Transcripts For CNBC Squawk On The Street 20160331

Unless something crazy happens today, this will prove, though, to be a very good month for most of the stock market. The dow, if youre not paying attention, up more than 7 just this month. It is now 1. 5 up for the year. We are going to take a closer look at some of the quarters surprising winners and losers, see if theres names that you own on either of those lists. Dow component ge in the news today. Ge capital officially filing to have its too big to fail designation removed after shedding a large number of its financial assets. The company does continue to transform. We talked about that yesterday, but well get more on what this may mean for the state and the entire Financial Services industry. And apples new products hitting stores today, but were not seeing any lines of fanboys down the street. The new iphone and ipad not getting a lot of buzz, but maybe, just maybe thats a good thing for apples stock. Were going to dig into that idea as well. Lets get now to this market. I mean, i feel like theres a bradbury short story, all summer and a day about people live on mars and they have one day without rain. I feel like weve lived a whole year in a quarter. Okay. With january, february and this month. Its slow now. What do you see happening . I like that theory, and the theory is basically that this market, this quarter had pretty much everything. Come in with the economy really slowing, somewhat because the fed raised rates, not acknowledged by most people, but thats a shame, except for janet yellen, who obviously saw the impact. And then we saw pivot february, 10, 11, where Bernie Sanders wins new hampshire, the medias still making it a horse race thinking that somehow, theres no such thing as superdelegates. That was when the oil passed, we got 25, 26, that was when Deutsche Bank was rumored to be in trouble, thats when draghi made statements that people didnt think would change things. And that was the bottom. And ever since then, weve been having a really great run, interrupted by one moment where retail sales were revised down. But frankly, ever since the bottom, people have been franticly trying to get back in and have not had a chance, as the charts show over and over again, whether it be for freeport or whether it be for a lululemon, whether it be for a general electric, which well talk about, or whether it will be, like, for stocks we never get any talk, travelers, United Health. Why dont we talk about Companies Like that, where people are making fortunes . My friend, we have 57 minutes of unscripted tv, we can do whatever you want. We ought to because i see stocks in the dow, a verizon, United Health, travelers. I mean, hey, these companies are making fortunes, and how . Because they just keep doing blocking and tackling. We tend to focus on a couple of companies, but i look at a United Health that pulled back from the affordable care, i look at travelers, which has pulled back from writing some insurance thats not that good, u. S. Competitive, and i say these are the stars. When you talk about the unsung stars, no one wants to talk about these companies. They just make money. They buy back stock, they do betterthanexpected earnings, and they are gems. Lets get micro in just a second but lets go quickly to macro. Last night on mad you said the fed would set us free. We know april is likely off the table, so put the fed aside. Lets make a deal, america, we wont say fed for 60 days. What is going to then be the most important thing for the market . Is it the stabilization of oil . Is it going to be actually, dare i say, earnings . Is it going to be mario draghi . You know what, im actually or d, all of the above . Looking back, a lot of times i like to look back at what was said a year ago and i picked up a good piece by michael semliss , i own the market. For years, he was saying europe was going to do nothing but go down. He called the bottom and said euro business is going up, corporate rates down, Mortgage Rates down, euro era banking lending. And he said look, the dollar is probably peaking. Year over year, geez, got the exact top. It was pretty amazing. And i think europe has come back. And i think that when you look at the distribution of our largecap companies, whether its a j j, a facebook, google, alphabet, whether it be an ibm, intel, microsoft if you get a turn in the dollar against the euro, then whats going to happen is raising numbers all those numbers i just mentioned, all of them i think if you went to sort of the average investor on the street and said how has the dow done this year . Well, they stopped looking at it years ago. Obviously, professionals are not really looking at the dow, but it is sort of the benchmark of the thing. These are incredible these are quartertodate numbers, okay . So, theyre yeartodate numbers as well. Verizon up 17 . Right. Caterpillar, 12 . Walmart, 12 . 3m, 10 . Those would be spectacular annual gains and weve had them in 90 days and no one seems to be paying attention no, youre wrong except for you. Theyre wrong. Every one of those stocks ive been told is a short by people who dont know much, every one. Caterpillar, jim, dont be confused, chinas really bad. Verizon, dont be confused it doesnt have real growth. Every one of those i have heard bad things about, okay . Walmart, come on, they preannounce, its a really bad quarter. All of those stocks overshot to the down side. By the way, oil stocks may have overshot to the down side. Look at the oil numbers that have been coming out. Theres actually a good piece today about gasoline. You know, people have been using more gasoline. So, i think that when you mention those stocks, ive never heard a long guy say you know what, youve got to buy caterpillar. Ive heard people come to me and say, how dare you Say Something positive about cat . End markets are what matters for cat, end markets and bottom. Look at this we got to a little bit yesterday on investing legends and conventional wisdom. Four months ago, everyone said brazil is doomed, theyre throwing people in jail, protests in the streets, inflation, economy, all thats happened is brazil is the single bestperforming Global Market this year. Shes going to be thrown out. But it goes to a point of sometimes when everybody is saying something, the dollar turned out to be a good stock, though, how crazy is that . Dollar has gone down. Look, the emerging market currencies have been the strongest in ages. We dont talk about it. Why do people not talk about these things . Why do they not talk about the baltic freight being up almost every day, which says europe is stabilized . Europe has stabilized. I could point to the baltic dry index, if you want to get really wonky. Thats what im doing the bbi has turned around a little bit. That is a measure, by the way, if youre at home, of the rates in the charter rates for ships that do things like fertilizers and corn and granular items. Right, right, stuff that suez max. I promised myself i wouldnt say suez max today. In the penalty box. Widen the panama canal. Its really great lets talk about apple walt mossberg, i read his view last night of the ipad and iphone. He says theyre not spectacular, but i like them. The iphone, theyve gone back to a smaller size, faster, good battery life with the ipad pro, but really, its not getting a lot of attention. Can the market move if apple doesnt lead, or is apple itself . Apple bottomed the same almost the exact same day as the chinese stock market. And i bring that up because i think these smaller factors are for china. The chinese do not want cheap phones. The chinese are very aspirational. And i think that these phones are going to sell well in china, and thats one of the reasons why apples multiples expanding here, because china is what turned the company around, thats where the growth is, and these products i think are meant for china. If youre an apple investor. Youre not a trader. You buy youre getting rich carefully, jim. There uyou go. So, you own it for your kids. Is the most important thing to watch, then, not the products but the chinese economy . China. Well, it tracks the chinese the stock tracks the chinese stock market. Look, some things shouldnt happen. It shouldnt track the chinese stock market. I mean, now Steve Easterbrook last night talking about 3 00 they send me an email saying, listen, steves talking right now to the media, 3 00 a. M. Talk to us, for heavens sake i made the case to him, call in if hes going to talk to china at 3 00 a. M. , he should be talking to us. Another outlet, but he so, apple, the lesson is watch the chinese stock market and economy, period. Nike should buy it because they have lets get to that news. Starbucks should go through 60 because of china. China is very, very strong for the consumer versus where it was five months ago. Were talking dow in china. Lets talk about mcdonalds. Lets do that. Mcdonalds saying mcdonalds is really carls thing. He knows the company a lot better than i do. Easterbrooks my guy because he knows how i 1,000 new Stores Coming in china. Now yum brands which, by the way, i say easterbrook, come on, you know thats a real low number. Look how many yum brands has. I love the split doing such a good job all im saying is its naturally a positive. We automatically, oh, more stores, china, its great. Is it great automatically . Why not . Theyve got tons of room. Theyve got tons of room. Greg creed is telling you that china is coming back online for the consumer, and i have to tell you, i think that easterbrooks making the right move. Thats where the growth is. Ill tell you what, mcdonalds has got to be one of the 93 to 123. One of the most surprising stories of the last month. The stocks gone from 93 to 123 if you can bring up a oneyear chart of mcdonalds. The ceo gets swapped out. I know theres a lot of optimism around the relatively new ceo, breakfast all day, which also, by the way, is expensive for franchisees, the workers dont like it if you talked to any . Yes you know they bought in. Its expensive, some of the workers guys are thrilled its working, but how much longer can it work is my point, breakfast all day shouldnt [ everyone talking at once ] shouldnt add 13 billion market cap to a company. Why dont you talk to jack in the box and see. Theyve been eviscerated. Jack in the box is like it by stephen king. Ever read that . It, its a good one. Stephen king holds up. Jack in the box, by the way, is the only company i think that will give you a taco on the side of a cheeseburger. Jack in the box is the only one who lost share to chipotle. They own the ka doba chain they didnt pick up any share. So, who is . Panera did, although they actually denied no one everyone knows that any restaurant chain can be victimized, so no restaurant chain is ever going to slam another restaurant chain for e. Coli no, my friend, i beg to differ. Publicly. Nope. Let me give you two days taco two days ago i walk into my local panera. A big sign, it says our soups are clean. Thats on the door of my local panera. I go there almost every day. That may not have come from ron shaich, the ceo. No, i think its a local franchise. That may have been a local issue because i was debating putting that sign up at my restaurant. Just kidding. Just the luck of the draw for chipotle. And the Better Burger thing . Ill talk about it weve got 48 minutes to go. Also there is so much to talk about, dont freak me out here, man. We barely touched ge well touch on ge and talk about the mysterious chipotle thing you just said, but we also must tease this. A live and exclusive interview with canadas new Prime Minister, Justin Trudeau. Hear what he has to say about the country, about security, about oil slump on his economy talk about the currency. Susan