Transcripts For CNBC Squawk Box 20170331

Drop 20 i said take all the gray out, this is what happened. High and tight. Certainly cheat the wind if you go out on a motorcycle. Man, no drag whatsoever. How come you didnt mention this until we went on air. No jacket, youre happy with that at least. Im happy with that. The whole look is clean today. Good. Good. You didnt answer my question, are you ready for baseball sunday night . Have you focussed on im focused on saturday night. Basketball . Yeah. Is it saturday or friday . Its saturday, isnt it. Not tonight. Saturday, both games. Yeah. I still have North Carolina. Good. Then im hoping South Carolina beats gonzaga, so all the people who have gonzaga do not win the bracket. Then its a North Carolina and South Carolina so youre rooting for yourself and against everybody else. In life and in the brackets, yes. It is the last trading day of the quarter. Right now it looks like the futures are indicating a lower open. Dow futures down by 41 points. S p 500 is off by five. Nasdaq down by 11. Overnight, in asia. Youll see that the nikkei was down by 0. 8 . So was the hang seng. Shanghai was higher, up about 0. 4 . In the early trading, in europe this morning, you will see right now things are a little bit weaker. Though the dax is flat. The cac is off by a quarter percent. The ftse off by a half percent. The tenyear yield, which was below was above 2. 4 yesterday, closed at 2. 418 this morning. Sitting at 2. 25 . Crude oil prices yesterday were up, today down about 16 points. Still above 50, 50. 19. Personal income and spending numbers are out at 8 30 a. M. Eastern. Followed by march chicago pmi at 9 45. The final read on march Consumer Sentiment at 10 00 a. M. Also, you know, i was going to talk about baseball for a second. I said i should do these important stories. And then im reading them, its like oo like i can talk just for a second. Im from cincinnati. Thats why you dont want to talk. They need to show me theyre competitive. Im hopeful. Yyou sound like a fair weathered fan. Theyre still my team. Who are you . Im a yankees fan, but i dont root against the mets, and this looks like it could be the mets season. I like sicindesyndergaard. He put on a lot of weight. Looks like thor. How about you . Im a mets guy. I would be a mets guy, however theyre a team i dont like but im a reds fan. Most people dont like excellence. Dont like what . Excellence. Jealous . When its bought and paid for. Instead of developed. Used to be. Im still mad at the way it happened in the 70s. We still killed you in 76. Yes, you did. But that led to a what am i living on . 40 years . Fumes. 41 years ago. Fed guys are talking today. Hold the presses. Neel kashkari is going to say something. Then st. Louis fed president James Bullard will say something. Thats why i didnt think i needed necessarily to rush into this without the baseball talk. And then last night you probably already know this, how you could miss it, new york fed president William Dudley say Interest Rate hikes are appropriate to reduce the risks of overheating. He also argued that even after the hike earlier this month, the federal funds rate remains inushi unusually low. Dudley believes fiscal policy is likely to become more stimulative, but said there is consideribility uncertainty for those policies and their potential contribution to the economy. Man, are you selling it. You are selling it. I did say anything at all . You left out the ecb. If you want to go there. I dont think so. Lets go to washington. President trump is expected to sign two executive orders today aimed at trade. One calls for a study of past trade agreements looking at whether they delivered on promised benefits. The second order designed to improve the collection of penalties for other countries illegally dumping goods. Yesterday wilbur ross told cnbc that the Trump Administration wants to formally start the nafta renegotiation grags pproc before Congress Goes into the april recess. Secretary ross will join us this morning at 7 00 a. M. Eastern. The president also tweeted this china meeting will be tough. It will be tough and we can no longer just sit there and be flooded with cheap goods if it hurts. If it hurts the jobs picture. Foreshadowing like that. I dont think he did that with germany, even when he handed them a bill for what they owe for nate to. Nato. Will be a difficult conversation, and it will be largely be about north korea. Im glad tomorrow is april fools. A lot of times you forget, someone comes in, does something, you are not thinking about it, you fall for t or you see, like, a newspaper or something, it is like, totally fake news. But i see it every day in the New York Times and Washington Post any way. How will i know the difference between an april 1st fake news and just what they put out every day . You know what i hate about the fake news story, it erodes confidence in every institution we have. The idea that we dont believe anything anybody says. If we dont like something somebody says, you call it fake news. Thats what bothers me about the fake news scenario. I used it the other day and was joking around about it, the more i think about it, it drives me crazy. Dont call anything cnbc does fake news. But it erodes our faith in institutions, in congress, in the presidency, in the media. And we all just decide to believe the facts we believe. The main team media erodes our faith in their institutions from there have been problems and there are things that are right to be called out. But other issues where if you dont like it at this point, people call it fake news. That draives me crazy. Ive been seeing fake news for a while. I agree that there have been things that have been its the placement on the front page. The idea that theyre objective is crazy. There is no objectivity. But some are worse than others. And there are some stories where people have ignored the reporters have ignored the facts and set that up. That needs to be driven out. I digress. Was my fault. Mike flynn has told the Senate Intelligence committity he is willing to be interviewed about trussia. The house and Senate Intelligence committee are investigating russia, and they could subpoena him, but he would not be forced to say something. The journlt sajournal says for immunity, but in the letter itself theres no request for that. When they interviewed the lawyer, the lawyer said he would be crazy not to get some type of assurance. Its asking for immunity. It is. He even said on meet the press, when people ask for immunity, youve done something wrong, youre right. Ive seen the carter hayes interview yesterday, you dont know whether to if you take it at face value, saying did you do this . Absolutely not. Absolutely not. Absolutely not. I dont know whether flynn will say that, yeah, i was i was doing this because the i was my assignment was to court the russians to get them to hurt my reaction is there is more thunder here than you will see in the actual testimony. Either way, it would be surprising. Politics is so dirty. You think about what the democrats were doing with the dnc. All it did was shine a light on a bunch of dirty stuff they do. Would it be totally ridiculous for an administration to say, hey, theyre helping us . I dont know. I dont know. Both sides are so dirty. His lawyer says he has a story to tell. Thats what makes people think, oh the question becomes, from the market perspective, how long does in drag out . Think if the democrats knew that there was remember that ridiculous dossier about the crazy stuff that went on over there, thats been sort of thrown out by that british think if the democrats got ahold of that. You dont think they would ask the russians to get that out . To hurt trump . Until all of this comes out, the information youre getting, which you identify as fake news, is nothing more than just a continual editorial, whether its social media or wherever it may be, youre just getting editorials. Twitter is causing fake news. All you need remember the cuba gooding thing, nobody would have written about that. Cuba gooding jr. Was playing around with one of his ill never do that. We go way back. I might screw around or something. I wouldnt be dehumanizing a woman, just busting