Transcripts For CNBC Closing Bell 20170406

Just in the last 30 minutes or so here as we see these stories unfold as the gang on power lunch talked about. You have not only conflicts brewing with north korea, triang gulated with china, but syria with russia. On the ground there in palm beach. Things growing by the hour here as we prepare for the summit between president xi and trump, yes . That is correct, and cannot be overstated, bill. We are watching as the first family descends the stairs at the airport nearby in west palm beach, arriving more than an hour after the chinese president and his wife arrived. Greeted by secretary of state tillerson. Interesting that the chinese president received by the secretary of state and not the president himself. Safe to say this is a tense relationship. Both sietsz ades prepared for a difficult meeting where potentially the chinese side comes with specific things it wants to see over the next four years while the trump team is said to look for tactical wins despite the fact that they have suffered legislative defeats in the past. We are still awaiting those pictures of the president , but we are getting some news about some items that hes addressed aboard the plane to the press. Mainly assad saying hes still running things, still in power, something should happen, signaling for the second time in as many days his views on the situation in syria changed, and, again, he said hes prepared to go it alone on north korea. Certainly, two increasingly escalating conflicts, and especially the north korea situation is one thats going to be at the top of the priority list for the conversations with the chinese president , whether they can actually agree, find commonground on how to approach that because the chinese have been fighting that situation and figuring out how to posture themselves with their neighbor, and they are increasing nuclear threats, but its unclear exactly what the Trump Administrations strategy is to get them to the table. Steve grasso here at post nine preparing for the exchange in a few minutes, but, steve, again, like yesterday, were seeing the markets selloff here late in the afternoon. This, not nearly as dramatic as yesterday, but do you think markets are sensing these tensions that may be prizing geopolitic geopolitically . A big week. President xi. It was the focal point was supposed to be about, but thats a conscious decision to run that headline that hes willing to the u. S. Is willing to go it alone with north korea. Thats a conscious headline to run the headline on syria, so these are something where President Trump wants to let the world know that he is prepared to do one alone or all of them alone, all at the same time. So its kind of shocking, shocking the world to have a perp want to throw all of that at the, you know, at the world all at one time. This is different than what we are used to. Suggesting its hard to know what the intentions might be. Steve, you said the marks are going ahead and pricing it in anyway. Yeah. Were basically, you know, want s p, two points turning negative on the session today. Looks like its okay because there would be this meeting between, and now it all seems to take a different tone. I think to bills point, and its telling. Yesterday we learned from speaker ryan that tax policy, tax reform was off the table in the short term or would take longer than they thought, and the market fell down in a precipitous fashion. Today, we are dealing with north korea and syria, and the market seems to hold in there. I think the market is focused on what the market thinks it has control over and what it can price in. We cant price in all variables involved with syria. President trump has spoken to putin already. Im shocked to see the headline hes not, and you had tillerson speak so pointed on syria already about assad. That, to me, shocking. Maybe the market needs to digest it, but the market is so focused on tax reform. As you talked, we got a note from mr. Cashin, himself, he agrees. He feels the geopolitical commentary is spooking the market. Kayla, if youre there, quickly, i dont know what kind of a schedule you have in front of you, but we have nothing we dont know whats going to happen this afternoon, which is unusual for a meeting of this magnitude between two World Leaders like this. It seems as though they are going to be taking it casually this afternoon, and that may be the uncertainty the market also is not comfortable with right now. Reporter well, weve not been given many details either, bill. We know when the white house announced weeks ago theres a dipper this evening at maralago, which well wait for a readout from that and other meetings that happen. Both sides with large delegations with them. You can imagine President Trump includes secretary of the treasury, some of the top advisers, steve banon, secretary ross of the commerce department, and ive learned from a white house spokesperson that peter nevaro, one of the most outspoken china hawks, the most critical of the way that china trades and massages the currency hes also traveling to florida with the president. Obviously, the president s going to be getting quite a wide array of view points on how to deal with china. Its unclear how hell distill that into one cleareyed strategy meeting with his counterparts from china. We know tomorrow theres a working lunch, and theres going to be meetings throughout the day, but, really, my guess, at this point, good as yours until we get more details from the white house. There are the markets and nasdaq now, slightly negative on the session, the dow up by three points, kayla, thank you. Back in washington, lawmakers are trying to squeeze in Unfinished Business before the twoweek easter recess. How are they doing . Kelly, its not where the administration or Republican Leadership wanted to be ahead of the long break. Clearly, the lack of a Health Care Bill is the most glaring problem, House Speaker paul ryan and conservatives in the party came together today on one aspect of the bill creating high risk pools for people with preexisting conditions. Its not repealing and replacing obamacare, but ryan framed it as a sign of progress. I actually think that divided narrowing quite quickly. What this idea represents is the goal that everyone from the Freedom Caucus to other groups represented here is seeking. Reporter this is, though, a tiny step in a massive agenda, and there are fresh signs that tax reform is not going to be a slam dunk. Ways and means brady promised democrats in the committee he will hold hearings on the tax bill, and that could end up pushing back the timetable for any path forward. The administration will probably miss a selfimposed deadline to start the count down to renegotiate nafta. A formal letter would be ready this week, but theres a lot of hurdles it still has to jump through. Guys, lawmakers have to hit the ground running when they return just to keep the government open much less make a didnt in their agenda. All right. Good points, thank you, ylan. In washington now, turning back to the markets, blackrock ceo and chairman is on squawk box today giving thoughts on how possible delays in that policy reform impact the u. S. Market. If you believe it will be longer phenomenon these to transpi transpire, and we have an economy that is slower because of the uncertainty, then i would say the market is the u. S. Equity markets are probably higher than they should be. So are the u. S. Equity markets too high right now . Joining us now our Closing Bell Exchange officially, john augustine, steve brasso, and Rick Santelli from the cme in chicago. John, i dont know, do you agree with larry, first of all, and, second, i mean, when you look anywhere, theres so much uncertainty, politically, militarily, economically, whatevers going on now, we dont know what happens next, right . True. Headlines, earnings season, better economic reform. The feds put themselves back on the scene yesterday as well. So in our view, though, whats running our investment thoughts, though, is still the bond market and the low yield. Yes. The stock market may be pulling values, but for discretionary money manager, we cant go to the bond market right now, so can we theres the place to be outside of cash and bonds right now. And what about where just reported, the president meeting with president xi as we try to wait for more information about what might develop in syria and north korea, you know, you are sitting there, chief investment officer, and do you make any adjustments to that . Just bring back the risks a bit, or none of the above . Not bringing back the risk. We put in inflation protection as an example last december, and have a little tip. Have bonds, obviously, as well. And then fully diversified in stocks, hold in our view, on the political headlines, react and act on the fundamental headlines. Those arguably are getting better, although theres questions on the economy. Rick, here we go again. Talking about the bond market. Any response there . Were at 23 had 4 on the ten now. Do you sense that the treasurys have been anticipating the issues involving north korea and syria before other markets have . You know, if you look at the close monday, tuesday, wednesday, today, its all within several basis points on ten. All maturities are unchanged. Dollar index up sixth of a cent. I dont like extra volatilities, patterns displayed over several sessions. We talked many times, price volatility is now a fundamental, in my opinion, keep it simple. Get the most volatility, and were extreme top, but im impressed. The issues are difficult to tie in the marketplace. Its holing. Ill make it simple. I still say that, yes, Pay Attention to bonds, equities are the main actor on the stage because i think what dents the actor now is lower rates. If we get below 227 to 225, tomorrows number our other fundamentals or other