Transcripts For CNBC Squawk Box 20160504

Percentage points and australia down after the bank to bring Interest Rates lower. Lets take a look at what happened in europe, youre going to see, at least in the early trading there, european markets for the most part are in the red. The dax down by 0. 75 . So is the cac in france. The ftse is down by 1. 3 . Finally, a look at crude oil prices yesterday, they pulled back again down 1. 13 to 43. 65. Wti is sitting in that same position at 43. 51. Were going to politics but first the top headlines this morning. The biggest one being this, takata expected to announce it is recalling 35 to 45 million more air bags in the United States. This is going to double what is the largest and complex safety recall in u. S. History. An official announcement could come as soon as today. Separately, a bidding war is brewing in the pharma sector as joe said. Pfizer approaching cancer drugmaker medivation to express interest in the acquisition. This could mean that the company could challenge the 3. 4 billion offer last week. Sanofi went public with that per share cash bid but medivation reject it at the time as too low. Also check out shares of cbs, First Quarter revenue, 10 being forecast. The owner of the u. S. Tv networks saw a 31 jump in ad revenue, thanks in part to the super bowl and political ads. Cbs les moonves is going ton on squawk on the street. And losing streak, when did that start . The dollar is on a losing streak . I know we need to shift, we need to quickly get on this, i thought the dollar was too strong for the manufacturers and the fed definitely could not raise rate. The greenback, not only a losing streak but a 15month low and current strategists are predicting further falls. So they made sure that they didnt in any way affect currency around the world. Fed. Fed because of the worries about dollar strength. Next thing you know, you wait a couple months, here we are where the dollar is weak. Maybe it will help manufacturers at this point. Well, it was a huge headline for over a year. This is what happens when you have a forwardlooking fed, though. Theyre looking at everything thats happened. Then yesterday, somebody in china said something that wasnt that great yesterday about manufacturing. About the economy. Thats why were down yesterday. So australia is like, wow, thats an important part. We better cut Interest Rates. Instead of that being something that everybody liked like it has been for years, any central bank anywhere eases and the market goes up, now its like, wow, this is a slow but thats what weve been waiting for, right . But we wont be hearing much more from china about things that arent good. Chinese authorities are now warning commentators with any remarks that run counter to their upbeat view, they do get in trouble. They can get that trouble if they say anything. I hope that never happens here because id be in trouble. You would be in trouble. By the way, a lot of news organizations have already gotten in trouble. You on the other hand let me say this, the New York Times, for example, was kicked out of china. We cant even publish in china. Certainly not able to publish from the obama administration. Theyre certainly going to be happy call the white house, im not sure about that. Maybe you just called the greatest president ever in america. Not the greatest world leader in history. Did you leave that i think he sort of implied that, didnt he . Called himself basically not just the greatest president but really the greatest i dont know that quote. I think he usually stops short of calling himself greater than abraham lincoln. I wouldnt bet on that. Anyway, i was needling you, harwood, earlier, that indiana marked the end of the road for ted cruz. The senator suspended his campaign after a resounding win by donald trump. I was talking about bryce harper and under armour. When did you change from the senators, the nationals are there now. Bob short moved the team to texas, they became the rangers, we were without a team for a decade. Are these the expos, who who you have . The former montreal expos. When . 2006, i believe. Weve got a nice stadium. Come down and check that out. Was that in the sports page . No, im kidding. Im going to execute a bryce harper like pivot right now and say that the general election is going to last six months. And it began last night in indiana. Donald trump won a smashing victory over ted cruz who had placed that as his last stand to try to stop donald trump. And a Nevertrump Movement after a vitriolic exchange in the day, incredible in its viciousness, ted cruz came out last night and said it was all over. With a heavy heart, but with boundless optimism, for the longterm future of our nation, we are suspended our campaign. But hear me now, i am not suspending our fight for liberty. Now, donald trump, who faces only weak opposition right now from john kasich, as he moves towards that 1237 delegates he needs to be nominated immediately turned his fire to the general election opponent, and thats Hillary Clinton. Were going after Hillary Clinton. She will not she will not be a great president. She will not be a good president. She will be a poor president. Now, unfortunately, for Hillary Clinton, she lost indiana last night. And improbably as it sounds, she faces a pesky challenge from Bernie Sanders that is going to last longer than the genuine challenge from donald trump. That diverts her ability to focus on him. But she has done that. She didnt spend money in i indiana in. Were looking aat the general election fight between donald trump and Hillary Clinton. Its going to be an ugly one. Im not saying that the media has been much better, john, the republican establishment. I love these lead, jerry saud, after indiana, shaking republicans. What happened, it snuck up on us . Did we do something . Is there a problem . I love that. We had and they thought they had like somebody for everybody. They had jeb for people that liked scott walker. Hes young and fresh, hes happening. Chris christie, the plain spoken guy from new jersey. And they had each one fell by the wayside, and its like, well, we still got this guy. Weve had them all on the show, too. I dont know what theyre going to do. Theyre going to take their ball and go home now and start think about 2020, the establishment guys. Well, right. And the real question is going to be does the Never Trump Movement disappear . Does it quiet down and ignore the top of the ticket, focus on the house and senate . Some of them have fallen in behind trump. Reince priebus tweeted out last night hes the presumptive nominee. People like john boehner and marco rubio said hed support him. What does mitt romney do, he came out and gave a blistering speech about trump. Calling him a pathological liar. Romney was probably the worst. Romney will be voting for hillary when its over. Id think these people stay home. Guys, we did see yesterday, mark salter, a top strategic for john mccain say after donald trump came out and repeated this completely unsubstantiated story about ted cruzs father associating with Lee Harvey Oswald before the jfk assassination. Mark salter said the Republican Party is about to nominate somebody, im with her. Thats a sign. You can guarantee that the number of people in the republican voting for a democratic nominee is going to be larger than weve seen. John edwards story is crazy. This is crazy, i admit. There are some facts about ted cruzs father. He was initially a castro supporter when he supposedly didnt know it was going to turn out communist. They got facial recognition people looking at a picture of someone that was in new orleans, two years before cruz was supposed to be im going to repeat blah i said, completely unsubstantiated. And the other thing that the National Enquirer publisher is a good buddy of trump. But the incredible thing, guys, the blast that cruz gave that leveled trump after that. Im sure you saw the tape of the rift that ted cruz went on where he called him a pathological liar. Said hes a serial philanderer. He repeated something that donald trump said on howard stern trying to avoid venereal disease in vietnam. But hillary cant move to the center. She cant put a stake in this guys heart even in indiana . John, what happens to the sanders supporters, do they support hillary . Because of the economic anger and the uncertainty with the voters there. Those two its strange they have tended to drop people who would vote for one first and then the other. But there are some strange cross currents between bernie supporters and the trump supporters. My belief, becky, the number of people who would be undecided between donald trump and Bernie Sanders is very, very small. And i do think that Hillary Clinton and the Democratic Party will need Bernie Sanders to come behind her. To rally his supporters. And right now, this is a difficult moment because he wants to keep fighting. She and other democrats want to move on. So, i think its not the best moment for democrats right now. Because donald trump is going to turn donald trump is not worried about john kasich right now. Hes going to focus on Hillary Clinton and begin building his campaign. And she has still got a problem to deal with. Im looking at the daily news. And the National Enquirer, daily news. Did you know that john edwards was on the president ial ticket. If it wasnt for that, we wouldnt know who that was. We wouldnt know who batboy was easither. Thats a different one in the globe. There were aliens advising clinton in the globe. Not that kind of alien, john. Anyway heres good news for republicans, trump is not Going Third Party trumps not Going Third Party. Hes running with the republicans. But some of the establishment of republicans are now saying, the last resort, now we need a third party candidate. Thats true. And dont know how well funded that can be. There are small independent parties that already have ballot lines like the Libertarian Party and the constitution party. So there is going to be some push to get somebody to carry the banner of traditional conservatism. A lot of conservatives are saying that trump is like ted cruz is saying hes not a conservative. Hes killing conservatism. Somebody has to stand up to that and how much can they pull in november. Its how big that push is going to be. Its in the New York Times, in the daily news. The New York Times could have done leg work on john edwards to see how much of that stuff was true. What do you think is written some of the worst most critical stories about Hillary Clinton during this whole thing, i think its shocking. I just think arent there things in the Clinton Foundation now who wrote those stories . I cant enter the conversation, the mindboggling. The times has written some the times has i mentioned the daily news. And the programming, donald trump is going to join us tomorrow on squawk box at 7 00 a. M. Eastern, and i promise, ill ask donald, ill ask mr. Trump about the New York Times. Maybe hes got some comments. Ill make sure to be there for that. Among the other stories that we are watching this morning, at least half the northern alberta city was orlandoed to be evacuated yesterday as a wildfire engulfed homes and sent ash raining down on residents. The main road sat Fort Mcmurray was closed. Fort mcmurray is the capital of albertas oil population. Unseasonably high temperatures combined with dry conditions have transformed the Aurora Borealis into a tender box. The European Telecom group needs approval from the state of new york and new york city for at tease to become the fourth largest cable providers. And google teaming up with fiat. Going to have minivan prototypes. The deal is to create test vehicles only. But we know, becky who loves a good minivan. Thats the only thing that makes a minivan worse than driving you know what it was, somebody pointed out on monday when we were talk about this, the idea that there are all kind of limits. Maybe it was bill gates, that you have to drive the speed limit. You have to override that somehow. Are you sick . Im not sick. You just have a cough. Just a cough. Correspondents dinner. Do you know how hard that is . It sounded like you had a cold. No, all good. Coming up, were going to get you ready for the trading day ahead. Plus, under armour reportedly signed the biggest deal with major league baseball. Were going to talk about it, when we return. A fair price, quality service, and that in a new house, you probably dont share the same tastes as the previous owner. [ dolphin chatters ] so when you need a little house painting or a complete remodel, well help you get the job done right, guaranteed. Get started today at angies list, because your home is where our heart is. You wouldnt order szechuan without checking the spice level. It really opens the passages. Waiter. Water. So why would you invest without checking brokercheck . Check your broker with brokercheck. Welcome back. Time for squawk planner. Heres whats coming up adp employment report out, it will rise 196,000. At 8 30, wee getting the first one on q1 labor costs and march. And Neel Kashkari speaking about too big to fail. And central priceline and time warner report before the opening bell, kraft, heinz, tesla, hopefully all out after the close. The shakeup at under armour, the athletic wear Brand Announces that kip folks will take over. And both of those moves for the officers become effective in july. Perhaps the biggest news, the company has reportedly signed Washington Nationals super bryce harper for a tenyear extension on his deal. The terms of the deal havent been publicly revealed. They got jordan. Jordan spieth, right. And steph. And this guy. So, you know, i dont know. The dow righti iriding a th losing streak. The s p in the three of the last four days, futures pointing to a triple digit loss. Senior Vice President of ubs. And michael tyler, chief investment officer. We just heard about stragglers, people who cant get their earnings in. The Quarter Ended in march. Its may. Were still hearing from these people. But mostly, the earning season is over. What do you give it, bplus, bminus . Thats fair. Beat expectations. Overall, weve had this chihuahua market, it makes a lot of noise, it doesnt really go anywhere. The rallies in the past have kind of faded out, id say, weaker oil, stronger dollar. This time around, youve got the rally again but youve got some stronger oil, weaker dollar. Cyclical participation. That was one of the Better Stories of the earnings season. Weve just come a long way from where we were in january and february. Yeah. It doesnt make much for investors to feel nervous. Weve been camping under this volcano worrying about when mount qe is going to blow. The market having big positions, having overweight positions in the staples and defensive names. So people have been worried. And for good reason. There are clearly issues out there. Its possible with the cyclical leadership that youve got a chance of doing better here. Not a lot of people believe it. Still, its probably a good thing. But if you get energy. If you get treelindustrials, if get materials and if you get some legs under those industries, you may have a shot at achieving growth. We didnt get up to the old house and we turned down a guy you can look at it and i dont know what a technician would say. This is two after both of the biggest worries, headwinds reversed oil, and knockout, we cant buy stock. And then the dollar has weakened. And all we manage is 0. 