Transcripts For CNBC Squawk Box 20160405

Point is down by almost 2. 5 . The ftse is down by 1. 5 . If you look at the price of oil, which was under quite a bit of pressure yesterday, you can see this morning its down another 22 cents, sitting below 36. Lets tell you about some of the big stories were watching today. Perhaps the biggest right now is this one. Shares of allergan are plunging after the treasury and irs announced new rules to curb tax inversion. The two companies releasing a statement saying, quote, we are conducting a review of the actions. Prior to completing the review, we wont speculate on any potential impact. We should say that allergan is one of the Largest Holdings of some of the hedge fund community. Its considered a topten holding of about 80 hedge funds right now. So you might see a big impact in that stock this morning. The stock was down by about 21 . Im saying it may even be worse. Some of the people we know. Were checking the potential impact. Its down 60 points. Theres not a potential impact. Theres the impact right there. The impact has happened. Youre waiting for the real open . Im waiting for the real open. Thats pretty close. A lot of lawyers think theyve overstepped here. The Treasury Department. And if you actually went to court, you might win. But its a three, fouryear process. So this may have stopped it dead in its tracks. Lets tell you about other news. Tesla giving back some of its gains, saying it didnt meet its First Quarter sales goals, pointing in part to a part shortage that impacted production of its model x suv. They promised not to make the same mistake with its coming model 3 vehicle. And new details this morning into the drama at pimco leading up to the departure of bill gross. A legal filing arguing that gross abusive conduct and an effort to, quote, sabotage colleagues he saw as disloyal, gave them grounds to fire him. The Money Management firm says it has good reason not to pay gross any more of the 200 million of damages. Last nights National Championship game came down to two shots. Villanova saw a sixpoint lead slip away down the stretch. Down by three, North Carolinas marcus page hit an incredible offbalance three pointer to be tie the game at 7474 with 4. 7 seconds left in the game. Moments later, Chris Jenkins of villanova delivered in the clutch, draining a three pointer as time ran out. The wildcats stormed to the court to celebrate an improbable 7774 victory. This was the reaction of the villanova fans inside the schools watch party on campus. Thats so exciting for them. It was a great year all the way through. I was on the losing end of a couple three pointers like that with wisconsin. The last team to beat villanova was xavier. This is why College Basketball is so amazing. Thats why the ratings are so amazing. North carolina wasnt supposed to be able to shoot three pointers. They were both like wasnt 70 , but maybe villanova was 58 for three pointers. North carolina was even higher than that. Just the crowds reaction. I saw some people watching. Depending on where you can watch it, you could watch prounc announcers or provillanova. Welch got stuck on the prounc. Whats going on . Could we have a little objectivity. Somebody tweeted, you can switch the channel. But they have that one guy, rafferty. I can do an imitation. He does this weird voice every time. Thats his only schtick. It works. Well, i dont know it works. Were going to have ariana on later talking about sleep and how important is sleep is. And that stupid 9 19 p. M. Start. Thats impossible for us. If we violate these sleep rules, you get some terminal disease, you cant think, you get fat. Even ceos that brag about getting four, five hours of sleep, theyre lying. Did you see the craig sager interview . You know who im talking about . I know who he is. Hes battling cancer. That was something i was watching this morning. It came back for craig. It did. But they did a very nice interview on the sideline yesterday. Jordan was at the game. Spectacular. Former villanova unc. You like him, right . Michael . Yes. And you like carl malone. Its a generational thing, yes. I know about that. Believe me. Heres this news. Is this going to be sheryl san diego be sandberg. Why do they have a hard time replacing people . Iger has big shoes to fill. For a while, people doubted whether he would be able to fill isners shoes. What happened to this guy . He was a deal guy, but then he ran the theme parks. He knows whats going on. Hes not a big enough thinker . Hes not a creative guy. Did you know iger was a creative guy . Lets get into this. I can give you a lot more inning a second. There were doubts about iger. Set it up. Let me just read this. Disneys coo Thomas Staggs announcing hes stepping down from the post he had held. He had been considered the guy to take over for ceo bob iger. Here now to talk about what happens next at disney, i have to do this one, but youre doing stewart. Yep. But brett harris is a research analyst. Nobody had any inkling or wind of this until it happened. No. Extremely young man. Exceptionally young man. 55, staggs. So he had plenty of time. Fair to say he had been heir apparent for a long time. Big surprise hes given the coo position and 12 months, 18 months later and this isnt iger that doesnt like the idea. This is the board. Or is it iger . Apparently. And iger is now extending the search. Thats one of the reports. Did iger want to stay longer . Im not sure we know about that piece of it. I think iger supported staggs, however i think there were people on the board who were never comfortable with him. There were a number of missteps he made since he got into this job. The theme park thing. Hes a very complicated guy. So theres a whole group of people there that apparently have not been thrilled. Back to you, youre the professional. I was going to say, look, you said it in your opening remarks, that i think they might be concerned hes a finance guy. He was cfo for ten years. Sure, he ran the parks. They wanted somebody with, as you said, maybe a little bit more vision, perhaps a better ability to navigate who qualifies for a role like that . Its pretty difficult if you have not spent time within the company. Absolutely. Thats the next question. Well, if you dont want somebody like tom staggs, 26year veteran, who then . So thats a big question out there. Who do you like . Sandberg gets thrown around. Shes on the board, knows the company. You heard peters name thrown around here and there. Ive heard chase kerrys name. Chase kerry has been on the beach for a while. Im sure hed do a great job. Certainly has the experience for it. There are a number of existing ceos today that are at perhaps Smaller Companies that are highly respected. Is Nbc Universal a Smaller Company . No comment. That would be a lateral move, wouldnt it . Certainly a lateral move. By i think hed rather crush disney than go there. He does get brought up. He does . Yeah, yeah. Bite your tongue. Hes going to stay. As i said, no comment. You hear that, sorkin . I have heard that name. Before we just said it . Yeah. Were you scared . Scared. Of you. Dont be scared of me. Hes the guy. No, it would be lateral. Im sure he loves it here too, right. And hes ceo of Nbc Universal. Comcast is almost a separate yeah. But there are a lot of les moonves, very highly respected. You dont think theyre going anywhere . Not yet. But these are names that get tossed around. Is there anybody else inside disney that you think has a shot . Well, the two major candidates are off the table. Former cfo. Right. And then jay rissoula left when tom was given the coo position. Unclear if theres another internal candidate. You have to think, is there really another if they had these issues with somebody like tom staggs, would there be anybody else . We mentioned before Sheryl Sandberg from the board of disney. Is that someone you would see stepping into that role . Certainly a possibility. Who knows if shed want to the leave her current position, which is a pretty great position. Right. All right. We will get more color from a guy who knows a lot about it. 7 00 a. M. Jim stewart. Wrote the book on them. Not only did he write the book on disney, he actually did write a book on disney. Yeah, he wrote the book. He wrote a book on disney. There you go. One of the great sort of business narratives of our time. Brett, thanks for coming in today. Thanks for having me. Lets get another check on the futures this morning. There is some red across the boards this morning. Dow futures down by 133 points. The nasdaq off by 36. If you take a look at whats been happening in the treasury markets, youll see that yield is still stubbornly below 1. 8 at 1. 725 . Checking out the dollar, youll see that at least right now the dollar, which was weaker yesterday against the yen, hitting its lowest level since march 18th. This morning, the dollar is down against the yen once again at 110. 37. Its up against the euro at 1. 1355. And gold prices are up by about 14 today to 1,233. 30. The other person, jack dorseying tadorsey i could take a third job. Hes on the board. Youre joking, right . Sort of, yes. I like ovitz. Maybe theyll take the job together. Voters in wisconsin hitting the polls today. John harwood joinin joins us th morning with more. Reporter andrew, this is an opportunity today for both the leading candidates behind the front runners to make up ground in the nomination race. Theyre both behind, ted cruz and Bernie Sanders. First of all, lets look at the republican side. You can see that donald trump has got a lead of not quite 300 delegates over ted cruz. On the democratic side, Hillary Clinton, 600 delegates up on Bernie Sanders. Both are expected to lose today, trump and Hillary Clinton. Theyve been trailing in polls coming up to now. Whats the significance of that . Well, first of all, on the republican side, donald trump still has a path, even if he loses today, to getting the 1237 delegates he needs to be nominated on the first ballot. But every state he loses makes that a little bit harder. If ted cruz does very well today, if he wins all the congressional districts and can deny donald trump all the delegates, then trumps path gets steeper. On the republican side, youve got Bernie Sanders way behind. Very, very difficult for sanders. His aides even participated in a postmortem story in the New York Times the other day, which diagnosed why he hasnt done better in the race so far. Hes done better than many expected. But hes got to win a huge set of victories in upcoming states in order to overtake her. Thats not very likely. The next states coming up are going to be new york on the 19th of april. New debate set between sanders and Hillary Clinton. On the republican side, ted cruz is beseeching john kasich to get out of the race so he can snatch more delegates away from donald trump. John kasich is showing no sign of doing that. Both of these races are going to go on after wisconsin. But you could get new life, a little bit of new momentum for these trailing candidates, should they do what the polls tell us and win wisconsin today. John, ted cruz has made a big point that either he or donald trump should walk away with the nomination. Hes made the point even if he has fewer delegates and fewer votes that have come in the primary, that it would be okay for him to win by convincing enough delegates to come to his side. Hes also made the point it wouldnt be fair for kasich to do it because he doesnt have enough. Is this something you think the electorate buys that, look, you can come in second place and still steal first place from the guy who comes in with the most delegates and thats okay, but you cant come in third place . Reporter well, depends which electorate youre talking about. When you get to a republican convention, if neither candidate can win on the first ballot or the second ballot, then delegates are released and ted cruz cant get to 1237, then i think youre in with those republican officials, many of whom have long histories in republican politics, you have a free for all. Thats the case for john kasich or for somebody from the outside. I understand the argument trump is making, that if you come in with the most, you should be the winner. I understand the argument others are making sailing, look, it doesnt matter. If you dont get to 1237, the rules are the rules. What i dont understand is the point ted cruz is making. If you come in with the most, it doesnt mean youre the winner because the rules are the rules, but we throw the rules out once you get to the point where we only look at the top to two people coming in. Reporter at this point in political campaigns, were not talking about principled arguments. Were talking about arguments benefitting the person making the argument. Ted cruz wants to disqualify any nontrump candidate other than him saying, well, no, of course you cant have somebody like paul ryan come in, you cant have john kasich come in. But this is a situation if we, in fact, get to cleveland without a first ballot winner that, we havent seen in a very long time. So what the republican rank and file have a tolerance for, what the Republican Party officials have a tolerance for, that just hasnt been tested. Everybody is making selfinterested arguments. Thats what ted cruz is doing. I think which of those argues will fly is something that were just going to have to see play out. I think kasich is much more ridiculous than the cruz argument. That is, you know, certain polls to talk about general election polls at this point and point to those as a reason even though ive won only one state and usually get 4 or 5 , and to make the case because these nebulous polls show me winning over Hillary Clinton, thats even flimsier. Thats just a way of staying in. The rules say anybody can win on the second ballot. He had his chance to get the nomination. He never did well in any state except one. Reporter joe, youre right. It is a flimsy argument. But again, its all selfinterested arguments in that case. For john kasich to win under this scenario at this point, its kind of like that twistering three pointer that marcus page hit last night to tie the game with four seconds left. No. Reporter he made the bucket. Its more like that Northern Iowa shot from the top of the other key to beat texas. Reporter okay. Fair enough. Did you stay up for the end of that game, joe . We didnt stay up for the beginning. We have Ariana Huffington on. You need sleep, john. Maybe thats your problem. Reporter that was the best finish ever in a championship game. Stop rubbing it in. I know that. Im going to watch it again now. Anyway, thats the problem. Theres a lot of good things about this. I was just reading some stuff about iger. Gets up at 4 30 no matter where he is. Big time exercise routine. Does the climber. We got one of those, and i hate it. You know i have a personal trainer. Did you see that yesterday . I did. Austin powers decided i dont know, does he decide those things . Yeah, baby. When did he get a show on hbo . Who . Austin powers. Like a year ago. Anyway, coming up, markets under pressure. U. S. Equity futures lower by triple digits. Were going to talk to strategists from jpmorgan and citigroup next. Show me movies with romance. Show me more like this. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Once again, stocks having to deal with the decline in oil prices, but is more of a decline ahead, or are markets at this point in a sweet spot . Joining us now to talk about the markets, jack caffery. Also, Steven Whiting from citi private bank. Gentlemen, thank you for being here. Thank you. Thank you. Lets talk about where we are. Jack, how are you feeling . Color if hn his cheeks. I think things are okay. We have certainly a friendly federal reserve. We have somewhat lower oil prices, which reflects lower inflation expectations. Valuations are not cheap, but we are about to get earnings season. Hopefully that gives us a change in the discussion. So you think earnings season is going to surprise even though so many people have been worried that this is going to be the worst earnings season we have seen in a while . The fact everyone talking about it being the worst earnings season sets up lower expectations. The fact that people are so cautious going into earnings, i think, means you have the potential for some surprises. Steven, how about you . Weve had upside surprises since mid2009. Every single quarter has been an upside surprise. I think that will be substantially stronger than this negative 7 First Quarter estimate. So thats where we are. But markets have come full circle from where we were a couple months ago. Now there are much more reasonable expectations for where were going. But theres also a great deal of new confusion over global Monetary Policy. This idea that were going to now stimulate the world but were not going to spill across borders and not going to have the problems of, you know, affecting exchange rates. And yellen spoke last week, but yesterday the boston fed president was out once again saying, look, id be willing to vote sooner rather than later. This is adding to the new confusion. We just had in the employment report on friday the best news that weve seen in the expansion so far. Six consecutive months of increases and labor force participation. Its as if the labor force is suddenly reawakened. I didnt expect that after six years of a dormant, weakening labor force. This is supply and demand in the u. S. Labor markets, now recovering for the first time. Yet, you see this idea we have to cling to Monetary Policy. We better do something, otherwise were in deep trouble. I know that you both feel like weve talked down earnings season. Maybe things will look a little better. I dont know if thatll translate into earnings for the current quarter. Maybe ceos are starting to feel a little better, but do you think youll hear confidence from them on the earnings calls with the guidance they give out . Because the market will key off that closely too. The way the macro data has performed, its strengthiening into the second quarter. Back to these issues of exports, but weve been through three quarters here where were having a global inventory recession. Manufacturing will hold back pruk profits. So the first half of the year, were not going to see this massive earnings drop and were not going to repeat the full decline weve had in the Energy Sector last year. Jack . The data is coming in better than below expectations economically. Two, were hiring. And generally, you arent going to hire people if you think the world is about to go through another contraction. I agree. The extent youre willing to spend money, bring in workers who need to be trained, need to be brought up to speed, i think that speaks to there is underpinning thrust to the economy. David rubenstein was with us yesterday. Hes the cofounder of the carlisle group. His point was, look, in the last month, hes really seen a turn. Hes got over 200 companies around the globe. Hes seriously seen a turn in consumer confidence, Business Confidence during that time. I just wonder if thats so new that a ceo is going to be a little cautious before saying that on a Conference Call and getting pinned down to expectations for the rest of the year based on a turn thats happened in the last month. Neither are Monetary Policymakers saying anything great about the outlook. Again, how much can you expect them to say . The estimates themselves have been cut more than we had seen at any point last year, and conditions are probably moving in a slightly more favorable way. The bigger part of the earnings gains for this cycle, sad to say, are over. Would you both be willing to commit money would you tell people to commit money here or wait for a slight pullback . Were having a slight pullback today. Triple digits down . Were still talking about levels right within distance of highs for the year. Within highs for the year, but i think youre constantly trying to look at what happens over the next 9 to 12 months. Thats what the market can try to discount with some degree of success. Six months ago, we would have been talking about markets closer to highs than low, and everyone was saying, well, i want to buy on a pullback. They had a pullback. No one really aggressively bought. They had a rally, another decline, another rally. The fact is, people want to buy cheap. Generally you dont get to buy cheap without some headline trying to scare you at the same time. Were constantly committing new money to both equities and fixed income. Where we were two years ago, we were committing a lot more incrementally to equities. Now you take a look in the United States where everybody feels yields are low. In the highgrade Corporate Bond market, you can get 5 yields if youre willing to take some duration risk. Folks have been generally staying in on the yeield curve, expecting rates to rise dramatically. So were committing incrementally more, but we still like u. S. Equities. All right. Thank you both for coming in today. Coming up when we return, baseball legend johnny bench has a beef with the mlb, and hes making his case in a new series of videos. Plus, new data on the top cities for college grads. As we head to a break, take a look at yesterdays s p 500 winners and losers. The first stock index musiwas createdoughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Welcome back to squawk box here on cnbc, first in business worldwide. Folks, check out the u. S. Equity futures. If you are just waking up, youre in for some red ink this morning. Dow futures are indicated down by about 141 points. Dow closed down yesterday at about its lowest levels of the morning. It was only down at the end of the day by about 56 points. You can see this is carrying over this morning, and its not just happening here. The s p futures are down by close to 20 points. Nasdaq down by 37. In europe, the losses are much steeper this hour. The dax in germany is off by 2. 5 . The cac in france down by 2. 4 . Check out the price of crude. It was under pressure yesterday. You can see that wti is down once again today, another 22 cents to 35. 48. Time now for the executive edge. A couple fun stoes to tell you about. A new study showing the most popular cities for college graduates. Here they are. Charlotte, denver, San Francisco, and seattle. Thats at the top of the list of graduates, followed by dallas, new york, and portland. According to the data from student loan marketplace. Those cities saw more outofstate graduates moving in despite being some of the most expensive cities in the country. Apologie apologies, theres no boulder. No boston either. Or cambridge. But boston is not great for weather. Thats the only thing. Thats true. Spring starts in june. Does palo alto also count . Yeah, i think thats San Francisco probably. Charlotte is nice. Charlotte has weather that were all going to have here in a couple years, which is why people complain about it, i dont know. Nice and balmy. Wouldnt you sign on for North Carolina weather here . Never really any snow. Theres got to be snow. Theres a blizzard up i dont want to get into this. I just read a whole article about how weather and climate are not the same thing. I read that too. They make that point that you never attach a weather event to Climate Change unless its sandy. Then you do attach. If it works for the argument, then its climate. But if it doesnt, thats just weather. Can i tell you about another pressing concern im actually very freaked out about . After ebola, this is the new scare. Vietnam has confirmed the countrys first two cases of zika virus. I bet you bedbugs could carry zika theoretically. No, just mosquitos. Health Officials Say the two women, who are 64 and 33, have tested positive in vietnam. Theyre in stable condition, but the younger woman is eight weeks pregnant. The World Health Organization says theres a strong Scientific Consensus that zika can cause microreceively in children. Vietnamese health Officials Say no Health Issues have been found among the womens family and neighbors. The models predicted a warm, dry, cold, wet year. Baseball legend johnny bench thinks the mlb is ruining opening day by spreading out teams first games over a number of days. He talks about the desire for Major League Baseball to revert to a single opening day. I remember that too. You know who it should be, the reds. The reds should open the season every year because theyre the oldest team, 1869. The videos are subtitled anger, sadness, and disgust. Also, the reds i was watching yesterday because theres some special deal from mlb that you can get a sample without paying for it. I thought they were going to lose to philly, but they won 62. So are you going to pay up . M i did one one year. If you watch 162 baseball games from your team, thats really dedication. He does commercials too. Its like watching grass dry and paint grow. Also, a bull in jeopardy. Not a bull market. This is an actual bull. Bull the beau walked through an open gate and wandered into a swimming pool. Tennessee firefighters guided beau to the shallow end, where he was able to climb out. The bull suffered two cuts on his front legs, but hes expected to make a full recovery. Coming up, gold making a run for it, having its best quarter in 30 years. Rex shares is launching two gold hedged etfs. The ceo will joins next to explain why hes betting big on gold. Squawk box will be right back. I love gold this just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. 