45. 88 for wti. So still talk about the possibility whether or not it is going to 50. Brent is 47. 53. Natural gas is 208. Janet yellen wont completely rule out negative rates but the fed chair also saying that the tool would need a lot more study before it could be used in the United States. Our comments coming in response to written questions from a congressman following her testimony on capitol hill. And Jeffrey Gundlach telling an investor web cast he sees some hawkish rebellion showing up. He calls yellen the biggest dove. 50 chance of only one more rate hike this year. He can see the s p going to 1600. On todays economic agenda couple of things coming up. April retail sales and the producer pricing index both out. Sales expected to rebound after a decline in march. Then were going to get may Consumer Sentiment and march business innervate ris. Retailers have had some problems this week. I heard. You missed a lot here. Did you see some of the people we had on this week . I heard. Your buddy Sidney Blumenthal was on. I heard i heard he described me as his little friend. Like almost a little marco. I did one liberal. Viewers so kind. They tweet me. I heard. [ inaudible ]. Big week. Guy that jamie called. A jerk. Right. Is jerk a word . Its half of a word isnt it . I said rim job radar when they did that. [ drum roll ] and he turns red. I dont turn red. Announcer this awkward momentum has been brought to you by joe kernen. We used puts earlier which is is also something that can a is meaning right. Its not nice to say that. Its an anatomical yiddish term. I didnt know that. You didnt know that. I just knew that it was a derogatory term. Everybody here knows. Everybody else knows here. You want to talk retailers. You want to get out of this . Youre back and its like i cant believe this. What time it . Also this can anybody use yiddish . Why i dont know. Im just curious. There are certain things i think youre allowed to call someone a schmuck or a puts or Something Like that. A mensch . I dont know. Im just throwing it out there. Youre saying maybe i shouldnt use because im im not saying that. Im just throwing it out there. I dont know what the rules are. Real quick. Seinfeld, they have done everything on seinfeld. Remember the jewish dentist converted to judaism and then all he did was tell jewish jokes. And and this is not the same thing as calling someone a schmuck. It might be. Are you shares of nordstrom getting slammed this morning. It is the latest retailer. Im not gonna ever use its your stuff fine. You use it. Im saying de blasio got in trouble for his stuff totally different. Mean about that being late that thing . Im just saying oh i god i wouldnt bring that up. Im just making the observation that people have different sensitivities. Pc. I dont know. To be very worried about the rules. I dont squawk box not to be a safe place. This is the safest of places. Microaggression on you today. Im sorry. Never again. Schmuck, no none of that. It is the latest retailer. Post a huge miss on both the top and bottom lines. The higher End Department store also warning on sales. And at the same time holy smokes. 17 in pre market. We got to look at if we go a little long was that that might be this week michelle. No i think that 17 is right now. The right. How about a year. Probably the high brutal. 51 down. And look at that leg, wow. Retail at dillard also reporting First Quarter earnings and profits that missed forecast and expectations. Same store sales also slipped. That stock is also under pressure this morning. There you go again down 14 . Said that in the top of the show. Lot of these stocks down 15, 20 in a week. Whether its avmz or something bigger. Little bit of both i think. Markets down today and i wonder if they are starting to wonder other day disney was down. Comcasts is above where it was when disease said that. So maybe it helps to have all those cable operations and the distribution side. But that day, disease was down. You could equate the losses in the dow pre market. And the dow didnt change but by tend of the day it was down over 200 points. The futures board. Wonder if as we see them down across the board for negative open is this spill through from concern about the Retail Sector . Joining us is seth masters. And joe zeedle. Please answer my question. Europe down too. Any concerns here . If you step back the retail story shouldnt be much of a surprise. Weve seen these retailers with very little pricing power. What were seeing is the real retail sales growth is being eclipsed by nominal retail sales growth. Ski think data a couple of months ago is first time weve seen that and plain english it means the number of units sold is growing faster than the number of units plus price. So it is deflationary. Yeah. Makes this point all the time the cost of things being bought is going down so sharply. Imports from china, etc. Feels like lately its been dramatic. Is this amazon sucking up market share because the consumer has dramatically shifted its style of buying . I think a lot of things coming together. As we see it we are in a relatively slow Economic Growth environment with very low inflation and that dun help. On top of that there are some structural changes in demand. So you are seeing people buying more online. The distribution of income is shifting more to the tails. We think some of the Dollar Stores are actually attractive now because they are growing relatively even as the retailers in the middle of the pack are slipping. And also people are buying different kind of things. Experiences more than objects. All of that is a shift. I think the key thing were seeing is a lot of volatility swings up and down in the market overall and huge rotations within the market and that is going to continue. And what does that mean . And why is it going to continue . I think the reason you are going to see that is lots of structural longterm issues are lurking out there. Central banks are trying to fight them but as the Central Banks are pulling back their stimulus, that means that the underlying problems are becoming more visible and that is an issue of course in market in that case . No quite the opposite. I think you have to pick your timing. Markets when they swing up and down a lot around a low return will have attractive entree points but the challenge is do it when the market is falling and actually become less aggressive when they are back up. Very erudite way to say buy low sell high. Right. Were bullish on the market. And the markets are highly cyclical. Energy, financial, materials. These more cyclical sectors and small caps we think drive the market higher and the reason is earnings. That is something we havent b been talking about the s p basically wrapped up its season. And were seeing this trough and earnings recovery. And stipically when earnings start to recover the most cyclicly sensitive stocks benefit the most. Small cap, energy, financials etc. They are going the best when earnings start to reflat and looking at whats performed or out performed since february its been those sectors were kind of following that playbook. We got a big Tech Corporate news story. Apple investing a billion dollars in the chinese Ride Sharing Service. Didi chuxing. The deal comes amid months of speculation ann about apples Auto Industry interest. The company has hired automotive experts and although the firm is just looking to focus on the incar experience some wonder if apple is looking to build self driving cars. Didi has like 99 market share in china totally overtaking uber. Puts uber in a box. I think it is that is on taxi sharing and private car driving they own a huge part of the market. The question is whether apple can actually be in the chinese market. Whether this binds them in a better way. Or by the way whether it creates all sorts of not antitrust issues in china but whether i could see uber start screaming in the United States and other regulators that somehow apple is going to be trying to help these other guys. When you look at these investors chinas investment corporation. A lot of Chinese Companies to me there could be a political whiff to this. To be alongside line them with the Chinese Government in china. Great for them. I think its great. What is the intention . Is the intention political or combination of both. I think it is a great move. The question i have though is whether uber is going when something bad happens to uber in europe or the United States they are going to somehow say that if didi does business elsewhere, meaning if they start doing business here, then dont you think that uber is going to say this platform is unfair and apple is well find out. Talk about apple. I was going to say hasta la vista to a trillion dollar market cap. But im not sure. Can i use spanish . I was going to seika say qe sar sara. Andrew, what am i. Get me a taco bowl. What am i allowed to . Get that joke . Yes i do. Next time you hear something really good happen in your life do not expect to hear mosul tov. I would not want to steal any of your proprietary phrases. The carnage in apple continues. I hope there is nothing in here. There is a lot of these foreign expressions. Shares of the quid pro quo. Shares of iphone down nearly 20 . Joining us to talk about whats ahead, robert baird analyst will power. Not even gonna talk about that. I love it. I think your parents are cool. No way i would ever change it. Now lets talk about whats you are our all time high priced target on apple was and how embarrassed you feel at this point. In this business long enough there is also some humble buy. Good calls on apple and some probably not quite as good. [inaudible]. This is the political season right . Texas two step. Im based down in dallas. Were you ever at 200 . I was never at 200. I this i weve gotten close to 150. Only as high as 150. We were in that range i believe. Between 180, 150. All right. Weve been over this enough. Everybody got caught up in it. Including the dow jones industrials. Id never been on the show a year ago. This is the top. If you get added to the dow it is only the downside. It was sage advice. That was the final thing that spelled doom but just the idea that at 750 billion everybody had a double on the stock and that would have been 1. 5 trillion and weve seen this again and again and again in technology and it just seemed like that would be some heavy lifting. And then you do 50 billion a quarter or whatever it is in revenue. Like that is your birthright for the rest of your corporate life, you are always going to be able to sell that much . That is not easy to do. They are still living under the shadow of the success of the iphone 6. Victim of their own success. At least six months ago said who gets to a trillion first. And she said straightforward google gets to a trillion long before apple and here we are google get there is before amazon too . To pick one. I dont know if we amazon was probably 250 salesmen. Its 380 or something now. Even before she was on. It vaulted into something where you would talked about that. Yesterday we had Walter Isaacson on also earlier this week. Steve jobs is special. Is that starting to become apparent . Scott wapner said you dont need to replace dimaggio with Mickey Mantle but it would be good to have a solid. 300 hitter. I think hoe is. Tim cook. Hes navigated the waters. Has he been good baseball analogies okay . Did you play baseball . I dont know. Fossils results earlier this week which of course i dont cover but look at an industry that apples already disrupted and despite the fact they actually a very good product but at the end of the day doesnt move the needle for them. But that stock is priced for the needed something other than different size and absolutely. Look sony has a product out there. The sony view which i thought apple would have. Does it go below 80 . Well the go 90 product does the price of apple go below 80 . See the clients are listening. Listening we dont think it goes below 80. If we thought it would you have never downgraded. We have at one point. We think consensus estimates are still too high. Question is how much of is that already in the stock. Fiscal 2017. Street has them up mid single digits. We downgraded the stock actually in beginning of 2013 and it was already on its rear then. With apple you are either trading it or taking a true longer term view. This deal, the billion dollar investment. A little out of character for apple to go out and make an investment. Talk about this back staining with your previous guest. They have all this cash overseas so this actually for them is a way to deploy cash and inject themselves further into that chinese eco system. Political deal or something larger strategically. I think probably partically political. Didi out of china and elsewhere . I couldnt even speculate on that. I suspect it is focused more on the chinese market. We call like dan ernst and brian white and other analysts its auto body, this is ed. They see cnbc calling and so thin too. Probably workout every day. Probably dont eat too much. One question about your number though. Does that anticipate any kind of breakthrough happening or doesnt even matter. You still have this tough growth compare. And so were not assuming new products so if the iphone 7 comes one big positive surprise. Im talking about something wide wild. No were not assuming a new product. Lauf hyper loop. We want hyper loop. Thank you for having me. Great to be here. A monorail. Every city. Every city needs a monorail. Paid for with taxpayer money right . Yes. That nobody rides on. Coming up shares of bank of america falling more than 17 this year. Brian moynihan explosion to wilfred frost about the banks perfornce and were going to show what he had to say next. 