Transcripts For CNBC Squawk Box 20150506

Dictionary. Com data base. To the markets at this hour the futures are looking better than yesterday yesterday. Theres green arrows across the board. S p futures are up by 6. 5. Yesterday the dow fell by 142 points dropping back below 18,000. S p down by 25 points yesterday but things are looking better. Nasdaq also up by 7. 5 points. Lets talk about the big stories were also watching this morning. Jobs the april adp employment report, the major focus for the market will be released at 8 15 eastern time. Forecasters say the economy added 205,000 private sector jobs last month. The ecb is meeting in frankfurt and greece likely to be discussed. There wonltt be a decision until the next meeting and they will appear together on a panel in washington. The discussion topic as you would imagine, finance in society. And yesterday we talked a lot about the dow has a couple of rough days. Its down for the year. Were having trouble making headway and yesterday i was watching apple and not as apple goes so goes the dow, thats not quite true but when apple has a rough session the markets, the nasdaq and the dow has tough sessions down to 724. Thats a key stock to watch and key area. Many stocks to watch this morning including sales force. Those shares getting a bump on a report that microsoft now was evaluating a bid for the Cloud Software provider but the two are not said to be in talks and no deal is believed imminent. The stock jirs fumpedfirst jumped on a report that they were working with advisors to help it field offers after being approached by a potential buyer. There was the big four microsoft, oracle google and ibm or maybe it was yeah but ibm was in there but no one really thinks probably ibm but oracle because they. Oracle is looking at this for a very long time. It makes the most sense. They buy stuff. Left and right. They dont think about it. They were helped by strong Digital Sales in the release of battlefield hard line. They Beat Estimates by a penny but revenue expectations on a conference call. Its fully committed to acquiring them and it believes it can complete the deal by the end of the year but at the same time theyre also trying to fend off a take over by teva because it would make sense for teva. The sandals. Probably not. Lets also tell you about news corp. Earnings and revenue falling short of estimates. The Company Points to a stronger dollar and drop in add sales at its newspapers. Online lending club with better than expected profit and revenue. The Company Getting a boost after rate cuts attracted more customers and solarcity reporting a smaller than expected loss. The company that is backed by elon musk says that solar installations were higher than expected despite bad Winter Weather if many key east coast markets but sales and marketing expenses soars and is sort of consensus. Retail stocks on the move zulily hit hard but sales fall short and guidance looks weak. Grow upon warning its full year revenues falling well short of expectations. Blaming a stronger dollar and weaker than expected billing which is shows the total amount collected from customers and then weightwatcher with a narrower loss than expected despite continuing to lose subscribers. The stock has been beaten down by about 67 over yesterdays close. Lets check on the markets this morning. There will be at least a bit of a rebound on the open after a tough session yesterday. Dow up about 72. The nasdaq up about 7 or so on the s p. In europe well see whether its acting the right way. Its not. Its not reacting to what happened here yesterday. Its a little firmer this morning but greece as you can see, everybody is talking about it again and its below 800. We had who was that guy yesterday . He was in the room. One of the negotiators. Its going to get done. Ceo or equivalent of the cfo. Everybody is trying to extract things from everybody else. They all say things they dont really mean. They have to talk tough however its also difficult to see how you sell all of this back home. You may reach a deal in the room but you have to go back and sell it to your constituent sycy that elected you. Greece had a rough time for like five or ten years and do you remember your friends that peaked in high school . Its been a long time. Big fat greek wedding was a good movie. It was. That was a decade ago. That was awhile ago. But they were that might have been the greatest civilization of all time. They knew math and we lost a lot of it and, you know over the centuries. We lost a lot of the evidence. Anyway oil. Did he backtrack on his 30 dollars . Its going to start going down again. He did not give us a low. There was a story today about how the hedge funds got crushed last month because a lot of the things they were betting on Lower Oil Prices and lower bonds in europe all of those things turned in the last month. Terrible performance. They had huge paycuts. Theyre cutting back. Look at what did he make . 1. 2 . Quick comment by the way because we ran these numbers yesterday and today theyre running them again. This is the hedge fund. This is the compensation. Theyre tightening their belts. He didnt even make a billion. He made 950. Just quick comment about this because its moronic the way the numbers are calculated. Because its the ft . No but the way that you see these numbers and you go wow these are the big fees and you think of it as these arent the fees. Half of these guys have their own money and most of the money and by the way last year the s p went up. If you have money in the market it goes up. And the fee money relative to the amount of money these guys actually made because they had their own money in the fund is a completely different story. But if you have an agenda to stir things up on pay isnt it better to do it that way. Move forward completely then. Thats the way we need to do it. The New York Times expresses those in lira or in yen and they dont say it. It starts going up when the economy slows. Rates went up in europe. And in europe its because of whats happening in greece. This is the biggest bond bubble in history. The greatest trade would be to short the 30 year if he could. Lets look at the dollar. This better stop. Im just telling you. 112. You should have gotten all of it. Should i prepay my hotel bills and stuff . You could change a whole lot. You could prepay the hotel bills. Im going to take someone. Can we take a lot. I dont defer to you on a lot on saving money. Thank you. You said that yesterday, right . Cheapest man in america. Proudly so. Thrifty. I like thrifty. Im proud of thifty. Buffet is cheap. He is cheap. Buffet is cheap. Id like to be called cheap. They didnt know it was each other. Did we look at gold . We didnt. Thank you. Thank you my friend. Lets talk more about the markets now. Despite pointing to a higher open most of our guests are saying a correction may be in the cards. Joining us is karen firestone. She is president and ceo. Also jeff is the senior Portfolio Manager at Riverpoint Capital Management and welcome to both of you. Karen, you think a correction is possible but not necessarily likely. The market is off slightly from its all time high. And over the last six months weve had several 4 to 5 corrections. A correction is not unnatural and i wouldnt be surprised if theres a few more points in the down side but the market is worried about the economy but if you remember just a short time ago, the last time i was on this show i come in from a terrible snowstorm in boston and said half joking that the First Quarter could be weak because of the weather in new england and the cold in the midwest. And the Oil Prices Going down and thats what happened perhaps so this may be a short lived stock and we can see the market resume some belief that the economy is coming back which we saw in the Third Quarter and Fourth Quarter last year and earnings pick up again. Do you agree with that . People are looking at this and thinking wow, 0. 2 for gdp. Thats shocking. Earnings are actually a little bit better than the much lowered estimates that some people have been looking for. Yeah, thats right. I think that the wall of worry items have been the dollar oil earnings and what the fed is going to do with earnings being the most recent and actually they have come in good enough is what i would say and we do expect them to be revised modestly up to mid, single digit and we saw them come through rather than being down five flat to maybe up a little bit this quarter. So absolutely. I think the market has, despite the head winds and concerns consolidated in here and its pretty confident its going to be good enough. Couldnt it be a correction year where we keep making the point were nowhere right now. Were flash flood. Couldnt we end the year flat and have this rolling correction where it doesnt go down . And the gains are much harder with the head winds at this point. It wouldnt bother me to see consolidation this year and then look into 2016 but by the same token i could see the market just pierce through these issues out there if we get 5 earnings growth. To see just a descent year thats certainly could play out as well. No one talks about the 20 . Not going to happen . I think you could get a direction. Thats not a direction. Thats a bare market. You could get a direction of 5 to 15 . So the signs are simply not there if you look at the technicals and whats performing well in the market. Its not the defenses that are leading. Economically sensitive stocks are doing well. All the things you normally see. You dont see that right now. So the fundamental backdrop is good enough and technically i dont see signs of a top. You both like consumer discretionary. Why . The growth in new households was 1. 5 million in march. Thats people moving into their own place out of their parents house and roommate situation and that requires buying consumer goods goods. Buying electronic equipment and appliances and that is great for consumer economy which we live in and the other factor is we have wage growth. They have started to pick up and 2. 5 is a reasonable level of wages to grow. You have seen walmart, target mcdonalds all increased wages and again for consumer economy in order for it to grow we need people having money to spend. Lets talk about one stock you have been buying in particular. Arm holdings . Yes, we like arm from the standpoint that it has very strong growth. Were looking at 35 type of growth or well above the market. They design the blueprint for chips in multiple areas such as smartphones and hand sets and even servers and data centers so broad based its the arms dealer of the Technology World with margins 90 and its just difficult to find secular growth stories like that today. And actually when i say their growth, their pe is around 35. Growth is somewhere in the mid 20s. Thank you both for joing us today. Thank you. When we come back is salesforce in play . Thats the question. If this stock chart is any indication, somebody thinks so. Well ask an analyst what they think but first before we do that heres a look back at this date in history. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Topping the list people are looking for government jobs. Job seekers also appear to be interested in working for disney, ups and the ncaa. Also in the top 10, baby sitting and believe it or not, journalism. Wow. Now probably not that surprised that government jobs are the most searched because theres more government jobs than anything else. Growth area of the world is washington d. C. Are you surprised about the journalism part . It goes hand in hand with government. Journalism . Yeah nothing expected of you. You dont need to succeed or do anything. Just put your time in. Just in general . Just in general. I have never claimed people tell me all the time youre not a journalist. If you want to grab a bite to eat with tim cook you better hurry. An option for a lunch. Look it up. Can you use apple pay . Well bring you the latest price and see if you can use apple pay for it. Microsoft considering a potential bid for the company he is from fbr capital markets. We had you on the show last week when some of this news first broke. It wasnt clear that microsoft was in the hunt. Sounds like they they are some what in the hunt but in my understanding it doesnt sound like theyre actually talking to each other so much as theyre sort of like two animals at a zoo. What do you think is really happening . Oracle is the most likely bidder and they likely approached sales force last week but when you think about it for microsoft, Amazon Google all the other companies in the space that want to be large cloud con conglomerates. They want 20,000 of cloud revenue in the long run. They have given analysts a peg out there and what better way to get there than sales force. Com which would make them a more robust enterprise application provider and by the way theres a big battle on the infrastructure side with amazon aws and youre keeping crm out of their hands as well. Are you owning it on the basis that its a bio target . Or is there a reason you can see it as it is today. We see a company that can get to 10 million of revenue on its own. It can get to 65 billion valuation all on its own. Theres fundamental reasons for wanting to own the stock today. Youre happy at 7366 to own. If they came out with a statement that said we plan to remain independent for quite sometime we just want to put that out there, the stock will go to what . So on the news that mna is not a possibility the stock will likely drift off a little bit just as people recalibrate but as you think about the longterm prospects its still the leader in the cloud and hottest growth space in tech and people want to own the names so down side is maybe high 60s but longer term the marquee franchise in the space and we think growth oriented investors will get back into the name and once theres a speck to of mna you sort of keep that premium a little bit because there will always be one eye. Hasnt there been a specktrum . Think about it its only heating up. Last week we had one potential bidder. This week were talking about microsoft. Maybe its amazon or google. Which is another wildcard. Are they out there . So we think generally theres no type of transformative acquisition in the cloud that you can do thats bigger and more marquee than sales force. Walk us through the internal psychology in the board room. Do you think that board is any more inclined to sale the company today than they were two or three years ago . I dont think theyre more inclined to sell because he hasnt done what he wants to do. I think he holds customers first and if they can be more productive and valuable for his customers being with microsoft and more tightly integrated its something he would consider because at the end of the day theyre a Customer Company and thats what theyre trying to aim for. Whats the percentage chance this deal happens . Its tough to handicap a percentage but looks like the smoke is getting thicker. I would say the odds are better than last week. Maybe 50 . 