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Eastern. The trade gap expected to have widened slightly from january. At 10 00 a. M. , well get the march ism service index. On the earnings front, drugstore chain Walgreens Boots Alliance reporting before the opening bell along with Darden Restaurants, the parent of olive garden. After the close, we hear from Pershing Square holdings. Thats todays squawk planner. Gold is a big beneficiary of the market uncertainty this year. Gold prices gained 16 , and that is the best quarter for gold in 30 years. Joining us now is the ceo of rex shares, greg king. Greg is launching two gold heads to etfs this morning. I thought it would have done better than 16 . That was a slow, steady, multiyear move that it had three, four, five years ago, right . Yeah, i mean, gold is big time in the headlines obviously with the last quarter. Our etfs are a new way basically for investors to access gold. We think its a good time for people to be looking at it, but in a way that allows them to stay long the market at the same time. Its rolled over a little bit since moving higher. You think thats base building to move above 1300 eventually . Yeah, i mean, you know, a lot of different technical ways to look at it. Obviously a great quarter. Uncertain about how quickly it consolidates, but i think longterm gold is a great thing. You make the case that negative Interest Rates make it a yield a highyield play. Other people say youre just whistling past the graveyard. I cant imagine negative Interest Rates are good for gold. Look what do you mean a yield play . Theres no yield. No, there is no yield. In fact, thats something that people, you know, dont like about gold. The idea is in europe and asia, investors are looking at negative Interest Rates, which some people are saying has put a bid into gold. Why though . Why . Because its youre not getting yield anywhere else, so you might as well have gold because youre not getting the yield anywhere else anyway. Yield is greater than negative something, right . It seems to indicate deflation is still a worry, and thats never good news for gold. Yeah, i mean, its interesting though, right. When rates got pushed negative was one of the biggest surges in gold. Im not sure that the conventional wisdom really applies. Well, the big surge youre talking about is back to 1250. The big surge in gold came at the front end of all of the qe around the world and all of the easy money around the world because people thought that would debase currencies. Thats why einhorn decided to buy it at 1800 or whatever it was. But the move had just been made and the Central Banks were moving into the last stages of all these accommodations. Gold had already come back down. I think it was in anticipation of that. We stay away from predicting the daytoday moves. The point is having a little bit of gold is a prudent thing to do in a portfolio. For the last three years, nobody wanted to talk about gold, and gold was just going one way, right. The last quarter, all of the sudden people are thinking, wait a second, it still has safehaven type properties. You saw vix ramp up at the same time. Vix has come back down, but gold is still up 15 plus. Overnight, you see markets off and gold up. It has this diversification. We think theres a time for investors to get a new way to access gold. Why an etf . You know etfs are growing by leaps and bounds. Theyre convenient. Theyre transparent. Theres been sort of this misconception with gold that people have to sell out of something. They have to sell out of stocks and buy gold, you know, when everything is bad. People dont, you know, necessarily want to have gold. It doesnt have income, doesnt have an earnings yield. Its kind of like paying your insurance premium. What were doing with these ghs and ghe, which launch today, is for the first time you can have a stock portfolio, right so based on the s p 500 or emerging markets, we have two funds, and you have that stock portfolio support a position in gold futures. So you dont have to you can stay long the market at the same time but have a little bit of that gold in there. Except we just said the other day that i want the physical metal. When i go to bribe the border guard and i show him my statement that i own some etfs and say, here, ill sign these over to you, that might not work to let me out of the country or something, will it . Isnt it better to buy physical gold . Look, theres people do you really back up all these etfs with gold . Is it really somewhere . Come on now, greg, tell me the truth. I will tell you the truth. Ours is an investor product. Theres people who want the coins. They want to hold them. Thats fine. Theyre heavy. Or they want the etf that has physical bouillon. This is taking the price of gold through futures. Were not as concerned about the bars and bringing them home. But isnt part of the problem that when you dont have the physical ownership of the gold, that the moves you see in the etf can be largely exaggerated from the actual moves from the metal itself . Not really. Actually, the price has stayed pretty closely in line with each other. All right. Greg, thank you. Im going to be dropping some barrels of oil off at your house in the backyard. You taking delivery in the driveway . That was when i wanted cattle. I didnt want oil out there. I wanted cattle when oil was 200. I would have rather have had cattle. Get leather, milk, meat, all those things. Hes running a farm in his backyard. Or an oil well or a gold mine. Coming up when we return, shares is of beverage maker cocacola and pepsi co. On the rise. Its on the rise in a weird way because there are falling levels of soft drink consumption under way. Well talk to a beverage analyst. Back in a moment. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Welcome back to squawk box. Soda may be facing a scary reality. Americans cut their soda intake in 2015 over 1 in the u. S. Alone. Cocacola dropped by 1 in volume consumed and pepsi dropped by 3 . But shares of both coke and pepsi have been surging. Join us to explain why is our beverage analyst. Good morning. What is going on. It doesnt make sense. I think that the stocks are responding more to macro issues, people looking for dividends, stable dividends. The sort of business while its in decline is declining slowly. You also had the dollar reverse a little bit so the currency which has been very negative for the last couple of years is not quite as negative. And most important if you look at coke which is outperforming you have some management change. The other thing that both pepsi and coke talk about constantly is packaging and margin, which is to say they are coming down in the size of packaging. They are saying dont worry that nobody that people are drinking less of the actual product were now producing different size products, smaller products and people love them just as much and willing to pay as much if not more for them. The price per ounce is going up. Trying to get a higher price for whatever they are selling. But i think youre absolutely right. This is not the Tobacco Industry where you got an addiction and people cant stop drinking soda. Theres lots of alternatives. When you look at what they are doing on the packaging front is that just a temporary step . I think long term throughout latin america they were successful in matching price with channel price. What about the effort to diversify the mix of products. You have pepsi which is clearly pursued that strategy the most. Tried to make pepsi as healthy as you can make a soda company effectively. Cocacola has not done the same. They tried to diversify the mix but in a different way. Coke knows the more coke it sells is better the profits. Particularly water is much less profitable because the competition is much more intense and they dont dominate those coordination. They have been very reluctant, they got in so slowly and counting against them. Their mix is still 80 to 90 carbonated soft drinks. Management change at coke . We have a ceo for the first time. Kent has been chairman for some time. That will change over the next year. The company accelerated its refranchising program. Return on Investment Capital is going up. Earnings will not. Would you prefer to put money in coke or pepsi. Pepsi. Shes differed the fwoods. Snack business is bar none one of the greatest consumer businesses around the globe. They dominate snacks. Its got great margins. It grows every year. On beverage side they are lotion. Is there a big transformational action for pepsi. No. People are now looking to coke and coke stock is outperforming because they are really under pressure to move faster. And you think theres a deal to be had on the coke side . The story is, ab when its done with South African Breweries it will come in a few years. Lets get South African Breweries done first and see what happens. When we come back a shake up at disney. The chief operating officer and heir apparent is stepping down next month. Jim stewart is here with the latest on disneys succession plan. Squawk box will be right back. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Show show me more like this. S. Show me previously watched. Whats recommended for me. X1 makes it easy to find what blows you away. Call or go online and switch to x1. Only with xfinity. Gobble be markets selling off. Nikkei drops to a seven week low. Europe opens in the red. U. S. Futures report a tripledigit loss. Well walk you through. A leadership change at disney. Heir apparent to bob eiger leaving the company. Well talk to the noted author of cnbc contributor james stewart. You are what you eat. No, no, no. Spit that out right now. I have got to teach you about food. Who are this years best chefs. Food and winfood a food and wine is here with the list. Squawk box second hour starts now. Announcer live from new york where business never sleeps, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin. Futures at this hour have gotten a little bit better. They were down over 140 now down 115. Oil pulling back, that probably isnt helping but its been less correlated in recent sessions and not down that much. Europe is a problem. Down more than 2 . Still are. Germany is down 2. 3 . Ugly chart or ugly board right there with four out of five down more than 2 . Only the ftse down 1. 36 . This hour we have some Economic Data out of the continent. German Industrial Orders dropping unexpectedly in february and maybe thats part of the problem. Got some other headlines. Heres whats going on at this hour. A war of words between pimco and bill gross. Pimco saying gross engaged in abusive conduct and acted unprofessionally when he abruptly quit the firm. Gross is seeking more than 200 million in damages. Two economic reports investors will keep an eye on. February trade deficit comes out at 8 00 eastern time. Expected to increase slightly from january. And ims index that is seen as improving in the march reading. Also Bernie Madoff is back in the news. Hell be deposed for former custom customers. It centers on victims who said their claims were undervalued. Theres been about a billion dollars in legal fees. A billion dollars a boon for the legal business. Isnt it always. All right. Lets tell you about some stocks to watch. Shares of allergan plunging. Allerganpfizer released a statement saying we are conducting a review of the u. S. D. O. Department of treasure aactions announced today. The market is speculating on that. Allergan shares were down by 21 . Tesla announcing it did not meet its First Quarter sales goals reporting a cart shortage. The electric car company promised not make the same mistake with its coming model 3 vehicles. That stock is down after moving up sharply on news of how many people put in their orders. I dont know how you can make that promise. Try not to. They won make the same mistake. But they have to make so many more. Big ramp up. Phil lebeau said you wont get it until 2018, maybe 2019. Maybe late 2017. Now they have so many orders than they can ramp up to. United airlines reaching an agreement on contracts everything k30,000 employees and machinist union. That deal will increase pay by 30 over five wears. Disney making a surprise announcement. Bob eigers heir apparent is leaving the company. Hes stepping down effective may 6th. Julie boorstin has more. Good morning. Reporter good morning. Thats right. Quite an unexpected departure coming. Disney shares are down more than 2 in premarket trading before he became ceo last february. There was a period of major growth and laid the growth in shanghai. He was cfo for 12 years. Close to the situation tells me after a year as ceo the board would not assure him he would be named eigers successor and made sense for him move to. Stag disneys board of directors will broaden the scope much its succession planning process to identify and evaluate a robust slate of candidates for consideration. There are no plans to name a replacement ceo. This is part of a plan to extend eigers tenure. Hes scheduled to depart in june of 2018. Disney is looking internally and externally with a focus outside of the company for now. Right now i hear there are no frontrunners. Andrew, certainly a very interesting war to watch. A lot of interest in who is being considered for that post. Thank you for that. Joining us now to talk about the leadership at the magic kingdom, jim stewart. As we mentioned earlier he wrote the book on disney. We wrote disney war. So, you hear the news yesterday and you think what . Frankly i was totally shocked. Both because theres a long history, as you know, of trouble with succession at disney, and that problem seemed to have been laid to rest. Eiger i thought was doing a fantastic job as hes done in many aspects of management in laying the ground work for succession, smooth transition, highly qualified, very popular, very smart, great candidate in tom staggs who was in this bake off for five years. What went wrong. The board wanted to look beyond tom skaggs . This is eigers board and i cant believe this is happening without eigers blessing. Stagds seemed to be eigers choice. Only one year since then. What happened in that year . Something happened. Difference between, without his blessing and if he was the one with the knife. Could be easily either one. The history there was to be the heir apparent at disney for so many years