Transcripts For CNBC Squawk Box 20160421

That decision due around 7 45 eastern and then draghi will be holding a News Conference that starts 8 30 eastern. The dax is down by less th than. 2 . What is that . The euro sitting at 1 13 versus the u. S. Dollar. And crude oil price, prices initially falling over night. Wait a minute. Contract rolled overnight. It was 40 yesterday. This is rigged. It was 42. At one point in the day it was at 42. This is the rnc. This is rigged. This is like Reince Priebus is controlling the further and further out. Going to 85 and like a no brainer. Its 40 now its 44 just like a contract roled. Its rigged. You cant go from 40 to 44 overnight and i looked at crude yesterday and it was 42 and change. Must have been up then. And looked at that it was 43 and change. So yeah. Rigged. We got Reince Priebus and trying to get him mad. I think we did that already. Hes so defensive. Have you seen him any of the shows. Theyre preparing for cleveland. Down in florida with ted cruz for three days. I know. They spawn this whole and then just keep doing things just to stick it into him. And do you know why trump won 60 percent of new york . Because he kept saying that. And everyone forgot about the abortion they forgot about Everything Else and thought wait a second. This is rigged. Oil reversed declines after the International Energy agency said 2016 will see the biggest fall in non opec something something. Headlines in just a bit. Well also talk more politics. Before that we want to go live to greece. The olympic flame is being lit in olympia, greece. The torch will now begin a relay that ends Rio De Janeiro brazil for the opening snoins of the 2016 summer olympics in august. One of those great images. Anyway, a very busy day. We got weekly jobless games at 8 30 eastern. And the results of the philadelphia feds Business Outlook survey and on the earnings front this morning, bio gen ie deck. And more. After al ab and volkswagen buying back cars that cheat emission tests. It is not clear at this point how much money each person will receive. At the Kelley Blue Book value or paying what you paid for it . Thats agreement expected to be announced today during a federal Court Hearing in San Francisco. Several. And by the way would these payments if you were an owner of one of these vehicles would this placate you to the point where you say im going to go back and buy another one. If you are doing this because you are environmentally green and thinking this is the right thing to do you are probably ticked off. You bought a diesel car. There were a lot of people who bought a diesel car thinking it was more environmentally down. Thats not what im talking about a. You dont have a car . Like talking about sex with the pope, right . You dont know anything about and hes making the rules and. Emc became the third old guard tech company in three days to report disappointing results. Ibm and intel. That is not tech. That is not mobile. When cramer said netflix. Already disappointed. Tech. Its old. Call it whatever you want. Its the old guard. They were watching this and wrote the story based on our discussion i think. Although print people they dont respect us i think. They probably dont watch us. When i worked at the wall street journal it was like an issue to get into the office by 10 00. Several stock movers up. American express moving higher after reporting First Quarter earnings that topped expectations. Now this is a dow component. That is a dow component. The others, i dont know. The Credit Card Company benefitting from strong net interest income. Customer spending and fees with card member spending up 6 for the quarter. Can it be an American Express card on the phone when you are paying . They could transition to the new world. They are on my phone already. So they will do that. Cant you cut them out the middle men . Theres got to be someone whos processing the middle man. Yeah right here. Well you do it. I dont want to show the number. Dont put its just the number. Oh right they can freeze got it. I did that once. Had to get a new debit card. Ceo saying the company added 3 million new proprietary cards in the First Quarter. Shares of yum brands moving higher. Posting a big earnings beat. Revenues were up 5 . With yums china division, realizing same store sales growth of 6 . And shares of mattel are tumbling. Posting wider than expected quarterly loss. The toy maker, maker of barbie and hot wheels and reported gross drop of 6 . Ceo said the company was still on track to meet guidance for the year. In the meantime president obama is in saudi arabia this morning attending a secure summit on isis, iran and regional stability. The president will speak to the media in the 8 00 hour this morning. Treasury secretary jack lou bag in on the Energy Market and we asked lou about the state of the economy. I think the saudis like all Oil Producers are coming to terms with what is a lower price of oil for now. One of the things we all know about oil prices is they go up and they go down. And you have to plan on a certain amount of volatility if your economy is based on a commodity like oil that fluctuates in price. Lou also spoke about changes ths to the currency and javers has that story in minutes. Yesterday the stocks closed higher. Same for the s p 500. The dow futures up about 34. S p by 2 and nasdaq just over 1. The ten year note yesterday hit its highest yooeld since march 30, 2016. Sitting steady at the same rate this morning. You can see the dollars down across the board. And gold prices were up slightly yesterday and this morning. They are up another 7. 70. Oil was ripping higher yesterday. Thats why 44 looks even crazier. When i looked there was only a dollar difference between the new contract and the old. Usually you can see a bigger difference than that. Both averages now up over 13 since the lows of the year in early february. Joique us now are carl tweeted something out and ive been talking about in this morning. A chart that showed the shoulders. But you can craw a down trend down. So lower highs and lower lows. And i dont know whether the one year shows it or the two year shows it better. People have told me a reverse head and showeders. Lets look at longer one. The lows are lower. And we havent made it to a new high yet. So if you draw a down trend line. Does it matter that the shoulders are crooked . We just called it a complex head and shoulders. Isnt it bullish . Or does it have to get through prior highs. Right now the market is at a very critical juncture, where we have the. In reality you need to confirm a breakout. So you need to spend more than just a couple of days above, really a couple of weeks above to confirm the reversal. Next two weeks. Were at a proving ground. How has the leadership been . How broad . Its up and downed. Leadership from the likes of energy. The crude oil has generated performance there. Skpm the significance, the energy spdr is moving above its 200 day versus the s p 500. Now we see performance from financials. So we get earnings out of way and the financial spdr very the s p 500 and looks like it could be a double bottom. I think our lips are going to be saying 19,000 and 20,000. People dont really think that. We got to a point a couple of months ago where people are saying this markets done, its tired and. Thats why i feel like the financials are going to be key. If indeed we can see it move higher. Ive had a bearish bias really. Are you ready to change in. Well i have to listen to the market. Im a technician and it is momentum. So it is all in how you balance your voes of overbought, oversold conditions and momentum. And momentum is win right now. And now were going to go to someone who never listens to the market and is mad the market doesnt listen to you a lot of times and does what it should not be doing and totally illogically. This has gone a lot further than i thought it would be. Ed needs to smart b up and do what my bearishness has really been around when qe is on the market goes up. When it is off it doesnt. In 2013 the New York Stock Exchange index is where it it was in 2013. Qe ended in 2014 it is pretty much where it was in 2014. Were at the krucrucial poin we are. I want to follow see whether it is a nominal new high or something that is real. To me the real action of interest is whats happening in kmovld prices. I think this bottom is for real. It is not demand driven, it is supply driven and the inflation statistics in the second half of the vpt year because if you combine, the feds could have an interesting situation on their hands. A weird point. Equities and commodities are correlated positively somehow. Well, thats the thick. Commodities have been falling five years. The stock market has been going up five years and now all of a sudden. Stock market wont like that. If the rise in commodity was demand driven and maybe the growth is actually getting better. But if they are more supply driven that is not necessarily the best thing. Assuming the decline was demand driven. In certain it was. But certainly in others it was excess supply that is now responding to theich drop in prices. So that is the next dynamic people should focus in on. You know, rates have skyrocketed in germany. From 15 basis to 20 basis ridiculous. Imagine if Commodity Prices continue to go up if where it is going to go. Central bankers created this bubble to get higher inflation and manual what happens to that bubble if they get inflation. But they want. The story is the traders want more qe. More lower rates. More better blues. 70 of the market is negative Interest Rates. Did you awrap . Really . Okay. Were wrapping. Two weeks. We got to watch. Stay where it is or go up a little more . Its got to go up a little more. There is something im missing. Were. Were going to have a big plate of crow here. Wouldnt be surprised to see markets go up. But then come back down. Were also approaching may. Right at the time when were looking for this proof. Couple more stocks to watch today. United continental reporting better than expected results. Also qualcomm forecasting Third Quarter profit below whew the street was expecting. The firm is looking for chip shipments to fall and that stock is down by about 3 and a quarter percent. Campbell mentioned many prominent executives in Silicon Valley and he passed away earlier this week. Alexander hamilton will keep his spot on the 10 bill but the 20 bill is getting a makeover. Harriet tubman is taking over for Andrew Jackson. Details in a moment. You shouldnt have to go far to get the help youre looking for. Thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Harriet tubman is going to be replacing Andrew Jackson on the 20 bill and hamilton will remain on the 10 bill. It is not just the public reaction and the broadway fans. These are people who are huge fans and historyians who looked and said this is not guy you should be moving. He initially said what he wanted to do was put a woman on the face of the 10 bill that. Would move Alexander Hamilton off the face of that and caused a big human cry. So they stepped back and reevaluated and jack lou said he had an a ha moment. And that led them to this sweeping set of changes. Harriet tubman becomes the first African American perp to go sonn the face of u. S. Currenciy reve. Harriet tubman replaces Andrew Jackson on the front. Jackson will move to the back along with the photo of the white house. And ton the new 5 bill, the bak will feature Marian Anderson and dr. Martin luther king and civil rights lawyers. This was a decision he came to over time and he felt it was in fact time to move forward with all of this. We also heard about literally hundreds of ideas of things we should represent. Fairly early in the process we made this bigger. We said this shouldnt be about one picture on one bill. Im very excited about it. I think it is much bigger than just honoring one woman. This is about saying that our money is now going to tell a much bigger part of our story. It is going to take years to get all of this through the process but jack lou said even though the Obama Administration is expiring he say hes confident whoever is the next in line will keep these changes on track. This is years in the making. A decade for some of these bills before they actually get into circulation. What do you think the real chance is somebody tries to undo this, change this or switch some of these people . Well that is certainly a possibility. New administration will have new ideas and a new treasury secretary will have the authority to put in whatever changes he or she would like. But jack lou said i dont think whoever is going to come next will want to change this. By the way. It is an executive order . Apparently it is at the discretion of the secretary of the treasury. He can simply do this. They dont need congress to weigh in here. This is the Treasure Department deciding this and rolling it out on their own. Great choice. Saw it yesterday. We were all watching. Great choice. And i dont need to wall street journals editorial page normally. They always get it right. Inspired choice. Harriet tubman. Then they get a little bit i dont know. They point out the irony. No doubt some american wills call this a case of political correctness. Jackson a southern white mail who owned slaves is replace bade woman ed by a woman of color. And then this gentlemen makes the case that on 20 bill, ds, democrats are replacing a democrat with a gun toting christian evangelical woman. History is delicious sometimes. Up on the capitol there is a series of paintings on the senate side of the building and they feature friscos with historical scenes and some of the spots there are blank and he left them blank deliberately because American History is not a static thing. He said that future generations are going to produce future Great Americans and were going to leave space for those deeds to be recorded as well. And that struck me that American History is constantly moving and constantly changing and reevaluating who the great ones were and what the contributions were to our story. To escape from slavery, that the is not enough. Go back and become a northern spy and basically led raids and recruited people Pretty Amazing. And advocates for womens right to vote. And you could go and took the operation up to canada and Pretty Amazing. So an inspired choice. Were going to talk about a company that may be inspired too. One of the best funded start ups we know almost nothing about it. Magic leap just closed funding and they dont even have their first year. We get annen inside look next. Take a look at yesterdays s p 500 winners and losers. They say that in life, we shouldnt sweat the small stuff. But when youre building a mercedesbenz, there really is no small stuff. Every decision. Every component. Is an integral part of what makes the 2016 cclass one of our most sophisticated cars ever. 