Sharply yesterday. Today a knock on gains, ftse mib leading higher in italy, 0. 89 . The german dax up 0. 3 . The ftse 100 up 0. 50 . Its maybe a focus on brazil, argentina coming into the discussion of late. Heres crude, up about 1 on wti, 49. 84. Brent up to 53 bucks. Nat gas up 0. 2 . The tenyear note at 2. 118 has moved up nicely. Now 2. 247. Youll take it in this kind of environment. And the dollar which has weakened substantially over the past couple of weeks hanging around 97 1 2. Its down about 0. 4 this morning. Finally gold. See how the yellow metal is doing. When will we add bitcoin to the board. Theres gold, down about 0. 10 . Good question what color is bitcoin . I think its gold. I have no idea. I thought it was an image of a gold coin. An image. It doesnt really have a color. Its a virtual theres all these other coins, theres icos now. Instead of buying a share of a company, you can buy a share of a currency from one of these cryptocurrencies. Well have one of our disrupters on. Hell tell us about how emotion associated with certain words can cause people to do certain hell have to start at the beginning for me. Youre supposed to know. He will start with the World Wide Web. What is that . Www does it stand for World Wide Web . Thats where i want him to started. As long as its not just me. This is we have some things happening in our country. But did they just impeach the last person . Yes. Hes the new person. Hes on tape soliciting or saying bribes are okay or something . Or caught involved with it. You could have two gone in a matter of months. The country can handle the transition once. I dont know if they can handle it again. When you say are we a latin American Country . Thats what were striving not to any way. Thats where it gets thats where it gets the bad rap. Watching the markets in brazil closely after markets plunged yesterday, in yesterdays session following a deepening political crisis. The countrys president facing calls for his resignation amid allegations of corruption. The bovespa down 9 it was halted. Circuit breakers, they have them down there, too. The biggest daily declines since the 2008 financial crisis. 8 here or 9 here, that would get your attention. We heard about they had been down 15 at one point. Were facing some exso steisl crisis here, it was down 380. 1 . I only know that because i saw it. You try to pretend youre not a genius. I so hard when youre so gifted. In the past, she said the nerd moniker does not apply to her. Shes more of a dork you have said. You saw me trying to talk about bio mass energy yesterday and dna sequencing. Yes. Yes. Wasnt pretty. You asked whether it was human dna or animal kelly, its the same. Its the same dna. Im still think being that. It animal chemistry or people chemistry . The countrys currency, the real, posting the biggest decline since january of 1999. In wall street news, leon coopermans omega advisers settling with the s. E. C. Over Insider Trading charges. 4 4. 9 million. The hedge fund has admitted no wrongdoing and cooperman will not be barred or suspended from the industry. Sounds like a reasonability way to get out from under this. He wanted to have a complete hes been on the show talking about how he wanted to fight it. In a statement cooperman says he looks forward to putting the matter behind him. Last september the s. E. C. Accused cooperman of Insider Trading after a fiveyear investigation. The next month he told us he would fight the accusations. Omega was built on doing detailed fundamental research and complying with the law. We could have settled with the s. E. C. For an amount that is far less far less than i donate to charity on an annual basis. But i refuse to do so because i know we acted appropriately and lawfully. It took me 50 years of hard work, very long hours, playing by the rules to get where i am professionally. Im not going to let them basically unfairly destroy my legacy. Reports say terms of the 4. 9 million settlement were significantly below what the s. E. C. Wanted. I dont know lee hes not like a member of the family, but the whole thing knowing him, just as from being on, the whole thing never i would take his word for Something Like this. Sometimes regulators do seem to overstep a bit. How many big banks finally said take it. Jamie dimon said look any Government Agency says we find joe kernen did hes another name. Russ. Lets go back to joe. We find that kelly evans youre lucky youre still at blackrock. You have met his replacement yet . Is his name c 3 p 0 . Who is replacing you . R2d2 . We have plenty of humans. Youre all being larry was in here. He mentioned you specifically. Who is the tall one that speaks language that you can understand. The taller one. Not the little one. We have plenty of humans left. You better hope youre not replaced by hal. You know. We have to keep going. In washington news, President Trump will leave washington today to begin his first foreign trip as president. Eamon javers joins us now from the nations capital. How would i describe the last 12 hours, quiet. Too quiet. No major bombshells. No tweets. Too. Quiet. Watch your twitter feed. That might be the next thing. Though there were some good tweets yesterday from the president. Yesterday we had an east Room Press Conference in which the president was asked if he ever asked former fbi director james comey to back off on the investigation into mike flynn. The president said, emphatically, no, no. And then he said next question. The president clearly wanted to deny it but incident want to go into detail. He was also critical of the decision to appoint a special counsel to investigate the russia scenario. Heres what he said yesterday. I respect the move. But the entire thing has been a witch hunt. Theres no collusion between certainly myself and my campaign. But i can always speak for myself and the russians. Zero. I think it divides the country. I think we have a very divided country because of that and many other things. I can tell you that we want to bring