was to have the kiss of death on your back. That was going to be an end. Under eisner was there no one of good enough. Eiger has almost the same aura. Its significant that eiger said hell step down on schedule. Why . Hes such a young guy. The whole world moved away from 65. Almost 70, 75. Hes young for his age. Is that a possibility . I assume so. Hes already extended it two years. He could extend it again if the search doesnt go well. So from a shareholder perspective its not a huge issue. Lets talk about that search. Among the names, cheryl sandburg. Shes on the board. A year ago when i wrote the column praising eiger for a succession plan, Cheryl Sandberg was the name. Shes a woman, shes digital, shes young, she knows the consumer base. So, yes, shes on the dream list no doubt about it. Another guy would she leave facebook . Is that an option . Is she going to be ceo of facebook any time soon . I dont think so. This is a great job. Why would you not want to be ceo of disney. Thats why its so interesting. This is one of the great jobs in the world. Anybody more qualified than steve burke . Steve burke. Hes got all the he knows abc, he knows disney. He has a creative background. Would he leave comcast a family controlled company . Maybe. What about chernen. He was much talked about when eiger chase carey. These are my names. You might have some. Now were getting too far afield. Look you got to manage talent. St staggs, i dont think anything went wrong. You have to be a master orchestrating these things. One person, ben sherwood. Great guy but only been running this a year or so. There was somebody else in there. I think theres nobody inside disney that you think is on the list. No obvious candidates. Nobody had their job long enough. Staggs has been there 26 years. He ran the theme parks. Hand on management experience. Is that what staggs is saying if youre looking for others im not is going to stay here and be in the midst of this. When you have been named heir apparent so visibly after five years you get it and then suddenly a year later board says well expand the search you leave. Whats weird about that, it would make sense if it was iger you got to move him out. Why do you want to start all over grooming some guy with 26 years and has these qualities unless its you thats to stay. If iger wants to stay he can stay. He could have gone to staggs lets keep going. I would say staggs gone makes iger harder for the next 12 months. The next person plus they have to have somebody to manage the place. We wont hear he goes to 2022 . I cant say that. Who knows. He could go longer. Hes on that stairmaster. Does he want to . Hes the one that set this retirement plan. He said he wanted to go out and do other things. Staggs is supposed to stick around. Shanghai is coming. Is that face saving or on the ground working . I hate to say this i like tom staggs, hes a great talent but a lame duck. What do you think about our other idea was to give jack dorsey a third job. Yes, know. You dont like that idea. He hasnt benton board that long. I wouldnt put him on the list. Marissa mayer might need a job. Theres going to be plenty of people who would love to do this even if it means going in there look what happened when they brought in ovitz from the outside. It can to be done. Fair enough. Thank you. Great to see you sir. When we come back well talk about this mornings selloff. Futures are lower. Down triple digits most of morning. Dow down by 113, s p off by 16, nasdaq by close to 30. Weak demand for it was line adding to the global oil glut. Well talk about that too. Later former indiana governor new president purdue, Mitch Daniels will be our guest. Box will be right back. Ok team, what if 30,000 people download the new app . Were good. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. Little fed news. Minneapolis fed president Neel Kashkari says hes comfortable on the current stance on Monetary Policy and comments he made yesterday he also said he expects moderate Economic Growth. Neel kashkari addressing reporters after his all day symposium entitled ending too big to fail. Im committed that at the end of the year, no one is going to be confused about the risk that remains. At the end of the day up to the American People and congress to decide whether or not they want to go further. Thats up to them. Thats their call. Thats the job of our elected representatives. I feel our job at the minneapolis fed is to speak bullpen the risk we see so no one has a false sense of security. Neel kashkari planning to release a proposal with a list of solutions by the end of the year. We have more from Neel Kashkari when he joins closing bell. Hell do that live. And talking hong kong overnight, chicago fed president Charles Evans argued the u. S. Central bank needs in his words proactive and aggressive to get inflation to hit the feds 2 target. Hes been pushing for only two rate hikes this year, just standing pat doesnt seem to be proactive and aggressive. We had him on last week and thats what we heard. To stay where you are and not increase is that proactive to stay where you are . I dont know. How are you proactive and aggressive when you stay with the current policy. Data points. Continue to northern. Very aggressively monitoring the data points. Were aggressively not raising rates. Lets get a check on futures. Weve seen a lot of red arrows. The dow futures are down by 111 points, s p down by 15, nasdaq by 29. Things are looking worse in early trading in europe. Joining us now is the chief Investment Officer at the bank and Investment Officer at deutsche bank. These red arrows weve seen, particularly weakness in europe, what do you think is happening . Europe is in a tough year. And the u. S. Market has had a nice rebound off the lows but were flat yeartodate. I dont think the market makes a whole lot of upward progress until after the election. Youre not expecting much out of earnings season. Earnings season will be tough. Profit recession continues. Revenue will be down 5 yearonyear and earnings down a few percent. Still very slow growth and our advice is stay away from energy. Advice for quite some time. I think its a good thing to keep doing. Keep selling energy. I like health care. Health care and pharmaceutical stocks will have a good performance. Jack what do you think about the markets fundamentally seems fine. Its valuation. Trump says theres a bubble. Investors are nervous. But i think that the real test is going to be First Quarter earning season when investors come face to face with these earnings numbers. Seems like the market is trading between, you know, roughly 15 1 2 forward pe to 18 pe where its 17 1 2 now. If we can get to that upper bound about 3 upside from here. Heres what i think about this. Were incorporate earning season. First quarter not is going to see great numbers although weve heard from some people in private equity, people who are willing to come in and say look we think things have gotten better in the last month sore. Theres a serious things. I dont know that will translate into confidence on the calls with the ceos who may not be willing to stick out their neck based on a relatively short term trend. I look at bottom up estimates, and its been a big miss. As recently as last june analysts had been anticipating Something Like 10 10 or 12 increase. Instead were looking at an 8 decline. A lot of people look at that and say the bar has been lowered significantly. True. Thats for this quarter. The problem is if you look out two or three quarters they are still back at the 10 increase. My sense is as we get closer to these quarters they are bringing these estimates down. The guidance you dont think well hear much guidance that improve the outlook. Thats the key. Certainly not going to be the numbers. Twothirds of the companies will outperform whatever those estimates are. You know, i think thats a given. Question are they going to say okay brighter skies ahead, we do see revenue Earnings Growth, whatever. But i tend to focus on revenue growth. What ive written about is look, Company Management hire accountants like movie stars hire plastic surgeons. They are not nipping and tucking at revenue. What they are doing is changing the bottom line. If you look at the spread between reported earnings and gap earnings its the widest its been since 2008. David, in terms of you thinking the market will be range bound that means if theres a 5 selloff you tell people to jump in. 10 . What makes you think this is a time to get. In decide at the time. Im very concerned about the commodity complex. While things have stabilized in the economy and stabilized in manufacturing, its still tough in manufacturing, still very risky in commodities. I think people should be very concerned that oil has gone back to 35 a barrel despite the dollar weakening by a few percent. Because if you have a weaker dollar why are you concerned about oil back at 35. We came up very sharply. As weve learned and largely past the point of debate Weak Oil Prices are a negative for us. The energy and industrial sectors, banks are under pressure. So oil of 35 doesnt justify these equity valuations and energy stocks, oil needs to be 65 to justify that. Thats why were underweight on energy. Earnings season will be as it typically twothirds of the Companies Beat 8 decline. It will turn out to be 3 decline pup dont see decent Earnings Growth until the back half of the year. Getting that will require higher oil and not a surge in the dollar and an improvement in global and u. S. Investment spending. Those are allbig ifs. One encouraging piece oil sustained a barrage of bad news in late january and early february. When the oil minister of saudi arabia says we wont cut production because we dont cut any opec member and oil stayed at 27 that suggests at least we now know what the bottom is. We think that neighbor credit markets, you know, have a bottom there too. Jack, david, thank you both. When we come back if you went to bed early a dramatic finish to the ncaa championship game. Its being called one of the greatest finishes ever. We have the highlights right after this. Mitch daniels president of purr due severe and indiana governor will talk to us about deficits, race for the white house and new tax inversion rules. Squawk box will be right back. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. We are the champions the mens College Basketball season came down to one came on monday night. Didnt start until after 9 00. Villanova wildcats facing off the North Carolina tar heels for the ncaa championship and it was all decided by two gigantic shots. I guess the last part it. A lot of great shots throughout the game. With less than ten seconds to go, there was a double clutch and hits the incredible threepointer from an impassable angle to tie it at 74. Carolina fans including superstar Michael Jordan couldnt believe it because with four seconds left they drove it down, barely got to the territory and then Chris Jenkins delivered and drained the threepointer at the buzzer to win it. Pretty amazing. Thats the way this season should have ended and well get ready for next march when i swear ill have the greatest brackets. When we come back former indiana governor and omb director Mitch Daniels is on the race for the white house. Well talk to bus that. New inversion rule threatens the allerganpfizer deal. U. S. Equity futures are under pressure as we head to break. How do you stay on top of your health . Ahh. Ahh. Cigna customers have plan choices and tools to take control. So theyre more engaged, with fewer high health risks and lower medical costs. Take control of your health at cigna dot com slash take control. When bargain carriers talk about unlimited data they dont talk about all the extra unlimited that comes with it. Like unlimited frustrations when they slow your data after just a gig or two. Or unlimited angry girlfriends. Because of unlimited undelivered explanations. And unlimited searching for. Whatever youre searching for. Stop searching and switch to verizon by calling 1. 800. 870. 8149. To avoid unlimited misunderstandings. Mom mom, whered you go . Maybe, not baby. And what feels like unlimited videos that wont go viral. So if youre done with your unlimited plan limiting you, call 1. 800. 870. 8149 and switch to verizon, americas best and most reliable network. And now get 20 gigs on four lines for eighty dollars a month. Welcome back, everyone. Among the stories that are front and center this morning, Darden Restaurants reporting a profit that was two cents better than expected. Same store restaurant sales rose during the quarter. That stock is up by 1 . A mixed quarter for walgreens. The drugstore beat the forecast by three cents with a quarterly profit of 1. 31. Revenue was below. Walgreens says its making progress in cuts costs in what it calls a challenging retail sales environment. That stock is down by 2. 