Transcripts For CNBC Squawk Box 20170407

The ftse is flat. Cac is down by 0. 16. The dax is off by a half percent. Looking at the treasury market. The tenyear yield is still deld below 2. 4 . Now at 2. 35 . Crude oil, syria is not a major oil producer. It produces the 66th market in the entire world for oil production. Any time there are bombs in the middle east, as pointed out, you see a reaction in crude oil. It used to be you sthuthoughe arab states would immediately look at us as on the other side. Jordan is dealing with such a mass influx of people who have been left behind. The knee jerk reaction was the straits of hormuz i can remember in previous the beginning of things. This was a targeted strike. Its not like 1991 or the shock and awe, but oil would go up 10 . Go up like 8. 91 it went up 8. Syria has been a problem for all the middle east neighbors. But at this point, even the oil reaction is muted. 100 point drop in futures is like half a percent at this point. Even that wasnt big. You figure in the old days, middle east conflict, look at the oil markets, what happens. Even thats muted. Now you look at the relationship with china and north korea and the relationship with russia. Thats what this ultimately turns into in terms of gaming out whats next. In addition to focusing on whats going on in syria, the other number well get in the United States that folks are looking for is the march employment report. That will come out at 8 30 a. M. Eastern time. Forecasters expect 175,000 jobs added. The Unemployment Rate Holding Steady at 4. 7 . Our top story this morning, the u. S. Military attacking a Syrian Government airfield. 59 tomahawk missiles last night. The strike was in response to a chemical weapons attack on tuesday. Heres President Trump from last night. On tuesday, syrian dictator Bashar Al Assad launched a horrible chemical weapons attack on innocent civilians. Using a deadly nerve agent, assad choked out the lives of helpless men, women and children. It was a slow and brutal death for so many. Even beautiful babies were cruelly murdered in this very barbaric attack. No child of god should ever suffer such horror. For more on the air strikes, matt bradley joins us now from beirut. Good morning, matt. Good morning, joe. As you mentioned, this was a a lot of markets dont seem to be roiled by this news. While it is true donald trump and this new administration are wade nothing a shark tank, its a an extremely complicated situation on the ground. Its not surprising that markets have not stood up and taken notice. A lot of people in the middle east and the reaction so far has shown people dont necessarily believe this will be a decisive attack, that will be sustained. They see this in the same way that so many in america see this that donald trump painted himself into a corner abowith bellicose language about the assad regime and his predecessor. Thats what theyre seeing. This is little more than a warning shot or a shot across the bow of the Syrian Regime. Recently we have had fresh news that the wall street journal is reporting that the Russian Defense Ministry Says only 23 of the 59 tomahawks launched against the Syrian Regime base actually hit their target. Now, this again from the russiarussian s who have an interest in saying the missiles have not hit their targets. Nbc will check with the pentagon to see if thats the case. That would be startling if true, that less than half the missiles were able to hit the targets. Again, reaction is still pouring in. Its coming from the same corners that you would expect, saudi arabia, turkey, israel are praising this move. Saying this is a Decisive Action against the horror of chemical weapons. Iran, the Syrian Regime and russia have come out saying this is just going to be emboldening al qaeda, isis, and other jihadi elements that donald trump actually ran on trying to subdue in the middle east. Its a very confusing situation, but so far the reaction has more or less fallen along the usual lines you would expect. The fault lines dividing the i ry i iranian interests and other interests. For more, Michelle Carusocabrera joins us from cnbc headquarters. Good morning. Good morning. Well run through seven charts here that will show you what the impact was on the markets when we learned the news last night. Roughly 9 00 p. M. Look at wti, you guys have already talked about this. 1. 5 move. As you mentioned, syria is not a big producer of oil. They havent been allowed to export since 2011 when sanctions went into place. That doesnt mean they dont sell it illegally. Theres been evidence of that. But perhaps this leads to a wider conflict within the middle east. You can see that knee jerk reaction of 74 cents on wti. Thats off the highs we saw in the Immediate Response to the attack. Safe haven moves were predictable. Gold moved to the highest level since november 10th. You will see that on the intraday chart. Thats the highest level since two days after we lrn edlearned results of the election. The twoyear treasury hit a low of 1. 202, left level since february 28th. You can see the intraday move last night as well as safe haven buying led to a decline across the yield curve. It was most notable in the twoyear. The dollar initially sold off and then rallied as we saw safe haven trade there. You can see that move. Lets show you specifically against the ruble. When we show you this chart, youll see at the bottom the dollar. So thats the dollar strengthening dramatically against the ruble. You will now get five more rubles per dollar than you would have gotten before the strike. So 56 rubles per dollar. Definitely weakening there. South korea, we saw a reaction in all the asian markets which were open at time. A lot of them recovered with the notable exception of south korea. If you are watching president xi in maralago with President Trump right now, this attack happens, and it makes very clear that President Trump is going to act decisively when he wants to. Hes not going to consult with the International Community first. If youre wondering what his reaction is going to be to north korea, maybe this emboldens your brief when he says well work alone if we have to if the chinese dont help us out when it comes to north korea, perhaps thats why you see such a weak response in south korea. As becky noted at the top of the show, markets have come back from the lows but Immediate Reaction was negative. Back to you. Thank you for that. Well talk to you a lot more today. For more reaction on the military action taken in syria and the next possible steps for the u. S. , lets bring in retired colonel jack jacobs. Good morning to you. Good morning. Help us try to play out the next permutation, if you will. What comes next in terms of military action and just as importantly what comes next in terms of our relations with others, including the chinese. President trump meeting with the president of china today and last night. May very well be there isnt anything. Marco rubio said overnight this was a strategic strike, and it wasnt, it is just a tactical strike. Very limited strike on one site to achieve a small number of very limited objectives. One of which was to convince the assad regime not to use chemical weapons again. And to that extent its probably been successful. Its unlikely he will use them again. Dont forget also that the president was playing to a domestic audience. He had castigated the previous president for drawing a line in the sand and not doing anything about it. So he actually had to act. Because it was a punishment strike, he to act very, very quickly. He had to do it last night or tonight or tomorrow night. The sooner the better, if you try to get International Support for it and go around everybody and say, are you in this with us . Will you support this . Youre not launching this punitive strike until, like, two weeks from now. And you cant do that. Whatever the punitive strike is, it has to be in close temporal conjunction with the act youre trying to dissuade. So many people pointed out the chinese delegation is only here for 24 hours. Some say beijing might be embarrassed by this because it looks like its a shot across the bow when it comes to north korea. Do you think thats the case . Is the administration here making a point that we will act when we choose to do so . Or was this something that maybe they could have waited 24 hours . No, i think there was some im not a fan of single factor analysis, theres lots of reasons why it was launched just when it was. I think one of them is because xi is here. It was important to send a message to china, who has been obstructionist in trying to get the North Koreans to abate what theyre doing, it was time to send a message to china that they need to be involved with the United States in stopping whats going on in the korean peninsula. Didnt want to wait until x wi t went home. We talk about this being a tactical attack. You saw comments from mccain and others suggesteding that we should have taken out even more. Interesting question. At the end of the day almost anything you do in business and government and your personal life really has to be objective oriented. What is it that we were trying to do . If what we were trying to do is stop assad, convince him not to use kchemical weapons again, we probably did what we needed to do. If you want to do more, the objective is to take out the assad regime, youre talking about a long, drawn out exercise. You have to get the russians involved in it. You have to get 200,000 american troops, a multinational force. Were not doing that. And weve destabilized a region by getting rid of a dictator before. We tried that before. It never works. We tried it several times, hasnt worked a sing the time. Single time. We did it last time because of weapons of mass destruction. Supposedly this guy doesnt have more. We a we crossed the red line, hothey were supposed to get rid of the chemical weapons. That didnt happen. The same rational that got us into the last war could be use r raised again. This guy has chemical weapons that isis could eventually have. It is a direct threat to the United States at this point. Except once bitten, twice shy. At the end of the day its always easier to take an objective than hold on to it. We discovered that in iraq. We will no problem taking iraq, but holding on to it required many more resources. I thought they got rid of all of them. This is seniis sarin, this is p the worse. You believed the secretary of state, ymaybe you shouldnt hav done that. And susan rice. I believe everything she says there. The last thing we want to do is politicize this at this point, but i wonder how much he has. Supposedly they got rid of 99 of the chemical weapons. The law of large numbers says he still has more. I dont think well bother with that now. We think that we made a point and hes not going to use them again. At the end of the day, like i said, this is a tactical strike, it is not going to change the long arc of the war inside that country. It will take political solution, not a military solution because were not nobody is willing to expend the resources to go there and stay there a long period of time. Colonel jacobs, thanks for joining us. The other major geopolitical story were covering, President Trump meeting with president xi at maralago. Kayla tausche joins us now. This military strike is overshadowing this, how is it all playing out . Overshadowing is the perfect word. It was a relatively friendly interaction the two president s had during dinner, but immediately afterward, according to nbc news, the president and his cabinet members went to a secure location to address the syria situation, then you saw all the statements from the cabinet and president after that. Interesting to see the comments that the administration provided. One that secretary tillerson specifically offered. Theres been questions about how this changes the u. S. s strategy towards syria and the middle east. The secretary of state last night said i would not in any way attempt to extrapolate to a change in our policy or posture relative to military activities in syria today. There has been no change in that status. But there is a question, as you were just discussing, of how strategic the timing of that strike, happening last night, while the chinese delegation is here for 24 hours, whether that was strategic or just symbolic. Either way, marco rubio told nbc news last night that its a sign that President Trump is acting more president ial. Its one thing to be a president ial candidate, its another thing to be president and confronted with that reality. Tonight was a part of that. Theres a saying actions speak louder than words. China has come to doubt many of the words that the president has said because they lack certain credibilities. But you cant deny actions. It is the approach now of the administration to approach the discussions today, bilateral meeting, working lunch, from a position of military strength from a prior position of coming off legislative setbacks. Kayla, i guess i wonder how this changes the calculus for what we expect to happen in the meeting. We had some High Expectations coming into this. Perhaps progress made on north korea and trade what is the new sort of bar thats been set to see that this is a successful meeting . The administration cautioned against wanting to see specific deliverables, specific results noting that its just a oneday meeting, and that the two leaders and two sides are just meeting for the first time. That being said, the north korea situation is an urgent one. As much as china doesnt want north korea to collapse, because they are an ally, they fear a unified south korea and north Korea Alliance even more. It will be interesting to see whether this changes the calculus of how the talks provide, whether, in fact, china now believes that the u. S. Would be willing to take military action from south korea because the feathers have been ruffled, so to speak. And perhaps this does change the conversation. Kayla, thank you very much. Coming up, much more on the reaction in the markets to last nights air strikes in syria. Plus well get you ready for todays jobs report. Employment predictions straight ahead. And later, Neel Kashkari taking on jamie dimon over too big to fail banks. Kashkari will join us at 7 30 a. M. Eastern in a first on cnbc interview. Squawk box will be right back. Ar ptheres no other to this. Itsve ive permane escaperom monototo. Ounses ake,he rg o. Perftly baed, i thi sudden, t th if ve somhing. Set ite. Seyou ound, giulia ve somhing. The power of t nq mark. The powe 100 of t worstop compies. Power of af. The r ofqq. The inking wput in, clout. Thpoweyour clitsportfoo at powsharesom qqq fore investing, consid the fds instment objecs, ris, charges and expse call 803 r the osct containg this inrmatio it full stributed by invco disttors inc. Containg this inrmatio it full for years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. The countdown is on. The march jobs report a few hours away. Economists at Goldman Sachs say weather may have wiped out 60,000 jobs from the march report. Goldman is forecasting 175,000, but says that number could have been higher from 30,000 to 60,000 if not for a winter storm during the Payroll Survey week. Other firms lowered their forecast. Ubs at 155. Jpmorgan at 140. Joining us is Michelle Girard and jim osullivan, and boris schlossberg. Thank you all for joining us. We got excited on that adp number, didnt we . Jim and i got nervous on the adp number. 