Transcripts For CNBC Squawk Box 20150422 : vimarsana.com

Environment today. Earth day started in 1970 making today its 45th birthday and attention sky gazers out there, aprils top meteor shower is here. Expected to peak before dawn today and again tomorrow. This is debris from comet thatcher. This could be the best part. No special equipment is even needed to see them. Just hope there arent too many clouds out there. Climate change. Earth day is not a climate day. I celebrate it. You should celebrate the earth. But are you sure the meteors arent related to the warming . You know the earthquakes from fracking i can sort of you know, i dont know enough about it but i could sort of see how that makes sense. Its a lot more sense than 100 of an increase causing all of these different things. Were going to celebrate it. We needed the earth. Are you an earth mother . Youre down to earth. A little crunchy. Youre not like a tevas. Every once in awhile i wear those out. Why is a shoe company trying to buy mylan. No that would be teva. So teva you were out yesterday. Yeah. You saw the headlines. Yeah. Didnt quite add up. All right. Lets check on the markets very quickly if youre just waking up well get you up to speed on this. Right now things are under a little bit of pressure. Right now the dow futures down by 60 points and nasdaq down by 15. Were looking for big stories this morning. A couple of things to watch. Before the bell heres what we got coming. Well be looking for Quarterly Results from Companies Including boeing cocacola and mcdonalds. Coming up this afternoon well hear from at t and facebook among many others and what are we now . Halfway through earnings . I dont know if were there yet . This may be the peak week though. Right at the peak week. And housing the big story because at 9 00 eastern time well get february fhfa home prices and then later march existing home sales and in Corporate News regulators looking at that comcast Time Warner Cable deal. Officials are set to meet with the department of justice antitrust reviewers as well and were mentioning you at the top of the show. The wall street journal reporting that google will report a new wire lesser vis as soon as today. Its set up to let customers pay for only the data they use. They agreed to carry the traffic on their networks. At the start, Google Service will only work on the latest nexus 6 phones and the question becomes if google does Something Like this will apple follow suit and will other networks play along. Youre only work at the second tier networks. Theyre willing to reset time over their network. Its also daunting for us to understand. Google doesnt have the infrastructure or any of that. Theyre going to lease it or something . In the u. K. This is very common. Most of the networks are forced to some degree. It seems like providing the wireless is owning the spectrum. What is google how are they part of the theyre just providing the service. Its a Branded Service over somebody elses lines but by the way this is what Virgin Mobile in the United States Virgin Mobile never owned the lines. Those were usually sprint lines. Just like you would buy Virgin Mobile and it doesnt matter. Nobody necessarily needs to know who owns the line. Thats sort of the issue. Its almost a marketing employ at that point. Yeah but ultimately can you provide a different type of service . Better service . Different pricing scheme. Does that then push other networks to provide schemes like this . Do you prefer dealing with those overseas you can pick europe. Yeah right. Theyre a great monopoly. But they dont like that over there. Looking for Something Else too. Looking at bringing another one in. Oh that takes some stones to go after those guys. They werent going to do it because they were already doing stuff with sanctions because of what they did and now theyll say thats not working anyway so now were going to go after it. So they shutdown it down. Interesting that they wait until spring. They waited until the other things i dont know have we had nothing we forget things dont we . We do. Peak earnings week im not sure right this moment. You say right there. It took they annexed a large part of the country and now own it as they rebuild the soviet empire. Thats hard to backtrack on it. Yahoo earnings and revenues fell short. They fell short of estimates. Shares got a boost after marissa myer announced that yahoo hired advisors to explore how to cash in on its stake in yahoo japan. Did you see the controversy about senator rubio saying chipotle. Its not. Because as you can see right there its chipotle. Right . I say chipotle. Earnings beat the street. Revenues were short. They were forced to remove pork from some of the restaurants after discovering a supplier did not meet Animal Welfare standards. It will take until the 4th quarter until it gets fully restored in terms of pork supplies as a result full year sales will be hurt. Earnings topped estimates despite a drop in store sales but the owner says that the business over there is now at this point recovered. Happening now, the high free yen sy trader is in court in london today for an extradition hearing. Wilfred frost is there and joins us with the latest. Good morning. Good morning, becky, thank you very much. We were expected to hear from the man accused of being involved in that flash crash about an hour ago. His hearing has been delayed but is due to take place at some point today. Relates to charges filed by the u. S. Department of justice in february this year which were made public after he was taken into custody today. It involves various kounlts of financial wrong doing and fraud from 2009 to 2014 including counts relating to that 2010 flash crash. Hes alleged to have made some 40 million during these counts of financial fraud and the u. S. Authorities have frozen some 37 million of his assets. The case today is just a bail hearing. Presumably he will plead not guilty. If he does then follows a lengthy proceeding to see if he will get extradited from the u. K. To the u. S. This will take months. Not weeks. That hearing is due to take place in the next couple of hours because it has been delayed. Were he to plead guilty things could move faster. Otherwise were expecting things to be delayed over the next few months but at the moment we still await to hear from the man arrested here in the u. K. Before we hear from him. Guys back to you. Very good. Thank you. Dow and s p closing lower with earnings continuing to be the focus. Our next guest, though remains bullish on the u. S. Stock market. Joining us is tom lee. The founder and head of research. Tom theres constantly so much noise and investors had been had done well to have listened to you over the past two or three years so after we have periods like this its always good to see whether youre still feeling the same way and the point you make right now is all of these headwinds that we talk about and sometimes we see them effect the market theres no one that doesnt isnt very familiar with all of these at this point. Thats right. I think when you think about whats in the news its not stuff you necessarily want to take action on unless you think its going to get worse. It is already wellknown. Exactly. About the strong dollar. Youre talking about the oil. Oil, dollar q1 earnings. Pork price. Pork price is not treating the pigs properly apparently. Yes. The thing you say might be different is that these head winds can become tail winds and what you mean by that is you finally see some Consumer Spending more because of oil. How does the strong dollar become a tail wind . Well i think what were going to see with strong dollar is that its going to strengthen the u. S. Consumer considerably right . And thats the engine for global growth. Housing is really going to be one of the big drivers. Housing is over the next six months what you think provides it. Thats right. Now Oil Companies are saying oil is low for long is what theyre prepared for. I think a lot of companies were only like 10 into earnings season. A lot will talk about this big margin story. Anyone that uses raw materials. Theres a big margin story. Companies have to raise margin guidance. So the oil not only as a consumer but even with companies that input cost. So, in fact this earnings season is going better than people thought as well. Thats right. They lowered expectations. Some people like to point out analysts really made big cuts into this earnings season but theyre beating by the biggest margin in 12 years. The companies are quick to point out the head winds that theyre facing and give you down to the penny what its costing for share on those items. You dont hear anything about how thats helping. Dupont was one example we saw that with this week. As you know the complexion of who reports changes so what you juan to look at is companies that are true industrials having a dollar head wind. Theyre forced to take market share due to markets. When you look at domestically oriented Cyclical Industries theyre seeing real savings. Their end Market Pricing is based on demand. But back to back nobody is talking about that. Its partly because were early in the earnings season. We are really early. We only heard from a handful of companies but industrials talked about margins being better. Its just the dollar headwinds. So the place to be is consumer as you said and financials as well. Also technology. I think tech if we take a step back has turned into a Good Business and industry and has a huge tail wind of Capital Spending an eventually picks up and its still priced to cheaply. Were going to talk about yahoo in a moment. Im not sure i put yahoo in the same category aztecs tech. Yahoo is more of a media company. Youre talking hardcore servers in tech. People think tech is a narrow list of winners today which is the secular growth stories. I think the big tech story like ibm, hps really come back to life. We pay 12 times for Software Stocks and 25 times for toilet paper and the multiples will converge with the software multiples going up. Do you ever run out of toilet paper . Its scary to run out of toilet paper. Theres a reason its more highly valued. The multiple goes up on the last square. Thats all you have to do is run out. Tom, thank you. I had a quick question for you because i think of you thank you for having me on the show. I think of you as an analyst at times. My take on the bundling controversy was that i go back to at verizon . I go back to when a content advisor says see i told you they would fold because people want the content to matter what. So the content providers are in the drivers seat and now theyre banning together saying hold on. But the question that i have for you is if they cant prove that the contracts that were signed prohibit the slimmer bundles, could the content providers be forced to go ahead and let verizon take what they want and do what they want with it . Or does it matter whats the fine print in the contract . Its all about the fine print and that could be that too. Im happy and proud too. Let me just say this. The contracts are iron clad. What verizon is doing relative to what the contract says and allows. Its completely at odds with what the contract says. They put the language in again and not allow this to happen. And to the extent look as we digs cussed the content world is going to fight tooth and nail the idea of bundling because effectively content loses power. Verizon is taking this to the court of public opinion. They saw what happened with Net Neutrality and they assume theyre going to get help. You dont know. No one voted on Net Neutrality. What theyre doing is a violation. What they are doing is a violation of the contract. I do think i dont know if becky is in the same place, i think the public if were just talking about straight up Public Interest the public would think they juan choice. Whether they should get the choice is a different question. But thats what they want. Then we find out im going oh yeah i do want that. Oh im above the im paying more for my ala carte. Its not just ala carte. Its being bundled with your direct competitors. Do you want to have anyone riding your coat tails. Do you want everyone riding your coat tails because theyre paying for you and getting everybody else as a result. Its the worst of all possible worlds. The demise of the bundle. I think its going to take a long time and well see. Your job is going to be fine for at least another couple of years. Thanks man. I appreciate it. It makes me feel better. Just as a fall back position, you know . This unbundling thing happens. I have to figure out Something Else to get food on the table. When do i put that on the calendar . 