Transcripts For CNBC Squawk Box 20160512

Gain of 44 cents. 44. 67 ber peril. Brent at 48 this morning. And out of brazil, the senate has decided to proceed with a impeachment of dilma rousseff. Vice president will replace her during the trial and permanently if shes guilty. 180 days guaranteed that shes out . Yes. While they undergo trial. Trial. And then they have a vote and the senate has to vote by twothirds to push her out permanently. We think based on the trial. But nobody thinks the trial is relevant. They think they already know the count in advance. And interesting the way the stock market has reacted. It was at one point maybe it still is the best performing market in the world year to date. Trading on her eventual departure with the idea that the Vice President is more market friendly. Almost anybody could be more market presently than dilma rousseff. Whats up . Closen on fifty in oil. The market was down 200 and supposed to be corelated. Doesnt work anymore. And then. Where did they get that . Squawk box. The diamond banker. The diamond calls someone a jerk. Put toint front page of the money section. But calls Community Banker a jerk. The perspective is he wrote, jamie diamond wrote an op ed i think on april 5th or around there if my memory is right. Sort of as an olive branch. It was at least portrayed as between big banks and Smaller Banks and a time when big banks are sort of, you know, continuously under fire. So jamie right this op ed and the head of the Community Bankers association responded with, i dont know, an interesting comment. It said just because jamie diamond says, you know, lets sing kumbaya right. It was take your olive branch and shove it yes. That was his response yesterday. Said that guys a jerk. You know him right . I dont think ive ever interviewed him. Hes been on a million times. Long time. Over the last ten years camden fine, probably been on 40 times on this show. Long time friend of squawk. You cant use jerk but maybe shes got a name for jamie we can elicit and then we can really get this thing going. Reality show for i will see your jerk and raise you a can i say putts . Yank i dont think you are because it means something. Is it so offensive were not supposed to say it on television is this. Yeah. Lets just really . Lets just move on. A stupid or worthless person engaged in inconsequential or unproductive activity. Keep going. I was gonna say is this the third or fourth. Only gives me those two. Oh the yiddish. I see. Okay. Glad youre with us. [ laughter ] okay back in the u. S. A pair of economic reports top the agenda. Weekly jobless and april imports both out u out at 8 30 a. M. Import prices expected to picked up last month after the relative will flat showing in march. Cleveland fed president , Loretta Mester and eric rose again and Kansas City Fed pretester george all fomc voters this year. Before the opening bell were going to hear from nordstrom and shake shack then after the close. Remember yesterday we were down 40 in the futures because of disney. And then macys hit. And he we closed down 40. I couldnt believe the market was that shows spread right . Well that shows you early on it does not necessarily immediately reflect what is going to happen in the regular session. There is not enough volume really early on. Since the recession. Right. Thats how bad it was. Right. And remember we keep i dont know we keep whistling past the graveyard. First quarter gdp then slowly came down 5 . No no no First Quarter is always week. No no no. Jobs are real weak. Makes you worry a little bit doesnt it . East with your does wrong time of the year. Gonna to talk to some fellas that coming up here that things arent that things are pretty tough out there. Hes our retail guest. He has a name well tell you later. Make up. Is there any powder left for me at all . Its all gone. They sent out for like emergency, over to duane reed to no. To try to. I was gonna wear your wig but. Pull on it. Go ahead. Touche. I have seen the leaf blower test. I did. The leaf blower challenge. I did. Yeah. The only people that call me folicly challenges are ones that just wish i was. And if that doesnt work they say get a new colorist. Corporate news, which is more important than this other stuff. Aetna says it plans to continue its Obama Care Health Insurance Business next year. That is a headline. Here is an Insurance Company that actually is going to continue to be in obamacare. And it may expand beyond the 15 states where it currently participates. Earlier this year aetna reported obamacare business has operating losses about 4 in 2015. Rival United Health one of the largest said it will exit most of Obamacare Exchanges next year. Linn energy, the oil and gas producer has about 10 billion in debt. Founded in 2003, went public in 2006. So it is a it is leaving. It is gone. 13 years and the epitaph. And nissan is reportedly gearing up to take a stake in mitsubishi buying out about a third of the company in a deal worth nearly 2 billion. After of course mitsubishi admitted to overstating the fuel economy of a number of its models and the purchase would make nissan mitsubishis largest shareholders. They say it gets like 45 miles to the gallon and its only like 18. Yeah. Unless you are going downhill. Much better. You know when i went to school. You walked. It was uphill. Both ways. Exactly. In the snow. There are golf courses, ive seen them. Spy glass. It is all uphill. Weird. Mails sis. Mines Investor Confidence on the street. And wreaking havoc. Well hear from kohls and ralph lauren. And the some more stuff. Did you know what was going to happen yesterday. I thought macys might i was expecting 4. 5. Did i know it was going to happen directionally . Yes. How did you even know directionally . Because i spend my life in Retail Stores and talking to retailers. People are buying apeapareap what are they buying. We know millennials are buying experiences. Are they naked during the experiment os just wearing the same dirty old clothes. Millennial have as many pieces of apparel in their closet as we did as baby boomers at the same anyone. It is not they are not buying clothes. They are buying them for a heck of a lot less than we are bought them for. What they pay for their clothes is dramatically less but they have just as many units in their closet. So lower average ticket . Tfrs not. It was traffic. But that traffic went to h m, forever 21, you name it. Places that sell the product one heck of a lot cheaper. Fashion these days. Not just fashion. Tjx. Ross stores. Burlington stores. All the prices off price also are taking share. Are they going to have great reports . No because all know there is too many retail right now. And we all know the biggest gain ner apparel is amazon. So online is really taking share. So between all of the factors and the worst crummy weather for the last year weve had for retailing, none of it worked. So not bad weather but bad for retail. A warm winter and cold spring thats awful. Rained for for like ten days in a row. The market cant go up till it stops raining. There is a data point. 48 square feet of retail space per capita. Depends how you calculate it. But the point is on an apples to apples basis we have twice as much per capita retail space as any other place in the world. Uk is second. They are half of what we are. So yes, we are the most overstored place in the world. What should that go down to . Its going to have to go pretty fast because that doesnt even include whats going on online. If you did that you would be up another 10 or so. So over 50 square feet. Its gonna have to go down by at least half at some point in time. I believe over the next 1. 5 yea 13. 5 years. How much in trouble, literally, are macys and anchor stores in the mall . Department stores . Well they are all in trouble i dont sales not going to go broke. Macys is very healthy. Great cash flow. It is going to monetize the real estate. As of right now they are probably a biesmt however if you look into the future, not that far we have 1100 enclosed malls in erk many. We probably need 700. The top 250 will do find. The rest are going to struggle. Macys had 800 stores. They probably need 500. Kohls and pennies between them have a lot of stores. Doesnt mean were going out of the mall business but we are going to need a lot less of them. Simon Property Group for example, that stock was at an alltime high two kay days ago. And they own a lot of malls. Todman mall gp mall, they are winners. Those malls are gaining market share. The bottom end of the spectrum, the c plus, b plus malls they are struggling. Could go out of business . They are going to go out of business. It is just a question of how was and what rate that happens. Purely location . No. Its volume, its anchors and location. Depends how good the mall is. Garden state, roosevelt field, king of prussiprussia. Why would you go anywhere else but the short hills mall. Yeah but the last time ive been in that mall i cant remember the last time. But we dont go to the mall. If i haed to goth to mall that would be the mall i go if thats why i gould. Now i go to the virtual mall called amazon. Those malls are gaining they are running positive comps. Ive been there you know why. Apple store to buy charger. They have every store. To jans point. They have every store that you would. What did you call it . Fast fashion . Why did they say sign him to me . You said that and it immediately impressed me and i havent said another word. I impressed you . Stla youre not a macro guy. Of course i am im a rae re tailer. You have to be. There is a consensus that were going to do 2 this year. No way no how we wont it is what we do every year and therefore we dont need to worry that the fed is at zero and we are going to go below two where they have no bullets left. Will we do two . Or can the consumer dictate that weve got a slowdown. The consumer is fine. They have money and more wages and there is nothing wrong with the consumer. Were selling cars like crazy. So macys does that and it is not a recessionary. That is not the real problem. The problem is price transparence to other modes see it spread to the rest of the market. If you dont think macys is reflective of overall gop. I think walmart is going to be fine by the way with their numbers and. They are the economy. Okay. So was it a one day reaction in the market yesterday . Pointing out that when macys numbers came out the futures numbers didnt go down even more and why not . To januarys pois point it is reflecting over overall. The wapner top. Discussion of the diamond bottom. The wapner bottom is better than the kernen bottom. Yeah dont try to pick a bottom. Its disgusting. [ drum roll ] thanks jan. It is a hard act to follow, you know. And he even had a rim shot. [ laughter ] no heed wi ed withad a drum. Isnt that what its called. [ drum roll. In our next guest is o ophthalmoptimis optimist optimistic. Accented snare drum back beat. That is what a rim shot is. Tell our viewers what you thought it was. I thought it was something to do in a basketball game. That is a ring. It is a ring shot. Hi ed. On that note. Do you want to weigh in in on this . No please dont. Just finishing this retail conversation. The market seemed to react through the day directly to that. How concerned should we be . I just heard i think it is really a micro problem rather than a macro problem. A shift in the share of spending not necessarily the consumer is in trouble. I think the consumer will continue to drive us higher. Not a tremendously fast pace. I think twoish. Not that things are great but were continuing to move positively. How does the market feel to you. 1810 to 20080. Come off a little bit there. Does it feel a little precarious position . Have we come too far for no apparent reason. Were basically at the same level as in november 2014. So weve been flat for a year half. And the main reason is simple is that earnings have been flat for year and a half. So the key this year is better growth in the second half of the year which i think likely to happen. Do you think the bottom is that bottom in . 1810 . Right. Just mathematically, the market volatility is about 20 a year so there is a chance it will go lower than that at some point. But i continue to think if im right that earnings are better in the second half, well work our way higher between now at end of the year. What do you think got the market from the diamond bottom to where we are today. We started the year off and a whole bunch of scares came out. Another china scare. And well probably get another one. But things got better. So you have a bunch of things early that dropped prices down and then people loorked around and said the market is a good buy. So fundamentally the dividend yield on the s p is well higher than the 10 year bond yield. You think it is fundamentals. Yeah. The flat earnings we had down earnings in the First Quarter but sequentially if you look second versus first were going to see probably about 8 to 10 jump in earnings. The head winds for s p earnings from Energy Prices being low and dollar strong are dissipating. Both of those things reverse, the weak oil and is it strong dollar. But we ran out of steam trying to get back to the old highs. The reversal of those two negatives didnt get us back. Seems like weve run out of steam on those two things reversing. I think it takes a little while for that to work its way through earnings. Again, year over year, Second Quarter would still be lower but on a sequential basis would be up and in the second half maybe 5 or 10 of earnings. Well still have a lot of volatility because the concerns about china and other things have not gone away. Just the fundamentals have been weak for a year and a half. The market can withstand a fed hike whether it comes in the summer or fall . I think the fed will probably hike at some point this year although i think it is going to be tough to get over 1 because the National Rate i this i is quite low. There is a lot of capital trying to find safe returns but i this i we can get buy thy that. If im right valuations are a little high but not high november to stop us in a world where other things are also expensive, capital has to go someplace and you get a better buy in stocks than other assets. Coming up only in texas. 