forces, i think that would be interpreted as weakness. The stocks would have a bigger problem than the patience issue on trump legislation and geopolitics. Steve, what do you have to add to that . Fair point. I think when we started the conversation, its a rotation. They are coming out, and eight years of demand, a stock market that roared and risked higher, you also have people in position where they had another return. So they were looking at that bond portfolio, and coming out of the election, people said, o, were going to break out of the funk of 1 to 2 growth, and were going to reach higher into 3 growth world. People had to be invested in the equity markets, so thats the biggest head wind that i see for the marketplace is that we cant break out. Weve seen some cracks, retail sales, cracked, durable goods, weve seen flattening of the yield curves so if those things remain persistent and look at value as far as pe ratio on the s p, we start to look a little bit symbolic of what we saw in 2007. Thats what has people afraid to put new money to work in the marketplace, and you start to see earnings come iing through, course, people dive back into the marketplace, but look at the market right now. Were still up. Yeah. It has every reason to selloff. They couldnt pass the repeal of obamacare. Yeah. They couldnt get anything done, but yet people still maintain a positive outlook. Still maintaining their propensity to buy equities. We have to go. You disagree with larry, you are a buyer of blackrock. We are a buyer. We like the stock. Thank you, guys, appreciate your insights on another moe mentous day that wall streets watching carefully. The dow is up 16 points right now, 45 minutes to go. Down as little as two, but hanging on to gains here. S p up and russell and nasdaq up. Pulling back on comments, ahead of the meetings with chinas president , look at reaction from former u. S. Ambassador to the united nations, Bill Richardson. That should be interesting. Watch out, google and facebook. The ceo of the Worlds Largest Advertising Company said snap could be a force to be reckoned with. Martin sorrell picks it exclusively next. Youre watching cnbc, first in Business World wise. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. Com [ [ screams ] ] [ shouting ] brace yourself this is crazy [ tires screeching ] whoo boom baby rated pg13. [ screams ] we were just discussing the next guest. It says here hes critical of facebook and google fake news. Stepping up the game to exert more control over digital ad placement. This interview has been going on for two minutes already, folks. With the rise of fake news story, martin says the tech giants are not doing enough on their platforms. Welcome. They are media companies, not Technology Companies. Well, that, so this is important. So very important. Their claim is we are internet companies, we dont have to take ownership of the content. Digital engineers. Tinkering. You dont need the ear piece, just talk it out. Educational pools to the news feed to help people learn what is fake news. So what weve been doing is working very closely with google who is the medium in which we placed 5 billion, just under 5 billion last year, and so it is, like it or not, the most powerful media channel, but it is a media channel, and google publishers, they are media owners and put that just like we do, and for your what you sell on air. The reports dont view it that way, but google as publishers that could immediately absolutely. Interesting, the regulators in europe have facebook and google on the agenda at the moment. See what decision comes down, but an issue they are mulling over is whether Technology Companies should be subject to the same that any classical or traditional media owner is. We have been talking a lot here lately about the Tipping Point witnessed in the retail industry. Especially in the United States. Away from brick and mortar. Stores closing now because the rise of amazon. Exactly. And other ecommerce. Are you seeing that in advertising as well . Migration more to Digital Advertising . Well, youre certainly seeing the rise of the allpowerful everywhere amazon. My favorite question is asking people what worries you, what keeps you up at night . Crimes and i would say 80 of the time amazon is mentioned. Used to be google is what troubled people in terms of what to do, but you see it in cloud computing, contempt, if you see it in payment, this morning, there were some articles about payments, that ad platform, valued at 350 billion. I think by one analyst yesterday, and now they take the view amson will not compete, and so what our clients want and agencies want is more competition in the market place. Anything to give you competition of facebook and google, accounting 75 of digital, in turn, about 30 of worldwide advertising, so that means google and facebook are 21 of worldwide advertising through that online. Anything that balances, snap chat is another important possibility in terms of balancing the marketplace, so getting more than two solutions is important. Aol and yahoo are another potential as we go shame on me. Report, owner of news corp. , published yesterday very disinteresting. But he, again, kind of makes this point about, you know, the difference between just monetizing content and actually publishing, it, for example, taking ownership of it. If you look to every analyst on the street that covers stocks, other than add milting theres near term you get to the numbers, this is not an issue, the platforms grow in strength and power. Youre in charge of placing money out there. Im not in charge of it. We have five do you see them changing any behavior in the overall shift . Well, they changed their behavior. Theres been boycotts, that we disagree with. Your negating or the most arguably one of the most powerful mediums, so why would you do that . Maybe you stop for a little bit. You pause. You wait and see and improve the technology. I mean, they go about media placement for a minute, which is what all this in the u. K. Was about and spread to the u. S. And india and elsewhere. What weveresponded well, actually, to be fair, come up with new technology, open slate, to define what are white stripes, in other words clear sites and black sites. I saw an article this morning that jpmorgan chase, not a client of ours in the media area, other areas, yes, not in media. Reduced the number of sites they put their online content on from 5,000 whatever it is to 400. So people that white list is what i refer to. Thats where you put your content where the content is cure ated and controlled. Not controlled where we put stocks that you dont know the circumstances in which which content is reviewed. You get fake ads. Misplaced ads. Yes. This is the problem, against inappropriate content. Running out of time, much more to talk about. Let me ask, your thoughts on ive lost count a number of advertisers who pulled from the Oreilly Factor on fox. How effective is that as a tool or weapon, and what do you think happens here . Well, i think people use it to make a point, and we were talking about this before. Direct correlation, a 1 1 correlation between withdrawal and boycotts whether its mentioned in the press or phone calls reported. One email to one ceo of our Client Company who immediately say, what do we do . So at least they paused. People are making a point because gender equality, diversity, this whole area of csr is becoming more and more important, it motivates consumers and people to join you or not join you as employees, it motivates people with you one way or another. This is a critical area. What were seeing here is this play out in a more and more significant way. One final question. If you had seen pepsis ad before it ran, would you have advised them to pull it . Are the other companies what i would mention is it came from an inhouse agency, and as somebody responsible for agencies, maybe not so bad. This is how they are trying to appeal to the youngest generation. You know, authenticity are not making comments, but a authentici authenticity, i mean, thats millennials or centennials, not 100yearold people, but those born after 1997. They sniff out autothen tisty. You have to be very care fful. Actual protest, for example might have been be very careful how you ask questions. You took a ding, cutting back on spending you had to sneak that in there. Heres the question with all do respect, people did not look at it carefully enough. They said they would sweat air assets more effectively. They were going to cut the number of free agencies by 15 . Thats a big opportunity. Is that a specific story or are you starting to see a slowdown in ad spending . Thats the question. The question is slowdown. We are seeing increasing pressure amongst the packaged goods sector for three things, disrupted technology. We talked about amazon, you know, bricks and clicks. Thats one example of it. From activist investors like procter gamble. Great point. And kraftheinz made the proposal in 48 hours in which strategic review, this response came as a direct result of that. The answer to the question, there are sectors which are growing, like technology, whether it be google with us or alibaba, whatever it is, but on the other hand, packaged goods is under significant pressure. Prolonging the agony, but Neilson David for the first couple months of this year is not good for packaged goods. You saw something i saw a statement, january and february packaged goods categories up 3. 5 . A span of 9. 