170,000, 140,000, 150,000. 160,000. I think we all had the same idea. Its a question of the weather. We enjoyed such unseasonably mild winter conditions in january and february. February produconstruction prin storm. We had winter storm stel la hla in the middle of the survey. So that swing up 60 to down 10,000 or 20,000 may account for the slowdown. Well have a way to gauge that looking at the Household Survey and giving us a clue of how many people were impacted by the weather. I dont believe any of us believe the labor market deteriorated as dramatically as numbers would look. Stella . Stella was four inches. It has a name . Stella . Stella disappointed. Didnt live up to the hype. Whats your problem . Why are you down . Its weather. The trend looks strong. You look at claims, they were low again yesterday. High for two weeks in march, coincident with stella. You look at previous two months, payroll gains averaged 187,000 a month in 2016 which is strong. The first two months of this year, 237. An extra 100,000 jobs. To some extent they borrowed from march and april. On top of that, you have the weather effects in midmarch. Obviously the adp number raises the possibility that the trend is picking up more than we think. It is making for an interesting report. Boris, that storm yesterday was big. Some airports had problems. It was bigger than stella for us. Two in the more important number is wages. If the wages show an upward tilt, at least for the currency market and for the bond market it will be a much more important number. Its wage growth that the market is looking for to see final demand. At this point were convinced that jobs are organically growing. Its a matter of creating better wage growth for the consumer. You could see potentially a dip lower. But if wages are good, we could have a big recovery at the end of the day. When Something Like that, as a currency guy, when Something Like that happens overnight, where is the first place you look . Dollar yen. Dollar yen. The dollar yen was the primary proxy or reaction there. It was interesting. It came all the way down to this very, very critical onetime level which has been tested four or five times over the last several weeks. But held. Because the market basically understood this is a oneoff event for now. It wasnt a situation where we will get involved in a longterm protracted military campaign. At least for now. Thats how the market looked at it. They sold it off and bought it back up. When youre on, i like to keep you focussed. Youre a currency guy. You talk global warming, now youre talking how many jobs are coming. Thats all part of it to me. We have strong wages, yields go up, currencies go up. Final thoughts for today . No matter what this report, i think shows, as weve said, the underlying job conditions are quite solid. The economy is on solid footing. I dont think this the worst it will be is a onemonth head fake. The truth is that if it comes in stronger, i think it will confirm that were doing very well. The tenyear was at 2. 25 again. Testing the lows again. Is inflation coming back or not . Will we get a read on that . It was 180 or so before the election. But the wage numbers, right now its 2. 8 year over year. I think it holds to that level after today. There is acceleration, the Unemployment Rate is still coming down. We havent talked about that at all. Probably comes down again today picking up. Thank you one and all. We have other stuff to talk about. We have to talk about gorsuch, too. Well talk about that and the reaction to the u. S. Air strike in syria. Well talk to the former ambassador to syria after this break. And later we will be joined by admiral robert stavridis, former supreme allied commander at nato. Squawk box will be right back. Yes . Pleaseepeathe obive. Thvent mutual funds. Managed humans, not robots. Fore investing, carefully read andonsider fund objectives, risks, charges and expenses in the prospectus at thrintfunds. Co wevee we in life with help from our advor, we madet through many mket swin. T weveever been the type tost. Easy. Not wheneve got smuch more to giv when you have the rit Financial Advisor, life can be brilliant. Amerrise various shouting heigh varis f to wwe go heigh woman theulf coast, new exxonmil project are expect to create over 4000 jobs. Supportswo others in the community. Are expect to create over 4altogether these are bs tt natural gas is helpiake happen, all while reducing americas emisons. The customer a will beive monday. Energyiv here. Brian, i justf can we at leasanalyze customer traff . Cawe push thoffer online can brn, i just alyze ick ques. Traff . Brian . Brian. Legacy technology can handcuff any company. But yes is here. Thelp om hpewe canfinally work. Will glive mony . wi the right mix obrid welcome back. Youre watching squawk box, live from the Nasdaq Market site in times square. Good morning. Todays top story, you probably heard i found out this morning. And i i saw last night. I immediately sent it off to the kids. They probably saw it. It was like 9 30 or something. U. S. Warships in the mediterranean fired 59 Cruise Missiles targeting a Syrian Air Base. Officials say the bates wse was one used to launch tuesdays chemical attack that killed syrian civilians. Sear yap Officials Say the missiles caused material damage to the air base. You are looking at images now from that airfields. Six other airfields were not struck yesterday. This was very targeted. You read a lot of Different Things about whether there are questions of where this sarin gas came from, and now that we know a lot more about the cia and the nsa, and the intelligence we gather, they knew which aircraft, they knew which fixed wing aircraft, they knew where it took off. They know how it dropped it. I think our intelligence agencies know exactly who is responsibility. I think that, you know, anyone who says its a people are calling it a black flag yesterday. A what . Its not real. Its used by someone used to draw the u. S. In . That the rebels actually did it. There are going to be investigations that continue. But as you mentioned, we know where the planes took off from. We know what happened. We know the reaction and response. Ive got nobody wants to get involved in something again like this but i started thinking about it yesterday. You cannot use chemical weapons on civilians. You just cant. And i was i was thinking if you had an auditorium with 50 children, theyre fine, theyre playing, you could do something to prevent this from happening, its almost like you have to do something the problem is what what the question is will assad back down . People bring up other things. Let them theyve been starved and bombed for years. What about the ones that explode from shrapnel from 100 feet. Thats okay . Theres been videos of children torn apart by those things. Have you been thinking about this . You dont want my thought. Its going to be political. No, no. We have a moral obligation. I think we were boxed into a corner. Someone was suggesting that trump boxed himself into a corner. Im not sure thats the case. We were boxed into a corner by assad, i think you have to do these things. The sad part is this is where the Political Part comes in, i think that President Trump had told people during the campaign that he didnt want to be the wo worlds policeman, he wasnt going to get involved in these things, and that buzz a hawas a thing to make that promise and pledge to avoid the rest of the word. But when youre in the white house, you have reality you have the geopolitical nature of protecting us and the importance of being a policeman to the world because the policeman to the world is beneficial to us ultimately. He may be realizing that now. Unfortunately well, there were different politics then. It also trying to be polite about it. Thats thats ludicrous. When it comes your responsibility its different than when it wasnt your responsibility. You know, to say back in 2013 in at the height of still dealing with the mess in iraq to say we should be very loathe to engage in things like this, that was not a stretch to say that. A targeted strike is not necessarily though we have now taken it is not solely our decision as to whether this continues or escalates from here. This will also be decided by the kremlin and how engaged they get and what their reaction is. Also how many if it were to extend yobeyond this, how ma other countries go along with this. For more on the air strike, lets bring in theodore kartouf, currently the president and ceo of amideast. Thank you for joining us. Whats your reaction to the strike last night . I appreciated all your comments. I think you got it exactly right. Iny t nthink the u. S. Had to do after the president indicated this is a game changer. Im flexible, i changed my mind. Assad has to understand he doesnt have a completely free hand just because he has iran and russia backing him. At same time its a dangerous situation for all concerned and certainly for u. S. Interests. So a tr gargeted strike on the airfield used to hit the town that with chemical weapons was just the right message. Rex tillerson and his remarks made it clear that this is, for now for now a oneoff but didnt take options off the table. So how will russia respond . Theyll bluster, theyll be angry. They already said we will not go along with deconliction of your planes and our planes. But they have egg on their face. They guaranteed in 2013 that all the chemical weapons and chemical weapons facilities would be destroyed, or shipped out of syria and destroyed, and that did not happen 100 . The spin from the kremlin is that these are not chemical weapons launched by the air sss regime, they were chemical weapons being stockpiled there, and the strike just happened to hit it what is the voracity of those claims . This is putin and his people talking, and Bashar Al Assad. Their track record is the truth is not very good. I trust our intelligence agencies. Its amazing how well they do in terms of collecting this information. What what happens next . What sort of signal does this seem to other potential conflicts . Im thinking north korea in particular. Is there a broader message that will be received from this . Yes. Here we have the president of china just sitting down to dinner with trump and his people, and this air strike is announced, Cruise Missiles strike, excuse me. It shows we can act unilaterally. We dont have to go to the u. N. When we feel vital u. S. National interests have been crossed. So it has direct implications for what weve said about about north korea, clearly theres no comparison with a oneoff strike against an airfield in syria and trying to take on north Koreas Nuclear arsenal and its missile capabilities. Ambassador kattouf, thank you very much for being with us. My pleasure. Lots of news today. History will be made in the political world. The senate expected to confirm neil gorsuch as the next Supreme Court justice. Yesterday the senate voted to scrap the filibuster on Supreme Court nominees, that removes the 60vote threshold. The confirmation will only require a simple majority. It is making cysthistory today. Lots of questions about the longterm conditions of that decision. Weird, 2013, everybody else now they do it that way. Thats all that was the last man standing, was the Supreme Court nomination. Right. The big question is does it go to mcconnell said it will never happen as long as hes majority leader, where it would go to legislation and you wouldnt need you would get rid of filibuster for legislation. Not much choice. You could have never fill this o filled this one. We were talking about the dynamic, and im surprised that the democrats went as far as they did it was payback for merrick garland. Someone said if Ruth Bader Ginsburg was 50 years old and nominated by trump, they would have turned her down. Thats the concerning thing, how far we have come with the two sides not willing to ever Work Together or see any places where they can say, okay, you get your time. If you look back. We had Supreme Court justices who did not receive 60 votes, got 52 votes, the up and down vote was still allowed to go. If you need 60, theres got to be a couple other people from the other side who are with you. The senate thinks its the most mobile, deliberative body on the planet. Nothing is working. For a while its almost like its been a negative for trying to get things done, that filibuster. A busy morning still to come. At 7 30, a first on cnbc interview with minneapolis fed president Neel Kashkari, hes taking on jamt ie dimon on too g to fail banks. A letter on tuesday . I recommended our viewers read it. Its one of the most fascinating letters in american business. You know the masters is this week. Im not comparing it to sports. All right. Maybe ill read it. If youre a business nerd, you happen to watch squawk box, you probably want to read the letter, too. All right. Maybe. I dont know. Then admiral jameses stavridis weighs in on the american air strike in syria. Its jobs friday. Unbelievab unbelievable. We should save some of this news for when there isnt any. March unemployment report at 8 30 a. M. Eastern, Market Reaction and instant analysis. Youre watching squawk box. Welcome back to squawk box. Time for todays executive edge. President trump meeting with chinese president xi in florida. For more reaction on whats going on in china, we want to get over to eunice yoon in beijing, try to understand how people are feeling there given the news about the meeting and, of course, this air strike on syria. Thank you very much, andrew. Whats surprising is how little chinese reaction there actually is. When president xi travels normally, you see a fullcourt press. Because hes in the United States, one would expect there to be greater coverage. However what were seeing is not the case. When the two president s met earlier this morning in china, there was almost no reporting at all. No photos of xi, and the discussions about the events were either blocked or censored. Only in the last couple of hours we have been seeing articles in the strait presate press, but tt been substantive, they talk about how President Trump agreed to visit china, and how beautiful the chinese first lady is. Ive spoke ton a couple of different chinese political analysts about why were seeing this near radio silence, they say its because the government is concerned about the outcome of this meeting and what that means for xis image. As you know, the chinese dont like it when things are unscripted. But President Trump is not really a sick to the script kind of guy. So theres concern here among some of the analysts and they believe that the government is worried that because trump is so unpredictable, that that could potentially diminish president xi. Separately, i want to talk a bit about the discussion here that we are hearing about how the u. S. Air strike on syria could potentially influence the discussion between president xi and President Trump. The Foreign Ministry did have some comment on this, calling for all sides to be calm and to handle go back to their political settlements. Ill read it in full. Theyre calling for calm and for all sides to stick to their political settlements. Guys . Real quick. Theres been sort of two views here in the United States. At least questions about the timing of the strike last evening and how it might impacts the conversations on a relationship with china. Im curious, on the negative side, theres a view maybe this embarrasses the chinese. Should they have waited . Should they have had a discussion with them first . Those conversations which are happening here are not happening there . Those discussions are definitely happening over here. I spoke to one analyst who had that same line of thinking, that his reasoning for all the censorship were seeing is he believed perhaps the chinese are worried that President Trump is going to come down hard on president xi, and it could embarrass president xi to the public here. So, that is one concern. The other discussion that people are having is whether or not chinas going to come to the table and try to offer something up to come down harder on north korea. Those are some of the conversations that weve been hearing over here, just like you. Eunice, thank you very much. Before we head to break, a look at u. S. Equity futures. They just turned positive. At least the dow and nasdaq have. The dow was down about 100 points after the news hit about the strike last night. This morning, up by 6 points. The nasdaq up about 1. 