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. By switching to xfinity x1. Rio Olympic Games show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Wilfred frost joins us now. Hello again. Yes i sat down with Brian Moynihan and we know from q1 earnings that march saw an improvement from january and february. I asked whether that improvement had continued through april and may as well. If you think about it from markets activity, trading activity what these guys out there are doing it is strong as march and continue to improve. If you think about from Investment Banking some deals arent getting done and it is coming along but takes longer to restart. Asset quality was also important in the First Quarter. I asked whether that had spread from q1 to two and whether it had spread from the Energy Sector into others. Weve seen the activity in our commercial portfolios is still strong. From a credit quality is still strong and oil and gas frankly is mitigated because of the obvious issue of prices have changed. And you are working through things. Quite a calling in our company is very strong. And continues to remain so. So quite a resounding response. Certainly on asset quality saying they see nothing in terms of the issues they saw earlier. Despite that bank of america shares still down year to date 14 . The next is see car in june. And for more on that and polit ticks and environment is full interview is available on cnbc pro. Late for you because it. Late for me made it on the second hour of closing bell. Thats 4 00 in the afternoon. When you get up at 2 00 a. M. It feels like. 7 00 or 8 30 in london. Have you switched to this time zone yet havent really because you are still on london time. Still on london time. Although this weekend im going back to the uk. I know you are. Let me know if the woolsly for you. Thats very kind. My favorite restaurant. Im not going into the london. Im be in the countryside this weekend. Ooh. Sorry. Yeah, exactly. Youre so cool. He is. I wonder if Brian Moynihan knew who he was. What do you mean who i am . Im a cnbc reporter that is what he knows. Could be the same thing someday. [inaudible]. Broadway play about it. I dont know if i would get nominated. Thank you my friend. All right were going talk. The donald says amazon has a huge antitrust problem. I this i it has something to got the Washington Post approximate or something. Hes upset about the Washington Post is one piece of it. So i saw the lead story in the journal the health law and other setbacks so i read that. And i then i went to the Washington Post front page. House gop but i wanted the analysis from the leading newspaper. The thought leading number. The New York Times. So ive gone into it. And im on page a1, nothing. 2, 3, nothing. I did find out about these birds proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. 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. This just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card welcome back to squawk box. It is now time for todays executive edge. Were talking about the intersection of business and politics. Donald trump saying amazon has a huge antitrust problem. The Presumptive Republican nominee telling fox news the online retailer is a monopoly and getting away with murder tax wise. Also saying amazons Ceo Jeff Bezos is using that paper, the Washington Post not to tax amazon like it should be taxed. Amazon isnt commenting. Whether to attack donald trump or not. Whats that guy at i cant remember his name . Hes like one of the worst. But he said that jeff bezos needs to prove that hes not a conservative before hes allowed to actual buy the Washington Post. Dont say anything. Allen sloane. Yes. Thats the guy. But i think a very nice. Im sure you do got to prove. Sure. Dot to prove i didnt hear that. Flaming lefty you are going but if this conservative. He these to outline what his views are is this recent . You can find ill get it for you. During the purchase. During the purchase. Needs to prove that hes not a right winger to buy the Washington Post which would, you know, take a left wing paper and maybe turn it into the middle. More of a libertarian of sorts. Bezos we need those outlined before you get approval to buy one of our crown jewels of liberalism. [inaudible]. I do to. Ridiculous to read it thats why i made the point. Guy whos not hands off. Mark cuban. Imagine if he owned a newspaper. Mark cube seas, says trump is t friend you shake your head at. The guy at the bar who will say anything to get laid. Yep that was the line. What . This was the line. I was going to print this out because i got it for you. But that trump has tapped into the mistrust of government and thats why he has so much support. You know guys like that. I was sickle once. I knew there was nothing you could say. So i didnt even attempt to. You try a few times and you realize you are groveling groveling is not attractive and it happens enough times where you say im not gonna do it. Anyway, facebook is detailing how its trending topics feature how that works. After the report this week that claimed i know people were shocked at this that the social network down plays conservative news. Heartbroken. Heart broken and shocked. In a new blog post Facebook Says a series of checks and ambulances involving both algorithms and humans ensures that the stories trending arent biased. I feel much better. The story links to a 28 page document facebook uses and Mark Zuckerberg plans to talk in the coming weeks. You wrote a conservative book. I did. We both did. Really my daughter. That was her you did not. Im in the middle. I dont even know whats going on. Im over here and you guys are over there. To camera right is what you are. Coming up. Helping customers connect on social media. What executives are doing wrong these days and how they can actually improve their tweet snaps and facebook posts as we head to a break a quick chaek at european markets. Eck at european markets. Theres nothing i do ive been looking for a girl 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. Hello . n presents the yardleys. Oh, pizza is here oh yeah, come on in [claps] woah lose the sneakers pal. Kind of a thing. Spring is on. Start your trugreen lawn plan today. Trugreen. Live life outside. E. T. Phone home. When you find something you love, you can never get enough of it. Change the way you experience tv with xfinity x1. Welcome back. U. S. Equity futures are kind of mirroring whats happening over in europe this morning. Down 61 63 points. Yesterday looked like a positive session. It was on the dow up 9 but that selloff in apple didnt help the nasdaq. Retailers were also week again yesterday so we are in kind of a rebuilding mode here. After that 200 point up day was followed by a 200 point down day. Obama administration issues guidance to every Public School district to allow transgender students to use the bathrooms that match their gender identity. Guidelines will be i should issued in a letter. Does not carry the force of law but is considered a specific threat schools who dont comply could face lawsuits or throat financial aid. Found over the Management Platform hoot suite. I have an account. And new for coming in. We ask this all the time. Everybody thinks they want to have a better social Media Presence especially executives and ceos often who watch the show but nobody really knows mow to do it. They want to be authentic and want to do it themselves. What are they actually suppose to do . And how much time does it take to be good at this. You have to play with it. And this is i they lot of the time where it can be a challenge. Twitter Facebook Instagram snapchat and it is an era of exploration right now. How much time do you think you physically spend mind share of a given day sending stuff out. I would not be average in terms of the world. I probably spend two hours a day, you know, looking at whats going on in social. Working in facebook, twitter, snapchat and other social channels. So spending two full hours. And you are a the social media ceo. I cant imagine having to spend. Even have i to spend a half hour. Too much. Too much unless you think there is a director roi to it. If this was 94 to 99 wed be having a conversation around email. Websites, they are table stakes now. It is a core competency ceos need to have. So play it forward to today. There is a transformation going on. That is huge shift and people need so break down just for the audience which social media sites you think actually work the best. So twitter going downhill, uphill . Is it necessary . Instagram, facebook . Break it down what do we need . Every social channel is relevant and important. So you have to do all of them. You dont have to do all of them. You have to figure where your customers are and where they are spending time and you have to get connected. You spend a half hour a day. I think i spend at least a half hour a day. Feels like a half hour too much. Twitter accounts. Twitter is the media talking to the media which actually if you are a ceo and need to talk to the media maybe not a bad thing to do. Scrolling feel dirt and cheap when im done but yeah. His Company Makes it a whole lot easier. For those who dont know what it is you can populate a lot of different places all at once and but i only have one place. You only have twitter. But now you could theoretically. You could have different key words set up to listen to different key words and different journalists and. Tweet deck . Were not competitive with our social networks. Our products. So we have twitter, facebook, instagram, others. All can feed through. Feed in through us and we really just help curate and make those easier. We have 846 of fortune one thousand using our products and a lot of power users on the way to that. You are a unicorn now. Technically. However as you know fidelity just wroen down its investment. Now public investors dealing with private. They also recently wrote up their investment. So they wrote it up too. Are you providing them with different information. They get pretty limited information. They did a broad average looking at Public Markets and then applied it to the private market. It probably was maybe a little heavy handed. Little heavy handed. You gonna go public . Were talking about that. Potentially in the future. Were just building a Great Company right now. Mark cuban said companies weight way too long to go public. Go too public. If you wait too long its a waste. Good advice. I appreciate that. Were looking at whats going on and building a Great Company and talk to customers and just building. I know your a devevotee of standing desks apparently. Yes. Is it good for my back or better . Some people say standing too long. Sitting is the new spomoking sugar was not the treadmill but i do a little wobble board sometimes. What im at your desk. Yeah. Yeah. I think everything in moderation. I dont think it is 8 hours a day. I think you do it for a while. Sit down, stand up and moderation. One of those balls to sit on. I have one of those too. Variation. Those work because your core because youre moving all over. Do you have a mat . Some people have a mat. What do you need a mat . Buzz youre going stand five hours it makes it a little softer. A whole thing going on. The stand up desk sort of eco system. Nice to see you. Welcome back. Over there no mats that e. But at least you get up. Make your employees rich now. Go public. Coming up the rally in gold, 20 this year. And why they are expecting gold to strengthen even more. And later the retail rack. Among retailers. Take a look at all these. Were going discuss whats going on there. A world of negative Interest Rates, slow global growth, driving demand for gold to record levels. The precious metal soaring over 20 . Crude also recovering up over 10 the last month. Joining us to breakdown the moves is dennis gartman, good to have you here. The World Gold Council yesterday saying demand is at an all time high. Except jewelry demand is at a low. What does that mean to you . Well it means as you said the demand for gold is very strong and i think you are seeing people move away from one currency, from all currencies on balance out of the yen, the ruble and moving to gold. One currency against another. You bought cable, you sold dollar mark. The bought the dollar mark, you sold the lira. People dont what the mark is but thats okay. I understand. We old guys remember it, though. Keep going. Do what you have to do. Its all right. I have been bullish of gold not in u. S. Dollar terms but primarily in yen and euro terms. Now im turning fundamentally bullish of gold in dollar terms. I am not a gold bug. I dont think the world is coming to an end but i think inflation is picking up at the margins. You are starting to see strength in the grain markets and strength in the livestock markets on a consistent basis. You have the monetary authorities