Good wednesday morning. Welcome to squawk alley. Jon fortt, sara eisen and me at post 9. Markets once again chasing some record highs, eight straight gains now for the dow, which, of course, hit a record intraday high earlier this morning. Thats a 13 jump for the industrials since the election. Joining us this morning, paul christopher, head of Global Market strategy at wells fargo investment institute. Paul, its good to have you today. Thank you. As the debate goes on about how much of this is fundamentals versus political expectations. You think its the economy at work here, dont you . Yeah, we do. We have a lot of clients, though, investors who think that, well, gee, if this is really all just about policy, then this rally is riding on thin air. We dont think thats necessarily the case. The economy started to improve long before the elections, just started getting noticed on november 9th. We got the s p now above the average yearend strategist target of 2,364, or just about there, but strategists arent raising their targets higher. Why not . What youre not seeing is were all behind the scenes scrambling to test different scenarios of policy outcomes and how that might affect the market. But at this point, theres no point in publishing anything because theres just no way to know how those combinations will come out. You could have very positive results for the economy and the markets and very negative results. So, its time really to stay pat. But once investors need to know that once those details start coming out, everyones going to be heading for the same door at the same time. All right. Want to bring in gabriella santos, Global Market strategist for jpmorgan funds. Welcome. Gabriella, you say this isnt a trump rally, agreeing with paul that its a global reinflation rally. How does that play into what we should expect for the rest of the year when it comes to perhaps, say tech stocks, which have been on quite a run since november after initially selling off . Thats correct. So, we really believe that this market rally began in the second half of last year as the Economic Data in the u. S. And around the world really started to improve. And i would agree with your previous guest who said that, really, we dont have a lot of details in terms of the politics. So what were going off of in terms of expectations is the economy that we have, which is one thats pretty good. So, our expectation for the market overall is 5 return for the next few years, and we really need to dig deeper to find some outsized opportunities with tech being one of them. Paul, im just looking at the discrepancy between the stock market and the bond market. The 10year yield seems to be stuck around 2. 40 right now. As the stock market has continued to make new highs. The datas been good. We got existing home sales earlier this hour, paul, and it looked like it was the highest rate in ten years. So, which market has it right . And is one sort of painting a cautionary signal for the other . Not necessarily. The bond market is going to be watching longterm inflation. Those expectations in the market have been flat. Thats why the bond market has been flat in terms of yield. The stock market, though, continues to see some good Growth Prospects for this year. And look, we think that even though those policy details are missing, investors should still be investing in the cyclical stocks that will benefit if the economy continues to improve as we expect. And gabriela, how would you recommend investors protect themselves in this kind of environment . Given, as carl mentioned, were already at about the levels that a number of strategists had targeted for the end of the year. How do you protect yourself to the down side . Is it just getting into the cyclicals, or is there a better way . So, its looking beneath the surface, looking for sectors that have higher return opportunities. So, we would agree those would be the cyclical sectors. But its also about looking a little bit beyond just the United States and thinking what other regions perhaps have higher upside potential . And to us, thats really where the action is going to be over the next few years, and that would be regions including the eurozone and including emerging markets as well. So its really looking at a portfolio and thinking globally here. Yeah, gabriela, weve had a lot of discussions really since the beginning of the year about how europe, according to some, is a lot less expensive than u. S. But even today, were getting a lot of this intraday news regarding french elections and potential alliances. Maybe its less expensive for a reason, right, because of the political uncertainties . Right. I dont think we can dismiss Political Uncertainty in europe. The issue is, though, with 19 countries in the eurozone, 28 in the european union, there is never not going to be a year where we have elections. So, its looking beyond a little bit of the political noise and looking at whats actually happening on the ground with the economy. And if you look at eurozone pmis, for example, that just came out for february, at the highest level in six years. So, separating political noise, which will be with us, versus economic improvement, which is very, very encouraging in the region. Its going to get interesting. Paul christopher, gabriela sant santos, thanks so. Well see you next time. Thank you. Thank you. The president this hour meeting with secretary of state Rex Tillerson ahead of the secretarys trip to mexico. Our Kayla Tausche is in washington