Jeff bezos is within spitting distance of becoming the richest person in the world. The dow is down by about 20 points below fair value after six sessions in a row of gains. The nasdaq is down by 2. 5. Overnight in asia, well see that the nikkei was down by 0. 6 . Hang seng was flat. As was the shanghai. In europe and early trading this morning, as things get started, most of the markets are weaker. The dax is down by almost a half percent. Cac down by three quarters of a percent. Ftse up by 0. 1 . Markets in italy and spain are weaker. Crude prices are higher after dropping by 5 in yesterdays trading session. Analysts say that extension of opecs production cuts where they agreed to make the extension was already priced in the market was looking for cuts to last longer than nine months or deeper cuts. Neither of those things happened. This morning wti back up by 25 cents. It is below 50 a barrel. A couple big stories were watching. Jim bullard speaking in tokyo overnight and said the path of inflation in the u. S. Is worrisome and the plans for raising rates over the next year is aggressive. Bullard is not currently a Voting Member of the fomc. Makes no sense. Worried about inflation which part . Those are anathetical statements. Im worried about inflation, but were raising rapts too quites. If youre worried about inflation, you would raise rates. He said the feds plan for raising rates is too aggressive. Makes no sense. If youre worry the about inflation, you would think you would need to raise rates more quickly. Its not the rates that matter, its the balance sheet. The only way to fight inflation is to raise rates. Normalize rates. Its really a normalization of rates. Once you started that, andrew, James Bullard, i was going to cut you off there. Say hes not a Voting Member. No, because we dont need to do these guys. You started with James Bullard i was going to go, eh not even comment on what let me tell you another news story. Lets see if this one measures up. Get your red button out. Talking currently. The pound is under pressure on polling data thats out in the uk. Where is your eh . Nobody cares about polls. Polls are wrong. The first ugov survey conducted since the terror attack in manchester showing the conser conservatives lost a full percent this week and the labour party picked up three. They lost a full percentage point. As we know, thats their limits of resolution. Theyre not even good within five points. On todays agenda theres a trio of economic reports out. I like those. Those are important. April durable goods out at 8 30 a. M. Eastern time along with the second estimate on First Quarter gdp. Growth revised up slightly to just 0. 8 . 10 00 a. M. , may consumer sentiment. Becky has news on bullard. It makes sense, hes worried that inflation is too low. Hes worried about the absence of inflation. Hes worried about inflation not being high enough. Then hes worried about deflation. Hes worried about that potentially. You could probably write the story three years from now. It makes his views consistent. Any way, im excited about my new word which i heard on the show before us. One analyst said were in a siculal. Its secular and cyclical. Does that make you a buyer or seller . I have a chart of the s p here. How does it look . An alltime high. We have to guess when it will end. Why . Because thats what we do every day. I know. I know. Katie stock was on the other day. Wasnt she 2650 . If we get through 2420 or so were at 2415. The santoli bottom was 2315. Dont chase the market at 2315. Were now 100 points. Not that much, 5 or so . But the market was chasible at that point. A lot to worry about at that point. A lot of worry, as there always is. On the acela, i think were definitely were out of delaware now. Does it go below d. C. . Im on a bicycle at this point. Were at bwi. Here is sorkin. Please. His thumb out on the highway. Didnt you jump on board at some point . With trump as president . No. I was its a precipice. That wasnt a trump hit. 11 00 to 12 30 yesterday, as oil declined, everybody wanted to get out of equities. Thats the most foolish strategy. Because its supply, not demand. Whats happening with oil is a good condition. I think we finally have to say to ourselves, lets remove oil from the grand conversation about the path of equities. Oil will be range bound. Its 45 to 55. What we witnessed theres no linkage. The correlation, its not there. Its not signaling a weak economy. No. May not be a linkage with the tenyear either. Thats the weirdest thing. The tenyear was down go. The weighting of equities is 6 . Doesnt have the impact. Low on the vix, it is a 25year low, 978, were at 1008 today. There are some stocks to watch today. Costco beating on the bottom and top lines. Comparable sales above expectations thanks to higher membership fees and higher u. S. Sales. Did they mean ultra . Did they leave out no, ulta. Ulta beauty. They wanted to name it that . Yeah. Any knew ultra was taken or something ulta is not a word, is it . Like ultimate. This is one of the Fastest Growing beauty retailer the fastest beauty retailer in the country. Bigger than sephora. This is an amazing story. They are counter to the trends because most of their stores are outside the malls. So they have retail stores. Yes. This is a bricks and mortar story. Ill let you tell it. No. Okay. I dont know if ill get to that. Im just definitely just reading here. Shares of ulta beauty getting a bump after beating wall street estimates. The Beauty Products retailer they make their own stuff . No, they sell everybody. But all that stuff in one place. Hair, makeup, beauty. Now youre speaking my language. Onestop shopping. Yes. You get a chart for three years on this thing, its like a 300 okay. Remarkable story. Are you kidding me, 18 billion company . Yes. By the wear, costcos earnings, witness what we saw