almost everywhere except for perhaps the United States saying that theyre going to do what they can to expand reserves in the system. All those things being equal, all those things being summed up, have to argue for stronger gold prices. Gold has been strong for the past several months. Likely to continue. The move could actually be emboldened even more if the fed gets gu gundlach today sayinge thinks its unlikely theyll raise. People are saying it wont happen at all. That would theoretically help out gold. It helps out gold if you see Commodity Prices in general continue to rally. Thus far the problem has been that people, because we have negative Interest Rates, people have been taking currency out of their banking accounts, holding it in cash. And cash is deflationary. You have to actually end up seeing the cash going back into the Banking System and being reservable and lent. That will spawn inflation. Thats what the monetary authorities want to get. We have had inflation at extraordinarily low levels. I think theyll start to expand. What do you think in terms of the price of oil . It looks like it wants to go from the lower left to the upper right. Over the course of the past several weeks you have seen the term structure continue to bullishly, you see the difference between the spot rate and the forwards. As long as it is narrowing youll probably continue to see crude oil want to move higher. Demand has been higher than people thought. Supplies had been reduced. Over the course of the past month and a half i have had to turn bullish because the trend has termed upward and the term structure, something i watch closely, forced me to look at the market from a bullish perspective. Is it purely technical or is there anything fundamentally out there that youre looking at as well in terms of the rivalry between the saudis and iranians . Is that off, is it on . It will still keep supply high. If there is a constriction of supply, the problems are taking place in venezuela and the problems that not enough people have talked about taking place in nigeria where you have a new splinter group, the avengers, who have bombed some pipelines and oil facilities. And the continued political dissension in libya where two groups who we thought would allow crude oil to be exported have continued to fight with one another and have stopped those circumstances. You have constrictions of supply which have led to higher prices. Those constrictions of supply are likely not going to go away anytime soon. I was shocked to see how rapidly Oil Production is falling in venezuela because they are such a disaster of a place. Its a failed a failed state completely. And its failing even more. Its amazing whats happening down there. Thank you, dennis. Good to see you. Good to be seen. Thanks for having me on. Colorado businesses that sell marijuana brought in more than 270 million in the First Quarter of the year. About 170 million was for recreational pot sales. The other 100 million was for medical marijuana, that is according to state revenue data. March sales alone generated 3. 5 million in tax revenue slated to go toward School Construction projects. Last year Colorado Marijuana businesses sold nearly 1 billion worth of product. Check this out. A problem with the checked bag screening system at Sky Harbor Airport in phoenix left thousands of bags grounded. Officials had to use alternative screening methods including canine methods to make sure the bags were safe to fly. The bags piled up. They were eventually moved to a specialevent parking lot and driven to nearby airports to be screened and flown to their destination. The system was fixed late last night but not before 3,000 bags were separated from passenger flights. Good thing it doesnt rain much there. Mcdonalds is giving fresh beef a test run in 14 dallas locations. This means that the companys signature sandwiches, the bacon clubhouse and the double quarterer pounder with cheese will be made from freshly ground beef replacing what if you didnt know were frozen patties. If rolled out nationwide going fresh could help the fastfood giant stand up to the likes of shake shack and inandout that tout their fresh, never frozen beef. Burger king in finland receiving an award for installing an inrestaurant sauna. At the spa guests enjoy meals while wearing burger king robes and playing video games. Eventually there will be tablets for customers to order electronically from the sauna. You can always do that over there. Get a massage . Theyre all of the fastfood restaurants are nicer over there. I do not want to sit in the sauna with you two eating burgers. Come on you do. Were waiting for the naked restaurant in london, its now 35,000 people. No. It is. You eat naked . Yeah. Really. Its just for the summer, and you dont have to be totally naked. There is a changing room. You come out. Where is this . The waiting list is 35,000. You cant get in there. You just have to you could probably get in. You could get a table near a waiter. Coming up, our guest host for the next two hours, private Equity Capital player barry sternlitz. He joins us on the set. Tokyostyle ramen noodles. Freshly made in the japanese tradition. When you cook with incredible ingredients. You make incredible meals. Get your first two meals free at blueapron. Com cook. sfx golf swing and breaking glass sfx broken glass falling heres to breaking more glass ceilings in golf and everywhere else. The kpmg womens pga championship. United we stand. Donald trumps meeting with gop leaders bringing the party supposedly closer, but paul ryan stopped short of saying, i do. Takes a big shot at retail giant amazon. Well talk politics, markets and mar with ceo capital Barry Sternlicht. Its friday the 13th. Retailers are getting slashed. [ screams ] macys, kohls and now nordstroms putting up their worst sales since 2009. Is amazon to blame . Well break it down straight ahead. Squawk heads to the back woods. Hell yeah. Discoverys moon shiner is here. Second hour of squawk box begins right now. Its friday, im in love live from the beating heart of business, new york city, this is squawk box. Thursday doesnt even start welcome back to squawk box here on cnbc, first in business worldwide. Im Michelle Carusocabrera along with joe kernen and Andrew Ross Sorkin. Becky will be back next week. The futures at this hour suggesting a negative open. Might be negative feed threw from retail. Dow opens off 52. S p lower by 6 and the nasdaq lower by 13. The price of oil is lower this morning by 65 cents. 46. 05 for wti. Brent 57. 44. This week has not been kind to retailers reporting quarterly results. This hour well get numbers from other familiar name. Jcpenney expected to post a quarterly loss of 38 Cents Per Share on revenue of 2. 9 billion. In other retail news tiffanys saying its chief Financial Officer is resigning effective may 20th. Luxury goods retailer now beginning a search for a successor. He was he had joined he is joining, rather, to leave to another firm. So far unnamed. We dont know. Before joining tiffany he was cfo at insurer signa. Honda reporting a quarterly loss. Nearly 860 million loss due mostly to costs related to the recall of vehicles containing takata air bags. Apple investing nearly 1 billion in the chinese ridesharing service. Tim cook saying the stake in the uber rival will help apple better understand the crucial chinese market. The deal comes amid months of speculation about apples Auto Industry interests. The company has hired Industry Experts and it says it is looking to focus on the incar experience. Apple shares dropping below 90 a share yesterday on concerns about slow demand ahead of the next iphone launch expected later this year. Tech giant suppliers have tumbled on demand worries. Watch out for how stocks like Jabil Circuit and broadcom and sky works do in todays session. Donald trump and paul ryan issuing a joint statement, calling their meeting a positive step towards unification. The speaker of the house stopped short of endorsing the presumptive gop nominee. John harwood joins us now with more. John, watching it yesterday, ill tell you the kind of conclusion that i came to. You knew full well they werent going to walk out and ryan say, im endorsing him i watched Reince Priebus and other people, the way theyre sort of managing this situation. Iff was almost impressed that they, you know, theyre not like keystone cops. The way they handled it almost looked like they were professionals and by the time we get to the convention, looking back, if ryan does have more meetings and does finally come out and do it and Lindsey Graham continues to make overtures, almost looks like they handled it the right way. Is that possible, that they could do that . I think they did, joe. I think this was a very good outcome for the Republican Party. Shocking it was smooth. It defused the tensions, though it didnt eliminate them. As paul ryan said, thats going to take some time. Here is paul ryan. This is a process. It takes a little time. You dont put it together in 45 minutes. So that is why we had, like i said, a very good start to a process and how we unify. Here are some of the key numbers that are relevant to the resolution of that process. First of all, there are seven Republican Senate seats up for election in states that president obama won twice. That makes that the trump relationship sensitive for those members on the ballot. There are about 50 house seats where members are either actually vulnerable or potentially vulnerable because of the composition of the districts because there are open seats with people retiring. We will be watching that. Republicans are likely secure in the house, but thats not certain. Finally, 90 is the proportion of republican votes that donald trump is going to need. The last four republican nominees have all gotten over 90 of the vote. In our polarized system you need number unanimous support within your party to compete. Donald trump lately has been moving closer to that number. He has had some success the last couple of weeks in consolidating republican votes. In april our nbc wall street journal poll showed him with only 72 . Now several polls have shown him in the mid 80s. Well see if he can get up to 90, which is what he needs to do, guys. A couple other things that i thought about, john. Maybe flash the commentary. No. We dont need to do that yet. Now both sides are its kind of funny. The two sides are arguing about who is unified and who is not. The republicans are trying to say isnt it ironic we know our nominee and you dont know yours and that there isnt just a disunity on the republican side, there is some disunity on the democratic side because hillary still has to deal with bernie on the left and she has also got the general election coming. One thing that bugged me yesterday, john. I saw one of Hillary Clintons ads that said trump is preaching unity, and it kept showing all these violent demonstrations and police like putting people in headlocks. I thought, wait a second. Those arent Trump Supporters that are that are ryoting. Theyre people sent by Bernie Sanders and occupy wall streeters and people sent by the democrats. How can she put that out as trump causing i have sent these people over to riot but its trumps fault. Thats a bad ad. Tell them its not going to fly. The rationale for that is that donald trump has been a polarizing figure. Thats what i thought of right away, john. I know i am not alone. I get your point. Its a fair point. But of course, the reason that there is Republican Opposition remaining that donald trump has to overcome is because he has been polarizing, because there are a lot of republicans who know that, to grow the party, they need to do better with latinos and better with women and thats the nature of some of those protests and well see whether or not its hillary. Whats that . I would just run what i just showed of hillary dancing. Candidates shouldnt dance. Remember when the shark tank guys danced . Remember seeing cuban . Joe, does trump dance better or worse than you. I am like kevin kline. I here music, i want to dance but i only move my little finger. You do move like that. Thats why you dont. I dont eat on tv either. Michelle, have you seen him dance . I wont dance. No nobody has. Nobody has. Ive killed them. Thanks, john. More perspective. This guy can cut a rug. For the white house and the best candidates for the market. How are you doing my friend, barry . Good to see you. For the next two hours. Barry sternlicht, chairman and ceo of capital. You are a bachelor. You are single digit, right . Index. I dont know about dancing. Would you dance if unless you were occasionally ive been known to dance. Occasionally. He is a dancer. Maybe after its the way he holds his shoulders. You can dance if you want to. You got 52 billion. More stuff going on. Love to talk about real estate, the economy and Everything Else, but i also, in recent years, have loved talking to you about politics. Really . I didnt notice. Yeah. So you just heard all that. Are you are you leaning one way or another . What do we need in this country . Are you declared . I was thinking about what i was going to say. I know donald really well. I know hillary. And i think the first thing you have to say is what created donald. How did he get here, right . I said the last