lee will do the interview and will probably ask about the currency. That is an exclusive. You dont want to miss that. More squawk on the street coming up. Trugreen presents the yardleys. Hello . oh, pizza is here oh yeah, come on in [claps] woah lose the sneakers pal. Kind of a thing. Spring is on. Start your trugreen lawn plan today. Trugreen. Live life outside. We are just pounding through the dow components today. Lets talk ge. Ges capital unit, whats left of it, has officially filed to have its socalled sipi, or basically, too big to fail designation removed. Ge saying it is no longer a significantly Important Financial Institution. After all, it shedded a large number of assets, including yesterday selling its Asset Management business for 43 million. This is a day after the government struck down the governments designation of metlife as being too big to fail. Your reaction. First, i think ge said they were going to do this by the end of the quarter, so lets not think for a moment its on the heels of metlife. Second, theyve done a remarkable job ges Capital Receivables decreased, cash is up big. Really, the debt they have now is much more oriented towards selling equipment. Remember, you have to finance equipment. So you dont want to get out of financing entirely, because when you go buy some of their stuff, you really do need some financing. But the competition of ge capital i think is very safe, a lot of cash, a lot of nonu. S. And the idea that this company is still shouldnt be under sipi, a systematically Important Financial Institution and Financial Stability Oversight Councils in charge, its kind of ludicrous, so it is good that if you own youve been looking for this for a long time. Not a surprise. But it would be big to get out from under that. And the judge yesterday really slapped the Financial Stability oversight, saying big win for metlife. No due process. Lets talk more about this with mary thompson. Lets bring mary in here to talk to her about this. Fabulous. I know there are some big interviews this morning. Hey, brian. I just got off the phone with sherrin asking him about the d designation process and asking about his reaction to the ruling on metlife yesterday. He said he was surprised by the ruling, but it really doesnt affect ge because theyve taken, as is noted by this d designation application, a different approach to trying to get that sifi designation removed from ge capital. Now, he said over the course of the last few months, as jim pointed out earlier, this was expected by ge. They had said earlier they were going to apply for the d designation process. He says he has had constructive meetings with regulators. Theyve met with about ten regulatory agencies. And again, he called the tone of the meetings constructive. He says he wants the regulators to take away from this process how ge capital has fundamentally changed its business model, its funding model. It hasnt only shrunk the business, its changed the business. He said he would be disappointed if regulators did not decide to remove this sifi designation from ge capital. He said he is unsure as to when that might happen. But again, sharon saying hes surprised by the ruling, but again, it doesnt affect ge. They had long planned to apply for d designation. No word yet on timing as to when the regulators might review this and then make a decision as to whether or not ge capital no longer deserves that systematically Important Financial Institution designation. Back to you, brian. Mary, let me ask you its jim when you look at what theyve done and you look at what they can do, they still dont talk about some of the things that nelson peltz wants to do when theyre waiting for big shareholder and friend. Do you see this as being a moment where youre going to start hearing about a bigger dividend . I know are you going to start hearing about a much bigger buyback . Because ge was up huge last year, a big industrial. Is there more to go in terms of restructuring and returning of capital . Well, i would say yes, and ge has said that a number of times as well as theyve gone through this process of shrinking ge capital, et cetera, that they do want to return more shares or return more capital to shareholders. And remember, in the wake of the financial crisis, of course, ge had to cut its dividend, something that i think has weighed heavily on jeff immelt, who would like to return or increase the dividend going ahead. So, certainly that is a part of his plan. Nelson peltz would like them to do that as well, but i think right now theyre hoping for a positive reaction from the regulators to what theyve done at ge capital to get that d designation so they can move ahead with more capital returns to shareholders, which is already significant, again, in light of what theyve done with synchrony and the sales and changes theyve made within the businesses. Mary thompson, thank you very much. Jim, the transformation of ge people have owned it for generations. I dont think they realize how much the company has changed. I used to refer to it as a hedge fund that made light bulbs. Now they are neither, really. Not incandescent anymore. What is ge . We talked about it yesterday. Its a digitized industrial that has the highest organic growth, very levered to aerospace and health care, power management. The last acquisition i think was perfectly timed. They are a company that you bring in in order to manage your power, which is manage your water, manage very big things that they are up against companies that have been playing with weaker currencies. That could be over. Thats one of the reasons why ge can go much higher. You know, jeff immelt has done a remarkable job. He was really given the hedge fund hand. It took a long time to unwind, because they were a big owner of bulgarian giant mexican real estate company. Weve got to go to break. Why . Why is that . Because weve got to pay the bills, man. Im all over that, like a cheap suit, man we have a fascinating story coming up about former ge ceo jack welch and a company he could have bought for 2 billion, which is now worth hundreds of billions. Theres your tease. Well do that. Weve got jims mad dash, futures flat. Could be a good end of the month and the quarter. And stay tuned for that, a cnbc exclusive interview with Prime Minister of canada, Justin Trudeau in a cnbc exclusive. Stick around. 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. Before a movie star unwittingly gave you a global product endorsement. And millions of women everywhere decided, i love that shoe. And the companys data center handled the spike in traffic without any drama. Before all of this. Cdw orchestrated a Scalable Software defined Data Center Solution using vmware nsx technology. Scalability by vmware. Orchestration by cdw. To make the world a more beautiful, colorful place . Ob at ppg we think thats something we all need to do. We create, invent and formulate amazing paints, coatings and materials. So we can make the world run faster, stronger, fresher, smarter, cooler, lighter, greener and better for the next generation that comes along. Ppg. We protect and beautify the world. All right, time for the mad dash. The snazzy animation suggests. Weve talked a lot about stocks that have reason to be optimistic. Yes. Micron technology does not appear to be one of those stocks. Now look, someones going to say, because people are so desperate to be able to find the new stock i mean, when i was in the business, id say listen, you know what, its time to recommend micron. And actually, srt says margins are dropping. My problem is dram prices, down 18 . The average selling price of most of their stuff, the flash is down, and i dont have it this stock used to be a 5 stock, and then it had one of the greatest runs ever. I dont have a case for it because this is pcs. This is just pcs, okay . Thats it. Because dram, the memory jims talking about, we talk about commodities flashes and other things, but micron is a commodity. Right. We could talk about the new ipad, okay . Well, thats not micron, all right . Im just saying, its not a communications company. But you know what, i want to contrast that with this, with this monster broadcom that hit an alltime high yesterday. Thats communications, highend proprietary. This is lowend commodity. And thats what this market is dimini distinguishing, between commodity and proprietary. The problem is, though, like you said, traders a few years ago made a boat ton of money on micron right. And maybe some are Still Holding out hope, especially on the technical side, on the charts. Well, im thinking about going vegetarian. Chickfila. Its called moo. Theres nothing else i can add to this. Thats the mad dash. The opening bell is coming up here. Well see what happens at the end of the quarter. A lot more to do, including an exclusive with the Prime Minister of canada trudeau trudeau. Not garry trudeau, great cartoonist, Justin Trudeau, the Prime Minister of canada. Some people confuse me with him, it is incredible. Im not kidding, we were separated at birth. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. It begins from the the second were born. Er. Because, healthier doesnt happen all by itself. It needs to be earned every day. Using wellness to keep away illness. And believing a single life can be made better by millions of others. As a Health Services and Innovation Company optum powers modern healthcare by connecting every part of it. So while the world keeps searching for healthier were here to make healthier happen. All right, welcome back. You are watching or listening to squawk on the street live from im going to try to do it in that voice the Financial Capital of the world, where the opening bell is set to ring in about one minutes time. The futures not giving us a lot of help. Dow futures may be slightly higher, nasdaq slightly lower. Still no doubt, jim, that a pretty doggone good quarter, a lot of stocks are well up quartertodate. Big industrials have done really well, some of the Technology Stocks have come back. The Retail Stocks bottomed. I dont really have a good case for a lot of retailers, but there is a note this morning from barclays, which i firmly disagree with, where they are basically saying that, you want to buy home depot. I love home depot, but come on, guys. You also said you want to buy best buy best look, they want to do the whole housing thesis, and i get that because people are spending a lot on housing, but neutral on costco . Come on. Costcos made a major comeback theyre highlighting the bigticket trade. All right, so exactly right. Lets go now to the opening bell. Good causes here today. Here at the big board, Hunger Solutions new york, dedicated to alleviating hunger in the state. And over at the nasdaq, the Lower East Side girls club, providing holistic programs and services for girls and young women. Both doing good work and ringing a variety of opening bells. There we go, green and red lights a flashing. Its like a japanese cartoon from the 80s, all kinds of flashing lights. Well wait and see where it settles. Here we go again. Dows not giving us a lot of help. Im going to be negative right at the open, looking at my charts. You know who cant get out of its own way . American express down 13 this quarter. A lot of problems. Look, i think that when you have opponents like bonga at mastercard, sharp at visa whos, by the way, going to get the costco business and by the way, i was hoping that munster would come out once again today to slam paypal. This time hes got a sell on paypal says googles not going to buy. Hey, be careful, googles not going to buy. The guy slams paypal every day. One day, hes going to get a head slam right upside the re code tech blog organization came out with a story last night, two