Transcripts For CNBC Squawk Box 20170330

Ears, i can hear, with the pressure. Youre sick. The nose spray clear. Your sugar i thought i was sounding pretty you sound up. Youre trying. Youre trying. I can hear it. Maybe its the end. It gets worse towards the end. You dont feel as bad, but you sound worse. Thank you. The european markets were mixed. Lets not fly over there. Im telling you, your ears will pop. Probably will. If youre buying wti, buy the barrel. A barrel will cost you 49. 41. Its touching joe has for your health. Melissa, save me. Here are the stories were watching. Saudi aramco has selected jpmorgan, Morgan Stanley and hbsc as Financial Advisers for its ipo. Saudi aramcos offering is expected to be the largest equity scale ever. The weekly jobless claims and the final read of q4 gdp out at 8 30 a. M. Grow cleveland fed president , loretta mester, john williams, rod kaplan and bill dudley speaking throughout the day. Jack lew, tim geithner, robert rubin, michael bloomenthal last night address the economic issues. With a specific focus on the u. S. Relationship with china. Lew sharing his thoughts on the current administrations decision to pull out of tpp. The standards of tpp reflected American Values and would have made our products and services more competitive. I see nothing good about pulling the plug on tpp. I think leaving a void is a bad thing. Somebody will move in i think china is moving in with the Regional Cooperation agreement which will have lower standards than tpp. Robert rubin warning about a potential currency crisis. If china really had an economic crisis, and as a consequence the currency plummeted that would put tremendous pressure on markets around the world to deprecate their currencies. Rubin saying we shouldnt try to exercise leverage on china but work with china to further common interests. Lululemons noufourth quart profits missed forecasts. The retailer expects weak samestore sales in the First Quarter blaming a disappointing lineup that led to lower online sales, fewer shoppers in stores. Well hear from an analyst in a couple minutes. Lululemons ceo will be on mad money with jim cramer tonight at 6 00 p. M. Eastern. That would be enough to watch. I think if jim were to model Different Things from lululemon, from the latest inventory, would that would that add to the ratings . Im just lulu shorts . Cargo shorts . They have the new mens bottoms, dont they . The abc right. Yes. Yes. Have you heard about that . Uh we talked about t havent we . Already put the abc just a more free pant structure for men. Does it stand for anything . Im not sure. I think it does. I think she knows. I think i know what the b stands for. Im not sure. Antisomething crushing. Yeah. Yeah. You are right. Its not chewed gum or anything. Abc gum, already been chewed. Right. They will a problem with womens bottoms also. Womens bottoms, the comps on that was bad. Color selection wasnt good. Do you think if jim would help jim . No, help ratings if jim was to wear different lululemon items. Walk back and forth, turn around . No . Will they be hit by the border adjustment tax . How about the Canadian Dollar . Thats what i was thinking about. Where do they manufacture this stuff. Im not sure. I would imagine overseas. I dont know about the border adjustment tax at this point. Hes kind of right. It might be a bold thing to do. But you saw what happened with when you try to do anything, it gets bogged down. Try to do that, thats a big move when you have such a divided government. Conocophillips is selling some oil sands and natural gas assets in western canada to cenovus. Cenovus, not the bank. For more than 13 billion. The divestment is the conocos history. H ms First Quarter profit fell less than expected. Stock is not looking too good on that chart. Conditions remain tough in many european markets. It plans to launch a new up market brand in the second half of the year. Besides amazon s there any retailer working right now . I dont know. By the way, did you see jeff bezos is the second home gee depot. The second wealthiest person in the world. He is . Yeah. Number one is still gates i want to say. Oddly enough. I dont think we know how much putin is worth. Well have him on. Well ask him. Maybe Geoff Cutmore will ask the question. Lawmakers in North Carolina announcing late last night that they have reached a deal to repeal the controversial bathroom bill. That bill restricted restrooms transgender people can use. The new proposal would repeal the bill but leave state legislators in charge of policy on public restrooms. The legislation led to business boycotts and hurt the states economy. A vote to repeal the bill expected today. The ncaa said make the changes or lose sports championships from 2002. The nba was supposed to have the allstar game in that state mast month and did not. Geoff cutmore is in russia this morning. Hes moderating a panel at the arctic forum with the president s of finland, iceland and most importantly russia. Russian president Vladimir Putin. Well begin that discussion live at squawk at 6 30. I think the iceland guy might be more news worthy, no . As opposed to the finland guy . I think you nailed it. I think putins probably the headliner. You think . Right . How do you think everybody else feels about being on the panel . Right. C cutmore will be like hurry up. Hurry up. Yes and no answers good from you, iceland. We do have our own headliner right now. Well get to washington for the top political stories. Our good friend eamon javers has some new polling data to bring us. Mr. Headliner, eamon . Good morning. So we know we have new nbc News Survey Monkey online poll here to bring you some information on. This is the Approval Rating for the president as of right now. 42 approve, 56 disapprove. That is a slight worsening from last month, which was 43 approval, 54 disapproval. And then look at this number. This is the right direction, wrong direction. This is the question that pollsters rely on so often to get a general sense of where things are going in the country. 37 say right direction. 61 say the country is headed in the wrong direction right now. That is also a slight worsening from the last month which was 40 right direction, 57 wrong direction. Guys, this is a little bit better news in this poll, this is a survey monkey nbc 6 new nel out this morning. In the gallup poll they have the president at 35 approval. The gallup poll organization is suggesting that that is among the worst performances of any president in their first year comparing it to bill bill who was down to 37 in june of 1993. And barack obama who was at 49 , his worst point of his first year in november of 2009. Gallup saying that the president starting his term with a job Approval Rating below majority. And the president has already received the alltime lowest Approval Ratings of any president in his first year. In this nbc News Survey Monkey, the picture a bit brighter. The Approval Rating there, 42 , disapprove 56 . Back over to you guys. Everything i read said reagan was actually lower at one point. The distinction is at one point than in their first year. Ronald reagan i have it here. His low point is his low point is 35 . What year . Towards the i dont have the year here. Towards the end of the first term. So he starts at 51 , goes down to 35, Ronald Reagan by the end was up to 63 . He ended strong. Obama started at 68, dipped to 38 in the first and second terms, obama ended at 59 . Um what else were you saying . I was going to ask you about something else. I already forgot. Right track wrong track. So were still on the wrong track, we were on the wrong track, now were still on the wrong track. Still headed in the wrong direction. Right. This is a pessimistic country. 61 wrong direction. I think were worse than that a year ago. We were 70 wrong direction a year ago. So we were in the wrong direction before the election in the last couple of years, now still in the wrong direction. Maybe slightly less in the wrong direction. Thats the good news. Going off track, but only a little bit less or something. All right. All right. Thank you, sir. Im in a bad mood. Stock market is going in the right direction. Maybe not in the last nine sessions. Lets get to the markets. Dow down nine of the past ten sessions. Still up slightly for the week. Joining us is charles campbell, keith parker also joining us. All along the narrative has been two of them, its the trump trade, the other is that it was going to happen any way because things were improving. If the latter is true, and so obamacare doesnt get repealed, if things were improving any way, maybe this doesnt get rerailed. Our view remains a synchronized turn up globally. Globally, has underpinned this rally and roughly half from an increase in earnings the second half of last year and half a rerating of the multiple. Valuations are closer to fair. So the key full fulcrum is the tax propose the aal and what do include . We value that at 75 points, and target 25 and 25 for the end of the year, assuming a proposal is out there. For being down 9 out of 10 days, this hasnt been much of a pull back in terms of being able to buy into it. Even at the lows, it wasnt 2 from the highs. Yeah. One of the worries coming out of healthcare, the nonability to pass that, a worry that tax reform would get priced out of market. The messaging out of the administration kept that fiscal put option alive and well. The market messaging, i think, didnt allow that laernrger pullback. Some people have said its been synchronized growth but also deregulation. Deregulation is not dependent on congress as. Not dependent on passing a law, and maybe thats just as powerful to keep this going. Good morning. Thank you for having me. Deregulation is difficult to integrate and model in your analyst forecast. Analysts are expecting about 130 earnings per share on the s p 500, up about 10 11 over 16. That would be the first increase in a number of years. Since january those expectations have come in fractionally, less than 1 , the first time in years as well. That doesnt include, i dont think, the changes to deregulation across american industry. Stock market prices do reflect that. We see that in the banking industry, since november 9 banks have outperformed. Even though the tenyear treasury went from 1. 85 on the tenyear cash to 2. 60 yield middecember. Now back below 2. 40, dollar yen going from 1. 18 middecember back down. Part of a recalibration. But deregulation is a significant driver. It will add, if hes able to do this effectively, a number of dollars per share to eps for the s p 500. You say the markets already factored that in . They have not yet factored that in. So if its 1. 30, whats the multiple . The multiple if its 1. 30, the multiple stayed the same. Markets were expecting 1. 30 before deregulation, if you add deregulation in, its closer to 1. 36. So what would the multiple be . Its 22 now. Not everyone thinks its 22. Theyre looking it forward. Some people will say that, you know, the market is at a historic high. If nothing is accomplished, the markets may be at a very high valuation. But the likelihood that the administration gets a fail on deregulation, gets a fail on infrastructure spending, gets a fail on tax policy, gets a fail on obama care repeal and replace is pretty low. I think most people would agree with that. Can i ask a question i dont know about that. The question is you say get to fail. Meaning if i told you that the Corporate Tax rate that there is some form of Corporate Tax reform but the rate is 28 , im not saying thats necessarily a fail per se, but its hardly what i think the market was expecting two weeks ago. Those things are not binary. Its not pass or fail, right . Its degrees of impact. Thats true, but certain tax moves they could make right now are not controversial. The repatriation. 2. 6 trillion held by u. S. Companies overseas, most dollar denominated. Lets say you offary holider a f 10 , they bring back 50 of that. 1. 