Transcripts For CNBC Squawk On The Street 20170404

What stocks staen to benefit from tax reform . Goldman sachs has a basket of names set to outperform. Elon musk is trolling his haters on twitter after the companys stock surge pushed its market cap above ford for the first time. The president scheduled to hold a town hall meeting with 50 Business Leaders. Among those slated the ceo of citigroup, blackstone, mast ecard and jetblue, it he will focus on improving the Business Climate discussions about infrastructure and jobs. Beth comstock from ge, tom farley from the nyse, john paulson, steve roth, largely new yorkbased. Jim . Got some wall people there and private equity, mike corbett obviously someone who would be able to talk about deregulation. Yesterday theres full scale assault halftime i think the deregulation is so important. Please, with enit comes to the banks, its pretty much everything. Maybe this is back on track. Maybe this is what was doing well. Now there are a lot of people who feel that what happened with health care was there was an agenda going with a full head of steam for business and got sidetracked. Is this the beginning of a way to get back on that ship . I dont know. I think steve vernado has a lot of office space but understand retailers. They have office space and small ownership i believe as well. Look i think that remember those times every single meeting it would be like kind of here is the new things, here is my phone number, call me, we got some dereg and suddenly the morass that is congress and the swamp. Swamp is the charge. Now theres reports this morning that there are attempts to revive the ahca, white house officials meeting with members of the Freedom Caucus on monday, golf with rand paul this past weekend, even raising the question of whether they can get a vote before the easter recess. Sheesh, how did that get back on the agenda . I hope he talks to some of the guys and realize weve got issues in this country that maybe soft, they know how soft from mastercard the receipts are from march. You bring back health care you bring back morass. Between the Supreme Court and health care, we are in gridlockville. Gridlockville. Last i checked the republicans control all three houses of government. Right. Gridlock is in place when you have at least one of the parties controlling one of the houses. Thats not the case, jim. Well you have republicans in name. House divided cannot stand. Are you with me . Thats ridiculous. You have the freedom party. What are they, not republicans . I dont know. I dont know how to describe them. Theyre a caucus, theyre not a party. Well im being metaphorical. Youll try to rename them . Im saying if you got one group of people not going to agree with another group of people in the Republican Party time to switch and take up taxes. Well talk to jason furman in the next hour. Holy cow he has an oped looking at the way to get a bipartisan tax deal which essentially he means focusing on Corporate Tax only and trying to get in the zip code of sensible and bring in some democrats to that process. Furman has horse sense. He used to speak at 8 30 on fridays, remember . I do. He would say its a great number and youd ask what was going on, great number and dig geeper and what you learn . Yes, great number. Great number. But the guys have been unleashed suddenly. Yes. Even jack lew is saying something. About thor, mr. Med . How did we get on him . Jack lew is from queens so maybe hed offer some little advice. I dont know if hes a mets fan. They looked good yesterday. Only 161 wins to go. Well were in first place. Meanwhile, tesla leapfrogging ford to become the nations second most valuable automaker in terms of market cap surpassing the 47 billion after tesla reported record quarterly deliveries and ford had the disappointing march sales but there are skeptics when it comes to valuation. Walt mossberg tweeted i admire tesla and elon musk but this is the billionth example of why stock market valuations do not reflect reality. Follow up reporting musk said exactly, tesla is absurdly overvalued if based on the past but thats irrelevant. A stock price represents risk adjusted future cash flows as musk said, jim, Stormy Weather in shortsville yesterday. Yes, hes a natural born comedian, too. Triple threat guy. Look at ibm, 161, 160 billion and say nothing should be bigger in tech than ibm, im referencing when i first got in the business it was inconceivable a microsoft or intel could surpass. It tesla builds 500,000 cars and they sell you would understand why this is, im not trying to rationalize. Ill go the other way on this. I think this has more to do with ford and gm one of the lower priced companies in the s p because people believe its peak autos. Go back over from phil lebeau said yesterday and you have an answer for why ford and gm, their price to earnings global are sinking because the numbers were terrible. Is tesla overvalued . If they make 500,000 cars, no. If they right now theyre making 100,000, rate of 100,000 a year. 25,000 a less quarter. Certainly not 500,000. Not yet, no. Theres a guy who knows cars, a man who knows cars, and that man is jay leno and jay leno said there and said name me another car company thats been successful in terms of the ford, chrysl chrysler, gm. I think back to what he said. If you are a believer in growth you believe in him. Obviously this is the amazon thesis. Theres only a couple of amazons. Theres been amazon and help me here. Theres been any other size amazon, you had total faith . No, nobody has gotten quite the credit in all ways that that word meanings it has. Nobodys gotten quite the credit amazon received from its Shareholder Base over a long period of time since jeff bezos wrote his report in 97 saying well go about securing future cash flows, not in the business for performing for this week, this month or year. To lenos point he was talking about what a great car it is. Were not talking about that. Were talking whether they can create great cars at scale. I want to meld that with what jim stewart said. This is an infurrial cult stock. People who like tesla stock like the stock. Theres a certain reason they like the car and the stock. Tesla is a loved car, and people buy the stock. Now does that make sense . Well theres a lot of things in the stock market that dont make sense, but if you love something and you want to buy the stock, a lot of people wont fight you. They will tell you, i could do g and say look at that balance sheet. Could you have loved your fitbit, you could have loved your gopro. When you saw that goat on the surfboard with the gopro. Ten cent validated this valuation. Ten cent didnt want to buy 5 of ford. No they didnt. Thats true. Can you make a fundamental case for tesla on a discounted cash flow basis, based on the company itself for the stock price . No. At this level . No. You cant. Even with it becomes much more than a car company, solar power company, it becomes a battery company. Well you have to believe that like a lot of companies that have huge market valuations when they come public, should we talk about snap . Snap, if you go and read that s1 the document, at one point they Say Something like maybe we dont even theres no way we dont want to become profitable until were scale. We got to scale. Go over snap and i could argue that snap is saying hey listen, forget about profitability. Were going for broke here. Tesla is going for broke. The market, there are people in this market major mutual funds that like to go for broke. Thats what they do, and if they have a panaplea for go go for broke stocks and two pay off. The jeffries call that equated snap to a lottery ticket. You think tesla is in that universe. Exactly. You wouldnt add it to your Charitable Trust . No, im more inclined go gm can be bought, because i like value. I dont think it has any place in a Charitable Trust. But you know what . Remember, amazon is what we saul sui generous. No way there would be another amazon but i understand tesla is bigger because i understand the flaws of the market. If youre short that stock and ten cent comes in, you cant cover, youre trying to bid it up to bring in the short because your boss is saying i cannot believe youre short tess larks youre idiot ten cent bought 5 . You dont know what youre doing and when i drive it, i love it. We are getting some news from ralph lauren, the Company Announcing its closing its flagship fifth avenue store in new york city. It plans to integrate its product into other new york stores on madison avenue in downtown. Rl announcing several key actions as part of its way forward plan. This is the latest element of restructuring, including more cost savings and job cuts. They have a very big charge involving leases which you start going right to the mall and when you think about the mall, you think about nope they are put out by matthew boss from jpmorgan, it was slow single digit decline in traffic and now accelerated to mid single design, Urban Outfitters talked about terrible numbers so the mall continues to get worse and the forward looking companies are taking action and ralph lauren is trying to see its way to get rid of high cost real estate and high cost mall stores because theres a diminishing of traffic that is extraordinary. No one saw this coming. This is happening at lightning speed. You go from low single digit declines to mid over a period of months. What about the general leaves j. Crew . 26 years creditor with a lot of their key look. And a lot of points, j. Crews and malls its tough and got worse as you say in february and again in march. And theyre all scratching their heads, guys like mickey drexel, jim. I know. Seen so many ups and downs and arguably one of the great merchants of his time, like what do you do . But if youre burlington and youre in that strip mall. You always come back to burlington . Well all buy burlington as the only way to whats the market cap . That was a needless ad hom i hominim attack. It wasnt you. Im having frustration with my email and im taking it out on you, sorry. You ought to go read the four agreements. Who . The four agreements. Oh, geez, you got so much work to do. Theres a lot to talk about this morning including a downgrade of b of a. Jason furman will talk about how to make tax reform bipartisan, calls on sales force, utx, cat, amazon, google, bank of america, well get to all of it when squawk on the street comes back. Be live monday. Customel can we at least analyze customer traffic . Can we push the offer online . Brian, i just had a quick question. Brian . Brian. Legacy technology can handcuff any company. But yes is here. Youre saying the new app will go live monday . yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Please repeat the objective. Thrivent mutual funds. Managed by humans, not robots. Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. B of a gowngraded by citi from buy to neutral. Shares up more than 35 since the election. I havent seen any reference to what the tenyear has been doing this week jim but we are watching it at 2. 