2016. I dont know yet. Could be id say first half sometime within hopefully the first half. Is all the are all your couch casting interviews are those over . That is complete. Yeah thanks. Okay. Its just casting. Just casting. Lets get back to yahoo . Lets get back to yahoo missing expectations on the top and the bottom line in the First Quarter. The shares are now down about 14 since the start of the year but as you can see the stock was up after hours. If you look back all the way to when marissa myer took over in 2012 theyre up more than 180 . Eric covers yahoo . Thank you for being here today. Thank you for having me. We look at the earnings lets talk about those first. Missing on top and bottom lines but coming up with mobile advertising showing strong growth. How would you rate the quarter overall . Its two stories. Theres the traditional yahoo business of selling display advertising on pcs thats declining close to 10 year on year which is becoming a smaller part of the business with every quarter. The bets marissa and the team made are now up to a third of revenue and growing 60 year on year. She has a business transportation issue on her hand. She needs it to be 50 or more of total revenue to get people more interested in that core core yahoo business. Still a couple more quarters of transformation. It was the announcement they made in the erngarnings call yesterday that they hired people to advise them on their stake in yahoo japan which is worth about 9 billion. That turned things around for the stock yesterday. We saw this with alibaba. Do they buy themselves more time by dealing with these issues and rolling them out as sweeteners to investors to stick in there . We believed yahoo is a sum of the parts story until you get into 2016. Youll get the spin of the alibaba stake in the Fourth Quarter. Investors will get that. We long believed yahoo japan was the next asset to be monetized. The announcement came about one to two quarters earlier than we thought we were going to get. If they can monetize that in a tax efficient manner nobody has that as well. Thats another leg of the story so one of the main themes were coming out with is theres multiple ways to win here. The last one is the turn around. But the last one is the turn around. He basically said once alibaba is gone and now to the extent that japan piece is gone she is for lack of a better word naked. She would now be the company is exposed for what it is in terms of operations. It added 500 million in cost to their operations so the question then becomes what are we actually going to be looking at and is the company thats left even if you get all the value still there, what are we going to be looking at a year or two from now and does that transformation take place that youre talk about. Theres early signs its taking place. If you look underneath the hood they could transform themselves from a mid to high single revenue grower in 2016. What the market is doing is putting the most value on that score. If you trip that today youre talking about a 3 billion value for score yahoo today. And they would have a billion dollars. And about 5 or 600 million of free cash flow. You think the valuation is undervalued at this point. Correct. Thats why i think it remains a sum of the parts story for now. I agree if we get to this time nest year and alibaba announced its happened they have to produce Revenue Growth to get people interested in that core that remains. She still has multiple quarters. For now you tell people to buy at 44 and change. 44 today. 59 price target. Okay. Thank you very much for coming in. Thanks for coming in. Coming up when we return an all electric truck that doubled as a drone launcher. Sounds too crazy to be true right . The Postal Service, they disagree but first heres a look back at this day in history. [ screaming ] rate suckers [ bell dinging ] your Car Insurance goes up because of their bad driving. People try all sorts of ways to get rid of them. [ driver panting ] if youre sick of paying more than your fair share. [ screams ] get snapshot from progressive, and see just how much your good driving could save you. Welcome back. The buzz story of the morning includes drones. A new Postal Service fleet could include drones. Is this true . Yeah. It is. Dont you want the u. S. Postal service to find new forms of revenue . This is one of the great money losing black holes. I dont like drones no matter where theyre coming from. Im just saying we have been trying the Postal Service is a public entity. Its been effective in managing and running things in the past. Somehow the mail gets to me every day. I think they said well the Postal Service then we figured out they lose 6 billion a year to do it. Maybe the drone thing will fix their problems. Well, they better save effort for liabilities. Did you see it drop something . Drop it right on your head. Its the same play that amazon is talking about. I dont like it in either case. The agency really really is i guess, talking to contractors about options including an all electric truck that i like the term drone launcher. Its an electric postal truck that launches drones. Its being pitched by a company and the university of cincinnati. There you go. Now he likes it. The school has an Unmanned Research vehicle. I thought you meant that the whole Research Project was conducted on its own. It is Research Conducted by people into unmanned things. Right. But if you think about the postal truck running around without a person driving it and then the unmanned drones. Its rise of the machine. Getting there. When we come back petrobras is expected to release financials after the bell. It could have huge implications far beyond the company. Michelle joins us to explain right after this. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Man you run a business. Could be any kind of business. And every day youve got important decisions to make, like hiring. 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Gov Business Today is the day that petrobras admitted late last year it couldnt report results because investors had no idea how much money had been ripped off from the company in what was a decade long bribery scheme. Is this the turning point or Tipping Point . Shes in rio this morning at the companys headquaters. Michelle. Andrew consider this petrobras is the worlds most Indebted Company and in a world washed in debt thats saying a lot and its involved in the biggest financial scandal in brazils history and if you know brazil thats saying a lot. Even though they trade on the exchange this company is controlled by the brazilian government. They control more than half the voting shares and they use the company as an arm of government boll policy. All of that is coming home to roost. In march of last year one of the directors was arrested for bribery. In september he started to sing like a canary and told investigators for nearly ten years every contract was padded by roughly 3 . The money was used for kick backs and funneled to the ruling parties of the country. Now nearly 50 people have been arrested. Ceos politicians and Party Members and at risk is the countrys president. Her Party Treasurer has been arrested and she was chairman of this company for most of the time in question. She denies knowing anything and investigators have not connected her to anything. Tonight the Company Expects to report Fourth Quarter earnings. Right now everybody is reporting q1 earnings. Tonight they expect to report Fourth Quarter earning ifs the board approves the release today. If they dont thats going to be a huge disappointment to the market. We expect to get a credible number on the amount of fraud. The spread is wide. Could be anywhere from 6 billion to 30 billion. Then a press conference tonight. Guys, to give you context of how big this is one third tier executive upon arrest within 24 hours offered to give back 100 million. That is one guy. Its a big story down here. Back to you. Michelle is it true that petrobras is better off financially when oil prices are low . How does that even work . Yeah thats part of the issue of government intervention. So petrobras is the only company that can sell gasoline here but they dont set the price. The government does and set it below cost so subsidize the population. There had been a boom for a long time in brazil so even though they drilled tons and tons of oil had to import oil in order to produce gasoline. So the price would go higher and higher and higher and steeper and steeper loss every gallon that they sold to the public so things are better off for them when it comes to their cash flow when prices fall because they dont lose as much money. You see government intervention. The woman that runs Morgan Stanley sustainable investigating group. Its not the group that i think is sustainable right . Shes hoping its sustainable. Its a group that invests in sustainable fuel. Yes. Misplaced modifiers. Its both. Going to join us next and mike jackson on his companys Quarterly Results. And later Joseph Stiglitz. Check out the dollar this morning. Actually how its doing against some other currencies. The euro the yen, and the pound. Well be right back. [intercom] drivers to your marks. Go its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. E financial noise financial noise financial noise financial noise when youre living with diabetes steady is exciting. Only glucerna has carbsteady clinically proven to help minimize blood sugar spikes. Im a bull rider make it part of your daily diabetes plan. So you stay steady ahead. Welcome back. U. S. Equity futures are weaker. Dow futures down by 56 points. The nasdaq down by 14. Yesterday morning we looked at the futures. They were positive. By the end of the day they had given background. We do have a lot of earnings coming out today. By the way, you remember this flawless 100 carat diamond on set last week . Well it was up for sale. Last night it fetched 22 million at an auction. The presale estimate was between 19 and 25 million. The seller wants to remain anonymous. Pretty good estimate. Wasnt that right between 19 and 25. It is. We have been talking about earth day and in honor of earth day were taking a look at Sustainable Investing and what it is exactly and whether this movement is gaining traction on wall street and what it means. She is the ceo of Morgan Stanleys institute for Sustainable Investing. Like the group to be sustainable too. So Sustainable Investing is just simply integrating environmental and social and good governanc efrkse. So we think thats smart investing and when you think about a world with 9 billion people on it 35 years from now and this huge increase in deman thats a significant trend thats a great opportunity. When people talk about Sustainable Investing they think about do gooder investing and the question is is there a trade off between do gooder investing and the profit incentive and all of that. Thats the 64 trillion question and we did two studies to try to unpack that. First of all, we surveyed individual investors, a thousand of them and youre in the majority. 54 believe theres a trade off. So then we say is that true . We looked at the numbers. We looked at 10,000 mutual funds and compared the performance over seven years of Sustainable Investments and found that on average investing options performed the same or better from returns and also the same or better from a risk perspective. Throw out a couple of Company Names for us to understand what you put in the category of a Sustainable Investment and then a couple of names of not so do gooder. I cant talk about individual companies but i can talk to you about sort of how we think about this. So companies that we would say are good Sustainable Investments are companies thinking about what is the fact that water seems to be much more scarce and more expensive. So cocacola earnings later during the show would they be sustainable . Theyre doing all sort of things for water. Would you put them in the sustainable category or no . Opposite . Theres mothers that think their kids should never drink the stuff and that would be not on the do gooder side. Investors have to think about what are the most important considerations and some investors care much more about the Health Impact and some about the environmental impact. But any company isnt thinking about what is going to happen when water becomes more expensive and scarce. When food becomes more expensive and scarce. You need to refer to it as dogooder. When you consider how much food were going to need and its going to be producing the situation and how water is for agriculture. I dont even see it. I wouldnt think there would be a negative trade off for it either. I think that theres different ways that there are investments and all kinds of different that are specialized. For example harvard and stanford with their endowments and the students thats different. Thats a Sustainable Investing category too and theyre protesting those endowments. Fossil fuels but i dont think and the dogooder. I think audrey is pulling the sort of just avoiding it and that ideological argument. Nobody could disbeauty or disagree or have a problem with this. Tell us the companies that fit into that frame of thinking though . What companies are being aggressive about trying to make sure that he are anticipating demographic changes and how thats going to impact the planet. Theres a huge range of companies and industries. Theres a huge opportunity that hasnt been fully developed around water efficiency or affordable housing. When you have 3 billion more people on the planet youll need affordable housing. Youre going to need as joe said more Sustainable Food production so theres a ton of those different kinds of opportunities. So were going to need energy obviously and people have different feelings about nuclear. They have different feelings about natural gas versus dirty crude oil or whatever. Would you be able to invest in a Clean Natural gas company or are fossil fuels off the table. No transition happens overnight and well need a mix for awhile to come. If you want to fly or drive or. Look the Energy Companies frankly are, many of them are trying to do a much better job at being more efficient. But were looking for more opportunity to get those. Investors are dying for this. One other related question do you think the shift toward Sustainable Investing is going to change the behaviors of companies that arent considered in this bucket and i know youre unwilling to actually put the companies in the good bucket or bad bucket but thats always been the question. Would investors invest in cigarettes after what happened and theres people that cig invest in the cigarette business. It hasnt put them out of business. Theyve had to stay in business. So, look i do think that companies are going to change and were already seeing they are. Today already one out of every 6 in the United States under management has some Sustainable Investing comeponent around it and the big change is going to be fuelled by the millennials. Theyre two times more likely to check products sourcing an packaging to buy a product because of its environmental considerations. Theyre twice as likely to invest in what they consider a good company and divest. Were seeing a big movement for millennials to say my money, my employees, my organizations that represent me and my money should think about their values as they invest. Thank you for coming in on earth day. Morgan stanley. Appreciate it. Good to see you. Lennons birthday too. The real lennon. The right one for you. Not the one the one on the upper west side. You know who im thinking of. Yeah. When we come back this morning auto nations ceo mike jackson pulling into earnings central. His companys latest Quarterly Results and view of the american consumer. And later his name might sound familiar. You certainly know his dad but chef ben ford is a rising celebrity in his own right. Well talk about his latest project. A restaurant inside an l. A. X. Terminal. Hell join us in studio at 7 40 eastern time. Stick around. Squawk box will be right back. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back to squawk box. Were going to look at some stocks that you might want to keep an eye on today like broad com that posted better than expected earnings and revenues. They sell wifi and broadband chips to cell phone makers like apple and samsung. The companies stopped consensus helped by higher drug prices and lower spending on research and development. Autonation experiencing its 18th consecutive quarter of double digit yearoveryear share growth. Its up 13 year over year. Lets get behind the wheel with mike jackson, chairman and ceo. Its always great to see you. That you for being here today. Becky, good morning. Its a pleasure to join you. Yes, we had our best First Quarter ever achieving 97 cents earnings per share, which is up 29 versus last year. As you said just under 5 billion in revenue. We had our best Customer Care quarter ever in the history of the company, up 12 . And we also completed acquisitions in the First Quarter that have revenue run rate of 300 million. So just an outstanding quarter for the company. Lets talk about some of the numbers, mike. You said 13 growth in revenue, which is impressive. If you look at earnings per share, its up 29 . Why are the earnings per share, why is the growth so much stronger there . Are you buying back shares . Is this improving margins . Whats happening . Well to achieve a 29 improvement in earnings per share, you would have had to have done all of the above. First we had significant revenue increases in all aspects of our business and we were able to improve our margins. I already called out the growth in our Customer Care business which is a very high margin business for us. Plus we have very attractive acquisitions now which are in our run rate from the previous year. Plus compared to a year ago weve bought back in a significant amount of our stock. So you put it altogether and youll get a 29 improvement in earnings per share. When it comes to sales, it looks like the domestic auto sales were the strongest out of all the three categories that you break out. Is that true . If you look at on a unit sales basis, the story is all about truck sales and there the domestics have a very strong position, so our operating results in our domestic business improved the most 24 . We also had significant improvement, though in our import and premium luxury business. You know were very diversified in three distinct types of business, the domestics, imports and premium luxury. And we are very diverse from a geographic point of view going from the east coast to the west coast. So how are consumers doing at this point, mike . Well consumers are still doing quite well when it comes to automotive. We have certain advantages maybe over other segments in that we had a depression in automotive so sales stopped for several years, so theres significant pentup demand that remains. The average age of vehicles on the road in america has not changed, even with the recovery of sales. Its now 11. 5 years. So consumers need to buy something newer. Whether its a brand new car or whether its a used car. You see we had a doubledigit increase in our unit sales for used. The financing is the best availability we ever had. They continue to perform on all their loans. And we have cheap gasoline all of a sudden here in america again, which is pushing truck sales, which is a better margin business than just lowend cars. So its really a extraordinary goldilocks period that at the moment is pretty clear, will continue for the next several years. Hey, mike horror of horrors, but in a hyperbolic piece here that a lot of people hit with copster nation edmunds. Com, the headline was more people trading in their electric and hybrids for suvs, the report claims and its from the Car Buying Service edmunds. Says in the first three months of 2015 there was a noticeable uptick in electric and hybrid car owners trading in those cars for fossil fuel suvs. People say they dont know whether thats true or not but 22 of the people doing that up from 18. 8 . Do you think theres anything to that . Well first, joe, im surprised they were able to find that many owners to get a statistic on it. Im telling you, priuses in san francisco, every other car is a prius and you can tell because every car looks ugly. Go ahead. Joe, in principle the story is absolutely correct. If you look at Industry Sales year to date up 6 . Thats entirely in trucks. Trucks are up 11 and passenger cars are down about 1 . Within that if you look at the sales of hybrid and electric its still stuck in low single digits, even though every manufacturer has invested billions in hybrids, plugin hybrids and the offering of all electric is expanding. And, you know with cheap gasoline, it just pulls the rug out from underneath the justification for these expensive fuelefficient technology and the American People are very practical, back of the envelope. They say what does the Technology Cost how much money does it save me at the pump and at 2. 50 a gallon across america, its hard to make the case economically for hybrids and transactionelectrics. Yes, there are certain people who are motivated about the environment and can afford to pay the premium, but thats less than 5 of the marketplace. The rest of the marketplace is very pragmatic and its a Kitchen Table back of the envelope calculation. So in principle, joe, the headline is correct, even though the industry has been mandated to sell fuel efficiency. Its tough to convince america to eat its broccoli. Hey, mike its great to see you. Thank you for joining us this morning. My pleasure. When we return weve got Quarterly Results from three dow components, boeing cocacola and mcdonalds. First Joseph Stiglitz will join us right here on the squawk set when we return. under loud music this is the place. Eir beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. I am never getting married. Were never having kids. Mmmmmm. We are never moving to the suburbs. We are never having another kid. Im pregnant. I am never letting go. For all the nevers in life state farm is there. The eclass has 11 intelligent driverassist systems. It recognizes pedestrians and alerts you. Warns you about incoming crosstraffic. Cameras and radar detect dangers you dont. And it can even stop by itself. So in this crash test, one things missing a crash. The 2015 eclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Dow components boeing and cocacola expected to report this hour. Well have the numbers, the Market Reaction and instant analysis all coming up. Plus cuisine that requires a tsa security check. Chef ben ford wants to shake up airport dining. Hes bringing breakfast to the squawk set. An arrest made after a brazen heist of a big batch of kentucky bourbon. Police say members of the crime ring met years ago through a softball league. Weve got details ahead. Drink up. The second hour of squawk box begins right now. Live from the beating heart of business new york city this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. Andrew is here joe is here im here. We are watching earnings today and we are expecting results from dow components boeing and cocacola within the next half hour. Then well be getting mcdonalds results at about 8 00 a. M. Eastern time. In the meantime weve been watching the markets. So far it looks like the bears are in command this morning. Dow futures down by about 52 points. S p futures off by 5 and the nasdaq down by 12. Weve got a couple of big stories this morning. The European Union has filed formal charges against gas prom accusing them of raising barriers to competition. They appeared to be headed towards a settlement until russias annexation of crimia last year. Also the high freaksly trader arrested in london is due in court this morning. Investigators say navinder sang used a program to generate large sell orders that pushed down prices. He then cancelled those trades and bought the contracts at lower prices. The biggest buyer of u. S. Chicken has halted imports of chickens and eggs after a bird flu outbreak was discovered in iowa on monday. Morgan brennan is that at facility and will join us with an update in a few minutes. It seems to be spreading and bigger issues now. Already in 10 or 12 states. We sent her out there . Its only 1 of chicken 5. 3 million hens is what theyre trying to get rid of and kill off so it doesnt spread. Its still a very small percentage. But we make a big deal of it because its gross and big. 5. 3 million birds. It sounds like a big number but on a relative number its not. Poor morgan she must have made someone mad. We sent someone out there . Bird flu, very dangerous, you go. People have a thing for chickens already. Theyre kind of gross. Especially when infected with bird flu. Ill never be able to eat again. Do you ever see how they make the chicken . They rip them open and all the guts fall in the package. Come on its morning. Joseph stiglitz out with a new book called the great divide unequal societies and what we can do about them. He is the 2001 laureate in economics. Professor, its always great to have you in and kick these things around. I thought about how to intro this and ill start with it really is a dismal science. Ill tell you why, economics. Youve got the nobel prize. You have certain opinions. And then we have Milton Freedman has one and f. A. Hayek was award awarded one. I look at the way you view the world and the way other gentlemen view the world and it might as well be polar opposites. Its not in any way close to similar. But im right. Its my duty im going to have to take the other side and push back so well end up talking at each other again. But there is a huge divide in the country right now in so many areas. But the question is there is one side that thinks that pro growth is the way to go and theres the other side that thinks that redistribution is going to be the answer. I dont think thats the right characterization. So you know one of the important ideas that i try to bring out in the book is that more equal society, less divided, grow actually better. Im sure thats true. We just disagree on how to get to a more equal society. And we also disagree about how we can get more growth. We began in 1980 you might say, around 1980 with an experiment. The experiment had lower taxes at the top, less regulation you know, a whole set of changes focused on supply side. You probably remember supply side. Now weve had 35 years of that experiment. What can we say . You know the theory behind the experiment perfectly understandable. Some said it wasnt going to work. The theory was that you provide all these incentives, take away the restraints the economy will grow faster. That yes, the middle bottom would get a smaller share but they would get a smaller share of a bigger pie and everybody would be better off. You know the results are in. A third of a century and what do we find . Growth was slower than before we tried that experiment. And the middle not only hasnt it was right that they were going to get a smaller share, but the slice of their pie, the size of their pie, their slice has gone down. But weve got the evidence for the past six years where weve sort of taken the opposite tack and had the Federal Reserve with its policy and its exacerbated every other recovery, the Federal Reserve itself estimated growth in 2011 to 2015 would be 3. 5 to 5 . We have not gotten out of the mud at 2 . Were growing anemically. Youre exactly right. And that skews the results. The growth in the 80s and 90s was fantastic. We were building up things in the economy and when things come down, they break the way they did in 2008. It takes a lot, a lot to get it going again. I agree its been miserable. The fed models have been very flawed. If you took your numbers out after 2008 just go straight up to 2008 what does it look like then . Pretty bad. Still bad . Still bad. The fact is that even in 2008 people were in the middle worse off than they were 10 15 years earlier. Hes not talking about growth, hes talking about income inequality. I understand. But let me ask you a separate question. Gdp growth from 1980 to 2008 was lower than it was from say, after world war ii until 1980. But then layer on globalization. I mean this is the tom freedman theory of the world to some extent, which is that the world changed and that all of a sudden there became competition and that you could argue postworld war ii the rest of the world was effectively out of business and we were able to create this middle class because we had a monopoly on the globe and the world and technology and all these other things have made it much more difficult. Well, see the way i would put it is all those advances in technology and globalization were supposed to help us make us grow even faster. Didnt work. And new and anticipated the extent to which inequality would grow in the United States. Today people with Median Income was lower than it was a quarter of a century ago. Median income of a fulltime male worker is lower than it was 40 years ago. So if you have an economy that is not delivering raising standards of living for significant factions, im talking about majority of our citizens, you ought to be worried. Your solutions are raising Corporate Taxes, raising taxes on the wealthy. Theres a capital flight out of the United States because of our Corporate Taxes being where they are right now. Weve got the highest in the world. Let me just show you one quote here. This is from an oped piece that was in the journal yesterday. Look at whats happened over the past six years. Food stamp use up 66 . 