3 trillion. You take 10 of that thats 130 billion. I think that is controversial these days, a holiday is, if youre talking about creating a territorial system and its part of it, theres a onetime bring back with a go forward, sure. But however getting there is complicated. How controversial is on a relative basis compared to obamacare, repeal and replace. You cant guarantee that youre going to high a certain number of people, he wont go for it. You have to hire people even if you dont need them. Fix a couple of bridges. They could use that 130 billion for bridges, roads, infrastructure. You do a Public Private partnership that becomes 260 billion. You keep it in the system, you can keep taxing it. I got you. I know how much you like to pay taxes. I dont know if that is on the other side to say, okay, you can bring it back, but you have to fix the bridges. Its the corporations money in the first place. Why do they have to do anything when they bring it back . Will trump and the administration show they can adapt and learn what they saw in this obamacare experience. Now the articles are being written that maybe the fed maybe they have to go faster than people are anticipating. Thats one stumbling block. Maybe, i dont know, brexit, italy, who knows what happens in france, is that on the radar . Our view is that the rates markets will be relatively behaved while the fomc and chair told us at the last meeting that longrun eke was lquailibrium r thats where the Treasury Curve is trading. It will take a bit to move that. I think rates are somewhat of a worry, but cash rates getting to a much higher level before i think the equity market takes pause. On brexit, i do think it is becoming more talked about. But its a risk that will play out over years. More folks are asking about china as well heading into the cpc in the fall, as to what may transfipire there. There are a lot of wildcards out there. Are investors rightfully complacent or is their level of complacency as measured by record high margin debt and the vix and the still intact bid for bonds, is that worry some . I think investors are sensing that fiscal policy is replacing Monetary Policy as one of the key critical variables. Thats what i was going to say. The tenyear should be at 2. 38. We will never do anything fiscally. Chair yellen now im on the other side. I dont think well get anything done. Because of a lot of your people. My people. Yeah. The freedom caucus. They said we were allowing 2 as a target, not a ceiling. She mentioned that in october, backtracked in december, now back on as a target. That allows it to run hotter and allows the fed to be running loser. U. S. Dollar weaker on that. I think in terms of concerns, theres concerns about geopolitical risk, what will happen in france, the election. Thats simmered down since the state election in germany on sunday. French german tenyear spread, less than 60 bips now. Concern about what happens with inco north korea and other provocateurs out there, rogue nations, but i think markets shrug that off until they see a problem they continue take notice. Well find out if theres problems in iceland. Or if finland. That could be a hot spot. Anything brewing there, sorkin. Take notes. Thank you, keith. Thank you. I think if im saying you people s that okay . Can i say your side . Were on the same side, joseph. Were all here for the American People. All right. Okay. All right. The eagles. Were the eagles flying. I never call him before the show. He called me before the show. Wondering the reaction when you saw joe kernen on your cell phone. Did you pick up . I didnt, not because i didnt see it on the phone. I called like three times. He called three times. He thought you were in the shower, asleep. What i was really calling for, so you pushed the tease off, the promo off on melissa . You cant be here on your tease week . I was ill. Im glad youre here. I personally am glad youre here. And melissa does such a great job doing the tease. Please. She does. She actually does. That, i agree with. Thanks, guys. Coming up, shares of lululemon getting slammed after Fourth Quarter earnings slightly missed. Reaction from an analyst is next. And were moments away from the newsmaker of the moment. Geoff cutmore will interview russian president Vladimir Putin live in russia at 6 30 a. M. If you have your Second Screen handy, catch the arctic forum that starts in a few minutes streaming on cnbc. Com. Squawk is rebuilding america tomorrow brick by brick with some of the biggest names in infrastructure. We will nail down infrastructure, ceo by ceo, including names like mark sutton of international paper, novrm anderson, jacqueline hindman, and doug parker. The road to rebilling america starts tomorrow at 6 00 a. M. Eastern time right here on squawk box. Squawk box. The power of a proven 15year track record. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Lululemon shares getting slammed. The athleisure retailer reporting profits of 1. 01 a share. It was the guidance for the First Quarter that came in far below expectations. Thats pushing the shares down by 19 this morning. Joining us now is Susan Anderson of fbr capital, covering Specialty Retail and apparel. Is this a forgivable miss . No, clearly not with the stock down premarket the way it is. Negative comps in the quarter was a surprise. I had expected it to be light, just given what we had seen out there with the tax refund shifts, but negative low Single Digits is a prize. How much work does the ceo have in front of him in terms of stemming the declines in store traffic, in fixing some of the some of the executions on the Conference Call yesterday were bizarre. We didnt have a good enough color selection. We didnt have a jacket modeled right. When we modeled it right there was a pick up in sales. These sound like missteps. When we look at clearance racks, typically what is on clearance is everything with color. Its interesting they want to infuse more color into the line. I think were going to be watching sales to see if he can improve them throughout the year. Thats what the plan is. When you look around the industry is going through fluctuations. Nike called that out, the athletic category is under pressure now, a lot from the sports retailer bankruptcies and retailers also shutting down doors. The bigger problem could be that is adding pricing pressure and more competition to the category. 2016 as good as it gets for athleisure . Im trying to get a sense of whats going on with the industry . Did we hit peak athleisure . Is the pie getting smaller . Whats going on . I think our view is that we somewhat peaked out. Not that the consumer doesnt want to wear athleisure anymore, but i think her closet is full. Its become more of a replenishment category. So those black yoga pants people were stocking up on before, theyre only buying a couple now to replenish. That could be part of the problem for lululemon, also the competition has increased. Theres more competitors in the market. Pretty much every Specialty Retailer has their own athletic line, and higher proem yemium b also coming online. We were talking about the border adjustment tax in the last segment and thinking about lululemon. Where do they manufacture their goods . Most of it over in asia. They own their own stores in the United States. They would get hit. They would get hit similar to most of the other retailers in the u. S. You know, they have a similar break out with 10 or so sales in canada, another few percent internationally. The majority of sales in the u. S. Have you modeled out the implications . Were still waiting to see what happens. We believe that if there is a border adjustment tax, theres probably going to be some price limit or phase in for retailers because a lot of these retailers will get killed if that happens. If theres a 50 price limit or 100 price limit, a lot of retailers fall under that and would not be impacted. You wont be a tech analyst . Do you leave retail . Do you think its likely . In a selfserving way do you think theres no are you arguing against is to retail remains a decent no, no. I think theres a high possibility that theres a border tax. There could be restrictions around that where the price limit on cost of goods coming into the u. S. , if its under 50, i may not have to pay the border tax. A lot of the costs of goods of retailers fall in that category. Then it would be then id start arguing against it. So it would just be for german cars or something . Those would be the only thing german cars, maybe consumers will buy less tvs. Everybody has a as long as its 100 or 50, some of these retailers wont matter. Correct. That would be disruptive. If you seen how many bmws are on the road . Everybody has a bmw. Would it be that much more expensive, if the dollar didnt rise t would be, wouldnt it . That would hurt. Yes. Yes. But i guess if you want a bmw, youre willing to pay a few thousand more. Can we go back to the price limit you talked about, you said 50, 100 what is the conversation youre hearing in terms of what that number would be . What product would count . I think it could be either way. I asked around retailers, even the 50 price limit, even if it as low as that, a lot of them coming in to the u. S. , the cost per article is under 3 50. Even at that low limit, they could slide under. Would a border adjustment tax make impossible a turnaround at a lululemon or any other companies within your coverage universe . Yes. Its obviously been a difficult environment even without a border adjustment tax. If there is one t could put a lot of companies in the red. It would definitely add to the difficult structural shifts were seeing going on out there. Thats why i think it will make it hard for congress to pass through a border adjustment tax, especially when you have walmart in arkansas and so forth that is heavily rallying against it. Whats the right pe for lululemon . It sounds like people are not going out and buying all those additional yoga pants, its become a commodity, a lot of competition. I dont know how strong the brand is. Even if that brand base is devoted in terms of customers, they may not still buy that extra pair of yoeg ga pants. How should we think about this valuation . We have a 59 price target. They do deserve a premium multiple given that they have a premium brand. It is a little bit higher growth right now even with the lower numbers versus some other retailers were seeing out there. Well be keeping an eye on sales to see if they can turn around as expected throughout the rest of 2017. Susan, thank you. Appreciate it. Thank you. We have a programming note. Lululemons ceo will be on mad money with jim cramer tonight at 6 00 p. M. Eastern time. Coming up, the newsmaker of the morning, Geoff Cutmores interview with Vladimir Putin is moments away. Well bring it to i live. As we he you live. Squawk returns in a bit with the president of russia. Excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. One of the largest business process companies in the world. Whether its in health care, customer care, technology, transportation or government. We touch millions of lives every day. Conduent. Advancing the everyday. Cmohappy birthday i survived a heart attack. 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If you cant afford your medication, astra zeneca may be able to help. Welcome back. Youre watching squawk box live from the mNasdaq Marketplae in times square. U. S. Equity futures at this hour, a ret mixd mixed picture. Dow would open down about 15 points. S p would open down about 2 1 2 points. The techheavy nasdaq looking marginally in the green. This would be our fifth straight session of gains on the nasdaq if they can hold this through the session. Give them some credit. Nasdaq, yeah. We had amazon, apple, intraday record highs yesterday. The day that one day we were down 50 points or so the nasdaq was up 11. The nasdaq has been i looked for one or two stocks that did it. It was really across the board. Do you think theres a correlation with squawk having moved here now . At the nasdaq. If we charted that. Are you taking credit for this nasdaq rally as a measure of your performance . Shes going to get unhappy because fm fm hfast money was the whole time. I think youre right. I dont care. Lets check the global markets. A quick look at europe. Europe, you know, flat to red. Germany is up a little. France. Everything else is down fractionally. In asia this morning, a quick look. Asia is negative this morning. We have the nikkei down almost a percentage point. 0. 8 . Hang seng is down a third. Shanghai down a full percent. Oil was good yesterday, back to 49. Tenyear, last we looked around 2. 