Transcripts For CNBC Squawk Box 20150403

Live from new york where business never sleeps, this is quarterback. Squawk box. If you can get mork and mindy from happy days, theres something to be done there for sure. Good morning. Welcome to squawk box on cnbc. Im Michelle Carusocabrera along with joe kernen and Steve Leisman. Stock market is closed today for good friday but there will be some trading. Equity futures will be open until 9 15 a. M. Eastern time and you can change on globe x until 11 15 a. M. Brent crude is trading. As for the jobs report forecasters say the economy likely added 248,000 jobs last month. The Unemployment Rate is seen as Holding Steady at 5. 5 and hourly average earnings expected to rise. 2 . So the Labor Department works on good friday. I think a portion does. Here are the other stories were watching at this hour. Iran, the u. S. And other world powers reaching a deal on a framework to curb tehrans nuclear program. This comes after eight days of marathon talks in switzerland. Details to be worked out and sanctions remain in place until a final deal is reached. More from john harwood in just a minute. In Corporate News ibm reportedly hiring investors to deal with restless investor in an attack by funds. Looking for help from activists to shake up the tech giant. But are said to have turned them down. And toyota is ending its expansion freeze. Reportedly planning to make 1. 3 billion to build new plants in mexico and china. Announcement could come this month. Were less than 90 minutes away now from the jobs report. Im not sure what time it is here. Its weird starting at 7 00 but its good. Our guest host this hour allison deans and a cnbc contributor. Before we get to you, i want to ask leisman. Wasnt it 284 before gdp . Nobody changed. Why do you think that is . Lazy . Adp has been a little bit below. Explain what happened. Adp is pretty good. And they missed. They were well below its been running within about 45,000 or so. And how short was it . It was 189. 40 or 50 short. And they didnt touch the 240. So i didnt see very many. Maybe one or two guys said theres downside risk. I remembered it was 248 before and you said 248 today. I know. Okay. So, hi. Thanks for coming in. Were only here for two hours, you guys. We told you that right . So weve really got to get three hours worth of information into two hours somehow without the stock market trading today. If they talk at the same time you talk we do not do that typically. Doing it right now. You didnt come down after adp . No. I mean three of the last four months have been terrible for adp. When you look at the last two years combined the average is close enough to 30,000 on a median basis. December was almost perfect. November missed by over 100,000. Its been on a cold streak. I want to ask allison first, is the fed still data dependent or are they doing it in june . I get the feeling it doesnt matter what happens from here. The number today could influence what theyre going to do. They need to do it. A quarter point is not going to hurt us. I think theyre still data dependent. Really . I think it might include stock market data. Even if some of the trends look favorable, corporate profits are under pressure right now. Thats not their mandate. Why would they do that . Well their mandates questionable. Fingers and toes. They were supposed to protect the soundness of the financial system. If theyre worried the stock market might make people nervous, it might be rationalism for them to hold off until later in the year. Then were in that cycle, right . If the market scares them they dont. Theres no difference between zero and a quarter. They need to get it started, steve. I think thats probably right that given the state of the economy that zero Interest Rates are wrong. But i think what they want to see is when theyre data dependent, i think theres a difference between maybe the markets conception of data and their conception. Theyre look at is the medium Term Forecast and how a single data point influences more of the long run. You know what . Ive seen people say its off to the races after the claims number that weve suddenly got past stall speed and things are cranking. There shouldnt be a reason for them not to do it in june. The numbers are going to start getting better. They have been better already arguably. In the last 12 months payrolls have averaged 2. 4 . The arithmetic is so overwhelming that unemployment is going to keep on coming down unless employment growth slows dramatically. At the end of the day its the employment rate thats first on the list for the fed. If it keeps falling, they will be tightening. Do they hold off until september . Tell me if im wrong, but i think people missed a little thing in a recent speech that yellen gave where she said were effectively prepared to hike if the core rate remains the same. Everybody said that that was a hugely dovish speech. Youre talking about inflation. And i think thats a little bit of a game changer. I think she has said that before. She also said shed be quite worried if it slowed any further. Now, since then actually the core pc did tick up from 1. 3 to 1. 4. I think number one on her list is the employment rate. The way the fed views the world, its a key leading indicator of inflation pressure. Has the move in inflation been enough for the critics out there who say if the mandate is both employment and inflation that inflation is at risk of falling and its not moving up fast enough. And thats why you wouldnt raise Interest Rates. I think if it looks fairly stable but if unemployment is clearly trending down then the fed will look ahead and say the downturn will push inflation up. Thats the structure theyre working with right now. I think if unemployment is on a down trajectory they stay on for tightening. Wouldnt you think a reasonable and competent fed chairman would probably emphasize unemployment more than inflation . I mean its not going to go lower. Europes going to recover. Were not in danger of deflation. You dont need to get to 2 . Thats a great thing to have 2 inflation, but i dont think its that profound to say im going to deemphasize inflation. But i also think theyre going to look at wage growth. Weve had this great trend in unemployment. But we havent seen much in the way of wage growth. Its going the drive potential inflationary trends. While people having going back to work, theyre going to lower pay than they had before the crisis. Seeing that change in attitude and the change in direction of pay is something i think will make it but it has started. Announcement by mcdonalds and walmart. Is that real because they cant attract workers . My sense is political. I think its the protesting around minimum wage. Probably both. You get tj maxx and walmart and all these guys. Theres so far to go. I pushed back on jim and said the Unemployment Rate will come down but the amount of slack in the labor market we dont know what the right Participation Rate is. To stabilize the Participation Rate. Okay . So we have not yet attracted people back into the workforce. I could see a scenario where wage go up at a rate. Im better off not working. Maybe im better off not working which creates this slack. I dont know that krueger is right here. That the people that left aint coming back. I think possibly they come back. Done about three points since it began. Saying theyre not looking for a job. Therefore not in the workforce but they want a job is about half a percentage point of that difference. Im not saying the whole three points or so drop is secular, but the bulk of it is. People retire and you look at other numbers saying that jobs are they have trouble finding workers or people saying jobs are plentiful, those numbers are all fairly consistent with the down trend in the Unemployment Rate. One thing we didnt say is i think its a possible because all the other data is weak that the jobs number could be weak as well. Theres been a bunch of stuff out there thats disappointed from retail sales to spending. Looks like we had softness in the First Quarter. I would not be surprised if that number was that portends a really strong number. Anyway thank you. Your work i dont i use you counterintuitively now. My work has been great until the last four months. Then it was im betting on a strong number. Much like adp and the other economists. I wont do my own estimate because nobody cares what my estimate is. I did john 3 16. You did scripture. I did pi and i got it right when i did pi. To a point. It was 314,000. What else have i done . A smiley face. I dont know what to do today. People could write in and give you a suggestion. Im not sure what to do. Anyway, thank you. Weve got to go on to this other youre going to be here. Alison is staying for the hour. Youve got to leave jim. We liked her better. See you later, thanks. The global story, the iran deal after marathon talks in switzerland. Supporters of the Iranian Foreign minister giving him a heros welcome today upon his arrival. But Benjamin Netanyahu calling the