Transcripts For CNBC Squawk On The Street 20170406

France is the only winner though the losses are not particularly significant at this hour. Ten year note yield crept up yesterday. Did we aye. There we are. Kind of hanging where we have been. When i was in this chair last week, jim, we were talking around there. We did have a yeah. Ever so slightly. Lets get to the road map and it does start on the global stage. Trump diplomacy. The president is set to host chinas xi jinping at his Maralago Club in florida today. On the agenda is trade, currencies and north korea. Plus, tax reform delay . House Speaker Paul Ryan saying the white house has yet to nail down a plan with congress. What that could mean for investors. And goodbye butter. Consumer giant unilever making big changes to the portfolio. Paul polman was a guest on squawk box, but well have more of the background to everything thats gone on there and what it means to the future of the Consumer Products giant. First though, President Trump and chinese president xi jinping be begin two days of meeting at maralago. Trade issues, worries about north korea are expected on the two primary areas of discussion. Jim, meteeting like this dont have the market moving repercussions, but theyre of great importance given the rhetoric that we have heard we havent heard it as much from the Trump Administration. Early from president elect trump and earlier as a candidate. The trade deficit being so important. Some of that seems to have been more muted of late. But we go into this meeting, theres a lot at stake. Right. I think that one of the things thats happened is that they have they let the yuan appreciate. Theyre focused on the currency very heavily, okay . Subsidized currency. Now they are adamant in the white house that these the state businesses, the ones controlled by the state are really just employment factories and just dump everywhere. I know that there is going to be a spirited defense against the state businesses that dump, that are run foolishly just to employ people. We would think is foolish, but they want to dump everywhere to keep everyone employed because they have a forestalled revolution. Theyre really focus on the state owned enterprises. Yes. North korea also is going to be an issue here. Yeah. Again, when it comes to the markets, rare is the day it seems that geopolitics weighs heavily on them. Every so often it does. But certainly as that country and that leader who seems to be so irrational moved closer to being able to load a Nuclear Missile or a Nuclear Device exkee excuse me on a Ballistic Missile thats going to become more serious. People forget the history except for those who were there. The communist chinese came in when the u. S. People forget they sent millions of people down to defend north korea. While there are times that the leadership has been erratic, this the communist saved north korea from being south korea. One korea. We seem to forget that. We seem to forget what military allies they are. Im sure there will be coverage of this. What for you would be an outcome that i mean, what are your expectations and what would be a positive outcome for investors . Getting it done. Just having it come out and trump said we agree to disagree, well work hard together. Its just really turns out to be a very good mano a mano relationship. Say some positive things. Get two hand shakes, not no hand shakes ala merkel. I think thats his goal behind the scenes. Hes not going to negotiate in public. Hes smarter than that. Youre watching it closely. Lets move on to stocks this morning. Theyre looking to rebound one day after the biggest intraday reversal for the dow and the s p in 14 months. It was the minutes from the last fed meeting in which some policymakers said they see the stock market valuation as high, that seemed to catch some people by surprise. Blackrocks larry finked said it seems longer to transpire and we have an economy that is slower because of the uncertainty then i would say the market is the u. S. Equity markets are probably higher than they should be. Always interesting when the fed chooses to at least include some language or have some sort of opinion on the broader equity market. The last time we can remember yellen talking about small biotech stocks and speculation there. Boy, she had that wrong. A lot of the small biotech stocks were subsequently taken over. Not to be not to dismiss the fed chief. We dont know how many felt like this. Obviously the real take away is wait a second, the stocks have been going up. There are stocks that need a good economy. And they are ahead of themselves. The economy is not that strong. Thats what i took away from that. Which is that this not about Procter Gamble being too high, but the eaten and the parker hanifans and the United Technology and honeywells getting ahead of themselves and that would be very bad. Far more important, once again, paul ryan, the lead story in the usa today basically putting the big kibosh on anything thats important to tax reform. You have said over and over again, once we get up this high we simply could not have a situation where we could stay there without something happening. I polled a lot of people yesterday before ryan spoke. Lets actually listen to what you had to say hes dynamite. This is paul ryan yesterday commenting on those challenges jim just mentioned about getting tax reform done. We will need more time to do tax reform. The house has a plan, but the senate doesnt quite have one yet. Theyre working on one. The white house hasnt nailed it down. So even the three entities dont arent on the same page yet on tax reform. Yeah. Its going to be complicated. With all respect to treasury secretary Steve Mnuchin who indicated it would be simpler than health care reform, i dont think so. Look, when you hear ryan, what youre thinking about b. A. T. , border tax thats a couple of years to figure out whats right. Because its the academics have to get involved. Theres going to be a lot of opining. This is 2018 if they if the house plan which distinctly is about border taxes. The calendar says they can get something out of the house in the next couple of montshs . Does he want to . What is the white house coming up with . They seem to want now take the lead to a certain extent. They dont want to go down the same road they were led by speaker ryan when it came to repeal and replace of the aca which failed and are there going to be dollclashing proposals or they going to come to a compromise between the house in white house the house and the senate. Border tax of course we sat here so many times and talked about the possibility of it. Or lack thereof. Lately i have been hearing, well, is it possible you could bring it down, not from 20 but to 10 . You raised the idea of walmart the other day it didnt go past me although we didnt discuss it that much on the show. Maybe they can live with a border tax because it would put them in a better Competitive Position versus the rest of retail which cant necessarily take the cut or i should say take the increase in taxes they would see. Anybody whos watched the ellison interview with Courtney Reagan which runs in a heavy rotation on our Network Makes it clear that jcpenney is questioning the solvency if this happened. The one yesterday explained the math, a dollar worth of profit on a 10 worth of sale and is paying 35 cents, theyd be paying 1. 40 in tax. So the tax would be far above the profits. The thing that matters is that the people who elected President Trump would be the most affected by this. Paul ryan is a selfstyled academic who believes this is good for our nation. You lower the Corporate Tax rate for the fat cat big wigs and you raise the genuine everyday sales tax for the individual . Thats about as counterintuitive and about as antiwhat President Trump stands for of anything we have heard so far. Thats why i said, if you listen to ryan, what he is saying is its a battle of the forms and their form is dead on arrival whatever they put up. And they have the ability to say dead on arrival to whatever comes out of the Trump Administration. Unless they can bring on democrats. The president has potentially at least offered the idea of linking infrastructure with tax reform. He did that in the New York Times interview yesterday as a way to bring on democrats which theyll conceivably need should we see two competing proposals from the white house and the house clash. Right. But im concerned when the speaker talks about how this could take even longer than health care reform. I have to tell you that means longer than never. Theres no such thing longer than never. Lets get back to the market. Here the fed says maybe things are overvalued. Some people believe we have a lot embedded here in expectations for tax reform. Others say its only a cut coming and repatriation which well still get. Are we ahead of ourselves given what youre hearing out of washington . If we get the latter and it comes in 2018 were ahead of ourselves. The most people expect this to happen during late spring or early fall. I think that the speaker basically just said thats not going to happen. I dont think hes going to let it happen. I think that thats really, really significant. So but lets remember, the fed is 0 for 2 when it talks about stocks. Rational exuberance, what a great time to buy. Biotech greenspan. Abbott, j j, a lot of the Big Pharmaceutical Companies didnt listen to the fed chief because they have no pipeline. Put that in the notes. Yellen or one of her staff. That was ill advised. Ill advised thing to put in. But david, it cant be 2018. And sustain these prices. It cant be. All right. By the way, well hear from speaker ryan. At least well take the g,q a. Speaker buy puts ryan. When last week you were calling him einstein, but in a sarcastic way i thought i picked that up. Yep. Was i wrong . Facetious. Selfstyled einstein. Like einstein bagels. Owned by j. A. B. They own einstein. I got hungry yesterday talking about j. A. B. Really . Still to come, unilever. By the way they own a bunch of food stuff too. And their ceo they dont like that country crock anymore. Its got low single digit growth. See you later. Theyre outlining the growth. They sent kraft heinz packing when they wanted to buy unilever. And also ahead, jeff bezos wants you to take you to space. How hes financing blue origin. See things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. Com