with the latest on this one. Kayla, good morning. Reporter good morning, sara. It will be a closely watched meeting when secretary tillerson meets with mexican president Enrique Pena Nieto and top officials to discuss border security, Law Enforcement cooperation and trade, among other issues. Of course, it happens since the president s own meeting last month was scuffered by a twitter war. The president hasnt tweeted directly about mexico since then, though last week he called the trade situation there severe. Joining secretary tillerson will be Homeland Security secretary john kelly in the midst of a plan to deport undocumented criminals and adding 10,000 new enforcement agents. The 11 million undocumented immigrants in the u. S. Paid close to 12 billion in local taxes. Thats data from the institute on the taxation and Economic Policy as of last year. Now, legalizing those immigrants, this agency said, would add 2 billion in tax revenue, but its unclear as of now what the Economic Impact of the current administrations plan would be. The trump camp has actually explored ways in the past to tax remittances, which actually reached a record 27 billion in 2016. Meanwhile, a congressional delegation is using their recess week to investigate border security. Texas senator john cornyn will host Speaker Paul Ryan along the rio grande today, and heres the majority whip last night in laredo, texas. I believe its our intention to lead with recommendations to general kelly, to secretary kelly, and to president trump, on how to actually achieve the goal of securing the border, at the same time leaving open the bridges and the important trading relationships that are so important to our prosperity. Reporter speaking of trading relationships, as we reported yesterday, the official u. S. Clock to renegotiate nafta hasnt begun yet, but treasury secretary Steve Mnuchin will be meeting the finance minister in the coming weeks. This happens as mexicos central bank will inject 20 billion in currency hedges to support the peso, but all of that, guys, im sure will come up in becky quicks conversation with the treasury secretary tomorrow on cnbc. Carl . Thats going to be a big interview, kayla. Thank you very much. Kayla tausche in washington. When we come back, big news from apple today and its new spaceshipshaped headquarters. The stock making new record highs. Immigrations Economic Impact. Trillions in Economic Growth at stake as the administration rolls out some new guidelines. Then later, netflix buying a big project from hollywood. A lot more on their content plans that involve scorsese, when squawk alley continues. H. We need your password so we can lock down the system. My password . Yes, sir, we need your password. The passwordhat i use . Yes, sir, your password. Theres been another breach sir right. Okay. Iha. Temyjob1. Ihatemyjob1 . Wanna get away . Now you can with southwest fares as low as 59 dollars oneway. Yes to low fares with nothing to hide. Thats transfarency. Sfx clap, clap, ding oh. Ncome on. Och method whats going on here . You know how ge chnology allows us to fix problems before they. They slow production, yeah. Well, no more catchy business acronyms. Wait, we dont need to smooch . Im sure we can smooch a solution we just need to hover over the candice, problem until. Just let it go. Hey, sorry im late for team building. Smoooooooch that felt right. Whats wrong with you . Hes so trusting. Ill send it over to seema mody for a quick market flash. The major indexes may be down, but one stock bucking the trend, shares of valmont, tracking for the best days since 2009. They specialize in irrigation equipment and beat results on its top and bottom line and upped its guidance for 2017. Keep in mind, valmont not only an agriculture story, but an American Manufacturing play. Shares were high, up 13 in early trade, and the stock is up about 40 over the past one year, carl. Seema mody, thank you so much. As we said earlier, the nasdaq coming off its eighth Straight Record high as tech continues to play a major role in the recent rally. Apples just one of the stocks leading the charge, hitting another record high yesterday. The Company Announcing its new 175acre apple park campus will be ready for employees this april. Kate mitchell is partner and cofounder of Scale Venture partners and joins us to talk about that and more. Kate, good to have you back. Good to see you. A lot of cynics look at any company that has a brandnew headquarters and they say thats got to be the top. Is this a sign that spending or capex or sg a or anything is out of control . No. I mean, apple, they did this initially at one infinity loop, so this is not the first time theyve launched a great, new campus, and with it, breakthrough, by the way, some of the things we have yet to see on this campus is what its like inside. They focus, as all of us do as users, on employee productivity, and it will be fascinating to see their view of what it looks like now. They dont have some of the challenges others have. I think it will attract a lot of people and a lot of employees, which is a big issue for Companies Like apple. Kate, what a lot of people dont know is that apple at one infinite loop has just been desperately overcrowded for years now. Theyve got employees scattered in small offices throughout cupertino, throughout santa clara, and when youre trying to get a project done, whether its software or hardware, thats really difficult. Theyre going to keep one infinite loop and also open up apple