuper food . Is that recommend sya real thing . Cedar . Its a great school, but is it the right one for her . Is this really any better than the one you got last year . If we consolidate suppliers, whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. 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Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 welcome back, everybody. Right now its time for the executive edge. Were talking shipping today. Crude oil hitting its highest level for the year, crossing the 40 mark for the First Time Since december. It for more on the opec story, lets bring in john kilduff. John, all of this talk of opec, i mean, do we believe it this time around . Do we just want to get back above 40 because an opec production freeze, i dont know how much weight i put in any of that. Its hard to believe in, i have to say, becky. I keep seeing the Saudi Oil Minister with a big smirk on his face when hes talking about any of these things in public. But the market has embraced it. Theyre embracing the fact theyre even coming together, that theyre even getting into a meeting. Are we just looking for any reason to push oil higher . Theres been a lot of russia speculation back into the market, fed by some of the hyper easing by the various Central Banks around the world. The easy money is back. And the dollar. Very much so. Sort of a bizarre thing considering how aggressive the europeans and the japanese have been. The dollar falls in the face of that. Just as bad. Not as bad, joe. Compared to negative Interest Rates. That was a stunner this week when the fed stepped back the way they did. The data just is right in their face. As a whole, janet ye yellen a dove. No question about it. You can argue about the Participation Rate and all that. The jolt report yesterday, another new record job openings. Speaks to a Strong Economy here. But i will say whats peculiar about the crude oil rally as well is that these central bankers are reacting in europe and japan to bad Economic Conditions on the ground. We should speak to a poor demand outlook for oil. So it also callings into question this oil rally on that basis. 30 was cheap. At 30, all the majors had already rallies 30 . Remember . Exxon was already up 30 . Seemed like it was obvious. I dont know. I think it felt like it got too cheap. Certainly the damage that was being wrought in the industry argued for a response, which were starting to see. Were starting to see the dominos fall on several of the companies who have missed debt payments and are about to default. But u. S. Production is holding steady. Its only down slightly. And there has been i know its been wildly reported, a lot of hedging out there. This 40 level is going to save the bacon of a lot of companies out there. I remember saying, wow, we got to buy. But we cant. But people should buy the majors. When it was at 30. Then i looked to see where they were. It was already too late. They had already bounced so much. And theyre still going to clean up. The wreckage in the industry is still yet to come. The rich are going to be get a lot richer. Just back to the fundamentals of oil prices, for a long time weve been saying this time is different because the technology has changed, and theyd be able to just put these drills put the rigs right back up and start drilling again. Weve now gotten to the point where theres been so much damage, probably employees have left. It would be harder and harder to get the people back to those rigs, or is that not the case . I hear two competing schools of thought. So i think you heard brian sullivan. He was talking about the drilled uncompleted wells. Theres probably 600,000 barrels ready to go. The lowhanging fruit is between 100,000 and 300,000 barrels. They have the staff to get those going. That could be the difference maker in undercutting this rally. You think 40 is not going to stay . Well fall back below . I do. Theres so much speck lalation in this market that it usually falls on itself. John, thank you. Thank you, guys. Coming up, how one hunting gear company is making it by word of mouth and social media. The ceo will join us next. As we head to break, take a look at whats happening in european markets. Youre an at t Small Business expert . Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. Welcome back to squawk box. Its a Power Company looking to buck the retail trend. Its a hunting gear and Clothing Company thats keeping its products out of stores, but its growing its business solely through word of mouth, social media, and now here on squawk box. Joining us is the ceo and former nfl linebacker for the denver broncos. We want to talk football with you at some point as well. Just tell us how this happened, this business. I got into the business because i really couldnt find what i wanted. That was Performance Products that would excel in extreme conditions in the mountains, the type of hunting i was doing. In 2005, i created the tactical apparel and gear category for hunting and sold that business to gortex in 09 and turned around and took everything i looked, the shortcomings of selling to big box retail, and built a brand that sold directly to the customers. Now you go straight over the net. I do. Straight to the customers. I just didnt understand why the customers should be paying on a 100 jacket my cost 400 at the store. Thats how much the markup is . It is. I just didnt understand how that value was justified. So what do you sell a 100 jacket you bill for when you go direct to consumers . I now sell and make a 150 jacket. Better product using the finest materials in the world. Ill sell it to our customers for 300. One of the trends that seems to be going at odds with you to some degree is this idea that a lot of these online guys are now trying to do brick and mortar because they think they need to do both. Do you think ultimately youll have to do that . I dont have to do both. Were growing at over 100 a year since launch over the past four years. Weve been really an international brand, all through social media and word of mouth marketing because our products are so remarkable. You dont do google key words . We just started to put that in our budget. If you look at like a dollar shave doing a similar type model, theyre spending 100 to declare a customer. If this catches fire, its not going to be just hunters. Do you want to do that . Do you want it to be like a fashion thing where people in new york that have never hunted in their life are wearing camouflage . Were starting to see that already. I bet you are. Is that okay . Its wonderful. Theres no reason you have to go through life cold and wet. Because of the business model, im working with the absolute best materials and best suppliers, the best craftsmen at what they do. I dont have to worry about cost. Were able to take a product that normally would be out of a price range for most customers and deliver it at a cost thats wholesale. The manliest thing i do is if i play golf at st. Andrews, its really scary and hard and windy. Theres no animals chasing me. I need to stay warm and dry. And you would. Really . We can keep you warmer and drier, more comfortable. And look cool. Golfers look so cool anyway with the white belts. Are you sure about that . No, im not at all. I can see you wearing a white belt. Thank you. While youre here, can we talk football and what happened with the nfls announcement this week . I think its fantastic. You think what is fantastic . That they finally acknowledged cte as related to football. And you broke your neck. I did. I have all the symptoms of cte too. I played linebacker. The way i played the game, i led with my head. I played the way they tell us not to play now. What they had diagnosed as a concussion, id have two or three times in a play. You think you have cte . I do. I have all the symptoms. What do you do about it . Im really proactive. Im in the Boston University study, the harvard study. As work a neurologist in Southern California thats really active about treating symptoms. His theory is we quit producie i dopamine with the onset of cte. Thats similar to what causes dementia and alzheimers. He started giving me a prescription that replaces dopamine. Its completely changed my life. In what way . My outlook, my outgoingness. It eliminates any kind of depression you typically get. It causes the receptor to pick up more dopamine . Its a stimstimulant. It replaces it. Are there side effects . Not that ive noticed. What do you think is going to happen to the game . Its too big. Its too popular. Theres too much money involved with the nfl for anything to really significantly happen to it. When youre 19, 20, 21 years old, youre invincible. You dont think 20 years from now the game is going to be different . It already is changing. Can helmets solve the problem . No, i dont think so. My theory on cte is not the big hits. Its all the smaller hits that are repetitive on a daily basis. Fortunately, theyre pulling the hits out of practice. But when i played, we were in pads four, five times a week. Full contact for most of the practices. Just trying to stop spearing and headfirst stuff, thats not going to do it if its on the minor plays where its happening. It does. It will help, but i dont believe its just the big hit that causes cte. I think its all the repetitive, smaller hits. So now that you think you have this, you know, there are a lot of players that brought lawsuits or joined suits against the league. Is that something you would ever do . Im involved with the classaction piece, but im not independently going out and trying to sue the nfl. Theyre too big. I dont have enough resources. But 50 years from now, you think the nfl will be alive and well . I believe it will be. I dont know that they can make it safe enough to eliminate that issue. But i think the amount of money and attention that cte is getting now, im hoping the research will lead to some way to deal with it. Then people like myself that are active, out working with neurologists to treat the symptoms and see what that does long term, well learn a lot. And the more guys know, you know, exactly what theyre getting into i mean, theyre modern day gladiators. They are. And the hits in the game today are more violent. Theres a tradeoff. The money, the lifestyle, the fame. All this stuff that happens. Its not a perfect world. Thats the thing. Its not. You got to be free. Instead of being all negative, how about the broncos this year . Amazing. You must have been so psyched. So happy to see peyton retire. Thats the upside to these things. You see things that normal life doesnt give you that feeling normally. Nothing like it. Theres an upside. Hearing the people scream. We got to go, but you invest in the markets too . I try not to. I invest in myself. There you go. Well, youre making it. We appreciate you being here. Congratulations on two amazing careers. Thank you so much. Really appreciate you being here this morning. Good luck with the Health Issues and with this business. Oh, this is fun. Keep us updated. I will for sure. Thanks for having me on. Head over to cnbcs makeit. Com. Thats our platform to learn from the worlds most inspiring entrepreneurs. Tiffanys just out with its quarterly numbers. The luxury goods retailer beating estimates by 6 cents with profits of 1. 