5 . Wow. People are starting to see the things we see from the administration and making people concerned, so that, plus amazon inviting manufacturers to seattle, to talk about direct relationships, again, more martin targets, means a lot of disruptions. In that environment, its tough. Fast changing world. Yep. Martin sorrell, will corrected me. No problem. Thank you so much. Thank you. Like moral, he said. Thank you so much. Always good to see you. Thank you very much. Very constructive. Going to the close in 30 minutes. Dow up 20 points, up 98 at the peek today, but theres been a day of slow moves out there. Geopolitics, and President Trump said the u. S. Could act alone if north korea does not step up. Former u. S. Ambassador to the u. N. , Bill Richardson, weighing in on the high stakes for both leaders. Up next, kissing cousins and Genetic Researchers meet. I cant wait for this one. Coming up. Who wants a donut . It use to be everyone had to be in the office. We lacked the technology to be flexible and productive. Then cdw orchestrated a collaboration solution for us. Using the lenovo x1 carbon. Powered by intel core processor technology. Now we can access our network and Work Together from anywhere. Hey hey everybody. You coming back for the Team Building . Mobility by lenovo. It orchestration by cdw. Icelands geographical isolation makes it a genealogists and medical researchers heaven, and some enterprising programmers cash in as a result. We are joined now from iceland with the latest installment of cnbcs modern medicine experience. Good evening, i think. Reporter good evening, bill. Thats right, were four hours head of you, waiting all day to talk to you about this place. They have incredibly genealogy records here. A quick note about the genetics and why iceland is a treasuretrove of Genetic Research because of whats known as the founder effects. This idea that the population here descended from a small number of ancestors. A company formed cold gene code genetic to mine the research and come up with new answers to diseases. We sat down with the ceo about what they are doing there. Take a listen. The citizens of iceland help to contribute to an understanding of the fundamental biology of humans, and so they are making an enormous contribution to advancing the basic science of biology. Reporter so not only are they contributing genetic, but gene yolgs records as well. We vi we visited some of the earliest census from 1703. You can trace ancestors wall the way back to that document. Still, records go back further to the sagas with medieval story about iceland in the 12th century and back further to the 800s. We talked with the National Archivists about the collection. Listen to what he said. We have 44 kilometers of documents, and the oldest document is from 1185 or thereabouts. They have the memory of the nation on who we are. Reporter decode, the company mentioned, they digitized this data online called the book of islanders. Anybody who is iceland can look themselves up to trace the Family History back. We asked the National Archivist to see if he was related to bjork, and it dated back to the 1700s. You can research families and genes inherpted, using things to study things like asthma, for example, making inkreden discoveries there. Driving Research Forward through genetics and genealogy. Im about to get on a plane. Im jealous. I told you and the producer, i would have loved this trip, and just as we are hearing that the fda is now allowing 23 and mae,a dna testing service, to test for ten different diseases, slowly getting this service back on again. Thats part of the outcropping ability the companies to do this as a result of the dna testing, right . Reporter yeah, absolutely. This is really big news in the genetics world today. 23 and me, a Testing Company where you basically spit into a tube and send it in to give you back a lot of information about yourself. Back in 2013, they were shut down by the fda for giving risk factors information back with al timers, Breast Cancer risks, things like that. Now they have the go ahead to give ten diseases to parties directly. It does not have the barc gene for Breast Cancer, thats are ask factor for a different disease, but its big news in the direct medical testing, guys. Great stuff, thank you. Appreciate it very much. Indeed, a genealogists heaven. I know youve been there. Its amazing. The waterfalls, all volcanic. You see that. I want to go to the archive. See what thats about. 27 minutes left with the dow up ten points. And former u. S. Ambassador to the u. N. Weighs on market moving comments about syria and north korea. Stay with us. I chose you for this squad because you are the most fearsome warriors on the planet. Well, not you roman. You just missed the cut. chuckle missed my ass why are you always yelling . Rated pg13 experience it in imax. Less than half hour to go, time for the cnbc news update. Heres whats happening at this hour, 5248 vote, the senate triggered whats been called the Nuclear Option barring filibuster of the Supreme Court nominees. Making clear of the way for the nomination of judge gorsuch to serve on the high court allowing the nomination to go forward on a simple majority vote. A mock explosive device found in a suitcase in toronto held up a chicago bound United Airline flie flight for hours. They swabbed the device for explosives, and the results were negative. Winds in lake michigan, warning of strong gusts that could hit up to 50 miles per hour. Chicago land will be under a flood and wind advisory until 7 00 p. M. Tonight. One of americas comedy legends died, don rickles suffered from kidney failure. Appeared with Johnny Carson over is 100 times, and he was most recently the voice of mr. Potato head in the animated toy story films. He was 90 years old. Thats your update at this hour. Back to you both. Thanks. Tight on time, but go home tonight, get on youtube, and watch an old tonight show with don. They were absolutely hilarious. Nobody was funnier. Rest in peace. Thank you. Stocks off the highs now after President Trump said, quote, something should happen with syrias assad and prepared to act alone on north korea. All of this ahead of the meeting with chinas president there at mara maralago. Lets bring in former under secretary of state, himself, a former ambassador, nicholas burns. Gentlemen, good to see you both. Ambassador richardson, mr. Trump is willing to go it alone on Critical Issues involving syria and north korea. What do you think of that . And how high are these stakes with president xi right now . Well, this is the most important bilateral relationship right now with china because of the differences of north korea, trade, getting sb inting into a china, i hope not, but the issue in my view having been in the National Security cabinet is who calling the shots in the administration. Obviously, the president says one thing about what hes going to do with syria. I think it was encouraging what he said, that hes not going to continue supporting assad with these mass murders, but at the same time the secretary of state, u. N. Ambassador, seems to be on another plane with syria. With north korea, i think the issue is we need china to help us pressure north korea, and if china doesnt do it, the president says hes going to go it alone. I dont know what that means. We need china. Are we going to do a military strike . I think that would really bring a real conflict into the peninsula where we have thousands of american troops, treaties with japan, treaties to defend them. Its an important meeting, and hopefully theyll have a good chemistry. The president , who is not very disciplined and flamboyant and the chinese leader who is programmed and quiet. Well see how they get along. You know, mr. Burns, as all this happens, the latest from the New York Times, options for military strike in syria, so, you know, these are two very difficult problems that pose himself themselves to be more urgent. Well, i think this is, this week constitutes the great challenge for President Trump and National Security with north korea and syria. Arguably, the two most difficult problems out there. I think they have to be careful on syria. Theres a statement from tillerson theres an International Coalition to out president assad. President trump inferring implicitly that action is possible, that military options are being drawn up. You dont want to have the president in a position where he goes up to the line of threatening action, and then backs off. Thats what happened to president obama in september 2013. That was a low point of the obama administration, and i worry that President Trump is putting himself out because ambassador richardson said hes not disciplined. He tends to say things in public that are not plugged in or backed up by the rest of his administration. If were going to threaten syria, thats a very serious course of action. All sorts of risks. Got to be careful here. Ambassador burns, im curious, what do you expect, you think, out of the summit meeting between the two president s this week, beyond just to get aquainted session . Do you think theres anything of substance in Foreign Policy . Well, i think there will be. The most important thing is they have to take the measure of each other. They have to get to know each other. These are the two most important leaders in the world, frankly, building some kind of relationship with xi ought to be the first priority. Clearly, north koreas going to be on the front burner because of the Ballistic Missile test, and this, i think, the Trump Administration is right to pressure china to use its leverage if thats going to happen to try to convince north korea to back down from its present stance. Thats a tall order, but i think that the Trump Administration is right to go there. Like ambassador richardson, dont think the United States can or should go it alone. We have two very important allies in japan and south korea, so a consequential meeting in florida and two crisis to deal with. Well, you said go it alone, does that not mean the likes of japan or south korea or imply that the u. S. Is willing to be the lead on this and not wait for the chinese to do so. I think its the latter what you said, and i agree with ambassador burns of the importance of this meeting. Its very critical that we recognize with north korea its the big test for President Trump. The north koreas leader is unpredictable. 