20 more people on disability. The Participation Rate in the labor force is plunging from all these things. Were at about 49 in terms of 5149, those receiving and those taking. Would you like a permanent number of citizens on the dole . This is all a reflection of how bad things got build up the build up of problems before 2008. Thats where the disagreement is professor. Lets read this quote that i had build up that the golden goose, the private sector has been destroyed in the past six years through regulation overregulation, through taxes. Here it is right here. Despite the biggest Fiscal Stimulus Program in history, the most expanse ive Monetary Policy in more than 150 years, the u. S. Economy is underperforming much more than it has in the past with recoveries because of bad economic policies. With better economic policies america was like the fabled farmer that had the golden goose. That would be the private sector. It laid golden eggs. Weve drained the pond burned down the coop and let the dogs loose to chase the goose around. Now were reaping what we so. The goose has stopped laying golden eggs and the administrations apologists argue were in a secular decline. The basic fact you have to understand was that this was the worst economic crisis since the Great Depression. Go back to the Great Depression. How long did it take us to get out of the Great Depression . We didnt really get out of the Great Depression that started in 29 until world war ii. Now, yes, this recovery has been slow, but its commensurate if the private sector doesnt save us if the private sector doesnt create the jobs that everyone is able to earn a living and feel earn success, what do you do without the private sector . Why not spur the private sector . Let me first say i agree with you, we need to spur the private sector, but first let me point out the private sector would have destroyed itself had we not come in. The banks needed the government. They had done such a bad job of managing risk allocating capital, that we only have our Banking System because the government intervened and saved them. Now, would i think take on the issue of the Corporate Taxes, what we need to do is lower Corporate Taxes for those firms that are willing to invest in america, great jobs in america, and raise it for those who arent. How do you do that . Provide incentives to invest in the United States. So lowering the rates or keeping them where they are and giving discounts to companies that are investing in the United States. Exactly. I agree that incentives are important. But right now we have some perverted incentives the way our tax structure encourages people to invest abroad. So to me thats the way i restructure and say if youre investing in america, yes, you should get lower rates. What kind of rates are you talking about in many terms of where you would raise rates, where you would lower, because most people we talk to who want to see tax reform say they would like to see Corporate Taxes lowered but evenly spread out so that companies that arent paying 28 and frankly a territorial system which to some degree may inspire people to either leave or keep cash abroad. I really think that the key issue here is provide incentives for firms to invest in the United States and providing a big differential between those who invest and those who dont. Do you think you can do that and make them competitive . Part of the argument that they suggest around the way our tax system is structured now is that internationally in a global multi when youre a Multi National conglomerate they cant be competitive. Thats basically nonsense. Let me explain. When you invest as it is you get a tax deduction. Interest is tax deductible. So, yes, at the margin youre paying higher taxes, but most of the investment in the United States is financed by debt. Some equity but new equities are relatively important. The net flow is actually out of the corporations not into the corporations. So once you recognize that debt is tax deductible then the tax system doesnt overall discourage investment. And then if you could add on to this a sort of incentive structure. Say look to the corporations, you want to operate in the United States, this is where the sales are, this is where take the drug company, where theyre making big money selling in the United States, so theyre not going to leave. The real question is can you get them to start producing in the United States. Because theyre going to be selling here. So build a factory here instead of in mexico instead of in africa instead of other places. Exactly. We are too important of a market for them to say were not going to have anything to do with you. Were going paul ryan on talking about this trade deal where actually president obama has actually called out senator warren and said youre wrong on this. Are you with senator warren on this trade deal . Yes. I think shes absolutely right. I think this trade deal is not about jobs. Make it clear, its not about jobs. You know our tariffs are already pretty low. The successes that weve had in number of rounds of trade agreements. What this is really about is two things. One is drugs. Generic drugs versus big pharma. This is the we worked out a compromise in the United States to try to balance the incentives. You want to get drugs at low prices, you want to have some incentives for innovation and we had that big debate in the United States and we got a balance. I thought it was right. Secretary clinton, president ial candidate clinton over the weekend was quoted as saying we need to topple shes aiming to topple the 1 . Is that the way to do it . Bring them down or bring everybody else up what do you think . What i think we have to do is try to get shared prosperity. Right now too much of what is going on is say, in some corporations not all, the ceos are taking a lot of money out of the corporation. But its the minimalists in terms of but theyre taking it turns out to be a significant share of the corporate pie leaving less for wages and what really worries me is less for investment. When you consider a wage of a ceo and compare the total payroll of the company, its a fraction. Were not talking about the wage of the ceo. Its all of the top management. We have to ask the question it used to be when we were growing the fastest after world war ii, our ceo pay was 30 times the average pay of workers. These are the same flash points, professor, right here. Weve got to get today its 300 to 1. Bringing them down is not going to help elevate everyone at the bottom. What we need 2 growth is the issue because thats the problem. And if we didnt have so much going to their ceo pay, wed have more money to invest in america, more money for creating more jobs. If you look at the numbers, its a fraction of a percent in terms of no i said its not just the ceo, its that whole management structure. Even that way. But is there a problem with the is the goose broken that laid the golden egg, the capitalist goose . Yeah. So thats broken. Its not the way that its being regulated or overtaxed, its an inherent problem with no, no, its not inherent. Thats one of the points i try to make in my book. Its that weve created what i sometimes call a false capitalism. Woe bail out the banks, we socialize losses and privatize gains. We create an unlevel Playing Field. We invest more in the education of our children of the rich rather than children of the poor. Of the bailout money most of that was paid back. Paid back in a very very strange way. So the fed lends money to the banks at essentially 0 interest rate. They take the money, lend it back to the government at a higher interest rate. You wouldnt advocate that they havent done that . What i think that they should have done is bail out the banks but not bail out the shareholders, not bail out the bondholders, not bail out the bankers. They had to save citibank and they had to save the banks, absolutely. But they could have done it in a way where we had a system of accountability. You just described a very nuanced approach that would require a scalpel. No. I say obey the laws nft United States. The laws say when you go into a bankruptcy, the standard procedure, chapter 11 or chapter 11 7 the question is whether you could have saved the way youre describing in an environment where confidence was at an alltime low, whether confidence would have been reinspired the way you just described. But if youre talking about chapter 7 or chapter 11 youre looking more at gm. Well chapter 11 the laws we had about whats called conservativeship, which is the way youre supposed to handle Bank Restructuring mean that this is standard in all countries, is that the shareholders lose everything the bondholders step in. You only need a government bailout when theres not enough money there with the bondholders. Thats the rules of the game. What we did is we changed the rules of the game. Shareholders got hurt. Tell the citigroup shareholders. Youre backing hillary . Yeah. Would you back elizabeth . I think right now we need to see where their platforms are. You know more than one issue. Would you go all the way to Bernie Sanders if he were to run . What i think is that we need to address the problem of this great divide. You know the fact is redistribution not growth. It is not delivering for the majority of our citizens and something is wrong. It has been too long since weve gotten to talk to you. Obviously way more to talk about. The book is called the great divide. Thanks for being here. When we come back bird flu is threatening the nations chicken supply. A report next from the iowa farm that suffered the costliest outbreak so far. Then are the governments gdp numbers misleading . Steve liesman has a special report on growth in the fist quarter. Plus cuisine that requires a security screening . Celebrity ford ben ford joins us on set. Harrison fords son is elevating cuisine for travelers at l. A. X. Airport. Stick around. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the well equiped volvo xc60 today. Visit your local volvo showroom for details. Mexico banning imports of eggs and live birds from iowa after a deadly bird flu outbreak there. Morgan brennan joins us now with more on this story thats kind of grossing us out, to be honest with you, morgan. Good morning. Reporter understandable. I tell you the smell too at some of these farms not so pretty just have to say. Anyway, so this is sunrise farms. This was home to 4 million egglaying hens and this is where the latest and largest outbreak or case of bird flu has struck. So this farm is now under strict quarantine and government officials are euthanizing the entire flock. Thats really because this strain of bird flu is highly infectious and highly lethal to poultry. Guys, i should note that according to the usda it poses low risk to human health. So including this case, that brings the total number of turkeys and chickens that have been affected boy bird flu, this outbreak that started late last year up to 6. 5 million. Those are cases spanning multiple states including wisconsin, which just recently declared a state of emergency due to this situation. Now, if you know anything about poultry, these numbers might not sound that large. After all youve got hundreds of millions of chicks hatched each month here in the u. S. But analysts say whats really worrisome is how this virus is spreading, especially here at sunrise, which had strict biosecurity measures in place. So, so far talking about how this is impacting the poultry industry, the flu has had the biggest impact on the turkey market. Weve seen 2. 4 million birds destroyed. Thats something thats affecting hormel which came out and said theyre facing headwinds in their supply chain due to this issue. Citibank analysts also saying we could see turkey prices start to rise in the stores relative to chicken. Thats really the thing youll want to watch now. If we see this outbreak of bird flu continue to ratchet up and start to affect some of these socalled broiler chickens basically your chicken meat thats where youll start to see an even bigger impact on the poultry market. Thats going to contribute to higher operating costs for companies in this space as well as weigh on export volumes. Guys back over to you. Morgan this is kind of a stupid question. But the birds that theyre destroying at this point, what do they do with them . Theres no way that winds up back in the food supply right . Reporter no absolutely not. They have very very very tight protocols between federal and state regulators and the industry. So this farm i actually was over by the entrance this morning, and folks are patrolling. Theyre not letting anybody near the entrance of this farm. This farm is quarantined and all of the farms within a 10 kilometer radius are quarantined as well. They have to kill all of the birds, whether theyre displaying symptoms or not and theres a whole disposal process that happens. These farms are quarantined until they can prove that the virus has been completely eradicated so thats an indefinite process. Morgan thank you for this. Good luck with the smell and whatever else is going on over there. When we come back weve got to tell you about a crazy story. It was a sevenyear conspiracy to steal more than 100,000 in kentucky bourbon. Police say it all started over softball. Weve got the details of that massive bourbon bust when squawk box returns. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back to squawk box. Weve got a wild story for you. It has been more than a year and a half since 65 cases of ultra premium happy Van Winkle Bourbon disappeared in kentucky. But police say they have busted a crime ring responsible for the heist. Nine people responsible for stealing that and other bourbon valued at more than 100,000 reportedly met through a softball league. Police say it was an inside job. At least three of the people indicted were employees of the disstillers that were targeted. One man sold stolen bottles of bourbon out of the back of his pickup truck. There were 18 full barrels of bourbon recovered. State officials said it would probably have to be destroyed because of consumer safety regulations. So there you have that. In the meantime were going to take a quick look at the futures board and see how the markets are setting themselves up this morning. We do have a number of big earnings reports. Well be getting boeing and coke in just a moment. You can see red arrows there. But boeings quarterly result just hitting the tape and phil is in chicago with those numbers. Andrew, weve got a better than expected Earnings Release from boeing coming in well above guidance and well above where they were last year. Boeing earning 1. 97. Thats core earnings. Thats what wall street looks at when it comes to boeing of 1. 97 a share. Thats 17. 6 above where they were last year at 1. 76 well above guidance or estimate on the street of 1. 81. Revenue a little lower than expected, coming in at 22. 