park. How much do you think this could improve their productivity now that theyre going to be able to keep the bulk of all their employees at these two campuses, which are just a couple of exits along 280 away from each other . Well, as academics and Companies Like apple have shown, collaboration is the way you get to success. Its the best and most important thing in terms of creativity. Its to share ideas with others. And their ability, and i think that circular shape is indicative of what i think a lot of us will expect to see inside. This chance for engineers and all of the people across the company to really begin to brainstorm on whats next. I think its going to jumpstart the employees. I think a lot of going to work is how you feel when you come into a place and who youre interacring with. I think its going to be a great shot in the arm for them. Yeah, the great talent race in Silicon Valley. Thats what it signifies to me, kate. I wonder with some of the hurdles coming from this administration, for instance, on immigration, something Silicon Valley has been hitting so hard, where apple stacks up, both in that fight on immigration and in attracting the best talent versus some of the other major competitors. Actually, you know, tim cook has taken the lead, i think, with his own personal communication about his lifestyle and taking the lead. I think he has both said im going to collaborate, obviously, with governments at hand, and he should, but i think hes, as they have for a long time, really taken a lead on being inclusive and thoughtful. So, i think theyre going to be particularly attractive, obviously not just because of their campus, not just because of the exciting changes and the new apple iphone being announced coming out this fall, but i think a lot of it is the culture of where you work. And tim cook in particular i think has taken a very public stance, and it all starts at the top. And you know, people put up billboards on the freeways around here simply to attract employees. I think apple couldnt do better than what theyve already done with tim cooks leadership on that. So i think thats going to be really critical because it is a talent war out there, and i think hes going to get a lot of the best people. Were all going to have to Work Together on this whole issue of immigration, and we obviously care a lot about it in Silicon Valley. And its great to have somebody like tim who is at the forefront of that discussion. Yeah, tim has a nice blog this morning talking about some of the details, including a theater that will have jobs name on it. Moving on to snap, kate, evan spiegel pitching investors in new york city yesterday ahead of the ipo, addressing concerns about spending, lower user growth and competition. Susquehanna today takes a pretty cautious tone ahead of the ipo, largely, they say, because of competition from facebook and instagram. A few moments ago announcing a feature whereby users can add multiple photos or videos in one post. Of the list of things snapchat has to convince investors of, is dominance, or at least ability to compete with facebook, one of them . You know what, absolutely, and i think thats one of the challenges right now. You saw that their growth slowed when Instagram Stories came out, for example. Its very tangible. Given the world theyre operating in right now, they have a nice brand, but obviously, thats a huge market power with their big competitors. So as their product stands today, i think thats a somewhat challenging issue, and its been raised by people contemplating buying the shares. I think if youre buying the shares, youre believing in Evan Spiegels future view of the world, and hes already made a statement that this is all about the camera. Theyve launched spectacles. Theyre very interested in hardware. I think much like when facebook went public, mobile was yet to become as significant as it has for them. I think if youre buying snap shares, youre believing in evans vision for the future where theyre going to be building a bigger mote versus their competitors. I think a lot of it will be about augmented reality. Youve seen the success of pokeman go. Thats what you have to believe Going Forward. I think if their product road map was to stay where it is today, i think that would be smpg to worry about. I want to bring in Farhad Manjoo of the new york times. Farhad, good morning. Picking up this conversation about snap, a lot of people will compare this to facebook, if only because theyre going to be competing for some of the same Digital Advertising dollars. But ive underestimated snap and other people have gotten in trouble for doing that in the past, but when you look at zuckerbergs bench, hes got Kevin Systrom running instagram, hes got jan koom running whatsapp, david marcus, all of them ceos in their own right. Doesnt snap have a big hill to climb here . Yeah, i think they do have a big hill to climb in two ways. First, on product. I mean, i think snap is just one of the most inventive companies out there. Theyre creating sort of new ways to use social media, you know, better than anyone else. The problem for them is theyre being copied, and then the ways that facebook is sort of copying them is often kind of extending what snap did and making it, you know, translating it well to the facebook and instagram and whatsapp audience in a way that really kind of undercuts with what snap is doing. You know, snaps user growth could suffer because of the product side of it. And then on the other side, i