50 . Thanks for coming in this morning. Thanks for having me. Well see what happens. Coming up how Fund Managers are targeting meillennials reaching parenthood. Plus why packquiao and promoters are being sued. We actually watched that fight together. We watched it together and we both want to sue. He was not allowed i dont think to get the shot because he didnt admit that his shoulder was hurt. He was going to get it and then he didnt get it because they hadnt been informed of it. I dont know if it wanted to matter. You cant hit floyd mayweather. Heres yesterdays s p 500 winners and losers. [ girl ] my mom, she makes underwater fans that are powered by the moon. [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] my mom makes hospitals you can hold in your hand. My mom can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] my mom works at ge. Man you run a business. Could be any kind of business. And every day youve got important decisions to make, like hiring. Where are you gonna find those essential people you need . With ziprecruiter, its simple. We post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates. Then well give you the tools to help you manage, screen and rank your applicants all so you can find the right one. Try zip recruiter for free today. All right. I turned into when i was young the people i wanted to shake my head at but that were old in terms of millennials. They annoy me but its a love hate thing. Your kids are going to be them soon. No theyre not. Theyre generation z already. But theyre hard to understand. They dont theyre too comfortable with technology, number one and, you know they dont do things the same way in terms of cable and just all the stuff and they think theyre so smart about everything. You do sound old. But theyre the majority of the work force. What are you . X. And the baby boomers are retiring. You cant ignore but if they start doing what these Fund Managers think theyre going to do im going to start getting them more. You cant just live in a city and go out every night and drink and go to good restaurants and have fun all the time. You cant. Welcome to our lives. Youre going to have kids sooner or later when youre 35 and at that point youre not going to be spending money on some little half portion down in trebecca. Youre going to move to the burbs. And thats what managers are betting on right now and sooner or later its going to happen. I thought they this would never happen for you. I thought they were moving to cities. When they have kids clients in their late 20s and early 30s say yeah we still want good restaurants. When you get fat and youre you know, 40 plus you dont want good restaurants because you, number one you dont want to get fat and eat all the time. Youre trying not to eat and number two you dont want to drink at night because it takes you three days to detox. Youre more interested in a gym. Youre more interested in a gym. Theres our supervising producer walking across the street right now. Anyway, i think that theres no hope for you. You may get a house in the country though. Im stuck inside this cement jungle or whatever it is. My guy at ubs told me yesterday hes having his third baby within a couple of weeks, bought a house out in west westchester. The millennials just waited longer to get married and longer to have kids and you can stay in the city until it gets more and more complicated. Im just telling you theres not a hint of Misery Loves Company in this discussion. Right. That has nothing to do with why. Thats not part of it. No no. Lie. That has nothing to do with why i want them to move out to the burbs. You want everybody to move out to the burbs. Whats going on in the burbs. Nothing. You get good public school. You know wait a second are you referring to swingers parties . He is. Thats his conception. This squawkward moment has been brought to you by Andrew Ross Sorkin. Its so bad and boring out there. Here you just go down to the neighborhood bar and pick someone, is that it . Just saying. Go if the in the restroom and get home. Hi honey, im home. Lets talk about other stories this morning in the papers. Good idea. Can we do that . Moving on. Im going to follow you around with a camera and see what really happens. Tell me what you think of this. The pacquiao fight that we have all been frustrated with. Horrible. It will take five years before theyre able to have another fight to get people to watch it. Every watcher is upset about it. Two watchers are now suing pacquiao for 5 million over this fight. Class action suit on behalf of Ticket Holders everywhere. These are people who actually wachd who watched it in the arena. Not people that bought it on hbo or show time frankly i wonder if they can sue too on the argument that pacquiao lied or perjdidnt tell about his shoulder. What about the people in vegas that bet on this and didnt know. If you knew would you have bought the Subscription Service that evening. But i will say having watched the fight it didnt look like he was holding back. Well he says he was. Hes having surgery this week. It was what he needed. Anything would have made it better and how much were those seats . Those are expensive seats. How much was it at home . 90 bucks or more . Something like that. The boxing always seemed a little bit its not rigged. It takes on a wwe wrestling thing. Justin bieber. Its not that but maybe knowing youre going to split at 6040 i could last a couple of rounds if i just ran. Which is what mayweather did. Now i have the image of you running away. But thats what seemed to be happening the whole time. Its impossible. Im sure in their heads theyre like dont hit me too hard. Just give me the money so i can leave. Were splitting 100 million. Where the winner gets a few or you land a few punches at least. Are there any where you have to knock the other person out. You know what the opposite of that is is ultimate fighting where they hardly make any money and kick the living crap out of each other. Where theres blood and they get in their you hope that you live after one of those. Thats why thats getting so popular. Yuck. What do you mean yuck . Do you want a fight where they dance around each other. I dont watch fights anyway. You dont either but we did. This comedian tweeted now we can go back to not pretending that were all interested in boxing again because all of these people we pretend we were interested for like three days and now its like im back to not being interested. When we come back coming up we have the exclusive Cnbc Millionaire survey. Find out the wealthiest americans supporting the president and then later billionaire investor b. J. Pritzker is going to join us. And president ial hopeful Carly Fiorina is going to join us. We have a big show. Squawk returns in a moment. Welcome back. 2. 3 billion in art is up for sale. A landscape of all of france by van gogh selling for 66. 3 million. The same work sold for less than 12 million and a landscape, water lily pond roses was sold for 54 million and both sales topped the estimates and we talked about these hedge fund guys. That may not be compensation but the rich that are getting richer that have huge dough why not buy something that in all likelihood is going to appreciate and you can hang it in your new york city apartment and have people come in and realize that you own an actual van gogh and you make money on a new one. Youre getting zero to put it in the bank but it makes you wonder when all of this finally, you know comes the day of reckoning comes, in the Zombie Apocalypse this is useless. So is your etf. Its useless. Do you think the goal is useful or no. Hit them over the head . It might be the last currency that you actually use in that world if theres other people that have things. I thought you said guns. Fantastic. Chairs tomorrow theres a spectacular story in Fortune Magazine about guns and gun safety and all of this new Amazing Technology and other things so nobody else can use them. And change gun control. Percentage of people that think that youre safer against crime if you own a gun its gone from 48 to 57 in the last two years. Why . I dont know. Unrest. Worry, whatever. Just going the wrong way. Thats quickly. It is. I was shocked when i saw it but in two years its gone from 48 to 57. Lets talk about the next installment of our millionaire survey. It kicks off today and it is the focus this time around for the 2016 president ial election. Robert is here with surprising results. Hillary clinton is the favorite candidate of millionaires. The Cnbc Millionaire survey showed in a race with Jeb Bush Hilary wins the millionaire vote 5347. She wins 91 of millionaire democrats and 13 of republican millionaires and 57 of independent millionaires. Looking at the field of a dozen candidates she wins with jeb coming in second followed by Elizabeth Warren and Chris Christie coming in fourth. Up that high. You see the extreme there. Bush wins among the older richer mill naries. So bush among those people making 5 million or more. They favor bush over clinton and 70 of millionaires younger than 48 favor clinton. So a big age split there. The most important issue for millionaires in the upcoming election taxes and Government Spending followed by political gridlock and foreign policy. You can read more on the Cnbc Millionaire survey on cnbc. Com. We didnt do this last election cycle. We did. Joe made the point that since the republican field was so plit last time he said thats not fair. Unless you have hilary against one of the candidates you cant get a good result and thats why we said okay matched up against jeb how does she do. Theres people that havent people call us and this was a third, a third, a third. The republican can dalts as a whole get 49 of the vote. So once they do you can have a republican favorite among millionaires and if you look at the past three elections millionaires had in each election 04, 08, 12 favored the republican candidates. Its been wrong every time. They have been wrong every time but this is the first time preelection that millionaires are supporting a majority of them a democratic candidate. Its one of the great histories of the limousine liberal mentality. Ill never be able to understand. Thats where the Republican Party has taken a wrong turn by emphasizing that but they lose a lot of people that would probably support them based on Economic Issues but the thing this year and its a blessing and a curse for Hillary Clinton is to millionaires theyd say well hilary says all of this stuff about toppling the 1 and private sector doesnt create jobs and they say oh its hilary. She doesnt mean what she says. She just says things to and thats the beauty of the clintons. They dont mean what they say. You would have to think given their top priority is taxes and Government Spending so they must think shes really not going to do it. You get up to a threshold over 100 million so you go democrat so millionaires for democrats and you need cover. Taxes arent that important. Because youre not trying to make your money. It doesnt matter you dont want anyone else to get rich. You get to keep what you have and you get to look good to everyone and do your stuff. And we have great stuff coming up later today on what they think the Capital Gains rate should be and what millionaires think the 1 actually pay in taxes. More interesting stuff later today i saw you chomping at the bit. The big auctions are next week. Well talk about it. Okay. Thank you robert. Thanks. We have a couple of pieces for news real quick. A deal just crossing the wires. Alexion is buying synageva. Both guys in the bio pharma space. They have a number of drugs and things in the works and i dont know if you saw this across the tapes but this is startling and scary. Remember the german wings pilot in that situation. Apparently theres a report out this morning that he rehearsed what he did. Meaning he had actually in the flight prior to this from barcelona back to germany he had actually done a rapid descent which they have now gotten from the black boxes on the flights before. Nobody knew about that . Apparently the other pilot had left. He left the cockpit. And he had practiced a rapid descent where he went down he brought the plane down 100 feet during its outbound flight to barcelona. But the airline didnt realize that at the time . Apparently not. Apparently not. The pilot was apparently outside. The copilot was outside. It was black box information that finally lead them to this. Yes. I dont know if its black box but i guess this is coming from the data recorder that was on the i dont know if it was the same plane or a different plane. But it looks like what theyre saying is that he was rehearsing doing this. When we come back this morning, the Steel Industry slammed by the Commodity Markets so u. S. Steel is work hard to cut costs. The ceo will join us next. Plus what story youre buzzing about today. Are you thinking about tech stocks politics whatever it is tweet it to us at squawk cnbc, use the keep squawking or post it on our facebook page. We will read them all and then share the best of the bunch at 7 40 eastern. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. 