5 on the gdp. Michael tyler, i dont know, we got a lot of things we wanted and we didnt push to new highs. And there is a global problem with growth that isnt even being helped with negative rates, Central Banks easing. And we still cant get above stall space. Im somewhat concerned about that. And also the prospect of a Trump Presidency is a little more more likely than it was yesterday and the day before. His impact on what markets might do is also somewhat concerning, if you look at his economic policies. But youre right which economic policies . In particular. The dramatic tax cuts combined especially with the very protection, i think can be negative for the u. S. And global economy. Because youve got at least a negative or sentiment from the left which you didnt mention. And even, you know, the republican platform is going to have supply side stuff in it. Less legislation. You decided to pick the scary prospect of trump because of his protectionism, and not the scary prospect of a socialist. Youre in boston, i guess . I think its more simply sanders path to the nomination is tougher than clinton. So you assume shell move back to the center then, because shes out there too. Much farther left on a lot of issues. That does not concern you though, economically . I think hes economically a little more moderate than obama is. Shes certainly more mainstream and accepted by markets than trump is at this point. Well see how that goes. Were still many days in the general election campaign. Youre right that negative interests rates have raised that much. And right now, were at the point where weve had five straight quarters of earnings declines. We have not seen that, even with the lower dollar. Even with oil prices up, we havent seen the market hitting new highs. So i think we could be in for a summer thats a little rocky, before finally getting to third and fourth quarter, i think the earnings comparisons start looking much more favorable. At that point, i think you can see the market hitting new highs. Its going to get rocky between here and there. Youve been around for the last eight years. Do you think the next four years will be worse for trump than the private sector or what . You cant rule them out, a 5,000 to 1 long shot in england can win the soccer tournament. What are you leicester. So youre saying trump is a 5,000 to 1 shot . Im saying you cant rule anything out. Statistically, were telling you that the numbers dont work for him right now. I know, but theyve been telling the black swan is conventional wisdom coming my way. There have been, there have been some people that underestimated him. Ive heard about that. Yeah. Well see. Theres not been a lot of real policy spiecifics, obviously. Theres been more of a charismatic effect that people have focused on and thats been his credit and his success. As we get to convention, as we get to policy, as we get to vps being named and more coalescing around him. Well probably see how serious it sand the market can begin to make up its mind. For now, weve got more uncertainty. And he did operate in the private sector. Yes. He did actually have private sector experience. Youre willing to say from here on out, what would happen over the next four years, would be worse than the private sector treatment in the past eight years . Its an unknown with trump. Really . Its hard to see that it could actually be much worse on the private sector. Yeah. Well, this gets back in terms of regulation and review of the last eight years is. Okay. All right. Two michaels. And also what congress is likely to do, whether they can step in the way of trump. We dont know. Okay. Thank you. Thank you, gentlemen. When we come back, a powerful Business Leader weighing in on the race for the white house and tax reform. We have that story next. Plus, would you like a little garlic with that . A big shakeup coming to mcdonalds french fries. We have the details straight ahead. Right now, as we head to a break, lets take a look at yesterdays s p 500 winners and losers. The force will be with you always. I am in defeat. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive hows it going watson . Welcome to the bank. Hello tom mccabe. Executive from dbs bank. I am keeping busy assisting your relationship managers. How so . I can read over a thousand Research Reports every day, to help you keep abreast of market movements and to help your relationship managers give better advice. Thats great. Todays fast moving markets make it hard to keep up. But together we can stay one step ahead. We make a great team, watson. Welcome back to squawk box, everybody. This is cnbc, first in Business Worldwide. U. S. Equity futures at this hour are indicated down by triple digits. Yesterday it was a triple digit decline for the dow. This Morning Energy the earin t youre seeing that again. Dow futures down 108 points. S p down by 15. Nasdaq down by 30. Indiana marked the end of the campaign trail for ted cruz. The senator suspending his Campaign Last night after a convincing win by donald trump. From the beginning, ive said that i would continue on as long as there was a viable path to victory. Tonight, im sorry to say, it appears that path has been foreclosed. And, so, with a heavy heart, but with boundless optimism, for the longterm future of our nation, we are suspending our campaign. Cruz never mentioned donald trump in his speech last night. Trump, on the other hand struck a conciliatory tone towards cruz. He was magnanimous about it. Just so you understand, ted cruz, i dont know if he likes me or doesnt like me, but hes one heluva competitor. Hes a one tough guy. And he has got an amazing futuring. Trump called for party unity as he closes in on the gop nomination. Donald trump will join us on squawk box tomorrow morning at 7 00 a. M. Eastern time. In the meaner titime, Berni Sanders thanked voters and had a warning for Hillary Clinton. I understand that secretary clinton thinks that this campaign is over. I got some bad news for her. Sanders acknowledged that his path to victory is narrow but said that indiana gave him another burst of momentum. In business news, blackstone ceo Steve Schwartzman weighing in on the issue for tax reform as part of the race for the white house. And telling us that a flat tax would make sense. It tends to work all over the world. So one should look empirically. And we have a tax code thats got so many pages, nobody can figure it out. And what happens when you get simple numbers, whether its 10 on the bottom. 20 on the top, you get rid of all deduction. Just make life simpler. It has a sense of working right now. And you have a safety net on the bottom. So that nobody really gets hurt. On the economy, schwarzman said that the cycle of slow Global Growth is likely to continue. Time now for executive edge, were talking about apple. With jim cramer, apple ceo tim cook weighing in on the fight with government. It would put millions of people at risk. So that was a bridge we thought we shouldnt cross that was not good for america, so we stood up, and we said were not going to do this. And so they decided they would sue. And subsequently right before the hearing, dropped, or ceded that. I think when youre approached like this, you have to stand up in what you believe in. Tim cook spoke to cramer about the role and responsibility of government. I think government in general has gotten quite dysfunctional. In the u. S. And in some other countries as well. And, so, what that does, i believe, is put more responsibility on the everyday citizen. And companies to help promote change and improving things. And i dont mean to play a government role. But its not just government who can change things. Where do you stand on it i know where you stand. Youre with tim, is that your position . Yeah, i want to make sure we can enscript things in the future. Technology is moving quickly. I want to stop these terrorist guys, destroying isis. Youve got to use anything you can. But anyway, lets talk about garlic fries. With allday breakfast and all day you can get fries there in the morning, i think this is a bad move. No one needs a coworker that had garlic fries in the morning. Thats because its the garlic. Youd take regular fries in the morning, wouldnt you . Yeah. Dont come in here after youve had a large garlic fries and Start Talking to us, not in the morning. I cant. Ill throw up. Come closer. Then ill throw up. Garlic has therapeutic benefits. And antivampire attributes as well. And immunity. Immunity. But if you eat enough of it everyone next to somebody on the treadmill who had yeah, fish you smell like fish. You got to watch what you eat in tellers of secretions. Id try garlic fries. Mcdonalds is testing these. Garlic fries at four restaurants in San Francisco. Im surprised they havent closed down all the mcdonalds in San Francisco. They do not happy meals there. You dont want to introduce any kids to start on this. If successful, the menu item could spread at 240 restaurants in california in august. The fries are tossed with a mix of garlic oil, crumbs and cheese, parsley and salt. Yum. They look bigger. Thats up close. Theyre regular fries. Coming up we have a fun segment, twister is turning 50 this year. Variety of the Popular Party game joins us next. Weve got a Team Starting to play. Theyre not getting into naked twister, though. Some people do that. Hes also the brains neebehind nerf ball, if you can believe that. Check out how the markets are reacting right now. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of the at t network, a network that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. 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 easytoreview list. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. 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. Welcome back to squawk box. That is the 50th anniversary of hasbros hit game twister. The body bending board game took off after being featured on the late show with Johnny Carson in 1966. Joining us right now is twisters cofounder and author of right brain red, seven ideas for creative success. Reyn guyer is here. Ill spin them, and you go. How did you create this . What was the sort of thought process . Whole thing fell into place when i was working into place on a promotion for a client of mine, and i wanted to come up with a kids game. And i thought, well, if the kids could, it could be expensive, we just had a map. Kids went around it. All of a sudden, we realized, bingo, people are the players. Theres no game around the market that people are the players. Did it take off immediately . How did it happen . Oh no. Milton bradley brought it out. It was not well received by the public be mostly by the retailers and they decided to pull it. And they called me and said, reyn, im sorry, were bringing it off the market. Unbeknownst to anybody. They still had time to get Johnny Carson to play it in his show. Right. And ava gabor enticed him on the board. The next thing you know, the next morning they were lined up at Abercrombie Fitch 50 people deep. Heres the thing, you didnt just invent this, how did you do that nerf. Well, we had a team. I am part of it. Ive led the teams, ive been the guy ahead of it. But you dont do it by yourself. Everybody is creative. But if you have a team of two, three, four, or five people, things good things happen. And how do you run a team . For those folks out there in the Business World who have to run a team or be on a team. The first thing you do with a team is tell everybody to use the three magic words. What are the three magic words . What happens if what happens if . If you begin every sentence with that. Amazing things happen. Not what if. What happens if. Right. And when you get a good idea, do something. Dont talk about it. These ideas were your ideas, or do you think these were the team ideas . These are ideas that have worked for me in my teams. Right. No, im saying when you look at nerf and twister, i know youre being very kind and perhaps humble in saying, this was a team that created this yeah, always is. But the inspiration for it. The original idea, the original concept that sparked us and got us going were people were the players. Right. What do you think triggers your best ideas . Do you get your best ideas in the shower . Is there something you do . You do it by working with other people, honestly. If youre working with a team and everything is open and youre willing to share your concepts and ideas, magic happens. Weve got to go. Why six, ive wondered about this, four across, six down. What was the magic there . You know, thats the math the first idea ran out into the bull pen where all of the artists were in our design company. And i grew squares, foot wide. And they were 6 by 4, for some reason, its been that way. Weve got to go. How do you feel about people playing naked twister . Do you think they do that . Ive heard about that. Id be shocked. Thank you, congratulations on the book. Thanks. Becky, back to you. When we come back, a new look for twitter. The stock down a whopping 62 just in the last year. Will the companys bet on the nfl be enough of a reversal of for fortune . Well ask an analyst next. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Big things, prge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. Welcome back, everybody. Twitter hitting a new low. The stocks plummeting down about 27 in the last two months. Joining us right now to talk more about it is james chockmack, an analyst. Thanks for coming in. Sure. We were talking off camera. You said in december you thought things would go up. Whats happening . If anything the outlook an twitter looks a lot worse. There is good news and bad news. Ill start with the good news. Its shorter. The n. A. User based multiactive users have stabilized and upticked. You have opportunities with revenue with the Google Partnership in the second half. The nfl deal could add something. The nfl deal is interesting. Its interesting. The bad news is that all the new dollars that they are getting are completely cannibalizing rev revenue from the old products and pricing is falling off a cliff. Thats got to be the biggest issue. Pricing falling off a cliff. What does that tell you . Its kind of by design because its from autoplay ads, which is the reason video has been growing so much for them. At the same time, you look at a company like facebook. Not only are impressions growing but pricing is growing as well because the demand is there. Twitter is in the news constantly. Political candidates use it as a way to reach out to people. Its highly front and center when it comes to peoples attention spans, yet they still are in these dangerous trends. Whats going on . Is this a fixable problem . I think thats fixable, but i think the strategy is sound. When you think about what theyre trying to do with live, it makes sense. With live, you know, we know that i was at the aol new fronts event last night. 77 of people use the devices concurrently with television so twitter has an opportunity here. Whats gets lost is how important twitter is for google. With that theyre able to get the realtime search results. Without that they lose relevancy in facetime giving google a window. Is that an argument for google buying twitter . I think it makes perfect sense for google to buy it. They have the access to it. Why do you need to own it . It makes perfect theoretical sense. But you dont need it. With the search steal in place you dont. On top of that you have the potential with the search deal in place. You are saying if there is a change of ownership, if somebody else tries to buy it. Correct. And at the same time google is probably treading lightly because of the antitrust concerns. How do you feel about snapchat relative to twitter . Snapchat is a prime company positioned to Win Television advertising dollars. On the 600 billion ad market 40 b is on tv. Do people snapchat while watching tv or is it functionally a different type of product because it is so video oriented that you cant watch video while watching i think about that a little bit. I think you can do it concurrently. I think the majority of the usage is dominated by messaging right now. I think the things theyre doing with the politics and the relationships there, the stories, and theyre really driving, you know, longer and longer engagement, which should help them win ad dollars. I think the future for snapchat is as bright as ever. The argument you laid out, though, is that the best hope, even though you think this should eventually work, the live, the best hope for valuation in the stock is the idea that there is a bidding war and somebody else and google get involved with this. Right now this is a 10 billion stock. Is it worth 10 billion . Do you see a premium to that if there was actually a fight getting sparked off . By the way, who would be the other bidder in this if google doesnt need to do anything until somebody else gets in . I think twitter will remain an independent company. You do. Because the only viable option really i think is google, at least for now. But the enterprise value is 7 billion because they do have a couple of billion in cash. I think really it boils down to them being able to execute, because right now, you know, i just dont see an acquisition happening. Can jack dorsey do that while he is still running square . Were hopeful. This has been a super tough stock to cover. We have been buy rated since, you know, 2007. I prefer buying on facebook than buying on this. Its a tough stock to cover if youre wrong. Its a great stock to cover if you said sell. Im sick of twitter. I am at home. Im on its like addicting. I dont like it. Should i go on snapchat or should i just do instagram. What should i focus my next media experience. You seem to appreciate good photography so instagram. Twitter has photography but its better on instagram. Can i switch my followers automatically . You have to build them all over again. What about snapchat . Whats that going to do for me. Snapchat helps you engage with current events. Then it disappears i dont twi. I dont tweet while intoxicated. Could i snapchat while intoxicated and it goes away . Or does someone take a picture of it and youre screwed . They could. There needs to be some level of optimism because the data is incredibly valuable. Theyre still in the social fabric of the information fabric of society. We talk about it every day. We use it every day. The strategy is sound. If they can execute behind it. Then legal deliver upside in the long run. Nice to see you. Geraldo and khloe kardashian. Ted cruz is out. Donald trump is in. The likely gop president ial nominee. Well talk politics. Ed rendell. The cruise ship running aground. A crushing defeat in indiana, knocking the texas senator out of the race. We are suspending our campaign. Donald trump now the likely nominee for the Republican Party. For the democrats, Bernie Sanders upsetting Hillary Clinton. Ive got some bad news for her. The reaction, the impact and more just minutes away. The biggest auto air bag recall is about to get even bigger. Takata now expected to add an additional 35 to 40 million cars to its recall list. The details, the damage, and the ripple effects straight ahead. And, if you want to be like mike, you can buy his mansion. Major champion and businessman Graeme Mcdowell of the pga with us live. The second half of squawk box tees off right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc. First in Business Worldwide. Im joe kernen along with Rebecca Quick and andrew ross sorkin. Futures at this hour are not down. Trip triple digits but down 98 on the dow. 14 on the s p, down almost 28 on the nasdaq. And this is after a tripledigit loss for most of the session yesterday based on some, i guess, negative comments out of china was all it took, which caused australia to lower Interest Rates, which was unexpected. More evidence that the entire world is having trouble growing to its potential at this point. Before getting to politics, which could be weighing on the markets as well, lets get you through some of the headline. The adp report an hour away. The economy added 196,000 private sector jobs last month compared to 2,000 in march. The fcc approved the acquisition of cable Vision Systems by altese. The deal needs the approval of new york city and new york state. May have huge implications on the cable industry. Theyre famous for cutting and doing skinny bundles and doing things that may be sort of a test for the rest of the industry. You dont think the market is selling off because of election concerns, do you . Just throwing it out there. At some point the election will come into play because of the market. Earlier you told me hillary would definitely win. That would mean the Market Selling off because hillary is definitely going to win. Maybe. I just want to get a clear idea of your thinking. Yeah. Yeah. Maybe the chances has changed a little bit, right . Which chance . You told me electorally 5,000 to 1. Are they 20 . Well do an entire segment were going to do an entire segment on this topic in a minute. Your other favorite topic is coming up. Joseph. I love them. The irs hiring up to 700 workers to improve tax enforcement. Im actually in favor of this. Okay. The more they enforce, for every dollar they spend they get Something Like 6 back. They dont understand agent fees, becky. They dont understand agent fees. There is now a note in my file. They make hay getting you to show every receipt youve ever had for lunch because anybody who writes off anything. If you have this number thats like agent fees under miscellaneous. They think if you have a number like that youre not going to have all the receipts. Yeah, really . Its one receipt. Its one receipt. When you get up to that level fine. Its fine. Its fine. Youre in that thing, that you could do it through bermuda. Caymans. Ill give you my tax lawyers name. Im joking. Im joking. No americans were on that list. Were you on that list, the thing that came out . Youre talking about my lawyer in panama . 700 workers will hopefully improve enforcement. Well see. Thats according to the commissioner of the irs and its the agencys first significant hiring in more than five years. We shouldnt joke. Trump clearing his path to the republican nomination for president after his big win in indiana. And senator ted cruz calling it quits. 53 of gop voters in indiana wanted trump. Cruzs 37 of the vote ended his bid to be president. Here is donald trump last evening. Just so you understand, ted cruz i dont know if he likes me or if he doesnt like me, but he is one hell of a competitor. He is a tough, smart guy. [ applause ] and and he has got an amazing future. On the democratic front, senator Bernie Sanders eked out a win with 53 of the vote. Because of delegate sharing it eliminated sanders from getting the nomination unless he can convince superdelegates to change their minds. At a rally yesterday in louisville, kentucky, he predicted a democratic win for the white house. I know that all over this country there is a fear that donald trump will be elected president of the United States. [ boos ] i am here to tell you that wont happen. [ cheers and applause ] it wont happen. It wont happen because, in every National Poll that i have seen for a long time, we beat trump by double digit numbers. [ cheers and applause ] right here now to break it all down. Former pennsylvania governor ed rendell joins us and u. S. Senator from new hampshire, jud greg. Bernie sanders said trump will not win. Gentlemen, is it a possibility and have we gotten it wrong all along and maybe we get it wrong again . To senator gregg first. Everybody has gotten this election wrong, so i think its reasonable to presume that bernie may be overstating the case a little bit. We have a big election coming up here in the sense that this is a dividing election. Not necessarily on personalities, which are obviously what people are going to Pay Attention to, but on how we basically run this country. We have a market oriented candidate versus a socialist in Bernie Sanders. Hillary is running trying to run to the left of bernie. She is sort of becoming a quasi socialist. Do we want to go down the path of france or continue on the path that made america the most prosperous country in the world . I gather you are a trump man . I have not made a commitment. Im with john kasich. I am hoping hell make a decision here oh, come on as a very practical matter, trump will be the nominee and i presume im going to support the nominee. Governor rendell. What do you make of this . I feel more judd. I feel for judd very badly. I mean, look, first of all, never say never in politics. And bernie is wrong. Donald trump is not to be discounted. People have discounted him all the way and hes beaten 16 opponents. So dont discount him. And i dont take him for granted. But he is a little unhinged. Here yesterday morning, he knows the polls show hes going to have a big victory, cruz will most likely drop out, and he attacks cruzs father and says some fanciful notion that he had something to do with assassinating jfk. I mean, he why . Why bring stuff like that up . I dont think he can control himself. I think thats his biggest weakness going into the fall. Ed, i think senator cruzs father has been like leading prayer groups and saying that the word of god that god actually handed down an endorsement to his son. So i mean, youve got some crazy stuff happening on both of those i think he was citing his buddy the National Enquirers piece to. We ask every single republican that doesnt like trump whether theyre ready to vote for hillary. Let me ask you a hypothetical. If Bernie Sanders becomes the nominee, just say he did. I know thats not going to happen, but lets say he did and you had to choose between Bernie Sanders and donald trump, would you vote for Bernie Sanders, governor . Sure. You