Transcripts For CNBC Squawk Box 20180212

Looking at the worst week in two years with all of the averages well see what happens today its been interesting to watch volatility to see whats going on meantime, lets take a look at whats happened overnight in asia the nikkei was closed for a national foundational day holiday in japan the hang sentence down over 0. 1 shanghai composite and stocks in south korea higher with the kospi at 1 . In early trading in europe, you can see things are in positive territory as well. Big gains. Gains of 1 or better across the board. In fact, the dax is up by 1. 9 right now. Then if you take a look at treasury yields, this is a big story. What kind of inflation do we see. The tenyear is yielding 2. 88 this week, were going to be getting inflation data cpi on wednesday and thats something that else to see if inflation is really out there. A couple big stories were watching before we get back to the markets. Vice president mike pence said the u. S. Is open to talks with north korea but will continue to watch the rogge state economies. Pence also said the south korea would first engage with the north. And then the u. S. Could soon follow suit. The Trump Administration will be unveiling its infrastructure plan today. It will include 200 billion in federal funding, over a decade, to incentivize new state and Municipal Building projects. Were going to get a live report from washington on all of that in just a couple minutes then on this weeks economic agenda on wednesday, january retail says, cpi thursday, jobless claims, ppi and philly survey and home production builder survey. Friday, housing starts, consumer sentiment. As earnings two dow components, 57 companies in the s p 500 theyre reporting. That list includes pepsico, under armor, metlife, cisco systems, marriott, heinz, kraft, and cocacola. The market may key off fundamental news as opposed to speculation. Though we got earnings numbers as well. And thats eye its own adventure. These are stralers. Were done with earnings joes closing the books were done with earnings. Looks like eququalcomm and broadcom are planning a valentines day meeting. To talk about broadcoms 121 million acquisition offer. The wall street journal reports the company has secured 100 billion of Debt Financing for that hostile bid also enlisted the help of two private equity firms the ceo of broadcom will be on squawk on the street today frld automatic toy plaker planning to raise production of the expedition and the Lincoln Navigator by a quarter wife this year. Both plants manufactured in the companys plant in kentucky. Ford is looking to challenge rival General Motors and boost its own profit marking and oxyconte maker Purdue Pharma is cutting its sales in half Pharma Companies have come under fire for the way theyve marketed addictive painkillers privately held purdue has been sued by 14 states accused of deceptively marketing opioids to try and generate higher sales. And then there is the weinstein, ill call it a drama, a saga, i dont know new York Attorney general Eric Schneiderman said hes filed a suit against Harvey Weinstein, his Brother Robert the suit alleges that the board failed to protect employees. More than 70 women have accused Harvey Weinstein of Sexual Misconduct the studio has been in talks to sell to a group of investors the sellers lawsuit puts the negotiations on hold in a statement, his attorney said we believe that fair investigation will common a 38 that many allegations against Harvey Weinstein are without merit. Irrespective of that, the lawsuit, to me, changes the game potentially if other a. G. S were going to try to stop transactions not just Sexual Harassment but any claim where they believe theres some aggrieved party and that that party could be paid the proceeds of the transaction, you could see this actually moving itself into many different places, far afield from this weinstein situation. Theres always been issues where a company has tried to sell itself after theres been a scandal of some sort but if you guy a company, arent you stuck with its liabilities . Weve seen that happen time and time again bear stearns if you buy a company, youre stuck with whatever liabilities they have down the road. And you normally normally that would be the case well, either you go into bankruptcy court, sell the company where a lot of liabilities oftentimes dont transfer but now you have an a. G. Jumping into the middle of a deal like this, it changes the whole dynamic. Its not just that the liabilities arent transferring or how they transfer, its that they wanted them specifically earmarked in a certain way to have these people be put at the top of the list they become the ultimate credit creditor right arent there about ten things Eric Schneiderman has embarked upon at least most rational people get raised for some of his actions . But a new York Attorney general attorneys general, they many times, have pretty aspirations that go beyond attorney general Eliot Spitzer i take everything with a grain of salt. But certainly in the weinstein case, and all of this stuff, and it gets even more i just wonder, in other states, in other instances how successful that is. I used to say its a magnetic thats bad to throw in the ambulances just in case, you dont have to chase the ambulance. Your Business Card ends up on it if people need to sue. Anyway, to the Broader Markets coming off a week in which the dow up and down moves made for a journey of more than 22,000 points joining us now, chief strategist at oppenheimer, jim turny, and a doppelganger for Vice President hows he doing . Hes doing great. Fantastic. You look like a younger brother. Hes been youthful but hes in his 70s now, and he doesnt look like it. Anyway, you look like you could be his somewhat younger much younger. Yeah, much younger. Ill tell you what i was gratified by with recent market moves we used to watch 50 and 100point moves and think we were actually reporting on moves in the stock market. And we didnt real iize that was like 2 . Now at 25,000, you need to recalibrate what the actual move is its really just 1 . But at least now, were in a position where our eyes arent when you see 1,000 points down, you think you need to go hunker down in a bunker. But really, it was what, 3 , 4 . Whereas in 1987, there was a oneday move of 23 . At least were calibrating a little bit what i want to ask you guys about is whether there is anything that you believe to be fundamentally broken or totally extended, either if the economy or in the stock market in other words, is there a housing bubble is there a Central Bank Bubble a bond or is there something that needs to be worked through or a reaction on 2. 8, 2. 9 on the tenyear we had gone straight up for 15 straight months, 22 out of 23 months were positive we were due for it boringly. Going up 50, 100. No volatility right this is introducing risk and volatility back in the market which i think is appropriate but is there anything fundamentally wrong . Is the fed introducing risk someone saying that the fed is finally introducing some volatility back into the market with the four raises we did this year qe was winding down i think the market was expecting two raises and now saying okay, the fed is right, three, maybe four were going on this path and the market is waking up and saying, okay, were on our way are we on our way to effectively measuring inflation . Is it possible itslooming in much worse state than it is . We dont think so we think the big offset is the secular and relentless move in the process of globalizationa gore ri algorithms, robotics on the factory floor and lower ends of technology whether mom and pop operations is this what caused the market selloff no its not what caused the market sel market selloff but it means inflation is not a concern. Of course, what ive been wrestling all week as the market was tumbling obviously, it starts as good news bad news scenario the question is, could the bad news create a spiral of additional bad news . Which is how much of this has been a wealth effect, to the extent there has been volatility and will continue to be even more, does that change the underlying dynamic of the ultimate economy i dont think so, i think what you have here is a situation where were in a period of price discovery as a result and were seeing a normalization of Interest Rates but we have a Federal Reserve that has shown to be remarkably sensitive over the nearly last ten years. You dont think the consumer is going to get any more sensitive as a function of what were talking about every morning, to the extent were talking about this, and this type of volatility for quite some time . I dont think so. I think well just have a return to a more normal level of volatility were you hyperbolically looking at this . I mean, were going to be at 24, 500 today. Art had this 24 hat on a month ago. Weve been begging for a correction thats been normal and routine and happen every year is this a tumbling horrific thing thats going to cause people to pull in their horns . I mean, are we there yet probably not. But if you had think the wealth effect goes at 24,500 i know, when i said this is the worst in two years, were till 10 up from where we were then youre worried about 20 . No, im not worried about 20 . I actually said you werent watching lasts wee ing. I saw you wrote a big piece on explaining the volatility when i did, i said i didnt think there was an underlying point to this at all however, as the week progressed and things got worse, i started to try to understand give me your viewpoint on the gains we had for the year. Right and as it was happening last year, the 44 gains and your sort of resistance to the idea that the market was moving up. Isnt coming down 10 sort of more rational for what you were thinking all along the market you didnt think much and that it could be here by this you shouldnt be surprised by this, right . Its not about being surprised. 10 should be welcomed for you, it makes more sense in the world of most people, right . I think relative to the consumer, are they going to be dislocated by this i dont think they will because wages are going up and the tax cuts and its only 10 and i just dont think its only thing that scares me nothing scares you . No, what scares me is the reckoning that we may some day have to come with yenky yellen andco and central bankers. They think they can extricate we take it for granted they went in and did this unbelievable accommodation but they spend more as a government the one thing is, what has drastically changed has been the evolution of technology in our lives. 30 some years ago, when i got into this business, if i was talking tech, i was talking about what technology would do for corporate. Today, its ubiquitous, its embedded in all of our lives how come our productivities arent any better . Sometimes, i think were working so hard at keeping track of our passwords and the process of cryptology, to protect what were sending. But i believe that we will see that work out in a process but relative to where weve been before, becky, it dcould be different because this is a huge disrupter and it dislocates i know, im a lot more productive in my personal life everything from ordering groceries online, the shopping, the hours that has cut out of my daily life and our Business Days are extended as a result and not necessarily uncomfortably, because its very convenient to pick up the iphone or pick up the samsung and catch up on issues you can be on vacation answer emails and not totally we live considerably differently than we did 20 years ago. Yeah. Is there a recession on the horizon . Or is there a cycle where we need to deal with inflation on the horizon . Is either one of those things possible possible, but which one is more likely . One leads to the other sometimes. I think inflation in the short term given the stimulus were seeing but in longer term, think about what amazon is doing. If they bring about this Health Care Program with Berkshire Hathaway and jpmorgan, thats 18 that they got to target. It is going to be a year before we see that but its a start. But what has changed significantly are wealth products because wealth has increased exponentially around the world whether a handbag that a few years ago was 800 now is 1600 by louis v. , lv. And tmercedes costs more this year than last year. I just wonder are we wondering about halfpoint hikes, six of them in a year you do four, and were back what, three . Its just hard historically. Its different, double 1 1 2 but if youre doing that as youre shrinking the Balance Sheet at the same time extended process of normalization. Hindsight, well be looking, oh, wear, i remember that 10 correction people love 10 corrections until they happen. Hopefully, its just a quick correction you hope it is just a correction obviously, im invested like the rest of the world. I hope its just like a correction just on market watch, theres no way this correction is anywhere over. A lot of people dont think its over. You cant think its over, or else the market would have to convince you it would its trying to keep you out we havent gotten political about it, clearly, this all began, this is largely a function, are all of the stimulus measures and of all of the things going on. And this is a 10 correction. The reason you are at 24,500 in the first place. Or not at 17,000 like everybody who said it was going down 10 but that didnt happen were up 40 you can give back 10 without throwing away the narrative. Since were getting political, john, jim, thank you guys for being here. Since were being political, why dont we get to white housashin. The white house is planning to release the infrastructure plan. Kayla tausche is here. Good morning good morning, that plan is set to be released today four principles are going to be in that, all recently reported by cnbc. 100 billion in state and local incentives for financing their own projects 50 billion in frontloaded block grants for rural communities. 