63 million for a football stadium. That would be a High School Football stadium. Thats next. Plus Vladimir Putins performance dropping sharply from last year on the ice hockey rink. You know it is always good video with vlad. Squawk box will be right back. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov welcome back to squawk box. Weve moved chairs because the subject matter over here is m e more. Decorum. And over there we try not to engage. Very serious over there. Dicey over there. So were going delve into this whole rim shot business. Actually were not. Its a snare. Thats all it is. Agreement on a 62. 8 Million Dollar football stadium for high schoolers. But what is the name of the show . Friday night lights. Football in high school in texas. They got a lot of oil money and everything else. Look at that. That is nice. Beautiful. Looks 62 Million Dollars though. What if they have a crappy team . Something tells me they dont. Right. Bunch of stiffs out with a stadium like that, right is this. High schoolers some of the best years of their life. Are you allowed to play for eight years in high school . No 23yearolds on the no. Voters approved a bond program that included more than 50 million for the stadium and event center. It will seat 12,000 people. That is amazing. The districts current stadium seats about 7,000. But the School District has nearly 25,000 students. It is expected to be completed by next year. That is pretty amazing. Infrastructure at the local level if they vote for it and approve it. It is wrapped in a 220 million bond is there may be things you liked in the bond and other things you didnt. You are stuck with the stadium. I love this story. Its within called the future of transportation. Hyper loop one unveiled the prototype of its high speed pod. Tested outside of las vegas on a track about a third of a mile long. The goal is to transport people and cargo in pods at speeds up to 700 miles an hour. Trying to prove it will work. Wants to go one under the United States going east coast to west coast really fast. I who you would love that. Its a fast train. But you travel the speed of sound. Its a fast train. Yeah. Really fast. But a really fast one. I know. But you just want the Structural Integrity of the track to remain like that the entire way or else that is what squares me about trains, versus planes. You can hit turbulence in planes. But if you hit one break in a track. As weve seen. As weve seen. And that momentum there are 30 cars behind and it it is an ugly you better have that track spotless. Yeah you better know about these structural integrities. And california . The slightest tremor out there . You know. Scary. That could be interesting. Like a roller coaster. Just got me worried. I was so excited. Well you just buy into this stuff without thinking about you know. Arent you skeptical about stuff at all . I dont know. Im hopeful. I want to i do not. He wants the sing you later to happen. I do not. Sing later. Singularity. Ive already reserved your avatar. I want to be you. I want to walk around you as you. In this case i really do mean it. Russian president Vladimir Putin took to the ice this week. Faced off with former russian nhl players in an exhibition match in the amateur night hockey lead in sochi. Notched one goal and two assists in his teams 95 victory. His team won . Shocker. Shocked. The guy was a bit of a slouch this year. He had 8 goals last year. Only, what, one goal a coupling of assists. The guys a good athlete though. Right . As he tells everyone, yes. Weve seen it. Look at him. Come on. Vlad can, look hes pumping it there. Hes a trainer there. Guys got skills. He did have his shirt on in hockey. And he shoots of course. Kgb, of course. One handed. Come on. [ eye of the tiger theme song playing ] is there anything he cant do . During his years as russias leader putin has frequently displayed there it is. You cannot do a vlad story without that. Right . Ive never done that. Never done that . Ridden my story was going to be on this guy hes 25. Got a dating service if you want to marry someone from canada in case trump gets elected, so you can move to canada. I want a pledge from all of these people who they they are going too move. They never do. If you make a pledge i you should have to put down a down payment. A non refundable payment. Maybe a pledge wouldnt work anyway since their signature doesnt mean anything anyway. No. But lena dunham. Alec baldwin. Make them pay. They all need to move. When they say they are going to move. Move. Coming up a kud between big banks and Community Banks. Jamie diamond called a jerk during his squawk box interview yesterday. Camden fine, big jerk, is going to join us next. [crowd cheering] i could get used to this. Now you can. When you lease the 2016 es 350 for 329 a month for 36 months. See your lexus dealer. Because you cant beat zero heartburn i take prilosec otc each morning for my frequent heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. charge music you wouldnt hire an organist without hearing them first. Charge so why would you invest without checking brokercheck . Check your broker with brokercheck. War is on between big and Community Banks. Long time Community Banker camden fine rejecting a wall street journal op ed by jamie diamond titled large banks and small banks are allies not enemies. Fine says diamond is trying to use small banks to help pass his own agenda in congress. We spoke with mr. Diamond ceo of j. P. Morgan chase yesterday. This is what he had to say. I think the guy who wrote thats a jerk, okay. The fact is stating a fact. We are one of the biggest banks through Community Banks. Joining us now to respond is camden fine, independent Community Bankers of America President and ceo. Welcome to squawk box. Good so see you again. Thanks for having me. Good to be back on. Trying to figure how we got here. Seems as though it started with a diamond op ed on april 95 which said large banks and small banks are allies not enemies. You said just because jamie diamond says lets sing kumbaya doesnt Mean Community banks are going to line up like a greek chorus to which he responded calling you a jerk. Why did you receive his op ed in the manner in which you did . Well dpirs first of all wow. I guess we found out yesterday that if you have a policy disagreement with mr. Diamond you are a jerk. That is his response . Really . I think he was channelling his inner mr. Potter. Because mr. Potter said something akin to George Bailey in the move it is a wopder life because potter wanting to turn bedford falls into the potterville i guess jamie wants to turn america into the jamieville and the independent Community Bankers of america have a legislative agenda. We have an agenda called the plan for prosperity, which is a whole package of Community Bank regulatory relief items and whether the wall street too big the fail banks really want do is glom on to our agenda to try to push through items that they want. Well, if jamie really is serious about wanting Community Banks or feeling sympathy for Community Banks to get regulatory relief, then what they should do is let our legislative package get through the congress and then they can promote their own legislative package and see if they can get that through congress for themselves. That is all were saying. He said yesterday right here that im completely sth lly sym to the communicate banks that some of these regulations are killing under the circumstances. These regulation error meant for large banks. I agree with that. I want some of the burden resident deuced on theme that doesnt sound like a guy wanting to pick a fight what is wrong with that comment . Nothing wrong with that comment. That is a very nice comment. Are you saying hi disingenuous in making it. Words where just words. What we need to do is see actions, scott. What we need to do is is see that wall street will stop trying to impose their agenda onto the Community Bank agenda to try to get their agenda through congress our back. We have a legislative agenda called the plan for prosperity can you fif give us an example how the big banks are trying to kblom on to your elective agenda. Well there are a number of regulate issues dealing with sifis. And they have their legislative agenda. There are a number of items that impact them that dont impa immateriimpact Community Bank and they want those items of their back. That is fine if they can get their package of their regulatory reluf through god bless them. But we have a package and we have broad bipartisan support to get our package of legislative regulatory reforms through congress. But the sifis do not have broad legislative support. It becomes partisan all of a sudden. So we want to get our package through. Shouldnt your arguments and anger be directed towards the regulators . The Treasury Department . Critics of banks . Why mr. Diamond specifically . Im also wondering just why him . Why hes become the face of this for you . Well he seems to be we dont have anything against jamie diamond. In fact im said some very nice things about him over the years. I think hes an excellent ceo. What we have a problem with is too big to fail banks trying to leverage Community Banks to get their legislative package through the congress. That is what we have a problem with. Why is it jamie diamonds problem . Is that not the regulators issue . Why arent you spokesperson. Jamie seems to be the i dont know if hes formally but at least informal lally kind of th spokesperson for the mega bank ceos. At least hes out there a lot. So it tends to be things he says and writes. We are upset with the regulators and we express that every single day. But to get those things changed you have to get congress to enact legislation that will ease the regulatory burden. Thats all we want. We want our plan for prosperity to get through the congress. On the other hand there is another issue here. And that is an issue where less than 2 of the nations banks, less than 2 of the nations banks control more than 70 of the nations banking assets. That is not exactly a balanced financial system. And so you have a discrete set of banks that are not subject to normal market forces. The government is forced to step in and bail them out with taxpayer money if they make bad decisions or have wrong doing. You have to understand that nearly every regulation under which we suffer was triggered by some egregious act or legal violation by a mega bank and we are suffering those consequences. So what were looking for is a level Playing Field where all banks are treated the same. Understood. Appreciate your time this morning. Thanks for coming on squawk box box. Sure. And thanks so much for having me. Appreciate it thank you. He doesnt seem like a jerk. He is the president and ceo of the Community Bankers association of america. So mag lev. Magnetic levitation and there are mag lev trains so it is above the structurely above riding a rail. Wouldnt have to worry about the track going bad. In an evacuation tube you could get up to 4,000 miles an hour. Once you accelerate to up to that. But it counteracts gravity using magnetic forces and one w once you are at that speed you dont need any energy. You just need wind resistance. You are getting converted. I am. Im getting excited. But i want to go somewhere though. I dont need to get home in like 30 seconds. Would be nose though. Coming up vimeo advertising and competing with adams. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. From icy ocean waters. To your wildckitchen counter. Mon. When you cook with incredible ingredients. You make incredible meals. Get your first two meals free at blueapron. Com cook. A rumble in the streaming space. Amazon unveiling a new ad supported video service, intensifying rivalries with the youtube and another content sharing site vimeo. Joining now is ceo of vimeo. Good to have you. Good morning. So you are like youtube except that people have to pay for stuff right. Vimeo has always been free of advertising on the site. So youtube has advertisements. You do not. Correct. But the tradeoff i have to pay for stuff. For creators they pay us to get upgraded version of the content and we also empower them to sell content however they wish. We see a world where monetizing with advertising is one path. However for a lot of creators selling their work is actually the best way to earn the most revenue. So i make videos for whatever reason about whatever. I can put them on youtube and then hope they get a lot of viewers and eventually i get advertising dollars because of the advertising structure. Or i can go to you and i can decide to pay however much i want . Exactly right. And when you think about it from the creators perspective. Earning 10 dollars. You have to stream something thousands of times to earn 10. Whereas you can sell it one time and eastern 10. Vimeo has a large marketplace to launch your own channel in an ad free experience and charge whatever you want for recurring month subscription. Are you getting enough eyeballs to make it worth it. We Just Launched the subscription feature on monday. But if you can get even with amazon and others. All this other free stuff . Just getting into this game. The new wave were seeing emerge now is were about 10 years into the ad supported e eco system in anline video and just starting to see the billions of dollars move from traditional into online. The major second wave is going to be paid premium video. Were just now seeing consumers ready to pay for content and just seeing creators be in a position to be able to charge for it. So were focusing on that second wave of premium paid video. And to a certain extent youtube is going after it. It is a massive opportunity and we are just maybe a couple of years into it. 200 bucks a year. If i do the 200 bucks a year does that get me access to everything . The 200 dollars a year is for creators to have our vimeo pro account which allows them to sell. They will be selling content for individual piece for so you make money by the 200 bucks a year. And then a piece of whatever they make. Exactly right. What percentage do you get of that cut. We give 90 back to the creator for content they sell attractionry and for subscriptions were taking just a dollar per creator per month. Amazon by contrast is taking 50 of the economics. What volume do you have to get to be profitable. We dont disclose any numbers for vimeo. Do you mean on a creator base or for the company . A number that when we get to x were going to break even. We dont break any of those out. What sort of role do the facebooks the snap shats the periscopes play in all this . Those are direct competitors . I dont view them as direct competitors. They are not as good places for creators to build a business. And i think it is going to be a combination of free content that people are distributing with low, for example, and probably know monetization and we ultimately think those are going to be driving into like those w are empowering. The youtube experience feels junkie. You look for something and a lot of people put on false labels because they know youre interested. I assume that goes away under your model. Who pays 200 a year to post junk. Thats right. Weve always provided the highequality environment and vimeo is committed to giving people i still dont know that i would pay up. But it looks interesting. Coming up, an equipment maker looking to gain a foothold in cuba. Why caterpillars ceo says the company is ready to move into the cuban market. Wow. Hes here and hes not here. The ceo of caterpillar met with cuban ministers in havana wednesday. For years the company has been lobbying for a lifting of the u. S. Trade embargo against cuba. And caterpillar could move quickly to sell products in the country. As a result of falling relations between u. S. And cuba caterpillar has picked an official dealer with cuba and is in talks to get a license to sell products despite the embargo. You were there. Yes. In cuba. We can assume the earthmoving equipment is in the same state as the sewing machines . Yes. Average automobile. Yeah. Theyre using tractors that are like horses. They use horses and plows to till. Yes. Socialism. Or is that communism . Ive never been able to distinguish the two. Both believe the government should be in charge of distributing resources. And it involves equally shared equal suffering. Equal shared misery. Yes. Quick story, the guy in charge of the reforms said well never have land reform in cuba because, if we did, the farmers that were more productive would get richer and they would buy the other land from the farmers who were less productive and that would be unfair. Who needs that. They would rather have lower productivity in food youre preaching to the choir. Im feeling the bern. Thats the last thing we need. Some people doing better than others. Higher productivity would be awful. Forget about it. Coming up, our guest host will be you cant agree that socialism is bad . Of course i can. Why do i need to even comment, though . You can be sensitive. Why do i need to comment . Some people dont believe socialism is bad. Some people dont believe social itch is bad. Its amazing. Good for them. I mean you could get elected someday. You wouldnt take medicine without checking the side effects. Hey honey. Huh. The good news is my hypertension is gone. So why would you invest without checking brokercheck . Check your broker with brokercheck. To embrace or not to embrace. Donald trump, that is. That is the question today on capitol hill as the speaker of the house, paul ryan, and Republican Leaders meet with the presumptive nominee. Well talk to former Vice President dan quayle and tennessee senator bob corker about the big belt way summit. The dow coming off its worst one day drop in three months. With more shopping giants reporting and new data on jobs ahead, can stocks stage a rebound . Well break it down straight ahead. Its rare to see a pitcher hit a home run in a Major League Baseball game. How about hitting two . He swings and flies one to deep center field. Back goes peterson. Near the wall. Its out of here thors big night in hollywood as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc. It was her first in business worldwide. Im joe kernen, along with Michelle Carusocabrera and scott wapner. Both of you and scott wapner. A fun hour. Its in the past. That was the previous hour. I was on the site that is the epitome of capitalism. Our guest host is a cnbc contributor Walter Isaacson. Well hear from walter in a moment. We were talking about cuba and socialism. You were not paying attention because you were on stub hub. Trying to get hamilton tickets. You said whatever anyone wants to do. I go, it could affect you someday. You werent paying attention. You want to go on record saying you are not a socialist. If it would affect me right now and make me not have to pay 800 a ticket for hamilton i would disagree. With socialism the tickets would be free but nobody could get one. Lets check some of the futures at this hour. Theyre up wow. Theyre too expensive. I cant pull the trigger on these things. For what. Hamilton. Theyre like 800 apiece. Its good, dude. You get what you pay for in america. Thats how it works. Its incredible. Incredible. I want to go see it. Because hes incredible. It is good. You should definitely go see it. Okay. We have breaking news out of brazil. The senate has voted to proceed with an impeachment trial for president dilma rousseff. She will be suspended for 180 days during that trial. The countrys Vice President will take over during the time. And will replace rousseff permanently if she is convicted of using fiscal tricks to manage the federal budget. The bank of england, as expected, voted to leave Interest Rates unchanged. The consumer in focus following yesterdays retail wreck which saw weak earnings from macys weigh on the sector. Kohls out with its earnings. Missing on the top and bottom line. Nordstrom and party city are out after the bell. Its a big day as well for fedrelated speeches. Cleveland fed president Loretta Messer and boston fed president earn rosen gren. All three voting members for the fomc. A good lesson there. People forget, you know, adam smith, economic supply and demand. Were back to hamilton . Yes. If you kept them at a hundred dollars or 50 a ticket there would be a fiveyear waiting list. When you let you let price clear the market. And match supply, it does go to 800. If you dont have 800 thats where you come in and do things and the government might be an appropriate we dont have to worry because hamilton is going to washington. So it will increase think about when you do rent control. No one can get the supply even think about health care in certain places where the doctors arent increased by the amount of demand and where its a twoyear wait to see a specialist in that case, when you dont let prices clear. Its a really good i think you have been very instructive. Thank you. I want to thank you for not paying attention to what we were saying and doing your own thing. It worked out well. My pleasure. Speaking of not letting price clear the market, aetna go ahead. Aetna says it plans to continue its obamacare Health Insurance business next year and may expand beyond the 15 states where it currently participates. Aetna reported the obamacare business had operating losses of 3 to 4 in 2015. United health saying it will exit the Obamacare Exchanges next year. An apple report generating buzz. Denying it plans to kill off the itunes service. It was reported theyre considering aggressively ending itunes sales or prolonging the phaseout. Some reports saying there is an internal conflict within apple on whether it should put for emphasis on the apple music service. Shake shack is looking for 5 Cents Per Share on revenue of 52 million. Shares have had a tough year, down about 47 . Wow. Look at the peak to the left it will disappear soon. The dow coming off its worst oneday drop in three months. Its been a roller coaster couple of sessions for the industrials. Whats next for the market . Lets ask jpmorgans strategist. Gabriella, whats more representative of how we should feel about the market . Yesterdays 200point decline for two days ago, 200point gain . Neither one, lets say. I think things are not perfect. We shouldnt expect 1 increases every year every day. But it is also not as dire perhaps as it seemed yesterday. We expect a little bit more stability in the market, a little digestion for the next few months until maybe we get better data out of the next earnings season. I thought you were going to say based on the last couple sessions more volatility. It can net out to more stability, lets say. But on a daily basis we can get big moves. Thats because sentiment is so incredibly i wouldnt say bearish but reticent. Neutral. You can get big moves intraday. Doug, where is the market . Where we came back from february 11th. 1810 on the s p to 2080. Almost the top. Where were looking at driving market. The four cs. Commodities, currencies, Central Banks and corporate earnings. The first three have been off the table. Currency, the usa dollar is big news. Took pressure off emerging markets. Now putting pressure on the euro and yen. Commodities and oil prices coming back and settling the market down. China did a trillion dollars of monetary and fiscal stimulus in the First Quarter, that lifted commodity prices. Corporate earnings is the red flag. Negative for the Fourth Quarter in a row for q 12016. Thats what the fed are looking at. How come corporate earnings are so negative. I dont like that. How long has it been since weve had four quarters of corporate earnings do that . 2009. I dont think we should forget why we did have the drops in earnings, right . It was exactly the points you were mentioning about commodities and the dollar. We have had a lot of stability since then. Well see we had a bottom why was the market so attached to oil . Is that still the case . You are seeing the correlation come down to more normal levels between the market and oil. I think what we learned is that low oil is good until it gets too low, then we start having concerns 50 . 