dont even have to go any further than that. Thats all i needed to hear. So thats where you are coming from. You would vote for a socialist in the United States that has a capitalistic system, you would vote for a guy who wants to spend 20 trillion and maybe raise taxes to 90 . Trump is that much of a go ahead. Well, because i think bernie, if he were to become president , and it isnt going to happen but he would find that those things are not doable and theyre not good for the country and i think Bernie Sanders is a very smart guy, but i think Bernie Sanders is a very smart guy and he is stable. He was a mayor of burlington, vermont, and never created a private sector job in his entire life. Judd, when you hear this, does it seem rich to you when you hear that from democrats . Well, i feel sorry for ed rendell. [ laughter ] im a big fan of eds. But lets face it, the Democratic Party has a much more substantive problem than we have. We have a candidate who is, you know, a little bit erratic. But they have got a party thats deciding to go down the path which has destroyed country after country after country. Thank you. Take venezuela, argentina, greece, portugal, spain, france, any country that has pursued a socialist agenda has been destroyed. And our nations strength comes from our people and our market economy. The fact that this party is abandoning that he is saying such an interesting thing you want to hear him fully say it . I would like to. Its not realistic and its not happening. He won indiana yesterday. I heard, i heard. Your candidate i cant beat a 74yearold socialist in the heartland. What i want to understand, though, from judd, when you think about the republican establishment, whether you think they are going to follow trump and, to the same degree that you think youre going to follow trump, whether you think everybody falls in line or, if hillary is the other candidate, not sanders and i think there is a big distinction, whether some of the establishment in the Republican Party ultimately votes for her. Yeah, i think there are some people in the Republican Party who arent going to vote for trump, as probably a fairly goodsized portion, maybe 10 to 15 . In the end, i also think trump will bring a lot of people into the party who historically havent been republican or havent identified as republicans. I think hillary has a lot of issues that she is carrying, the worst of which, in my opinion, is the fact that she has gone so far left to try to push sanders out of the race and she hasnt been successful. So she has other issues but thats the most substantive difference. Senator, trump has said all sorts of things, obviously, that have lots of different people on all sides of parties have found offensive. Is there anything he could say that would upset you enough where you would say, i cant do this . Yeah, there is. I said i wouldnt vote for ted cruz. Because i didnt think we should trust him with the presidency. So i have been pretty specific on the type of language which i think fails the test the threshold test. Now is there anything he would say that would persuade you . I like hillary as a person. I served with her. She was on the committee that i chair. She was a substantive senator but she has gone off the deep end here in her attempt to push sanders out of the race. In my opinion thats pushed her so far off the off what i think is the path of prosperity for our nation, which is a market economy, that i have real problems with the way she is going. Governor rendell can i respond to that . If you were advising go ahead. Look, i think Hillary Clinton would not only keep our market economy but blend the right combination of Government Action and privatesector growth together. Ill give you a perfect example of why i think what judd is saying is a little unfair. The issue of fracking. Bernie sanders takes the easy way out, appeals to the base and says ill ban all fracking. Hillary clinton gives an honest and very nuanced and correct answer. And that is that fracking should be regulated with a lot of oversight but we need natural gas to be a bridge to the day when we can do our electricity and fuel with renewables. And natural gas is significantly, maybe 50 less polluting than coalburning plants or than petroleum in cars. It was a tough answer for her to give. The easy answer is short. Ban fracking. Thats what the base wants to hear. I think Hillary Clinton has walked a fine line and walked it fairly well in the primary. Dont worry, judd. She will be for a market economy. She understands that. Governor, she ran into some trouble in West Virginia just for a second, she ran into trouble in West Virginia when she made comments saying were going to shut down a lot of coal companies. She got real blowback from that when she showed up in the state. She is being honest. By the way, its not government policy federal government policy thats shutting down coal factories. The state of texas decided that there will be no more coalburning plants in texas. Thats a red, conservative state. Its a fact, and what Hillary Clinton should be for and i think she will be for is the nextgeneration coal product that president bush started and gave a 5 billion grant to illinois to find a feasible way to capture and sequester coal. If we can do that, were in business because were the saudi arabia of coal. If we can capture and sequester carbon. And unfortunately, when the when the war came, the 5 billion which was thrown we havent done any explanation of that. We should surely explore that because that would bring the coal industry back bigtime in an environmentally safe way. Judd, sorry i interrupted you. You actually raised the point i was going to make. On the issue of coal she has been on both sides of the issue and basically she is driven by a green agenda which is, for alternative source energy. I am very much for nuclear energy. I think we definitely should be using that. As a very practical matter hillarys positions have been on both sides of the issue of coal, and so how do we know that she is going to stick with fracking when the green community, which is so much opposed to any carbon emission, gets on her case. I think she has got issues. I think she has serious policy issues going to how we run our country, how we make our people more prosperous. Judd, i but theyre mostly personality issues. Theyre not substantive policy issues. Epic mudslinging, you two guys. Next time you come on the whole time you were talking down there it said epic mudslinging. We didnt mean those two. Oh, we didnt . Im sorry. I apologize. I didnt see it that way. Tone it down, you two we appreciate it. I should tell you, by the way, i just want you to know. Talking about gop faithful. Marc andreessen went out on twitter last night hillary . Putting it in. Hope springs eternal. I know he disappointed you in the past being a privatesector guy. I am a privatesector guy. I dont know what youre talking about. Coming up, the biggest names in the Hedge Fund Industry making big investment calls today at the sohn conference. Well get the buzz before the conference kicks off, next. 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. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. 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. Welcome back to squawk box. Futures right now have improved a little bit. They were 110 or so at the beginning of the show, then 98 last time we checked. And something for everyone here. Theyre either theyre either going down because trump might have a chance or theyre going down because hillary is guaranteed to be president. So we havent decided yet on the show which it is, andrew. We have to pick one or the other. Were working on that. Okay. Thats why its hard to ever talk about politics and or an actual president ial election and whether its having a daytoday impact on thats anyone can say they can try to push their side based on that. We wont be pushing im watching. You watch me. Im watching you. You know what, this works. Becky is in the middle. Balancing. Here you go. Moving on. Sone sohn conference kicking off this morning. Speakers include larry robbins, Jeffrey Gundlach and more. The conference presented in partnership with cnbc and raises money to fight pediatric cancer. Joining us is kate kelly to break it all down. Whats going to happen today . We have a lineup, of a dozen heavy hitters and a half a dozen in the next wave conference. David einhorn, always a compelling presenter armed with scores of pithy slides and often harsh critiques of companies. Greenlight had an awful 2015 but it now one of of the few hedge funds showing a huge upside. 3 to date. He announced hes bullish on natural gas and the web reviewer yelp. His pick last year a short basket of oil drillers. Notably Pioneer Natural Resources aka the mother fraccer, did well. Jeff gundlach is equally unvarnished on stage. Full of opinions. His presentation comes at a time when the bond market should be poised for better returns and a higher Interest Rate environment if you get away from energy and certain municipal credits. He was prescient last year with his advice to avoid junk bonds. Another player to watch. Zach schrieber. He never does press but his sohn presentation two years ago, i still remember, a thesis on wti crude versus brent. He was right on the money, saefr essentially. He really called it. And he looked at the two futures contracts over kind of like a threemonth, sixmonth and further with like one small exception to his overall recommendation he was absolutely right. He knew it was time to go short. Whats elys specialty . I think he is there for fun and to provide variety. We had him there with all the faces. It doesnt say anything. It just said manning. They bring somebody who has an interesting outlook on sort of how the mind works. Given the Hedge Fund Performance the last couple years, i have no problem with his picks on these guys. None. Hes got as good a shot as einhorn. Im sure of that. The other person i am eager to hear is the Silicon Valley social capital ceo who was profiled in the wall street journal recently. Very outspoken, very interesting guy. He is speaking today as well. So should be a good lineup. Good to see you. When we come back, well be hearing from citi private banks. And Graeme Mcdowell joins us to talk about his Business Ventures and the pga tour. Squawk box will be right back. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing we built our factories here because of a huge natural resource. Not the land. The water. Or power sources. Its the people. American workers. They build worldclass products. And that builds communities. And a better future. For all of us. Because making something in america means so much, to so many. Weathertech. Proudly made in america. Welcome back to squawk box. An Appeals Court in brazil overturned a ruling that suspended Facebooks Whatsapp messaging service. It ordered Service Providers to black whatsapp for a legal reason that wasnt publicly disclosed. Mark zuckerberg called on them to demand that the Service Never be blocked again. A roundup of the indiana primary and pro golfer Graham Mcdowell joins us after the break. Take a look at u. S. Equity futures. Among the stories front and center at this hour, april adp report will be out in 45 minutes. Consensus forecast calling for 196,000 new private sector jobs for april after a gain of 200,000 jobs in march. Target cracking down on suppliers, raising fines for late deliveries. The retailer is taking those steps to better compete with rivals like walmart and amazon. Mortgage applications falling 3. 4 last week according to the Mortgage Bankers applications. Refinancing applications fell as Mortgage Rates rose slightly. Indiana marked the end of the campaign trail for ted cruz. The senator suspended his president ial Campaign Last night after a convincing win by donald trump. From the beginning i have said that i would continue on as long as there was a viable path to victory. Tonight, im sorry to say, it appears that path has been foreclosed. And so, with a heavy heart, but with boundless optimism for the longterm future of our nation we are suspending our campaign. Cruz, never mentioned donald trump, though, in his speech last night. On the other hand, struck trump struck a conciliatory tone towards cruz following the victory. Just so you understand, ted cruz, i dont know if he likes me or if he doesnt like me, but he is one hell of a competitor. He is a tough, smart guy. And he has got an amazing future. Trump called for party unity as he closes in on the gop nomination. Donald trump will join us on squawk box tomorrow at 7 00 a. M. Eastern. Meantime, Bernie Sanders thanked indiana voters for what he called a great upset victory in the democratic primary. And he had a warning for Hillary Clinton. I understand that secretary clinton thinks that this campaign is over. Ive got some bad news for her. Sanders acknowledged that his path to victory is narrow but said indiana gave him another burst of momentum. First time i was listening to some analysis about what Bernie Sanders really wants, and he wants to be part of the platform in the convention and part of the selection for the Vice President who becomes the heir apparent he is angry that Hillary Clinton has brushed him off to this point. He knows he is 74. He has some influence on the Vice President ial pick and maybe gets someone far left of what Hillary Clinton would normally pick as the heir apparent to but that i was watching some of his speeches yesterday. The country isnt that far left, andrew, as far as the Democratic Base is right now. Its just not. Hillary we just heard it was the base from rendell. Just said the base wants no fracking. I was watching some of bernies speeches yesterday, rallies he was holding