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Go pro with crest prohealth advanced. Moms right. Again we rise above our differences. The right amount of garlic reigns supreme, and what separates us is mostly whether were chopping or frying. Food is a language we all speak. When we cook together, we find harmony in the kitchen. We make more than a meal. Enjoy fresh ingredients and healthy recipes, delivered to your door each week. Subscribe today, at hellofresh. Com welcome back to squawk box everybody. Cnbc, first in business worldwide. Weve been watching u. S. Equities. They have been a little higher. Six out of seven sessions the dow and s p 500 have closed higher. The dow is up 35. S p up 2. 5 and the nasdaq up just under a point. Our executive edge this morning. The secrets of Virtual Reality magic leap. One of the best funded startups in history. Raising a half billion dollars. It has yet to produce a single product. Senior editor of wired magazine part of the cover story on imagimagic leap. Visited the Head Quarters and met with the ceo. He explained all of the things he was doing with this stuff but i couldnt understand what he was trying to do. Yeah hes like you take a little bit of star wars and the hobt and mix them together and boom. The ceo of google joins your board. Bit and mix them togetherd boom. The ceo of google joins your board. What is magic leap . He calls it mixed reality. Right now were seeing Virtual Reality and heard of augmented reality. You put the gogs agles on and y can see the real world. And his is the next step. A visual overlay of the world and allows you to interact with the world and the overlay. There are a lot of players in the space. Magic leap is the one people are most excited about. Oculus, step one, step two. Step one is Virtual Reality. Its kind of here now. Step two is what happens after and that is when you can be in that other world but your real world doesnt go away. And that is what magic leap is. So different from being in a video game. It is being in a video game at the same time as being in your living room. But here is whats kpag exciting about it. It is not the video games. It is the idea that what hes developing is going to replace your iphone overtime. Its why people like google ceo joined the board of alibabas chairman joined the board. The idea is if you have a child or grandchild in another state you can put these glasses on, sit next to that child and read them a story. Creating things we dont even realize well need yet. Right. And steve jobs was an aggressive yeller kind of guy. I dont think hes ever raised his voice. You signed an nda. Yeah. Did you get to try any of this stuff . I totally got to try it. Okay. So tell us as much as you are allow allowed. You put on this technology. Right now its a head set still attached to the computer. But by the time you see it it will probably be much smaller and the demo that really got me was i started watching this bug fly around the room. Now ive seen a lot of these demos. But what was different about this one is there was no appendix pixelation at all to the bug. It fly around and room and it landed on my finger and i felt it. And i thought if they could really pull this off thats crazy. I dont understand the feeling piece. I dont understand the feeling piece either. Whether rony will tell you is your brain is tricking you. Your brain is so primed to have that feeling that it is telling you, you had a feeling. First i was thinking google glass. And then i thought you have two realities going on at the same time. Because the beauty of Virtual Reality is it takes you completely out of where you are into a different reality. And if im going to do Virtual Reality i dont want to be at 6th and 51st. I want to be in dinosaur land or something. Whats great about mixing the two. When you made the point about the bug then i get it. And the grandchild. Well that sounds like a Conference Call or something. Not if it looked for real. Is this guy for real . Did you touch him . I saw him. Lets say that you are standing at this corner but you dont speak english you speak chinese. What happens if you put on these goggles and look up and suddenly everything around you is translated into english in real time. You are looking at the screen right . It is not like you are looking through it and you are projecting onto the screen. You dont perceive a screen. You just see the digital assets. Looking. Internet being integrated with. When is this coming . So much further away than we hope. All of that stuff that you are asking about points to this fact, which is that we have to design that future first. The iphone wasnt useful until the apps were born and then people figured out what to do with it. It is going to be years. When is this going to be in the wild . They wont say. Im going to guess end of 2017, easterly 2018 but that is my guess. They wont say. Are people going to school to do this . Really fun. Cool. I stopped at High Performance i couldnt do anything. I cant even write whats it called anymore . Cursive. You can read the prompter. Coming usouthwest airlines posting estimates. And gary kelly joins us next on first on cnbc. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of the at t network, a network that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Im spending too muchs for time hiringnter. And not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer6 great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back everybody. Southwest airlines reporting kwaurl profit of. 88 centquarte. Gary kelly, thank you for being here today. Stocks already trading higher and when you read through the results you see record after record. First quarter record gap income. Record First Quarter free cash flow. Talking about record First Quarter load factor of 85 . Whats happening . Just strong across the board. Boy, its happening. Yeah were very very pleased. And the other thing that is interesting is were outperforming virtually ever other competitor. Very proud of our people. These are terrific results and the First Quarter, you know, often times is the worst quarter of the year so were off to a fabulous start. Why are you outperforming and beating your peers . First i would credit our people. They are doing a fantastic job and this is probably the best start to a year weve had in 20 years. Great on time performance, wonderful hospital by our people. But the other thing is we dont nickel and dime our customers. Weve got a Great Advertising Campaign under way with bags fly free and no change fees and we call that transparency and i theys struck a cord. We also have at lof developing markets are that maturing rapidly and producing nice gains. So you know just all the way around i feel like our folks is doing a very good job. I remember in the not too distant past we spoke at one of these quarterly interviews where you kind of hinted that that may change, the idea that bags fly for free. I think it was when fuel prices were a lot higher. I think when the industry was really talking about how much it was making in fees but what it sounds like today is you are doubling down and you are not going to start charging for bags. Oh i think that is a very fair assessment. I dont know that we ever really wavered on our desire not to charge all the hidden fees. We need to be open minded to what customers want and clearly after this many years is just not anything customers want. It would be bad for customers to make that change and obviously the revenue results support our approach. Very pleased with that. Customers love it and its good for business. I do it all the time. Whenever im on the airline i do pay for the early bird check in. And sometimes i do pay extra to get to the a list. Roar right . Right. Thats usually two fees. The early bird whatever the original and. And we make that available for customers who want that choice. And roughly 20 of our customers take us up on the early bird option. But that is a far cry from forcing a very expensive bag fee or change fee which execompetit are charging hundreds of dollars. We dont do that and obviously the customers really love what were doing. If you hear me say early bird, im talk about dinner. Joe doesnt pay for the early bird. Gary do you pay for the early bird if you are doing it . Gary, let me ask you a little bit about Something Else that i saw in the results. You said that operating revenues grow in line with the available seat mile growth is Strong Performance especially considering increase in stage length. What is stage length . And why did it increase . Sounds like weve lost gary. So its not that he didnt get the joke. I did want to know as the ceo you need southwest is fantastic typical response to your questions. It wasnt supposed to be a joke. I wanted to know whether the ceo of the company does the early bird. Otherwise the line can be very long. Then you have to pay extra. On southwest youre talking about. And then if you wanted to listed in the a list, the first way onto the plane. Who wants to be first on the plane though . No middle seat. The reason you have to pay all the additional fees hes back. Good he gets to respond. Assigned seating. Gary im not sure if you can hear all of this talk. Im can hear you now. Im back. Okay. Great. I dont know if you want to address Andrews Point or Something Else. I was arguing if you do the early bird because otherwise you get the middle seat. Thats where i was going with that. Well what we wanted to do is just evolve the southwest experience where we give our customers more choice and especially the road warriors who appreciate some amenities. We try to be as egalitarian as possible. Every customer is important to us and this works. Thats why were the Largest Airline in america. And the way weve got it set up right now i think works real well. Congratulations on the results and thank you for joining us this morning. Thank you. And sorry i lost the ear piece there. But we really appreciate you having us. Appreciate you being here. Thank you. I guess ive never im pretty loyal. Love southwest. In new jersey. I am a southwest but i do pay the exthe tra. United. And everything goes on that. Whenever we do anything. Big ticket items and then the miles. Coming up. Betting on buzz stocks. Supposed to look at a new etf that tracks Companies Getting positive mentions on social media. Dont go to paris. Dont go to la. Dont go to tokyo. Live there. Hey, welcome come in, come in. When you airbnb, you have your own home. Make your bed. Cook. You know, the stuff you normally do. Wherever you go. Dont go there. Live there. Even if its just for a night. Oculus. Welcome back to squawk box. The new etf harnessing the power of social media to identify Investment Opportunities is out. The index mining platforms like facebook, twitter and blogs to target stocks generating the most buzz. It compiles a portfolio based on those companies. It is called the buzz index. Current components include alphabet, apple and disney. Lets bring in the creator of buzz indexes. Explain this. Youre mining facebook, twitter and everybodys blogs to figure out what should be in the etf . Exactly right. What we do is look at what the collective discussion is on all of these online social platforms and try to determine what people are talking about, how are they perceiving their investments and what are they planning to do with their investments. We try to identify those stocks with the best bullish perceptions. We call it an insight score. Which we believe are likely to outperform. The index has 25 stocks. Before choosing the stocks we set important parameters. So there is four or five thousand stocks that trade every day. Where do you start is the problem. What we have determined after years of analysis is the most important thing is the depth of the conversation