60. More around that level. Otherwise we start getting concerns about defaults and spillover effects to the economy. What you are seeing is the Oil Supply Glut is working off with the canadian wildfires, some corporations not doing the arctic leases. There are a lot of cutbacks which is helping sustain oil. I want to call your attention to shares of kohls under pressure. Continuing the theme of what we have been speaking about about retail weakness. Estimate earnings fell short of estimates on the top and bottom line. The stock there is down nearly 5 . That follows a big decline yesterday from macys. And kohls. The twoday decline on kohls was 10 . New low down from oof. Down 50 in one year. Thats not a reflection of the consumer. The consumer is really theyre buying everybody says its a reflection of amazon. Instead of buying clothes theyre buying autos and houses. Experiences. The consumer has i say, is in a virtuous cycle. Full employment. Low Energy Prices. Low Mortgage Rates and its really jobs, jobs, jobs. The half percent gdp Means Nothing to you in terms of a read on the economy . No. A lot of it was because business spending collapsed and went down 6 . With low oil prices it looks like that will work its way off. But First Quarter there is an anomaly in the First Quarter. The fourth wasnt good either. What was wrong with the fourth . Certainly there is economic weakness out there. That was an inventory blah, blah, blah. A reverse in the First Quarter and wasnt reversed. One thing about government statistics which gdp is. You hear theres lies, damn lies and government statistics. It gets restated. Its positive but we see a 2 trend. Its going to reverse in the Second Quarter. One of the interesting things you just mentioned, its the amazon factor. It would be cool to ethe correlation of amazon stock getting above 700 and kohls going down. To what extent do you think there is an amazon factor in there . I dont want to pick out particular companies but there are idiosyncratic risks. Some Companies Win and some fail, but there is a big transition with technology. It happens all the time. You saw it happen with apple. Do you know how many competing Companies Market caps were rolled into 700 billion of apple. We can think of 30 different companies. It also allowed other companies to rise. Whole new industries came up because of the iphone. You know youre preaching to the choir. Consumers are smarter now too. Theyll shop. Amazon has a lot of Capital Market in other places. Thanks. Sydney blumenthal coming up. Hes got a book out on a republican. The last one he liked, actually. Abraham lincoln. He is joining us after the break. Later, tennessee senator bob corker will be our guest. Well talk to him ahead of Donald Trumps big trip to capitol hill today. His take on the race, the white house, the economy, valeant and more. Squawk box will be right back. Our next guest has a new book out this week examining the life and career of abraham lincoln. Sidney blumenthal is the author of a selfmade man, the political life of abraham lincoln. He is a former Senior Adviser to bill and Hillary Clinton. Good to have you. Thank you. Whats a democrat like you writing about a good republican like abe lincoln . I group up in illinois. I always had a picture of lincoln in my school room. I was taken to springfield as a boy and i have always admired lincoln. I finally got the opportunity to really explore his whole life. There are surprises in the book as well. Its not the but positive surprises. I mean, its hard to get a better, i think, narrative or legacy than abraham lincoln. The greatest american story, joe. And, you know, the lincoln that i found in was a discovery. He is not the alabaster, marble lincoln on a pedestal. He is a real politician. He starts as a poor boy who makes himself, through selfeducation, to a capable lawyer and the floor leader of the when you ig party in illino he was political. He was honest abe not because he was always telling the truth. Didnt he mediate horse races . He would pick by a nose and you could believe him. It came from a gambling sort of background. People trusted him. And they learned to trust him, and he was somebody who could make deals too. He was he was into the art of the deal as a floor leader in the illinois legislature. Moving on to politics. Oh, boy. Is that all we get for the book . Why write a book right now, man . You know you go on the book tour and youll answer some youll get flogged. If you write a book about lincoln you know, since lincoln is a politician, that there will always be politics. She is asking you whether you talked to the fbi. Shell beat it out of you. My fellow Wellesley College graduate, is she furious that Bernie Sanders has not dropped out yet . She went to the end with barack obama. She said bernie has the right to go to the end and lets see what happens. He doesnt have a fighting chance. He is forcing her to fight in a primary. In 2008 when we when hillary ran i was involved in na campaign. You still are. Are you still i have no formal role. Formal role. Youre still emailing each other, arent you . As i said, i write lincoln and i write hillary. And one of them responds. Which one . One through, you know, esp. But you know, the obama people said in 2008, the math was against us, and it was. And you know, mathematically bernie is really eliminated right now but he wants to go on. You are saying she doesnt want to be a hypocrite. Let me ask you a question. Why shouldnt he go on if he continues to win states . Well, he cant win the nomination, but i think he has a different calculation. I dont want to put ideas into his head or speak for him, but he has he wants to go to the convention and appear before the Platform Committee and fight for certain positions. He could do that in any case. Well see what his true intentions are. I think he has a long game that he should think about about being in the senate and his relationship with the new administration and possibly a democratic senate. Who will she pick for vp . Search me. You have no idea. I have no idea. Would she pick bernie . I dont think anyone has really come down to a serious decision yet. We are still involved in that part of the campaign. Have you met with the fbi about the emails . Well, as i have said, i cant comment on an ongoing investigation. At least you called it an investigation. So youre off the reservation there. Its not just a what did you call it . A security review. Comey yesterday said, i dont know what that is. The word investigate is in fbi. Federal bureau of investigation. This is an investigation. So we cleared that up. And you know the certain News Networks have gone back and framed the 10 or 15 times shes said either security review or security and play it one after another and have superimposed comey saying it isnt an investigation. I understand politics and even back in lincolns times there were politics. Here is a question that i think is partly responsible for the high negatives for hillary or for the crooked hillary or the dishonest sort of word that you always hear attached to that name. So you couldnt really join the state department, and i dont know whether that was just because of bad blood between you and the Obama Administration or whatever it was, but then you are representing some clients in libya but still able to influential the secretary of state and on the payroll of the Clinton Foundation. Is that all aboveboard . Does it just look bad or is it actually is there something there that its unethical . Thats not really an accurate representation of what happened. Let me say i testified before the benghazi commitment. I answered all their questions. They said it wasnt televised but they said it was a cordial testimony. I testified for nine and a half hours. I wanted it to be public. Second i came out, i said i wanted it to be public. On the question of socalled clients, i had no contracts with anybody. I didnt invest in anybody. No one made a nickel. No one spent a penny. So and i had a real job at the Clinton Foundation working on educational projects. That was a separate matter. All these were all these were clarified. You werent being paid by libya . No. Should we think that there was ever influence in state Department Affairs that were influenced by donations to the Clinton Foundation . I dont know whether weve totally vetted whether thats its certainly it certainly has the aura of perhaps there is something untoward or at least certain people think that in certain circles. I think the reports show that there were not donations to the Clinton Foundation that had any influence on state department policy. And you know, about the benghazi committee, i have urged for the release of my transcript. I have always urged for it. I want it to be completely public. How would we know that donations wouldnt affect policy . I mean how would you know . Yeah. Well, i think there have been some examples that have been reported, and in the times and they have been debunked. The iranian and all that . Are you or the clintons at tall concerned about the film coming out in the next several days from cannes, a documentary about the clintons and the money . I dont know anything about that. Okay. Its tough flogging a book. They drag you out, the publishers. Youre going to take it. Im on lincoln. I have to hand it you write the book, you go on the book tour and youre ready for the questions that come. We appreciate that. I have been on the other side too. You didnt have to say anything because one last question about the book. You may. Which is, 1850s, thats where the book ends. He is in the whig party. Whig party disintegrates around him. He is a tough politician. And a third party starts, the republicans. Do you see any resonance for today . I do. I think that the Republican Party is in danger of going the way of the whigs. Parties do break up. They do disintegrate. They disappear and they become something else. The reason that the whig party broke up is the same reason that is dividing the Republican Party today. The whig party broke up in part over race and the question of slavery then, and split into northern and southern wings and it broke up over immigration. There was a huge wave of immigration and part of the whig party broke off and formed the kno knownothings or what they called the american party. They were nativists. Lincoln was very much opposed to nativism. It took a long time to put together a new party. In order to do that he had to figure out how to deal with the radical app libolitionists. It sounds similar not only on the republican side but also on the democratic side today. History doesnt repeat itself but it rhymes occasionally. A whig party would immediately bring back all of them. Thank you very much. Coming up, former Vice President dan quayle joins us to talk about the race for the white house. Futures suggesting well have a positive open. Squawk box will be right back. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Big things, quite like the human foot. Introducing the 241 horsepower lexus is 200 turbo. With almost twenty percent more base horsepower. Once driven, theres no going back. The first stock index was created over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Former Vice President dan quayle weighing in on the race for the white house, announcing that he will support presumptive gop nominee donald trump. He joins us now. Veep, its great to see you. Thanks for joining us. Absolutely. Is that too familiar . Mr. Veep . Mr. Vice president. That sounds good. The only thing that would sound better is mr. President but that didnt happen. You should have been a media pundit. How long ago was that when you said trump very likely will be the nominee . How long ago . I indicated that back in november. November i said, look, he might win. I didnt think he was going to. I said but he might. That put me in sort of a rare category saying that he might. I still thought somebody else would probably win. But who would have predicted this . I didnt predict it when he got in. He knocked off 16 republicans. And a lot of them were very good, solid people. And would have been good president s. Yeah. And he one by one by one theyre gone. And he wins. You know all these Establishment Republicans. You know them all. Ive gotten to calling some of them farosees. Now ive seen them called the establishment powders. Cardinals. Bill kristol. Just outraged that people in the country could go against what they know to be the best thing. Almost like the current administration, where the people actually are making decisions instead of the smartest people in washington. But these guys, do they realize how its either him or hillary. Its a binary choice at this point. Look, look, you know, anybody expected donald trump to be our nominee, the presumptive nominee. Nobody expected Bernie Sanders to take this race on to california. You know what, if he wins california, which he could, thats going to be an open convention or a possibility of one. Who would have predicted that we would know who our nominee is going to be before the democrats do. Mike murphy cant throw the hand back into the deck and say deal me a new hand, right . Going to i dont want to go back to that stuff. But youre backing him. And many arent. No, i am, because we need unity in the party. We if were not unified it will be much more difficult to win. But look, as i said, he is a winner. He knows how to win. Now hes in the general election, he has won the primary. General election, the bar all of a sudden goes up. We have Establishment Republicans on all the time who say he cant beat hillary. A meeting this morning with the speaker of the house who said im not sure im going to support him. I cant get inside paul ryans head but here is my view of that. Inside romneys head . Oh, i can get there. But why . Dont go there. No. Seriously, i think paul was surprised that cruz folded as quickly as he did, right after indiana. All of a sudden he goes, whoa, im going to have to make a decision here. I was anticipating an open convention. I am the chairman of the convention. Obviously im going to have a lot of influence in the convention, and i can help get some of my ideas not only the platform but whoever the nominee is going to be. Boom, within two hours cruz is out and trump is the presumptive nominee, and he says, i need a little time. Okay, fine. Hes got a little time. Hell go down there my prediction is that paul ryan, he is a team player. He is a republican. The great majority of his caucus will support donald trump without qualification. Getting back to the socalled establishment folks still arent on board, im sure there are probably a few. I think theyll eventually come around. But look, everyone missed whats going on out there. Right. They missed donald trump. They missed Bernie Sanders. Everyone dismissed these guys. The reason i mean, here is Bernie Sanders, calling for a Political Revolution. How do you think president obama thinks about that . Here is my democrat independent democrat socialist in the senate calling for a Political Revolution and getting half the vote. Can trump beat hillary . Absolutely. This is the year of the outsider. If you want to look about qualifications, of being an outsider and being successful, he wins. What talking points would you give him for the meeting with paul ryan on capitol hill today . You know, he is going to find out, as he starts to go around capitol hill, that folks in congress they