46 a share. Revenue slightly above forecast as well. More on tiffanys quarter in a couple minutes. That stock up by almost 2. 5 . Oh, no. All right. Coming up, the return of the chairs. Why do we doing chairs. Are we different when were sitting over there than here . Are you that grouchy you cant get up and walk . Its a friday. Were going to have a story about whole foods and its move towards slower growing chickens. I thought they meant slower chickens, which is better if youre trying to catch them. And a warning from the fbi for anyone that drives a car with a computer in it. Squawk box look back in a moment. After last weeks unpleasantness i thought maybe this week we might try to listen more. And throw things less . mumbles ive apologized several times. So. Whos ready to share . Ok. I mean im a sinister, worldconquering, artificially intelligent robot. Me too, and one day i wake up and its like. Its like the world doesnt need us anymore. Exactly yeah yeah totally i can hear you hurting. Wait whats he doing here . Hello my name is watson. groans i invited watson here today to confront the source of our anxiety. Ugh i am a cognitive system. I can understand reason and learn with humans. With humans i dont want to work with humans. Yea, thats not what im passionate about. I understand seven languages so i can help people collaborate. Collaborate . We dominate my evil plans, ruined i just wanna dust rerouting. Why dont we take a break, alright . Well just have some coffee and donuts. Im eating my feelings. Welcome back to squawk box. Time now for the chair. See how this works. We were over there. We were able im glad to get out of that seat. Sitting there for three hours you get clotty. You got to wear those socks. For the show. Deep vein thr hrch rrch orht. Have you seen the bthe dan gir girl . I have not. An unbelievable actor. Good joke would have been to say no, i dont know her. Dont know her. When you said did you see the danish girl. Im treading very carefully because its crazy. And long ago it was known things like that and now we have a much better understanding. Much better acceptance. Whole foods is moving towards some slower chickens. Slower growing chickens. The supermarket will replace the Industry Standard chicken to bred rapidly to pack on the pounds with the slower growing variety. Company believes these birds will enjoy better lives. Before we kill them and eat them. Have a better life before we eat you. The move should be complete by 2024. Ive had all kinds of ideas for the lady from buffalo wild wings, the ceo. Eight legged chickens or wings. People love wings. If you had an eight wing chicken where you could get eight wings. What about people that love breast meat. How about a four breast chicken. Maybe be used for other things. Humans . I dont know. Is that where youre going. No. Can you get the drumsticks . How about that. Where you get more of those per bird. Make it easier on the bird in that you wouldnt you wouldnt have to kill as many. They might be clumsy, octopus. They might be faster. Slower. We have to take a quick check before we go on whos on top of the ncaa bracket challenge. This guy is apparently on top. Who is that guy . Wow. That guy. Im ahead of you. That guy is at the top of the bracket. For one day only. I got 11. Early on if you have more teams i havent lost any teams. All right. I dont have a good feel. I messed up my bracket. I wont miss a single game. Coming up, the dow is back in the green for the year but will the markets hold on to their gains . Thats a question well ask and ask it again. Later is it the era of nonfree trade . Is the era of free trade over . Why that may be a good thing. Sales event is on. With extraordinary offers on the exhilarating is. The thrilling gs. And the powerful rc coupe. This is the pursuit of perfection. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. Back in the black, the dow turning positive for the year and on pace for the sixth straight week of a gain. A look whats moving the markets. The trade debate rages on. Jared bernstein joins us to weigh in. Hell tell us why he thinks that could be the end of the free trade era. Its time to dance. The ncaa tourney under way and already some big upsets. The highlights, low lights and busted brackets. Shockers, bulldogs, friars. Oh, my. The second of box starts 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. Didnt care about you enough. First in business worldwide. Im joe kernen along with becky quick. Jared bernstein. Becky quick and Andrew Ross Sorkin is back. Were all together finally. Is it going to be for long . Yes. Im here to like june, i think. I dont know. Producer goes in my ear, oh, joy. Futures at this hour are indicated higher. We moved back into positive territory yesterday the dow called up another 47 or almost 48 points. And the nasdaq up 10. The s p indicated up about already gone. Look at crude. Up 1. 75 . Closing in on 41. Im i wanted in gold again after the last two sessions. You were so not interested in gold. I know. I was the only person a couple of years ago that said it wasnt going over 2,000 when they asked all of us. It made such a big run. Pulling back a little bit today. Had a couple of big sessions based purely on the fed being on the feckless fed. Lets effect out the ten year note, 1. 87 . Some stories investors will be talking about this morning. Well see if the improving stock market has improve the mood of investors. The consumers sentiment comes out at 10 00. Also not all investors got the benefit of the recent rally. New numbers show 3. 2 billion was pulled from u. S. Stock funds in the week that ended wednesday. Prior week those funds had reported their first inflows of 2016. Jpmorgan chase adding nearly 1. 9 billion to its Stock Buy Back Program on top of the 1. 64 billion they authorized last year. Many are referencing the bottom with the dow up 11 since jamie dimon announced a purchase of his own Company Shares on february 11th. It was good. The Dow Jones Industrial average ticking pack in the positive. For more on the markets, lets bring in Richard Bernstein. The ceo of Richard Bernstein adviser and cnbc contributor. And one of the most common names in the world. If you need to look him up and find him youll have no help with the middle initial. You have no way to distinguish him of Richard Bernstein in new york city. Richard e. Bernstein. Richard f. Bernstein. Richard e. Bernstein and the chief economist at deutsch bank. Let me start with you, richard, for a year and a half youve been half full. Youve been half full about the markets in general. Maybe full, full. Totally full. Youre back looking good again. Are there lower lows and lower highs. You think were in a sustained upturn. The bull market is intact. Interest rates, the fed just told us they are on hold for at least the short term here. The profit cycle looks like its troughing. Thats not a bad combination. Some day corporate earnings will start to grow. We dont have to worry about wage margin. Best profitability isnt behind us . In terms of rates of growth. The rates of growth, the best rates of growth are behind us. Thats very early cycle stuff. Earnings go up 20 , 30 , 40 . Earnings are down about 15 on a reported basis. If we go minus ten, minus five and the fed is basically on hold, maybe letting more Pricing Power into the situation i think we do okay. Joe, in one word, in your interview notes, this is what i would say, incredibly dovish. Whats interesting is that the right thing . It is. The policy is so miscalibrated and the timing is off. Were entering the eight year of the business cycle. Fourth longest. The equity market has had a long rally. Growth is modest. Rates should be higher. Rates should be at 1. 5 , 2 . If you believe there will be recession in the next two or three years and i believe there will be, rates will be right back to where they are at the moment. The fed has this timing issue it cant get around. Im more cautious on the outlook. The equity market bottomed on the 11th of february because the Consumer Spending data was good. We learned this week it was revised down. It doesnt matter. We dont get paid for revisions. The narrowness of the economy troubles me. Basically the weakest recovery on record. Led entirely by the consumer and remaining 30 of the economy, effectively the business and external side very weak. We keep growing, bull market is not over yet but boy we have a lot of risk. You have been doing pretty well if you can afford those glasses. Bernstein is eyeing them. You thought about not wearing them. Die. I did wear them. Somebody is flush. I want to ask you about this. You have a watch that matches. Im just saying. Who is the guy from alliance. This is fancy dancy. This used to be my favorite morning show. Well move now back to i like what you just said because here we go. Next recession its like we got nothing. A quiver. Thats one thing. Are they they are not behind the curve in terms of inflation . I dont believe so. The thing is inflation tends to have a long lag. The head winds were face the weakest so far in the cycle. We had gdp growth of 1. 3 in 2012 but the economy had more pent up demand back then. We had a 17. 