Transcripts For CNBC Squawk On The Street 20160307

Hillary clinton. Got rumors of two potential deals swirling this morning. Chemicals and tobacco in the spot light. Well put a dose of reality on both. Apple mac users being targeted by hackers with ransomeware and how the company is handling that problem. The dow coming off its third consecutive week of gains closing above 17,000 for the first time in two months. S p just shy of 2,000 friday, closed at 1999. 99 as china said it would target Economic Growth between 6. 5 and 7 . Some talk in china about cpi targets around 3. We know thats more a political chan nick thing. Exactly. One thing that happens out of china, we believe everything they say. Our country can say these things. They say theyre just making stuff up. Target, 6. 5 to 7 , and we believe them. The coal stocks go up. Steel stocks go up. Iron ore. Will you give me a break . Were in an era of where a lot of the stretched names whether its valet or cliffs natural or u. S. Steel, or a seadrill are going up. Its like the froth here scares me. The froth in those names. Theres no froth in the big cap stocks. The froth in every oil company that raised equity and how far theyve gone up, i dont trust them. They dont have bases. If you want to go back and buy stocks on this weakness, dont buy the stocks that have no base and went up like that because people felt like everything is over. If you look at the sevenyear curve, if you look at the sevenyear curve for oil, it hasnt moved. Its still you can get oil 45 bucks out seven years. Yes, we have had a remarkable move off of oil, which has triggered a lot of this. The Chinese Parliament triggered some of this. Dont get too ahead of yourself. What happens is as oil goes up, the futures get sold again because the Oil Companies need cash. Wells do get opened. Its been a remarkable cessation in drilling, but dont get too excited about the stocks that have been hammered. Still more bad news to come on the Balance Sheet front for many of these producers. Yes. We talked often about those who have raised equity. Im sure theres more equity raises to come. Definitely. And some bankruptcies which we have yet to see a wave of. Were not talking about the mega caps or the large caps. Were talking about small to mid cap. But not insignificant. Everyone can draw down the credit line. If you look at chesapeake, chesapeake is up 5. Natural gas was 1. 66 on friday. Thats much lower. Some of this is warmer weather. Thats back to 1999 levels. I think people will start saying who has more oil . Who has more gas . Mcclendon was trying to shift chesapeake towards oil. He wasnt able do it. Its a natural gas company, and that stock is up gigantically. More broadly on commodities, you guys mentioned iron ore. Holy cow. This is the biggest gain going back to 09. Youre saying the supply cuts and telegraphed cuts in Chinese Labor is not taking hold . Up 16 , iron ore up 19 . No. Thats a big short cover rally. I think copper is doing a bit of a peak here. Thats been up for days. Watch alcoa, aluminum has not kept pace yet, but that would be next if you think iron is real. Theres a big throw in the towel or maybe profit taking trade for everybody short all these heavily indebted oil, gas, copper, mineral companies. Once you got their covering done, i dont know who comes in and buys. A lot of things we were worried about earlier in the year, high yield we talked a lot about. European banks we were worried about. High yield recovered dramatically. Yes. Theres been a big rally in that market. Thats important. Certainly because it is also seen as a proxy more often for the equity market than the actual bond market. It also reflects the ability of companies to do a lot of different things. Its not just about energy. You have that going. We dont seem as concerned about the european banks, though we are awaiting for the ecb to make its move this week. A lot of negative publicity about negative rates. February 10, february 11, february 12. That was the bottom. We thought Deutsche Bank would have problems with the converts. Deutsche bank came out saying well buy back 5 billion. Heres something interesting. What was the exact bottom during that period . What occurred . Quiz. Ask him. Hes better at quizzes. What occurred at the exact bottom on that thursday on february 11th . What . Jamie dimon bought 500,000 shares at 53. 14. Take a look at what that stock bottomed. Its a little eerie. Perfect. He cant flip, but that was the bottom where he said, wait a second, were in much better shape than people thought. I looked back, spent all day yesterday looking thinking what is metaphorical for this moment . Dimon said banking is better than we thought. February 10, we found out hillary got soundly beaten by bernie, but Deutsche Bank said well buy back our bonds. I think that was the end of the credit crunch period. Since then, weve been straight up. I dont know if thats right. We have the political quotient to consider. A debate last night. No pause in the harsh rhetoric between candidates. Our chief washington correspondent john harwood is in washington wrapping up a busy weekend where he sat down for that exclusive with Hillary Clinton. Carl, lets run through the results over the weekend. You had a split verdict in both parties. On the republican side, donald trump won the biggest contest in louisiana and kentucky. Ted cruz had wins in the caucus states. Rubio won in puerto rico. Hillary clinton won in louisiana, biggest single delegate haul that day. Bernie sanders won in maine, nebraska, kansas. Look at the delegate race, donald trump has a lead over ted cruz. He has 395, about a third of what you need to capture the nomination. On the democratic side, Hillary Clinton has a larger lead if you count the superdelegates. If you take those away, its a closer contest. But she has a clear lead and a path to the nomination. I sat down with her in detroit and asked her when why she designed her tax plan she set the 4 tax at the 5 million level. I have several proposals. Number one, i would like to apply the buffett rule on anybody a million or more. So we avoid what Warren Buffett rightly points out as the anomaly and unfairness of he paying a lower tax rate than his secretary. I have a 4 surcharge on top of income at 5 million because i want to try to stop gaming of the system. Were going after where we think the real money is follow the money. The tax system has been, in my view, not effective in capturing money from people who are very successful. We need to do a better job. Follow the money. That is Hillary Clintons guiding principle in her tax plan. She doesnt go after as much income as Bernie Sanders does. Very populist race for the democratic nomination. Hillary clinton has a lead in michigan and so does donald trump. Front page of the times today tries to argue that Donald Trumps victories over the weekend were uneven. His opponents are beginning to get some traction. Do you buy that . Yes. The question is whether its enough traction. You need to see somebody change the path that this race is on. Donald trump has got an advantage. Once you get an advantage in a race like this, if you keep winning especially when the delegate contest turns to winner take all as it does a week from now, you can be unstoppable at that point. Michigan is important. Can somebody stop donald trump there . Then next week can marco rubio hold florida . Can john kasich hold ohio . If they cant, and if trump wins, this thing might be over. John harwood in washington, thank you very much. Jim, we havent had you in the past few days. How have recent events colored your views of the market . Once again this election is more set in the sense that hillary, i listen to what she talks about for taxes, people say thats more business as usual. I think shes gotten more strident to fend off bernie. Sanders. When it comes to the republicans, theyre still not talking about anything that would necessarily impact the stock market. A trade war wont impacts the stock market. Hes been saying it from the beginning. Yeah. But the likelihood of his nomination is bigger than it was at the beginning. I just think as everyone theres been a parade of people on this morning who refuse to say whether they would be for him republicans, if he got the nomination. I just think this market in the last few weeks has been trading up because we have a better idea who will run. I still think that cruz has a shot. It matters that we went in with certainty, and the market is saying that Hillary Clinton will be the president. Thats one of the reasons why its been doing so well. Is that so crazy . National polls show her with the lead over trump. Those things are virtually meaningless at this stage. Yeah. Theres a lot of yards to go between here and the end zone. True. But if you go back to again, go back in the way back machine to february 10. Thats when we didnt know who would be republican and democrat. Thats the bottom in this market. Now as long as we get certainty even if trump surges in the poll i dont want to say we know where he stands, there is a daytoday element of where he stands. Plus it is an entirely new race, the general. I do say as much as the media would like to say Bernie Sanders is very much in the mix, we get a sense that hillary is way ahead. Hillary is regarded as being fine for the stock market. Fine. Fine aint so bad. Fine. Fine. Something investors will have to think about more over the next few months. Remember, it was not fine on february 10th. On february 10th, sanders was in the lead. Not fine. I think its fine. When we come back, apple staying on offense against the fbi. This new argument, well talk about that. And the ceo of anthem, joe swedish, sits down to talk about healthcare, obama care, drug prices. S p break even for the year. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive youre an at t Small Business expert . Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. A couple of stocks moving this morning on various reports of large deals. Well see. Lets start off with bats, British American tobacco and a report in the telegraph that says that there may be something going on there. There isnt. There is nothing going on right now between b. A. T. And reynolds. B. A. T. Owns 42 of reynolds. The report cites the possibility of a center view been hired by b. A. T. My understanding is center view which advised on another deal, which b. A. T. Helped, buying up assets leveraging up to do that, owning 42 of the combination still, they did bring a banker on from ubs quite some time ago from center view who followed and advised b. A. T. That does not mean that theres anything going on here. In fact, there isnt from what im hearing at this point. It doesnt mean strategically that eventually you wont see a deal. I note a jeffries note that says it seems almost inevitable there would be some sort of end game consolidation in Global Tobacco over the next five years. Thats more the point, over the next five years. Right now reynolds is trading at 22 times earnings. Not an insignificant multiple. B. A. T. Has leverage on its Balance Sheet already. To get to a number that would make sense, they would get to a leverage number that in this market seems too high, 5. 7, almost 6 times, and foreign exchange. The fact they would be buying u. S. Assets with currency coming from other markets that are not doing well. For any number of reasons, a,ing theres no going on. B, it doesnt make sense right now, and c, it makes sense that this could happen in the future. Were in a new era where the people who write the stories dont have to correct themselves. There will be another era where a person will say i wrote this story, it didnt happen. The story was more rumorish. You dont do rumors. Its easy to rumor. Its easy to rumor based on some guy getting hired. Okay. Theres a giant german chemical company. Yes. That is supposed to be in talks with a giant american chemical company, seems like we cant put a stake into that one. Bloomberg late on friday reported basf was weighing counterbid to break apart the dupont dow merger by trying to make a bid for dupont. The journal says the same thing, they have been considering it for weeks, a counterbid. They also say the chances of an offer are low. Again, i dont have reporting on this one. I would simply say having followed this area for so long, its hard enough to do a cross border hostile. But to do a cross border hostile to break apparent an existing deal, where theres a 1. 9 million break fee, and some antitrusts as of late, if thank you dont want it, look what United Technologies was able do in terms with honeywell. We got the background of the merger last week. We think one of the companies referenced there was basf. They sniffed around dupont, as you expect they might have. To break apart an existing deal, antitrust risk, doesnt happen very often. Thank you. When i read this, i know it would make sense. Basf looks a lot like dow. If you felt that dow and dupont should team up, you can understand why they would do this. Dupont is a major american company. Basf is a major european company. Our country will not accept this deal. This is an alleged breakup that will not happen. People should buy dupont because they think the earnings are coming back. I think breen will break them up into three companies, this is dupont dow, it is terrific. Do not buy dupont because you think basf will bid. Its easy to talk honeywell did bid. They had an absolute proposal and talks. Theyre going to win. I just dont want people hurt. You are buying dupont at 64, buy it because you think the earnings power is there. Please. Dont buy it because you think something good will happen. A lot of stories swirling in m a. When we come back, well get cramers mad dash. One more look at the premarket. More red ssquawk on the streeta moment. Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card. Thats why i run on quickbooks. Details. I use the payments app to accept credit cards. And everything autosyncs. Those sales prove my sustainable designs are better for the environment and my bottom line. Thats how i own it. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Man, its monday. Its a mad dash. We got about six and a half minutes before the opening bell. Ubs goes hold to buy wynn. I wish it looked more like this. The numbers are done going down. The numbers can go up. Steve wynn has done a remarkable job. I would say on any pullback, numbers are so good Going Forward you want to own it. I wish you could see, this is up from 50 to 80 in a straight line. Right. So the call is late. David, the casino stocks have bottomed, whether its wynn. There you go. There you go. Thats straight up. As this comes down, it will get buyers. The casino numbers for macau the last month are quite good. Were beginning to get easier comparisons. Theres a lot of easier comparisons coming because of the dollar or china that will make it you wanted to buy stocks that you hated. Wynn. Steve wynn is back. The numbers are good. Its macau and to your point these are comparisons as this year moves along. Yes. People have to understand, i know it seems a losery. Those compares were down last year. No, market doesnt look at that. They say theyre doing better than last year, lets buy. As the stock goes to here, you want to be a big buyer. There it is. More coming up on squawk on the street, i including that opening bell five minutes from now. We got another one. I have an orcogram for an owen. Thats me. You should hire stacy drew. She wants to change the world with you. She can program jet engines to talk and such. Her biggest weakness is she cares too much. Thank you. My friend really wants a job at ge. Mine too. Im a wise elf from a far off shire. And sanjay patel is who you should hire. Thank you. Seriously though, stacy went to a great school and shes really loyal. You should give her a shot. Sanjays a team player and uh. Youre watching cnbc, squawk on the street. The opening bell in a few minutes. Futures lower after stocks were up three weeks in a row. Vix at the low of the year. Oil best week since august. Jim stubbornly says watch out. Youre not a Firm Believer in a big rebound in commodities at large. No. I think we may have reached do the m bottom in a lot of commodities. Theres so much money waiting to invest in oil, every time they do a deal you look at the marathon deal. That was one of the great trades of all time. I will point out that the whole stance of what the fed is based on is a fed being on hold. Commodities are not going to continue to rally. I dont think they continue to rally this far. I think were seeing a bottom in china, bottom in oil, bottom in iron ore and copper. This doesnt mean we suddenly shoot up. I dont want people to come in here and say its time. Time to start buying freeport. I think its not time to start buying freeport. The time to start buying freeport, three weeks ago. Chesapeake, too . No, its 1. 