time i was on the show i think he is a product of this president , obama. I agree. He is really right. Right from the start, with make America Great again, we love winning, we just love it. We love when Osama Bin Laden gets taken down, when we win the hockey game. He tapped into a deep vein. Were cheerleaders. We want to know who the hockey team is who won, the basketball team. Were an optimistic nation. Obama basically apologized for us and were tired of apologizing. I want to know, do you trust donald trump. This has been great theater until he got here. At the moment both candidates we know we think she has had to go left and shes going to have to go to the middle. Who do you trust . The standard deviation in both candidates is pretty high. Thats what im asking. We dont know. Thats what im you know, i think theyre both capable people. I think i think its going to be i think donald has to give us issues. We have to talk about things that we can be winning but how do you define winning . Have you ever done a business deal with donald trump . No. Why . It hasnt really opportunity hasnt arisen. If one did, would you . Feel completely comfortable doing that . Well, i think with both candidates it would be challenging. I was about to go to the other side. Youve given money to Hillary Clinton . He wrote the book, the art of the war, right . You might have a better deal dealing with the clinton foundation. I dont know. Do you have any things going on . It would have been better when she was secretary of state. When she was secretary of state you probably would have done a little bit better. In 24 states the middle cant vote, right, in the primaries. And i think who wins is going to take those votes. Right . I think i am kind of an independent voter. I can go both ways. Most of my colleagues are physically conservative, socially liberal, we dont really have a party, so whoever appeals to us, is who we vote far. There is a Libertarian Party but it never gets far. It doesnt. I have a fascinating stat that the average viewer of cnn is 61. Do people watch the young turks . 2. 7 million. None of your guests or me watch it. And theyre voting. These are the kids. My son. He watched the young turks. He is the one who told me that stat. Theyre listening. Who is he voting for . I dont know. He is in berlin for the semester. I dont know. I havent really asked him. I am afraid to ask him. I think a lot of people might sit it out. Both of these candidates dont have high Approval Ratings on their own. A lot of people are saying the good news is the nation is going to pay attention. In the first debate, which will have greater ratings an the super bowl just got back from germany, israel, london. Every one is talking about this. Asian investors. Everyone is talking about it. This has been great theater but it will come down to actually i think the nation has to rise up words of jeb bush and focus on what do they stand for . Its not enough to throw barbs at each other and if she moves far left where the nation isnt and he changes his positions a little bit. I am waiting to hear exactly. I could be supportive of either candidate if they go to middle. We have real issues. Serious issues. We havent talked entitlement reform . I dont think its come up in the last five months. Isnt the fundamental problem that nobody trusts either candidate . As you said if they come out with this exact position, theyll have a position today and then will have a different position a week from now. I dont know what to tell you. I think we have real issues. We dont fix our education system, we cant get jobs. We wont have a strong economy. If we dont get Energy Independence we always be relying on foreign cap the first debate, one of the things donald trump says were a country of winners and were acting like losers. Why are we doing it. I love it. He changes his message on many things but that core message is very simple. Very powerful. He is a nationalist versus a geopolitical guy. I think we need to return to how do you feel about that as a business person . You know what, thats a dangerous assumption, right. You can err on one side. If the chinese dont buy our debt, were going to have to do qe 17, right . And youre insulting the chinese. I agree with him. We pay large import duties to china. But i think there is diplomacy and then there is a stick. In business you have to use both. You know, this but it is working with the great because we dont feel like were winning. He is absolutely right. With stagnant real wages. Do you think he would be a better negotiator on those points because he is tougher . I think a lot of it will be who he surrounds himself with. The Vice President candidate he chooses is important. Somebody thats a real important. We had a guy on from Morgan Stanley who said Business Investment is hurting right now. It doesnt just get through january of 2017 and, didnt care who it was. Couldnt be worse than what we have had. Business investment is down like 22 . Couldnt be worse. Even if its hillary. He wants obama to be gone. Business leaders. Its not even obama. You just need to know what the new rules of engagement are. But thats what i am trying to get at. Everyone says, oh, we cant wait until january, then we find out the new rules. Guess what. Its unclear what the rules will be. They might tell you the rules today. Its congress. It wont be easy to change everything overnight. Congress will be a break on most candidates, right . Well be in gridlock. Business leaders can deal with gridlock. But the range of outcomes if youre making Capital Investment decisions today. From the perspective of someone who wants to bring in capital to this country, right, right, you would love all the sovereigns to put more money to work here. Which candidate is more attractive from that perspective . I think there is no question hillary is more attractive right now. I dont think no, no, no. Who wants Corporate Tax reform . Money is already leaving this country. No, no, no. The point is they need, they dont know donald. He says a lot of different things, right. Mosel mostly not positive to foreign investors. Cut Corporate Taxes, bring the 3 trillion back thats over there. Right now you are having money exit this. There is no common sense in politics today, right . No common sense. There is a wide swath for common sense in the political arena. Capital is not being treated well here as is. Forcing us to keep our cash offshore really is a dumb idea. Thats what im talking about. You like infrastructure. You like Infrastructure Spending, right . Oh, yeah. Bigtime. So but for the most part i hail from the great state of connecticut. The Republican Party for the past eight years have said they dont want to do any Infrastructure Spending. They wanted to do keystone. The spending happens but the infrastructure doesnt. The reason donald is the candidate is because republicans blocked Infrastructure Spending and blocked taxes on the internet because its a new tax where amazon is killing retail and they dont pay taxes in 25 states. We want to talk about that in a little bit. Is the internet still a startup . You have to subsidize amazon in 25 states but not taxing the sales . We need revenue. Level the playing field. Its interesting because i think its wide open. I dont know whats going to happen here but i would never count donald out. He has certainly surprised a lot of people. It was easy to call this guy little and he has little hands, here is Lindsey Grahams phone number. Lets lets hope the conversation realizes to a level of substance. Its not. I know. Im worried it wont. There is a lot of material. There is a movie coming out, too, hillarys america. Right . At the end of the day, donald has a chance to define himself going forward. He has been all over the place. Its worked. He has gotten 2 billion of free impressions from the media. Crowded out every other candidate. He is a brilliant tactician. Already this morning. Hillary is going to fight for air time every step of the way. Hillary has bernie to deal with. When she turns her machine on she is much better organized and has a bigger machine than he does. On trump with amazon, he made this the antitrust. Do you buy that . Does it make sense to you . What was he referring to . I didnt see the context. A little murky. Do they have too much market share and does he control the Washington Post. The Washington Post is the second i dont know if he was relating it directly. They wrote some bad pieces about him, obviously. Not surprising. I recently heard jeff speak. He was saying he didnt make the mistake of promising wall street earnings. And he got to keep this amazing thing. Built the Cloud Services which are just the how that happened is amazing. Because it isnt about selling books anymore, right. And its pretty shocking. He is disrupting the retail spectrum but its still on the margin. Its just a small part of the business. Barry is here for two years. I forgot this. Harwood is the biggest dancer. If he is at a party where there is dancing we need to bring him back. He dances . He is the dancer. He is a wild, crazy. You should have a segment. You havent done that yet. A dance hour. Dancing with the cnbc stars. Rough week for macys, kohls, nordstrom. A look inside the rout and if its stilling bigger troubles in the economy. Later, Mortgage Rates dropping to a threeyear low. What impact will that have on housing. Ceo of the Mortgage BankersAssociation Joins us to talk real estate in just a bit. Nordstrom is the latest in a series of disappointing retail earnings. Now raising concerns over the health of the overall consumer. Courtney reagan joins us with a look into the retail wreck this week. Thats right, michelle. I think its fair to say that this week has been a retail wreck. Im not sure it means that the consumer is not healthy. Macys, kohls and nordstrom, worst results in 2009. Dillards worst in six years. Macys and nordstrom cutting the first year earnings forecast. Kohls didnt update and thats probably the wrong move. Department stores have shed more than 5 billion in market cap and we havent started trading today. Nordstroms shares plunge dz 22 . Theyll lose more when trade begins. Macys lost 18 . Jcpenney shares only down 13 this week. The government retail sales report is due out in an hour. Its actually expected to show a healthy increase thanks to steady job growth, low gas prices and strong gar sales. Consumers are spending, but less on the merchandise that Department Stores sell. Total Clothing Sales have been declining over much of the last decade. So the total amount of clothing sold is getting smaller. And its getting further divided. Fast fashion retailers, ecommerce brands like h m, zara are taking share that used to go to department and specialty stores. Amazon too. Amazon now has seven of its own privatelabel clothing brands. But selling clothing is not that easy. Just ask nearly any retailer. I think amazon has a challenge on its hands when it comes to apparel. Thank you for that. While barry is here. How many malls do you own . 24. How are they doing. Whats going on. The consumer is kt aing totally irration. The 22 drop. The consumers are doing the same thing. In the crazy climate people say, im not going to spend money. Im going to wait to see what happens with this political situation. Savings rate has gone up. All that came out of that. Everyone said ill delay the purchase. This is temporary. I agree with his comments earlier. I think the good news is that we havent fallen into a recession frankly. Business spending. You are a ceo and youre making an investment, you dont know what your tax code will be. This election has is crazy. You dont know whats going on. You just wait. Wait is a recession, yet we didnt go into recession. We went to half a percent gdp growth but not recession. Im fairly bullish on the economy in january. February and march. Because theyre going to spend americans love to spend. If we feel like were winning, well spend money. I think this is temporary and its a shift. People going to restaurants, theyre spending money differently but the dividend you have to wait six months from now. Yeah. What is surprising, people dont understand, is that apple falls apple is important to the mall industry. If there is an apple store in the mall the rent with be 100 per square foot more. I think its a good stock. Its not a major position for me, and i think you had someone on last week youre 24 youre 24 malls. Up 2 in sales year to date. How many shoould you close down . None. All good ones. A guy said the other day that a third of all the malls should be closed. The bad ones are dying. The tenants are changing. We have a hard break. Well continue the conversation after when we come back, are home buyers hitting a wall . Ceo of Mortgage Bankers association joining Barry Sternlicht to discuss. The ceo of sugarland. Here to talk about the revolution in white lightning. Squawk returns in a moment. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing among the stories front and center. Not a lot of stories make me nervous. This one does. Another malware attack affecting the worlds banks. Swift, the organization that runs the international Banking System said the latest attack targeted an International Bank getting access to bank codes. Earlier this year youll recall hackers stole 81 million from the bank of bangladeshs account at the Federal Reserve bank of new york. Mdp reports hardware sales fell in april and Software Sales dropped 21 . 