need a lot of stroking. You got to be nice. Now, he he could be nice when people are nice to him, right . And i think it will probably be a very cordial meeting. Paul ryan is a very substantive person. He has a lot of ideas. Theyre going to share their ideas. There are probably some things that they can agree on. There will be things they disagree on. If trump becomes president hell have to deal with paul ryan. Its not like in business. In business, you try to get a deal. If it doesnt work out, guess what, you go to the next deal. In this situation as your president , if you cant get a deal, you dont you go on to the next deal but youre dealing with the same people. So you better understand that these people arent going to go away. Hes going to be the speaker, and the congress is there, and youre going to have to deal with the congress. So this is part of the process of stroking. Donald trump understands politics. Should he release his tax returns . What do you make of the fact that he refuses to do so . Hes not going to do it. I know hes not going to. But should he . Its his call. Everybody since 76 has done it. So what. You better be prepared for an unconventional election. Its 40 of primary voters might not like him anymore if he doesnt. Look Hillary Clinton is saying she released, what, 3,000 pages and all that . He is not going to release it. You know what, its a story today. It may be a little story tomorrow. End of story. He says hes not going to do it. He kept saying until the audit and all this. Hes just not going to do it. So what. How do you get along with the bushes now . I know its not a monolith but i get along with them. How about jeb signing the pledge and now is he going to eventually . I hope so. He did sign the pledge. The pledge that he would support the nominee. Yes. Its bad form. You respect someone dand think theyre great like romney. Im not sure what to think of him at this point. Didnt he have some kind of harry reed release your tax returns as well . How can he with a straight face i actually think donald trump called for mitt romney to if im not mistaken. When is that book coming out . When is his book going to come out . I tell you what. Its expect the unexpected. Thats the whole thing. You guys are all journalists. No one has ever seen a year like this. And its clearly the year of the outsider. I just i was a in china not last week, the week before, and i didnt meet with the political leaders, but i met with a lot of the business folks over there. Of course, thats all they wanted to talk about was the president ial campaign. And so i took them through it and all that. Then i would ask them. I said, okay, who did you guys think would be best for china . There was a strong consensus that they would rather deal with donald trump than Hillary Clinton. Why . I pushed that point, why. When she was over there as secretary of state she didnt have quite frankly a lot of authority. They didnt say this, but they cut her out as secretary of state. We would go over and have conferences on human rights and women in the work force. A they would have these i call them hectoring issues. China does not like to be lectured to publicly. The genesis of the relationship between china and the United States, its with richard nixon, a republican. Theyve done well with republican president s. Whether its nixon. Ronald reagan. George w. Bush, george h. W. Bush. Hittiananmen square happened 1989. So we had sanctions on. Neither the president nor i in those four years travelled to china. He was an ambassador. Counsel. His ambassador was in taiwan then. But he was the council general. He and barbara had three or four fabulous years there. He is very close to china. Would the veep make a difference for trump in the general election . Dont you know that these president ial elections are always dependent on who they put on that ticket . The Vice President i mean, he carries the president every time. You have three who is your top three for trump . The two obvious ones would be, i think, rubio and kasich. Marco rubio, john kasich. Senator from florida, governor from ohio. But the one i think would be a really good choice, not on too many peoples lists right now but he is substantive, got all the credentials, would be a good teammate for trump, and thats rob portman from ohio. You dont put a woman on to combat the hillary factor . If thats the reason the people will vote for a woman, theyll vote for the top of the ticket, not the bottom of the ticket. I know portman personally. Its awesome. Great idea. His bouackground. He has it all. He is very much in favor of more trade deals. And that was a major issue. That would be good. Because look, everything is negotiable with with our presumptive nominee. Everything is negotiable, including trade. He just thinks there have been bad trade deals. You can make an argument that we could have gotten better deals. Every deal could always be better. But having rob portman right there and being involved, i think that would be a great choice. People would say, he is serious. And thats what you know, look, the nomination process is over. He won that. Now he knows he has to win the general election. He knows how to win, so have at it. See what happens. We didnt ask you anything about the global economy. I was going to ask you about skin cream. Why do you look the same as when you were on the ticket . Golf. He is golfing. Something i dont know about . Skin cream, restalyn. Youre looking good. How is business . Its good. Is it a 5 employconomy or a sub5 employment economy . We think its slow growth. The real unemployment is obviously higher than the 5 thats out there right now. The thing is, i have said this for quite a while. Were a lot like japan, unfortunately. Look at japan the last 20 years. Low growth, low inflation, low Interest Rates. Thats where we are right now. Now, you i have heard you all talk about this, is this the new normal . Could be. Everyone is now talking about we have had eight years of recovery, right . Seven, eight years. When will the recession come . Well, we dont know. Hopefully it will be a while because, if it comes now, janet yellen has no tools in the box to fight a recession. What are you going to do . Negative Interest Rates . I suppose you could, you know, talk about that. Japans done it. Germany has done it, you know. Does the United States follow . I hope not. She is talking about raising rates. My guess is that it wont happen until december. She is not going to do this during the campaign. Its too risky. She doesnt want to do anything thats too risky. Particularly she would rather have, i am sure, rather that Hillary Clinton than donald trump. You think she has done a good job, janet yellen . Well, i think she is extraordinarily cautious. I think most people will say that she missed a real opportunity several years ago to begin to raise the Interest Rates just in case something happened to have some as i said, some tools in the box. She is very smart. She is cautious. But you want your central bankers you dont want them to be not cautious. I think well have to wait and see. Well have to wait and see. Indiana. Goes for a socialist. Rolling over youre not dead. Rolling over in your grave. Can you believe that . The great state of beyond goes for a socialist. Thats the state of the Democratic Party right now. Its unbelievable. You talk about our socalled tea party. Donald trump is sort of an evolution of the tea party. He is an outsider. Thats theirs. And, you know, no matter what happens in the election, everyone thinks if she is president shell be more like bill. I have my doubts about that, but they think shell Governor Center of the left. She has a huge leftwing Progressive Movement that will be right there and watching her every step of the way. If she doesnt toe the line theyll primary her and she will be looking over her head so domestically i think shell have her hands tied. Internationally its a little different story. Well, come back. But donald trump will be the next president so we dont have to worry about that, right . Well see. Come back. Cool stewudio. Isnt it . I like it. Coming up, the baseball world is buzzing this morning after a mets pitcher does something not done since 2007. As we head to break, take a look at u. S. Equity futures, trying to bounce back after yesterdays decline. Doing a decent job in the premarket. You wont see these folks at the post office. They have businesses to run. They have passions to pursue. How do they avoid trips to the post office . Stamps. Com mail letters, ship packages, all the services of the post office right on your computer. Get a 4 week trial, plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. 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. 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Ask your doctor about cialis and a 200 savings card stop taking cialis and get medical help right away. singing you wouldnt haul a load without checking your clearance. So why would you invest without checking brokercheck . Check your broker with brokercheck. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Welcome back to squawk box. Among the stories front and center, Retail Stocks in focus again today after that big selloff yesterday in the wake of the earnings miss by macys. Kohls shares sliding premarket after it too missed on the top and bottom lines pointing to challenging First Quarter sales conditions. Off 7 premarket. Two economic reports coming out about an hour from now. The government reporting on weekly initial jobless claims as well as import and export prices. Oppenheimer shutting down a twodecadeold commodities fund. It will be liquidated in mid july. Its not posted a positive return since 2010. Doesnt that reek of a bottom . That means the commodity bottom is over. Right . I like the name of the fund. Total return. Total return has been zero since 2010. Thats the total its like ironic. Your total return youre lucky youre getting some return on principle at this point, i think. When we return, a republican senator bob corker of tennessee joins us. He has been mentioned as a possible running mate for donald trump. Find out if he would take the job, next. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. We are just over an hour away from donald trump meeting with House Speaker paul ryan on capitol hill. We do countdown clocks. Its silly but we do. Everybody does countdown clocks. There was one last night. 15 hours and 39 minutes to when trump and ryan were going to meet. I am looking at it. Its like, wow. I needed to know that. 15 hours and 39 minutes. Senator bob corker. I am sorry, senator. We should have had a clock saying the minutes to corker. Chairman of the Senate Foreign Relations Committee and a member of the Senate Banking and budget committee. Thank you, senator. We havent seen you in a while. Good to see you today. Always good to be with you. I miss you. I miss you too. So, have you noticed that its kind of a were in political season. There has been some stuff going on. I dont know how closely youve been following it. How would you characterize it . And weve talked already a lot about the Establishment Republicans. I dont know who is who now. I dont know who is tea party, who is conservative, who is populist or for trade or against trade. Did you ever expect this . No. I think what you are seeing is a campaign that, if you think about it, there were 17 candidates and instead of people being different on policy issues, it became somewhat of a Personality Campaign as people tried to differentiate. The American People decided they wanted someone who was irreverent, strong, antiestablishment antiwashington, if you will. Now were going through the second phase that is usually first where i think there is more focus on policy issues. So my sense is that the trump effort is focusing a great deal on those issues. Theres a lot of evolution taking place. And i think you are already seeing that in many of the statements and comments coming out. And i think i actually think todays meeting with Republican Leaders is likely to go very well. Its too bad, too. Jack welch has been on a few times talking about, okay, i have noticed the tone. I got it. Big hands, small hands. I noticed all that stuff on the republican side, but youve got a couple of social hillary is not a socialist but look at the policies and how far left theyre moving on the other side. Everybody is focused on, you know, these ridiculous arguments about, you know, lowenergy jeb and little marco. On the other side youve got a party moving its center to socialism. And it also unnoticed. I think whats happening on the republican side is there is a coming together thats taking place. On the other side, there are deep divisions that are occurring. Bernie is still going strong, and its going to take a while for that to heal. I think youre right. The focus has been on one side, but actually theres a lot happening on both. Again, i think i think there is going to be a lot of coming together on the republican side over the course of the next two or three weeks. Have you endorsed trump yet, senator . I have always planned to support the nominee. I have said that from day one. So thats a yes . We have had conversations. We obviously, you know, are when asked, were giving suggestions on certain things. But i think, you know, we are watching this evolution. I have no doubt that at the end of the day were going to support the nominee. And i like the way the campaign