1 billion. The street was expecting revenue of 22. 5 billion. The core margins down a little bit compared to last year. 9. 6 versus 10. 2 last year. There will be a few questions about the operating cash flow. It came in at 88 million for the First Quarter compared to 1. 1 billion a year ago. But we should point out that boeing is not changing its guidance in terms of operating cash flow for the year. Still expects it to be at least 9 billion. In fact boeing is reaffirming its guidance when it comes to eps, revenue and deliveries. The commercial airplane unit delivered 184 airplanes in the First Quarter. Thats an increase from 161 a year ago. 30 of those were 787s, so that meets the projected production rate of 10 per month from boeing. But again, 1. 97 in the First Quarter for core earnings from boeing. Thats an increase of 17. 6 compared to a year ago and well above the estimate of 1. 81 a share. Guys back to you. Okay thank you. While you were talking we also got results from another dow component, cocacola, that are out this morning. The company has reported earnings per share of 35 cents. They say comparable earnings per share are 48 cents. The street was looking for a number of 42 cents. You want to look at some of those items that impacted earnings per share, they cite things like primarily related to the early extinguishment of certain longterm debt costs associated with our previously announced Productivity Program and charges related to our venezuelan operations. The questions will be how much did analysts know about this how much did they put in those expectations and numbers. You can tell whether its good or not from the estimates for volume right . Thats what you look at usually anyway. It doesnt look too good from where im sitting here. When you look case volume do you have the estimates there . Ive got the estimates right there. Let me just tell you that north america was zero. North america was supposed to be up marginally. Worldwide was up 1. Supposed to be 1. 6 . Latin america zero. Supposed to be 1. 9 . Europe was 1 . Supposed to be up 1. 3 . No down. Down 0. 3, i apologize. So we havent had a single one good. Asian africa. Up 3. 7 . Up 4. What was the europe number again, the actual . Europe case volume up 1 . So thats better than expected. They expected a decline of 0. 3 . So two numbers are better but worldwide below expectations. If you look at the stock it is trading higher right now. Closed at 40. 78 yesterday. Looks like its up by 1. 5 . They continue to view 2015 as a transition year as the benefits from the announced initiatives will take time to materialize against a macroeconomic environment. We we continue to create longterm shareholder value and we will see what people like mr. Global sparkling beverage volume grew 1 . Global still beverage volume also grew 1 . Which they said was mostly tea. Got an email this morning, Wintergreen Advisors the activist investor whos been making a lot of noise about cocacola putting together a list of six questions that he hopes gets addressed on the Earnings Call today. I guess he didnt listen to jack last week. Jack said we should right winters off. He specifically mentioned him and hes smaller than people jack was talking about not listening to. Nonetheless, one of the questions he asked is this goes to the issue of why the stock is up today, has the cocacola board purposely set growth expectations too low for this year in order to make an even mediocre performance look like success on their part. Of course i imagine he will be trying to ask that question and get an answer on that call which i believe happens this morning. Did you get your email . How does he always get through to you. Hes got my email address. We just spent 30 seconds on him again. Forget about him. You know what reasonable question to ask. We do have an analyst for cocacola coming up a little later this hour. Well ask him about that. The Conference Call is at 9 30 this morning. Organic root Revenue Growth was 8 . Thats pretty good i guess. Maybe thats why its up. All right. Coming up are the governments gdp numbers misleading . Steve liesman has a special report next on a pattern of distortion in the First Quarter data. As we head to break, take a look at u. S. Equity futures. When a moment spontaneously turns romantic why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com Government Data indicates the economy weakened again in the First Quarter, but there may be a reason the q1 slump feels like did you write feels like deja vu all over again. I didnt say all over again. I know but it always follows deja vu. Its like the soup du juoour of the day. Steve liesman joins us with a look at the government reporting that raises questions about the gdp data. Are we under a percent yet . They havent reported q1 yet. Its 1ish very 1ish. Wow. Another weak First Quarter on tap, not reported yet. Maybe as low as 1 . Given what we know so far about the First Quarter. Will it be a coincidence that its another weak First Quarter . We went back to 1985 and did a detailed review of 30 years of Gross Domestic Product data and found what looked to be substantial and persistent problems in the data. Heres what we found. Gdp for the First Quarter averages 1. 87 versus all the other quarters. All of them combined add up to 2. 7 . Six of the worst ten First Quarters. Since 2010 it looks like another economy, more like europe averaging 0. 62 versus 2. 3. It is underestimated by wall street economists 80 of the time, by far the most underestimation of any quarter. Here is what the average is for all four quarters. You can see it right there, its substantial over the past 30 years. The Second Quarter picks up some but not all of that growth. This is true whether the economy is in expansion or if its in recession. Our work was checked by three other economists all of whom were surprised by the findings and they also duplicated the work. They found the differences statistically significant, which is a big deal for economists. They said such large differences, they shouldnt appear if the data was correctly adjusted for seasonality. Given the failure of the data to correct itself over time the government should be involved in trying to correct it. But the bureau of economical analysis, they do the gdp work for the government, they declined to comment. Now, the potential for the q1 effect to be depressing data right now is significant since fed officials are considering rate hikes and some have suggested that the recent q1 weakness gives them pause. Investors faced with the issue whether the economy is really weakening or should they be banking on a Second Quarter rebound. Here we go again, guys. Weve been here before. I knew it was true since 2010 because but the trouble is theres only six First Quarters since 2010. And we had a couple of big negatives. We had a big negative last year. Even though everybody said it was weather effect it went way beyond what anybody thought that negative 2. 1. The miss from economists was 3. 2 . They were looking for 1. 1 on the up. It came in minus 2. 1 down. Get rid of 2010. Go back from 85 to 2010 q1 still lags. Do it in recession, do it in expansions, it still lags. Its a problem in the data i think. You see that enough people are saying the fed never raises. You saw that . There was that little hint out of dudley right . I dont know if you were you were gone monday and tuesday. Yeah. I think it was monday that dudley said we hope to raise in 2015, which people took as a possible sort of i guess photographic negative. Maybe that means you dont want to, youre not going to raise in 2015. It certainly raises the possibility that they wont. Well lockhart who we had the end of march was pretty definitive about it. Its going to be june or september, im not sure which one, but one of those. Now taking june off the table, more leaning toward september. September or never is the yeah. Thank you, steve. I want you to come back and talk about the stiglitz debate. You can read the whole report we did on cnbc cnbc. Com. Coming up chef ben ford raising the bar for airport dining. Hell be on set with us to talk barbecue. His cookbook on adventurous cooking and growing up with a celebrity father, harrison ford. Were back in just a moment. Hey mom, you want to live by the lake, right . Yeah. Theres here. Did you just share a listing with me . Look at this one. Its got a great view of the lake. Its really nice mom. Your dad wouldve loved this place. Youre not just looking for a house. Youre looking for a place for your life to happen. Zillow welcome back everybody. Demand from travelers for better food in airports has led to an emerging business opportunity, chef its opening hot new restaurants on the other side of the security line. Ben ford is the chef and owner of fords filling station, which has locations at l. A. X. Airport and in downtown los angeles. He is also the author of the cookbook taming the feast and i think that is what brings us to this massive brisket sitting in front of us right now. Absolutely. This is like gold nowadays. You guys werent over here early enough to smell it. It is really good. Its got some smoking on it. Taming the feast, how did you come up for this idea cooking for big, massive groups. It was something we were doing in the restaurant. We were getting involved with raising our own animals. I started going outside and building contraptions to roast these big animals and turned to a cookbook. I was researching this stuff that there wasnt a lot of information to cook that way so i wrote the book to demystify and empower people to cook that way. Another part of the book is tamed down for the kitchen. So 8 to 10 or all the way up to the ceiling. We know that you have your restaurant, that you are now downtown l. A. Yes. Moved out of culver city . Yes. Moved down there. Aig was a big partner. That really was some energy i wanted to be a part of so were real excited to be down there. You like being downtown. Yes, and it gives us some synergy with the airport. Weve seen people like Wolfgang Puck who have gone to airports and opened up. Dont often think of airport food being great food. When you think of some locations, i can see it. What kind of stuff to you serve in there . Well we try to do everything were probably the only restaurant that i know of in a major airport that preps everything on site. So fresh food doing things in a chef way without compromise. We had to break a few rules along the way, but i think that really has helped improved the quality. Is it sit down . A sitdown place. No takeout . Theres to go. Theres that element to it. I think when youre sitting there, you dont feel like youre in an Airport Restaurant for a few minutes. Thats what we were trying to achieve. We wanted to elevate it and make it feel like you werent eating what you would think of as airport food. I think about what i pay for bad airport food. Extremely profitable. Its also a good test. Any time you can retest yourself in a different market its a good thing. Because you can charge more because the rent is low or because theres just so much foot traffic . Theres so much foot traffic. Theres so much foot traffic. Youll tend to drink a little more and tend to have a little more of a balanced check after it. Worrying about the flight. Theyre expensing most of it a lot of it are business travelers. Thats a big part of it as well. Theres lots of little factors that go into making it a better business, but its been tremendous for us and one id like to do a lot more of. Do you have plans for expansion right now . Absolutely. Where . I dont know yet. Well, i know were working on some projects but i dont know where they are. When it comes to some of the contraptions that youve made up you said you cook some of these things outside. You were looking for contraptions. You played off of what your dads carpentry experience had been for that . We grew up in a really kind of a shack in the hollywood hills. It was an old rangers station built in the 1890s. It was a playground for kids. It was incredible. At the same time we also had a workshop next to it because my dad was a carpenter at the time full of wood and chisels that we could ruin and lots of good stuff like that. But we had free rein over there and he really did install that into us as kids really to be able to work with your hands, have a craft, understand what it means to work with your hands and he allowed us free rein in there so it translated into a lot of contraptions that i build now. What is this . This is baked beans. I thought it was. A little brisket there, Collard Greens some pickles. Whats in that jar . Good Barbecue Sauce. You dont have youre not canning that. You cant get any of this just yet. Working on the Barbecue Sauce down the road. Open it, its smell it. Would you be doing more canned stuff . Would you sell stuff . Oh, yeah. Its great. In terms of your brand . I mean selling outside of your own restaurants . Absolutely. Barbecue sauces barbecue rubs and all that stuff is really a great way to go. And something i already have a passion for. What are you doing with that there brisket. Taking it home joe. I have a backpack. Thats my lunch for the week right there. No really its amazing whats happened to brisket prices. They have really soared through here. What does this cost you and what can you sell it for . This costs about 3 a pound, 3. 