yesterday with west bubest buy, consumer not doing that bad. Its a mall story. Its about brands, less about brickandmortar, but there are some Success Stories in retail that indicate the consumer is out there feeling more confident, optimistic and spending money. Frond is a word. Did you know that . Nobody heard a plant, frond. Theres no segue to this. You guys were playing that game yesterday. You wont play. I tried frond and i still lost. You say its a frond palm . If you have a fern, its frond. Ults is not a word either. But we digress. Gamestop falling despite solid quarterly results. They had their first increase in sales thanks to the anyone tend to switch game. Shares are down because the company wasnt able to raise its fullyear guidance. Down about 7 . The ceo paul raines will talk about this. He will be on the show at 7 40 a. M. Eastern. I knew that. I read system of the notes already. Its my interview, in fact, it will be incredible. Stay tuned. Well await that. Talk about the cicular uptrend. You may want to brush up on the nintendo on switch. We havent decided. Gaming is incredible. Are you a screen time kind of family . They have to read dickens . No, they know the passwords on the ipads, a problem already. Go back to the best buy earnings and the numbers on nintendo. Gaming is a huge part of this. Target referred back to that. President trump attending the g7 meeting in sicily. He will be attending meetings on terrorism, immigration and refugee policy today. Eamon javers has more on all of this. On these overseas trips they have to work odd hours. The g7 arrival happened in sicily a few moments ago. We have some video of that. This is a big day for the president in italy. There are some of the leaders arriving earlier today. Just within the past half hour. The president earlier today met with shinzo abe, the japanese prime minister. Next up a reception and luncheon for the g7 leaders this afternoon. He and the first lady are also going to attend the Philharmonic Orchestra concert. Tonight a dinner hosted by the president of italy as well. Its apparently a beautiful seaside location where the g7 is being held today, turned into an armed fortress for all these World Leaders arriving. Business on the agenda today. Back at home, the president not able to escape bad headlines surrounding the Russian Investigation. Late last night it was reported that Jared Kushner is someone of interest to the fbi in this investigation. Hes, of course a senior white house adviser and the president s soninlaw. A powerful figure inside the Trump White House. Nbc news reporting that investigators believe kushner has significant information that they would like to know in their russia probe. But cautioning that does not mean that they suspect kushner of a crime or intend to charge him. Kushner in a slightly different bucket in this investigation than Paul Manafort or Michael Flynn who are of more intense interest to the fbi right now. Still that puts that that puts puts that investigation into the white house and into the president s family. Back over to you. Right. Right. We know jared. Hes such a nice i dont know. I cant believe this will i dont know. Stranger things have happened, i guess. I dont know. Jared . Does anyone believe he was meeting with these guys going, listen, you guys get the wikileaks stuff. You hack into that . You release that before the election. All the podesta stuff. That comes out. My fatherinlaw do we believe that . Honestly . I dont know. Well wait and see what investigators discover. Right. Clearly investigators think something is amiss. Right . Thats why theyre asking the questions. I dont know. Thats certainly what the democrats say, there must be something there. Because of the investigation there thrust must be something. What cia director john brennan said this week, he saw contacts between people in the trump camp and the russians that caused that were cause for concern. When he left the cia earlier not the subject or the content, just the actual meet just the contacts, but we dont know the content. Its a big country. Thats why he said we need an investigation. Okay. We do. Well let it run course. Everybody trusts this guy, mueller, to do a good job, nonpartisan job. Then well finally know. The problem for the Trump White House is that this is hugely distracting. If youre Jared Kushner, you have to get lawyers, pr advice. You have to be careful about what you say and do inside the white house. All of that will affect a certain number of brain power and your waking day. At some point that means less brain power and less hours in the day for the other stuff this white house is trying to do. For the last ten days, it has not been distracting. I know its the back drop, but im watching whats happening over there. I know the media loves it. C nshg cnn, they barely broke to cover manchester. It took them they had to be dagged kicking a ege eged dragg screaming because of some russia thing they were on. They have the guests there, all of themthem frothing at the mou. Were they frothing . They were frothing. Lie l like i am now. More importantly the market has not paid attention. I hope there is something for your sake, andrew. How long does the Mueller Investigation take . A long time. They could find a blue dress. A year, could take two years. Could go on for a long time. It started as an Arkansas Land deal, it went to paula jones, then the intern at the white house. It could go anywhere. That said, mueller doesnt have those kinds of speaking authorities right. So he has to kind of stay in his lane a bit more than what we have seen in that investigation. But it can be sprawling. Not to get to the market but to the extent people talk about healthcare, tax reform s this disruptive to those things . Actually beneficial. Goldman sachs, alex philips puts out a great report, because of this Mueller Investigation, the chances of a Government Shutdown at the end of september are lessened because of the investigation going on. Why . Dont want to take the chance with the investigation out there and a contentious battle to shut down the government. Makes a strong argument about that, which i agree with. Mnuchin is already trying to get congress to act on this quickly. What about other policy issues . Selfpreservation, taxes. Selfpreservation for the republicans. In 2018, they have to give the voting public something. Here is the one grand achievement that we have, the easiest thing is a taxes maybe not the magnitude of the trillions of dollars being put for the now. Maybe 1. 