its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . If youre gonna needatch dom, a little help. Im in love. Rubber bullets, big mistake. I was a little aggressive. Oh damn no no no no no no lovin that lambo now . Ooooo ahhhhh rated pg13. Experience it in imax. But weve got the get tdigital tools to help. Now with xfinitys my account, you can figure things out easily, so you wont even have to call us. Change your wifi password to something you can actually remember, instantly. Add that premium channel, and watch the show everyones talking about, tonight. And the bill you need to pay . Do it in seconds. Because we should fit into your life, not the other way around. Go to xfinity. Com myaccount unilever announcing plans to overhaul the operations and promising to return money to shareholders as well. This after rejecting the takeover offer from kraft heinz a few weeks back. Earlier on squawk box, the ceo paul polman made it clear he isnt ruling out future deal making for the company. Being a unified company, something that we have studied every ten years by the way. Having a unified company would make this simpler to do. It would allow us with one share capitals instead of anglo dutch having one company to participate in future major m a activity, where to come along and where of interest to unilever. We want to prepare that optionality to position us peter for the future. Wanted that specific sound cut, jim, because it is important what he was talking about. Of course, remember its an anglo dutch company, two separate entities. It was in play, the fact that they have a shticking in the netherlands could have come to their defense. They had no interest in dealing a deal with kraft heinz from the very beginning. Clearly that was not understood by kraft heinz and their backers at 3g. Nor did Warren Buffett in any way, shape or form expect anything of a hostile nature. Something i reported on not on air, but finding out what exactly happened there and they come out with a plan that they told us they would. Not only about putting together the anglo and the uk into one company, but the divestitures and the buy back and a few other things. I had a good talk with paul this morning after he did his conference call. It was a good statement about what has to happen at the company. And remember this is the best this has done the best of the big Consumer Products because they understand the emerging markets. The business hes selling the spreads business has no growth. It hasnt grown in years and years and years, its just been losing. Theres a lot of pe money out there. 5 or 7 billion. These are large deals. And private equity is typically interested if theres a more or a less Sustainable Cash Flow model where they can conceivably cut some costs and layer on some debt. It can find its ways into the hands of private equity. The only division thats actually declining, so you have to think about that. Hes got a lot of divisions you can go and see all those that were winning. What is most interesting is where hes putting his dollars for advertising. 50 online. Including google, facebook. Mentioned that he likes snap. Amazon is a good partner. In the middle of it he starts he says everything has changed. I want you to join the Dollar Shave Club. Watch the video, and i said, well, i want to good morning b talking about what do you think about the big no, i want to talk about gillette. And this is obviously an attack on gillette. Got 3. 5 million in Dollar Shave Club. Its about millennials. 3. 5 million subscribers dubin is hilarious. You have to if you look at my twitter feed, people love dollar shave. Im a subscriber. You do . I do he comes at gillette. You have to open the key. This is not about going to cvs. Did a great job of building value and selling it to unilever. Whats interesting, polman this morning talked about being too long term in terms of his thinking and needing to kind of come to at least an intermediate if not short term view of what shareholders want. Contrast that yesterday with ron shaich who was talking about i hate the quarterly pressure. Im going to be so happy to be private. Obviously unilever cant be private. But paul suppressed displeasure to me he has to do that. But the people reward him for a 1 gain. Obviously also by the way, polman is a big thinker about stakeholders. Big thinker of employees. The model very much about culture. Hard to imagine how the kraft heinz guys could have really thought that there was going to be like oil and water. Paul polman is a statesman by the way. Hes been a big thinker a long time about what needs to be done in the emerging markets. Also by the way if hes putting 50 in the web, thats the most of anybody that i know. Plus hes trying to get millennials. You cant get millennials. I mean, if you go to the Dollar Shave Club commercial, they use words that i would not use with you. Really . Because i wouldnt understand them or because they would be too risque. Would offend me . More kind of more of a youtube approach. I see. Youtube. Wow. Dont forget it, you and i are completely out of touch. Completely. I did join the club. I have been spending 748 a year for gillette. I think the packaging not to fill nine land fills. Yeah. Sitting there and waiting for someone at cvs to open that thing. Im so happy. Could you come over and open t the gillette hey, ill get to you pal. Im jammed. Well see what unilever meant by big acquisitions. Did not sound as if thats near term. Take that off the table like paul ryans tax reform. Back to paul ryan. This is going to be good. Up next hes not jack ryan, okay. Paul ryan is not jack ryan. What happened between the two of you . Nothing whatsoever. I was on meet the press hes really nice. A nice guy. All right. Get ready for your mad dash. I dont want it to be on ryan. Fine. Also ahead, one of the nations Largest Trucking Companies is going public here. Well talk about schneider national. Well have an interview with the ceo. We have only nine minutes until we get an opening bell. Pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. 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We have six minutes before we get an opening bell here. Thursday. Its raining yesterday again. Where do you want to go on the mad dash . I can get the camera on this heresy piece of research . David, theres nothing like a buzz kill. This is a buzz kill. Amd . Amd. Goldman sachs goes to sell 22 down side. Says that look at this. Oh, my god. Were they there for it . No. But it doesnt matter. Theyre a party killer. Taking away the punch bowl. Theyre the Federal Reserve of research. And they say that its intel, and nvidia coming in. Its way too bullish. I was going to do tesla. This is priced for perfection, you have to get out. And amd is the retail way to play chips thats what people have been doing. This is going to put a real damper on it. Look at intel. Make sure people dont confuse what youre saying. This is going to put a damper on this. To be fair, they may have missed it, but the stock is up theyre doing to amd what was done to nvidia earlier this week. It its it inchy. Thats what you have to do. A lot of guys are ayn rand these days. What bothers me, i think they have a great product lineup, but the froth, theres froth. Thats what theyre saying its froth. Tesla can have all the froth it wants. But amd cant. They do gaming chips. I think gaming is still good. Up against intel. I think they have a Good Business against intel. Its remarkable. Like nvidia. Hey, listen, you know, take it easy. Yeah, take it easy. Kind of like right. Take it easy. Like the eagles. Yes. Not the eagles, man. Linietzsche. I have seen the trucks on the road. Yeah, they have some nice trucks outside. They do. Hey gary, what are you doing . 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. Youre watching cnbc squawk on the street. Were live from the financetial capital of the world. The opening bell will ring in a minute from now. What is the key to todays market . I debated doing bed bath, but i was talking about the defensive fleet core but david, it ea its tesla. A sell on tesla by barclays, but the price is sat 165. Talking about that it can be explained by the matrix. Now a little spoiler alert he does it too. This is taking neo, offered the red pill, or the blue pill to kill in anger on bliss. On tesla we take the blue pill while we remain on the red bill. This is what research should be like. This is what i want. I want i think that this is so cogent because it does explain the blue pill. The blue pill explains everything. You have barclay trying to sell, been dead wrong. Dead wrong. [ opening bell ] theres the opening bell you need to see star wars. Schneider national celebrating the Public Offering the truckers know they do. Over at the nasdaq, the Parkinsons Foundation marking parkinsons awareness month. You were mentioning tesla, jim. It had such a great run. You know, the numbers i have heard is hedge funds lost 2. 5 on that stock. And panera, the terminal short. A lot of people were short panera. They thought that the cheddar soup bowl with broccoli, what was the short there . The company had clearly figured it out, accelerated the comps. But the shorts they dont like good stocks, meaning stocks that go up a lot. Valuation has been a sucker game. Always a suckers game to short a stock. You cant do it. Because it doesnt have staying power. Like when thats what it is. Your downside is unlimited when shorting a stock. When youre doing it purely on valuation not on catalyst, not on theyll have a terrible quarter. Something bad is going to happen. Right. When my youngest daughter was in second grade i told her it was a 5050 of a coin flip. She said i know what the trick is. When it comes up heads this is literally of course if you can flip it a million times but no one has the staying power to short this tesla not since your friend ten cent got in. Not your friend but i like that. And obviously panera a very bad short. J. A. B. Did it to keurig. They killed the shorts in keurig. J. A. B. Is a short buster. They are a short buster. Whats the lets get that list. Lets buy them all. It is interesting. And panera stock of course trading not far below the 315. Shouldnt take too long for that deal you were tough on ron. I was . I didnt think i was tough. No, you asked questions about what was the process was. Which is so exciting. People are wondering i have not heard and i know this is going around, that starbucks may have been in there. That goldmans complaining you know, they werent. That they missed it. I dont know, jim. I think starbucks again according to my reporting is they were sort of around there in 16. As ron shaich indicated, all the industries theres back and forth. This was a very people talk to each other. Do you believe starbucks though has more of a competitive threat from panera that is private and that has all of these coffee brands that it could bring in some way because j. A. B. Owns so many . 