50 a pound right now. Its up a dollar from the year period prior. Do you know why that is. One, we naturally have rising prices during the summertime, beef prices tend to go up. But also we have a lot of stress on the system. A lot of stress on the actual product. Its become very popular as you can see by all the barbecue places you have in new york. Theres about one every block. And also arbys has done very well in the love arbys. They have taken up 5 of it. 5 of the available brisket is at arbys . Yeah. Its really shot it up. How is your father feeling . Hes doing pretty good. Hes healing up. You know hes a real life superhero. Is he psyched up for star wars . He is very psyched up. As you said old getting asked about your father kind of get tiring . This is your thing now. Im willing to just talk about you. Will you ever expand outside the galaxy . You know see how i just keep it i keep it without even referencing he knows better than anybody how hes feeling. We all care about him. Weve had conversations about taking it to space. First place to colonize mars. To the cafe. They need food up there. Ben, thank you very much for joining us today. Thank you for bringing brisket too. Appreciate that. I would like to see joba eat that thing cold. He probably would. Thank you. Cocacola just out with Quarterly Results. Well dig through that report with an analyst. Then next in the next hour mcdonalds. Coke and mcdonalds at the same time, expect a report. Well bring you the numbers and the Market Reaction. Stay with us. The Technology Changes the design evolves the engineering advances. But the passion to drive a mercedesbenz is something that is common. To every generation of enthusiast. The 2015 dream machines, from mercedesbenz. Todays icons. Tomorrows legends. Visit the dream machine event today for up to 3,500 towards purchase. Cocacola out with earnings. Muhtar kent called this a transition year. Is it a transition year . What does the other side of the year look like . I do think it is a transition year. Remember going back a couple of years coke cut marketing spend when kurcurrencyies started to get bad. It usually takes one and a half to two years to get a full return on this spend. As we get through this year coke has a lot of costcutting theyre putting into place, investing back in their brands so in 2016 we should see acceleration of volume growth. What about the currency issue . It was basically in line with our estimate. Currency is easy to model because we see the movements every day. Its now going to be 100 basis points worse for the year than they thought going back a few months ago, but basically for the quarter it was in line with our expectations. So well see where the dollar goes. Maybe next year they can actually get a tailwind depending on where the dollar is relative to other currencies. Weve got to run. Fair price for the stock, what is it . Weve a price target in the upper 40s. We think thats a pretty reasonable target. Nice 20 upside from where we are today. We think coke is a good 12month opportunity. Weve got to leave it there. Thank you for joining us and giving us your perspective this morning. When we come back mcdonalds expected to report at the top of the hour. Well bring you the results and reaction from an analyst. Congress is talking trade today. The house ways and Means Committee will hear from the commerce agriculture secretaries and Committee Chairman paul ryan will join us right here on cnbc. Ideas come into this world ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary and messy and fragile. But under the proper care, they become something beautiful. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Es ronald on the right track . Fast food mcdonalds reporting right now. The menu makeover and what its going to take to get the stock sizzling again. Plus the president pushes back against opponents of his trade deal. When you dig into the facts, they are wrong. House ways and Means Committee chairman and former Vice President ial candidate, paul ryan, will join us to talk about his comments, the economy and the race for the white house. Move over harley theres a new hog in town. I can get 70 miles to the gallon on this hog. It started as a dream in a chicago warehouse and has now become a reality for the founders of genuine scooters. Well hear their story and were going to go for a cruise as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. We are about 90 minutes away from the opening bell on wall street. The futures this morning have been under some pressure. The news from mcdonalds probably not helping. It looks like mcdonalds came in i know same store sales are lousy. Youve got 84 cents, which is a decrease of 31 , and even consolidated operating income was down 28 . But theres a lot in here. Number one, theres strategic charges totaling 17 cents a share. I dont know that will get you to that probably is added back. It doesnt get you to 1. 06 but theres negative foreign currency translation impact of 9 cents a share. In constant currencies and excluding the strategic charges earnings per share was down 11 cents. So it was 1. 21 last year. Im not willing to call this 1. 10 because everything in here nothing is good. Can i just suggest to you, we have a new ceo. You say were going to have a turnaround plan. Theres still numbers in here that arent just throwing stuff in the kitchen sink. Comparable sales decreasing in the u. S. Down 2. 6 and thats not just throwing it in the kitchen sink theyre saying its negative sales and guest traffic was bad. Promotional offers did not overcome the competitive activity in the u. S. Market. And up here it also says due to weaker the consolidated operating income decrease of 28 due to weaker operating performance and strategic charges of 105 million. Theyre closing restaurants. And also just im saying theyre starting anew. We know that. Youre making the point that its a kitchen sink quarter, we got that. Its a new guy, throws everything in. On top of Everything Else its bad. But im saying they didnt spend but one of the reasons that i would argue that it is as bad as it is this quarter is they probably didnt spend much on the quarter knowing that it was going to be a disaster and as they say in their statement, theyre developing a turnaround plan and will put an initial details plan out on may 4th so investors will have to look for that in a couple of weeks. Will keenly focus on acting more quickly to better address todays Consumer Needs in a competitive marketplace. Were developing a turnaround plan to turn around performance and deliver enduring profitable growth. At this point the stock is trading higher. Its up to 95. 25 to 9550. Asia pacific and africa the First Quarter comp sales were down 8. 3 and they say this is due to the impact of prolonged broadcast Consumer Perception issues in japan along with negative and improving performance in china. Coke was units, right, so that wouldnt be reflected to the same extent. Although for the quarter, 77 in constant currencies because of strategic restaurant closing and other charges. So there are many things that theyre dealing with here one of them is Consumer Perception issues in places like japan and even in places like the United States and thats going to be the big issue they have to tackle. Revenue is down 1 11 if you take if you put currency in. But still 1 even if you back currency out. It was still revenue actually lower than in the year ago period. For more on the numbers, r. J. R. J. R. J. R. J. Hatovi joins us right now. The company is dealing with some of the same issues that have been that its been dealing with with its last ceo. Got a new ceo. Still dealing with some of the same issues. Was it worse or better than people thought, do you think, that was already out there, r. J. . Yeah, i mean i dont think the expectations were very high for this quarter. Frankly the numbers im hearing were pretty lousy. I think it came in a lot lower than most people expected. But i think people are eagerly awaiting what Steve Easterbrook has to say and the turnaround plan. I think that will be the focal point of todays Conference Call a little later this morning. This guy is someone that has had some success with what hes done in the division that he was running at mcdonalds, so theres a feeling that he may know what the right medicine is. Were just waiting to see what that is . Yeah. Theres a sense of optimism surrounding steve right now. I think if anything the way hes positioned himself to explore all options to enhance shareholder value right now. I suspect that well see four priorities today. A lot of focus on the menu and what changes need to be made. You dont expect to hear that today. Hes now saying hes going to put that out in this plan on may 4th, riot . Ght . I think well see some direction, some hints towards what well see there. Well also see some emphasis on improving franchisee relationships, what it takes to turn around japan and germany as well as maybe some hints towards refranchising or at least acknowledge they have looked into retransactions. I think those are the things the market wants to hear from steve today. R. J. When you think about this as a kitchen sink kind of quarter, just throw it all in because you know its going to be bad, one of the points joe was making and i dont want to make it for him was this idea when you look at samestore sales, theyre down unto themselves. Was there something they could have done this quarter . Do you think they stopped spending just knowing that they have this turnaround plan coming . I think it was something of a kitchen sink quarter, but i also think the results show that its not going to be an overnight turnaround. Theres a lot of moving parts, a lot of significant investment needs to be made and a number of parts to the business. So i dont think theres a lot more they could have changed. To the point about changing Consumer Perceptions in an evolving marketplace, i think thats the key thing here. So even though it is something of go ahead. No go ahead. Finish your thought and ill tell you what others have said. Ill read you easterbrooks comments. I like this. Theyre nebulous and totally philosophical but go ahead. I was going to say i dont think there was a lot more they could have done to change around the quarter in the samestore sales. He said ray kroc made a statement about our business that is as relevant today as 60 years ago. Take calculated risks, act boldly and thought fully and be an agile company. So people weve had on in the past, r. J. Said slim down the menu. You dont need to be everything to all people. Make it fast and make it fresh. Go back to your roots. The perception of whether youre gmofree and healthy to millennials, maybe that comes, maybe it doesnt come. Theres still a lot of people that go to mcdonalds expecting what they want and just get it faster and fresher and that might be enough right there. Yeah i think the phrase right there, the key is calculated risk. I dont think weve heard Something Like that in mcdonalds releases in some time. I think thats probably if anything whats driving the market up on the name right now. They have been taking big risks, right . They have been doing crazy stuff. They make that what was that rib thing. It wasnt even ribs. They had a mold they put some kind of the mcrib. It was a mcrib sandwich. It was crushed up stomach what do you think Chicken Nuggets are . Into a mold to make it look like nobody needs that. They were kind of popular when they brought them back. If they were that popular, theyd still be there. So are they going to be able to turn around the millennials and Michelle Obama . You know, i think what theyll do i think they have to focus on what demographic they want to go after. If its millennials some changes will have to be made. Never going to be in school lunches, r. J. Thats fair. Thats a fair point. If they want to go after families, i think some changes need to be made. But to easterbrooks point certainly simplification is the starting point. Go after fresher ingredients, because that is something that commands Pricing Power in todays environment. Thats a good starting point. Again, its not going to turn around overnight. Were probably looking at negative comps through the rest of the year. But if you look at 2016 and beyond, maybe youll see an Inflection Point but it all depends on the blueprint for a turnaround here. What are you saying . You know a place they could get a good deal on some chicken, that is what you were going to say . No, not at all. Looks, you know my phobias. Look out with avian flu. Chicken, cheap. Hopefully that doesnt thats a scary situation. Anyway, r. J. Youre not an expert on bird flu, are you . You need to know. No. No . Conversational. You dont have to be an expert but you have to know the potential implications. Worrisome, if its contagious. And they do Chicken Nuggets. I know they do. Becky says thats really not chicken, though. No it is chicken. Some parts of chicken. It is chicken. It is molded though too. Is it moldest . I dont know what that means. By the way, when the obamas leave the white house, could mcdonalds hire Michelle Obama to actually be a spokes to help them get more she would be a great spokesman for them. Kids dont eat they wont even eat whats on their plate anymore. At least they used to see something. Now they see this thing of kale and like a raw broccoli. No. Theyre not even eating now at lunch. Theyre sneaking out and getting pizza. This is very true. Weve got a couple other things to tell you in the meantime. Our good friend becky, has a cough. Its been a mixed bag on corporate earnings so far. While many big earnings beat on earnings, they missed on revenue. Here to talk about the trend and his outlook, jim paulson is here chief investment strategist at Wells Capital management. Good morning to you. Good morning, andrew. So youve been you were bullish, bullish, bullish, then i think you sort of turned. Where are you now . Well ive been expecting kind of just a volatile flat year. I think thats kind of what were getting and it could get more volatile yet. I think the market is somewhat vulnerable because weve had a good run, sentiment has improved, maybe a little too much valuations have improved maybe a little too much and were probably going to have to reset Interest Rates higher before the year is out. That makes it vulnerable but it puts it between a difficult position right now. I think the market is worried about whether the First Quarter weak are growth was a one off or whether were going to have a spring thaw and a bounce. I think were going to get a spring thaw and a bounce and that might bring some optimism to the stock market maybe push it toward 2200 but the problem in the United States is if we do get better Economic Growth were going to quickly move up the exit of the Federal Reserve again and bring the prospect of rising rates back into the picture. So i think if growth doesnt recover, thats a problem for earnings. If growth does recover, thats a problem for Interest Rates. Thats the problem for the u. S. Stock market. Although is there a chance that you could still see a real goldilocks scenario jim, where the economy improves and that allows the fed to maybe race rates once and be done with it let things lie for quite a while. The