around those stocks. We want to understand which stocks are being talked about the most to measure that baseline conversation and then have the most confidence that what is being said online will ultimately propagate through the social universe and ultimately into stock prices. Isnt the old saying. Live by the buzz saw and die by the buzz saw . There are many different ways to measure sentiment and get insights. Some people try to do it from a shortterm perspective. Think of a High Frequency trader. Were looking for longerterm trends. If you think about the most talked about stocks the visual i give is almost like an ocean. An ocean of data with this consistent pattern to it. Thats the traditional sentiment of that stock. We look over a longer term period. Were looking at it from weeks or months perspective. Isnt that the funny part about social media. Whats the delay between how often are you adding a new stock to the index . Once a month we rebalance the index. Thats what i was going to say. Social media is such a crazy place, right, that things seem to change minute by minute. It doesnt when youre looking from a longterm perspective. Think of a wave or momentum building in the ocean. When the wave starts to build, we can see the change in sentiment. Waves dont just stop on a dime. They continue to crest. Yahoo is on your list. Its possible it will be sold or not sold in the next month. A month from now, whatever people are saying now about yahoo will likely be irrelevant to whats going on in a month, right . You could say that with any investment strategy. Anyone who holds yahoo for any stock. The company could come out with an announcement. I can understand with blackberry or rim. Its not part of the conversation anymore. Its not. I understand how you can pick up things like that. I think sometimes social media tends to pick up trends that are not necessarily as mainstream as we think. I am just thinking back to the primary this week in new york. Google said the most searched for candidate was bernie sanders. He did not win the New York Primary. He may have been the most searched for kentucky dercandid insight around him may have been different. They talk about the collectively groups can be more intelligent than any group and whats the right environment i assume you backtested this . We have. What type of returns who the index produce. We backtested to january of 2013. Prior to that there is not enough online two and a half years. Three years. We have outperformed the s p by 30 . Nasdaq by 10 . Its interesting to see how the sectors rotate within the index and get insights. These are all investments that youre making as long positions. Fully invested, long only. Would this work for short positions . There are lots of things were studying and can do for long short strategies. What we wanted to do is think about beta to social momentum. Our view is social momentum leads and predicts price momentum. The only community is like the stock market. Millions of people determine what the stock market is doing every day. Is this a licensing fee . We license the index. I appreciate it. Thank you. Based in toronto. Based in toronto. Come visit. Youre outperforming. You live in a house . A house in toronto. You can make fun of joe for his cincinnati accents. He says he says i say ropa. How do you say roof. I might say rufe. How about routers . We had a roofer come over the other day. A ruffer. I guess i still have my accent too. My friend from boston says i always kid him. Moving about the house. Yeah. Thats northern. Its not a bad thing. Its a good thing. Its classic. Thank you. A flood of earnings. Travellers, blackstone, under armour, verizon and General Motors coming in the next hour. Numbers and instant reaction from the street. Other vehicles on the road. T its been shaken and pummeled. Its innovative enough to brake by itself, park itself and help you steer. Its been in the rain. And dragged through the mud. The 2016 gle. Its where brains meet brawn. Lease the gle350 for 599 a month at your local mercedesbenz dealer. The first stock index musiwas createdoughout over 100 years ago as a benchmark for average. 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Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Goldman sa. Happening now. Wall street looking to extend the rally to seven days. Earnings reports, a old oil call it and the ecb meeting. We break down what you need to know in the trading day ahead. Earnings alert. Gm set to report gquarterly results. The cfo Chuck Stevens joins us to break down the quarter. Thats first on cnbc. A change for the 20. Harriet tubman the new face of the 20. Alexander hamilton is spared. Well tell you what treasury secretary jal jack lew said abo the aboutface. 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 joe kernen along with Rebecca Quick and andrew ross sorkin. Futures again looking likely to have a positive session. I think first we said 7. We meant six out of seven. But we have, in the last telling you, from the day that guy was on squawk on the street and said there is no more upside to this market i read that and tweeted it out, i am writing this down. It was just like make note of this moment. It was so loud and so obvious. Anyway, weve been up ever since and were at almost 18,100 at this point and we just had a Technical Analyst on who said we need to spend a week or two above 18,000. She said the next two friday closes are very important. I love technicians. You cant use them because a lot of it is already in hindsight. You combine fundamentals with technicals and you might at least be right 51 of the time. Thats all you need. Here is whats happening at this hour. Earnings just out from dow component travelers earning 2. 37 a share for the latest quarter, below the streets expectations of 2. 55. However, the miss was because of a 69 cent hit related to recent wind and hail storms in texas. These were storms that happened late in the quarter. March 23rd, huge hail storms in the dallasfort worth area. Weve heard from other Insurance Companies who have warned that the storms cut in with the catastrophic losses. Its the type of thing you expect with insurers. Travelers say there are strong underwriting results a. Revenue was above the streets expectations. Home builder dr horton out with numbers. Earnings in at 52 cents a share. Revenue also beating the forecast on a 24 jump in net new orders. President obama is in saudi arabia this morning. He will attend a Security Summit on isis, iran and regional stability. The president will speak to the media in the 8 00 a. M. Eastern time hour and well bring you the remarks as they happen. Treasury secretary weighing in on the Energy Market. Tom costello asked him about the state of saudi arabias economy. I think the saudis, like all Oil Producers, are coming to terms with what is a lower price of oil for now. I think one of the things we all know about oil prices is they go up and they go down, and you have to plan on a certain amount of volatility if your economy is based on a commodity like oil that frluctuates in price. The recent nuclear deal with iran is expected to be among the primary topics discussed today. American express beating on the top and bottom lines. Expectations, Company Revenue rising for the first time in five quarters. Among the reasons higher spending by card members in the United States. Shares of mattel tumbling after the Company Posted a quarterly loss hurt by the stronger dollar. Toy makers of barbie reporting a sales drop of 6 . Theyve struggled to make up for the loss of the disney license resulting in a sales gap of 450 million this year. The ceo said the company is on track to meet guidance for the year. Stock is down about 6 this morning. European Central Bank Meeting today. Widely expected to hold Interest Rates steady. Decision due around 7 45 eastern time. Then draghi will hold a News Conference at 8 30 eastern time. Well watch that and monitor what he says. European stocks ahead of the decision a mixed picture. It may turn around depending on what happens here. Lets show you whats going on with the euro. I think it could be time to still travel. You want to make a jaunt . Still good. I like the pam 139. Better than 143. I saw Something Else that they had oh. Something else they had in london. What . I dont know. I saw it somewhere. Naked hotel. Naked i dont want to travel there for that reason. I wouldnt want to travel there where do you come up with these things . Everywhere you sit in the Hotel Somebody elses bare rear has been sitting on it. No thank you. As a germophobe i am so not interested. Its the rear germs. Its not the visual that you dont most people that like to be naked, you dont want to see. Its the ones that dont, right . That is a true fact. I can tell you that from where was clothes are a good thing. From munich, the naked park. Its not a good thing. Continuing on. Not a good thing. Markets continue to surge higher. Theyve changed that word for me at the last minute. Were in a mini melt up. Keith bank is president of u. S. Trust, responsible for almost 400 billion in assets. He has actually just turned 28. You worry a lot, dont you, with 400 billion. Now you have the gray hair. Thank you, joe. No. Along with gabriella santos, Global Market strategist at jpmorgan funds. To keith. He already said he thinks there will be a meltup. Would that surprise you if there was a meltup in equity prices from here . I think for the next few weeks we may see a little bit more of consolidation. Then we are expecting, especially with the Second Quarter earnings season, maybe that will be a new catalyst for the market to move higher. We have come a long way in quite some short time. A meltup, keith, implies not necessarily that its that there is actually an underlying reason for it. It just means that its happening and people werent prepared for it. Right. Its a trillion dollar short they need to cover. Zero Interest Rates. Is that why you yes. I think, look, the multiup is well under way. It may go for a while. Could go through the spring. But i think, in my mind, joe, we saw the classic death versus despair phenomenona. The market in january february began to discount death. Global and u. S. Recession. Hardlining in china. Currency devaluation. Oil into the teens. The markets began to discount that and portfolios were positioned for that. When none of that transpired, we celebrated despair, meaning 2 growth in the u. S. Looked pretty good. 4 earnings growth, ex energy looked pretty good. All of a sudden you had this repositioning going on in an aggressive way. Thats what, to a large degree, caused our mini meltup. I said earlier, if we were forming the words 19,000 or 20,000, that would not shock you at some point in the next year or two . On the dow. Not on the s p. That would shock me. We think fair value right now for the we think were at fair value. So 17 times for us is about right. With zero Interest Rates around the world and negative in some places, fair youre basing fair value on historic historical levels of Interest Rates. Whats fair value at zero . Its not 17 times earnings. It will be 22 times earnings. We dont think it continues to be zero, number one. You have a u. S. Election coming. Geopolitical risk. Plenty of things will tamper down. If we get much above 17 times it makes the market vulnerable. We have an election coming up, but barring bernie sanders, could we get an administration less enommamored of the private sector than weve already had . Thats a question for others to figure out. Youre not a person, a voter. I am a voter but a private voter. Joe, its not even so much the impact. Its just uncertainty, right. I just think you know. I dont know. I think that well at least the worst we could do is stay where we are in terms of friendliness towards the markets. Yeah. Gabriella. Towards the markets. Look how the markets have done. Zero Interest Rates. Is that the piece youre going to write . 1. 5 . United health care dumping out of every single exchange. Premiums soaring. Regulations through the i think they stayed in three of the 12 they were in. Exactly. 3 of the 12. Does the election matter . We usually advise our clients that the election, especially in the u. S. , right, doesnt tend to matter for the market or for the economy. This one may be a little bit different to the extent that there are some antiestablishment views being expressed. And as a result we may see a little bit of volatility in the market in the leadup in the election this time compared to other ones. In the long run we really dont believe that it has a fundamental impact. Expressing antiestablishment views are different than putting them into practice or being able to put them into practice. Exactly. With congress. Exactly. Thats one factor leaving us feeling less worried about it, right. Even if you get a president who has more different opinions, it will be hard to actually implement them. We have had a discussion about china, and it gets complicated. But that its its in a secular no. Its in a cyclical releveraging in the midst of a longterm secular deleveraging. That makes sense. Do we have a couple good years, though . I think the china problem is one for the medium term. Right now they are pulling on the credit leverage to be sure to stabilize growth, even pump it up a little bit. In the medium term i think theyll have to deal with the fact that they have 200 in gdp just in private credit. Thats a problem i think not for today, this year, but a few years down the line. You said japan is going better all of a sudden. I thought it wasnt the stock market in japan. Mmhmm. I thought it wasnt too because the yen has been can we count on japan and europe to do better . Things are aligning, right . Especially you can count on europe to do better. We really see the impact of Monetary Policy there, besides the currency, right. For europe it is also a story of credit really seeping into the economy and really helping domestic demand there. For japan i think it may be a little bit more questionable, a little bit more tied to the currency effect. Its as simple as we looked into the abyss and turned the lights on and there wasnt anything there, right . Yeah. I think we got back to more normal levels of valuation. I agree with gabriella. 