deal an historic mistake. In washington critics are already lining up as the focus turns on Convincing Congress to support the deal. If Congress Kills this deal not based on expert analysis and without offering any reasonable alternative, then its the United States that will be blamed for the failure of diplomacy. Joining us now, john harwood. Good to see you. It was suggested to reporters yesterday when it comes to lifting the sanctions, it was going to be gradual. But when you listen to the iranian version of the deal its that the sanctions are going to be lifted all at once and nearly immediately upon verification. It seems to me already that were starting to get into this gray area of disputes. Well i guess it depends on when verification takes place. White house is saying that the lifting of sanctions is going to be some years off and not something that Congress Needs to act on any time soon. Youre exactly right. The different ways this is framed iran came out of the agreement yesterday saying we dont have to shut down anything that were doing. The president said were reducing their the active centrifuges by 2 3. The president s going to have a burden of persuasion to the congress. But i have to say in talking to some of the republican Foreign Policy experts including some who served in president george w. Bushs administration, they were impressed by some of the elements of this deal which was more specific more substantive than some had expected. Its going to be the verification process, though right . I mean already people are saying all of those parameters are great and youre right, better than we expected. More specific than we expected. But historically iran cheats. And always has and theyre not convinced that theres enough theyre convinced theres still enough wiggle room in this they could start another facility. Thats the crux of the decision facing congress. Whether or not they can be confident as president obama said yesterday, this is not based on trust. He called it the most rigorous inspection regime that has ever been imposed on in a country. Now, all the details of that regime havent been worked out yesterday. Weve still got a couple of months to go until june 30th where they pledged to actually have the specifics. And thats going to tell us whether or not members of congress are going to be persuaded by that argument. John like so many things i read all the editorials this morning. It was weird. Did you read the Washington Post . You just said how much more specific and substantive it was. In the Washington Post with the key parameters on the deal fell well short of the goals originally set by the Obama Administration. The Washington Post goes in to go back and look at all the president s quotes about what we would accept and what we wouldnt and none of them were satisfied. So i got the post and i was like wow. I was really surprised they were there. The post has been consistently critical of the president on Foreign Policy. Reading the new york times, at this point its kind of like the old show not necessarily the news. Its kind of a parody. I think its i dont think theyre really serious half the time. I think its kind of a joke because its so off the wall and then i try to read the wall street journal and get the sense. They just said what you said. That there were some things in there that were better than some of the real skeptics were anticipating. So the journal seemed what fair. I get a little uncomfortable when i see cheering throngs dancing in the streets of tehran late into the night. That just makes me think that i dont know. Can i read you something from the tehran times which i think speaks to that . Do we have that full screen guys . In the framework of the agreement, none of Irans Nuclear facilities as well as the previous activities will be stopped, shut down or suspended. Irans Nuclear Activities in all its Nuclear Facilities will continue. Its a paragraph from the tehran times. I said that cant be right. Then i read the facts sheet. Im like you know the way this is written its vague enough to be accurate. Theyre right. I mean heres what the president s going to be counting on. Hes going to be counting on his wing man David Cameron as well as Angela Merkel in germany and the other negotiating partners of the United States to stand up and say we also think that this deal is worth doing. And so youre going to have a decision point. Israel has been very critical. They said the smiles in switzerland conflict with the retched reality of this deal. Were waiting for a statement from Prime Minister netanyahu this morning. I got a note saying his statement has been delayed. Well see what he says in front of the cameras. But the president called him as well as called other leaders last night. And, you know its a pretty historic turning point, i think. And for the president , hes got a lot at stake. Hes put a lot of chips on the table for this agreement. And when he does that and when he makes public arguments, how is the American Public which is inclined to want to deal and hows the Congress Going to react when they look at these balance of forces. Israel on one side allies on the other. Hopefully it will be vetted. Instead of just saying wow i hope they dont just criticize this and, you know itll be us that gets blamed if we dont do it and the only alternative is war, hopefully it can be vetted. We wont know for years what to think of this john. And how this finally turns out. Youre right. And, you know youd be open to it but like we say, dont just take their word for it. Youve got to verify vet it make sure its the best you can get. Absolutely right. Okay good. Did we just agree, harwood . We did. Thats historic too. Thats good friday. You know what . Were going to see cats and dogs hanging out now. Iran and me and you and us. All right. See ya. Thanks john. Coming up kentucky goes hightech. President obama visiting louisville last night to recognize the citys effort to talk about the hightech skills gap. The louisville mayor joins us next. And then Goldman Sachs chief economist joins us. Then the president of amc here to talk about the Season Finale of the walking dead and mad men. Stick around. Im sure shes showing off some bourbon there. Louisville, kentucky becoming known for more than baseball bats and bourbon. President obama making an appearance in derby city last night recognizing the city for addressing the hightech skills gap with its program code louisville. This program has been used by the Obama Administration to develop the tech hire initiative. Joining us now to talk about the Technology Skills gap and more is louisville mayor greg fisher. Good to have you here. Good morning. You started this program before it started out of the federal government, right . Tell us what is code louisville . We recognized a shortage in the community nor technologists like there is all over the country. We wanted the community to qualify and of course businesses are saying we need more not just here but all over the country. We developed a program here locally and began scaling it up with Louisville Free public system. Anybody with a library card could have access to the tree house coding class. And we have some community mentors. Weve scaled it up since then with the help of the department of labor. And what was the involvement from the Business Community. Say that again . What was the involvement from the Business Community . Theyre saying we need more technologists. Used to just have Technology Companies 10 to 20 years ago. Now everybodys a technology company. They said we need more folks for these jobs. We convened the parties and came up with a solution. Did they provide any support in terms of either financing or for spaces for the classes, et cetera . No. What they did, you know were always talking to the Business Community. Im a business guy. This was an obvious need. They were trying to fill it themselves so we wanted to come up with a Community Solution as well. Thats why we focused on the library. Anybody with a library card can access this service and it comes with mentors to help people get unstuck as they learn how to code. How long did the classes take . I mean you just go take a coding class at a library . It sounds so complicated to me yet we hear about all these kids learning to code and as a result being able to get better jobs. These are 12 and 15week courses depending what you take. You learn at your own pace. Then youre a cohort group where you meet with a mentor group. These are entry level jobs. 40,000 to 70,000 jobs. Then we have a more concentrated version as well thats an intense 12 15week fulltime course, a developers boot camp as well thats a lot more specialized. Think about Community Training and community education. Our junior and Technical College systems. Community Technical College is going to be offering credits for your portfolio work as well. So thats a big step for us. Does that mean youre more technologically advanced than cincinnati . Are you significantly more advanced than cincinnati. Oh