8 30 a. M. Eastern time april retail sales. First month of the Second Quarter. Very interesting. As well as last months Producer Price index. Jcpenney is out. Its posting a First Quarter loss of 22 cents an share. There is an adjusted number here. Im kidding. 32 cent loss. The regular loss was 22. Adjust it and its actually 32. Maybe there was a gain of some sort. Terrible report out a week ago that they couldnt even make some of their payments to people. This is above expectations, though. [ laughter ] i mean, thats 32cent loss is not as bad as a 38cent production. The sales number, 2. 81. Thats below the 2. 91 that people were expecting. Samestore sales down. 4 , which i think is probably pretty good for jcpenney. And the 3. 4 growth. Maybe its not good. When we do macys,s one thing. Nordstrom another. Kohls another. You have jcpenneys in your malls . Yeah. You know whats working for them. S sephora inside their stores. Thats working for them. Your malls are we overstored in the country . Sure. The problem is some malls are too big. You cant find tenants. If you bring in a big discounter, it destroys the small stores that make up the mall. Its really interesting. This is its going to be its going to just evolve. The bankruptcies in retail are normal. They happen all the time. I grew up in connecticut. We had a retailer called cal doors that came and went and was it bradleys . Yes. There is a hot jewelry chain called pandora. Not the music server. They cant get enough of them. The retailer has to pick up his game and the mall owner has to create activities in the mall to pull people into the property and do things you cant do online. The teenage girls are the bulk of your shoppers in a mall. Everyone is nervous. This is not surprising. I think its bullish. I think the fact that were not negative in gdp with this sluggish investment is good. You know who quadrupled spending is the government. States and local municipalities are spending money but only a quarter of what businesses are spending. Its helping and it will get better if we get out of gridlock in washington and start to spend money on infrastructure. The chinese have overspent on infrastructure and we have amazing Interest Rates and cant get anything done in infrastructure. In connecticut they want to pass a bill and theyll sequester the money to do the toll roads and the democrats wont make the language tight enough to leave it in the lockbox so it just fixes the infrastructure. They will have to lay off people. A crisis is a great thing. It will fix things. In connecticut they had to lay off teachers and other public pension workers saying, were not going to let you raise a hundred billion to fix the highways. We had a crisis. It didnt do so well. If you listen to druckenmiller, the fed he wants to spend money. He wants spending that will actually work. It hasnt worked at the federal level. A lot of money. He wants to spend a lot of money. So bond deals that goes directly to roads bubbling over with enthusiasm. Dont you want a Publicprivate Partnership at least . I think the government should do only the things the federal government can do, right, like defense. Exactly. Major infrastructure. Invest for the future that private businesses cant do. There are some things we cant do. How do we make it so 90 cents doesnt as always fall into the cracks. The government is a giant company with a lot of excesses in a lot of places. Even democrats talk about Publicprivate Partnerships where at least the Purse Strings are controlled by someone i love it. I love it. Im good with that. Yeah . Why are you pointing at me . Nothing. Something going on . She wants to see you dance. Coming up thats harwood. Ive seen him dance. Harwood. He shakes his gray hair. Shake shack spiking in trading after hours. A closer look at the burger chains earnings in sales. The numbers and their business barometer. Took at u. S. Equity futures. Down less than 50 points. Welcome back to squawk. Report out this morning from the Mortgage Bankers association showing that Mortgage Applications for new homes decreased 11 in april. Joining us with the data is david stevens. Mortgage Bankers Association president and ceo. Its not good. You have to look at the overall trend. We peaked earlier this year. Home applications typically reach their peak in march or april. March was the peak for this year. Its seasonal . It is. Were still up 15 to 20 year over year. Home sales will continue to rise. New home applications will continue to rise. Overall Housing Demand continues to be relatively strong. You dont see it as a grand slowdown. No. If you look at household formation data, were creating 1. 2, 1. 4 million new homes annually. Bear says the uncertainty about the election is hurting investment. Could Consumer Spending with hurting home purchases as well . Were still seeing growth. There is a lot of variables that will affect the demand. I am not sure uncertainty is Holding Buyers back. I think cost of inventory. You own a lot of residential. Im wildly bullish across the specter. I am the chairman of try point. Eighth larger home builder. We started a couple years ago. Its more labor constrained supply. Housing prices, probably the sleepiest, best sector of the economy. Up 6 year over year. Our apartments we have almost 84,000 apartments today. Year over year rent growth 6 . Wow. Where do you see growth like that, right . Then we have colony starwood homes. Explain that. Just reported on monday were talking about how and it comes up 10 . People talking about how the country is going to hell in a hand basket. No politician can screw this up. Our demographics of 80 million millennials. They go to apartments, marrying later. More Single Family house holds. Theyll shift into homes. Its a fact. The red tape, you know what the cost is to bring a unit to market today. Tripoint is not building houses with airbnb suites in them. Janet yellen said she likes low rates. So do i. I wouldnt expect anything differently. Our forecast is for rates to rise. We do like certainty in markets. The uncertainty variables create all sorts of distortions. We forecast Mortgage Rates to rise over the 30 years. If rates rose, i think people would say i have to buy now. They can afford these homes. The guys are building, especially lowend homes, are doing great. Thats where the stock is short. We need to build more entrylevel housing. Same in the rental market. We dont need class a new york city homes or San Francisco. Made famous in the back woods of appalachia, the business of moon shine is booming across the nation. The owner of Sugarlands Distilling Company joins us along with dare mains from the show moon shiners on discovery. Things could get interesting, like white lightning. Be right back. Were hot, hot out here. Were likely to have liquor out of this thing. I would say we will. Here it comes. Thats good liquor. Hell yeah. Thats a held of a strain of liquor coming out of there. Hell yeah. A clip from discoverys reality show moonshiners, the business of moon shine emerging from the back woods. Once known as the bad boy of spirits, its been tamed and taken upmarket. Tennessee based sugar lands distilling Company Bringing you the unaged corn whiskey into the world of wine style tastings and celebrity backed products launching hooch. Joining us is the owner of the distillery, ned vickers, wearing a suit and digger mains, star of moonshiners who is appropriately dressed for this and all occasions. Good to have you here. Good to be here. What you do on tv, its not legal, is it . Not necessarily, no. How do you get away with making an illegal product on National Television in which there is hundreds of hours of tape and youre sitting here. My lawyers Say Something about hearsay evidence. I dont know. I guess they have to put you and illegal alcohol in the same spot at the same time. I see. You dont ever do that. I try not to. Excellent work. I try. Moon shine is hot . It is. Absolutely. We opened two years ago. Were now in 21 states and 24 by the end of the summer. Q 1 up 30 over last year. Thats volume . Dollar volume. Dollar volume. I never knew there were so many kinds of moonshine. Butterscotch, gold moonshine. The base is always corn . Not necessarily corn. Sometimes its rice and other spirits. Its if you can get something to ferment, you can make alcohol from it. Right. So my question about moonshine was i Never Associated it with a type of liquor but a legal status more than anything. Right . Moonshine is meant to be illegal. Well, thats the mindset i always had. That its got to nobody is going to buy liquor thats produced in a legal facility. I had to eat crow. I was totally wrong. Its a rage i would have never in my life believed that it would be at this point that it is. I feel honored to be one of the people thats brought it from heritage moonshine, the way it used to be in the days of my predecessors, to where its at today that its artisan liquor. The important part is we worked with people like digger to develop a recipe that is authentic and just like what they were making back in the woods and brought it out so everyone could enjoy it. My father told me never drink moonshine because you could go blind. Look at you i love that face. What . They say everything to make you afraid. What my mother told me you would have to walk me in here today. I didnt go blind. I thought moonshine was like 150 proof. Right is that like grain alcohol . Whats 150 proof . Typically coming off the still and digger can speak to this youre looking at about 110 proof. 110. Some of this is 70. These are mixed . Theyre tampered down. The oldtimers would have said ta tamper tampered. Unaged bourbon is what moonshine is. If youre going to pour that youll want a little pourers or youll get it everywhere. Did you make real moonshine on the show . Next question, please. All i can say is im not going to waste any mash. Im not going to say i made anything but im not going to waste any mash. Do you drink it out of the mason jar . Absolutely. Thats the way its meant with be drank. If you want to drink it out of the cup. It doesnt pour it doesnt pour augout of th mason jar well. Are you using a straw . How about my coffee cup . The butterscotch is real good in coffee. Its outstanding in coffee. The butterscotch is great melted with some butter and put on your pan cakes. This is delicious we are from the same area. One of the things that we did when we started this company was we went out and actively sought moonshiners. Some were willing to you had this idea,and you found absolutely. I was the guy that, piff was he on tv yet . Yes. He was an early find. Some of the others were harder. Im right next to gatlinburg. You want to buy in . Totally. Come on down. You could sell this is this a very american thing . Is this like jazz and Country Music . Its 100 american. Whiskey text was the first big political controversy. Is this a long line of family . No, sir. My daddy absolutely hated the fact that i made liquor. He is called a pappy, isnt he . My father. Do you know anyone who was in the business . Oh, yeah. Popcorn sutton, the notorious moonshiner that unfortunately took his own life rather than go to penitentiary over making liquor was a dear friend of mine. Was that in tennessee . Yes, sir. What year was that . 2009. He was up in the woods . Mmhmm. We didnt make liquor out in the woods. We had buildings. And thats what got him caught. One of them caught on fire. Unfortunately. But by that time i had retired. How long you been doing this for . This time what he doesnt actually do . How long have you not been making moonshine for . About 30 years. Its been a business for you . Thats how you made a living . No, not necessarily. I probably about broke even now with the show and the alcohol sales, popcorn had me in debt and what i had wasted along the way. To me its i classify it like indian artifacts. I used to walk fields looking for arrowheads and bits of pottery. To me this is our heritage along with the fact that the American Indians that were in the land before we were, its just heritage. Sounds great. We hope you get really rich now making moonshine and being on tv. I appreciate that. Did you just take a picture of him on tv . I did. Im posting it on twitter. This was a great segment. We loved it. Im glad you did. You would have liked it a whole lot better if you got you a big horn of this moonshine. Im going to try. This mornings top movers, the list of stocks to watch. Later the owner of wish to challenge walmart and target. This is, you know, talking about a golf swing here. Lets look at some stocks to watch. Nvidia reporting quarterly profits up 46 from a year ago on increased demand for the high end Computer Graphics chips. Allergan. Talking about business and finance at goldman. Goldman cites an improved Business Model and stronger Balance Sheet for the drug maker. Mobile Technology Provider mobileeye struck deals with two unnamed auto makers to provide selfdriving car systems. The deal calls for the company to be part of an effort to fu y fullyautonomize. To make cars fully autonomous by 2018. If you had to read right now wed have to wait until probably 8 00. I told you about those bars. Theyre so good. The pumpkin. Best out there. Unbelievable. Protein. Five ingredients. Theyre not bad. Not all the junk in the other bars. All this all these chemicals. No chemicals. Rx bars. There is not a single chemical. Its like made of something not from this earth. Its all chemical jcpenney out with quarterly result. Closer look at this weeks brutal retail wreck. Well talk to you after the break. 