20 million for socalled transformative projects and the reminder going towards bond and loan programs as well as federal Office Buildings just 14 of the price tag is coming from the federal Government Programs short on funds but long on anticipated reforms to regulatory processes the white house expects the 200 billion in chrises will be offset by elsewhere in the budget and the president is open to raising the gas tax even more. And the bipartisan budget deal from last week included 20 billion for infrastructure which leaders called a down payment for the program but keskeptics have said its an insurance policy and the republican unwillingness to spend more money. The plan will include 11 congressional committees, six in the house, and five in the senate they say last year 40 meetings have taken place on a bipartisan basis with congressional members to discuss the package and that effort will continue this week President Trump will meet on wednesday with more members of congress on all relative committees today, hell meet with mayors and governors. Well see if the plan really gets momentum once it comes out and whether it faces opposition and comes down dead on arrival even though its an infrastructure bill and those are usually things you can get around, the left is not going to like this because they dont think theres enough federal spending on this the far right conservative is not going to like it because they think its too much money after all the money spent at this point what do you think the odds are at this point . I think its probably 50 50, becky, you have the complication, and white house officials are well aware of this you have to get everything done legislat legislatively, in the next five months really all appetite for legislation will try up at that point. There is resistance on both sides of the aisle to this program but the white house says they have been working with congress that they are well aware of whats in the plan theyve been, in their words, socializing this to try and get members on board and if theyve left enough of this plan to be filled in by members of congress, that they should be able to feel some ownership of it. But there is still a lot of work to do. And it does lean extremely heavily on state and local governments to come up with a lot of money too kayla, good to see you. Thank you very much. Good to see you coming up, box office controversy, were going to tell you why some parents are calling for a boycott of the kids movie peter rabbit. Well continue to monitor futures. In the green, dow looks like 270 points higher after a roller coaster ride squawk returns in just a moment and she was just small hey, need fast heartburn relief . Try cool mint zantac. It releases a cooling sensation in your mouth and throat. Zantac works in as little as 30 minutes. Nexium can take 24 hours. Try cool mint zantac. No pill relieves heartburn faster. Mom anits not theirs. Car. Its mine. Mine. Mine. And it always will be, forever and forever. The new rx 350l with three rows for seven passengers. Experience amazing at your lexus dealer. Welcome back, everybody. Fifty shades freed tops the box office it brought in 38 million in the debut weekend. Women brought in 90 of the audience guessing none ever you was there . No. No. Peter rabbit took number two in the box office bringing in 25 million believe it or not, the movie sparks back lark over parents of a scene giblgting allergy bullying in the picture, villain tom has a blackberry allergy, and the rabbits throw blackberrys at him, including one in his mouth. He goes into shock and stabbing him with an epipen it brings light to bullying in a blackberry way henry sorkin saw this film. Did he . He went with two friends. It was a dropoff movie situation. A Birthday Party or something . I didnt get to see it. We had a whole conversation about this film. He did not tell me about that scene so like 10 of tupac, have you seen the two scratching. Have you ever watched. Weve gone from where we can watch the simpsons to yeah. Lets not even talk about any disney movie. Did you see whats the gary oldman the church . I have not seen it i have not seen it i cried you cried i did not weeped. But i did my best. Teared up did my best not to. Like this. Im not sure anyone saw me but pretty good. Will said it was amazing. He did. I had it on the list. Wilf probably didnt need subtitles. Proper english. By the way, were the one who pa bastardized that disney announced a couple price hikes. In park admission structure yesterday, the increase will hit visitors in disneyland in california, the hard heft with a nearly 9 increase oneday prices in the kingdom in orlando, 2 to 4 . Disney uses a threetier structure to help manage crowds by charging more during peak periods. The company will continue to tweak the structures in the leadup did you see dunkirk . I did saw it on the airplane. I saw it. But it just all is interrelated. Because a large part of what churchill is dealing with is the entire british army being and thats it and it comes up with connecting the dots between the films . Absolutely. Its operation, its the only way they were able to use all of the civilian boats its very moving ands, you know, a crappy history teacher, obviously because, you know, im learning a lot of stuff learning a lot of stuff. Maybe it was me. It might not have been the teaching when we come back this morning, President Trump is set to release his infrastructure and budget plan today. But axios says theres a better plan of passing. He will join us with details right after this with a clear advantage. N te fidelity, where smarter investors will always be. Wow record time. S. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. Than you. Imagine if the things you bought every day. Earned you miles to get to the places you really want to go. With the united mileageplus explorer card, youll get a free checked bag. Two united club passes. Priority boarding. And earn fifty thousand bonus miles after you spend three thousand dollars on purchases in the first three months from account opening plus, zerodollar intro annual fee for the first year, then ninetyfive dollars. Learn more at theexplorercard. Com we cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Welcome back youre watching squawk box, live from the Nasdaq Market site in times square. Good morning, everybody. Welcome back to squawk box here on cnbc weve been watching the u. S. Equity futures, and this morning, at least, so far, you are seeing pretty strong green arrows looks like the dow opening up by 290 points s p up, and nasdaq up by 77. And this comes from friday at least by 1 . At arrest from the indices, youre still looking at the worst week weve seen in about two years for each of these major averages its going to be a very busy day in washington. The white house set to take the wraps off the big infrastructure plan joining us now is axios editor. Good morning this infrastructure plan dead on arrival, i gather . Were at acalling it the bud deal and infrastructure deal and we throw it right in the recycling bin. I think the infrastructure plan is in a similar place. If you look on the hill theres not a huge bunch from republicans to add money after the tax deal and budget deal make later in the year, a small bore of pieces might come together to a rose garden ceremony to say if the bill passed but the president s big infrastructure package is not going anywhere on the hill its almost sad with the talk of infrastructure, it seems like on a bipartisan basis, theres nothing in the water that could revive things or turn this thing around this is like the big political sort of behihindsights 20 20. There wasnt a lot of agreement with democrats and republicans in taking action but theyve done that, as far as health care and doing taxes on a party line they could have gotten something but were on a very compressed calendar weve got immigration to deal with and the midterms are startinging. Trump and republicans in particular are beginning to shift the way they run washington to run on the tax bill to run fighting democrats on the wall. And to take more of the cultural flash points to tweet about to build up the base for the midterms and thats not something that gets bipartisanship on infrastructure at all you said there was Something Else to happen today what is that the immigration thing is still out there. We could get some deal on it whats amazing happening on the floor, Mitch Mcconnell on the floor will let senate try to get whatever they want on some type of deal. Let democrats try to get proposals. And watch senators tom cotton and purdue, what they signal with trump and if anything, that process in the senate of course the deal with the debate in the house. And then kelly, the drama, the soap opera that is the west wing whats happening there and should the investors care . I dont think investors should care. Not now. If this was happening a couple months ago before a tax bill before the budget deal was done, when the west wing intrigue could have possibly endangered those, then i think it would be worrisome. Because there arent big legislative things coming down the pike in interest to markets. But there is worries in the west wing itself. A lot of reporting, they focused on what kelly knew and when he knew it. Whether he was lying to his aides. Whether he was telling aides to lie for him. Were hearing a lot from aides in the white house uncertain about what kelly knew and what kelly was doing. I think its damaging among the staff and the administration jonathan, in his sneak preview email, newsletter that he puts out, gets into a whole set of me too conversations in the west wing. And some pretty eye opening chentss that have gotten criticism that the president has made about that. Right but remember, the president internally is attacking porter saying what he did was despicable externally, you showed earlier the clips what the president has said about sort of not mentioning the women in his statements and how he also talks about privately sort of the me too movement is damaging for ceos, that women can make allegations that can destroy a career. This is a fine line that the president has accused of sexual improprieties and inappropriate behavior, a fine line hes trying to wind very closely. There was a tweet over the weekend, i think one of the quotes was theres no recovery for someone falsely accused. Some folks in the white house said he was referring to steve wynn right that was their Immediate Reaction when we saw that, what was the one thing happening in the white house, it was rob porter who has faced accusations. Sort of photographic evidence of what his wives say he was doing to them. And theyve tried to shift it. Again, it has settled cases with his accusal. The president , this is a difficult place for him in terms of his history and how he deals with it on twitter absolutely nick, well leave the conversation there always great to see you. Thank you does infrastructure include like baggage systems at airports . No. You had some issues coming in . Enouyouve never had issues t north . No actually, i take that back golf clubs. You have tried to do you have miniature golf clubs to put them in the overhead bins. Send them through what was that ship sticks im just telling you, a sixhour flight red eye and then an hour and a half what do you think theyre doing for an hour and a half what do you think is happening for an hour and a half is it the Port Authority its not united, right . Its not the airline i dont know. I kept going you can imagine how many times i went back and you thing that i explain to the airlines. No i didnt explain to the airlines this is the Port Authority youre going after the Port Authority . I think thats who it is. Im wondering. If you have you walked off the plane, when you get to the baggage claims there are your bags thats what happened to me. Switzerland thats what happened to me at newark they were waiting for you yeah, thats because i took and changed the babys diaper and did a few other things on the way. I was going to ask you about that okay, youre doing all of that stuff. Andrew, an hour and a half i hate my golf clubs so much anyway, id really like to leave them but, you know. Folks, a multidollbillion dr deal announced, csra and general dynam dynamics csra had closed at 30. 82 on friday as you can see that stock is up right now 27 on this news looks like its trading at 39. 20 joe. Coming up, were going to wrap up an exciting weekend of olympic action and look ahead to this weeks event its Carl Quintanilla joins us live from south korea and later black rocks Jeff Rosenberg is going to talk to us about wild Interest Rates. Plus, senator dan sullivan joins us on set to talk about the president s budget and infrastructure plans that we were just referring to stayun ted youre watching squawk box on cnbc mercedesbenz glc with its hightech cameras and radar, contemporary cockpit, 360 Degree Network of driverassist technologies, and sporty performance, whats most impressive about the glc . All depends on your point of view. Lease the glc300 for just 449 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Get a shot here. Welcome back, u. S. Equities futures at this hour indicated up 270 points on the dow after a 300plus point rebound on friday. The s p indicated up 28 this morning. Strong performance at the nasdaq right now, indicated up about 63 points okay, the Winter Olympics are under way in south korea and the weather playing a big part in the story. Carl quintanilla is there live this morning from the games. Carl reporter andrew, good morning to you what a weekend of competition. A lot of u. S. Success in figure skating. And snowboarding and in the luge, as well. Big story this morning, Chris Mazdzer, youre going to get to know that name, the first medalist u. S. Men ever in mens single luge. He took silver in sochi. The u. S. Has never won gold in this event, guys but in this case, we did take silver talking about the ice, very hard, very controlled here making control very difficult which brings to us the weather, all of the icy winds have postponed alpine skiing. The brits have complained that maybe snowboarding should be postponed again. They didnt do as they had hoped. This is perhaps the coldest winter games in modern times windchills down to zero. Athletes using things like tape and vaseline to minimize the amount of water that evaporates off the skin its actually that cold. Especially on the hill theyre spending more time in the tents some even left ceremonies early medal count, norway, eight, canada, six, germany, six, u. S. , four and red gerard won the first gold of the weekend. In snowboard slopestyle. And now here in both men and women, the guys, i dont know if you remember, sochi, the weather was the story