please. A lot of people feel louisville is the center of the universe. Right. Better than cincinnati, correct . Joe, did you want to pick up on that . Who do you like this weekend, mr. Mayor . Thats a little bit of a sore spot, i guess, too. Im not even going to bring that up. Im the mayor of louisville but when theyre not playing, im for the university of kentucky. Really . Wow. Thats a pretty good rivalry there. Louisville is great. Were like almost sister cities in cincinnati. You have a good jesuit you have a st. Xavier or is that in lexington . Trinity high school, two big high schools here as well. Are you loving louisville . I love louisville. Isnt that like hatfield and mccoy thing there . No, no, no. We stick together. Cincinnati airport is in kentucky. Did you know that . I knew that. I with ent there. Can you come back and talk about bourbon some time . Bourbon is hot. We call it bourbonism. Come check it out. All right. President obama we gave him a Treasure Chest full of bourbon. Id take that. We have chili. Chili and bourbon is good. Theyre the napa of bourbon, louisville. Thats right. Bourbon is we now have a 365day a year tourism people are coming to enjoy bourbon. It is really hot. Its worth its own story. And baseball bats. My kids use them. Louisville sluggers. Gave one to the president yesterday. Did you really give one . Ive taken a tour of that used to go to a Golf Tournament down there. The ned beatty tournament. Not the same thing. You cannot bring up deliverance in front of ned beatty. Weve got to go. No. Its the dating game. No its not the dating game. Oh, price is right. Not donl i date myself but i had it wrong in the process. Bob barker made a weird april fools prank. Now we know the music. Thanks, mr. Mayor. Coming up one of the models on the price is right makes a 22,000 mistake. Well show you next. And then later, the mad man behind amcs success, ceo and president josh sapan joins us to talk about the hit shows and future of cable television. Push your enterprise and you can move the world. But to get from the old way to the new, youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps businesses move on all the possibilities of today. And stay ready for everything that is still to come. Welcome back to a special jobs friday edition of squawk box. Among the stories were watching this morning, the ftc is reportedly considering settlement returns for the Reynolds American to proceed. There had been a consensus the tieup could be blocked. A boeing official and six others pleading guilty in a kickback scheme. It involved giving bidding information to suppliers to the companys satellite division. And Severe Weather in parts of the midwest. A tornado last night near the kansas oklahoma border strong storms also dropped pea sized hail in the area. Strong winds look at that strong winds with gusts up to 30 miles an hour forecast for today. And check out this. It takes big skill to win on the price is right unless someone screws up that works on the show. One of the shows models made a 22,000 mistake. 19,211,000. Which one is it . 19,849. Go ahead. No. Oh i won it congratulations, we just gave you a car. Thats cute. You know ive never seen vanna mess things up like that. Ever. She was perfect over all those years. She was. And never wore the same outfit twice. Im embarrassed to say i had a later wakeup call this morning and i was able to catch a little wheel last night. I did catch a little. The kids like to watch. The woman had the Million Dollars and when they do the thing where shes got to then out of theres about 30 of them you could get. Youve got to get it there too and then solve the final thing. She did it. She couldnt solve the one of my greatest achievements. Shooting a behind the series on wheel of fortune. I got to interview them. Very nice. Theres a woman called the finger lady there. You know, pat knows how many numbers. Because she sits there shes the finger lady. We could use more staff here. Tell you the numbers. Do that for the jobs report right . We dont go over. Youre not allowed to go over. Referee we of course were watching the you know on nbc property last night. Shark tank. I watch lester and then dateline with lester. That was a good one last night. But it was the husband. Its always the husband. This time though cyanide. Thats not a good way. You really had a great time last night didnt you . Thats the worst way. Okay. Because theres oxygen in your blood. Sitting over there wondering if he wants to come on set. Why would he wonder . Because youre here. Because andrews out . Coming up jan hatzius. Dont move. Thing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . Th cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com i am never getting married. Were never having kids. Mmmmmm. We are never moving to the suburbs. We are never having another kid. Im pregnant. I am never letting go. For all the nevers in life state farm is there. Welcome back to squawk box. After 12 straight months of strong gains on the jobs front, some recent sluggish data suggests the economy may be a little softer. With us now on set is jan hatzius. You recently brought down your jobs forecast. Thats right. We took it down to 220. Still a good number. But, you know a little softer than where we been for sure. Just seems to me that the economy isnt nearly as weak as the First Quarter tracking estimates as gdp would suggest. But i dont think its as strong as close to 300,000 jobs per month would suggest. Which is where weve been running for awhile. So we think theres going to be some convergence between the jobs numbers and the other economic indicators. You also brought down your First Quarter tracking. Youre down below 1 for the First Quarter. Were at 1 . We lifted it after the numbers yesterday. Whats going on out there in terms of where the weakness is from . Four six, five 2. 2, and now one. I think the gdp numbers have been too volatile. Theyve picked up the stronger periods and the weaker periods. But i dont think the economy was nearly as weak as minus 2. 1 for the First Quarter of last year would suggest. I dont think it was as strong as the 5 number for the Second Quarter would suggest. I think the truth is probably that we have been running at 3 maybe a little more than 3 . Weve now slowed down to something many for in the 2 area. I base that on current activity indicator which indicates a broader set to figure how the economy is going. But not a worrisome slowdown in your mind. I wouldnt say its you might be a little worried. Even on our current activity indicator, were only growing in the sort of 2 range. Id like to see that being stronger, but not nearly as worrying as the gdp numbers would say. Since youre a like a savant. Theres actually two words. Im not going to use the other one. But you know so much. Im going to run this by you. We have this discussion all the time. The reason weve had six years of 2 number one because of the financial crisis and the lack of demand and how hard it was to get out from that. Or two, that some of it has to do with the fed misallocating assets. And allowing people to use the low rates to do buybacks and mergers and not do the things that actually build an economy from the ground up. Is there any truth that this weakness, this tepid recovery has been selfinflicted . I think the fed helps. So im definitely in the first camp. Thats the reason for why its been a very sluggish recovery despite generally better signs over the last couple of years. You know leaving aside the sort of shortterm ups and downs. But clearly its been a weak recovery. I think the main reason for that is not that the fed has hurt the recovery. I also dont think that its due to very longterm factors. I dont think were really in a secular stagnation. But i do think the aftermath of the housing and credit bubble is painful. You dont think theres been any misallocation of capital . You could say on balance what the fed did was good. But within there theres not misallocation . Theres always misallocation of capital. Thats part of capitalism. But you think they could roll over debt so something that should have been put out of misery and that money put to work somewhere else doesnt happen because they can just roll it over and roll it over. The question is whether theres a good case that the fed held back Economic Growth by running an expansion and monetary policy. I think the answer to that was no. Theres regulation and taxes and obamacare. A lot of things thrown in. To just be an activist government. A bigger government. A more involved government in the private sector could have held it back to some extent. I would argue that the lower Interest Rates and people and Companies Buying back stock and doing things like that was a response to the financial crisis. So blaming it on the fed when i think its a response to we overdid it on the credit side so now were going to ere on the side of being extremely cautious. Whenever you come out of that type of bubble and the magnitude of the crisis we came through