66. It moved from 2 to 5, the stock. Be a nice trade. This is different from exxon. I like exxon. I think exxon can go higher. Any of the high quality oils can go higher. These will succumb to profit taking. Steel will succumb to profit taking. You want you to be in the blue chips as they pull back. Thats where you will make money. I think they can rally. Theres the opening bell on this monday. S p at the bottom of the screen. At the big board, ncr corporation. At the nasdaq, Internet Service provider Cogent Communications celebrating its tenth anniversary as a public company. Little news on dizzy, zootopia is one of the best march opens ever for disney. I think the biggest opening for an animated film for disney. This is important. When i was looking at disney going to 98. What happened with disney, we decided it was only one metric. That metric was espn. You forget they have the ability they have other levers. They raise prices for jam times at theme parks. They have a host of characters in movies. I think to write this company off was a grave mistake. Again, its just had a big run. That would be an example of on a pull back i buy. Thats different from cliffs natural. Thats different from chesapeake. This is a high Quality Company that got crushed. And i think that thats where you want to be. To your point, leaders today will be chesapeake, newmont and alc alcoa. I look at caterpillar, its gone up on what . The baltic straight going up for eight Straight Days . Chinese Parliament Saying good things . I think that world has bottomed that it sells into. But the stocks have overreacted to the bottom. Yeah. I think theres a giant Short Covering trade thats been going on since february 11th. Chesapeake up again. Their 10k, which was filed a week or so ago did say that the head of their Audit Committee will be stepping down this week. He informed the company of his decision to resign from his position as director. He was the chairman of the Audit Committee of the board of directors at chesapeake. But the disclosure was just in the 10k on page 159. They say no disagreement with the company. He will spend more time focusing on clairion off shore partnerships. Blackstone has money to throw at this group. If i were chesapeake, if i were on the board, i would say, listen, lets do 160 million share offing right here right now. Make it so we dont have a problem paying off that 2017 debt. Thats what they should be doing. Primary shares, do it right here, right now. 160 million shares what im afraid of is that someone will come in today, not realizing thats something that would be prudent for them to do tomorrow, very prudent. Look, marathon, mro, you got to 8, it was fabulous. Devon, these were all things that the banks wanted. If i were chesapeake management i would say were getting a chance here. Without natural gas rallying, natural gas at 1999 lows. We have a lot of people coming in who want stock. Lets give them stock. Then lets take 2017 worries off the table. What a unique opportunity to not participate today in buying chesapeake. Yeah. Wait. At this point, you wait for the deal. If theyre watching the show, guys, go ahead. They couldnt do the deal at 1. 50. Now they can do something. Plenty of demand. Still a long road theyve got. These all have long roads because when you look at that curve, oil is not remember, every time most of these Companies Break even between 30 and 35. At 40 they start doing well. We have had a dramatic decline in drilling. Iran is not pumping nearly as much as we thought. Theres even a spread now where west texas crude, we can export that and make a little extra money. Brent is too high. I was saying if i was watching the show and the treasurer, whoever is calling shots on the stock at chesapeake, say, we just had a great move here. This market will bear 160 million shares. If we do that we take 2017 liquidity off the table. Reuters saying opec wants 50 to be the new target for the year. There is no opec. They got rid of opec. There is no opec. Theres saudi arabia and all these other countries that rumor the price up so they can make a little extra money. Opec broke up. Tended. So when i read this stuff, i always think thats someone some country trying to get oil up a little. They succeed. There is no opec. None. It ended. That was the point. The cartel broke up. Thats why oil fell to 26 on, yes, february 10th. Right. Retail, pier 1 for the quarter, in line, 18 to 22. Estimate was 20. Well get urban tonight. Pier 1, nice they affirmed since theyve not affirmed for the last three years. Its been a disaster. Alex smith has kept his job. Urban, we want to see. The companies that have done well when you look at retail, tjx and ross stores. Those are the winners. They buy stuff from the guys who dont have too much inventory. Thats the winning trade. Yeah. Last week a losing week for shareholders in valeant. That stock came off dramatically. The announcement began with the return of mike pearson. They say they will host a Conference Call on 15th of march to update their Financial Guidance for 2016. Remember, it was withdrawal of that guidance that seemed to scare investors along with so many other things. Seemingly a number of communications missteps at the company by the very least. In a quote, mike pearson who is the ceo, no longer chairman, says were looking forward to providing shareholders with an update on the companys progress. February 29th was my first day back to work since a twomonth medical absence. Now that ive returned, ive been working diligently to look at the business so i can share the latest performance with stockholders. Stock is up a bit on the news of that Conference Call, webcast on the 15th. He got some criticism as well for some calling a friendly disclosure. Talking with people, but never holding a broad call. Scheduled a call, canceled that. It was a strange week. The gretchen morganson piece in the New York Times questions what the cash flow it. The cash flow has been the rallying cry. Cash flow is still there. She questions whether we know about the cash flow. Hope springs eternal. She has a terrific piece about how theres always some statement that comes out from valea valeant, then people buy into it, more information comes out and they lose hope. But the old model is done, as far as well keep acquiring, mark the drugs up. That whole engine is done. Gone. Now, so is the stock price from 1. 75 to 65 or whatever you want to call it. That stock was at 1. 40 before we got the hint that there was something wrong. It had already fallen. The idea of theyre just deciding to ramp up r d and sell more new drugs, thats not what they do. What do you pay for that company . On the 15th well get some answers from mr. Pearson. Do some get in on the 14th, the rest of us on the 15th . Hopefully everybody will be apprised at the same moment. That would be so cool. Al of us find out at the same time. Like you get with bristolmyers. Right. A couple food names. Dunkin cut by guggenheim to neutral. Tonight is shack. The journal is skeptical, points out Short Interest record high. I think shack is one of those stacks that is teslalike. I have the burger, so i want the stock. I get that. I think shaq can grow into its market cap. It hasnt been hurt by mcdonalds. I had pop eyes, louisiana kitchen, they were hurt by mcdonalds. Jack n the box was hurt by mcdonalds. Ihop doing forever all day breakfast, but everybody dealing with the mcdonalds disruption. Shake shack doesnt have to. Its not like lets go to mcdonalds, no, lets go to shake shack. Its like lets go to a hockey game, no, lets go to a broadway show. Lets go to my place, lets see macys forget it. On the town. The bronx is out. Dow down 32. We welcome back bob pisani to the floor. Good morning. Good to be back. Ten days in panama and colombia, went to the panama canal. Very exciting. A lot of exciting things going on in latin america. Very unhappy about the strong dollar down there. Lets look at the markets today. The dow is down, we see energy up. Here is your market leader. Materials also up fractionally. Financials down a bit. We had a great month in financials, theyre up close to 5 . What a difference going away ten days makes. We were worried about recessions in the early part of the month. Some of those fears, recession fears seem to have abated. We had a commodity rally. Oil rallied about 35 since the february 11th low. The short positions there have been dramatically reduced. Put up that full screen. That oil rally had dramatic implications for earnings. It has positive implications for credit. You see financials up 12 from the february low. Its decreased a lot of worries about deflationary sfipiral. Look at the emerging market rally. Eem up almost 9 in five days. Russia, south africa, brazil, colombia, i was there last week. The colombian stock market rallied about 9 . A big move up in all of these beaten up groups. Theyve had a terrific month overall. Asia is mixed today. The nikkei is down fractionally. Shanghai on the upside. Even though the fiveyear growth expectations were lowered. The big story is what happened when china talked about capacity cuts in iron ore, shutins and layoffs. We saw a big rally in iron ore. You can see this in the stocks that trade steel and iron ore in the united states. They had big rallies in these names last week. These are real numbers here. 27 move in cliffs, vale up 4 . Siderurgica up 2. 