your chops. People see cuba gooding doing that. They tweet about it. The Mainstream Media is watching what people tweet about and write about it as if its relevant or true. Social media has not improved the journalism process. You dont think its increasing productivity in this country . Not at all. Youre right, the real issue is what this means for the markets. How long is it going to take . I dont think anyone identified this. Phil orlando is here, too. This is our issue of the day, what next with the markets . The russia stuff, all that is just a distraction. What i prefer do is focus back on the economy, the potential implementation oftrumponomics, all this other stuff is a side show which takes our focus away. Assuming it doesnt bring down a president if its all true. That would be a problem, your trumponomics wont work if its pencenomics. It would be huge if it were true and we see resignations. At that point, thats not the case. Its the last day of the quarter. Yeah. We matched march come in like a huge bull. We did great. Came in like a bull, had this sort of wave of pessimism that came in. The healthcare bill not getting passed, wondering whether the rest of the administration could get the tax plan through. Where do we stand now . Thats the issue. As disappointed as we were with the way the whole healthcare debacle played out, we dont think thats the whole death nail for the execution of trumponomics. They screwed up. We would not have prioritized healthcare first. We would have built up positive momentum first, and then gotten to a more contentious issue like healthcare that was going to be uglier, later in the cycle as we got some positive momentum. One of those things being infrastructure in. Infrastructure in our mind is at the top of the list. Getting tax reform, repatriation and infrastructure done earlier, we felt had more bipar san suppo bipartisan support. Do you feel we still have the policy put and what is the next catalyst . Do we look to the emerging markets and europe which are performing well, and now Money Managers saying we dont want to be in the u. S. , we want to go outside the u. S. For investment opportunities. We still like whats going on domestically. The next thing is well start earnings season in about a week. Right. The earnings recession is over. We had seven consecutive bad quarters year over year. A good quarter in the third quarter, a good quarter in the fourth. This quarter we think will be up 9 , 10 year over year. I dont think the street is focusing on the fact that things have gotten better. Part of that is that the Energy Market troughed. We dont see crude prices back into the mid 20s. We do think well start to get some better positive momentum going in the economy. If we can get some trumponomics things in place over the course of the year, we think that trend accelerates. Where do you focus. If you are telling people to invest money, where should they put it . Weve had this negative rotation the last month or so. Given the improvement weve seen coming out of the election the first two months of the year, we tell clients we could reasonably expect a 2 to 4 correction into the march april time frame. We had that. We came back about 3. 5 . If you were waiting to put money in, you missed it we started adding into that. What weve done, because a lot of economically sensitive names got hit in march, thats where were focused here. Energy, financial services, those are two areas that we think are attractive. All right. Phil, thank you very much for joining us. Thank you. Good to see you. Coming up, all day long on cnbc were taking a closer look at President Trumps plan to rebuild americas infrastructure. Up next, former pennsylvania governor ed rendell tells us why the plan should be fast tracked. Hes the cochair of a Bipartisan Group encouraging investment in roads, rails, bridges and more. He looks really good there. Great shot. Thats what he looks like, though. Squawk box will be right back. With e trades powerful trading tools, right at your fingertips, you have access to indepth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade. Start trading today at etrade. Com i provide for my family. I will use my education to help my community. I will inspire our next generation of leaders. I am a college student, but i am only 1 . Only 1 of College Students are american indian. Donate now, and help our numbers grow. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Welcome back. All day here on cnbc, were looking at rebuilding america. President trump promising 1 trillion dedicated to Infrastructure Spending. Ylan. Mui has more. The trillion dollar plan is still taking shape but three Big Questions are framing the discussion. The first one is figuring out what counts as infrastructure. Transportation secretary elaine chao has said the president s package would not just include roads and bridges, theres energy, water, and broadband and veterans hospitals. The secretary is in canada today to learn about how it privatized its air Traffic Control system. The second big issue is regulations. Cgla estimated it takes 9. 5 years to move an Infrastructure Project from start to finish. Congress tried to streamline this process in a law passed over a year ago, businesses say provisions have not been fully implemented. The big roadblock to the plan is how to pay for it it. On the campaign trail President Trump proposed tax credits, and secreta secretary elaine chao said there is a place for public and private partnerships. Every time we talk about this, we say this issue has bipartisan support. Thats probably nuanced when you try to find both sides and where they agree and disagree. You get a sense this is Something Congress will come together for . We talked to peter defazio, the congressman and Ranking Member of the house transportation committee. He told us that he is willing to work with the president , but he needs to see federal dollars behind this program. They are not willing to leave this all to private investment. Theyre worried that could leave Rural Communities behind and that projects that dont turn a profit wont get funded. I know you said you will answer to anything. Were still working on thepronu. Ylan mui. One syllable. My spanish is like mui bueno. I never this was our argument before you came on. You just need to say cervesa. Thats right. Or uno mas cervesa. [ speaking pspanish ] thats welcome parking lot. Okay, mui. Mui. Mui . Mui. Mui. That sounds like two. Ylan mui, am i saying it correctly . You got it. Ha. Thanks. Rendell is easy. Our next guest says the president s infrastructure plan should be fast tracked as a priority. I cant believe that, that a democrat would say anything that trump wants to do should be fast tracked as a priority. Hes been out of office for a while. I dont know. Youre on the wrong page, ed. Youll get yelled out for saying that. That is an old democratic thing, too. Ed rendell former governor of pennsylvania, now cochair of building americas future a Bipartisan Coalition seeking to improve infrastructure. Saun s well have ron klain on, he says this is not an infrastructure plan trump has, he says this is like a tax plan or a he disparages it. You want to do infrastructure. Do you want to do it the trump way or do you have a different way you want to do it or at least have a seat at the table. When we say we need to repair the american infrastructure, its more than bridges, roads and highways, it is our electrical grid, water systems, our wastewater systems. So the president is dead right about that. Secondly, the president is correct that even though fast track had some things in it to speed up the regulatory process, its not good enough. We can do better. We should do better. I think democrats basically agree with the president on those two points. The third point is how to fund it. The president is also right theres a place for private dollars. Private dollars can be invested into good, big projects whereas you know the private sector wants a decent rate of return. Lets take one example. We have 55,000 structurally deficient bridges in america. 