happens. Im not sure if the fed hadnt kept Interest Rates low, it would have been worse. Its not just here. Its been global. But thats what bernanke wrote also. But were the main driver anyway. What happens to those company ifs they dont refinance, they go bankrupt. What happens to the Interest Rate in the economy . And where would the Interest Rate be in the economy if the fed were at 1 . We remember a time when the fed tried to push up on rates. The long end didnt respond. Its a question. I point to a funny line james grant wrote. In normal times when a company is failing and needs to go into liquidation liquidation, its easy to screw it up and it happens. But you got to really put your back into it. Right . So when that doesnt happen thats a good line. And makes a good point. Radio shack should have died a long time ago. Think about the other side of a whole bunch of companies that have survived that may not have survived but should be there. But should they have is the ultimate question. We dont know the answer. Last but not least, any comeuppance in the next five years from the incredibly easy policies we see . Some people would tie 2007 and 2008 to some of the mistakes the fed made. Is another Something Like that looming . I thought we would agree that the fed made mistakes mostly on the regulatory side. Really . Well, thats not what they say. I think on monitory policy its more debatable. I do think that it was a relatively gradual level of rates. Maybe they should have moved more quickly. But thats arguable. In the next five years, thats a long horizon. I would not rule out recession. So no chickens coming home to roost. Its difficult after a long period of easy monetary policy. You know that youre ultimately going to have to get to a much more normal monetary environment. And thats not going to be easy. And there will be turbulence while it happens. And thats why theyre spending so much time thinking about how to plan the liftoff, how to communicate the liftoff and the rest of it. Good to see you. Thanks for coming in. Thank you. Nice to be here. Coming up amc building on the success of breaking bad and the walking dead launching spinoffs of both series this year. And they also prepare for the final season of mad men. Amc Ceo Josh Sapan joins us next. I mean, come on. National gives me the control to choose any car in the aisle i want. I could choose you. Or i could choose her i l ike her more. And i do. Oh, the silent treatment. Real mature. So you wanna get out of here . Go national. Go like a pro. Lets say they value the agency at 65 million and they buy 51 of it that means your share is over little over 5. 5 million. 25 of that upon signing. Oh my good ness. I got 10 . Keep counting those chickens. I hope you realize this is a pathetic ploy and a delusion. It is until everybody votes on it. Sorry. Just heard about the partners meeting. Perfect timing. He hasnt signed. He missed the vote. Whats going on . None of your bees wax. Ill take the deal. Goodbye, harry. Dont worry about it. In the final season of amcs mad men kicking off this sunday night 10 00 p. M. Eastern. The Network Stock is on a roll up over 35 over the past six months. Joining us now is josh sapan. He is amc Networks President and ceo. Once you get lucky with maybe a breaking bad, maybe with a mad men, it doesnt happen like this. Then a walking dead. The people you employee that took amc with old black and white reruns to some of the most creative stuff in content thats been on. Congratulations. You know what a fan i am. But its scary. Thanks for saying so. Nice way to wake up and hear that. I look forward im not a mad men person yet. I dont know. Theres no walkers whatsoever are there . There are no obvious walkers. But we talked before you came on that maybe don draper the way he is he might survive in a post apocalyptic world. Like cockroaches, yeah. So at this point, there are so many things to talk to you about. Lets talk about mad men. The detail with the appliances and the kitchen which were all exactly what i remember perfect period piece. In my 1960s kitchen. And the spoke smoking and the dresses and the parties and alcohol. That was part of the why people liked it so much. And i think the creative team. You mentioned how it happens. I think the people that work on the show both in front and behind the camera really do it with beauty and they do it with real respect. And they do it with the highest level of craft. That really matters. In the old days you would run a series forever until it was you know, until it jumped the shark quite literally. Why is there so much more discipline in the universe to say weve got six years out of this, call it a day. We really attempt to respect the stoirs. We try and respect the people who make and write them. And we think it is as important to put them to bed beautifully as it is to bring them in beautifully. And i think viewers ultimately recognize that and youll be rewarded if you treat everything really kindly and well and you dont just run it off. I want to know the answer to joes question in more detail. Is the answer to not just creativity but continuous creativity . What do you think youre doing differently . Because everybodys tried this. And theres probability numbers about hits and theyre lousy. And every organization every television, every movie company, theyre lowusylousy. We set out ten years ago we did. If theres any consistency in our approach its to do the work and craft to hopefully greatest respect of those who made it. And didnt have as much urgency as most television does in terms of achievement and accomplishments of near term results and inpatience with sort of what would be called underratings performance. If theres a difference it is that. And i think theres one other thing thats occurring. Which is the system of television is changing an awful lot. People have all sorts of choices now. They can go to tablets and phones and go over the top. And you really have to be excellent to be found and chosen. So we sort of thought that. I wonder. Youre creative but also a great businessman too. Youd have to be. But we dont know how the future looks. I have discussions with andrew about whether its content gets marked up or marked down. I think it always gets marked up no matter what. If its worth watching youll find a way to monetize it. But its a daunting universe. Do you go on with apple . Does amc become part of any of these things . How are you going to make sure you get paid for what you do . Thats a big question. I think it gets marked up too. Whether its coming in through the box, whether its coming in from the cloud. Whether its coming in over the top. I think increasingly theres a few things youll want and remember and find and the material thats indifferent, youll probably pay less attention to. So i do think the marries will change. I looked at the apple stuff and pay 30 bucks for that. I think i need more stuff. I have get up to 90 bucks which is what a normal cable bill ki get up there so quickly that maybe i do have 1500 channels and i only watch 30 of them. But its easier to get that than to figure out everything i want and do it a la carte. Its funny you say that. Through all these options theres also going to be newfound resilience in the big bundle which is receiving an awful lot of not so nice attention today. I think it will for the reasons you said rise up. Is this the golden age of television. The series now are movie quality. Why is that . 75 inch screens, high def. I think it absolutely is. And for all sorts of wonderful reasons. Technology, options. I think its because we buy our content now. When you buy your content, you get better stuff because you dont have to we got no time. We should have left more time for you. Because, you know, walking dead started in atlanta. Everything had already happened. We need to see how this happened. Prequel . Is. Its not really prequel. But its fear the walking dead. Its going to be when it first starts happening and when the virus gets out. Yeah. Actually, its i cant believe you doubled down on this. Youre going to make so much money. Anyway youre close now. Were close now. Walk back over here at some point and well talk again. Thanks. With the headline its possible somebody in mad men is a zombie right . Coming up predictions from alison deans. Squawk box coming right back. Developing story out of louisville, kentucky, right now. These are live pictures coming into the newsroom. Theres a four alarm fire at a building at the ge appliance park. We dont yet know details on whats made in the plant, but we will keep you updated as we learn more. We just had the mayor of louisville on half an hour ago. I wouldnt be surprised if hes headed there. Look at that. Holy smokes. Coming up the reason were all here today. The march jobs report is a little more than 30 minutes away. Our panel of employment experts are all on set to break down the numbers. Stick around b. Good friday. Jobs friday. The markets are closed for the holiday, but were here to give you the