Transcripts For CNBC Squawk On The Street 20170317

Macro to watch. Our roadmap begins with u. S. Foreign relations in the spotlight. The president meeting with merkel in washington today. Plus, the secretary of state Rex Tillerson giving a very strong warning to north korea. Then were going to move onto deregulation nation, what the current climate of deregulation means for media and telecom stocks. Shares of tiffany up on strong earnings. A Silver Lining perhaps for the luxury market. But first up, when the president meets with german chancellor merkel later this morning, trade, immigration and defense among the major issues likely to be discussed. Both leaders will hold a joint News Conference this afternoon. The Trump White House has been critical of germanys trade surplus as the u. S. Remains its single biggest export market, although the president has said nice things personally about merkel and her strength as a leader. Right. I think this is a rubber hits the road meeting because i think that we have not really seen trump in action, lets say against european leaders, particularly about nato. But secondarily i know this is when youre going to hear about russia in a substantive way. I think thats going to be the liberal media will be talking about how merkel is a sworn opponent of russia and obama and merkel worked together. And this is the beginning of the, i think, the problems with the special relationship between our country and germany that obama had created. I just dont think its going to be the same. I just dont think theres any way that this antinationalist, totally globalization premier, right, is going to meet up with an americafirst president and discussions are not going to be the way youll think theyll go, historically. Theyre not just having a bilateral, theyll have a roundtable with the ceos of bmw and siemens. Bringing in some apprentices going to speak for vocational training, how that works in germany and maybe how they hope it will work here. Well, bmw is a controversial company, it shouldnt be. Bmw is a huge manufacturer in this country, but theyre also a huge manufacturer in mexico. I know from the contacts that i have that people within the government here are saying bmw ought to build more plants in this country. So thats important. Siemens is just straight out headtohead against general electric, frankly. But i do think that this is the leader who is the most nationalist versus the leader who is most globalist. So theres really not a lot of Common Ground here other than the fact germanys been on our side for a long time. But look out. I think there are going to be sparks. You do . I do. This is not like other meetings. Is there any point the broader markets react to geopolitical concerns . Because it doesnt seem thats been the case yet. Its just been a lot of talk about the possibility of protectionism and possibility of certain friction with allies, but. The thought that navarro the reason im coming at this is the navarro comments were the most incendiary comments we have had with our ally germany that i can recall. Okay. So i dont think that unless the president totally disowns navarros comments, i mean, i dont know how you have a pleasant meeting. Honestly. I dont know how you have one. That is an interesting point because it depends who hes channelling in other words is it navarro or more of gary cohns thoughts which we believe are much more towards being more constructive . Navarros been very focused on the trade deficit. He sees it as a real evil. Right. While other economists argue its not. Right. Kind of to put in very simple terms without getting into the level of complexity. This week navarro did say he hopes to create a powerhouse of trade between us, mexico, canada. Mnuchin the pesos back. Theyre all walking it back. But i do believe honestly, take a look at that relationship obama put together with merkel and i think thats a relationship that this president doesnt want. How about tillerson . Speaking on his ae asia trip about essentially giving up on 20 years of diplomatic efforts to rein in north korea. All the options are on the table. Certainly we do not want things to get to a military conflict. Were quite clear in that in our communications. But obviously if north korea takes actions that threatens the south Korean Forces or our own forces, then that will be met with an appropriate response. He says the era, the strategic patience has ended. Wow. And earlier last week the chinese premier said the u. S. And north korea are like two accelerating trains on a collision course. Look, for years what we thought is that if you gave them food they would relent. And they havent. And i think this is the beginning of a new policy towards north korea. Again, i go back to, i mean, geopolitical concerns sort of becoming something investors start thinking about front and center. If theres any one its got to be north korea which we know is trying to outfit an Intercontinental Missile with nuclear weapon. Like a parallel program . That could hit los angeles. You know that. Youre looking at me like you dont know what im talking about. Of course you do. Im talking about homeland for heavens sake. They have a Nuclear Program and iran has a Nuclear Program. Counsel of foreign relations, right, number one challenge going to face this administration, hes not alone in that leaf. No, but south korea is a great ally. South koreas in disarray, right . South korean governments in disarray. Their president s been impeached. Look, weve always felt that i dont want to speak too much foreign policy, doesnt make us any money but weve always felt the chinese were not doing their job to reign in north korea. Our plan has always been keep feeding, theyll come around. They never came around. Tillersons a serious guy. Tillersons breaking with everything at the state department. Tillerson is speaking very more nationalistic, very less conciliatory. Thats just whats happening. But i do think, look, theyre walking it back. Theyre doing a lot of things that seem like negotiating. Its like, you know, they come out really hard. And then, you know, see whether this side gives a little. Merkels not giving anything. Im telling you, this is going to be different meeting. Were going to focus on this. I really do. All right. Something else were focused on today is deregulation. Im in germany, howd you do that . Im just moving on, baby. Were talking about the president s push for deregulation of course all day on cnbc today. And what that could mean for your money. The fcc for example becomes into key focus when we talk about deregular d dereg in media and telecom, something weve talked a lot about already on this set many, many times but certainly worth going at again as we see the new fcc chair ajit pai get more and more focused on eliminating title 2, which is Net Neutrality, right . The fact that your isps, your Internet Service providers are regulated as though it was a telecommunications service. This was an area of great consternation for some under the previous administration, under chairman wheeler when it was regulated that way. And it is very much apparent that mr. Pai is going in a different direction. And it will be a positive, no doubt, for the likes of our Parent Company comcast and charter and verizon, at t and so many that provide Internet Service and Broadband Service really is what were talking about to the nation. Heres what mr. Pai had to say when we interviewed him a couple weeks back specific to eliminating Net Neutrality. I cant give you a specific timeframe, but what i can tell you is were studying the issue very carefully, were speaking to members of congress who might have an interest in this as well. And at the end of the day i think we want to deliver positive results for the American Online consumer. And as i said for two decades the proof was in the pudding that the consumer was best served with light touch regulation. And i think thats the end result that were hoping to achieve. Light touch regulation, of course, will go beyond Net Neutrality. By the way we should mention Reed Hastings yesterday talking about it from netflixs point of view, of course seen as potentially a company that would be hurt by the elimination of strict Net Neutrality. Did you see i did. Hes saying its not going to hurt us that much. But its a real question as to whether this will allow the provider of your broadband to start essentially charging you more to a certain extent and or the provider as in netflix charging them more in terms of fees for getting to you given youre using so much of the b d bandwidth to stream your movies and download your movies. Right. I can see where this would be a winner, but regulation has helped netflix so much. Yes, seen absolutely positive fabulous for netflix under the former administration and fcc chair wheeler. But its things like the broadcast ownership caps which have been in place since the 70s and perhaps dont make a great deal of sense. Thats why youre hearing talk about the possibility of tribune getting together with sin claire. Doesnt appear theyre that far along, but if you eliminate those caps somewhere around 39 in a given area, you would allow for a deal like that. Set top boxes, remember that one . We talked to pai about that as well. No longer can go out and buy your own. Privacy laws also being not as strict. Thats a positive for the isps. So so many areas where deregulation is already having an impact and will have much more of an impact. Then we move on of course to the possibility of mergers, which weve always talked so often about here. Right. Whether it be sprint and tmo, which by the way everybody can Start Talking on april 17th lets call it. Thats when you can Start Talking again as a result of the incentive auction, remember, for the air waves, that being done. And then that quiet period or not collusion period having expired. Ive been trying to scoop you on this. Yeah . Im going to london to talk to some people involved in this. David, i think theres going to be a deal. Between whom . I think the germans are done. You got to be more specific. I think deutsche tell is ready to move on. To do a deal with sprint . Well, you know, its interesting. We certainly no masa son has ownership strength would love to see a deal. Still becomes structure, what the germans would be willing to accept. And then you still get to the department of justice. The fcc remember they look at things theres masa, under Public Interest rule. Public interest is what stopped time warner cables purchase by our Parent Company comcast, because you can just keep it out there forever. But this fcc doesnt appear particularly interested. For example, they didnt want to weighin on at t and time warner. I know. I know. Right . And theres nothing really before them that they have to weighin on because theres no real licenses at stake or anything of that nature. So its the department of