5 . Sports authority reaching a settlement with suppliers as the sports goods retailer navigates through bankruptcy. They wanted to take back 85 million in goods. Sports authority said it needed products to sell in its remaining stores. New entry in crowded market for streaming services. Starz is launching a new service that cost 59 month aimed at 20 million u. S. Homes that pay for internet but not the full cable tv bundle. Part of a big unbundling strategy out there. It will offer original starz shows as well as thousands of tv episode and movies. Star Wars Force Awakens will happen later this year. Treasury department unveiling some new inversion rules. Shares of allergan falling more than 20 on the news, on fears this could derail its merger with pfizer. So what im hearing this came as a shock all around. While people were cautious about whether this deal would close given treasurys aversion to inversion nobody expect these rules to come out and nobody expected them to target this deal like it is. Lets look what these new provisions bring. Treasury came out with two other set of rules before. People are calling three year look back and earnings stripping. Earnings stripping is a way of shifting around assets or debt to lower taxes after a deal. Folks are not bothered by that one. The one that affects this deal is the three year look back and it reinquires to the number of acquisitions that a Foreign Company make of u. S. Companies that can be counted in its size when you consider whether its an inversion. Look why people think it targets pfizerallergan. We have a list of the recent deals that allergan has done in the last three or four years. You can see it did its first, first acquisition of warner back in october of 2013. Thats how it ended up moving to ireland. In 2014, actavis bought forest labs and then they bought allergan last year. Folks are saying these new rules would take out those latter two deals and that equity wouldnt be able to be count in its size when you calculate against pfizer size. It wouldnt meet that 40 60 threshold. What about allergan. Would it be paying different taxes . Assume the deal doesnt go through and allergan is a standalone. Would it no longer be considered an inversion. Thats whats causing fears driving down allergan stock. Thats not a concern because the warner deal was long enough ago. Its inversion would still stand under these three year look back. Can you imagine both of these Companies Suing the government or i can imagine it. What ive been hearing is that that would be a long legal battle, presumably they might have to close the deal with the u. S. Tax base and then sue the government and what im hearing thats too risky for both sides to contemplate. That can take too long and the deal as structured doesnt make sense for either side if they pay usa tax rate. Threw have it. People are nervous about whether this deal goes through. It certainly seems like it will shut down inverge erosion but what it doesnt do is change the valuation for u. S. Corporations that Foreign Companies would come in and potentially buy. They would still pay more money in a situation like that. It fixes part of the inversion problems, but it would take a complete tax reform change the entire system. Thats what treasury says as well. Even though they come out with these rules, Congress Needs to act and they are still asking for tax reform. This does chill this potential inversion. Theres a question whether they can still do it under the 8020 threshold but that takes away the trappings of the deal for them. In terms of foreigners coming to buy what might not be considered an inversion, straight deal, that it still makes that harder or makes it less appealing to some degree because of the earnings stripping issue. Thats going to impact you no matter who you are. I have heard that will impact everybody maybe a couple of Percentage Points but thats not considered to be as big news today at least with the three year look back. Thanks, meg. Battle for delegates is all about wisconsin today. The candidate that will eventually go on the win the white house will have a lot of big fiscal challenges. Joining us now is Mitch Daniels former governor of in, cochair of the committee for responsible federal budget and president of purdue university. Welcome. Good to see you. We just had all this conversation that i think is in the air about inversions, and it all brings up the overall point of how we get enough revenue to keep the government running. Do you think there will ever be a time when we dont have to, you know, work around the edges of these issues and we just make capital to be more attractive to be kept in the United States. Will that happen in the next administration, governor well deal with this eventually. Well either work around the edges or i hope more directly or the problem will work on us in a catastrophic way. I think im just a spectator these days. Nor participant than any of you. We spectators have been a little disappointed lets say in the quality of the debate so far. But the single most disappointing element to me is the almost complete absence of wrestling with the really the transcendent problem facing our country which is 18 trillion of deficit, tens of trillions of unkeepable promises, unfunded liabilities that the federal government has taken on. Would you have thought by now that this monstrous problem of imminent enough that it couldnt be evaded. So fair trade has been. Lets hope in the months remaining that somehow someone will force it on to the, into the front of the debate. Its stark choice too between two sides right now. Even if you dont speak specifically about the individual candidates on either side. On the left they are running head long towards even more entitlements, more promises. I dont know how that would affect the 19 trillion or the unfunded liabilities. I cant imagine it would affect it in a good way. On the other side people talking about getting rid of the deficit in eight years but at least they are talking about an answer to the problem of being found in growth, not in just increasing the size of government and giving out more free stuff. Is that a Fair Assessment of whats happening. The American People, wouldnt you go for growth . Its always easier to accept more free stuff. Neither side has distinguished itself in my opinion. Theres been again completely unkeepable promises made on both sides and nothing substantive said by the remaining candidates about how we begin to address this problem. But, you know, i think about it like Everything Else these dis look it through the lens of young people on the purdue campus and elsewhere. Young people today that have student debt. We worry a lot about that. Average maybe 30,000. They owe 25 times that, they are in store for 25 times that much debt courtesy of us, our elders that we piled up for them and a threat to their future. Its a threat to the present economy. You know, you are exactly right. This wont be solved without a lot more revenue. But there wont be revenue at 1, 1. 5 growth rate. You would think people on both sides would recognize this reality and as a starting point before we get to any other issue agree we got to stop Strange Technology growth in the american economy. Seems like, governor, it would have been an ideal year for a pragmatic republican to gain support with the growth platform and maybe lowering corporate taxes and in sort of a reasonable way. After these eight years it would have seemed you would be a pretty easy winner. Thats not what we have. 35 to 40 are very happy to break the establishment wideopen for, i guess, based on a populace message. Would you prefer someone like a paul ryan to come in that might have an idea what to do with the budget and entitlements and Social Security and medicare and Everything Else . I make no comments these days about any individual or even as between two parties. I will just say that although i dont yet hear anything really constructive or realistic being said by the socalled antiestablishment candidates its not hard to understand why people are anxious and frustrated and looking for something very, very different. This is clearly true of people who have seen their own economic prospects lowered, and their expectations not met, and frankly for those who have thought about it, if youre not displeased with the way the establishment, both parties have failed to deal with our National Debt problems then i dont think you paid enough attention. You dont want to cut your nose off to spite your face either. Im not sure which nose youre referring to. Lets say people on the republican side of things, 35 2 to 40 . They are unhappy where they are in life, angry about a lot of things. You want solutions. You dont want to exacerbate it. You might elect Hillary Clinton. Thats what the current thinking is. A number of people on both sides appear to believe they have not been dealt with honestly and forthrightly by our political process and they are right. Single best example, however of that is the completely misleading things they have been told about the nature of the socalled entitlement programs, the size of this problem and the threat it poses to them and their children. You know, you should never blame the American People for believing that somehow this current arrangement can continue. Theyve been actively misled and politicians of both parties share in that responsibility. Youre not getting involved in politics. Are you involved in critics. That entire conference youre in right now, what was that . I mean im kind of embarrassed for the entire conference. What happened . Well we beat each other up all season and, yeah. Im actively involved in recruiting. Once again were recruiting the strongest entering class academically in purdue history even as we grow the school. Who cares about that. Im talking about your basketball team. I know what you meant. Im kidding. Anyway good luck. Thanks governor, president of purdue. Good to see you. Coming up when we return, food and wine revealing its list of best chefs for 2016. Find out who made the cut and more importantly if the restaurants in your own city. At the top of the hour well dig into politics, economy and executive changes at disney with Arianna Huffington and talk about sleep and how were not getting enough of it. Box will your honor in just a moment. Welcome back to box. Futures right now, take a quick look down 109. Best weve seen this this morning. Not great. Triple digits but it was almost 150 earlier. S p now indicated down 15 or so. And the nasdaq down, faring a little worse than the others, down almost 34 points. Food and wine emergency best new chefs list is out. This list highlighted the Young Leaders behind most of americas most celebrated and successful restaurants. The editorinchief of food and wine. Great to have you here. And joined by chef andrew. Kind of hard to get into but now we know each other. Just text me. We can work on that. I dont know if you can noninvite. How do you make the ranging . This list is a list we have been doing since 1988. Weve literally been putting incredible talent on the list. Daniel bloom, thomas keller, nancy silverton. The way you headache the list this is not what you take lightly. It takes a year of our staff working hard. You have to be running a restaurant for less than five years. Less than five years. Five years or less. By the way, how much do you guys like try to get on the list . Is this a whole back behindthescenes. I won in 2000 and i had no idea they showed up which is why its a legitimate list. You dont know they are there. They do a lot of research. Still a prominent thing. We tease this and said well tell you some of the chefs. Can you tell us some of them . Yes, i can. We had a party for them last night. They were all in town. Whats exciting about the trends, i see a lot of entrepreneurship. Now that we look at what andrew has done, established an empire of restaurants. These very young chefs have started their mini empires. Three started restaurants in their own homes. These are people especially committed to the idea. Top, top three new chefs. Well depends on where you are. Im really excited about the duo we have in new york. Incredibly talented young chef. Wild air and contra. They have two. I like lazy bear in San Francisco. Another chef in San Francisco. If youre down in new orleans go to mofo. Its a combination its a play on the vietnamese word for pho. Morrison foster is the company. Goes by mofo. What were you talking bp same thing. Restaurant question for you. Theres a whole trend now to getting away from tips. What do you make of that . That make stones you the no tip situation . Im conflicted as a customer i like the idea of tipping. At the end of the meal i can choose how well service was and reward somebody. As an own i like that incentive it gives somebody to sell well. Give good service. With the new labor increases well see how that model works. Were studying it on a weekly basis. How does minimum wage debate impact you . Its going to impact things a lot especially new york city. What will change as a function of it . Prices will go up. Service go down. Will you decide, you know what . Were going to try to find a way to eliminate one or two positions. Thats the balance. Do what we do well. Make sure the prices are in line what people want to pay for. What do you see in terms of customers. Depends on the restaurant and neighborhood. Im in a bunch of different neighborhoods. Depends on style of the restaurant. I like the sense you can stop by for a bite to eat and a big night out. Neighborhood place and destination. Its interesting in terms of what youre saying in terms of the Economic Impact of restaurants. 