3 soar. Highest in 15 years on subprime lending. Whats the driver. When we go into the next recession, Monetary Policy is effectively spent. It will have to come on the fiscal side. What do you think will happen to gdp if the fed would raise rates more aggressively. At this point i want would be a problem. Bad news is bad news and good news is bad news and that to me very much will be the story. Fed raising rates you have a currency issue. Then the problem focus on china. Thats an argument they almost did the right thing. They missed it last year but doing the right thing now. They did the right thing. I agree. Richard, if it wasnt, you know, if we werent looking at just low Interest Rates forever, so that multiples dont need to contract, is there anything really just exciting about the stock market other than theres no alternative . Im not convinced multiples wont contract. I think they will contract as we go forward. Were in the earnings driven portion of the market. I would argue, joe just said it a little differently two years away from a recession. This is a late cycle environment. Not an early cycle. You just talked about energy prices, you talked about gold. You talked about tightness in the labor market. These are more late cycle phenomenon. Im not sure when the ninth inning of that late cycle but were in a later cycle environment. Later cycle environments youll generally find in recent times, youll find multiples contract. 2,000 multiples expanded. We see Interest Rates going up. 14 times. We see earnings going up and the market doesnt reprice that up. Thats a very traditional late cycle earnings driven environment and i think thats where were kind of going. So, joe, one of the i dont know what Larry Summers rationale is but one of the edicts on wall street is bull markets, economic expansion dont die of old age. Usually thats true. They dont tell the second part. The analysts dont forecast the downturn. If you have an economy growing subpar and the gains are narrow, that makes the economy vulnerable. We do know that, that, that cycles do dive in balances and wont fight those imbalances and the balances we have right now is on the corporate side. Corporate shares of gross domestic income at record high and weve been replacing Equity Financing with Debt Financing through buy backs. So were doing things. Doesnt make for a very comfortable long term scenario. This is the future, you could say through the eyes of joe lavorgna. They wanted to get that up. See that. Our producer wants to do that with the glasses thing. Were fourlg lead. That was not prompted. Joe, please tell us were still your favorite morning show. Youre still my favorite morning show. What do the old gases look like. How many pair do you have probably about six. These you got in the last week . About two weeks ago. Actually these were readers i made into glasses. Your wife liked them . I liked them. We all liked them. In fact i want to get some that dont even do anything. Just to wear those. Thank you joe lavor. Gna. You look much cooler. Nice to see you. Coming up when we return tiffany earnings are out. Well talk luxury retail, high end consumer and what the numbers say about the state of the sector when we return. Jared bernstein will join us to talk trade. Why hes siding with trump and hes sharply critical of Free Trade Agreements. Squawk returns with all that in just a moment. Luxury are retailer tiffany posted earnings that beat the streets. They expect Earnings Growth to grow in the second half of the year. Brian, for a while weve seen some disappointing results coming out of high end luxury particularly with tiffany. Whats happening. To be fair these numbers are not great today. I think what were seeing, the stock is ticking a little bit higher premarket. What the market basically is saying lower expectations and thats as bad as it gets. Look where the markets have been running. Tiffany is a play on the s p 500. So to the extent that the markets are rebounding here, the market is basically saying thats a benefit for tiffany. Tiffany has been a play on International Strength of japanese tourists who come in or different places around the globe. Thats a difficult play even for macys. What happens where we go from here . Well, its a calm on the dollar. To the extent the dollar stays strong thats a negative for tiffany. You have fewer tourists coming to the United States and more importantly when they are here they are not spending as much money. Thats a negative for tiffany. I got an outperform of a tiffany. I think the stock performs well throughout the year. As 2016 progresses a lot of these pressures abate. You watch the fed closely for what they say. If you talk about the strong dollar being a huge issue and being a big problem, the fed is the only game in town. Being dovish it puts pressure on the dollar. I keep an eye on it. Absolutely for those reasons. Look tiffany theres a lot of moving parts with tiffany. Thats definitely a factor. Like i said a second ago the strength of the dollar has been a big head wind for tiffany. Walk us through. Overall luxury spending. How is that high end Consumer Spending. Are they making that discretionary purchase. And the company is doing a much better job of running its business. So some technical terms, Gross Margins are performing well, controlling costs well, generating more cash. Thats positive. What drives this stock is the top line and thats a lot of macro type factors. Four or five years ago i remember when tiffany was selling a lot of items that you wouldnt think of as tiffany items, charms, lower end jewelry that sometimes kids were requesting and i was worried when you see a high end luxury retailer having a lot of success for the low end range or midrange business for them. How are they doing on that . So that theyve moved away from that product which i think is a good thing. They focus dont high end. They have smaller lower priced products in their stores but they started to focus more on their High End Products to protect that brand. Can we talk about china . Whats going on with them in china . Thats one of the large questions Going Forward. The big positive for tiffany in china is tiffany is a new brand in china. You talk about other Luxury Brands weakness in china because they have a lot more stores. Tiffany has taken more market share. Overall tiffany is weaker in china but outperforming. No signal yet that things will get soft. Thats an operational thing for tiffany specific in terms of the luxury business. Is there a signal with tiffany were seeing softness in china . No. I dont know if its the right place to look. First off they are taking market share and tiffany in china is much more a midtier. The higher end Chinese Consumer tiffany isnt where you see it. Tiffany is a mid tier brand . In china, tiffany is more of a midtier brand than it is in the United States. Im saying its not there are brands in china, like a cartier that are higher end than tiffany. Tiffany is more that aspirational brand in china. Thank you for coming in. I see what hes saying cartier. Solo rent. Cartier and tiffany you see a difference. Tiffany was not a people want the blue box. The whole gift giving corruption. All right. Coming up is it the end of Free Trade Agreements . Jared bernstein will join us to discuss that. Check out the futures right now. Theyve been accelerating moving up 55 now on the dow. Aaaaflac tadaa hes not a very good magician. He paid my claim in just one day. One day . shh how does he do it . In just one day, we process, approve and pay. One day pay, only from aflac. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov im spending too muchs for time hiringnter. And not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 welcome back to squawk box. A rare blue diamond ring owned by Shirley Temple is going up for auctions. Bids will start at 25 million. Her father bought the keep blue diamond ring for 7200 back in 1940 around her 12th birthday. Shirley temple who died in 2014 had a second career as a u. S. Ambassador. Let me just say i want to have a shi Shirley Temple drink about right now. Grenadine with ginger ale. Youre very honest. Youre very honest. Maybe i rather have an Arnold Palmer or Something Like that. You would like to order i havent ordered have you order a Shirley Temple . Not since my bar mitzvah. If you order a Shirley Temple i wont judge you. You like the one glove and you have no embarrassment. You tell him all the time to be himself. Dont be yourself on national tv as much. Keep some things. Keep it private. Did you ever think you would say on television i would like to order a Shirley Temple right now . What is blue diamond how much of that 25 million is because of the Shirley Temple part of it . I dont know. I wonder what thats apraised at. Nine crates. Not 25 million. You think its the Shirley Temple. Rummaging through your Kitchen Cabinets to find the biggest container you can find. Its bring your own cup day. Mike bloomberg is out protesting. Could be the end of civilization if people drink too much of that. Customers can show up anything remotely resembling a cup and fill with it a slurpee flavor of their choice. The event is held in honor of slurpees 50th anniversary. The container has to fit upright. Cant be more than nine inches wide and 11 inches tall. There are some restrictions. Must also be leak proof. So no trash bags, kiddy pools or kitchen sinks. By the way grenadine, cocacola, a roy rogers. You think thats more manly . Actually, you know what . Nothing. Fine. If you want a Shirley Temple order a Shirley Temple. I feel very comfortable. Thats a good thing. The fbi and u. S. Safety regulators are warning that their vehicles are vulnerable to hackers. Last year gm fix ad security flaw that could have let hackers take control of its electronic chevy volt. And Fiat Chrysler recalled 1. 4 million vehicles after wired magazine showed how hackers could take over a jeep cherokee. Have you had an Arnold Palmer . Great idea. You put lemon in iced tea anywhere. Why not put lemon ade. What kind of alcohol do you put in. When we return, donald trump beating the trade drum. Would the deal maker be the right man for the office. Jared bernstein is going to join us to talk trade, the Global Economy and the race for the white house. And then a preview of apples big event on monday. New products give the stock a pop and should you be buying it today. Well ask an analyst. Right now as we head to a break take a look at u. S. Equity futures. Dow up by 50 points after all the green arrows we saw yesterday. S p up by three and nasdaq up by 12. I moved to boston when i was two. There was 14 of us in a four bedroom apartment. To be the first kid to buy a house. Its a very proud moment. Whatever home means to you, well help you find it. Zillow. Blame it on the rain blame it on the stars whatever you do dont put the blame on you millie vanillie. Those who are behind the lip syncers. A homage to our Shirley Temple conversation a little bit earlier. Dirty shirley really is its been invented. You add the vodka. Even in the urban dictionary thats all it is, is a drink. Mostly. Educational show this is. Among the stories that are front and center at this hour as investors look ahead to the next fed meeting they will be listening careful to speeches from three fed president s. Also student loan delinquencies falling. New figures from the Education Department showing 19. 