because it was too warm thats definitely not a problem this time. Selfish less because iless q going to be there in about a week you indoors, enclosed, whats goigo going on reporter it is open air in the back weve got heaters, i imagine you did that in davos as well. Im layered. Youre going to fine if youre not, too cares carl, i saw the luge guy, that was i thought weve never won a gold have we ever won anything before in single luge and the german guy ran into the wall he kind of hit the wall. That was so sad. I mean, the guy couldnt even get up it was so sad. Reporter i know. Go ahead. Reporter theyre calling it turn nine. Its apparently this wicked turn very difficult maybe one of the hardest turns in the world and you couple that with a hard ice. Its not good. But, yeah, i think women women, okay reporter women took bronze in sochi, i believe, erin hamlin, perhaps. But this is the place for men. It looked like bronze, ended up getting silver he was so excited that was great to see. Now, this is you know, carl, the zero degrees, thats just weather. The sochi think really was Global Warming when it was warm, that was climate. This is just weather just as long as you get your story straight you got that, right, its just weather . Reporter whenever i hear you say this on the show, i see becky and joe just copy go uhhuh anyway, thats weather. Carl, what about the north korean cheering squad. That has gotten a lot of attention and created a lot of concern for people who think this is whitewashing that regime reporter yeah, that story is so fraught, we went to womens hockey im sorry, short track. And ended up sitting very close to those cheerleaderse it was surreal i mean, they had a conductor they were so organized i took video just to show people whats going on. Theres a sense in american media, global media how do you show it without kind of endorsing it its very creepy we know how dangerous this regime is. And this charm offensive, i mean, is it effective . Apparently, reuters this morning said the president of the ioc is going to go to north korea once these games are over it was chilling. I saw the stories and pence and everybody else and the sister, right yeah, i saw it on cnn shes great. Shes great. I saw a big piece on cnn, carl shes great. She took the place by storm. Reporter yeah. Glowing reporter i dont know, i think the times mentions her makeup shes awesome ask cnn. Were going to see a lot more of carl. I saw it on instagram. Youre eating with david chang reporter yes, later in the week korean food, david chang looking forward to it, carl thanks when we come back, well talk to a scientist who is working to reverse the ageing process. What . Yeah, listen up he thinks that the fountain of youth could be its blood thats pumping through your veins and hes got ideas what to do with it i want to be that guy oh, thats lovely. So graceful. The corkscrew spin, flawless. His signature move, the flying dutchman. Poetry in motion. And there it is, the baby bird. Breathtaking. A sumo wrestler figure skating . Surprising. Whats not surprising . How much money heather saved by switching to geico. Fifteen minutes could save you fifteen percent or more. Today, innovation in the finger lakes is helping build the new new york. 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Savviness and most of the developments have happened with park kin son sons, cardiovascular disease you track the process, getting older itself is there some way of slowing it. Can we halt it that prevents the disease from happening. Thats what weve been doing youve been studying youngblood yeah. Whats the difference between youngblood and old blood. Lets go blood in general its the one thing that connects every single thing in your body, heart to your pancreas, liver to the brain. Everything goes through the blood. Its like a highway. Its also an information map theyre talking to each other. As one gets older, the other one is also going to feel that. Looking at a picture right now. Oh, yeah. Those are actually zoomed in versions of little parts of the neurons, the brain cells that you have, and those are actually from a mouse and theyve been there the entire life of the animal that would be the equivalent of a young person around 25 and an old person 65 to 70. Whats the hairy stuff . Like spines, a stem those are the physical connections where the two neurons are talking to each other, the synapses. What happens when you get older, they go away you give youngblood to an old animal, you bring them back. Its not about bringing new cells describe this youve done this in the lab doing what yeah. Theres a couple of wasys weve done this. You connect two mice together. You make little siamese twins. You make a young animal, an old animal and connect them together and you pump it. The thing that were excited about is youngblood reverses aging. The opposite is also true though. This sounds like the 17th century of how much we know about. Whats in do you know whats in the blood thats helping . No. Thats great. That would help. Thats the whole thats the point, right youre fitniching people. Were not letting go of the humor. Is it white blood cells, red blood cells . As youre getting older, things are happening cytokaines were losing things, too. What do you make of folks who are doing this actually doing this to themselves there are people in silicon valley, we hear, who are doing transfusions with youngblood themselves, very dracula like fashion. What i tell people, going back to what you said, identifying the things. Lets see what were doing. Controlled environment when we have the how many people do you know that do this to themselves i dont know anyone whos doing it there have been some clinical trials, places such as stamford has had one thats more of a safety one we know, okay, nothing bad will happen short term if you do plasma for residenticsidential phoresis. Thats like a dumb fad. Jump on any fad like that. You want to make it into a drug. You want to find out which factors are, isolate the factors and use those. Absolutely. Without taking any bad stuff. Yeah. Thats the thing we do know theres bad aging factors as well. We dont want to combine that. Nona, nonb, we didnt know it was hepatitis c you could be getting stuff you have no idea what youre getting from people. Thank you ill have to give him some blood. Coming up, monday morning Market Strategy, we have a rundown of the events that could move the markets ahead black rocks Jeff Rosenberg will be here. Squawk returns in just a moment stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. I thwell wait. What did you meetthink about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. Markets indicating theyve come back a little bit dow futures pointing to a 200 plus gain at the open, but dont turn away because if last week was any indication, the picture can change in the blink of an eye. Fire sale, Weinstein Company hitting a roadblock as new yorks attorney general files a lawsuit against the studio and founders. Plus, going for gold were heading to south korea as the Olympic Games kick into high gear as the second hour of squawk box begins right now. Live from the beating heart of business, new york city this is squawk box. Good morning, everybody. Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick along with joe kernen and Andrew Ross Sorkin. The u. S. Equities are looking for a sharply higher open. Talking about the futures at this point being indicated up by 267 points for the dow s p futures up by 27 nasdaq up by 61 points this comes after a rough week last week. We were down by the most weve seen in two years. For all the major averages you did see some big gains with the dow up 330 points on friday. Well see what happens as we get closer to the opening bell obviously volatility is back President Trump unveiling his plan today to improve the nations infrastructure. It is part of the proposed budget which seeks 200 billion for infrastructure and more than 23 billion related to Border Security and Immigration Enforcement and boosted military spending it produces cuts that are aimed at the projected spending deficit. Well see what happens with what congress does with all of that again, that is due today and the price of gasoline is on the rise the latest lundberg survey shows the average price is up 7 cents a gallon over the last three weeks. That would put the price at 2. 65 a gallon which is 35 cents higher than where it was a year ago. Ford is planning to boost production for the Lincoln Navigator and ford expedition. Thats the largest and most expensive suvs ford is increasing the output targets by 25 at the kentucky truck factory. The company says it can sell every single vehicle that it produces at that factory. Qualcomm broadcom planning a valentines date theyre set to meet wednesday to talk about broadcoms 125 billion acquisition offer. They raised the cash and stock bid last week to 82 per share the company has secured as much as 100 billion of Debt Financing and enlisted the help of two more large private equity firms. You dont want to miss the exclusive interview with broadcoms ceo thats going to be on squawk on the street. The big question is whether a deal like this would be the trust of regulators. That is something that i imagine hock tan will be speaking about. Theres a multibillion dollar announcement taking over csra is being taken over for 45. 75 a share csra had closed at 30. 82 p 30. 8r share on friday. The weinstein woes continue. New York Attorney general Eric Schneiderman yesterday said he had filed a suit against Harvey Weinstein, his Brother Robert and the company itself the suit alleges that executives and the companys board failed to protect employees. More than 70 bill have accused Harvey Weinstein of Sexual Misconduct he denies those allegations. Its a group of investors but snydermans lawsuit has the allegations on hold. In the statement, weinsteins attorneys told cnbc that we believe a fair investigation with mr. Snyderman will investigate that many of the the dow and s p are coming off the worst day in years mike, we know that theres corrections and theres bear markets. Yeah. I guess we could do a study on how many bear markets there have been and how many corrections there have been and if theres been twice as many corrections as bear markets, then you come to the conclusion or three times or whatever yeah. That not all corrections lead to bear markets. Thats absolutely true. Probably most of them dont. I think 1 3 of corrections have ultimately gone into a bear market youre kind of fouled up if you go way back in the 30s because you were up and down 20 all the time the weight of the evidence says this is a nasty correction the features of this selloff that make it a little bit more seem like a correction than the start of a bear market is its the sharpest, in other words, the quickest 10 drop from a record high ever or in 80 years, since 1928 wow. What does that mean it suggests thats more net positive because bear markets tend to kind of the market weakens. Theres a long period of higher volatility before a bear market, a prolonged period of weakness where youre going down more than 20 starts up its been obviously all of this volatility trading and the market trying to come to terms with higher Interest Rates were resetting valuation, sentiment and investor positioning from over stretched levels at the end of january in a very compressed way. And thats what happened here. It doesnt mean this correction is over even though fridays reversal to the up side had a lot of the features of what youd want to see for a pretty good test of a trading low i do think you have to be prepared for this phase to last a little bit longer, but its really unlikely because you didnt see anything systemic coming out of this you didnt see the credit markets throw a tantrum. You didnt see earnings estimates start to flag. It really did not seem to be something that it was an economic shock so i do think its about what the market is willing to pay for good fundamentals right now and to see if in fact its up and away with Interest Rates or if were panicking in advance of the real pain. If youre going to design a way to ring sentiment or if things get too bullish and we know that that can be a bearish thing when people are too complace complacent, if you want to ring that bullishness out of the market, typically the way to do it is very sharp, deep, fast correction. Right. If its water torture where just over time its down 50 points, everybody is like you get lulled into hanging on. Absolutely. You never get that scared. Absolutely. That ends up at 20 if you go really quickly yeah. In a hurry it undercut a lot of the assumptions that people had for staying in or buying in in january, right because you hadnt been down 1 in a day in how long the longest streak with 3 all of a sudden it gets turned upside down. The counter for that is we havent had people to have time to say, this is something scary. I think personally theres a little bit too much focus on the technical, mechanical volatility stuff. It excuses people from thinking maybe this isnt just a glitch theres Something Else going on. Right thats nitpicking reversion of the mean we knew was coming. Without a doubt all you did is get back to november or so at this point mike, stick around. Were going to continue this conversation joining us right now is uri timber, with global macro in the global Asset Allocation Division Chris burtleson is here. Good morning to both of you. How are you i will start with you, uri. Is the pain over as youre listening to mr. Santoli here . Yes i agree with mike. The market ultimately this comes down to valuation, and the two problems that the market had from last august until two weeks ago was that it ignored signals from the bond market, and it actually made me think a little bit this is starting to look like 87 the other part was obviously we had a big earnings boost from the tax cut but the market rallied well it rallied well beyond that. You know, the s p was 450 points but 200 points was justified by the earnings gains and the rest was multiple expansion at a time when multiples were already super, super high. The other part, of course, bond yields went up 80 basis points, 85 basis points and the market ignored it we have four things going for us the stock market is listening to the bond market which averts i think an 87 repeat. Two, weve given back 2 pe points so that extra froth in the market since last august is gone c, earnings of course are a really good story and probably will continue to be and, d, i think the bond market has largely done its job in repricing what the fed is going to do. You know, near 3 on the ten year is consistent with four, five more hikes and i think thats pretty reasonable and certainly a lot better than last august when the market was pricing in only one more hike. When i put those four things together i see a market that is much more in balance than it has been. Chris, a, youre in agreement with that, but i want to throw in the issue of multiples into this conversation, which is to say were still hanging around, say, 17, a little over 17. Doesnt have to come down i mean, if you think on an historical basis we were living at 16. Right you know, it would be great to see the market at 15, but i think times are changed. 