this great country of ours together. The president s first foreign trip, he leaves this afternoon. This is the agenda. This is an actionpacked foreign trip for any president of the United States, particularly a president engaging in his first foreign travel. He starts in riyadh in saudi arabia. Then he is going to jerusalem, israel. Hes going to vatican city. Hes going to brussels, belgium, sicily, italy where he will attend the g7 summit. He will visit nato headquarters in brussels. Had is a wideranging trip. He will go to the headquarters of three major relgigions. He will be engaging with military allies. Thats a lot to to pack into one trip. The white house looking forward to this trip. They feel its an opportunity to showcase the president on a foreign stage. And its an opportunity to shift the subjects back home and look outward. A lot of guests on today will talk about this trip. The journal piece talked about how saudi arabia desperately wants to reset relations. Im thinking the saudis didnt like the last administration. I think israel desperately wants to reset relations. Israel and saudi they seem not necessarily on the same side. Who did we saddle up to . Then i figured it out, iran. Its almost like we curried and appeased and brought in our enemies, but alienated our allies. One other thing, did you see yesterday peter baker wasnt there. The president the president called on i dont know who the other guy was. Scott thuman of sinclair. Okay. But he asked he was channeling peter baker. He asked a peter baker question. I love the question. Hey, mr. President , since youve taken office, has anything youve done been impeachable . Thats a question that the president i expected him to go, lets see, there was the i have about five things, actually that what was the i goi gos name . Scott . What kind of answer do you expect if you ask list the impeachable offenses. Thats what we say in the business is a self answering question. You wonder why i dont want to have those. I love that. I talked to him afterwards. He said it was not preplanned. That the president would call on him. But he had that one ready. But the president signaled at him and said peter baker. Which was not scotts name. They handed him the mike any way. He stood up and asked the question. Peter alexander nodded that he would get the question. He called on peert ater alexand nodded at the other guy and give it to sid or scott scott. Peter baker would have been proud of that question. A lot of headed noing goi en on in that room. Everybody trying to catch the president s eye. Doing one of these. I would figure it would be a lot of in that room, probably a lot of this new york you are not the legitimate no. You no. Thanks, thanks for playing. Happy to. I love the song you guys opened with. Kelly recorded that. I didnt record that. You said you said im an alto. Yes. I think i could hit these notes easier than you could. In other administration news, Jared Kushner reportedly called up the ceo of Lockheed Martin and asked her to cut costs. The Lockheed Martin ceo said she would look into it. President trump is expected to announce one of the largest arms sales in history this weekend. Lets check the markets after yesterdays rebound. Following the worst selloff of 2017. With us now is jack caffrey. A Global Equity alpha portfolio manager. Searching for alpha . Yes. You dont deal with beta. Some beta comes with it. And from blackrock at least for today, russ a very small part of it. We use t but plenty of humans left. Youve seen the movie terminator. I have. You think its coming . If things get out of hand. So this rebound has legs or the selloff was just the beginning . I think the telloff is the beginning of more volatility. More volatility or lower lows . Lower lows. Were 2 from the high. Its not like we cant go down a bit. We had a period where volatility has been close to historic lows. We looked past high valuations. We last past the fact that the pedestrian will be tightening and the vix is at 10. I dont know if thats sustainable for the summer. Do you think volatileity is back or sell in may sell in may and go away . Yeah. If we Pay Attention to where the economy is going, it is getting better. Not as quickly as wie would hav hoped. Weve seen some negative economic surprises. I agree, valuations are high. Earnings are getting better. Earnings are going to be the drivers of markets over time. Can that mean we have markets that move 1 today instead of moving just up 50 basis points a day in a Straight Line . I think, yeah, you can have more volatility. Volatility creates opportunities for alpha equity managers. Wouldnt you guys say you want volatility . Yes, you want volatility. You do. You dont. You will get volatility. Im saying, broadly speaking, the fact its been so low is bad for traders and institutional investors, good for the general public. Actually its interesting while the volatility has been so low. One reason is youve seen for the First Time Since the financial crisis that the correlation between individual stocks has been going down. Right. Thats good news for active managers. Gives you a better opportunity set. But so but that has been happening even as volatility has collapsed. Thats one of the reasons volatility collapsed. As you get more dispersion, as they dont move at same time, that damps volatility. So its good. We have stocks going their own way based on their own stories. Volatility going extremely low. That means were not in an environment like we were stuck in for eight years where the fed will do this, the fed will do that. Well buy and sell everything. You shifted from the narrative of bad news is good news. Bad news would get the fed on your side. Even if earnings dont appear, thats okay. We can support higher valuations. We have come to a more truer market in the as soon sense tha have better earnings. Its also helpful that it is not ashgstory, it becomes a japanese story. You actually have better news on a global basis. But the fed is still around. The fed is there. But i fwes thats tguess tha inflection point, they passed the point of where there will be any they already made three moves. If i go back to high school math, i have a rule. Where is the tenyear . 