justice, jim, thats really going to be the key in any kind of a deal like that. What would the germans be willing to accept in order to offset the risk that theyre taking on that the deal would once again be turned down as it was when at t tried to buy tmo or even prior to them even announcing anything the last time through when they at least got the state of play from the department of justice between sprint and tmo trying to get together. Thats a key question. And i still maintain four going to three in a very Competitive Industry where prices are going down where its the key bill for most consumers, you have to wonder whether youre still going to see a doj thats going to be that willing to allow it. Right. If deutschetel want to do it, im not saying this is going to happen, this is what ive been working on. Youre not going to scoop me. Not in that area. No way. It will not be allowed, you will not be successful. Im letting you know. I want to go right now to a commercial. Im upset about this. You can wander all over the place but you cant get right down into my business. You cant get right into my business. I got this. You got the whole world. Ive got this little bit and youre still going to get in there . Yeah. No. No. Broader question for this deregulation theme were going to hit all day, jim, is how much the markets relying on it, right . You got a lot of people wondering about the stall in the banks, the dollar down two days in a row. Yesterday i think the banks did well. Some banks it was hit or miss. Wells did well because people think theyre clawing back. I think it really doesnt matter. But i keep thinking about what would have happened energy transfer, what would have happened to adp if Dakota Access had been blocked . This is an example of why deregulation matters. That company could have been sunk. Im having the best pipeline guy in the world tonight on mad money to talk about how this is the industry that deregulation is saving. So why is energy the only sector down since election day . Because were pumping so much oil in this country. Were pumping 100,000 more barrels a day each month because of ingenuity and technology and because of belief that this president is not going to block any of the pipelines that we need to go from oklahoma, to go from pennsylvania, to go from ohio and go from texas. Because all these are going to be disputed. This president is going to ram them through because of deregulation. Im not kidding. My pipeline expert tonight will unveil all this. Is it going to kill the market the way hamm said it could if you take production too high . Hamm . You mean the guy when it was 80 going 110 . I mean, the guy who picked thought princeton was going to go all the way. I dont know. Look, ive got to tell you, hes been wrong. Hes a great american. But i have to tell you we are pumping weve lowered the price of oil so much out of the ground here were 22 to 25 now in the last few months got it down to that. You can imagine how much money were making. So, yes, we are wrecking the price structure. But when we get to 50, 55, we back you have. We sell futures. Thats what we do. We dont sell oil. We sell futures. What country is that . I forgot. No green tie from david. Lets get Industrial Production with rick. Hey, rick. Good morning, carl. Well, Industrial Production for the month of february came in unchanged. Goose egg. Were expecting up a couple of tenths. We did gain two tenths on revision but still negative from minus 0. 3 to minus 0. 1. 75. 4, arguably a tenth light but close to expectations and garnered an extra 0. 2 on january from 75. 3 originally released to new stand at 75. 5. Yields are hovering just above 2. 5 where they were right before this number. And of course well pay very close attention to how we go into the weekend considering it was just about a week ago we were at the highest yields virtually since 2014. We havent come down that much, but we have come down from very significant resistance levels. David, jim, carl, back to you. Rick, thank you very much. When we return, its been five months since tim sloan was named chief of wells fargo. Were going to hear his strategy for the banks future in an exclusive interview. More squawk on the street from post nine in just a moment. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade amgen shares falling, comes after new data on cholesterol lowering drug reduced compared with stapd ard streemt but analysts are worried Risk Reduction is not enough to persuade insurers to pay for the drug which costs almost 15,000 a year, jim, this is pretty yeah, i expected this to show 20, 22, some people say its only 15 . That price tag no go. Now, over time maybe it will be better, but this is look, amgen has done a lot of things right and i dont want to just say this is the end of amgen because thats been to count them out is wrong, but this study was not as good. And a lot of people were thinking about this analyst meeting, including me, as being the breakthrough meeting about a new drug that would really dramatically cut maybe even much better. Reminds me a little of bristolmyers with opdivo when it just didnt come through. But that said all it is is debate and this doesnt quell the debate reading adam does great stuff on this, im not willing to writeoff amgen and as a matter of fact i think we havent heard the last of this drug. We havent heard the last of this drug. No, trying to look here they released everything at the same time amgen in terms of slide, everything else, what they met, what they didnt meet and obviously the market is making quick judgment here in terms of what youre going to see success or lack thereof of, of this drug, repatha. Insurance Companies May not go for it. When you think about that, thats the payer. And this is disappointing. 27,000 patients. Beneficiaries here on the other side that are competitive . Its almost the lipitor right. So what happens Insurance Companies in the new world of deregulation and where the president wants prices down, you know, certainly medicare was not going to go for right. Thats the point. If you cant prove that it is going to be that different than the existing therapies why the Insurance Companies going to want to pay for it. Anything that its about that is kind of roughly equivalent, the governments not going to pay for it. Really worth following this because this is this was a drug that i think a lot of people thought their doctors were going to recommend. They aint going to recommend it. Yeah, theres a lot we dont know about Health Care Policy this year. Well get cramers mad dash, after the break get the opening bell. All averages are higher for the week, making it 7 out of 8 for the s p, 5 of 6 for the dow, back in a moment. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley hello, my name is watson. I am helping 8 million taxpayers get the largest refund they deserve. One Million People can benefit from precision cancer care. 197 million passengers can fly with less turbulence. I am on my way to working with one billion people. I look forward to working with you. All right, keeping our eye on amgen, down almost 8 on days repathas results and probably will again as the opening bell is just minutes away. Say carl, we have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh. And i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Why do so many businesses rely on the u. S. Postal service . Because when they ship with us, their business becomes our business. Thats why we make more ecommerce deliveries to homes than anyone else in the country. Here, there, everywhere. United States Postal Service priority you happy st. Patricks day, of course, as we countdown i know. I forgot. Funny, i was going to grab a green tie, completely eluded me. We have a mad dash to get to with a few minutes to get to start here. Very crowded on the trading floor, software ipo mulp. I have new relic, great video, a site monitors whether your site is doing well on omni channel, and you cant do it well without mulesoft. An incredible company, a real company. At the beginning of this ipo period you get the real good ones. Take a look at their website. Youll see a series of videos of companies that count on them to be able to operate their own websites. Its quite an Impressive Company with a great growth rate. Its a winner. Mulesofts a winner. Just go to the website, see what they do for wawa, local chain for me. Cocacola a very big client. Yep. Salesforce by the way is a big investor, marc benioff going to the white house today meeting with merkel and the president , hopefully discussing about what will happen to the displaced workers. Did you want to hit adobe before the mad dash . Last night im coming home after a hard days work and sometimes youre just so lucky. You know how theres like a great Netflix Binge . Two nights i binge on the oracle call, last night it was adobe. If you want to do anything creative on the web, its them. Them. And theyre recurring revenue here is incredible and creative market, creative cloud, you got to go there. They also keep track of all the retail sales. There isnt anything that this company hasnt lured to. Youve been positive on the company for quite some time. Yes. Ever since they switched to recurring revenue model theres a record for alltime highs this year, they have to be in the running. Yes. Its almost like every day. This man is a quiet genius, this ceo. And its an incentive company. Your kid knows that. Every kid knows how to make something that used to take, you know, the best printers [ bell ringing ] theres the opening bell and big board at the bottom of the screen. Mulesoft celebrating its ipo. Well talk with the ceo on squawk alley. At the nasdaq Employment Staffing Company kelly services. We just got that i. P. Number a few moments ago. The factory component up for the sixth straight month is the best since 08. So even though the goose egg on the headline manufacturing is taking off. Look, this onethird of the economy could get to be more than onethird of the economy. I know were a Consumer Spend economy. I am continually being impressed by the manufacturing economy and by the technology economy. Im sorry just to dwell for a moment more about adobe, but adobe is an empowerment company. All of us can do and ive been doing going back and forth with my daughter. Lets do some stuff with adobe because you can make great Creative Things and make it look like its been done by a very expensive company. This is the design for editing, sundance, everybody makes these movies at sundance, they use adobe. I wonder whether moonlight was they shot it for a million and a half, its possible. I love that movie. Adobe is the biggest gainer. Second is going to be tiffany with a pretty decent outlook for the full year, jim. Yeah. Comps unchanged. Its funny because interim ceo, but they were more bullish than theyve been. China sales very strong. And that was worth