mean, facebook just has this huge lead in the digital ad business. And so, you know, it has all these contacts with the Advertising Industry to get those advertisers, you know, not exclusive. Its not like the advertisers wont go with snap, but its, you know, it makes it much more difficult for snap to kind of stand out, both on the product side and on the advertising side. So i do think it is pretty difficult for, you know, for what theyre trying to do. Finally, guys, ubers ceo, travis kalanick, holding an all hands meeting at the Company Headquarters yesterday following allegations of Sexual Harassment and gender bias at the startup. Employees who participated in the meeting reportedly calling it honest, raw and emotional, adding they were taken aback by kalla nicks response. We covered this a bit yesterday, farhad, kara swisher, but impact on culture at uber right now. I mean, everything ive heard suggests that its bad, that morale is low. You know, this incident follows, you know, several weeks of people talking about whether kalanick would or would not be on the president ial advisory committee. Lots of employees were upset about that. And there was that delete uber meme, which from what we know sort of hurt user numbers, at least in the u. S. , by a lot. And you know, i think the question for uber is, like, they have this brand that no one sort of gives the benefit of the doubt to. So, every story like this that comes out kind of hurts them in the long run with users, like with their, you know, like what people think about the company when they use the app. And its just an app, right . Its just software, and people can easily choose a competitor. In every country they serve now, they have a welloperating competitor, and people could easily switch drivers and users. So you know, i think this is a longterm problem for them. The way that people feel about the company is a longterm problem for them. How big of a controversy is it, kate, for a company that is arguably one of the most successful startups and largest startups in Silicon Valley that is potentially bracing for an ipo, that is valued near, what, 70 billion i think was the latest, kate . How big of a deal is this in that sort of rise to a Public Company . Its a huge deal. No, its absolutely the right question. And i think, you know, the doubters in the valley are saying, gosh, his reaction was really his concern about the success of the Company Going forward. Was it a real concern about the issue . You have to, you know, give him some benefit of the doubt there. I will tell you, it has been a wakeup call. Susans letter ricochetted throughout Silicon Valley, and i think the smart ceos have been using this as a teaching moment. And culture starts at the top, and we need to be its a talent war that were in. You need to have the best people focused on doing the right thing, collaborating for success, as we just talked about with apples new campus, where you have that kind of infighting, a lack of inclusion and a welcoming environment, it is not the recipe for success. And i agree with farhad that thats affecting how we perceive the company and its public persona. Its been a big issue. I think it could be a challenge for them Going Forward as an ipo. I think in many ways its a gift to the rest of Silicon Valley to remind us we all need to still focus on this issue and doing the right thing, much like facebooks been doing recently with many of their newest policies. Leadership starts at the top and hes got to take ownership of it. Kate, how many wakeup calls does Silicon Valley need . And by no means am i just singling out Silicon Valley here. Its a problem everywhere. But weve got Sheryl Sandberg leaning in, weve got all the issues around Marissa Mayers ceo tenure and the criticism that she endured there that people saw as gender biased. It seems like there is a wakeup call every year, yet people are still asleep. Isnt there a deeper issue here . How do you fix a culture thats eight years old . Uber turns 8 next month thats behaving this way . Well watch what Arianna Huffington and eric holder and many do at the top there. But i think you raise a really good point. I mean, this has been a longsimmering issue. It starts in the graduate schools now in computer science. And ill tell you, it is going to be something that is going to be that we need to stay focused on, because i agree with you, its a topic that hasnt gone away. I think one of the things youre finding is in the last starting with Sheryl Sandbergs book, by the way, its now a topic that is regularly covered. I cover it a lot and talk to a lot of men and women on the topic and people of all minorities, status, et cetera, that all need to be brought into Silicon Valley for us all to stay competitive in the u. S. And again, i think partly with the discussions around immigration letter now so front and center in everything we do, this topic isnt going away and we have to keep talking about it. I compliment all of us for being here raising the issue for those of us that are listening. Again, this is not being about good, its being about smart and the best way to build our companies and being inclusive and thoughtful is important, and i think, therefore, its a question for companies that havent shown yet that they can do it and ubers still in that category. Yep. Kate, farhad by the way, farhad, good piece in the times regarding the news flow. Good to see you guys. Thanks. Thanks so much. Thank you. And when we come back, why Walt Mossberg says roku, apple