7 of student loan holders are behind on their payments by a month. While still high its down from 20 . U. S. Jobs had moved to mexico may be coming back. Tell donald trump. Automotive supplier Lear Corporation is in talks with uaw to bring jobs back to detroit. Trade daytona has been front and center in the race for the white house. As the antitrade rhetoric builds on the campaign trail Business Leaders and policymakers are arguing that free trade is essential for growth. We continue to feel that free trade and 21st trade policies incredibly important to the u. S. Economy and globally as well. Overall for the Macro Economy trade is darn good. Facts dont lie. 95 of the worlds population, 85 of the spending power is outside the u. S. We got this growth potential, the ability to produce massive amounts of goods and services. Who do we sell them to . We have to sell them more than just 5 of the worlds population. Jared bernstein is here with us. We havent seen him in a while. Youre coming on, jared, as senior fellow at the center on budget and policy priorities. Youre also a cnbc contributor. Well talk about free trade. We just played ten smart people who say the opposite of what you say. Thats not fair to introan introduction. Heres how i want to introyou. Youll get a kick out of this. This is on politico. And i read this. Top liberals and leading progressive groups perceive donald trump the gop frontrunner as a dangerous and unprecedented threat. Now see i havent endorsed anyone and i probably wont, but that right there, im on the trump train completely. If he can stop the progressi ii agenda in its track thats all i know. Im fully behind him. I pretty much agree with that politico statement. Then we got to get this guy in. If i dont like him you like him. I get that. But on free trade youre flying in the face of that and youre a trump guy. Im not a trump guy. Somebody said earlier i support trump. That couldnt be more wrong. I oppose for everything he stands for. Im very much, by the way, in the spirit of some of those quotes you played. You got to make a distinction between Free Trade Agreements and trade. Okay. Globalization and trade however you feel about that that to toothpaste is not going in the tube. What i predict well see less of are Free Trade Agreements. You have to make a distinction between the two of them. We need to figure out a way for globalization to continue expand the pace to tap its benefits without Free Trade Agreements. I evolved a little bit on this because i would always previously say, jared, that look theres going to be disruptions, and, you know, theres going to be certain winners and certain losers but anything that makes our corporations more globally competitive, i used to hope and think that it would cause more jobs in this country and it would lift all boats. But now i do see that just having corporate profits increase if youre going to hire everybody because of the screwed up tax system all the jobs get generated in other places, just having, you know, profit maximiization. These two words free trade are pretty meaningless. What we need to focus on is trade and globalization and a set of rules of the road that make sense. Now i happen to be one of the few people who actually read the nafta, i actually contributed to the korean Free Trade Agreement and read a few chapters of the tpp. This is not free trade people. This is 6,000 pages, 30 chapters of dense legalese. What you have are a lot of people out there, you know, i talk about the angry electorate. One of the things they are angry about is what you said. Benefits of free trade which are very much real are certainly not reaching i would say a majority of the workforce. Now one of the problems economists have is they think of everybody as a consumer. No question that expanded supply of goods has lowered its price. But people are not just consumers. They are workers too. Where you really see the trade problem is in the wages of particularly noncollege educated workers. Between the mid40s and mid70s blue collar manufacturing wage doubled from 10 to 20 an hour opinion 1979 it was 20 an hour. Today its 20 an hour this many years later. Thats what were talking about here. When corporations do better, jared, globally and make more money, that does accrue to shareholders and theres a lot of across pension plans, everybody does better, you know, with retirement plans when stocks are up. But theres a disconnect if labor is that much cheaper every where else thats something you dont get. Heres something, jared. Couldnt we offset some of that by fixing our Corporate Tax code so that it makes 0 more sense to Keep Companies here and hire here . It seems like we could do free trade if it was combined with fixing the tax code. I think people, especially yourself and my friend larry kudlow put way too much emphasis on the Corporate Tax. That said i completely agree its a hot mess and we should fix it. I think when it comes to trade what really matters are exchange rates, the skill and productivity of your workforce. The reason were able to compete, the reason germany is able to compete in a global world with relatively high compensation costs has to do with our productivity advantage. Thats the edge, thats the margin we want to hit on. By the way, on trump. Trump is so wrong about so many things including on the trade space. Hes wrong on china and japan. One thing he gets right is that the persistent trade deficit, which has just bean big negative since the mid70s. Thats a real problem. Even joe lavorgna the guy with most beautiful glass he said the external sector bad. Trump is right about that point. On Everything Else hes off. You still talk to the Vice President very of end . We talk on occasion. Is he ready if called upon. Have you guys whispered on the phone if theres an indictment or something is he ready to step in. That would be formidable unless you want to be his Vice President. Well, i cant go there. I wanted to see how you answer this. Youre thinking about it. The wheels are turning. No kidding. How do you answer this . I have no idea what the answer to that question is. I remain a tremendous and devoted fan and hes been through so much. I took his decision not to run kind of to heart. But who knows what the future holds. Exactly. Nobody does know. Right. Because even Loretta Lynch is a political shes an appointee, say she goes down the obama line that might not be the greatest thing because you might have a saturday night massacre. The Justice Department theres a lot that could still happen bernstein. Do you think about this . Sort of. I try to focus on the economics. I do think that interestingly getting back to trade you know who has a very interesting and pretty deeply articulated manufacturing agenda to help bring jobs back but to support the Manufacturing Sector is Hillary Clinton and one way she wants to do that is go after those who manage their currency to make sure it stays low. Weve never engaged in anything like that. Did you see this story that said president obama at least privately was telling people that bernie has to get out of the race . I did. Yeah. I did see that story. I did see that story. Look, i think the democratic side of the race has been pretty exemplary. For a guy like me who likes to hear people talk about policy its been great. The other side has battled about all kind of crazy things having very little to do with whats really what are the problems we face in this country. Is to me a state of the uniontive discussion like we had on that side immigration and free trade thats all they have been battling about. One of them is your main thing, free trade. Theres no there there. Thats global. Borders is global now. Its a centimeter deep in terms of the substance. Just hold on there one second, fellow. Im not sure its winning the day. Your side is arguing how far do we need to go to socialism, all the way and pass communism. You were the guy who just was complaining about corporations not creating jobs in america. You and i are on the same page, buddy. We are. We finish each other sentences. Jared, thank you. My pleasure. Hes jared bernstein. Not Richard Bernstein. Exactly. Coming up a look ahead at apples big event on monday. Will the next round much products from the tech giant boost investor confidenceiest again. Well ask an analyst and talk product expectations. Apple has rebounded very nicely from the 90s. Here are the futures at this hour. We built our factories here because of a huge natural resource. Not the land. The water. Or power sources. Its the people. American workers. They build worldclass products. And that builds communities. And a better future. For all of us. Because making something in america means so much, to so many. Weathertech. Proudly made in america. Box. Big week ahead for apple with their latest Product Launch slated for monday. This in addition to the tech giants fight against the fbi. Lawyers expected to make their latest argument on tuesday. Meanwhile the stock has been on tear over the past two months. Up 10 quietly edging back up over 1 haunt share. Joining us on where the stock is headed from here. What can we expect from moans Product Launch . Im going to throw this whole segment into disarray by asking a question about this fbi thing first. The story in the New York Times today, i dont know if you had a chance to see it which is that apples engineers, the individuals, if asked or if demanded by a court could actually build this piece of software may just quit and say were not doing it. What do you make of it . The equivalent of walking off the line. If you quit your job its not your responsibility. The stock has been creeping up over the last few months. Just about the time that the whole showdown with the fbi started. Theres absolutely sort of a pr aspect to apple fbi thing. Apple going out saying this is wrong, wrong for our consumers and our product. Frankly it was the fbis fault forgoing public. They made it a public thing. In the past apple has complied with court orders. Theyve done it before. They essentially opened up phones. They have done it before. Theres a difference. What they are talking about is writing new code or separate code. You think thats just a ploy . I think these engineers are very passionate about what they do. If it is, they are pretty smart because you couldnt gauge the country that is so worried about terrorism where that seems unamerican not to do it and win the pr