17 seems to me to be reasonable, particularly as jurrien said, it comes down it gives investors an opportunity. I looked at the correction since it was so short and sharp as being more mechanical and i think illconceived volatility products that people had a sugar high on. When will they ever learn . I think that was a part of it. Robo advised rebalancing where these robo advisors dont hold widows hands and it winds up to be a mechanical thing. Also i think a little bit, algo trading, you can put in bitcoin and Everything Else into it. I think really what comes out of that is that it only benefits a few investors, all the Algorithmic Trading and smart beta rebalancing so those really exacerbated what we had sure were due were probably due for another one, but i think it was very mechanical jurrien, what would you be looking for here lets say the market tries to have a recovery, go sideways, maybe last weeks lows get tested or Something Like that. What are the indicators you would like to look at in terms of the character of any rebound that happens from here if you look at the garden variety sharp correction in a bull market, which i think this is, you fall 10, 15 to the 200 day moving average, which is exactly what happened on friday. You bounce you know, the decline from top to bottom is 340 s p points you retrace 1 3 to 2 3 of that so you get back up to whatever, 27, 27. 50 on the s p and then you chop around for weeks, maybe even longer. There could be a retest of the low at some point, but, you know, i think the market has gone straight up 52 from the beginning of 16 until two weeks ago with record low volatility that is not a sustainable path and so my sense is now that economic momentum is maybe peaking a little bit when you look at the pmis in the 60s. My sense is that the markets going to be more of a twoway street here chopping around, still going up but, you know, valuation really is the issue here, and my sense is that were going from a market that where price went up more than earnings to one where price maybe goes up less than earnings and fortunately earnings are growing at 20 so thats not a very high hurdle, but i think the market goes up in a little bit of a choppier way and allowing pes to contract here as they normally would be during a later stage of the economic cycle. Chris, what are you doing with your money this morning were rotating into those areas that are actually low pe and cheaper. So anything thats infrastructure, commodities i think, copper, whatever, maybe pick up some oil stocks. I think that makes a lot of sense, and stay away from the high pe. As hard as it is, start to sell some of those tech leaders. Were going to leave the conversation there thanks, gentlemen. Appreciate it. Thank you. Thank you. Coming up, bitcoin bouncing back by nearly 50 since dropping below 6,000 a week ago. Really that happened last week . I dont have it on my screen yes. Call on the cryptocurrency from one of bitcoins biggest bulls, hes next the futures right now have been up more than 200 for most of the session were up 287 on the dow now. 29 on the s p. Nasdaq indicated up almost 69. Youre watching squawk box on cnbc whos the new guy . They call him the whisperer. The whisperer . Why do they call him the whisperer . He talks to planes. He talks to planes. Watch this. Hey watson, whats avionics telling you . Maintenance records and performance data suggest replacing capacitor c4. Not bad. Whats with the coffee maker . Sorry. We are not on speaking terms. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Welcome back to squawk box, everybody. Weve been showing you the futures this morning, and they are indicating a higher opening for the dow up by 286 points lets also take a look at the tenyear note which is yielding 2. 882 thats what people are watching closely, too, trying to figure out if theres potential for inflation coming thats part of what spooked the markets. Well get a read on that on wednesday with the cpi, Consumer Prices well see how hot inflation has been, too. Cryptocurrencies are seeing gains after being down most of last week. Joining us is brian kelly. Hes the founder of b. K. Capital management and a cnbc fast money contributor and, brian, all this talk of additional regulatory scrutiny really drove prices down pretty significantly last week. Was that a valid concern and a valid selloff . Well, you know, the regulatory scrutiny and or crackdown really came from asia. In terms of bitcoin and cryptocurrency south korea first south korea, china. Cftc. Right thats what turns things around. Imf. Thats whats interesting sec and cftc meeting in front of the Senate Banking Committee Really turned things around. Particularly the one line, we owe it to the next generation to foster this. Meaning were not going to stamp it out. Not going to stamp it out rightly so, they have concern for fraud. This is a grand slam this is a new way to raise capital, a new asset class and we are going to be protecting the public and fostering innovation. I heard somebody whos active in cryptocurrency last week saying we shouldnt be calling this cryptocurrency. You cant go to the Dunkin Donuts and buy a coffee, you cant go to a hotel and pay for a room this is a crypto asset. Right thats why my fund was called the Digital Asset fund this is broader than just a currency im making a bet that this is a new asset class in general youre going to have eco smart commodities, youre going to have stuff like gold you will have a Global Digital currency, im not convinced its going to be bitcoin. History of tech tells us tech disrupts itself. Andrew was asking you this in the commercial you want to ask him. This was an interesting point. Which part . Is there a point youd sell i said is this going to go to 1 million because weve had some people come on and say bitcoin is going to be worth 1 million. You said you would be happy for it to get to 20,000. Im a trader. I bought some at 7,000 at 20,000 why wouldnt i take a little bit off that being said, it doesnt mean im less bullish bitcoin at 20,000 you can come up with crazy projections. Is it going to a million maybe. Theres a lot of room between here and a million. So we talked about bitcoin, bitcoin, bitcoin whats more interesting than bitcoin now . Of the currencies out there that you think have the most opportunity yeah. Theres kind of two big themes for 2018 first of all are the platforms we talked about aethereum when i was here theres eos and neo. Anything that can be built on top of and that you can issue an asset on top of. To me that leads into the second theme where were going to have securities tokens. You see what t0 is doing. I dont see what t zero is doing. The big theme is youre going to have these tokens which are now Crypto Assets will be equity will represent equity in startups thats effectively what these icos have been t zero is creating an exchange to trade them on register with the sec, full regulation now youll be able to buy into startups but it will be an equity portion its the mashup of venture capitalism and Capital Markets that seems to get more regulated more quickly than anything else youve talked about so far. It is regulated theyve gone to the sec and said regulate us like any other exchange out there these are equities lets follow the rules like Everything Else. When you start regulating, what does that drive out if youre trying to get rid of fraud and eliminating people using it for bad trafficking how much pushes out. It does what are you talking about . Particularly with the Crypto Assets, youre not talking about as much as you used to there are some that are privacy centric where you cant necessarily tell where things are going. Those are being used on the dark web, but in terms of the asset class, if you have a crypto equity, lets call it, that is unlikely to be used on the dark web. How much of your pot of your assets are in crypto stuff a lot like like 20 , 40 . Oh, no, more like 90 . Wow. But im making a big bet. I run a fund i have money in that i have investments elsewhere im making a big bet on it. You see your total net worth swinging 10 , 20 on a weekly basis yes. With these moves were seeing. Youre comfortable with that . I am comfortable with that. My recommendation is take 1 to 5 of your investable assets 5 if youre very risky, 1 if youre not that risky. You can spill water on the desk too, while youre at it. Brian, thank you for coming in. Thank you we will clean that up in just a bit. In the meantime, another big oops for wells fargo the banks latest misstep coming up next. I thought they would play Britney Spears right about now oops, i did it again, both at what happened here at the table and Everything Else. Take a look at futures dow off 312 points nasdaq off 75 points i didnt say off, i said up 75 ints stay tuned youre watching squawk box. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. daniel jacob for every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts to about 10 pounds of Carbon Dioxide every week. malo hutson growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. Then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. Who knew asphalt could help save the environment . Welcome back to squawk box. Making headlines this morning, oxycontin maker Purdue Pharma is cutting its sales force in half and will stop promoting opioids to physicians. Pharma companies have come under fire for the way theyve marketed addictive painkillers theyve been sued by at least 14 states accused of deceptively marketing opioids to generate sales. Another misstep for wells fargo. The bank has been trying to make amends to customers who are forced to buy Car Insurance they didnt need. Wells fargo says 38,000 customers mistakenly received a letter that didnt contain a refund one noncustomer was sent a check. Wells fargo will work to ensure customers get the appropriate communication. Another its like every day every day theres a headline with these guys. I dont understand this. All right when we come back, we have more of this mornings top stories, plus a new oil report from opec just hitting the tape. Well bring you those details next as you can see, wti up by 1. 6 back to 60 at 60. 20 a barrel check out the u. S. Equity indicating a higher opening. Aqp futures 330 up nasd u78 and s p up 35 looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. And the nx hybrid with a class beating 31 mpg combined estimate. Lease the 2018 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing everyone has a thing. That binge watch over the weekend thing. More checkingin or checking out things. That tripledouble thing doing it yourself or tagging a friend thing. More revolutions in the making thing. That play like a girl thing. That fourlegged friends thing. At t gives you more for your thing. More entertainment, internet, and unlimited plans. More for your thing. Yeah, thats our thing. Good morning, everybody. Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. The equities are indicating another steep open the dow up by 317 points it looks like the s p would open up by 32 points here the nasdaq up by 76. Lets get to some of the stories that are front and center this morning. 21st century fox says it will maintain the independence of brittains sky news for at least five years if it is allowed to buy the 61 of Parent Company sky that it doesnt already own. British competition officials are opposed to the 15. 75 billion purchase they said they will make a final determination by mid june. Puerto rico suffered a setback in trying to restore power. An explosion caused a widespread blackout puerto rico is still struggling to restore full power after the devastation of Hurricane Maria half the island is still without power. Universals Fifty Shades Freed topped the box office. It took in 38. 8 million in north american ticket seals. Peter rabbit was second with 25 million. New this morning, opec just releasing its monthly oil markets. Jackie deangelis has the details. The headline, production went down slightly in january but, still, over 32 Million Barrels a day. Now production in saudi arabia up a little bit, higher in iraq, too. Iran a little lower, venezuela lower as well. Opec towing a line on the promised production cut. The question is, does it matter . After last weeks wild ride with equities crude touched correction territory dropping from over 65 just a couple of weeks ago to 58 and change at one point. Why that dramatic drop well, slight increases in the dollar index u. S. Production topping 10. 