32. This uniquely sidesteps that. Talks much more about the idea the estimates are coming down but basically saying yes the estimates come down, delusion of warrants and trimming their numbers but they really, if you read it, you want to buy it is what im saying. You read it, you want to buy this stock. They say its move too much versus jpmorgan. People would say wait a second they have a bigger deposit base so that actually isnt wrong. Its also, remember it was the most undervalued going in because the stock is trading back to where it was six years ago but i do say it could go down a buck or two but you want to buy it because jpmorgan is here, and the valuation cannot be solved. I dont like this call. I dont like this call. I think that you get a couple rate hikes, you get a couple good numbers out of moynihan and you say what did i sell it at 22 for . What was the purpose . Youre not really thrown by Consumer Spending on friday, auto sales yesterday. Well see what durables do but its flat or down three out of four months. I am worried about march. March was a weaker month but i think that march was a weaker month for some Consumer Spend that may be related to tax receipts, the auto numbers were weak, the retail numbers are not great so i am concerned. Im just saying that i think that it may be with net interest margin, unless you get a weak number on friday, then this fellow could be more correct. Im just saying that the bank is very undervalued and you cant be so precise if youre a retail investor. Ill get out of here but get back in at 21. March was not a good month. We need to see a strong number on friday. We need to see a blowout number. I think march something happened. Lot of it may have been with washington. Theres that. Some are trying to posit that, we had the warm weather discussion last month. Yes. Maybe it did draw some jobs forward. Well find out. I go back to the caterpillar upgrade well get to later talking about construction about to come back. Ringing the opening bell btu, the Coal Companies have money. What is a coal company doing with its money . Goes to caterpillar and it buys mining machines. They have running video of their operations, the size of those trucks. Theyre really big. Oh my lord. Like the tires are twice my size. Yes. But im not giving up on the construction side, technology is a very nice upgrade but yes, i want to seize those numbers on friday. They better be good. Yes. Better be good. Well find out. You mentioned the cat call over at goldman. Target goes to 120, they added to conviction buy. Part of their thesis in Mining Equipment is truly discretionary and after going for market share last couple of years, theyre now increasingly focusing on efficiency. Yes, and what i thought was very important about this, they minimize just by the amount of print they spend on, the litigation risk, the investigation risk. Theyre saying listen lets go beyond that. This is a very bullish upgrade, and its basically saying that its all systems go, 120 price target. I dont know. The construction part of the economy, the United Technologies upgrade we got this morning again very, very important. That was from out of the u. S. Bond because Capital Equipment, construction really doing well right now. All the regional banks will tell you that but theyre not going to the mall and theyre not going to build any malls but theyre building stuff. Data centers, although in the nvidia downgrade theyre saying theres a slowing, that would be news to the companies i no he who build data centers. I saw that downgrade this morning. You were talking positively about nvidia yesterday. Dave kohn once a receiver for you guys, definitely a met fan. He was an excellent company. They make data centers and theyre sold out, in most of their data centers. Try to work back to the mets because i know you love them. I appreciate that or the coneheads. People thought they were angry at each other and im the only one who is really angry. When we get back jim cramers mad dash. More squawk on the street straight ahead. Hey, hows it going . Um. Who are you . Im val. The orange money retirement squirrel from voya. I represent the money you save for the future. See . Were putting away acorns to show the importance of being organized. Thats smart. Whos he . Hes the green money you can spend now. Whats up . Oh you know, gonna pay some bills, maybe buy a new tennis racket. Tennis racket for a squirrel . Hes got a killer backhand. When its time to get organized for retirement, its time to get voya. 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 seven minutes before we get to the opening bell for this tuesday. Nvidia we spoke about it briefly and talked about it a lot at the beginning of this year given its incredible performance last year as a stock, jim. Theres a downgrade today. This is Pacific Crest i have it in my hand and its violent, because this is an actual downgrade to sell and underweigh, talking about desktop saturation of their cards. Now i got to tell you, theyre saying theres big inventory issue. Lower margins incremental tend to switch to revenue, possible pause in the companys Data Center Business this summer . David, this is, they also mention tesla lead times, signaling perhaps theres no longer, thats part of the data center, no longer that much supply may be outstripping demand for the moment or at least getting lets say this is one where you cant have this multiple if you dont have that level of demand. All right, but nvidia story is about a lot more than gaming chips. Its the fact their chips have been good for other uses that are growing enormously. Yes. I think this is a relative downgrade. When you look at it, what theyre really saying is its had a huge run and others i think would be better. Ive got to tell you that i think in nvidia has been picked on, its up 200 last year versus sky works and cirrus logic and broadcom, and xpi, why is there so much coal buying at the 110 level. But you know what . People are struggling with nvidia because nvidia is a quiet company. Theres not promotion saying were doing great. You got to let it come in. What can i say . Youll get the reaction and defenses tomorrow the autonomous driving needs enindividualia, the data center is not slowing down. There is no gpu saturation. If you take action today remember youll hear that tom re. They will be out there defending nvidia, they always do, they being wall street. All right. Well keep an eye on those shares and so much more, when we come back with the opening bell here on squawk on the street. Stay with us. The youre wat strpt strt live from the Financial Capital of the world. Opening bell in about 90 seconds. Busy Tuesday Morning as we await durables in half an hour, the president meeting with about 50 ceos later on this morning along with a slew of analyst calls. We havent got on it half of them yet. I am very concerned that we are getting big Cap Commercial enterprise upgrades, but when we see Something Like this Urban Outfitters downgrade that people should recognize theres a very tough piece about, this is the numbers are quite bad and when i look at the report that came out last time, mid single digit down this quarter, as the quarter goes on, this is worrisome to me. Again like the ralph lauren you cant miss. The elle brands downgrade, bath and body works, victorias secret are not working. What works, Capital Equipment and the mondelez their fiveyear plan is committed. [ cheers and applause ] i think theyll be able to show some mild organic growth. Might be an interesting place to go. Okay, lets get to the s p at the bottom of your screen and the opening bell here at the big board as jim said earlier, ringing the bell here its coal producer peabody energy, celebrating its emergence from bankruptcy and the resumption of trade. [ bell ringing ] undertake btu at the nasdaq, Abraxas Petroleum natural Gas Exploration and production company. Btu is really the theme here, this cat move, this is about industrial materials, freeport stay of execution in indonesia obviously versus the consumer names which are not doing that well, and then nvidia, i feel some of the charters are saying you got to sell this. Mark chakin says you have to sell. Its a stock that has been a test of the nasdaq, so be careful there. Its a wild day. Its a wild day, that bank of america downgrade is going to resonate. You think we see tenyear at two or three first . Oh, boy, two, that would be breathtaking. If we saw two. Temper was on a few weeks ago, wake me up when it hits four as if it were a fait accompli. Rip van winkle. That is the raise twice thesis is how you get the bank stocks to better valuation. Yesterday on halftime they said you have to raise twice. You cant raise twice if we go to two. What would be the point . There wouldnt be one. Here we are 2. 6 just three weeks ago and now 2. 3 . Meanwhile germany car registration is up 11 and they keep the euro down. China is looking better than europe. I mean come on. Germany is so strong and it means nothing. How is that possible theyre allowed to get away with that . Peter navarro analogy is extreme. You really call them manipulator all the time. I believe in fair trade. Wilbur ross has an excellent editorial in the financial times. When dan damico was ceo of new corps school and i am a believer, trade adviser to the president , dan damico, this is a Lyndon Johnson position in case you wonder whether this was some hard right position, the Old Democratic Party used to be in favor of these things. In favor of what specifically . Protecting workers. Thats what, now if you look at the counties that won for hillary clinton, theyre all the richest counties in the country. All the poor counties are going republican. This is a reversal. That election was an amazing reversal we dont talk about it enough. I think we talk about it plenty. You do . Yeah. Ill talk about earnings. Policies will come to bear as a result of the election to your point on trade, we havent really seen very much. No, we havent yet. At this point wondering na a nafta, there will be any significant changes to it. The mexican pesos came up since the president stopped saber rattling. David because you insist on new things, estee lauder hold to buy Goldman Sachs is a selfie generation. Need makeup to go outside. You told me that before. I didnt believe it the first time i heard it, i still dont. I guess its true. This is one i think could have a major reacceleration. Fa breeze yo doing a fantastic job. Look your selfie best. If you go to a mets became how much do you put on . I start every day with makeup on as do the two of you but i do try to take it off almost immediately. Really . Yes. You keep yours on all day . No, because it gives me, i break out. Depends where youre going. Depends where youre going. It was not close, polo, right, polo bar was not close. It was not close. I always wear my makeup there. Jim we mentioned peabody, btu down here at the exchange. Ceo talks to the fte and they ask him whether or not theyre building white house policies on coal into their assumptions essentially says no, says its certainly pleasing but weve not built it into any of our assumptions. They have to have natural gas go higher and have to have more steel being built. Remember