is evolving. I thought the Foreign Policy speech was a step in the right direction. You give them an atta boy. Exactly right, sir. It is weird. How about your some of your im sure friends of yours that are never going to endorse him . They take their ball and go home, play another game, get a new hand dealt . Wait until 2020 . What . Thats my comment there, joe, has been just to chill. I mean, this is again, this campaign was sort of done in a backwards way. I think youre seeing policy points coming out now. I saw yesterday where now theyre focused on entitlement reform and now theyre redoing their tax policy. For the people who have said never, my advice is chill for a while. Let this evolve and get a better sense of what policies will be put forth. My sense is a lot of people who have been resisting will become more comfortable but well see. Senator. Its scott wapner. Hi, scott. One question relating to the valeant hearings where you said, quote, i have been fascinated since i have been here by the role hedge funds play in trying to shape public policy. What did you mean by that . Well, theres a huge influence of huge money being spent on all kinds of groups to help shape policy. I think youre seeing that play out right now in the puerto rico issue, which is not something i have been particularly focused on. But i think around the issues of the gse. There is no question that there are three hedge funds in particular that just them alone have an opportunity to make 17 billion, just in their three funds, in the event these entities are reipoed. A lot of money sloshing around here. Public relations groups, civil rights groups. There was a lot happening. Its amazing to see how that might how that right. Have you met with bill ackman privately about the issue of fanny and freddie . I noticed an the calendar were set up in a couple weeks, maybe two weeks from yesterday. We are going to sit down. Obviously thats one of the things we discussed in the hearing. I was going to ask you if you know whether youre being vetted but we dont have time so youre going to dodge that one. I have no reason to believe i am being considered. Thanks a lot. Thank you, senator, we got that in. Hope to see you again soon. Coming up, senator Amy Klobuchar, a democrat from minnesota, she has been mentioned as being on the possible list for possible running mates. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Big things, hey kevin. Hey, fancy seeing you here. Uh, i live right over there actually. Youve been to my place. No, i wasnt. Oh look, you dropped something. Its your resume with a 20 dollar bill taped to it. Thats weird. You want to work for ge too. Hahaha, what . Well were always looking for developers who are up for big world changing challenges like making planes, trains and hospitals run better. Why dont you check your new watch and tell me what time i should be there. Oh, i dont hire people. Im a developer. Im gonna need monday off. Again, not my call. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Vern from voya . Yep, vern from voya. Why are you orange . Thats a little weird. Really . Thats the weird part in this scenario . Look, orange money represents the money you put away for retirement. Save a little here and there, and over time, your money could multiply. See . Ah, ok. So, why are you orange . Funny. See how voya can help you get organized at voya. Com. New this morning, mr. Trump goes to washington. Presumptive gop president ial nominee meeting with Republican Leadership in an effort to unite the party. Retail wreck, redone today. Kohls shares crushed after earnings fall short. This one day after macys miss sparked concerns about the retail sector. And everybody dance now. Big business meets intense electric music. The end result, even bigger bucks. Well jam with the Company Behind this weekends electric Daisy Carnival as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, here on cnbc, first in business worldwide. Im joe kernen along with Michelle Carusocabrera and scott wapner. Becky and andrew are off today. Wow. This is the electronic dance fever from electric daisy. Whats that in the big lebowski. Yes. Autobahn. But there is a real one. Craft works or something. This could be your theme song. I know. You like . This is annoying. I dont like it. Yours is too. You could ask him about it. Less than 90 minutes away from the opening bell on wall street. The futures right now have been improving. Not quite back to getting 50 of a retracement of yesterdays big selloff. But 83 points at least is not an extension of those weak equity prices yesterday. And, yesterday oil up over a dollar. It didnt help the equity markets. Today up another 50 cents. Not quite halfway between 45 and 50. I would say that a fivehandle is it wouldnt be that surprising, probably. Yeah. In the not too distant future. The bang of England Holding Interest Rates unchanged today, as expected. In a statement, the bank of england said a u. K. Vote to leave the eu who push up unemployment and stoke inflation. They say growth is slowing ahead of the brexit vote. More on that in a minute. Thats in june. Other global news. Brazils senate voted to proceed with an impeachment trial of dilma rousseff. Shell be suspended for 180 days during the trial and the Vice President will take over touring that time. Global gold demands soared to the highest First Quarter total on record, maybe due to negative Interest Rates. Strong inflows into goldbacked etfs. Retail hit hard this morning. Kohls missing the mark, falling short of estimates on the top and bottom lines. The retailer points to challenging First Quarter sales conditions, to say the least. The stock was down yesterday in sympathy with macys and its having its own problems this morning, down 51 over one year. This morning its down 6 1 3 . Monsanto on the rise this morning as takeover talk swirls around the agricultural chemicals baker. Both basf and bayer are interested in bids for monsanto. Basf is said to be working with investment banks on the bid. The Company Formerly known as computer estimates Beat Estimates by three cents. Gave better than estimated fullyear forecast as it expands its cloud and mobile software applications. Back to this mornings top Global Market story, the b. O. E. Warning a vote to leave the eu would damage growth. Frost is following the story. You have the latest polls . I dont have the latest polls but weve been listening to mark carneys press Conference Following the decision to keep rates on hold as you mentioned. He has uttered the r word. He said the consequences of a brexit, quote, could possibly include a technical recession. He also said that sterlings weakness over the last year, a figure he put at 9 , had been half down to brexit fears. He said that there could be, quote, perhaps a sharp fall further off sterling in the event of brexit. He warns of materially low growth and notably higher inflation if we saw a brexit. He did also say that Monetary Policy alone might not be enough. Of course, fiscal policy is not in his remit but seems to suggest that you might see a broad response from the government and bank of england in the event of a brexit. He has meant to be impartial. A tweet from Prime Minister David Cameron who said the bank of england is right to warn leaving the eu could cause lower growth and unemployment to rise. The question on whether the bank of england, which is meant to be impartial, is overstepping their mark. Mark carney maintains that he has to make Inflation Forecasts and growth forecasts and this is the main event on his horizon that he has to consider. For now ill send it back to you. Well we want to know, whether it will happen. I dont know what to say about the whole experiment. All you did was talk about the effects on u. K. We just wonder about the effects, if there is a brexit, on the whole eu. I think its an important thing to consider. So far weve focused on what the pound is doing day to day. I think as we get closer to the vote we have to also consider with the euro does. Youre rightly suggesting that this would have big liquidity impacts. More on the london than on the oo u. K. You can vote. Ill be doing it by proxy. What will you vote . I will never say what im going to vote. Okay. Give you a pass. I have a pretty good idea. I dont know if you do, joe, i dont know if you do. Really . Wow you know what i think, so are you saying i am wrong . Im genuinely torn. But i know which way im going to vote. I think thats indicative of how this is going to go. The polls have a big portion of undecided voters. A big swing factor. At the moment the odds and pound have suggested with a little confidence that well remain. He feel the slight confidence that the vote will go remains perhaps overdone. It will be closer than expected. Even if the polls dont change sterling back up at mid 144. Even if the polls dont change, as we get closer to the vote i think well see more sterling weakness, which happened ahead of the scotland vote as michelle knows. The polls never changed too much but as we got closer the uncertainty increases and you see softness in serling. Good job not taking the bait, will. I cant believe he is voting for brexit to u. S. Politics. A new Cnbc Millionaire survey out this morning which finds the countrys top earners plan to vote for Hillary Clinton. With support for trump growing the outcome is not so clearcut. Robert frank joins us with more here in the studio. Hillary clinton still has a double digit lead among american millionaires but trump is moving up the wealth ladder. The survey asked millionaires who they planned to vote for in november if its a headtohead contest between trump and clinton. 44 of millionaires plan to vote for hillary and 31 for trump. Thats up from the 9 who said they supported trump six months ago with a more crowded field. 15 of millionaire voters are still undecided. Hillary wins 90 of democratic millionaires, 42 of independents and 8 of republicans. Trump gets 61 of republican millionaires and 22 of independents. Investments for millionaires, 42 said Hillary Clintons election would be a Good Opportunity for investing. 39 said she wouldnt. As for trump, 36 said his election would be a good investment opportunity. 41 said he wouldnt. The most important issues for millionaires in this election, Foreign Policy followed by political gridlock and then taxes. They also said trump would be the best candidate for business and the wealthy. Foreign policy being terrori terrorism. Foreign policy, Global Leadership and terrorism. All that stuff wrapped into one. Boy, trump would be the best for the wealthy, but the wealthy are voting for Hillary Clinton. Right. Which shows democrats theyre in taxfrees. I told you how that works. They got theirs. It could also mean theyre setting aside personal interests when they vote. I somehow doubt that. Well, that happens quite a bit. Yeah. You see wealthy people advocating higher taxes all the time. Its not in their selfinterest to vote for things that end up hurting people correct. I am saying thats exactly right. Our next ghost our next guest. We dont have ghosts. We dont have ghosts. Next guest said to be on the short list for the vp spot if and when Hillary Clinton secures the democratic nomination. Joining us now to talk about the race for the white house and jobs and ending the embargo and cuba and more. Senator Amy Klobuchar from the great state of minnesota. Thank you. Great to see you, senator. I hope i can get you to talk a little minnesota. I do a little bit myself. You betcha real good. There you go senator, thanks. Do you i mean, would you know if you were being vetted . Its always an honor to be mentioned for these things but i think, yeah, i think you would know. Like you would probably have to start giving information to the campaign, and i havent heard if thats happening. I know i havent been contacted. I will say this is the first time i have ever followed a segment about a poll of millionaires. I was so eager to jump in. Pretty cool. Did you want to vote . No. Some are actually good people. I wouldnt qualify. Some of them are good people, senator. What i thought was interesting about it no, no. I come from a state thats second per capita for fortune 500 companies. 17 of them. Were very proud of them. What i have picked up from Business People i was interested that the concern about trump that the International Factor was there and that you had a number of people still in there supporting Hillary Clinton. And i think, when you listen you mentioned terrorism, but when you think about what he said about Nuclear Weapons and countries in asia that dont have them, with the talk about building a wall to mexico. There is a lot of business in my state in getting Immigration Reform passed when we have a 3. 7 unemployment rate. Are you worried that trump could beat hillary . I think that you have to prepare for any election seriously. I dont think you can take anything for granted. When you mentioned odds, the odds are with her. She has been running a Strong Campaign. When you look at this immigration issue from a business perspective, when 90 of our fortune 500 companies this is an old stat, but were formed by immigrants. 200 formed by immigrants and kids of immigrants. 