economy continues to improve. Because the fed has to look at the Dollar Strength and try to figure out what raising rates here while everybody else is lowering rates would mean. Thats certainly possible becky, theres no doubt about that. I just think i think its not as likely as struggling for a period with some overheat pressures. You know wages in the First Quarter, average hourly earnings, were up at a 4 annualized pace. I sort of suspect the dollar is peaking as we speak and crude is bottoming. I also expect that were going to see a bounce in growth overseas, in europe and japan. Thats kind of what those stock markets are telling us that a bounce is coming. And if you get that together i just think you get a weak dollar, a jump in Commodity Prices unemployment heads towards 5 wage and pressures show up even more pronounced all at the same time then boy, i think the slow and steady exit approach of the Federal Reserve, what theyre advertising, goes out the window and it becomes a panic tightening if you will. And i just think were going to have a little turbulence in dealing with this. After the mother of all monetary easing cycles if were exiting that finally, i still find it difficult were going to just skate right through that without any turbulence. Thats kind of what im looking for. If youre right, if theres panic tightening and panic selling in the stock market as a result of all that turbulence out there, do you look at that as a buying opportunity . I do. Thats my most likely outcome. I dont think the bulls over the next few years. I think this is a bull refreshing year where we gut check sentiment, we bring valuations down a little bit, we start the process of raising rates so it isnt such a big deal anymore and maybe we can convince another run. But it could be a pretty volatile ride until we kind of get through some of those refreshing parts. I wouldnt be surprised if we get better economic reports here in the next quarter and the market runs up towards 2200 but then i think i wouldnt also be surprised if that brings rate fears and overheat fears and maybe we see a market below 1900 before the year is out as well so just a volatile kind of frustrating year is what i anticipate. Jim youve been an economic bull for a long time. Every year you know it looks like youre going to be right and then you always get hit with Something Like this current period were in again. Youre big economic bull scenario isnt going to play out in the First Quarter again. All of this i dont know where all your wage increases and inflation and commodities is going to come from in such a tepid, domestic semi. Do you reevaluate from time to time and say god, look at this here we go again. Joe, i think thats an interesting point. I think wall street could be making a big mistake that we cant have overheated environment with weak growth. Heres why. Ive been believing all along that our problem is not so much lack of demand the reason were growing slowly is supply issues. We have no Labor Force Growth because of aging demographics. The working age population is growing less than onehalf its average post war speed in this recovery. And then to add insult to injury, this is the worst recovery for productivity of any in the postwar era. If you put those two together we can grow about 2 from the supply side of this economy. Now, the reason thats important is take the Unemployment Rate. Were growing job creation at 2 a year but only growing the working age population about half a percent a year. So even if labor force grows better than the working age population, say it grows at 1, the Unemployment Rate is going to be falling 1 a year from here. Has been. And what that means is even with very slow growth 2 growth a year because we have no supply side growth in this economy, we could get to overheat sub5 unemployment pressures very quickly. So i think its a fallacy to think that you need 6 7 8 growth to have overheat conditions. You can have that with very slow growth if you have no supply response. Then youre headed towards stagflation and nobody likes that. You can even boost prices is my point. If demand for labor is going at 2 and supply is growing at half to 1 that could lead to higher wage rates. Hey, jim, thank you for joining us. Thanks for having me, guys. Coming up when we return google fiber expanding. Squawk box returns in just a moment. Its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Google chose kansas citys kansas and missouri to be the first locations for its launch of going el fiber, its highspeed internet product in 2012 after a nationwide competition. Today it says it is expanding. Kate rogers is in kansas city kansas, with a look at what its done for the area. Kate, good morning. Reporter hey good morning to you becky. Were here in kansas citys Startup Village and in a few hours all of these bungalows are going to be filled with entrepreneurs leveraging the Fastest Internet in the country. So since 2012 the buzz around googles fiber product, which is gigabit internet 100 times faster than the average connection speed has brought more than 100 startups in the area thanks to six accelerated program real owe making this an entrepreneurial hub in its own right. When google chose kansas city to bring google fiber, it ignited passion and innovation just simply because they chose kansas city. People rallied around it. Reporter now startups are figuring out what to do with that blazing fast connection. It can be kind of hard to develop products that leverage fiber because its not available nationwide yet. It is available, though here in what google called fiberhoods. There are hundreds of them in the Kansas City Missouri and kansas city, kansas metro area. As they expand their footprint here, theres one major question and thats how much google actually spent on this project. Now, Kansas City Missouri officials tell us that as they expand their footprint to five additional metro areas, google will have likely spent about a billion dollars in this area alone rolling this out. Back over to you guys. All right, kate thank you. Thats an interesting point, though, that youre only as good as your weakest link. The fast stuff works but only in the areas where it actually exists. Reporter thats right, becky. The buzz is its really been incredible and ignited the passion for entrepreneurship here in the metro, which is something amazing in and of itself. Kate, thank you. When we come back this morning, the 30 under 30 list revealed. And then the president defending his trade deal saying that it is the right thing to do. And that his opponents are wrong. Congressman paul ryan chairman of the house ways and Means Committee, will join us next to talk about this. Squawk box will be right back. Good. Very good. 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The 328 horsepower q50 from infiniti. Welcome back to squawk box. Box. Ink magazine rolling out its 30 under 30 list. Who are the young entrepreneurs making it big and making the list . Here with us now on the set to give us some of the highlights from that list is eric shuren berg. Many of the folks on your list have been squawk guests. Why dont we go through some of the list. Why dont we i always say letterman style, we can go 10 to 1 or 1 to 5. Why dont we do by the most. Which is the one thats most likely to be the next zuckerberg. Actually hes been on your show or they have been on the show the collison brothers from limerick ireland. Their company is called stripe its disrupting the payments business. What they do is make it very easy for merchants to take online payments without having to send you somewhere else like paypal. So thats a real benefit to the merchants, makes it much more likely for completion. The company is now worth 3. 6 billion. So if you were betting on one if i was betting on one, that would be it. Stripe is your company. One on being successful one on being a huge market cap company, one on changing the world. If you look at zuckerberg he kind of did all those things. Yeah. Well thats what i define it as, so doing all those things. Its a very profitable area disruption is ripe and theyre pretty good leaders. So who else do you love . Theres a guy on your list who has given me a foot massage on tv. Do you know who this is . Couldnt be guta could it be . No. We can talk about him. Think about someone thats a little quirky. Ben kauffman. Great guy. What do you think is going to happen to that company . I dont know. I think that their partnership with ge is awesome and speaks well for both companies. Kauffman is an awesome entrepreneur. He started his First Company when he was 9 years old and has gone through a couple of great wins in mofi and now quirky. Hes a previous 30 under 30 winner. I thought he was a winner this year too . No. Hes one of ou proud hes an alum. Hes an alum. Diversity on the list. The Company Called nature box. What they do is kind of a Subscription Service for healthy snacks. Pay 20 a month and you get nature box branded healthy snacks. He was overweight as a kid and saw this as a way to kind of fight back. Women on the list . A third of the 30 under 30 this year are women. Now, did you try to do that or do you think that it was organic . Well it was a little of both, but i think what were seeing is that a lot more women are getting funding and a lot more women are starting companies. What the coolest business that youd put on that list. The host heart warming was kate keegan shilenberg. What they do is 3d printed orthotics. She was flatfooted as a kid. She was embarrassed by it threw them in the back of her closet. She decided as an entrepreneur that she would solve that problem. Do you think that you have to be young, meaning under 30 to get on the list yeah. To get on the list yes. But to have true sort of shoot the moon entrepreneurial success . There are people who say, as you might know peter teal for example, likes to invest in people who are under 30. Thats actually like a cutoff for him. I dont think thats necessarily true andrew. I think its an advantage. Figures show that the age at which you have the highest likelihood of success in starting a company is actually 39. 39 . Tloin39. However, look, if youre under 30 you are digital native so you have an upbringing that sdpoez disposes you to think of things that are disruptive. Also because youre entering the workforce in the most recent few years, you question things and come up with innovations. Thank you for being here. Go out and get the issue ink magazine. Cnbc will be teaming up to create the first ever ionic tour. Its a tour that focuses on entrepreneur entrepreneurship, Small Business and innovation. Part 1 is may 19th at the Chicago Theater and features key speakers, including kneelneil Blum Blumenthal blumenthal. You can register at cnbc. Iconicconference. Com. Coming up, the roller coaster ride that is the Amusement Park business. Six flags reporting this morning. Should you buy the stock . Thats coming up. When a moment spontaneously turns romantic why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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It accused of the Russian Company of raising barriers to competition when the gas markets of central and european. Later today well get existing well get data on existing home sales. Did we just did we say the eu or the u. S. We said the u. S. But i thought it was the eu. Theyre letters, two letters. And the u is the same. There are regulators youre right. If the u. S. Went over and did that, that would be why we would say that would be cool. We dont do get involved with that do we andrew . Would we go over and do the yeah. Whats that movie, extradition. Thats sticking our nose into someone elses business isnt it . Anyway president obama stressing the importance of passing trade Promotion Authority. In an interview with Msnbcs Chris Matthews last night. Everything i do has been focused on how do we make sure the middle class is getting a fair deal. Now, i would not be doing this trade deal if i did not think it was good for the middle class. And when you hear folks make a lot of suggestions about how bad this trade deal is when you dig into the facts, they are wrong. Congressman paul ryan chairman of the house ways and Means Committee joins us now with more. Good morning. Im going to call you mr. Chairman, i think, today. Youve got a lot of titles. All right, mr. Kernen that would be fine. Okay. And then i read about rob portman. I mean ive never seen in the journal today, i dont know if you saw that piece, paul. Theres an oped with ted cruz in the journal. No. He wants to put some currency manipulation language in it which wouldnt work. Hes up to reelection and thats pandering to his interests in ohio. God almighty. Everybody has got a horse here. Strange bedfellows, you and the president. Nice. Nice to see. But the president said Elizabeth Warren is wrong. Theres fighting on all different sides. Its weird. It is different, ill give you that mr. Kernen. Hello, mrs. Quick, mr. Sorkin. Nice to see you. Nice to see you guys too. Look, heres the deal. This is about more jobs and higher wages. One in five jobs in america are tied to trade. 