theres two kinds of coal, the thermal coal and the kind that, steel coal and the kind of coal that goes the thermals the heat, good utilities and remember, 30 of our country is still on a coal train. I like that, coal train. Coltrane was very good. Favorite one is newport, 1964. Theyre on the coal train and i think one of the railroad has been so strong one of the reasons is not because of the potential takeouts but because the coal cargos have leveled off. But remember, even under the energy protection, i mean the Environmental Protection administration there will be phaseouts in coal plants because its risky a democrat gets in some day and theyll say tear down those coal plants. Right, but the larger trend as you have told us so many times is natural gas regardless because it is the Cheaper Energy source and we have an abundance of it in this country. We dont know where to put it. Huge in philadelphia, natural gas, talk about butane and propane, we have too much of those. Theres a glut of propane of tremendous proportions in this country. Is there . Good. Good. Makes it cheaper. Ill run my grill. I thought you were reverting to your kind of Critical Thinking approach of what i bring to the party, kate spade, msg. Really . Youre going there . Yes. Msg . Lets look, is it up on the requesting New York Post story . No idea. Go to my wheelhouse and criticize, kate spade cant get another buyer besides coach. Jim, restaurants, i know you hit cmg last night. Its up another percent today. Panera is coming off 5 after yesterday. Panera, i did something on halftime i did not mean to put it in play so to speak but the natural everyone was saying starbucks. Starbucks donesnt do those deals. Panera just run 100 points and you got to love that asian Chicken Salad for 431 calories. All right, snap today was up today on a bloomberg story. Saying theyve been contacted. The dow jones story says staples has been contacted exploring sale. Everyone is exploring sale. Panera is doing well enough it doesnt need to explore sale and ron shake was on our network friday. Hes on our network talking about it and then contacted. Hard to imagine. Isnt it . In some ways. But you know what . Popeyes got a bid. Yes they did. And panera figured out how to do mobile ordering, and remember i still believe starbucks, read by kevin johnson, late of juniper, will figure out how to do mobile pay without a more than pit. Baird cuts panera to neutral, wouldnt buy until it hits 260 and not expect starbucks to bid but yum to bid. Wouldnt that be interesting. Yum is separate from china. They need cash. They need critical mass. Potentially stem the dilution. Staples the wall street journal dow jones reporting staples exploring a possible sale of the Company Early talks with buyout firms, im looking at a headline, i dont have a lot more to share. Staples, office depot, they tried and failed yet again and they lost in court. Right. On the antitrust case. There time it would be private ek withity. We dont hear as much from private equity. Doesnt figure nearly as prominently in mergers and acquisitions. They have funds in which to put to work so you might imagine that would be at least something they would take a look at. Dont know the financials at this point in terms of how much leverage they can put on the company or what kind of equity check you need. Were talking a sixplus, maybe over 7 million market value now. Remember waiting from walgreens reports tomorrow and im thinking the New York Post has been heavy in coverage of m a. Will they fish or cut bait on the rite aid deal . The rite aid deal is hanging there. I havent checked in on that in a while. It is hanging there. They created that collar almost that the price goes down as the Number Stores goes up and get to a certain point they can walk away. You know whats unfair . You know whats unfair . No. I go to a lot of rite aids and walgreens. Rite aids when youre in that play i dont think you keep your managers. I think people move on. This walgreens is actually i think hurting rite aid to the point where its helping walgreens, kind of a win, win, win so to speak. What do you think of that analysis . Ill accept it. Ill accept it. Feint praise. Price target up bmo to 1200, they cut google to market perform centered around the ad business. They believe that amazons ad business has so much momentum its going from a dupoloy to a tri where theyre all included. I read that piece, they really kind of make it so that suddenly amazon will be the ad power. Alphabet was up yesterday. [ bell ringing ] theres a lot going on alphabet thats good. [ applause ] the most important thing that happens, j j is back, they fixed the Google Youtube problem but didnt satisfy the main stream press which has yet to come out and say that they fixed a lot of the problems. [ bell ringing ] i think my sources there indicate this problem is going away rather fast. Finally industrials are working, utx we havent mentioned got added to the u. S. 1 listed b of a, price target 130. I think greg hayes is doing a remarkably good job there. I think that there are problems with the turbo fan, the giant engine are being solved and when theyve solved that manufacturing problem this thing is going to take the world by storm because it uses so much less energy, and more important perhaps for what i think is about to occur environmentally, less noise. I think a lot of the airports and cities going to crack down. This engine used much less. What you have heard is that they will resolve this problem in the near term . Im looking at the upgrade and saying its going to be, that they are there. That they are finally ready to be able to ship. Remember, thats a composite engine made of a lot of Different Companies so they ship a lot of Different Companies parts, when i visited the plan and once you get all the parts there were some flaws and there were also some flaws in the actual execution but i think theyll be put behind him. Technologies makes a lot of sense. Honeywell david cote retired last thursday. Honeywell is doing well with mr. Damechek. Honeywell its interesting. It is not an Aerospace Company i think the larger part of its revenues are outside of that, that gets that multiple which is a lower one than it otherwise would get and theres frustration there. I think the debt could be reshuffled. New divisions that go and divisions that go and new divisions that come because that was something i speak to the company that company is always on the move in terms of its parts. What its buying, what its divesting. United technologies not so much. Right, wasnt that long ago honeywell was we wanted to buy United Technologies. Yes, dave cote said that United Technologies was poorly run, and that therefore there was opportunity. Kind of put it in there, kind of not that well managed. If youre greg hayes and you watch that interview, i think that you might disagree. I expect you would. Existential. All right. Dow is down 10. Were watching the tenyear closely at 234. Lets get to bob pisani. That tenyear is the primary mover of the stock market right now. Lets look at whats going on. The european autos after the debacle yesterday with u. S. Auto stocks, all trading down a little bit. We did get some u. S. Numbers out of the companies, daimler had mercedes sales in the u. S. Up 2 , volkswagen had u. S. Sales up 2. 7 , not bad numbers but all down in sympathy for what happened yesterday. We have this riskoff width to the market. Gold at 1,57 on gold, the highest level since the election in the beginning of november. Tenyear was 2. 31, its up earlier since stocks opened. The lowest since the end of november. The vix up a little bit, not much but was 11, just a few days ago. Tenyear is a problem, you look at the sectors, the banks are down again, the kbe primary bank etfs got 10 . Banks just went positive a moment ago, they were negative at the open and the reflation trade, your industrials and energy all having trouble sort of moving into positive territory. Tech which has been the Market Leader slightly to the downside. The hot topic is the tenyear. When traders talk about something besides the stock market Pay Attention because normally they dont and of course, why this is happening, this flattening of the yield curve a lot of people are attributing to the unwinding of the trump trade, the idea of inflation and growth would pick up imminently with the adoption of tax cuts and fiscal stimulus, that of course being pushed out a lot further and also the secondary debate is how much growth we are getting right now particularly on the hard data and soft data. The horde data on the autos, the soft data notable. But hard data is winning out over soft data. You want the two etfs to watch the next two weeks in my opinion is the tlt, the long bond, 20 plus and looking at pricier not yield then moving up throughout the month of march, that means yields have been going down. Huge volume in this yesterday and light volume day, very big buy, people were buying into long bonds price up yield to the downside. Watch that trend if it continues, thats going to be a problem. The other thing to watch, my opinion, the referendum, the primary etf on the trump trade would be russell 2000 and you want to look there at the itw, thats the one and this is what im talking about, the itw is on the bottom there, that white line, the top line thats the s p 500 for the year. The russell 2000 began underperforming, the s p 500 towards the middle of february, when there started to become a lot of questions about how long the trump trade would last, how long, how quickly could we get the agenda passed when the dow started kicking in and when the russell started rolling over. There is your referendum on the trump trade. Watch the itw right now. Let me move on here, one more point i want to make about the trading business, another deal in the trading business, more consolidation coming there, cowan announced they were buying convergex for 116 million. Cowen is respected Trading Services on our air all the time and convergex, in the trading and execution services, trading technolo technology, market strength tour, eric knoll the ceo one of the most respected in the business. 116 million not an awful lot of money and indication how tough it is in the execution business and stock market business overall but two respected firms getting together. Finally i would point out here, carl, is the s p 500 for all this worry were still 1. 5 from its historic high and the market still acts very well, look what happened yesterday, down at the open, and the market slowly pushed its way back so no big attempt to get out, no big selling pressure but not a lot of buying interest, sort of like market is in a classic hold. Dow is down 3 points. Carl back to you. Great point. Dips are getting bought. Boy thats a great point, yesterday surprised people and you said the banks are up. You think theyd be down. How about the fact the other semis are all screaming despite nvidia. What do you think nevermind, what do you think of that . Well keep our eye on that. Rick santorum is back. Hey rick. Hi carl. Bob said so many important things. When you consider how little retracement, how close we still are to the highs in equities, goes to the whole premise of really the trade structure, since november. We could argue does it really matter why markets moved in november . If youre of the frame of mind its not necessarily about who won but who didnt win, i think youve had a much clearer perspective especially on equities and the treasury market is dealing in many ways with quantitative hard numbers just as bob said and we can almost prove it just by looking at the charts. If you look at the twoday of tens, yes, many traders were looking at 2. 