noting. This stock has been way up ever since they got activist come onboard. So its impressive. Ive always felt they have a price point that should do well if the world starts doing better. I was surprised china was so strong. That to me was the big takeaway. They actually referenced it as being strong. By the way, thats good for apple. Its good for, oh, apple. Simply shows willingness to spend on Consumer Products at a high right. Not hong kong, but in china. Understood. I keep hearing great things about the apple the next apple, the next phone. Keep hearing things. A lot of components being ordered in china for the next phone. Just hearing a lot of good things. I want to be so negative, i cant. Pack crest out with a note on amazon today. Yeah. Trimming numbers on aws because they say microsoft and google are finally making some inroads. Yeah, they could have added oracle because oracle and Larry Ellison took direct aim at amazon. Ellison powerful competitor. I dont know, if youre going to send down amazon, theres so much business. Amazon is trying to handle its business. I know from two companies that do the distribution and do the warehousing for amazon. Dont cry for me, amazon. Amazon is going to be fine. I would buy amazon if it gets too hard. You would buy amazon . Because i dont think Amazon Web Services is nearly as threatened as that note indicates. Also you point out the pie is growing quickly. Oh, my, yes. Even if your share is not growing quite as fast as it was, youre still going to have quite a growth rate. Look, amazon is asking for more warehouses to be built in inner cities so it can do last touch. I mean, they just look, its true that google got 400 million a year from our friends snap. How is doing. Snap is not doing particularly well at least in the last week. Crackle pop . Below 20 for the First Time Since the ipo. I would say they better get their business they got to Grow Business because they owe 400 million to google whether they do Good Business or not. What are you looking at . Interesting how they grouped, twitter, alibaba, snap, all of which went public in the last few years and then oracle and they need two winners and two losers. Jim, you just retweeted benioff, at the white house today . Yes, he is. Flew in from last night and wants to talk about, i think, look, what he wants to talk about is job growth. But i think that gender equality, this is good. I told him the message he should do is something hes been harping on and spoke at davos, which is what do we do with workers after theyre displaced by Brilliant Technology . And we dont want to have two societies. And i thought thats my hes asking for anyone tell him what he wants, be open minded. I went to a speech where benioff said hes open minded and open heart toward the president. Make sure he knows how to spell angelas name when you talk to him. Nobodys perfect. Kel. You know what joey brown says, some like it hot. Yes, last line. Often number one on the funniest movies of all time. Definitely, right . Billy wilder, right . Benioff has not met right, he hasnt been in those tech summits. No, but hes been id say probably the most one of the most open minded people affiliated with president obama. Look, everyone is open minded because if he wants to create jobs, everybody wants to create jobs. Its kind of a unifying concept that seems to transcend some of the other issues. It will be interesting to see what happens because this is like i said a fireworks meeting. This is not your typical meeting. I just dont think this is the same meeting where everybodys just theres a couple different wrinkles. Theres some reports that she spoke to chinese president. Shes going to the kremlin on may 1st. Thats important. Yep. Now f we could get if they could get the sanctions lifted some degree in russia back, russias already having a pretty good year, but it would matter. Remember, the High Water Mark for european trade was when you were in sochi, right . That was the High Water Mark. Yes, few years now. Its time to come back. I think merkel may know that. A lot of people want to do what trump wants to do because they dont want to be on his bad side. Yesterday talk dutch elections and said High Water Mark for nationalism. I didnt know if you meant that seriously or not. No, i think high watermark for lets say religious nationalist, antireligious nationalist. I think that economic nationalism is very different than religious nationalism. I think they are very different things. Yeah. Interestingly, you know, Neil Kashkari is out with a medium post on why he dissented. And our Steve Liesmans going to bring us up to speed on that. Good morning, steve. Yeah, good morning, carl. Neil kashkari explaining his dissent in an essay he just released and says the reason why he did not vote with the committee on the quarterpoint increase is because inflation is still below target and that the fed is still coming up short on its 2 inflation goal. He wants the target to be a target, not a ceiling. He says he still sees slack that remains in the labor market. The labor market continues to grow so that means theres more slack there. He also says challenges remain on minority unemployment. He prefers rather than hiking that the feds next move should be to publish a detailed Balance Sheet Reduction Plan before the fed does further rate hikes. Finally, he says im not following the markets here, Financial Markets are, quote, notoriously bad at forecasting political outcomes so be wary of what the market is saying. Hes not incorporating fiscal plans into his outlook yet. He does point out that unlikely a Market Correction would trigger a financial crisis, carl. Steve, he says hes not going to do an update after every meeting, but its kind of interesting to have a fed president go on medium to explain his position. Yeah, this is sort of normal. Its been a tradition rk actually, carl, after a president dissents, especially the first time they do come out and feel the need to explain their dissent. Look, theyre worth following. Sometimes dissents can lead the way. Sometimes they can lead you astray. Its been my experience covering these things over time its always worth thinking about the reasons for the dissent to see if it gives you any hint on where policy is going and whether he has a chance of bringing others onboard with his view. Right now i would say majority is solidly on the other side of Neil Kashkari, but hes a smart man, thoughtful guy, former markets guy. Worth following his opinion. We remember him well. Thank you, steve liesman. Were following amgen as well. For that were turning to meg tirrell this morning. Hi, carl. Amgen swinging down on repatha just presented this morning amgen down 6. 5 on these results. These were important because investors wanted to see just how much their cholesterol drug could lower the risk of heart attacks and strokes. This was a 27,000 patient study and it showed on the primary goal of the study they reduced risk of heart attack, stroke and death of 15 . On a secondary study taking out reducing the risk of death they met 20 reduction of risk for heart attacks and strokes. That falling far short of investors expectations for what it will take for insurers to start reimbursing these drug. Theyre already on the market but only bringing in about 140 million a year for amgens repatha, also regeneron getting hit. Theyre competing with a similar drug in the same space. Esperion down 27 on the results and the Medicine Company same target, not same target but in similar space. So this hitting cholesterol stocks hard. Amgen down 6. 5 as folks worry these are not enough though reduce the risk of heart attack to boost insurance reimbursement for these drugs, carl. An interesting day in your space, meg. Thank you for that. Dows up 12, mcdonalds leading as Credit Suisse quarter is going well on comps. Easterbrook, one trick pony, one trick pony, the guy is bringing in technology thats going to change the speed of how long it takes and be able to look, im telling you, hes got the franchise buyin. Hes doing such a remarkable job. The other day someone saying youre like his buddy. No, i happen to like egg mcmuffins. Theyre 330 calories, david. Have you ever been to a mcdomds . Yes. Not in a long time. Have you actually eaten there . Well, yeah, back when i was a young boy we used to go to the one in forest hills. No, im talking last year. Right there austin street. Youve been to one last year . No. You havent seen the revolution occurring. No. The revolution will be televised. I went to get a shake not that long ago and they changed the whole vanilla shake thing. They have a st. Patricks day shake. They have a green shake. The wife said we got to have the shake. Shamrock shake. The wife said we have to have the shake. I said we cant, im trying to lose weight. Everything in moderation. Lets get to bob pisani see whats moving on the floor. Hey, bob. Good morning, carl. Nice volume at the bottom. A lot of volume at the open and a lot of volume at the close on the rebalancing. Right now lets take a look. We have what weve seen for a while, Tech Leadership and leadership in health care, but again this continuation of what i call rotation. Stuff thats beaten up last few weeks has done better this week. So nothing ever really falls apart anymore. Energy came as close as you possibly could get. That was down about 10 at the maximum, but so far this week golds up 2 , that had gotten beaten up. Russell 2000, small cap index, worries about that earlier, thats up 1. 3 . Reits are up, Energy Stocks which were the worst performers for a long time, theyre up. So this rotation helps keep the market going here basically, so s p 500 up fractionally as some of the laggards are up. There are a couple laggards out there, but again, not to any great extent. So banks, kbe, down fractionally for the week, its been drifting around for the last month. We all know that yields have been backing up here. But again, with the kbe down thats the major bank etf down a half a percent, i wouldnt call that theres your drift around, i wouldnt call that any serious move to the downside. The other move were watching x transports here. Its been a rough week for the airlines, many down 7 , 8 , 9 , not Just Airlines but some of the railroads. Norfolk southern has had a weak time of it. But i wouldnt say its the start of any decline, just the weakest out there and stands out because theres very few signs of real weakness out there. Meantime waiting for mulesoft here. We dont have any indications on it but original talk was 12 to 14. They upped to 14 to 16 and priced at 17. So heres a tech ipo thats doing very well. And they use the technology to stitch together different apps for companies to make integration better, integration being a big theme overall. So tech ipos are starting to materialize finally. You know how many we had in january and february . Zero. Zero tech ipos in january and february. So far in march weve had three. We had snap, presidio and now mulesoft. Next week a Data Analytics firm going public, so that will be four in the month of march. Again, my theme finally starting to open up, theres going to be a week in april, guys, were going to see seven, eight, nine ipos coming in a single week. Thats my story, im sticking to it. One that were looking for today is a big oil services firm, propetrol holding, story here, they priced it at 14. Price talk was 16 to 19. So there you go the difficulty of getting an Oil Service Firm out in this kind of environment where oil is not going anywhere. There are several oil firms that are out there, fracking companies, Oil Service Companies waiting to go public and will be watching this one very carefully. As for canada goose, i would call that a very mixed open yesterday. Its true 12. 