3 global growth, u. S. 2 plus. 4 earnings, exenergy. Thats a reasonable environment for the market to continue to perform well. Well keep an eye on the multiply to make sure it doesnt go too far and we think the market continues to grind up and we think we have a few years left at least in both the economic recovery as well as a bull market. If you were to lose the 400 billion. Are there people below you you can blame it on . Are there people you can sacrifice . Is it all on you . No. I have a Terrific Team around me. Do you have people above you . Better to blame it on people above you. I have people everywhere. Youre here no matter what. Were going to grow the 400 billion, not lose it. Im just saying worst case scenario. Well be all right. I dont want you to worry. Wouldnt you worry . 400 billion . You have half of that under management, right . I already got 400 billion. Dennis gartman of the gartman letter says alcoa is a great way to play the market. Well find out why he says the stock should be in your portfolio. Under armour reporting and beating on the top and bottom lines. Up by better than 4. 5 . Well talk about kevin planks plan to grow the business internationally. Up next, the ceo of europes largest coffee brand. Hell talk java trends, the european economy and how the company is perking up sales. Squawk box will be right back. You shouldnt have to go far to get the help youre looking for. Thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back to starbucks. Or squawk box. About to talk about starbucks right now. Then well talk about illy in just a second. Reporting Second Quarter results today after the bell. The stock has been on a tear up nearly 28 the past year. Analysts expecting earnings at 39 Cents Per Share compared with 33 cents a year earlier. Sticking with coffee. Reports from the International Coffee organization showing that worldwide Coffee Consumption is set to grow by 25 in the next five years. Can producers keep up with demand . Joining us is the ceo and chairman of italian Coffee Roasting Company illycaffe. Andrea illy. You were telling us during the break you started playing with coffee when you were 4 years old. How old were you when you started Drinking Coffee . 4 years old. My mother started the first espresso preparation at home. We were experimenting. Half an hour. 45 minutes per day. Every day, seeking the perfect grind and perfect quality. It was really pioneering. Did you develop taste buds at that point that would actually help you differentiate between yes. I was given only little spoons. As a baby, you know, you cannot get too much caffeine. Sure. Introducing to the taste. In terms of growing and growth right now we were talking about what starbucks and you guys are doing. Whats going on with coffee demand . Its going up every day. Crazy to me. Coffee became very positive in the society in the perception globally thanks to three virtues of quality of coffee. One is pleasure. Better quality, better preparations, better consumption places and better everything has improved. So this made coffee to conquer also the asian consumers and the emerging countries. Also, the producing countries. Brazil became such a big consuming country. And china and india and others, russia and the middle east. So the if you net the demographic increase, the compound average growth of Coffee Consumption quadrupled in the last 20 years. Now we are around 2. 7 , 3 . That means that its we need to produce twice as much of the coffee from here to 2050. So it will you know, adding exactly the same amount of coffee is produced today in the next 30 years. This is a challenge. Also because in the meantime, as a consequence of climate change, the suitable land for coffee cultivation will shrink. So we might we dont know the exact algebra but we might need to quadruple productivity. Which is quite a challenge. Never happened before. Therefore the coffee where will the price of coffee beans be five years from now . Who knows. For sure the volatility caused by how the Coffee Market is structured on the stock exchange, that part of other commodities with a speculative markets, and this speculation kind of emphasizes the fundamentals deficits that you gaps that you have from time to time, because as a consequence of longterm lets say production deficit, versus consumption, we are now in a situation where stocks are not so high. So with low stocks and a tight, lets say, balance between production and consumptions, it can happen that prices go like crazy. One week from the other. Were talking about starbucks earlier. There is more competition than ever right now. Its crazy. Youll hate us. We have an espresso machine at home. Is that a problem . No. I think you have an opportunity to upgrade to illy, which is even better, you know. I was going to say, in terms of how you make the distinction, though, between the different products these days, what makes your product different than the others . For illy, it is an obsession. It was born 80 years ago with a dream of my grandfather to offer the greatest coffee to the world. And since then we have kept innovating. Illy is the most Innovative Company in the coffee industry with three of seven of the most important readical innovation in the coffee sectors came from illy. Starting from the pressure espresso machine that Everybody Knows in the market today. This formula has been introduced in 1935 by my grandfather. As a matter of fact, we are celebrating the 80th anniversary of this machine today. Then we kept the first portioned system, which is still a pod, has been developed by illy. More recently the espresso that you are enjoying with this cappuccino. All the innovation for the sake of better quality and andrea, is the nerve of Howard Schultz to think he can put starbucks in italy. What does starbucks know about coffee to an italian . Is that going to be well received over there . Are those going to be empty places . Tumble weeds going through the inside of the starbucks over there . Should he be coming over there to tell you how to brew coffee . I dont know. Just say no. Howard is an intelligent person and he he should have been smart enough to stay out of italy. The answer is who knows. Who knows. Starbucks is very much about the third place, an experiential place to sit down, young people getting wifi, socializing and so on. I think this could be an opportunity for the italian younger people as well. But we have to consider that, in italy there are one bar every 400 citizens. Its totally saturated. Whereas in the states, after this huge obsession with coffee shops you have one bar every 12,000 citizens. How can you penetrate such a saturated market . Question mark. It will very much depend on prices. The price of espresso in italy is one euro, which is very low. And nobody drinks milk. Right. How many people drink a cappuccino, latte. Stupid foamy things. Good. I hope they just you cant go to italy and tell them Great American company. There was a paulie walnuts. He went in. Just looking in a starbucks at the cappuccino. I just want to say this is a great chappuccino. Coffee smells great. It is not a hotel. Its not a naked hotel. Its a naked restaurant in london. This is a family show. There is a waiting list for of 5,000 people already. You are able to imbide like the romans imbibed, spilling stuff. Stain on your clothes. Wine. There is a naked place and im sorry. Thats worse than a naked maybe not. 5,000 waiting list. The country is going crazy about currency. New 20 bills will feature Harriet Tubman. Alexander hamilton staying on the 10 that story blowing up this morning. D aflac pays cash. Aflac isnt Major Medical enough . No whos gonna help cover the holes in their plans . Aflac like rising copays and deductibles. Aflac or help pay the mortgage . Or child care . Aflaaac and everyday expenses . Aflac learn about one day pay at aflac. Com boat blurlbrlblrlbr i am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Ahhh. Now the answer to todays aflac trivia question. Whats the oldest team in Major League Baseball . The answer, the Atlanta Braves. Becky. Hi. Welcome back to squawk box. It is for becky. Could be me too. Topic everyone is buzzing about today. Treasury department putting Harriet Tubman on the face of the 20 bill. Here is treasury secretary jack lew. We said we were going to listen to the American People, and we did. We heard a lot of commentary that, you know, a woman should be on the 20, not the 10. There was a sense that thats the bill that people use the most. If were really going to put a woman on a bill that people see as being an important statement, it should be the 20. Alexander hamilton will stay on the 10. Joe, you still have to see the show. You do. You have to be in the room where it happened. Youre playing into what i just said, that the guys life wasnt good enough. The book is not great enough. It wasnt until there was some commercial broadway show that changed our minds and keep him on. You should still see the show. Thank you. speaking japanese exactly. I can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to Cyber Security. speaking japanese go to ziprecruiter. Com and post your job . To over 100 of the webs leading job boards with a single click, then simply select the best candidates from one easytoreview list. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 with new members on board is united heading toward greener among the stories front and center this morning. Were just about an hour away from the latest numbers on first time jobless claims. Em economists looking for more new claims. Pult te Group Founder bill pulte escalating the push to remove the companys ceo. Now threatening to vote against the entire board at the companys annual meeting unless dugas resigns immediately. Apple pushed the Earnings Report back one day due to the Memorial Service on monday for Silicon Valley business legend bill campbell. We have earnings just out from verizon. We can tell you, matched estimates with profit of 1. 06 per share for the First Quarter. Revenue was slightly below street estimates. A lot of out rage on twitter about the Atlanta Braves being the first team. The founding year for the mlb they use 1969 wh869 when the Cincinnati Red stockings were established but in this weird nuance that someone in atlanta decided to stick in here, youll also see the Atlanta Braves, the oldest continuously operating team because the Cincinnati Reds were an independent team. But the 1871 boston red stockings had connections to the original team of 1869. Atlanta is 1871. Says the cincinnati boy. Yes that trivia alex trebek. They would have to award the dollars back. You get it wrong, so they add what you lost and then they add. Anyway, we have an earnings this was much more important. Oh, no. I guess General Motors. Sorry, phil. Earnings alert from gm look at him. He is mad. Phil lebeau has the numbers. Sorry. This is a beat on the top and bottom lines for General Motors in the First Quarter by a wide margin. Earnings per share of 1. 26 well above the street estimate of 1. 01. Coming in at 37. 3 bernie sand 3. 2 billion better than expected. A richer mix of sales in the United States and china the reason. Higher profit suvs, crossovers and trucks, a greater percentage of sales going into those categories. Overall a record First Quarter, pretax adjusted profit of 2. 7 billion. Profit margin 7. 1 . If you look at the margins around the world, it continues to be the u. S. And china pulling the weight for General Motors. In the u. S. They made 2. 3 billion. 518 million in profit in china. Europe essentially break even. A loss of 6 billion. South america for them and for all the auto makers continuing to be challenging. We talk about the richer mix of sales for General Motors. We know what it is in the u. S. Were seeing record sales. China often overlooked. Suv sales in the First Quarter in china for General Motors, up 140 . Well be there next week. Thats one of the big stories going on there, the growth in suvs in china. Dont forget. Well be talking about Chuck Stevens not only about these numbers but the question now, guys, does gm have to raise its guidance again . Not sure they will but these are strong numbers. They just raised their guidance in january. Impressive First Quarter for gm in terms of profits. What a number we both kind of suv sales up what, phil . 