32 as support. Int intraday as soon as it popped above those it wasnt a lot. Very technically driven. Look at the twoday chart. Consider this, as you look at that chart. Last thursday 2. 42 yield. Friday, 2. 39. Just about 2. 40. Yesterdays close earnings dropped. What happened . Think four on the floor lebeau. The auto sales isnt about politics or gridlock. Its about disappointment, about a long cycle potentially ending. Im not saying it will but that certainly shows you how needs responded right at the time some of the preliminary auto sales data was coming out. Lets take in another step. I was a little bit off where we closed. I kept saying i thought we closed at 227. We closed at 244. I made the statement long before year end. Why . Lets open the chart up to december 2015, because that close at the end of 15, 2. 27 is key as for the high around 2. 62. Pay attention to the levels. B bund couldnt get to 50 and twoyear back at minus 84 and the dollar index, you talk about it counter intuitive trade, too strong because of money market reform or dollar denomination around the world but it is going up. However as you look at that chart from november, we have lower lows as you see there and thats important. You want to Pay Attention to around 101. 5. Carl, jim, david, where is my pina colada, and back to you. Good to have you back, rick, especially this week. When we come back the past month has been tough for the banks following the postelection rally as the sector peaked and what about the road ahead for deregulation . Well talk to the head of kbw in a moment. Dow is down. Dont go away. Live shot of washington, d. C. , nec director gary kohn there addressing a town hall of ceos saying that air Traffic Control reform is the most exciting thing that the u. S. Can do on infrastructure. Theres corbett. Says the white house will cut delays, flight times, possibly save a quarter of jet fuel if they address air Traffic Control, as he talks, steve schwar schwartzman on the left. Look, we all know that anybody who flies overseas, one of trumps, when he was elected, he talked endlessly about how our infrastructure looks so bad versus everybody else. 63. 38, interesting. Well see if we get more on this. Kohn goes on to say the appropriators in congress are one of the key hurdles to air Traffic Control privatization, jim, and the efficiency that we might see because of it. Swamp. Okay. What can i say . Gary is trying, gary kohn is trying to get something done. John paul just walked by. Thats elaine chao former labor secretary, now transportation secretary. Gary is, gary, secretary kohn is talking about something that i think pretty much america agrees with, the airport we are not literally, if youve been to the airports, overseas that are worse than ours . I go to mexico its much better than any we have. Im not kidding. Were going to get some comments from ceos at this meeting. Later today well get jamie diamonds letter always a good touchstone for the mood of corporate america. I wish he didnt write it so long. I told him make it shorter. It will probably come up. Balance sheet might come up. Z i got to school, you got to come to my school. Okay. I run a school between shows. Chao goes on to say the government needs to let loose the permitting process so the Infrastructure Projects dont take so long to green light, something we saw following the last recession. These are long, long form things that you have to this is four years, five years to make the changes. In the meantime, rates so low this is the time to do the 500 billion make americas roads good right now bond. Kohn also talking about the hyperloop, actually saying that touting it, the hyperloop, elon musks hyperloop. Hyperloop . I wish the trains didnt get derailed. Two derails in penn station in two weeks. We can work on that. Talking about tunneling the entire way apparently. Tunneling the entire way. Hes going to tunnel. Tunnel. Tunnel the entire way. We cant even tunnel from jersey to new york. Yes we do. It is a very big infrastructure project. The Second Avenue tunnel was like took quite some time and not done yet. The longest tunnel in the country . The longest tunnel in the country, the the euchary tunnel still trying to repair from sandy. The expansion of the verraza verrazano, correct . I think. Jim what is on mad tonight . We have david kohn. No we have cyrusone data center. The symbol is cone. David, he picks that perfect game, wasnt fort mets, it was for the yankees. David kohn pitched a perfect game for the yankees but he was a key part of the cog of the 8889 best team was not with the mets. Jim, i im wearing my phillie phanatic head tomorrow. Hes going to the booth. Unless or according to reports unless the team really needed him back. Hes a jet in real life, he made me like him. I hated that telling me my wife was gorgeous. Well get more on the president and the ceo summit in a moment. Dow is down 11. With e trades powerful trading tools, right at your fingertips, you have access to indepth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade. Start trading today at etrade. Com please repeat the objective. Thrivent mutual funds. Managed by humans, not robots. Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. Is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Talk to me baby good Tuesday Morning. Welcome back to squawk on the street. Im carl quintanilla, the dow is flat down about 8 points awaiting some data. Ceos meeting at the white house, well keep you honest on that. Tenyear focus at 2. 34 or so. The road map today begins with President Trump hosting and attending a town mall hehall me. Well take you there. How to make tax reform bipartisan. Jason furman is with us. And President Trump is getting ready as we said to meet with the president of china. What is at stake for the u. S. And Chinese Companies . Well talk about your portfolio and more. With the dow down 9 points first Economic Data crossing with rick santorum. Kelly we are looking at february numbers. Orders up 1 . Last month 1. , now stands at 1. 5. If you looked at orders transportation drops down and gives you some clues, only up 0. 4 but last month gained 0. 2 to up on the revision. The meat of the matter durable goods february final up 1. 8. Keep in mind we are up 5 in october of last year, lets get to the nitty gritty here. We always like x transportation, you drop the number to up 0. 5. Aircraft, business spending Capital Spending down 0. 1 following another down 0. 1. This needs to pick up and looking at shipments versus orders a little bit more stable at up 1 . Carl, all yours. Rick thank you very much, rick santorum. The president hosting a town hall meeting with about 50 Business Leader this is morning. Among those slated to attend the ceos ofcy group, blackstone, mastercard, jetblue and others. It will focus on improving the Business Climate. Topics infrastructure and tax reform, regulations, cyber security, and immigration. Already getting some comments on infrastructure kayla tao is here to talk more. Good morning, carl. The first part of this meeting has focused squarely on infrastructure and specifically how to improve the nations infrastructure and how to do it quickly. On the stage gary kohn who is the chief economic adviser to the president , and transportation secretary elaine chao, fielding questions how the companies can play a role in improving the infrastructure and fielding some complaints about how long some of this stuff has taken in the past. To that end the secretary of transportation said in her words they are interested in letting loose the permitting process, saying that it takes more than a decade on average to build a bridge, takes more than a decade on average to build a road and thats just not good enough for the country where it is right now. Gary kohn then went on to say he thinks the single most exciting thing the administration can do is to privatize air Traffic Control. He called it insulting that other countries have lapped the u. S. In doing this, despite the fact that the u. S. Has the funds and the wherewithal to do this. He made a joke noting that many of at tendees in the room, 50plus ceos of Large Organizations with exposure to new york city, because this is a meeting that is spoo earheaded the partnership for new york city. Many of you are jet owners and nervous about air Traffic Control because you think there will be a tax on your private jets. Were probably not going to do a tax on general aviation. Hes giving more sells here and there what the administrations policy could look like as they field questions and ideas from those in the audience. Hes been sisityioliciting recommendations from elon musk tunneling to build new train tracks and highways because theres so Much Development on the land up move. Some interesting information tossed about at this meeting, carl, but i know that a lot of executives from many different sectors are going to be weighing in on exactly how they can be involved and how they can make sure their voices are heard within this administration. Kay larks you made the point earlier on twitter that the population of ceos is not evenly dispersed around the country, largery from the northeastern corridor and new york. Right, this is a meeting spearheaded by the partnership for new york city, a group that advocates for Infrastructure Development in new york, and business in new york. So this is perhaps the president going back to a familiar crowd, back to the well of manhattan, where of course he has spent much of his entire life, instead of actually reaching out to companies that operate in the rural or Middle America regions that were responsible for him winning the election. Granted the companies have operations and do employees and have exposure to those parts of the country but you can tell by some of the comments that have been made it is a very new yorkcentric conversation. There were jokes about how the acela needs to be faster and private jets, and so it appears that some of these executives are preaching to the choir, but its unclear what actually will result from this that will improve the infrastructure of the country at large. New york is not a bad place to start, given the needs here. David, what would it take for some of the investors on their own to look at the economics of this, were going to tunnel, okay were going to build a bridge. Well expand an airport. Does it exist without the partnership with the federal government . I dont think so. I think the plan kohn has mentioned in part is a private public partnership, that seems to be the idea that theyre