earlier in the day in indiana. I was a little stunned. He said look at the walton heirs. They have x amount of money. The crowd was booing them. Granted they inherited the money. Youre throwing out the idea these people have money, lets get them type idea. He talks about a revolution a class revolution in the United States. He made a convincing argument that we need to invest in education. It really shouldnt be k through 12. But there is no way to actually pay for his plans without completely upending capitalism. Socialism. Everything is free but no one has anything. They have the old cars, 52 driving around. We are following big money this morning on squawk. Earnings season wrapping up and the jobs report ahead this week. Lets get a sense of where High Net Worth investors are putting money to work. David bailened joins us. Head of Global Investments at city private bank. David, this is the point when the bernie crowds would say boo they would be doing that. You look at the markets. You think that, look, were not done with the Global Expansion but maybe thats baked into the prices. I think thats largely the case. I think what you are seeing is the sort of fear moments in the market last month. You saw them in mid january and this week. At the end of the day we see growth extending out for the next 12 or 18 months globally and we think some of that is baked in. Youre seeing variations of the market that create Investment Opportunities but prices do really reflect whats possible. Its a huge concern for people who are trying to look around and find are you saying alternative investments or sitting on the sidelines . The clients have been very active in energy and theyve been investing in u. S. Energy in Energy Stocks and mlps. Starting when . Pretty much they should have started in mid january but they actually started in early february and continue to do so today. Citi has called the idea that the Energy Bottom has put firmly in place and we expect prices to be between 50 and 60. Which could bring gas back to three bucks. The bottom line is thats a good place to be. They are buying the hard assets. You think the fed can only do so much. You say they can provide easy money but they dont conjure up the real resources that are needed for Economic Growth. So theyre all this that weve done may or may not work. Could it be deleterious . Just not ineffective but also be hurting . If you look at whats happened since the g20 meeting, the dollar has done exactly the opposite of what people expected. During yellens talk which i attended now a month ago. It was remarkably dovish. As a result of that type of talk you have seen gold rally, youve seen the dollar basically go the opposite way. That all said, you are really dealing with a situation where you have political uncertainties, our election, brexit and the like. Beyond that, the question is whats happening in the economy. Youll see it in the jobs report today that it could be particularly strong which could continue a string of job growth in this country which underlies the idea that our economy can continue to expand for the next 12 to 18 months. Thats why we believe that you need to look for stocks that will give you, you know, Dividend Income that will be bought back, things like that. That will create not a huge gain but a reasonable gain. You mentioned the brexit and our election in the same breath. Yes. Do you think they are comparable . No. Our election of more immediacy but the brexit will be a bellwether event for the health of the European Union and will it will stay. Theyre huge. Do you have a position, not necessarily your own politics but to the degree you think one candidate over the other is better for the economy and the markets and whether those things are even the same . I think theyre probably different. I am not allowed to actually have that view except personally. This has been an election season when remarkable things have happened. If you asked everyone every month if this would have happened every guest, including myself, would have said thats not likely. The fact that bernie has hung out for so long was not that likely. You see an enormous rise in populist sentiment which becky was talking about earlier. Its considerable and its rallying markets. David, a great pleasure. Great to see you. Coming up, the governments jobs reports two days away. Working to get the private payroll data from adp later in the show. Well talk about the nations labor picture. First, Ronald Mcdonald spicing things up with fries in california. Well tell you about it when we come back. I am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Ahhh. Anfrom icy ocean waters. S to your kitchen counter. On. Pure. Pristine. Each one its own delicious arctic prize. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door. Get your first two meals free blueapron. Com cook. As long as you love me, its alright bend me shape me, any way you want me. Shape the best sleep of your life. Sleep number beds with Sleepiq Technology adjust any way you want it. The bed that moves you. Only at a sleep number store. Mcdonalds is testing garlic fries at four restaurants in San Francisco. If successful, the menu item could spread to spread almost sounds like a like some type of blight. It could spread to 250 Mcdonalds Restaurants in california in august. The fries are tossed with a puree mix of garlic, olive oil, parmesan cheese, parsley and salt. I saw a picture. They look good. I am excited for this. Its exactly what i think deepfried french fries need. Even more of a reason to want to eat them . Have you looked at the calorie count on a large fries . I love it. You need more inducement . They need to taste better . I want a large fries and a big coca cola. Why dont they make garlic kale or garlic something that doesnt kill you. Put it on something i dont want to eat. I already want to eat the fries. They dont need to be better. Coming up, the winner of the 2010 cheese on broccoli. This guy, man, played with him yesterday. Love this man. Won at pebble beach. Where would you rather win the u. S. Open, Graeme Mcdowell joins us. Ice in his veins. He might be better for putting a dagger in the heart of the ryder cup team. The Brand Ambassador to rbc and mast masterca mastercard. Well talk restaurants, his foundation which has raised millions for childrens research. It was like a fever breaking yesterday. He saw something i was doing and my life is never might be okay. Since 2001, more than 700,000 comcast Nbc Universal volunteers have lent a hand to their communities. This year, were extending our partnership with our friends at red nose day and global citizen. Making it our most rewarding day ever. Hands down. Right now its time to get on the court with secret lives of the super rich. Michael jordans chicago mansion up for sale with the Basketball Court and a basketball what do you call it . A ring . Yeah. The ring is there, to throw the the hoop. Right, right, right. Its a rim. That, and a locker room included. Robert frank joins us with a look inside Michael Jordans highincome home. Great to see you. He sells a lot of sneakers but cant sell his mansion. His 56,000 square foot house in Highland Park on the market since 2012. Now its only 14. 8 million. The broker gave us a tour of the ultimate home court. I definitely feel the pressure, you know. Shooting baskets on michaels court. Its a Pretty Amazing feeling. The jump man logo at center court is surrounded by the names of jordans kids and special cushioning under the wood eased the wear and tear on the superstars knees. Next door m. J. Designed a full gym for his hardcore workouts and even put in a locker room to accommodate his famous bulls teammates. The year before he won his first championship he decided to invite a few teammates to come work out, practice, training. Theyd meet in the morning and eat breakfast with his private chef. The camaraderie actually led to the first championship. The house also has a gentlemans lounge with doors from the playboy mansion. Michael is now in charlotte. He owns a 3 million house there as well as a place in jupiter, salt lake city. He is good on the real estate. But houses by celebrities and by star athletes are just tough to sell because theyre so customized. How many multimillionaires are out there who want their own Basketball Court jupiter, florida. He is not that rich. How much work do you think this place needs . Because thats what i have been told because i actually know somebody who looked at this property, that you need to spend lots and lots of money to fix it. If thats your taste, its perfect. If you want to redo it all for the chicago area, 15 million is a lot of money. Are you sure about this beat of yours . I mean, if you go to a Bernie Sanders rally, its going to look like a scene from homeland when one of these people are over right, when the group catches one of those guys . Have you thought about youre going to continue with this . You are brave. I dont have a view of whether wealth is good or bad, joe, i just cover it. You have no view about whether wealth is good . You dont think wealth is good deep down, that creating wealth is probably good . I have a lot of respect for people who have created their own wealth. Did you not read the brilliant story he wrote. My comrawde . You would like this one, joe. You put things in perspective. It talks about how much taxes are paid by the wealthy and what happens when they leave the state. When one person leaves new jersey. Great piece. Graeme mcdowell is here. He is from ireland. And another guy who is less famous and less of a stud, bon o, has said that in ireland the guy on the hill you say i want to kill him. Over here you say i want to be that guy because its a meritocracy. We wont talk about those things. He is irish. Do you know this guy . Did did you watch the open and ryder cup . Was it the same year or backtoback. 2010 i won the open. Great opportunity to have the last you didnt miss any putts the entire year. I had a Jordan Spieth type six months where stuff just kept going in. This is Graham Mcdowell. Go back. Im going to read the whole thing. We worked hard on the intro. Hurry up, hurry up. All right. 2010, that was when you won the open at pebble beach. And then youve gone beyond the links, if you win an open and do what you did in the ryder cup suddenly youre thrust into everybodys consciousness and you can start a foundation and do a lot of charity work and get a lot of sponsors like rbc, mastercard. You are a restauranteur and retail entrepreneur that i have a vest of yours which i said you said it fits you good. Fits me well. His charity, the gmac foundation raised millions for childrens medical research. To start out, graeme, when you win a major like the u. S. Open with that much fanfare, your began there sort of in terms of sponsorships and moving into the top echelon. For sure, life changes. Especially with it being a west coast u. S. Open, the viewing figures here on the east coast were pretty massive with the prime time, sunday evening slot. People started to kind of know who i was. From a corporate point of view you start to become a little bit more valuable, and your time your time definitely becomes a little bit more more valuable for sure. Its been great. Its been a great its been the last five or six years have been busy, crazy, but its been a lot of fun. Thats what you dream of. Major championships. Pebble beach. Fathers day with your dad there. I mean, thats what its all about. I would have taken my first major championship anywhere in the world, but that was a pretty special place to do it. Dustin johnson, who i thought would win. Then i remember number two kind of at pebble was that an eight or nine . Horrible. It was like seven or eight. They had the rough around the bunkers at pebble that year. Pretty unfair. Dustin got a little unfortunate there. We have big purses here, bigger than the European Tour here. But you can make more robert, you can make more with sponsorships and endorsements even if you have a great year, you can probably make more away from the course than you can on the course. Even though you can make millions on the course. Obviously the top players in the world golf has become such an influential sport from a corporate point of view. I think the opportunities theres not a sport thats as successful as the game of golf where you and i, like yesterday, we can tee it up and have a good day together. Playing tennis with Roger Federer wont be a lot of fun for you. When we play golf its not a lot of fun for you. It was fun for me. I had a good time. But from a sponsorship opportunity point of view thanks for bringing the irish weather. Look at us. We look like were playing in we do. We got the industrial look. You look pretty good. I do look pretty good. Its a beautiful golf course. Theyve done a nice job over there from a links creation point of view. The game of golf, were lucky, the last 20 years. Tiger woods has changed the game from a financial point of view. Were all very aware of that, he has transcended the sport and created Something Special that were certainly enjoying the fruits of his labor for. And its the game of golf is in a great place thanks to him. You partnered up with what company for gmac, the line of clothing. I have a vest on. Its great. You have other things. A restaurant chain. Whats it nona . I live in an area of orlando called lake knonona. Its called nona blue. You invest 20 and open a restaurant. The restaurant were having a lot of fun. I have great Business Partners who i have already created something fun. We are a modern tavern. A tavern feel but we modernize it with great food, great service, great ininteriors. I have always had a passion for the restaurant business. One of the things i love about traveling around