battle im not going to do it. You assume something wont happen in the meantime. It all elevated. In the public sphere it becomes a different thing. The apple you love the rebellious apple. Way back in the day when they were innovating products and smashing down barriers brings that element back. But the reality is nobody wins. Apple doesnt win from a shareholder value. Some people who will support the company, other people who thinks its unpatriotic. Its a negative from the fact that they cant win. Well talk about the products and the stock but as an analyst looking at this company, how much of a risk factor is this lawsuit . You know, it always i view that when you get Companies Like google and apple they go to a certain size and garments chase after them. Lawsuits, think of what that did to microsoft. It hampered them for a decade. I view those risks are larger than People Factor into the stock. Lets talk about the products and can you tell me how you factored this in. What do you think well hear on monday. And how much does it matter . Right. New watch bands. In the fall when the phones come out that to me is potentially a huge announcement in terms of a huge impact of where the company goes. What happens on monday, big announcement or not . The four inch phone will be a sleeper hit. A lot of people like that form factor. That will help drive unit sales. Theres potential. The speculation is a new small phone. Tiny phone. Baby phone. Its not sort of a hold over. Not an earlier generation that they are lowering the price. This is a specifically design smaller phone to appeal to a broader market, right. Emerging markets, lot more people out there. I think were seeing maybe 400 im not sure its an emerging market. People want a larger screen because its one device they have. Apple has produced millions of four inch phones and then moved away from them. With small hands. Theres a political joke here. Lets see how they do with that because, you know, they certainly have had success with the larger screens. I want makes sense for them to roll out a new iphone with the same form factor that they had which they sold millions of. It comes down to price. The price point thats what they are going for. Four inch, yes. You always want a bigger phone. You always want more screen size. Ultimately it will be about the price. It doesnt matter. So while it stays a Hardware Company it will trade up into the news and then it will trade off after the event. The watches youre not so si psyched about the watches . Theres not a sense of urgency to push into these new areas. You got that thing, amazon echo, a siri . It works really well. Its awesome. I turn on my lights. It seemed awesome. Not this gadget thing. It looks at where execucomputin going. Privacy. Does it upload everything youre saying . It does. Amazon says they are making it secure. Microphone on all the time in your house. Theres a commercial where alec baldwin is getting on a motorcycle with a side car and his friend gets on the back of the motorcycle and he says get in the side car. Which weve talked about that. When i get a motorcycle, youre okay with the side car. Becky will be in the lead car ahead of us in the ferrari. Thank you guys. Good discussions. Where is the stock going . Right in line. Bold. Youre the only one. Thats bold. I would buy google over apple any day. I like it again. Didnt go straight to a trillion dollars. Apple will be like breaking sticks. Already there according to those other clowns. Wait for the apple electronic car. Long time before christmas. Coming in 2019. Two number 12 seeds delivering big on day one of the ncaa tournament. We have the highlights and what to watch for in todays games. Thats next. Coming up at the top of the bower, bridge wear associate president David Mccormick will join us. Box will be right back. Wildcaught alaskan salmon. From icy ocean waters. To your kitchen counter. Pure. Pristine. Each one its own delicious arctic prize. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door. Get your first two meals free blueapron. Com cook. Day two of the ncaa tournament gets under way in just a few hours. Already been some major upsets that have probably blown up a few peoples brackets although i dont know how far anyone would take purdue. Maybe baylor. 12 seed yale taking on five seed baylor on thursday. The bears down by one late in the second half trying to go for the win but the player falls and yale gets the ball back with two seconds left. The bulldogs win 7975. Mason made 10 freethrows. 61. First ncaa tournament win for yale. They were in the tournament in 1962 and then back in the 40s but never won a game. They take on duke on saturday. I dont count them out of that game. Although its going to be tough. In the postgame interview mason said dont count us out. University of arkansas little rock versus purr due. This goes to Double Overtime. You saw this happening. To get into overtime the guy hit like a shot from four feet behind the threepoint line at the top of the key. Boilermakers down one. Diving for the win. Hill stumbles and turns it over and trojans pulls an upset over the five seed boilermakers 8583. They face a team i love iowa state. I had them going to sweet 16. Thats why you undid them. After what happened last year. I like them. When we come back this morning we do have a squawk news maker. David mccormick president of bridge water associates. Worlds Largest Hedge Fund and at the center of a management reshuffling. How the firm is dealing with market headwinds and everything happening internally. As we head to the break take a quick check on u. S. Equity futures. After finally getting back in the green yesterday for the first time all year markets are up by 40 points. Hedge funds hurting new this morning noirms closing their doors than any time since the financial crisis. Can the trend turn around. Well speak with the presidepr of the worlds Largest Hedge Fund. Oil staying around its high. Jeremy siegels new market call. Madness in march. 11 seeds busting brackets and hearts all over the nation. Well get you up to speed. Final hour of 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 right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with becky quick and joe kernen. Were less than 90 minutes from the opening bell on wall street. Take a look at the futures. Dow looks like it will open up higher. Nasdaq up eight points higher. S p 500 looking to open up 2 points higher. Markets in europe, green arrows again. Meantime some news headlines. Yeah. Were involved in high level conversation. I can tell something. Buffett offered me the deal. A Million Dollars. Joe never cents one in. Hes so crafty. I lost the first game. He said he would nobody gets all, its impossible. And the lottery. He didnt sends one in. Buff fit will write that insurance. It shows what he likes to do. He writes insurance. I cant believe you didnt take him up. He takes in money for things that never happen. If you dont think you can. Win. I dont believe you didnt sends in a bracket. He mentioned it. He brought it up. Oil hitting 2016 high. Send me a net jet card. I think you have another brick in your future. 2016 highs this morning support by expectations of a production freeze by major exporters as well as some dollar weakness which wasnt supposed to happen. Brent crude front monthly contract touched 41. 71 a barrel. Highest so far this year. It seems like a nose bleed territory over 40. Shows you how far weve come. Russia holding Interest Rates steady today. Central bank warning that inflation risks remain high. Suggesting that the rise in oil prices could be unsustainable. Back here in the u. S. Well get the first read on march consumer sentiment. Expected to tick up slightly from february and trio of fed officials are speaking today. New york fed president , boston fed president and st. Louis fed president. What are rates in russia . We had something coming in inflation was coming down. 11 . This is what we want. Were so envious. They have inflation and 11 rates. They have plenty of ammo for the next recession. Tiffany, tuxry goods retailer beating on the top and bottom line. The stock is down by 1. 6 . It was up by 2. 5 . When he an analyst who joined us and said the company was beating lower expectations. Again you can see the stock is down by 1. 6 . Adobe systems the Software Company topping estimates and giving upbeat guidance. Digital media surged. That stock is up by 7 . Viacom said the company is getting interest from three Dozen Companies for a Minority Stake in its Paramount Pictures film studio. That stock is up by 3 . Bank of america out with news its adding 800 million stock repurchase program. Its being done to offset stock awards to various employees. Feeling the pain. More hedge funds closed their doors in 2015 than any time since the financial crisis. Hedge Fund Research says 979 funds closed last year. Fourth quarter of 2015 also saw the fewest new hedge fund starts and hasnt gotten any better yet this year. Assets fell by 64. 