2,000 panera stores that sell peets they sell stumptown, i love stumptown. A new competitor comes in. But starbucks problem is themselves, its the mobile ordering which is what ron solved. Adam brotman said this will be solved. Thats the mosh pit that ron shaich said there was a moment when he came on mad money. I have got to fix this. Well, when starbucks fixes it the stock will go up. When you have 2,000 stores you have a new coffee. If j. A. B. Which is private can charge well under starbucks then people will talk about it. Yeah. I saw you put them on the wall of fame last night. He deserves it. Because hes retired. I cant put anyone whos active on the wall of fame. You put cote on there too. Hes twice the s p. A lot of voters for this wall of fame or is it just you . Do you know what a yonkers state is where the rich people have three votes to every one . It its A Uber Yonkers state. Lets get to costco. Its not up as much, but it would be a reflection of the current state of retail the consumer which is you hear all the bad things about retail. But it doesnt mean the consumer is bad. Total comps, up 5 and u. S. Comps are up 5 . A remarkable quarter. The Charitable Trust sold it here. We dont like retail. Not a bad month of march. Lets go over lets put this into context of the two other retailers. Elle brands which simply it was not minus double digits. And david i have gone over the Bed Bath Beyond quarter multiple times. Heres what people are missing. Okay, it wasnt great but they had a plan. They had a plan. More importantly, david, listen to me on this. They had 200 million shares and now theyre down to 100 million shares. They have 1. 7 billion left to buy. Its a david, its a 5 billion company. Is this a creeping takeover . Youre talking about it being a creeping lpo for years. I havent missed that conversation. They have reduced the flow as you say, the outstandings enormously. They cut it in half. They cut it in half in five years. They believe in emtithemselves. 150 million shares. Im looking at a new count but whats important, david, what really matters the Company Believes in itself. This was not an existential Urban Outfitters they really and truly believe that they have got the model. 150 million. But they cut it up gigantically. But their online strategy is working. We went through l brands quickly. Its up a lot. Are things that good . Not just as bad. To clarify 144 million shares. It was 2 went down yeah, because they l brands up 10 . L brands did bath and body works was unchanged. I got a first read i wasnt thrilled with victorias secret but it wasnt as bad. Mall traffic is down double digits and their numbers were not down double digits. Matthew boss, satellite work, this company is got oversold. Everyone got too negative. People are no negative on bed beth. Paul ryan could kibosh it in a second if he goes border tax, border tax, border tax. Because these companies are all off the margin. Theyre not walmart which probably secretly actually wouldnt mind onethird of their goods remember, 90 of the goods are sold at retail are made overseas. I hear that frank blake from home depot is talking up the idea that its not a bad thing. They have a much better situation, they have more affluent base, as does costco. Talking about the border adjustment tax. Less likely to happen than not. Home depot has been unique in the sense that it has it has Pricing Power beyond almost every other retailer i followed. Lets talk about yum china, up 11 . Same store sales are up, 2 of pizza hut. Well, they opened 133 new restaurants during the quarter. But got their margin up to the key is operating profit up 22 . 27 when you take out fx. The key is that pizza hut had turned around. It had become a black hole as did Kentucky Fried Chicken and pizza hut is terrible. Yum china, the ceo did a good job. I think he has and handle on it. I need a pure play china, i have yum china which is what they thought would happen. Mr. Novak thought it would happen. Pure play and turn around and pizza hut, wow. I mean, this is the only one i know. People are playing china with three things. Playing with nike, and china is still strong for nike. But north america got weak. Theyre playing with starbucks. China still strong for them. North america got weak. Playing with yum china. Pure play as we like to say. Pure play. Pure play. Theres another one alibaba thats pure too. I like that company. Once that guy you know, aliba alibaba, when we interviewed them at a conference, you and i, they played ropeadope. You know we can run, but they cant hide. The stock is what up one of the bigger gainers from that. Up a lot. Talking about 261 billion market value. Alibaba. Not bad. If they like tesla, holy cow. Well, ten cents probably enough on tesla which is up another percent. By the way our Parent Company shares, jim, i should mention are up over 1 . Comcast this morning introducing its wireless strategy. Which is built around this mobile Virtual Network operation agreement they have with verizon. I know, its called an nvmo, but what youre able to do is have that in addition to the hot spots for wifi. Theyre able to sell their customers a wireless plan. In a sense. Its big. Yeah. Xfinity mobile. So you bundle Wireless Service with comcast, other xfinity experiences. Xfinity mobile, customers only pay for the gigabytes they use. Flexibility to switch back and forth between data options. For now, this appears to be what comcast is happy to go with as their mobile strategy. Remember, there had been plenty of speculation, does comcast have interest in buying an actual operator and having what we like to call owner economics . That does not appear to be the case at this point as we get ready for this possibility of some consolidation amongst some carriers when the anticollusion agreements expire for the for the auction. That comes lets call it towards the end of if month. Thats two notes about tmobile having a rate of increase thats slower. I dont know. It was a downgrade at tmobile. Yes, a downgrade this morning. Ive got to ask you this because and the quarter could be softer. There was a change in the ip the fcc changed so it that verizons and the comcasts could actually be more on an equal footing to google and facebook. Thats the proivesy stuff. But comcast said theyre not going to leverage that and the stock got hit a little. Can you give me the background of how did google and facebook somehow avoid the regulation . Because theyre not under the fccs control whereas comcast was under if you assume its a Telecommunications Provider regulated by title ii thats why. The others are under the ftc. Its a different jurisdiction. Different set of rules which is why they said its not fair. Its not. When i put Dollar Shave Club, google follows me everywhere to the earth. Theyre everywhere from now on. Like every other shave and into the word shave, comcast cant do that. Jim, i want to pivot quickly from this conversation back to washington, d. C. Okay. Devin nunes, of course the head of the house intelligence hes stepping aside. Yeah. Stepping aside from the Russian Investigation. The quote here, several left wing activist groups have filed accusations against the office of congressional ethics that charges are entirely false, politically motivated he says. But despite the baselessness of the charges i believe it is in the best interest of the House Intelligence Committee and the congress for me to have representative mike conaway with assistance from trey gowdy and tom rooney take charge of the Russian Investigation while the House Ethics Committee looks into the matter. So hell continue to be committee chairman, but hes essentially recusing himself as had been asked by many on the left to no longer be in charge of that investigation into russian hacking of the president ial election. The influence that it has and potential ties between trump the Trump Administration an unreal situation. Justice department, comey, you know, thats what actually thats who really well, this house investigation sort of has gone off the rails. Yes, it had. Remember nunes maybe it was during the day, reviewing intelligence. That raised some questions at least. Anyway well, it obscures things and remember, everything you hear about the house takes the houses time. The house has a plan on tax reform. Remember the white house does not. That was pointed by ryan, right . Very clear that the white house doesnt have its act together. I remember well hear from speaker ryan shortly. Others may involve in breaking news about congressman nunes again stepping down from his role leading that investigation from house intelligence into the russian hacking. Right. Or the russian relationships and the influence they tried to bring to bear on the election. Im trying to figure out the market relevance other than it could delay things. Yeah. It could delay things. Could delay things. Every so often we have to do the other news too. Right. David, you follow energy transfesh partners. I did for a while. They own sunoco. They got a 3 billion market cap. So interesting youre getting so many deals that are actually very exciting and david theyre not hitting the big radar screen. No. Kind of Like Unilever selling i cant believe its not butter. And country crock. So many little deals behind the scenes. Deals in the range of 5 to 10. The big guys if youre going to do a big deal, the word uncertainty is coming up. When it deals with cross border and domestic. Given the things weve been the call been talking about on the show. Repatriation, when is it going to happen . People want to see more. It doesnt mean you need to know the bill. But it will get there in a time frame. By the way, i was going to say this, its up too much. Constellation brands, theyll be on the show. This is the quintessential border tax not story because they import from mexico. The metrics are here are extraordinary. This is the Fastest Growing Consumer Products company. The beer this is beer taking