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Steel is meeting with shareholders today laying out its plan for longterm growth amid a tough industry environment, but before he meets with investors, ceo mario longi sits down with us. Good to be here joe. One of the things that we talk about all the time and that worried us about macro events was that the fed finally responds by raising rates. The dollar strengthens and gets Even Stronger and that causes a slowdown in this country because of exports and layoffs, and youre almost u. S. Steel is almost a microcosm. Its really hard to see its really hard to look at your latest report because layoffs are coming in large part because of energy and because of the dollar. Thats correct, joe. But if the strong dollar was the only thing we needed to contend with, i think we could handle it. The problem is if you look before the dollar got strong if you look at massive amounts of dumping that has been taking place continuously that has been the source of the major problems with the industry. Lets just get back to some of the things that you said in the report because the numbers were surprised people just how much you had been affected by these negative headwinds. So your total employment is currently at what for u. S. Steel . In total globally almost 40,000. And in this country . 28,000. And 28 could drop below 20 in this cycle . It could. Its very unfortunate. Right now we have about 9,000 of our people under notices. Under notices. Yes. Based on this last result. Yeah. Youve been trying to rationalize operations and cut costs. You have what the carnegie way is something that youre instituting. Thats correct. But the dropoff in crude and the Energy Slowdown along with the strong dollar could not have come at a worse time. Its almost like a perfect storm. Its sad because if you look at the progress that this organization had made last year you know after five years of losing money, were able to deliver economic profit in the first year good profit too. It was very good. And its not that it was done in a market that was very very good. It really came from the efforts that we put in place in every area starting from the commercial organization, revisiting the way to deal with customers, looking into operations for productivity efficiency and quality. At the same time we came to significantly reboost the amount of innovation. We put engineers to work to really come up with solutions that are more differentiated so there was a lot of good going on. But dumping had been occurring all the way through. The dumping, this is dumping that youre saying that is in violation of existing trade pacts. That is correct. Whos doing the dumping . Weve heard about russia but you say south korea . South korea, china, russia vietnam, indonesia, brazil its coming from everywhere. Our country remains the most open country in the world. If you look at the trade partners that we have most of them have some kind of inhibiting rules for trade. We hear from Business Leaders who really want the trade pacts to get passed. Are you completely opposed to that . No. I think trade is a very good mechanism for us to engage and provide for the betterment of societies around the world, but it has to be done under the rule of law. That is the key element. How much are these other countries losing while theyre dumping . I dont think they lose because of context, andrew. If you look at the way governments subsidize their investments, they dont have to deal with regulations that we do from safety to the environment. And they design with a social agenda in mind. They will invest and get technology and get jobs for a period of 10, 15 years while we suffer. So its not just straight dumping where theyre dumping product at a lower cost. No. And actually losing money. Thats correct. Okay. So the dollar has weakened a little and oil is back a little. What does u. S. Steel need to do to flourish . Have you switched to mini mills . Its a Different Company than it was 30 40 50 years ago. Thats correct. This is part of your problem with the middle class here andrew, u. S. Steel is a prime example. Part of the carnegie way transformation includes a more flexible operating platform. We Just Announced we are going to begin to put some electric arc furnaces in our portfolio. In godfather 2 when they said they were down meeting in cuba, they said were bigger than u. S. Steel. It was the preeminent company. Part of the carnegie way, joe, is trying to revitalize this pride that the people have in this organization so the desire is we succeed here we will regain the status of an icon once more. Thanks for being here. Pleasure being here. When we return j. B. J. B. Pritzker watch out hes working on making chicago a major hub for technology. Were back with him in a moment. Your money, your vote. Lets go people. Lets win this thing for america. Gop president ial candidate Carly Fiorina, plus the man running Hillary Clintons president ial campaign. Will microsoft buy salesforce, stock popping on that rumor but analyst rick shurmer says theres a much better candidate to buy salesforce. And a setback for uber in the sunflower state. Toto i have a feeling were not in kansas anymore. The Ridesharing Service pulling out of kansas over background checks. Details ahead. The second hour of squawk box begins right now. Live from the beating heart of business new york city this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and Andrew Ross Sorkin. Joining us is j. B. Pritzker. Hes on the forbes billionaire list. We will talk to j. B. In just a minute. But first we do have some deal news to tell you about, alexion is buying synageva. Both Companies Develop therapies for rare lifethreatening diseases. Lets tell you about some of the other stories this hour. A milestone for mobile search. Google saying it gets more search confer yqueries from mobile devices than pcs and thats been reached in just ten markets, including the u. S. And japan. The u. S. Trade department has approved a number of licenses for Passenger Ferry Service between the u. S. And cuba. No word on the number of licenses issued. Ferry operators must obtain permits from the u. S. And cuba. The service could be up and running. Did you know that American Airlines actually has direct service from miami to cuba . I dont know if people were aware of that one. Also the april adp employment report a major focus for the market today. It will be released at 8 15 eastern time. Forecasters say the economy likely added 205,000 private sector jobs last month. Well get the governments jobs data on friday. Yeah, its direct service. What, are you going to have a layover, its 90 miles away. On the america to cuba flight. Its like a 12minute flight. No i know what you mean. Yeah. Well lets put that screen up again just for one sec so we can mention whats going on. The dow looks like it will open a little higher about 56 points higher, nasdaq up about 6 points higher and the s p 500 up about 5 points for now. Some new frightening details on that Germanwings Flight that crashed in the french alps in march. Investigators say the copilot apparently rehearsed the descent on an earlier flight on the planes trip from dusseldorf to barcelona, the plane landed in spain. On the return trip to dusseldorf, of course the pilot locked the captain out of the cockpit and crashed the plane, but you can see from apparently the black box that he on the outbound flight he had looked into at least doing this and trying to understand how to do it. I wonder whether he was planning to do it the first time around and didnt. Maybe so. And we understand why. I mean he had tested it and one of the most frightening things with his breathing and his heart rate during the whole incident just stayed flat. So yeah he had practiced it and knew he could do it but thats still frightening to be that under control when youre facing the mountains. Anyway reports out that microsoft is mulling a potential bid for salesforce. Com. Salesforce has told cnbc that it doesnt comment on rumors or speculation. Lets get more from a top microsoft analyst, rick sherlan. They have never spent this much money before, have they . Or it hasnt rick. Does it pass muster with you . This is really unprecedented for the Tech Industry to see something this big. It would be about 65 billion probably at eight times revenue, which is the middle of the range for acquisitions in this cloud space. Look, i think microsoft is far less likely to be an acquirer here than oracle. Its a much better strategic fit for oracle. Theyre in that business they want to own that market. Mark used to work for Larry Ellison and i think oracle has excess sales capacity to absorb this. And oracle kind of protests too much. So one suspects that oracle probably was behind this originally. Last week i was at microsofts developer conference in san francisco, and after the news broke, i mentioned it to a couple of the Board Members and they all seemed surprised by it. I wouldnt think youd do a 65 billion acquisition without informing the board, so i think microsoft was not the original company that might have approached salesforce. My suspicion is theres so much smoke here maybe theres fire underneath. It could just be bankers trying to drum up interest and make it look like theres a competitive process. You know, they do that sort of thing. So whether microsoft would make a serious bid, im more doubtful. I think oracle probably makes the most sense. Either company it would make sense. You earn almost nothing on cash these days. So i think for oracle if you could cut the costs about 10 and you could enhance revenue 10 , which i think would be fairly easy to do i think it makes sense. I think oracle would be a much more likely buyer than microsoft, though. But you think that has a deal of happening . Andrew has talked about that its been in the works for a year. People have been talking about a transaction. But cash you dont get anything on it. And Larry Ellison is not afraid. Hes not someone that gets that really gets worried about what would happen if he makes an acquisition. Its sort of his bread and butter, right . Well its awkward because you have thomas currien who runs development who would like ellisons job at some point and you have mark hurd. Larry has enjoyed pitting one manager against another, so its a little awkward, the dynamics within management what would happen there. But the cash is all offshore. Oracle has 53 billion in cash all offshore most of it so youd have to figure out how to finance this. Its a lot of money. Rick, spin it around though. Were talking about the psychology of oracle. What about the psychology of salesforce. Where do you think the ceo of salesforce head is at in terms of bowing a willing seller at this point . A number of years ago i asked mark about that because there was speculation that maybe cisco had an interest in the company and mark assured me that look ill do the right thing. If i have to go to maui ill go to maui. So i think mark would have shareholders best interests at stake in Something Like this. It so happens that he would be a pretty good fit, i think, at oracle. Hes very proactive. Hes a good salesperson and good with the technology so he has good skill sets. I dont know that microsoft would need mark benioff as much. I dont think the fit in terms of management im not sure theyre in that part of the Cloud Business anyway. Oracle does. They go from the bottom of the cloud stack all the way to the top through applications. Well, isnt it true though that there are a couple other potential bidders and its been rumored, of course that ibm, maybe even hp which there are rumors that they might like to have mark benioff running the company, but microsoft it strikes me has an issue here and that is they have got their own dynamic crm project. So why would they go acquire salesforce when theyd be going head to head pretty hard at it . So the dynamics is a much smaller product. They probably have about 2 million users, so it doesnt really quite have the scale and its more appropriate for smbs, the small, Medium Sized Companies than the larger enterprises. We ran the merger models on a number of companies a week ago in a report we published, and cisco, you know could be as well, its a bit of a stretch for them to get into that business. Ibm i just dont know that ibm has the financial resources. It certainly would give them a new place to hang their hats and they could use Something Like that. Hp seems to be a little awkward and thats a lot of money. The name that might be a little more credible would be google. They certain low have the cash but theyre not an enterprise Oriented Company but they have google compute engine which competes against amazon so theres a thread of a reason to think, well could they have an interest to get into the enterprise market. Yeah, but this is a very different part of the stack. This is the high end, this is the apps and they compete more at the platform as a service so im not sure you spend this much money to try to enhance your position in the lower end of the stack. But its a possibility. All right, rick. We appreciate it. Thank you for coming on and always inciteful. Just real quick, we mentioned synageva. Did we look at the price very closely . The stock closed at 95. Its indicated up 1. 