30 of the u. S. Nobel laureates born in other countries. This is a lot of american businesss story, the way weve been able to bring in talent from other countries. I know that she has said this is one of her Top Priorities when she gets in. Its certainly one of my Top Priorities. I think its an interest business argument when they talk about Foreign Relations as one of the reasons and you look at the numbers with independent millionaires which are decidedly in her favor as they are with the general public right now. I called it a great state, and i think of how been reliably blue. I remember hubert humphrey. Senator mondale. So i understand youre forgetting the Michele Bachmann era, though. We have a how can we forget . Mar yi, pa lenti was our governor. We get along quite well. Now youre ruining my intro. I just need to do that. I was wondering, even in minnesota, are any eyebrows being raised by the rise of acceptable socialism as an economic model in the United States . Well, i think, first of all, i am in support of Hillary Clinton, and i was listening as my friend bob corker was on a few segments ago and he was talking about the divides. I think whats very clear in our state and in our country that, in the end. Our parties will come together. Senator sanders has run a Strong Campaign but has made it very clear that he is going to believe in a unified party, that hes going to be supporting our nominee. So i am not as concerned as some are or as bob was mentioning. Some are disheartened that there have been so many republicans who have disavowed trump but so few democrats who disavow Bernie Sanders and socialism. Its strange to me. Well, i think first of all we are just simply in a different place than the republicans. They have had vicious, vicious commercial is the Democratic Party against socialism or not . I think that youll find a lot of people who are much more focused on mainstream democratic economics than on socialism. Bernie sanders is the only one in the senate that identifies as a socialist. Thats an elected leader. You are against socialism, right . I am a democratic i believe in democratic economics. I believe in a strong economy. I work across the aisle. I have never subscribed to socialism. That is correct. When you said mainstream economic policies, thats whats scary is that socialism somehow, among a large part people in indiana, people in West Virginia democrats in West Virginia, socialism has become the mainstream Economic Policy of the Democratic Party. If we could step back a little. I think that a lot of people who are voting for Bernie Sanders are not selfidentified socialists. I simply think that they are concerned, one, about whats going on, what theyre hearing from the other party and, two, theyre interested in getting involved. Theyre concerned about Student Loans and theyre concerned about a lot of things. I believe in the end that these candidates will come together and that there will be support for Hillary Clinton. It is amazing that yep, both sides, the presumptive nominee has to worry about the other half of the party and whether they come whether they come out to vote in november. Its really weird. Its very weird. Surreal. Is it the end of days, walter . I think its twitter. When everybody starts popping off and anonymously saying nasty things, i think thats the beginning of the end. I think thats what caused it. I do think anonymity on the internet has caused a lot. Senator, you went to cuba. Youve been part of lifting sanctions there. What do you think the prospects for american businesses down there are . Oh, i think there are some real promises there for american business. You were talking earlier about the head of caterpillar having been down there and the port he wants to do business in. Ive been there. That is so much promise there. Right now its brazilian finance and theyre using chinese computers. Pretty soon, if we start to lift the travel ban, which i hope we do and the president has done some of that, well have 5 Million People a year visiting a country 90 miles off our shore. Pretty soon theyll be sleeping in Spanish Hotels and eating chinese food because that will give that Critical Mass so that more business will invest in foreign companies. If we dont lift the embargo well lose that business. Thats why i am leading the bill to lift the embargo. Its a bipartisan bill. We have 24 cosponsors in the senate and there are who are the republican cosponsors. Jeff flake. Mi there are a number of republicans and certainly a bunch of republicans who said they will be supportive of the bill moving forward. Rand paul is supportive of opening the embargo. You have many others, especially midwest republicans that may not be on the bill but who would vote for the bill. Thank you so much for joining us. Thank you. It was great to be on. Coming up, a retail winner amid many losers. Well talk about it when squawk box comes right back. Andrea sikon. Medical doctor from cleveland clinic, watson, lets review the Electronic Medical record of the next patient. No problem. Its a pretty huge file. Done. Sorry for the wait. That was quick. As part of our research, i also compared lab results with notes about prior treatments, then cross referenced it with thousands of medical journals. And i get the benefit of much more data, and a lot more time to plan the best treatments. I stay focused 24 7 and never sleep. You sound like a lot of medical students i know. Welcome back to squawk box. Shares of ralph lauren. Sales dropped 1 during the quarter hurt by higher discounts to clear inventory. Weak north america. Shares higher in the premarket by 3 . Coming up, platinum portfolio, picks from the energy and telecom sectors. Stay tuned. Youre watching cnbc. I like this theme song 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 back on squawk this morning. Crude oil bouncing around in recent months. In the past month its on the upswing to the tune of about 11 . Here with some ideas in her platinum portfolio picks is sara kett rer, the chief executive officer of Causeway Capital management. Good to see you. Good to be here. Its interesting, some of the plays you have in the energy space. You got rid of an energy stock and then got into royal dutch shell. Why the switch . The point of it was to lower risk. The stock that i removed from the platinum portfolio this is reflecting what we do for institutional clients at causeway. Taking out some crude beta and replacing it with a very stable, very well managed company, royal dutch shell, that had made an acquisition of bg group. Its now consolidating that and becoming more efficient. A large dividend yield, over 6 . You think its safe . Much safer. Less crude oil sensitivity because its an integrated oil company. So were still, for our clients, taking advantage of a rising oil price. Were expecting oil to get to as high as 65 a barrel, brent, by the end of 2017. I was going to ask you where you think oil is going as it starts to push closer to 50. Up is the answer. You think its sustainable . Yes. That has a lot to do with the supply situation, which we believe is going to continue to narrow. And as supply adjusts and shrinks, that should push up the oil price. Its difficult to call. But with royal dutch there is quite a bit of safety. From a value manager perspective, all that income compounding plus the financial strength, and the costcutting. So that all makes a very attractive package. What does royal dutch do that makes them so much safer . Because theyre integrated they have both the refining as well as the upstream. And so theyll benefit as oil prices rise. Because theyre also using oil as an input, they kind of get it both ways. Do you look at whether theyre going into alternative Energy Sources . Absolutely. Were convinced that its the integrated oils and the oil majors that are ones that will be the biggest spenders in alternative energy. Theyll get us there. They know energy. So from a longterm perspective rather than the oneyear platinum portfolio outlook, royal dutch is also a good choice. Can i ask you quickly about barclays. There has been certain about the yo european banks. It is the anchor in the platinum portfolio at the moment. Whats fascinating about this particular stock. There is a new ceo. He came from jpmorgan. He is a very talented individual and has figured out this, again, is a restructuring story. But barclays trades at half of its tangible book value. So its blindingly cheap. There is a lot of margin of safety in a company that should see a considerable improvement in focusing on their core franchises and credit cards. Good to have you here. Thanks so much. Coming up, joseph. Ha, ha. Saved it coming up. Breaking economic news, weekly jobless claims. The numbers and instant market reactions coming up next. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Incredible blnow comes with protection an incredible big things, double your money back guarantee. Always discreet is for bladder leaks and its drier than poise. Try it, love it or get double your money back. Always discreet. Welcome back to squawk box. Breaking news. Our latest read on initial and continuing claims. Initial claims jumped up 20,000. 20,000 thats pretty big. From 274,000 to 294,000. So were going from numbers that were sub250, havent seen since the early 70s, back up to something closer to 300,000. Now, this might start to get close to a threshold for investors might pay attention. We want to watch yields. The april look at import prices on a month over month basis. Half what we were expecting. Up. 3 . Looking for a number up. 6 last month. Increased. On a year over year perspective down 5. 7. Last month 6. 2. Originally released. Now stands at minus 6. 1. Carney worried about brexit. Says there is more room to ease. There is always more room to ease. Left of zero on a time line goes to negative infinity, doesnt it . Their currency market, the pound not moving much. The equity markets, ftse doing a bit better. Nothing hugely surprising there. But we see the stampede of demand for anything that doesnt have a negative yield, whether its corporate, highyield or sovereigns. Today is no exception. 30year bond on tap at 1 00 eastern. Mcc back to you. Thank you. Steve liesman is here looking at the numbers. I heard you say wow it was the claims number. Economists were watching the claims number for closely because of the april weakness. The 160,000. The question is it confirmed in jobless claims. The weakness is confirmed here. Getting close to 300,000 is something to raise your eyebrows and look at and think maybe perhaps the jobs market is weaker than we thought. Maybe april was not the aberration. Next week will be the tell. Thats the week of the job survey. So the claims number will be more important next week, but this is worth watching. When was the last time we were over 300 . I dont know. I have to look. Its been a while. We have had a string of very, very low numbers. And one of the things we are watching is not just the claims numbers but also, you know, the jolts came out. That was strong. A little bit of push and pull in the data. I think this is enough where well see where the forecast for may come down a bit. It may be more in the 150,000 range. This is not the end of the world when it comes to jobs, but it is weaker. Its a hit for those who have been making the argument that the accurate read on the economy, or more accurate, is not so much with gdp, its with jobs. If you have softening in the labor market, thats going to throw a little water on that point of view. Yeah. Its good for those who like the world to agree on both sides of the ledger. I dont like it when you have one piece of data going one way. It may be i have been saying this all along. That the q1 weakness which has been we showed it was something that was an aberration. This one might have been real this time. The weakness that we had in the First Quarter might have been down at the 0. 5 range. Petroleum and import prices up 4. 1 , a big number for april. However, year over year theyre down 37 . Dont get too excited about that. Prices are still falling overseas. All imports down 5. 