20 nuclear weapons, im told, Ballistic Missiles. They dont want to see the dialogue. The only way i believe right now to get north korea to the table is with china of the they provide north korea with food, energy assistance, and all kind of economic aide. They have the major leverage, but china really in the past has not wanted to help us. They like the turbulence and problems for us in the northeast peninsula, so the most important test, i believe, is how they get along personally. I think its important that the president restrain himself a little bit, you know, and not try to punch the chinese leader who is not only very disciplined, but very tough. Oh, heaven forbid. Lets not have that be the headline tomorrow. Gentlemen, thank you both. Good to see you. Former ambassadors Bill Richardson and nicholas burns. Thank you. Appreciate it. Heading to the close with 16 minutes left, dow up 25 points. Weve had its come back a bit throughout the close. Turned negative almost earlier. Coming up, whether republican lawmakers could lose Political Capital. Amazon chief seeing his stocks down today, but hes still looking skyward towards the moon, and beyond, with blue origin. Well take you inside his new shepherd and capsule coming up. Go after it the same way . Y chasing after short term returns. Instead ifetting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential sometimes they just drop in. Always obvious. 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. Welcome back, the amazon founder held a rare meeting with the press to unveil the vehicle he hopes takes blue origin to the forefront of space exploration. We had a reporter there joining us now from the lovely colorado springs. Hello, morgan. Reporter hey, kelly. Thats right. The blue origin, a brain child of amazons jeff bezos, revealed here at the space impose yum, the actual model of the new shepherd capsule to carry paying customers to the end of space. They are going to be reusable just like the rocket, and as you can tell from the experience of the rocket behind me, this one here has actually been launched and landed five times. That concept of reuseability is key to get millions of People Living and working in space. If we can make access to space low cost, then entrepreneurs will be up leashed, creativity, dinism, not the same thing in space that i witness on the internet over the last 20 years. Reporter bezos stressed this is going to take time while hes hopeful it starts service next year, the company has not yet started taking reservations or disclosed the price of these trips, so you might be wondering, how is blue origin being funded right now . Well, the billionaire also disclosed yesterday that hes selling about a billion dollars worth of amazon stock a year and investing it into his space startup. Also noteworthy, i spoke with blue origin president oneonone as well, and he also confirms that the company is considering and looking into the possibility of developing an amazonlike cargo Delivery Service to the moon. Guys . Richard branson wants to do the same thing, he would go in space. Did jeff bezos say whether hed be on a flight . Does he want to did into space . Reporter he has for years expressed interest in going into the space. As of yet as far as i can tell from, and ive been trying to fact check this all day, as far as i can tell, hes not actually pledged to be one of those, for example, first passengers, but he has expressed an interest in going into space. Well see what happens. A lot of emphasis from yesterday on the safety and the testing of this. Yep. Amazon shareholders could have a problem with that. Great, morgan, thank you. Morgan brennan in colorado springs. I would not be quick to get up there. Ten minutes to go. Looking at the potential Business Impact on the meeting between president s trump and xi and whether the market is in for a rough ride based on comments about syria and north korea. So how old do you want to be when you retire . Uhh, i was thinking around 70. Alright, and before that . You mean after that . No, im talking before that. Do you have things you want to do before you retire . Oh yeah sure. Ok, like what . But i thought we were supposed to be talking about investing for retirement . Were absolutely doing that. But theres no law you cant make the most of today. What do you want to do . Id really like to run with the bulls. Wow. Yea. Hope youre fast. I am. Get a portfolio that works for you now and as your needs change. Investment Management Services from td ameritrade. Dothe only thing theyut cant handle. T you. Dominic toretto just went rogue. I dont know what shes got on him, but that wasnt dom. It aint too late to stop this. Come and get it. [ grunt ] now i know what it feels like to be every cop ever chasing us. Dom is that a torpedo . Take the wheel. [ grunt ] rated pg13. Experience it in imax. Art told us the market on close are selling by 900 million. We heard it was a big number on the sell side, 900 million. Well see if that has an impact. Meantime, l brands among the best performers in the s p today. Same store sales fell by a slightly worse than expected 10 last month. The Victoria Secret parents of the sales negatively affected by two to three points due to the late coming up east ere day this year, another ten days away. Advanced microdevices lower. Goldman sachs initiated coverage of the stock with a sell rating and 11 price target. Citing competition from intel and nvida and said valuations are difficult to justify. That stock down 6. 5 as a result today. Timely, twitters cofounder and current ceo of medium, Evan Williams announced hes sold 4 million shares was social media giants stock and reportedly plans to sell up to 30 of his shares over the next few months, cutting his stake in twitter from 5 to under 4 . They do that for estate purposes or whatever. Dow up 14 points, we are watching things, but were going to come back with the closing countdown. After the bell, plenty of talk about the high stakes summit with china, what it means to President Trump, and the event is critical for president xi. Well go live in beijing for the best and worst outcomes for china. Youre watching cnbc, first in Business Worldwide. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, it helps pick up some of what medicare doesnt pay. And could save you in outofpocket medical costs. To me, relationships matter. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] with these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. 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We dropped one basis point on the ten year. Good market watch that you are, your conclusion is there was a slight response in the stock market, and really not much of a response in the currency market or in the treasury market. Thats correct observation. I agree with you. I think there is a legitimate question, and we talked about the traders about the go it alone attitude. Go alone to north korea and syria. Whats it mean . What are the implications, so i think there is a little bit of worry about that, but not an awful lot. Remember i said a couple days ago, you really want to watch the trump agenda. Watch the russell 2,000. That held up well. Look at iwm, we had active volume and big ecs, there were problems recently, big volume, the russell 2,000, and im telling you, thats the ref run depp there, the iwm, and the retail index, all created a lot of problems recently. They had a very good day on very, very good volume, so, yes, there is a legitimate question of the go it alone thing, but i dont think the impact on the market is too great today. And if you want more evidence of the different world we live in now, weve gone the whole hour, and tomorrow morning, jobs number, the expectation, any idea . Numbers float around at 175 range. After the strong adp number, they are going up. Certainly 200,000 is in the barrel. That number tomorrow morning at 8 30 a. M. Eastern time on squawk box. More on the summit in the second hour of the closing bell with kelly evans and company. See you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, im kelly evans. Beginning with the close, up 16 points on the bell for the dow, turning negative almost, amid tensions throughout the afternoon about syria and north korea. More on the situation for you shortly. The dow the worst of the performers, by the way, less than tenth a percent, and everybody else managed to stay positive and even more so, the s p was just a fifth of a percent to 2357. 