the world is to be able to go to great restaurants. I am a foodie guy. Youre a guinness guy. Mario ber tollis restaurant last night which was a lot of fun. Thats a sorkin hangout bigtime. Best restaurant in the city. People ask me, who are you and why are you here . Sorry i am not andrew. You did duck out early last night. Good call. I ducked out at 10 15. Hideous for me. The foundation focus. You have a couple different areas of focus, right . And a lot of guys like you in the whole pga tour really gives back a lot, probably maybe not more than any sport but they carry a fair load themselves. For sure. The pga tour are definitely one of the leaders when it comes to giving. They raise a huge amount of money for charity. And my own fund, we focus mainly on childrens sort of heart disease. Were partnered up with a hospital back in dublin and were doing some stuff with st. Jude here in america. New york city has probably been one of the hubs for my fund raising. With new york athletic club, raised 3 million with the dinner. Great people here in the city, the americanirish connection. The fund has helped us out a great amount. Its been fun and certainly something i look towards in the future, something i want to get more in tune with. My mom is an m. S. Sufferer, so i certainly want to get into that area of fund raising as well. The Foundation Gives me a lot of pleasure to get involved in. And the game of golf. Youre headed to saw grass . The players championship next week. Were opening our second restaurant there in the Ponte Vedra Beach area. Then oakmont. I saw yesterday beat me, so i figure youre playing pretty well. Game is in good shape. To beat you. Did you see put it in the slot i dont look that bad from when you do your thing we changed your life yesterday. You did. Someone told me my club face was too face so i am smothering everything. Graeme, im glad you rubbed off on him instead of him rubbing off on you. You should turn around on my chip shots. Ill mess up your tempo. We have it sorted out. Were ready. Good. Thanks so much for having me. Good luck. Thank you. One of the great guys on the tour. Coming up, donald trump knocking ted cruz out of the race with a win in the hoosier state. Hoosier daddy is what a lot of people are saying. Donald trump is. The gop frontrunner virtually clinching the nomination. Well talk trumps next move with his campaign spokesperson. Thats next. Layer, the price of the wage hike. This guy has been outspoken. How the minimum wage debate is impacting businesses and jobs across the country. Andrew puzder joins us. Squawk box will be right back. Across the countr. New this morning, donald trump one step closer to the gop nomination. After ted cruz drops out. So whats his next move . We will ask trump spokesperson Katrina Pearson straight ahead. Breaking economic news. A first read on jobs, the market moving adp employment report is 15 minutes away. Battle ground india. Why tech giants like apple and google are betting big on that market. The final hour of squawk box begins right now live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, here on cnbc, first in Business Worldwide. Im Rebecca Quick along with joe kernen and andrew ross sorkin. The adp employment report is due at 8 15 eastern time. Polled forecasters saying they think the market added 196,000 private sector jobs last month. Futures have been weaker, under pressure all morning long. These are the best levels weve seen all day. This morning dow futures were down. Right now theyre down about 80 pints. S p futures off 12. Nasdaq down 27. Pfizer reportedly approaching cancer drug maker medivation to express interest in an acquisition. The company could challenge a 9. 3 billion offer thats already out there by santa fee. Medivation rejected their offer last week as too low. The stock, medivation up 4. 5 . Takata expected to announce its recalling 35 to 50 million more air bag inflaters in the United States, more than doubling what its already recalled. Its the largest and most complex auto safety recall in u. S. History, and it affects one out of every four cars with these new additions. The fcc is approving altices purchase of cablevision. The European Telecoms group needs approval of new york state and city. It could become the worlds fourth largest cable provider. Today donald trump taking indiana and ted cruz calling it quits officially. John harwood joins us now. Hell break it all down with the full story. John, good morning. Good morning, andrew. For all practical purposes, the sixmonth general election began last night after a day of incredible vitriol between trump and cruz. Ted cruz came out last night saying he was ending his campaign. With a heavy heart, but with boundless optimism for the longterm future of our nation, we are suspending our campaign. But hear me now. I am not suspending our fight for liberty. And donald trump immediately turned his fire to Hillary Clinton, who lost indiana to Bernie Sanders last night. He said he is going to take the fight to her especially on economics. Were going after Hillary Clinton. She will not she will not be a great president. She will not be a good president. She will be a poor president. Now, Hillary Clinton begins the general election as the favorite. She led 5039 in the most recent nbc wall street journal poll, a new cnn poll out this morning shows her up by double digits, 54 to 41 percent. Donald trump defied expectations throughout the campaign. His strategists hope he can generate a large turnout of the white, working class voters who powered his primary bid. Some strategists are not ready to count him out yet. The rasmussen poll an outlier, john . I think so. If you look at the realclearpolitics average, its a 7point spread for clinton. I put a lot of stock in our poll. Its been pretty reliable. But well see. Donald trump is he has done a lot of things that nobody expected and weve got six months to go. Yeah. Just as someone were going to cover it. Its going to be unbelievable. Theyve got stuff to say about him, obviously, but the stuff he has to say about her everybody else is afraid to say it. He is going to say stuff that nobody else has said. He has about 15 different lines that he can go with. The whole clinton legacy going back 20 or 30 years of public life. Its a treasure trove. No question about it. Thanks, john. Joining us Trump National spokesperson and surrogate Katrina Pearson. Katrina, welcome. Good morning. Just we may as well assume and lets say he is the nominee. I know kasich thinks he has trump right where he wants him. Right where he wants him. Lets say that it is trump. Who do you think is in charge now in terms of visaing hiadvis . Do you do that . Manafort, lewandowski, ivanka or donald himself . Well, ultimately donald trump is in charge of the trump campaign. He seeks advice from everyone around him. He thinks its very important to get input from the quoteunquote advisers around him and from those who work from him. I have seen mr. Trump ask supporters for advice. So he is always asking everyone for their opinions. So the base that was attracted to him in the first place, the ones who like his outspokenness and his authenticity, will they stay with him if he becomes fmore ofa politician to try to close the gap that we just heard about that john harwood says he has with more conventional voters . Will he try to draw them in by appearing less erratic . I guess they call him erratic, people who criticize him. They call him less president ial because we have been conditioned to he hear politicians say things a certain way and say things in the manner and tone that they want it. Donald trump will still be donald trump. The supporters who have been with him from the beginning and the polls show his supporters are locked in 80 to 90 , theyre not going anywhere. This is greater than donald trump. This is someone who has been willing to put everything on the line for his country, to put everything on the line to help the people who havent had a voice in this country for a very long time. So what you didnt really answer me there. So theyll stick with him. Theyll stay, yes. How does he will he win over enough people that might not be thought of as his demo . Will he win them over by sticking to what he has done or everybody attacks in the general election. Everybody expects hillary to tack back to the center. Will he tack in some direction different than what we have seen . People who think hell lose would say if he continues along the same vein that hes been in hell never get above 45 or whatever. Look, weve heard this from pundits and talking heads on tv for the last 11 months who have been wrong, and they think they can predict whats going to happen over the next six months . I dont think so. Donald trump is going to win over a lot more people. Hes going to continue to be mr. Trump. Youll hear more policy discussions. Im sure there will be some great debates coming up. And hes going to win simply because we will finally have a contrast in this country between the republican and the democrat. And Donald Trumps policies are very different than your traditional establishment republican. And of course thats going to win people over. We saw it happening in iowa. We see it happening today, even with some of Bernie Sanders supporters who are looking at mr. Trump because of his positions on the economy. He said he is going to wait to even talk about a possible Vice President until he is the nominee. Were getting closer and closer to where he could start assuming that, you know, he wouldnt be putting the the cart in front of the horse . Is that how it works . I dont know. I always get it the way its supposed to be. Its time where he could. Does he pick someone who will deliver a key state, or does he pick someone who maybe has some political experience . Does he pick someone that was in the 17 that started, or is it a total outlier . Are you advising him on this . Can you give us any insight into how thats going to work . He has already said he would prefer someone that did have experience in government. That person will be working closely with many of the lawmakers. But donald trump is going to pick the candidate that is going to be able to help communicate his vision and what he wants to do to help america become great again. And i dont know. I mean, this is something that hes been thinking about for a very long time. Theres a lot of people that have been sent over to him to consider. And hes going to look very carefully at everyone involved because its not just about who can win a state or who can bring this group. It is going to be about a team, an effort, that can really get things done for the american people, so hes going to make that decision probably by the convention, but he is definitely going to take his time in the process. Did you do the math . What does he need of the remaining delegates . Its below 50. It is below 50. He did win a majority of the delegates last night. So were probably looking at 45 now, i believe. I havent seen all the congressional counts this morning. But were going to do really well. He is already ahead in the polls in the majority of the states moving forward. Hell do well in california and new jersey. Weve been saying this whole time that donald trump will have the delegates prior to the convention and he will be the gop nominee. Okay. So youve got Chris Christie as a. G. Giuliani homeland security. Ive been hearing that. Ted cruz scotus. Hell be on the scotus, he will vote this is what i want to know republicans always put people in that you dont know whether theyll vote liberal or conservative. Ted you would know. He would out scalia scalia. Do you think cruz will ultimately support trump . Yes. You do. What about you . Do i think so . No. I dont know. You dont think cruz will support trump . I think he will eventually. Look, this was a very contentious race. He did a fantastic job coming from being the antiwashington guy and staying in there. I mean, look, the establishment has to choose between two people they didnt want to begin with. So that is a win for senator cruz himself. And i do think that senator cruz is going to come along simply because this is about beating Hillary Clinton. This is about getting a republican back in the white house. Its about fixing the economy. Its about national security. So i think a lot of the people who were quoteunquote never trump, at the end of the day are going to realize that because i cant see them, out of principle, contributing to the downfall. Do you have Contact Information for diamond and s l silke . If we want to have them on the show. Id love to send you that information. Theyre great. Katrina, thank you. Well get it straight from the candidates mouth. Not going to call him a horse. Well have it straight from the candidates mouth tomorrow morning at 7 00. 7 00 eastern. Actually 7 15 a. M. Eastern time tomorrow. Coming up, breaking economic news. Well get the adp employment report and the numbers, the market reaction, well all do it straight ahead. Stay tuned. Youre watching squawk box here on cnbc. First in Business Worldwide. Used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Im spending too muchs for time hiringnter. 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 offer6 welcome back, everybody. Were moments away from the release of the april adp employment report. Looking at the futures, theyve been under some pressure. This is about the best levels we have seen of the session. After closing down by 140 points yesterday the dow futures this morning indicated down 73 points. S p futures off 13. Nasdaq down close to 29. Looking at the treasury market right now. The tenyear note looks to be yielding 1. 