share. This is corona you pointed out many times you have to make the mexican beer in mexico. This has been hit as a result of concerns about a trade war between the u. S. And mexico. The shorts are all over this. Betting that somehow its going to unravel the company. You bet against rob sands, you put your life in your hands. Hes put together a incredible country. Prisoner wine is doing good. Ba ballas point. Theres a wine called prisoner . You never had prisoner . No. What are you like chateau what are you doing . All right. We have to get to pisani. Twist off guy. Bob, did you ever have prisoner wine . Yes. Orrin swift believe me. He knows jim knows what he speaks. Huge success. They spun it off, of course and gone into other labels. Dont get me going on the prisoner. Mixed open, i want to show you what happened over in asia. Japan the nikkei hit the lowest levels of the year. They have problems with the yen strength. Like 4 1 2 month high against the dollar. So its tough. Chinas mixed ahead of the meeting with president xi and President Trump. Hang seng was done. Shanghai is moving in line with the u. S. Stock market, that often doesnt happen. Look at europe, of course, the whole thing with the fed paring back the Balance Sheet. That didnt go over well. France, italy, germany, friday i did a story they were at 52 week highs at least. Some cases multiyear highs. So were off of that. There were some dovish comments from draghi. Mixed open over here. Oil moving towards 52. Huge help to Energy Stocks obviously. Huge help to the earnings outlook. Materials, about even on the advanced decline line. The guys mentioned constellation. I have to tell you the acquisitions jimmy is right. This was what, 35. , like four years ago . Do the math on that. Good sales and good acquisitions and good sales of things. Big ipo calendar this week. April is hot, i have been right so far. Sixth this week. Including waiting for schneider here. Schneider the soaked second largest Trucking Company in the United States. Already theyre shouting out indications here, 19 to 21 so 18 to 20, looks like it will open between 18 and 21. Meantime, a little bit of drama about Elevate Credit. Supposed to go public today. They provide online loans to nonprime consumers. You might recall they tried to go public last january. One of the worst months ever for ipos. Theyre trying again and they repriced last night. Instead of 7. 7 million shares at 12 do 14, they repriced it at a different price. Lower price here. 6. 50 a share and so the bottom line is they almost cut the price in half and doubled the shares essentially. The important thing is now theyre going to try to go to public here. I think whats going on, they had to refile with the s. E. C. And theyre waiting for the s. E. C. To grant approval on this in order to be able to go public. Were waiting to see. A little bit of drama about that. Right now, schneider 19 to 21. Ipo market looking good right now. Back to you. Okay, bob, thank you. Bob pisani. Lets get to rick santelli. We are awaiting for speaker ryan. Well get to him as soon as he starts the q a. Rick, take it away. You know, david, of course rates have been a little drift lower. Lot more volatility than we have seen on an intraday base. You see the two day chart there. You see the todays action the way we turned right back down. A couple of basis points. Down one base point on the curve for today. I want to show the charter shows you theres some defense of the 232 area and 237, 2015 settlement big area on the charts. If you open up to december 1st its an interesting pattern. The real debate, will it hold the bottom of the range . A couple of other charts that say it will. One of the charts is the following. The tens they give you a directional buy as to which way the spread will go. Lets say we hold the bottom of this range. If you look at tens minus twos since november 1st, were the flattest on that spread. Now under 110. So we want to monitor that. Bob is absolutely right. I like to pick the chart of the day thats most viewed by floor traders that i see. Certainly is the dollar yen. Bob is right, basically the dollar at the weakest level since about november. You really want to Pay Attention here. A lot of Foreign Exchange issues going on. The dollar index even though its suddenly up on the day, its still down on the year and still a very significant aspect. If youre monitoring things like border adjustment tax as tax reform of course becomes more front and center. David, jim, back to you. Thank you, mr. Santelli. Coming up of course as we have been telling you Speaker Paul Ryan is going to be set to take questions from the media. Its his weekly house his weekly press conference. A bit earlier than is typical. Were waiting to see if he has anything to say about tax reform given his comments yesterday. Well want to see if he weighs in already with a statement but see what else he has to say about devin nunes deciding to step down from heading the investigation into russian ties with the Trump Administration and into the election. So well get to it when it comes. We have a lot more after this. Lets go to capitol hill. Speaker paul ryan about to take questions at the weekly news conference. Lets listen in. Everybody is getting off the bus right now. All right. Well, this has been a very productive week in the house. As we continue our efforts to repeal and replace obamacare. As i said before, this promise is too important and the consequences of inaction are just too dire for American Families for us to just give up. That is why over the last couple of weeks we have encouraged members from across the conference you see many of them represented here today. We have encouraged members from across the conference to come together and to try to find consensus. In particular, i want to thank kevin brady and greg walden our two chairmen for being so engaged in the talks. We have made some Real Progress this week. Thats why were here today. We have come together on a new amendment that we all believe will lower premiums and provide added protections to those facing real challenges gaining access to affordable care. This brings us closer to the final agreement that we all want to achieve. This idea was offered by two of the most conservative members. Gary palmer and david schweiker. But it has been embraced by a broad spectrum, people representing all corners of the conference. As you can see by a few of the members here today. I would let the author speak more about it, but let me say briefly. This amendment would create a new federal risk sharing program. Its a right risk pool that will lower prices for those with preexisting conditions. I have asked the House Rules Committee to mark up this amendment and add it to what we were already considering before. I want to thank gary and dave for being so productive throughout the process. Their amendment makes this a much better bill. It gets us closer. This is the kind of collaborative, bottom up effort that we have been looking for. Like i said, we have more work to do and those conversations continue to take place and they really show promise. But this amendment alone is Real Progress and it will help us build momentum for delivering on our pledge to the country. I want to ask the majority leader to speak if he could. Thank you, speaker. Thank you for being here and good morning. Well, there we go, david. Once again it turns out to be health care and its a slow track. You know health care, you cant cant change it without at least remember it took a year for obamacare. Lets not forget this could be equal. It really represents the major derailing does it surprise you that they focus on health care . No, the speaker is simply not focus on the job growth. A different issue. Or they feel this has hurt job growth. This is a very critical moment for the Trump Administration. Its not china. Its his own party. And whether his own party is going to allow them to do the things that are necessary to create more jobs in america. Now, i think the republicans have felt that this has been a job you know, stymies jobs. But to put this thing back on the red hot griddle is to delay the things that i think are important for the market to continue. Right. By the way well go back to the press conference when speaker ryan takes questions. But for now, you can see majority leader mccarthy addressing yeah. Look, im not trying to be too critical. I think the market went down yesterday off of ryan. Okay . And off of the fed. The market is not bad. If we get a strong employment number. And that key thing that we havent talked about, david, was the claims this morning. Theyre unbelievable how low. I mean, theres job creation. Job creation without the fed squawking about the stocks being too high will breed a better stock market. I dont know if youre going to be around at 8 30, there will be a big number. Why wouldnt i be around . Youll be around. I want people to know were still buddies. People think were too overcritical. Lets get right on mad money tonight. Rob sands from constellation. Yeah. Dave, i never stop with the teasing. I think that rob will tell the story about the great packaged good company that is really that he created himself with the justice department, making them spin off with a little help from the government. But we have only two we have madella and corona, thats all you need. They have double digit growth and nobody else has it in the whole industry. We sell pacifico and in mexico where my house is its the worst. Its a premium brand. Like charging busch charging 9 a glass. Busch, keystone, pbr. All right. Feingold. Well come back to capitol hill when speaker ryan takes questions from the rmedia. Thats all for jim, not just today, but until tonight. Back after this. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. At crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. Good morning. Welcome back to squawk on the street. Im sara eisen here with david faber and mike is anal santoli m post 9. Were watching live pictures of capitol hill, theres house ways and means chairman brady speaking. Well continue to monitor that for you, bring you the q a as soon as we get it. Especially in the wake of those market moving comments yesterday from the House Speaker as it relates to the time frame for tax reform. Our job harwood john what areward is monitoring this. We can get the announcement on devin nuance breaking moments ago. Exactly. Look, republicans are treading water right now. Just some context for the press conference and you jim cramer was talking in the previous hour about how focusing on health care distracts from the tax reform and infrastructure that might have a more direct effect on the economy. Theyre treading water because this is the day actually tomorrow, friday, is the day that republicans had planned had said that they were going to have a repeal and replace bill on President Trumps desk for his signature. The ship hit the reef, theyre taking on water. The members are treading water right now. Trying to create the impression they havent given up. But they are trying to transition to the issue of tax reform and when wapaul ryan sai yesterday that it was going to take more time, that caused the market hey, im im going to cut you off to take the q a. Lets listen in. [ indiscernible ]. Yeah, i think thats narrowing quite quickly. What this idea represents is a goal that everyone from the Freedom Caucus to every other group thats represented here is seeking. How do we lower premiums . How do we lower premiums and continue the protections for people with preexisting conditions . This idea does that. And so this is one of those issues that brings people closer toward consensus. There are some other ideas that were still working on and talking about, trying to build consensus on. To continue to do just that. Lower premiums even further, give states more flexibility so they can address the unique needs of their Insurance Markets while making sure we keep the protections for people with preexisting conditions. This someone of the ideas that get us closer together and closer to consensus. Thats why well keep working in the days and the weeks ahead to go and find that consensus and try and get this bill done. Back in philadelphia in february [ indiscernible ]. Still on it. Yeah. You talked recently about [ indiscernible ]. Jonathan, i will never stop believing in the charts. Im a big believer in project management. We have in our time line lots of flexibility build into it. We have to work with the United States senate. The senate moves a little more slower on any week, day, month or year than the house does so we have plenty of cushion built into our plans and we are well within that spectrum of time line that we built into dealing with the obamacare time line. Also on the health care all those things are on still on the same time line we have been on. Mr. Speaker, devin nunes has stepped aside from the probe into the russia potential ties and meddling in the election. Did he do anything wrong no, i put out a statement. First of all, nunes has earned my trust over many years for his sg sgintegrity and his critical wo to keeping americans safe. He continues to have that trust and i know hes eager to dralt to the Ethics Committee that he has followed all proper guidelines and laws. In the meantime, it is clear that this process would be a distraction to the House Intelligence Committees investigation into russian interference in our election. So chairman nunes has offered to step aside as the lead republican and i fully support his decision. Representative mike conaway will lead this investigation with respect to the House Republicans on the House Intelligence Committee. Im confident he will oversee the investigation and follow the facts wherever they may lead. I dont think thats the case but i think chairman nunes wants to make sure this is not a distraction to the important investigation. He wants to go clear himself while this Investigation Continues on without any kinds of distractions. Yeah . To be clear on that, given the fact that you say he has your support, reiterated several times your trust in him. But the fact that had been a distraction does he still ha have do you still have confidence in him . I do. I do. I do. Last question. Right there. Can you focus on [ indiscernible ]. Im not going to get into the particular details of the conversations that are going on. But we believe that there are additional reforms and ideas that can do both things. Protect people with preexisting conditions and continue to lower premiums and give states flexibility so that more insurers can come into the marketplace. One of the concerns we have is that inshiurers are leaving lef and right and some people are down to one choice and thats not good. Having one choice is not good, thats a monopoly. We are trying to find the provisions that bring more insurers into the market place so that people have more choices and then you have more competition and with more competition you have lower prices. We are all dedicating to making sure that people with preexisting conditions gets affordable coverage and we want to find a way to do that in such a way that everyone else whos in the Insurance Market can also get lower premiums, affordable choices and more competition. Thats what this is saul about. I wont go into the details, the particulars but those are the kind of debates were having. Thats why this is a step in if right direction. Its closer to the final goal and agreement and well keep working on it until we get it right. Up that. Thank you. And that was house Speaker Paul Ryan taking some reporter questions in the weekly news conference. Still focused on health care there and trying to repeal and replace obamacare. Did take a question after that announcement this morning that devin nunes the house intelligence chairman would step aside from the Russian Investigation. He supports him in his role as chairman of the committee and his decision to step aside. John harwood has been monitoring this. We were waiting for comments on tax reform after he sort of punted and pushed that back in terms of the time frame yesterday. Didnt get that. Thats right, sara, i think we need to step back. Speaker ryan is a very effective spokesman for his party. But when you look at the bigger picture, weve got a republican controlled government thats in a considerable amount of difficulty so far. We have got a Health Care Plan that was supposed to be put on the president s desk by their time line tomorrow. Thats not going to happen. They dont have an agreement. They do not have consensus on a tax reform plan. The white house, house and senate all have different ideas about this. Paul ryan said that out loud yesterday, caused the markets to go down. We had devin nunes step aside. We had steve bannon yesterday in the white house demoted from his position on the National Security council and interestingly in an interview that President Trump gave yesterday to the New York Times, he threw a new wrinkle into the infrastructure discussion that is not going to go over well with those members of the house Freedom Caucus. What he said he might have a trillion dollar infrastructure plan on top of whatever Public Private tax credits he has. He said when you can borrow so inexpensively you dont need to do Public Private. I can guarantee you the members of the house Freedom Caucus arent going to look kindly on 1 trillion in borrowed money to finance infrastructure projects. A lot of turbulence ahead for this republican government. John harwood, thank you for putting it in perspective. Lets put it through the market lens right now. We are seeing the Stocks Holding up. The dow is up 30 points. Joining us is david zer bus of jefferies to talk about this. We have the investment strategist joining us here on set, bruce bittals. Not on set, but remotely. I got mixed up on that intro. The question is tax reform and whether the delay that House Speaker ryan yesterday is a big disappointment for the markets. It came in around the time of the fed minutes. Also there was some nervousness ahead of the president xi visit. What do you think . You know, sara, look, im excited to wait and learn about the tax reform like everyone else, but im realistic in my expectations. I dont think it will come that quickly. I dont think that infrastructure is going to come that quickly. I think the market yesterday was probably responding a little bit more to hawkishness out of the fed and the minutes that came out talking about the cessation of the investments earlier than many in the market had thought. So i dont see its sort of putting the kibosh on tax reform thats changing the Market Sentiment at least yesterday. In general, just to answer your question, sara, i remain pretty optimistic. I remain more optimistic about the deregulation side than the fiscal easing side because thats easier to execute at the cabinet level. I think those are powerful tail winds to creating stronger growth and real returns in capital. Bruce, are you holding on to the optimism . Yes. I think the delay in the tax reform bill is probably bullish for the markets in this respect. We had a big rally after the election. Perhaps expectations got ahead of reality both on the confidence level and by the price level of the averages. But as long as that carrot remains out there, the regacarr tax reform, i think the downside is limited and we have that to look forward to. The markets typically climb a wall of worry. The fact theres uncertainty out there right now does not bother me. David, you mentioned that the market seemed to take this tone of hawkishness from the minutes yesterday, perhaps negatively. I wonder what you think the broader take away is here . Seems to me that markets are fine with the fed. Obviously on a tightening path if its in response to an economy running hot. If the market sees the fed as having some other dogmatic sense we have to get moving in the hurry, they dont like it so much. I think thats right. I think its a difficult situation to ascertain. I dont think the feds politics line up that well with the current administrations politics. So theres reason to consider that they could go in different directions. And although the feds been kind of waiting in the wings with like all of us for fiscal and regulatory policies to come into play, i thought yesterdays move was a little more aggressive than maybe i would have thought i would have thought personally could come this early. So maybe we are going to see more of a head butt between the administration and the Federal Reserve and less about Economic Issues and more about the way of politics and the difference the views on politics that are between the two institutions. Thats been a view of ours at jefferies, but we thought that might come at the end of the year as the fiscal clouds parted and we got more clarity on what we were getting there. But i thought yesterdays discussion by the fed was definitely more aggressive than most people i speak to in the market had thought. Sort of brings forward a conversation, bruce, that maybe we thought wed be having next year. But clearly the fed is talking about it and that is Balance Sheet normalization, 4. 