Trump about how we could end up in a major, major conflict in his words. Did put some pressure, if you see the nikkei, down about 0. 3 . Same with the hang seng. In europe this morning n some early tlading, things are mixed. The ftse is down by 0. 25 . The cac is up by that much. The dax is up by 0. 10 . With crude oil prices this morning, looks like wti is still below 50. Up 27 cents. Tech stocks on the move this morning. After quarterly reports late yesterday. Lets give around up of whats going on. Amazon eps tops estimates by 36 cents. Saying revenue from the Cloud Business, advertising and Subscription Services helping to drive those results. Alphabet beating the street on both the top and bottom line. Strong ad sales sending profits up 29 , despite some advertisers boycotting youtube. And microsofts ref knew ju revenue just missed consensus. Sales of the Cloud Services platform jumped 93 in the quarter. Last but not least, look at intel. Reporting lower than expected quarterly revenue due to an unexpected slowdown in growth in the data center business. Much more from a tech analyst in a moment. That part is somewhat surprising given the growth in the Cloud Business. New high finally for microsoft, series of new highs. Been years and years, remember when it was stuck. Everybody said i would buy short google, buy microsoft. Microsoft was 27 or so. Here they are at 68 now. 527 billion for microsoft. Someone still uses a pc somewhere. All of us right here. All the other things. The first read on First Quarter gdp okay. First read on First Quarter. So confusing. First read on Second Quarter, second read on First Quarter. But this is first on first. Whos on first. Whos on first, exactly. And trump said major major, thats the guy on catch 22, major major. First thing i thought of. I have to control my mind. 8 30 eastern, the economist survey. 0. 8 pf 0. 8 is what you should remember about the First Quarter. Easy to say but hard to fathom were only growing at 0. 8 in the stupid First Quarter which always is either or less. Liesman has done work on this. Its like inventory. I think it needs to be adjusted. I dont know if that reflects the underlying growth rate. There was weather, there is seasonality, which we just talked about and delayed tax returns. The First Quarter employment cost index is out at 8 30 a. M. For those of you keeping score. At 9 45, we had april chicago pmi followed by Consumer Sentiment at 10 00 a. M. Earnings continues today with a lot of big names like chevron, exxonmobil and General Motors reporting before the opening bell. In washington, congress has until midnight to pass a bill to fund the government or face a shutdown. Negotiators at this point are expected to pass a oneweek extension, like a stopgap to allow more time to reach agreement. The whole thing is only for the rest of this year. Yep. A week to get a fivemonth deal . The way things work in washington now, you wonder why people have questions. Democrats say they would reject the extension if republicans pushed for a vote on healthcare reform this week. But then last night House Majority leader, Kevin Mccarthy announced there would not be a vote on the healthcare this week. Not just because of democrats demands, but because they dont have the votes yet. Nope. Spoke to kevin brady about it. He said theyre hoping members can get to yes. But theres more no votes. 15 nos, 20 leaning nos. Undecideds. 28, 22. Lets also talk taxes. The white house planning to slash corporate deductions as part of the new tax plan. Eamon jav javers has more detai. This is what the white house is saying oz of yesterday. A Senior Administration official briefing reporters explaining that slashing corporate deductions is the flip side of lowering the overall Corporate Tax rate to 15 . Look at what this official told reporters last night. He said when you have a 15 Corporate Tax rate, we dont believe you have to give people a lot of deductions. He said a lot of deductions that corporates have taken will disappear. Its just math. I can also tell you i spoke to gary cohen, the National EconomicCouncil Director last night. I asked if you have a situation where some companies now are paying an effective rate of less than 15 . Because they take all these deductions that we were just talking about. I said for those Companies Paying an effective rate of less than 15 , would that be a tax hike . Gary cohn said im okay with that. For some companies there will be a situation where this plan could work out to a tax increase. Politically the thinking here is this. If you go after all of the Corporate Tax deductions at the same time its less of a political fight than if you go after them ones, twos and threes, youre not picking winners and lidz osers, youre saying everybody is a loser, everybody is on a level playing field. Thats the argument from the white house last night. Whether or not that flies on capitol hill and the lobbying groups that defends each one of these Tax Deductions is another question. The full yoquote here from dona trump last night talking to reuters about north korea. He said theres a chance that we could end up having a major, major conflict with north korea. Absolutely. The president also said he prefers to revolve this with diplomacy. Well see where we go from here. I want to talk north korea in one second. On the tax front and the deductions, when people talk about this tax plan being scored. I know its been hard thus far to score it. When people talk about the 15 rate, are they talking about that with no deductions, or is that with the deductions . Based on my conversation with a Senior Administration official last night, they are envisioning