55,000 that are potential tragedies just waiting to happen. That hinder our economic competitiveness. Now, probably no more than 500 of those bridges could be told to produce the return on investment the private sector needs. The other 54,000 plus have to be done with government dollars. It doesnt have to be all federal dollars. 19 states raised their gas tax to do roads and bridges, but they need help from the federal government. So, mr. Defazio is right when he says that we need federal dollars behind this. Theres twoways to do it. One, raise the gas tax, which we ought to do, it hasnt been raised since 1994. Its worth about twothirds of what it did in 1994 because of inflation. But theres probably not votes in congress for it. I ask americans when i go out and speak on this issue, anybody know what the federal gas tax is per gallon . No one in the audience knows. No one knows. So its fairly easy to raise. Assuming theyre not going to do that, we have to use some of these repatriation dollars to fund the federal share of the infrastructure plan. Thats a good idea. It will put the repatriation dollars to use. Not such a good idea because when this next phase is over, those dollars disappear, we still need to Fund Infrastructure revitalization. So there is Common Ground to be reached. Democrats are serious about infrastructure. Best of all, both sides talk about highwage jobs. Infrastructure and the factories that produce the steel, construction sites, the worker theres, make 60,000, 70,000, 0,000,70,000, 80,000, 90,000 a year. Thats tough. Tough to do. With the gasoline tax, in the past you have it, its supposed to be for this, it goes for Something Else. Is there a way you would be totally confident that you can write the legislation so that it would go exactly what it was designed to do . Thats always the problem. Sure, you put a provision in there that the Highway Trust Fund cannot be used for anything other than the repair of roads, bridges, highways. Cannot be used period. So if Congress Tries to use it for Something Else, any taxpayer can bring a lawsuit against it saying it violates provisions of the bill. There are angss answers to do. The question is is there congressional will. We better do it and do it fast. Are democrats that wont even use the word president in terms of trump. Seriously. You say it, and im not kidding. Youre not in office now. Its such a bizarre environment that were in right now. Would you go for gorsuch . We have manchin yesterday and mccaskill saying some things. Up or down or gorsuch . What would you do . I have not paid enough attention to the hearings to know. Weve all paid attention. Come on. Easy answer for you. Hes qualified. Thats a yes. Sotomayor was qualified, she got some republican votes. Look, the answer is the answer is are you still mad about Merrick Garland . Yeah. You are. But i dont think you can punish gorsuch for that. What the republicans did was unconscionable and unprecedented. They were just following the biden rule. Doesnt matter, two wrongs dont make a right. I think obviously judge gorsuch deserves a vote, deserves a hearing. There are some things in that hearing that are disquieting, but on the other hand hes a bright man, lil r shg, literalt great economic background. People will focus on infrastructure when American Safety and the American Economy is at stake. If the president comes up with a good plan, work to modify it the way you think it should be modified but we need to do something about infrastructure now, not later. Now. All right. Youre one of the good ones, ed. I believe that, governor. Thank you. Thanks for being out here. Have a great day. You, too. When we return, our rebuilding America Special coverage continues with a look at the stocks that could benefit from President Trumps infrastructure plan. The s p construction and engineering index is up more than 18 since the november election. As we head to a break, look at yesterdays s p 500s winners and losers. 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. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. 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. Youre watching squawk box live from the Nasdaq Market site in times square. Good morning. Welcome back. This is squawk box on cnbc. Lets look at the u. S. Equity futures. Looks like right now things are under a bit of pressure. Dow futures down by 41. S s p down by 4. Nasdaq off by 10. Boeing awarded a 2 2. 2 billion pentagon contract for 17 maritime aircraft. 11 planes are for the u. S. Navy and two for foreign sales. Jo johnson and johnson says its sale of actelion will go ahead in the second quarter. The r d unit will be spun off as a swiss group. And eog efforts rose to profitability, every time oil prices go up. Spigots are turned back on, that brings the Oil Prices Back down with increased supply. Rebuilding america. Talking about it today, but lets do it stock by stock. Joining us is anne dygden, a member of a superior genetic background, a ginger with red hair, like my kids. And my mother. Yeah. Exactly. So, listen carefully, shell probably be right. Can you subdivide the different infrastructure plays for us to start out with . Theres bridges, theres theres a lot of different infrastructure, and actually right now theres no agreement in congress around the definition of infrastructure. You look at things like bo broadband, thats generally under the purview of the usda, getting that out to america. We have to first define what is infrastructure. Can you subdivide it into three or four things . The biggest part is roads and bridges. Roads and bridges. That is the biggest. Recently the American Society of Civil Engineers did raise the point that were about a trillion dollars in deficit in investment in roads and bridges. Just that part. Just that part alone. Theres definitely the need out there for an infrastructure bill, a need for increased spending. I think the whole issue will come around to how do we do it . Where do we get the money . How do we allocate it . Who is responsible for . Is it ppps, federal money. If you look at the current administrations budget, theyre proposing a 13 cut to the department of transportation and theoretically they would be the ones doing the spending. They would be doing the spending but, you know, we can do it without blowing all the money on the people that are deciding what to do the spending on chltsd i wou on. I would rather spent the money on the roads, bridges than the layers of bureaucracy that decide what to do. I think thats a great point. If you look at states themselves today, 20 states have increased their own fuel taxes in order to do it themselves. Yeah. If you look at private nonresidential construction, were already 44 above last cycles peak. So were doing it on our own. We dont need the federal government involved. Lets say becky talks to buffett, he decides to throw some money into this who would make money with roads and infrastructure . Cement companies . You begin with aggregates. Like who . If you look at my sector, i cover machinery. Probably the most obvious name would be caterpillar. If you look at the stock price, thats already reflected in the stock price. Were neutral caterpillar. The price target is 89. If they pulled back, we would get more constructive. They are the biggest player in machinery, they will benefit from activity out there. Who is alison . Alison transmission is indirect. They make automatic transmissions for things like cement mixers, Waste Disposal trucks. No kidding. Theyre the only ones that do it. They have a great niche position. How long have they been automatic . I used to learn how to drive a truck back in the old days. You do not want to be grinding gears. Some have 10, 11 gears. 18 gears. One for each wheel. 