and google arent changing fast enough when it comes to television. Plus, first it was twitter and the nfl. Now facebook might be getting into live sports streaming. Squawk alleys back right after this. Runs on intel . That ride share . You actually rode here on the cloud. Did not feel like a cloud. That driverless car . I have seen it a. Intels driving. The future traffic lights, street lamps. Business runs on the cloud. And the cloud runs on intel. I wonder what the other 2 runs on. car horn know you have a dedicated adsoand team who understand where you me from know you can craft an Investment Plan as song yo r values know that together, with theuidance and support of your you caestablish a meaningful legacy dedicated pnc wealth management® team. Netflix reportedly teaming up with one of the biggest names in hollywood. New reports the companys buying the worldwide rights to scorseses upcoming film the irishman, formerly with paramount. The film is set to debut in late 2019. It will reunite de niro with al pacino. Its funny, weve got the oscars this weekend. Not unthinkable that netflix could be up for competition in the coming years. Explain this to me, carl, because netflix had beasts of no nation, idris elba, could have been a big film, didnt do that well. Is this their chance for a doover . Do you think theyll go theatrical with this release as well as netflix, because theyre spending a lot of money . A lot of money. I dont know we have terms on this deal, but the fact that they took it from such a large studio, an echo of what amazons doing, and amazon has real oscar aspirations this year, not next. Apparently, theyll do Something Like a backwards, benjamin button style, make them look younger, hence the big budget. It shows netflix is changing the content game, not just distribution, playing 6 million this year, more than last year, and not just coming in original shows but movies, too. Rewriting the script here literally i think for producers and agents and actors. The hot, new thing, scorsese movies with pacino and de niro. Still to come, why one study says the president s illegal immigration crackdown could cost the u. S. Economy as much as 5 trillion over the next decade. Squawk alley back in a moment with the dow up over ten points. [pony neighing] what . Hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a livperson right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at Td Ameritrade. Im Contessa Brewer with your cnbc news update at this hour. Iraqs government sanctioned Paramilitary Forces made up mainly of shiite militiamen, are launching a new push to capture villages west of mosul from isis militants. Iraqi Government Forces took a hilltop area overlooking mosuls airport. The body of an egyptian cleric convicted of plotting terror attacks in new york has been returned to egypt for burial. Omar abdel rahman died in a u. S. Federal prison over the weekend. Convicted of planning terror attacks against the United States. He was linked to the 1993 west bombing. Calphalon is recalling 2 million knives because they can break when you use them. They were sold between august 2008 and march 2016. The Company Received more than 3,100 reports of those knives breaking and more than 24 reports of cuts to the hand. According to bankrate. Com, the percentage of americans with more Credit Card Debt than Emergency Savings has grown 2 to 24 over the past year. Only 52 say they have more money in Emergency Savings. Thats unchanged from a year ago. Thats our cnbc news update for this hour. Lets get right back to squawk alley. Contessa, thank you so much. Lets get the european close here. What a day, especially in france. Seema modys got all the details. Hey, seema. A lot of politics, carl. Stocks are mixed in europe, but the economic story continues to improve, this time on the inflation front. The eurozone just posted its first month of rising inflation across all its member states. Italy sees its biggest rise in inflation since 2013. So, say byebye to deflation, for now. Also in focus, german sentiment in business is climbing. The german stock market hitting a new twoyear high and back above 12,000. In stocks, unilever on the rise after rejecting a takeover offer from kraft heinz, the consumer giant now announcing that its conducting a review of options aimed at boosting shareholder value. Investors had been urging unilever to assess its costs and structure. Shares up over 5 . In the uk, lloyds posting its best fullyear profit in a decade, thanks to lower provisions. It also unveiled a special dividend payout. Now eyes on whether the uk government will prioritize its efforts to offload its remaining stake in the bank as the companys financial outperformance continues. Alcor saw strong operating demand in germany and the uk, which offset weakness in france, but a lack of guidance for current year weighing on the stock. Meanwhile, they have named former french president Nicolas Sarkozy to the companys board. He will be in charge of its international strategy. So down but not out. On the topic of french politics, growing concerns over Front National party marine le pens support ahead of the firstround election in april. Moments ago, French Center risk politician bayrou seen as a heavyweight proposing an alliance to manuel macron. Sara . Seema, thank you. The Trump Administration out with two sweeping new immigration orders, promising to swiftly support more of those living here illegally, but whats the true Economic Cost over moving undocumented immigrants . A recent paper from the National Bureau of Economic Research suggests it could be as high as 5 trillion over the next ten years. And joining us, the reports coauthor, Queens College associate professor of economics frances ortega. Thank you for joining us, professor. Good morning. Glad to be here. You really dive into the various industries that could be affected, both in terms of output and employment. Whos most exposed here when it comes to cracking down on illegal immigration from an Economic Perspective . Well, in terms of industries, agriculture, construction, regional hospitality are in the industries that have the highest concentration of undocumented workers, they could see employment fall by over 10 . They could take a big hit. But id like to emphasize that undocumented workers are really spread throughout all sectors in the economy. So how do you tally up the Economic Cost when you get to that 5 trillion number . Yes. So, there are about 7 million undocumented workers in our economy. Thats about 5 of employment. And our analysis predicts that if we were to lose those workers, gdp, u. S. Gdp could fall by 2. 5 to 3 . Thats a big number. Thats like the whole Economic Contribution of the state of massachusetts, and it amounts to this about 4. 7 trillion over the tenyear period. Of course francesc sorry. Sorry, go ahead. If income falls, if gdp falls, federal taxes, federal revenue will also go down. And our calculations say it could go down by as much as 1 trillion over a tenyear period. So if were going to keep Current Services at their current levels, then well have to make up for that lost income. Francesc, how much of the impact is from actual deportations versus workers just not coming in the first place or choosing to leave just because of the stress of this new political and policy environment . Yeah, both things will have similar effects. In our analysis where workers lose, they show up to work, they produce in whatever industries they are employed. So, if we lose those workers either because they are deported or because they dont show up to work because they just hide for fear of deportation, the lost income could be about the same. Have there been other countries where your hypothesis here has been put further into practice than the u. S. Has . To my knowledge, there hasnt been in recent times a serious discussion about deporting such a large number of workers. So, really, we dont have a lot of actual data to go by. We have to rely on analysis. Youre talking about such big numbers to our economy and our labor market, francesc. I wonder why the market doesnt appear worried, hitting new highs every day. Economists havent forecast down their forecast for this. Do you think its because they dont actually see it happening . Well, so, we have to see exactly what are the whats the translation of the new executive order and the new legal changes, but probably we wouldnt be talking about the president is not talking about deporting the full 7 million workers. It would be a fraction of that, to the extent that its not as many people, then the Economic Costs are going to be scaled down. Like lopping off the equivalent of a massachusetts economy from the u. S. Thank you for joining us, francesc ortega. Were going to continue to watch this. Thank you. As we talk about how these immigration orders come through and the Economic Costs, potentially. When we come back this morning, Walt Mossberg on the future of television and facebooks plans for potentially streaming major league baseball. Dows virtually flat. Rick santelli, what are you watching . Im watching all the markets. And ill tell you, weve had many discussions today alone on cnbc regarding the relationship between stocks and bonds. Were going to do a little counseling on that relationship after the break. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medire doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligle for micare, you may know it only covers about 80 your part b medicaexpenses. The rest is up to you. 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[ maouncer ] jo the mlions of people o have already enrolled in the only mecare supplemen insurance plans endors by aarp, an Organization Serving the needs people 50nd for generations. Remember, all Medicare Supplement insurance plans help cover what medicardoesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds plans that will be here for yo now and down the road. I have a lifetime of experience. So i know how important that is. Im scott wapner. Coming up, the return of the activist investor. Karl akon and others are piling into new positions. Why now, and should you follow them . Plus, the semi index up 60 in a year. Today, one analyst has a list of names he believes will jump even higher. And one of our traders buying up shaurz shares of a broker today. Is it the right one . Were going to debate the name. The best of the bunch as well. Schwab, etrade, Td Ameritrade and others. The halftime report, carl, starts in less than 20 minutes. See you there. Well tune in for that. Thanks, scott. Lets go to the cme group and get the Santelli Exchange with rick. Good morning, carl. You know, i was going to talk all about the big negative rates in europe, how their twoyear note traded minus 90 basis points, how theres huge distortions going on and how the policy in europe is just ticking. Hows it all going to end . And were going to continue to monitor that, but i heard something that diverted my attention. I heard a couple of guests today talk about all the relationship issues going on between stocks and bonds, and a number of times i heard, well, you know, inflations flat, and then the topic would move on, just brushing that aside. Im not sure i agree, and theres plenty of other channels that involve pricing. So, lets go to the board. On inflation, im not sure i agree its flat. Just lets take fiveyear tips, okay . If we look at where fiveyear tips are and take the on the run fiveyear minus tips, its 201, the breakeven, hottest since 2014. Take the 10year minus 10year tips, its a 203, running the hottest since september of 2014. I dont know, that doesnt seem flat to me. Lets look at our most recent data, about a week and a half ago. It was for january on cpi. 0. 