5 trillion Balance Sheet. What does that look like . What are the market implications of that . I think you can argue that what the fed is trying to say, that the economy looks like its in pretty good shape. And certainly thatll be a plus for corporate earnings and for the stock market going forward. I dont think the fed is going to be that aggressive. However. If you look at whats happening in the debt markets, the yield on the benchmark ten year treasury note is languishing 2. 4 . 2. 6 is a great wall that it cant get through. I think short term rates likely are going to go up maybe 1, 1. 25 before the end of the year but i dont think long rates are going to go up much. Its pretty difficult to put a stock market down unless Interest Rates are really rallying significantly. We dont see that. David, i guess the big question, i mean, none of us can really decide for sure how policy dependent the market is right now at these levels. I just wonder what you think is the current state of the overall kind of economic path globally. Is there momentum thats sustained or have we seen a little bit of a burst of growth in the last several months that might be petering out . I mean, it comes back to this kind of sentiment indicators versus the soft versus the hard data in the u. S. And the soft stuff is just ripping. The hard stuff is hanging in there. But it hasnt shown the same robustness. I think the sentiment is very strong. It will change some of the hard data. We saw a great adp yesterday. Well get another look at payrolls in the labor market tomorrow. Im reasonably optimistic in the u. S. That these fiscal and regulatory easing tail winds are really going to set the stage for some better news ahead on the economy. I cant be that positive for europe or japan at this stage. I think theres still plenty to be concerned about there. Although im more optimistic on europe given what happened with the dutch elections. We have to get through the french elections. Its a critical thing. But in the end, i dont see them as power houses of growth. The real growth change is coming in the u. S. And its likely through the policies. David, thank you. And bruce bittal from bardz. Well continue to watch washington. Were waiting news from the house intel committee, Ranking Member adam schiff, on the recent announcement that devin nunes will step aside from the Russian Investigation on the House Intelligence Committee. Squawk on the street will be back. Yes . 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. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. Find out how american xfinill get my coat. Ek is back. Meaning you can catch up on all the moments house intelligence Ranking Member adam schiff, a democrat, now responding from capitol hill. To have a fresh start moving forward. I look forward to working with mr. Conaway. This i think i think this investigation is of such critical importance that we need to get fully back on track. It is i think worth noting that the investigation never went into hiatus. We have been continuing to help our witness lists to work out some of the logistics in terms of how we bring people before the committee. What the process will be. We continue to go through the documents as i understand it now the materials that the chairman viewed at the white house that i subsequently viewed are being made available to the full committee. I think thats a very positive step as well. So i do want to say i look forward to continuing to work with the chairman on the whole range of other issues that our committee has to deal with. We have i think worked together very well on a range of other issues and obviously the russia investigation is important. But there are a whole host of other issues that the committee deals with on a daily basis including of course some of the preeminent threats to the country posed by al qaeda, by isis, north korea, iran, the challenge posed by china among others. So a lot of continuing and important work to do. I look forward to working with the chairman on those issues. I look forward to working with mr. Conaway and the other Committee Members as well in the investigation going forward. And have a great admiration and respect for mr. Conaway and i look forward to our continued work on that together. I thank you. Mr. Brief statement there from house intel Ranking Member adam schiff. The democrat just responding there in case youre not keeping score to the announcement we got moments ago that devin nunes, the house intelligence chair, will be stepping aside from the Russian Investigation about meddling into the u. S. Election, about possible ties to trump. Hes still chair of the committee and House Speaker ryan backed that decision by nunes and of course backing nunes as still remaining the chairman of the House Intelligence Committee. Guys, we watch all this through the market angle of how much of this russia investigation is going to be a distraction . How long is it going to take to get tax reform after that set back from House Speaker ryan on the time frame. I guess disappointing that we didnt hear more from ryan. I guess he said his piece yesterday. That its somewhat difficult to get competing plans if we get them from the white house certainly. And then the senate weighing in as well on tax reform. We knew that was not going to be an easy area to forge agreement. Even though you do have the same party in control. I wonder if its a signal theyll let the white house take the lead a little bit more as were hearing the white house is crafting its own proposals. I dont know if thats the case. Certainly kevin brady doesnt seem to indicate that would be the case. Dont forget the senate which will play an Important Role if it ever gets there. As it probably will. Orrin hatch always has a very important impact on tax policy in this country. Thats yet to even come into play. Theyre just sitting back and waiting. What we hear is the senate not on board with the house blueprint if it involves the border adjustment tax. President trump is getting ready to meet his counterpart xi jinping this afternoon. We have more from beijing on what the chinese are expecting from the meeting. Eunice . Well, thank you so much. The most important thing from beiji beijings perspective is for xi to project strength at the meeting. China is facing a leadership shuffle in the fall. So for domestic reasons, president xi wants to appear tough. From the governments perspective here, the worst Case Scenario is if they see any development that could potentially embarrass president xi. Any awkward moments, any disrespectful tweets or any signs of open hostility. In other words, they dont want to see a repeat of President Trumps meeting with german chancellor angela merkel. In terms of the best Case Scenario they want to see a path to constructive dialogue and also to avoid a full on conflict or disagreement over important issues like trade. Market access or north korea. They also are hoping to get signs of stability in this relationship and just to illustrate that further in the past hour, the global times news which is a communist party paper has started to tell the chinese public that china has main contin enjsy plans for on the tin jensie plans between the two countries and nothing will dissuade beijing. Beijing is trying to project strength but at the same time, indicating that its a little bit uncertain about how this meeting is going to go. I would love to know what the contingency plans are. Eunice yoon, thank you. For more on the significance on the meeting with president xi, we have two experts. Former ambassador to china stapleton and gentlemen, great to have you both. Mr. Ambassador, president xi comes to maralago to shake the hand of a man who accused him of raping our country. How is this going to go . I think the summit will go well. This is no longer the campaign. We now have the leaders of the two most important countries in the world meeting together. I think they want to establish a relationship that will help them to deal with the problems of the bilateral session relatirelatio. There are two goals that both share. One is to establish a personal relationship that will help them manage the problem areas in the relationship and secondly to create a framework for dealing with the issues because they cant be solved at simply one summit. Well try to fix some of your audio problems there. But tom, let me turn it to you. You have been a board member of a number of chinese companies. I think youre the First American to sit on a board of a Major Chinese bank. The narrative going into today is that President Trump is going to be more aggressive on north korea and more aggressive on trade. How do you think the chinese are going to react . Well, i think the chinese will expect Mutual Respect to be the objective of the meeting and i think if President Trump becomes too aggressive or too assertive early on in the meeting i think that hope will be violated. My sense is that the chinese are really looking for an outcome here that is simply the start of a relationship. In many ways this is is an introductory meeting for both leaders, theyll try to understand one anothers style and this presents the basis for continued discussions around more Strategic Issues going forward. I think in my view if we can get to the point where both nations perceive the opportunity to create a long term strategic relationship that might span four or five decades with perhaps a rolling five year plan that would be the most significant outcome. That cant be accomplished today but thats a first step to creating cordiality. Tom, what message or tone do you think the chinese leadership is going to deliver on the trade relationship in particular . In other words, if there is some kind of friction back and forth about perhaps having more of a level playing field, what do you think their stance is going to be to the president . Well, i think theyll come in with a firm russ aation of the facts. From their view, the American Companies benefit in an extraordinary way from trade with china already. Exports are nearing 500 billion annually and theres a chance to go