days wherever that basically apple pay might start to get integrated into websites, the safari browser, which instead of seeing check out through paypal, you could see apple pay, which means you wouldnt have to be just on your phone. Which is possible. Paypal is taking share, its growing like a weed. People venmo each other. What does venmo mean . Really . I go to hotel and restaurants, i dont know the lingo if i owe you money, i could venmo you money. How much are you offering . I dont know. Look, i can venmo yeah, i can venmo you, if i have to. Kayla tausche was going to venmo me for the money i put up for the holiday party. I said, no, i want a check. I need to learn venmo. I just learned rfid. Lets talk about a stock down right now, because its always, lets say an interesting stock to talk about because people are so passionate either side. Valia valiant. People yesterday were criticizing the coverage, said hey, this is good news. What, that theyre asking for a debt waiver . Yes. No, but there was an argument that what they said, they flushed the what out i Like Companies that dont need debt waivers. I Like Companies that dont have a lot of debt, certainly dont need the waiver. So, i dont want to put a positive spin. I mean, you know what, okay, you know what thats like . The sixers. The philadelphia sixers, theyve only won nine games. Nothing positive about the sixers. That means theyre going to get firstround pick, but there are no firstround picks in stocks. No, theyre not. Theyre the sixers. Not going to happen. And valeant may think theyre going to get a firstround pick. And the lovers of valeant love it almost as much as they love sun edison. Why do you have to bring up sun edison and ruin everybodys day . Sun edison, my friend, carlton english down 89 this quarter. Sunedisons a 55cent stock. Doesnt even meet the market cap requirements were supposed to use. Like the oil companies, they used to be 10 billion but so many people have lost money following hedge fund managers, rather than doing their own work. A lot of people talk about oil. Its the one thing i feel like ive got a little bit of Knowledge Base in, which is this i like the turnaround ive seen in some of the oil names, but i will advise people, i will not say dont do names, its not my job, but note that the best performing oil stocks this quarter, some of them are up 150 , 250 , are the ones that have been the worst over 12 months, their Balance Sheets are rough, theyre heavily shorted. Right, right. I dont think it is a real rally for a lot of these companies. Your thoughts. I totally agree with you because their average costs are much higher than what oils selling for, and they either have hedges that are about to come off or people were shorting them when oil went to 26 because they figured they were all going to break down right then. Exxon has it together. Chevron, occidental, which my trust owns, has it together. But a lot of these other guys, theyre just bouncing. Look, eogs a great company, nbls a great company. We talked about sheffield, we talked about pioneer pioneer. But the problem is, is that oil may not be supportable above 40. The article in the paper today about how theres more driving, true. More gasoline use. But when i check in with the Big Companies that sell gasoline, whether it be like a crt, you know what i mean, the old the guys who were spun off from valero, youre just not getting huge gasoline use. But yeah, i wouldnt want to invest in those companies. By the way, weve done interviews with big oil ceos and people say why dont you interview this guy or this company. Im trying with all of them. Marathon oil is up 30 this month but down big over 12 months. I want people to know ive reached out to marathon oil, and if youre listening, sit down with us. Ive reached out with them probably five to ten times in the last 12 months, saying you need to come on cnbc because your investors are scared. And theyre like, they keep saying stuff like, its not our time or when is that time . Your coverage has been unbelievable. You have covered the guys d i mean, youve had a lot of guys who have come on and been pretty naked about how poorly theyre doing, and they did, and youve gone to see them, and its been remarkable coverage and i salute you. Thank you. All the team, all the team. Whether it be in north dakota no, no, im talking about tgt down 2 right now. Its 1. 67 barclays guys. Downgrading. Target. Target. Big winner. Part of the call out earlier where they like home depot and best buy, but downgrading target. Same call. I call it trite. Brian cornell delivered a remarkable quarter and had the Fastest Growing of any of the online, including amazon. And the quarter was remarkable. And this guy comes out and he puts a sell on it, and i think youre going to look back and say, wow, that was just a really bad call. It was a bad call. And guys make bad calls. Now, they make loud calls. I mean, i think this guy wants this is a statement. This is a statement. When you go from buy to sell it typically means you know something and ive got to tell you, he dont know anything, because theres nothing thats happened to target since reporting, other than good things. Lets dig into the call more because a lot of people earn the stock. I had Service Corporate international in yesterday. Lets dig right into the call. Barclays downgraded target, like jim said, basically two notches. Not only that, they cut the price target from 90 to 70. 70 bucks on, lets call it an 82 stock, is 14. 5 below where the stock is now. But they do have upside of 90 Bucks Barclays put 15 haircut price targets generally on big stocks like target but if you want to make a splash and get talked about on squawk on the street and big deal, you know, thats what they did. Now, i think that Brian Cornell does not need to defend himself because he had a remarkable quarter, the ceo. And i think that target is a gift. Theyre giving you a gift. This fellows giving you a gift. Mr. Under way is giving you a gift here and i think you should take it. I also think that his analysis of just the usual pileon of home depot and i love home depot no value added, but this one theyre going to send down because when you go from buy to sell, people feel like they know something, but im telling you, the guy doesnt know anything, because i just spent a lot of time with cornell after he reported that quarter, and this is not the retailer to sell. Its just not. Okay, all right. Its not. Its doing well. Lets go now to an interesting story that i referenced a few minutes ago. Bob wright who used to run nbc, was on squawk box this morning. Yeah. And he was sorry, i asked a question i asked a question whether we had the sound bite. We do. Its interesting. Listen to what he had to say about former ceo jack welch and a company that he could have picked up for a couple billion dollars. Apple, spindler came to us. We had these quarterly meetings with the senior executives, and he wanted an opportunity to get his pitch. And a lot of people would do that. He came and gave a pitch in 1996, and he kind of broke down during the presentation. He was telling us that the stock is killing him, that investors are on his back and he cant get this thing rolling. The consensus in the room was we cant do anything with this. This is way outside of our game. We were not a Silicon Valley company or an orientation at that point, and there was no supporters at all. But we all felt terrible that we couldnt jump in here. Ge could have bought apple. Now, you cant assume lets say they did it that apple would have become the company it is today. So, you cant just say they left a couple hundred billion on the table. You have to remember that was the heyday of intel and microsoft, when you go back to look at those evaluations. Andy grove, a great man, passed away. Passed away. Probably the best business book ever, by the way. Fantastic. If youre going to read one business book, thats probably it. And he also says that a quarter is he said a quarter is a good judge of the ceo. So, ceos who say listen, think longterm, didnt read andy grove. But i think we have to go back in time and remember, this was king. Pc was king and there was no reason to think apple could topple it. Bill gates was, you know, hailed as a genius, not a dancer. And i think that you have to remember thats what apple looked like. That was the cell phone, before cell phone. Larry ellison of oracle could have bought it for 10 million in the 80s. I believe thats the actual number. Ill look that up. Anyway, lets go to bob pisani with more on what is moving for you this morning, the final day of the quarter. Bob. It is, and thats what were going to be talking about. But look at sectors here. This is sort of an indeterminant open. There is not a lot of leadership. Telecoms leading early on, materials. Tech lagging. But this is either side of positive or negative. Not a lot of market leadership at moment here. An extraordinary quarter, extraordinary that were ending the quarter, at least now, on the up side. Look at the major indices, s ps up 1 , s p mid caps up 3. 2 and the russell down 2. 2 there. So, remember, we were down about 10 in the middle of february at the bottom of this thing, and so, its rather remarkable were in positive territory. In terms of sectors, very defensive tone if you really look at it, because telecom and utilities and even Consumer Staples are the market leadership. On the lagging side, financials, which never got a lot going due to concerns about Interest Rates, and health care i think is the biggest story of the quarter. And im particularly referencing the collapse in biotech. And i dont think collapse is too big a term. If you look at the ivb, this is the etf for biotech, its the market capweighted etf for biotech, you see this is for the yeartodate, down 23 , 24 . That never recovered. It bottomed around february 11th when the market bottomed, but you see no recovery, no vshape of anything. And thats got a lot of people talking about it. Some of the big names, big seven or eight that are in the s p 500. Many of them like virtex pharma down 37 , regeneron, all of the big names. Put that up, you can see theyre down really big right now for the yeartodate. These are huge drops, so a lot of people wondering whats happening with biotech. There are several things that have been going on throughout the quarter. I think the most important thing is that weve seen funds reducing their exposure. Some of them have used it as a source of funds where theyve had redemptions. Weve heard about that. Momentum investors have generally been leading throughout the quarter. And i think the most important thing is we have seen overall slowing sales and earnings growth. I asked btig to put together an indication of what was going on with sales growth for some of the big seven or eight biotech firms, and you can see here they are declining. So, 2014, there was 41 sales growth. Now were down to 20 , 2015, 5 . These are for the big seven or eight biotech firms together. And same with the earnings situation. Earnings are slowing down a little bit. To a certain extent, youre hitting a natural wall in how you can sell into the markets, how big the markets are in selling firms. Regenerons a good example of a company that had enormous sales growth. Look at this, 446 million in 2011 and now youre dealing with 4 billion. Thats enormous, but it slows down. The numbers slow down eventually, because you get so big, you hit the law of large numbers. And of course, thats fueled the stock price. Remember, regeneron was 30 or 40 ages and ages ago, and it was 40, 50 in 2011 . And it went all the way to 500 or so in the beginning of january. Since then, you see its come down. But theres been a straightup rocket all the way