15. Look at the chart really quickly. They close at 95 and its going to open between 211 and 224, so alexion is paying our charts arent showing it yet. It is indicated to more than double. So anyone who took a chance on biotech stock, and people are buying drugs instead of developing them at this point. Up 115 now. Thats going to be something to watch. When we return the man tasked with getting Hillary Clinton elected president. Campaign manager will join us on the set. Then gop president ial candidate Carly Fiorina will join us. Later the ceo of glaxosmithkline will join us. Were back in a moment. Boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. The network that monitors her health. The secure Cloud Services that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. Welcome back, everybody. Democrats sticking by candidate Hillary Clinton. According to a new poll released last night about half of americans said Hillary Clinton is honest and trustworthy but 80 of democrats said she had those same values. Our next guest is tasked with getting Hillary Clinton elected. Robby mook is the manager of her president ial campaign. With us is our guest host j. B. Pritzker as well. Robby, welcome to the table. Its great to be here thank you. In terms of strategizeingstrategizing if we take a page from the obama playbok playbook, it was important to have young people to their advantage. Are you planning on doing the same . Absolutely. We want to be able to communicate our message to every voter in the way that they communicate in their daily lives. So we have a big presence on mobile you know on the screen. Maybe at work. And then facetoface, persontoperson, on campus or at the door. So were going to be on all different platforms that the voters are on. Hillary clinton obviously, very familiar to older voters people who have been around for a while, watched her Husband Campaign and watched her in the senate and then again in the Obama Administration. Where do you have the tougher task, with young people or with old people . Well you know whats been really interesting is were doing this campaign and were finding broad support across the board. That coalition of voters that was so strong for obama, including young people were seeing in the polling and as hillary is out campaigning, theyre on board. What voters are looking for in this election is someone whos going to be a champion for everyday people. And for young people thats debtfree college. That is you know finding that job after you graduate. And for seniors, thats standing up for Social Security and medicare and hillary has a long history of doing that. Were looking across the board and well fight for every single vote in every single state. One thing weve seen for the past six years and people argue about which way to go but theres the notion that some progrowth policies may have generated better gdp growth maybe. The job picture has improved but wangz wages really havent. The economy is not humming, its been 2 . I understand why in a primary season republicans need to beat other republicans and go right. Maybe they need to go right. I dont really understand, since hillary probably is not going to be challenged i dont understand why she needs to tack left. I think shes almost got more democrats. If she wanted to bring in independents i dont know why shed sort of run from some of her husbands progrowth policies or one of the first things she said when she announced was that im going to take on ceo pay and income inequality and then she said im going to topple the 1 . You know sort of divisive things instead of bringing in independents. Why not say im going to be everyones president. Im going to be a private sector friendly president that is interested in raising everybody up. Why not do it that way . First of all, you said theres not going to be much of a primary. There is and were going to fight for every single vote in the primary and hillary has made that very clear. We expect a robust primary. But she doesnt have to move left to secure the nomination like a republican has to worry about hes outflanked on all sides. He doesnt know what to do. Hillary is not tacking left or right, shes tacking to Everyday Americans. And theyre looking for a champion whos going to stand up for them. The deck is still stacked and shes been talking about this on the campaign trail, in the tax code. Its still hard for people to find that job that they want. Wages are not rising the way they need to. So this isnt about left or right or this or that this is about are we making a difference for Everyday Americans. I will tell you, robby, we have had a lot of people come in here, wall street friendly types who support hillary. When we ask them they say dont worry, shes just saying this now but she will change and move more to the center once she secures the nomination. Is that true . Are they right or are they wrong . Look, this is not this is about focusing on Everyday Americans and building an economy for the future where, as we were discussing, young people can get the education they need. That they dont go in with debt. That they can find a job, start a family that young people can start a business. Were not focused on tacking this way and that way, thats not what this is about. This is about being a champion for Everyday Americans. Let me ask you about the champion issue. We were looking at a poll yesterday that related to inequality and the way people look at bothin equality, just the divide and i think the poll was suggesting the larger issue of mobility. How important is it to hillary to make the poor richer versus the rich poorer . I think what hillary has been very clear about is that the deck is still stacked against ordinary Everyday Americans. So the question is how are we giving everyone that same opportunity so that the tax code is fair so that people have the same opportunity to start a business, to get an education. That the middle class doesnt just get by that they can get ahead. So thats how were looking at this. But along with giving opportunity, once the business is started, you want sometimes regulations can stifle business. Sometimes youve heard from the other side what is Holding Back Growth at this point. Why not throw a bone and say its all about entrepreneurialship. Because theres different ways of helping level the Playing Field for middle class people. Some people think its redistribution, just move it over. Other people think lets do progrowth things so everybody is able to do better. Less regulation more business friendly environment. You mentioned the other side. I think what youre hearing are the same failed economic policies. I dont think the 80s and 90s were failed the only way you can say the 80s and 90s were failed is if you say that that resulted in 2008 which just isnt true. Bill clinton had a great economy during his presidency in the 90s. Thats not a failed well we definitely agree with that. You wouldnt say reagan had a horrible economy, would you . What were saying is that the same economic policies top down policies, tax breaks for the wealthy, you know special loopholes for corporations, these are the policies that crashed our economy and hurt Everyday Americans. Now, they have done what they needed to do to dig out and get back up. The question is are we going to move from progress to real prosperity. Robby, just yesterday secretary clinton gave a speech about offering a path to citizenship for so many people here in the United States that are undocumented. Frankly, it was probably the most emphatic position taking that any candidate has taken across the board this year and maybe even in the Democratic Party. So can you talk a little bit about why yesterday . Whats driving it . And is it something that she just came to or is it something that shes believed in for a long time . Again, hillary is running to be a champion. She was with the dreamers yesterday. These are hardworking young people who just want to get an education, start a business create growth, create jobs. And she made this a defining issue in the election. And there is a very enclosure contrast that she drew yesterday with the republicans. Not one of the them has enclosurely lyclearly and consistently the way that she did yesterday supported a path to citizenship that is full and equal. You see some of them waffling and some of them supporting secondclass citizenship and thats not enough. Hillary made it clear if congress does not take action she will. Unlike the republicans, she supports president obamas executive action and she would go even further to provide a Clear Pathway for the parents, for example, of these young dreamers to remain here so that families arent broken apart. Although jeb bush has been very very consistent with his views on immigration and his push within his own party. Well except he would repeal president obamas executive orders. I mean not one republican candidate has clearly and consistently supported comprehensive Immigration Reform. This will be a defining issue in the election. Youll see hillary really be a champion for these young dreamers and their families moving forward. J. B. Youre a supporter of Hillary Clintons too. Your reasons for that . Unlike what joe said my view is not that shes trying to push down the top. Actually her progrowth policies are indicated by positions like the path to citizenship position that shes taken. Because this is if you talk to anyone in Silicon Valley for example, they will tell you probably the number one issue holding them back is immigration. Thats just one industry. So take that position and then take the point of view that her you know she grew up in a Small Business household. Its what her makeup is. Shes for the small oath family thats starting the business thats fighting for not only creating jobs for their own family, maybe in a family restaurant, a barbershop or even a startup business. She lived the experience in chicago, boy they the way, her father starting a business with the merchandise mart. I think thats actually where her energy is. Its all about creating Small Business jobs. J. B. Is our guest host and he will be with us for the rest of the morning. Rob robby, thank you for joining us. Carly fiorina, wish you could stay for that robby, will join us on set. Her plan to take on a crowded republican field and may have some comments about secretary clinton. Plus we want to know what stories youre buzzing about today. Todays big farmpharma deal tweet it to us. Use keepsquawking. Is that the number . Ask robby, he does it all day long. Or post it on something called, what is that, facebook . Well read them all and then share the best of the bunch at 7 40 eastern. 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And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Now the answer to todays aflac trivia question. When did twitter first unveil cashtags to track stock symbols . The answer, july 2012. Welcome back to squawk box. Alexion pharmaceuticals, i think they have got funding too, did you see that . 3. 5 billion from someone. Buying synageva. Now you can see what were talking about here, its 8. 4 billion. J. B. Is looking at this like damn im not that familiar with geva but that would have been a nice one to have before this deal wouldnt it . Look at that up 120 at 216. Its like a venture deal. Alexion will acquire it for consideration of 115 in cash and 0. 6581 shares. They are calling this an 8. 4 billion net of synagevas cash. Alexion is a 34 billion company at this point. See if i can find whos providing the cash. I think it was 3. 5 billion. Bank of america. Bank of america and jpmorgan. So those are the two. But the 230, by the way, is based on a nineday volume weighted average. But there are people at home that own that thing and theyre like lets see whats going on on cnbc. Ahh they had it at 95. Its like hello good morning. Good morning. Wake up people. Are you watching . Im on a millennial kick. Are you watching millennials . Thats what can happen in the stock market. You dont want to invest you want to stay in cash dont watch cnbc fine. Then youre not going to get into synageva. Im not bitter. Bitter party of one. When we come back a former tech ceo who wants to be the next president. Carly fiorina ran hewlettpackard. Now shes taking on a crowded field for the gop nomination. She will join us on set after a quick break. Take a quick look at the u. S. Equity futures. Things looking a lot better than yesterday. Dow futures up by close to 70 points. This is after the dow fell below 18,000 yesterday. S p futures are up 6. 5 and the nasdaq up by 8. 5. Stick around squawk box will be right back. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back to squawk box, everyone. In our headlines this morning, Mortgage Applications fell 4. 6 in the latest woke. That drop is coming just as Interest Rates jumped. The british trader accused of contributing to the 2010 flash crash which was five years ago today, he says he did nothing wrong and was just good at his job. He appeared in a London Court Today as he fights extradition to the United States. Jpmorgan says it is in advanced stages of settlement talks with the Justice Department and the fed. All of this has to do with previously disclosed investigations into the banks Foreign Exchange trading. Federal authorities have approved the use of an unmanned drone to spray crops in the u. S. Its called the yamaha rmax and its large enough to carry tanks of fertilizer and pesticides. Its a remotely piloted helicopter that weighs just over 200 pounds. It has been used by farmers in japan and elsewhere, but this is the first time that a drone big enough to carry a payload like that has been approved in the u. S. We always talk about drones being a toy helicopter. This is not a toy helicopter anymore. The republican field for 2016 is quickly expanding with the latest edition of former arkansas governor mike huckabee. How can he be from hope . How can they both be from hope . How big is that place . Its like 12 people. How are they both from hope . Did he move to hope after clinton . No, he didnt. The field reflects a growing diversity in the professional backgrounds of the candidates. Two doctors and a businesswoman, Carly Fiorina is one of them. Former ceo of hewlettpackard and author of rising to the challenge. Good morning. Good morning, joe. How are you doing . Its good to see you. Youve been coming on squawk box 20 years. 