16. And ak steel is up. A lot of people are not believing the rallies. We asked our friends at kenshow what happens when we get a 60 rally off of the lows . From the highs to the lows, we dropped from the november highs to the lows, we retraced 60 of the losses that we saw from january to february 11th. We asked what happens when that happens . Theres been eight bull market corrections since 1980 exactly like this. The s p has been positive the majority of the times. The typical move is 9. 6 . Even though theres huge skepticism, thats the markets best friend. The paying trade, at least to k kenshow stats seem to be higher for the next couple of months. Happy birthday, arthur cashin. Today is his 75th birthday. Art is the dean of all traders on the floor of the new york stock exchange. He has been a friend of mine for 20 years. Well be tipping back a few in tribute to him later today. Happy birthday, old friend. Another march birthday. We have a bunch of those. This morning been reading through the proxy for allergen and pfizer, which gives you the background to the merger. It is a worthwhile read. Those who have been following this closely, this is a fairly large spread between the value of the deal and where the stocks are trading. In part thats because of the continued concern about, well, would treasury try to stop something on the regs. And one theory is risk arbitrators do nothing but worry there could be an argument made that when activists, thats what the forerunner to allergan was, when activist and pfizer were talking together in the summer of 2014, they were talking of a deal as much as 307 a share for activists at the time, was in preparation for this deal. In other words, could you consider them having bulked up in order to do the next deal, and yet the big deal so they could get in under the inversion rules. Therefore they would say its all one actual big long transaction. We wont let you do it. In the filing they say a number of times, when they reference the talking between them, that pfizer was not aware that activists was actively pursuing ability terntive transactions and did not know that activists had approached legacy allergan. They say the same thing when talking about the talks having fallen apart. At the time the parties ceased, pfizer was aun aware thunaware had approached legacy allergan regarding a possible combination transaction. Pfizer said you need to get big tore actavis, well get a little bigger, but you need to get a lot bigger, well do a 60 40 deal. Thats a lot of hoops to jump there. Pfizer saying they had no idea that they were talking to allergan. They come back to each other after allergan was bought by actavis and changed their name. According to isi, allergans numbers are assuming 10 top line growth. Those numbers are above where the street had estimated allergans revenues and earnings. Doesnt seem to be doing anything for the stock price. Allergan, the old allergan, the David Piatt Allergan was under attack from valeant. We understood out of nowhere brent saunders, old friend of david piatt, comes in, saying we can save you from valeant. It would be heart for me to know that pfizer knew about that. They didnt. Though, again, ailer gab was considering strategic alternatives. Theres so much that went on, including the teva deal, the sale at the top to teva by mr. Saunders. When i had brent on recently, ceo of allergan, he says it will soon be done. Soon. After april, its not soon. Breaking news on apple this just in from the supreme court. The court is refusing to hear apples appeal of that case involving ebook prices. Apple had been held libel for conspireing to raise the price of ebooks. Not the only lawsuit they have running right now. The stock had a big run last week. Apple trades a little like caterpillar. Really . Apple and cat . Trades more like caterpillar than avago. Even though avago is a big supplier into apple. People are chartists when it comes to apple. Apple held certain levels, broke out. Now theres chatter. Goldman had an interesting note saying apple is not as bad address you think. I think thats the kind of thing that you keep hearing about a lot of the stocks that have stopped going down. Theyre not as bad as you think. Thats really kind of applicable to many stocks that bob pisani was talking about. I liked that. When we come back, early netflix investor paul holland, as the binging of house of cards begins. And Grover Norquist for americans for tax reform as the primary enters a key stage. Back in a couple of minutes. Free wifi is nice but also risky. An open network isnt encrypted, which means your personal information isnt safe. Movie times . Great. Online banking . Use a secure network. Protect yourself from prying eyes. The more you know. In sports, Peyton Manning making it official following his super bowl win with the broncos, he will announce hes retiring later today. Drafted number one by the colts, hes a fivetime nfl mvp, twotime super bowl champion, leaves the league as the alltime leader in passing yards and touchdowns. Those two super bowl rings with different teams. Brady on record saying he mastered football. Belichick saying he didnt enjoy when the patriots met manning, no matter what circumstances were. What a great man. What a great man. Can we go back eight weeks ago during that season . Theyre talking if he had not gotten better he would not come back and start . Overcame some serious injury. Positive story. Amazing career. When we come back, stop trading with jim. The lexus command performance sales event is on. With extraordinary offers on the visionary ls, the generously appointed es and the new, eightpassenger lx. This is the pursuit of perfection. Nice to have cramer back, stop trading. Randgold, a gold stock with growth to it. Caught its fifth straight downgrade, buy to hold today on Morgan Stanley. Does that stock look like a stock that had five straight downgrades . No. That stock is going higher. Gold is going higher. Randgold on any weakness. I think gold is not done. Gold is a trade out of china pulling money out of their own country. Not wanting to put it in dollars or yen or euro, putting it in gold and randgold is the best gold miner on earth. What is on mad tonight . Josh tetrick has plantbased mayo that tastes like mayo. He has things in target and walmart. Dont know if you use the just mayo plant based. Tastes the same. Really . Cleansing, all monday milk i was bad in london. I did not unless guinness is a cleanse. Maybe thats like like kale juice. Guinness . No . Ill take it. Not going there . Its good to have you back at the desk. Thank you very much. Jim cramer, mad money 6 00 p. M. Tonight. When we come back, carla harris, vice chair of Health Management and Morgan Stanley, chair of the National Womens business council. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. neighbor yeah, so were just bringing your son home. dad ah greetings, neighbor. Neighbor boy. He really loves our wireless directv receiver. dad he should know better. Were settlers. We settle for cable. But let us repay you for your troubles. Fresh milk for the journey home . neighbor we live right there. dad salted meats . neighbor no thank you. dad hats then vo dont be a settler, get a 100 reward card when you switch to directv. Good monday morning, welcome back to squawk on the street, im carl quintanilla, with sara eisen, simon hobbs, david faber. Ecb will be one of the highlights of this week. Oil, after three weeks higher adding more to 36 and change. Here is our roadmap this monday morning. Saunders and clinton facing off as the race between the republican hopefuls heats up. Grover norquist will weigh in on the latest news in politics. Morgan stanleys vice chair of Global Wealth management weighs in on womens role in business. And what some of the recent stock gains are also some of the most shorted. Coming up later on, the ceo of anthem will talk about the cigna deal and antitrust concerns. First u. S. Markets slipping and on track to snap a threeday winning streak. Stocks look like theyre taking a breather after three straight weeks of solid gains. Lets bring in Craig Johnson from Piper Jaffray and cnbcs steve liesman. Good to see you both. Craig, were pulling back here a bit after a nice string of gains. Little in the way of Economic Data and earnings on track for this week. We get an ecb meeting. I know youre technically driven, but what do you think will drive the next move in the markets . Lets talk about the technicals on this market. When you look at the internals of whats happening, its amazing. We have the highest number of 26week new highs since the end of last year. A growing number of stocks entering uptrends, and sentiment towards the market is negative. Over