up given the growth into which the companies are selling. And the fact that china appears to be liberalizing certain segments, not sufficiently fast to the liking of American Companies or ceos. Naturally. But in their view liberalizing, nonetheless. They feel theyre conforming and trending in the right direction and putting forth a positive atmosphere for American Business. I think if you were to talk with the american ceos directly my view, my experience would suggest that american ceos would like to have a more level playing field. They would like the Trump Administration to advocate for that. They do not however want the Trump Administration to disrupt what has become a stable atmosphere for American Business in china. They simply want it to be improved incrementally and in positive terms. We should look today for something to come out of this that really begets more stability, rather than more volatility. Ambassador roy, is it your opinion then that they really will get to some of the meatier issues between them on trade given President Trumps focus on the trade deficit on what he says is currency manipulation of china or are they setting the stage for a future conversation . Oh, no, i think all of the difficult issues are going to be on the table. But theyre not going to be solved at this meeting. I think what they need to do is to get the issues out in front of them. And then agree between the two leaders that these need to have a process that will produce a positive outcome. Well it there, gentlemen, as we wait to see first photoops this afternoon from maralago. Ambassador stapleton and tom manning. As we head to a break, take a look at the shares of schneider national. This is the ipo that just priced and traded up a little bit from the 19 price right here at the nyse. Well sit down with the ceo, chris lofgren, coming up next. Much more ahead on squawk on the street. 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 welcome back to squawk on the street. Im Courtney Reagan. Heres whats happening at this hour. A Senate Showdown is at hand over neil gorsuch. Democrats will try to block the nomination by denying the republicans the 60 votes needed to proceed to final passage. The gop expected to respond by changing senate rules to require only a simple majority to move forward. Japans Prime Minister shinzo abe spoke with phone with President Trump, a day after north korea launched a Ballistic Missile. He said he and trump agreed that sanctions are not enough. British Prime Minister theresa may welcoming donald tusk to 10 downing street. On wednesday, he laid out the tough guidelines for the brexit negotiations. Residents cleaning up after a strong storm hit parts of kentucky that left major damage in its wake. Homes were damaged and power lines were brought down by large hail and strong winds. Thats your cnbc news update for this hour. Back over to Jackie Deangelis for the inventory report. All right. Im not jackie of course. But you already know that. Well get back to her later. Lets get to the ipo here at the new york stock exchange, one of the Largest Trucking Companies in the United States. Schneider national went public not long ago. Joining us is the ceo of schneider national, chris lofgren. This company has been around since 1935. Thats right. Now youre public. Why the choice to go public . We have a number of things we have done over the past couple of years to really grow and grow through acquisition and organically. It was an opportunity for the family to now start to move the ownership into the fourth generation. And so separating those two things and letting the market help that process was just the right time to do it. So you have selling shareholders here that are the families that ben friefit from ipo today. Yes. Youre raising money to pay down debt and do a few other things. Yes. We had two acquisitions last year. So were paying down that. Were we have some longer term debt well get rid of and position ourselves to take another run from mergers and acquisitions. Right. All right. We like to hear that. Hows the business overall . We heard Different Things about the freight in the country. Its a fairly good indicator of economic health. Yeah. We eat and we buy clothes and we buy things so it rolls along if you will. But its been its been kind of tepid. Everybody is in a hopeful mood. We just say we cant put a lot of hope in our trailers so were looking for things to pick back up. What about jobs . Is there still a trucker shortage . There always seems to be a trucker shortage. We like to believe that we lead the pack in getting the best and brightest to come to work for us. But its not an easy job. So not everyone can do it or wants to do it. Its interesting because as we constantly hear about a shortage of truckers, you also hear about the long term industry moving to driverless trucks. Is this something you have to set the stage for down the road or explore in any way . Well, i will tell you, we think this autonomous truck move is great because its fundamentally making our trucks safer and easier to operate for our drivers. And there will be probably be some point in time where that is going to work and be there. But im not sure the motoring public is comfortable yet with 80,000 pounds running down the road and nobody sitting in it. I think society will have to go through a transition as well. As you think of the future for the company, do you think about that 10, 15 years from now . What kind of time line do you use when you use Autonomous Vehicles including trucks . I think theyll play roles in different applications and well start and move it there. But i really think when you get and the motoring public and theres nothing like a driver to be able to respond to whats going on. Chris, President Trump met i think two weeks ago with the truckers association. He wore an i heart trucks pin. He got inside. Are you optimistic about the policies and which ones do you think can move the needle for the industry . I think this infrastructure investment, we have run on the public roads. Thats going to be important. The industry is willing to do their share to help pay for that frankly which people are often surprised by. But thats going to create jobs. Thats going to have goods move. So in the end, its well have to compete for drivers but its going to be good for the industry. And now most of your trucks are owned by you and operated by your drivers but there are also trucks owned by your by driversio it si outside, correc . Correct. Owners operator. Do you move towards one more than the other . Ours is an strategy. There are some who like the industry, who want to have their own truck or a few trucks and were delighted to have them come and work for us. And so that plays a part in how we put equipment on the road and we like owning trucks. All right. Well, today you also own some stock i guess. Thats probably trading and up, i think as well. Its moving up a little bit and thats okay. Slow and steady is fine with us. Thats kind of how we run the company. Well, thank you for being with us. Appreciate it. Its a pleasure to be here. Thanks so much. Have a great day. Ceo of the newly public schneider national. When come back, blue origin founder bezos is speaking out about his top venture. I think the demand is up to the customers. As i said before, you know, i have thrown parties before that nobody came to. And i dont think thats going to be the case here. Im super optimistic. Super cool outfit. So will customers pay up for a trip to space . Would you . And the death of the mall. Is it a reality . Is it impacting the outlets . Well talk to the ceo of tanger family outlets. The dow is up 50 points. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Top analyst dick bove said hes growing nervous about the bank stocks. Find out why. More squawk on the street is coming up. No secret, retailers are getting hit hard this year amid concerns of the border adjustment tax suspected to levy a 20 tax on goods if it passes. Including the traffic and the decline of the malls. For more on what kind of impact it will have on retailers lets bring in tanger family outlets ceo steve tanger. Welcome to post 9. Plenty of doom and gloom for the sector. Is it spilling over into outlets . No, actually not. People love to shot in the outlets. They buy direct from the finest brand names and designer names in the world. Cut out the middle man and save 30 to 50 every day of the week on the broadest assortment of products. We have a different Distribution Channel than the malls. We have no Department Store anchors. We have no macys, sears. Any of the troubled retailers. So our products are sold direct to the consumer at great prices every day. And people love to shop in the outlets. I love to shop in the outlets. As we have talked about. But what about the pricing advantage with the rise of the e commerce and online, does that make it harder to be as enticing from a lower priced perspective . We have taken price out of the equation. We at tanger guarantees that every item you buy in a Tanger Outlet center in this country and in canada is the lowest advertised price for that product. If not, well match it and gladly give you the difference. So were not worried about price. Our consumers arent worried about price. They trust that they will get the best value every day when they come to the outlets. Steve, you know, you kind of paint a picture here as in youre pretty insulated from the big trends. Your mall reits are getting punishmente punished. Are the stores that are closing not part of the chains in the Outlet Centers . Actually as many stores close at full price retail it helds the outlets because theres less dilution of the spending and retail. Theres more focus on value. Actually, our retailers have done a terrific job of merchandising their stores. Were the only place that you can go for their complete assortment of products in the environment they envision at the prices they think are great value every day. So yes we are isolated. We have been doing this for 36 years. We have never ended the year less than 95 occupied. This is not the first cycle we have been through. No. Although this cycle mike makes reference to is different because were talking about the growth of online. I mean, every day, more people are getting more comfortable with ordering things via the internet. Thats not a threat to the Outlet Stores . Well, we have been having this conversation for 20 years. You may recall 20 years it was called dotcom. And now its called e commerce. Its called amazon. Com and its got a 400 what is it . Now . 