39 million americans say they make their decisions where they will go based on what they will do there with food. Thats incredible impact on the economy. These people are stimulating our economic future. Bigger opportunity in the ultraexpensive side of the restaurant or middle of the road or lower right now you know, im in like the middle upper. Middle middle upper. You look up and say the per se stuff done work. Its about the real estate. Depends on what your occupancy costs are to make that deal work. What your costs. Depends with you are. That model works in new york but not work in cleveland. Does everybody need to get in the burger business or some way to franchise themselves. Shake shack was the big deal there. Burger field. Trying to do some kind of franchise, something. Is that the way every chef has to approach the world . I never thought i would have multiple restaurants. I thought i would be there cooking every night. Now i have ten. Its a new way to look at things for chefs. Thank you for bringing the croissants. At the top of the 8 00 a. M. Hour we welcome Arianna Huffington as our guest host. Well be talking politics, matters and much more. At 8 30 a. M. We have mark ber torch bertolini as our special guest. Why do so many businesses rely on the Us Postal Service . Because when they ship with us, their business becomes our business. Thats why we make more ecommerce deliveries to homes than anyone else in the country. Here, there, everywhere. United states Postal Service priority you great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. This is the kind of stuff you can meditate to and get really, really to relax. Throw a little yoko. Lets take a few stocks to watch. This is what this is a prelude to. Disney, the ceo, tom staggs is departing the company. Tesla motors selling nearly 15,000 vehicles during the First Quarter up 50 from a year earlier but lower number than had been expected the automakers output slowed in part by supplier shortages. Well see how it comes right down to it when they have to do over 200,000. Coming up in the next hour, Arianna Huffington talks disney, politics, sleep and much more. Then at 8 30, aetna ceo Mark Bertolini is our special guest. Theres arianna. Well see him in a few minutes. Check out the futures this morning. A bit under pressure all day. Yoko. Squawk box will be right back. Of james and patricia thompson. This tv . Margaret and tom lee. The championship game ball . That was sebastian diaz. Good guy. And all i had to do was ask for their money and pretend i was investing it. Their life savings is now my lifestyle. Female announcer dont let someone else live the life youre saving for. Find out if youre dealing with a registered investment professional at investor. Gov. Its a great first step toward protecting your money. Before you invest, investor. Gov. Gomery and Abigail Higgins had. A tree that bore the most rare and magical fruit. Which provided for their every financial need. And then, in one blinding blink of an eye, their tree had given its last. But with their Raymond James financial advisor, they had prepared for even the unthinkable. And they danced. See what a Raymond James advisor can do for you. New this morning an nbc news poll shows Donald Trumps National Lead dipping after a rough week for the gop frontrunner. This comes as voters in wisconsin head to the polls for the badger states primaries today. Our special guest this hour, Arianna Huffington. A healthy view on business and life. Aetna ceo Mark Bertolini is here to talk about his company, the industry, why he says its more important than ever to get some sleep. And oops well tell you why walmart is apologizing to the university of maryland this morning as the final hour of squawk box begins right now. Were on. Welcome back to box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin and were less than 90 minutes away from the opening bell. I feel like opening the market today. Futures are down 114 points. Not as bad as it was. They were down by 150 earlier. A lot of this is directly import order exported from the continent over there. Journal down 2. 3 . We definitely dont want numbers like that here if youre long. Over 2 in france. Ftse down 1. 3. Italy and spain down 2 . I dont know whats ailing them. Those german orders for something. I read something about that briefly. But look weve seen the market come back really sharply. A lot of people nervous about it. The fed is not raising rates which wont help things in europe. You saw bubba watson on 60 minutes. Did you also see the german prison story . These people live nicer than they do. Its just germany they are a kindhearted people and they want to treat now they decide they want to couple of world wars later they are now sensitive. I was just watching it. Its classic. Allergan shares are under pressure and that may be an understatement if the shares are down 20 . They are down after the Treasury Department and irs announced new rules to curb inversion deals. Allergan down by over 19 . Pfizer superby 2. 5 . Allergan and pfizer are waiting to close the biggest tax inversion of all time. They are reviewing the governments actions. Disney chief operating officer tom staggs is leaving the media giant. Staggs learned he was not guaranteed the top job and disneys board would broaden its search for a new chief executive. This came last year when he was named heir apparent. Disney shares are down by 2 . Tesla is giving back some gains. The company said it did not meet its First Quarter sales goals part due to a parts shortage. Tesla promised not make the same mistake with the coming model 3. Twitter social blogging is on a deal to show thursday night nfl games online. And will stream those games. We should tell you theres a connection. Darden julia has more on this story. Reporter i just confirmed from a source close to the situation that twitter and nfl are about to announce we can expect the announcement within the next hour twitter has secured the streaming rights for those thursday night games. This was first reported by bloomberg and we should expect to see the official announcement shortly. Of course theres that connection between twitter and nfl. This speaks to what twitter is trying to do in terms of driving users and hoping to use this as a way to grow its base audience beyond that 300 million number where its been stagnating. It will be an interesting area to watch. The question whether it will attract new users and whether twitter can be the destination for realtime commentary. Twitter has made deals with the nba. Putting an emphasis on sports. Doing stuff around super bowl. This is an interesting move. Likely a very expensive one for twitter. Some commentary this is a make or break bet. Do we know what the price tag is . We dont know. Ill be doing some digging. I dont think twitter will disclose but well get some reports. Nfl games do not come cheap. So certainly a big investment on twitters part. Do we know how they plan to stream. Currently they have a website. They have twitter mobil. They own periscope. Which is Live Streaming technology. The periscope acquisition is about a year old. Has bean big success. But streaming nfl games to a massive number of people rather than periscope streams which usually one person streaming to a grouch people, a couple thousand twitter needs have the technology in place but they have some time to get this all set up. The twitter embedded in a lot of set top boxes now . I think you can access twitter if you have an apple tv but this is really more about the second screen. What twitter wants here is for everyone to go to their phone and say hey i want to watch a football game, i want to comment on whats going on here. I think this is less about the tv and more about where a lot of video success consumed right now on month binghampton devices. Julia, thank you very much. Julie boorstin. Lets talk politics. Voters in wisconsin hitting the polls today. At stake there are 86 delegates for the democrats and 42 delegates for republicans. John harwood joins us right now. John this one is interesting bus the frontrunners in the parties not necessarily the frontrunners in the race tonight. Reporter thats right. If you look at the polls they are both favored to lose. Lets start with trebs. You see from these numbers real clear politics. Com averages, donald trump is behind 3935 in those averages. Ted cruz is hoping for a bigger win than that. The bigger his margin of victory over donald trump the more delegates hes going to get and the better chance he has of denying donald trump a first ballot nomination in cleveland this summer. On the democratic side you see also a narrow lead for Bernie Sanders. If Bernie Sanders is going to overtake Hillary Clinton given the democrats proportional allocation rules per delegate hes got to win big in wisconsin and many other places. So a narrow victory for Bernie Sanders doesnt do all that much. Lets step back and take a look at the National Picture which is an indication where the race may be headed as we go to other states. Nationally donald trump still leads by a healthy 17 points over ted cruz but his lead is down slightly in the nbc survey monkey poll from what it was before the week that he had last week which was filled with bad news. On the democratic side, Hillary Clinton has a ninepoint lead. Shes in a Pretty Healthy state with regard to Bernie Sanders. Where the race goes now to northeast, Hillary Clintons home state new york. Donald trump has a large lead. He needs to win big to stay on track to get those delegates that he needs. Tonight will be important to see whether for either of these candidates the momentum shifts in a significant way. Not just narrow wins but in a big way towards cruz and sanders. John, the new hairdo going there. Got your go to sunday meeting hairdo for the big wisconsin primary. Was that it. Looking good fella. There you go. And thank god North Carolina that would have been actual. Thats why you got a bounce in your step. At least the worst Case Scenario didnt pan out. You can be happy for cramer. North carolina is a great program. Their team really showed a lot of fight last night overcoming that deficit late. Great shooting. Tremendous game. Amazing finish. The sequence of those two threepointers the circus shot from paige to tie the game and Chris Jenkins winner we havent seen a final end like that ever. Amazing. Winning it all which is the story of my life. Were going to talk politics and a lot of stuff with our guest host, Arianna Huffington. We have to start because i didnt see a minute of that game last night because i needed to sleep. Appropriately arianna is author of sleep revolution which is out today and she is editor of chief of the Huffington Post. I was going to start with just the, whether you think twitter and social media and the internet has just lowered all of our civility or what do we blame where we are today. Im blaming twitter anonymous trolls that write whatever they want. Actually, you can blame sleep deprivation. Theres a study at the university of massachusetts did where they actually looked at peoples sleeping habits, people who cant sleep at night and tweet. Its much more negative. More sleep deprived more negative they are. Theyve done a study of tweeting patterns, insomnia and negativity on the internet. There should be some mandatory jail terms, anyone who is crazy enough to tweet while intoxicated, right . Absolutely. To your boss or to anybody. Its insanity. Whats happening now because of this awareness around drunk driving the accidents, the krarks the deaths going down but deaths and crashes for Drowsy Driving are going up. And distracted driving. 1. 2 million crashes last year. 8,000 deaths because people are tired but they get behind the wheel and they think they will power through. Getting people to take the pledge the way they designate a driver for drinking to designate one if youre exhausted. I just can you help at the Huffington Post to launch a new way to socialize that starts what are we supposed to do . We need to have people start thinking its cool to go out at 5 p. M. Well never be cool. Never hang out. We got to get up at 4 00 a. M. You are the epitomy of cool. What you do sets trends around the world. Dont worry about that. I need eight hour. We need to change cultural norms. When super successful matcho guys like you two say i need eight hours it will have an impact. Tradition has been for men we all need eight hours. We dont get eight hours. How many hours did you get last night i got seven. My ideal is eight. How often do you get eight. 