focused on in the administration in terms of the infrastructure spend that theyve bandied about. We hear the trilliondollar number. Well see if we even get it or if, how it may be attached to something, theres some thought that perhaps it will be attached to a repatriation deal and bring some of it back and some of it will go towards Infrastructure Bank and get democratic votes for tax cuts. Kind of goes in a lot of different places. But this has been a developing asset class. You look at the pension funds, were going to invest in indiana tolls or whatever it is. Is that economical on its own . Before we even get to the point of talking about Elon Musks Boring Company . You do have a fairly dedicated cash flow stream that can support the debt load that you would be putting on, and they probably can pay you a reasonable yield at least in the low rate environment, and again another reason perhaps to do these kinds of things now. Its interesting, and there are those examples of them, but then theres also some people who are uncomfortable with the idea of the Aviation System or being controled by private hands. You know who is doing this effectively, canada. Nav canada is a model of what this country could to. Canada is doing a lot of things right, banks are outperforming. Wasnt that a great piece . Rbc put out this piece, im sure you saw it, the canadian banks are one of the only places in the world to outperform berkshire hath away. Extraordinary. Unbelievable. They also have nationalized health care up there, kelly, you know that, too . Looks like thats where things are headed. Speaker ryan is talking about a revamped attempt at Health Care Reform saying its too soon to discuss the time line and at the same time republican leader mcconnell is saying that he will file a petition on tuesday seeking to end the expected democratic filibuster of Supreme Court nominee gorsuch. So we got multiple pots boiling. Mega change. The socalled nuclear option, carl, that mcconnell is talking about, youd need 51 votes to approve there has never been a filibuster of a Supreme Court nominee, the if, time in history and the response is equally partisan and there you have is. Jason furman published an oped in the journal how to make tax reform birk partisan. Good morning. Good to talk to you. Great piece and sounds like you want to make this as simple and bipartisan as possible essentially by starting with corporate, right . Exactly. I think thats where most of the economic benefits are to be had. Corporations move in response to tax rates much more than individuals do. You could set a simple set of rules, keep it revenue neutral, keep it distribution neutral, and then just be technocratic and figure out a better way to collect taxes. Couldnnt doesnt sound like opposed to a bat of source even though various industries have come out strongly against it. I think border adjustment is a clever idea in terms of tax policy. It has a lot of Macro Economic side effects. I dont think people have fully thought those through, so i would not go the border adjustment route as sympathetic to the idea as i am. Theres other ways to deal with the minimum tax which was an idea senator portman supported, president obama supported. Could you argue over what rate you want to tax at, repatriate the earnings tax free, it would make our system competitive and collect a little bit of revenue, too. Jason, you talk about how low rates could drop. Getting the rate down to 28 is possible you say, but if thats it, how far is that from our effective tax rate anyway . Would it be worth it . I think it would be worth it and theres nothing ideological about the rate. If we could get it down to 10 and do it in a revenue neutral manner i would be fine with that. It happens the arit hmetic, maye you could do better or worse. 28 is about the statutory rate of the major economies, places like the uk, france, germany, wither never going to be able to compete with ireland or the Cayman Islands on tax rates. We have to compete with them on the attractiveness of investing in a great country like the United States. Do you think it would have the effect of stopping inversions, of course many of them have been stopped by the Treasury Department in the previous administration, do you think it would have the effect of not having corporations tie themselves and not do inefficient things to get their tax rate lower . Yes, i think it would greatly diminish that for two reasons. It would make it more attractive to invest in the United States and remember in addition to the lower rate, youd be getting expenses. You get 100 writeoff of your business equipment investment up front, so youd be making it more attractive to invest here and with the minimum tax make it harder to complete lay void your taxes when you were overseas so the combination of the two of those would make Companies Really want to invest in america, stay in america, or have Global Supply chains as made sense for economic efficiency, just not for tax reasons. You spoke to politico and said if the white house can propose something within the zip code of sensible, then youd like to see democrats go along and work on it. What elements would be truly bipartisan . Look, i think the two most important are revenue neutral, distribution neutral. That is the starting point that president Ronald Reagan had in what was his successful bipartisan tax reform in 1986. Secretary mnuchin talked about distribution neutrality, speaker ryan has talked about revenue neutrality, combine the two of those, do it the way Ronald Reagan did and thats a great way to start a conversation. 80 of all Small Businesses are passed through. You deal with it a little bit, jason, im not sure how. Is it that easy to separate corporate from individual . I think thats tricky, no doubt about it. But i think you have to do it, because if you try to lower the individual rate a lot jason it costs a lot of money, yes. As were watching the ceo meeting heres a. J. Bank of mastercard. Comes all the risks a lot of people arent aware of. Consumers prefer functionality over choice and second because the weakest link tends to be the Small Businesses and medium sized businesses and kevin, you are a Small Businessman you understand this really well, were attacked more often than others and when they get attacked they get shut down more often than others. You put all that together, my sense is that the series of things that can be done in the short term in cyber be about t from Public Private relationships to the kind of act that congress passed, did i think 70 of the way to get the right level of information sharing, take that forward, liability sharing as well, and then from that the global rules and globally consistent rules to all the things we could do in the fwut workforce development, and the right things biometrics. Theres a series of things that can be done to make the internet of things safer and more valuable for our future. I think everybody gets that. The what and the how are clearer. Im not sure what the structure will be to get this to work better. Im not sure what the structure and the appetite is from both congress and the administration to make something happen in the relatively short term, and id love to hear your views on that topic. First of all, thank you for your help on this, and youre right. We did move legislation last congress and it is it get us 70 of the way there, and the interesting part, it was just foundation. It was getting us to be able to communicate together and share information without a fear of being sued. So thats a strong foundation. I want to give the administration credit, theyre going through an executive order and they just didnt throw one out there just for speed, theyre working it through to make sure you get it right. This is an area that i think we have to continually look at, how Fast Technology moves. We create as much data in two days as we do from the beginning of time into kevin brady responding to ajay bangas question from mastercard. Jason furman, weve seen a lot of these gatherings. This one feels a little more substantive. I wonder what you make of it. Id love to see a substantive conversation about what we could do to increase our productivity growth, make america grow faster, you know, this idea of Business Tax Reform is certainly one part of that, and one thing that we could do in this country. We collect taxes in a pretty stupid way now. We could collect the same amount of taxes and collect it in a less stupid way, maybe aspire to do it in a smart way. This is like jason furman, you know, unmasked out of the administration, throwing around words like stupid. But there is a lot beneath the surface. Sounds like a simple thing to do but bringing people together, jason, what is it in your plan you think could bring democrats together, could attract the support of the Freedom Caucus for example, or is that not the priority . I dont know the Freedom Caucus very well. I dont know about them. Theyve put out statements like anything that has any tax increase they seem upset even if youre putting the money back into a rate reduction, but you know, the big debates in taxes are over what the revenue levels should be, and how you should distribute the burden of taxes. Those are really important debates to have. I have views on both of those questions, but i think we should set aside that debate for now and instead focus on how we can collect the same amount of taxes from roughly the same people but just do it in a better way. And we can do it with a broader base, a lower rate, not historic decisions about what assets to invest in, how to finance those investments. Jason, i want to ask you as well from your experience working in and with the white house it sounds like the bradyryan plan, dave camp had a plan a couple years ago. This is an area where the white house is coming up with its own plan and looking to drive the outcome that way. Is that going to be effective and what is the difference in terms of making it happen for them to start with the white house plan versus a piece of legislation from congress . You know, i have no idea what the white house plan is and my guess is the white house right now has no idea what the white house plan is, and i think it just depends. If theyre going to sit down with the Freedom Caucus and try to hatch some back room deal, i dont think thats going to be good for our economy. I dont think thats something that is going to be able to pass the congress. If theyre serious about some of the things that they were saying on tv a week or two ago about reaching out to democrats, then id love to see them make a major effort to do that. So i think its really the ball is very much in the white houses court. I think its something good they could do here but some of what you see on health care is not particularly encouraging to me. Jason, appreciate your guidance on taxes, on health care, on this meeting with ceos, talking there to leader mccarthy. Jason furman thanks so much. Thanks for having me. Were going to have more on this meeting when we come back. Theyre in the second of what are four discussions this morning. The next one coming up