140 in china. For gm. Man. Wow a lot of people too. Inner china. Thats where its at, joe. Inner china is exploding. They are like americans. Theyre little suvs right . Little suvs are growing, but its also the larger, midsize and luxury suvs that are growing as well. Thats all china needs are a bunch of big suvs. 1. 3 billion . Youll need selfdriving cars because you wont be able to see who is in front of you unless youre on top of them five feet away. All right. Thanks, phil. You bet. Under armour reporting this morning quarterly profit of 4 cents a share doubling the streets estimates. Revenue also beating the street forecast. Joining us right now is paul swindlen an Equity Analyst for morningstar. The numbers are whoa are you an under armour fan . Guys, i had to get up at 3 30 in the morning. Its raining in chicago and i bike in. I said either you do the phone or were going to be dressed in under armour. Here i am. You are a fan, supporter and user, i take it. I am a product user, absolutely. I have used the product since the preipo. I like the product. My kids use it too. Lets talk about the numbers this morning. This is much better than the street had been expecting. What really pushed them above the expectations . You know, i just got the press release myself. They are talking about the shoe, golf. Footwear is up very high and international is growing. Those are all expectations. I would add that the company usually guides a little light in the turn of the year and tries to raise guidance throughout the year. To me, even though its beating the printed numbers, sometimes those expectations are already in the stock. Lets talk about their updated outlook for 2016. Theyre saying that they expect 2016 revenue of about 5 billion. They beat revenue for the First Quarter. And already the street is looking for basically that same number. Would you be raising your estimates despite their guidance . Yeah. I am already pretty close myself. And im also very focused on the operating margin numbers. The operating market guidance is up. If you look back a the earnings per share over the lost few years operating margin has trailed revenues and share count has grown. So while the company is doing very well, their operating margin has gone down over the last three years. Again, i am a fan of the company. I like that kevin is making a big bet on connected fitness too. But theyre also spending a lot to do that. So the operating margin is down. That has to pick up at some point. Whats your price target . Do you have one . Morningstar does a price of the stock today. I am at 29. That will come up. If you translate that into a target, it would be 10 , 12 higher. To 33, 34. I would only come up like a little bit. My numbers are already close to what the raise guidance is. They have been impressive in terms of the growth that theyve come in with. Revenue growth of 20 or better for the last six years, 24 quarters in a row. Thats kind of amazing. Yeah. Theyve been amazingly steady. Even if you compare to nikes history, theyve outpaced the steadiness of any other company that i have ever covered. On the flipside, though, they are growing the retail doors. That provides some steadiness. But then, if you grow that too big, you actually get operating deleverage if there is a down tp tu turn. Im a little bit wary of that. Its positive because they tell a great brand story in the branded houses. Im not sure that the nike wholesale is not retail strategy isnt the better one. Paul, thank you for joining us today. I cant wait to see what your hair looks like when you take that off your head. Could you put a sell out on under armour if it deserved one . Are you sure youre objective about this, paul . Joe, right now i have it rated at we do the star system. Joe, you asked me about that on nike. And 5 is better. I mean, its under valued. 2 is over valued. I am at two stars. Were independent. Thats the best thing about working at morningstar. So i do the valuation. I try to get the future cash flows right. I have got the stock almost tripling in ten years. Ten years, okay. Meaning that the operating cash flow just because you wash you like the stock better than do you own nike stuff . I dont understand this. I cover nike and adidas and under armour. I cover the whole Sporting Goods sector. I dont own any of the stocks. No stock but he owns the goods. Exactly. I own the goods. Thanks for showing up today. Great to see you. Thanks. Markets in the meantime on a sixday winning streak. Futures higher. Joining us is Dennis Gartman founder and publisher of the gartman letter. One of your big calls right now is alcoa. Why. I have liked alcoa for quite a period of time. My old story i want to own the things that if i drop them on my foot will hurt. I am a simple guy. I dont understand high tech. I never understand big pharma. I understand copper, aluminum, cars, railroads. The chart of alcoa looks strong. More and more aluminum going into planes and cars. If you look at the simple circumstance. Aluminum is incumbent in growth. When people like Elliott Management are big sponsors, i have to join the crowd. Its been going up lately. I am a fan of doing more of that which has been working and less of that which has not. Its been working. Ill do more. Much of the story for alcoa and Many Companies that are producing things used, like you say, in the automakers and railroads. China has been such a huge part of the picture in terms of demand. And that is a picture thats anything but clear right now. Well, its not terribly clear, but i think that china weve gone through a great understanding or a great expectation or fear, for lack of a better term, that the chinese economic circumstances are slowing down. But if you take a look at whats been going on in the stock market for the past four months, after yesterday it fell precipitously. Today its back up again. On balance the stock market has been doing quite well. I suspect there has been too much depression, too much lack of optimism on the circumstances in china. Im going to suggest that its probably going to be stronger than people think. Again, i have liked alcoa. Its been working. Why would i not continue to do more of it. Something thats been working recently that you like too is gold. Yeah. If you look back over the last several years thats been a tricky one to figure out. It doesnt always go along with the fundamentals. No. Well, it really doesnt. If you own gold in dollar terms, its been a particularly bad trade except for the last three or four months. If you have owned gold in nonu. S. Dollar terms, in yen terms, for example, its been a bull market for the past three and a half years. If you have owned gold in euro terms its been a bull market for the past year and a half. Its trending how the currency moves. You have to figure out the currency move. Thats not that difficult to do. You can predicate almost anything you want in another currency and take a look at the chart pattern thats evolved. If you own gold in dollar terms, not a great fund. If you own it in other terms, its been a bull market. Its been working. I shall continue. Dennis, thank you for joining us. Thanks, becky. Well see you in a little bit. Very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Welcome back to squawk box, everybody. The futures this morning have been indicated sharply higher. Dow futures up about 41 points. S p not sharply higher. Moderately higher. S p futures up 4 points. Nasdaq 5. 5. This comes after six out of seven sessions where the dow and s p were higher. European markets weaker. Dax down. 25 . Volkswagen reaching a deal to buy back cars that cheated on emission tests. The cars theyll be paying more than a billion dollars to compensate owners. Its not clear how much money each person will receive. One german newspaper reporting it will be about 5,000 per affected consumer. The agreement expected to be announced today during a federal Court Hearing in San Francisco. We have been waiting for this. A lot of times this is the headline. The ecb rates were left unchanged. Chief european economist at bank of America Merrill lynch joins us from london. Good to see you. A little bit tongue in check earlier today we said the german boon had tripled up 33 in the last week to 20 basis points. So i i mean, when you went to school, did they prepare you for commenting on markets like this at any point . When i went to school i was not prepared to talk about the market at all. I went to school in france in the 80s. But when i was at the university, i think Interest Rates in france were about at 10 or something. It was seen as somewhat normal. Yes, it feels weird. Its weird, and i dont know whats more interesting to talk about how we got here or to try to predict how whether or when if things ever normalize again and what kind of world were in, whether everybody is old, no one is having kids, whether this is a demographic problem globally and if its a savings glut that Larry Summers talks about. Are we here for four or five years in this type of environment . I dont know. It exceeds my forecasting horizon. For quite some time i think, definitely. There is a mix of reasons why we are there. First of all, when potential growth is lower, and it is lower across the globe, you would expect the Interest Rate to be lower. Second, when you have accumulated slack across the globe after the recession of 08 09 you expect downward pressure. This has an effect on Interest Rate. Yeah, it might be the savings glut explanations having an impact and partly the demographic situation which we are in. My view from a european point of view is that the main reason why we remain in this extraordinarily low Interest Rate environment is because our growth rate has fallen markedly while we have accumulated a very, very high level of debt. We have accumulated a level of debt that was commensurate with growth rates of maybe 2. 5 , 3 . Like we were having in 2007, 2008. We need to maintain Interest Rates at this ridiculously low level now just to keep things together. Yep. So were in april. You dont think that the ecb really makes any moves until after the summer. So thats quite a distance. But we will hear a lot of commentary. What will we hear about the expect draghi to talk about helicopter money or any of these other extraordinary measures. Will europe eventually go negative like like japan . Well, europe is already a negative on its deposit rate. If you look at the whole curve. I mean on a tenyear youll see a german eventually see a bund at a negative rate . No. Its not where we see. But on helicopter money and i guess that draghi will get quite a fair share of questions about this this afternoon. My questions is that he is not going to elaborate too much for a couple of reasons. One, its one thing to talk about it as an academic and consider that it might be an interesting debate. I think its an interesting debate as an economist. As a central banker you probably want to be more prudent if there is no clear reason why you should get to these last resort solutions. And if, as in the european case, its actually very complicated to implement because our institutional setup is definitely not geared towards helicopter money, its probably better not to talk too much about it. Because after that its hard to control expectations. But making the case that the ecb still has some ammo, yes, definitely. In march clearly draghi wanted to counteract the impression that he gave in december. The ecb was very constrained. So there will probably be an insistence on the capacity of the ecb to always do more to fulfill the mandate. But helicopter money, for me, its a very complex debate in which the ecb has not much to gain at least in the short term. Thank you. We appreciate your time this morning. Got a restaurant for you. He is over in london. No, no, no. When we come back, gm cfo Chuck Stevens on the companys quarterly results. Hell join phil lebeau. Steny hoyer joins us to talk about the race for the white house. Budget talks and how he wants to improve the nations Cyber Security systems. Squawk box will be right back. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Youto get the help yourefar looking for. Big things, thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Lets get to phil labeau. He is in chicago covering the results from gm and joined by a special guest this morning. Phil. Chuck stevens joins us from detroit. Much better than expected earnings on the top and bottom line in the First Quarter. It sounds like a broken record, but it continues to be the strengths and trucks and suvs and crossovers in the u. S. And china that are driving things, correct if. Well, i think if you look at the results, phil, we also had 500 million of improved performance in the First Quarter of 16 versus 15 outside north america and china. Better performance in europe. Broadbased improvement in the First Quarter of this year versus last year. You lost just 6 million in europe. Its been a long time fighting back basically to break even. Do you see profitability Going Forward from here . Well, obviously thats our objective. I mean, everywhere we operate we want to make money and we want to earn the appropriate return on invested capital. The first step is getting to breakeven. Were confident that were on the path to get to breakeven in europe in 2016 and the First Quarter was a great start towards that objective. Chuck, lets talk about your overall profits. 