the last week, the page rate which had been down is starting to flip and turn higher. Investors are questioning whether this advance is more than just a relief valley. We think it is. The internals of the market are beginning to improve. The Economic Data has not been as bad as what a lot of people expected. Steve, good morning. Is that how would characterize this idea of pricing out a Recession Risk and investors just got too bearish and pessimistic . I think thats exactly it. There was a lot of fear earlier this year. China was slipping. The other part of that fear is concern that the Central Banks had really run out of bullets. It was like they were trading without a net. One thing thats gone on is the Economic Data has come in better than expected. The question snow whether the markets in the words of Goldman Sachs has become too complacent about fed hikes this year. We have a bit of fed speak this week. Today at 1 00, stan fisher and branarg coming out. One is more hawkish than the other. At 2 45, well explore some of these issues, especially the ones that interest you specifically, the international ones. She has good experience on that, i know from treasury, steve. Is what youre saying that the bigger market risk Going Forward here might not be that our economy is slowing, but that our economy is doing so well that you have to put Interest Rate hikes back on the table . Id be interesting in the other guests comments on this. One of the things that happens if you have better Economic Growth, you should have a turnaround in profits. Usually profits leads the economy. Right now, what you have is a situation where profits of certain sectors of the economy have been severely challenged. I would not be surprised to see better numbers coming out of the consumer because of that strong jobs report. Still low oil prices. We need that to show up in two ways, first, actual profits and second the discounting of profits in the market. Steve, theres a lot of wrinkles in all of this one thing people keep pointing to is the rise in subprime auto delinquencies. Has that been on your radar . We see that in some of the Federal Reserve reports about lending. Its out there. Everybody i talk to famous last words is less concerned about this than housing subprime. The numbers remain smaller. The asset that underlies it is not overvalued. One thing with subprime lending and housing is the asset went up, when they took the asset back, it was of diminished value. The underwriting still seems to be better. I take my cue from mike jackson of autonation, hes not worried yet. I appreciate you described what you see as bullish dynamics from a relatively low base. This is the week in which the ecb will come through with a judgment that may disappoint, as it disappointed back in december. The bank of International Settlements has also come out with a report. For a long time the b. I. S. Was worried abo worried. Arguably you should take it with a pinch of salt, they say the confidence in Central Banks healings powers have for the first time been faltering. Thats how they would sum up the beginning of the year. What is the precise advice for investors from what you see. The precise advice is first and foremost you have the ecb k very accommodative, the fed accommodative and the bank of japan accommodative. These are three powerful Central Banks, i will not fight these. When i look at the stocks, rate hikes are priced in june could be a time when you could see a rate hike. Im starting to see the interestsensitive areas inside the market, reits, consumer staples, they are now starting to sell off. Were starting to see this unfolding in the charts. In my world, price is fat. Just to come back on the European Central bank. Are you suggesting theres no possibility that the European Central bank could disappoint on thursday . If they ease, they ease. You say dont fight the expectation. But your expectations of the Central Banks could get ahead of the reality and when people see it in print op thursday, they say never say never. There could be some disappointment. With this. The way were seeing stocks trading, especially in the u. S. Coming right back up to key moving averages and pausing. Theyre waiting on taking a cue from the Central Banks. Right now they dont want do anything to upset the equity markets. The equity markets are doing good things in terms of generating wealth and improving the overall global economy. So i dont think theyll do anything to disrupt this trade. Never say never. Have you looked at a chart of iron ore recently . Jumped 19 today. Does that mean the china risk is being priced out of the market . Its interesting you say that, some of the work weve seen in our report this week, we started to see the basic materials sekts sector reverse g longer term down trend. Stocks like alcoa starting to reverse a down trend. Some of the moves here may be more inflationary and demand is stronger than people think. Thats what it suggests to me. That will be interesting, steve, if you hear fed talk about that. Craig johnson from Piper Jaffray, and our own steve liesman. The country is remembering nancy reagan this morning as a woman who changed the role as first lady. Jane wells has more. Reporter the Library Remains closed today as plans for a private burial and interment here. Nancy reagan designated previously who she wanted as pallbearers and speakers. All the details set to come out later this morning. Being a first lady is no easy job. Theres no real job description. Nancy reagan took the reins and brought to the white house style and influence. She met her husband when she was confused with another nancy davis who was accused of being a communist sympathizer. Nancy had said she hoped her union chief could clear up the confusion, and said in the first meeting she was september off her feet. She guarded her husband throuev while he had alzheimers. Their son, ron, spoke of their life and how the assassination attempt on president regs life shook her to her core. She told today, that she was more complicated. My mother was aware of the dark corners of life. The darker aspects of human nature. Her view was more im going to watch. If i think youre good for my husband, then you have a friend for life. But if i think youre bad for my husband or hurting him in some way, oh, you know, you better watch out. Because now you have an enemy. Its not an enemy you want. This morning at the u. S. Capitol, House Speaker paul ryan has ordered flags at half staff. And condolences are coming in even from people as politically opposite from mrs. Reagan as Bernie Sanders who called her an exemplary first lady. Even after her time in the white house, she was an outspoken advocate for Stem Cell Research to find a cure for alzheimers. Nancy reagan had a good heart and she will be deeply missed. Up next, Grover Norquist will weigh in on the race for president. The dow just flipped positive. Its a fact. Kind of like bill splitting equals nitpicking. But i only had a salad. It was a buffalo chicken salad. Salad. Ngo to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. March 15th, thats the day that many in the Republican Party believe will be the last chance to stop Donald Trumps momentum to the gop nomination. It marks the delegate rich winner take all in florida and ohio. Here to weigh in on the state of the republican race is Grover Norquist, president of americans for tax reform. Grover, you have not endorsed any of the republican candidates, have you . Correct. All of them have made a commitment to oppose, veto any tax increase. And all have put forward very sound progrowth tax policies. Are you nervous about what people are calling a civil war in the Republican Party . What that will mean for the general election and the future of the person . I would be except Hillary Clinton is a uniter, not a divider. Whoever is the republican nominee is up against Hillary Clinton, who i think lost the election in the debate last night with two simple sentences. The first was that under her new rules, fracking would exist almost nowhere. Because of the rule she wants to put in. Democrats used to be able to insult Energy Industry because they lived in texas, oklahoma, louisiana, alaska, they dont vote democrat. But she declared war on pennsylvania and ohio with that statement. Thats not the way to win the election, its how you lose it. The other was her comment on guns. Hillary clinton is old enough that she doesnt know that since she got involved in politics, 13 million americans now have active concealed carry permits. 5. 