18wheeler. Thats weird. Okay. What was the other one i saw up there . One we would avoid now is manatowac. The stock almost doubled after the election. So we think more of the upside is already baked in. It makes cranes. They might benefit, but theres a Company Whose sales peaked at 4 billion back at peak of the cycle. As far as other areas of sfrux th infrastructure that we talk about, do you cover those . Im just the machinery expert. And agriculture. But we would avoid the agriculture names also like deere. If you look at all the sects that would be negatively impacted by the current administration, its agriculture. If you look at the strong dollar policy, any trade disagreements, the mexican peso and its devaluation, they are the third large effort st importer of agrl food items, immigration policy, go down the list, its negative for agriculture. Just look at the budget. They just cut the 2kdepartment agriculture budget by 20 . Yeah. Or proposed to. Everyone keeps talking about utilizing a fuel tax. Ilize a fu lot of the names you mention i wonder how priced in it is. When you look at the Energy Infrastructure, there has to be a return on investment. Lets set up an Energy Infrastructure bank. You have 60 of the land mass, marcellus shale, lets go after Energy Infrastructure here. Get a return on our investment. Look at natural gas. Were now exporting 30 more natural gas to mexico. So i would say the real opportunity in this infrastructure potential bill would be in the pipelines, the dwevelop developmentes. Flow serve is a name directly correlated to pipelines. And were utilizing the greatest asset this country has, besides technology, which is oil. On the global stage its all about oil, especially at this point. Thats not where the shortfall is the Oil Infrastructure has been taken has been build out by the private sector already. How will that help with the 55,000 bridges ready to fall down . I disagree with you on that. There has been a private sector incentive to invest in Energy Infrastructure in the last eight years . Just the last three months were talking about it. Why have we doubled production in the last three years . Were transporting energy on railcars. Is not the frukinfrastructur short fall were worried about. Youre basing it on where we will make the most money if we do it. We have things that are lacking, right . Im not thinking about whats happened in the boom in ill oi production and shale and natural gas that doesnt seem to be where the government needs to step in and grease the whooel. Wheel. I dont think enough states would benefit, thats where you have the problem. Who makes concrete or cement . Anyone here . Aggregates companies. We wont buy from symex, would we . Thats not a u. S. Company. Thats all we need to start to do. Theyll haul it for you. Allison transmission makes the engines in the concrete mixers, so theres a derivative play for you. So we need to turn someone else in your office to talk about the aggregates. Yes. Can you call them . When i get back to the office. But you cant call them now . No. Thank you. We had manitowoc as a pick, but its not a pick, its a pan. Yes. Great. When we return, an interview with wilbur ross, he will explain the president s orders on trade. And ceos speak about the president s commitment to rebuild the infrastructure. Mark sutton will join us in the next hour. And at 8 00 a. M. , doug parker tells us why he thinks its crucial to rebuild the air Traffic Control system. Stay tuned, you are watching squawk box on cnbc. 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 . bell chimes nice work brother dominic. Now we just need 500 more. Translated into 35 languages, personalized oh and shared across the 7 continents. other languages spoken look abbot, i got it. Its a miracle. Welcome back. U. S. Equity futures at this hour have been under a bit of pressure. Right now dow futures still down by 46 points. S p looks like it would hope down by 5 points. Nasdaq looks like it would open down by 1 1 1 2. Th look at crude oil prices. Wti falling back to just above 50 a barrel. Down 29 cents this morning to 50. 05. And it is time now for the executive edge. Some global stories that are on the radar this morning. The European Union is setting out its Draft Guidelines for brexit talks with the uk. Donald tusk said that the task would be difficult and confrontational, but he promises that the eu will not take an unnecessarily punitive approach. There was one important olive branch for the uk, a discussion on a fresh future trade deal could take place before the end of the twoyear period. Only provided that sufficient progress has taken place on the separate divorce terms before then which will be for the eu to decide. The Draft Guidelines will be formalized on the 29th of april at the eu summit. Yesterday for a while on drudge, the lead was did you see that the efshgsu guy said, all right brex President Trump came over here and said brexit is a good thing. Well try to break up the United States. Jeanclaude juncker taking aim at president saying if i continue to voice support for countries that leave the eu, juncker would n his words, promote the independence of ohio and austin, texas. You wonder why you do it to us, we do it to you. You wonder why theyre lost over there a little bit. It wasnt a funny joke . Was it a joke . It was supposed to be a joke. Yeah. You didnt find it funny . I i find it funny if its california might leave. California might leave. I dont know. No. I guess its sort of funny. I just sort of have had that view, i dont know how i i didnt i had it years ago that this is a jusystem that is you would have a centralized finance center, and it would be doomed from the start. It is crazy for a common currency with a country up here and one down here with totally different economic you understand after world war ii, trying to bring them closer together, but, y but everybody having their own presidency and their own head, and their own parliament, you can never centralized those different pieces. You basically have one economy, being germany, that contributes to all the growth. And you have got theres still a lot of simmering differences the countries, youre denying the nationalists its like trying to tell a fish to swim. They say youve got mississippi and massachusetts. How can those two totally different. Common language and common history. Right. That, too. When was world war ii . 40s. Not that long ago. You know how fast ten years goes. I used to think it was a long time ago. The older i get, the less longer it was. When we return, rebuilding america, ron klain, the former chief of staff with joe biden will join us, and hes warning that the president s plan is a trap. Hell explain next. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track. 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. Kevin, meet yourkeviner. Kevin Kevin Kevin Kevin Kevin Kevin Kevin kevin kevin trusted advice for life. Kevin, hows your mom . Life well planned. See what a Raymond James Financial Advisor can do for you. What we do every night is like something out of a strange dream except that the next morning it all makes sense. 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Yeah, sure. You know, candidate trump had a plan in the campaign to use tax breaks to incentivize forprofit Infrastructure Projects. This is a point joe was making in an earlier segment this morning, which is that really it would be a boone to things like pipelines, and Utility Company projects, you know, things some people like, things some people dont like but it would do nothing to fix our roads, fix our bridges, fix our water system. The kind of things most americans think about when they say we need more Infrastructure Spending. And i dont really know that we need a bunch of tax breaks to Energy Industry investors right now. What we really need right now is investment in the kind of things in our infrastructure that are falling apart. Although the idea of trying to get some of the Public Private partnerships has been one thats worked in the past and one that has been used beneficially for Public Housing and other items along those liensz. If you use the Public Private partnership, people who are advising the president on some of these issues points out that look, youll get some of the benefits of private industry where you can probably do things cheaper and more efficiently and more quickly. I think thats a little bit of a shell game. All these projects are Public Private partnerships. We dont hire Public Workers to build roads anymore. These are all projects that get jobbed out to contractors. So the question is really are we going to fund a real unfunded needs or are we going to give tax breaks to people in the Energy Industry. You know, thats the choice. And most interestingly of all, of