will feature secretary wilbur ross and ivanka trump and well take you there live. Stocks are down this hour, dow is dropping 23 point, s p down 6 as this skid continues. Squawk on the street back after this. So youre having a party . How nice. Ill be right there. And the butchery begins. What am i gonna wear . This party is super fancy. Lets go. Im ready. Are you my uber . [ horn honks ] [ tires screech ] hold on. [ upbeat music ] the biggest week in tv is back. [ doorbell rings ] whos that . Show me watchathon. Xfinity watchathon week now until april 9. Get unlimited access to all of netflix and more, free with xfinity on demand. Some of the topics on the agenda with the chinese president , putting pressure on north korea, what will the Market Reaction be domesticalry len in asia. Were joined by chief asia equity strategist timothy mote. Welcome back. Great to be here. What are you looking for this weekend . A few things. Intensified focus on trade, very much of a part of the Election Campaign and the post election conversation. Its been a bit quiet frankly and investors have been surprised by that but now that the main players are in place, and i guess with Robert Lightheiser soon to be ratified, one would expect there would be more dialogue on this taking place and a natural place to begin discussing that would be this upcoming event. How does the trade discussion fit with this new geopolitical discussion . In terms of north korea, its a little bit hard to say specifically. Clearly theres going to be some linkage between the two. Theres an objective obviously in terms of trying to have exert greater pressure on north korea, and china could play a role in that and to the extent the trade relationship could be used as a lever in that regard, then the two may be conjoined. We had this discussion yesterday in part, you could use trade as a tool but the president s comments to the fte suggest a different tack, which is that we can do something militarily unilaterally and leave trade out of it. Which happens. This could be. Its a little bit tough to speculate that but one would imagine that trade is one component of this overall larger geopolitical issue. Thats what makes this so tricky watching it from the outside. Seems like the only outcomes are status quo and nuclear disaster. Walk us through some of the more likely possibilities that fall between those two outcomes. I think it may be extreme to posit in terms of those pol polarities. The world tends to work in between as im sure we all know. The north korean situation has been going on for a long time and reached various peaks and troughs over the course of the last 20 years with the sixparty talks and so forth. Certainly one aspect of this now is the thaad deployment in south korea. The reason thats contentious from chinas perspective, the radar can peer deeply into china, disturbing to the chinese side so theres speculation among people ill be speaking with that thaad may be on the table possibly deploying it elsewhere as a bargaining chip and larger negotiation to encourage china to exert more pressure on north korea which it could do from a trade standpoint. It could but theres no sign theyre going to do anything like that. Agreed. So we do have to see what happens and whether and the extent to which all these are conjoined. By the way one point id like to make on the trade front specifically, many people including ourselves have been focusing on the potential Downside Risk from trade whether its a border adjustment tax or across the board 45 systemic tariff or something more benign. There is one potential upside, could be a positive surprise for markets if there was a solution arrived at to reduce the trade deficit that the u. S. Has with china through more u. S. Exports and so that would be kind of a win win for everyone, great politically. Domestically here more deployment, involving agriculture or energy and that could be a positive outcome to the trade situation. The rhetoric, tim has been heated from the Trump Administration prior even to taking control. Right. Peter navarro has written numerous books about china as the enemy. Thats right. They so emto see things as a zero sum game and the president said theyre a currency manipulator even though theyre not forcing the currency down. The opposite. Correct, david. What Trump Administration shows up at the meeting . Thats a good point and as one understands behind the scenes there are various factions with different spectrum of views. There is the hard line as you just said in terms of Peter Navarro and mr. Leightheiser and wilbur ross but more moderates, Steve Mnuchin and gary kohn and so forth so theres probably discussion behind the scenes, i have no knowledge but one might posit theres some animated discussion which would be weighing the pros and cons of a more hard line approach versus something thats more nuanced. Tim we have to leave it there for now but we look forward to talking to you after the weekend. Tim moe of Goldman Sachs. Back to washington, d. C. , and ivanka trump speaking to the ceos. When she was in taun a few weeks ago because the germans have led the way and the swiss done a great job more recently and in england weve seen a lot of focus on Apprenticeship Training so really thinking about the role of Vocational Education, and making sure that it is incentivized for the students to consider it as a viable option and partnering with the private sector to really ensure that whats happening the education taking place whether its a Community College or at Apprenticeship Programs matches ultimately their need so skillbased education. The last thing were looking at is workforce retraining. So for people who have been out of the workforce, for a number of years and looking to reenter or in the workforce but in a field where jobs are rapidly being displaced. How do we take large groups of people and think about how to retrain them in areas where their skills will be more relevant to the workforce of the future . So its a big topic. Theres tens of billions of dollars that are allocated across over 14 agencies on this topic, so another area similar to what we were talking about with infrastructure is taking a look at all the programs that are out there, consolidating those programs and working collectively. We had a meeting last week, where we had the secretary of education wilbur, we had the secretary of Mick Mulvaney was there. Mick mulvaney was there, thinking how we could ensure everyone is working collectively with the goals in mind. Great, thank you. Secretary ross, are there ways to incentivize the private sector to further their investment in workforce training . Many of them have many a leadership role on this already. Yes, the big corporations seem to be finding a pretty good way to do it. If you have a large number of employment needs in given locations, you can partner with local Community College, with even some of the high schools to accomplish the purpose. Whats harder is to get the Small Business who has very limited needs to be able to do it. So weve been focusing some on delivery mechanisms, and one of the ones im kind of intrigued with is integrating technology into the delivery mechanism. You have licensing problems at schools, you have all kinds of things of that sort, so i think combining the human instructor element with internet delivered service in education is a very important thing. Specifically for the Small Businesses, were looking at programs whereby they can get an assurance of retention through a kind of loan program to the students with the idea being they would gradually forgive those loans as the student stays on with the employer, maybe over a fiveyear period, and trying to match that with tax deductibility to the corporation, but hopefully not taxable income to the student, as the loans are forgiven, and couple that perhaps with some loans from the Small Business association, Small Business administration to the little companies backed by the combination of the companys credit and the loans that they had made to these students on some realistic loantovalue ratio. Were trying to get into the nitty gritty of the how, so that this can truly be rolled down on a nationwide basis, and help not just big companies, but little ones, because the Younger Companies tend to be the ones who are really producing the jobs and are expanding the most rapidly. Just want to get a feel why secretary ross is the at table on workforce development. Dina, the private sector to continue on that conversation, as weve mentioned so far, theyve been the leaders so far in workforce development. As we look at making this a True Initiative of the administration, what role will the private sector play in that . Well, first of all, i think clearly defining some measurable goals in each of the initiatives. Having spent the last ten years in the private sector im having a little bit of whiplash coming back to government, and remembering some of the inefficiencies and some of the difficulties. When reed and jared and chris spoke to the president taking on the i. T. Challenge, the minor thing trying to modernize the i. T. Of the u. S. Government the president nailed it, by saying it sounds like a really hard thing to do thats going to help the next guy, and i think thats often why so many of these projects havent been taken on, they require president ial leadership and capital, and a real commitment to work with the private sector, and i think the private sector will push us in the right direction through the American Innovation council to actually have measurable goals in each of these initiatives as leader mccarthy was laying out. When i was working with kathy and bob steele and others in new york on the private sector initiatives we built, we really tried to think about our company as at the time as a lab of innovation. The private sector can take riskier capital to build new models around job creation, economic development, whatever they may be and actually have the rigor of a Measurement System to see how this program worked and what it achieved but it really is ultimately only government that can scale programs in a meaningful way, and i do think in this administration there is an incredible desire to have a real legacy around things that the private sector helped us achieve that we can really measure in an important way. Its been interesting as weve started to study it, the same principles that are holding true in countries that have always favored Apprenticeship Programs are true here its tri driven by the private sector, when the private Sector Companies team with the colleges, put in place internship and Apprenticeship Program at the college level, theyre achieving terrific results. People are not dropping out. Theyre having a pathway to a job and theyre good, high wage jobs. So this is something that we as an administration can 100 get behind and amplify, and thats really i think our mission. On that point its worth mentioning the task force formed with the private sector on this topic so this will be informed by incredible academics and both Government Agencies and people working in just across the private sector, but