2. 22. Yeah, 2. 22. Better than zero. Why is the dollar why is the dollar going down and Interest Rates going down at same time. Because you had a lot of move up in the rates, and the notion of well see reflation out of washington. Are you as confident about that today as you were four, five months ago . Not in being disappointed with the pace of change in washington, just more on what some of these numbers mean in terms of domestic strength. How is the u. S. Economy . The u. S. Economy is sound. But has it accelerated . Has it accelerated since the election . No. It was assumed would have this acceleration, reflation trade. But you see a lot of reasons why things that people that make decisions, the ones that are in those positions are making decisions to do things that will be reflected in a stronger economy soon. You see Small Business confiden confidence, you see consumer n confiden confidence. The problem is you have not seen the Economic Activity yet. It may come. Fwe are still back in the 2 environment. In the terrible 2s effectively. Well said. Come on, please. It would be nice, but were eight years into the terrible twos. Well have the longest expansion but also one of the more muted expansions in terms of tremendous duration. In that world you make decisions and make them slowly. Gentlemen, thank you. These guys were both talking in the green room, getting the story professional courtesy. Getting your story together. What if they ask this. Thats not way we design these things. Separate the witnesses . China wall. So we can get you to argue if possible. Before you got here, you should have heard what he was say being you. Im sure it was compelling and interesting. He initially didnt want to come on with you. You sure it was about him. Why you trying to stir the pot now . Its over. You have another two hours. Are you on hes not on for two hours. You got an hour. Youll kick me off long before that. Because wilfred cant get here until 7 00. Thank you very much. Coming up, a painting sets a new record for u. S. Art at auction. Details coming up. Stay tuned, youre watching squawk box on cnbc. Hey. Pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. Whether youre after supreme performance. Advanced intelligence. Or breathtaking style. Theres a cclass just for you. Decisions, decisions, decisions. Lease the c300 sedan for 399 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Welcome back to squawk box. A 1982 painting by Jean Michel Basquiat i got basquiat right. Selling for a record 110 million. 110. 5. Yesterday at sothebys auction. The sale of the painting is the sixth most expensive work ever sold at auction. There were only ten other pieces that broke the 1 100 million mark. It was the biggest number for an american artist. I will keep my thoughts to myself. Gap shares rising on better than expected results. Dana telsey joins us now. Gap is up 4 . You can see if we zoom out to the longerterm chart, the narrative around gap seems to change every two weeks. Right. What do you think is going on, given the broader struggles of brickandmortar . Overall the gap has three brands. The core gap brand is trying to reinvigorate itself. Old navy was the driver of the earnings beat. 8 comp is a good number. 8 . 8 . They havent had an 8 . Thats a terrific number. Does that include Online Presence there from old navy . Yes. Overall the business did better in the First Quarter and the gross margin was better. The aur was up. Whats aur . Average unit retail price. I do a weekly trend report, i look at prices week over week. The 40 , 50 , it did not accelerate from that. Theyve been managing costs. Getting better margins. Working on the store base. It will be flat openings this year. Not really any openings compared to earlier in the year, there was an expectation of up to 40. Theyre laying the ground work. They need to get better product for the gap brand to make it exciting again. Old navy sounds exciting. I thought Banana Republic is the question mark. I thought i heard reports about potentially a sale, a spinoff, total what do you think needs to be done with the Banana Republic brand . They just put in a new ceo. Mark breitbart returned to gach after being at gymboro. He understands the brand, hes a merchant. Speed to market that theyre putting in place in order to deliver new goods faster, lets see what happens come the holiday season. Banana and j. Crew, i speak from personal experience, these were the they were the they had the real estate. They had the product. You could go into the mall go one to the next what is happening to this category . J. Crew that gone private. Comps have not been great. For womens work wear, whatever that category is, is there something particularly happening there . Women used to buy clothing for four reasons, work, weekend, gym, party. With the increase in casu casualizati casualization, and the cash ral sooi casual environment, and then work, weekend and work are integrated. So you dont need more occasions. More people are spending their time on services. Final question, your gap brands, what do you do in that environment . Do you try to adidas has athletic. Do you do something aggressive into athleisure . Theyre doing that. In each brands, theyre a bigger active wear company than you think. Gap owns athleta. Gap owns athleta. Oh. There you go. Art peck is putting the steps in place it will be interesting to see product, merchandise, experience. Thats what you need to drive xiltme excitement. They own athleta, theyll be okay. Youre going there this afternoon. I went there last week. Dana, thank you very much. Coming up, this mornings stocks to watch including the shares of salesforce, and President Trump ready to embark on his first foreign trip as president. His first stop, saudi arabia. Well look at the stakes. F