data and tell you what it means when trading resumes next week. Our esteemed panel ready to break down the numbers. And from the state of the economy to your investments, we cover it all as this special hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Its good music for this numbers. This is big, significant. Its weighty. Welcome back to squawk box here on cnbc first in business worldwide. There had to be Something Big to bring us in on a friday when everyone else is at home mostly, arent they . Im joe kernen. But its two hours. Im not going to wine muchhine much. Im here with Michelle Carusocabrera and Steve Leisman leisman. The jobs numbers will be released in 30 minutes. Sometimes they have a weird system on the first friday of the month. When its really early in the month and there was some kind of holiday or Something Like that. Three weeks after something that happened in the last month. Have you seen the formula for calculating the date of easter . Complicated formula in a of man kind. Its crazy. Its not as difficult as calculating christmas though. I can never figure that out. What date is that . Im trying to think. I had you going for a second. No no. Okay. Got it. As for the jobs report first is new years by the way. Right. So its one minus six is what that is right . Economist jokes are gut busters. No economist jokes. Stop. Youve got nothing else. You came in with no material today so youre relying on me. Totally ignoring mark zandi. No respect. My own tribe. You know . The Unemployment Rate is seen Holding Steady at 5. 5 . Hourly average earnings expected to rise by. 2 . I was alluding the adp report which mark puts together. Which was much weaker. 40,000 weaker. Yet the consensus for this didnt come down. I think everyone went away. I just dont think theyre running their mouths. Hatzius did. He came down about 20. He came 240 to 220. Thats goldman. Let me introduce our other panel of jobs experts. We use that in the loosest way we can. Here to preview and react. Weve got andy stern here. Kevin hasset. And zandi. You dont need any introduction. Really . I dont think so. You gave us the trillion dollar stimulus that didnt work. The zandi man. Thats why were creating 300 thourkss ,000 jobs a month now. Weve got one safe bridge left. Anyway thanks for the involve ready stuff. Ill tell you what was shovel ready but you needed boots too. He has no new material. Hes using that one now. Yeah. He did that and the zombie thing through the last half hour. I introduced everyone. Roll it up. Analytics for mark zandi. Do i need to introduce you . Youre like a fellow now. A distinguished fellow at columbia university. Your name is andy stern. I already said that. You did . You were over there doing all this stuff. Whats your number for today, kevin . I like steve have a model. The models been getting me embarrassed on the show but im sticking with it until you toss me in the show. But its been right, you know often enough so i havent ditched it. I thought you were giving me some praise for the first time ever. But 174. I think that were in a weird spot where were having maybe for the fifth gleeryear in a row. Then we have a rest of a year thats pretty good. We just saw a quarter like that and the jobs numbers are going to disappoint. I dont think its a negative trajectory for the year or anything. But im expecting a weak number. Im about 40 below consensus right now. Youre kind of on the record. Andy, im not going to put you on the spot to guess a number. I just like talking to you philosophically. Is this is a way you would like things to happen in terms of wages rising . Would you like the companies to act first before there was federal legislation for a minimum wage raise . I dont think it really matters how it rises. I think its great that companies are doing this. Im not sure how much of it is because of a tight labor market and how much of it is because of a brand. And then gap does it and the walmart does it and the target board of directors say how come were not doing it and it kind of passes along. I have my own metric model. It was really cold recently so were going to have less construction and less retail. Under 200,000. So you did want to make we agree about everything. Thats why hes coming down with me. You know hes youre away from the force now and you actually youre not looking at the i think you would want growth in the private sector to cause a shortage of skills to have demand push wages up naturally rather than do it in some artificial way. Totally. When the market does it it works a lot better. I think the problem now is its create creating wage jobs, the quality of the work we have. You think that innovation and technology is qualitatively different than what weve seen in the past . You remember the luddites didnt want the what were they . The machines the weave stuff. They thought that was going to be the end of the worker. No. I agree with sorkin who i think you kicked off the show for me today. I think something is really different. Weve seen all kinds of efficiencies. Thats why after 2009 the jobs that were lost were middle class. The jobs coming back are lower wage. Because we can globalize the work. We can use contingent parttime. And at the same time you know were hollowing out the job market. Productivity growth has been very, very weak right . I mean less than 1 . I think imagining the next set of factors that are out there in the economy are a huge challenge for investors. Think about the world we have right now. Its a world where corporate profits are at or near alltime highs. Both the s p absolute value and the margin. Wages and salaries are at a near1948 low. Lets imagine the next economy which is hopefully the one we get to which is one where wages and salaries are higher. And its not i dont think its terrible mark or kevin, that profits or Profit Margins come down a little bit and you get to more balance. I dont know what the investment proposition is there, but it may be one of at least with some companies a lower multiple because that extraction from the economy ends up its whats going to happen. Thats a good world to think about. So lets look at mcdonalds for example. Weve been talking about it on this show for a long time about whats the natural rate of unemployment . When are wages going to start to go up . And every estimate is its a little bit below where we are. But close. And i think that the reason why mcdonalds and walmart and all those guys are moving with wages are were actually getting into a tight labor market and theyre having turnover or problem recruiting quality workers. So they have to jack it up. You end up with people with more money in their pockets. Do you buy target stock because they have more money to spend at target . Its a balance. Its probably a negative for their profits. Because the labor share is about 70 and the profit margin is going to be pretty small for them. Well get an interesting look in seattle. At 15 youre already seeing some dislocation. And i dont know what the end result is. I think the hike in the minimum wage across the country was the precipitating factor for decisions by walmart, tj maxx. They would have gone anyway kevin is right. Once your turnover rate starts to rise as a business person youre going to start raising wages. I think thats whats happening to these folks. But on january 1st across the country the minimum wages increased. Im not sure i agree. Every year wages didnt rise. I think walmart still has a huge turnover number here. And cost gos less because they have a higher sallarysalary. Its a change in the turnover rate. Youre right. In the Retail Business youre going to have high turnover rates. I think it all depends on whether their workers still want jobs. If youre at 30 and then go to 35 turnover and still have a line out the door of people looking for work, im not sure that makes you raise wages . Do you think theres really a line out the door . Yeah. People cant find work. But its partisan mumbo jumbo to say thats why mcdonalds includes increased their wage. Your competitors have higher costs, thats good for me. Then im stealing the work from them because they have higher costs and eventually i have to hire more people and that drives up my costs. I dont think theres a direct link. You know im a futurist andy. Sorkin worries about some jobs being displaced by robots. Im like elon musk or bill gates. We may be like roaches to a. I. Well be servants. They wont even need us as ser vabts. The factory of the future has only a man and a dog in it. The man is there to feed the dog. The dog is there to make sure the man doesnt touch anything. Thats an economist joke. Thats a terminator joke. Was it funny . Thats okay. That was okay. That was not bad. Lets see what else is happening this morning. We are expecting a statement this morning from israeli Prime Minister Benjamin Netanyahu. Telling president obama in a phone call any deal based on this framework would threaten israels survival. The proposed merger between Reynolds American allowed to go through. The ftc is considering to allow it to proceed. It was questioned whether it was going to happen. Ibm is reportedly hiring advisers to help a deal with shareholder unrest. Shareholders have been seeking help from investors after the Company Reported 11 straight quarters of falling revenue. Ibm is said to bes on an investment strategy. Coming up lots of details to be ironed out with iran. But are we on the cusp of u. S. iranian relations . Then the numbers of the month, the jobs report will be released. Well have brian belski and what you can expect in the trading week ahead. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the well equiped volvo xc60 today. Visit your local volvo showroom for details. Welcome back to squawk box. As we wait for the jobs report geopolitics also front and center this morning. Security is tight at a College Campus in northeast kenya a day after a militant attack there left nearly 150 people dead. The attack was carried out by the Islamist Militant Group al shabab which has been linked to al qaeda. This was the worst attack on kenyan soil since the u. S. Embassy was bombed back in 1998. The other big story this morning, iran and global powers agreeing to an initial framework to curb Irans Nuclear program. Michael singh is from the washington institute. Thanks for being here. Good to be here. A lot of skepticism about the deal. Some says its stronger than we thought. Historically, though the big issue is that iran always has cheated before. What do you think of this deal and will it actually get done and will they stick to it . Well look. I mean the first thing to point out is its not clear there actually is a deal. You have sort of duelling statements out there. Even the United States and european statements are a bit different. Iran is sort of making their own decisions about the ordeal. And their Decision Maker has been silent about the parameters that were announced yesterday. So not only is there a lot more to do between now and june 30th but its not exactly clear what the status of yesterdays announcement really was. I want to highlight something, point out what you just said through a piece or a paragraph from the tehran times. If we can bring up this full screen. The tehran times say in the framework of the agreement none of Irans Nuclear facilities as well as the previous facilities will be stopped, shut down or suspended and Irans Nuclear activities in all of its Nuclear Facilities will continue. And when i first read it i said that cant be right. Then i looked at the fact sheet and thought you know what . Its vague enough to be accurate. Its correct. When you look at this deal and compare it to past u. S. Positions, it looks like a lot of u. S. Concessions here. And the wall street journal pointed that out this morning. President obama wants you to compare it to a sort of apocalyptic alternative, the alternative of war. And he wants you to see this as a breakthrough in u. S. iran relations. If you look at it in that framework, it looks like an achievement. If you look at what our positions were before, it looks like a significant climbdown for the United States. Again, duelling narratives out there and only time will tell really where this comes out and what it produces. Impossible to answer right now whether or not this is the safest path possible correct . Well it is. I mean i think what we can say is if this deal is culminated by june 30th it is a very narrow technical, and temporary view. So its not going to produce the sort of major geopolitical shift that i think weve been looking for for a long time with iran. That would have to fall. That would have to come out of post deal iran policy. And there are a lot of marks against us. Inside iran theyre not very excited about better relations with the United States. Theres a a lot of hurdles. The other issue with iran i bring this up because of the situation, the horrific situation in kenya with the attack by al shabab. Iran still a supporter of groups like hezbollah, et cetera on the international stage. This deals with none of that. It doesnt deal with any of that. Thats right. It doesnt deal with iran support for terrorism. It doesnt deal with regional activities. And remember when we signed an agreement with North Carolina in 1994 one of the reasons it fell apart is one of the Ballistic Missiles program. And so theres a lot of things which are just not addressed in this deal and again which were going to need different policy solutions to address. So what happens if this deal falls apart and we dont have negotiations or an agreement with iran . What is the trajectory of Nuclear Progress in iran without a deal . Well, i think if you dont see a final deal by june 30th, i think this has been going on for 12 years. The most likely alternative is the negotiations continue in some other form. You know its not clear to me that that june 30th deadline is any more of a deadline than past deadlines have been. Then i think were back to where we were before trying to increase the pressure to get iran back to the table. But doesnt progress on Nuclear Weapons continue in the absence of a deal . Wouldnt it be more rapid . Its hard to say because it depends on what calculation iran makes. Without a deal there are things to deter iran from taking that path. Theres the effect of increasing sanctions. If iran says were going to just sort of take away all the restrictions and expand our nuclear program, then that gives us a lot of coverage to go around the National Community and give more sanctions. It also raises the specter of military conflict. Just two days ago josh earnest was saying again that military strike on iran was a possible alternative to a negotiation. Whether you believe that president obama would do that or not, the iranians have to think about the next president , think about israel. They have to think about arab states as well which is active in the region. Good to have you on. Thanks for joining us this morning. Thank you. Coming up the march jobs report. Well have numbers and instant reaction from our panel. And check out this lineup for monday. We will talk final four results with nbcs dave briggs. And the cfo of ubs. A lot of letters there. And we might be rotflmao after that interview. And then get this doors, its dominos. Ceo will be here. Wtf. Rtwhat . Developing story out of louisville, kentucky right now. Take a look at your screen. These are live pictures coming into the newsroom. This fouralarm fire at the building of the ge appliance park there. Fire departments are on the scene. Fire seems to be in a mostly vacant part of the facility. One concern, massive flooding from the ohio river this morning could make traffic complicated for the rescue crews. Lets get to the final predictions from our panel. Rick santelli joins us from chicago. Rick, your prediction, please. 201,000. Fancy type. Wow. This is an easy one. Theyre not going to make it stop at 13. They have Emeril Lagasse in the kitchen going bam its going to be 201. All right. Moving onto mark zandi. I think i have to agree with mark. 200 k. Hassett, go ahead. 174. You explained that earlier. I sure did. All right. Andy stern. 198. Nice. Joe . Joe, are you ready . Here it comes. Nice. Grateful dead. Nice. Very nice. Because i saw you do one. I did one but im terrible. So much better show yours now. No. I dont want to show mine. Did you work at that . I did one on the back to see if i could get it done. You did that to one up me didnt you . Yes. Its in color too. Nice. Very nice. I think thats it. Oh. We got a little bit of time here . Were way below consensus. Weve got one minute. Consensus is 248. Everybodys below. Lets hear from rick. Where are the bonds positioning this morning . I saw the little tick down in the strength of the dollar this morning. You know, i think no matter what happens personally with this number i think youre going to see rates pretty much stay in a range between 186 and 191 today. If i had to guess, i think theyd settle around where were trading now. The issue you want to pay most attention to continues to be the Euro Currency and the greenback. Were going to do that when we come back. Joe, you have the toss to break. Coming up thank you. Just go ahead. Color. I even had color. It was nice. Thank you. As we head to break, take a look at u. S. Equity futures. Theyre kind of flat. Well see what happens after the number. Just seconds away from the jobs report. Lets get right down to Hampton Pearson at the Labor Department. Hampton . 126,000. March nonfarm payrolls increased by just 126,000 jobs. Thats the lowest since december of 2013. The Unemployment Rate 5. 5 . Average Hourly Earnings up slightly 0. 