1995 we did the spinout of lucent. It was you and mark haines. Youll have to come back if we ever celebrate 20 years. That would be great. More and more carly, it just seems like we talk past each other already this morning. You know we know about how divided the country is right now, but the one thing that we all want is for everyone to be able to have the opportunity that america is known to give people in terms of earning your success and prosperity and thriving and being happy. And hillary, supposedly wants that and jeb bush supposedly wants that but the ways of getting there are really different. Well, you know its interesting because ive spent a lot of time in the last couple years but particularly in the last several months talking to americans all across the country. And there is a huge gulf between people and government and the Political Class, a huge gulf. And whereas pundits in washington, d. C. , say to me wow, youve never Held Elected Office before. Americans say yay, youve never Held Elected Office before. There is a gulf and its not partisan, its not political. People truly fear that we are losing the sense of limitless possibility that has always identified this nation. People dont feel possibilities in their lives anymore. And i agree with you, this has to be a nation where every american regardless of their circumstances, feels that there are real possibilities in their lives fopr themselves, for their children, for their grandchildren. When we lose that possibility, we lose the core of who we are. And thats one of the weve talked to j. B. And perhaps secretary clinton needs to worry this time about being outflanked on the left. Maybe thats true. But for me i feel like things have been divisive over the past six years. Instead of toppling the 1 id like to turn the 1 into the id like to turn the 99 into the pun1 . You know whats interesting to me, the democrats always talk about income inequality and kroeny capitalism. I agree with Elizabeth Warren. Crony capitalism is alive and well. We see it here. Doddfrank, whats the result . Ten banks too big to fail have become five banks too big to fail. 3,000 Community Banks have gone out of business. Fannie mae and freddie mac have never been reformed. The truth is the policies that Hillary Clinton and Elizabeth Warren are pushing make income inequality worse. California, a state i spent 12 years in liberal state. The model of regulation under the Obama Administration for the rest of the nation. 111 billionaires, good for them and the highest poverty rates in the nation. Industry after industry after industry has been driven out of the state of california. The middle class has exited. Young families have exited. Theyre now destroying the agriculture industry. This is the consequence of big, complicated, powerful corrupt government. Which of course the democrats want more of not less of. Even with j. B. When we were talking, the one you got passionate about immigration which i think can be a bipartisan solution to immigration because its something that will probably make it easier to succeed in terms of the private sector because the private sector doesnt have all these talented people that wed like. Theres something there for everyone. Well, you know but what would you do differently . Would it be regulation . How would you grease the skids for job creation . What would we do . Lets back up for one second because i think immigration is a classic case of where people in the political status quo of both parties frankly have been tinkering around the edges for decades. Our Legal Immigration system has been broken for decades. We have 16 different visa programs. Half of the people here illegally came on a legal visa and overstayed. We let the wrong people in send the wrong people home. Theres boy partisan agreement on that and its never been fixed. And i think one of the reasons that people respond to my candidacy is i say, Look Management is about doing the best you can within the status quo. But were at the point now where management isnt enough. We need leadership to change the status quo. Lets go fix the Legal Immigration system for heaven sakes. George w. Bush talked about comprehensive Immigration Reform. It failed. Obama talked about comprehensive Immigration Reform its failed. Meantime the borders arent secure, neither north nor south, and the Legal Immigration system remains broken. Lets go fix this. But it takes leadership. Carly, one thing that strikes me as ceo of hewlettpackard, you were able to come in and really turn things around. Youre able to do that because youre the ceo and your word goes. In washington its not that easy. You have these hundreds of congressmen who are running around, 100 senators and all of them, you have to convince them to do things the way that you want to do them. It would be a very different job in washington. Yes, although your analogy isnt quite accurate because a ceo doesnt have the luxury of just saying do it because i said so. You may remember i had a proxy battle. I had to convince every single shareholder to move ahead with a merger. You have to convince employees and customers flts its not just do it because i say so. But youre right, we have a constitution that says we have coequal branches of government i think one of the opportunities here is to use technology to engage citizens in the process of government differently. As an example, you know in the federal government its a seniority system. So you can watch pornography all day long enter in the same pay, pension and benefits as somebody whos trying to do a good job. We have no idea how our money is bowing spent. What would happen if the president of the United States went out to the American People and said you know, instead of voting for American Idol this week on your smartphone id like you to vote on two questions. Number one, do you think the federal government should go to pay for performance system. Number two, do you think we ought to know how our money is being spent. The American People would respond and that helps put pressure on a political system because youre right, Congress Responds to political pressure. Youve said that its an advantage to come from outside the Political Class. In fact i think youve criticized several of your opponents in the republican primary or potential opponents who are new senators. They have been there maybe two or four years and are running for president. But you tried to run for senate. You wanted to be part of the Political Class and lost. Now youre saying hey, give mowe a promotion to president. Having wanted to be part of the Political Class, now youre attacking the Political Class. So which is it . Well im not attacking the Political Class. I think the reality is that people get into a situation where its all they know. It doesnt make them bad people. But if all you know is politics. Hillary clinton, the personification of the Political Class. I give her great credit but she and her husband have been in the Political Class their entire lives. Thats not true. She got a lot of criticism for being in the private sector while her husband was governor and then, by the way, had to give it up when her husband got elected president. She hasnt been in office except eight years and then served this president for four years. So thats not her whole life. Its a large majority of her life. Lets just stipulate that i would say. But in terms of the senate race yeah, i lost that general election. Whats interesting is in the state of california i won more republican votes more democratic votes and more independent votes than anyone else running in 2010. Thats how big california is. What that election demonstrates to me is that a conservative can win with democrats and independents because people dont actually expect to agree with someone 100 of the time. What they want to know is what do you think . Are you awe thennic, are you trustworthy and are you a problemsolver. How are you different than jeb bush . Everything about me is different. You think everything about you is different . I have a totally different experience set. But in terms of your overall governing philosophies. Well, i dont support his notions around comprehensive Immigration Reform for example. I think we have to get some basic things done right first, which weve never done like secure the border like fix the Legal Immigration system. I think common core is a really bad idea. It is a giant bureaucratic program and we have demonstrated over 40 years the department of education can get bigger and bigger and bigger and the quality of education continues to deteriorate. I think its pretty clear based on those facts that giving more money to the department of education doesnt improve learning in the classroom. So why would we make that worse. So there are things that i disagree fundamentally with jeb bush about. However, its also true that there is in 2016 i believe, a core difference here between my governing philosophy, as an example, and Hillary Clintons. I truly believe that no one of us is any better than any other one of us. Every one of us has the potential to live a life of dignity and purpose and meaning. Every one of us has the capacity to take advantage you dont believe that she believes that . I think the effective liberal policies is this. What she believes the effect of their policies is this. Some of us are smarter than others, some of us are better than others. Some of us are going to take care of others. I think that is the effect of their policies. And i think thats the conversation we need to have in 2016, i truly do. I truly do. Great news in the republican primaries, there is a woman running because i dont think there has been at least in my lifetime, a serious female candidate on the republican side and from my perspective and of course im supporter ill have to stop you right there. We did have one from alaska did she run for president . Vice president. Shes sort of been back and forth. And i think youve had one on the Democratic Party, Hillary Clinton and Hillary Clinton. I cant think of another woman. And were so excited now that there are serious female candidates on both sides. I think thats right. Absolutely. I look forward coming back for your 20year anniversary. Thats amazing. Thank you. When we return we asked you to tweet us about the stories that youre buzzing about this morning. Up next, the topics that you want to hear more about. Its a segment that we call keep squawking. Take a look at the u. S. Equity futures. There have been green arrows all morning. Right now it looks like futures are near their highs. Dow futures up by about 80 points s p futures up close to 8 and the nasdaq up more than 11. 5. Squawk box will be right back. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. Earlier you might recall we asked you to send us the stories that have you buzzing. Now its time for us to share some responses. Less of a buzz maybe in russia. Loyal squawk fan and tweeter ivan the k. We see him all the time. He is so blocked, so obnoxious. Maybe the worst. I like ivan the k a lot. Not surprised. Sobering news for vodka distilleries. Russia is turning away from alcohol. He points to a story that suggests stricter rules, economic problems and changing social habits mean russians are drinking less. For someone that hates cnbc so much, why does he still watch . I dont get it. Anyway vodka sales plunging. Have they switched to heroin . What is the what are they replacing it with . Im not sure. What do you think . Alcohol consumption in russia, which is believed to have fallen into economic recession, dropped by 6. 3 amid ongoing political tension, the collapse in oil prices and a government crackdown on drinking. So that just less of it. Russians drink 12 less vodka the last year. What do you do in siberia if you dont drink vodka . Youre very cold. Not a whole lot to do in prison except desecrate your flesh. Its illegal to buy alcohol between 11 00 p. M. And 8 00 a. M. And Television Advertising of vodka and wine is prohibited. So its a crackdown from government at the same time that youre seeing a big economic decline. You just talked about vodka. I dont understand vodka anyway. All i want is to be able to put it somewhere and not taste the alcohol. Cover up the taste . Whats a premium vodka when its tasteless . I dont drink hard alcohol anyway, so margaritas really the best best way to go. A lot of sugar, though. Youve got to do the low cal mix. I know. Do you really drink those . With my pinkie proudly. Alcohol itself has a lot of calories. It does right. Do we have another story . Were going to get kicked off here. When we come back uber pulling out of kansas. Well tell you why next plus a lot more. Were back in a moment. If you want to succeed in business, mistakes are a luxury you cant afford. Thats why i recommend fast reliable comcast Business Internet. They know what businesses need. And theres a nomistake guarantee. If you dont like it, you have thirty days to call and get your money back. With comcast Business Internet you literally cant mook a mistick. I meant to say that. Switch today and get the no mistake guarantee. Comcast business. Built for business. music boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. Welcome back. Uber is not in kansas anymore. The state legislature overriding the governors veto of a bill that had stricter they certify drivers have comprehensive and collision insurance and requires new drivers to undergo a background check by the Kansas Bureau of investigation. Uber conducts its own background checks and provides insurance coverage. The new regulations maybe it impossible to operate in kansas. They have this problem in texas. We were just talking about it. And then by the way, theres some investigation going on in china. There was a big investigation. The Chinese Police department visited ubers offices recently. We had this challenge in illinois. Theres a huge lobby for taxi drivers as well as the companies themselves. Theyre opposed to it. We just came out with an app. The mayor pushed to get an app for just the Taxi Companies to use. So you know a big battle. Whos going to crush who . Well does uber crush everybody in the end . I think in the end uber is going to crush. Is there only one that wins . This is not like a cell phone game where you can have a verizon and at t . I think there are going to be two or three, but its going to be like uber at the very top and somebody in the middle and somebody at the bottom. Do you have money in any of these . No. Lyft . No. I wish i was in uber early. They have so many opportunities as a Logistics Company. 