782 . Steve leishman joins us with the numbers. Adp coming in light at 156,000 versus a consensus of 196,000. March was revised down by 6,000 to 194,000. Goods was down 11,000. Well look at the detail of that in a second, with services up 166,000. There you go. There is the details there. Nonpharm payrolls estimated at 205. Well see if that comes down today and tomorrow ahead of the big jobs number on friday. This is one of the bigger misses weve seen from adp. You have to go back to 2013 to find a miss like this. You can see where the weakness was by looking at business by size here. Small business doing its part, up 93,000. But its the medium and Large Businesses, especially those over a thousand that you cant see right there, Large Businesses at just 24,000 right there, over 1,000 was just 9,000. Small business, though, pretty good at 93,000. Take a look at jobs by industry. Youll see construction powering ahead up 14,000. Manufacturing showing some weakness, not a lot going on in financial activities, professional Business Services up 27,000. This is a soft report, one of the softer reports we have had. In the report today it suggests that perhaps this comes from the swoon we had in markets and overall sentiment from january, february, this is a knockon effect from the Business Sentiment and the concerns that cropped up about recession. Take a look at the gdp chart that we have for you here which shows whats happened to the cnbc wrap it up update over the course of the quarter. It came down. Down and downer. There are durables taking about a half a point off. Income spending, 0. 9 trade. Now running 0. 7. I dont know if you heard phil lebeau get excited yesterday about Light Vehicle sales up 17. 4 million. A pretty big jump from march. Thats a sign that maybe the consumer is back from what happened in the wintertime and the late winter there. So were looking today to trade at 8 30. The ism services could be a big deal. We will see if we have a rebound. Well have an update at 11 00. Were in San Francisco because tomorrow were talking to San Francisco fed president john williams. Back to you guys. Steve, thank you very much. When we come back this morning, battleground india. Why google and apple are both betting big on that country. Thats next. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Welcome back to squawk box, everyone. Futures this morning a little bit weaker. Dow down by about 80 points. Down by triple digits earlier this morning. The red arrows continue. Dow back down by 95 points. Its heading towards a triple digit loss. S p off 14. Nasdaq down 31. Devin Energy Reporting a narrower First Quarter loss due to a drop in expenses that helped to partly offset the continued slump in oil and gas prices. And during the quarter, devon cut its work force by 20 . Brazilian prosecutors filed a civil lawsuit demanding that bhp, vale pay up to 44 billion in damages and cleanup costs. The companies are responsible for a catastrophic dam failure in november. The accident is believed to be brazils worst environmental disaster. Killed 19 people. Destroyed villages and polluted 400 miles of river. Glen core reporting lower copper and zinc production in the First Quarter. Its promised to cut output as it seeks to slash costs. Lowering targets for the full year. Apple and google are turning india into a mobile market battle ground. Josh lipton joins us with a closer look. Good morning, josh. Cnbc can confirm reports that google is launching Carrier Billing on the play store in ind india. That means users in aindia can purchase music, books and games from carriers rather than billing credit card companies. Thats especially important in india where Credit Card Penetration is limited. Less than 5 . But smartphone adoption is surging. India is the Third Largest market for smartphones. Last year alone, 102 million smartphones were shipped there. That was a 49 jump from the previous year. Google is making this move just as apple is also targeting the Indian Consumer much more aggressively. Ceo tim cook told cnbc why he is so excited about that market where iphone sales jumped 56 in q2. India today has about 50 of their population at 25 years of age or younger. Its a very young country. People really want smartphones there. Really want smartphones. And this year the first year, lte begins to roll out. Huge market potential. The two tech giants are competing hard for india. Just as china has become a challenge, at least in the near term, apples q2 revenue in Mainland China fell 7 in Constant Currency while googles core business is blocked in china altogether. Back to you. Thank you. A few other stocks to watch this morning. Etsy is reporting firstquarter profit since going public a year ago. Growth in user and revenues remain strong. The only marketplace for handmade and vintage goods says First Quarter revenue rose 40 , outpacing marketing cost. Match Group Reporting better than expected First Quarter revenue as its popular tinder dating app attracting more paying users. Match which also owns match. Com and ok cupid getting the bulk of revenue from membership fees and paid futures. Joe probably has a good laugh. Swipe right, swipe left. Is it different for one way or the other . One is a garbage can and one is like i check you out. Whats ok cupid . Its different. Its another one of these matching how is it different . They dont have the swiping business. Its like you go in and look at peoples profiles. Tell them who you are. Is tinder more mainstream . It is. You dont have to hook up a half hour from after you meet . No. I know a couple people who have found longlasting relationships on tinder. Which is really good. Shocking. Its used a little differently than it used to be. Snapchat and tinder are both coming away from their original sort of seedy i gave you the benefit of the doubt and was asking him questions. I cant tell you why i know this. It isnt from personal experience. Its from someone close to you. You know too. Really . Ill think about that. Coming up does he work on this show . Is it a he . Who says its a he . Have they used it. Yes, obviously. Just read the teleprompter. Media names on the move. Stories behind cnbc and time warner earnings next. Then later are they single . Its not my story to tell. Dont miss jim chanos. Live from the sohn conference. Youre watching cnbc. First in Business Worldwide. charge music you wouldnt hire an organist without hearing them first. Charge so why would you invest without checking brokercheck . Check your broker with brokercheck. Higher powers taking hold on me baby welcome back to squawk box this morning. Priceline shares under pressure this morning. The company beat on the top and bottom lines with its latest earnings but the Current Quarter forecast short of consensus. Citing lower ad spending. Hbo and turner helping time warner beat First Quarter estimates. Earned 1. 49 a share. Intercontinental Exchange Says it will not make a bid for the london Stock Exchange. The New York Stock Exchange parent also reported Quarterly Earnings that exceeded street estimates. Were seconds away from First Quarter productivity and cost and the march trade deficit. Weve been watching futures. Dow down almost triple digits. Down 98 points. S p off by 12. Rick santelli standing by at the cme in chicago. Take it away. Here we go. On the trade balance, the deficit, a smaller negative than we anticipated. 40 billion. Thats, you know, following a 47 and change, which was slightly revised. So of course that will have implications for gdp in the First Quarter. Nonpharm productivity minus 1 . Minus 1 shouldnt make anybody happy, but its definitely a smaller negative number than we were anticipating. We were looking for a number closer to down 1. 3. This follows an upward revision, last months 2. 2 negative standing now at minus 1. 7. Unit labor costs up 4. 1 . And of course, following that rather dismal adp number. Lowest since spring of 2015 at 130,000. Setting the table for a variety of issues, not the least of which is fridays report from the bureau of labor statistics but also the Service Sector numbers coming, nonmanufacturing ism. Of course, we have seen weakness in most of the isms and some kind of mixed reads in europe. I noticed that we still are watching Foreign Exchange closely. But at least we jump back to 106 handle. Dollar scrapping a little bit. Dollar index mildly higher. Interest rates, hovering right below the 180 mark. To give you some context. We established the highs of the year right in the beginning of the year, the lows at 166. Settle at 227 last year. High yield was right around 230ish. To give some context. Boon yields dropped a bit. Were tethered there. All this will be viewed through the lens of what central bankers will do. Surely well hear a lot of talk from both sides of the dove and hawk aisle. In the end janet yellen has the decision and many on this Trading Floor dont think its a decision shell make in favor of tightening anytime soon. Back to you. Thank you, rick. Futures right now, a quick look at whats going on here. Well show you the board right there. Dow looks like it would open off almost 100 points down. S p down 31 points. S p 500 off 35 points. Joining us, jason trener. Strategic Research Partners research developmeinvestment an. How depressed are you . Not overly depressed. Its very hard to get Economic Growth without productivity and its hard to get productivity if companies are more intent on buying back their stock than making green field additions to plant or capital spending. And i think the election yesterday obviously was something that probably provides more uncertainty as far as capex is concerned. That also makes it more difficult to get out of this you think were just going to be paralyzed for the next six months . I think its more of the same. Weve largely had 2 real gdp growth for the last several years. Productivity growth has been anemic. And companies have largely manufactured Profit Growth through Financial Engineering as opposed to topline growth. Does that mean that the market just falls out completely . No. I think that, unfortunately, simply because pathere is a paucity of other alternatives, the largecap stocks hang in there. Coca cola trading at 21 times earnings and procter gamble. Those multiples could grind higher. A lot of our clients are active money managers, thats what worries them the most is that you have a narrow market where the multiples of relatively slow growth because there is no place else to put the money. In some ways the stocks look like proxies for sovereign debt. Johnson johnson or coca cola looks more like a riskfree asset than, you know, debt what if you want a stock that will materially go up, though . On its own. The problem what else is out there. You have to take a lot more risk, and i think this is a little bit what the fed for Monetary Policy has wrought, that you have to push people further and further into riskier assets to get high growth and high returns. Which means you have to go into things that might not have earnings or a very highrisk investments. We have a piece out this morning on the highyield market which we think is pretty close to fairly valued if not somewhat close to overvalued. Its harder now. I dont think there is a lot of obvious answers to the question. Where is the Stock Exchange at the end of the year . Its probably higher. I actually think it will be a little bit higher partly because i think whomever wins the election, i think two things will likely come out of the new administration. One would be infrastructure spending, and one would be Corporate Tax reform. I think there will be some optimism. Regardless of who wins around that. I think there will be more of a focus on fiscal policy as icahn has talked about. I think people feel good about that. Can we speak directly about the politics . When you look at both candidates, and you if you look at them simply on an economic basis, and then a markets basis, how lets play markets first, even though the real economy is frankly more important. How do you think the markets look at this right now . Conventional wisdom is still that Hillary Clinton wins. Yes. I think conventional wisdom is still Hillary Clinton wins. Could be wrong. I wrote a piece last august saying that trump could win. Trump was underowned like a momentum stock that people keep shorting. I still believe that. Also its six months from now, the election. Seems like weve been going through this forever. Its an eternity in terms of peoples opinions. Peoples opinions towards donald trump can change no way. No way. They dont even have to think about him. He said, for example, that he would like to replace janet yellen. Right. To the extent you believe the market likes continuity how does that portend for you . He wasnt going to take her out ahead of time, correct . Yes. Shes got listen, i would say the conventional wisdom is that the status quo is better for the market. I think there is theres something to that. You think that about yellen . I am not married to yellen at all. Put kevin worsch. His piece in the wall street journal last week was right on the point. She is not some legendary greenspan. I am not suggesting she is. I am just posing the question. Whatever is best for capital formation, which goes back to productivity, is whats best for the market. If you continue to focus on Financial Engineering, countries and Central Banks are doing that nothing good happens. When you think about capital formation, you talked about sovereign wealth and all the money thats come into this country. When you think about what may or may not happen under trump versus Hillary Clinton relative to free trade and all these other issues, how does the dynamic change . Or does it. I think organic growth would probably be better under donald trump than it would be under Hillary Clinton mainly because there would probably be a focus on