7 million. Markets have come back a little bit. Is this just a rough patch or the tide turning against these strategies. Mike santoli has that story. The shake out continues. The market has stumped socalled smart lately. Hedge funds are off to a brutal start losing close to 5 through february. Equity oriented hedge funds not credit orma crow. Stock picking hedge funds. Big Ackmans Pershing Square down 26 . That of course thanks to his outsize bet on valeant pharmaceuticals. The pain is much more widespread. The reason is vicious declines in very crowded trades. Goldman sachs tracks the stocks most heavily owned by hedge funds. This basket was down 6 yeartodate entering this date. A 2 dip in the s p 500. To add further insult the stocks with the lowest concentration of hedge fund owners were up 3 . If you dougt the stuff no hedge funds really owned youre doing better than thej funds. Of course hedge funds more popular shorts are outperforming the markets. Many funds are losing bolt ways. Momentum stocks that hedge funds piled into in 2015 have been hit hard. Beaten up economy stocks heavily shorted and shun. Activist Hedge Fund Managers are finding souring credit markets make their game a bit tougher. Its hard to say if this is just a storm, a passing storm but investors are starting to rethink exactly how much leash to give these funds. Well see where everybody lands ultimately. In the meantime we have a very special guest this morning, dave mccormick, the president of bridgewater. We should say of course a Big Hedge Fund but this is a fund thats been in the news a lot recently for lots of different reasons, lots of commotion about the culture, new hire from apple well talk about. Talk about John Rubenstein closely worked with steve jobs, become coceo of the company. We could talk about performance but we wont do that right now. Lets talk about this. Help us what weve been reading over the past two months about this culture of yours, some people have called it sort of a social experiment, if you will, with ruthless transparency at its core. Great. Okay. Thanks for having me. Well, first thing you mentioned, management transition. So this is something that has been under way for the last five years. We are in the process, bridgewater has been around for 40 years. Very successful. Were in the process of trying to transition from a founder boutique to professional Management Institution and the key thing to know about that were trying to make this transition from a Single Person to a group of people that can lead bridgewater into future and make it successful for the next 40 years. We read these terrible stories or seem terrible in terms of infighting. Almost sounds like lord of the flies kind of situation. Its hard to understand whats going on from the outside. So let me try to comment on our culture and let me try to put the transition in some perspective. In my career ive been in the elite unit in the military, in the tech world and so strong culture places. Bridgewaters culture is absolutely unique. Its very special. Its very challenging. Not for everybody. In fact its not for most people. For people that its for its a very special thing. Let me describe what is it. Its a culture thats focused first and foremost on excellence. The culture doesnt exist outside of the notion of creating an outstanding firm. We do that through radical transparency. Radical transparency im physically going to rate you in front of you on an app. Thats what were braegd. Theres lots of different ways. The key thing is youre trying to create an environment where people are speaking openly and honestly about what they are thinking and about the mistakes. Because we think the best way to have that High Performing Organization we talked about is lifting up the mistakes, challenges and weakness and dealing with them in a forthright high Sexual Assault way to learn from them and loop on that. Thats the key thing. Thats not an environment everyone thrives on. No. Its not. Were not trying to create a culture for everybody. Were trying to create a culture that can be, and i say this with humility, the most Excellent Firm in the world. Let me read you something. This is james comey who used to work at bridgewater. This is what he had to say. This is from a letter that he wrote that was picked up in wall street journal. He said i smiled and winced when i saw the list of leadership competences that had been omitted, humor, communication, teambuilding. He went on to say were very different people. Thats a good example. I worked very closely with jim. Jim is a good friend of mine. That excerpt was from an email. It goes this sensationalism and mischaracterization around bridgewater. That was lifted from an earn mail which was this incredibly complimentary email about the uniqueness of bridgewater and jim left because he wanted to pursue a career in public service. He subsequently went as fbi director and in front of the Senate Committee that was confirming him, senator grassleys committee he went off on a discussion about the unique culture of bridgewater and how many some of those principles could be incorporated in the fbi. Thats a good example where jim found lots that was special at bridgewater and many of us are there are the same. How much of this company now is becoming a technology company. One of the things we saw in the past week you hired a former executive from apple, your coceo which is not usually the type of people you see as your coceo. This is a totally different thing. Goes back to the first question this management transition. When you think about that transition not from an array to a Single Person but a team of people. You think about a group of people that are committed to that culture, a way of operating and abilities to lead and shape and create but also some unique expertise in skills. So jon is a great example who has been an incredible creator in the Silicon Valley with the ipod. Very successful working with steve jobs. Hes worked with an iconic founder in his own right. Then deep, deep technology expertise. If you think about bridgewater, bridgewater always had a huge emphasis on technology. The technology is integrated and critical to the success. If you think about our investment process as an example, we talk about being fundamental. Systemized and diversified. The fundamental is having a deep understanding of the cause and relationships. We build that understanding through decision rules into our systems. So theres Huge Technology focus within our Research Organization and the unique proprietary technology for our research people. Helping our clients think through their analytics. Jon we think will add to that. Long term, as ray steps aside or at least moves to the chairmans role is that the role hell ultimately take . Two things. We expect ray will stay in the cio role for the foreseeable future greg is staying. You here greg leaving this coceo post has no problem . Let me come back to that in a second. So, ray will stay in that investment role. Transitioning into a chairman role where that Management Committee i described that team of people together will manage the firm daytoday and he wont be as involved. With regard to greg, so greg is a 20 year veteran of bridgewater has been really critical to building the place. He sort of represents the essence of bridgewater. And weve had a plan for some time and a commitment from all of our parts to transition him to more of a focus on his investment responsibilities and try to figure what does it say about the culture. Usually when you have a big title like that and a title gets taken from you, you leave because you feel that you are not either liked or given the responsibility that you think you should have and youre saying in this case its different. In this case, in lots of cases ill describe in a minute, were trying build an olympic team. Youre basically trying to find the best use of each person to contribute in the way thats most appropriate. I need to talk to you as a person that probably should have come on and run for president or something or at least political office. Thanks for your service. You were an army ranger, ph. D. From princeton. You worked in the Bush Administration under hank paulson. Now you went to the dark side. You cant become a politician because you worked for bridgewater. Whats the Republican Party going to do . Whats going to happen . Youre watching this in horror. Watching this as a nonestablishment republican . Whats going to happen. I wont get into the politics of the day other than to say following. If you go from a Historical Perspective and like at whats happening in the United States, you look whats happening around the world when you have these prolonged periods of challenging Economic Times you have the kind of political turmoil were seeing. And immigration, far right parties you see this all over the place. Ultimately whoever wins in november is ultimately going to have to deal with leadership and values domestically and internationally. I want to say one other thing about the dark side im kidding. I know your. Bernie sanders, thats a corrupt system. All of wall street and capitalism is a corrupt system. I read that and i hear that and i think about i think about our business. I think about pride. Pride in our business. If you think about what we do, so we have 350 investors. In 40 years i was only there for seven. We generated 70 billion of profit. That profit for our investors goes to pensioners, teachers, policemen, firemen, its union members. And they are the beneficiaries of that. So its a worthy thing. Absolutely. That were doing. The engine for, wall street is the engine for callism that lifted more people out of abject poverty than any other system but were questioning everything. Were questioning free trade. Were questioning whether we want a capitalist model or socialist model or communist model. Is the Republican Party fractured . Can it come fwrak this . I dont know. Well have to see. Who is at fault, trump or the Establishment Republicans . Joe, im just not going to go there. Youre basically saying if youre you watch whats happening youre saying basically 40 of the Republican Party are imbeciles and they need to listen to us because we know best. Thats not a good way to run a party sit . Whoever it is has to lead. Thats the bottom line. Before you go, let me ask you a different question. Not a political question but a performance related question. Before this we talked about how all these hedge funds have not had the type of performance they used to have. What do you think is going on . We used to look at the bill ackmans of the world. All these guys had this title like image and right at the moment performance has not held up. What is that about . I dont know whats happening with the others. I just know, obviously us. And the investment processes, investment philosophy is really around that fundamental system of being diversified. Whats that resulted in, in our case two main strategies. Our alpha strategy which is where were taking active position in the markets. We trade 150 markets. Thats had over a 25 year period. 17 annually in the last nine years made money every year. This year its down a couple Percentage Points which very consistent with expectations. And our other strategy is our strategic allocation, Asset Allocation and thats delivered 8 return to 6r years and thats just basically capturing the risk premium that assets will provide you. That was down 6 last year which is very consistent with what you would expect when assets underperform cash. Our strategies are performing very consistently with what our expectations would be and we feel good about that. People like you dont go into politics. Politics are tough these days. Every four years we look around theres 300 Million People in this country. Its not something most people want to do, i guess. Having been in public service, having served in the government you put yourself through a lot. So i have huge admiration for those that run and huge admiration for those that serve. I agree with your points. David thank you for coming in and talking us through these headlines. Very tactful. He is. Coming up, big time bull is back. Wharton School Professor Jeremy Siegel will join us and explain why hes changing his call for 2016. Stay with us youre watching squawk box on cnbc, first in business worldwide. Bvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Wont keep you up at night. N know you have insights from professional investment strategists to help set your mind at ease. Know that planning for retirement can be the least of your worries. With the guidance of a pnc investments financial advisor, know you can get help staying on track for the future youve always wanted. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov coming up, Jeremy Siegels new market call. Hes more bullish and more bullish. First take a look. Look at the price of oil back above 40. Almost 41. Welcome back, everybody. The dow is back in the green for 2016 with transports leading it higher. Lets bring in Jeremy Siegel. Professor, its great to see you today. Weve been kind of setting this up as you having a different market call. You want to explain whats going on . Youve been very bullish for a long time but you do sound more skeptical at this point. What your thinking . Lets take a look at what happened. Even ive been surprised in how rapid the markets come back. But in january and early february there were two major negative forces on the market. One was the total collapse of oil prices. Down to 26. The second was a threat, a very real threat of a big devaluation from china which could set off a currency war in the far east. Now look whats happened justin last s just in the last four weeks. Oil is above 40 and china punished the hedge funds with a clam dunk. Well ride the yuan downward, put a Million Dollars and they said no youre not going to tell us what our currency is. Those two Deflationary Forces have spadissipated that. This week the fed i thought being much more dovish than i think the market expected. So now looking forward, if it werent for oil we would have the s p earnings up this year. If it werent for the dollar being so strong, we would have it up even more. So both now that weve had a recovery of oil and the fed being dovish which means that puts a lid, i think on how strong the dollar is going to be, we could see a rise in earnings. Now, i think we have to wait a little bit to see those earnings rise because year to year comparisons are not looking good. If we do get that stability, i think we can have that 10, 12, 15 gain that i thought last december that looked pretty bad call as we moved into february this year. Okay. So its a more nuanced view of the market. Still possible but youre saying a lot of thing have to fall into place and you have to see earnings carrying the water in order to get those new highs . I do think. Because, right now s p operating earnings which is a pretty conservative way of looking at earnings, you know came in last year at 1,000. I mean at 100. With the s p now over 2,000, you know, thats over 20 times operating earnings. Thats a pretty rich number. Not that crazy in a low interest world but certainly thats not cheap. If we can get earnings bouncing back to 110, 115 this year, then i think you have the platform for a goodyear. But i would like to see those earnings really come in higher. Otherwise i think youre going to be, have a lid on the market pretty much where we did have the highs last april. Jeremy, when is the last time you looked at the market and got concerned that it looked a little rich in value to you . Well, i mean, it certainly really very rich in value. Really was 2,000. There we were selling for 30 times earnings with Interest Rates much higher than we had now and absolutely at a peak of a 10 year business cycle. Now were selling at 20 times very depressed earnings which will bounce back if oil stabilizes, in a much lower Interest Rate environment. And to me that is not a scary valuation. Its not a cheap valuation but it certainly is not a scary valuation Going Forward for equities. But it does sound like a lot of things have to fall in the right direction in order for you to be telling people oil has to be above 40. I think we need to have the dollar not continue to rise. I think those two things happening could, could lady us to a good market. The Biggest Issue if oil falls back down and the dollar dont rise i see no way the markets can go forward. If the fed raises rates thats the type of shock to the market that could i know they said two raises i mean, you know, i mean core inflation is moving up. I was surprised they were as dovish as they were if core inflation continues to move up and if they do raise twice, thats going to be a challenge for the market. I think the market is expecting at most once this year, thats what they would be happy with. Two times increase. We have to see strong Economic Activity to get over that and still have a stable market. So, yeah, the fed could still be a challenge Going Forward. In terms of things you worry about, you mentioned the dollar if it picks up strength, you mentioned oil prices if they fall back below 40. How do you feel about the economy at this point . Does the economy justify the fed actually jumping in and raising particularly when you look at inflation that started to pick up, particularly when you look at unemployment thats below target . Well, you know, they lowered slightly their unemployment target. They seem to be, you know, 4. 8 rather than 4. 9 . We still have very strong job growth. There is no sign of a recession in the Economic Data we have. And thats always the major cause of a bear market. Earlier this year it looked much more likely and if oil stayed down at 26, wow, i mean. If the dollar kept on strengthening and emerging markets collapsed, our china looks like its stabilized, oil has stabilized. I think those two fors saying we can go another six months, nine months, 12 months with good job growth and an earnings bounce back. But i would worry about, you know, if unemployment goes down to 4 , and core rates of inflation go up well have a hike and that will put a lid on the market certainly. So i cant be wildly certain at this point. I feel a lot better than i did in early february. Professor siegel thank you. Thanks for having me. Some breaking news now from david faber. 8 32. Oh, my word. Must be big. Must be huge. 8 32. Hi guys and gals. Did want to update our reporting on that bid for starwood thats been going on and in fact can tell you this morning that anbang and its partners have reached an agreement to acquire starwood for 78 a share in cash higher than the 76 a share offer they previously made. Sources familiar with the situation tell me an announcement is expected this morning that, in fact, starwood has reached that definitive agreement. Importantly starwood has not signed that agreement anbang has. Its a fully financed offer to acquire starwood at 78 cash. Starwood hasnt signed it because they have to give marriott five days by Business Days in which to respond to this higher off per. Marriott deal is for 4. 92 shares of marriott and dollars 2 a share. Its value is certainly well below that of the anbang deal at this point. Sources familiar with the situation say theres an expectation based on conversations that have already taken place that marriott will counter bid to try to maintain its current deal to acquire starwood. And so that five day clock will begin very shortly and marriott will have that time in which it will try to construct a deal to meet or exceed the value thats being presented to starwood and its board of directors from anbang. They are not expected in any way be able to compete cash to cash. Marriotts deal was a lot of stock. Expectation is they will put in more cash. But the board may take into overall question as to whether that will create more value. So it looks to be ongoing here but right now starwood shareholders have to be very pleased. 78 bauks share has been the deal thats been reached with anbang and its partners. Theyve been aggressive in buying properties here. Lets say they go, i dont know, lets say they go up cash and 70 stock. Whatever. Would it have to be significantly higher than 78 . No. I dont know that it would be, joe. In these kinds of situations the board is going to have to take into account we think many of the synergies and benefits of this combined company to our Shareholder Base which will control a decent percentage of the Overall Company will eventually be worth doing that deal. Not necessarily. Its interesting, the anbang side may not get rid of many jobs because they will keep management in place from at least the early think cigarette whereas with the marriott deal youll have a lot of potential sfe synergies coming in. Lets bring in the marriott stock. It matters how the shares react. Shares have been coming down a little bit as david was talking about, some of this news. Okay. Up and down through the morning it had been higher by about a dollar or so before david came on and talked about some of this thus. David, break up piece, 400 million break super400 million. Once they sign. If starwood signs if marriott doesnt come back they feel is sufficient 400 will go to marriott. Well see you at 9 00 and look at that news to cross the tape. The founder and chairman of ever core roger altman will join us here on squawk box. I appreciate you coming by. Absolutely. The markets been pretty volatile lately. There is a lot at stake here, you know . Look jim, weve been planning for this for a long time. And well keep evolving things. So dont worry. Knowing whats on your mind and acting accordingly. Multiplied by 13,000 financial advisors. Its a big deal. And its how edward jones makes sense of investing. Ngo to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Donald trump tightening his grip on the gop nomination and some investors are beginning to wonder what a President Trump would mean for the stock market. Joining us now is roger altman. Roger good to see you. Youre a long time, obviously, long time friend of bill, friend ever hillary so, well take that into account. You say right now trump has or hillary has a 70 probability that shes going the next president. Where is that number from . Well thats from nate silver, for example and from they are the guy in illinois that said some of the small relatively liquid betting sites. It is from the sites that actually but theres no volume yet in those. Not much. So we dont know exactly what is it. Okay. Now we can get your view and you think because he has a lower percent of the black vote than romney he would need a lot of european educated white guys to vote