40 billion make any sense as a valuation. I had an opportunity to invest at 40 billion and didnt. Thanks so much. Coming up hes the mayor of chicago and the former chief of staff to president obama. Rahm emanuel joins us next. He has a couple of famous brothers. Then the ceo of a Company Called grubhub. And when you bundle your home and Auto Insurance through progressive, youll save a bundle [ laughs ] jamie. Right. Make a bad bundle joke a buck goes in the jar. I guess thats just how the cookie bundles. Now, youre gonna have two bundles of joy im not pregnant. Im gonna go. [ tapping, Cash Register dings ] there you go. [ buzzing ] bundle bee coming it was worth it saving you a bundle when you bundle now, thats progressive. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. The network that monitors her health. The secure Cloud Services that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. Crude sitting at a new high for 2015. The adp private payroll report is just minutes away. And a possible deal to salesforce. Com. Guest host j. B. Pritzker is here to talk about whats driving the markets and where hes making deals right now. Another cnbc exclusive. Will glaxosmithkline continue its slide or will their promising respiratory portfolio breathe new life into the stock . It is down 17 this year alone. The ceo will join us for a special interview you can only get right here. And he spent 33 years at espn starting in the mailroom and ending his career in the board room. George bodenheimer on building the biggest Sports Network and how failure is on the road to success. Squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box. Im Andrew Ross Sorkin along with joe kernen and becky quick. Were just about 90 minutes away from the opening bell on wall street. You can see the dow will open much higher. Nasdaq looks like it will open higher too, about 13. 5 and the s p 500 looks like it will open up 8 points higher. Check out the markets in europe at this hour. Youre seeing a pretty green picture. The dax up over 1 on the morning and the cac and ftse also looking up as well. Here are the stories investors will talk about. The april adp report is 15 minutes away. Forecasters say the economy probably added 205,000 private sector jobs last month. Productivity and cost hits at 8 30 eastern time and fed chair janet yellen and Christine Lagarde kill be appearing together on a panel in washington. The discussion topic, finance and society. Joe, i dont know if you want to do your impression again. No, you can do it. Alexion is buying synageva for 230 per share or about 8. 4 billion. Well have more on this in just a bit but the premium, was it over 100 . What was the stock trading at . You can see right there. It closed at 95. Its up 131 . Unbelievable. Also earnings at glaxosmithkline missing the mark but sales were in line. They are laying out growth targets. The ceo will join us in just a little bit as well. And hain celestial. Earnings matching estimates while sales were better than expected. The flash sale site zulily fell short. Also groupon, from chicago, warning that its fullyear revenues will fall well short of analysts expectations. They blame a stronger dollar and weaker than expected billings. And then theres Weight Watchers reporting a narrower loss than expected, despite continuing to lose subscribers. Why has Weight Watchers had such a tough time . Its been like a constant struggle. The country has gotten fatter and they have struggled more. Its hard to Weight Watchers running it is hard and losing weight is hard. Its a struggle it really is. I dont know why youre looking at me. I was not looking at you. I was not. I looked at him for groupon. Hes from chicago, i looked at him from groupon. J. B. Any comment . Im waiting for a groupon for Weight Watchers. I noticed it too. Itsyoure making this stuff up. You didnt look over . Go to the videotape. Now on to the windy city where mayor rahm emanuel won a second term in office just a few weeks ago. Hell be sworn in on may 18th. He has a lot on his agenda including more tech jobs a budget overall and big push for a new city. Mayor rahm emanuel joins us now. Mr. Mayor, its great to see you. Good morning. Glad to see everything sorted itself out after sort of your attack from the progressive wing of the Democratic Party. Well we put forward, i think, what i would call an affirmative Progressive Agenda one based on opportunity. One of the big things were doing is changing our education from kindergarten to high school to prek to college. And if you earn a b average in High School Community college will be free in the city of chicago. Creating all that opportunity through Economic Development we want to make sure everybody has a chance to participate. I think that more positive affirmative opportunitybased agenda is exactly where i think is not only good politics but more importantly its the right policy to provide people the tools that they need to succeed. Mr. Mayor, you true low arely are a ceo of a city now. Youve noticed. Watching how youve managed that city and you have to do certain things that are going to alienate what i believe is the core or at least a large part of the Democratic Party right now. When it was happening, i wouldnt say i took satisfaction in watching one of its own get attacked by the progressive left, but any association you had with the private sector, any greasing the skids for private industry kind of came back to haunt you. I think thats one of the sort of the most unfortunate things about the progressive wing of the party right now, but you had to deal with it. Well let me say this. I kind of view it absolutely different. Im sure. A good example is i basically view it really based on what i call opportunity. Our economy is growing. Two years in a row chicago has been the number one city for corporate relocations. We had the biggest drop of unemployment of any big city in america, about 40 . 73,000 net new jobs in the city since the height of the recession. Number one city for direct Foreign Investment and number one city where college kids start their career in america. Youre not bragging about the growth in government at all. Youre bragging about the growth in the private sector but see heres go ahead. This is the interview part where i get to answer the question. Yeah go ahead. So heres my point. The point is its not about government or the private sector. We have a mutual Beneficial Partnership in creating opportunity. Where i do think the government plays a role is we have made Major Investments in our transportation, upgrading our infrastructure for the 21st century and making sure our education provides everybody an opportunity. J. B. Has been a great partner in making sure not only we go to universal full day kindergarten for every child but universal prek of the on the prek. On the other end of the spectrum we have the highest Graduation Rate of any other big city. In short order well have 80 of our kids graduating from high school. We want to make that a milestone where everybody has to go on to further education, whether Community College, fouryear institution or military. That means educational training and opportunity, everybody can participate in where the private sector is growing specifically in a tech economy. That means i believe opportunitybased progressive politics is better than i would say politics based on pitting one part of the city against another. Thats not how you win. Mr. Mayor, its j. B. First, i should congratulate you on your whopping reelection frankly, by 11 points or so. And i think 14 but whos counting. There you go. A few lastminute votes came in. So i have to say one of the things that chicagoans observed is that youve been focused for the last four years on job creation and in fact your view has been that coming out of the recession that your focus on helping industry in chicago hire new people is probably the number one thing you could do. I know there are all these other things that need to be done in chicago, but so many jobs have been added and youre regularly announcing them. World business chicago, which is, i know your youve recreated as chairman has been the bullwart behind that job creation engine. Can you talk about particularly in the tech world, you started off and said id like to create 40,000 or 50,000 jobs or at least get to 40,000 or 50,000 jobs in chicago and its exceeded that. Tell me you know in your view what the things are that have sort of made chicago really the top of that group of the rise of the rest. Four or five things that i think are key. One, we have 15 fouryear institutions in the city of chicago. Our universities are drivers of basic research. The university of chicago, university of illinois northwestern, iit, Illinois Institute of technology. So whats going on at our universities . You want to integrate into the core Economic Strategy of the city of chicago. Second, recruiting the type of talent both in the city and outside the city to come to the city to start their careers and their enterprises and make sure that they know were hospitable to that effort. We just opened one specifically in health care and medical devices and were about to break ground on northwestern universitys new Medical Research Center in the heart of the city of chicago. So unlike joe was saying this is Publicprivate Partnership to create jobs. Joe, let me just no joe, heres what i actually believe. We get into this old debate. I create a platform working with universities helping recruit kids to come to the city of chicago, modernizing our Public Transportation system, making sure we have bike lanes for people pause thats what people in the tech economy want to see for a transportation alternative. Thats the platform. The private sector they create the jobs i dont do that. But having made the right investments in education, the right investments in technology making sure that the universities are one of the big drivers of new innovation new company spinoffs, that strategy between public and private partnership we actually do have a partnership. My job is to create the platform. The private sectors job is to create jobs and enterprises. And knowing our roles and where we create that partnership rather than being at each others throats, we should Work Together and knowing what our functions are. My function creating the platform for private sector to create the jobs and the enterprises of tomorrow. Youre preaching to the choir, rahm. Partnership is different than vilifying the 1 . Sure. Orrville phiing the corporations. You have steve forbes come up there. He sings your virtues to me. So youre not your average progressive distributionist, rahm theres a difference. Let me say this. Ive advocated that were going to raise the minimum wage. Were going to go to universal prek for all 4yearolds. Were going to make sure we have affordable housing. Thats what i call opportunitybased economy. Were also going to go and i dont see business against this. Actually j. B. Has been a leader on this also. If you get a b average in high school, Community College will be free. Two years minimum of Post High School education is essential for success. To me this debate either against business or the private sector is right on 100 is not where the economy of tomorrow is. It is about the partnership between the public and private sector, knowing our roles and then excelling at the roles. Theres a difference between Common Ground and skorts but weve got politicians on both sides and its frustrating for people to watch. Mr. Mayor, like we said im glad you beat back that assault from the left, from the progressive left. Thank you. And retained the job because i think youre doing a great job. Thank you. Thank you. Thank you, j. B. A reminder cnbc will be in the mayors hometown of chicago on may 19th for our firstever iconic conference. Were bringing together influential investors and entrepreneurs like mark cuban and Neil Blumenthal to explore innovation and entrepreneurship. Go to iconicconference. Com to register right now. Stick around weve got adp right after this. Squawk box will be right back. Organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. My name is tony sartorio. Im a lineman for pg e out of the Concord Service center. I have lived here pretty much my whole life. I have been married for 12 years. I have three kids. I love living here and i love working in my hometown. At pg e we are always working to upgrade reliability to meet the demands of the customers. Im there to do the safest job possible not only for them but everybody, myself included, that lives in the community. Im very proud to do the work that i do and say that i am a lineman for pg e. Its a rewarding feeling. Together, were building a better california. Welcome back to squawk box. Adp reporting 169,000 jobs created in the private sector in april. Thats a miss compared to the 205,000 estimate on the street. And also march was revised down by 14,000 to 175,000. Here are the estimates. 