almost no Tax Deductions no, no all these outside groups the past days who have been mouthing off about this tax plan is their score based on deductions or not . Exactly. I cant speak to that. Its impossible to score this because you dont know at what income level on the individual side, you dont know at what income level the tax brackets are coming up to. And what the onetime repatriation rate is. Senior Administration Official said last night the repatriation rate, a lot focused on bringing that money back to the United States. The official said that rate will be somewhere between north of zero and south of 15. We were in washington yesterday, eamon. I was lost, what else is new. I was Walking Around where we were broadcasting from i passed by your office. Yes. I went on one side. Took me three, four minutes to walk past to get to the other side of that it had your name there. It does. You can shower if you need a shower when youre at work . You have a fully stocked bar. Who are you . Who are you . There is a shower in that facility, but you wouldnt want to use it. They clean it semiannually. Do you share that office . You dont want to get fungus. Do you share that office . Is that the eamon javers office . Was that Walter Cronkites old office . Ylan mui and i are office mates. Eamon we have to run. I want to understand, the comment that donald trump made about north korea, was that, in your mind, from what you know, intended to send a message or just so happened those reporters were in the room, asked him about it, this is what he said . I think the latter. Just watching donald trump speak over the past four months, he says very much what is on his mind. He says bluntly the thing other people say in diplomatic turns. Its obvious theres the possibility for confrontation. Donald trump speaks in blustery terms, when he talks about it he talks about it in a blustery way that catches peoples attention there. He says if we dont resolve this diplomatically there could be confrontation. The context of it, he did say were trying diplomatic measures first. Exactly. I agree with your assessment of that completely. Yes. Eyecatching because other president s have not spoken this way. But hes saying whats on his mind and what people have known. Thank you very much. You bet. Lets check the markets now. Joining us is steven wood, Russell Investments chief market strategist, also jack caffrey. Gentlemen, welcome to both of you. Lets dig through everything weve been talking about, starting with washington. Steven, it looks like some policy measures are a bit further off. Does that matter for wall street . Thats what we expected. We thought we would get Corporate Tax reform by august, september. A lot of the nonexecutive order regulatory stuff will be pushed off into 2018. Which means from an Economic Cycle perspective you will so he the impact of this being the back half of 2018. So we think it is positive to the economy, to earnings. Just more modest in our assessment about how much and how soon it will be in effect. Jack, the markets keep marching on in large part because of earnings. They impress on a lot of different levels. Right. If we think about the economy as a slowmoving, the slowburning issue, the earnings story has been the positive. As of last night looking at 11 Earnings Growth year on year. 5 surprise. Those are sort of above average earnings gains. That winds up being supportive of higher valuations year to date. Does this make it a market difficult to short. Short it at your peril . I dont get to short. Its not something i spend much time thinking about. From the perspective of people talking about timing, timing will be hard. We look for mid high single digit return for the fullyear in that environment you cant miss a 2 , 3 move if youre talking about total returns of 6 , 10 . If youre waiting for the pullback. If youre waiting for the pullback, you basically need to be invested and almost have a shopping list. What would i want to upgrade into, what would i switch into other than saying ill be a little too cute, maybe a decision to sell, make a decision to wait, make a decision to buy. Steven, what do you think about that . The key here is to lose the u. S. Centric focus. We do a lot of traveling. And personally ive been in a half dozen countries just in the last month. We think the u. S. Valuations are rich. Earnings will be good. Were increasingly suspicious theyll be good enough. By looking global, we think look at europe, look at asia, look at emerging asia. Now is the time to trim. We dont have a recessionary view on the u. S. , but at these valuations, reambulanbalancing globally, we think these valuations are called for. We do have gdp numbers expected today. We dont expect them to be good. What is that indicative of and is that a reason to be cautious . Its not a reason to be cautious. If i could have told you that we would have thought we would have another really boring 1 sort of growth rate for the First Quarter, we could turn that into 11 growth from an earning s perspective, you are finding stories that are finding growth, finding parts of the market that are finding growth. And ef fectively gdp numbers ar backwards. January and february have been slow. March seemed to pick up. You think theres a bit less traditionality in the market when people are talking. We should go back to gnp. Gross national product. Or do 4 and then add it. We could get to 4 if we just change the way we do it. Change the math . Subject to revision. To some extent your first first, second first, third first. Thank you, guys. Lets talk tech earnings. Alphabet and amazon beating the street. Sales of amazons Cloud