lower regulations and lower Corporate Taxes. So thats the offset to a lot of the more nativistic or antifree trade arguments that donald trump hes running on the republican ticket. So you know that there are things that democrats are in their platform and there are things that are in an election season both sides have said some crazy things. In general, you ask a business guy about which policies and normally he wants tariffs on all sorts of trade, which totally changes the dynamic the left on trade is far worse than even far left. Bernie is worse. But if you look at Hillary Clinton, she hasnt proposed 45 taxes tariffs on china. I know but he everything is a negotiation. He has also said everything is a negotiating tactic to get a better deal. I think it will be interesting now that theyre both pivoting to a general election it will be interesting to hear what kind of talking points they come up with. I wouldnt worry about it at this point. Right, jason . Start preparing for hillary. Get our investments in order and dont worry about it. Thats what i am doing. I was in london two weeks ago. Brexit came up, right . I think a lot of these things when you have very low nominal gdp terms, its a broken play. You dont know. The conventional wisdom is often wrong. I think brexit is more potentially likely you wont see youll only see him in a saturday night live skit. What about larry kudlow for fed chief . We cant live without yellen . Cramer. Look, i sat next to you for years when you kept telling everybody that romney was going to win and the math was said the exact you know, the exact opposite. And we pretended for months that that was somehow a possibility. I told you romney was a shooin . Not a shooin but a realistic given the previous four years, i would have thought. The numbers said something different. He cobbled together a coalition that resulted in his reelection. Can i just say, i think we pay a very wellknown political strategist last september a lot of money to tell us that trump had zero chance of winning, okay. We also hired james carville. One thing that i think what he got wrong is he went through the list of demographics that trump could not win. Africanamericans, hispanics, women, so on and so forth. Looking back at it, the demographic he missed in, in my opinion, is that it still goes back to carvilles thing. Its the economy, stupid. Its income. Its the guy or gal who used to work on the Assembly Line who was a union member, not because economic security. I think those things resonate quite a bit. Both trump and Bernie Sanders theyre actually. Hes telling sanders voters, come to me. Both have been very on message with that sentiment and lack of certainty. The fight for 15 gaining traction across the nation. New york and california set to raise minimum wages, will it mean more job cuts in the state . Well ask andrew pud zer, tzer,o when we come back. Two wellknown media names out with quarterly reports. Time warner and cbs. Julia boorstin joining us. The shares are moving higher in premarket trading. Subscription growth at hbo and improved advertising as well as subscription results at turner. The metrics outweighing declines at the movie studio. Time warner call just beginning, starting late after technical issues. The ceo saying the companys investments in content are paying off. Now, this comes on the heels of cbs beating expectations on both the top and bottom line on stronger than expected advertising. It reported after the bell yesterday, and the shares are up about 1. 5 this morning. Less moon ves predicting double digit percentage price increases and saying this years political ad spending should set a record for a president ial election year. He also praised the impact of the trend towards lower cost skinny tv bundles with fewer channels. Its a Huge Positive for us. Again, the rate we get per sub here will be even higher than were getting from our current partners. Moon ves would not comment on that cbs was looking to collapse the dual share structure to give themselves more control. He weighed in on the radio sp spinoff saying while it makes sense theyll consider offers. Back to you. Another subject, the minimum wage debate raging across the country. States like new york and california already approving hikes. But will this start to hurt the people that its intended to help . Thats a question we have been puzzling for some time. Andrew pudzer is the president and ceo of cke restaurants, the Parent Company of carls junior and hardees. Thanks for being here. I know this has been an issue youve been focusing on and writing about for quite a while. You have a huge concentration in california. I wonder what you are seeing so far, how things are shaping up and how you plan to react . Really so far there hasnt been much to see. The minimum wage went to 10 an hour in january. We knew that was coming. And for the next two years the last two years of jerry browns administration it only goes up 50 cents a year. Its the next governor where it goes up a dollar a year. I think thats when you will start to see the impact. When you get to 15, the math just doesnt work. You take a lot of jobs. And you make the cost of hiring employees exceed the productivity of that position. And when the amount you have to pay somebody exceeds what you can make from hiring somebody, you see jobs disappear, and you will see that in california at 15 an hour. You have been testing the idea of maybe automated serving, dealing more with machines and less with labor. Where do you stand in that sort of exploration at this point . Well, everybody is doing that. I think you go even in the casual dining sector even more than in quickserve. If you go to the restaurants, youll see the tablets where you can order. At your table. There is a restaurant in San Francisco, now one in l. A. Called eatsa. In the front they dont have any employees. Theyre in the back. Everybody has been automating. Weve been automating for years. It will continue to come. You see it with atms, getting the Airline Tickets at the airport from a kiosk. The gas stations used to have five people run out to your car and now you pull in and nobody is there. You pay through your credit card and pump your gas. Automation will come to the restaurant industry. The question is how fast. Do we give the lowskilled workers a chance to adjust to the new economy and get the education and training that they need. When you raise the cost of hiring lowskilled and young workers, you really price them out of their jobs. You encourage the advent of automation. What were seeing here is a push on businesses, pressure on businesses to automate. You cant automate every position in a restaurant. It cant be done. Sure. You can automate a number of them, and while wed prefer not to, you like that customer experience, if the choice is either i go out of business or i automate, i mean, businesses will automate. You know, i was searching around trying to look up for some of the arguments on the other side of this. And i came across the department of labor. They have a whole page called myth busters. They say the myth is the Small Business owners cant afford to pay workers more and therefore dont support an increase in the minimum wage. They say according to a jul 2015 survey three out of five Small Business owners supported a National Level of 12 an hour. Obviously the National Level not the same as what california and new york have been doing and implementing so quickly. Would it make a difference at 12 nationally . The lower it is, the better it will be for businesses. A poll was done in california by the California Restaurant Association that showed that while 63 of the people in california supported a minimum wage increase, only 46 supported going to 15. Which is why i think the unions and Governor Brown took the initiative to go to 15 off of the popular ballot and passed a bill, because it looked like they couldnt get an initiative passed. So i do not think there is not broadbased support for a 15 minimum wage. Whether the number is 9, 10 or 12 probably depends upon where you are doing the poll. I think people support going over 7. 25. I dont think they support the higher numbers that drive businesses out of business. What is the number that makes sense . Do you buy the argument suggesting that, if you put more money in some of these peoples pockets it will ultimately actually get spent with places like yours . Starting with your second argument, if thats right, if raising the minimum wage actually improves the economy, lets raise it to 1,000 an hour and well all be rich. Two plus two doesnt equal six. Economic growth has to be generated organically by which requires not more regulation, not more Income Distribution but lower regulation, lower taxes that lead to Economic Growth. We can grow ourselves out of the Current Crisis that were in. We cant regulate and tax our way out of the crisis. Answering your second question first, and now your first question what was your first question again . I got so carried away with the second i forgot. To the extent that you do believe that the number should be higher if you do at all, and i think you imply that you might, what is the number that makes sense to you . Yes. And along the same lines, now that you said if we go to 1,000 why would you be even in favor of it going up at all . I would think you would want it to be zero if possible. Well, the real minimum wage is zero because when people lose their jobs thats exactly what they earn. But the bureau of labor statistics did an excuse me, the Congressional Budget Office did an analysis about a year and a half ago that said at 9 an hour youd lose about 100,000 jobs. At 10. 10 an hour youd lose 500,000 jobs. So i could see going to 9 an hour and expanding the earned income tax credit, which currently actually lifts the hourly rate for people that qualify, women with one, two or three kids. You go up to 11 or 12 just with a 9 minimum wage and earned income tax credit. Im sorry, becky. Buffett and gates advocated for the same thing, the earned income tax credit when we spoke with them on monday. So obama, gates and paul ryan. Its broadly accepted. I was there for nixon and for the wage and price controls. We had both of them. And, you know, you can almost ask anyone on the street, are you in favor of wage and price controls, and 90 will say no. And they dont really consider the minimum wage as a wage control. And in a perfect world, obviously, youd want a gang buster economy where people are competing for workers and for Skilled Labor and where the natural level would be 15 an hour and that everybody could do well. Thats what you would strive for, obviously. And, you know. If you go to north dakota where they have oil fracking, they are paying 15 an hour. Right. That works. If theres economic support for it, you can do it. You cant mandate growth. Otherwise i agree with you. Lets do 100 an hour and everybody will be doing great. And well all be rich. Yep. Okay. Andy, thank you. Two plus two doesnt equal five. Its a conversation to be continued. Come on back. In the meantime, jim cramer joins us live from the New York Stock Exchange when we return in just a moment. 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. Lets get down to the New York Stock Exchange. Jim cramer joins us now. I didnt check at the very end of the day, but most of the session the market was down triple digits yesterday and apple was up a couple a percent. I attribute that to something that happened during your interview, and maybe a little bit of a bounce based on whats been some negative sentiment, jim. Yeah, i think the latter is true. Had it down for eight straight days. By the way the stock has been down a bunch of times this percentage after a particular event. So it wasnt an unusual decline, it just wasnt relentlessly a daily decline. I wouldnt be surprised if it doesnt come back. Im waiting for analysts to downgrade. I cant believe these guys who have it kind of as a soft buy dont pull it and thats how you get a negative bounce. Thats how you get the real bounce. You have to get all these sunshine bulls out of the way. And i think that can happen eventually. In the meantime, you know, we have a weird market that weve got all good quarters reported. Every one. But the futures are down because the rest of the worlds down. And because people are afraid the dollars actually going to start going back up. I dont mind the market. I think the markets fine. It was china, i guess, yesterday and then australia. Yeah. I mean, you know, people wanted the metals and mining and now rotating into other stocks. Very typical. All right. 18month low on the dollar. Jim, thanks. Todays big Market Movers when squawk box comes right back. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. 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Its time to bench the benchmarks. Something well show you. Through small things, big things, and spur of the moment things. Welcome back to squawk. Take a quick look at the futures right now. Dow looks like open off about 100 points, nasdaq off about 31 points. S p 500 off about 15 points. I would say the adp was not exactly very happy. Well show you the tenyear real quick. Youre looking at 1. 77 right about now. In the meantime make sure you join us tomorrow squawk on the street. Absolutely sure. The donald 7 15. 7 15. Dont want to miss it. Squawk on the street begins right now. Good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla with david faber, jim cramer back at post nine on the New York Stock Exchange. Adp misses badly, europe is lower although pmis were pretty much in line, u. S. Productivity down a full point in q1, and were watching politics as donald trump now on a clear path to the republican nomination. A roadmap begins with sck