5. Nasdaq up 1579, and russell outperformed, 1 , 1364 for the small caps. Mentioning President Trump holding a twoday summit with president xi in florida, how the meeting could Impact Business here in the u. S. And xis political standing in china. Were going to have much more on that coming up. Joining me on todays panel is cnbc procolumnist, and kicking it off is jim research at post nine, and stefanie at post nine from ciaa investments. Mike, first to you, you know, its tough. Its one to be appointmented out earlier, explain to me how the syria and north korea situation impacted earnings this quarter. Well, yes, earnings are important, but the markets have a lot to discount, right . Id say it doesnt. The market doesnt think it does, but i do think that you have, essentially, a very, very minimal bounce underway either in the middle of the day from yesterdays selloff, and twosided nervousness. Were trapped in the range, skiddish, and the bond markets, yields refuse to lift on the sustained basis, and that does not give the stock market permission to get a little bit more enthusiastic, and its much more complicated than that. President trump and secretary of state Rex Tillerson talking syria and north korea, putting pressure on stocks in the time hour. John harwood with the latest, john . Its a dramatic moment in this young presidency. Within the last 24 hours, weve had an apparent reversal of the administrations position on syria in the wake of that news of gas on children, that horrific attack watched on television for the last 24 hours. Now, President Trump who consistently argued against intervention in syria had this to say about the future of bashar elassad. What happened in syria is a disgrace to humanity, and hes there, and i guess hes running things, so something should happen. Reporter something should happen. We had an even more dramatic direct reversal from just a few days ago from secretary of state tillerson. Last week, he said its up to the syria people to decide if assad stays in power. Heres what he said moments ago. It is very important that the russian government consider carefully their continued support for the assad regime. His role in the future is certainly unclear, with the acts hes taken, it would seem there would be no role for him 20 govern the syria people. Now, both parts of that sentence or quote were extremely important because, of course, russia is a strong ally of assad, and if the United States takes military action with President Trump in the pentagon, which they are now considering, that potentially could put us in a challenging position visavis russia, even the potential position of hitting some Russian Forces who are in syria, so very touchy moments for this young administration, which has had turmoil with the staff trying to find footing. You just had steve pulled off the National Security counsel yesterday. Well see how they work through this challenge as the president goes ahead with that meeting with the chinese leader in florida. John, thank you. John harwood in washington. Its certainly enough to, you know, these are tragedies were talking about, finding situations in north korea, and steve brasso said, the fact these markets just continue to try to take this in stride, and if anything, try to look tapped in and focus on controllable items from washington tells you something more about the sentiment right now. This is serious. You can see why and understand why the market actually took a dip when these headlines came out, fur sure, but we are from a stock point of view, equity market point of view, so focused on the macros right now. By the minute, i mean, yesterday we had the trifhawkish fed, pau ryan walk back the tax bill, and we also had oil invenn stories, very disappointing, and im of the mind set we needed that Oil Inventory to be good so we could confirm global growth. That surprised people. Today, it was geopolitics and ryan again resuscitating aca. All the thiengs daytoday, you ignore if youre long term investing. Focus on fundmentals. Thats next week with earnings. The big macro might take a step aside while we focus on what companies say. Whats the best way to position while this happens . The Economic Data continues to be pretty good. I mean, even if you look at some i know we talked a little bit about last week about retail in the consumer being kind of, you know, mixed at best, and we had good numbers today from costco, good numbers from young china, and we had symptom pretty good numbers across the board so far in what we heard from companies, so we just need more of that, i think, to get confident, so i still have the cyclical bias for sure. Im adding to energy, adding to consumer where there are pockets in the marketplace that are kind of dislocated and have lagged. Thats where i favor at this point. Jim, what about you . The fed yesterday basically described stock valuations high, and bond yields are drifting and sagging here. How do you expect all this to come together . Well, the bond market is suffering from two things. On the one hand, theres a fear that inflation or growth pushes yield higher in 2018. Very well understood story. The media between now and next summer, this summer, is everybody shorts up on markets. Everybodys positioned for a rate rise. I was at an Investment Conference this morning, 250 people at the conference. How many people are bullish on the bond market . Ten hands went up. The person who asked the question, not me, said, that many . I mean, thats how bearish everybody is in the bond market which i think the short is already in having a hard time selling off from here. What about stocks, then . Stocks will continue to tread water to be okay. I think the biggest problem in the stock market is look energy, earnings up 5 or 6 , xenergy, 10 with energy. Sounds like the years done now. Doesnt mean we sell off. Somethings god to change in order for the market to move forward. We have not done earnings season. We have, were at the point in the cycle where you see work on this. The difference between the better and worse performers on the fundamental basis for Companies Reporting results should widen out again. This is the nature of where we are now. That means maybe the overall market pulled forward gains, but it means its a washout from here. By the way, we have the big jobs report in the mornings. You know, im not sure how high the stakes are, frankly, i mean, you can argue its been so strong even if it disapoints, and in april, it has in history. What do you think . Do we need that to be strong in order to you mentioned something out of the oil inventories. That hurt. You know, do we need the job report and wage numbers and all that . Id like to see the wage numbers go higher. We are rooting for that. I think the bond market would react if we actually got a little hotter wage number. I think the stock market would like that. For sure. I dont know well get a block buster number. Talking about weather distortions dampening it. Look, at the end of the day, we have a healthy if thats the one consistent thing we had over the last two years, consistent improvements, and thats a good thing. Thats good for consumers, which is why they are actually shopping, choosing why they are shopping. That is why we see manufacturing pick up. Thats why you see a 2 gdp, and that hopefully will increase as we get throughout the year. Most hopeful thing the other day, story of two bus drivers, School District changed, kids schedule schedules cant afford to pay them more. Julia, whats happening with twitter . Yes, kelly, thats right. Twitter is suing u. S. Government over a demands for records on an antiPresident Trump account. Those demands reveal who is behind the account. Twitter saying in a filing to the federal court in San Francisco that, quote, the rights of free speech afforded twitter users and twitter itself under the First Amendment of the u. S. Constitution include right to deseminate such anonymous political speech saying that a special agent within the u. S. Customs and border protect agency demanded records that would lead to the unmasking of the user account. They said its unlawful unless the government shows that they are trying to invest gait a specific occurrence. That account called itself immigration resistance created in early 2017 and has now more than 33,000 followers. In response to the lawsuit, they tweeted the First Amendment and retweeted the aclu, they would go to court to defend the users rights on twitter. Now, twitter has a history of protecting users privacy, such as protecting an occupy wall street protester, and theres guidelines for Law Enforcement explaining how to request information about twitter accounts via a valid legal process. Kelly, over to you. All right. This is an interesting one. I mean, any thoughts, guys, on what happens now with twitter filing a suit against the government and trying . Its obviously raising stakes on the back and forth administrative thing going on behind the scenes. Julia said its a consistent position on twitters part. They have a very, you know, high minded selfregard for what their mission is, and i think they stick to that. I dont know that we can infer whether this was an education kalation under the Current Administration of any efforts of trying to find out who the people are and on what grounds they wanted that person. It also reminds twitter wild west. A lot of stuff going on there, if youre an advertiser, you want to look away in horror, and go, do i want to be associated with the things going on there . Maybe this was completely legitimate. Maybe twitters got a chase here. But, you know, it doesnt remind me of what can be seen on twitter makes you want to be an advertiser. At the same time, nucleus blocking ads from channels with fewer than 10,000 views. Thats a major shift the wall street journal reported after a backlash over advertising how trustworthy some of the critters are. Were in new ground here. We dont know how its going to work out. Never had this, these platforms with this growth with this many users on at the same time. You know, growing pains if you will, serious in that, of course, but i think that twitter going after trying to find, you know, the culprits, the bad guys and going after them is actually a good thing. They are trying to protect the people on the site. I feel its straightforward too when Law Enforcement looks at this. I imagine the treatment of the property is somewhat consistent, so if it was enough to, you know, be valid for a warrant to search x, that applies to twitter, and it not valid for x, it should not apply to twitter. That is true. Twitter, of course, tries to police, you know, abusive tactics, abusive speech by use eres, right . They reserve to basically knock you off the platform if they feel as if you have been consistently abusive, right . They have done that with prominent examples, so maybe theres going to be some clarity as to the policies on when to defend free speech and what they take action. Again, that news is that twitter will be suing the u. S. Government or their demand for records on an antitrump