course, as president , donald trump hasnt said any infrastructure plan to congress at all. Indeed the only infrastructure proposal hes made so far is the largest cut in roads and bridges in 40 years to fund the wall at the southern border. We have to see what President Trump is going to put on the table. Is it going to be the same plan that secretary ross wrote back in the campaign. You can ask him that when he comes on the show later on today. Or is it going to be a different plan. What is the plan and when is it coming . One report from the white house said they wouldnt send the plan to congress until 2018. Late in 2018. None of these projects are going to get started until 2019 at the very earliest. Ron, im getting a weird, uncomfortable feeling because i think im maybe saying we need to expand government in certain respects. Yeah. But if you think about police departments, or fire departments, or or the our armed forces. The government sometimes needs to do things where you just know youre going to spend money that you raised through taxes. Maybe its gas taxes. If you could make sure that thats where it is going to go. But then i could just wish that you had the accountability and the innovation of the private sector to take that money that you know you got to spend, maybe infrastructure really is like the police department, or the fire department, and then you raise it through your taxing authority, but then you make sure you dont blow it with the government waste that we normally have. I think thats the private part of the partnership that we want. 100 , joe. I mean its funny. You and i are in agreement on this. I know. Very uncomfortable. Must make you scared. But i think thats absolutely right. Which is there are some things that only government can fund. We need private contractors. Private involvement but we have to rebuild our roads, our britains, our tunnels. Those are public goods. We all use them every day. We should all have them. Youre a smart man, ron. Appreciate that. Okay. Thanks. And thank you. Thank you, joe. Way to the right of me, apparently. H things we can make money on. You know what . Im going to think about it. Coming up, commerce secretary wilbur ross joins us. Because im kind of nauseous, i think. Joins us on President Trumps new executive orders on the trade deficit and tariff enforcement. First 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. Hes a nascar champion whos shes a worldclass swimmer whos stared down the best in her sport. But for both of them, the most challenging opponent was. Pe blood clots in my lung. It was really scary. A dvt in my leg. I had to learn all i could to help protect myself. My doctor and i choose xarelto® xarelto®. To help keep me protected. Xarelto® is a latestgeneration blood thinner. Thats proven to treat and reduce the risk of dvt and pe blood clots from happening again. In clinical studies, almost 98 of patients on xarelto® did not experience another dvt or pe. Heres how xarelto works. Xarelto® works differently. 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To help protect yourself from dvt and pe blood clots. Talk to your doctor about xarelto®. Theres more to know. Wil ross. New this morning, President Trump. Do i move, too . Or just youre going to move. Uhoh, no, stop. President trump expected to sign im a pro. To sign executive orders on trade to fulfill a key campaign promise. Make trade fair. Commerce secretary wilbur ross will join us in a first on cnbc interview. Rebuilding america. The administrations trillion dollar plan and the impact on business and of course your investments. The ceo of International Paper is here to talk jobs, manufacturing, and Infrastructure Spending. And closing out the first quarter, the dow is on track for its first six quarter winning streak since way back in 2006. What you can expect as we head into earnings season, as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Good morning, everybody, welcome back to squawk box here on cnbc. We are live from the Nasdaq Marketsite in times square. Im becky quick along with joe kernen. Andrew is off today. In studio with us today, sharing his thoughts on the economy, washington policy and Global Business is mark sutton. He is the ceo of International Paper. And mark, welcome. Great to have you. Great to be here. A lot to talk about with mark. A lot going on through the entire show. Get you quickly caught up today with where the futures stand. If you havent seen it already the futures are under a little bit of pressure on this last trading day of the quarter. Dow futures down by about 45 points. The s p futures down by 5. The nasdaq off by 10. In our headlines this morning it is the busiest day of the week. For economic numbers. Well be getting february personal income and spending. Thats coming out at 8 30 eastern time. The Chicago Purchasing Managers index is out at 9 45 eastern and then at 10 00 well be getting the university of michigans Consumer Sentiment index. Dupont has struck a deal that moves it closer to winning european approval for its planned merger with dow chemicals. Its divesting part of its protection business to fmc corporation. Dupont says the transaction satisfies commitments it made to european regulators. And new york fed president says the feds recent rate hikes should keep economic expansion on track. He told the florida audience that the hikes will reduce the risk of the economy overheating and of overshooting inflation targets. The president s former National Security adviser mike flynn has told the Senate Intelligence committee that hes willing to be interviewed about the trump campaigns possible ties to russia, that in exchange for immunity. Flynns attorney said no reasonable person with Legal Counsel would submit to such questioning without an assurance against unfair prosecution. Flynns connections to russia are being investigated by the house and Senate Intelligence committees. President trump, meanwhile, is expected to sign new executive orders on trade today, and one of the orders is expected to put u. S. Trading partners on notice for any abuse that contributes to the trade deficit. Joining us now is commerce secretary wilbur ross. Got to call you like mr. Secretary now after all these years, wilbur. But, you know what, at least you got to get something out of this gig i think, right . Thats true. Out of this disrespect now from squawk box although were old friends. I read both executive orders for today, and it sounds like theyre very similar. I dont know why, two executive orders but theyre sort of designed to do the same thing, right . Unfair trade in the first one, and then dumping and antidumping in the second one. Could you explain the two . Sure. The first one calls for the Commerce Department to conduct a 90day study, country by country, product by product, of why are we having so much trade deficit with each of those parties. Now in some cases, it will be legitimate reason. For example, were still not selfsufficient in oil. So, obviously we have to bring a lot of oil in from somewhere. But in other cases, it will be bad practices. It will be dumping. It will be unfair subsidy of outbound product from other countries to us. It will be currency misalignment. It will be any of the variety of reasons. Were going to try to pin down the causes, pinpoint the kinds of responses that might be made, and that will guide trade policy Going Forward, in a very measured, very analytical way. So thats the first order. The second order is about the other half of it. When i first took this job i was horrified to learn that billions of dollars of duties that have the been won after these hardfought cases have never been collected. Something like 3 billion. And the reason is that a lot of times these Foreign Countries set up straw man importers who really have no financial substance. So when they eventually win the case, theres nobody with resources to go after. What the second order will do is to give us the power to set bonds, namely either letters of credit, or Insurance Company bonds, or cash that those importers will have to put up so that when we do eventually win the case, theres really somebody there who can pay. And that those finds will be collected by the Homeland