40. Just slightly above or slightly below. Now 2. 37. 2. 37 now. The dollar, dollar trade is not evident in terms of people that were bullish. The euro holding up well as brexit became official yesterday. There is the pound, 1. 24. Gold is on a mini run since in 2017. In Washington News a federal judge in hawaii extended and order blocking trumps travel pl ban. The ban restricts entry of people from six predont namina muslim countries. President Trumps Administration plans to unveil a 1 trillion infrastructure plan later this year. Transtaportation secretary alai elaine chau sao says it would b done over ten years. Cover transportation, energy, water and potentially broadband and veteran hospitals. Chao says the administration plans to offer incentives for Public Private partnerships but no word on how much federal funding will be proposed. Thats the key to see whether democrats will be on board with this. Paul ryan says he does not wanted the president to work with democrats, he says he fears the Republican Party is pushing the president to the other side of the aisle so he can make good on xhCampaign Promises to redo obamacare what do you think about that . I think trump is paying back the right with some body language that i dont think i dont think the democrats are prepared to play ball either. Its not like this is happening any time soon. Weve never seen a max semaxine waters, all she wants do is impeach trump. Thats her entire goal in life right now. She says it openly. This is a Democratic Party that or a divided country now. I remember dubya, people hated him, but now that seems like a love relationship its all relative. Under obama, the republicans thats true. Though you could not have been this nasty with you know,ed media is always going to be on one side. They love the president. The republicans could have hated obama, but you wont get the type of coverage youre getting in cahoots with the hating party at this point. Im not going to agree with that. All right. We have more trump news. Ivanka trump now an official employee of the United States government. The president s eldest daughter will serve as assistant to the president but not take pay. It subjects her to the same rules as other government workers. Her attorney said she would file financial december closure forms. She had taken up an office about a week ago, agreed to voluntarily participate in the in the ethical disclosures, but under this, there will be a bit more significant. She was in that interview with 60 minutes originally after he won the president and said i just want to be i will be the president s daughter. Im not going to be in the white house. A lot of people were skeptical about that. Perhaps they had reason to be. Yeah. All right. As a professional anchor see professional anchor. You see how hom anymores hom dont know. Small business has been have there been tears or has it been on a tear . This is whats really going on in the show. Theyll think its scripted now. So you think that amateur anchor might say on a tear okay. They corrected it to make clear what youre supposed to say. I would have. If it had been andrew during the obama administration, Small Business there are tears in all the owners of Small Businesses because of the regulation. So i would have known whether it was tear or tear in this case. Its been on a tear this year. Poor kate is like, i thought i was supposed to hit at 6 42. Any way, much of this were coming, kate. Much of this sunny outlook hung on two key Campaign Promises from President Trump, Regulatory Reform and repeopaling and replacing obamacare. Here we go. Could we see a change next month . Kate rogers joins us from the headquarters, waiting patiently with that story. You knew it was a tear, right . Would have nailed it. I knew it youtchlit. Youre a pro, joe, you nailed it as well. Its ban stro its been a Strong Quarter for main street. The largest month over month increase in the surveys history at 105. 8 in december that was reported in january. In february that ticked higher to 105. 9. This trend held in last months report with a slight dip to 105. 3, all of those numbers well above the historical average of 98. This positive sentiment was hit in quarterly data from wells fargo. Much of this on the hopes of deregulation and more business friendly policies for main street. Each month the optimism has yet to translate into progress in the way of hiring and spending. In the latest drama out of washington, that wont help with the American Healthcare act pulled before the scheduled vote last week putting healthcare reform on hold for the time being. Healthcare costs were the number one issue for Small Business owners in 2016. So this will likely show up in confidence numbers in april and potentially in march. Last month if you remember the nfib called out lawmakers and the administration saying Economic Growth will depend on washingtons ability to deliver on the agenda Small Business owners voted for. That delivery will impact next quarter forever sma small busin owners. Well keep an eye on that. Back over to you. Appreciate it. Coming up, the newsmaker of the morning stillGeoff Cutmore cutmore interviewing the newsmaker of the morning, Vladimir Putin and the other two gentlemen as well tagging along. Stay tuned, youre watching squawk box on cnbc. Wanna get away . Now you can with southwest fares as low as 59 dollars oneway. Yes to low fares with nothing to hide. Thats transfarency. Ellis brown inherited a family recipe for i hads by cuss tfor for i think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading Companies Lead with digital. Box. Stocks to watch, synovis financial is buying the financial unit of cabelas. You know what . I referenced cenovus earlier. It was cen. A honomonym. Any way, we digress again, synovus doing this with cabelas. About 5 billion in loan. They will keep the deposits held by the unit and sell the credit card portfolio to capital one. And toshiba is set to spin off the memory chip unit paving a way for the sale of the whole business. Toshiba hopes to raise 9 billion. Reports say there are at least ten potential bidders. And worthington industries, Third Quarter profit rose 20 . This was driven by sales growth in higher steel prices. Results for this maker of propane oxygen and scuba tanks missed analyst forecasts. Lets talk brexit. The Brexit Process officially underway. Joining us with a look at reaction and the markets is wilfred frost joining us from cnbc headquarters. Good morning. Yesterday as we know, theresa may officially fired the brexit starting gun by april 2019 the uk will be out of the European Union. Lets, as you say, have a look at the market reaction, which was fairly muted. Yesterday the ftse 100 closed up a half percent. Down a bit today because the pound was down slightly yesterday. Its down a little bit more its recovered in the last half hour since Worldwide Exchange ended. Essentially flat today. The invoking of article 50 was well telegraphed. On march 13th the brexit bill passed all stages of the legislative process in the uk and thereby allowed theresa may the choice of when to invoke article 50. The interesting response in sterling since then is a move to the upside. Suggesting that brexit related factors on their own are already priced in. That is a longerterm chart, but in terms of the reaction, as you can see, at the end there in early march weve seen the pound rally. As for the tone and content of theresa mays letter and speech yesterday, for the most part its being seen as firm but positive. And forward looking. Apart from one much positive an forward looking, apart from one focused mainly on line saying our security arrangements would obviously lapse if we left the deal, many taking it as a threat that they would cease to offer security should the eu play hard ball on a future trade deal. The government fiercely denied theyre playing with peoples lives this morning on that particular talking point. Yesterday we also saw a Dollar Strength broadly against the euro as well softer yesterday. Guys . Will, thank you for that. Always helping us understand a little bit better first day of the rest of your life, will. First day of the rest of your life. You should be floating on air. Floating you could say the first day of 730 of negotiations, then the first day of the rest of our lives. All right. But the u. K. Great Britain has always resisted. Historically theyve been people with moxie and courage. Theyve always resisted. Always resisted or always persevered and survived. Yes. Now theyre going to flourish because now theyre going to no longer be under the eurocrats. Churchill, thatcher. Go ahead and think about it, shakespeare. All great names, i agree. I agree. David beckham. Thats a big gap in time. Will, thank you for that. When we come back, a lot more to bring you on squawk box. Russian president Vladimir Putin will be live from the arctic forum right here on squawk box. Back in just a moment. In just. And thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed. Daniel you need to cool your brakes. Understood. Brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Our customer is a our 21yearold female. Heavily into basketball. Wait. Data just changed. Now shes into disc sports. Ah, no shes not. Since when . Since now. Shes into tai chi. She found disc sports too stressful. Hold on. Let me ask you this. Whats she gonna like six months from now . Who do we have on aerial karate . Steve. Steve. Steve. And alexis. Uh, no. Just steve. Just steve. Just steve. Live business, powered by sap. When you run live, you run simple. it just feels like anything is possible here in upstate new york. at corning, i test smart glass that goes all over the world. But theres no place like home. Theres always Something Different to do like skiing in the winter, jet skiing in the summer. We can do everything. New york state is filled with bright minds like samanthas. To find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin. Search for our page, the market. Redict but through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back to squawk box this morning. We go to russia this morning. A panel has been slightly delayed a little bit this morning. If you have your Second Screen ready, you can watch the opening remarks streaming right now on cnbc. Com and were going to bring you the discussion live right here on squawk box in just a couple of minutes only on cnbc. Coming up at 8 00 a. M. Eastern, former treasury secretary Larry Summers weighs in on the global economy. Squawk box will be right back. Ready to help if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade various shouting heigh ho its off to work we go woman on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. And each job created by the Energy Industry supports two others in the community. Altogether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energy lives here. Welcome back to squawk box right here on cnbc. We are live from the Nasdaq Market site in times square. Joe kernan is over there. Becky quick is out. We are awaiting Vladimir Putins comments live. The president s of finland and iceland are also there. We will bring you the questionandanswer session live on squawk box as it happens. What part of russia is this in . Could we sao that again . What town . We had it up there before. In the meantime what town is it . You know what, joe its in russia, right . I think viewers would like to have an idea which town its in. You can see it as well as andrew can, joe. Why dont you pronounce it. Arkagelus. Were only undermining ourselves. Well have Immediate Reaction from senator george mitchell. Evelyn farkus will join us as well. In the meantime, take a quick check on futures on this hour. Were looking like were in the red on the dow and s p. Dow would open up about 20 points down, s p 500 looking to open down a little over 2, almost 3 points now. At 8 p. M. Eastern, the government issuing its weekly jobless claims and economists expecting gdp to come in at an annual rate of 2 , up very slightly from the 1. 