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. Market alert. The dow on track for its Third Straight weekly decline but could new numbers on the consumer and inflation change the game . Market moving Economic Data just 30 minutes away. Retail wreck nordstrom shares slammed on weak sales. And downbeat outlook. New this morning, jcpenney rolls out its results. Donald trump calls out amazon. Well tell you why the president ial hopeful says that jeff bezos has a huge antitrust problem on his hands. The final hour of squawk box begins right now. Boom here we go 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 Andrew Ross Sorkin and Michelle Carusocabrera. Becky will be back on monday. And were counting down to two big economic reports this hour. Weekly jobless claims and the Producer Price index. Futures right now are indicated a little bit lower, but you would expect that on friday the 13th andrew. Some people are afraid of it. Because its friday the 13th. Yes. So, tell you some other things you might want to be a little bit afraid of. The word of the day is. Word of the day is on wall street is. What is that . You think this is a joke. Whatever word is on the screen, thats the word. Thats on the screen. Paraskevidekatriaphobia. Were going to move on. The question is do investors actually fear friday the 13th. Youre not going to try to say it . No. The s p 500 has been positive 63 of the time on that date while the dow is positive nearly 70 of the time. Michelle. I was looking the word up on google. Appleal investing 1 billion in the chinese ride service didi chuxing. Tim cook saying the stake in the rival will help apple better understand the crucial chinese market. There has been malware attack. Future apple cars through them. Could be a lot of reasons for it. Politically directed lending is always problematic. Affecting the maluaware attacking swift, the latest attack targeted an unnamed kergs bank somehow getting access to valid bank codes. This year hackers stole 81 million from the bank of bangladeshs account in the Federal Reserve bank of new york. A global crude supply eve overhang could last until next year. Stocks to watch. Jcpenney, it did post a smaller than expected loss. Sales below estimates and the retail lowered its fullyear growth profit margin guidance. As a result, the stock is down 77 cents, or which is more telling 10 because its a 7 stock. 10 drop in the stock. But it only takes 76 cents to do that. Nordstrom earnings missing the mark. Company is cutting its fullyear outlook after instituting bigger discounts to clear out excess inventory. Shake shack beating the street on top and bottom lines. This is one i think, sorkin, we were talking about being right about something. I think youre right about this. You didnt believe it when it came public . I didnt believe it at the nearly 100 price. Its 36 now. Trying to tell you you were right. Thank you. I appreciate that. Youre welcome. God almighty. Do you remember that you said yes. It was hard to support those prices. Its down 70 . If you had shorted that you wouldnt even have to work today. Still not exactly cheap. Do you have shake shacks in your malls . Yeah. Actually not ours but ive been to a couple. I went to a shake shack in kuwait. In a mall there. Do they have good burgers there . It wasnt that big of a line. The restaurant chain raised revenues and sales growth forecast for the full year. Dillards earnings falling short of estimates. Third consecutive quarterly decline in same store sales and nvidia reporting a 50 rise in profit. I just talked about this. Chip maker got a boost from strong video game demand. Honda citing a Fourth Quarter loss due to the takata air bags. Honda lost 860 million for the quarter. Dow fluctuating between positive and negative territories yesterday. Ending the day barely in the black. Dom chu joins us. He has more on the negativity in the markets and the crosscurrents. Dom. Paraskevidtrika phobia. I brought it because because joe brought it up when we were talking about the number 13 horse nyquist at the kentucky derby. I remember seeing it out there. Lets talk about whats going on overall with the market crosscurrents. Like you said, the retail earnings have not been great. At least the outlooks havent been great and the stocks have been getting hammered. We have seen with the s p 500 the tight range overall. We cant seem to get out of the range between the 1890 issue here. Thats since february. See the highs . We have only been trading at a very tight range just for the past month or two. Only about 600 points for the dow overall as well. If you look at some of the push and pull, tug of war thats developing, why markets cant seem to go down or up, there are a number of reasons why, too many to count. Lets put up some of the crosscurrents in the market that have people talking at least a little bit about why things are not moving one way or the other. You have a great earnings season, not really, right . Things are down. Its better than we thought it was going to be. At the same time, fed uncertainty. Maybe the two pulling in opposite directions. You have a weakening dollar. That should be a good thing for the Multinational Big Companies in america. Thats maybe a good sign. On the other hand you have the technology, financial and health care stocks, the three biggest sectors in the industry, all lagging in the overall market. Maybe thats a bad sign. Then higher oil prices. We have been talking so long about how oil is supposed to be driving the market. Its a good sign when oil prices go higher. Maybe thats a good sign. At the same time you have the u. S. Election risk coming up here, and nobody knows what will happen. As we talk about the reasons why the market is doing what its doing right now, there is a lot of fear in the market about the unknown. All these guys here are pulling in opposite directions, guys. Thats one of the reason the market is stalling out at these levels. Back to you. Thoughts on the global macro lens. Drags on the u. S. Economy and drag. M a is down. Ipos are off. Everybody is down or getting busted by the justice department. By the wayewe have to talk a starwood marriott. What are you doing as a function of all this . Were cautious. On the investment profile weve bought 8 billion of apartments in the last six months, but we are being cautious. Were looking through the wreckage. We like this. We like uncertainty. Are you saying we got a 10 down, 5 . Or you say we think it will be flat. The u. S. Economy . Kind of like what you see. It will pick up after the election, i think. Household formation is good. Housing will be okay. Apartment rents are going up. There are pockets of weakness. New york city is weak. San francisco is turning over because of the tech bubble bursting or deflating. Have you putting any money weve bought, nashville is strong. Seattle is strong. Denver is strong. Portland is on fire. Southern california. Florida is pausing because of the exit. Long time we like it a lot. You see in the property markets the results of the tax situation or the taxation of states. The states with no taxes are winning. I was in texas yesterday. Austin is a million. Theyre getting all these companies and plano is doing great. Dallas is doing great. Houston is has got the oil situation. The Housing Market is soft but not terrible. And there is no yield in the world, so property is a great place to invest right now. If there is inflation, you get a free call on inflation. You know what, its interesting, in europe with brexit coming up the transaction volumes have cait crated. I think this is actually good. That the economy is actually positive. I thought, with oil crashing, we might go into a recession. And we didnt. I thought it would be now. I thought we would see a recession. And we didnt. I am actually surprised. You kind of new businesses would stop spending. You knew consumers would go, buy the shirt tomorrow. Nordstroms and jcpenney. Thats womens apparel. The biggest category. Theyre waiting and theyre buying Technology Devices and doing other stuff with their money. Health care. Car sales are great. Car sales is really good. Surprisingly good. There is a shift in consumer i was thinking about amazon and their impact on retail. There is a great shift online. And look at restoration hardware. People even buy furniture online. Their numbers are not so great. People are use pausing. Actually restaurants are good. Leisure is not terrible. We own 600plus hotels. The numbers are not bad. Your former company, starwood. Yeah. Getting taken out by marriott. What do you think of the deal . I think its a really good deal. What did you thing of enbang trying to get in there . I was surprised they dropped the way they did. I mean thats one of the problems the chinese have in american markets is they have a reputation for kicking tires hard and walking away. That didnt help. I imagine the government said stop. You think the Chinese Government said stop. Yes. An article came out in the wall street journal about who is enbang and where did they come from, where does the money come from . They went a step too far. Number one buyer today for property in the u. S. Used to be the canadians by a huge factor. Yeartodate its been the chinese by eight to one over the canadians. It will be interesting to see whether the money continues to flow to get out of china. If youre worried about china, the money will come out or the government slams it shut and says stop investing offshore. You distinguish between the individual buyer who is desperate to get their money out versus enbang who has to have government approval. Its hard for individuals to get their money out. We had some retail Residential Property in new york city. The chinese buyers are with the corruption scandal, they dont want to move money around. Theyre nervous. All the stuff, the crack down in china on corruption. All of it will pass and the world will resume a more normal pattern. What do you think of San Francisco and new york city where we are now . Theyre soft. New york city is rolling over in every category. Rents will go down in new york city. What are we looking at . Office rents. Both office and residential . Yeah. Residential is already cracking hard, at the top. Even multifamily rents are down in new york. What about florida . Florida is strong still in the rental. In miami. The condo market is definitely people its exactly what you are seeing. People are just waiting. There is no sense of urgency right now. People say, i dont know whats going to happen. So that waiting, if you own property, you cut prices to try to induce them to buy something right now. I think miami is like that except its all about brazil which is having massive issues. Yeah. Even there, longterm you have to be bullish on that, i think. Because the the neighbors, argentina, peru, colombia, theyre right in their fiscal policies. The brazilians have gone left and its not working. They have to behave their like neighbors. Peru is going like 4. 5 . Brazil will it will be quite a storm. A somethingstorm but it wont be that kind of storm, at least not on tv, but it is it could be could get really ugly and were happy we kind of avoided brazil and the rush to brazil. Watch money, though. Money is flowing. Its the flow of capital now around the world that is really impacting things. Japanese investment in the u. S. , there is where retail is coming. Almost 7 billion into the reit stocks. 