2 Million Barrels a day. Equity drops that made investors pause will the demand be there to fuel this rebalance now what about opec . Will prices drop more . Is there anything the cartel can do to further support this market probably not cuts have been pretty painful. One of the turning points was when tax reform was announced, a i balance in stocks and a belief that it was changing enough to absorb the excess supply now doubts that that might not be the case. Mid 50s, not out of the question as you can see this morning with the bounce in wti prices, stocks are going to drive crude prices in the immediate future, guys. Very weird. Very complicated were going to talk about it, now, jackie, because everything is interrelated. Everything seems to key off equities but then the equities were keying off currency supposedly in the first place which are keying off bonds. Right. Lets try to figure that out. Lets at least talk about it lets talk more about commodities and currencies joining us is neck benebroke matt smith is head of vest at delivered no, you wear a vest never with the jacket, matt. It works for you thank you nick, i want to start with you. The dollar had something to do with the nervousness with equities and related to the ten year it all seems related what i dont understand if yields are going up why isnt the dollar stronger. You point out that the slope of the yield curve makes potential hikes by the fed less supportive of the dollar . How does that work is there any way a layman can understand that . You have a dwubl edged sword. Its just not as powerful as the dollar as some of the earlier increases. So any reason to be bullish on the dollar on the index or versus the euro or yen what do you see in the next six months and how will that affect equity prices . During this period of extreme volatility, we see the dollar up the yields were substantially higher the dollar still out performed the dollar is going to go down, the euro and some of these other currencies are going to go up. The main reason to be positive on the dollar is if you get unsealed markers. Then all of this relates, matt, if the dollar goes down, oil should be going up why did oil come down as the equity markets got volatile . Well, last week, joe, what we had, as you said, there was a flight from risk crude was wrapped up really in that Broader Market sentiment. As we saw the dollar rally, we saw crude come off we also saw the situation exacerbated by these net long positions really strong in terms of hedge funds as oil prices moved lower we saw this kind of Snowball Effect as some of those bullish bets were unwound. Thats why we sort of dropped 10 last week, the biggest weekly drop weve seen in a couple of years there. So is it about asset flows and people liquidating positions and, therefore, it affects the oil market is it about a weaker dollar or a stronger dollar immediately causes oil to be sold or is it just risk off that people just take profits and everything . Its hard to see the exact correlation with when you get a very volatile stock market i dont know how you predict what happens in oil or currencies at that point. Well, thats right, but i think in times of crises you see oil assets correlate we saw this flush out of equities so we saw that flush in crude there as well, but what weve seen this year particularly, joe, is oil being used more as the inflation hedge and thats why weve seen the rally up to 66 so far this year. You see why that makes no sense. If the you know, if the stock market is going down on Inflation Fears and oil goes down at the same time. Oil should be going up if inflation is coming back and its a hedge but it just gets thrown out its like the baby with the bath water. Gets thrown out when people take risk off the table in general, i guess. Is that how you explain it yeah, thats fair, but then again as youre seeing here, equities are rallying. Weve got the dollar weakening youre seeing crude getting a bit of a bump up again today all of these things are interlinked, arent they yeah. I think its all linked. Theyre linked and then we talk about the fundamentals of each its hard to separate the two. Whats your get back to the dollar, nick what is your objective on the euro or the yen by year end, do you think . Will we go back to 130 on the euro well be 130 to 135 for the euro i mean, the ecb towards the end of the year will be changing its monetary policy. The yen, doesnt look like anything going to happen there smaller gain on the yen, probably 1. 07, 1. 08. Not too excited. You saw what happened when an Administration Official said they wouldnt necessarily, i dont know what, maybe he wasnt you know, maybe we made too much of the dollar weakness story, but we dont care if the euro goes to 1 point be point 35 . Will that be so good for our trade picture that we dont care that the dollar is weakening like that . It seems like a large move, but i think if you look at the sensitivities of the economies, exports and so on, i dont think its overly dramatic for the u. S. And overly dramatic for the euro if that happens steadily over the course of 12 months, think well be okay. Whats the dog and whats the tail if computer traders decide theyre going to do something with the market, thats going to affect currency and oil . Right now i think the currency is the tail i think its equities and yields that are the dog thats wagging the currency. Whats first, is it yields . No, i would say its equities equities one of your previous guests was interesting. You know really . We always have a quick which one well invite him back . All of them we always have a quick decline we always have a quick decline i think this next week and the week after is going to be important with whats going to happen with the equity markets you see the sharp forward and then some stability. We have one of the guests talking about how we were feeling priced if we return to relative calm, thats going to return to relative softness. Nick, matt, thank you as well seriously, do you remember which one . He really wants to know we will invite this guy back. Its rare. Looking at the blood type the blood guy. That reminded me of leaching. I want to bleed you. Its cool you have no idea what theyre doing. Yeah, but theyre figuring it out. I would like to know. He does, too. He thinks in five years its a source. He wants to figure it out, too. Ill tell you what. What . Monkey blood. Try that just get a as a cocktail big transfusion of monkey blood. Maybe it will work. Then and now. Were going to head to south korea for a look at how the economy there has changed in the last 30 years since the last Olympic Games were held in the country. Carl is there and well come back to him in just a moment. The futures are looking up this morning, triple digits in the green. Dow up 315 points. Well ebe back in a moment. Sometimes, they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. So thats the idea. What do you think . I dont like it. Oh. Nuh uh. Yeah. Ahhhhh. Mmmm. Oh. Yeah. Ah. Agh. Ddd. No. Hmmm. Uh. Huh. Yeah. Uh. Huh. In business, there are a lot of ways to say no. Thank you so much. Thank you. So were doing it. Yes. Start saying yes to your companys best ideas. We help all types of businesses with money, tools and knowhow to get business done. American express open. Some moments can change everything. One. You cant always predict them, but you can game plan for them. For 150 years, generations of families have chosen pacific life for retirement and Life Insurance solutions to help them reach their goals. Being ready for wherever life leads. Thats the power of pacific. Ask a Financial Advisor about pacific life. Today, the new new york is sparking innovation. You see it in the Southern Tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. Which helps improve every aspect of advanced rail technology. All with support from a highlyeducated workforce and vocational job training. Across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. Happy monday morning, everybody. Welcome back to squawk box. Weve been watching the futures this morning and they have been indicated higher right now dow futures are up where theyve been most of this morning, just over 300 points higher s p futures up over 31 and nasdaq will open up by 74 points here weve been watching the treasury market the yield on the ten year at least at this point. Its been pretty consistent this morning. Around 2. 8 yeah, 2. 88 . Now its at 2. 891 thats something well be watching closely. The olympics are being held in korea for the first time in 30 years how did the economy look then and now . Carl is at the games walk us through this how are things today versus then reporter its amazing, becky. The summer games in seoul in 88 were a very big deal and helped korea start its merge against as a world exporter. I heard you talking about trade. Gdp in 88 in korea, 200 billion. Today 1. 4 trillion. The stock market, the kospi has gone from 651 back in 8 to 2407 i dont know if you recall, stars were flo jo who won three golds. Carl lewis won two golds and thats the year that samsung became an olympic sponsor. They now have a massive presence here in olympic park which were going to show you later on this week you might also be aware that samsung is responsible for about 1 5 of all korean exports. Samsung on the World Trading stage is pretty remarkable as far as competition goes this morning, keep in mind the name maria nagasu, the first woman ever to land a triple axle in olympic competition. She made her olympic debut back in 2010. She missed sochi last night she was the second highest trending topic in the world. So congratulations to figure skating for taking a bronze. Medal board continues to look pretty good for norway theyre in the lead although United States tied for fourth with the netherlands well see that change over time, of course, as the events start to lean in our favor as we take a lot of medals in different kinds of games later on today well talk to a bunch of stars, Chris Mazdzer won the silver in luge the 17yearold red gerard who took the first gold. 55, 115 pounds from silverthorn, colorado. What a story and what a morning hes having here, guys i just had deja vu, carl. So i havent watched everything. Youre over there. Is norway, is it the speed skating again . Or is it the shooting, right . The ski and shooting. No, you remember the speed skating guy that got in a big tiff. Oh, i forgot about that. Yeah, thats what im talking about. Is that what it is, again, carl . He loved his speed skating were no good at anything else because of football. The coach and joe got into a little bit of a back and forth. It was a big deal in norway speed skating is responsible for no winter event has contributed more to u. S. Medals in history than speed skating. So i have no idea what hes talking about. But is that what what is norway winning is it like becky said . Ive got to look. I imagine its a bunch of in order dick, some downhills, things like that. Hencethe nor in nordic. This guy was like, yeah, you guys are what did he was it our uniforms . People thought there was drag on the uniforms. Lillehammer. Under armour. They ended up keeping under armour. Yeah. They kept under armour. They went and redid the uniforms were going to get a better look at those over the coming days. He was disparaging our whole system over here because were so focused on football i dont know if he saw that great super bowl i guess he probably didnt he likes to watch them go around and around and around and around i dont know i guess thats okay. You know what norway is winning in curling doing real well. They came in second. Thats a cnbc thing so im not going to say anything bad about curling and we tried it. We fell flat on our and curling is one event for which we have never won gold. No . Along with things like crosscountry skiing and luge, actually. So you tweeted out the picture of the luge guy. Youre hanging out with him. He was here a moment ago. Financial planner yeah, he wants to be a Financial Planner and life coach but part of that is getting his Financial Planning certificate and he bought bitcoin and exited because he said its like vegas, youve got to lose to win. You have to know when to walk so apparently hes already liquefied his bitcoin holdings. I love the trivia you bring up we need to remember. No, because im also looking up south koreas top ten export samsung and Hyundai Motors another one thank you, carl great to see you. Okay, guys. Coming up, the s p tech sector down more than 4 last week it did finish well off the close. Are there opportunities in technology we will ask veteran tech investor paul meeks. Hes next. Futures continue to be strong, strong this morning. Stay tuned bcquk xn ching sawbo o cn mom, dad, can we talk . Sure. Whats up son . I cant be your it guy anymore. What . You guys have xfinity. You can do this. Whats a good wifi password, mom . You still have to visit us. I will. No. Make that the password you stillohave toovisit us. Thats a good one. [ chuckles ] seems a bit long, but okay. Set a memorable wifi password with xfinity my account. One more way comcast is working to fit into your life, not the other way around. Welcome back to squawk box. Is the tech tide turning thats the question the sector lost billions in value paul meeks joins us. Hes chief investment officer. Good morning to you. Good morning. Weve had a number of guests this morning come on and say, you know what, if youve got to make a play, rotate out of big tech rotate out of the faangs you say what well, about a week and a half ago i was on air and i suggested that people under weight the sector and as far as the comment about taking some money off the table in the faangs, that might be appropriate overall i think there are great opportunities in tech beyond the faangs. Lets talk about where you think the opportunities lie. Maybe before we do that, specifically are there certain we talked about the faangs broadly obviously thats only a handful of stocks. Are there any in that group that you would want to hold on to well, hold on and buying them fresh are two different things, but as far as my favorites right here, i continue to like amazon. Their total available Market Opportunity is enormous and growing larger i think the under performance in facebook even before they reported their quarter was not justified and i actually think i could buy facebook well before i buy snap and twitter any day of the week i think the other smaller Digital Advertising companies are short. Out of the faangs, those would be my two favorites. The other stocks you think are going to perform i think its a real interesting opportunity brewing in semiconductors within the technology sector. Those stocks have been hammered and, again, they were hammered well before recent quarterly reports. I particularly like micron micron put up a 2. 