3 . As we said this is the lowest gain weve had in jobs since december of 2013 when it was 109,000. Obviously way below the consensus which was for 248,000 jobs. We also had some significant downward revisions for january and february. The total downward revisions for the two months 69,000 fewer jobs than previously reported. It might be a knee jerk thing to say weather had to play a role. Based on at least the household survey, weather was not a factor. There were 182,000 people with a job but not at work due to weather in the month of march. But however, theyre actually still counted as being at work. Job gains, just a few. Professional and business services, up 40,000. Health care, plus 22,000. Retail trade, plus 26,000. Also across big sectors of the economy we had little gains or even some negatives. Mining was down by 11,000. Manufacturing, transportation showing little to no gains. Construction actually was done 1,000. Manufacturing off 1,000. Government, 3,000 fewer jobs. Civilian labor force Participation Rate 62. 7 . Longterm unemployed 2. 6 million. 29. 8 . Back to you. Wow. What an interesting report. I was closest. Yeah but if you go over youre out. So were all out. This is not the price is right. It is. Let me turn first to mark zandi here. Your thoughts on wait a minute. Everyone went over . Everyone went over. So my face wins. I won again put it up to show it again. Can you reach that . We cant reach it. Well get it. I won with pi. I won with john 3 16. Lets get serious for half a second here. I can try. Mark your thoughts on whats going on. Monday we started talking about the possibility of a weak number. Three things. One is definitely weather. You can feel it in the construction decline. You can feel it in the weak retail numbers. Energy, obviously that is having an impact on the job numbers. And thats the manufacturing decline you think . Mining was down. And i bet you the dollar is now having an effect too. Thats the manufacturing effect. Look at the futures. When we went in there, it suggested an open of nearly 4 points. Now a decline of 56 points for the dow. But i dont think the world is now 135k. I think were still well above 200k. To the panels credit, everybody was substantially below consensus by a lot. The average on this panel was probably below 200,000. Kevin, your thoughts on how to treat this . And look at the euro which looks to have strengthened in the last couple of seconds here. The first thing is that joe asserting that he won means that youre a zero right . Hes effectively saying putting the face means zero. No. I just didnt go over. You need to defend yourself. His comments were definitely the most in and nobody listened. They dont listen to you anymore. The adp number was down. Did you hear what the revisions were . They were all down. I bet you theyre now very close adp was on the soft side. Lets get to rick here. Rick, because there is some activity in the bond market today, what are yields doing . You know, it was fascinating. The knee jerk reaction you went down to 182 no the tens. Went back up to 186. Hovering at 182. 186 on the close. Closed below significant. But its watching stocks and stocks are watching the euro. So the euro as we talked about earlier, really nice. Solid pop. And the volatility and the equities is to the downside as the dollar of course, continues to weaken which you can argue should be bullish. I like the interpretation of whats going on with the equities. But the other thing is theres curve implications. The big moves are on the short end. Twoyear note. Hovering at 48. Finally were starting to see more of a yield curve reflect the notion that if the fed is data dependent, short end. All right. Whats happening is dialing back on fed expectations. Right . Thats what you mean when the short end starts to come down. And on the 10year you said it went to 182, it was at 190. Thats a pretty big move in a short amount of time when were this low. This is part of i think the story that well see for the next few months which is the First Response to the big decline in Energy Prices is that you see lower sales at the walmart gas station. You see the people shutting down the drilling and the trucks not going there and Capital Investment in Energy Sector going down. But the second act of that is people who recognize that they spent 200 bucks a month less at the gas station and then they go out and start buying things. But that second act is the second half of the year or at least a summer thing. So were going to have a weaker first half and stronger second half. It takes time to figure what to do with it. By the way, lets bring in andy. It takes businesses time to gear up for that change thats out there in terms of youre out there selling oil and all of a sudden theres money to sell something else. But you dont necessarily have the capacity for it. I think thats true. And, you know i do think its going to lag behind. Im just not so convinced that people have other debts and things that theyre going to be looking at to pay off and that all of it will go into the consumer spending. But i think youll see some bump because of it. I just look at the revisions going backwards not knowing a lot. And that kind of worries me. We keep revising downward. Rick can you give us your sense . And i know youll give us your sense of when you think the fed should raise which i think was six months ago or a year or two years ago. But what is the market right now . Is there a better bet on a particular month right now in the market . You know listen. I know we all want to say watch fed fund futures or watch how the dollars convert. But i really do think its different this time. I dont think those metrics work. When you could say that the janet yellen and company could look at fed fund being in a certain place and then connect the dots next meaning cut that in half theres no way to price that in. I think until normalization begins, we cant trust the markets expectation. But what we can do is when we see a week number and fiveyear note yields five basis buoyants and the long is down half of that. Thats your best indicator. The market is going to believe that janet yellen is really data dependent. Because they were already biased thinking then why is the stock market not rallying then . If you think this number is so bad it pushes janet yellen further out on the calendar probably because if you were a trader you only have 25 minutes to trade on the electronic trade. So what are you doing sfood . Did you notice the average hourly earn sngs they were up. 3 and that would be consistent. If we start getting. 2 ,. 3 . Given this number, what should the fed do . Should it look through this number and say i should stay on track to an Interest Rate hike despite this number. Pay more attention to the wage growth in there. Less attention to maybe what is noisier. Two things. One, i always get nervous about average wage growth. That puts together high end and low end. And two is i think she should focus on jobs. Even at this slow rate of growth. 139 did i get that number right . Was that the number . For this months gain. What was it . 126. All right. 126 in a typical economy would be considered to be pretty good. Enough to bring down the unplamt rate . Its not the rate you need to absorb the people coming into the labor force, right . So our bar is now a lot higher. Because weve been experiencing very rapid job growth. I want to give you a shot at that. Rick you probably agree with this. I think some day it becomes clear to people that the fed is out of bullets and were really not doing that great right now. Even if we do stay at zero sooner or later, the day comes when people say weve been bidding up the market based on zero. But it really doesnt help the underlying economy. And sooner or later thats hitting home. 129. What if we get a series of 129 . Mark doesnt think so. How do we cut rates from here if we do enter a slow period . Weve got nothing. Weve got nothing left. We cant get out. But there actually is something. There is something. Thats the argument why the fed doesnt want to raise rates too soon. Saying we havent built up anything. Rick, go ahead. I think ira harris should be on the fomc committee. Because he has been spreading the notion normalization is actually more important than raising rates. What he would do is he would throw some of the reserves in the market place. Its starved for good collateral anyway. A step towards normalization, if they miss timing to raise rates a bit, i understand theyre in a corner here. If anything happens in the Business Cycle falls off the cliff, were already extending through the average life. They dont have an encore. I say let reserves go. Bad news wont be good news anymore. Yes. The economy is going to need the market is going to need good news. Its just where you cant say wow traders are glad because theyre not going to raise. Is that happening today . I have some information about your face that perhaps you were not the sole author of that art there. I requested it. But you didnt necessarily draw it yourself. Somebody else drew that . Youre taking credit for somebody elses work. Ill tell you what i drew . I asked to steal your face and all i got was the thing at the top. You put the skeleton in there. I put the skeleton and the circle in like 30 seconds. Somebody else did the color part. Okay. How did i miss this . Yeah. It was right here and i had to hides it from you. Thats what all the printing stuff was. I did this for you. But i won because i didnt go over. Thats right. Youre the winner. Still to come on this very special edition of squawk box, brian belski his thoughts on the numbers and what the market will make of it. Heres the futures. Theyve gone negative. Squawk box will be right back. My world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. 