6 month over month change on that and ppi. On cpi, it was the biggest month over month change since september of 2012. For ppi, february of 2013. I could go more on ppi, but i found cpi more compelling. If you look at yearoveryear headline up 2. 5 , thats not flat. And 2. 3 on year over year core, thats now 15 months in a row 2 or higher. 2 , of course, is that arbitrary Federal Reserve level that they consider important. I dont know, legislation just says stable prices. All right, but theres a lot of other things that affect whats going on between this relationship. And when we talk about investment buyers, yields may now have gotten juicy, especially when you look at minus 90 basis points in the european twoyear. So, what does this do . They actually pushes rates down. Less hedging that 3450e7means as stocks go u theres not much selling in treasuries because of let nervousness in stocks. Think vix here. That pushes rates down. Overseas rates, the relative value trade. It might not be pulling one for one, but its pulling nonetheless. That actually brings rates down. And central bankers, their Balance Sheets still bloated, qe still being done at many central banks, runoff, u. S. Federal reserves still buying . Thats going to keep rates down. So, let me think here. Whats actually going on . It seems the one camp you might need to pay the most attention to, growth and change. On change, think of all the trumponomoic, and on growth, the datas gotten a lot better. You have many arguments while growths wellbehaved, you see it heerks but i dont think inflations one of them. Joan fort, back to you. Thank you, rick santelli. Back then, he was treasury secretary designate Steve Mnuchin and shared his views on the economy here on cnbc in november. Our most important priority is sustained Economic Growth, and i think we can absolutely get to sustained 3 to 4 gdp, and that is absolutely critical for the country. To get there, our number one priority is tax reform. This will be the largest tax change since reagan. Weve talked about this during the cam rain. Wilbur and i have worked very closely together on the campaign. Were going to cut corporate taxes, which will bring huge amounts of jobs back to the United States. Well, now the rubber hits the road. Tomorrow at 7 00 a. M. Eastern, becky quick sits down with mnuchin, now the treasury secretary. A big interview you dont want to miss. Well be right back. The whole wheelie thing. What do you mean . I just got this baby to get around the plant floor. Right, but now Ge Technology monitors eve machine. Yeahitrings massive amounts of information right to u. So you dont need that. Well, makes me look young yeahitrings massive amounts of information right to u. And uh. With it. Time to move on. Oh ill move on. Right into the future. Ackwards youre going backwards. Not just on your little thtablet, my friend. Und us itwith directvnd at t,tream live tv anywhere datafree. Join directv today starting at 35 a month. No extra monthly fees. Welcome back. Roku, apple, google, amazon, netflix, just a few of the Tech Companies trying to revolutionize tv. But our next guest says while consumers are streaming on mobile devices, tv, its not there yet. Walt mossberg is the executive editor of the verge. Welcome, walt. Interesting column, provocative, i would say. You talk about you want more unbundling, but let me push back on that. I dont get to say to netflix, ah, i dont want to watch all the netflix shows, i only like a couple of them, so i only want to pay 2 bucks a month. Isnt everybody bundling in one form or another . We dont get to pick everything. We dont get to pick absolutely everything. Youre not paying per show, joh. But netflix is not a collection of networks. Its a collection of shows. And so and its a huge collection of shows including an immense back catalog. One of the interesting things i learned at the code Media Conference last week which helped give rise to this column is people want a combination of new and back catalog just like they do with music. So, yeah, obviously were not going to get to complete total a la carte but were a long way from that when we talk about the cable box today. So, walt, isnt there a question of who gets the power in sort of the streaming friendly Digital Entertainment world of the future . Is it going to be apple and amazon who get the payment and then decide who gets distribute or is it going to be people closer to the content actually getting made . I can see dangers either way. Well, yes. Somebody is going to get the power. Right now all the power or most of the power is in the lands of the studios actually. Some of it is of course in the hands of the cable providers. I just think its inevitable. When you see the cable subscriptions falling. Like i