75 eps. Thats annualized to 11. The stock is trading four times below earnings yes, its a commodity memory chip company, but on the other hand i think that this cycle is going to last much longer than folks think. Thats my best idea. Where are you on stocks like nvidia i was watching jim cramers twitter feed if the market dips today, get yourself over there . I do like nvidia. I think as a play in gpus i had a probably go instead with Advanced Micro Devices just instead of the relative disparity. I own some nvidia. I wouldnt buy here. Its very expensive. How would you think about the broadcom and qualcomm situation . The ceo of broadcom is going to be on squawk on the street at 9 00 this morning. Interesting play. Qualcomm i probably would buy because heres the situation even if they get close to the 82 pick up price, theres limited down side in qualcomm and nothing lights a fire under management as much as potentially losing your job. I think they will do everything they can it might be an interesting play here. Thats not a call on the deal taking place, thats a call on kwa qualcomm getting its act together to the extent you believe they havent its a little bit of both i believe the pressure to get the deal will get them going as the price goes from 70 to 82 even if they fend off the deal, they have to make some moves to improve their fundamental base to more broadly diversify away from wireless chips and into internet of things chips and i think they may not be great at doing that, but i think theyll have some gains. Meantime, stock pays 3 or 4 dividend. What do you think of snap and twitter which has much better than expected earnings last week and all of a sudden people said, have they turned a corner . Has something happened here . I am still skeptical, particularly that snap is in the middle of changing their business plan. Until further notice, what i would do is every time someone thinks about buying snap and twitter, slap yourself in the head and buy more facebook or google. Final question, where do you land on tesla . Thats not a tech name but tech land talks about it all the time the interesting thing about that is if you were to black out or redact the statements with elon musks name out and ebs out, if you take a look at this company on a fundamental basis, its the ultimate short. However, i wouldnt short it that means i also wouldnt go long because elon musk, frankly, is such a salesman thats his genius in my view even more than being a technology visionary. Paul, thank you always great to see you, sir. Thank you. Talk to you soon. Wonder if elon would take that as a compliment rather than a genius, hes the ultimate salesman i dont know. I dont know both hes aloof when we come back this morning, the great debate is a big part of the market story blackrocks chief Investment Strategies Jeff Rosenberg will join us. Stock markets look like theyll open up. Dow futures up by 300 points s p up by 30 and nasdaq up by 68 stay tuned, you are watching squawk box rig he cc. Hteronnb your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Stocks surge the dow pointing to a triple digit gain and then some at the open after a wild week on wall street well talk Market Strategy with blackrocks Jeff Rosenberg coming up. Trumpononics dan sullivan joins us on set. Plus, a warning shot to big tech well tell you which megaadvertiser threatened youtube and facebook to clean up its content or else. The final hour of squawk box begins right now live from the most powerful city in the world, new york. This is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen along with becky quick and Andrew Ross Sorkin lets get a check on the futures this morning we like to do this, get an idea where the opening is indicated i have no idea what it will be by the end of the session, but were about 300 so far premarket on the dow. S p up 30, nasdaq up over 70 in europe, theyve got that nice bounce back we had on friday here and the positive sentiment this morning as a result, nice gains across the board in germany, france, england, italy and spain then treasury, all up over 1 . Germany up almost 1. 5 treasury closing in on the 2. 9 level on the ten year. You know whats after 2. 9 . 3. No, 2. 91. No, 2. 9111. Yeah, youre right. One of these days. One of these days possibly 3. A little bit of deal news. General dynamics buying csra the price tag 40. 75 per share in cash. That deal worth a total of 9. 6 billion. That includes 2. 8 billion in assumed debt also making some headlines this morning, qualcomm and broadcom reportedly going to be meeting on wednesday qualcomm raised its cash bid and secured as much as 100 billion in Debt Financing for its hostile bid and enlisted the help of two more large private equity firms you dont want to miss the ceo of broadcom will join the gang in an exclusive interview at 9 00 a. M a lot of questions about the antitrust issues also, the number of jobs that are ultimately going to get lost when you think about the sort of large numbers that people are talking 10, 12,000 people, engineers. We talked about. You were here last week when we had this conversation. Yeah. Yeah well see what he has to say about that. You missed it there was somebody waiving behind you. Sfwhapd. She went away. Our plan was to be on the ground floor in times square any time anybody acknowledges were here and stops they jump off as quickly. This guy is on the phone. Yes, these are real people behind us. Hi. Yeah, someone look at us you want to be on tv. Any time they do anything other than what carl did at the olympics, fireworks. I tread lightly showing people who are Walking Around times square. Theres crazy stuff. We didnt plan to be on the ground floor. You know whos always naked out there . Who elmo. Because elmo under his furry elmo is always naked, isnt he hes covered in fur. There are painted statue of liberty people that i think are naked. Those are the desnudas. Painted on clothes. Little chilly this time of year. It is it is. Probably get more of that in the summer something to look forward to. In the meantime, it is a busy week for data on wednesday you can look for january retail sales and cpi thursday well be getting the jobless claims ppi, the philly fed survey, Industrial Production and National Association of home builder survey friday, housing starts, import prices and consumer sentiment. The fear of rising prices is what weve seen. Steve liesman joins us on what happens when rates rise and well be getting cpi and ppi that will give us a good indication of whether this is something we continue to worry about. The market needs some actual data rather than virtual data to trade on but youre right, becky. People are calling this the big rate scare thats why stocks sold off so we went back and looked at six periods of major rate increases in the 10year treasury to see what happens to the stock market if you wouldnt mind coming over here, take a look at 1993, 94 during the time of the rise stocks were down 1. 5 . Thats not true for the rest of these. We have some powerful gains in stocks while rates went up take a look at this time here, 98, 2000, up 44 . You remember that time it was kind of crazy going on here to 03, 04. You can put up the rest of the numbers. Pretty powerful. Even the one here, 21 i do want to show you this thing, whats happening is stocks are going up in the context of lowering rates. You have these bumps up in rates, but ultimately rates are coming down. This recent bout, even though its a low rate, pretty strong rise, 150 basis points total during this time now well look at the next piece of this, which is what happens six months later and there you see the returns are not quite as appealing. Going back to 13 . That was good. That was the down the down period now take a look at the rest of these. A little bit more lackluster six months after rate rises. You see 8. 4. Who knows what happens there lets put it all together. What happens when you do it . The average yield that weve tracked here is 211 basis points, 2. 11 . The s p goes up an average of 26 . What about the next six months not quite so sexy. Just up 6 in general, guys, what we see is the biggest factor of all of these is rising gdp. Thats the thing that tends to send yields higher, becky. Rising gdp, meaning a strong economy, meaning rates are going up for good reasons. Not inflation, by the way inflation tends to go down during these periods the fed in the earlier periods goes up afterwards all right steve, stay right here because we have another guest to talk to us about all of that he knows a lot. He does Jeff Rosenberg is blackrocks chief fixed income strategist. You heard what steve kind of laid out about what to expect with the stock market. I guess the biggest reason is why are rates climbing right now . Is it for good reasons because its a growing economy or is it for bad reasons because Central Banks are going to stop buying quite as much, not going to see other buyers step in or youre worried about deficits what do you think has been happening . A number of things have been happening, becky i think the change most recently if we focus on just the last week is really the change in the budget math. And what most economists have been focused on was the impact on the tax reform. There was a lag in terms of bringing up forecasts to reflect that, and now you have this much bigger than expected and much more than what had been priced into the markets in terms of not only the Economic Growth impacts from the budget deal, but also for the markets this has to be financed so the supply side is a lot bigger than weve seen happening at a time when the fed is pulling back so that the net impact, the combination of supply going up and the feds support for that going down means a lot more issuance. Thats why youre seeing a steepening in the curve and rise in real Interest Rates. Jeff, that makes sense logically. I can think it through the rise we saw in Interest Rates happened before that budget deal. That was the end of the week last week. All of this big movement that we had seen kind of predated that. Oh, absolutely, becky, but what happened last week, which was really interesting, was the acceleration in real Interest Rates. So you mentioned this week we get a cpi number going to have a focus again on inflation. Inflation expectations were part of that earlier rise but whats happening now is a bit more of concern around the supply demand imbalance. You saw a bit bigger increase in terms of Interest Rates. I dont want to over state that it was just the supply picture youve had growth and supply, the impact of tax reform, but on the margin last week i think the supply picture really caught markets attention. Were acting surprised that the Interest Rates ever finally getting towards 2. 9 man, it has been a Long Time Coming the economy has been doing very well shouldnt we feel a little better about all of these things we should feel better about it what steves piece goes through is that a lot of times when Interest Rates are rising as your opening question is about, its a good sign its a sign of growth in the economy. The issue this time around, which is really different than any of the historical experiences as steve was talking about, is really coming off of very unique period, a period of global Interest Rate what we call financial repression, zero Interest Rates, quantitative easing sitting on the back end of the yield curve, very flat term premiums. The realization in markets that that era is ending and the transition to a much higher, more normalized Interest Rate environment is a bit of whats causing some of that volatility in the equity market i know steve has a question for you, too steve . Jeff, im trying to fund my retirement off of collecting 100 from everybody who wrongly calls the end of the bond bull market, and that has been true i dont know about the chart back behind me, but that has been true throughout this bull market while the thing has declined if they have the other graphic is the one i was looking for there, but its been a steady decline in rates. This piece does look a little different, but, you know, its the context has been rates have come down, down, down even in the context when rates have risen in between that. So whats your call here, jeff is this finally the end . Is this little piece were talking about right here the end of the bond bull market . Im not going to go there im going to keep my 100 in my pocket, steve. Its a fools errand. It is. Because people get confused between the secular moves and what may still be lower rates if you eventually hit into an environment of the end of the cycle. Were not talking about that any time soon, so this is going to feel like higher rates we think higher rates are here for a while and the supply side stuff that i just talked about, very good backdrop for notonly u. S. Growth but global growth. This is the opposite this is what i put in my outlook piece for 2018 this is about fuel for overheating and about how the next cycle occurs is not through too little growth and recession but through too much first so its going to feel like higher rates for a while. But you dont think that the fed is going to raise super aggressively this year you think that this is something that they kind of wait and monitor and this is more of a 2019 story absolutely. This is not about the fed. I mean, whats happened in the last week, the front end has been relatively sanguine its about changes in expectation for supply, changing in the term premium, change in the impact on global monetary policy, impact on that term premium coming off and so seeing a steepening but not necessarily the fed accelerating because theres really not a huge inflation component, a huge inflation scare. Inflation is coming back to trend. The feds going to want to see that theyre going to embrace that. The market hasnt really moved off the three to four hike pace. Thats our expectation as well. Which means what for investors . What should they be doing if these are people considering one of the most important things that it means, this is a bit of the challenge here for looking at riskier assets is that pricing in that normalization in the fed has restored some value to save assets seeing a 2 Interest Rate on a twoyear treasury is something we havent experienced in a very long time. That restoration of some safe alternatives is something that investors can be looking at. And i think as you see more volatility and a revealing of how much risk youre actually taking to generate some of the returns and some of the income, taking another look at what is now available in the safer part of the market has certainly increased in terms of its relative attractiveness. Jeff, thank you for joining us today its good to see you. Good to see you thanks, becky. Steve, thank you, too pleasure. A lot still ahead. Up next, pharma. Pharma in focus. Will President Trump take aim at pharma alaskan senator dan sullivan joins us on set to talk about the president s budget and rebuilding america plus, were continuing to watch the futures which are strong and sharply higher this morning. Just turned up 300 again on the ayw jones. St tuned youre watching squawk box on cnbc oh, and theres the closing bell. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. Welcome back to squawk box. Check the futures again. We did it on the way out, but they just moved back into 300 plus territory 306 now on the dow strong opening after a strong session on friday. The s p indicated up 31 and the nasdaq indicated up 74 at this point. The ten year was closing in on 3. 9 but then last we looked i think it was 2. 87. 2. 87 on the ten year as you can see there. 2. 878. A little news crossing the wire starboard delivering a letter. The activist invest or Martin Frankel a guest franklin. Franklin. Newell shares are down nearly 40 since the jarden acquisition. Martin franklin will be joining the squawk on the street gang at 10 00 eastern time. The white house will unveil its budget today and a few measures may take aim at the pharma industry. Meg tir rel joins us with more. President trump pledged in the state of the Union Address fixing the prices a top priority many say the first look at trumps potential actions doesnt look so bad for Drug Companies. Much of the focus is changes on the way medicare pays for drugs. Importantly, trumps plan doesnt appear to give the government insurer the potential to negotiate things directly one of the things trumps plan may do is change the way rebates or discounts paid by drug makers are distributed getting applied directly to the cost of the medicine rather than being distributed to all plan beneficiaries. While this may reduce what those patients pay in copays, some say it could increase what everyone in the plan pays in premiums the focus brings another group into the spotlight, pharmacy benefits managers. Those are the middlemen that negotiate rebates and drug prices on behalf of insurers and employers. In a report released friday adds to that pressure suggesting pbms contribute to a system that encourages Drug Companies to set high prices. They dispute it. A lot of people say not so bad for pharma even though it looks bad on its face. Still whats surprising is when a deal gets cut that nobody was expecting to come through, right . We could have something that automatically comes together, nobody saw it coming and here you go. Yeah, certainly thats always a risk if people arent anticipating something a lot of these things have to go through congress and theyve been batted around and havent been super popular its an issue thats arising and people are worried about drug prices. Thank you, meg. Coming up, unilever has some strong words for a few tech companies. Were going to tell you why the Consumer Products giant is telling facebook and youtube it has to clean up its content or else more coming up ds, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Weve been preparing for this day. Over the years, paul and i have met regularly with our ameriprise advisor. We plan for everything from retirement to college savings. Giving us the ability to add on for an important member of our family. Welcome home mom. With the right Financial Advisor, life can be brilliant. Welcome back to squawk box this morning take a look at futures we are in the green this morning on this monday morning dow looks like it will open up 300 points higher. Nasdaq opening higher, 72. 5 points s p up 30 points unilever with a warning to tech and social Media Companies saying clean up your content or were going to pull back our advertising. The message aimed at platforms like youtube and facebook. The company is pushing the Digital Media industry to weed out content that exploits children, spreads false news or supports racist and sexist views. Consumer products giant follows through with the threat, it will be a very big blow unilever one of the Worlds Largest advertisers. And in the same kind of category, younger people are abandoning facebook for snap chat at an increasing rate thats according to a new study out from emarketer that firm says that facebooks user growth is coming from older, not younger users it also expects facebook to lose 2 million users under the age of 25 while snap chat will pick up 1. 9 million users in that age bracket. The market insists facebook will be the dominant social network this year. I think that will probably be changing any time soon also, disney is raising admission prices at its theme parks. Tickets for value days are going up by 2 to 109 a ticket. Regular day admission is 4 more and peak days will be an extra 5 disneyland regular day prices will go up by 7 and peak prices by 11 bucks. Disney says the hikes are aimed at preventing over crowding. Okay. When we return, we are counting down and making more money. Counting down to the opening bell on wall street. Later republican senator dan sullivan will join us on the set. We await the house infrastructure plan and budget squawk returns with all of that in just a moment this is my headquarters. This is where i trade and manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. The entire Community Came whtogether as a whole. T, it was such an overwhelming response to help others. No one thought that they were going to do this before it happened and everyone just did it. I think thats the way that human nature should be looked at. Ill stand by you. Ill stand by you. Wont let nobody hurt you. Ill stand by you. Did you know theres a world of miracles inside our bodies . For example, your eyes can see ten million shades of color. Sometimes, all you need to do is look up. We can hear thousands of sounds from 20 hertz to 20,000 hertz. Our bodies can withstand temperatures around 60 degrees centigrade. Our tongues can differentiate 100,000 different tastes. Nice our noses can distinguish more than a trillion scents. Knowing each one of them thats the tough part. Get out there. Explore. See. Smell. Hear. Taste. Touch. Widen your world. Good morning welcome back to squawk box right here on cnbc were live at the Nasdaq Market site in times square among the stories front and center, we have a few Earnings Reports coming across the tape among them, first data estimates of a quarterly profit of 44 cents a share while revenue topped street forecast Restaurant Brands international, burger king and popeyes, they reported a profit of 66 cents a share, 9 cents above estimates a big boost in consumer traffic at burger king Comparable Store sales rising 4. 6 during the quarter. Do you guys do any burger king no. It wasnt you guys . Gasoline prices are on the rise. The latest lundberg survey shows 7 gallon increase over the past three weeks. The average price 2. 65. Thats 34 cents higher than it was a year ago. President trump set to release both the budget and an infrastructure plan later this morning. Joining us now alaska senator dan sullivan welcome. Welcome to times square. Squawk square. Great to be here. Andrew, good to see you. Good to see you, sir. I saw someone talking about the Washington Post piece. When boehner and obama used to argue about budgets. One would argue about what they wanted done, the other would argue about butter guns and butter. The age old priority list. The criticism in the post is that neither side is arguing that theyre disagreeing to both and that its going to blow out the deficit, i guess should we look at it that way sf well, look. These are hard agreements. Sometimes theyre difficult to vote for i did vote forit my focus was on the guns, on the department of defense. We cut from 2010 to 2016, we cut military spending 25 as the threats to our nation have risen. So to me that was my main focus with regard to this budget deal but, look, youre raising an important point, that we have to get back to strong levels of Economic Growth. We have to have a much more functional budget process, and i think we need to take care of longterm entitlement reform for the next generation of americans to address the deficit challenge. Theres no doubt that this was something that was an important bipartisan deal. My focus was on the defense side. If you were just a normal person out in the hinterlands watching, we thought daca, we thought the democrats really that that was going to be something they were going to hold out for, very important, and then we had the shutdown and then where did it go trump keeps talking about it, but i dont see us getting any closer and they did the budget without daca i thought that was going to be necessary to get to arrive at a budget deal. Wheres schumer . Well, i think one of the important things about this agreement was we did kind of separate the issue of Immigration Reform. They were going to they shut down the government because it wasnt separate. I think when the minority leader Chuck Schumer shut down the government, he realized that wasnt a good move most americans didnt support that even if they did think doing something for the Daca Recipients was important, then youre going to see this week. We have these important issues with regard to Immigration Reform giving the structure of the budget being laid out, the prevailing view is that this whole thing is dead on arrival no debating it its not going to happen. They announce the principles of sale today. In particular, what theyre going to focus on is not just in terms of spending, both private sector and public sector, but the permitting reform. This is the most important thing i think we can be doing. Its what the president s focused on we had a hearing in the Congress Committee a couple about a year and a half ago. The seattle tacoma airport, it took 15 years to get a permit for the runway. Oh, no, it took me 15 years to get my luggage. I flew into laguardia you came into laguardia. Its a permitting issue, not a spending issue. Theyre related theyre related this way, because the more you have certainty in terms of permitting, the more you can say to private sector investors, we can get this permitted in a year and a half or two years, the more money youre going to see from the private sector that will want to invest. And i think thats a critical component thats been missing. Understood that it has gotten really stretched out to these kind of ridiculous lengths you will see some people on the left, senators and house members on the left who will say, wait a second, this is going to thwart environmental protections. Are there enough votes in the senate to do this and are there enough votes in the house when they say we dont want 200 billion being spent on this . Good point. If you look at the u. K. , australia, canada, they do major Infrastructure Projects inside of two years in terms of permitting i have a bill, rebuild america now act, which is all focused on permitting we have all the building trades. Weve heard from some of them. Very excited. They say it takes eight years or longer and that means jobs. These are men and women that build things in america. They are supportive of this permitting reform. Which is where i think we have an opportunity for bipartisan support. Every mayor, every governor sees these problems so i think there is support. When the president talks about a 1. 5 trillion infrastructure plan you think what hes talking hes talking about some federal spending. Im asking you about federal spending. Are you in support of are you in support of federal Infrastructure Spending . Im supportive of some. What kind of number this bill that we just had im about 200 billion or less. I actually think but i actually think, again, the vast majority of this is going to be coming from the private sector if you reform our permitting system that can assure ensure investors that costs will go down and that we can bring these projects online on time and thats where you get the money from the private sector. What do you make of the other side of the aisle will also say, look, we dont want the private sector to own the toll roads we dont want the private sector to own the bridges. Look, its a combination, right . One of the elements of the president s principles on infrastructure today is going to be a focus on rural states like mine, alaska certain states that dont have big populations cant always have the toll roads so theres going to be a set aside of about 25 in this proposal for rural states so to me its going to be a combination of what the government can spend, what comes from the private sector but importantly what we do to fix a broken, dysfunctional permitting system that in my view really inhibits private Sector Development and in many ways state development as well. Where is the heavier lift, in the senate or the house to get the votes for it its in the senate. Its always in the senate. Its always in the senate. But thats why its important to really focus on a bipartisan approach to Infrastructure Spending, which is what weve been doing the white house has been working this on the hill, in the senate for months so hopefully were going to see a good reaction and these principles are announced by the white house today. So its valentines day is coming up. You know whats coming up eventually is november where do you stand with the do you think the house goes . Do you think the senate stays . Do you think neither goes . I hear the dnc is broke but then i hear there used to be a big generic advantage for congressional candidates or democrats. Now the republicans are going to get more i dont know, theyre going to ramp up the benefits of the tax reform legislation. Well, look what do you think it looks like in november whats the Political Landscape the generic ballot is starting to really get about even i think if republicans stay focused on the key issues Americans Care about, what are those, jobs, growth, energy. This is an area where the administration and the congress are now focused. Its an enormous opportunity for our country. You dont think republicans keep both houses if we stay disciplined on those issues and Americans Care about jobs, Economic Growth, energy, Strong National security, i think we keep both houses. Im glad elections are every two years for us i cant believe its going to be november get to watch again its good to know where people stand. You hear where people stand, you watch the media, you hear one thing and then like the last election, it might not be that might not be