52. Coming up, okta is launching its ipo today and will be worth 1. 5 billion. Ceo Todd Mckinnon will join us next. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Know you have a dedicated advisor and team who understand where you come from know you can craft an Investment Plan as strong as your values know that together, you can establish a meaningful legacy with the guidance and support of your dedicated pnc wealth management® team. Squawk box, tech unicorn okta set to make its public debut in the nasdaq today pricing at 17 a share. Joining us is Todd Mckinnon, the ceo and cofounder of okta. Congratulations. Big morning for you. Its exciting. Thanks for having me. Great to be here. Was this always a goal for you . We started out to build a large, Important Technology company. And this is inevitably a step along the way for companies that have that goal. So yeah, its exciting. Big milestone. The reason i ask is so many unicorns have remained private unicorns and the sort of decision to extend that out as long as humanly possible. I want to try to understand your thinking. Theres lots of factors that go into it. And i think the first time you take venture funding, going public is inevitable. Right. And we felt the timing was right, and this was a good riern. When you announced that youre pursuing an ipo how many calls do you get from other companies who say maybe theyll progress in terms of actually fail, meaning to acquire you . I think theres Nothing Specific around the ipo. Right. I think mostly it was people congratulating us. Saying nice work. The hard works paid off. Exciting. How do you think about your product versus all the competition out there . Im thinking microsoft getting into this space. Sales force is now in the Cloud Security space as well. Yeah. Our platform does a lot of Different Things. In fact, our platform is called the identity cloud and theres six individual products on that that address specific use cases. One of the really unique things about okta is we take a lot of complex technology and make it very simple in one integrated cloud. And we built it from the ground up as a Cloud Service where a lot of our competitors started by Building Software and poured it into the cloud. We should try to explain to the audience exactly what okta is. The 20 second version . Absolutely. We securely connect all the people that a company interacts with, whether theyre customers or partners or suppliers or employees. And we connect those people securely to all the technology they need to work. Whether its email application they need to send email. Or whether its customer portal. We make it very easy. So its secure your relationship is like your dumbest employee whos dealing with this stuff . Thats not our marketing but if i open something on outlook, i open an email thats got a virus in it, theres nothing you can do to stop me from myself, right . Well, we can make sure only the right people open outlook, right . Making sure its really easy to open outlook so you dont use a pass word so easy to guess someone else can open it. Theres a lot of security thats simple maintenance and housekeeping. We do that very well. Besides some very advanced features that are not intuitive but also very secure. You hire a bunch of genius code writers for this . What do you know about this . Did you write any of the code . I did in the early days. Oh, my god. You did . My background is in engineering. Before i started okta i ran engineering and learned a lot better about how to build a scalable Cloud Service and wrote some code. Engineers tell me it wasnt very good so they retired it and debugged it. Do you worry, though, about some of the big cloud providers, like an aws, google, im thinking microsoft, as they build up the stack, effectively providing these types of services, either for free or complements on top and they compete with you . Yeah. One of the key insights we had is its really about connecting these hubs together. So its connecting amazon to microsoft to sales force to workday and our Value Proposition really is that we sit in the middle of it all. And we know about all the applications and we can securely connect our customers and the users to any cloud, no matter what. Whatever is best for them and their business. Not what might be best for one provider. Congratulations to you. Wish you lots of luck. You have a security tip for everybody here . Practical thing besides double authentication . Twofactor authentication. We preach that a lot. Text is good or no . Texting is good. What about the little chip . No hardwa token. Soft token. Code for some scalable web services. I have an iphone. Could you back my stuff up on the cloud . I doengt know how to back it up on the cloud. Help me . Next report for joe kernen in just a little bit. Ill write it for you right now. I dont know how to get the gigabytes. Well be talking jobs when squawk returns. Es. Sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Various shouting heigh ho its off to work we go woman on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. And each job created by the Energy Industry supports two others in the community. Altogether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energy lives here. All while reducing americas emissions. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Breaking overnight. The United States launches dozens of Cruise Missiles at a syrian airfield. We have the latest straight ahead. Market alert. Geopolitical concerns in the jobs report will be the focus of todays trading session. A roundup of the Global Trading picture minutes away. Also President Trump meeting with his chinese counterpart today. We will bring you a live report from palm beach, florida. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Good morning, welcome back to squawk box right here on cnbc. Were live at the Nasdaq Marketsite in times square im Andrew Ross Sorkin along with becky quick and joe kernen. Breaking this morning the United States launching dozens of Cruise Missiles last night at syrian airfield in response to what it believes is syrias use of banned chemical weapons that killed at least 100 people. Two u. S. Warships launched the missiles from the Eastern Mediterranean sea. 59 tomahawk missiles were fired. We want to talk about the implications of it, and the implications on investors this morning and futures have reacted in a very muted way. In fact the dow is now up after having dipped overnight. Now up about two points. Nasdaq also looking up, as well. The s p 500, well call it off marginally. Might as well be called unch. Check out all this morning. Oftentimes when theres issues in the middle east we immediately look to the oil markets. This a little bit of a different story. Wti crude trading at 52. 14. Syria not a huge oil producers. And of course has not exported oil in quite some time. European markets, as well. Youre looking at relatively mixed picture. Again the reaction across the globe relatively muted. We will bring you updates, of course, on any developments throughout the morning and telling you what all of this developing story could mean for your money. Gabrielle desantos at Jpmorgan Fund is going to join us. And then in 30 minutes minneapolis fed president Neel Kashkari is going to be joining us to talk about banks. And admiral james stavridis, former nato commander and nbc diplomacy analyst is going to join us as well. As for the broader markets, take a look at what happens with the treasury market. The yields there continue to be under pressure. 2. 32 is the latest for the tenyear note. Dollar strengthened against many currencies after the strike. You can see right now that the dollar is up against the euro at 1 02628. Up against the pound at 1. 2423. And perhaps the sharpest reaction is when you look at the ruble. The dollar up by about 1 against the ruble. Just as news came out last night you can see that spike as the news was hitting. Joe . For the latest on what we know, chief International Correspondent Michelle Carusocabrera joins us once again from cnbc headquarters. Michelle. Good morning, joe. U. S. Government says it launched 59 tomahawk missiles last night from two u. S. Warships in the Eastern Mediterranean. The pentagon released this video. The target of these missiles, an airfield the u. S. Government believes was used by the Syrian Government of Bashar Al Assad to launch a chemical weapons attack earlier this week in the now 6yearold syrian civil war. The horrific images of that chemical attack, which killed more than 100 people, were seen across the world. And widely condemned by the International Community. The airfield is one of six in the country used by the assad regime in their war against the insurgency trying to oust him. It is in Homs Province in western syria. Syrian tv is showing video of what they say is the aftermath of the air attack on the airfield. This was the first direct American Assault on the Syrian Government. We have attacked al qaeda positions before in parts of syria. Russia, which supports Bashar Al Assad, was unsurprisingly negative about the missile attack. Foreign minister lavrov calling the attacks an act of aggression that violates International Law. All right, michelle, thank you very much. The other story the markets are watching is the meeting between Prime Minister and chinese president xi jinping taking place in florida. Kayla tausche joins us right now from palm beach. Kayla . Becky, as military strikes unfolded, donald trump was playing diplomat in chief. Hosting the same type of dinner for chinas first family that he had criticized the Obama Administration for doing. He joked to attendees at the dinner that he hadnt budged, he hadnt made any progress in his talks with xi so far. But that a friendship was afoot. But very quickly the conversation turned from friendly dinner banter to those u. S. Strikes on syria. And the agenda for the bilateral meetings taking place today in the working lunch, or at the very least the tenor of those meetings will likely have changed after those strike. Heres what the president then later said last night. Years of previous attempts at changing assads behavior have all failed, and failed very dramatically. As a result, a refugee crisis continues to deepen and the region continues to destabilize. Threatening the United States, and its allies. The secretary of state Rex Tillerson told reporters not to read too much into the set of strikes. That it didnt necessarily signal a wholesale change in the u. S. middle east policy. He said i would not in any way attempt to extrapolate the change in our policy or posture relative to our military activities in syria today. There has been no change in that status. Secretary tillerson, though, did take an opportunity to criticize russia, calling them either complicit, or incompetent in their dealings with syria. But the focus here in palm beach is what message this sends to china. And how this does change the meetings today. And whether it does put pressure on china to resolve the situation in north korea. An economic conversation that was purported to happen today may take a back seat to the north korea discussion in light of this. And that might be a good thing. Ill just give you a few reasons why. The narrative on chinas economy has changed dramatically since trump on the campaign trail had a very clear message that they were weakening the currency to increase improve their trade, and hurt the u. S. Trade deficit, and that u. S. Companies were moving their jobs there. Well, in reality, in the last few months, the currency has actually strengthened, and theres been more investment from china into the u. S. Than the other way around. So perhaps these strikes have a twofold effect, guys, of not only ramping up the pressure, and putting forward a signal of strength on north korea, but also perhaps buying some time to deal with some of these economic issues. All right. Kayla, thank you very much. Again, kayla tausche. Well be checking in throughout the morning. With more on syria and china, were joined by former deputy treasury secretary robert kimate. We were initially, mr. Secretary, mr. Ambassador, ambassador to germany, as well, originally going to talk mostly about china. Obviously this this influences that, as well. But lets just talk about the action yesterday. I was just thinking about it last night, mr. Ambassador. Its a its a small step, you know, Cruise Missiles, one airstrike. And yet its really a large statement it seems like that the u. S. Might be back in the business of policing parts of the world again. So its hard to understate it but i its hard to overstate it, as well. Joe, i agree. I think you have to be careful what you say as the United States. But you have to mean what you say. I think the message that is taken away, including by the chinese leader, is that when the u. S. Says its going to take action, it will take action. I think thats an important point, not just again for the chinese leader, but for leaders around the world, to know. It we do have proof from there. We do have the possibility of some russians getting, you know, getting caught up in this, which hopefully, you know, we heard that not all the missiles hit their their designated target. It seems like it could exacerbate, you know, relations with russia. But then again, should russia be that surprised that something was done . When, you know, supposedly the chemical weapons were destroyed. It was civilians again. I mean, theyve got to understand that you cant necessarily sit idly by with this. They shouldnt have been surprised at all. Weve actually followed a fairly traditional track here. We tried diplomacy first. Then economic sanctions. And now, weve taken military action. And the hope will be that that military action is energizing to the diplomatic process. Because at the end of the day, the