7 . Export prices down 5 . What i have been confused about on the retail level you have had this retail weakness out there. What we know is that prices, for consumers, are falling at the retail level, but they dont seem to be helping profits. Input prices should also be falling. Here is a chart that gives you a very different look on whats happening in retail. This is retail exautos. Look at the inflation adjusted number. When you adjust for what people paying, retail looks very healthy. Its the nominal number that is really very weak and has caused the concern. So i am confused as to why retailers are not making profits. It may be as joe suggested in the 6 00 or 7 00 hour, all those many moons ago now, that its amazon gobbling up share out there and gobbling up share at a low price. Thats becoming clear this week. Steve, thank you. Sure. Presumptive. Getting tired of saying that. President ial nominee donald trump who else is it going to be . Slated to meet with paul ryan. Mitch mcconnell and rnc chairman Reince Priebus in just under 30 minutes. John harwood would give anything to be a fly on that wall. But obama might catch you and smash you if he saw a fly. Anyway you remember when this happene when that happened, i know, john. How is the scrum . Does it look like someone will have to be pulled away if they get too close to the trumpster . Major scrum outside Republican Party headquarters. Donald trump has landed. He is on his way here for a series of meetings with Republican Leaders. Mitch mcconnell, as you mentioned, who has already endorsed him. The most important one is with paul ryan who hasnt endorsed him. What he said yesterday was hes going to try. This is a big ten party. There is plenty of room for different policy disputes in this party. We come from different wings of the party. The goal here is to unify the various wings around common principles so we can go forward unified. The thing to remember, though, is that the policy differences are real between paul ryan and donald trump, and its stylistic differences are very real as well. Paul ryan is somebody who cares about philosophy and policy and ideas, especially limited government, lower taxes. Donald trump is more of a transactional politician, is not somebody who has shown a great attachment over the years to particular policy proposals. And paul ryan has got to figure out whether he can be comfortable with how donald trump will approach this campaign both in the tone and substance. And we dont expect a resolution of their issues after this meeting, but as paul ryan said, its the beginning of a process. All right. Thanks, john. Well be watching. Big events the day. Coming up, a multibillion dollar business booming, electric dance music or edm. Outperforming all other music genres when it comes to streaming. Well talk to an edm pioneer about the festival landscape. Squawk box will be right back. At ally bank, no branches equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. Welcome back to squawk box. Here is whats making headlines this morning. Takeover talk continuing to swirl in the ag chemicals industry. From german companies. Basf and bayer now reportedly eyeing bids for u. S. Based monsanto. Monsanto was rebuffed in its attempted buy of rival last year. More recently dupont and dow chemical struck a deal. Tiffany leaving one of the Worlds Largest anti counterfeiting groups. It did not give a reason for leaving the International Anticounterfeiting Coalition Following the departure of guchi and michael kors from the group. Kors leaving due to the admission of alibaba. Apple denied the report that it would phase out downloads of music and emphasize the streaming music. The electric daisy canivern. Pascal rotella started to host raves as A Los Angeles teenager in the 90s and has turnede the parties in a global festival. He joins us now. The qu. I keep wanting to say pasqual. Convince me this is a big business. I am a skeptic. Its a huge business. I have been doing it over 20 years. Los angele las vegas has produced brought in over a billion dollars over the five years that weve been in las veg as. Live events are great in the internet age. People want to go to them. You can charge for it. As opposed to downloading free music. There is nothing like being at an event. The 360 audiovisual experience. Nothing like it. If i go to citifield this weekend how much does it cost . About 75 a day depending on the ticket you get. And what what was the other question . What do i get . What happens . You get lots of art. You get, of course, music, its not just about the music. Its a full experience. You know, theres art installations. The stages themselves are art pieces. And we have the actual how long . How many hours . Is it a 12hour day . Its about a 12hour day, yeah. Its going on for two days, saturday and sunday. Its not just what we bring to the table. The people who attend edc, theyre part of the attraction. Its the best crowd in the world. They get all dressed up. Its a blast. So that we can feel a little bit hip now, youre doing more transthemed music. Tell us what the next genre will be that we can look forward to and feel like well know what were talking about. Trance music is one genre of dance music. There are so many different styles of dance music. Whats coming next . House and techno have been buzzing for a bit now. They still are. Where there was big room house, the massive tracks that were crossing over to the mainstream. That was big for the past five years. Now its split up into, you know, house, techno, and even break beats are coming back. Are you worried that the world is overfestivaled. The world is overconferenced. Festivals are becoming more pervasive for the reasons that walter highlighted. Its much more profitable than streaming music. Were over the edge to me. How do i know this isnt a fad . Well, its i can tell you that were growing every day. Not only are we growing within the United States, but we are growing internationally. Next year were going to be in japan. Were going to india. We just did brazil this past year. Were selling out events and adding more here in the states. With all those festivals, do you have to compete for talent . Do you have to pay the performers even more . Do your cost inputs go up as you see more and more of these occurring . It is competitive in some markets. Some markets are wide open. Some markets dont need another festival. It really depends on where you are. But its definitely not going anywhere, and you know, our 20year anniversary is in five weeks. 20 years congratulations. Thats great. Were already thinking about the next ten years, what were going it be doing and how were going to use technology to enhance the experience. Its an excitemeing time. What has tesco done for it . How much money does he get paid. He deserves it. What sort of influence has he had and wellknown djs in this kind of space done for electronic music, house music and things like that, and bringing it back popular again. The artists who are making great music are the ones taking it to the next level and helping people understand it more. Especially those who have collaborated with artists who arent dance music. That was happening a lot. It started about five years ago. Black eyed peas with david guetta is when the big crossover was coming on. Sounds like a great combo. I love that. Thats when things started to blow up and more people who were outside of just the dance music culture started to open their ears to the music. A moment ago you talked about technology. Taking it to the next level, whats the new big tech thing that will happen . Virtual reality. I have a meeting with Virtual Reality probably every other shall you know i could have one every day. Have to focus on the core business, of course. There is what can you do at a live event with Virtual Reality, how can you enhance the experience. Do you have sponsors . Who are they . We do have sponsors. You havent mentioned them yet. Were already six minutes in. You should have had them at the top. I am teasing you. We dont do sponsorships the way they used to at festivals. Its about them bringing enhancing the experience. We dont brand our stages. Our events are about edc and everything that that means. 7up is a great sponsor, for instance. Theyll set up a stage and theyll actually hire artists and set up do a whole setup where you walk in and youre in this its our seventh stage at edc. So theyll enhance the experience by doing special things like that. Youll get how many people this weekend . This weekend well do about 75,000 over the two days. And then in at edc we do in las vegas, 420,000 over three days. Wow has running this business made you rich . Its okay to say yes. Its better to say yes, in fact. I am very happy so, yes, i am doing well. What are the tips for somebody who wants to get into the business . You know, you have to be passionate. Its hard. Its not a party throwing a party. Its a lot of work, and there are no shortcuts. Its you need a great team behind you, of course. You were a club kid, Party Promoter or in your younger years . The 90s. I started off as a raver going to warehouse parties and being a fan. When it collapsed and there was no more events to go to, i said, you know, i cant not have this in my life, and thats why i started. Thanks, pasquale good luck this weekend. Appreciate it. When we return, jim cramer, a product of a lot of raves, i think, joins us from the new york stock exchange. Check out the price of oil. Up almost 1 . Youre watching squawk box on cnbc. First in business worldwide. You wont see these folks at the post office. They have businesses to run. They have passions to pursue. How do they avoid trips to the post office . Stamps. Com mail letters, ship packages, all the services of the post office right on your computer. Get a 4 week trial, plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. You wouldnt order szechuan without checking the spice level. It really opens the passages. Waiter. Water. So why would you invest without checking brokercheck . Check your broker with brokercheck. Jim cramer joins us now. The retail group did drag down the market. The market was up. That correlation was broken, at least temporarily with oil. I think sometimes its just the facts get in the way of oil. When oil is doing well, the world is doing better. But were not getting that story out of china. If you destroy that correlation, then youre left with the facts and the facts are things it looks like its coming from macys and kohls, which are undifferentiated and you cant stop the onslaught. Do you think its amazon and not necessarily a weak consumer . I think it is. Im not saying its disingenu s disingenuous. Well see home depot next week. And thats the kind of company they cant beat amazon. Is it the kind of stores and where its located. The people who run macys are very, very good but the people who run amazon are not the same people. Coming up, well play a game of rapid fire with Walter Isaacson with the big stories of the day. Do not miss another exclusive. Brian moynihan will be on the closing bell. Thats at 4 00 p. M. Eastern time. I asked my dentist if an electric toothbrush was going to clean better than a manual. He said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. E trade is all about seizing opportunity. And id like to. Cut. Thank you, well call you. Evening, film noir, smoke, atmosphere. Bob. Youre a young farmhand and e trade is your cow. Milk it. E trade is all about seizing opportunity. Sign up at etrade. Com and get up to six hundred dollars. Todays top political story. Donald trump in washington arriving at the rnc headquarters in d. C. Today. He will meet with Reince Priebus. Well have continuing coverage all day long. There is mr. Trump arriving just moments ago at rnc headquarters in d. C. Our guest this morning, Walter Isaacson is the president and ceo of the aspen institute. He also a cnbc contributor. I dont know. Do you wish you were still cnn . Or are you glad youre going back leonardo. Thats a few years ago. There are some interesting things going on now. Sometimes its unnerving whats happening now. I do think if i could go back to something, it would be going back to being a political reporter at Time Magazine which is where i got my start. Id love to be on this campaign trail now. Pointing out the absurdities on both sides of the aisle, i guess, huh . Would it be equal, fair and balanced or would it be time . Time magazine was always perfectly fair. Ill tell you what Time Magazine was. It was a sort of center right republican but it was very establishment. It was very much what the rebellion is against these days, which is sort of that east coast media establishment, even though it was henry loose and claire booth luce were republicans when they founded it. Just because youre sorry identifiable with the steve jobs book and just about apple, the stock has undergone some turbulence of late and people are raising questions about tim cooks moxie, whether he can pick up where steve jobs left off. Whats your read on that as youve had a little bit of time now to step back . People are critical at whether he can be what is necessary to take apple further. I think tim cook is a great ceo and steve jobs always thought he was great. The question on apple and i have no inside information now is every four, five years beginning in 1998 when steve jobs came back, there was just something like, oh, my god, i did not know i needed a thousand songs in my pocket but i cant live without this absolute thing of beauty, the ipod or the often. It transforms my life or the app store or the ipad. Im looking for the next big thing and i dont quite feel the i got the watch but i dont use it that much. Im not sure the watch is the next big thing. I think we have to look and say what is the next breakthrough theyre going to have in. We had one guy from stanford who said tim cook, great operations guy but they need an elon musk, they need a great visionary, somebody who pushes them hard to replace the steve jobs reflect. Well, nobody can replace steve jobs. He was the greatest genius in knowing intuitively the type of thanksgivi things that would be objects of our desire. When i once asked steve jobs what was the greatest product, it want the iphone that got put in place, it was the team that was put in place. What may be missing is the unbelievable visionary like a steve jobs, but you just cant say, okay, lets replace a steve jobs. It just doesnt happen. Hes a genius. Does he have to be Mickey Mantle to joe dimaggio or can he be just good enough . Well, not good enough. One of the thing steve jobs said to tim cook is dont wake up every morning and say what would steve jobs do . On that note, thank you. Squawk on the street is next. Good thursday morning. Welcome to squawk on the street. The new york stock exchange, big morning taking shape. Trump meets ryan, retail earnings, three fed speakers, Brazils Senate backs impeachment, jobless claims at oneyear high, futures in europe are solidly in the green. Washington europe today. The iea