Business jumping 40 . Parent of google, alphabet, not seeing much pain from the boycotts of major advertisers from the youtube platform which became more of a brouhaha. Joining us now is internet analyst ron jo jshj jshjosey. Which took would you want to own if you could only own one . I think amazon at this point. Though facebook is our top pick. Because . Facebook has a lot of things going for it. More and more advertisers are joining the platform. Instagram is becoming more monetized. Theyre on a good pace for continued growth and revisions upward on earnings. You cant go wrong with any of the three to be completely frank, but facebook is the top pick followed by amazon and google. Hard to complain whats happening at google. Lets talk about google. Were you surprised that the advertising held up given the News Headlines we saw about youtube . Those headlines came out in the latter part of march. We were thinking 1 q would be okay. The question was 2 quk. It Online Advertising grew 22 in 2016 overall in the United States. Were in a massive environment where more and more rad ver tizing is shifting from offline to online. Goingal is al google is a benefactor of that. Can you get a sense with microsoft, reporting their own earnings, amazon clearly the winner in the Cloud Business, how much theyre nipping at im talking about google and microsoft now, how much theyre nipping at the heels of amazon . It is certainly hard to deal. When you have aws growing 43 this past quarter. And you look at by the way, on a 14 billion run rate. Were modeling higher than that for the year. You look at gcp, google clouds platform, theyre just beginning. So they need to ramp hiring, ramp capex, but its many years until you get close to the sale to start impactsing amazons numbers. You cover microsoft . I dont cover microsoft, no. And just george buthe other. You said you like facebook. In terms of advertising play, you like that over google . We do youre seeing Significant Growth on facebook. Its amazing when you think about google, search has been around for 15 plus years, still growing 20 plus percent w mobile being a major driver of that now. On facebook, youre in the early days of social. They have 5 million advertisers, but more and more are allocating spend online and to facebook specifically. A lot of room to grow with facebook. Anybody you wouldnt own in this space . Its really tough. I was listening to your segment prior to this. Frankly, the large caps are working well here. Here in the internet sector. You know, ebay is one that is still in the middle of a turnaround. Theyre doing good things. Were in a wait and see mode. For sure, facebook, amazon, google, its hard not to own any of those. Okay. Well leave it there. Thank you very much. Thank you. Coming up, yew nighted Airline United airlines reaching a settlement with the passenger who was violently removed earlier this month. Unpleasant for this gentleman, dr. Dao. I just want to know how much. 30 million. Come on. I think a court would give him 10 million, 15 million. Ill volunteer. I am. Drag me. No, you wouldnt. You really wouldnt. For 30 million . We dont know how much it was. We dont know how much it was. On monday, an exclusive hourlong interview with former fed chair ben bernanke. You come in here every day for a lot less. Squawk box will be right back. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Welcome back. Yew knig United Airlines reached a settlement with dr. David dao olently dragged off a flight earlier this month. The terms of the settlement were not released. Im sure the pr value is worth it. Shares of united up about 10 cents. We were in washington yesterday, and it was take your kids to workday. I figure, you know, you mistake your kids to workday and you dismiss it. My son scott is here. That was not going to fly. I hear you. Scott, this is you in 012. Just i havent changed at all. But you on the other hand are almost as tall as me now. Did you when you walked in. I have not seen you in a couple years. Me neither. You have gotten probably seven inches taller than the last time i saw you. Youre a young man now. You look fantastic. Thank you. Theres a reason hes here today, too. Because we can promo the big production in millburn of Little Mermaids. Yeah. Thats tonight, right . Yeah. At the middle school. It will be on friday, saturday and sunday. You got a role in this. And you have a speaking role, too. Yeah. Im in the chorus. We have all different lines. I actually have a line. Say your line. Secure the rigging secure the rigging well done. Tonight is the premiere. Theres 30 tickets . By now, i dont think there are. Theyre sold out right now. Were going to all three. I will see Little Mermaid three times. I like it. I like it already. But, you know, i have seen part of the play, this is like for a middle school, this is a full broadway type production. Youre probably on stage half the time. Yeah that was before we had costumes. Yeah. Now youre all decked out. Ready to go. Our budget was like 8,000. All right. All right. But we have 18,000 now. You made 18,000. Profiting enterprise. We brought it back to money. We have to update your sister is not here. Shes been at every take your kid to workday. She was out until 2 00 a. M. Last night. Boy. Its okay. Because the mother of the day brought her home. It was prom night. Quick followup. We went to a preprom party. Everybody was there right in the center. Blake looks like penelope. Thats paul. That was last night. Shes not here today. Bigger, important things to do. Gorgeous. People do pre prom parties. 150 people. All the parents go to the pre prom party. I want get over the thing he did