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The 10year yield was 1. 90 beforehand. Now its 1. 85. Is that what that says . 1. 83. Fairly big move. 2year yield is below 1 . Nice. So yields have definitely moved lower. And stocks have moved lower. And were going to go to brian belski joining us now. Hes at bmo capital markets. Hold on for one second. Paulsen, jim paulsen emailed edemailed. Hes been talking about the notion were underestimating how much it comes back. That will be a good thing eventually. But its going to help. The dollar wont get that much stronger because eventually youre going to see that there is some inflation which we dont think about. It was a 3. 7 annualized wage. Thats different, isnt it . Anyway brian, normally 129 would cause the futures to go up. Just recently that happened. I said they want to mainline more qe. And did not do that today. Have you said clean needles . Sam zell. He said why does the qe work itll work as long as the needle is clean. Anyway brian, you still bullish on this . Or you think eventually its going to be problematic for the stock market . Well near term you know 2015 is turning into quite the transition year again as we kind of unwind the former thinking and wind up the real thinking. And the real thinking is down the line as we see rising Interest Rates is actually good for the stock market and good for the economy. So i think at the end of the last segment, you said bad news is going to transition to bad news. And good news is going to transition to good news. Finally. I think thats a positive. I think the report is mostly disappointing. Its not bad news. Its certainly not surprising news especially considering the tone of Corporate America coming out of Fourth Quarter earnings and really what weve seen in terms of estimates coming down for the rest of the year. Corporate america is retrenching a little bit. We had bad weather in february and march. Not too surprising. The key factor we think, and youre doing a good job highlighting it is wages this is all about wages and wages were actually positive. So we dont think that it takes the fed off track from raising rates earlier this year. Yeah. That was the very first question we asked this morning that june is coming. Why not . A quarter. A quarter. Just do the quarter and then you dont have to do anything again. But i dont know if theyre data dependent. The only data they might be dependent on is if the market really were to sell off, maybe they might not do it. Well i think the nervousness in the market is really transitioning to how the rest of the world is handling their qe. See some volatility in asian markets which is likely. The key thing investors need to understand is the template that many investors are trying to play in europe and asia was the same way that they played stocks in 2009 and 2010. But the difference is that the fundamental backdrop of america in 2009 2010 is much different than the fundamental backdrop of europe and asia right now. So, yes, developed markets, u. S. Is underperforming so far this year after the big run the next six years. We wouldnt be too fast to throw all of our assets overseas. The market is taking a breather here. Again, we transition into fundamental investing where good news is good news and bad news is bad news. We better hope we get some good news. Thats the only thing. You think were up for the year though, brian . Youre a longterm bull. You think the s p has a positive gain . Its already april. I mean its were barely up. Well it was a volatile start of the year joe. And i think mr. Paulsens right. I think the wage pressure is going to be the key thing. And remember too, everyones talking about the positive impacts of lower oil for the consumer. What about the positive impacts in terms of input price ifs for the manufacturing side as we try to get things going again as well. No ones talking about that. And so we think the industrial sector, the tech sector continues to be great places to be with respect to growth. Thats where we really see the big surprise in earnings coming the second half of the year. Should people have covered their short euro . Well certainly this morning if you look at it joe, were up above 1. 10 where we havent been since the end of march. Were about to take out an early march high. All i can say is we started late last week talking about the idea that this could be a disappointment. And thats a very logical trade, the idea that jobs could disappoint. The first time you lost big money on that trade. The drum beat was so strong for parity parity. It was so consensus. Thought, oh yeah. Itll work out just fine. Whats happening with rates again . You think its still coming. Yeah. Europe is enjoying a cyclical bounce because of the weaker euro and decline in Energy Prices. But the structural problems are still in place. I dont think the ecb will be raising rates for a long long time. Ten years i bet. But the crucial thing about todays number mark if you whack into the natural rate of unemployment, this is what the report looks like. If you get to full employment, then all of a sudden you see wage growth and not many jobs. So three or four of these in a row, then were saying okay were at full employment and thats the normal wage pressure that makes the fed have to move. But thats really bad for equities and bad for businesses because the feds going to be moving and wages are going to be skyrocketing because maybe the fed is a little but three of these in a row with the wage i dont think this is related to a top labor market. The weather was bad. The Energy Effects were significant. We still have heres a number for you. We had 6. 5 Million People who stepped out of the workforce that say they want a job. If you go back before the recession, it was close tore 4. 5 to 5 million. The scary thing is the we have to worry about getting up up higher. If that switches to where we see it could get out of control at some point. We are so far away from that. I dont think so. The 10year bond is at 1. 83. Then the fed would find themselves, wow, were three or four hundred basis points too low. Inflation is over target for awhile. Bring it on. Inflation is too low. Weve definitely got to heat things up. Thats a bad thing. As long as you worry about it, it aint never going to happen. That is a good point. You are the force, joe. You are super antiinflation. Right now the consensus is inflation is never going to be a problem again. In a country that causes raises, cannot have inflation. So joe, in the dna of the Federal Reserve board is that we cannot let inflation get out of control. Weve learned that lesson. So theres no way. Brian, thank you so much. No no. Keep worrying. Weepkeep worrying. We are worrying. We will wrap up our special coverage of jobs report with our panel. And a preview of big data points coming up next week including the fomc minutes. And next week, check out some of the big guests coming. Dominos ceo. And friday chairman of the Boston Red Sox tom werner is our guest host. Well be right back. Good. Very good. You see something moving off the shelves and your first thought is to investigate the company. You are type e. Yes, Investment Opportunities can be anywhere. Or not. But you know the difference. E trades bar code scanner. Shorten the distance between intuition and action. E trade opportunity is everywhere. Were back with more from our jobs panel this morning. I want to explore more about this issue of the dollar and whether or not its parity based on divergence in Interest Rates. Mark zandi, we had a quick moment there. Is it another ten years before europe ever raises rates again . I think its a little extreme, but if you told me five, six, seven, eight years. Our economy is more dynamic. For the euro dollar, its two years versus treasury yields. You look at that spread its a strong predictor of euro. Given what the fed is going to do and ecb is going to do. Based on how long we have kept serp in place and we have more issues they could go far longer. But the thing is that the european economy is really surprising on the upside this year. Last fall i was thinking its a recession year next year for europe. And its not because of the positive oil shock. But the fact is that europes very strong right now when compared to what we thought. But theyre not as strong as us. All right. The profit is coming on after us so we cant mess this up. Thank mark thank andy. And thank you, steve. Thank you. You get the last best one. Thanks joe. I enjoyed being with you. We will see you on monday. 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