said, theyre not collapsing but they fell significantly in the last quarter, in the last couple quarters. So change is coming. Im just really impatient about it. And what i want from the point of view of a consumer is what you kind of have in this rather brilliant heck of a product called cavo, which was you pick up a remote. You ask for any show on any of your boxes, on any of your services and it just comes up. It handles, you know, knowing whats on every box at any one time, what youve been watching. It doesnt matter if its a live show, a dvred show, streamed show, if its something you bought off amazon or itunes. And thats what i want. Who is behind that company and who in general, water, is leading the charge for this . For a while it looked like ap e apple. Who should we watch . I think you do have to watch apple. The read i got from eddies statements even though like every apple executive he doesnt tell you what their product plans are is. They are just playing a long game. Theyre waiting for the studios to become more amenable for changes in Consumer Behavior to come around and theyre going to keep at it. Keep at it. And the key to this really is unbund unbundling. Im going to Say Something now that is going to sound crazy but i dont think its crazy. I think a lot of the tv networks, the general purpose ones. Not like cnbc where you know exactly what cnbc covers. But the general purpose ones, i think have outlived their usefulness. The whole concept of a general Purpose Tv Network means nothing. Would it matter to fans of st. Night live if it moved off nchlt bc to abc . Would it really matter . I seen youre talking about broadcast networks that have three letters essentially, you think that they are dinosaurs . I do. And i also think some of the Cable Networks are dinosaurs, too, if theyre too general purpose and they dont have a personality or focus. So for instance, i dont know what t bs is. I know some shows on t bs that i watch but i cant tell you and i bet if you go out on the streets of, you know, any city in the country say, whats the personality of tbs . Nobody knows that. And thats a basic cable network. But to make that not just the broadcast guys. To make that leap, walt, though, would mean that no one would ever come home and just say, whats on . Im going to turn on the tv and find out whats on. Youre saying that kind of linear appetite is dying. I totally is dying. I know that i never do it anymore. And im not exactly a millennial. I dont know about you, john. In our house we look at what have we got recorded on the dvr. Whats on real core apple tv, whatever, that we might want to watch. Usually were in the middle of bi Binge Watching something and we watch something from there. Im a millennial and i watch the evening news. And millions of americans watch the evening news. Thats going to be valuable for these networks slo s as long as have the advertising model in place. Of course it is. But you will still be able to watch the evening news if we go to a showbased model because thats a show. So if you want the nchlt bc eve news, im not going to take that away from you. They can do six versions of it and you would love it. Well im just saying the bundle is the problem. Got it. The great unbundling continues. Thank you, Walt Mossberg. Thank you, guys. Great conversation with walt. Well get the later on snap when squawk alley comes right back. Yes, sir, we need your password. The password that i use . Yes, sir, your password. Theres been another breach sir right. Okay. Iha. Temyjob1. Ihatemyjob1 . Wanna get away . Now you can with southwest fares as low as 59 dollars oneway. Yes to low fares with nothing to hide. Thats transfarency. Sfx clap, clap, ding 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 as snap commutes with investors, evan spiegel needs to convince them not only to buy 3 billion worth of shares but shares with zero voting rights. Snap is selling about 3 billion worth of shares all of them nonvoting. It will be the first time a Company Goes Public offering zero rights to shareholders. Yesterdays road show lunch investo investors brushed it off saying snaps nonvoting stock is similar to structures that have become founder among led tech ipos. We took a look and the results are mixed. The Success Stories include google, facebook, linkedin and box, all up quite substantially since the respective ipos. Google and facebook have created nonvoting shares of their own in recent years and yet their stocks continue to rise. But when things go wrong at companies with dual class structures the performance really suffers. Gopro and fitbit, all Founder Led Companies with multiple classes of shares. Each of them are down forethan 60 since their ipos. Before buying shares in snaps ipos investors need to decide whether cofounder evan spiegel and bobby murphy who will cant control 88. 5 of the voting power. That is why the innorthern meetings with snaps management are so important this week. Guys . Explains how wide the road show has been, leslie. Thank you so much. Lets get of wapner and the half. Thanks. Welcome to the halftime report. Im scott wapner. Our top trade this hour return of the activists. Why carl icahn, nelson peltz and others are suddenly swarming again and what it means for investors and your money. With us for the hour today joe terranova, steve wise, brothers najarian. We begin with the markets and why big name investors are back and battling with the countrys Biggest Companies if latest example, carl icahns reported new