into the end of 2015 overall. So, well talk a little bit more about whether or not you want to buy biotech or whether you should move into smaller cap biotech a little later on in the day. I finally wanted to note for the quarter, the big winner, of course, is a lot of the names that are anywhere in the materials group. But spider gold trust, look, up 16 yeartodate. I understand this is the biggest quarterly rise in 15 years for gold. Im trying to confirm that. Certainly a tremendous quarter for these people who gave up gld, certainly in a big way. Well get back to rick in a second, but almost every gold ceo we talked to in miami said theyre pricing in 1,000 an ounce for gold in their budgets. So, if gold stays up at this level, it could be very good news for the gold miners. Well, gold miners are up north of 30 . Look at gdx really well. This is one of those rare quarters where the miners have outperformed gold. Hasnt happened in a while. No, it has not. Bob, thank you. Rick santelli is at the cme in chicago. Thanks. There are a couple of dates i want to concentrate on. The 22nd of march and monthtodate as we complete the last trading day. Look at a twoyear from the 22nd. Notice how free fallish it looks, obviously, after janet yellen talked earlier in the week. Open it up to the 30year, keep the same date. Yes, rates are moving down, but the 30years are much more stubborn just like 10s or 2s and 3s are moving down in yield, up in price much quicker. Lets take a bigger view. If you look at the first of march, so monthtodate, you can see the twoyear followed by the 30year. It really jumps out at you, and this is directly associated with Janet Yellens dovish talk and the notion that even though gdp based on atlanta gdp for the First Quarter were finishing up is paltry, you can see where the stocks are and connect the dots on your own. If you really want to see 30s minus 5 showcases the steepening started on the 22nd of march. Now, the lasting impact, of course, to any type of policy always seems to fall to the Foreign Exchange side of the Exchange Rate differential. No change here. Look at the dollar index from the 22nd, look at it from the 1st, and contemplate the notion that the euro versus the dollar is toying with 1. 14, just like im toying with the march release of the chicago purchasing survey. 42. 8 is the number, and that is definitely not a very good read. I take that back. I take that back. That is not correct. 42. 8 is a different number. Were at 53. 6. Whoo much better. 53. 6 follows 47. 6. Sequentially strong, better than expectations, but it couldnt surpass the 55. 6 we started off 2016 with. But we will be back in about a half hour going through all of the sub indices. Brian sullivan, back to you Rick Santelli, thank you very much. All right, coming up, canadian Prime Minister Justin Trudeau in a live and exclusive interview right here on squawk on the street. Stick around. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back. Lets talk trading on fitbit. Yeah, i have been wrong on fitbit. I thought it should have been valued higher. Heres a piece that says the valuation is borderline unconscionable. Thats a term to use for the stock at 13. 30 and going higher. Theyre really talking about corporate wellness, which is what i got caught up in, thinking this is the way, like under armours wellness. This is really the big call for it, but you know what, they say theres short spin all over it. I point it out because i think it is rigorous work done by the analysts. But ive been wrong. A million of the blaze device billion would be a lot. A million of the blaze devices that ship. What is on mad money tonight . We have radius and seres therapeutics, a biotech show tonight. Now susan lee with the canadian Prime Minister. Reporter hi, brian. Yeah, thank you so much. Lets get to it, the great honorable Prime Minister Justin Trudeau joining us today. Good to see you, Prime Minister. Excellent to be here. Reporter lets talk security and brussels reigniting debates over immigration. Canada has taken in 25,000 Syrian Refugees since december. What do you say to those that say that allowing immigrants from the middle east or north africa makes your country less safe . I think, obviously, any time youre accepting a visitor, a tourist, a resident, a refugee into your country, there are security risks. And what weve done is understood that you separate security risks from your immigration policy. You recognize that you need to do everything to keep canadians safe and you make sure youre doing everything you need to on security, but youre not denying the fact that we are countries that have been made great by immigration over the decades and over the centuries, and drawing people in is part of what is great for our economy and our society. Reporter that includes working with your biggest neighbor as well, and recently, youre in d. C. On your official visit and engaging in informationsharing on nofly lists and other sorts of lists with the u. S. Going forward. Do you feel confident that you can keep canada safe from terrorist attacks . I think part of making sure that we have a Good Relationship with the United States and, indeed, the world, is ensuring both the security of our borders and the safety of canadians, but also a constructive, positive engagement with the world, and the agreements weve signed around border security, which will both keep people safer and allow for this easier flow of goods and people over the border is good for trade and its good fob for our countries. Reporter but have the events in brussels maybe changed your view on how to maybe protect canada . I think we need to make sure were constantly vigilant, that were empowering our communities, and indeed, our Police Services and Intelligence Services to do the work necessary to keep citizens safe. But the fact is that fear doesnt make us safer, fear makes us weaker. And making sure that were both confident and reassuring in how we deal with our citizens and build security into something that is effective without limiting the rights and freedoms that are core to our open societies. Reporter so, how do you feel about the rhetoric coming out of the republican race right now that has trump saying he wants to ban all muslims, cruz saying he wants to patrols muslim neighborhoods . I think, you know, what makes an open and free society is the defense of the principles and values that lead us to be an open and free society, and i think that in times of elections there is often polarization around discourse, but i have tremendous faith in the American People and in the american political process. Reporter and youve said before that you will work with whomever wins the white house. But this seems to go against all of your ideology. So, how do you find Common Ground . The Common Ground between our two countries go far beyond any individual relationships or even leaders. We have an extraordinary integrated economy, you know, goods and services and individuals flow back and forth across the border for work, for family reasons all the time. We know we have a great relationship that is, indeed, a model for the world, and we need to continue to work on that, and that will be a priority for whoever occupies the white house, like it is for any canadian Prime Minister. Reporter well, the u. S. And canada are each others largest trading partner, and that also goes under nafta, the north American Free trade act. How do you feel about the leading contenders on both the republican side and the democratic side, they talk about renegotiation or even canceling nafta . Theres always little spikes of protectionism around election times, around various rhetoric. I think we have to understand that trade is ultimately good, not just for our countries but for our businesses and for our workers. We know that engaging with the world in a constructive, positive way leads to good jobs and good growth. We just have to make sure that were constantly, you know, looking for the best looking out for the best interests of our people and our economies. Reporter but Prime Minister, surely, you must be preparing yourself to try to or having to engage in renegotiations i dont think thats a real issue. Reporter thats not a real issue . I mean, i think its a concern, but im not worried that were going to suddenly reopen nafta or other trade deals. The challenge is, once you reopen it a little bit, they all tend to unravel, and its too important for both of our economies to continue to have a strong trading relationship. Reporter what about the tpp, the transpacific partnership. That was a pivot to the obama administration. There are a lot of contenders against it at this point. How do you feel about tpp Going Forward . Trade is good. Trade is important, as i said. It leads to growth, it leads to jobs. The challenge is always that whenever there is a new deal, there are going to be people who have concerns, there are people who are solidly behind it. Weve committed to engage with canadians, with various sectors and industries to make sure that were maximizing the benefits for the long term and drawing the right kind of support from reporter but when its going to be a reality is a whole different story at this point. You know what, you have to have faith in the fact that were moving forward in a responsible way to engage with the world in the constructive, productive ways that canadians always have. And ive committed to making a case for trade in general to canadians, and were going through the important steps of consulting and getting people on board as we move forward. Reporter yeah. Speaking of engagement, lets talk about the rest of the world, and china in particular, because theres a slowdown taking place in china. This morning, s p downgraded their outlook on china long term. You know, chinese money has flowed into canadian borders. Every third home in vancouver has been bought out by chinese money. You know, what happens if the money dries up . What happens to the canadian economy . We are, as is every country now, connected to the Global Economy. And how we maximize our engagement by, for example, moving forward with the Canada Europe trade deal that weve just signed, how we move forward with greater engagements around the Global Economy is going to be really important. So, yes, as various areas face challenges, others create opportunities, and we need to be resilient and diversified in how we engage. And canada, quite frankly, with its diversity, with its geographical strength, with its Human Resource and nafl Natural Resources, were well positioned to grow in the coming years. Reporter but Prime Minister, the canadian economy, of course, has been struggling, last year going through a recession. And this year, some say theres a 35 chance of a double dip. How concerned are you, especially with oil prices down 70 . Obviously well, oil prices are a big factor in i think how the canadian economy has responded, and thats why weve put so much of an emphasis in our recent budget in investment, in growing our economy by creating good, longterm, stable infrastructure, whether its Public Transit or green investments, whether were looking at supporting the middle class through equity or creating growth thats going to work for everyone. That diversity that we have as core to canada needs to be more than just a Natural Resources but all the different perspectives and views that we have, and im very excited about how canada is positioning itself in the coming years. Reporter but i think your government also recognizes that canada needs a helping hand. Your recent budget, the first one under your administration, you are forecasting, you are spending more than basically any other Administration Since the Global Financial crisis. Is that frugal