5 trillion, but i still think thats the asymmetric risk. A percent will do a bill thats different in the house. That same logic makes it difficult for the Trump Administration. If youre that eager to get some accomplishments on the board, that eager to avoid a Government Shutdown that weakens your negotiating position going into both of those things. That will make it tougher for them to get what they want. But thats the point. This could be a trillion, 1. 5 trillion. Well move on. Lets get to the broader markets. Joining us is rich steinburg, president and chief Investment Officer at steinburg global asset management, and joe terranova, our guest host. Rich, you think were getting to the high end of a trading range where you need to start worrying. You cant claim the trading range was something you were expecting as a now point to get less bullish. Listen, joe, the reality is this, the market is run by three things. Trend, sentiment and valuation. The first two have been really driving this market. The s ps returns this year to date, ten stocks are driving 50 of the s ps returns. We have not caught all this market. We caught about 70 of the market because we have a hedge in place. I insure my car, that doesnt mean i want to have a car crash, but im willing to have that insurance in place. This conversation we had last time you were on, 100 points lower on the s p. I know. But, you know what . Alt at 131 in earnings this year, at 17 times plus earnings, 118 of the 15year average, joe, im willing to take a bit off the table and not be full metal invested right now. Were you on november 10th, were you bullish . We had that same hedge in place. We had about a 15 hedge in place. Ouch. Okay. Joe, theres different types of investors in the market. Were investing for families, endowments and foundations. Its different when you have to look at the risk profile of the clients that youre taking, so when we put our hedges in place, its in context for the underlying investor that were working with. Rich f you, if youre invesr the longterm, for families what are you doing for the income side . Its hard. Our duration is down to two years now. We had some money in the intermediate part of the curve. We took that off when the tenyear came down to 2. 2. I run the short duration part of the firm. The duration has always averaged 3 to 5 years. Were on the low end of that now. Im not sure the fed will theyll do a deal in june. But i think we are not going to see extremely high rates. And were starting to if rates stay this low, we may extend duration a bit. My issue is this on the stock market. 22 this is the best quarter weve had in 22 quarters. Valuation is just a bit out of whack right now for us. Yeah. Valuation valuations are hard to determine. It is. And it can get more and more stretched. Now oil is back, not necessarily going to be a tax on the consumer. Rates. Now theyre worried about raising them. I think an interesting play may be if in the mid cap space right now, were trading at about 18 times next years earnings. Small cap is a bit extended. Theres a lot of banks in the small cap space. If we do start to get higher rates, you may see money flow back to the small cap space. The trump rally ripped the small caps. Theyve been lagging. But i want to see proof in the pudding in the next couple quarters, and the big overhang, which you were talking about before are tax and policies still. All this happened without that i wonder what happens if that does look likely. Rich, thanks. Take care. See you. I will be with us for the rest of the hour no youll be with us. The two joes. All of us will be with us. The two jakes, a movie. Not bad. Remake of china town or sequel. Coming up, Mark Zuckerberg returning to harvard to give the commencement address. Hes calling for the government to give everyone a basic income. We have details and the debate on that after the break. Hey ron theyre finally taking down that schwab billboard. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . The future isnt silver suits anits right now. S, think about it. We can push buttons and make cars appear out of thin air. Find love anywhere. Hes cute. And buy things from, well, everywhere. How . Because our phones have evolved. So isnt it time our networks did too . Introducing americas largest, most reliable 4g lte combined with the most wifi hotspots. Its a new kind of network. Xfinity mobile. I dont know. Welcome back to squawk box. Mark zuckerberg gave the commencement address for harvard yesterday. He called for a universal basic income as a solution for inequality. Now its time for our generation to define a new social contract. We should have a society that measures progress, not just by economic metrics like gdp, but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas. Zuckerberg said he was only able to pursue his passion in facebook because he had a safety net to fall back on. Who was that, his parents . Must have been. You cant run for president until youre 35 years old, right . Right. Theyre talking about him wanting to run for president. Theyre talking about the rock running for president. They are talking about the rock running fo