78, opens at 18 certainly looks like a success. But there were 2. 3 million shares, carl, that traded at 18 and immediately went down towards 16. There were a lot of people who bought at that open who were losers on the day overall. Even though the initial price was higher, the final trading price was higher than initial price, all of those millions of retail owners who bought at the open, they were under water by the end of the day. I call that a very mixed open for canada goose. Right now the dow up 6. 5. Waiting indications for mulesoft. Thank you very much. Stick with it. Dont sell canada goose. We recommended it hard last night on mad money. I think theres many good things happening. The apparel stock of choice for growth managers. Hold it. Youve been kind of focused on have been these ipos, even retail. Hard to get through right now. Highest quality material is getting through this chut including mulesoft and canada goose. Later on when bob says, seven, eight, then well be saying stay away but these are High Quality Companies getting through the chute right now. Dont dismiss mulesoft. Very strong. Lets get to eamon javers who will raise the curtain not just bilateral, eamon, with merkel and the president but some of these german ceos as well. Thats right, carl. The honor guard from the u. S. Military is here in the krdrivey at the white house getting in position to honor Angela Merkel as she comes to visit with donald trump today. Were getting a list now some of the german ceos participating in a roundtable discussion here at the white house, theyre going to be talking about trade and also apprenticeship and job training for blue collar workers. The ceos that we have on the list today haralbmw, siemens, and Abigail Marie davis of schaeffler will be here as well. We have andrew liveris, ginny rimty and marc benioff, and i can tell you, guys, the last time they did a ceo roundtable here at the white house, one of the big topics of conversation was the way in which the germans do vocational technical education. That was something that a number of the ceos on the u. S. Side raised here at the white house. They said thats a model for American Companies as they consider how to boost u. S. Employment, u. S. Jobs. Thats something that this white house has taken to heart. Theyre going to be discussing it today and obviously a couple examples of successful apprenticeship programs will be here at the white house as well, carl. Eamon, we look forward to hearing more about that this morning and this afternoon before the president goes to palm beach for the weekend. Eamon javers, well be coming back to you. Lets check on the bond pits as well. Good morning once again, rick. Good morning, carl. There was a feeling as i talked to traders on the floor that rates have come down a lot and we rallied a lot. We did rally and rates did come down, i guess a lot we could put in air quotes. Oneweek of twos down one on the day, down three on the week. Oneweek of tens down three on the day, down six on the week. So down half a dozen basis points on the week. You can really see it show up in the following chart. This is a oneweek of tens minus twos. So youve definitely seen it flatten a bit as it hovers at 1. 20ish, but i do caution this chart, you know, you kind of see the high and low of the yield curve, but not the closes. If youre looking on a closing basis as you see down three on twos, down six on tens, not nearly as much as the intraday extremes would dictate. A yeartodate of the hyg, i dont show this often, ive been showing for a couple of weeks, it can be like the dollar index, kind of a bellwether for bigger issues. This may be the level of calmness or however you want to phrase that spectrum of the fixed income market in general. Now its coming back a bit as the price goes up i would think the spreads are going to tighten. And if high yield trades well, of course treasuries are going to trade even better if hi yield doesnt trade well, sometimes treasuries trade better too. Its a weird relationship when you reach for yield and take a lesser credit. Now, oneweek of the dollar index fascinating. So this is pretty easy. Were down over a penny on the week. And since we settle at 102. 20, were currently trading 115. I dont need to be a genius in math to know thats down close to 2 for the year. And that is really a huge story. Is mario draghi going to raise rates while theyre still doing quantitative easing even though its going to be less quantitative easing . I dont know. But theres something strange going on with this market. Look at a november 1st euro versus the dollar. Our central bank has actually tightened three times. The euro is toying with 108. As a matter of fact the opposite problem is the yield curve. If you were to look at about 40 days of intraday trading for the euro, youll find in early february it was popping through 108. But as you see on that chart it didnt settle above 1. 08. What do you think the big closing resistance is going to be . You got it. 1. 08. Back to you. Thank you very much. When we come back well hear more from wells fargo Ceo Tim Sloan. This is him talking to wilfred frost about deregulation. We made some mistakes. We made some significant mistakes. Weve owned up to them. And were making a lot of progress. Uh, yeah. Its over, larry. What is . The whole wheelie thing. What do you mean . I just got this baby to get around the plant floor. Right, but now Ge Technology monitors every machine. Yeah, it brings massive amounts of information right to you. So you dont need that. Well, it makes me look young and uh. With it. Time to move on. Oh ill move on. Right into the future. Backwards. Youre going backwards. The futures all around us not just on your little tablet, my friend. upstate new york is a good place to pursue your dreams. At vicarious visions, i get to be creative, work with awesome people, and we get to make great games. what i like about the area, feels like Everybody Knows each other. And i can go to my local coffee shop and they know who i am. Its really cool. New york state is filled with bright minds like lisas. To find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin. Busy day at the white house. As you see the honor guard outside this morning. Were going to have a bilateral with german chancellor merkel, a round table with merkel and some german ceos later on this afternoon a joint News Conference. Were going to bring all of that to you today. Dows up 20. Well get stop trading with jim in a moment. Time for jim and stop trading. Theres incredibly Important Note that has come out this morning from wells fargo. And its driving starbucks. Starbucks has been very underperforming stock, why . People feel theyre in trouble in mobile pay because of the inability to have throughput. This note says dont worry, second half is going to reaccelerate. And they are basically saying, look, this is going to be strong new store Growth Trends and perhaps they can solve some of this mobile pay, but its getting the stock going. My travel trust owns it. Its been a dog of late, but weve own it forever. And i still believe in kevin johnson, whos now going to be running the whole show. And Howard Schultz to be able to fix and Adam Brockman to be able to fix mobile pay. And they know how i feel about it. They know im tired of waiting. Yes, im anyway, i think it might get better there. We know coffee chains are outpacing the industry overall, right . Right. Thats why mcdonalds is expanding. Coffee is good. I just want it fast. Thats all. Whats on mad tonight . Were focused on deregulation. And we brought in the expert rusty braziel and he knows what it means for the oil patch most jobs will be created and its mostly through pipeline when you discover how much buying u. S. Steel for pipeline, not necessarily u. S. Steel, this time new corp, were putting it together because this is where jobs are being created and rusty knows all about it. Solid week. Yeah. Mu mulesoft. Youre off to get scoops on deutschete and craft heinz. You go. Whoever comes second has to, quote, sources the other one . Yes. Im not going to do one of those european news things like they did for msci. They make it up. Im doing the real thing. I know you are. I am after your beat. But had you worn a green tie i might have thought otherwise. Thats all right. Youre not going to get there. When we come back well count down to the president s meeting with the german chancellor. Also ahead, deregulation nation from stocks to the economy, more on what the president s push to scale back on regs could mean for your money. Vaous shouting igh ho its off to work we go woman on the gulf coast, new exnmobil pjects are expected to create over 45,000 jobs. And each job created by the energy indury supports two others in the community. Algether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energyivesere. All while reducing americas emissions. Our first name has alws en american. At at t, we employ more than 200,000 people with goodpaying jobs. Internet, and entertainment. Budiness throughobile, at t its morinto americaseconoc company. Bringing americans more choices, more eedo and tertainment everywhe. No company is more invested in americas future than at t. Good friday morning. Welcome to squawk on the street. Happy st. Patricks day. Im Carl Quintanilla with sara eisen, david faber at the New York Stock Exchange. Pretty mild start to the market day, dows up about 16. Not too far from 21k once again. But obviously a busy day, quadruple witching and the german chancellor to the white house. Lets get to Rick Santelli with a lot more macro data. Rick. Absolutely. Well start with our leading indicator read, thats for february, thats up 0. 6 leading economic indicators, a bit stronger than expected and follows an unrevised 0. 6. To the meat of the matter. Lets look university of michigan, this is a march preliminary read. Well drop this off in about two and a half weeks, that read is 97. 6. Now, we were expected a number around about 97. This is a strong number and follows an unrevised 96. 