in these times . I think its responsible. One of the big challenges were facing right now around the world is lower growth rates than we need. And were positioning ourselves on the investment side of the investment versus austerity debate. We believe that confident, optimistic countries should be investing in their future, and thats exactly what were doing. We have an extremely good fiscal positioning, the lowest debttogdp ratio of any country in the g7. We have low Interest Rates, as everyone does. So, this is a time to be investing in the kinds of solutions and the kinds of growth that were going to need in the coming years. Reporter yeah, and people are talking about the canadian currency, which is a muchtraded currency globally, and it hit a 13year low this year. You have come up with comments recently talking about the comfortable level of the looney, the canadian dollar. Does that mean you prefer a weaker currency for canada . Its important that monetary 3 policy be detached from politicians, and thats well enconspired in canada. But theres no question, when the dollars lower, Certain Industries do better, when its higher, others do better. What matters in a modern economy is that we have the resilience to be able to adapt to whatever level the dollar is at. Reporter yeah, but to also come out as Prime Minister and your finance minister to talk down the dollar, thats traditionally not done in canada. I dont think im talking down the dollar. Im recognizing the reality and where we need to be responding to challenges and opportunities that come with fluctuating monetary markets. Reporter okay. And i also want to talk to you about whats happening, you know, for instance, elsewhere in the world. And just how do you broaden relationships in the u. S. Going forward . Just to take it back to politics, because everybodys talking about this, the u. S. Chamber events as el. How do you feel when you hear some of the comments, the quotes coming from, say the frontrunner for the republican nominati nomination, donald trump . I think one of the things that were seeing, and weve seen it around the world, is a level of frustration by citizens at politicians in the political process, and i think were seeing various articulations of that on the left and on the right here in the United States. But i also have tremendous confidence in the American People and in their capacity to move forward in a positive way. And i look forward to working with whomever they choose to elect in november. Reporter whomever. Just final question for you. And this those do with sports, and some would say the National Past time in canada, hockey. This is the First Time Since 1970 that no canadian nhl team has made the playoffs. What are you going to do about that . Obviously, a difficult challenge, but as weve seen, there are good years and bad years, and you know, my beloved Montreal Canadiens are going through a bit of a tough year, but i know were going to bounce back. Reporter all right. Prime minister, thank you so much for sharing your time and enjoy your trip to washington, d. C. Appreciate it. Reporter very honorable canadian Prime Minister Justin Trudeau. Back to you, simon. Okay, thank you very much. Susan lee there with the canadian Prime Minister, Justin Trudeau. Welcome to squawk on the street live from post 9 with sara eisen and mike san totolsa. Free trade. I thought the comments were noteworthy, what he said. Elections tend to increase the polarization, he said, around discourse on trade and protectionism, really playing down this idea that they might have to reopen nafta, the north American Free trade agreement, which involves the u. S. And canada, something that candidates like donald trump have threatened to do. He said, i dont think thats a real issue, reopening nafta and other trade deals. Once you reopen it, according to Prime Minister trudeau, they tend to unravel. Spoken like a man whos recently won an election and can have some perspective about these things and is trying to govern. Yes, he absolutely had nothing but support for the idea of free and open trade and feeling as if it was almost just a default position once we get through the political season. Also did say, of course, its really time to invest as governments. Interest rates are low everywhere, and so, therefore, this is the time to try and stoke longerterm growth he was defending his budget there without a doubt. His spending budget. Also, by the way, on the canadian dollar, which susan asked about, being at a 13year low, said hes not trying to talk it up or down. And its important that Monetary Policy be separate from politics, which is also sort of resonates with the u. S. Election here right now, with senator ted cruz, for instance, talking about the destruction of the dollar and other politicians talking about it as well. Something to keep in mind. Okay, lets get to it. Up five points now on the dow. Youve actually had made more money this year investing in treasuries than the stock market. Treasuries having their best quarter in about four years, lifting the tlt, the ishares 20year bond etf up almost 8 for the quarter that were about to finish. Compare that with the s p 500, which of course, has rallied 14 from last months lows but is now barely positive for the year. Jeff rossenberg is the chief investment strategist for fixed income at blackrock. Welcome to the program. Thanks, simon. Great to be here. Thats one hell of a performance youre sitting on there. And thats a reflection of dampening expectations for fed policy, normalization and expectations for rising Interest Rates, and also a reminder of what bonds should be in an investors portfolio. A lot of that return came from the negative sentiment that we had in the markets, all the conversations weve had around china and oil and the highyield market. That resulted in a big riskoff and bonds benefit in that kind of environment and thats what youre seeing in the returns you highlighted. Its there is a simplistic sense of trade that is working, jeff, and therefore, it is attracting a lot of hedge fund managers, arguably hot money that will move quite rapidly, its always claimed, if they see the tide is turning. Does that make this market vulnerable, or do you think there will be further gains . Well, i think you have to be careful about taking too short of a perspective there, in that thinking about bonds as a trade, as you just described, for certainly some people in the market, thats how its going to play out. But i think for most people watching the program, we want to think about bonds in a portfolio context. And this isnt about getting in and out of bonds or trying to pick the bottoms or the top. Its about structuring a portfolio and what, again, what we saw here at the beginning of the year is we saw bonds value. This is a very low Interest Rate environment. The value of bonds is not really the yield or the income when were talking about safe treasury bonds, the value is balancist, that you have an offset to the risky stuff in your portfolio that youre allocating for income, for capital appreciation, but when things go wrong, bonds here have demonstrated that they can be that ballist in a portfolio. How about within the bond market and trying to allocate within fixed income . What we have seen is highgrade Corporate Bonds, of course, and government bonds, rally very strongly. People have fwlok edflocked to whereas highyield bonds have certainly improved over the last couple months but have still lagged the rest of the fixed income market. Is there value in high yield or is that a warning sign that risk aversion remains . A little bit of both. The market certainly got ahead of itself with regards of the immediacy of the risks we talked about in january and february, the oil prices, collapsing commodities, and high yield is a reflection of that. What we have now is a much riskier environment. So, when we go into those asset classes, we have to be a little bit more cautious that the best cycle, the best backdrop for defaults is really behind us. Were going into a higher default rate environment. That means we need a bit more caution when we take on higherrisk investments and fixed income, like high yield. That being said, certainly, we did see a tremendous rally and recovery here in global credit markets, part of that because weve had stabilization in oil, part of it from the expansion of the Corporate Bond Purchase Program by the ecb. Okay. So, a lot of things changed, jeff, over sort of the last month or so when it comes to stocks, bonds, equities, but for me, the real driver and maybe im bias because i pay close attention to currencies is the dollar stopped strengthening from multiyear highs against emerging markets currencies and against big trading partners like the euro. How much was that a reason for the rebound in oil and stock, and will it continue . You know, its a big factor, sara, as you point out. And its one of the critical factors. The fed is trying to normalize Interest Rates in a world where the rest of the world is still highly accommodative. And the impact of that was this dramatic strengthening of the dollar. That tightens Financial Market conditions. You know, people dont understand this, but when you denominate your debt in dollars and your cash flows are not, when the value of the dollar goes up, your indebtedness goes up, and that was the pressure on the market. So, certainly the fed pulling back here, the speech by janet yellen is very helpful, you see the weakening in the dollar helps to stabilize the relationship there between commodity prices. So, theres a bit of a window here of opportunity with the fed pulling back and a little bit of dollar weakness lending some riskon. We wouldnt get too ahead of ourselves on that view because a lot of the underlying imbalances, the excess capacity in the commodities sector, the vulnerability there that we see, the potential of bringing back the story around oil prices is something we have to be cognizant of. Its leading to very bizarre situations, of course, where for example, jeff, as you know far better than i, corporates with now head to europe and raise cash almost at 0 . Some corporates are now effectively lending negative Interest Rates, which seems extraordinary. Where is the value here . We were talking yesterday about a lot of money last month thats gone in to emerging markets stock markets, partly because of the move on the dollar, partly because of Janet Yellens guarantees. What happens further down the line there . Do they become much more attractive . Well, certainly, they have become much more attractive because the valuations have changed dramatically. And both the valuations in terms of what were seeing domestically, locally, but als what were seeing in terms of the fx. So, to saras earlier question about the dollar perspective, the price of admission for u. S. Based investors or dollarbased investors to get into emerging markets is generally the currency. So, you cant get really bullish on fixed income in emerging markets when were talking about local currency emerging markets until you have more stability on the dollar. The fed here near term pulling back on normalization, thats giving us a little bit of a window of opportunity. But again, we dont want to get too over our skis on that opportunity set, given that we still see some vulnerabilities with regards to commodities and the commodities closures down the line. Never wise to get over your skis, for sure, jeff. Thank you for your time. Jeff rosenberg joining us from blackrock. Thank you. When we come back, the backlash against North Carolinas discrimination law continues. Now more than 100 ceos and Business Executives signing a letter calling the law antilgbt. One of those ceos is former yahoo coo and current