some of the programs that weve examined and Ginnie Romney from ibm is on our task force and one of the incredible things she did at ibm was really work with a series of now over 40 Public Schools to ensure and creating a curriculum with the pools the p tech schools the first one in brooklyn, new york, actually, to create a curriculum for the students going through and ibm would hire the students on the other side and this stemmed and we heard it time and time again whether it was from andrew, from dow chemical, or inie from ibm, so many Large Organizations were looking to cultivate and really create in this next generation of graduating students the skills that they need to employee, so its really happening already in a very robust and dynamic way in the private sector, because of the need right now. There are over half a million jobs that cant be filled because the students graduating dont have the skills that are relevant for those positions. So we want to bridge that gap and take the programs and grow them in a real and measurable way. Its a great point. And one of the things we have to do as part of that, we have to rebra rebrand Vocational Education. Make it as honored as your father said so often a skill needs to be honored, and fortunately we have someone in ivanka that knows a little bit about branding. Youve also been a vocal person about the need to empower women in the workforce and in the workplace. Today is equal payday, nationally. How will this Workforce Initiative support your goal of empowering women in the workplace . Well my father wants to create 25 million jobs in this country, and women need to fully participate for that to be realized and for that goal to be realized. Women are starting businesses at enormously fast rate. We need to empower them to feel that growth. When we think about workforce development, and just one component of it, i was talking about earlier, s. T. E. M. Education, while 48 of todays workforce are women, only 24 of people in s. T. E. M. Fields are female. You think where the jobs of the future are coming from its a frightening statistic. Were moving in the wrong direction. Over the course of a little over a decade womens participation in science, engineering, math and technology has actually slid from just around 30 to now in the low 20s depending on which of those disciplines. So its really important we think about the introduction of girls in s. T. E. M. Fields in our School System making sure that theyre really participating in these fields, because when we think about equal pay and the challenge we have to finally level the playing field, i think this will be a very important component when we think about the future to doing just that. We talked about in the first answer, this is going to be a wholistic approach and unfortunately and fortunately all these topics were talking about today are big topics. They take sustained effort in order to effectuate them properly and youre talking about workforce, well that starts in k12 and then leads into a vocational or apprenticeship and gets into retraining as ivanka was saying. These are big projects, big initiatives but thats what this administration wants to take on. Lets go to the ceos to get their input and ideas. Just to pick up on the apprenticeship idea, weve tried that at rental Technology Company in new york, and its worked pretty well but took a lot of time and this is where thele from government can help. We gafd kony our software, they build two courses around us and the kids get certified, but finding the professor who understands and understands its okay for academia to partner with a commercial company that took two or three years to find that person and the second thing is the funding. Has to be infrastructure set up, the curriculum has to be built so its taking another two or three years. The idea is great but needs some way to scale it over time. Because thats what happens in india and manila. Theyve been doing that for many years. The shortage of talent in technology is the way to address it. And weve seen some of the most successful examples happening organically just like you mentioned where private sector needs at companies are being met through Community Colleges where theyre collaborating locally creating a curriculum mutual advantageous so were studying all the different efforts and looking to figure out how to scale it. I think secretary ross mentioned the role of digital, which is enormously important. Also the role of creating accreditation programs and really thinking about how to create both standards and certificates across Different Industries and the Construction Industry in particular has done quite a good job on this run and thats why so many of todays apprentices that you see are coming up through that industry. So taking some examples and bringing that to manufacturing and bringing that to technology. Id like to challenge the people in this audience to come up with a better way to label vocational. Reed mentioned about branding. I think it needs rebranding in two dimensions. One is with the young people themselves, because vocational has taken on a pejorative meaning that i think is unnecessary but the other is with the parents. Parents have a revulsion to the idea that their offspring might actually work with their hands or not work after college. I think we need to change both mindsets in order to get this program to really work for the young folk. This say big topic. We appreciate the time. Thank you so much. Thank you. And i would encourage everyone in this room to try and create Apprenticeship Programs at their programs because you can all move the needle. Interesting exchange with the commerce secretary and ivanka trump, assistant to the president , talking about some causes close to her heart, Vocational Training, work life support from corporate america, striking the Comfort Level that at least she has with this audience, referring to andrew of dow chemical. You wonder how much this stuff moves the needle but it cant hurt. Infor ceo just spoke up. The point the secretary was making about Vocational Education is so interesting. I remember growing up in high school there was the regular high school and that was Something Different and that was something other, and changing the structure of these schools and the way the parents and the kids themselves think about it, how would you feel if your son or daughter said hey im going to be a welder. Should you embrace that . Theres a lot of math involved in welding these days as you know. Theres a shortage of welders. Theres been a lot of talk in this administration about Vocational Training particularly sort of along the lines that weve seen in germany, which succeeded in a great deal of creating a lot of high value jobs that pay very well, but arent necessarily relying on a College Education to get there, but on a lot of very specific training. Heres the Vice President speaking. Privilege to welcome you to the white house. Thank you so much. I want to thank everyone involved in the partnership for new york city, michael corbett, steven schwartzman. It is an honor to have the leaders that are gathered in the room here with us today. I know the president is on its way over and its my great privilege to share a few thoughts in the midst of this important conversation on the topics that youre covering, before i introduce my friend and the 45th president of the United States. But let me say first and foremost the Companies Represented in the partnership for new york city are all american success stories. You have our administration, you have our appreciation. Your businesses account for more than 7 million jobs and you add over 1 trillion to our economy each and every year. Whats more important is the people behind the numbers, and the topics that youve covered today are all about creating more jobs and more opportunities for americans who are anxious to climb the ladder of success in the organizations that you represent, and in companies all across this country. So first and foremost, on behalf of the president and the whole team that youve heard from this morning, distinguished members of our cabinet, thank you. Thank you for what you do. Thank you for your leadership. I think as you will hear this morning in the dialogue that is about to commence that america has elected a businessman as president of the United States and he is committed to being the best friend business has ever had in the white house. Weve already seen the results, since literally when the election was called at i think it was about 4 00 in the morning that morning, wasnt it, ivanka, we were all together, literally weve seen renewed energy and dynamism in the american economy, the first two jobs reports as im sure you are aware, thanks in no small part to the leadership represented in businesses here in the room today, the first two jobs reports show that under President Trump, nearly 500,000 new jobs have been created in the first two months of this year. Businesses and consumers havent been this optimistic in decades, in fact we just learned from the National Association of manufacturers that in their historic Quarterly Report 93 of manufacturers are optimistic about the future, that represented almost a 40 point increase in optimism since the last report. [ applause ] we think that is evidence of a vote of confidence in our new president , and in his vision to get this economy moving again by putting common sense principles into practice from the very outset of this administration the president has been mr j energetically working to roll out regulation and red tape. Leaders in congress and i see leader mccarthy who is with us today have been producing under whats known as the congressi congressional renew act to roll back legislation emerge milliondollar the waning days of the Obama Administration and in the coming days President Trump will be signing more bills into law rolling back that avalanche of red tape. The president s also taken decisive executive action on expanding american energy, the Keystone Pipeline and the dakota pipeline. We continue to work earnestly with congress for a new future on Health Care Reform, and the president and i remain confident that working with the congress, we will repeal and replace obamacare with Health Care Reform that will work for the american people, and work for the american economy, and of course, in the offing before we reach the end of the year. The president is determined and to roll the sleeves up, work with the congress and pass the largest tax reform in a generation. Business as i said from those numbers about optimism, business has clearly gotten the message but todays conversation is all about learning from job creators, represented in this room, how we can continue to build on the momentum in this economy, particularly focusing on infrastructure, a government modernization, and workforce. I can tell you that the subject that i came in at the end of, and i know was much a topic today with ivanka and with wilbur having to do with improving the quality of our workforce expanding opportunity for what is known as career and technical education, what we back in