9 i reported just a month ago and jobless claims are expected to fall. Shares of yoga wear maker lululemon is getting slammed this morning with a much larger shortfall in its quarter forecast. Theyre saying theyre simply not colorful enough. Now all those black and gray pants are going to get a little more color. Its ceo will be on mad money tonight. Andrew, lets get to the markets right now. Joining us is chris heisey, chief Investment Officer of Merrill Lynch and bank of america. And also could you handle two like him . Are you as good to be able to do that you think . Im a portfolio manager, too. I manage money. Okay. But just to start out, lets start out like this. What is the maximum equity exposure domestically that you would carry in what you do and where are you right now . In a centralized model, max would be 60, 65 . Where are you now . We like both the u. S. If you had to put money today, more nonu. S. Than u. S. We could talk for an hour and just you saying that is probably a good sign of how you feel about the markets the Merrill Lynch and u. S. Trust, right . Thats right. There are enough positive things happening that the risk side of things does not cause you to pull in your horns at all . Well, yeah. I would look at it this way. You can come up always with an excuse about whats wrong and theres a lot of uber bulls out there. I would characterize this market as a bunch of wolves around. A bunch of wolves . A bunch of wolves howling around about everything thats wrong and forgetting the fact that theres three major positives out there that we havent had in a while and theyre a little bit dismissed right now. The biggest thing is capex x energy on a year over year quarter live growth basis year over year its up 12 . We hadnt had that for a lorch ti long time. You could argue about and mill spirits but the base, you still need a business and the base is capex confidence claims and thats feeding into productivity, which we havent seen in a long time. Do you have any similar . Is there a maximum amount of exposure that youll have at voya . All clients arent alike but the base unite were at full allocation, at 60 . Were in large cap, small cap, emerging markets. Emerging markets are at almost triple return, you have to be more risky. I see the growth in reflation trade is still in tact and were seeing signs corporate profits, q1 is about to start. Something like 9 . You need to be in the market right now. Manufacturing, broadening manufacturing, not just the u. S. But all around the world. The consumer, i call them the game changer, everything is the tail wind for the consumer, you add tax cuts to that and game on. Emerging markets. I just saw an article that said india just passed legislative tax reform, the biggest since india went independent. This growth and reform progrowth economic is starting to catch fire around the world and thats going to help global growth. You guys both sound like uber bulls. Does that worry you when were 7 off alltime highs. Does that worry you . Its a good point, melissa. When you talk to investors, theyre still very skeptical, still very nervous, theres still a large pool of money out there thats underinvested, in the sovereign wealth funs and institution and pension funds, theyre overallocated and i would caution the more you wait, the more you have a drag on your portfol portfolio. Even at these valuation levels, i would still say that the down side of waiting for a correction is you dont actually get the up side. Youre talking u. S. Market or i would say overall. Weve had a number of people come in over the past couple of weeks who say if you have cash on the sideline, u. S. Market is one side and maybe theres some marginal up side, maybe but europe is much more interesting. The interesting part about europe is the bounce is bigger because of what the expectations originally were. The caution there is still the political landscape, which is a caution were going to have for quite some time. The u. S. Is at 18 times earnings so its hard to argue that the u. S. Has a better return potential. But when you look across the board, look at allocations across the board, cash is still very omni present and its still waiting for that correction. Thats hard to come at a time when optimism is as high as it is. So you both have yearend targets for the s p or not . Ill tell you, im impressed so far. Im at 2,400 2,400 . 2,400 and it could be definitely i mean, we almost hit that. That doesnt sound very bullish. Youre being safe . Every time it gets there you raise it another 20 points . Youd probably be within 20 points of your you have to look at other markets. Im in a broadly diversified portfolio. You dont sound very bullish on u. S. Equities then. I think theyve had a run. Its been a narrow market in the s p 500. I would advise narrow in what way . In just the s p 500. Its been one of the best performing equity markets out there, international, emerging markets have lagged. You need to rotate into that because it looks like theyre going to have their day. I would always say make sure youre broadly diversified. Most investors are too u. S. Centric. Thats why i think the s p 500 valuation is higher and theres a lot of cheap, high growth. And i think a main point is everyones too pessimistic because of the political drama. If you look at the economic facts, the fundamentals and the confidence and you talked about the Small Business, thats well underprice. Its fascinating you guys both say there wolves out there and yet we have a market that doesnt want to pull back by more than 1 . And we have margin debt at record highs at this point. Weve got the vix at 11. 5 and were saying people are pessimistic and i dont get it. Were not seeing that in the markets. Its something thats basically hard to fathom when you see these dips that are bought right away. A lot of it has to do with the Hedge Fund Community is over overhedged. Thats number one. When you look at the Options Market and you look at other areas and up see the big pools of money come in, which is very different today than ever before, when you think about sovereign wealth funds years ago, today its five times that amount. When youre looking for dollar assets and much of the world is based upon dollar liabilities, that uber money comes in on the normal prescriptive investor, think of the mill ennialmillenn. When were we were first investing, 401 k s, thats what we were doing. Thats what they are doing. We could see significant escape velocity to the up side in the next ten years. There was a big switch. So President Trump gets elected, the growth, trade Interest Rates pop, very important but the consumers had been in a fetal position, very defensive, overdefensive and ive been on the road and my clients have been saying finally starting to feel more confident that this is going to be sustainable but they havent positioned that way yet. At a time when Monetary Policy has to pass the baton to fiscal policy in a seamless way. Thats the troubling thing, you were finally getting comfortable with the optimism in the country at time when things might be teetering a little bit. Thats enormously positive that the fed a couple weeks ago raised rates. So the fed is seeing the same thing. Initial claims coming out, its at a 40wreer lyear low. Were going to have to have some wage participation and wage reflation, which is good inflation. When reflation goes up, risky Asset Classes like equities do well in a reflationary environment. At the top of 8 00 hour, former treasury secretary Larry Summers has been critical of current treasury secretary steven mnuchin. Hell be our guest. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Republicans and democrats see eye to eye on at least one thing. Both parties are experiencing sharp internal division. This is according to the latest nbc News Survey Monkey poll. Eamon javers joins us with more. Whatever i say that, its like nbc news and survey monkey. Is it always going to be called that . Is that okay . Im not in charge of survey monkey branding, joe, so well wait and see. All right. But this is some interesting numbers here this morning. Im give you the quake hiick highlights. The president s approval, slightly worse than it was. Disapproval 56 , that is slightly worse than last month where he was at 43 approval and 54 disapproval and so an erosion there for the president. In terms of the major number that a lot of pollsters look at in terms of right track, wrong track, 37 say the country is headed in the right direction, 61 say wrong direction and that is slightly worse than last month where 40 said right direction and just 57 said wrong direction. That 61 number is a big one and that is an indication of some of the political problems that donald trump is having right now nationally. Even saying all that, this is better than the gallup poll, which was one of the worst performances of a president in modern history, even worse than bill clinton, who was at 37 in june of 1993, he is first year in office. Barack obama, his worst performance in his first year was 49 in november of 2009 according to gallup. So hes numbers a little bit better than gallup but still not great for the president. Thats going to cause him some political trouble. When youre trying to push a big, ambitious legislative agenda, it helps to have approval numbers up in the 40s. It will give you some momentum on capitol hill, give lawmakers a reason to buy into your agenda. Now the president will be wrestling with these low poll numbers, trying to push this agenda that doesnt give him a whole lot of wiggle room politically. I guess it would be nice to have great poll numbers to get the other Party Feeling like they have to do something but thats not even the problem. The freedom caucus, those guys didnt fear him, which well see whether that was well whether that was wise at this point. But some of them, they come from such conservative districts that its almost impossible to be as conservative as the district where some of them are from. So you cant be as conservative nationally, right . Those guys are running in very small congressional districts that have been jerry mannedered over the years that have extremely strong bases of support, nationally you have to lead a whole country. If you can just get the republicans. He doesnt need a 65 Approval Rating to bring in 10, 15 democrats. Look at gorsuch. Will he get one . Can anyone break with the ranks over there for gorsuch . The lower the president s Approval Ratings are, the less likely it is the democrats do anything. They werent counting on democrats anyway. Right. But they were counting on a unified Republican Party which we know they dont have or they didnt get anyway. Paul ryan has been talking about wanting to get this Conference United up on capitol hill but hes been talking about that for the better part of a year and hasnt been able to do it. John boehner couldnt do it. I imagine john boehner is off somewhere smoking cigarettes and saying this looks awful familiar. Playing golf. Tanning. Or at least using a cream or something. Its not his natural color . If you use that cream, eamon, your hand turn all orange. Youd be better to not be tan. I never used it. We used to see boehner at the capital grill on pennsylvania avenue. Even though he was speaker of the house, they wouldnt let him smoke inside the restaurant. Hed go inside and have his steak but then hed have to stand out on the sidewalk with everyone else to have his cigarettes. Pa paul ryan, not a smoker. Youll have to get him at the gym. Youre few and far, unless youre over in europe. The guy, the ticket agent over in paris, the ashes are dropping on your boarding pass. Thats not paul ryan. Thank you, eamon, for both the political and health update. You dont smoke, do you . I do not. Do not. Do you get enough sleep . Have i been getting enough . Not recently. But youve been traveling around. Youre in a little metal tube filled with germs. Im worried. Because you tried a lot of stuff yesterday. Because i have a cold youre saying. I tried mucinexd, i tried motrin for the that side of it and i tried emergenc and i tried tea. Im glad youre hear todre t because we have some tough interviews. Coming up, president putin speaks and well have that coming up and Larry Summers is critical of steven mnuchin. Nah. What else . What if we hire more sales reps . Nah. What else . What if we digitize the whole supply chain . So people can customize their bike before they buy it. That worked better than expected. Ill dial it back. Yeah, dial it back. Just a little. Live business, powered by sap. When you run live, you run simple. Stocks to watch today, lululemons Fourth Quarter, the profit misforecast because they were hurt by a strongerthanexpected Canadian Dollar. Stocks not acting like thats the only thing, though. They blame a disappointing product line. That might be more representative of whats happening. Theyre down almost 20 . That led to lower online sales, fewer shoppers in stores well hear from an analyst in a fumes. And lululemons ceo will be on with jim cramer tonight. And h ms First Quarter profit, the company says conditions remain tough in many european markets and the u. S. P but plans to launch a new market plan. And growth is forecast to be revised slightly higher to 2 . Cleveland fed president and San Francisco fed president and dallas and new york fed president s are all speaking throughout the day. So of course their words will be watched carefully. Coming up, president Vladimir Putins remarks live from the arctic forum. Hey, we have putin on . Someone call boris schlossberg. Squawk box will be right back. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . A Winter Weather emergency. Governor has declared announcer soon, Insurance Companies wont pay for damages, that is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims, into one focused on prevention with predictive analytics. Helping them proactively protect the things that matter most. Get ready. Because were helping leading Companies Lead with digital. The dinosaurs extinction. Got you outnumbered. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Something for everyone is awesome. Find your awesome with the Xfinity Stream app. More to stream to every screen. Good morning. Welcome back to squawk box right here on cnbc. Were live at the Nasdaq Market in times square. Chinese conglomerate has agreed to buy an vinsme meinvestment i group. U. S. Stock exchanges are getting a warning from germany saying they should not attempt to buy germans deutsche boerse. And legg mason laying off 3 , cutting positions from a variety of departments due to what it calls disruption in the industry. We saw that at black rock earlier this week. It was a little bit different because theyre also going to be bringing in the robots. But they do acknowledge the chang in the Money Management industry, which has got to be a trend toward passive. Warren buffett says buy the index. Thats the deal. Lets bring in boris schlossberg, managing direct r director i was thinking about a lot of the popular trades and a lot of people got those wrong. When it comes to bonds, to do the lar. Where does it stand now . Clearly those trade have stalled, pretty much peaked middle of december and have been drifting lower. The dollar is not a buy and until the yen goes above 3. 15. We found the bottom at around 110 this week. I think the market is very much in a wait and see mode. Again, the issues are political, not economic. Economically the conditions are basically just aokay. Theres nothing here to move the needle one way or another. Were at steady growth, getting 0. 02 . But the juice the market was looking for, the incredible uptake from tax reform or infrastructure spend is just not happening. The market is waiting for the next act to happen. Do you think we overvalued at this point . We have bond yields and weve had a flat yield curve. The tenyear, 2. 4 , that helps valuations, doesnt it . I will keep saying it forever and ever and ever because the bond market is the smartest market in the world. It always tells you the real truth. The bond market has not been biography the whole reflation story for a while. Until u see the tenyear comfortably above 2. 5 why do you think the bond market is the smartest . Its the most sensitive to Macro Economic news because their money is really on line and its very definitive. Stocks can be varied on a million things where is bonds are valued exactly on the economy. I tend to take what they say but its not just based on our economy anymore, bonds. Right. Stocks are based more on domestic economy and bonds are influenced by central bankers around the world and differential yields around the world. To your point, which is a very good one, one of the things thats been happening thats interesting is that european yields continue to kind of drift lower. The ecb is actually kind of upset. Theyre not getting the reflation trade they want. Today german inflation came in lower than expected and theyre not happy. Can you not have a reflation trade in europe and have a reflation trade in the United States . I think its hard. The idea with the central bank is trheyre trying to coordinat everything. Because they cant get the picture in sinync it sounds like youve been a buyer of bonds. Ive been a buyer of bond but ive been a seller of the trades. I am not a buyer of stocks. I really think equities are due for a correction. Joes been making fun of me because ive been saying this for a while. Maybe the broken clock how big a correction in. I think at least 5, 10 . Were just too comfortable here, too complacent. Its going to be a political factor, not economic one. Do you think there is a 5 or 10 premium in the market right now . The market ran way ahead of itself but weve had lots of people come in recently and suggest that actually the economy the real economy has changed for the better over the past couple of months. It has. But not at a pace that justifies the huge premium you still think theres a 5 to 10 premium based on what you might describe as trumpian expectations . Yes. That could change, if something really happens positive on capitol hill, if it looks like they could do something by august, all that goes off the table and equities get swept up again. Oil change my mind in a heart beat if i see progress in washington, d. C. Not believing in a reflation trade in the u. S. Because of the lack of ability to take hold in europe, that alone makes you bearish. It looks like the populist impulse is moderating with europe. But they have the problem with brexit now. If there is a lot of tension, they cant get oged there. Thats a big demand that comes out of europe. So internal problems around the world, its not in sync. Thats why the market seems to be in this waitandsee mode. Okay, boris, thank you. Boris schlossberg. Coming up, president Vladimir Putins comments live from the arctic Forum Taking Place in russia. Squawk box is coming right back. Squawk is rebuilding america tomorrow, brick by brick. The road to rebuilding america starts tomorrow at 6 a. M. Eastern time right here on squawk box. To stealth bombers. To nextgeneration fighters. To landing an unmanned vehicle on a carrier for the first time in history. Just wait till you see whats next. Thats the value of performance. Northrop grumman please repeat the objective. Thrivent mutual funds. Managed by humans, not robots. Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. President Vladimir Putin answering questions about russia and the United States at the arctic forum moderated by jim cutmore. Translator american political agendas. The antirussian card is played by different Political Forces inside the United States to trade on that and consolidate their positions inside the eu. And i mention it here to mr. Ambassador of the United States and he has been can communicating with representatives of the government and Major Russian Companies who dont interfere. We on the contrary help and try to assist them. Meanwhile the conteacts of our ambassador are limited and a negative response and reaction to any possible meeting of his, but hes there in order to be able to maintain contacts with people, the political elites, with senate and congress, with the government administration. Otherwise why had he come there, which is global diplomacy, common practices or like the meetings of our bankers and businessmen are cited every now and then but american businessmen also come to talk to russian counterparts and cabinet members. It not in the interest of the majority of the American People to make bilateral relationship trying to favor the warmongers and today we have over 20 billion of dollars of trade and previously we had 27 billion of mutual trade which is negligible for countries and want to go to extremes and come back to the cube and crisis. This is irresponsible behavior of some people. What are they leading us to . I believe its a huge mistake and i hope that in due time, the earlier the better, things will straighten out. Now with respect to ukraine, we know for sure there is an opinion that the worse the relationship for russian ukraine the better for them, it will make russia weaker and let russia be submerseed into border issues. This is a mistake. No one will benefit from that because if someone uses such hazardous means as original conflicts to deter or restrain someone else, it will lead to global conflicts, which we should do our best to resolve different types of cooperation and now with respect to the arctic zone, weve been caught operating here in this region with our American Partners within the Arctic Council and now it presided by United States together with the United States, the Russian Federation worked on an agreement that is to be passed shortly, if im not mistaken will happen in the last its about using the joint research from the arctic zone and carrying out joint research from the arctic zone, which is very important bil bilaterally. We still keep on border issues like the residents we do have the visafree regime for those border area residents so that they can visit their families and relatives on both sides of the strait, which is very Good Foundation for expanding that in the future. We also have specific regional issues that both parties want to seem semented like the barings straight so the Russian Federation and the state want safe navigation in this area as well both of of us want to preserve the population of the polar bears and want to organize and that was mentioned by the icelandic president to count are illegal fishery, which is now common interests, to say nothing about the huge potential of tapping the mineral reserves of the region and hydrocarbons. It has huge prospects for the Russian Federation and other countries of the world as well. And i hope that we will be able to adopt the twoway relationship for benefit of our people of our nations and people in all the world, the rest of the world. So, mr. President , i just want to be very clear about this. You and the russian government did never try to influence the outcome of the u. S. President ial election and there will be no evidence found. Translator Ronald Reagan once debating about taxes and addressing the americans said, new yo no, watch my lips. Watch my lips, no. I just want to ask one more question before i move on but please forgive me for this but i think its very important for the International Audience to see you apes these questions. So let me just follow up here. We have seen very prominent businessman olek offer him p himself up to the committee because there are things that have been said about him that are wrong and inappropriate. Would there be any way russia would make people available to appear on those committees just to clear up this business . Translator we hear infinite groundless al fwagss of alleged interference. Talking Cyber Security. But do you know that us proposed to the american side that an agreement should be elaborated and signed on Cyber Security . It was our proposals, the americans rejected. Turned it down. Why . Probably because they just benefit from accusing us to match their political cycles. Why . So as regard speaking in congress or russian parliament, the state duma, i know for sure our mps turn to the u. S. Congress and senate inviting them to come to moscow and saying that they were ready to come to washington, d. C. To have meetings and frank talks and discuss relevant things about a national agenda. But they received no response and they made these propose as two or three times. But if a business okay, its up to him, its his right, let him do that. As far as i know, he has been banned access to the United States. I dont know why. No one explains why. No one accounts for that. Let them explain it to us. Let him come to the United States and speak before congress if