169 is the number. February revised down by 14,000 to 175. The good sector disappointing, down by 1,000. Service sector okay at 170,000 jobs. Theres the payroll estimate for friday for the overall private sector and government jobs 228. You have to think that number is going to come down. The big mishapings happening because of Large Businesses. Medium size okay up 70,000 but Large Business up 5,000. You have to think that could be because of the challenged earnings environment in the First Quarter, whats happening with the dollar for big businesses as well as a drop in oil prices. Lets bring in mark zandy, he puts this together for adp. Mark, second month in a row below 200,000. Has it happened since, drum roll, last year . I dont know. Its been a long time. Last year under 200,000 two months in a row. Last january. Was it . Okay. No, i dont think its the earnings per se. I think its energy prices. The collapse in oil prices is doing real damage to the Energy Sector and the Big Energy Companies are starting to pull back. The dollar is also having some effect on manufacturing so the Large Manufacturing companies are laying off as well. But i dont think the earnings pictures is playing a role here. I think its mostly the oil prices and the dollar effects. My argument would be if youre not making money, you would be hiring a whole lot of people. Lets go to the issue of the overall economy. Does this tell you that the economy is slowing down . Does this tell you that maybe the First Quarter wasnt an aberration with who is now a negative running number . No. I think this reflects the slowdown in growth related to the ill effects of the collapse in oil prices. So falling from 2,000 to less than a,000,1,000, so were seeing the effect of that on the job market. The Energy Sector is adjusting to it. So the next several months well see declines in the Energy Sector so still job losses. By the second half of the year thats over. And the dollar effects are also more or less temporary. Again, its an adjustment primarily in the Manufacturing Base and that probably will be over by the second half of the year. Then we get the benefits of the Lower Oil Prices starting to filter through. So this is a reflection of things that have happened, not where were headed. Im a plus side. Do you draw any confidence from the idea that Small Business and Medium Business seem to be doing okay on the hiring front . Yeah sure. This is a flip right . You go back in the early part of the recovery it was the big guys that were doing really well. The small guys were really struggling. Now things have flipped around. Its large low becausely because the small guys are tied into the American Consumer and the housing sector. As the American Consumers spend more, because everything is going right for American Consumers, and the Single Family Housing Market kicks into a higher gear the spring selling season feels pretty good they should be fine doing well and add weight to jobs going forward. I think the thing people care most about is whats going to happen. The First Quarter went negative for the first time minus 0. 33. The second is still about 2. 9 . How confident are you in the Second Quarter rebound . Well not confident. I think my sense is that the underlying growth rate in the economy abstracting from the ups and downs and all arounds is about 3 and thats what q2 is tracking right now. But these are early days. We dont have a lot of data points and theyre kind of mixed. So i dont think 3 in q2 i dont say that with a lot of confidence. But i do think that that is the trend rate of growth. Thats roughly what were going to get for the year and roughly what were going to get next year. Well reaccelerate as we move into the second half of the year. Mark, thank you for joining us this morning. Andrew, during the day what were going to be watching for is whether or not economists bring down their estimate for friday which is running at 228. I have to think this will undermine it somewhat. Andrew. Thank you, steve, for that. When we return were going to talk about espn. From the mailroom to the board room the man who ran the espn empire talks to us about his rise to the top, plus his memorable encounter with apples steve jauxobs. You dont want to miss this after the break. Then an exclusive interview with the ceo of glaxosmithkline. His stock is down close to 20 over the last year. Whats it going to take to turn things around . Stick around and find out. Were back in a moment. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . music boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. When we return failure is the first step to success. Former espn executive producer George Bodenheimer. I would think that the well call him that. Ill defer to andrew. Shares his Business Leadership stories. Later did grubhub investors misunderstand the companys results. The stock down 13 in a month well set the record straight with the ceo in just a bit. As we head to break, take a look at u. S. Equity futures. Welcome back to squawk box. George bodenheimer. He was the longest tenured president at espn and under his leadership they established themselves as the premiere of sports media. Well show you a photo, one of his early jobs was driving you drove him around . Dick vitale around then unknown College Hoops commentator back and forth from the airport. George is out with a new book called every town is a sports town Business Leadership at espn from the mailroom to the board room. Its worth noting that 100 of the proceeds are going to the v foundation for cancer research. Thank you for being here. Thank you andrew. Whats so fascinating to me this is the man responsible really for the cable model that supports even what were doing here which is that you turned the entire thing on its head. Which is to say cable tv used to rely on advertising and you may be singularly responsible for carriage agreements for cable. First off, it was a group and a team effort. I was just one of the many people that helped make it happen but it dates back to really the early 80s. I was down in texas selling espn in the southwest portion of the state, of the country, rather and we were at the time pitching an unknown quantity of 24houraday sports. I got the same response from every mom and pop cable operator out there. Gee, george 24 hour sports sounds like a crazy, crazy idea. But if youre giving it away which we were at the time well put it on because you know every town is a sports town. And i realized quickly, as did all of our folks, that sports has such a hold on the towns of this country, you know every town. Maybe high school maybe college, maybe pro. You were starting to pay for games and you needed them to subsidize it . We quickly realized without a flip of the business model, espn wasnt going to be around and that was our pitch to the cable operators. Guys, if you like what you see, if you like the notion of a 24hour sportsnet network, we need some revenue. That was the process we did in the early 80s. Thats changed the Sports Network because so many leagues and teams make so much more money than they would have otherwise. Certain low the numbers have grown. Who was the first Cable Company that got on board with that and said we agree . You know thats a great question becky. I dont believe who was the first. Names that arent around anymore, united cable, htc which was a predecessors to time warner comcast. Of course your Parent Company was in there from the very beginning. I want to hear more on whether you think the model will change again once we talk about unbundling. But theres a fascinating story about steve jobs. You met steve jobs at one point during your tenure. Right after bob eiger became ceo of disney one of his first big things was to purchase pixar. Overnight steve became disneys largest shareholder. I used to be invited to attend the disney board meetings. So im sitting in the early room where you make your own coffee and whatnot if youre up early. Im the only one in there and in walks steve. I had never met him before. I thought i better introduce myself. I walked over steve, George Bodenheimer with espn and he said i hate your phone. And that was my introduction to steve. You had a phone . Espn had Just Launched a phone to much fan fare. It was called the mvmn model where we were going to own the hardware and supply the software. Were there other conversations following the i hate your phone line . Yes, they were. We quickly and to bob eigers credit he quickly months later called me and said were on the wrong track here and we flipped our model. And its actually been a big success because all the people we hired have been driving our mobile business and espn is number one in that space and has been for quite some time. Talking about business model, the model that you developed, theres a lot of talk about it being unbundled. Youve seen what verizon is trying to do to espn which is to put it on a separate tier a sports tier and have a kids tier. Do you think that thats going to be successful . Not necessarily just verizon, but long term and how do you think that changes the model . Of course im no longer at espn so i cant speak for the company. I think the bundle has tremendous value. I think the bundle is here to stay for a long time for a great many number of customers. Having said that theres some technology you cant stand in the way of technology. Consumers want more choice and the Walt Disney Company and espn are working with our distributors and looking for new ways to distribute our product. I think the challenge is consumers will do what they want to do and theyll demand to have it as a separate unbundled you see hbo doing it and others. I guess my question is do you think that espn can sort of keep up with that . Because there are an awful lot that want to hang on to the old model, theyre not going to let it die. If they do that too long they are going to die because someone is going to take that over. It depose back to the title of my book every town is a sports town. And you talk about sports frequently on your show. Sports has such a hold on the American People and the popularity of it. Its up to espn management to evolve going forward. Bow careful what you wish for. If you had to buy espn if you unbundle it completely you might end up spending more for it. You want espn really . No no then you add ten of your favorite channels up and all of a sudden those ten cost you more than your bundle. But i think thats absolutely i would argue ten years from now that absolutely will happen. The question i have around the pricing for that though is if you decide that 30 of the country decides theyre going to pay for espn you have a big issue because all of a sudden instead of charging 7 you want to charge three times or four times and youll lose a lot of advertising revenue because its a smaller audience. Do the economics of all of that hold long term . I think just by definition they will hold and Companies Like espn are going to have to figure out exactly what the right mix of the models are going forward. As i just said i think the mix is going to be a portion of a bundle and a portion of Something Else. The Something Else is what were going through now as an industry. George, i know that youre no longer there so you cant speak for espn. When i looked at espn versus verizon, if i was espn id be more ticked off they were putting me in a tier with all of my competitors and to pay for me you get all my competitors rising my coat tails. Would you agree with that . Certain lowly that would be an element. In this case from what ive read and from arms length it looks pretty straightforward. Espns position is verizon does not have the right to do what theyre doing. Different competitors have different feels with different sports so that its almost you can exist at the same time. Youre going to need both. If you love soccer or if you love lacrosse or if you love and espn doesnt have that or if you love bull riding youre going to need them if you could like estimate how much sports content has appreciated over the last 20 years, theres no apples to apples but its got to be is it triple . Well i remember in 1987 when espn got its first nfl contract for sunday night football at the time, i believe we paid 153 million a season and we were 153 million and now its what . The numbers start with a b. Thats what i mean. And its not going down from here. And thats the question. Thats the content. Quick boxing question. Can that ever be repeated . Is that such a lousy fight that its going to take years before people pay that money to see a fight . It remains to be seen. How many people who dont think of boxing dont know who mayweather or pacquiao are were interested in that fight. To answer your question well have to see. I did notice that espns ratings more than doubled during the fight. There was plenty of people that said im interested but im kind of listening to whats going on round by round versus paying 100. What do you think of the shoulder issue, this lawsuit. Some of the spectators are suing saying that they should have disclosed it . Its boxing. Nothing surprises me. Do you consider that a real sport, boxing is that the wwe to you. No no its a real sport and has many fans. We televised it forever and ever and ever back in the day. Colorful character. You remember the promoters and ali and all of that. Its just a colorful don king, its crazy. Theres a big following. But after the financial crisis, its taken eight years for people to invest in the market again. I think its going to take a while before people come back to paying 100 for a fight after that. Staying up to midnight on this coast. Yes. It was supposed to start at 11 15, it did not, and they were running the same packages. I dont know if you noticed. They had to fill the space while they were waiting. They kept asking the analysts the same questions over and over again. I had people tell me after they bought the fight that they went to bed in the seventh round or eighth round on the east coast. George, thank you. Congratulations on the book. Thank you for having me. Appreciate you having me. Come on back and well continue this conversation. Will do. Glaxosmithkline, latest Quarterly Earnings were slightly short of expectations though revenue was in line. Glaxo also laid out its growth targets and scrapped plans to float its hiv drug business. Meg terrell is here with more. Did you talk any synageva . Did you tell me to buy that . I dont think i did. Did you tell anyone . I didnt no. I didnt know it was coming. It was actually kind of a surprise. Up 125. 