3. And before 96. 3 for january we had 98. 5, which was the highest read since january of 2004. So this is a strong read really on both of these. And confidence indices have been running on the hot side. I dont see much Market Movement on this, but the dollar index once again has shifted negative. And it shifted actually right before these numbers came out. Sara, back to you. Maybe the market is getting used to those better confidence reads, rick, thank you. Rick santelli in chicago. Cnbc today highlighting a pillar of President Trumps economic agenda, that would be deregulation, what impact it will have on the stock market and who stands to benefit. Our Kayla Tausche has the story for us this morning. Kayla. Good morning, sara. Well, much of President Trumps input on regulation has come directly from ceos, so its not surprising the resulting actions have been favorable to business. The president s executive orders have done everything from setting up a Regulatory Reform task force to find inervegtive rules to disincentivizing the creation of new rules and freezing or rolling back regulations put in place under president obama. On that last note, congress is doing that using a little known and rarely used authority that until now lets them reverse regulations past since roughly june, about a dozen rules so far relating to labor law reporting and disclosing Energy Payments on federal lands have been rolled back. So how much does it cost . Well, senator john thune who chairs the Senate Republican conference estimates whats been done in both branches so far has saved 50 billion in longterm Compliance Costs and 46 million hours of paperwork. Now, each rule alone might seem niche but together they have a real impact, a slow build wont be reversed overnight. Yes, it has definitely grown over the last eight years, but this has been piled on for 20, 30 years. And its a 2. 3 total cumulative impact of 2. 3 trillion. Thats just one industry. Some of the most meaningful deregulation in the meantime will come from the agency level. They have the authority to change rules within their purview. We got one example today, the fed raising threshold of bank mergers that get heavy scrutiny to 100 billion from the previous 25 billion. So now analysts say look for banks with 10 billion to 50 billion in assets to merge tie up otherwise under the previous regime wouldnt dare. M t bank announced acquisition in 2012 of hudson city but took three years for the fed to give that deal a green light, even though it is above the threshold now, take a look what the stock has done since the election. Its up about 43 . And the Regional Bank index is doing much the same because of those large expectations, guys. I know republicans, kayla, seem to universally agree at least for the moment that deregulation is a helpful thing for this economy, it will unleash jobs and create all sorts of activity, but especially on banks i just wonder when the democrats are going to start kicking and screaming about this. And not just democrats, opponents, the financial crisis wasnt that long ago, which was largely a result of a sector being too deregulated. So theres a limit to this, isnt there . Right. Some of the expectation is that what congressman Jeb Hensarling will be putting forward, what hes calling the financial choice act this summer, will become a highly partisan fight. Which is why its so hard to predict exactly what new Bank Regulation will look like because there is going to be a very tough fight put up by the democrats who will argue that it was the banks that caused the financial crisis and therefore these regulations are needed to stem another one, at least stem the issues that we saw in the last crisis from cropping up their heads again. Well see exactly what gets done, but theres some big pieces of legislation that are coming down the pike, guys. All right, kayla, thank you. Kayla tausche in washington, d. C. Speaking of deregulation, by the way, wells fargo Ceo Tim Sloan sat down with our own wilfred frost for a cnbc exclusive. Wilfred is here onset to share highlights. We of course discussed the topic of deregulation with the ceo of the nations second biggest bank. Capital rules of course are very important for banks. I asked him whether in an ideal world his capital level would be lower than it is now. It would be a little bit lower than it is right now. Our minimum Capital Requirements by regulation are 9 . We think its prudent to operate with a bit of a cushion, so that brings us up to 10 . We ended the year at about 10. 7, 8, 9, something in that range. So over time wed like to get down to that 10 level. We dont need to do it day one, but over time we want to return more of our excess capital to our shareholders. I also asked about deregulation of the Financial Sector more broadly. This is what hes looking for. The important thing is to look at whats good for the economy, whats good for the economy is Economic Growth and more job creation. Thats the focus. If that happens, thats good for banks, thats good for wells fargo, thats good for everybody. Now, one area of regulation that wells fargo has failed on in recent years is the living will test. They passed three years ago then failed the last two years. I asked what would happen if they failed for a third time in a row. My guess if we fail it three times in a row i probably wont be sitting here for the next interview, so i understand that. We were very disappointed that we failed. We let our shareholders down. We let our regulators down. That is not going to happen. Our team has been working incredibly hard to make sure that were responding to the concerns about legal entities and shared services that we heard from the fdic and the fed. And im confident in our team and im confident in the resubmission that well be sending in later this month. Aside from the topic of deregulation we also discussed the sales practice scandal. We made some mistakes. We made some significant mistakes. Weve owned up to them. And were making a lot of progress. We apologize to all of our stake holders for letting them down. We are making changes to make it right by our customers, by our team members, fixing what was broken and building a better bank. Much more on that particular topic later in the day including his own defense of his pay increase last year despite that scandal. Also, some clear comments on loan growth and what the fed Interest Rate hike means for wells fargo. I liked his answer on living wills. He at least is straightforward about the fact its all on him. He was cfo, so its not as though he hasnt been involved in previous strategy and or dealing with that particular area. When they failed that living will scandal last year, the second year in a row, its a huge shock for the market but came in light of the sales practice scandal, almost lost enough negative focus, made a joke losing his job if that happened. Also in light of trumps first 100 days and said his first 156 days felt like 156 years. Didnt wells fargo, wilfred, didnt get incredibly lucky by the fact President Trump got elected and the pabanks just to off not to mention Interest Rates tick up. Absolutely. Asked him given the reaction since the recovery had there been an overreaction last fall to the sales scandal and said, no, was owning up to those mistakes. In terms of the actual impact on the earnings and the sales that theyre facing, hes also got some more comments on that coming up later in the day. I mean, youre looking at 59, thats 20 above the level where the shares were prescandal. Well, that is is true, but if you look at it relative in terms of market cap to the other banks and the gains theyve had, they still lost a lot of market cap from the scandal. Youre right, Interest Rates picking up is a big thing for the sector and massively outweighs the earnings impact. Warren buffett said to becky quick a couple weeks ago, long term will this have an impact he didnt think so but in the short term huge. But admits later on in the clips weve got they underestimated a fallout from a pr standpoint. I remember you saying a number of times as well. Wilfred, stay with us because we have to talk about this other top story. The president set to meet with german chancellor Angela Merkel today at the white house. Merkel expected to have several german leading ceos of germany to promote germanys trade relationship with the united states. Of course top of mind has to be those comments from President Trumps senior trade advisor a few weeks ago, peter navarro, whos been critical of germanys trade policy while calling their currency valuation exploitative. U. S. Is the top buyer of u. S. German exports and we have a trade deficit, something that President Trump has gone after countries for with germany, its not the biggest, but its the third biggest behind china and japan. What are you watching today . Well, listen, i think the biggest thing chancellor merkel will be coming across to say is are you behind the eu or not . Because thats caused a great about of ire domestically in europe. The fact hes not only not backed the idea of european integration but actively campaigned for the likes of brexit and sort of almost baited europe to suggest that europes going to break down. So i think shes got reason to push back. One thing she could offer for example would be to commit to the nato 2 defense spending. But what i think is perhaps slightly underestimated here is how confident Angela Merkel will be with dealing with a leader that disagrees with her. Shes been in power for a long time. Shes faced this sort of conflict before with vladimir putin, plenty of times over the last five years, and i think this is a different type of meeting than say when Prime Minister may or Prime Minister abe came over. Angela merkels also got an election to fight for coming up soon. Shell have to fly her flag herself because the people back home in germany are watching this. So i think its going to be more conflicting than perhaps people expect. Shes not going to cater to what donald trump wants. Certainly jims point this morning when he said you got maybe the worlds biggest nationalist official talking having a bilateral with the worlds biggest globalist. But does the result in the netherlands this week give her a little more ammo that perhaps the disintegration of the union is not happening as quickly as some thought . Probably gives her more confidence, but i dont think that lessens her conviction that Donald Trumps rhetoric against the eu project is something she wants to stand up against. I think the nato point is clear that donald trump has a lot of ammunition there, saras point on trade clearly a lot of ammunition, but shes not one to muddy her view or soften her rhetoric. With an election coming up, i think shes going to come in with a strong though she is a smart and experienced world leader, as you mentioned shes been in power 11 years. This is her third u. S. Administration shes dealt with. President clinton, president obama, President Trump. Yes, a more contentious backdrop, but she knows how important the security relationship and that trade relationship is. The two global powerhouses of the western hemisphere. Absolutely right. And i dont think shes one thats going to air the laundry publicly. I dont think this will come out in the press conference. She speaks perfect english. She never does anything in english. She keeps it clean, sticks to script. Shell challenge him privately. Im fascinated to see what type of stepdown President Trump gives if any. Coming into all of these meetings, china, japan, uk, theres been contentious topics going in and come out with some kind of bone to give to his opposition. Yeah. A lot of people say a lot depends on who gets called on in the joint News Conference this afternoon. No, no, its will it be a hug or a handshake . Exactly right. That gets a lot of focus. Maybe hell leave the meeting today in a bmw or Something Like that. Well have to see. Learn more in a few hours. Wilf, thanks. Pleasure. When we come back talk to former health and Human Services secretary kathleen sebelius. Dows up 14. Stay with us. That schwab billbo. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. The dinosaurs extinction. Got you outnumbered. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Something for everyone is awesome. Find your awesome with the Xfinity Stream app. More to stream to every screen. With the new Gop Health Care bill in the works, changes are on the horizon, but the industrial still divided on the impact of the proposed reforms. Joining us on the phone is kathleen sebelius, former health and Human Services secretary under president obama. Madame secretary, good to have you back. Good morning. Good morning, carl. How are you . Im good. Im trying to keep pace with everyones opinion on this matter. I see Susan Collins is out today saying she cant vote for this in its current form. What kind of chances are you giving it right now at least . Well, i think that as i said from the beginning, im not sure what the republican goal is. And they seem to have done a pretty good job of making everybody unhappy. So on one hand there are definitely republicans who feel we need to protect the coverage of people who have gained coverage under the act. Weve got the lowest uninsured numbers ever in the history of this country. And Susan Collins is a great example of somebody who says we dont want to take a step back. On the other hand you have conservatives who say far too much of the original Affordable Care act of obamacare is still left and we need to roll more back. So i dont know how they move. Right now i think the numbers are pretty terrible where you have projected about 14 Million People who immediately lose coverage and then over time an additional 10 Million People lose coverage. And if you go into cbo, what theyre projecting is that a lot of older, lower income americans who wont be medicare eligible yet but will be priced out of the marketplace. And that is a pretty terrifically bad swing to make in this country where Older Americans will take the brunt of this plan, poorer americans will take the brunt of the plan and richer and healthier folk will continue to be fine. So what do you think are easy adjustments that would matter, that would be of scale . Some have suggested if you did away with the penalty for interrupting continuous coverage could that reach across the aisle . I see peggy nunen out today saying the president has to make this more of a bipartisan effort. Is there something you would be happy with . Well, i think that the certainly the level of subsidies, the amount of Resources Available to people to help them buy their own Health Insurance need to go up. And also needs to have some kind of income variation. Right now it doesnt matter if you make 25,000 a year or 70,000 a year, you get the same amount of subsidy depending on age. The other thing that theyve done is i think change the age ban so that Insurance Companies in the future could charge Older Americans five times what they can charge other americans. Those two issues getting changed, putting some subsidy money back in, looking at that age issue and what it does to Older Americans in terms of their premiums, the estimation is it will add at least 3,500 to everybodys costs. So for me im about covering people, but i dont think thats the main goal of the republican plan. I think its to save the federal government money. And if you do that, you then shift costs to individuals, you shift costs to states and local governments and thats exactly what this plan has done. I mean, theyve argued a number of times, madame secretary, that they dont want to pull the rug out from anyone and they want to give consumers more choices. I know, you know, youre not a stranger to defending obamacare, this was his legacy legislation and you were there to implement it. But can you at least sympathize with the main republican argument that its too expensive, premiums increasing double digits, it doesnt give enough Consumer Choices and its very complex . Well, again, i certainly am sympathetic to those arguments. They dont necessarily bear out in fact. Only 3 , 3 of the people in the marketplace paid rate increases last year. Yes, premiums went up, Insurance Companies adjusted prices, which is not unusual in a brand new market. But the way the subsidies were organized, consumers did not pay those increases. So while the increases are cited, that is not what consumers saw. Choice is very important. And restoring the kind of risk pool putting in place a public option, allowing an Additional Company to have competition, that would be terrific. But that means that stable marketplace, not doing what the republicans are doing which is kind of changing the rules mid game. Thats bound to drive companies out of the marketplace. And what everybody wants, whether theyre in obamacare or employeebased insurance, they want their out of pocket costs to go down, not up. They want to make sure that they have coverage and dont pay out of pocket. And nothing in this plan addresses that. One last question just on process and the calendar. There are 42 weeks left in the year. Congress is scheduled to be in recess for 16 of those 42. So at what point do you think the administration has to cut bait and move onto Something Else . Well, i think it depends what we saw in the early days of the Obama Administration is that the president was committed to using the moment in time to pass a major health reform. There were lots of people who argued he spent too much time doing it, he spent too much Political Capital doing it, but it impacted positively millions and millions of people. I think this is a decision the president is going to have to make along the way. He cannot walk away from this bill. He cant blame anybody else. The republicans own all the real estate, they control the house, senate and presidency. They have promised now for seven years that this was their number one priority. So as they go forward and how much time and how much capital is spent is really their decision. And i would just point out, madame secretary, that obamacare was signed into law march 23, 2010, so it actually took about a year into the from where we are right now in that term. You bet. 15 months in the president had a bill on his desk. And in some ways that was record time, in other ways people felt that was way too much time. So, again, thats a decision that really starts with the president , how much of his Political Capital, how much of his time in office does he want to dedicate to this. And at the end of the day what the result will be in terms of, you know, who gets help and who gets hurt. Kathleen sebelius on the ahca, appreciate your time. Thanks so much. Talk to you soon. Great to visit with you. Byebye. Happy st. Patricks day. Same to you. As we were talking we have propetrol at the exchange opening, up about 6 . Mulesoft indicated 22 to 24. This came in priced below the range of 16 through 19, but you are getting a 6 pop here at least at the open. It priced at 14 a share. Its an Oil Services Company that helps frackers mainly in the permian basin. Before that well talk a bit about deregulation. The president of course stressing deregulation across all sectors, most notably pharmaceuticals where he hopes to help Drug Companies get their products to market faster, though he also wants those drug prices down. Meg tirrell has a lot more on the entire subject. Meg. Hey, david, you hit the nail on the head there this dynamic what trump has talked about in the drug industry. He always talks about getting prices down but at the same time he usually follows up and says he wants to get products through the fda faster. His designated person for getting that done is fda commissioner nominee scott gottlieb, folks were pretty happy when he was nominated at least in the industry because he has talked about bringing a lot of the regulations streamlining through the fda. Where is that lead going to focus . There was a bill approved last year that already has a lot of things included in it focusing on speeding drugs to market. So we could see impacts on rare disease drugs, also complex generics, things like the epipen trying to make sure there arent situations like that where competitors can get to market and help bring prices down. And also in mobile health technology. Gottlieb has written quite a bit about this trying to help Companies Like apple in the space where regulations have been a bit murky. Where could we see the stock impact . Companies like vertex, sarepta and alexion, could benefit from the fda trying to streamline drugs through the process. Complex generics, biggest generics, mylan, teva and novartis. As were talking about drugs and speeding things through the fda, we have to talk about the other big drug story this morning and thats amgens cholesterol drug results in a big study there driving amgens stock down more than 6 . This hitting makers of cholesterol drugs across the board including regeneron which has a direct competitor and locked in a patent battle right now. Esperion and Medicines Company as well. Back to jou. You have to wonder whether well see deregulation or more regulation for those drug makers on prices, meg, thank you. As we head to break another look at propetrol just opening for trading moments ago here on the New York Stock Exchange floor. Were going to talk to the ceo. The stock is up 6 . Much more squawk on the street straight ahead. upstate new york is a good place to pursue your dreams. At vicarious visions, i get to be creative, work with awesome people, and we get to make great games. what i like about the area, feels like Everybody Knows each other. And i can go to my local coffee shop and they know who i am. Its really cool. New york state is filled with bright minds like lisas. To