Law Enforcement there, the special services set forth claims and accusations against him that are not unfounded, okay. Doing business is a complex sphere. There may be some breaches if they have some of it to let them a very good signals in this senators and congressmen and well be always glad to see. President niinisto. I go back to a couple minutes ago when you describe tensions are growing. I do not agree with you totally because what we have seen, specifically in europe, that the need of dialogue has been widely confessed and i see now very many of my European Union colleagues visiting moscow, even our neighbor, foreign minister of sweden met her counterpart in moscow. The dialogue is increasing and thats not tension, thats getting rid of tensions. We have this kind of a very positive Development Going on in warsaw, the nato countries at a meeting last summer and every member underlined the importance of dialogue with russia. But there is a question and that is the question dealing with relation between United States and russia. We dont know actually at the moment which how it will develop and turly its the case of russia and United States to go forward but it is of huge interest also in countries like finland. I remember even the years of goldwater, we are not nearby those but nevertheless we understood then that washington and moscow certainly well, edidnt gra quite a clear pitch of what the other one is anying. And this is a positive thing, even if you dont agree. And now we are waiting how this relationship is going to develop and we wish the these things are all connected to be honest with you. Go what would be a better surrounding than a cool arctic to solve thos tngss . Everybody stays cool. President johannesson, do you want to come in . Translator the guys tell us about this, we should listen to their advice. Iceland is also very cool. Evenland for that matter. [ applause ] i think it would be hard to find seated next to each other president s of countries more dissimilar in size and power. Russia, the greatest land mass on earth, iceland a small island in the north atlantic, we dont even have a military. We have sovereignty, though. Sorry. How much . Need help . Sometimes. Sometimes being small can help you. I do not want to belittle the seriousness of the issue, accusations. We have a president ial election in iceland as well and nobody has ever asked us about outside interference of any kind. We, however, survive as an independent sovereign state because respect for International Law has grown in the 20th century and the beginning of the 21st century. We need to hold ton on to that correct hold on to respect for International Law, International Treaties and we were talking about the paris agreement. And if im not mistaken, even a company like exxon mobil actually will encourage the u. S. Administration to maintain adherence to the paris agreement. So respect for International Law, respect for International Treaties and also like the president of finland mentioned, trust, and you were where the other player was in the cold war. But do you remember another remark of Ronald Reagan during the cold war years . It was a russian saying trust that we, the mall but we cannot possibly assist temperature and it a sim p symposium like this where we meet and discuss is all the better for us and therefore we a miss patriot. Thank you very much. The warmth come off you three and let me come back to this. You are and your security is ensured by nato and america is a key participant in this secretary of defense james mat is, he described as what he saw how is this helpful what are you referring to . O our. Its a quote from james mattis, the u. S. Defense secretary, as he took ups pgs. As an upgrading basesrussias, a technical of in. So this is not me making this up. Translator well, like we develop our defense and military capabilities on russian soil, which is the territory of Russian Federation and we assume that like any other countries, for example, the United States, which is our arctic neighbor divided by to have aole have our road military facilities and they develop their own, which is a sudden threat us. Becau because, you may and jove chaccing concerns in terms of global secure and stall on the periphery. It helps minimize the our response. And yet as. That was a corn arestone of providing strategic stability and once they withdrew they started we can to camp all the deal economic it can and the use the pmt and you know that piracy is rife and apart from this, we not on and the deal and triple your infrastructure i would say and our emergency mip sfich some services prehaventing possible oil spills and this in my irnally sensitive region of the world. And these infrastructures will our scientists and researchers that and it was will also help from infrastructure, its a complicated infrastructure, including the military and i believe it is the correct thing to do and id say that we are fully open and invite everybody to cooperate, including our American Partners. Unfortunately the shared military exercises that used to take place in the arctic have now stopped. Again, to get that cooperation, how do we get to that point, given the difficult relationship and the sanctions . Translator well, i know during my visit to finland last year president niinisto voiced finlands concern about the fact that russian war jets fly with transponders off over the baltic sea and these are devices that send signal to air controllers saying that a plane is flying, a military jet or some other jet and ive been promised to the finnish president that the Russian Federation would come up with a way to the fact that all the countries that have military equipment would have transspo transponders and turn them off. It turns out some steps should have been made to harmonize those signals. And we stated we were ready. We heard no, nato members will not do so and just ask them why they are reluctant. Their activity is much higher than ours, several times higher, multifold. Just look the number of russian jets and nato jets flying over the baltics is. And someone tries to accuse us of aggressive behavior afterwards. Its idle talk its just suitable for media only. Same refers to the, a technical region. Were n arctic region. Were not going to wage war or compete with the United States here. Everybody knows that the United States spends more on defense than all other countries of the world together, taken together, put together. Now they will increase their military spending once again by 40 or another 60 billion but still the Russian Federation and United States are Major Nuclear powers and were vested with special responsibility before the international and Global Community and the quicker we reestablish our military cooperation the better. And, by the way, with some sense at the issues, for example, syrian corporation despite external statements we have within having retangible kw cooperation improving and we can see our partners developing that interaction and hope it will encompass other regions of the globe including the arctic regions. Did you want to come in, president niinisto . First of all, i go to baltic sea airspace and transsponders. First of all, vladimir, i didnt say that only russians are flying without transponders. I said to you last time that there are planes flying without transponders. It is how i saw that question is its a minor step surely. One piece of globe, the baltic sea airspace, just question of transponders, technical equipment, but it might be a small step to build up counderstanding. And i thank you, vladimir, for supporting and pushing forward. I know that you have done a great job in russia in developing technically your place but i dont see that we have actually missed the case because i remember in a couple of months ago in security conference, both minister lavrov and the secretary, theyre very positive and now theres a group of experts, the International Organization that are studying the case and they have promised to take up also transponders in their discussion and that is a military question. So we havent lost the case but i think the most important, its a small step but if you can take a small step, that is an indication that you can make even a bigger step someday. And that is the whole idea. And i think to president putins point about the cooperation that is taking place in syria with forces very close to each other, it is clear there is operationally a requirement for both american and Russian Forces to talk to each other. President trump believes hes going to launch a new campaign against isis. He talks about wiping them off the face of the earth. Would this be something that you would, if mr. Trump, President Trump reaches out to you, is this something where you could find Common Ground and Work Together early on . Translator we definitely have the Common Ground, which is fighting National Terrorism and the fact that President Trump has this as himself firm goal is a right thing and we definitely support these efforts. When i spoke back in new york at the United Nations i said that only by joining hands we can combat terrorism efficiently. And its not about the location on our planet. Its a global issue. And the saudi king told me back in the past that the first victims are islam be states and it true and it on nats several years ago with it happening now and then and pow were having one of these up surges in terrorism and these are treasury developments and the United States and europe sufficient from and they all recall t the 9 11 and Russian Federation is target of attacks and if we at least try to use our forc forces if we try to struggle and to eliminate terrorism if we are guided by some political designs of ours and the fact that trump wants to have. O could i ask, is this something that will row flekt to plp kill areson when he goes o moscow . Abo about. And ive met him on two or three occasions by and you foe better than myself, however, that not have the without constructive work with our colleagues and tease agencies will nthis area of sovereignty and security by addressing russias claims in the, a technical. Because as we know, there are beyond 200 maroon meals temperatures it it a lowlevel discussion. How do we. Its very hard to set his fire tradeoffs are a m of f probably in 08 or in 2010 of a. After many years, weve been able to reach a limb tag and ive beenable to dlan and define the state board to the sat foobs and on oo left, my count are part, and himself country has what mall away pmt and we will not be guided by such ideas and concepts, is have and we assume that such beous will be and if we base on these presents will we be able to come to terms with denmark and others welfare reform. Of ry. Are you ready to be dissatisfied . No. But we live in a. We lef in a world of options and you do not get wa. And we have done well in the arctic region, within the Arctic Council. We have had satisfactory methods to resolve disputes. True we disagree, especially when it comes to meetings between russia andes landic be but if we approach the problem in a nonprovocative manner and respect the other opponents view and furthermore believe in we have discussed many things to do been stop by that shn p should concern us is. I dare to say decreased respect forrine federal budget wear us. If we lose the respect for o i dont see and we have done okay. When it comes to fishery ps. We have had sign tis on m these are the undeniable facts. And if we do not agree, if we do not agree on how to divide the catch, then both of us will lose. So in in spirit, i am confident that we frm so specific. Let move on and talk about how we see the arctic developing from here and im aware as i look out to the audience in this went u there pop involved in the, a it can counsel and there a large rpand has talked about its interest in. How do this f is it purely about putting in in i. Reporter wrchl we have the national so we come buy f but we believe the countries of the world have arrived to operate in this region. The question is who i to p but everybody already is here. P but apart frfrmt two even f the equipment spl sfchlt you can watch the continued live ro o prc prchl. She served as Deputy Assistant Russia Ukraine under president obama. A and. And he is prts oof prchl folks, you heard