coo of chegg. He joins us to talk about it when squawk on the street comes right back. Executives from more than 100 companies are demanding that North Carolina repeal a state law that they say sanctions lgbt discrimination. They say the law is not only bad for workers, but its bad for business. Scott cohn is our relative authority on the state of competitiveness around the United States and he joins us now live from Silicon Valley. Scott, for people watching live in europe and asia, we should point out that North Carolina is a Major Business area. This is where bank of america, of all people, is actually headquartered. Absolutely, and its always been a factor in our americas top states for business rankings, simon. This will be our tenth year measuring the competitiveness of all 50 states in those rankings. Theres been a trend lately. Weve talked about it. It used to be all about cost. Now its really all about workforce and where companies can go to attract those talented, skilled workers to fill all those positions that they now have open as the economy recovers, and thats the main point of a letter which has now been signed by more than 100 ceos to the republican governor of the state, pat mccrory. We believe that hb2 will make it far more challenging for businesses across the state to recruit and retain the nations best and brightest workers and attract the most talented students from across the nation. Now, this law would override, or does now override local antidiscrimination ordinances like the one in charlotte, and it is also in a first now restricting the access by transgender people to public facilities like bathrooms. But governor pat mccrory in a video message released the other day says the law is not discriminatory. And to the people and businesses of North Carolina, we are a state of inclusiveness, openness and diversity, and im very, very proud of that. Now, we began considering inclusiveness in our top states for business study last year after a number of companies, dozens of companies, really, spoke out against proposed religious freedom laws, socalled religious freedom laws, in states like indiana and arkansas. It will be part of our 60plus metrics this year, so only about 2 of the possible points, but it can make a difference. Case in point, is North Carolina, the lack of statewide protections there, is one reason why North Carolina placed last year compared to fifth place the year before. It placed as high as third place back in 2011. But its not just our numbers. New jerseybased Pharmaceutical Company bray burn pharmaceutical saying it is reevaluating plans for a 25 billion expansion in North Carolina. And in the state of connecticut, which has statewide antidiscrimination protections, the governor there is using those protections as a tool to try and woo businesses from North Carolina up to connecticut. Youll be hearing a lot more of this in the months ahead. Mississippis Senate Just Passed a religious freedom bill that the governor supports and companies are already expressing concern about that. Our tenth annual americas top states for business rankings are due out this summer. Sara . Thank you very much, scott cohn in mountain view, california. Lets talk more about this corporate activism. Despite the 100plus businesses calling for repeal, yesterday on this show, during this very hour, North Carolinas Lieutenant Governor also came out and downplayed any potential business impact. Have a listen. These Business Leaders that are out crying right now have not even read the bill, and ive talked to many of them who admit they havent read the bill. The Business Community in North Carolina has loved North Carolina for years. Its one of the Fastest Growing states in america. Charlottes one of the best business communities in america. There is no cost here. Listen, this is a big fantasy. It happened in houston when houston had the same ordinances, all these same cast of characters were coming out saying they were going to pull out of houston, they werent going to do business look, houstons still in business. Joining us now exclusively at post nine, one of those aforementioned Business Leaders calling for the repeal, former yahoo coo and now ceo of chegg. The governor has a point in that for now, these are just signatures that are ceos campaigning against it. Nobodys actually threatening no one major is threatening to boycott or pull out of the state. Well, i think what ceos are trying to do is represent their communities and their audiences and their customers. And the fact of the matter is, when a state is legislating discrimination against any group, that shouldnt be okay. And North Carolina in particular for Tech Companies has been historically a big triangle for technology companies. And so, normally, you associate that with more progressive thinking, less discrimination, more employeebased benefits and those kinds of things. So, the thought that a state would legislate against a particular group and then go one step further and say that the local community cant do what it thinks is right, that they have to listen to the state legislature i think really galvanized ceos, not just in technology but in every group, and its just not okay. So, you were saying in the break, you dont actually have an operation in North Carolina. Right. Chegg does not have an operation, but we have thousands and thousands and thousands of students at all those universities. And believe it or not, we do hear from those students. Students do see chegg as their voice. They see us as helping them, you know, improve their education and save money and do those things, but they also like us to be a voice for issues that are important to them, and this is an issue that weve heard from from a lots of College Campuses in North Carolina that are saying, you know, thank you, chegg, for signing this letter, because it doesnt represent who we are. And so, to the degree that we can be a voice of those students ling their government know its not okay. Now, aside from signing the letter and speaking out like this, is there anybody within the sort of State Government of North Carolina that you can reach out to, that youve actually gotten any reception from . We heard from the Lieutenant Governor and the administration, but are there other places you can go to see if you can actually change anything . At the moment, mark benninghoff has been the leader in all of these things, so i congratulate mark and that group of people that have done it. So, i have not had the opportunity to participate in calling anybody in the government because we dont have a Business Operation there. We will be sending notification to the governor to let them know how the students in that city feel, but mostly, its around Business Leaders to Business Leaders, because working with governments that are so adamant as you saw the Lieutenant Governor basically said, hey, Business Leaders, butt out of our business. Thats not the kind of reception that you would hope but its very dangerous. I mean, transgender is the most difficult of all the issues to deal with because of what we saw the Lieutenant Governor say, what they can accuse, perhaps incorrectly, about whats going on there. The question is, if businesses all come forward on a bandwagon and says change, and they go, actually, were not going to, thats a dangerous precedent, isnt it . What i dont understand is why theres not a greater discussion at the state level. I appreciate that the emotions are very high, but this is bank of americas headquarters. They were very late to actually tweeting out on tuesday night that they would do something about it. There are such resources within the Business Community. I read bank of america funds both sides of the legislature. You would hope to get in there and change it before the becomes such an issue. Yeah, look, this is a complicated issue for people. It shouldnt be, but it is a complicated issue for people. And you know, businesses always fear one group of customers by supporting another group. Normally, they are apprehensive about jumping into these debates for those kinds of reasons. The tech company has determined that since most of our employees and a lot of our constituencies feel this way, we are an advocate on their belief. So, you would hope that bank of america would do exactly what you just said, and they may end up doing it. I think this is only at the beginning of this discussion, and businesses are only beginning to see if they can flex their power. And so, i think this is going to become a more normal dialogue against discrimination of any kind in any state. It worked very effectively in georgia, for example. And so, you know, at some point, someones going to call the bluff, and when they call the bluff, well see what businesses actually end up doing. But on that point, it can backfire. You sort of have to choose your battles. I remember when Howard Schultz, ceo of starbucks last year wanted to start a conversation about Race Relations in this country after ferguson and wanted the race together on the coffee. It backfired. How as a ceo do you make that calculation about whether its going to be good for business or whether you feel you have a moral obligation to weigh in . Well, i think the good ceos look at the core values of their companies and they say, who do you represent and what do you represent . And you go fight for those things. And so, Howard Schultz actually succeeded in starting a dialogue about it. The way he did it may have backfired for the shortterm, but starbucks is doing extraordinarily well. By the way, he did the same thing with guns. So, i have to commend Howard Schultz for having the courage to go out and do that, and these tech leaders and the local leaders in North Carolina. Look, you have to be willing to get into the debate and the judgment. You have to be willing to take a shortterm hit for your core values. And over time, you generally get rewa rewarded. Thats what you have to believe as a ceo and thats what chegg believes. Over 50 of all College Students use us. Their view is antidiscrimination and they are vocal about it. You hear about it whether its about agengender or race or iss of sexuality. This is an important issue of the millennials coming up and we feel an obligation to represent their voice. Have you read the bill . I have read the parts of the bill that have been summarized. I have not read every piece of the bill because i havent had the opportunity to. But what i do know is people legislating to say to somebody, you cant do something look, americas about giving people more rights, not taking rights away, and thats the part thats most offensive. Always good to see you, dan. Thanks for having me. Dan rosensweig, ceo of chegg. Coming up, apples smaller, cheaper phone. The iphone se hits stores today. Will it be a hit . Were live at an apple store after this. We believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov thinking about retiring . Do you have the coverage you need . Nows the time to get on a path that could be right for you. With Unitedhealthcare Medicare solutions. Call today to learn about the kinds of coverage we offer, including aarp medicarecomplete plans insured through unitedhealthcare. These Medicare Advantage plans can combine parts a and b, your hospital and doctor coverage. With part d Prescription Drug coverage, and extra benefits. All in one complete plan. For a low monthly premium, or in some areas no plan premium at all. Unitedhealthcare doesnt stop there. Youll have 0 copays for preventive services. Like an annual physical and most immunizations. Other benefits can include routine vision and hearing coverage and the pharmacy Saver Program gives you access to prescriptions as low as 1. 