president said we were not going to allow this action by the syrians to go unchallenged. He has lived up to what he has said. But i think as both he and secretary tillerson said, lets pivot now back to the diplomacy. That will be centered in the security council. Yes, russia is there, but also the chinese. And thats why some of these discussions today with china will have to be about syria, but i do hope there are broader discussions also with the chinese in this first facetoface meeting. Well get to that. Ive seen some people say that the biggest fear for the Trump Administration is that assad would again use chemical weapons, and wed have to do something again and russia just said that theyre that whatever its called deconflicting. The deconflicting of their air power over there, thats not going to happen next time. So if we went in next time, then we are they going to reciprocate in some way . Hard to tell. I would say that the next military steps become trickier. More difficult, theyll have to be very close consultation with the congress on this. But again, the joint chiefs have given the president an array of options. My understanding is there were four. He narrowed it down to two. Chose one. I think he proceeded carefully. This was a measured incremental military response. Important, but incremental. I think the further steps do become more difficult. And were going to have to continue conversations also with the russians on important issues like deconflicting aircraft flying over the same space. Okay. So mr. Secretary, theyre sitting down to dinner with the chinese president. There have been some say that this could embarrass the chinese president , that it was done while he was here. Others are talking about what it means for how we approach North Carolina north korea, with chinese president. You think it embarrassed china that it happened on the same day as the meeting . I dont think it was embarrassing. My expectation is that the decision was made based on what the team felt was the militarily optimal point to move. Weve had situations in the past where summits of World Leaders are interrupted by other events. You may recall when president bush 41 met with gorbachev for the first time after the fall of the berlin wall in malta, right in the middle of that there was a coup attempt against cory aquino, we had u. S. Jets flying over manila. These things happen. And so i think that the more important thing that happened last night is that these two leaders met facetoface for the first time, and the record on the chinese american relationship is it starts at the top. It has to begin with eyetoeye, direct contact between the two leaders. That is reagan and deng xiaoping, it has now happened between President Trump and president xi. So one of the things that we had talked to you about before this latest news last night was that the investment that china is making in either germany, or the United States, is getting tougher, and as a result they may they may recoil a little bit from making it easier for us to invest over there. So is that still your view . That doesnt sound like progress, that sounds like going backwards. Well, what i would say is it sounds to me like an issue, joe, that needs to be discussed facetoface. In the past, most of the discussions between china and the United States have been around trade and currency. 22 but the flow of capital dwarfs the flow of goods. And i have a concern that were seeing growing investment protectionism, which i dont want to turn into investment wars like trade wars. Were seeing those developments both in the United States, and i would say in europe, with the germans calling for the europeans to put in a europeanwide investment review law like we have, our commitmy on Foreign Investments in the United States. Both in the u. S. , where new legislation is pending, and in europe, that is animated by chinese investment, but those laws will not hit the chinese only. They hit all investment. I think the chinese need to recognize that the more they open their economy, particularly those sectors from whence their investors come the more opportunities theyre going to have abroad, and by the way, the more beneficial it will be to their economy. I think investment has supplanted trade as the potential flashpoint in the relationship. You think theyll have a chance in the time allotted to talk a lot about that . Or is it going to be about north korea in light of a more activist United States . I mean, its you need more than 24 hours i think. Sure. Listen, the chinese relationship is a 360degree relationship. There are political, military, economic and financial dimensions. I think the goal today, joe, is to set a framework for further discussions. By the way the two leaders will meet again exactly three months from today on the margins of the g20 summit meeting in hamburg. I think thats going to be an opportunity to see whether the framework that they established today is beginning to show progress. Ambassador, real quick, how do you think this changes the dynamics within washington . In terms of how polarized things have been, and all the conversations. You talk about all the policies that we expect to impact the domestic economy here. Do you think this changes that dynamic in any way . I think that it shows the seriousness of purpose on the part of the administration. I think the Administration Needs quickly to engage the congress on both sides of the aisle. And again, i think its important for everybody, whether its an International Affairs or domestic affairs, to be careful what they say, but to mean what they say. Mr. Ambassador, mr. Secretary, thank you. Thank you. We appreciate you coming. And shifting gears, to talk about all the new stuff. Coming up Market Reaction to the strike on syria. Plus the jobs report. Investors will have a lot on their plate in the coming weeks. Well break it down after the break. The few urs right now are positive across the board, but now the s p is slightly lower. Is jamie dimon wrong about the strength of banks . Minneapolis fed president Neel Kashkari thinks so. Stay tuned. What powers the Digital World . Communication. Like centurylinks Broadband Network that gives 35,000 fans a cutting edge game experience. Or the network that keeps a leading hotel chains guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. 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And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Welcome back, everybody. The news overnight of a u. S. Airstrike in syria. The president meeting with his chinese counterpart and a jobs report. A lot of Different Things to the markets to be reacting to and digesting this morning. Weve been watching the futures and theyre flat. Theyve turned slightly positive. Joining us right now is gabriela santos, Jpmorgan Funds Global Market strategist. Michelle myer is bank of America Merrill lives cheap economist. Welcome to boast of you. Gabriela why dont we just start off with the Market Reaction. This is not what people may have expected last night. The knee jerk reaction was futures sold off by 100 points. But now weve seen dow futures positive this morning. What does this indicate . I think it indicates that the market is really paying attention to what secretary of state tillerson said which is this does not indicate a change in posture from the u. S. This is seen by the market it seems like a discreet event. And as with any geopolitical action the market focuses on the impact to the economy and if it is a discrete option then it doesnt have an impact on the u. S. And global economy. It may be a onetime action. But, as joe was pointing out before it certainly does send a much larger signal these days. This is a different way of viewing the world and dealing with the world, correct . It may be. I think its still too early to tell. And thats why the market is paying so much attention, as well, to the meeting with president xi jinping, and the attitude towards north korea. Which is really the big focus here. Seeing green arrows this morning. Is that brushing off the airstrike . Kind of giving credence to what they think may be positive talks with the chinese president . And also, thinking has the jobs number may be positive . How do you get to the positive numbers . I add it all up based on the data weve seen this weak. The most important number to me, to us, is really the Global Manufacturing cmi, which reads 53. Its a high for six years. That means that the u. S. Economy is picking up. But it also means the World Economy is picking up. Its a synchronized improvement that we havent seen in six years and i think thats whats underpinning the market. Its not washington. Its the actual improvement in Economic Growth. If we are looking at Economic Growth improving how come were looking at the tenyear note today yielding the lowest levels that weve seen since november. The tenyear has been talking a pause this year after having rallied so far the last two months of last year. We think this is just a temporary pause, exactly. Theres a lot thats being overshadowed by politics. Once the market focuses that, 9 fixed income market focuses on inflation growth that tenyear number should be much closer to 3, 3. 5. Lets just talk about where you see growth right now in the United States. This has been a it was a very weak First Quarter. Where are we now in the Second Quarter . I think, as you said q1 was weak, but its probably partly residual seasonality we like to talk about. Its happened the past several years. We should see growth rebound into the Second Quarter and confidence surveys are indicative of that. I think we should take these surveys with a bit of a grain of salt. They go up sharply, they come right back down. Theyre kind of fickle. You dont want to fade it entirely. Taking some positive signal from the strong survey data. The idea that youre going to have some rebound after residual seasonality hurts q1 gdp growth i think well be heading into the Second Quarter, into the third quarter, with a little bit more momentum. That said, i do worry that optimism was just too high heading into the year on the basis that wed see some significant policy changes. Where do you think well see the jobs report today . Were looking for 200,000. Which is a little bit above the consensus. And pretty comfortable with that number. You had the ism manufacturing surveys. Shows strong employment series. Manufacturing job growth to pick up. The housing numbers are still strong, which support construction. Although the weather does play a role for construction. The actual number, because Steve Liesman is here. And your work has been so amazing lately on the numbers. What . 209. 208. Oh, 20le 8. Steve, if you were watching the show, you would think that steve was like on the other side of a thing, not physically right here. Look. You were looking for him. There he is. Hes such a fan. He stands there the entire show. The whole show. Hand signals. 208 was a hand signal. Thats right about in line with what michelle said. I do see it. I think thats about right. Im getting big thumbs up right now. Did you raise your number after the adp report . We didnt change it. So we had been at 200 and adp came out and left us feeling comfortable. And then the Consumer Confidence labor differential number was strong. So theres a number of things that are kind of working in favor of a preseason number. Its not going to be as strong as the last few months but still pretty decent. Michelle, gab he wiriela, thu both for being here. The storm . Continue talking about the implications of syria on the market. We have the jobs report coming up. We have Steve Liesman. Well get him a microphone. Try to get him some lighting as well and maybe a little bit of makeup. Minneapolis fed president Neel Kashkari taking on Jpmorgan Chase Ceo Jamie Dimon in his annual letter dimon says too big to fail fierce have been eradicated. Nash cari disagrees. Kind out why when he joins us on squawk box. Tonight i call on all civilized nations to join us in seeking to end the slaughter, and bloodshed in syria. Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin trusted advice for life. Kevin, hows your mom . Life well planned. See what a Raymond James Financial Advisor can do for you. Over hereno ver here dog barking whoever threw it has to go get it. Not me somebody will get it. dog barking anyone can dream. Making it a reality is the hard part. From the b2 to the upcoming b21, Northrop Grumman stealth bombers give america an advantage in a turbulent world. And were looking for a few dreamers to join us. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Still to come, jobs in america. Our panel of experts, standing by. Payroll predictions and instant reaction. The countdown is on, only on squawk box. 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. For years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. U. S. Military attacking a Syrian Government air field with 59, 59 tomahawk missiles last night. The strike was in response to a chemical weapons attack on tuesday. Nbcs joe neile joins us live from moscow with the russian reaction. Hi, bill. Yes, good morning, joe. Good morning, everyone. Russia taking a couple of swipes at the u. S. This morning. Within the last few minutes, russias Defense Ministry claiming that only 23 of those 59 Cruise Missiles actually struck the base. That the main runway at the base was not hit by a single shell. Thats according to the russians. And that no aircraft were hit. Russias Defense Ministry saying the combat effectiveness of this massive attack was just very low. Russias response from the kremlin was also strong, but predictable. Claiming that this was an act of aggression against a sovereign country and a violation of International Law. Also, asserting that syria does not have chemical weapons, as russia has done in the past, and therefore that this air strike was unjustified. So all of that kind of wholly predictable. Russia also said it was suspending its agreement with the u. S. On deconfliction. In other words, an agreement that prevents u. S. And russian aircraft colliding in the skies over syria. But again, russia only suspending that agreement. Not pulling out altogether. The kremlin spokesman also conceded that russia had been warned in advance about these air strikes, and significantly, and in another sign of russias muted response to these u. S. Air strikes, the Russian Foreign minister Sergey Lavrov said this morning, i dont think any of this will lead to an irreversible situation. So limited airstrikes, limited condemnation from moscow. At the moment, president putin is meeting with his National Security advisers. They will want to discuss what next. Theyll be watching President Trump very carefully for what he will do next. Was this a 30minute air strike or is there more to come . Will he want to impose nofly zones . Will he want to impose a more aggressive pursuit of regime change against president assad . One thing that will not change for now is russias support for president assad. But ill leave you just with one quote again from the kremlin spokesman Dimitry Peskov yesterday before these air strike happened Dimitry Peskov said russias support for president assad is not unconditional. So russia sending out another signal