1. 25 per share, well above what the street was expecting at 1. 01. You just raised your guidance in january. When you look out for the remainder of 2016 Going Forward, should we start to raise some of the estimates that are already out there . Well, i would say we had a great start to the year. Certainly q 1 was better than we expected. It gives us even more confidence that were going to achieve the objectives that we laid out earlier this year, which was improved profitability. Another record year of profit. Earnings per share of 5. 25 to 5. 75. The way i would posture it phil, is were more confident well deliver the objectives based on our First Quarter start. Lets talk about april. I know you dont want to say what your april auto sales are yet. We still have time this month. There is a lot of concern out there that the American Consumer is slowing down and well start to see that with auto sales. Are you seeing that at all . Well, industry grew at 3 in the First Quarter. Obviously march was a little bit softer than we expected. We still see the industry in the u. S. Growing at that 3 level for the rest of the year. The basic foundation, whether its credit availability, low Interest Rate, strong household balance sheet, is supportive of 17. 5 million to 18 million for this year and into the foreseeable future. Well monitor but were construbtive co constructive on the industry from 2016. A day where gm beat the street on the wide margin on the top and bottom line. Its the trucks, suvs and crossovers. Theyre improving their business overall but those guys continue, those vehicles continue to really bring in the profits because of the higher margins that you have there. All right. Phil, thank you very much. When we return, House Minority whip steny hoyer introducing a bill that he says will beef up the nations Cyber Security systems. Leader hoyer joins us after the break to explain. Futures higher this morning. Dow futures up 27. S p futures up 2. 5. Nasdaq up by 3. Squawk box will be right back. O face tough questions from reporters this hour. Well bring you the highlights. New this morning. Vws diesel scandal. Reaching a deal to buy back nearly 500,000 cars in the u. S. And shell out a billion dollars to owners. And the view of business from 30,000 feet. Wheels up founder is here with a look at how hes trying to take private jets to a whole new elevation, not just for one percenters. Even for people who feel the bern. As the final hour of squawk box takes off right now. Spinning wheel, got to go round live from the most powerful city in the world, new york, this is squawk box. Let the spinning wheels spin welcome back to squawk box here on cnbc. First in business worldwide. Im joe kernen along with Rebecca Quick and andrew ross sorkin. He is in the hall of fame, i hope. They better be. We are less than 90 minutes away from the opening bell on wall street. The futures right now indicated to open higher. Not as much as earlier. They were up a little bit more. We call it a moderate up, 45 or so. Now up 25. The s p and nasdaq in sync with the dow. S p up 220. 2. 2. Nasdaq up over 3 points. Markets in europe after the ecb left rates unchanged. All red arrows. Manageable. About. 5 across all the boards. Among todays top stories, the European Central bank holding Interest Rates unchanged. President draghi holds a News Conference at 8 30 eastern time. The International Energy agency predicting today that 2016 will see the biggest fall in nonopec production in 25 years. Suggesting this will help rebalance an over supplied oil market. Iea expecting a 200,000 barrel per day cut. Nonopec supply just this year. Opec prices have jumped in a big way. 44. 12. Rigged. Just like the colorado telling you. Talking about Reince Priebus this is a nice segue. Volkswagen reaching a deal. The embattled auto maker to buy back 500,000 diesel cars and pay to compensate owners. The agreement expected to be announced today. A ton of earnings moving this morning. Travelers earnings falling short of estimates. The miss was because of a charact casualty losses from storms in texas in march. The huge hail storms in the dallasfort worth area. A lot of property insurers in the area, casualty insurers had big losses. Still a surprise to the street. Stock is down 47 cents. Revenue did come in above the analysts forecasts. Also looking at verizon. That company posting parenthero line the earnings were in line. Revenue a little bit short. The stock is down 1. 5 . General motors, just heard from the cfo. Company beating on the street on the top and bottom lines. Helped by a more favable sales mix, meaning it was selling more of the higher profit margin suvs and crossovers, big trucks, the stock is up 2. 9 . Under armour shares, lets look at whats happening there. Yeah. Theyre up 5 . The company doubled estimates with quarterly profit of 4 cents a share. Revenue beat what the street was expecting and the results helped by strong apparel demand as well as launches of new running and basketball shoes. President obama continues in saudi arabia this morning attending a Security Summit on im going to call it isil. We have isis here. Since were talking about the president , on isil, iran and regional stability. The president will speak to the media in the 8 00 hour this morning. Guarantee you hell call it isil. Treasury secretary jack lew weighing in on the Energy Market. Nbcs tom costello asked jack lew about the state of the economy. I think the saudis like all Oil Producers are coming to terms with what is a lower price of oil for now. I think one of the things we all know about oil prices is they go up and they go down, and you have to plan on a certain amount of volatility if your economy is based on a commodity like oil that that fluctuates in price. President obama is expected to speak, as we just said, to the media this hour. The government is stepping up the fight against cyber attacks. A recently introduced bill aims to try to modernize the federal i. T. System to protect your privacy. The man responsible for the bill joins us to tell us more about it. Congressman steny hoyer is the House Minority whip. Lan thanks for being here. Glad to be with you. We hear so much talk about how the government is trying to be better with Cyber Security protections and modernize things. What does this bill do . I think we have clearly examples of why we need to do this and make our systems more modern and more agile. What this bill does, it will set up a fund of 3 billion, and it will be a Revolving Fund. So they will draw down on it and repay it over time. They being various different government agencies. A board will be established which will be headed up by tony scott, who is the Information Officer who comes from microsoft into the administration, to make sure that we are using the latest technology, that we are doing large projects but doing them in a way that the private sector does, that they do a part of it, test it, make sure it works, get it done quickly, and make sure that its a secure system as well. So this is all directed at trying to make it more transparent, more efficient, more secure, and give the public a more Responsive Government that they can trust. That makes perfect sense. The bill, as you just laid it out. I would have thought that thats how things worked now. How do they work now . You would have thought that they would work that way. But let me tell you, i was on the treasury Postal Committee that oversaw the irs for a long period of time. And they installed a large system, and unfortunately they didnt test it in small segments as the private sector does. As a result, frankly, we didnt do it very effectively or very efficiently or cost effectively. This is going to utilize, i think, the best practices in the private sector, bring people from Silicon Valley and other hightech centers of excellence into the federal government for their advice and counsel. As a matter of fact, we have started its called 18 f. I visited out in San Francisco a small office which is utilizing, as i said, the best talent of Silicon Valley to get us where we need to be so that people can have confidence that they get good communication and good value for their dollar, invested in Information Technology and they have a secure system. How much of this is bringing in people from the private sector, like the gentleman you just mentioned from microsoft . I think a lot of it is. I think that we need to make sure that the private sector, which is more agile and moves more quickly, because it can we are using the experience that they get, the best practices that they install, and make sure that thats being used in the federal government. Because its absolutely essential in this world that we keep our Information Technology both secure and up to date and efficient. I know this is a bipartisan bill. How much support do you have from the other side . Darrell issa, former chairman of the government reform committee, is a cosponsor. Weve talked about this. He is excited about it. Obviously one thing we have to do is pay for the 3 billion which is the initial fund which will be a Revolving Fund which we think will be paid for by savings in making our systems more efficient. Thats exactly what happened in microsoft when tony scott was there, and i think its what can happen in the federal government. So were seeking im going to be talking to the majority leader. Our staffs have been in communication about this bill as well. This is a bipartisan, nonpartisan issue, obviously making government more cost effective, more efficient and more transparent is i think an objective of both parties. Lets talk about an area where there is not so much bipartisan support. The election. You think not . Maybe not quite as much cooperation taking place on the grand stage. Probably right. What do you think about where things stand after the New York Primary . Both donald trump and Hillary Clinton had a big victory in new york. I think its made it pretty positive that she is going to be our president ial nominee. From my perspective she is going to be the next president of the United States. I think what we saw is a state that knows Hillary Clinton well, voters came to the polls and they voted overwhelmingly for her. I think they voted for her because not only does she have a vision. Clearly senator sanders has a vision. But what they also see in Hillary Clinton is strategy and policies to realize a vision. And i think thats what they want. And i think people know she is tough, shes focused, shes able and shell be a very good president of the United States of america. I think thats why shes going to win. It was a very good night for hillary. Obviously a good night for trump. Trump has a much more difficult path, i think. Steny, i have read a lot of your comments about both clinton and trump and what happened tuesday. And i it sounds sometimes like youre even more excited about donald trump because you think that will be good for democrats in the house and senate. Why is that . I frankly think donald trump or senator cruz will be opponents that we will be able to take on very effectively and well win. I think neither one of them reflect, frankly, the Broad Perspective of the American People, the desire to have the American People see a positive, engaged, effective government in washington. They dont think thats the case now. I think president obama frankly has accomplished a great deal in very tough circumstances. But, having said that, its clear the American People want to make sure that they have an efficient government. Frankly, donald trump is a lot of a lot of rhetoric, but no solutions, and simply conclusions. I think that we are excited about that opportunity to run against donald trump or senator cruz. Both donald trump and bernie sanders, on your side of the aisle, have tapped into a huge amount of discontent in the american population. I agree with that. As a changing electorate. What do you do about that . Thats the case, becky. You have a lot of disaffected people who see the government not working as well as it should. I share that view. Clearly. Thats putting it mildly. Its clear that over the last five or six years weve had grid lock in washington. A board of directors thats not working as effectively and as appropriately as it should on the citizens behalf. Theyre angry and disaffected about that. There is discontent in the International Community as well. I think were seeing a response in votes for trump or cruz or sanders to that effort. I think, in the final analysis, theyre going to make a judgment that one candidate in this race has responsible, Effective Solutions to offer to them and is tough enough to carry them out and savvy enough to work with the political structure in washington, d. C. , to get things done. So yes, there are disaffected people. I share their views, as i said, theyre about 10 of america that things the congress is working. I said to the press that i want to find those 10 because they dont know whats going on. We had effective, over the last two months of the last session of the congress, where we did a lot of things, but we did it because john boehner resigned and, in that context, the republicans deferred, in effect, to bipartisan work. Theyre not doing it this year on budget, puerto rico, immigration and tax reform. Thats not happened yet. I think the