95 of the worlds consumers dont live in america, they live in other countries. So if we want more jobs if we want higher paying jobs and tradebased jobs typically trade more we need to open up markets to our products so we can make and grow more things in america and send them overseas. The second point is the rules of the Global Economy are being rewritten writeright now, theres no question about that. Whos going to write them america and our allies or is it going to be china. I would strong low arguely a if we sit by and do nothing, china will rewrite the rules to chinas benefit and that will not benefit the american worker. Its about getting a more level Playing Field for our workers so we can have more jobs. Look our economy isnt growing near its potential. Opening up markets, giving us access to nearly a billion new customers, 40 of global gdp in asias case is good for us its good for jobs its good for our economy. In this case i think the president is right. And so when i think hes right, were going to support him. Thats why this is a bipartisan effort. Id have to say the same paul that if the president you know we take issue with a lot of the moves, whether they really do help the people hes trying to help. I think hes sincere that he wants to help the middle class. Some of the things i think are selfdevote selfdefeating, but in this case if you, paul ryan, and some of your associates on a private sector issue can actually agree with this president , i mean its got to be right. If hes on board, youve got to go way left of him to where this is not a good deal. Go to the wall street journal today and ted cruz and i have a joint editorial explaining why this is very important. Why trade Promotion Authority is the necessary process that gets congress engaged early on makes us codrivers in this process, keeps congressional responsibility, the constitution intact, advances trade and is important for workers. You see republicans saying the same thing that some democrats are saying which is we need to open up markets, we need to write the rules of the Global Economy. This is good for jobs. Its about getting a better deal for our workers and leveling the Playing Field. And so if you are standing still on trade these days youre slipping behind. Joe, there have been 48 trade agreements since 2000 in asia alone, and weve only been a party to two of them. As a result, our share of trade, our share of the imports going into asia has gone down 42 . That means were losing sales. All of our competitors have done better than we have because we havent been on the Playing Field. Now were finally getting engaged and so we have Bipartisan Legislation called trade Promotion Authority which we think makes sure that we get the best trade agreements we can. We dont yet have a trade agreement with asia yet. We havent finished negotiating this. Then were going to try to get one with europe to increase trade there as well. This is good for us and its whether we write the rules or china and thats really the question. Its funny because now youve got cruz all the way to you all the way to the president. So that just leaves lets see, Elizabeth Warren joe stig litslitz and the castro brothers isnt it . Whats wrong. No comment. Why do we think, paul when you phrase it that 95 of the consumers are outside this country. So it would be hard for me to argue the other case. But i see what theyre saying because we want jobs here. We dont want labor being exported to where its cheaper. We want to its almost as if we want it both ways. We want to sell to the rest of the world, but we dont want their labor to go into a lot of the manufacture of it and i can understand why unions would feel that theyre not getting a fair shake. Theyre still people are still arguing about nafta. Id make two points joe. Number one, take a look at what were talking about here in this trade agreement. Take a look at what were talking about in trade Promotion Authority. 150 negotiating objectives have to be met by the administration. And the quick to that is raise the standards. Bring these other countries up to american standards, dont lower our standards. And if we dont do Something Like this then china will write the rules which lowers standards. So i would take a second look if i was somebody whos suspicious about this. This helps raise our standards to american standards. Thats point number one. Point number two is we already give most of these countries pretty good access to american markets right now. We dont have reciprocal access to their markets. So this is about leveling the Playing Field and opening up access to these other markets that we dont now have access to. Typically if youre a Multi National and you want to sell to another country, you might have to manufacture in that country in order to sell in that country. But with trade agreements you reduce those barriers so you can keep your manufacturing here at home and send them overseas because you removed those barriers and sell to those market places. Thats the deal here. Paul where do you think the country is right now . And im thinking about millennials. I think you might even be a millennial. Im an x generation. Im like sorkin im x generation. Youre darn close. But you even look at the way i remember when the clintons when bill clinton was in office he was called a liberal. We now look back at the type of positions that he took and we realize maybe he really wasnt a liberal. Now were at a point where senator clinton, secretary clinton is being pulled much further left than she and her husband were back in the 90s when they were in the white house, even to the point where she says we need to topple the 1 . Whats happening in the country . Have we skewed that far or do we just think were that far to the left all of a sudden. Are we really there . Look youre asking a conservative to give you psychoanalysis on the Democratic Party. Youre just trying to do what you can do. I just wonder if were past the point of no return with the millennials because they buy into all this dont they . I think the progressives have basically taken over the Democratic Party and run the party for the most part. But no i dont think thats true with millennials. Millennials are suspicious of big government. They dont like being told how to run their life. Is that true andrew . Thats exactly how i feel. They are libertarian types which is what i would call myself a classal liberal, limited effective Government Free enterprise free markets i cant get you to get out of the bedroom, though with a lot of your views so you just said what we want to hear. Libertarian and yet weve got people saying that the conservative or the republicans have to run someone who can galvanize the religious right to turn out in droves and thats the way were going to win. Is that the way were going to win . I believe the way to win is another reaganesque look i wrote about this a lot in my book. As conservatives we need to show why these important founding Core Principles of america are so special, so important and how if you apply them to the problems of the day you can offer far better slougszolutions than what the left is offering right now. I do think we can be extremely competitive. I think we can assemble a Big Coalition of people who want to turn the page on eight years of progressivism and get back to upward mobility get back to Economic Growth. And i think get back to a Foreign Policy where america is stronger where america is leading and where america isnt doing this proverbial leading from behind. Thats why im pushing for trade. Thats why i think this is good for economics. And what would you say the chances are that this that this works . I think its going to work. What do you mean, are you talking about trade . Yeah. First of all, its bipartisan. I know theres a lot of anxiety but people ought to look at the facts. Handful of democrats. Thats what sandra levin said. I disagree with that. I think there are more than a handful. We negotiated this with ron woidenwoid widen. The appellate ispresident is a democrat. I dont think democrats in congress are going to let this president fail on probably his biggest signature issue foreign affairswise, tradewise of the day. All right. Mr. Chairman mr. Congressman, mr. Vice president candidate kernen mrs. Quick, mr. Sorkin. Have you endorsed anyone . No i havent. Give me your top three. Im not going to do that. Its not that hard. No im not going to do that. Heres why. Give me your top 26. How much time do you have . Theres 26. You cant give me one . Im the chair of a thing called the president ial trust, which is the fund for the general election for the nominee. So im actually required by my chairmanship of the president ial trust at the rnc to be neutral and therefore because of this position im not going to answer your question. But youre not backing hillary. Thats correct. Safe assumption. You might like Elizabeth Warren. Who doesnt . Anyway hes like get me out of here ive got things to do. Thank you, paul. See you. Thanks guys. See you. When we come back this morning, an earnings recap. The companies that are moving markets this morning, including dow components mcdonalds and boeing. Later the story of a couple of guys turning their scooter parts warehouse in chicago into their ultimate dream. Check this out. They are bringing the scooter back to the streets across the u. S. The founder of genuine scooter will join us in just a bit. Guys these three scooters have our names all over them. New york state is reinventing how we do business by leading the way on tax cuts. We cut the rates on personal income taxes. We enacted the lowest Corporate Tax rate since 1968. We eliminated the income tax on manufacturers altogether. With startupny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. All to grow our economy and create jobs. See how new york can give your business the opportunity to grow at ny. Gov business six flags are reporting a quarterly loss of 75 cents a share. That was a little bit wider than the street had been expecting but revenue did beat wall street estimates. Joining us right now is an analyst to talk about this. Before we do we should point out that the stock is on a run, up more than 40 over the last six months. Barton crockett joins us right now, he covers six flags. Barton, we know the company lost money for the quarter. Thats because many of the parks arent open for that quarter. What did you see that you liked . This is a small quarter, only about 5 to 6 of the full year which is why they lose money but their attendance was up 13 . I think thats really an encouraging start to 2015 not just for six flags but potentially for the theme park group where i think the backdrop of declining fuel prices you know i think easy weather comparisons to last year and a steadily improving job market is encouraging for the year. Thats what i was wondering, how much do you think is lower gas prices and consumers feeling a little more flush and how much of it do you think is weather . Well, i think all of those things factor in. I think the you know the weather is a big thing. Last year we had a lot of delays to school at the end of the school year the polar vortex was a big issue. But six flags under this ceo has executing tremendously well. A lot of that is in the stock which is why were market perform, but i think theyre pioneering some new approaches to selling membership and season pass thats resonating as well as i think just making some very Good Investments in the parks that consumers are responding to. Is that the active pass thats whats been selling . Yeah. That was up 53 been selling . What did they say 53 or something. They had 53 growth in the past year in a monthly kind of subscription membership program. If youre sitting around thinking about what youre going to do for the weekend, if you have this pass paid for you go in. You notice that in the small periods and i think thats a big part of what happened in the quarter. Thanks for your time. Great thank you. We return with jim cramer back on the street. Earnings and what investors are going to watch ahead of the bell today. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Jim cramer joins us now. What was more interesting or noteworthy . I have to tell you i think mcdonalds given the fact that theres so much hope here the revenues were made. So the idea that there can be a main meeting that can be something thats major or talking about bold theres a lot more to come here. Cocacola cocacola, i love the organic but the idea that theres a data point, a big deal with the revenues being met, theres game here people were not counting on. I guess a good point. Too early to say anything. We dont know anything do we. They did turn around internationally. Very tough. By the way, i have to tell you i think the heat should be off here. This is a remarkable quarter from the point of view with bang for the buck. They did a lot of marketing that cost a lot less. Dont forget monster closes in q2 and thats important. Both of these are surprises. The term honeymoon period, how long typically is a honeymoon period . Two days right. Two days. Two days all right. I got to see fast and furious. Thats a honeymoon. Time dilation. Everything happens faster in this new world. Jim, thanks. See you in a few. All right. Whats coming up when we return . Its the age of a scooter. I cant call it a bad boy. Im sorry, its not a harrell lee. Harley. Financial noise financial noise financial noise if youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. 40 of streetlights in detroit at one point did not work. At the time that the bankruptcy filing was done the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. They had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. Kids are feeling safer while they walk to school. 40 of the lights were out but theyre not out for long. Theyre coming back. Welcome back. This hog here gets about 100 miles an hour. Joining us is the founder of genuine scooters. Saving a lot of fuel. You dont want us driving cars. You want us to drive these every morning. Absolutely. To help the economy. Its a good cost of ownership with it. Mostly, theyre fine. How much do they cost . Between 2,004,000. Im going to put the helmet on. Do you wear the helmet . Its a good luck the recordfor you. You want to see a good look . How about that . Just like the guy from outer space. Now im worried if i were to do this on the way to work is my hair going to get screwed up . Is this suppose to be a fun vehicle . You can commute with these. Is this a clutch . No its not. Theres no gears. Its automatic. Would you feel safe driving around new york city . Absolutely. Take the Motorcycle Safety course. Some of them that bike could go on the highway. Instead of your porsche would you want to get on one of these . If i was going to take the chance i would get on a motorcycle. That one does about 40 miles an hour that one 60. This is a city bike. Yeah this is better than the city bike. Youve been in business 13 years . Do you sell in the United States or elsewhere . Just the United States. We do have some in canada and working on australia. Did you bring one for us all to keep . Is that how this works . Goodbye, everybody. Time for squawk on the street. Good morning and welcome to squawk on the street. Im david with newly wed jim cramer. Hes ready to go too, man. Lets give you a look this morning. We are looking for i guess ill all that an open after yesterdays down day. Crude oil, 10 year note is what we go