5 of the adult population. She announced it was her policy to reduce the number of people who have guns, not bad people, just people who have guns. Theres a voting bloc of 5 of the electorate that did not exist 20 years ago. Clearly you disapprove of her policies. That may be true what youre saying, it may not resonate with the american public. The concern here, i would think, for the republicans is that you cant get behind a nominee and we may be headed into a contest the convention and who else knows what else that could hand the election over to mrs. Clinton no matter what. Only if people dont come together. I would argue if you look at the key issues on Economic Growth, taxes, and i mentioned two the reason theyre important is that hillary doesnt understand that attacking the Energy Industry is no longer attacking a handful of republican states. They already lost West Virginia because of this. Now theyll lose pennsylvania and ohio. You cant win the presidency with outpennsylvania and you without pennsylvania and ohio. Those states die if you take away fracking. You cant declare war on 5 of americans who have conceal and carry permits and plan to win the election. Can i circle back to what you said that all the republicans have sound tax policies. I appreciate trump has a 10 foreign repatriation tax. Let me give you the cover story from barrons this weekend. Though some of trumps tax cutting initiatives could potentially help both the economy and markets, those tax cuts coupled with his adamant refusal to address ballooning entitlement costs such as medicare and Social Security would expand the National Debt to the breaking point. Fiscal conservatism used to mean you were worried about the deficit, too. Trump, cruz, kasich and rubio are running for president. Five times the Republican House hasvoted for paul ryans road map to prosperity. That can be done within reconciliation within 51 votes in the senate and the house. We have the votes to do that in the legislature. And i believe any of the republican candidates will sign something which looks like that and dramatically reduces spending over the next ten years. Tremendously reduces it over the next 50. Just for the record, you said that all the candidates have tax cutting policies. Has donald trump actually signed the promise that you asked gop members to sign . The reason i ask is because hes already beginning to flipflop on policies, i wonder if he could flipflop on tax cuts, too as he tries to get the middle ground in politics. He made a definitive statement that he would oppose and veto efforts to raise taxes. His company have told me he has taken the pledge, we need to get it physically from him. But he made the statement unq f unequivocal unequivocally. Keep in mind, a majority of the house of representatives have signed the pledge. Nobody is sending anybody in the white house a tax increase. Not hillary, not trump, not cruz, not rub yoshgs not cairub. Do you approve of trumps plan to tax imports from china 35 . Tariffs are taxes. We started this country with a war on tariffs, international pac taxes put on tee. Theres the first time that South Carolina called out its militia in revolt was in the 1830s over tariffs. Tariffs or taxes, not a good idea. Theyre taxes on the american people. I do not believe a Republican House and senate would support tariffs. We should negotiate good trade agreements, but tariffs punish american consumers, not other countries. That would suggest you have to have a serious problem with trumps platform because he has been unequivocal about those tariffs, would you not . I would not support increasing tariffs, but when somebody says theyre interested in something, would the house of representatives and senate pass it . If so, it will keep you up at night. If not, its less of a challenge. On the income side, corporate and individual, each of the candidates has a progrowth policy, as senator hatch put forward. And the republicans on the weighs and Means Committee starting with paul ryan and brady. Grover, quickly, whats your prediction as to how this will go. Do you think your party will get in line behind donald trump if hes the nominee or will there be a third party and a contested convention . A year ago i was sure stot wa scott walker would win the nomination, im sticking with that. Scott walker . Hes not running anymore. You wanted a prediction, thats what i made a year ago. The other guys, i cant tell you. Morgan stanleys vice chair of Wealth Management carla harris will join us to talk about the women in business. President obama aupon tppointed the chair on the National Womens business council. Onethird of all businesses in this country are owned by women, and women are taking up ownership of businesses at a much more rapid rate than men. From d. C. , carla harris, who president obama appointed chair of the nwbc, also vice chair of Global Wealth management at Morgan Stanley where she worked now for almost 30 years. Welcome to you. Good morning. Good morning, simon. The headlines here are pretty impressive. Yes, we are very pleased to talk about the research that well release today at the white house. There are now 10 million businesses owned by women in this country which we believe is a tipping point. More importantly, simon, that represents 1. 4 trillion and 8 million jobs. Some of the other data that has come out of this Research Also tells us its been meteoric rise of veteran women owned businesses, less than 100,000 in 2002, now almost 400,000. Also impressively the largest growth happened with women of color in entrepreneurship. That rate is 300 since 2002, versus overall Small Businesses which have been single digit. Yeah. My takeaway in addition to the comments that you just made, my takeaway is that were seeing a surge of women setting up on their own in business. Thats true. As traders really. The figure is 91 of new businesses are women working on their own. Obviously its particularly skewed to the south as things stand at the moment. A lot of that is also around presumably health and beauty. This is not women employing large companies, this is a women in a sense trying to make a good of it on their own. Youre right. 91 are these single employee businesses, but theres about 3 of womenowned businesses that have ten or more employees and have almost 1 million worth of revenues. Thats significant for us to focus on. Obviously one of the issues is still access to capital. As you know, you need capital in order to scale your business. While we have made significant progress, thats an area where we have to focus to have the scale and size of business comparable across the board for women and men. One of the most fascinating debates to watch over the recent weeks is one prompted by Madeleine Albright suggesting there is a special place in hell for women who dont help women. In a sense, a generational reaction particularly with then democratic race for white house with saunders, where younger women were saying something different. Where do you stand on it. One of the reasons weve seen the growth weve seen in womenowned businesses is because theres a different appetite for risk among millennials versus theists and. Im excited that you will see this kind of growth as this generation comes online. Theyre far more interested in innovation, entrepreneurship and have a greater opportunity given whats happening across the board in terms of new forms of capital being available to women. In terms of your point on women making more conservative strategic decisions, being less risky, i wonder why were not seeing more female executives climb to the top of your industry. You work at Morgan Stanley, why are there not more women bank ceos . I think we made progress over the last 30 years ive been on the street. No question, still a long way to go im optimistic that we will see more Women Leaders across the board in all corporate sectors over the next decade as this next generation continues to rise. Sadly, the clock beats us. Please come back. Next time well talk more about Wealth Management in particular. Nice to see you, simon. When we come back, some of the biggest stock market gainers over the past few weeks have something in common. They are all heavily shorted. Well name some names in a bit. Sales event is on. With extraordinary offers on the exhilarating is. The thrilling gs. And the powerful rc coupe. This is the pursuit of perfection. So what else is new . Humm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. Good morning, im sue herera, here is your cnbc news update. A suicide bomber attacking the entrance to a court in northeast pakistan killing 11 people and injuring 15 more. The bomber opened fire at Police Officers and then started running towards the courtrooms before detonating his explosives. A group affiliated with the Pakistani Taliban claiming responsibility. Vice President Joe Biden visiting a mosque in the United Arab Emirates pausing to remove his shoes before entering. Later he visited a model for clean energy on the outskirts of abu dhabi. North korea threatening to respond with an allout offensive against the u. S. And south korea over their annual military drills calling it nuclear war moves. The countrys stateone tv making that announcement earlier. Kensington palace showing photos of the royal family during their vacation in the french alps. The duke and duchess of came break spending time on the snowy slopes last week. All right. Thats the cnbc news update. Lets go downtown to carl. Sue, thank you very much. Sue herera. Lets get back to the markets, introduce art cashin. First we want to wish our friend a very happy 75th birthday today. Art is a legend, as you can see what do you put on art cashins birthday cake, ice cubes marinading, right . Of course. 