140 premium. Yeah that was huge. Were going to bring in ceo andrew witty. Sir andrew thank you for joining us. Its a pleasure meg. So tell us about your strategy that you laid out the next couple of years. Some of the criticisms have been they dont know what the focus is. Did you lay that out today and how would you articulate it . Well i hope very much people will not have that concern going forward. So following on from the transaction we just closed with novartis, weve really reviewed our strategy strengthened our focus i think in three key areas. So were now the Worlds Largest Vaccine Company, Worlds Largest overthecounter Consumer Health business and obviously a very strong pharmaceutical business particularly focused in hiv meds. You put those three together and we believe that sits us absolutely right for what we think is a theme which is really not spoken about enough in pharmaceuticals and health care. Everybody is focused on price and the pressure on price. The reality is while theres pressure on price, theres such an enormous volume opportunity around the world. To put that into context, the next five years, theres going to be 300 million new Health Care Consumers start buying overthecounter products for the first time. Thats the size of the u. S. Coming into our marketplace. Thats why weve strengthened consumer. Every year for the next five years there will be 130 million new babies born. Thats why we wanted to be the biggest Vaccine Company in the world. And theres also going to be 300 Million People over the next five years who become 50 for the first time. Thats why we want to have a strong presence in pharmaceuticals and vaccines which meet the needs of the elderly. So you put all of that together we think these three businesses now, weve got Global Leadership positions. We think were really aligned with where the river is flowing. The river is flowing for more volume. Were going to focus on that get that volume out there at a fair price, good returned on our r d investment but not be fixated on defending higher and higher prices in the developed world. That approach is interesting because there is so much pressure on prices right now. Can you articulate what you mean by not keeping prices at the high end or focusing on price increases to grow the business . I mean are you going to be pricing under where competitors are pricing in order to increase volume and access . So weve been doing that organically over the last several years, meg, and have seen some terrific responses from that. As weve reduced some of our prices particularly in the Fastest Growing emerging markets in the world, weve seen enormous jumps in our volume. To give you a couple of examples, our biggest antibiotic product, augmentin, today we sell 300 more volume than we sold in the peak of the sales in europe and america combined. Pretty soon well sell more product by revenue than ever. You look at ventolin another really strong product. Again, that product peaked in the United States about 10 or 15 years ago. Today we sell 200 more volume around the world. So really its clear that if we get these price points right, we can access enormous volumes. Thats important because it helps us make our factories economic. It gets more life from all of the assets that we spent so long doing the research and development on. Its an important part of the strategy. You combine that with our vaccine business and our Consumer Health care business youve got really a terrific offering, not just to the wealthy in the u. S. And western europe, but to all categories of consumers across the world. Thats what weve been building up over the last seven years. The transaction we just closed really brought those businesses all simultaneously to a point of really Global Leadership. Sir andrew so much more to discuss but well have to leave it there. Thank you for joining us this morning. Thanks, meg. Meg, thank you as well. When we come back this morning, over 230,000 food orders are placed every day on grubhubs application. Investors like our guest host j. B. Pritzker say they are hungry for more. Well hear from the ceo after this. First, though check out the futures. Things have been looking up all morning. The dow futures up 70 points s p futures up 5 points and the nasdaq up close to 8. Squawk box will be right back. Of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. In the us, three in ten College Students drop out. But how can you spot whos at risk . The one who lives far from campus . The one who works the night shift . The one with new responsibilities . One thing cant tell you, but the right combination can. Universities are using ibm analytics to understand pressures in and out of the classroom some expect to cut dropout rates by twentyfive percent. Ibm analytics is working to make education smarter every day. Welcome back everybody. Grubhub reporting stronger First Quarter profits as the platform continues to attract new users and hands more daily orders. Shares have fallen almost 14 over the last week. Analysts are apparently disappointed with the pace of the companys order growth. Here to walk us through the numbers is matt maloney, the chief executive officer of grubhub. Matt thanks for being here today. Thanks for having me. If i understand things correctly, it looks like the number of active diners was up 46 . If you look at the number of orders, that was up only 30 and thats where the street was a little concerned about what was happening, correct . The street is going to do what the street is going to do. Really the numbers we posted 50 increase in revenue, 75 increase in profits, i think it was a gangbusters quarter. If the street doesnt like that were aggressively investing in the future, then so be it. The numbers youre referring to its really about diversifying away from new york city and specifically the corporate diners that are so such a strong power in the ordering. So your point is as you expand and grow these are diners who are not going to necessarily be ordering out every day . No my point is in new york city delivery specifically is part of the culture. Its the greatest delivery city in the whole world. And so as we have record growth in cities across the country, miami, phoenix, denver youre not going to see the same velocity of ordering as you see in people from manhattan. So thats just a natural part of our growth. We are seeing faster growth in the outer markets than we ever saw in the core markets earlier. And so what were doing is aggressively pushing grubhub across the country. Were in over 35,000 restaurants now in over 900 cities and continuing to grow very very aggressively. Matt, its andrew here. We were talking about uber earlier in the show and now at least in new york and i dont know how far they have spread elsewhere in the country, they have introduced uber eats trying to get a little into your business. Theyre not nearly as extensive in terms of menu or options in terms of restaurants but i wanted to get your views on what theyre doing. Yeah i mean to us what uber is doing in delivering a sandwich is just is just another restaurant. We have 35,000 restaurants across the country and this is just one more opportunity. The space in Food Technology right now is more innovative than it has ever been. Its extremely exciting. And grubhub is in a unique position to accelerate that innovation, given our scale. The investments, and this is what i was just talk about with the aggressive investing in growth. The investments in sub30 minute delivery to those 235,000 orders a day from 35,000 restaurants across the country, no one can innovate at the scale we can. But talking about but the scale question on uber is given the number of drivers they have around the country, you know are they in a position at some point to flip a switch . Are they a Logistics Company or a taxi company . They are a single restaurant currently in our model. So, yes, they have a lot of drivers but so do a lot of other companies. I think that over time you will see this transactional transportation layer be commodityized. Youre sort of transforming restaurants too. Yeah. So what were doing, we are enabling restaurants to take massive volumes of orders. The whole industry the takeout and delivery industry is growing rapidly. So weve been talking about a 70 billion market opportunity. I think that is expanding rapidly as you have innovation andrew, that you were just talking about but all across the board through all kinds of different technologies, different processes. So what were doing is were capturing the best of those technologies. Were recreating through our Restaurant Technology platform through our Driver Technology platform. Were helping restaurants talk to drivers and were helping our Customer Service organization manage these 200,000 orders per day in a way that is more transparent for diners and ultimately making the delivery experience better for people who look to eat out across the country. J. B. , i called you an investor before. Youre not an investor in grubhub but you and matt have been good friends for a long time. We have. I will say i know a reasonable amount about matts business. They really are transforming the way restaurants are working in the industry. The other thing is uber eats and maybe, matt you can talk to this, i think theyre only delivering curbside. Like they dont actually the drivers arent getting out of their cars. That makes sense. That must save a ton of time. If you think about it youre a driver you might want this business for curbside delivery but im not sure how many consumers actually want to stand out in the rain. Yeah, exactly. What we found is the diners like the most is to be able to order from any menu in any restaurant, any dish that they want, not be constrained on the choice of restaurant or item and not have to go down to the street. So what we provide is the fully featured menu ordering that everybody wants delivered to your door as fast as possible. Uber is very limited. Im seamless in the brand in new york that he owns and we use it all the time. Joe is looking at me but i use it constantly. There has to be a good reason to live in the city. The bill from seamless every month is substantial . Is substantial. We probably helped with some of those numbers. Thank you for your support. We like that seamless headquarters is in chicago. Matt, thunderstorm watch forank you very much for joining us. Grubhub will be part of a first ever conference may 19th in chicago. Were bringing together influential investors and entrepreneurs including mark cuban and Neil Blumenthal to explore innovation and entrepreneurship. Join us live. Go to iconicconference. Com and register right now. Now. Coming up when we return we have jim cramer from the New York Stock Exchange and tomorrow an exclusive interview with former secretary tim geithner at 7 30 a. M. Eastern time. Rereturn in a moment. Ing, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. The network that monitors her health. The secure Cloud Services that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. There is an ancient rhythm. [ ] that flows through all things. Through rocky spires. [ ] and oceans swell. [ ] the endless. Stillness of green. [ ] and in the restless depths of human hearts. [ ] the voice of the wild within. Welcome back. Apple announcing a 7 million bond. Book runners expected to price that deal with maturities of two to 30 years later today. Lets get down to the New York Stock Exchange. Jim cramer joins us now. Youre known, jim, for any stock, any symbol. You know it. Do you have any experience with that . Have you talked about it . 6 million revenues one major drug. Much more fully valued but at the same time lots of different products. I think this is tremendous overpay. I have no idea why they had to do this. This is a good drug but not being sold. This one is completely mystifying. I did not message you. I was going to ask you about that. It was all in there already in your noggin. True. A much better product portfolio. These unmet needs. I would not go against biomarin. Good guys. All right. Well be watching. We got about five and a half minutes and squawk on the street will start. Up next though we have more. Spencer capitalist and a programming note since leavinge j. C. Penny coming up at 11 30 a. M. Eastern time. Squawk box will be right back. Boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. Welcome back. Now were going to spend a last couple of minutes with our guest host for the morning. J. B. , question for you. All the things youre investing now. Youre not in grub hub, we know. Whats the single best thing you got going . Well we Just Announced a transit action yesterday actually for a accompany. Its a accompany revolutionizing in old Line Industries and property management. Technology invading a whole bunch of old Line Industries. Did you build that to help with your hotels and other building properties. No. It was an entrepreneur in chicago built it from scratch. He had been in the old line industry. Understood the industry better than anybody. In fact the son who is a technologist got together with him and began to build a platform and now its being used across the country. 90,000 locations are using it. They did a million services a year. Its grown like a weed and took investment from a new york firm. Can i ask you what you think about Pricing Technology overall . One thing they said is you have money because its so cheap and so much of it thats been put out by Central Banks it can create bubbles in certain areas. Do you think theres a bubble in technology now . I think across the board cheap money makes it readily available. We have a private capitol side of our world too. So, you know there as well as on the tech side its just clear theres a lot of money nowing. I wouldnt pin it on tech in general. I dont think this is like believe me i know what 99 and 2,000 felt like. I lived through that one. This isnt quiet like that. Whats happening now, at least the companies were seeing, these are real companies. Not abunch of eye balls. No revenue but hey, it will be worth millions. When you see the sock puppet thats when you worry . Its true that may be the signal. The sock puppet. More when you actually announce youre a democrat. I know youre a democrat. Im a democrat at heart. I think youre a republican at heart. This is what we need in this country right now. I left the lights on for you. Make sure you join us tomorrow. Squawk on the street is next. Good wednesday morning. Welcome to squawk on the street. Im carl with jim cramer at the New York Stock Exchange. Stocks trying to make up for yesterdays losses. Adp did surprise the down side. Second month in a row under 200 k. Oil does hit 62 today and