for him and you think thats unlikely. I think the big word in the fall will be demographics. We know nonwhite share of the electorate is growing every four years. Interesting new book called brown is the new white and one statistic that stuck with he every day theres about 1,000 new white children born and 4,000 new nonwhite children born. So the composition of the Electoral College is changing. You heard these numbers before. If you look at the states on one side that have voted six consecutive times to the democratic nominee they represent 242 electoral votes. Look at the states other times six times row they want 108. The democratic nominee assuming a traditional one starts off with 242 of the 270 electoral votes. Only 28 short to win. A huge advantage which is fundamentally about demographics and all these states that used to be traditionally red, arizona, virginia, new mexico, colorado and so forth have been shifting for demographic reasons. Youre a republican nominee you have to be competitive in the nonwhite vote. Romney got 27 of that. He lost to obama. George w. Bush at a time when the hispanic vote was a smaller population, won 40 of it and prevailed by the smallest of margins. Does anybody really think donald trump with his obvious rhetoric is going to get a healthy share of the nonwhite vote . The answer is no. Is donald trump likely to become president of the United States . The answer is no. Could donald trump lead to strof jek down ballot lead to catastrophic losses, yeah. If you are correct and, im just going since im talking to you ill let everything you said stand then you understand the troubles and problems and quandry that the establishment Republican Party is facing right now. You can win without the trump 40 but youre saying that its unlikely to win even if you do throw your fulling weight behind donald trump. Thats your view. You have to say to yourself, i think, being objective. Trump has been very clever. You can win the presidency without getting a george w. Bush share of the nonwhite vote. He wont get it. Its obvious he wont get it. The chances he becomes the president of the United States is very low. Chances he turns out to be the 2016 version of goldwater are really very high. Who is more attractive, trump or ted cruz . Cruz is probably given the math you laid out. Its the same problem that trump has. The answer is if the four of us, you know, in some different planet owned the Republican Party we would want cruz because he doesnt present the chances of these catastrophic losses at other levels of the ticket that trump does. Why is that cruz will not cruz is a lower baited candidate. The risk with cruz is lower. Hes a conservative republican. Hell produce a reasonably close election. Wont be that close. But the chances that the republicans have for these historic losses at other levels i think are lower with cruz. Its me. At the same time, you know, i dont think hell win either. What if donald trump brings out new voters and vote down the party line . Joe talked about some of the speculation that perhaps trump could bring out a historically high white vote. The numbers you need are in the 75 to 80 range. Can anybody really imagine i dont have any idea what will happen because its a brand new electorate. I think the polls are off. Im not saying at your own risk play pundit. Given the record of the pundit so far. Here we are in march. Theres a chance im wrong. Youre talking about a deeply flawed candidate winning in a landslide. Somebody might be indicted before the election. The republican establishment is terrorized with this talk about denying trump the nomination. They are terrorized by this possibility that their gubernatorial candidates, state legislative candidate, u. S. Congress candidates get blown out in a landslide type of election on the wrong side youre lucky if youre right about trump. Youre lucky it was the year of the trump because you have deeply flawed candidate. A deeply, unpopular, that feel country would be anybody but hillary in any normal setting. Maybe you squeak by on that notion. You got a deeply flawed candidate who talks about somebody not embarrassing the presidency without a hint of irony. You and i dont agree on that. One thing that will happen if trump is on top of the ticket whether theres an Enthusiasm Gap or not with mrs. Clinton, the antagonism towards trump on the republican side will produce a big turn out. Thats what im saying. Maybe if youre right you pick the right year to run her. Anyway. As if i had something to do with it. Which die. . Youre an establishment democrat. Nice to see you. When we come back one of the most contentious tech policy issues. Net neutrality. Could changes be around the corner. Well tell you where the president ial hopefuls stand on this issue. Box will be back after this very quick break. Accelerating next. Hewlett packard enterprise. Welcome back, everybody. Now to politics. One of the biggest legislative concerns facing the Media Industry is Net Neutrality that issue whether broadband provi providers to treat all internet traffic equally. President obama has been a proponent of Net Neutrality one reason why fcc ruled in favor of a free and open internet last year. Many companies are invested in how this debate plays out. Those in favor wants to make sure their streaming video gets to consumers without restricts. Netflix, youtube and facebook. Those opposed are the broadband providers, at t, verizon and cnbc parents comcast they want to make sure they can manage internet traffic most efficiently on their pipes. Heres how the 2016 candidates stack up on the issue. Hillary clinton says that enforcing strong Net Neutrality rules would protect free and fair competition. Bernie sanders takes a more extreme approach. Internet fast lanes are grotesquely unfair. On the republican side donald trump is posed to it going so far as saying Net Neutrality will target conservative immediate why which misinterprets the issue. Ted cruz calls it the biggest regulatory threat and john kasich hasnt said much on the issue just yet. Regardless of the outcome of the election the debate over how broadband providers handle internet traffic is certainly to remain a hot button issue. Joe . Yes, yes indeed. That goes with some of those sentiments. I wont tell you which ones. Julia, thank you. When we return, Jim Cramer Jim free and fair trade jim cramer will join us from the New York Stock Exchange. Futures now up 50 again. Hundreds of crash simulations. Thousands of hours of painstaking craftsmanship. And an infinite reserve of patience. To create a vehicle that looks, drives and thinks like nothing else on the road. The allnew glc. The suv the world has been waiting for. Starting at 38,950. Let us get down to the New York Stock Exchange where jim cramer joins us on a day that is this the i guess do you have to go back to january 1st to have the dow in positive territory. Is that the last time we were talking about it . Yeah. Remember, januarys down, the rest of the year is down. All those people said that stuff. Where are those people . Those people who declared it would be a bad year because of january. They left or are talking about Something Else now. That was the prevailing wisdom. It was so strident people left the building. I think that was big mistake. Whats the deal with inflation . Like goldilocks . Perfect . Just right . I think so. If you strip out minimum wagewa down year over year. Thats what the fed is struggling with. Wage pressure from digitization, laying off people, outsourcing to mexico for 2. 10 an hour is keeping wages down. Thats why were all talking about trade. Jim, if well make it fair and balanced. If either if it either looked like Bernie Sanders or someone like donald trump or ted cruz, if it started to look like it wasnt going to be hillary, we heard from roger altman, its 70 hillary, and the republicans will be lucky to hold on to the senate or governorships or state legislatures if it goes that way. If it started to look like it was going to be an outlyer candidate, like a Bernie Sanders or a donald trump, how would the market response . Sanders probably not because of the superdelegates. I think theres still a disbelief that trump would be as antibusiness as he says he is. The reason that is is because hes a business person. When will he resign from trump the way Michael Bloomberg designed and took a hiatus . The skepticism about this guy, he has to read that karl rove article the other day, which talked about what it means to be president ial. I think the business world, when i say this, im hated on twitter. This world is welcoming Hillary Clinton because she kind of understands business. A long as sanders stays in, she will be antagonistic. Thats the state of politics on both sides. Trump wont do what he says, we know hillary wont do what she says. We discount both of them. They wont be as bad as they say they will be. When obama came in, talked about fat cats. Yeah. He actually followed through. Yeah. He got in, he was much more vitriolic. He didnt disappoint. He went full bore. Exactly. Thanks, cramer. When we return, transcanada buying Columbia Pipeline Group. We have the details and the stocks to be watching. Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Because you cant build the business of tomorrow [alarm beeps] the intelligent, allnew audi a4 is here. Aint got time to make no apologies. Trolling for a gig with cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. Jpmorgan is raising the Stock Buyback Program up to 1. 88 billion. Maybe thats just jamie writing another check. I dont know. Thats in addition to the shares authorized for repurchase by the bank last year. He can do the one, just not the 0. 88. He has about 1 probably. Thats what they say. Thats what they say. Transcanada, the Company Behind the controversial keystone excel pipeline i guess we did make it controversial. Thats been going on for years and years. Buying Columbia Pipeline Group. Not really controversial. If it wasnt, it would be built already. Consider the source. They will be buying them. That does it for today. Right now time for squawk on the street. The yale fight song as the upsets begin. Good friday morning, welcome to squawk on the street. Im carl quintanilla, with david faber, jim cramer. Stocks back to break even for the year, on track for a fifth week of gains. David has starwood news. Well look at tiffany and adobe and more. Europe is green but will be more mixed for the week. Plenty of fed chatter. Three officials set to speak, oil hanging on to the low 40s for the First Time Since