American Public is rightfully upset about it. Steny, who is coming back next year on the terps . Do you know anything that the public doesnt know . Joe, i dont know anything. I have no inside information. Im sorry that stone is leaving. I think stone, another year at the level that were playing. I do too. What about some legislation . Not letting him leave. That would pass. No, i dont think it would pass. Maybe not. Am i still with you. Finally something to talk about with maryland. I am shocked that you had you really had it going on. I think he lost his piece. An arm out of nowhere. Look at that real pro. Think we lost his microphone too. No. Am i back . Youre back. You are back. Okay. A slight technical difficulty where we lost the mike. Well played. Joe thank you very much. It was a good move like stones. The good news is trimble may be back but i dont think legislation Holding Stone here. A lot of big 10 teams around the country and maybe acc and sec teams would say, no, good riddance, we want stone in the pros, not playing for maryland. Hes too tough. Hes going to be good. It was a fun team to watch as a fan. A wonderful team. Trimble may come back and i think another year would be good for him. Steny, xavier was good. I would have liked to see xavier play maryland but it didnt happen because of lucky shots, wisconsin throwing up those stupid good to see you. Ridiculous. Thanks. Coming up, the American Dream dead . Victor is here today. Big wisconsin guy. Going to have to slap him around for that. Hot debate from cleanlyioll campuses to the campaign trail. New survey just out. The results might surprise you, the details when squawk box comes back. Welcome back to squawk box. Question of the morning. Is the American Dream dead . More than 68 Million People across the United States dont have access to workplace savings according to the department of labor statistics. In ab recent Global Survey of affluent investigators over 50 of overall respondents said the American Dream is no longer in reach. Interestingly enough, 64 of investors with Household Incomes of 250,000 or more also agreed. Joining us to break down the findings is matt schiffman, leg masons managing director and global head of marketing. Whats your takeaway here . Its interesting and certainly gathering a lot of attention. Just to level the set for the viewers, this is the fourth year weve done this survey. The average investor were surveying has an income of 200,000 or more and are over 45 years of age. Do you think theyre living the american treem . They do not. 62 believe the American Dream is basically unattainable for americans. How much money do they have 200,000 or more. As investable . Investable assets outside private residence. Yes. They dont believe thats the American Dream. How were they defining the American Dream . Thank you for asking. We wanted to know that as well. Historically had has been for my grandparents parents, most americans, its owning a home. In this case the number one cited definition of the American Dream was living comfortably. Or i should say living in a secure fashion. Secondly, it was but thats not being financially independent. Financially secure. Secure. That means knowing that your job will continue we dont have that information, becky. We know that Financial Security is what they care about. The goal posts have moved. The goal posts perhaps have moved. Secondly, theyre concerned about whether they can live the life they want. Third, can they retire at the age of 65 and live comfortably through old age. Thats the changing goal post is were living a lot longer. Used to want a chicken in the pot, one car in the garage and maybe one tv. Now you have three or four flat screens, couple cars in the garage. Vacation in cancun and you still arent living the American Dream. All your kids got smartphones. You know, i i cant address that. It wasnt exactly in the survey. You know what i mean, though. I do. Everybody is living better. The American Dream what it means to people has been highly elevated. Now they want to be either youre Warren Buffett or youre not living the American Dream. Lets talk about whats getting in the way, whats the nightmare creeping into that dream . When we asked them whats causing them sleeplessness at night its overwhelmingly a concern about the Global Financial market place. Theyre concerned about another financial crisis looming. That makes sense. Is it that or the job situation . Wages and the idea that instead of having a job at one company for 30 years you might be having multiple jobs and as we talk about the economy and all that thats not this. It doesnt appear to be from the research. Again, theyre fearful of another financial crisis. Secondly, theyre concerned about a continued market volatility. What are they doing with their money as a result . Not investing in markets or do they see it as the only way to get enough income to have a comfortable lifestyle in retirement . This is what concerns us. When you look at the way theyre allocating assets. 23 of the investments are in cash. 23 . Now, that earning zero. Over the last four years, joe, it has reached well, the highest was 25, the lowest 22. How much is in stocks . Is that hosistorically low . This all sound bullish. If people are out, when they finally get in and say, no, im not worried about another financial disaster that will be the top. It wont be the top until they get in. I read it as being very conservative if not somewhat bearish and cautious. I think, if right. That could be a counterindicator. Bill miller, do you remember him . I do. Longterm investing. Buy. Youll do well over the long term. Were in one of these periods where people are still afraid of 2008. Its incredible. What we see is we believe that they absolutely have to move beyond the traditional investments. They have to go beyond stocks, bonds and cash. Into what . Nontraditional assets. Alternatives. Low correlated. Real estate . Exactly. Since the crisis there have been more solutions brought to the marketplace for low volatilityhigh dividend. Ask i ask you a question about the definition of the American Dream. I read a lot of history about how people have defined it over the years. I think joe and becky are right. Its shifted materially. Used to be anything could go from nothing to something remarkable. It was a shoot the moon American Dream. Now it seems to have developed into something very different, which is comfort. Its become very material, right . Its no question. If you are responding to the survey saying Financial Security is your number one definition of the American Dream, i think thats pretty explanatory of whats going on. You think if you did that survey 30 years ago it would be the same thing . No. I would speculate what do you think has changed about why people define it differently . I think that their overwhelming concern is based around finance and the financial marketplace. The amount of the way youre talking about the stock market. I think if you go out and do the survey in the street most people wouldnt be talking about the American Dream in the context of how the stock market is. They talk about Financial Security. Theyre talking about its a sense of wellbeing thats being defined financially. The financial break did come with 10 unemployment too. Thats right. If youre worried about losing your job or dont have a job, i mean, thats those are the primary things. Absolutely. Thats everything. Absolutely. Thanks for coming in. Longer discussion and bigger debate. When we return, breaking economic news. Weekly jobless claims straight ahead. Waiting for president obama to make comments to the media and answer questions in saudi arabia. We will bring you that as soon as it happens. Stay tuned. Squawk box will be right back. Coming up, breaking economic news, weekly jobless claims. And the numbers in the Market Reaction straight ahead. But first, as we head to break, here is equity futures up 30 points on the dow. S p has gotten better up 4. 5. Nasdaq up 8. You are watching squawk box on cnbc, first in business worldwide. The first stock index musiwas createdoughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to squawk box. Were now just seconds away from weekly jobless claims. Lets take a quick look at the futures. Dow up 30. Rick santelli standing by at the cme. Rick, the numbers, sir. Initial jobless claims breached the psychological level of 250,000. 247,000. This is a better direction than we were looking for. We were looking for a jump. Last week was unrevised at 253. Well call it an even down six hovering at levels we havent seen since the early 70s. Philly fed down 1. 6. This is also a bit of a surprise. But in the other direction. We were looking for up 9, 10. Down 1. 6 takes you back to a comp of february when it was down 2. 8. Consider this. Unrevised last month at 12. 4 means that we broke a streak of six negatives and now, of course, were back to negative. We want to monitor that. Ecb activity, well monitor that and the fact that rates moving up, commodities moving up. Industrial metals moving up. We want to watch all that. Joe and becky, back to you. Rick, thank you. Among todays top corporate stories. Volkswagen reaching a deal with u. S. Officials on the diesel emissions scandal. Phil has the details. Sounds like we have some details but not a lot of answers to other questions. We have a few weve been able to confirm. There are reports coming out of europe as well as here in the u. S. Here is what we believe will be announced today when volkswagen meets at a courthouse with u. S. Regulators in San Francisco. A federal judge will likely to hear about a settlement between vw and the u. S. Where vw ends up buying back or offering to buy back more than 500,000 cars, compensation to be determined. Weve heard 5,000 for every owner, but that brings into the question, is that 5,000 and your car gets fixed . Is it the fair market value . That remains to be seen. Owners who keep their cars, as we understand it, will be able to get the vehicle fixed, though a fix has not been approved yet and also get compensation from General Motors. Which then brings up the question and one investors will focus on, how much will this cost the company just in the u. S. Were not talking worldwide. The estimate, ballpark, 3 billion to 5 billion. Many saying that could be a little bit low. The settlement, by the way, does not resolve the department of justice investigation into volkswagen. Remember, thats a criminal investigation that we could see charges and some type of a fine months down the road. By the way, vw sales down 7 year to date. We know they were negative last year in a market that was positive. The hearing is scheduled to take place at 8 00 a. M. Pacific time. 11 00 eastern, again, at a federal courthouse in San Francisco. Thats when we will find out about all the details, or most of the details, of this proposed settlement between volkswagen and the u. S. Government. Guys, back to you. Phil, so thats impacting vw across the board. Or it sounds like it. Are they still selling some diesel vehicles at all no. Thats not a piece of this . No. Theyre not selling them right now. There is a stop sale order in effect. They have not come up with a fix for their Diesel Engines. Once they have a fix in place, then they will also be able to work that into their vehicles, so that all of their vehicles are meeting emissions standards. A fix might be impossible if the whole thing was based on basically a fraud, right . Or the cost might be so or or the cost might be so much higher that its going to make a real dent in the number of people who will want to buy a diesel model. They might say, wait a second. Im not paying another 1200 to have a Diesel Engine thats in compliance with u. S. Emission standards. Again, as we understand it at this point, that is not part of the settlement today. They still have not come up with an actual fix for these engines. All right. Phil, thank you. You bet. Switching gears now, so to speak. No state is more dependent on oil than alaska with 90 of the states revenue generated by the oil and gas industry. It finds itself with a 4 billion budget gap. Scott cohn is in alaska and joins us with more. Hi, scott. Hi, becky. All kinds of challenges here. The legislature in juneau is in special session talking about the economic challenges all day. There is also an engineering challenge that creates economic challenges. Talking about the transalaska pipeline system. Now entering its 40th year of operation. It runs about 800 miles from prudo bay in the north to the port of valdez in the south. It was designed in the 70s to carry two Million Barrels of oil a day. Today, with the price of oil down, its now a moneylosing proposition to produce oil there and the pipeline is only carrying a quarter of its capacity. Some producers in the north slope have cut back and others pulled out entirely. Here is the engineering challenge. The pipeline is still full of oil but the oil moves much more slowly. Used to take four days at full capacity for a barrel of oil to get from one end to the other. Now it takes close to three weeks. Thats where the engineering challenge comes in. Half of our line is above ground. Half is below ground. We go through some very cold areas in the winter. There is some water in the crude oil, and theres this potential for ice. Its not just ice. There is also a byproduct of oil which is wax which can actually build up in the pipeline like plaque in a clogged artery. The transalaska pipeline operator consortium has been working on solutions on all of this but every one of them have costs. I have woken up worried about kind of the future end of the transalaskan pipeline system. Its not just technical. Its economic. There are no easy answers to this. Engineering or economic. The company, for the time being, is hunkering down now and figuring it will probably be three years before prices come back. But who knows if thats going to happen. As i said, lots of other economic challenges here, chief among them the state budget, which theyre going to be talking about later on today. Lots more about all of this at cnbc. Com. How was the flight to juneau yesterday . The flight was good. Its a beautiful view coming up the west coast, up to seattle and then the second leg up to juneau. Its gorgeous. And its just this is a beautiful place, which youll see during the day when the sun comes up which is not that far from now. But it is 4 00 or something in the morning here. Thank you for the update. Well watch through the day. Bring me some of the peanuts you were telling me about. Okay. [ laughing ] okay. Coming up, ecb leaving rates unchanged. Mario draghi speaking right now at a News Conference. Well bring you the highlights. Later, flying high with wheels up. The Company Opening up private air travel markets to the masses. The details next. Box, everyone. This is ecb president mario draghi. He has just begun his News Conference. He says Interest Rates are likely to stay at present or lower levels for an extended period. He says its essential to preserve accommodation as long as needed. Euro at 113. 