7 billion searching for yield out of japan at the u. S. Property market. If that slows down the reits crack. This has nothing to do with fundamentals. This is people i was reading about that the other day. No return on the capital from japan. Were buying efts, not the stocks. Well continue the conversation with Barry Sternlicht. Donald trump argues that amazon has a huge antitrust problem. Well tell you what he has to say about jeff bezos. Stay tuned. Youre watching cnbc. First in business worldwide. We need to be ready for whatever weather may come our way. My names Scott Strenfel and im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Welcome back to squawk box this morning. Donald trump saying amazon has a huge antitrust problem, the Presumptive Republican president ial nominee telling fox news the online retailer has a, quote, monopoly and getting away with murder taxwise and saying jeff bezos is using the Washington Post to not tax amazon like it needs to be taxed. He says hes assigned reporters to attack him and other political enemies. Amazon is not commenting. I want to say amazon is one of the Great American innovations and we should be supporting that. I dont believe for a second that bezos is assigning the stories. We should tax amazon like every other retailer. Maybe. If you think thats why they have an advantage. I have an advantage because i dont have to go to the store ever again. Whether they tax it or not. Absolutely. Its an incredible company. Incredible. Speaking of one of the losers. Jcpenney posting a smaller than expected quarterly loss. Revenues falling short. Retailer lowering the fullyear profit margin outlook. Here to break down the numbers. You see whats happening in the stock. Down 10 . Off a small number. They say that even though sales were not as expected theyll maintain the full year. Do you believe them . You have to give them credit right now considering how big some of the other Department Stores have guided down this year and jcpenney has by and large kept its guidance, been true to its word of saying theyre going to grow free cash flow, which they did last year. You give them the benefit of the doubt. Whats going on in retailing . Is it because were at this tectonic shift where the whole world is like me saying why do i bother to go to a store . Or is there something wrong with the American Consumer . I think its good timing to talk about this right after amazon. Amazon had strong numbers in the First Quarter. Qvc, the bellwether in tv shopping. They had a strong First Quarter. Seems like when you look at macys, kohls, nordstrom, the weakness across the board from such large players, its hard to think there is not something going on with the consumer but the online retailers are doing okay. How do they get back to strong growth . Is it decreasing the number of stores to focus on fewer spots in fewer places . What do they do . Im not sure there is a way to get back to consistent, sustainable topline growth in the Department Store channel. There is a consistent share shift to ecommerce. A lot of the best privatelabel brands are vertically integrating and going direct to consumers. Im not sure its a challenge to grow out there. More stores need to look to what pennys is doing, drastically reducing expenses. This has been such a bad week for retailers, the contrarian says right now is the time to buy . Anything look good here even as we look at all the carnage . I like tv retail. The diet companies have been doing well. Weight watchers and nutrisystem have had strong First Quarters. The Department Stores, thats been tough for a couple of years. Decline of 50 in one year. You dont think there is any turn on any of these . Well see. You know, a lot of it remains to be seen. What are you buying . Qvc, weight watchers, hsn. None of the traditional retailers . Were looking towards new, online, focused retailers. Some contrarians would say that was an even better sign. Keep that between you and me. All right. You have a question, barry . Mall occupancies are record highs. Its kind of hot, right . You would expect massive vacancies and its not hard to find i think weve done 12 deals with h m in our malls in two years. Were retenanting them. Everyone has to get better at things. Youre taking out that what was the crazy italian sbaro. Youre putting a new constant in the food court. We took out ashleys furniture and put in a movie theater. You have to actively work the assets and get people off their couches to go. Its an experience. Millennials are about experiences. If a mall doesnt create an experience with the high school choir, the parades and the art. You have to make people want to get off the couch and go. Things that are really interactive, theyre working because people are seeking community. The mall, the retailer, has to figure out how to get people that with great service. You have to go there. She says you look spectacular in that. You cant get that online. When i look at jcpenney, if they didnt have sephora, what would it look like . It would be tougher. And you have seen movie theaters, fitness centers. It used to be that the big anchors would the traffic drivers to benefit the properties in the interior of malls. Now you are seeing malls needing other traffic drivers. How big do stores need to be . Theyre using them as showrooms. Lulu lemon, i went into the store to buy the shorts and they said, its on sale online. Like, what are you doing . Why would you do that . Get them in there. Some retailers are being shortsighted, i think, though, about you know when you pull out of a market you lose your physical store, the sales go down. The store is a Marketing Tool for the brand. Whether its like i am on the board of estee lauder. They are opening a lot of stores. They see everything. The Department Store, which is a collection of other peoples brands, if you want hilfiger underwear, you just go online to get it. You dont have to go to the store. Department stores in general dont matter in the retail landscape. Its walmart, amazon, and Everything Else. Walmart is all of retail. Right. Mr. Furman, thank you. Thank you for having me. Coming up, the Obama Administration planning to issue guidance to Public Schools about transgender students access to restrooms. As you know, North Carolinas bathroom bill draws more controversy. Brian moynihan calling for a repeal of that law. Well show you what he said when we return. Flrb [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Amazing sleep stays with you all day and all night. Sleep number beds with Sleepiq Technology give you the knowledge to adjust for the best sleep ever. Its the semiannual sale save 500 on the memorial day special Edition Mattress with Sleepiq Technology. Know better sleep. Only at a sleep number store. Obama administration issuing guidance to every Public School district to allow transgender students to use the bathrooms that match their gender identity. It does not carry the force of law but is considered an implicit threat that schools that dont comply could face lawsuits or lose federal aid. This on the back of North Carolinas controversial bill. Bank of america ceo Brian Moynihan spoke out to cnbcs will fred frost on this issue. Weve been clear that this ought to be repealed. We have 200,000 teammates and 50 million customers. We run the company to be the greatest place for people to work. We our own employees are worried that a law like this will impact them. Even though it might not affect them personally in a sense of who they are and what they do, it affects their teammates. Theyve been clear with us. Well continue to monitor the situation. We hope it solves. Amid the legal fight between the federal government and North Carolina over the states batroom law. Breaking economic news. Retail sales and the Producer Price sxeindex. S p 500s winners and losers. It was wonderful. Bravo. I love that. It was great. Pretty good. It wasnt bad. Parts of it werent very good. I didnt like it. It was terrible. It was bad. Awful boo boo 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 flip your way through your last 9 shows with the tap of a button. Change the way you experience tv. Xfinity x1. Were just seconds away. 18 seconds. Now 17. I cant keep doing this or i wont be able to read anything. From the Producer Price index. Well have that from leishman. The futures continuing down 63 points. Tenyear not worth looking at usually. Rick santelli has the numbers. Rick 1. 3 is the month over month change in advance retail sales. Boy, thats a much better number than we were looking for. Last month remained down. 3. Lets go through the internals. Stripping out autos and thats up. 8. Strip out autos and gas, up. Of. The control group used as inputs, over twice expectation of up. 4 and up. 9. Positive revisions on both of those. Ppi for april, up. 2. 1 cooler than expected. Strip out food and energy,. 1 as expected. If we look at the final demand there, it was unchanged. So all in all, if you look at the inflation data, its about as expected. You could argue a tad cooler, though cpi next week may be a better number. And of course, all of that gets more focused, say many in the back row, on services versus products in the manufacturing side. How is the market responding . Especially the retail sales . Well, we were down about 65 in dow futures. We cut that in half. That actually makes sense. If we look at whats going on in yields, joe is right. Hovering around 172, 173. Thats about where we are, though you could argue that we are moving up a few basis points, selling off a bit, which isnt necessarily bad news. Yields are pretty low, almost challenge the 160 handle. If you bought threes on tuesday, tens on wednesday. You have to look at your position. Other than the 30year, Everything Else is under water, especially the tens. Came out at 171. Hovering around 175. Michelle and the gang. Back to you. Steve liesman, the retail sales number, the first month of the Second Quarter. Yes. Does that put to bed the concerns about the q1 no. I was just saying from the lord of the rings, the quest for a Second Quarter rebound was hanging by a thread. If this number came in lousy it was you were going to have to give up the ghost on the secondquarter rebound because the evidence would go the other way. This is a good number. Its more than expected. Its not incredibly broadbased. I would like to have seen more strength throughout the economy. Especially when you exclude autos. Thats a good number. The control group, the number that flows into gdp up a strong 0. 9 . That will flatter or help the Second Quarter gdp numbers. Let me give you some of the details. 3. 2 on motor vehicles. The way the Government Data works, michelle, we know there were strong data sales. Its never entirely clear if thats going to flow in through the retail sales number. Gasoline station sales up 2. 2 . Not necessarily good, but its part of the spending thats out there. Now, here is whats interesting. The big debate out there, is this a shift in Consumer Spending . Yes. Or is it a downshift in Consumer Spending . Let me show you whats been out there. The lousy retail numbers we have gotten. General Merchandise Stores up 0 . Department stores up 0. 3 . Nonstore retailers, which includes your amazons and your internet and your catalogs, up 2. 1 . Wow so its arguing i need to see the details. Its arguing for a shift rather than a downshift. Courtney reagan nieeeds to put that into its a spread. Its a big spread. Yes. Up 0. 5 last month in a weak environment. What youre seeing here is this thing barry had fascinating comments about why amazon gets a free tax ride in 28 states. Will we work to equalize that. Republicans hate new taxes. I do too but the question is whether or not everybody likes equalization. Barry, do you have thoughts on the shift versus downshift . You are in the catbird seat when you see the consumers coming in. Are they spending or is it a matter of theyre spending online . I am surprised theyre spending at all. Why . The saving rate is going up, right . No. I do think theyre hoarding cash, waiting for a clearer picture of whats going on in the Political Climate across the country. I think people are nervous. I think this kind of this kind of divisive politics, the extremes with bernie on one side and, you know, ted cruz on the far right, its just discomforting to americans. They say i dont need my sweater today. I dont needna another bathing suit. The whole climate induces paralysis. The trouble with that is it gets to be selffulfilling. Its a pretty good backdrop for the consumer right now. Stocks had a nice rebound. Housing prices continue to rise. There is employment. Whether it is at a low wage or not. A lowwage job is better than no job at all. Plus, you have the Savings Rates are there if people want to spend. Its good. Wages are going up. Were raising the minimum wages, which i am not opposed to. I think i think real wages are rising. Employers employees are benefiting more from their profits. I think, from this i dont i was expecting robust growth in the United States. Lord give me 2 . On a global basis we look gorgeous. Were really hot imagine if we had a leader in washington. I want to shift gears that was for you, joe. The gratuitous comment. I like how you said, you know, republicans dont like taxes. I dont like taxes. That was very revealing. Want to highlight. Republicans and i dont. A democrat or a republican. Nobody knows what you are. Youre down the middle. Nobody has any idea what you are, steve. What is the ratio of the two numbers . So the new channels the online versus i think its still only, i think, 15 , 12 . Its small. That being up 2 and the other month to month, though. Its not year over year. The year over year growth on that number is 10 . Its growing much more strongly. No question people are shopping online but theyre still going into stores. I have a place now in so ho. I walk around on saturday. Its unbelievable. People are teeming out of stores. Its the right stores. Thats another issue thats been mentioned, right. All the millennials move downtown into the urban environments and the chain stores are not necessarily there. The places where theyre shopping may not be the places that show up. Thats not quite right either. Were actually moving back to suburbia. As the millennials get older they move out. There are huge waves of demographic changes affecting everything. Millennials only need two pairs of jeans. They dont want 12. Two pairs of jeans and experiences. We collected 12 pairs of jeans. Theyre a different generation. I wish i was part of their generation. The boston fed president had this to say when it came to fed rates and speculation. One cost of higher of staying too low for too long involves the potential of very