there principally to the u. S. I saw that yesterday, bill. That stuck out. The russians say Something Like that and you wonder. And anyway, weve got to run. Weve got other stuff to do. We appreciate your time and an anal sis this morning, thank you. In his annual letter to investors jamie dimon stated that our Financial System is unquestionably stronger today and too big to fail has essentially been solved. Outspoken discenter, though, Neel Kashkari, president of the Federal Reserve bank of minneapolis says that jamie dimon is wrong. Good morning to you, neel . Good morning, andrew. Good to see you. Lets walk through this. Jamie dimon effectively saying that he feels theres higher capital, more disclosure transparency, he says, stress testing, Corporate Recovery planning. Far higher liquidity requirements. You say what . I say the banks dont have nearly enough capital. The core argument that mr. Dimon repeatedly makes in his letter, and by the way i like jamie dimon, i think hes a good person so this is nothing personal, is he keeps pointing to this notion that were going to convert debt into equity in a crisis. He calls it bailin debt or total loss absorption capital. Its a great theory. It just almost never actually works in a crisis. This is what was so hard for us to arrest in 2008 that you know so well, andrew, from your book. Its the dominoes falling. One bank bringing down another bank. Brings down another bank. Its this contagion risk. The core is that in a crisis, government officials do not want to haircut debt. They dont want to impose losses on bond holders because it can create that domino effect. And thats the fundamental flaw in mr. Dimons analysis. Thats why our analysis says the biggest banks need twice as much Equity Capital as they have today. If we made the big banks fund themselves with twice as much Equity Capital we could more or less address too big to fail. We havent done it yet. Lets just break a couple things down for a second because the markets, as youve seen in terms of what the anticipation expectation is for the Banking Industry has been relatively positive in part because theres an expectation, at least for the smaller banks, that we might loosen up capital. Just to put a fine point on it. When you talk about higher capitals are you talking about the nine largest banks in the United States or across the board . No, just our plan that we release a draft in november, it calls for substantially higher Capital Requirements for banks, 250 billion in assets and up. Thats about a dozen banks in america. That we think should be more those are the too big to fail banks as we see it and we would want to relax regulations as you said on small banks, on community banks, because theyre not systemically risky for the economy. Weigh in, if you will, or weigh out the implications for the economy in that theres long been an argument made that, of course, the higher Capital Requirements you have the less lending that some of the biggest banks can and credits that they can put forth into the economy and therefore the extent that youre trying to juice the economy, and President Trump, of course, has ran on a campaign of bettering the economy, and growing gdp, that it makes it that much tougher. How do you weigh that versus the risk on the other end . So, youre exactly right. And so this is about analyzing cost and benefits. The benefits of higher capital are we avoid these disastrous financial crises that brought down the u. S. Economy and almost put us into the great depression. But its not free. Safety is not free and so there are costs and benefits. The analysis that weve done looks at the cost of higher capital in terms of what lower lending from the biggest institutions. And the benefits of higher safety. And our analysis says if we double the Equity Capital requirements on the biggest banks and only on the biggest banks, society is better off. The benefits outweigh the cost. But youre right there are costs, safety isnt free. And, neel, christopher whalen, i dont know if you noticed this on twitter, sent out a tweet said yo squawk box ask Neel Kashkari why more bank capital would have prevented the 2008 crisis which he says came from securities fraud. Somebody saying more capital would have allowed more fraud and forestalled the crisis until we could have had a grander one. What do you make of that . I dont understand that. If banks were buying securities or had loans, lets say there was fraud, they didnt understand what they were buying, they didnt know what was on their books, if they have a higher capital cushion thats protection against all of those mistakes. Whether theyre caused by fraud or stupidity or just by bad judgment, capital protects them against those mistakes. You know, this is just like when we get a mortgage, i got a mortgage a year ago, the bank made me put 20 down to buy my house. That 20 down is designed to protect the bank in case i run into economic hardship. Its pretty simple. If we make the big banks put 20 down on their investments, we can protect the taxpayers. And thats what my interest is here. There was a report out just two days ago that gary cohn, formerly goldman kachs of course, talking about potentially supporting the idea of bringing back gas spiegel. Where do you stand on that and do you find it surprising . I found it somewhat surprising given some of the other comments that weve heard. I think during the campaign President Trump or president elect trump at the time, candidate trump was also proposing reinstatement of glass spiegel. Im not opposed to that but it will not solve too big to fail. Lehman brothers and bear stearns are great examples of too big to fail banks that were pure play investment banks, that were not the supermarket banks, and they were systemically risky. You also had pure commercial banks running to trouble and posed systemic risk. Its not simply the merger of these two activities that creates the risk. Its the scale, its the interconnectedness, and the lack of capitalization. Are you a lone voice within the fed complex if you will on this issue at this point in terms of what kind of support privately are you getting or not getting, given the politics of the moment . You know, privately i have a number of people reaching out to me saying thank you for speaking out. Were glad somebodys speaking up about this. We have not talked too big to fail. But i think there are a range of views on this. The most important thing from my perspective is i dont want to give the public a false sense of security that doddfrank has solved too big to fail. The biggest banks are still too big to fail and i think policymakers, whether its congress or the executive branch or regulators need to take that on. Need to present options to the American People, and they immediate to tell us how much safety they want. And before we let you go, go to ask about jeff lacker. What your thought is on that . But also, do you get lots of calls from analysts and journalists, and market participants, and do you take those calls . I do get calls from journalists occasionally. Sometimes i take them if i have a message that i want to deliver. Im shocked by the jeff lacker situation. People inside the fed care deeply about ethics and integrity. Its a very ethical institution. And we all need to work extra hard to make sure we maintain the publics trust. So were all shocked by it. But i think appropriate action was taken. Okay. Neel kashkari, thank you. Appreciate your time. Still to come on squawk box, reaction to the air strikes in syria from nbc diplomacy analyst and former supreme allied nato commander james stavridis. Implications with russia and beyond right after this break. At the top of the hour were going to kick off the final countdown to the jobs report. We have the numbers and the Market Reaction at 8 30 a. M. This morning. Its big screen entertainment, right in your hadnds. Buy a Samsung Galaxy s8 and get one free when you have direct tv and add a line. May not always be clear. But at t. Rowe price, we can help guide your retirement savings. So wherever your Retirement Journey takes you, we can help you reach your goals. Call us or your advisor t. Rowe price. Invest with confidence. President trump decides to strike back at syria following the recent chemical weapons attack. Joining us to talk about the military action and what could be next retired admiral james stavridis. Professor at tufts university, also the former supreme allied commander at nato. Admiral, youve been in this business and making decisions. Or at least advising people on decisions like this. At first blush, what do you have to say . This is a good decision. A good call. This is legal proportional strike. Its not particularly tactically significant. But it sends a pretty important strategic message that the United States is unafraid to use force. Will continue to be in the game in the middle east. And lets face it, part of the audience here is not just russia, iran, and syria. Part of the audience is president xi. And as we used to say with the soviet union, perhaps it is no coincidence, comrade, that the strike get launched while president xi is down in maralago. Pretty good signal that the United States intends to play hard with north korea, as well. Over all good call. Could have been serendipitous, though, if it happened on tuesday. And we were under the impression, there was no chemical weapons left, and suddenly president xi is here. It almost its almost i dont fortuitous is one way to say it, certain dip dus is another way. It does show how serious this administration, north korea, and how ive still got march madness on my mind. And how serious this administration is about maybe being more activist in the world. Thats exactly right. And it also lets face it, theres a domestic component to this. Here in the United States. Versus the Trump Administration. We have a president who has talked about his desire to move quickly, to act. This is a pretty good example of that. And i think it also reflects a very professional National Security team around President Trump. Particularly the consolidation of Lieutenant General h. R. Mcmaster as National Security adviser. This has his fingerprints all over it. Its measured. Its sensible. And then the professional execution by the u. S. Navy under general jim mattis. Its a very professional move, well executed. Admiral we know for sure it was sarin gas, and we know for sure it was the assad regime . Thats a given would you say . Its absolutely a given. We have the video. We have reports from the turks, who took in a bunch of the victims and are doing medical exams of them. I think it is incontrovertible at this point so putin you think putin got advance number one, they dont even acknowledge that this happened. Because they say there are no there are no chemical weapons left there. But you figure, so he knows. Do you think he had advance notice on, with assad whether this was something that they planned to try to test trump . Or i mean, what do you think . I think thats unlikely. I would guess that the russians were woke up, and were unpleasantly surprised at this. But they know. For assad yes, they know it happened. Oh, absolutely. But i think they were unpleasantly surprised to discover this. Then that explains the, that its not unconal. Probably explains why putin saw this, is going to say its aggression and the United States has no right, its a violation of this, violation of that, but they shouldnt be surprised by it. And they probably, deep down, know that it is something that trump had to do. And therefore they have this muted resprons. Maybe they dont, you know, unconditionally back this guy. Yeah, that would be my guess. Is that at this moment in the kremlin, theres a little bit of reconsideration going on about how long they want to stand with this particular client, who just is difficult to control. Does not seem to have a winning hand himself. Is a weak leader. And now has managed to provoke significant military response from the United States. I think what will be interesting to watch will be secretary tillersons visit to moscow later this week. See what the tone of that comes across. I wouldnt be surprised to see the u. S. And russia bury the hatchet right in the back of assad bch this is all over. Although no question, putin has taken a step back with this too, correct . This is the first time that he has been stopped in quite some time. Does he respond to what he might be seeing as the success . This is always the question with putin, and if you have to bet one way on a putin response, bet that hes going to puff up, show a lot of arrogance about him. Hes not one to look for the subtle way out. And again, hes playing, putin is playing to a domestic audience which has been fed a diet of continuous winning. Syria is doing wonderfully. Were fabulous with our ally assad. Those videos are in russia, as well. And i think there is going to be some reconsideration. But i would bet for the moment hell stand fast with assad. Admiral, of course, President Trump with president xi from china. Lets talk about the implications in terms of the chinese relationship. Could it be had a conversation with the president , president xi before doing this . Theres going to be theres lots of speculation about whether this embarrasses him and how it changes the dynamic in terms of their conversation. Yeah, andrew, i think its a terrific question. My guess is President Trump probably said something to president xi like, you know, weve got something thats going to happen here fairly dramatically. This is not something we staged. Its just the timing of whats happened here. But again, as joe and i were talking about up front, the timing of this does appear to really send a dramatic signal to president xi, and as you know, andrew, the chinese hate surprises. More than probably any other country. Theyre very protocol driven. So, i think this will have an unsettling effect on the talks. On the other hand, longterm, i think it shows President Trump is willing to take tough measures against north korea. Thats a good signal to send to china at the end of the day. Admiral, for the antineoconwing of the Republican Party, theyre up in arms right now. Can the case be made that if chemical weapons are used, that we have to be the policeman for the world . I mean, do they not see that . They probably say, you know, civilians die a lot of different ways, and admittedly this is a horrific way, but theres things happening all around the world that we cant control, and here we are getting into what could be another sticky, you know, drawn out situation. Is there merit in that argument . Or do you have to just say, children, and sarin gas, and if im not going to do it, whos going to do it . Im going to do it. And you know, damn the torpedoes, you know, to use a military term. I mean, is that, whats your view . I think youve got it about right. Which is to say, none of us want to get drawn back in to another long, drawn out misadventure in the middle east. But i think answer to the proposition you posed is, look, were taking this one step at a time. We do need to respond to this, as a civilized nation, and particularly as a leader in the world. And we shouldnt back up from that responsibility, and under International Law, this is an appropriate, proportional response. Right. And maybe it was too soon after iraq for president obama to consider Something Like this, but a tactical, small strike, i mean, it might, you know, it might be beneficial to our interests, i guess. Admiral. Thank you, appreciate your time this morning. Thank you. Up next, the military action in syria, and your portfolio. Well tell you a look at the defense stocks and to show you how they are reacting to last nights strike. Squawk box will be right back. Still to come, jobs in america. Our panel of experts standing by. Payroll predictions and instant reaction. The countdown is on only on squawk box. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Welcome back to squawk box. What can the strike in syria mean for defense stocks and your portfolio. Morgan brennan joins us to break it down. Defense stocks havent moved notably overnight. And the question for investors now is what does this aggressive response signify in terms of President Trumps, and Congress Commitment to building up our military. Now in particular, for a sector that has rallied sharply since the election, that said, take a look at raytheon. Raytheon is higher premarket, up about 2 . Raytheon makes the tomahawk missiles that were used to carry out the u. S. Strike in syria last night. The tom hawk is a long range subsonic Cruise Missile launched from navy ships or subs from up to 1,000 miles away from the intended target. It can fly at low altitudes up to 550 Miles Per Hour dodging threats and it is highly accurate. Its battle tested, reliable weapon of choice for a strike like this, dating back to the desert storm in the early 90s. They were used in 2011 to oust libyan leader gadhafis government and more recently in the fight against isis. Now conflicting numbers are out there right now about the price. Multiple experts telling me its upwards of 1 million per missile. Meaning from a weapons standpoint the cost last night was upwards of 59 million. The navy has a stockpile of about 3,000 of the most advanced tom hawks. The attack represents according to an analyst about three months of Defense Department production and replenishment which is likely to be considered now in the budget process. Becky . All right, morgan, thank you very much. When we return, the countdown to the jobs report is on. Our panel is standing by with predictions and Market Reaction. In the meantime take a look at the futures, theyve turned around, s p is flat right now, dow futures up by 5, the nasdaq up by 1. 5. Tools, right at your fingertips, you have access to indepth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade. Start trading today at etrade. Com making news this hour. Jobs in america. The march employment report is just minutes away. Our panel of experts are standing by with everything you need to know. The numbers, lightning fast analysis, and the instant Market Reaction. A special hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Good morning. Welcome back to squawk box here on cnbc, live from the Nasdaq Marketsite. Im joe kernen, along with becky quick and Andrew Ross Sorkin. Its jobs friday. Were just 30 minutes away from the march employment report. Forecast expect the economy added 175,000 jobs last month. The Unemployment Rate is expected to hold steady at 4. 7 . Weve had some people say its going to keep coming down. I dont know. If the workforce keeps Participation Rate continues to go up a little, then you maybe dont get the employment rate going down. Right. You could actually say which is a good thing even if it rises. Get a check on the markets this morning. Even after all the news the market has absorbed all of it. Looks like the dow futures are indicated to open up about 7 points. S p futures just turned positive. Nasdaq up by about 1. 5. Weve also been watching treasury yields. This has been an interesting story to watch once again. The tenyear yield moving to its lowest position since november 22nd. This morning its yielding 2. 318 . Before we lets go to michelle and then well come back to this. Todays top story the u. S. Military attacking a Syrian Government air field with 59 tomahawk missiles last night. Michelle carusocabrera joins us to break it all down. The 59 missiles from launched from two u. S. Warships in the Eastern Mediterranean. Overnight the pentagon released this video. The target of these missiles, an airfield the u. S. Government believes was used by the Syrian Government of Bashar Al Assad to launch a chemical weapons attack earlier this week in the now 6yearold syrian civil war. Chemical weapons are banned by International Law and this attack is thought to have killed more than 100, many of them civilians including young children. The air field al shayrat is used by the assad regime. It is in Homs Province. Assads Defense Ministry released this drone video last hour of what they say is the aftermath of the air field attack. They claim the attacks effectiveness was low. That it destroyed six mig 23s in a repair hangar, a warehouse,fa room as well as radar. You say the runways, taxriways, aircraft parking areas of the Syrian Air Force were not damaged. That is, of course, according to the Russian Defense ministry. Michelle, thank you for that. Market reactions to the air strike on crude prices this morning. They are higher this morning marginally. 52. 12 a barrel of wti crude right now. Want to get to jackie deangelis. Good morning, andrew. After a knee jerk reaction last night to the news of the air strike in syria, crude did move up to just under 53 a barrel. The highest level that weve seen since early march. This morning, coming off a little bit still supported. So far this year, of course, the oil conversation has tend to be around supply, demand dynamics, and theres been less focus on geopolitical risk than weve seen potentially in the past. But, military action in the middle east has a way of heightening concerns about supply disruptions. Remember, in this case, the concern is less about syria directly, not an oil producer, but more about disruption potentially in the region. Its also about what the russian response will be longerterm. Oil prices were already on the rise ahead of the events last night. Seasonal trends taking the market back over 50 a barrel. But this is exactly the kind of issue that not only leads to support to that momentum, it also could move prices very high and quite quickly. Right now, though, the markets seeming measured. Thank you, jackie. Were going to talk more about former defense secretary William Cohen at 8 45. But the point i was going to make, when you know, theres i dont know if its an unconventional view but in terms of why the market is actually up, the idea that this politically in washington could actually act as a reset for so much of the policy conversation to bring certain people together that may not have been together. Having said that we talked about the criticism from the right. Flanks of the Republican Party or republicans and democrats . Republicans and democrats who look at this, and also think that maybe the conversations weve been having about russian interference and all these other things, at least get pushed off the table briefly, and might offer sort of a respite for some of these kind of other conversations to take place. Already, we had i guess hes a colleague, but Chris Matthews went from comparing a ivanka and i guess some of the other children to saddam husseins children, uday and he was comparing trumps children to them. What . He went now to say this is a wag the dog, whatever it is, that this would be the version. From the other problems, and this missile strike was used to just to divert and also to point out oh, yeah were really good friends with the russians. Does this look like were good friends with the russians . Immediately politicized. Political perspective to the extend weve been talking about whether you can get tax reform or any of these others is back on the table and get away from some of these other things. There are people in the Investment Community who think that maybe this might just that implies i would think youd think that was a positive. No, i would say that implies a certain degree of cynicism that even im uncomfortable with. That you would use tuesdays attack on children to reset your own political no, i dont think theyre as a result as a result im not suggesting it was strategic in that regard. Though it may very well have also come in to play. But i think the question is whether it does something else. Anyway, wanted to put it out there. Serendipitous. Lets get to our jobs panel this morning. On top of all of this other news were counting down to the march employment report which is less than 25 minutes away. Joining us right now is barbara reinhart, head of Asset Allocation at Voya Investment management. Jeff rosenberg blackrocks chief income strategist. Doug holtzeakin who is American Action Forum President and Austan Goolsbee who is professor of economics at Chicago School of business. Welcome to all of you. Jeff, before we jump into the jobs number today id really like to know about your reaction to the tenyear. Weve been pointing this out this morning. Lowest level since november 22nd. Why . Why . Lowest yield i should say. Yeah, you have a number of things going on. You know, certainly this morning you saw big spike, and thats a risk off environment. But before that you had a number of concerns developing. As andrew was just talking about, concerns around the policy side that the market had heightened expectations for a degree of momentum, and success. And some of that clearly came off with the failure of the health care vote. And that had been weighing on the market. The other thing is positioning and technicals. Most of the market, ourselves included, everyone had this expectation for higher rates. So you had positioning towards higher rates. And you had the momentum going in the opposite direction. So you had some technical Short Covering going on into that environment. Just because it was such a crowded trade at that point . Very crowded. Very consensus positioning around the expectations for higher rates. You have this development that point to the other direction people have to get on the right side of that. All right, barbara, lets talk about the stock markets reaction to all of this news overnight. What andrew was just talking about, how do you at it all up . Theres a couple things. Any time that you have military strike it always causes some indigestion in the equity market. I think this is going to be seen but theres not really. Its going to be seen as relatively limited i think at this point. I think hes done enough in terms of some of the survey data that had been really propping up the equity markets. Some of the hard data is coming up to meet it at this point. You saw 118,000 jobs added in march in Small Businesses that was consistent with what we saw in february. So backing up the confidence numbers weve seen for both consumers and businesses . Yeah. And First Quarter earnings, should be relatively good as well. Enough of them to hold it all together. And youre also starting to see theres a big divergence and i think youre starting to see it come up at this point. It may be that the soft data or the survey data is already pass its peak. But it doesnt necessarily mean bad news until youre getting into contraction territory. Austan how would you set things up . We have seen a lot of strong numbers come in including the adp report yesterday. Look i hope that we get some strong numbers. I think weve got this weird weather related we had a huge snowstorm right during the reference week. So i actually think the number might not be the head line number might not be as good as what our expectations are. But overall the economy still continues to plug along pretty decent, and as youd say, becky, weve got weve been getting a lot of information. Which says the economy just keeps on chugging. I think the military action, if its just a oneoff symbolic gesture, i dont think will have very much impact. If this drew the iranians in to do something else, if this escalates, its sort of a second or a third strike, then i think there would probably be a lot of fear that theyre not going to get the Corporate Tax reform any time soon. If were in an environment where weve got an escalating military cost. Because the two things that would blow the budget up, i dont think they could do at the same time. Doug your thoughts on everything happening overnight . Im pretty much with austan on the economy. Its chugging along pretty well. I think the weather is going to affect the number, if only because the february number was a bit higher because of the unusually warm weather. I think the military action is a very important step for the Trump Administration, in establishing how its going to handle itself in international relations. I dont think its a signal of broader intervention in the middle east, or military conflict. And so, i dont expect big fallout from it. I think thats right. And certainly worth watching. Probably a bigger deal in terms of whats going on overnight is the meetings with xi down in florida, and just what u. S. china relations will look like going forward. Thats a significant relationship. Has big economic implications and ought to be watched carefully. Doug, weve had people tell us this morning that it was just a coincidence that these strikes happened now. It was the most important time militarily for that to happen. Weve had other people say no, no, this was very clearly a signal to the chinese regime about north korea. What do you think . I think its a signal no question about it. But the timing was dictated by the chemical attacks. I dont think theres any mistake that they saw those attacks, that they thought back to the performance of the Obama Administration in similar circumstances, but they cannot fail to react. And they took their time and took the right action. Austan, just in terms of what doug was talking about, if this was a oneoff, thats one thing. There are a lot of different issues out there that are kind of jockeying for the president s attention at this point. What would be best . I think youre absolutely right. There are a lot of things clamoring for attention. And youve got investigations. Intrigue type stories going on. So its a very full plate for the president. As it almost always is. So were going to get were going to get an observation of how does President Trump do as a multitasker. Which we sort of havent seen. Weve kind of mostly teed up so far in the Administration One issue then the next issue. This is more normal. That a lot of things will be going on. And hopefully this does not escalate into something bigger in the middle east, and hopefully the chinese do not take this as a slap in the face that you invited me to maralago, and then you launched an attack while im here without telling me. All right, folks. Stick around. Were going to talk a lot more about what to expect as we count down to that jobs report. Coming up were going to find out where the jobs are. As we count down to the payroll release, squawk box will be right back. Predictable. The comfort in knowing where things are headed. Because as we live longer. And markets continue to rise and fall. Predictable is one thing you need in retirement to help protect what youve earned and ensure it lasts. 