95 of the time. What about napping . Napping is fantastic. I was talking to charlie rose yesterday who naps three times a day. How many times do you nap a day . Napping is fantastic if you havent gotten a full nights sleep, jet lagged, a sick child, whatever. We have rooms at the Huffington Post that are full and its better than going for a third doughnut. Heres what else is so serious about that. Is the connection between sleep deprivation and alzheimers. Its now one in nine people over the age of 65 is going to get or has right now alzheimers. All the new Research Shows if you are sleep deprived and toxins collected during the day are not cleaned out during the night and thats the time when the brain actually washes away the toxins. Thats one of the primary causes of alzheimers. There is to be a correlation between the epidemic of alzheimer and epidemic of sleep deprivation. You talked to the current stateoftheart researchers on this. Absolutely. It was not understood 20, 30 years ago. Science is very recent. The first scientific sleep institute was founded in stanford in 1970. Now there are over 2,500 centers. Which toxins. When neurotransmitters mediate thought and Everything Else we do they are not broken down. Im sure they need to be replenished. Obviously sleep must be a time when theres a lot of important things happening. Rem and nonrem. We used to believe that sleep was a time of inactivity. It was like turning off the ignition in the car. In fact, time of frenetic activity, thats when all the things that lead to memory consolidation, processing of information happen. Theres a Tipping Point last week, i dont know if you noticed, the Harvard Business review run a study by mckenzie consultants and the title was proven link between leadership and sleep. That leaders sleep deprived are less likely to come up with solutions, less likely to be able to build and motivate teams, less likely to find short cuts through problems and they have all the Science Behind that. What happens in their prefrontal core texas where executive function happens. What i love its scientifically based. Is it get picked up by ceos today. Thats the example that has to start at the top. Exactly. This is a very new phenomenon to have a new ceo taking over and making that announcement. In the past probably if they did sleep for eight hours they kept it to themselves. Now its supposed to lead to better management. We need to change a lot. Ben franklin, smartest thing he ever said was early to rise its better. This lifestyle the better. We were talking about bob iger gets up at 4 30 in the morning. Better lifestyle but difficult to be happening and out in new york city at night. We need to change. Got to be 5 00 to 8 00. Im doing the early bird special. I can get reservations at 5 00 p. M. Every night. Coolest places. You look cool when its light outside. Thats our problem. Thats changing. We can change culture. The other thing, these are all physiological things. Think about the arguments you overcome or weird things you go through that somehow are taking care of past problems that you didnt complete. Absolutely. Dream analysis and all how much joyful you are. I dont know about you guys. When im sleep deprived im ranky arank cranky and i overreact. Still to come we have global stocks under pressure this morning. Well talk Investor Sentiment next. Later aetna ceo Mark Bertolini joins our guest host Arianna Huffington to tell us why a good nights sleep is so important. Stay tuned youre watching squawk box on cnbc, first in business worldwide. Welcome back to squawk box. After a wild start to the year investors are still putting fwhoerng in this market and perhaps putting more risk back on table. Latest results from the American Association of individual investors showing folks are now shi shying away from cash. We have the Vice President of American Association of individual investors and is editor of the aaia journal. Help us through this. So investors are staying in cash. Some cash but going to work in the stock market right now yes. Some are. We actually saw this in january and february where some investors said they were looking for bargains, looking for opportunity to buy stocks. In early february, around february 11th before the market bottomed we saw Bear Sentiment such up 48 . Bull sentiment was below 20 . Once the market rebounded a lot of fears that the drop would actually get worse and we have not a correction but a bear market some of those father fe subsided. Investors looked around and saw stocks were on sale and picked up stocks at lower prices. When you say investors going into the smart are they buying individual stocks or buying mutual funds . They are doing both. A lot of our members do buy individual stocks. We spend a lot of Time Training them how to look at individual stocks. I think the majority own a mixture of some funds and some stocks. You know, were walking into earnings season. Theres a since that earnings season may be bad. I know yours is backwards looking. What do you think they will have done when you look next . A lot of them are not changing allocations too much. Some small things around the edges. We try to encourage them focus long term. Certainly concern about earnings. Its split. Some members are encouraged that overall trend in earnings is positive and certainly if you take oil out of the calculations, earnings look better. But certainly fears. Theres fears in general or i should say concerns about Economic Growth not only here but also in europe and china. Even here in the u. S. Theres concerns that the pace of growth is just still too slow. Right. Real quick i notice here it says cash, you tell me m is the allocation 18. 5 or is the average 24 the average is 24 . Right now about 18 administers allocated to cash. Our average members are in their 60s. We see high levels of cash because some members need some set aside. Not that they are waiting for this big moment. You have some but a lot arent necessarily waiting for this big moment. Some are looking for bar begins or some fearful there could be a further drop in the market and what weve seen so far this year is the first step in a bigger downturn. Charles thank you for joining us this morning. My pleasure. Coming up we got some breaking Economic News. This time on trade. Plus its masters week in augusta. Well show you the pros prepping for the tournament and weather channels that they could face. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Vern from voya . Yep, vern from voya. Why are you orange . Thats a little weird. Really . Thats the weird part in this scenario . Look, orange money represents the money you put away for retirement. Save a little here and there, and over time, your money could multiply. See . Ah, ok. So, why are you orange . Funny. See how voya can help you get organized at voya. Com. In squawks sports news, azaleas are blooming in georgia. It can only mean one thing, the Masters Tournament this weekend. Some took to the famous course for practice yesterday. The weather was perfect for the tune up but the forecast shows some possible thunderstorms for thursdays opening round but then after that the weekend is looking all clear for the 80th edition of the masters at augusta national. Hopefully no snow that we have up here around this time of year. You picking anyone, becky . Bubba, maybe. Jason day really good. The one im pulling for is ricky. Tiger returns. Tiger is not playing andrew. How is your game . Horrible. My arms will not is synchronize with my body. I need sleep. I need a psychiatrist. Im not really sure i need a lot of practice. I need practice on the range without being in tournament settings because thats only time i play. Crowds, cameras and everything. I cant fall back on anything when the nerves i got to play well with penelope. Im a scratch golfer with my wife. You need look at tournaments. You need a partner. Breaking Economic News on trade plus well welcome aetna ceo Mark Bertolini to discuss all things hearth. Youre watching box on cnbc, first in business worldwide. Seconds away from the International Trade deficit report for february. Rick santelli is standing by at the cne in chicago. Reporter here we go. Februarys read is minus 47. 1 billion. Trade balance is a deficit, minus 47 and change. To put it in perspective, minus 50 is the most recent high watermark august of last year. This ends up being the next biggest deficit next to that. The best level weve seen as of late was november at 43 and change. This comes at a particularly interesting time as many of the candidates, of course, talk about trade issues and trade imbalances. I think the Biggest Issue today is eight basis points is the low yield today on a ten year boom. Historic all time low yield close, about one basis point away from that. The dollar is losing ground against the yen. Risk off starts to take its toll on counter intuitive moves on foreign wrecks change. You want to Pay Attention on this day and i hope everybody saw that buzzer busting great finish to the ncaa tournament last night. Wow back to you. All right, rick, thank you very much. Rick santelli. We got some other breaking news four. Nearly half of all americans can get less than the recommended seven hours of sleep a night. For most of us we know that. For more on productivity and health of business were joined by Mark Bertolini. The yceo of aetna. Our guest host this morning is Arianna Huffington. Shes the author of the sleep revolution. Theres the new book. Mark, great to see you. Thank you for joining us. I know health and wellness is a top priority for your at aetna, something youve been watching very closely. Sleep is something youve been monitoring. How important is it . Its really important. And as a matter of fact being president in the workplace and making better decisions has a lot to do with our business fundamentals. Last year we start ad program that was built around how do we get our employees to sleep more. If they can prove they get 20 nights of sleep for seven hours or more in a row well give them 25 a night up to 500. How do they prove that. Fit bit. Fwhat have my kid wear my fit bit. We assume positive intent. The whole idea you think it makes stoirns bottom flynn people are sleeping out more. If people are checked out in a meeting why are they now. If were talking about important things we can get things done quicker. You cant be prepared if youre half asleep. It changes the cultural delusion that most businesses have been operating under. Which has been that the more exhausted and burned out the employees are the more productive they are and all the data now shows that this is completely false. That, in fact, we lose 11 days in productivity because of how exhausted employees are. And how disengaged from the job. What i love, mark, about your story is that while youve been bringing these Wellness Programs into aetna over the six years youve been ceo you have quadrupled aetna stock. You see the direct connection between how engaged and healthy your employees are and the bottom line. Definitely. Its all about the business fundamentals. Business fundamentals in our business are brought forward by people. Its in those business fundamentals we have consistently product that customers buy over time. Some of our greatest revenue gains is customers we keep which is selling customers. If we can make those business fundamentals better by investing in our people that shows up in our revenue. Shows up in our bottom line. And in the streets confidence. Measuring it. You brought in duke university. Yep. To measure the impact of your Wellness Programs. What did they find . 69 minutes more a move productivity on the part of us investing in mindfulness. Its the other programs. Sleep, meditation,o garks mindfulness. 69 minutes in additional productivity a month. Are you monitors fitbits and stuff like that. Is there a big brother element to this . We dont monitor as a company. We have people use those tools to monitor their own health. In terms if youre providing 25 for sleep, how does the Company Monitor that . We have an on site website called get active aetna which allows people to record their diet, sleep, exercise and record it every day and they get points for doing that. How long are you on . Are you even no, hes here for two segments. Theres other stuff i want to talk about. I want to talk about exchanges too. I get minus on the Huffington Post and Chelsea Clinton said obamacare is, the premiums are so high its just it was telling that she said that. Im not sure what it means. Im trying to read the tea leaves by her criticizing it. In such an open manner. Can we talk about it now. Well continue it. What are we going do with these exchanges we have to serve a population we have to build products that serve populations that those products. People we have in the public exchanges today are the people who are too poor too rich for medicaid, too young for medicare and quite frankly are crony jalkly ill and subsidized. Those products attract those people. Thats a terrible demographic. We want to maintain that as the exchange population we have to think about the risk adjustment differently. If we want more people in exchange stop subsidizing at the premium level and create more products and pool and subsidize at the capital level like we do as insurance companies. What do you mean . Right now what we want to do is cross subsidize across all populations. For people at the younger and healthier ages they dont want to pay out of pocket, they dont want a 6,000 deductible, they dont want to pay for the doctor every time they go. If we get a different set of premiums they will use services they always use them. That cross subsidizes the other pool of people who are sicker, older and need more care. New dont think the young people will use is service where it becomes you have to offer them products that they want. They want to look good. They want to feel good. They want to exercise. They