75 years, esquire do this thing where they talk to legends and they ask what have i learned. What have you learned . I learn one years of experience 50 times over. No, its been absolutely fascinating time. Back before the kennedy assassination, the cuban missile crisis, a wide variety of things, and the market is always a good teacher. Its like coming in every day to a great detective story. You look at that tape and you have to figure out whats moving it. Its an interesting challenge and keeps you alert and awake. Market has been very good to me. We get so wrapped up in the current current events. The political cycle, monetary policy, all of that. When you look at it over the space of time, and all the major things youve seen that you just mentioned, how does it rank, the period were in . Well, i i think it is among the potentially more volatile than we have to see how this all plays out. You have the distinct possibility that you could be seeing a Political Party coming apart or reinventing itself. Depending on which way things work out. You see the potential for a president ial race that could wind up in the house of representatives to be decided. So, these are potentially historic times. What you have also lived through are worse and worse crises. The last crises, of course, being fundamentally asking a lot of questions of people, alongside that inequity quucult that people say has diminished. Do you think thats a oneway street . No, i certainly hope not. I would like to see it come back. Weve seen a great many changes, even structurally within the business. The robo trading and a variety of other things. I think the public is having a great deal of time, people of the baby boom generation did get badly hurt. You know, they were told that in many cases the stock market was a onedecision thing. You buy and hold. It was for many years. For decades it was. It was. But between the dotcom bubble and what we saw with the great recession, a lot of that changed. Many people held on to stocks that really have not come back at all. You know, people are, in many ways underinvested. They will be approaching retirement without the wherewithal to adequately retire. One of the reasons for that, though, is that the Central Banks has made money so cheap that the money people save doesnt earn a return anymore. Its deliberate. You put money in a savings bank, you might not keep up with inflation. The world has changed for how people plan. And people are confused at a time when theyll live a lot longer. Theres no question the savers have been punished for the last seven years. You hear talk around now, this all i honestly believe borders on the use of negative Interest Rates, to get rid of the 100 bill, to get rid of the large denomination bills all around. They say it is to prevent malfactors from using tshit, i would say this, if Interest Rates go negative, the best thing i can do is put it in my mattress. But if its got to be in 20 bills, it will be a lumpy mattress. I think they decided if we go to negative rates they want to make sure people dont frustrate the system by just holding on to their money. You can give me your money, ill look after it for you. Let me ask you a question about you. Its your birthday. You come in here every morning. You talk to us, as if you were 30. What is your secret when people ask you your secret to endurance, to energy, vitality what is it . Im pretty much distilled in alcohol. Pickled. On that note, we hope this helps. Maybe we can open this later on. Whether its with us or somebody else. Thank you. Happy birthday. Happy birthday, art. Thank you. Art cashin. Thank you very much. Up next, an exclusive interview with the chairman and ceo of anthem. Plenty to talk about with him from the cigna deal to anthem. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. U. S. Hospitals last week urged the department of justice to block anthems 48 billion deal for cigna, that was announced over the summer. Saying the deal could wind up raising premiums for consumers. Here to shed light on the process and the Affordable Care act and the Exchange Business is joe swedish, chairman and ceo of anthem. Thanks for being here. Good morning. The deal announced last summer, 48 billion in cash and stock. Last week, joe, the American Hospital Association Says the following. The acquisition threatens to reinforce existing barriers to entry and raise new one, further entrench dominant blue plans and exacerbate conditions conducive to abuse of market or monopoly power. Whats your response . Let me begin by stating we live in an incredible transformational era in healthcare. This transaction is about delivering affordability, access, and quality to the consumer. So when you look at the opinion thats been expressed by organizations such as this, we believe facts demonstrate something totally different. Theres a robust competition in the marketplace. We believe our combination will create a new environment promoting affordability access and quality. How is that argument coming along with the regulators. The regulators obviously are working closely with us, and us with them. Its a work in process. We are right in the document production mode. And were still hopeful, very optimistic that well get an opinion by the second half of the year. You mentioned document production mode. You had a second request, which is expected. Fairly close to completing what theyre asking for. We believe its not in the too distant future. We are working closely with regulators. Well be in dialogue with them, im certain. Your deal was announced, aetna and humana was also announced. Both being considered at the same time. We had a major candidate for president , Hillary Clinton, come out some time ago, last fall, and said she has serious concerns about these deals. Do you feel at this point judging from what you the feedback youve gotten from your Regulatory Regime that youre confident youll get this through . We are confident. Very confident. We went through a significant discernment process prior to announcing the transaction, which demonstrated this transaction has great merit. We believe that going into the review at a very granular level, it will be proven to be just that, a beneficial combination for the marketplace. What is the reason . If you can give me the Bumper Sticker reason as to why that makes sense, why the hospitals, for example, should not be concerned or their patients should not be concerned. Affordable, access and quality. We know we can deliver to the marketplace. With providers, its about creating value. Were both interested in that were dedicated to that. I believe there will be tremendous opportunity in the marketplace to benefit the consumer. I want to move on to the Affordable Care act. Even though theres only fewer than 800,000 of your members in the exchanges of your 38 million. Right. Theres a lot of focus on it, for obvious reason. Earlier this year and late last year it looked as though the exchange based part of the program, a key part of it was not doing particularly well. Youre 30 below where you estimated you would be. 791,000 members. Are things better on the exchange front . Will you stick with it unlike some of those threats from unh that we got last year saying they may pull out . I cant speak to any other company but ours. We entered the exchange in 14 fully prepared, great pricing, great product. We had a successful year. 15 was a transformational year, transitional year. To be expected. Looking at 16, we already accumulated enrollment that surpassed our estimates. Were optimistic Going Forward. Quite frankly we believe that space will be a contribution to our growth strategy. Those who look more broadly speaking, you understand the nuances of what it is in terms of ensuring people in these exchanges, more broadly you want to say its a success or failure. Where do you come down . I believe that it is transformational. It is transformative in a way that were going to have to navigate to success. We always