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Check out the shares of some gold mining stocks like barrick gold, ram gold and gold fields all rallying this morning as the syrian air strikes prompted some safe haven buying. Healthy Advisory Group upgrading walmart, saying the retail giant appears to be regaining dominance in the physical retail market. A couple stocks to watch amid all this geopolitical news. Yum brands saying its kfc unit has given its suppliers until the end of next year to stop the use of antibiotics in chickens. Kfc is the last of the three large chains to sell chickens that do so. Also are twilio was upgraded. Now a good value after tumbling from the september highs and notes that Amazons Web Services unit is using Twilio Technology to power a number of its new products. And Southwest Airlines says revenue passenger miles increased by 3. 9 in march kard to a year ago and says that bookings brookings on the mind but bookings and overall trends remain high. Always be a place for you over there. At brookings . Oh, yeah. Ill have to book my ticket at brookings. I could go and butt heads that way. Much more fun when youre doing it right here on set. With you in the middle. Coming up the final countdown to the march employment report. We will get the payroll predictions from our jobs panel next. And later the world reacting to the u. S. Missile launch in syria. We will talk to former defense secretary William Cohen. That is coming up at 8 45 a. M. Eastern time. So let me get this straight. Youre a rabbit . Im vern, the orange money retirement rabbit, from voya. Riiight. And that means. . Im the money you save for retirement. I help you get organized so your money could multiply. See . Got it. Whos he . Hes green money for spending today. You know, paying bills, maybe a little online shopping. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Welcome back to squawk box. It is jobs friday. Time to find out where the jobs are this month. Were looking to the sky right now. Kate live in dallas. Hey, andrew. Good morning. Well the Airline Industry is growing rapidly both in the u. S. And globalry. Some 3. 8 billion passengers travelled in 2016. That will hit 7. 2 billion a year by 2035 according to the International Air transport association. To meet that demand, air Passenger Services are on the rise and that means one thing. The need for more manpower. The Airline Industry employs some 700,000 people in the u. S. Alone. A number that stands to grow according to experts. Based on all trends, the next few years look to have more hiring in the Airline Industry. And thats important, because the more we hire, the more actual jobs we create and that Ripple Effect throughout the country. Reporter carriers like Southwest Airlines are expanding in nearly every part of their business to meet demand. Pilots, flight attendants, administrative staff, finance positions, marketing positions, and probably the biggest position is operations. Reporter now with President Trump in office the industry is hoping for deregulation, lower taxes and modernization of air Traffic Control systems to continue growth. Were looking at current regulations that dont make any sense and eliminating those. Those savings, those efficiencies, will make us better able to continue to invest in our employees, and in our product. The industrys also investing in its employees with u. S. Passengers, airline spending about 3. 6 billion per month on their workforce. Thats up 42 over the past six years. And coming up later in squawk ally were going to tell you how Southwest Airlines, were live from their big hub in dallas today, theyre hire people for their attitude and training them for skills. Andrew, back over to you. Kate rogers on the tarmac. Always appreciate it. Thank you for that report. And, if youre taking southwest youve got to pay extra a little bit to get on the plane early. That has some value. Coming up when we return, just minutes away from the big payrolls release. First final predictions from our panel. Then were going to bring you those jobs numbers and Market Reaction. Stay tuned youre watching squawk box right here on cnbc. I think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading Companies Lead with digital. Good morning, and welcome back to squawk box here at cnbc. Live from the marks today. Top story u. S. Warships in the mediterranean fired 59 Cruise Missiles targeting a Syrian Air Base overnight. Heres President Trump speaking last night. Tonight i ordered a targeted military strike on the air field in syria from where the chemical attack was launched. It is in this vital, National Security interest of the United States to prevent and deter the spread and use of deadly chemical weapons. There can be no dispute that syria used banned chemical weapons. Violated its obligations, under the chemical weapons convention, and ignored the urgen of the u. N. Security council. Le. A syrian official said that u. S. Missiles did cause damage, and you can see that looking at images of that air field from syrian television. Global markets reacted, and then sort of didnt react. Dow futures initially fell sharply on the news. But have recovered, and now positive for awhile. Theyre now down a little bit as you can see down nine points. Crude, as i mentioned earlier, crude did move, as i mentioned earlier, there were times back in the 90s, and 2000 where when you got a move in crude it could be like 10 , 12 . It would really knock your socks off. That was with the first invasion, remember with kuwait. You were talking about countries that produce much more oil at that point. It had to do with whether the straits of hormuz, whether it was disrupted. But it used to be more of a and we also have a lot more. Were now the largest producer give and take with saudi arabia. Right. It is jobs friday. Right now its time to get final predictions from our panel. Jeff, why dont we start with you . So theres a big weather story. I think youre going to hear a number of people talk about that. Consensus around 175. Im on the low side of that at 140. 140 . Dont take it the wrong way. Its not a bearish statement. Its more that youve had a lot of weather effect in this report. It may show up. So you think if its a oneoff you think it comes back the other side of that . It definitely would come back on the other side of that. And even if its a oneoff i think its important, Market Expectations have some expectation for the weather effect. It wouldnt have as big of a story than a jeff is at blackrock. Youre factoring in 60,000 robots got hired so its really 200,000. So youre really its really 200,000. Robots, yeah. No. Yes . No, not happening. How long you going to survive its man, and machine. Oh, yeah, yeah. Thats what they told john conner at sky net. Dont worry. Then they haste hasta la vista, baby. We think its probably going to be close to consensus around 180. What were focusing on also is the potential for labor market shortages in the u. S. Its starting to really leak into the, you know, pervasiveness of what people are talking about, and investors in the market that youre running out of workers. Okay. Great. Were going to have to move, because were coming up on the jobs report in about an hour and 45 1 minute 45 seconds. Doug, whats your guess . Im putting it right where we were last month. Weather would knock it down. But all the high frequent data pushes it up. Id just call it a wash and im at 235. Austan, how about you . Im at 165. I think this weather thing is going to confuse it. All right. Steve . 208. I dont have any weather adjustment in my model. It just does what it does. And if the weather affects it, well come back next month and get it righter. Wages . I dont do wages. You dont do wages . Let me just say the wages also has a weather effect potential in there as well because it shortens the work week. You can get an artificial. Rick santelli. Your number . 267,000. You know, i was thinking weather. Weather is going to weather the storm of the number but i dont know. Winter tends to be winter, and 94 Million People out of work is a good pool not to overlook in terms of shortages. I really think were going to be sailing ahead one of these months with a big number and maybe this is it. Coming up on that number, joe. Just a few seconds away. We are just right now about 30 seconds away from the jobs report. Lets check out the futures. Wow. You want to say somethings flat. Down a little over a point on the s p. Flat as it gets. Dawn now over a point on the dow and the nasdaq down a half a point. See what the other tenyear which has got all the way to 2. 25 at one point. Back to 2. 31. All right now. Hampton pearson, i sometimes worry about him. Its a lot of pressure. Hes standing by at the labor department. He may already know the numbers. But you cant tell from his expression. What are they, hampton . 98,000. March nonfarm payrolls increased by just 98,000 jobs. The Unemployment Rate dipped to 4. 5 . Average Hourly Earnings up, way below the Consensus Forecast for 175,000 new jobs and 4. 7 Unemployment Rate. We also had significant downward revisions for january and february. Basically lower by 38,000 for the two months than what had previously been reported. Private sector new hires in march, 89,000 new jobs. That 4 4. 5 Unemployment Rate, we got there from the Household Survey by a decline. 326,000, and the number of unemployed, 472,000 new hires. Job sector growth, business professional services, plus 56,000. Mining up 11,000. Health care up 14,000. Job losses, a big head line here, the retail sector, lose pg 30,000 jobs in the month of march. The socalled real Unemployment Rate, down to 8. 9 . Down 0. 3 from the previous month. Now, with those revisions, and the very low head line job growth number today, the revised average for the first three months of this year is 178,000 jobs per month. Back to you. Wow. Thats a wow. Wow. Not even triple digits. Thanks, hampton. Lets get reaction from our panel. Barbara reinhard, jeff rosen gerg, douglases holtzeakin, and Austan Goolsbee. You were closest. As i mentioned in the expectation, there may be a weather effect. I dont have the construction number in front of me, ill look at that in a second. That may have pulled stuff back. You had about 60,000 boost in 16 so construction was 6,000. Oh, even weaker. Thats a huge number thats clearly a weather effect. So thats going to help a bit take off some of the edge of what seems like a bad head line number. And the participation right, a little bit of a positive story there, ticking upward. So a bit of a mixed bag. Liesman i said you never miss. Youre always right on. You got the best system around. And i ruined it for you. Yeah,ing theres no theres no weather effect that i can whats interesting is 211 is. Its 98 you missed by a country mile this time right after i said you get it exactly right all the time. Why . Well, what im looking at here is, is the weakness in the service sector. Thats really the story here. I think construction, you know, 59 last month, 6,000 this month. Take a wash. Its 33,000 average last two months, okay. Manufacturing doing pretty good. 26,000 last month. 11,000 this month. Thats not where the weakness is. You dont get a whole lot of jobs producing. Service sector, just where did it go here . Just 61,000. Doing 125, 130. By the way i would point out you have to take a nod towards taking a look at whats going on on the household side. Huge decline in unemployment. Increase in the workforce, and increase in jobs there that sort of is off the charts there. So whats interesting what didnt show up in the Employment Survey did show up in household some interesting stuff happening in the markets. Austan, do you still dabble in economic stuff . I see you on fox almost every night, and they have you on i still do economics. What are you talking about, joe . They have you talking about with steves revisions they have you on to talk about devin nunes resigned as chairman of the and you opine on the whole russian scandal. Why do they have you on they make me do that. Youre just a generic democrat now . Youre just a generic democrat . Youre on every night. You ask them why they ask me. What do you make of the syrian thing, austan . Im just waiting for accusation of a deep state at the bureau of labor statistics. They revised down the last two months. You realize what that means. Job performance under President Trump is not too good now. There might be something to that. Theres still some holdovers, dead enders from the Obama Administration skewing the numbers down now. Thanks, austan. Oh, here we go. My model number is up. I skewed them up for a reason. Because it was wonderful, they have such a nice stretch of jobs under the last administration. But i said a lot of times, if you get a raise from 50 to 100 grand but your bills are still 200 grand, still you did better but its not time to celebrate. We need growth and productivity. Thats the issue. Granted this isnt good the markets bear that out. We came right down to the 227, 228 issue. Ive talked ad infinitum about how important 2015s tenyear settlement is. Took us all of eleven months to overtake it in 2016. Thats where the market needs to hold. Overseas rates are drifting. Whether its the gild, the boone, all of those seem to be breaking this pattern a bit. This is really a significant level for the weekly close for tenyear note yields. Im getting emotional. That almost sounded like Rick Santelli said something nice about the Obama Administration. Did i miss that . I did it was a nice thing. But its too bad it wasnt nice enough thats all im saying. I think you cant be happy that was like a christmas either Something Like that from him. You know, like thats as good as its going to get. Its nice to be objective. I think it just goes to show that the market sensitivity and sentiment sensitivity is going to be very high to the labor market. This is going to be big rally in bonds today. Selloff probably drop in Inflation Expectations, it may cause credit spreads to widen a little bit because Inflation Expectation barbara, just because they do it, does that make it right . Is it really time, given the streak in the run of jobs weve had, to change your view of whats going on on the jobs market . No. Especially if jeff and the other economists are right that this is a weather related weakness . Its weather related. And the bond market peaked at 260 on the day the fed raised rates in december. It peaked at 260 on the day that the fed raised rates in march and it rolled over. The date stay should be strong enough, earnings should be strong enough, there should be enough ceo confidence that this is going to be a blip thats going to get reversed. I do have an issue and a question, which is we havent seen the hard data to support or to really become in line with the jobs data thats been out there. Doing these 200 pluses, what ive not seen in general since the crisis, ive not seen employers take on workers in expectation of demand to come. Theyve only done it essentially in response to it. Theres a lot of shifting things going on here. Corporate america doesnt want to do much because they dont know what the policy is going to be on tax reform just yet. So theres a little bit of a Holding Pattern there. It also bleeds through to capex. But it goes to something that were positioning our portfolios on, theres more slack in the labor markets in europe and outside of the u. S. So were looking towards europe to maybe take some from the u. S. At this point. All right. Austan youve got to run. I know youre taping Tucker Carlson about the gorsuch nomination, right . Youve got im going to talk about you, joe. Youve got to get over there quickly. Thats coming up. I love that im going to right a new report, joe kernen wrong again. You know youre pretty good on those generals. I mean you may know nothing but youre never in doubt on that stuff. Its awesome. Anyway, thank you. Hes been hanging out getting on your bad side. I know. I know. We got to just pretend we know. Anyway, jeff rosenberg, you will be replaced is there a date . No. Not yet. You know what larry did . Larry did say 30 billion dollars out of 5 trillion will be, you know, computer aided. And you know who we didnt talk to and need to thank, doug. Doug . Douglas holtzeakin. Thank you. His name douglas, thank you. Hes trying to stay under the radar so we dont call him out for dougs the man all right. Thanks. Im just going to stay out of the food fight today. Yeah, exactly. Thanks. When we come back this morning the Global Reaction to todays top stories. The u. S. Airstrikes in syria, former defense secretary William Cohen will join us. Thats right after the break. Squawk box will be right back. G by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . Say hello to at ts best, unlimited data deal and never pay overages again. So now the whole family can binge, surf, shop, navigate, listen, game, stream and more. All without the hassle of worrying about overages or running out of data. In fact, youll never pay overages again. And remember, its at ts best, unlimited data deal ever. So get at t, get unlimited and get everyone more for less. 