Security through their customs and border patrol. Yesterday we were having the ageold argument, again, wilbur, about trade deficits. And it was former treasury secretary Larry Summers was here. They use just the notion that a trade deficit is a bad thing, as a way to impugn your, you know, whether someone understands trade or not. And i am sure you still hear this all the time. There are people that argue that a trade deficit is actually a good thing. Because were getting more for our stuff than, you know, were actually i dont know, the more we get from china cheaper, the bigger the trade deficit is. And so its actually advantageous to have a trade deficit, which i dont know. Id still like to export a lot of stuff. But we are a rich country that by definition can buy stuff from everybody else, because we consume more, because were able to. Because we have the financial wherewithal. Do you ever do you ever question whether its a red herring that the whole trade deficit idea . Well, trade deficits are good, why is china so pleased that they run a huge trade surplus . How can it be that both deficits and surpluses are good for your economy . Thats the question that i would ask that. And i think its perfectly obvious that if china hadnt been such a huge net exporter it never would have grown at the rate that it did. So unless someone can figure out how both surpluses and deficits are each good, i feel they wont. Its kind of like i wont say it. No its kind of like Global Warming can cause a lot of snow, and no snow somehow at the same time. And it is, its like im not really sure how that how that necessarily works. But you make a good point. That, is it a good thing . I guess it could be nuanced, maybe, for a developing country or, you know, like china maybe it makes more sense to have i dont know. Im sure someone these guys that take the other stand would have a good answer for you, i think, wilbur. Well, whatever their answer is, we are going to work very hard to try to reduce our trade deficit. So assuming we accomplish our purpose, well find out soon enough whether or not its good. Right. I would like to have so many like the president , so Many American workers that making a great paycheck, and making stuff that we, you know, people love levis around the world. I wish we could send Everything Everywhere and make it here. I couldnt see how that would be a bad thing. It wouldnt be a bad thing. And well never get quite to that point. But, think about it. We have right now 187 trade cases against chinese against steel dumping into this country. Thats 1887 different instances of violations of fto or wto rules. Thats not toll rabble. And it surely shows that those people who are dumping, i can promise you, they think that exports are much better than imports. Secretary ross, i definitely agree with you that sometimes weve gotten taken advantage of as a nation. But i look at all of these things added up together, with these executive orders, when you consider what President Trump was tweeting yesterday about how these negotiations with china are going to be very difficult. When you start looking at things like the border adjustment tax thats been prepared to try and make it a fair irPlaying Field, more level Playing Field for our manufacturers, and taken in whole you start to wonder if there will be unintended consequences to ought of these. That other nations would not look at that and say, okay, this is a very different environment, then if you do that to us were going to do Something Else to you. That certainly has been one concern that our trade relationships would be hurt. How would you soothe any of those concerns . And how do we know about the unintended consequences of all these actions . Well, first of all, i dont believe the administration has endorsed border adjustable taxes. Thats a proposal that has come out of house ways and means, and weve been studying it very carefully. But i dont believe that either the president that the president has taken a position on it just yet. Whats your position on that mr. Ross . My position on it is several things. One, there is an inherent unfairness to the way that the valueadded tax works for other countries. They get a rebate of it, usually something approaching 20 , on their exports. We dont have a value added tax. And three times the wto has ruled against measures passed by congress to let our exporters deduct their Corporate Income taxes on exports when they make the export. Thats an inherently unfair anomaly. So something has to be done to fix that one way or the other. As to border adjustable itself, it, too, is a very complex thing. There are many details of it to be worked out so that it doesnt produce unintended consequences. So, as the details unfold, when ways and means makes their detailed proposal pretty shortly, then well be in a position to analyze it and come to a conclusion. You heard anything about whether they may go back to, wilbur, they may go back and try and do obamacare again to get the trillion dollars to do the tax reform . Do you think that mcconnell says no. Other people say yes. You walk around there. You listen to whats going on as a fly on the wall . What do you think . Well, this fly on the wall is mostly focusing on trade. As opposed to the health care projects. The president has given us quite enough assignments in commerce to try to deal with without grappling with health care. Can i ask you a philosophical question. Sure. Like yesterday when i was, you know, i talked to academics, and they still, i dont know, they still think that a guy like you, that it cant apply to government which is very weird to me that things like the innovation, in the private sector or the accountability in the private sector, that that cant somehow equate. Ill take a business guy any day over an academic or law professor or Something Like that. But, i just i just conceded, willler, that maybe we need to use pure government money derived from taxes to rebuild our infrastructure. Well, to me, infrastructure has three separate buckets. One is the project that has very clearly designed, very high quality longterm sources of revenue from user fees, or tolls or what have you. Those are easy to finance thap can i do tax exempt bonds, they can do taxable bonds, they can get private equity funds to give them equity. Those are the easy category. Okay. Second category are the ones that have no revenue stream at all. And we need. And those are a matter of public policy, does government wish to finance them. Yes. Then you have a third bucket, and those are the ones that have some sort of a revenue stream, but maybe its a little bit flakier. Maybe its a little bit less certain. To me, those are the ones that are logical for a Public Private partnership. Because then youll have private sector equity, shielding the risk for the lender. And making the rate of return. And we made an example that after yesterday, we announced a 56. 5 billion project with at t to really build a 21st century, First Responder network throughout the entire country. We put up 6. 