42. A little higher than earlier. European stocks, which earlier this morning had been down from, oh, about. 2 to. 5 . Still sitting there. Dax down and a. 1 . Ftse down. 7. Wheels up plans to start offering Shuttle Service and crosscountry flights from new york and l. A. These will be scheduled flights sort of like an airline but not really because it will be on the comfort of a private plane. Its the latest move to open up the market to the business traveling masses that might not be able to shell out what you think about it private jet travel. Here to explain the new platform and the impact can have on the industry, wheels up founder and ceo. Kenny, i guess we shouldnt be that surprised with whats happening in the world with uber and all these things. Sooner or later i guess it had to happen with private aviation. But it seems like its a harder thing to do. Jet fuel has certainly helped. Im sure it helps. Thats a great factor. Whats propelling us into this market is the shared economy. Right. Peoples desire to be together. I think were really the first social Aviation Company in the world. And our addressable market, you know, when we started marquis jet it was five or ten times netjets market. This is five or ten times marquis jets market. Millions of people can play. In building this platform you know henry and the folks at t. Roe price encouraged us to look at what the millennials were doing. We are a people want to be together and assemble. Our platform addresses that via shuttle. How does it work . Where does it go . We have Critical Mass now. Well finish the year with 80 airlines. We have assets. To be a player in the space you have to have assets. What well do with king air. There are oneour flights. New yorknantucket. Boston to new york. New yorkd. C. Plenty of those flights out there. L. A. To San Francisco. L. A. Vegas. I assume youre doing it seasonal seasonally. We can adjust it. Well sell the seats to our members, and now we have two tiers. At 795 per seat. That opens it up whats the second tier membership cost . Thats an 8760 partnership is 5950 per year. If you want to go on the shuttle for one way, you take one of those, you dont go through laguardia or you keep your shoes on. Keep your shoes on. 795 one way to get there is Pretty Amazing. On the coast to coast, the cost of king air, which is 4950. You can zip to teterboro. To l. A. 39. 50 there in less than five hours. On a citation 10. One of my favorite jets. 3950 each way. Its interesting. Citation 10s, there have been 329 of them produced between 1996 and now. The brunt of them between 97 and 2006, we have an opportunity with our partners, scott and scott, to really, as theyre taking airplanes into the factory, repurpose them for the longrange runs and really the depth of that market, you know, hundreds of airlines are coming back. Theyll sell their new latitude and longitude and hemisphere. Like a car dealer, you have to take the planes back from existing owners to service. So what a great opportunity. Seems the confusing part will be logistics. Making sure you know what asset is where at which point, making sure you have enough to cover the members who want private stuff versus this. How do you figure that out . Three or four years ago, becky, you couldnt have dealt with that. Today, technology . Off the shelf technology. At the end of the day well make a Huge Investment in technology and keeping track of everything you just not purpose built but are these for example, if youre doing the shuttle, from one way to the other, is it the same plane that i could also charter myself . Were going to dedicate the citation 10s just to shuttle. Could you do 30, 50, 100 citation 10s over time if it works, and i believe it will, you can be a big operation that way. The king airs will be fluid. Meaning you can Charter A King but we dedicate some of them to the onehour routes. You do when you are a member you have kind of a security clearance for your members, i guess, beforehand, right . Basically the the tsa has different rules for airplanes with less than 19 seats. The pilots are responsible for the tsa check. Of course, the passengers are responsible for checking with the pilots. Okay. The most interesting thing i am seeing out there, joe and becky, andrew, is we believe, you know, first off by 2020, i have said it before on the show, well be the largest platform as it relates to members flying private in any one equip. This tier two membership, the 87. 60. Steph curry, j. J. Watt, rickie fowler, our clients. We can bring them up close and personal with our membership which i think in todays world, you look at live nations numbers. Look at broadway record years. People want to assemble and do things. They dont want to sit on their news at home. But you dont have a Financial News celebrity . You dont have one of those yet . Listen, were interviewing you and Larry Summers. And well i see wheels up so i am worried about your advertising expense. I see it all over how much are you spending on is some of it huh . This is like the cheapest man in america. I bes hes not spending anything. The same way donald trump says he doesnt have o to spend money because he has a brand already. We have a special currency. Hours. All the people you see with the logo. The members buy membership with us. I see the logo all over. I am shocked. I have to thank our advertising and marketing folks in our business. You have to thank american pharoah. How many by the end of the year . 2300 currently. We finish the year at 3500 as it relates to our core business. Partnership on the 8760 with apollo. Already at 400. We havent announced it yet. Finish up at 500. Who are you taking business from . A couple places. Sort of the old economy players. I think were sort of the seven, eight or nine iron. The current members. If you want to fly less than an hour or two youre crazy to fly in the fractional space and the old car business. You should be with wheels up. The other thing thats fantastic about the business and addressable market. 45 of our members are coming from commercial aviation. So thats encouraging. Okay. Great. Thanks for the update. I kind of like the flight it was built for you. Four grand . 3,950. Thats four grand. Each way. Each way. 39. 50 and well throw in love at first sight. Well throw in a juice press. Thank you. Ecb president mario draghi speaking at a News Conference right now. Lets get some of the highlights. No major policy changes announced in this meeting. Draghi hitting on a couple interesting points, saying that following the big package that we announced in march broad financing conditions have improved, households are strengthening, domestic demand supported by monetary measures. He says that global uncertainties persist citing Growth Prospects in emerging markets. He says inflation could turn negative again. Deflation has been a challenge for the euro zone. Looking forward he says its essential to preserve an appropriate degree of monetary accommodation moving forward. That basically means he is keeping the door open to further rate cuts and other monetary tools. So that seems to be what draghi is trying to hit on right now in this press conference. One thing to look for is whether draghi mentions the helicopter money option. It has been widely speculated that draghi will look to this option by basically means injecting money into households to boost consumer spending. Its widely speculated he might announce that in this meeting. Well see if that comes out. Right now stocks have been staying flat throughout the day. Throughout this meeting. And the euro, interestingly enough, at 1. 13. Strengthening against the dollar. Todays meeting doesnt match the drama that we saw in march where the ecb expanded the pool of assets that it was buying and increased the length of quantitative easing. Back to you. Thank you very much. When we return the Treasury Department putting Harriet Tubman on the face of the 20 bill. Well tell you what donald trump had to say about this decision. Well talk about that next. First, as we head to break, check out the futures. As mario draghi has been talking the futures have continued to hold on to some of the gains. Theyre lower than earlier this morning. Dow futures up 18 points above fair value. S p futures up by 2. Nasdaq up by 4. Things seem to be dropping a little bit. Well talk more countdown to the summer games is on. The olympic flame was lit earlier this morning in olympia greece. The torch will begin and end if rio, briz al. Summer olympics, august 5th, write this down, about 12,000 torch bearers will get to carry the flame between now and then. Its only an hour time difference and you have the networks of Nbc Universal. You know how Many Networks Nbc Universal can air this on . Theres no reason to miss anything live. Was it the olympics in atlanta when they did or maybe it was barcelona where they had the triple threat on three of the networks at the same time. When you go to the other side of the world, its tough because you know who won. And you would play it as live and people get mad and criticize you and sometimes youre on your stupid twitter and you see who won something. This is the sweet spot. This is an hour and its going to be we wont be doing curling. What will we be doing . Maybe we get cnbc will get something. Well get something good. I forget what weve got i dont know in past summer olympics. Squawk box will be own because those ratings cant compare to squawk box. We is another story. Espn has officially fired analyst Curt Schilling on a facebook writing a man is a man referring to states that restrict bathroom access based on gender. Espn said it is an exclusive company and his employment has been terminated. Things we dont have access to, theyre like nitroglycerin. I dont even retweet anything and you dont want a twi either. Whats inthat . Tweeting while intoxicated. I never heard of twi. Havent you ever heard of while youre drinking . The best thing to do is tweet about your boss. Dont do it. And the Treasury Department putting Harriet Tubman on the face of the dollar bill. Alexander hamilton will keep his spot on the 10 thanks to fans of the hit Broadway Musical hamilton. He had a Pretty Amazing life and did a lot well. One of the great president s definitely. Treasury secretary. I say that just because i know ill end up on facebook or twitter. Media matters will definitely do that. Stocks on the move this morning including yum brands. Take a look at the price of oil this morning. Were back in just a moment. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing take a look. These are live pictures of president obama, who is giving closing statements at that summit of gulf states hes been attending at saudi arabia. When this wraps up, hes expected to take questions from reporters and cnbc will be carrying the questionandanswer session live. Stay tuned for more. And Stanley Black and decker reported quarterly profit of 1. 25 a share, 14 cents above estimates and raised its full year earnings estimates. Homebuilder d. R. Horton, new orders jumped 10 from a year earlier and that stock also up about 2 . Well see whether we get 7 out of 8 on the averages today. They are indicated higher. Make sure you join us tomorrow. Squawk on the street is next. Good morning. Welcome to squawk on the street. This hour an exclusive with United Airlines ceo oscar munoz, his first since undergoing a heart transplant in january. Meanwhile, it is the busiest day of earnings season so far, oils pretty steady. We are now on the june contract. Verizons profit in line, travelers with a miss and