account. Thank you, guys, jim, stefanie, joining us here this afternoon. President trump set to host chinese president xi in florida. Trumps highly critical of chinese trade policies and tensions could be high. Next, what impact the meeting could have on american businesses, and the republicans in congress at risk of using all their Political Capital before they even take up tax reform. Well debate that. The impact on the markets still to come on the closing bell, youre watching cnbc first in Business Worldwide. President trump hosting president of china at the resort in florida for a meeting on trade and north korea. We are nearby in palm beach with the details, kayla . Reporter kelly, the two leaders are in palm beach, each arriving at the Respective Hotels separated by eight miles of coastline here. It will be a very intense conversation. Whether it begins. The president aboard air force one telling reporters that the two topics are north korea and trade saying, quote, weve been treated up fairly and have made terrible trade deals with china for many, many years. That is one the things were going to be talking about. Those comments made back in a press cabin up front with the president among others were secretary ross from, and economic adviser, and steve bannon and priebus. They confirmed peter nevaro, a china hawk and trade adviser to the president will be joining on this trip to meet with president xi. Tillerson, though, the secretary of state, has been leading the public engagement, receiving the chinese delegation today. Last month, in beijing, he echoed the communism partys language say iing he wanted a winwin relationship, and he wanted Mutual Respect between the two countries, but today to reporters, there was a harder line. Today will be a time to exchange candid views on the nature of the u. S. China relationship, and we look forward to additional discussions in the future on topics of mutual importance. As President Trump has said, the chief goal of our trade policy is the prosperity of the american worker. Reporter so those were the comments that set the table for meetings over the next 24 hours, kelly. The only real schedule item on the agenda are a working lunch tomorrow and a dinner tomorrow at the resort tonight, and interestingly thats taking place despite the fact the president , President Trump in the past, has criticized the American Government for hosting state dinner for chinese leaders saying he would just take them to mcdonalds to negotiate. Unclear how dinner will go whether theres images of the two leaders together. Well watch out for mcnuggets, thank you so much. Blackrock ceo was on squawk this morning for expectations about the meeting. I personally believe that the Chinese Government will be good listeners to see what our new administration is what their intention is. I actually am on tptimistic tha this will be a good meeting, both sides actually, both sides need a form of success. I think youre going to find ways to improve the relationships. Joining us to talk about how the meetings impacts businesses is the National Committee on u. S. China relations, and Scott Kennedy for the center from strategic and international studies. Steve, how long has your organization been around . 50 years. Wow. We were set up 50 years ago and hosted the chinese pingpong team in 1972. How do you describe relations between the two countries today in the context of that history . Right now, they are undetermined. I think the next 24 hours is going to tell us an awful lot. I think that President Trump is welcoming president xi down here in palm beach is a statement that he wants to try to make this relationship work and be constructive, create jobs for the american people, and bring the chinese closer to american terms of restricting north Koreas Nuclear weapons program. The skscott, a major issue. In the meantime, it was reported xis going to be arriving with a gift basket of quote on quote tweetable deliverables. The idea it may include trade sweeteners, look for u. S. Get easier control of exports for things like hightech. These are all on the trade front, which is just one piece of obviously the many different aspects theyll discuss today. Yeah. Theyre going to have a wide range of issues that theyre going to talk about on security and economics front, and i think we shouldnt expect too much in the terms of deliverables from either side. I think this is really more of a gettoknow you meeting, laying out concerns and goals and hopes are. I think if they are going to talk in detail about deliverables, the most urgent issue, of course, north korea, and talk about trade issues to some extent, and i think President Trump lays out two paths, one is, if we can get greater chinese cooperation on trade, heres what a relationship could look like, and if we dont, heres the other way it looks like where there would be more tension. Steve, the relationship struck a position of defending world trade since President Trump. What note do you expect president xi to strike when it comes to all this in the sense of trying to be look like he wants a better relationship, but defending the principles of open trade . I think he is going to say that a lot of the trade deficits is in china, exporting back to the United States. Its a mea culpa. You tell your companies to stop setting up in china. I think they are going to look kind of for a frame work, talk about investments, somewhat. The easiest way for china to create jobs is through greenfield investment, through infrastructure investments, and i think thats going to be a portion of what president xi says, and that is, even if its not specific, is a deliverable of sorts. Well come out with a report next in a couple weeks, that say 141,000 americans now receive their paychecks from chinese companies. Wow. Done through acquisitions, but what president xi says, we can build that. We can grow that. We still have 3 trillion of reserves, and we should kind of find ways to use reserves productively in the United States. So, scott, we were asking the question of what Business Community should know or look for coming out of this meeting. With all this said, what do you think american businesses should be looking for . I think they probably should be looking for whether both sides walk away feeling like theyve gotten something from the agreement, and that theres a productive path ahead. One of the things that they are going to most likely talk about is the type of institutionalized dialogue that they should have. Over the last eights years, under the obama administration, the u. S. And china had something called strategic and economic dialogue, and theres a possibility that will be reformed, the two dialogues split, one to security issues, one into economics. If they announce that, thats a positive snag. All right, gentlemen, thank you. News alert on ferrari. Whats happening there . Thats right. Looking at the very first interview that pharara has given. He spoke with the New York Times on monday, but the report was just published. It was his first day as a distinguished scholar in residence at the New York University school of law. Now, my favorite quote in this article is where he says that his firing, resignation, was an example of a direct example of the kind of uncertain helterskelter incompetence when it comes to personnel decisions and executive actions that was in peoples minds when this out of the blue call for everyones resignation later came. He is referencing, of course, the administration, and they are about face when it came to his job because if you remember, kelly, back in november, he was told that he could stay on as u. S. Attorney, and then out of the blue, at least according to this interview, he was asked to resign on march 10th. To plenty of interesting stuff in here, and well continue to dig in and report back with what we find. Leslie, thank you. Theres been plenty speculation about the timing of this, mike, whether he was looking into trump or people close to him, for example, and now questions about what steps pbharara makes. They had to know you gained a wellsourced critic, immediately, a vocal one. Not a big surprise bharara strikes this note frustraom the outside. I doubt it escalates, but i expect peeling away of the layers of what was underway in that office, u. S. Attorneys office. Donald trump jr. May be getting into reports say. Thats what the reports say. We have to emphasize. Well see. Another Company Getting into the wireless war, comcast, our Parent Companying, offering a Wireless Service becoming the first major u. S. Cable company to do so. Coming up, why it could be an attempt to stop cord cutters. Going public, but in a very unusual way. That could be the latest indication that the wall street Business Model is broken. Well have details when we come back. Well in life, with help from our advisor, we made it through many market swings. Sure we could travel, take it easy. But weve never been the type to just sit back. Not when weve got so much more to give when you have the right financial advisor, life can be brilliant. Ameriprise please repeat the objective. Thrivent mutual funds. Managed by humans, not robots. Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. Heres to breaking more glass ceilings. In golf and everywhere else. Kpmg, continuing our commitment to the next generation of women leaders. Welcome back. We do have a news alert on youtube. Julia has all the details, julia . Kelly, announcing steps to protect its creators, the changing design to protect advertisers. App issue thats driving an advertiser boycott of youtube. Youtube announcing it will no longer serve ads on Youtube Partner Program crater videos until their channel reaches 10,000 likes on views. The new threshold, youtube says, gives enough information to see the validity of the channel and whether the channel follows Community Guidelines and advertiser policies. They have a new review process for new creators applying to be in the Youtube Partner Program, allowing them to share ad revenue. Kelly . How big a deal is this, julia . Seems like a shift. Put that 10,000 number in context, if you can. Well, i think the key thing here is that youtube wants to make sure that it keeps on encouraging creators to put the best content on youtube. So many other platforms to share content including facebook. In order to do that, youtube needs to ensure that advertisers are not boyboycotting. To do that. You need a new threshold level. A channel that has 10,000 views, thats a beginning point where you make significant money. Below that is not significant money generator, and youtube said its not going to let people with fewer than 10,000 views generate revenue. Its not worth it given the potential risks they are doing something offensive or extremist. They might know as people grow and put out the content. Got it. Our Parent Company announced they are getting into the wireless business of the what can you tell us about it . Well, thats right, kelly. Just today comcast unveiled Xfinity Mobile to 25 million broadband customers. They are looking to lock in existing customers by offering this additional mobile service and potentially lure in new customers. They are going after the 130 million mobile phone lines that are in that comcast foot print. They are pairing verizons 4glte network with hot spots that automatically connect the service. Customers of the tmobile service get up to five lines with no per line fee and switch back and forth between data options with no extra cost. Unlimited data option is 45 a month for customers, and the top package is 65 for other customers, or you can pay 12 a month per gigabyte 6 data. Comcast said theyll roll out the Service Later in the quarter. The most popular devices are the iphone and samsung8 family of devices. The main goal is not to compete directly with other wireless carriers, but to use the service to Grow Customer loyalty to its bundle. This comes as at t steps further into content. Just yesterday announcing they will give away hbo free to unlimited customers. This is Cable Companies competing against each other to differentiate services. Kelly . If i dont have xfinity or subscriber, can i use this mobile service . You can if youre within the foot print. In order to sign up, in los angeles, we cant access comcast either broad band or cable. I couldnt become a subscriber here, but if you live in a neighborhood where you can access comcast broadband, you can sign up for the service. You have to it has to be bundled with internet service, so the idea is that youre not just doing it as a stand alone thing, but figure most people subscribe to a broadband package and ultimate level phone pack, bundled together. You dont have to pay for a tv bundle to get the phone bundle. Thats a different thing. They have 25 million right now paying for broadband. They automatically sign up for this mobile phone service, or if youre within the comcast foot print, sign up for broadband as well as mobile. Rall right. I think i got it. Favorite point in this is, of course, Wireless Industry does 82 billion in earnings effectively. Cable just 35 billion. Tremendous pull. The other piece of the backdrop is theres talks that once the Wireless Networks get much many better, youll be able to get everything over the air. You might not even need bundles, so allow people to access it. Its always been hype and content over the pipes, but the last mile of the pipe is virtual, wireless. I think charter has it coming next year too. Getting interesting. Heres whats happening at this hour. Health Intelligence Community nunes will temporarily step aside from the investigation into russian interference in the 2016 president ial election. Hell be replaced by mike c conaway, a republican from texas. Nunes earned my trust for years of integrity and dedication to the critical work that the Intelligence Community does to keep americans safe. He continues to have that trust. Clashes broke out between police and striking labor unions near argentinas capital. They fired Water Cannons and tear gas as protesters attacked them with sticks. They are protesting government austerity measures and demanding wage increases. A new tool to spot fake news stories and other misinformation that spreads. They feature the top at the news feed for a few days in 14 countries. Kelly, back to you. Interesting move. Exactly. Thank you very much. House Speaker Paul Ryan says tax reform may take longer to get done than replacing obamacare. Could republicans end up using all their Political Capital before taking it up . Up next, that debate. 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. Welcome back, a nail bitie ing finish to the close. We almost were negative in the final hour or two amid tensions surrounding the meeting between trump and the chinese leader xi over what aspect of the north korea strategy might come up, and, of course, over syria. Tillerson gave a News Conference and trump making headlines about how the u. S. May go it alone with north korea if china does not participate, and them, of course, syria reports from the New York Times and elsewhere there could be military action considered there. All of that, again, effectively going negative for some of the an averages, but closing positive. Republicans have also been promising to repeal and replace obamacare for years. President trump promised it would be done quickly, but the house was unable to finalize the bill, and now theres talk about moving on to tax reform, but as the gop squandered its Political Capital, heres mark meadows on this very question earlier today. Im optimistic on tax reform if we do it differently than health care. I believe well get tax reform and think we can get it done before august as long as we are really serious about having real debates. Joining us now, the American Enterprise institute, and cnbc contributor and chris edwards, director of tax policy studies at cato institute. Thank you, guys, for both being here. What about the Political Capital . How much is left here . Well, i know its like the natural interest rate. Its tough to measure directly, but you can try to figure it out, and one thing that popped up today, Goldman Sachs had a report, stock links to various trump initiatives, tax reform, infrastructure, a few more, and every one of those baskets of stocks is in retreat. Some are back, you know, where they were before the election. I think thats just one sign, also, the president s popularity. They did not start out with a lot of Political Capital. I guarantee theres a lot less now. This agenda, particularly tax cuts, amazing as it sounds, the idea of big tax cuts is in tremendous jeopardy, but the moderate tax cuts is in more trouble than i imagine given these are republicans and they control congress and the white house. Yeah. Chris, you are an optimist. Why . Absolutely. Tax reform is going to happen this year. Particularly business tax reform. Never seen a president so committed tax reform. Bush wasnt, clinton wasnt, nor was obama. Trump is visceral against the Corporate Tax rate problem. The highest priority here is flashing the Corporate Tax rate. Britain and canada slashed theres down to 15 . They did not lose any money. Thats what we ought to do. Republicans have to get rid of the boarder adjustment stuff. Its dividing supporters, dividing members, and they get rid of that, they go whole hog on the Corporate Tax cut and do it a smaller individual tax cut. It can absolutely happen this year. I dont believe it has to do with Political Capital, whatever it is, but it has to do with arms lifting and horse trading. Obama passed obamacare with horse trading. Republicans ought to get down to the horse trading, do what they need to do to pass big tax cuts. Whats common with all sorts of popular leaders, whether its this country, other country, they dont recognize political and economic constraint, and at this point, the talk about a tax cut, a leer rate, 1520 , and no border adjustment. Dont try to pay for it. I think thats not going to happen. It loses a ton of money. Now its a cut down to 28 . Thats not the math jimmy, yeah, youre not looking at the experience of other countries. Not dynamically scoring the analysis . Ill give you a precise comparison. Britain cut the rate 28 to 20. Canada 28 to 15. I looked at data in detail. Neither country lost any money in terms of Corporate Tax revenue as a share of gdp. These Corporate Tax cuts pay for themselves because multinational they invest more. Even the tax scoring from the tax foundation, tax cuts lose money. Aggressive dynamic scoring. The most the real World Dynamic scoring is two of the our biggest trading partners. Proof in the pudding. They did not lose money. Rates came down across the world for this reason because both politicians of the left and right realized cut the rates. Looking for the mother of all tax cuts. That time passed. Chris, i guess the question is, you know, what do you say to the president who is very committed, he gets it, but why not run into the same types of businesses that health care did, where you have people, saying, listen, we have a hard line here. Its basically on paper buy our math. Wydens out the deficit, we dont want to go for that. Its going to happen, i believe, these things dont happen overnight. Reagan tax reform in 86 was years being moved back and forth between the white house and congress, and it was all kinds of horse trading. It may take a while. Tax cuts are the central balloon that holds the Republican Party together. They know they got to pass it. Its been a central promise of theirs. I think its going to happen. They have no plan. Last word, jimmy, last word. They have a president they the president did not Pay Attention to policy. They are sitting here in appraisal with no plan. What they had in Political Capital, not much. They have a plan, but too focused on the border adjustment, diverting attention. Get rid of that. Get down to rate cuts. We gave you the last word, chris. Oh, no, going back and forth. Thank you. Fun to watch it, but nerve racking for investors admittedly. 