low Interest Rates encouraging speculative behavior. And he goes on to say, one area where i have some concern in this regard is the commercial real estate market. Do you agree, barry, with the boston fed president that there is speculation going on and that it is spawned by rates having been too low for too long . That all goes to the yields on properties, right. No question people are paying aggressively for great assets because there is no alternative for capital. To the extent cap rates, yield on properties, are related to Interest Rates, he is right. The core fundamentals of the property sector havent been this good in the United States in 20 years. Most every asset class is in balance and rents are rising. I was chastising my guys about a building we didnt buy in cambridge. Rents are up 15 . In places like oakland rents are up 7 . Uber moved over there. Hotel sales are still positive. Retail in our malls are up. There was no building that went on. The rates were really low. And i sat around with a bunch of real estate guys. It was like, no, anybody is building anything. Were buying stuff. Its picking up. But its not picking up enough in certain markets and the rents are going up. He is right. We have created an asset bubble. Do you really think rates can rise aggressively when the global rates are so low . The dollar will go through the ceiling. Did you say uber drove prices up . Uber moved the headquarters to oakland. Theyre building a building. Everyone followed them. San francisco is horrible. Its like going to brooklyn. Its the brooklyn of San Francisco. Who knew . Oakland is hot. We missed it. We missed part of it. Portland is kicking ass. Seattle is on fire across every sector. Its sort of the austin, texas, of the pacific northwest. Thats amazon driven. Microsoft is doing okay. Boeing used to be seattle flu off the face of the earth. Not anymore. Now its all things amazon. Thank you, steve. Pleasure. Great to be on with great people and a great guest host. Talking about amazon, when we come back amazon beware. Ecommerce startup wish looking to be the biggest Shopping Mall in the world and its all on your phone. The ceo of that Company Coming up in one moment. Back in a bit. 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. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back to squawk box. Here is whats making headlines. Update on a story we told you about earlier. Tiff tiffanys chief Financial Officer has resigned effective may 20th. He has been named the chief Financial Officer at newell brands, the former Newell Rubbermaid as of june 8th. Sorry you havent made your famous joke. Which one . Honey, come watch the show because oh, yeah. Honey, ralph got a new job three people in the world know who ralph nickaletti. We made you say it. The ceo is moving from one place we like ralph. Honey, honey, get out here, quick theyre telling us where the new cfo of Newell Rubbermaid is going. Ralph, come on in. He has an open invitation. Two more economic starts due at 10 00 eastern time. The government will release march business inventories and the university of michigan honey, march business inventory this is unfair. Jeff gundlach says the fed is facing a hawkish rebellion with more fed members warning of the dangers of low Interest Rates. Gundlach says there is a 50 chance that the fed will only raise rates once this year. The other 50 is not at all. Apple investing 1 billion in the chinese Ride Sharing Service didi chuxing. Tim cook saying the stake will help apple better understand the crucial chinese market. Uber ceo responding tweeting, my girlfriend owns apple shares, which makes her adidi investor. Shaking my head. Thanksalot, tim. We talked a lot about amazon this morning. We talked a little bit about walmart. Maybe both those guys should move over you have to meet a Company Called wish, the largest Shopping Mall in the world that happens to be on your phone. Wish features 200,000 stores that add 400,000 products a day. Now, the 3 billion shopping app services 5 million customers daily and grew over 200 last year. Wish is backed by pretty good names including tech investors like yuri milner and peter tiel. He is here because Barry Sternlicht is an he investor. The ceo joins us now from francisco. Peter szulczewski. Wishs cofounder and ceo. A former Google Search executive. Barry is with us as well. Thanks for waking up early with us, peter. Yeah. No problem. Thanks for having me. Explain what you are trying to do. I understand you think there is an opportunity to create a 3 trillion marketplace on a phone, effectively. Yeah. I think the exact number was a trillion dollars. Our mission is to create the largest, most convenient and affordable Shopping Mall in the world, like you said. We are doing that by putting it on customers phones. We have over 200,000 stores. Offering over 40 million products, and its extremely convenient. Its directly in your phone. You dont really have to go anywhere. So what whats the Business Model exactly . Should we think of you as ebay . Ebay without the auction portion . Or should we think of you as an amazon . You dont do the fulfillment yourself. Whats the best comparable . Actually neither. So we think that the most Successful Companies in ecommerce were very focused on intent. They all start with a giant search box. You come in and you want to buy a 70 inch tv or a new knife set for your kitchen. Were much more like a Shopping Mall. So our original hypothesis was, when we started four years ago, what is shopping going to look like on the phone. Where the screen is much smaller, where people tend to not want to type as much, the session links are shorter and where Consumers Want to derive some kind of entertainment value every time they want to use our phone. In our experience, anytime we put a search box in the app the engagement goes down by about 38 . That showed us early on that consumers werent interested in searching. They are interested in browsing around and impulse shopping. What kind of stores are in your online mall . We started predominantly with fashion and accessories. Now fashion is only about a quarter of the sales and we have moved on to makeup, to beauty, home decor. Im on the site right now. This is a site for girls. To me it looks like its a site for girls. Nothing but girl stuff on here. So actually the majority of our consumers are female. You must have logged in as a male or it detected you as a it knows i am a female, right . How did it know . Maybe my name . I signed in with google, so google probably knows and it tells it, right . It might not. Okay. Sure. Yeah. Back to the Business Model. You take a piece of every transaction. Who is doing the distribution. When i said which stores are in the mall, are they brandname stores that we know about or Smaller Stores that are just providing product . Two parts of our hypothesis were lets focus on the smartphone and lets focus on solving the big matching problem of which Consumers Want which products. We have 240 million registered consumers and about 40 million products. And every time you open your phone, without having the chore of actually putting in a search query were supposed to show you something that youre likely to be interested in and actually buy. The part of the hypothesis that we didnt get right until launching the product was that this works extremely well for valueconscious consumers. The millennials are less focused on brand. Theyre looking for a good value. That only works if you vet the merchants well. A lot of the brands are small brands that you havent heard of but you can vet the content by looking at the performance and ratings and reviews and even pictures and videos that the consumers upload of the products. And by sharing those across the platform. Anything i put in my bag here is 14 to 21 days before it arrives or 21 to 25. Thats a long time. You dont do fulfillment, right . The vendors do the fulfillment . Thats correct. We help along the way. Were doing some supplyside fulfillment deployment meaning that were ag ge grating on the supply side. Were starting to do forecasting and trying to figure out how much the products will sell in various regions. Over half of our sales come in europe. Sorry. I was going to ask you about europe. Where are you strongest in europe . Where is shopping online become . I have a guess. Where is it strong and where is it not taking hold . It varies by country. So basically yeah, varies by country a lot. So very strong in the u. S. Very strong in canada, australia. Those are not our biggest areas. Our biggest areas are western europe. Western, central europe, scandinavia. Thats where were the strongest. The consumerlot. So getting payments portion correct is really important. For instance, consumers in germany, denmark, sweden, theyre not going to use credit cards online. Thats just something you learn the hard way. Italy is cash on delivery, so you have to deploy various methods to get this right across the continent. The uk is a lot like us, right . Correct. Peter, we want to thank you for waking up early. We wish you all the luck in the world with this thing. Thank you. Thanks for having me. Coming up, the death of tv may be greatly exaggerated. Why the broadcast networks are very excited about this years ad sales. The details coming from hollywood next. First as we head to break check futures this morning. Improved a little bit after that number we got at 8 30. Youre watching squawk box on cnbc. Might be that guy moving rubbermaid. First in business worldwide. Playing for the usual phil . Always stacy. At kpmg weve always believed leadership is about vision and integrity, confidence, inspiration, and passion. Pitching wedge. Thanks phil. And always having the courage to take your best shot. See the best of the best at the kpmg womens pga championship welcome back. In media news the annual broadcast up front sales period starts on monday and Old FashionedTelevision Business may be looking better than it has in years. Julia boorstin joins us from l. A. With more. Andrew, this years up fronts when broadcasters pitch their new lineups to ad buyers will be the first time in five years that broadcasters secure more upfront ad dollars. A 5 increase in dollars and 10 increase in prices. There is a benefit from political ads and olympics, plus less inventory thanks to ratings declines and a number of Cable Networks including viacom and turner cutting back on commercial time. Even nbcs saturday night live will be reducing its ad load. Les moonves says additional dollars are coming back to tv amid efficacy of certain formats. And gardners andrew frank agrees. Few media can match the kind of impact, the kind of sight, sound and motion the tv delivers for an advertiser, particularly advertisers that are that care about their brands and care about their image. Its very hard to match that kind of impact with a digital banner or research app. Now, tv ads are becoming more hightech. Nbc universal, cnbcs parent company, viacom and turner in particular are all using data to more narrowly target ads, to guarantee, for instance, the number of potential buyers of mid size cars that a potential ad will reach. So theres always a bell between networks for eyeballs, but now the networks are better positioned in their battles with other ad formats. Michelle. Good to hear. I like it. Julia, thank you. Coming up, barry sternlicks call on the white house, and later dont miss inge thulin will join me on power lunch. Stay tuned. Youre watching squawk box on cnbc. We are first in business worldwide. [ beep ] but youll be glad to see it here. 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Com offer2 our guest host this morning, barry sternlick of starwood capital, chairman and ceo, so overall its a pretty good time. I guess all around we get im really worried, but i said in terms of, you know, weve come through what i think has been a difficult time for the private sector. Thats going to change soon enough. And were at a market thats almost at 18,000. I mean, after your New York Times magazine piece this is not the best of times . Now you dont think its the best of times . Make up your mind. No, i was saying the feeling on the set has been its been very negative. I think the u. S. Economy is in better shape than probably people think. Its feeling better now, but i think its a loaded spring. Having said that im angry at Central Banks, not the j. P. Morgan banks, the Central Banks they have with just printing money tried to pave over the lack of governments fixing themselves, fixing the real fundamental issues, labor force mobility, wage growth, its really bad. Its become the pan panacea is hurting. It feels fake and makes us nervous. I do want rates to go up, i dont know how they go up in a world where theres no rates. Thank you, sir. Youre welcome. Great to have you. Fun two hours. Make sure you join us on monday. Squawk on the street begins right now. Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with david faber and michael santoli. Retail sales come in better than expected despite this weeks ugly Department Store earnings which do continue today. Well get to that. German gdp rises by the fastest in two years. Ppi with its first gain in three months but just shy of expectations. Roadmap begins with another brutal day for retail earnings