find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin. Music plays throughout why pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. President s meeting with the Republican Study Committee on health care. Lets listen in. Say good things about it. Okay. Fake media. And there is no good news about obamacare. Obamacares dead. Unless we gave it massive subsidies, its not going to be here. When they say there will be more people on the plan, there arent going to be anybody on the plan. People dont know what to do. Its a disaster. Obamacares dead. Nothing to do with these people, nothing to do with me. Its on respirator. And its just about ready to implode. Now, we could wait for six months or a year and let it happen. Its not the right thing to do for the people. This is a great plan. This is going to be fantastic. Youre going to have bidding at the one level by Insurance Companies. And remember this, remember this, those lines are going to come out, youre going to have bidding by Insurance Companies like youve never seen before. Plans are going to come out like nobodys ever seen before. Plans nobodys even thought of now are going to be devised by Insurance Companies to take care of people. And were going to take care of people at all levels. So i just want to let the world know i am 100 in favor. These folks, and they are tough, and they love their constituents, and they love this country, these folks were nos, mostly nos. Thats correct. Yesterday. And now every single one is a yes. And i just want to thank you. Were going to have a Health Care Plan thats going to be second to none. Its going to be great. And the people will see that. By the way, it will take a little while because before it all kicks in, and welds together, takes a little while. With obamacare it got worse and worse. Premiums went up 116 , they went up 58 . The governor of minnesota said the Affordable Care act, obamacare, is no longer affordable. Thats what he said. The Affordable Care act is no longer affordable. And hes a guy that hes a good democrat, he wanted obamacare. He said its no longer affordable. Obamacare is not an alternative. Its not there. Its dead. Dead. So i just want to say thank you very much. I really appreciate it. 100 of the nos are yeses. Some of them were strong noes. We had a couple that were mixed. But i just want to thank you folks. And were going to have a great, great Health Care Plan. Thank you very much. Thank you, mr. President. All right. Thats the oval. And a reflection of how much time and effort the president is now spending on this top legislative priority. As you heard meeting with gop lawmakers saying that every one of them was against the bill prior, now for the bill. As he has taken this on whether its talking to ryan on a daily basis, going to nashville, having events like this. We havent heard him call it trumpcare yet, but yes, he is coming out in favor very much, very publicly trying to play down the fault lines that were exposed, i think, in the Republican Party since this legislation was unveiled just last week . Yes. It hasnt really been that long. And of course saying many of the things weve heard from them before that obamacare was going to collapse from its own weight, given the lack of competition in the state market, certainly in some states at least where premiums have gone up and where you havent had enough people who are not sick, younger people in particular, signing up to sort of generate a risk pool that insurers want to take on. Bidding like youve never seen before, he says, will take place amongst insurers. And plans like youve never seen before. Underscoring the fact that this is going to be more competitive and there are going to be more choices for consumers. And we have yet to see really the Market Impact on that. Also, you kind of got the argument from how theyre going to combat this idea that the cbo says that more people will be uninsured versus obamacare. He said obamacares going to be dead. People wont even be on it because its so expensive and its so limiting. So thats clearly the line of thinking of how theyre going to continue to bill this. The continued line theyve been using for some time, perhaps working with some of those undecided votes. Well, lets move on as well. Optimism on proposed deregulation continues to buoy the market, but veteran investor morris mark not buying into it until he sees implementation of reforms. Hes joining us now at post nine from mark asset management, of course. Morris, nice to have you as always. Nice to see you, david. You and i always talk media and telecom, one of your areas of expertise 20 years ago or more at this point. Its true. I was talking earlier on the show one of the key beneficiaries it would seem of a light touch fcc, do you see that as happening . Does that change your view at all when it comes to that sector you know well . Well, its sort of work in the direction that we thought it would. We try not to predict, but we want to be prepared. And i guess we were prepared for somebody who i think wants to encourage more investment in more transmission. He wants to encourage it with existing broadband. He wants to encourage it with 5g and we think were well positioned for that. How are you positioned then when we talk about Net Neutrality going away at least titled to regulation or broadband . Or privacy regulations going away to a certain extent . Or a lot of things just simply being lifted off many of the incumbents in these markets. Do you own them . I think we do. I think we own the right ones. Weve been invested in either charter or Liberty Broadband for over four years. Now its Liberty Broadband because wed rather be john mallones partner than his limited partner. We think that the opportunity for the Big Broadband Cable Companies now is increasing because, one, theyve got a great business. Two, the demand for broadband is increasing. Three, the ability to tie that to wifi makes it raeally usefu when everybodys Walking Around with mobile devices. And four, there is going to be 5g. Its not dpoigoing to happen to maybe not even tomorrow, but its happening. And theyre in a fulcrum position, anybody who wants to provide 5g Services Needs backhaul. They need the broadband capacity these companies have. And these companies can set up their own 5g now with the nvo licenses they have from verizon. So we think its in a great spos. Right. Although that does also sometimes bring talk of potential consolidation between the broadband providers, if we want to call them that such as our Parent Company comcast and some of the wireless providers. I think thats really possible now because as you say when you have a Regulatory Framework that wants to encourage investment, wants to encourage more capacity and better service, its not, i think, going to be blinded by the fact that you have a traditional Wireless Company getting to some sort of strategic relationship with a traditional broadband company. Theyre all involved in communications. And the whole idea is how do you get Better Communications for less money . I see you had some thoughts on tax reform. I wonder how youre balancing waiting for clarity on the policy versus waiting too long and having these names all run up in advance . Well, i think number one is to own a great business. Number two, to realize that some things already happening as we talked about in terms of the fcc, we know that everybody thats being appointed wants to operate government with a lighter touch. So thats going to help a lot of businesses. But i think there are some companies that are operating well now that will do better when we have tax reform. Look at apple with 250 billion of frozen capital. Thats not doing anybody any good. And i think we want to encourage that money being brought back here. Googles got 70 billion or 80 billion. I mean, were talking everett dirksons old line, a billion here, a billion there are. Starting to add up. What will you do with it . Will it be returned to you for stock repurchases or just buy stuff . I think a penny for what they should do, but i think your friend larry kudlow has put it, shareholders arent a bunch of wealthy people, shareholders are institutions trying to protect Pension Funds. Public Pension Funds that are underfunded. If they get money back, theyre going to be stronger. And theyll figure out what to do with it. But i think a lot of the companies will use it strategically. I think apple should. You do . One last thing. Are you prepped for policy disappointment . Thats why you want to own great names. As long as the prices are attractive. You do know we have dereg, you do know the economys Getting Better and you do know that inflation is starting to inch up. So you want to own businesses that can do well now as long as the prices are right and that are really going to do much better when the world gets better. Always good advice, morris, thank you. Youre welcome. Morris mark. Lets get to sue herera get a news update here. Hey, sue. Good morning, carl. Good morning everyone. Heres whats happening at this hour. Secretary of state Rex Tillerson visiting the Demilitarized Zone that separates north and south korea. He posed for photos, spoke with soldiers and later he held a joint News Conference with his south korean counterpart with a warning to north korea. Let me be very clear, the policy of strategic patience has ended. Were exploring a new range of diplomatic, security and economic measures. All options are on the table. A house in maryland suburb of washington, d. C. Was leveled by an explosion heard for miles around early this morning. The blast shattered windows, caused other damage to several neighbors homes. Occupants of the home have not yet been accounted for. And the cause of the blast is under investigation. And google and levis have created a smart jean jacket that lets you control your phone with your sleeve. The jacket uses technology thats been under development by google since 2015. It will retail for about 350. It should hit stores this fall. I dont know if you want to do that while youre on a bike, but nonetheless there you have it. Thats the news update this hour, sara, back downtown to you. Yeah, usually you dont bike in denim either. Yeah, exactly. Who knew . Who knew . Maybe it will be useful to some people. Sue, thank you. Youre welcome. Shares of propetrol Holding Corporation going public today here at the nyse. Just opening moments ago for trading. The stock is up 6. 