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, everybody. Just eleven minutes ago we got the jobs number. They were quite a bit weaker than had been anticipated. Youre looking at the nonfarm pay roms up by 98,000. The consensus estimate was for 175,000. As a result take a look at what happened to the futures. Wed been looking at futures flat. Right now looks like dow futures down 54 points. S p futures down by 6. 5, the nasdaq down by 12. 5. If you take a look at the tenyear yield this has been the other major market story. Yields put under more pressure falling below 2. 3 . In fact this is the lowest level at 2. 289 that we have seen for the tenyear since november 22nd when it was 2. 287 . Before that it tfs 2. 1845 back on november 17th. Well keep a close eye on this today. President trump has launched the first direct military action against the Syrian Government. The u. S. Air strike was prompted by a chemical weapons attack that killed syrian civilians earlier this week. Joining us right now to talk about it and break it down, former secretary of defense William Cohen. Good morning to you. Good morning to you. Mr. Secretary, help us understand whether you would have made the same decision, and what comes next. Well, i would have made the same decision. I think something had to be done. Particularly after President Trump very emotionally described the reaction that he felt, and had when he saw those children. And so, something was required. I think the something that he exercised was the minimum option. Says, okay, youre going to pay a penalty here. Its going to be fairly prudent strike. And not a massive strike. Because we have other interests involved, namely the iranians, the russians, hezbollah, and other actors in the region. So i think it was the right thing to do. The question is, is it pursuant to an overall strategy . Just launching one strike doesnt make a strategy. Its a tactic. So hopefully theres a comprehensive strategy being developed. One of the things thats been missing is the state department, mr. Tillerson, doesnt have a deputy, doesnt have a fullblown staff. We need to get the state department really beefed up so that secretary tillerson can have his full team to give all of the options to the president as he moves forward. It wont be just military. It has to be diplomatic, it has to be economic. And to bring pressure upon russia and syria in order to ultimately have a regime change. Secretary tillersons going to be in russia next week. How do you think this changes the dynamic between those conversations . Well i think it sets the tone. Saying, life between us is going to be somewhat different, perhaps, to what mr. Putin, you had looked forward to a Good Relationship, but you have taken actions which undermine that relationship. Not only intervening in our own political system, but continuing to support a country and a leader who has engaged in war crimes. And so i think it sets the tone for mr. Tillerson, who knows president putin. He has dealt with him. I have enormous respect for Rex Tillerson. I think hell be very direct with president putin. We want a Good Relationship with you. But not on your terms. You have to get back to staying out of our system. We intend to fully explore that. And secondly, you have to get better control of your client state which is engaged in war crimes and by association, so have you. Is there a response, is there some kind of response that you could imagine putin taking . I can there are multiple responses. You could have the iranians targeting our forces that are on the ground in the region. You could have syria doing more extensive, nonchemical attacks upon our forces in the region. You could have putin start to shake and rattle and roll up in the baltics again. Buzzing our ships in the sea. You could see him doing a number of things. But what has to be made clear to him is that we are not going to have a Good Relationship. You are not going to get the respect that you are eager to have, as long as you act in a way that disrespects the rules of law that have been established, and that youre contravening those by annexing crimea, by destabilizing ukraine, by now a desire to destabilize the baltic region. This is not going to get you what you want and that is for you to be a respected leader on the world scene. Thats not respect youre going to get, its condemnation. Do you ever remember anyone in the at the kremlin saying that assads our support for him is not unconal . Is that the first time theyve said that do you think, secretary cohen . I dont recall him saying that in the past. But, i think does it mean anything . Well i think it does. If putin is saying our support is not unconditional, means we are not going to indicate our our support for a heinous act, which has been committed, something that hasnt been done well had not been done until recently, since world war i. And so you have the condemnation, the world condemning this action, while president putin was supposed to have removed them, and secondly, the only reason that assad is still in power is because of president putin. So theres a a responsibility, and an Agency Relationship by the by russia with syria that i think puts putin in the in the blame, as well. Mr. Secretary, what does this do in terms of signaling the chinese as to what we may or may not do with north korea . Well, it shows that the president is eager to keep his word, that if hes talking about drawing red lines that hell back them up. With respect to north korea, its a much more complicated situation even than that in syria. Because north korea does have nuclear weapons. An attack about the North Koreans could unleash even a conventional attack upon seoul, killing millions of people. So, its a much more complicated situation, because you now have to take into account the chinese military, and their alliance, sponsorship, or support for the north korean dictatorship. And just to understand the other piece of this is in terms of the relationship with the chinese, theres been some conversation, speculation, about what kind of conversation may have or not have happened between president xi and President Trump last night before the airstrike. Do you think the timing made sense . Well, i dont think he had much choice. I think it was it made sense because you have the president of the second most powerful nation, certainly economically, sitting next to you. And conveying to that president that youre a man of action. I have just returned from china. I spent ten days over there and frankly they were looking forward to this meeting. Publicly, i said that the United States was not prepared for such a summit meeting. Because we dont have our full team in place. And when you have a summit meeting, a lot of work has to go in to refining the details to make sure that theres something that comes out thats positive on both sides. But what i did say is, i thought the symbolism of the two men shaking hands, and saying were going to Work Together, the symbolism was the substance. Right. And i believe that to be the case. I think important signals to send to all of our allies in the region and to the chinese people. And finally, mr. Secretary, does this change the dynamic in washington at all . Weve been talking to some investors this morning who suggest that perhaps, maybe not a reset but maybe a soft reset in terms of some of the policy issues that appeared to be going by the wayside that maybe this will give the president some strength in terms of bringing some people together on other issues outside of these geopolitical ones. I would say it depends how the president goes forward. He demonstrated that he was going to act, and he did act as commander in chief last night. The problem that, at least i have seen, is the that President Trump is hes president but he hasnt been acting president ial by engaging in so much of the tweeting, and getting involved in side issues, and accusations. I think the American People want him to act as he did last night. Meet with powerful leaders. Set parameters on what the nature of our relationship should be. Read the documentation. You have got real adifficulults the National Security field. Do not cut the state departments budget. Give a full panoply of staff to the secretary of state. Combine the military with the diplomacy and i think youll find congress and those who have been criticizing the president to be very eager to support him. Okay. Mr. Secretary, we appreciate your time and of course your perspective this morning. Thank you so very much. A pleasure. When we return, jim cramer joins us live from the north korea a from the new york stok exchange, around hell talk about the jobs report. Here are the futures, take a look at the big bank stocks. Squawk box will be right back. Its our little differences, that can make a world of difference. Expedia, everything in one place, so you can travel the world better. Remember here at ally, nothing stops us from doing right by our customers. Whos with me . Were like a Basketball Team here at ally. If a Basketball Team had over 7. Im in. 7,000 players. Our plays are a little unorthodox. But to beat the big boys, you need smarter ways to save people money. We know what you want from a Financial Company and well stop at. Nothing to make sure you get it. One, two. And we mean nothing. And we mean nothing. The market. Redict but through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Since 2010, energy is aprils top sector. The best performing Energy Stocks are southwestern, range resources and chesapeake energy. Check out the shares of raytheon. Makes the tomahawk missiles that were used to carry out the u. S. Strike in syria last night. Pretty nice gain. I guess we have got to buy another 59, at least. At this point, i was interested to see if they didnt work as well, only 23 hit the site thats according to the russians. Lets get to the new york stock exchange. I was kidding around with austin goa goals by, hell opine on Different Things. I can ask you about syria and china and the jobs report. Heck, id throw in a gorsuch question. I mean, we try to only do things that affect business news, but it all affect us at this point, right . Yeah, because last night the s p futures dropped dramatically when we had the news of this strike and then they came back as people realized perhaps this was a limited option. Then they went down again obviously on employment. Because the ten year is what everybody is keying off of. I think the ten year is signaling ten year was right all along. The ten year was saying that march is it was a weak month in the country. And maybe exactly what youre saying, joe, because washington wasnt able to do repeat a repeal and replace. Pretty amazing, jim. I was scratching my head about the ten year saying oh, its because of the global blah blah blah. You know, still over there. But maybe it was saying something about, you know, domestic, economic momentum. Yeah. This was the month where we had double digit declines in the mall. So you had to start Closing Stores and these people just go right on the rolls. I mean theyre closing the stores. They close them immediately now. They used to stage them. But not anymore. I think that retail is just really amazoned. This is the quarter that amazon really kind of struck and people recognized you know what . Aint coming back. Holiday season wasnt so great. I think thats weakness. I know storm or no storm we can opine on the weather, on syria and china. But the most important thing is that retail is terrible because of amazon. Amazon. All right, jim. Thanks. See you in a couple of minutes at the top of the hour. Squawk box will be right back. e University Counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. Com i did active duty 11 years. My in july of 98. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. All right. Folks, lets take a final check on the markets. The markets had stabilized after dropping. We saw the futures down about a hundred points on news of the syrian air strikes. Now youre xoing going to see t stabilize until we got the job reports. It came in at 98,000 and the dow futures are down about 34 points and the s p is down by three. The as in dock is down by 4 1 2. The ten year is under pressure its actually picked up a bit. Looking at the lowest level since mid november right now. Oil prices also under a little bit of pressure actually, adding to their gains. Those have come off too. We were up by 1. 50 earlier. Devin nunes left yesterday. I mean well, recused himself from this. Its amazing a lot of other things going on. Theres a priority of ten. Maybe you get certain issues off the table. The whole russia thing is we talk about russia all day. Had nothing to do with whether there was any contact during the transition or before. It was totally different subject. Ill make you a promise. The issueb wi will be back. Well, maybe youll find something some day. Join us on monday. Squawk on the street is up next. Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, and dave faber of the new york stock exchange. Three big stories to watch, syria, the president s meeting with china and now the miss on march jobs. 98,000 is well below estimates of nearly down that. We have you covered on how the market responds. Futures are down a bit. Mild losses in europe. The yields briefly dipped below 2. 3 to