5 billion through spectrum, unused spectrum that we contributed to the venture. At t is putting up 50 billion of actual cash so weve got almost eight times as much in cash than at t for the project as we contributed. That kind of Public Private partnership, to me, makes perfect sense. Now maybe the academics could do better. But i think getting that kind of a ratio is a pretty good job. Yeah. Agreed. We just had ron klain on. He pointed out that its all Public Private partnerships. Because when the government decides to do something with the tax money, they usually go to the private sector to get whatever it is done. So, you know, theres always the private sector involvement. My point is, how do you bring things in under budget . How do you bring things in on time when youre the government, youre controlling the purse thats what i want the private sectors sort of, and its really driven by profit incentive in many times, that keeps people worried about what their boss is going to say to them. If theyre late. If they overcharge or anything like that. Thats what i wish the government, you know, thats where i wish the private sector to ride herd over a lot of the projects. Can that be done . Well, it is being done. The president created a kind of task force, an Advisory Committee on infrastructure consisting of my friend and Business Partner richard latrack and others in order to provide real input from private sector people who are the worlds best developers. Secretary ross, can i ask one more question. Im sorry, i think i cut you off in your answer of my last question, i was so interested in what you said about border adjustment and the administration not taking a stance on that yet, but back to the point of unanticipated consequences, if we are doing things potentially to rile up our trading partners. Do you worry about that . Are there any overall effects of the cumulative effect of all of these moves . Do you worry that there will be other nations that take actions up against us . Well, there are unintended consequences of doing nothing, as well. So as to doing something, you have to think about it this way. We are in a trade war. We have been for decades. The only difference is that our troops are finally coming to the rampart. We didnt end up with a trade deficit accidentally. We ended up with a trade deficit because of the way we negotiated treaties. And because of the determination of other countries who dont agree with the academics, who are desperately trying to have the trade surplus with us. The fact is that our trade deficit overall is about 500 billion a year. And quite miraculously, that also equals the net trade surplus of the rest of the world. Its not inherent in free trade that one country has to absorb all the net exports of the rest of the world. Willler ross, we appreciate your time this morning, mr. Secretary, and hope to see you again soon and were excited. I want to see concrete and cranes and get started. Lets get moving. Lets break some ground. Break some ground somewhere. Youve got a builder as the president. It should be easy. Well were going to try to break ground without breaki ini glass. Or breaking wind, which nobody needs. Anyway, thank you, wilbur. Okay. Thank you for appreciating joes humor. Yeah. Oh, wilbur, you know, get him cocktails in him, and oh. Thank you wilbur. When we come back our guest host today, International Paper ceo mark sutton will talk to us about jobs in america and the trait of manufacturing. Stay tuned. You are watching squawk box right here on cnbc. The greatest population shift in Human History is happening before our eyes. Sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. 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. In welcome back, everyone. Earlier this year, President Trump announced plans to launch a manufacturing jobs initiative. One of the members of the president s jobs Council Joins us this morning. Our guest host today is International Papers chairman and ceo mark sutton. Thanks for being here today. Thank you, becky, im happy to be here. You just heard what wilbur ross had to say about those executive orders about where hes going to be trying to make sure that American Manufacturing may be getting a fairer shake. Where do you think we stand now just in terms of manufacturing in america . I think manufacturing in america, manufacturing jobs are good for the country. Theyre some of the highest paying jobs. Weve lost a lot of them over time so a lot of different reasons. I think what were talking about on the council you mentioned is trying to include competitiveness, and manufacturing jobs have a right to be here. So if jobs were lost because of tax policy and competitive despair or regulatory complexity we should talk about that and see if we can fix some of that. There are other jobs that left because of labor Cost Component being 70 or 80 of the products cost. And its not likely that that type of job comes back, because americans wouldnt want to pay that much for the product. So its really a practical way of looking at why are we not doing more, especially for domestic consumption. The thing that you point out there are some jobs that are not coming back, because that is something that maybe hasnt been said quite as clearly. Youre doing this with the understanding that not every job is coming back. The team of leaders that are willing to work on this, a because its good for our country, secondly, its mostly good for our companies, so you think about International Paper, a lot of what we do is to help other Companies Get their product to market. Were largely a Packaging Company now. So if we can have policy that with tax and Regulatory Environments that are allowing the competitiveness of u. S. Manufacturing and to take our industry, were globally competitive based on Land Ownership rules, based on Sustainable Forest management, we have a right to compete all over the world. And if we can maximize that we can export what the world needs that they dont have, and we can make the products for domestic consumption. But it matters if our customers business improves. The primary tax policy thats been put forward has come from the house ways and Means Committee talking about border adjustment tax. You just heard secretary ross say the administration hasnt signed off on that, the president hasnt signed off on that. Is that something youre supporting . Heres the way we think about that. Its a bit theoretical right now in terms of how it would work. If you just look at the first order effect for a company like International Paper were a net exporter and we import virtually nothing. On the first order great idea. Its a great idea. Awesome. The second order is what does it do to the economy and our customers . We serve ever resegment you can khaj and a lot of our customers import product and if it plays out and hurts their demand then it hurts our company. Anything that improves gdp in this country over time is the right way to go. So tax policy, combined with regulatory policy, needs to have that goal in mind. Raising wages does the border adjustment tax help or hurt the gdp . Well i think thats the 64,000 question. If it plays out like economic theory says it does, it may end up improving. If it doesnt, we may end up with some of these questions you were asking secretary ross, what happens when somebody views it as a as a tariff. As a tariff, and unrelated industry gets a tariff placed on it. Or what if the currency doesnt adjust and things get more expensive for people who import components. Those are hard to answer but i think we have to look at it more from what it does to the economy than what it does because the currency is moving in the right direction. And i think thats exactly why our position is we need to see the gings of legislative language, i think a lot of companies are there, before we react to the framework. Because if you look at the blueprint, its a pretty high level framework. But you made some interesting points. Were going to lose jobs to automation. Were going to lose some jobs to labor. But why should we lose a single job based on selfinflicted tax policy, or antiquated rules on the books. We should never lose any. If we lose them for a good reason. Weve got, in our country, joe, weve got a greatwork force. We need to reinvest in that. Thats one of the initiatives were working on, workforce development, encouraging young people to get into science, technology, edge nearing, math. Weve got a lot of jobs. Its not as many in some industries but the jobs are more sophisticated now. So better training. But youre right. We should have a competitive spirit that we dont lose a single job that were globally competitive on. That we could avoid losing. If were doing it to ourselves. Why question it . Thats why i get irritated when people say oh, manufacturing is never coming back. Theres nothing we can do. You know. There is something we can do. Absolutely. Mark is our guest host. Hes going to be with us for the rest of the morning. When we return on squawk box, david bianco, deutsche Asset Management is expecting the s p to hit 2400 by the end of the year. Thats almost a percentage point. Thats crazy. Wow, david out on a limb. Will drive this market higher after the break. Also take a look at the u. S. Equity futures. Ahead of the open it looks like were still under a future. Due futures down 37, the nasdaq almost and at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. 