from president putin. At ff almost thos thanksgiving are fictional nn and the andy russia card is played by different fofrzs inside the United States and trade on that and consolidate their positions inside. Evelyn, do you believe that . No, first of all, he was quoting the wrong president. The read your lips quote was george h. W. Bush about taxes, not Ronald Reagan. Look, we have our entire Intelligence Community unanimously with high confidence, which is a big deal for them, high confidence, saying that Vladimir Putin in 2016 directed an Information Operation against the u. S. Elections and in order to reduce americans confidence in their democracy and in elections. So, you know, i believe our Intelligence Community, our intelligence experts, i dont believe president put be. Let me ask you also about what he described as common practices in terms of the communications and conversations and meetings that took place between americans, potentially mention in a were part of the Trump Administration in this case, and their russian counter pats there are members peld held by members of campaigns, Foreign Policy officials with foreigners, but they are not done very frequently. Certainly db done are on, given, a very onand russia, aside from attacking our elections, in and off itself, the mugs government when prutin talks about International Law and order. Theyve been invading their neighbors, annexing areas illegally. We know theyve been violating they violated the international is are. He talks about question racial but hes not talking inwhen comes to the information related to russias interference with our election . Ephs in but knowing and hearing that our Intelligence Community nchg understanding the relation siep between wikileaks and the russian government, i would even without having any inside information. Want to get fop relating to all this on none and kwn. When you saed related to getting this information out. The censure o. And if the trump fox, how they fond out how we knew about meth meaning we no who. In technical when you talked about if they fond f what ephs getting at was the fact a woorp having. And if endeed there was an zegs investigation on fwpg sfrmt i wand to make sure that congress knew about it about concern in washington about what was going o on with regard to mission actioning on New Hampshire because ephs afraid in a somehow there might be. Actually halem not enoughs was can x and said thats why you have all the leaking to make sure we get it out. People are accusing you, evelyn, of admitting that. There or urging people or at least saying that intelligent leaking, would be even. Reporter so i was referring to the pa fchg and i was trying to but in because this were afraid a cover hp up. I absolutely no hot can condition. Why pop might be vote vated to do that . Based on what was coming out of the press from the leaks and from official sources that newspapers were quoting people that my government probably has a pretty go f. Do you know the oat of or f so when you say youre concerned about information disappearing, did you actually know what sorts of information . Did no. knowing what i know about our Intelligence Community, they theyrenrmt that whaef information our administration was being passed not just to the hill where they havemer mission to have fallf if they said when we found out this you knew that was there surveillance going on. No, no, et considerate and people could get hurt if they were giving us information. And there want a great dal from a still it it. About what nam i look at what my sense is a there. In and the clinton cam pap. In that mapt. And they were really blind sided by the russia threat. Thank you for helping clear that up at least for now. I want to move on to the former treasury secretary, Larry Summers. In particular, do you believe him when he says there was no interference. There can be deference of what constitute interference but certainly as our kplj would i this it much more roar, as very troubling opinion now. In or the trump campaign, which remains to be investigated. And i think we all have to hope for an honest, thorough, bipartisan investigation. You think thats happening now . Foot to oo the. Who is hardly a fiery florida and he said this is the most important thing he was going to do in his public career and i hope that the senate will fill the space. This isnt what i do, evaluate investigations, make judgments about russians. This isnt where i have expertise, but as a citizen watching the house investigation, it felt neither objective nor professional. On both sides, though. Adam schiff is also aly bit hyperbolic. Senator burns as well they appear committed to doing well have see what happens. I dont i dont look, politicians use strong language, but i dont i think well be disupon honest and disingeneral ubs even by the standard of your rightwing advocacy, joe, to somehow suggest that congressman schiffs sins, whatever they are and i think theyre small, are remotely connell prabl to what the house of the intelligence chairman has made repeatedly. He seems more interested in the process hes very interested in the substance dpsh. They dont know what the substance is yet. When they have been universally acknowledged and apologized for, egej it is to be expected that there lab desir to discuss those process issues to make sure those kinds of process errors are not repeated. But we would agree. Youd like to know the information of course we would like to know. No, the process its a process is an extraordinary process failure that would make anybody suspicion he wasnt meeting a white house official. Came from that source. And trey groudy said i dont care if you got this from the white house or the waffle house, im interested in the content, not process. Thats exact the kind of means justifies the end that was behind watergate. In many of the entirely secure facilities maintained on an apolitical basis in washington. Look, joe, ive been in government. I dont think you have. No, no. There are a variety of norms and expectations in dealing with classified information and sensitive matters about how one basis to isolate politics. You should have helped hillary with that. We have seen examples you should have talked to her about that. Where those things have been violated. Im not talking about means of communication. Im talking about investigations of sensitive questions which are done carefully with extensive lawyering with a view to protecting everyones rights. Not with a view to getting on television as rapidly as possible and currying political favor. We need to thank can we please get back to the economy in. I want to thank you for joining us for your perspective and your candor in discussing some of those issues because i hope that helped to clear stuff up. I want to turn back to larry for a moment and ask you about the economy, but in relation to this which is to say so much of where the markets are or where they may be going has been about what the Trump Administration may or may not be able to do and accomplish. And to the extent that this is a cloud or not offver that, that me is a central question right now. Theres a variety of cloud, the failure with the united house, senate, president of one party to be able to pass legislation with the filibuster avoidable and the house of representatives where Party Discipline is generally strongest, the failure of the party with universal control to be able to pass legislation embodying what its seicentral political priority has been for seven years, that is a stunning Political Development which i cant think of Something Like that which has to call into question their ability to carry through on any other part of their agenda and the fact that you see them having announced on friday that theyre out of health care and then discussing going back to health care, the fact that you see the president talking about cooperating with the democrats and the chairman of the house saying thats not going to happen and its a bad idea and the fact that you have a dilemma around planned parenthood coming up, which is hardly the most consequential issue facing the nation which could shut down the government because the House Republicans wont pass a bill that doesnt cut it off and the senate wouldnt pass a bill that passes it so were at risk of a government shutdown, i think theres a huge set of leadership issues around the president s ability to lead in the way president s do that goes comes before and is separate from whatever addon russian investigations and thats not my field. What about the idea of a selffulfilling prophecy, meaning people felt better and therefore they bought more. Its hard to believe that any of what i just described is good and its hard to believe that adding the russian overlay doesnt make it worse. Ive been worried for some time. Ive said it on your show that we may be seeing a kind of sugar high and that sugar highs tend to be followed by much less happy periods. Sugar high in the market or are in the economy . Well, it isnt clear that were going to get a sugar high beyond the market because you have seen for some time highly optimistic sentiment. The gdp figures for the First Quarter, most people dont think theyre going to be very good. On the other hand theres something screwed up because the First Quarters always week so i dont knowite know quite what to make of that but if you use the standard of what the administration has held out hope for, there is nothing in any data suggesting that were moving toward that 3 to 4 growth standard. When you hear optimism at 16year highs and ceo jamie diamond talking about a real pick up in business and you factor in the idea that a demand for credit usually comes about nine months after you see these readings hit highs, which means there could be demand in the pipeline, you think theres a sugar high, that this wont be born out by real activity . Thats why i said the market was up, there have been real movements in sentiment. I think the evidence is that sentiment is often not always a signal of whats going to happen and it depends on how long that sentiment persists. My sense would be that if you continue to have the degree of division, confusion, rancor and uncertainty in washington that weve seen, we may not see those sentiment changes lasting as long as many people thought they would a couple months ago. So i think well have to watch the data going forward. But just as this is the most famous joke on wall street that stock market and the sentiment have predicted ten of the last five recessions. Something like thats true on the up side as well. So i would be cautious about any big revision to the up side in forecasts and if you look at forecasts if you have look at most hard core economic forecasters, they differ in whats going to happen but very few of them are predicting some big break to the up side. In part because i think they think the fed is sort of controlling the thermostat here and if we get more of that boomy stuff, were going to get higher Interest Rates and if we get less of that boomy stuff, were going to get lower Interest Rates so i dont think theres room for a big rally. In terms of boomy stuff, dont you think President Trump is going to put a win quickly on the board and that would come in the form of tax cuts, in terms of Corporate Tax cuts separated from Everything Else and do it so theres something there . Its possible. And then the question will be without doing them in a balanced budget way, will he be able to pass them . How much pressure there will be for reform along the way, how far hell be able to reduce the Corporate Tax rate. I think if i had to bet, id bet that we id bet with moderate confidence that we will not see a Corporate Tax cut before the end of the summer. And i think theres a real risk that there wont be any change any big change in tax policy that will take effect for the 2017 tax year and that was i think a surprise relative to what people expected a couple months agriculture and i think its going to have to be a bit of a disappointment. We want to slip in a quick break and continue this conferring with Larry Summers when we return. Plus this mornings big Economic Data including 2 quarter gdb revir gdp revised higher. Ba squawk box is back in a moment. fans cheering because when you really, really