2017 is a politically critical year for the president xi too. What he needs to do over the next two days to keep beijing happy. First, potential plans to go public why that may spell trouble for wall street when we come back. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Welcome back. Brazilian airline founded by former jetblue ceo is set to price the ipo any moment. The carrier had plans to go public twice in recent years, meanwhile, spot jify may go public in an untraditional way. Leslie picker has the details. Kelly, rather than an initial public offering, its an initial public listing. That means is that spotify would not sell new shares or market itself in a traditional road show. Instead, the Swedish Company would register its stock to allow current holders to sell on the market. Supply and demand would determine the price. This is something the company is seriously consider, sources say. Why do something so unconvent n unconvention unconventional . For one, spotify has 1. 7 billion dollars in cash on its Balance Sheets and doesnt need to raise money through an ipo. Spotefy could save millions on bankers frees and talk freely to get others to the same place and not have the rules that come with an ipo. One investor likes this alternative method. If you are going to offer an initial public offering, that means that shares are going to get deluded. If the company doesnt need the capital, then theres no need to raise capital just for the sake of it. He said he has not decided whether hed sell yet, but experts say it comes with risks. Liquidity would not have a set offering size, and spotify will not have the benefit of banker introductions in a road show, but spotify is successful, there could be others following suit. Fascinating, thank you. Is this the same thing the maker is doing, saying they go public, but not really, and if you buy 5,000 in shares you get a rotisserie or something. A nonpublic offering selling stock, but this is grum a grudg way to be a company, allowing investors in the private market to have linquidity, but not goig through the process. I dont know that its about fees. It reflects the fact that these big, very wellfunded private companies needed in the areas just dont see the need. Theres a provision, i dont know if its in play, leslie knows, if theres a certainly number of shareholders whatever it is, you file papers saying youre public thinkway, so you have some of the downside of being public without the listing making it easier to fill stocks. The jobs act got rid of that for the most part. Definitely companies have been able to raise so many rounds and become so massive that they can do this, and whats interesting here is that it seems like a lot of unicorns taking in money in a very expensive way, which means that theyve taken these debt structures, debt securities, making it so that it becomes more expensive the longer they wait to go public. Now why spotefy has exactly chosen this method is something im continuing to report because i think theres more to the story here. It is something that we could see be emblematic of the unicorn phenomena trying different things. Too cool for school. You wouldnt want to have an unwritten offering, make a big deal going public, and the public valuation is lower and embarrassingly so. I dont know if thats the equation or not. For wall street, i know 7 fees on ipos. Its come down, probably, but still lucrative, and they would not get a piece of that if ha happens. A law firm in new york did a study that showed that the average ipo, and much smaller ipos than what spotify would be doing, prices are 12 million. They can run as high as 100 million. Thats just for ipo fees, so that does not include some of the other expenses that go along with the megaipos. Spotify has been a trend setter, and the opportunity is here as well. Thank you, leslie. Thank you, guys. Leslie pick ir. Tale of two World Leaders with chinese president xi by the book and President Trump is off the cuff. Upcuff. Up next, they are hoping their twoday summit in mara lago will bring. One beaten down sector that has the chart mast, saying you have to sell now. Wheel be back right after this. . . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. Deartheres no other way to say this. Its over. Ive found a permanent escape from monotony. Together, we are perfectly balanced, our senses awake, our hearts racing as one. I know this is sudden, but they say if you love something. Set it free. See you around, giulia welcome back. President trumps twoday meeting with president xi jinping at mara lago is under way. There is a lot at stake. Good morning, eunice. Reporter good morning, kelly. Well, i know its early in the morning over here, but the level of coverage of president xis arrival so far is very, very minimal and unusually low for an event like this. So far what were seeing is a 100 word acknowledgement in the state run News Agency Xinhua that she has arrived. There are no photos of xi, no video. All conversations of event have been blocked. The media is a part of the governments overall effort to control the narrative around this event to its people from beijings perspective. Whats most important is that president xi appears strong in this meeting. For domestic reasons, because china is facing a leadership shuf him in the fall, its very important for president xi to appear tough. One of the worst Case Scenarios reeling for the Chinese Government is if there are any unscripted moments in this event, which could potentially embarrass president xi. So any disrespectful tweets, awkward moments, signs of open hostility and the best Case Scenario is that china manages to avoid a full on disagreement over trade, market access, north korea or other issues and also if theyre able to establish a path for constructive dialogue and sent a sign of civility in the relationship, thats really what china wants and kelly, i dont know if you remember yesterday, but i was telling you about how there was a bit of grumbling on social media that mara lago was chosen as the venue, instead of the white house and that some people saw that as a sign of disrespect. Well, that conversation now, has been completely censored. Kelly. Wow, im surprised there is so little coverage, its really interesting. Eunice, thank you, we will see how that changes as the two leaders continue this meeting. The ceo of one of the Largest Companies is meanwhile getting a massive pay cut. Well have those details next. Dont miss jim cramers interviews, tonight at 6 00 p. M. On mad money. Various shouting heigh ho its off to work we go woman on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. And each job created by the Energy Industry supports two others in the community. Altogether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energy lives here. 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, Energy Giants bp flashing the 20s 16 pay package of ceo bob dudley to 40 to just under 12 million. It comes after the 2015 pay package that gave them 20 million. Its like the Company Loses 5 billion during that period, mike. It seems its a trend against all investors in uk companies. There seems to be a big backlash after corporate scandals, just the sentiment is running against it. So big votes against high pay packages are perceived as high, theyre not binding the company is responding, glox so smith klein. The big ceo, his pay was cut. Still very much competitive with other Big Oil Companies in europe. How common is it in the u. S. For shareholders to push back . There are these stay on pay votes. Every big company, theyre nonbinding as well. I think the research is completely mixed. I think many investors dont see it as their role, basically in the u. S. Its look, you can tell the stock if you dont like how theyre paying. Its taking, seems to be picking up momentum in the uk, there are signs in europe, the corporate governs is improving. You can look at elliot, the ppg situation, but there is a lot of hurdles as well. Its going up over there. I think thats the case. When it comes to pay, there is ratio on ceo pay and worker pay. So its a little different tone over there. Speaking of pay, we get the wage numbers tomorrow morning. We do the wage number and labor force participation. We tell you about this, too. They can vote this down if they dont like the number. You can do what you want with your bonds, based on what comes out. I think the market is prime for a soft number. I think the incentive is maybe we can give back. You bring up a good point, if its as important. I know people have been saying this for a while. The broader one the president still talks about this all the time. You want to see that go down, but also, if, in fact more workers come into the work force, it does give the fed more leeway to say maybe were not a full employment. Maybe we dont have to rush so much. The interpretation is more labor slack than we thought, if it does go up, if workers do come back. We look forward to that report. We will learn what is happening then. That does it for closing bell. Fast money begins right now. Fast money starts right now we start with two major stories out of the Trump Administration as global tensions are on the rise, secretary of state Rex Tillerson and President Trump are both getting tough on syria and this as the president has arrived in florida, getting ready to meet with chinese president xi. The tough talks, the stocks say that was up at 100 points, the highs on the day, ending up high higher, about 15 points. Eamon javers and kay