50. At thousands of pharmacies across the country, in Retail Locations like these. Just a few ways we connect you with the people and programs. To help give you a better healthcare experience. Call to enroll today and enjoy these benefits and more, like smart ways to save and tools to help you stay healthy. Most plans also include part d Prescription Drug coverage. Your healthcare needs are unique. Thats why, with over 30 years of medicare experience, well help make things easy to understand and guide you every step of the way. So dont wait another day. If youre new to medicare, or retiring, call now and talk to unitedhealthcare about our plans, like aarp medicarecomplete. Lets get you on the right path. Call unitedhealthcare today. The new ipad pro and iphone se hit stores today. What is demand going to be like for the new products . Josh lipton is live at an apple store in palo alto. So, still fairly early in the morning, josh. Reporter well, as you can see behind me here, not the typical mad rush of people looking to buy this new se, but thats to be expected, because this is a different kind of Product Launch for apple, where the companys really targeting this specific subset of customers, those who just appreciate the smaller screen size. When you look at the se, at first glance, it looks a lot like the older model 5s, same 4inch screen, but the components of the se, the brains of the phone have been updated. So, the se actually has the same processor as that iphone 6s, the a9, meaning its super fast. Reviewers also say the battery life of the se is very, very good. And in addition to the features, what might attract a lot of customers is that price point, at just 399. Its certainly cheaper than a lot of people had expected. Now, that said, the team at rbc estimates that the se is going to drive about 7 billion in sales this year. That would be about 3 of the companys total sales. So, a modest financial impact. But the se does have certain strategic importance for apple. For one, we know the company did sell 30 million 4inch iphones last year, so this se now gives those people a reason to upgrade. Also, at 399 bucks, it could appeal to a priceconscious consumer, especially in the emerging markets where a new, smaller, cheaper phone could win over some fans. In addition to that new phone, we also do get that new, smaller version of that ipad pro today, starts at 599. We know the ipads been a disappointment, at least for wall street, so the question for investors is do you think this new ipad could change that products trajectory . This store behind me in palo altos going to open up in about three hours. We will be talking to customers and bring you updates throughout the day. Back to you guys. Josh, thank you very much. Well look forward to those updates. Still ahead, stocks seeing quite the turnaround in the First Quarter. The dow and the s p 500 actually positive for the year. So, will the rally continue into q2 . The one and only art cashin joins us to weigh in when we come right back. At mfs investment management, we believe in the power of active 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. 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. Before the band separated over unknown creative differences. [ crash ] and reunited three decades later for a tour that sold out in three minutes. And your cisco hybrid cloud handled millions of ticket orders without breaking a sweat. Before all of this, [ crash ] the experts at cdw orchestrated a cisco hybrid cloud solution. Scalability by cisco. Orchestration by cdw. Man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Welcome back to squawk on the street. Im Bertha Coombs at the nymex. Were awaiting the eia inventory number for natural gas storage. The expectation is for a withdrawal of about 20 to 24, and the actual number is down 25 billion cubic feet, so its a little bit better than expected. Natural gas already coming into todays number was trading at a sevenweek high, above 2. And we are seeing natural gas, if you take a onemonth chart, having one of its best months in an awful long time, up about 18 for the month of march, a very nice recovery. For the quarter, though, it is still down. Now lets head over to sue herera over at the news desk. Thank you very much, bertha. Heres whats happening this hour. Vice President Joe Biden meeting with the turkish president on the sidelines of the Nuclear Summit in washington. He may also meet with president obama, although no formal meetings are scheduled. At least 15 people were killed and dozens more injured when a portion of an overpass under construction collapsed in a congested area in eastern india. An official says the private builder had missed several deadlines for completing that overpass. Brussels airport will remain closed to regularly scheduled passengers flights at least though tomorrow evening. Flights will initially operate at no more than 20 of regular capacity. Officials say refurbishing the damaged departure hall could take months. Some Airports Service workers are on strike at Reagan National airport in washington. Theyre protesting unlawful termination and threats of retaliation and intimidation by their employees. Thats what theyre alleging, at least. Other major airports are expecting strikes and protests as well. You are up to date. Thats the news update this hour. Simon, ill send it down to you. Thank you very much, sue. Meanwhile, relatively flat on the markets today, and of course, for the quarter as we now close out the first three months of the year, slightly positive overall for the s p, but the bigger story, perhaps that huge rally, up 14 that we had from the lows last month. Art cashin is director of floor operations at ubs. Art, does that sort of tectonics good morning, by the way. Good morning. Does that tectonics shift that you have mean there is a rebalancing to be had later in the day, massive volumes from some of the bigger players . Youll see very large volume. Its the end of the quarter. There will be some indices that have rebalancing. I believe there are three. None of them is very huge. So, the bulk of what you see will be Portfolio Adjustments from Pension Funds and others for end of quarter. If you look at whats driven the rally here, art telecom best performer, up 15 so far this year, utilities and Consumer Staples, all defensive, not super fastgrowing sectors. Does that tell you anything about where we go from here and the sort of air of caution that has fueled this rally . Yeah. We got a big boost out of yellen, for example, so up until then there was some uncertainty. The nonvoting regional president s threw a Monkey Wrench into the market, and that had things a little screwy. But i think youre going to see the market pretty much stay defensive here. Were going into earnings season next week. That means that the corporate buybacks have to stand down. Many people believe that they have been up to 70 of the support in the market. And so, that will be a little bit of a headwind for the markets to face. On the other hand, art, april, people dont talk about it quite as much, but one of the stronger months of the year, whether that seasonal stuff matters anymore. And also, i just wonder about, you mentioned yellen. If the market is treating what she had to say as a little bit of a green light in the sense of, look, a strong jobs number on friday doesnt really seem to change the picture, so can good news be good news for a little while . Yeah, i think it probably can be good news for a while. She laid out a very long criteria of things that people should watch out for, including a lot of things offshore. And so, you cant, i dont think, take any one indicator or piece of data here and turn it into a market mover. What is better underwritten now . Sara described the areas of the market, the stock market that have done well, the bondlike areas of the market. We were highlighting how bonds, treasuries have outperformed massively in the First Quarter, the stock market. If yellen is saying Interest Rates will stay lower, if the ecb doubles down with greater qe tomorrow, which is the start of their heightened activity, and lord knows what the bank of japan will do, whats better supported . What does well, bonds and bondlike stocks or the stock market in general . I think its the former. I think the bondlike stocks. I think we will continue to see those doing well. Now, its going to be key as we move closer to june and see as the ecb really starts to roll that ltro routine out this is the cheap money to fund the banks yeah, there are some hints that the banks arent quite as enthusiastic as it looked. We wont know that for a couple of months. So, and we may get a surprise next week. Youve got the wisconsin primary. There are a lot of people wondering, could that be a shift of gears for mr. Trump and where things will go . So, next week earnings and a lot of interest in that. Artofbeen critical on a lot of the central bank moves, some of the easing, but are you bullish on stocks as a result of them right now . Well, im since yellen spoke up, and one of your favorite topics, the dollar has eased back, that had been a threat. It was working on the multinationals and others. So, that gives me a sense of ease about the market, so im a little happier with that. Worse quarter in five years for the u. S. Dollar. This was a real inflection point. It could be very dramatic. And coming out of the g20 meeting, which is one that really took hold. People said they didnt come up with anything. Conspiracy theories its either a Conspiracy Theory or just a coincidence, but the uptake after the meeting was, they didnt get anything done. Right. But as sara says, theres enough conspiracy theorists around, they say the fix was put in, that there was almost a plaza accord. I dont tend to believe that because action looked independent to me. Well, thats a foolish thing to suggest because the euros rocketing higher, and i cant imagine that the ec bank overjoyed about that, given the lengths theyre going to on their own to try and weaken it. Thats in the in the interests of the ecb, and arguably, its situation is far, far worse than youve got here. I wholeheartedly agree with you, thats why i said i doubted the Conspiracy Theory although maybe they were more worried about their banks than having a strong currency. Maybe, maybe. Well see. Good to see you, art. Art cashin from ubs. Still ahead, ciscos John Chambers is investing in a drone startup. Hell be joining us live with the ceo for that company, airware, to explain by. Well be right back. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. As california debates raising the minimum wage to 15 an hour, on trading nation, we take a deep dive into what companies and sectors may be impacted the most. Go to tradingnation. Com. More squawk on the street coming up. We were born 100 years ago into a new american century. Born with a hunger to fly and a passion to build something better. And what an amazing time its been, decade after decade of innovation, inspiration and wonder. So, we say thank you america for a century of trust, for the privilege of flying higher and higher, together. Welcome back to squawk on the street. Stocks largely unchanged right now. Industrials and materials competing for the worstperforming s p 500 sector, as you can see there. Among the names, leading materials to the down side today. Steelmakers like n nk cor, monsanto, fmc corps, Cf Industries all down a percent or so in the early trade. The sector was one of last years underperformers but is holding up so far in 2016 year to date, up 3 on that market. So simon, materials a focus for investors in early trading. Counting down to the end of the quarter, don. Thank you. Lets send it out to Rick Santelli in chicago. Good morning, rick. Good morning, simon. Of course, the Chicago Purchasing Managers survey, lets open up the board. Good number, better than expected, but still didnt take out the lofty 55 and change from january. Lets go through it. The headline was up six, 53. 