470 million market value, you know, thats not something thats insignificant 430, excuse me. Amazon is a convenient scapegoat if stores are well merchandised and well priced. And give the consumer a value, they do well. You cant buy products from tj maxx or marshalls online. And their stores are doing extremely well. If you give the consumer the value they want every year, and every day, theyll shop with you. Oh by the way, the inconvenient fact is that most of Online Shopping for retailers of and our products are apparel and shoes primarily with 35 to 50 of the product returned, very few people make money. And were a for profit business as is most of our customers and the dotcom or ecommerce part of the business is not cash flow positive. The Outlet Stores are very positive. Can you stay that way if theres a border adjustment tax . I cant speak to the political atmosphere, its not something im qualified to do. But we have been through we started in 1981. Keep in mind there was a major tax adjustment and change in 1986. There was a stock market crash in 1987. Various other major recessions. The outlets have performed beautifully in good times people like a bargain and in tough times like these, they need a bargain. We do well on all economic cycles. Is it a frustration that the stock price as michael referenced has not been a particularly good performer . I think down 9 year to date . Candidly we have been public 24 years. We have been times that we have we were the flavor of the month and there are times we are not. The stock market price is is only one indicator. We look at producing value for our shareholders. We completed our 53rd consecutive quarter of comp increases. That takes into account all of the business youre talking about. All the sectors of the business. I dont know if well be able to continue that. We sure hope so but we got through 13 consecutive years of comp noi increases. Ask them how many years they have had comp noi increases and were in a tough competitive business. Have you not seen any change in customer traffic . Is that something youre able to monitor pretty closely . We do. We have card counting traffic at every one of the Shopping Centers and we have measured it for 25 years. Our traffic is up 1 to 2 . Actually in apparel and shoes which is primarily the product we sell theres been price deflation. So if you have 2 to 3 deflation in out the price you have to sell four to five the number of units to make the number of dollars which were able to do. Lets not forget last year in february was leap year. So you had an extra day of sales and lets see how much focus that gets in the First Quarter when they report sales. Hottest outlet store right now . Theyre all hot. We love cant name a name . The ones that pay rent we love. Theyre all your customers. Theyre all our babies and we love them all. Good to check in with you. Thank you. Thank you as always. Keep shopping with us. Tanger outlets. Oh, she will. Yes, ill do my part. Lets go over to jon fortt for a look at whats coming up on squawk alley. We will talk to someone who is a bit of a contend retail content retailer, well talk youtube tv and more coming up and we have Elevate Credit ipo here on the floor. Interesting time for them especially given trumps assault on regulation and then Carol Swisher will talk about tech pros and whats not the problem with Companies Like uber. All that and more coming up. Eirs connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. 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. Welcome to holiday inn whether for big meetings or little getaways, there are always smiles ahead at holiday inn. Amazon Ceo Jeff Bezos speaking out about his about his super secretive venture. Morgan brennan is in Colorado Springs and joins us with those highlights. Hi, morgan. Reporter thats right. Great music choice. Loving the david bowie. Take a look at this. This is a model of the new capsule that will carry six paying customers to the edge of space at a time. This is going to be roughly 11minute trip. Its going to include several minutes of weightlessness and its taking place in what is a fully autonomous vehicle. This is the brain child of the founder and ceo of blue origin and amazon. Speaking here yesterday, bezos is optimistic about demand for the trips bringing down the high price of space travel. If we can reduce the cost of launch by a factor of 10 and then by a factor of 100 and believe me that will take time and a lot of hard work, but if we can do that, youll live in a new world. A golden age of space exploration. Reporter so in other words, bringing down the price of a launch from say 100 million down to 1 million, thats a scenario bezos envisions so that millions of people can live and work in space. Now, the key to all of this, being able to reuse rockets like the one to my right, which has been launched and landed five times as well as the capsules like this new capsule and do so efficiently. You have to get much more like airliner operations. You have to be able to land, refuel, maybe do some minor inspections, and then off you go again. Thats where were going to get to. Reporter but bezos is stressing all of this is going to take time. While hes hopeful that they will Start Service later this year, he and his team is by no means racing to hit that deadline. Instead, theyre focused on testing and safety and thats the reason that blue origin has not yet started taking reservations or disclosed a price for these trips yet. Guys . Interesting. I guess bezos also mentioned that he feels like the Business Model for this venture is pretty good because he keeps peeling off a billion dollars of amazon stock and selling it to back it so its good for another few decades if thats the way it goes. Reporter yes. He did say that yesterday that hes been funding this by selling or looking to fund this by selling 1 billion worth of amazon stock a year invested in the company. The goal is for blue origin to generate its own sales and profits and be completely sustainable because he believes thats the key to lowering these costs of space so, yeah, its very interesting. I think the other thing to note there on that point is that he does have the money for the long game here. For him, its not necessarily about space dominance in the next couple years, but 20, 40, 50 years out. I think of elon musk, richard branson, is there competition here . Is one ahead of the other . Reporter there is a lot of competition here and certainly the rivalry between blue origin and spacex has not been underplayed in the press. Its something that came up yesterday. Bezos did speak to it. He talked about the fact that he and musk are like minded and focused on reusability and both launching and landing rockets vertically but engineering about how theyre going about this is very different. They are trying to hit aggressive deadlines for musk and bezos is launching it and testing it and getting as much information out of it as he can so that when the time comes to build their next generation rockets, theres all this information and wealth of knowledge that they can basically create that vehicle from the ground up as reusable. Right. Then we can send tourists like mike and david to space to test it out. Morgan, thank you. The dow is up 32. You wouldnt do it . I think its interesting that you chose both of us. Ill spend you guys to space. So you can be alone. So i can find out what its like. Lets go out to rick santelli. Good morning, rick. Good morning. Yesterday was really fascinating with the fed minutes. Believe me, there have been many sets of minutes even when the notion of normalization and higher rates was on its way as we just passed the hurdle of the third tightening. The markets were ready for everything. Deep inside of all of this were Balance Sheet issues. Ive had former fed officials on whether its bob heller or mr. Olsen that talked at great length in their opinion this was an issue that needs to be tackled. And, you know, the fed is addressing it. Hats off to them. The real issue is many traders on this floor look up and just lets macro some of the fundamentals. Some of the feds favorite measurements for inflation have now crossed that magic 2 threshold. Others arent quite their favorites like cpi year over year that have been over 2 for quite a while. When you add in what has happened since november, whether its who was elected, who wasnt elected, no matter what it is, just the fact equity markets are up, think about it this way. As you look at a chart since november and theyve been in somewhat of a tight range at a time when were making history on how well exit and normalize rates and you see a market thats pretty calm all things considered. So traders on this floor think it is as cnbc and their guest talked about after the minutes, it could be more of a stretch process. If you substitute runoff, meaning once the securities material and talking about treasuries and mbs, Mortgage Backed securities, instead of reinvesting them, of course theyre not. The Balance Sheet shrinks. Thats not talking about generalized sales that at some point might have to occur but you can play the runoff for a while but its a tradeoff between less tightening and the issue were discussing. You could make a couple of meetings go by where you get more in the specifics. Last, heres the ironry ry of all. Me and many others since 2010, 2011 and all of the episodes of qe talk about how its been the feds mission to hold up assets but yesterday they throw out the notion of stock prices being high. It just seems so counter counterintuitive to me. They gave it a jab. A shot. I dont know how its going to turn out. The relationship between stocks and Interest Rates is more important than ever as stocks are weathering the storm every bit as good as the yield curve. Back to you. I thought you would have an opinion on those fed minutes. Rick, thank you. The s p is up 0. 2 being led by energy. Much more ahead. Stay with us. Last year, he said he was going to dig a hole to china. 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Welcome back to squawk on the street. S p up. That does it for squawk on the street. Lets send it over to the team at squawk alley. Thanks. Good morning. Its 11 00 p. M. In beijing. 11 00 a. M. Here on wall street and squawk alley is live