indiana call Vocational Education is a real passion for our new president , and we look forward to partnering with you in ways that we can continue to encourage investment and create opportunities for expanded career and Vocational Education. So today is all about really giving you an opportunity to share your thoughts. Its part of an ongoing conversation this administration has commenced since the very first day the president took office, listening to Business Leaders, listening to Everyday Americans about ways that we can bring about his agenda to make America Great again and to have our economy growing and expanding in a way that is consistent with the most powerful economy in the history of the world. I think the president is in the side chamber, so let me say to all of you, the opportunity you have today is to hear from a man who i have a chance to sit with every day. What youre going to see firsthand is what i see each and every day, and that is not only just a businessman made president , but youre going to see a leader in form, focused, decisive, and absolutely committed to make America Great again. It is my high honor and distinct privilege to introduce to all of you my friend, the 45th president of the United States of america, president donald trump. [ applause ] thank you, mike. Good morning. Hello, ivanka. I know you know a few of the people in this room. I do, all the killers from new york, im looking at all those competitors. Those great, great talents, great builders. I have to give you a heads up that ivanka chaired one of the sessions before this, tough act to follow. Shes tough. Very tough. Vice president pence listed some of the amazing accomplishments that have taken place since your election, and your 75 days in office. The stock market has had almost unprecedented sustained growth. Unprecedented confidence from our Manufacturing Sector and other business sectors leading to massive private Sector Investment in job growth, you have gotten rid of regulations that were unnecessary and job stifling. You have strengthened our bordered and strengthened our military. Youve nominated a great supreme, superb Supreme Court justice amongst many other things. How does all that feel . Were getting unbelievable credit for what weve done, other than the Mainstream Media which gives us no credit whatsoever, but we are getting tremendous credit, if you look at the real estate industry, the mining industry, the farming industry, if you look at any of the major industries, you see whats going on. Was very happyi read this morning early that our trade deficit with others has gone down considerably in the last short period of time. Its having a big impact. As you know, im meeting with the president of china on thursday and friday in palm beach, florida, and i think were going to have a very interesting talk. Were having i have a lot of respect for him. Ive spoken to him numerous times. We have to do better. Our deficit with china, as you know, 504 billion. Thats a year. Thats enough for a lifetime. Even steve would say that. Thats a year. So were going to have great meeting. Im sure well have a fantastic meeting and talk about a lot of things including, of course, north korea. A problem and thats really a humanity problem, so were going to be talking about that also. You have made it a driving force, this administration, to bring in the best minds we can from the private sector to listen intently to them and take decisive action. How important is that and how important is it to reform government to bridge the gap between the private and public sectors . Well, i did. I brought you. I brought gary cohen. A lot of great people. My friend, steve, is helping us out. We have a superstar committee of 22 people and every time somebody calls me, i say, steve, put them on. No. We want to keep it at this level. The heads of the Biggest Companies want to be in our committee, right, but steve likes to keep it very small. But they will go off and theyll disappear and well put others on. Weve had some great meetings, and weve all learned a lot. One thing that did come up and it came up yesterday was gary where is gary . Is he here . Could you bring that chart . This was something. This was sort of incredible. Thats so beautiful. To build a highway in the United States, now, this was just done yesterday. I saw it for the first time. I said im speaking to someone of my friends who are builders. Really great builders. Theyve gone through the process. Weve all gone through it in new york. We call it the zoning process in new york. You start up here and this is anywhere from a 10 to 20year process. You have 17 agencies. You have hundreds and hundreds of permits. Many of them are statutory where you cant even apply for the second permit until six months go by. This is a simple highway. These are the agencies, 17 agencies, how many different steps is it . 16. 29 different statutes. Five different executive orders that apply to this process. This is indicative. This is not a specific project. This is the type of process that a State Government would have to go through to permit a highway federally. This is just federal. Not state regulations. So it can take from 10 years to 20 years and then they vote and you lose. They dont want it. And it costs sometimes hundreds of millions of dollars just to go through the process. Thank you very much. That was a great job you did. Be careful. Dont fall. I dont to have you fall. Youll be a big story in the paper if you go down. So i just saw that yesterday. Gary cohen walked in and showed it to me. For no reason. I said you have to do me a favor. But a lot of you are such pros, some of the best pros in the world sitting in this room, you understand it. Its a process. It gave people that could go through that process an advantage like jerry but it gave us an advantage if you could get through the process. Getting a building approved in new york is a horrible, horrible thing. And thats nothing compared to when you get into the highways and the dams. They dont talk about dams anymore. Hydropower is a great form of power. With we dont talk about it because to get environmental permits are virtually impossible. Hydro. We dont talk about it anymore. Weve come to a halt. We have a tremendous person that we put in charge of epa, scott pruitt. An environmental person. He wants clean air, clean water, but doesnt think it takes 26 years to get a permit to build a building and to have jobs at which time those companies are usually gone out of business, et cetera. So were really speeding up the process. Were going to try to take that process from a minimum of ten years down to one year. I say cant we make it four months . Cant we do it in four months . And there is a certain logic to that. Well be satisfied with the year. It wont be anymore than a year. So we have to build roads. We have to build highways. Were talking about a very major infrastructure bill of a trillion dollars. Perhaps even more. When we have to do our jobs, i mean, if we say were giving to new york city hundreds of millions of dollars to build a road somewhere, it doesnt help if they cant start. Its going to take 7 1 2 years to get the permits. Even to redo, it takes years. You have to get permits for the asphalt youre using and concrete you may want to use. If were going to give this money, there was a large infrastructure bill approved during the Obama Administration. A trillion dollars. Nobody saw anything being built. To this day i havent heard of anything thats been built. They used it on social programs. We want this to be on infrastructure. Im working with steve roth and with richard, two very good builders, they know how to get things done and cut red tape. Well give them the advantage of having what we have. I see elaine is here. Doing an incredible job by the way. Secretary of transportation. And elaine will work but were going to set up a committee headed by steve and richard and well cut a lot of red tape. We dont want to send a billion dollars to new york and find out five years later the money was never spent because were going to be strong that it has to be spent on shovels not on other programs. A lot of it was spent on other programs. If you have a job that you cant start within 90 days, we wont give you money for it because it doesnt help. Doesnt help us. Were going to be very strong on that. They have to start within 90 days. Some of the great Business Leaders in the country here. They have a few questions if thats okay with you. Sure. Hello, jerry. He was ready to say his name. We know jerry. Jerry spire, everybody. Mr. President , youre doing a great job. Were all really grateful to you for sacrifices youre making. Hope you heard that. That sounds much better. I think from new yorks point of view, we send a lot of money into the economy. As a number of people have said, its over a trillion dollars. Were worried that were going to have a problem with congress. With the deductions, right . That too. That too. But were worried about various programs that help the city. The city is doing fine right now. Even the yankees are doing fine. But what were really concerned about is the future. Do you have any advice for us . Well, look, i love new york. Were lucky im from new york because new york has unique problems. So does los angeles. So does chicago. There are places that have unique problems. One of the problems that you have is debt and deductibility. Thats a big one. States with no debt or little debt like in the case of mike pence where he did a good job in indiana and its a aaa rated bond, one of the strongest in the country, and deductibility isnt that big of a deal because they dont have that much to deduct. Over here, you know, new york when you look at whats going on with us, we dont know in terms of the municipality and in terms of the state, we dont know if it can even make it if you dont have that. Are people going to buy. Its a very big problem. The problem i have is that there are many places throughout the country that are the exact opposite position. They consider that a gift to the state. And a gift to the people. New york does things that people dont read about. You look at the money that they contribute to our economy and our country and people dont know about that and dont want to nknow about that. You have a tale of two cities. You have different interests. I am watching over everybody. Youre in good hands. Okay. Youre in good hands. Believe me. You can tell the people of new york. Even though i didnt win new york state, i should have won new york state, but i didnt. [ applause ] mr. President , i want to return to a conversation we just had with ivanka, dean and wilbur on the job and workforce of the future. As we think about that and our skill sets, in new york city alone, our Public High School Graduation Rate is at 70 . But the readiness of our students for college and careers is assessed at 37 . So as we look at the pace of change, we look at the Digital Transformation we all see in business and the marketplace, and we look at the skills, the disconnect between what employers need and what our students coming into our workforces are prepa