that based in reality as they tell us it is all the time. Joe, so one thing thats actually very important. You see what is reported on in d. C. And other places. Then you go home i try to get home almost every weekend in alaska. Your constituents tell you a different story. I think that story is typically about jobs, strong growth and national security. When you go back, off camera, keep an eye on putin because you can arent you close . We can see russia. You can see russia from right there. Palin used to keep an eye. I dont know if shes watching anymore. Governor palin used to watch. Youre watching a lot of Foreign Policy and defense experience. Thats exactly right. In alaska were on the front lines of freedom out there protecting our nation, whether its missile defense. Preaching to the choir. Freedom. Individuality at this. Hard work. Cold. Its cold i know. Its nice. Bears. Thank you. Thank you. Great to be on the program. Great to see you. Lets get back to the broad jerel marke er markets dom chu is with us dom, good morning. Good morning, becky so one of the reasons why we wanted to take this exercise to heart was because throughout the course of the current market melees weve been highlighting the bigger market moves from bottoms to topts, tops to bottoms to get an idea of where the most trading activity has been and where traders are battling things out. We decided on this bounce to take a look at the friday trade. We saw that real dip lower only to see the markets close higher. Where exactly do we see most of that buying habit . It turns out 47 stocks within the s p 500 saw large moves from the low to the close by 5 or more so a pretty big swing from their interday lows to where they ended up closing here are some of the names of what went on those trader and investor shopping lists during the dip we saw on friday target shares on the retailer side of things up 5 to where it actually closed maybe some people taking a look at retail names that have been beaten down. Microsoft, megacap technology. Up 5 from the lows to close facebook also on that list 5 rise there and then amazon, we know a lot of folks have been wanting to try to find amazon shares on discount they found a little bit on friday and bid it up by 6 from the low. Another one, cboe, exchange operator, a lot of talk about them because of their Earnings Report and the fact that they own that very popular vix index thats become the center of so much Market Technology concerns about whether or not cboe would take a hit because of the negative brand value of the vix being done in the market today. That played a role in it people bought those shares up by a big amount becky, just an idea. It could be fundamental buying or short coming. These are some places where investors went and took a little bit of a bet on some up side well see if those hold up in todays trading session. After some pretty significant pull backs for some of those names, too they were leading the way down. Exactly if they went on shopping lists maybe there was enough value there or maybe people were covering shorts, we dont know if they play out again today, it might be a tea leaf. Dom, thank you. Lets get down to the cme. Rick santelli joins us rick, weve been talking about where bond prices have been headed looking at almost 2. 9 a couple of times for the ten year thats something to sit up and take notice. I was wondering, when was the last time we were at 3 . Well, we had one close above 3 other than going back to about mid 2011, becky, and that one close was december 31st, 2013 the last trading day of the year we closed at 3. 03. That was it. So basically 2011. I think were going to get there. As a matter of fact, you know, just like in stocks, when youre bullish, you try to buy the dips when youre bearish you try to sell the rallies i think were in the type of i wouldnt try to get all the small points of resistance the market is in a stretch were going to test the december 31st 3. 03 yield close. Its more important to see where the market holds when it goes back down. 2. 63 last years high. Weve held it on an interday basis. For the most part, once we went through weve never turned around i think as long as were in this mode we will continue to stretch the yields higher. Weve been talking about this this morning, trying to figure out the increases weve seen in treasury yields. Is it for a good reason that the economy is doing well, things should be picking up, or is it for bad reasons . People talk about deficits people talk about the Central Banks not being the buyers they were whats happening you get to stand in the middle of it all. I do think that if you look at the balance, whether its our fed or the cumulative balance of all the major Central Banks currently over 16 trillion but a little off its highs, that it really does track very closely with the complexion and the patterns of the bull equity markets. As Central Banks slowly, and i mean slowly start to revert some of their Balance Sheets back into the marketplace, i think thats going to be a very Disruptive Force in all markets, particularly in the fixed income market does that mean that we have to follow it all the way down and theres no hope for stocks no i think its more like the line for the balances is going to continue to go down with the market but theres going to be a point at some point in the future where the economics, the positive economics will float in higher were just not at that fulcrum yet. Rick, thank you, sir. Great to see you this morning. Thank you. Coming up next, the 2018 Winter Olympics, they are underway carl is live what do you have for us . Reporter hey, andrew olympians these days have a lot to handle from social media to taking a stand to some of these north korean political decisions. Well check in with a decorated olympian, apollo ono, from these games. Today, smart planning is helping the new new york rise higher than ever. As the world leader in unmanned aerial systems, were attracting the worlds best talent to central new york. And turning the airport into a firstclass transportation hub. All while growing urban areas into vibrant places to live and work. Across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. Want to get over to carl hes live at the winter games in south korea this morning or this evening for him tracking all of it carl reporter yes hey, good morning, good evening, andrew its a lot different being an olympian these days than 20 years ago. You have social media, the transparency of the internet no one understands that better than apolo ohno. The most decorated winter olympian we asked him just how different is it . Its entirely different when i walked in my first opening ceremonies in 2002, there was no camera cell phones, right . Didnt exist so we walked and we were completely present there was no other distraction now we live in a world where youve got so theres a million pieces of information being thrown at you every minute and your ability to process information and decipher from time to time is totally different. So the athletes are under more scrutiny but they also have a wider audience when you see that as an opportunity rather than a challenge, i think it kind of raises your eyebrow. You can have simone biles or any athlete here whos a superstar or become a superstar overnight and they have front and center, communicative line to talk to people before we just said, oh, apolo ohno, he has long hair put the helmet on. Maybe unrecognizable now you have ongoing 24 7 access to this individual see what the personality is like off the field of play. Thats special. North korea, you tweeted a picture of one of the players practicing it underscores the spirit of the olympics how are they supposed to be perceived. Back home theyre considered a dangerous regime. Absolutely. I think this is where the Olympic Games really shines, right . You have such an isolated country who sends athletes who we havent seen. Ill take short track speed skating, for example these athletes, we dont see them train they show up once every four, eight years. We have no idea what equipment theyre using, what their strategy is like i watch them skate and i see they are 10 to 15 years behind. Its a difficult game for some of these athletes who want to separate the north korean athletes who are here from some of the calculated moves obviously that kim is trying to make by the way, those north korean cheerleaders we talked about earlier this morning, guys the womens hockey team, the korean womens hockey team, the first team to combine competition lost to switzerland 80 and as the journal points out this morning, becky, that was written up broadly in north korean media but the score of their loss not included in those stories. Just an idea of the full information and how different it is in that country they dont even give them that information so as far as they can tell, theyre only going to find out if they win gold medals . Reporter whatever it was, it was good. They say they lost, carl . Did they not say the score i can identify with that sort of you know what i mean i did not win a Golf Tournament but im not telling what i shot, you know what i mean reporter is this why you didnt want to see your golf clubs in newark . I didnt really care whether they you know, i didnt like waiting. I considered leaving them, believe me maybe its that could be it maybe theres something i dont know stiff shafts maybe im ready to get some regular shafts i dont know, carl. Yeah, its the clubs. Always the clubs. Reporter its the clubs. It worked on tuesday wednesday and thursday i dont know what happened to those clubs overnight . Who knows someone snuck in where were you some little gremlin snuck in carl, you do a good job over there. You have a passion for the olympics youve done this before. Reporter this is number five. Wow. Reporter for andrew, it will be number two. Number two. Reporter well be seeing him this weekend. Excellent thats right are you guys going to be passing like ships in the night . Going to see each other on friday, i hope. One quick day. Thats the plan carl, thank you. We will see you in a little bit. I know well be seeing a lot of you today and throughout the week. When we come back, jim cramer will join us live from the new york stock exchange. Well get his take on the biggest movers dow futures up by 275 points s p open up by 30. Nasdaq up by almost 70 squawk box will be right back. Its all yours. Wow record time. 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Wells says 38,000 customers mistakenly received a letter that did not contain a refund although one noncustomer was sent a check a spokesperson says wells fargo will work to ensure the customers get the appropriate communications down to the new york stock exchange, jim cramer joins us now. If we add up friday and today, if it were to stake here, it would be 600 points. Rates are going the wrong way this morning which would indicate theyre better now we need to see rates lower youre up so much. You have to take profits those people are your enemy. Theyre going to come in and take profits. Like a suckers h me i mean i dont want to put you on the spot. Are the lows in . I think well see those prices again but i think when we get there buyers will be all over it. What we need to see is this tv ix, much lower it is lower today. Look, i wish everyone would follow what fidelity did and well not participate in the east and Retail Investors participate, these products are worth so much money. There is no way. There is the rights of Free Enterprise markets celebrations to cboe, free markets. I care about people getting hurt theyre going to get hurt. It is all about the olympics. I dont know where you start in purdue lost and xavier won and st. John is the hottest team where do they go . Michigan state moving up one or two or something i think Michigan State does virginia lost you had to include the olympics and this. I think that nova maybe softer than i like. Where is xavier they go higher. Theyre fabulous in the tournament i may pick them for the final four it is copping ming up to theg east tournament, we should go. Georgetown is looking better. The march 30th. We drop everything for that i am going to go, call stub hub. Can you help me with that, go on the the app thanks jim. Well let you go so you go on and they give you where the seats are. You pick the seats. You dont call them you put the credit card in and how do you get the tickets get the app and then the bar code will be on your phone and you scan it like you do at the airport. What do you do at the airport . I got to have a boarding pass, where do you put your luggage thing to stick on. Where did that come from did you see that oh, confetti that drops here for the opening bell we just missed it. Thanks. Coming up on squawk on the street, dont miss the exclusive interview with the ceo of broadcom. Stay tun, lbeig bk. Edwel rhtac no matter how the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Take a deeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac on thousands of hotels, cars and things to do. Like the occidental at the xcaret destination for 32 off. Everything you need to go. Expedia. Everything you need to go. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley welcome back squawk box, take a look at earnings, earnings season is whining down. A couple of names that you will want to watch this week. Pepsico and under armour and Campbell Soup and cocacola. Even though it is kind of towards the end, people still care about those ones. I think cramer had some followers. I saw what he said on twitter. Last week about about the markets we are under 200 now. You heard of what tim just said in terms of 200. He said that i would sell the rallies and well see the lows again. Well be up 300 and maybe coincidence. He was only on 10 minutes ago with us. Hes been saying that since 3 00 this morning. I know he has on twitter. Maybe we do have more viewers than he has with twitter followers. He has been saying it but sud n suddenly, we are not up 300. It gave good analysis. Well hear from him directly in just a moment thanks guys, make sure you join us tomorrow, squawk on the street begins right now good morning, welcome to squawk on the street, i am david faber along with jim cramer we are live, Carl Quintanilla is with us at the Winter Olympics in pyeongchang moments from now, broadcoms ceo, hock tan is going