4 . And joining us here at post nine, dale redman, the ceo and founder of propetrol. Good morning. Good morning, sara. Congratulations. So the stock actually priced a little bit below the range but did open a little higher. Everybody was watching this to see whether the oil sector was back. Why now . Well, i think number one we were motivated to be on the exchange for access to capital, to help our customers grow, and it was also driven by the opportunity that it aligns itself with our Employee Base. And when youre aligned with your Employee Base and your customer base, you can give them every opportunity to succeed. And this platform allows us to do that. So your primary business is fracking services, right in the permian basin, mainly, which is sort of texas, new mexico. Yes. How much has the region seen as prices come back from the 20s all the way to the 50s . Obviously you guys have seen the shale revolution thats gone on. Through this downturn its established itself somewhat inelastic to whats going on in oil prices. So if youre going to be in a cyclical business, you better be positioned in the low cost basin. And thats what weve done. And well continue to do with this offering. Yeah, i mean, permian is the lowest cost. And certainly the most productive, but it hasnt meant that it hasnt put pressure on you in terms of the services you provide. And i would note, i mean, your revenues decline from call it 570 million in 15 to 437 million in 16 and your Gross Margins also fell. Sure. Even though you managed to go public. Not bad. But do you turn that around . And when . Well, i think you have to do it simultaneous with the economics of what your customers are faced with. And weve done a really nice job through the companys history to align ourself with customers that look at this as a long term marathon race, so to speak. And take out some of those bumps. Its a real challenge. And its been a real challenge across the energy space over the last two years. And you can only be waterboarded so long before you come up for air. And its very encouraging whats going on in the business community, looking at things globally with oil prices. I think a recovery is in order, and we wanted to set the company up for that recovery. Obviously has huge implications on the labor market. Yes. In your area of the country, up north. Yes. Are there going to be enough workers if production continues to ramp . We think so. And were in a part of the world you guys know where we are and you better know the makeup of that Employee Base. The Hispanic Community is really helped build our company and grow our company. It will continue to be a big part of the backbone of the Employee Base in that part of the region. And you empower it. You embrace that. And its a beautiful thing to watch every day. And thats a large part of why we think well be able to attract, retain and motivate the workforce. Well, i mean, you must be watching President Trump very closely, not just on that front with immigration but he wants to deregulate the energy industry. Deregulation is a huge theme for us. What are you expecting in terms of shale production and actual policies well get from washington . From a macro perspective i think the way things are going i think everybody would agree this administrations going to be pro business. And hes surrounding himself with a cabinet that has made a lot of money and have done things the right way. And to see those guys divest of holdings to help this country is quite humbling as i watch it unfold. And thats not without its consequences and challenges. But i hope everybody will get behind the administration. Hes our president. And he deserves the opportunity to help our country in the manner that he drives it and his cabinet drives it. Yeah, rick perry, his energy secretary, good choice . Well, yes. I think he knows the landscape. He knows the energy markets. And we wish him the best. Obviously hes a texan. So i think thats good for the country. And it will be great. Thank you for joining us to talk about that and the new ipo, propetro trading right here at the big board. Stock up just about 15 a share, dale redman founder and ceo. Nice symbol too. Thank you very much. When we come back, former u. S. Trade rep Michael Froman will join us with what to expect from the president s meeting with Angela Merkel. Well continue to watch mulesoft as that company sees indications 25 to 26. Ceo of that company with us on squawk alley later on this morning as well. Your path to retirement may not always be clear. But at t. Rowe price, we can help guide your retirement savings. So wherever your Retirement Journey takes you, we can help you reach your goals. Call us or your advisor t. Rowe price. Invest with confidence. According to one top strategist, the best stocks to buy right now are the ones that wall street the most dislikes. Hmm . Tom lee makes his case and gives ideas at tradingnation. Cnbc. Com. More squawk on the street coming up. Time now for the san tellte exchange. We need Rick Santelli, here he is. Thanks, david. Ill tell you what, jim bianco, one of my favorite guests. You always have such interesting takes on everything, especially the fed. So, we have a rally that many just cant put 100 confidence behind, okay. Maybe theres a faith aspect to this. Maybe its more about the last administration or the administration that never existed because trump won. Well never know. Uhhuh. But youve given high marks to the way the markets responded considering weve had three fed tightening. Why dont you tell us about it . People ask me the question all the time, what happens when the fed tightens, i always respond, why are they tightening . If the fed is tightening because theres a fear of fear of infla they have to slay the inflation monster, you get a completely different response out of a tightening cycle than if they think real growth is just leaping ahead and theyre trying to return to normal, which is what theyre doing now. After three tightenings, the stock markets up 15 since december of 2015. How does that rank historically . Number one. Its the best return ever for the stock market and into the third tightening that weve ever seen. Why . Because theyre not trying to slay inflation. Theyre trying to return to normal and bring real growth back. Now, if we get inflation, that will change everything. I happen to believe that might be a story for 2018, but its not a story right now. Now, when you were telling me this, and i always love to listen to you, my question was, well, people are questioning, just like the market, whether the growth is going to show up, but you had a very unique answer. As far as the growth showing up, i think what youre going to see happen with the market is its going to show up in various ways. Its showing up in the belief of the soft data rather than the hard data thats going forward, and theres a hope in the market that youre going to see the data show up and that youre going to see the growth come. What about those that are looking to retire, those that are 55 or older . You know, do you have any advice for them . Its always a little dicier for that group to jump into the stock market, to try to feather their retirement nest. I think that if you look at people, their two biggest expenses are their home, and im going to go with different on your second biggest expense is your retirement. And in a lot of cases, both of those are related to Financial Markets. If you live in San Francisco or a major metropolitan area, your home goes up and down with the Financial Markets. Retirement goes up and down with the Financial Markets. Biggest problem we have is that there have been surveys that say 50 of the public has less than 400 in savings. Doesnt matter if the stock markets roaring ahead. They dont have the money. So, youre thinking the fed might be trying to tap things down a bit to keep certain assets from getting out of reach for servicing by a generation that really isnt prepared to retire, is that sort of it . Exactly. And if you want to know why trump is elected and why theres general unease, yes, the stock market could roar ahead, and yes, thats great if you have 500,000 or 1 million in retirement, but if youve got 20,000 in retirement and you did all the right moves and your portfolio goes up 20 , you still cant retire well, were out of time, but we have to say, 78 years northwestern hasnt been in the tournament, and theyre in it. And they won by two points, sara. And jim has one more comment. Its the greatest thing thats happened in chicago sports history since early november. Anyway, congratulations, sara. Jim, thank you. Back to you. Very proud northwestern alum. That was exciting. Go, cats thank you, rick. Well have much more squawk on the street. Stay with us. Dows down about six points. Mcdonalds is in the lead. Well be right back. Ing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. Experience exciting offers on sales event is here. Our most thrilling models ever. Get up to 2,500 customer cash on select 2017 models for these terms. Experience amazing at your lexus dealer. When we come back, former u. S. Trade rep Michael Froman will join us ahead of the president s meeting with german chancellor merkel. Dows gone into the red, down about ten points. Back in a moment. music plays throughout e trades powerful trading tools, give you access to indepth analysis, and a team of experienced traders ready to help if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade ltry align probiotic. N your digestive system . For a nonstop, sweet treat goodness, hold on to your tiara kind of day. Get 24 7 digestive support, with align. The 1 doctor recommended probiotic brand. Now in kids chewables. Welcome back to squawk on the street. Im seema mody. Stocks are trading in a narrow range here on friday with health care among the worstperforming sectors in todays trade. Its really the Biotech Sector that is weighing the most on this unhealth care as amgen shares fall about 6 , one of the biggest movers in the nasdaq biotech index. Disappointing results from amgens latest cholesterollowering drug, so investors are digesting that news. Health care as a whole, though, has been under pressure all week, off about 0. 5 since the gop announced a new bill that would unwind the Affordable Care act. Investors trying to understand how that will impact the bottom line of some of the Biggest Health Care Companies out there. Now lets send it over to carl and the gang for squawk alley, as we look at the dow down just about 6 points, the s p 500 down about 2 and the nasdaq lower by 5. Of course, politics will also be a big talker. We are awaiting President Trump and german chancellor Angela Merkel to speak. And currency, trade, defense likely to be the topics that will be announced. Back to you, carl. All right, seema. Thank you very much. Good morning. It is 8 00 a. M. At Adobe Headquarters in san jose, it is 11 00 a. M. On wall street, and squawk alley is live. Happy st. Patricks day. Welcome to squawk alley. Im Carl Quintanilla with sara eisen, jon fortt at the New York Stock Exchange. As seema said a moment ago, were watching the market dip into the red, but its largely toeing close to the flat line all morning long. The german chancellor meeting with the president for the first time at the white house today. Expect them to talk trade, immigration, defense. Thats all going to be on the