6, obviously, since january. Color . Yeah, rick, this is a good report. The barometer held up by new product demand, seasonal product demand, warmer weather and also the release of some monies for Capital Expenditures and special projects, but ill caveat that last one, was on the miner side. You have ordering components up, thats good news, fueling your production and also the biggest ups were production and employment, 9. 7, 7. 6, 53 and change, almost 53. What is that telling us . Right. So, thats telling you that, you know, youve got a lot of orders, youve got to produce and youve got to hire some workers. I would like to point out that this employment, theres a big jump here, rick. But last month, we were at a 6 1 2year low, so youre going to naturally have some giveback there. Thats what a lot of people are saying post report that i talked to, the traders, is that this report isnt bad. Two things its making up for a lot of weakness. Yes. And as we get to these areas, which are more negative areas, it underscores inventory is the main driver. Can you talk to that . Right, we can talk about that a little bit. Now, the problem here is that were not firing on all cylinders, right . So, we have our supplier deliveries shortening i made this colorful minus 1. 6, because as this goes down, deliveries, what that tells me is i might get my product faster. Correct. But if im betting on the stronger economy, i want to get my product slower, i want it to take longer. Right. Thats why its a bit colorful. Its slow as in 2013, but another way to look at that is that isnt necessarily a good thing. Thats right, because we really had some underlying demand, youd be choking at the supply chain may be longer. Stretching out, right. Inventories up just 0. 9. These have been a contraction five months in a row. This is a reflection of people doing just in time, made to order, being very cautious, because the thing they say thats bothering them is this election coming up. They dont know which way this is going to go. Im going to stop you there. I know you wanted to say this, and we talked about off camera manufacturers complain when the dollar is going high, okay . Dog ate my homework in the form of the stronger dollar. The stronger dollar dissipated with janet yellen letting the cage of doves fly in every direction. So, now its politics . I dont know. You look at both sides of the party, you can come up with the crazy on either side, whether its taxes or who knows what somebodys going to do, but in the end, i have a hard time swallowing that excuse, but you can continue. Well, they are telling me that its bothering them. They are also telling me that because of the election, they are not expecting much in the area growth. Can the barometer range between 45 and 55, yes . The problem is, they need to learn that justintime inventory isnt flawless, we need to go to the second power. They continually made too much and now were churning through it. Quickly, special questions was a biggy. Special question is what do you think your orders will be in the Second Quarter as compared to this quarter. 44 said higher. 44 higher. 42 said the same. 42 the high. And 14 said lower. 14 lower. If you look at the lowers and the same, they outweigh the growth side. Thats right. And thats the point. Right. And thats a direct reflection of last year them being wrong all year. Alyce, thank you. If its politics or not, we dont know, but its always a great excuse. Sara, back to you. Rick santelli, thank you very much. Speaking of politics, up next, the leading president ial candidates dont agree on much, except when it comes to trade and the idea that it is hurting america, but is that really true . More on that question when squawk on the street comes right back. Canadas Prime Minister, Justin Trudeau, in washington for a summit on nuclear safety, speaking exclusively to our susan lee less than an hour ago on the show, making some headlines as well on trade policy. Susan joins us now. I see the winds, susan, hasnt yet died down. Reporter yeah, yeah, the gusts are still going out here, but lets talk about the u. S. canada relationship. And a lot of it is hinged on trade. They are both each others largest trading partner, 670 billion worth of trade go through each others borders each and every year. And as youve heard, some of the rhetoric during this election cycle, both from the republican and the democratic side, both frontrunners say they want to either renegotiate or cancel nafta, the north American Free trade act. So, i spoke to the canadian Prime Minister, Justin Trudeau, and asked him if hes concerned. I think we have to understand that trade is ultimately good, not just for our countries, but for our businesses and for our workers. We know that engaging with the world in a constructive, positive way leads to good jobs and good growth. Im not worried that were going to suddenly reopen nafta or other trade deals. The challenge is, once you reopen it a little bit, they all tend to unravel, and its too important for both of our economies to continue to have a strong trading relationship. Reporter and he also said that during, of course, election cycles, the rhetoric seems to be spiking a little bit, but then it dies and goes back down afterwards. Now, what about the canadian economy, because we also touched on oil pricing, as well, downs down 70 since 2014 and 20 of canadian trade is based on oil exports. Canada went into a mild recession last year. He says hes not concerned about 2016, because in his recent budget, theyve announced one of the largest deficits since the Global Financial crisis, but hes going to spend for growth in canada and diversifying away from Natural Resources. And also, when talking about his largest trade partner, i asked him, once again, who would he prefer to be in the white house . He didnt want to be drawn into it. He says he will continue to work with whomever wins the vote. So, there you go, yeah, very diplomatic answer there. Thank you very much. We enjoyed the interview. Susan lee in washington. Lets talk more about trade politics and bring in matt. Its good to see you matt. Thank you. Good to be here. So the Prime Minister telling us that hes not worried about having to go back to the they fwoesh yating table and rediscuss it. Should he be . Well, he was very articulate in voicing how for Canada Overall and its companies and workers trade has been good. Whats worrisome is none of the currently leading president ial candidates are giving voice to that narrative. Theyre all talking about the down side of trade and globalization and whats missing right now is voices about why trade is good overall and what we might do to address the concerns of workers and families that arent benefitting from it. Manufacturing and steel and other industries have been harmed by open trade. What do you say to them . Thats a great point america has long enjoyed games overall with the trade. We continue to enjoy larger games in the future. But not every worker and company and community correctly benefit from trade. Thats been true for generations. Thats going to be true for the future so what is needed are voices to acknowledge the gains. Acknowledge that the concerns of some workers and communities are legitimate but then find the policy and solutions that are well targeted, well designed and well funded today dress the concerns of people that arent directly benefitting. I think the problem may be far bigger than we anticipated. These candidates may not be going rogue. They may be reflecting what the bulk of the population believes suggesting that two third of american favor more restrictions on imported goods instead of fewer. Its a big deal that allowed the situation to deteriorate. Surely. Thats a big deal and the survey evidence has shown ambivalence theres the gains evidence in the research and a spurt of productive and Greater Consumer choice and yet as this recent poll underscores a lot of americans worry about their jobs and the impact on wages so theres a window of opportunity here for leaders to step up and give voice to the benefits and what smart policies could address these concerns about jobs and wages are we saying that the people are wrong or the policy has to change . No i think what is clear is some of the most sophisticated people are workers impacted. Doing things on the physical side to address wage concerns. The policies are very clear and a lot of good research. Its finding skroiss to lead the policy change. Are you suggesting that we use the tax system in effect to subsidize wages. Yes, thats one possibility. If youre concerned about americas tax code not being progressive enough you can look at the payroll tax so you can have redistribution for that or other wage programs such as wage loss Insurance Programs so to make up for the lost wages certain workers might incur in transitions across jobs to entice them to take jobs that might be more risky but hold for opportunity. So you mention that neither of the front runners are talking about this. You were an advisor to president bush. I wonder what caused this shift and thinking and whether its broader than just trade when it comes to republicans and their ideology about the economy. I think time has ticked along. We had many years now where for the majority of American Workers the wages are not rising. In some measures theyre falling. So the pressure on labor markets is what has changed. We have this opportunity for some leaders to step up and say the concerns are legitimate and theyre real and yet heres the smart policies for how to address them. But just to highlight what youre saying here, the smart policy that we have identified in this conversation is greater entitlement spending to deal with the problems that we have with free trade. That would seem very wrong to people that support free trade in the first place. Thats not supply side economics is it the question is what type of policies do you design to facilitate transitions in the market and give people the opportunity to gain more skills in the short and longterm and to the extent you think you need some Political Support thats part of why we have the tax code i just wanted to get your thought here. Would you advise donald trump if he does become the nominee and ask for your price or do you think his views on trade are so dangerous like the Economist Intelligence unit and the economy that you would decline. Interesting question. Im terrified at the prospect of starting a trade war at the end of next january. The way to address the concerns of workers is to try to find more ways to connect American Workers and companies to the world and address concerns about how many of them directly enjoy the gains. Thank you for joining us on this important issue. Lets send it over to john fort and have a look at what is coming up on squawk alley. Good morning. Well, downloads did it to record stores. Uber did it to taxis. Have we reached that moment for banks . Possibly. We could see lay offs of up to 30 because of this technology. Also John Chambers is going to join us. Not talking sis coe but a new technology that hes invested in. It has to do with drones. Well dig in and there are lines at tesla for the model 3. This car could mean make or break for tesla and its future. Were going to look at that as well. All that and more coming up on squawk alley. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Good morning, its 8 00 a. M. At apple headquaters and 11 00 a. M. Here on wall street and squawk alley is live. Good morning and thank you for joining us here