want to be there. But you cant. cheering at cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready. Because were helping leading Companies Lead with digital. Welcome back to squawk box. Our special guest former treasury secretary larry summer. And steve leaseman iesman is alt with us. The deregulatory moves that have already been made have already born fruit and will continue to do so, does that factor into the sentiment . Of course it does. I have spoken often of the importance of animal spirits. I said many times that stimulus is the cheapest form of confidence. How much those regulatory changes are going to go into effect and how large theyre going to be i thinks open to question. A very powerful story in todays times making a point that in coal its not regulation at all. The no, the new york times. It could be the financial times. Youre very selective in what you read, joe. It turns out the main reason coal has gone down is natural gas is cheaper and you dont need guys with shovel anymore, there are different technolo technologies. So the idea thats going to bring back a lot of coal jobs is basically nonsense. And i think it isnt clear that there really is a thoughtful change regulation strategy that will create jobs. The look of things right now is that relative to what many people in the industry thought a couple months ago, doddfrank reform looks to be something thats going to take place much more slowly. So i dont know how much this is going to produce increased employment but, yeah, i think its good to be encouraging Business Confidence but not to be encouraging Business Confidence at any price in terms of the environment, at any price in terms of Financial Stability and part of what i have to say is very troubling about this administration is its not so much as the questions of ideology, though theyre obviously big issues there but just the questions of competence and thoughtfulness. I watched the reagan administration, the two bush administrations, they did many things that i would not have agreed with but their officials explained them in rational terms with serious arguments. Whats disappointing about this administration so far is its all policy by tweet, policy from the gut and with profound questions of conflict of interest, the idea that carl icahn should have Major Investments in the refinery sector and at the say time have major input quasi input in regulatory policy, that kind of thing should make one very, very cautious. I think that we did need a period of regulatory adjustment after the last eight years but we needed a carefully considered and thoughtful period of regulatory adjustment. Im wondering if we could pivot to the fed. Its where you always want to pivot to, steve. The feds seem ton using the rise in the market as the kof to oo. Look, i think watching the data and be responsive to the daetia data is right. I think the risks of overheating are substantially overrated, that was fighting a war of a much different kind and deflationary era and a domestic target means one should be accepting one risk of inflation a little above 2 . So my general concerns about the fed policy would come from the dovish side rather than from the behind the curve side. I think its hard to get excited about given how slow the increase in rates have been so far, but i think there is some risk that the fed will overplay its hand and that well see a situation where we raise rates into the des paegs of the sugar high and tip the economy too far downward and if we do that, were going to be in a very difficult situation because the fed has le room to move than it has going into any previous slowdown since 1950. And that is a substantial bid bit of brittleness that we have in the economy. I dont think the fed has recognized that. I think Janet Yellens speech in august claiming that the fed had plenty room to move mead it, frankly, implausible arguments. So that would be where my concern would be but the carefully telegraphed, very dovish 25 basis point increase in rates, i dont know whether i would have held about a raet increase on a day when the tenyear index bond yield fall, if there is such an feng this evening as an, opinions right when you see them a couple Percentage Points away from record highs, does this concern you or give you hope how do you view that, as the Glass Half Full or half empty . And as a former treasury secretary, did you ever view the stock market as any sort of report card on the policies of the administration or how you were doing your job . No, becky, very early on in the Clinton Administration when people in the white house would get very, very excited about what was happening in the stock market, bob rubin, who had watched markets for a long time would say to them markets go up, markets go down and weve got to stay focused on the fundamentals. I think if you look at the best ceos, the best ceos and best companies and living for their days best stock price. As tresh i didnt secretary, i always tried to stay away rewarding some pao i think if you manage to the thats a trap that can be very dangerous and thats yet another concern with an administration that is that has its employees it has its leaders be so much selected from one walk of American Life that theres going to be a tendency to overjudge things on the basis of whats happening in markets. President clinton never, you know, we had the during the eight clinton years, markets went up faster than virtually during any other presidency. There were plenty of milestones when the markets coulded 8,000 and 9,000 and those were never things the president went out of his way to celebrate because we wreck important and im disappointed thats not something that the current team seems to recognize. By the way, larry, you gave me one of the highest compliments you can give a female anchor by calling me becky. Excuse me. No problem. I had to get that out there. In the meantime to the new york stock exchange. Lets get down to the were going to wait for jim. Well continue on with were not going to the break. I dont know. I would take a business guy thats actually made decisions in the Business World over just a career politician any day. I mean, i dont know if the day will come back when you come back and have to revise a lot of the youll be ready to and youll be with us a year from now or two years from now. It will well know by then whos right, whos wrong about whether think of these things were kept, but it will be interesting. It will be interesting to see what happens, joe. But id be surprised if you really wanted to be defending the way in which these arguments have been these arguments have been made. The use of data or lack of use of data. The elementary dissent into high fallacy thats behind the statements of key officials that trade deficits are bad because every dollar of trade deficit reduces gdp when any economist knows that its much better to live in a country that capital is trying to get into. And you cant have capital on net invested in your country without running a trade deficit. These kinds of things coming from the secretary of commerce have to undermine confidence that policy is being managed in a sense the guys that sit with the cabinet, sit with the president , the jack welchs, the allstar ceos that are in the room carefully selected whatever. They come out universally and talk about, wow, im glad wilbur ross is commerce secretary, tillerson will make a great secretary, jamie dimon is there to tell me about dodd frank. Trump is asking questions. Time will tell. But someone with some private sector experience versus 8 government appointees of the last eight years i dont see how we can do any worse. Joe, joe, i think you have to make a judgment and is it more important that the president of the United States be winning the approval of the ceos of the fortune 500 which were the first which in the first two months of his administration he did or more important he be winning the approval of the American People which hes not odoi doing which hes not doing as president he did that in you have to get over. He did that on november 8th. To an unprecedented degree. Hes our president. Im rooting for him to succeed. Come on. Come on. I am. Really . Very important for the economy to succeed. One of the comments you made recently on our set, post election, was the expectation that the peso would drop. Do you remember we had a long conversation about the discount of how it would become more attractive to do business for example in mexico because there would be a discount, right . And the peso has risen remarkably so. No, lets be fair. What i said was that the peso had dropped and that was a serious issue. If you read todays papers, youll see that the Trump Administration has backed way off Donald Trumps claims as to what he was going to do in terms of revising nafta. And has backed off to a very minimal set of adjustments to the peso. So to nafta and its in response to the Trump Administrations backing off the very dangerous policies that i was criticizing that the peso has risen. Thats really a confirmation of what i was saying. I will take that to the bank. Im glad you clarified that so thank you. Cramer, are we yes. Lets get down to jim cramer. He joins us now. I dont know if i need to ask you anything, jim. First lets say hi to larry. I miss him. I miss him from the academic days. Good to see you, jim. Thank you. Thank you. I love that peso discussion just now. Its true. The nafta backoff was rather shocking. Like on page 18 of the papers and larry, this is a reason to think that the peso can continue to climb. Well see, well see. There was no reason why the peso needed to collapse except for their extremist rhetoric. They are backing off their extremist rhetoric if once its recognized that theyre backing off the extremist rhetoric, they stay with that policy. I suspect the peso may continue to climb and that will be good for the american economy. Good for the competitiveness of north america. But lets not confuse retreat from your Campaign Promises that were dangerous with successful economic leadership. Are you as negative about the prospects for the type of economy that the Trump Administration is going to be able to manage as larry . You heard the comments. I know, im less negative than larry. And i a lot has to do with the people you mentioned, joe, that i do have confidence in. Wherever they were, whatever walk of life. Its still up in the air. So far, so good, deregulation. Not so good working with congress. All right. Let me say, jim, things may work out but they may work out like theyre giving evidence of working out with the peso. They may see the light and back off the policy by tweet. Back off the crazy Campaign Promises. And if so, things may work out well. So the question isnt how things are going to work out. That is obviously what we all care most about. But it may well be that things work out better precisely because policy moves back towards the mainstream. But i dont think we have any evidence that the original trump ideas are have anything sound about them. Okay. Thanks, jim. We will see you at the top of the hour. Stay tuned. Youre watching squawk box on cnbc. Its great to finally meet you. Your parents have been talking about you for years. Theyre all about me saving for a house, or starting a college fund for my son. Actually, i want to know what youre thinking. Knowing that the most important goals are yours. Its how edward jones makes sense of investing. Various shouting heigh ho its off to work we go woman on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. And each job created by the Energy Industry supports two others in the community. Altogether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energy lives here. We want to thank our very special guest host, Larry Summers and also we had president putin on. Pretty incredible. Great to see you as always, thank you for giving hip a hain time. Melissa, thank you. Squawk on the street starts right now. Good morning, welcome to squawk on the street. Im david faber with jim cramer. Were live from the new york stock exchange. Carl quintanilla is still off. You can see where we stand and of course european markets have been opened for quite some time. Not getting into italy or spain anymore. And spain in major comeback mode. Ital t