expected that it would be kind of a long ro social securit process. I think a lot of members and enrollees are trying it figure out what it means to be an enrollie. Value is being demonstrated. People who are enrolling will find value there and will be willing to stay in. The key thing i hear, you have to get that 25yearold who is healthy and say i want to spend the time. You can do that and spend the money to be in the exchange . Its a twosided coin. Yes, we have the obligation to provide the right pricing, right product to the marketplace. The other side of the coin, governmental regulators need to adjust policy in a way that makes it attractive for the young and healthy to come in. Its a partnership with government. I believe weve been there, worked on success factors, and i think well work it out in the end. Your last earnings report, which was well received, you also made a claim around then that express scripps, one of the largest pharmacy benefits out there, owes you 3 billion a year under a tenyear contract, which concludes the end of 2019. George paz on their earnings call, recently, the ceo of express scripps says i have no clue where the 3 billion came from. I have no concept. The number makes no sense to me. Your response. Let me underscore were driving towards affordability. Drug costs is a significant part of the cost of care. We monitored, we stayed close to it. We want to deliver Affordable Drugs to our members. Our conversation, our negotiations with express scripts we believe has the potential to deliver value. Were hopeful that goodfaith negotiations will, in fact, create that opportunity for the marketplace. But that 3 billion ask on your part, i would point out at least, revenues are attributable to anthem from express scripts increased a total of 1. 3 billion from 2012 to 14. How do you get to 3 billion of overcharge . I cannot speak to how they book their business. I can only speak to what we know about the marketplace. What we know is appropriate pricing in the marketplace. When we run the numbers, we believe its a valid number and were hopeful that we, in turn, can translate that to affordable drug cost fors can translate that to affordable drug cost for for members. Thats a key point, affordable drug costs. Its come up a lot recently. The focus on valeant, for example. Do you think were getting a handle on that . Do you think there will be more of a backlash against some of the Drug Companies in terms of, for example, taking older formulation and raising prices dramatically . Its an interesting question. We are focused on how we do business in the marketplace. Focused on how we can best examine evidencebased nature of the new drugs. Where is the value . Ultimately what do we pay for the drug . How do we translate that to benefit to the consumers. So were optimistic that affordability will work itself out over time, irrespective of the changes that you mentioned. Will you make some of those decisions then in terms of what youll pay for a helpc drug, gilead versus another formulation of a drug to treat hepc . I believe this will evolve so we are working in tandem to get to affordability. So the second half of this year you expect to close. Absolutely. Maybe you will join us then. Looking forward to it. Simon, over to you. Chinas top leaders pledging reforms in an effort to stabilize sentiment amid indications theyre physically intervening in the chinese stock market to ensure it shines during this weeks National Peoples congress. Well go live to beijing when we come back. Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card stop taking cialis and get medical help right away. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Chinas Top Legislature holding its annual meeting. You saw headlines over the weekend. Cnbcs eunice uhn is live from beijing. Eunice. Thanks so much, simon. The Chinese Government acknowledged concerns over the economy and continued slow down in growth over the weekend. The chinese premier presented his annual work report and said authorities lowered the gdp both rate to a range of 6. 5 to 7 . Now that acknowledgment was seen largely as a positive, but many economists still are concerned the government here will struggle to reach that level of growth. The at the same time, policymakers over the weekend and today were expressing their confidence that china would avoid a hard landing. The central bank said today they expected to see greater Crossborder Capital outflows but at the same time believe those would be manageable. Also, the finance minister today addressed an issue thats really been important for the economy, and that is rising debt. The finance minister said that he believed that bad loans would continue to rise as the economy restructured. At the same time, he believed those bad loans were going to be under control. Now he also said that the government here has room for more fiscal stimulus, and said that the authorities had lifted the fiscal deficit to 3 of gdp from 2015s 2. 4 . The main takeaway, though, that is probably one that many economists dont necessarily want to hear, and that is that it appears that the authorities here are prioritizing growth for the year instead of reforms. And one of the big concerns among the Business Community here, as well as economists, has been if the economy if it the government here delays economic reforms, it could be good for the nearterm, and prop up growth, but could just kick the can down the road and lead to even bigger problems down the road. Guys, back to you. Well, certainly the market seemed to like it for now. Eunice, thank you very much for going through some of the highlights. So weve been talking about this market rebound over the past few weeks. What are some of the biggest stock gainers over that time period have in common . Well, you could say theyre the most hated. Our dom chu has more. Youre right. Were looking at something called Short Interest or how much traders and investors are borrowing stock in a company to sell betting they can buy it back at a lower price sometime in the future, make profits that way. According to data from fact set, there are around 50 members of the s p 500 where 10 of their stock is betting on a drop in the stock. We have wellknown names here. Farm equipment maker deere around 12 sold short, highend retailer nordstrom 20 Short Interest and the stock with the most Short Interest in the s p 500 is currently video Game Retailer game stop, 40 of its shares sold short. Now, many times a lot of Short Interest can lead to those violent upswings in the stock to book those profits. Among those higher Short Interest names we talked about, those 50, we ranked them by how much shares have gained over the last week. Perhaps no surprise, guys, the top 8 percentage gainers are in oil and gas or metel ales and mining. Energy exploration and Production Company murphy oil up 42 and still down 50 over the last year. Offshore driller, transocean up 44 in a week. But still down 20 over a year. And then nat gas company chesapeake, more than doubled in a week. But its still down 65 over the past 12 months. Now, Value Investors are part of the story, but there is a concern that Short Covering is as well. And if its more Short Covering, then fundamental buyers, the question is whether the up swings can last. Sara, the top three percentage gainers today in trading, chesapeake, range resources and murphy oil. Three of those eight on that list we talked about. Back over to you guys. The squeeze continues. Dom, thank you very much. Lets head over now to jon fortt with a look at whats next on squawk alley. Good morning, jon. Were going to have paul holland, early investor in netflix, over at Foundation Capital and rallying that stock and other gross stocks off the lows from february. Also, mac users targeted by ransom for the first time. What does this say about other uses of encryption and security Going Forward. And drew rosenhaus, the storied sports agent, is going to join us to talk about the retirement of Peyton Manning. What it means for the nfls overall brand and more. All that coming up on squawk alley. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . At ally bank, no branches equals great rates. Its a fact. Kind of like social media equals antisocial. Hey guys, i want you to meet my fiancee, denise. Hey. Good to meet you dennis. Good morning, 5 00 p. M. In yorkshire, england, 11 00 a. M. On wall street, and squawk alley is live. Little Downton Abbey tribute after the finale on pbs. Kayla tausche is out today. Jon fortt and myself manning the post at post nine. An interesting day. Dow started the morning and week in the red. But now up about 18 points. A lot of that on the back of oil, which once again after three weeks higher, and the best week since august is