want to do all those sorts of things. They are not waiting to see a doctor to get a test or a prescription. You had a meeting with a health and Human Services secretary criticizes some of the exchanges. You toller about some of these things. What was her reaction shes a great secretary. She gets the whole program. Shes working very hard. She has the data right. We need legislation to make these kind of changes and thats not going to occur in this cycle. We have to wait until we get to a different place. Everybody has a mind to make it better. Will aetna stay in the exchanges . Too early to bail and were not being hurt. In the grand skeechl thing we have million lives in the program and were not making money but were not, you know were not hemorrhaging money. So youre a million or United Health care. Were the biggest. Let me ask you a Customer Technology question. Yes. In this great age of technology, why is it so impossible as an aetna customer i speak on behalf of every aetna custom out there to submit my bills to you . And get paid back. Its crazy. Youre getting out of network services. If you use doctor in network thats taken care of behind the scenes. But out of network you know how impossible at the moment aetna makes it. Submit them in paper. Yes. We have more to do. You dont have it any more. You just lost them. Two months. What are you talking about. United health care all year. Youre not even in aetna. Every customer no. Is there a day. We have yUnited Health care. We shouldnt be doing claims procession. We should have a reserve department. Well get there. With these consolidations youre seeing and ability of Large Companies to pull resource we can create a clearinghouse. Meaning that, the patient wont ever touch the bill at all right. How far along are we on that . Five years. Five years . Its only bean couple of months. Its all year long. Dont fight. What is it, march . April. Two months. Increasingly right. People are awake at night bothered their health insurance. What your talking about . Youre not answering him. You have United Health care. He done use in Network Doctors so you shouldnt buy the product. I shouldnt use the product. Every new yorker using aetna product bass you guys cant handle it. People are going to use out of network. You dont want them as patients. Better to use Network Providers for the billing purpose. No. For cost purpose. For cost purpose. Cost doesnt matter. You know great doctors in new york city that dont take your insurance . Yeah a lot of them. Give me a list. I will. Thats taking new patients. Yes. Doesnt matter. It doesnt matter. Arianna and mark will stay with us. More on health care and politics. Stay tuned youre watching squawk box on cnbc, first in business worldwide. Some say free the whales. For them, nothing else is acceptable. But nothing could be worse for the whales. Most of the orcas at seaworld were born here. Sending them into the wild wouldnt be noble. It could be fatal. When they freed keiko, the killer whale of movie fame, the effort was a failure and he perished. But we also understand that times have changed. Today, people are concerned about the Worlds Largest animals like never before. So we too must change. Thats why the orcas in our care will be the last generation at seaworld. There will be no more breeding. Were also phasing out orca theatrical shows. Theyll continue to receive the highest standard of care available anywhere. And guests can come to see them simply being their majestic selves. Inspiring the next generation of people to love them as you do. Welcome back to box were joined by huff and Mark Bertolini. We have yet to talk politics. We got into a little bit the aca stuff. Do you have any regret at all now that trump has become the frontrunner that he is in terms of how you have treated him . Donald trump is sort of an american equivalent of kim jongun. Hes a buffoon and dangerous. We first covered him under entertainment and then day he proposed to ban 1. 6 billion muslim from the United States we started covering him as a clear and present danger with the same editors note reminding our readers and viewers every moment that hes a birther, hes constantly inciting violence at these rallies and he wants to ban a complete region from this country. But the republican establishment is the treatment of the 40 of their base that views mr. Trump favorably and just looking totally down at that time entire population. Those people are not Huffington Post customers in the first place. I understand that. But i had a problem as a journalistic entity you were choosing my candidate before i had a chance. No thats definitely an editorial comment that it should be in the entertainment section and i thought it was kind of embarrassing you had to take it back. Now hes four out of five of your stories. I dont think it was your idea it was the editors. Entirely my idea. 40 of the country, they are so dumb they are entertaining. Making a decision that donald trump is dangerous for this country. Do you disagree . Im a journalist. Come on. Thats absurd. The first time you ever said that. I feel that way about Bernie Sanders. I think Bernie Sanders is a bigger embarrassment from policy. How could you say that . Easily. Because socialism doesnt work. A man who believes that barack obama of not born in this country. That a moan who thinks women who have an abortion should be punished. Do you think this man should deserve to be president of the United States with his fingers on the nuclear button. The tone of the campaign on the right has been, we should have asked for more but the substance of the debate for me on the left is much more disturbing in terms of socialism and of throwing away or attempting a system you have no system lifted more people out of abject poverty was is not all fraud. Its not alter bill people. You have a daughter. I have two daughters. I know. Isnt it the most embarrassing thing to have her watch a debate with donald trump, to have her watch a rally with donald trump. Done he represent everything weve made this point. The tone on the right has not been could have been a lot better all along and politics is dirty and nasty but the substance on the left, watching Hillary Clinton all of a sudden change on tpp and fair trade, watching, all of a sudden all of wall street is a fraud. Youre changing the subject. Youre changing the subject. Im not at all. Yes, you are. Could i add something. All of this served of how angry americans are at the system. So we have people on both sides. If you look at the demographic and anger its on both sides. Far left and far right and people are upset because we had a denigration of our economy and quality of life in this country as we regressed globally and social determinance how people live. We have to make those investments. When you decided to increase minimum wage. Thats part of when you look at the oecd nations and look at the amount spent on gdp and social programs United States is 12th. 12th. When you look at the split between the two, less than half is on Health Care Every where else but the United States its 80 . Underinvest in social determinance which the middle class took care of by itself for years and now its gone. Those are issues that matter to you. What candidate addresses those issues best . None of them. It doesnt fit the populace rhetoric that you need to get through the primary to get elected. The primary system is broken. Does that mean youre not is going to the polls. Ill go to the polls. Ill make my choice. I have a right as an american to vote. But in the primaries is where this is being decided and the way the primaries are set up its not good. Were not talking about the real issues and not having this talk about how do we reestablish the middle class. Thats why we did the minimum wage in our organization. We changed benefits. We got to make that investment and Business Needs make it now. We can wait for government. What about the acknowledgemen you made yesterday about national health. Well engage cities around the country to talk about Holistic Health not just physical health but how, bike lanes, urban farms, how do we invest in our population, how do we deal with the storm determinance. For a company like ours to invest in sornl determinance of our employees and members its a better way than them showing up in the Health Care System and playing big dollars. What has happened . We have a microsite. People are talking about how they do it. Its not the same for every company. And the expense of how they do it. Social determinance issue is a big issue. Its why people are angry. As a ceo and youve watched the way Huffington Post covers trump do you think that media organizations should cover candidates this way i think we should all ask questions that are relevant to what people want to hear versus attacks going on both sides. Theres a dereliction of duty to have major Media Players like bob woodward conduct a 96 minute interview with donald trump and not ask him about his incitement of violence, not ask him about wanting to ban all muslim, not asking about the fact he questions the legitimacy of the president of the United States. That is not objective journalism. That is simply not doing your job. Thats been happening. The media are very responsible for the rise of trump. You know, the republics have been destroyed by demagogues. Now we begin to have everything is in the eyes of the beholder. No, i dont agree with that. You watch George Stephanopoulos interview Hillary Clinton or do the debate when he was a hitman for a husband and a chief strategist for the Democratic Party and doesnt disclose his own donations to the clinton foundation, its happening on both sides. Its in the eye of the beholder. If i were to interview Bernie Sanders, i wouldnt know where i would start as someone who covers business news. I wouldnt. There are people on either side. Thats how you view the world. I view the world Bernie Sanders sanders world is much more disturbing to me than the donald trump world. I disagree with ted cruz, but i dont consider him an unstable, dangerous farce for america. Its a completely different composition. You understand there are avid trump supporters. So youre just dismissing 40 of the Republic Party as racists, bigots thats not the point. The point is that the campaign is always about either appealing to the better angels of our nature or our worst and darkest fears. Every primary season we see the former. Every primary season we see a lot of the former and not the latter. John kasich is maintaining a civil tone and appealing to the base. But hes not doing well in the polls. He has three delegates. We will continue this conversation. Thank you, mark, who has done a great job staying out of this fray. When we come back, jim cramer will join us live from the new york stock exchange. Squawk box will be right back. There it is. Ohh. Ooh. [ gags ] so when you need a house cleaner or an exterminator, we can help you get the job done right, guaranteed. Get started today at angies list, because your home is where our heart is. Lets get down to the new york stock exchange. Jim cramer will wear that hat. Oh, boy. Jim cramer wearing his villanova hat. So you saw the you saw the last minute of that game, jim . Geez, you know, i would have liked to have gone to sleep, im trying to get my voice back. Im screaming at the tv. The tv was listening to me. I was watching the neutral version, which was only that was very pro unc, but very neutral. The neutral one was pro unc, too. Thats what i heard. Well, look, theres a lot of pros from unc in the audience. Not from nova. They keep showing raleig raleigh mossamino. It was nova and goliath. The guy who goes, look at that big fella every time they go to break. That big fella he does it every time. Theyre all big. Theyre all big. Which one . This i was speaking to richie im sorry, to ryans father on sunday. Were you . I was. I love this team. My friend murphy, who was a cheerleader on the 85 team. He said ryans dad wants to speak to you because youre such a big supporter. All i can tell you is everybody graduates from this team. Everybody goes to college. They actually go to school. A lot of them are coming back with two red shirt freshmen. Theyll be better next year. Theyll be good. People have to recognize they go to school. You dont go to jay wrights program in order to play two years and then go play forty e the sixers. We will mess up our handoff to you if we dont get out. Congrats. Nova over sixers next week. Yeah. I got them, too. Over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. They are. Do i look smarter . Yeah, a little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. Thank you for being with us. Congratulations on the new book. Thank you very much. I brought you a pillow to remind you to sleep your way to the top. Can that be used for any part of the body . Any part. Because theres Nothing Better for performance, including sexual performance. Wasnt talking about that part. All right. Thank you. Well see you guys tomorrow. Time for squawk on the street. Good tuesday morning. Congratulations to the villanova wildcats and to jim. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at the new york stock exchange. Futures are weak, and if they hold up suggest the worst twoday dec