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. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. 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. Ways wins. Ing this information. Read it carefully. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Good morning, welcome back to squawk box here on cnbc live from the Nasdaq Marketsite in times square. Blackberry is out with earnings this morning. Company reported a profit of four cents a share compared to estimates of a breakeven quarter. Revenue also exceeded estimates. Blackberry right now specializes in software and services. And oh, good. I was looking it up just to see. It has a market cap of 3. 7 billion now. So its a 7 stock. It used to be a 150 stock. So it used to be 20 times i cant even defend it anymore. The iphone is so much better. I still have both of them. But yeah. It is a the iphone is. Its just so worlds above. So many things you can do with it. I dont even need a laptop anymore. I can remember with my blackberry, i found a way to get on to the internet. Yeah. By really but it was so clumsy. I really tried hard. Wow, i can get on the internet here. And its like i can do the most Amazing Things from my iphone. Its unbelievable. It is. But you know, its too addicting for kids. My kids i dont know what with the blackberry you could get through your emails faster. No distractions. Thats why i keep it. I can type so much faster. Youve got to do the dictation. Not only because its fast i cant when i have a screaming baby she has the most ridiculous things. You look at what she comes up with, and its almost like a a lot of times im trying to do it while the babys sleeping, so im you know well, thats true. Oh, oh no the 5monthold, caylee. Im thinking the actual baby. Yeah. President trump will sign two new executive orders on trade today. Earlier we had heard from commerce secretary wilbur ross. Right now, ylon joins u. S. With more on all of this. Good morning, becky. President Trumps Administration is looking to crack down on trade abuses. Wilbur ross was just on the show minutes ago outlining the new executive orders from the white house intending to root out what he called bad practices. The first order is a review of the nations trade deficit. Heres secretary ross. Were going to try to pin down the causes, pinpoint the kinds of responses that might be made and that will guide trade policy Going Forward in a very measured, very analytical way. Some of the things that theyre looking for are currency misalignment, overcapacity in any one industry, perhaps lax enforcement on the part of the u. S. This review will be due in 90 days. The second executive order will bolster the governments efforts to collect duties that its already imposed on countries for dumping products into the United States. It also beefs up efforts to combat counterfeits, and pirated products. Are unintended consequences of doing nothing, as well. So as to doing something, you have to think about it this way. We are in a trade war. We have been for decades. The only difference is that our troops are finally coming to the rampart. And these orders come on a day when the president will be meeting with small and medium sized manufacturers for a roundtable discussion at the white house. And of course next week the president will host president xi of china in maralago. President trump tweeted last night that he expects the meeting to be difficult because of the countrys trade imbalance. So lots of saber rattling happening this week that maybe the president will strike a different tone once theyre down in the florida sunshine. Back to you, joe. Right. Its like i believe in s. A. D. , seasonal affective disorder. Down there you are in a better mood ylan. Thats why i bring the guy i want to soften up, bring him down maralago, maybe golf course, seafood, nice lobster at the clubs, right . Spring has sprung. And lobster is very popular in china. Really . Beautiful. Beautiful. See . In the spite of myself i come up with some things. Anyway, thank you. Lets talk markets on the final trading day of the first corner joining us is david bianco, deutsche banks chief investment strategist for america and head of u. S. Equities. Becky tells me i have to be nice because okay. Were at were at 2370 basically on the s p. Yeah. And youre i called it a bold call because youre saying 2400. Thats 1. 5 . Thats right. Okay. Now of course weve been pointing to 2400 for the end of this year since late last year. Right. And that is saying were not going to 2300 or 2200, which could always happen, you never know. So that is somewhat bullish. But my point is, david, its only march. Thats right. Youre basically saying that the lions share of the gains for the year weve already seen. Thats true. And all were really going to seal for the rest of the year is consolidating those gains, maybe correction in the meantime. But ending around where we are right now. That is exactly my view. I would add to that that we do expect to get good returns mid to upper single digit for several more years. I think its going to be a longlasting expansion and bull market. But right this moment i think what you should be focused on is not so much the overall market but segments of the market and my favorite part of the u. S. Market, growth stocks. Health care, technology, if you want value, buy financials, not energy. Not industrials. I do think the infrastructure theme is overhyped. I think Oil Price Recovery will be slow and volatile. If youre looking for value opportunities look in europe. Why is the infrastructure theme overhyped . Because its already in the stock . Of course you have to start out whats in the stock. The value uses are demanding. Theyre described as acceleration, reflation, and the way we see it the commodity price recovery will be slow. Export activity is going to be just moderate, not as strong as the fire cycle. The infrastructure is on the agenda but health care, and thats been a distraction, and tax reform, which is so much more important to me, is a bigger benefit to things like financials and more domestic exposed companies. Thats whats going to happen first. So i would love to get a new penn station. Every time we talk about infrastructure we should talk about a need for a new penn station in new york city. Theyve got to fix laguardia first. I need an easier commute. It will make me so much more productive. Penn station is kind of run down. Is that is that it is. The whole area can use a refreshing. How would you pay for it . I mean, if this was out of your thats the challenge. How much more would commuters be willing to pay for it . I think we need a Public Private partnership in this sense and i do think the u. S. Federal government should pay a little bit for penn station. It should be a jewel to the country. So your your muted bullishness is valuation, is that what its already reflects a lot of the were expecting 10 Earnings Growth in 2017 before any benefit of a Corporate Tax did so why cant we do 10 . The s p is trading at 19. 5 times, 18 times the earnings that im forecasting. It stays where it is. I do expect us to get a good 5 plus benefit in the Corporate Tax cut at some point. 15 remaining premium, Interest Rates totally support and we think longterm will only go up slowly. All right. So, youre not making a call on lets make both calls though. I like the growth stocks. Your muted bullishness is not based on the inability of washington to function . Well were counting on washington to get some things done. But 1. 5 . Yes. And to some extent the market is counting on that, as well. You know, i remember things. So if this market goes above 2400 and next time you come in and you give me a 2500 target for the s p my target is 2500 for 2018. You just raise it when it goes above it. Oh, yeah were looking for 2500. You better stick with 2400. So if it goes above 2400, its going down. 2400 for year end is probably where were going to be. Okay. Well see. Watch it. Coming up, gearing up for infrastructure growth. Jackie hinman, ceo of Engineering Firm ch2m joins us. Company gross some of the largest Infrastructure Projects in the world. She will join us next. And then at the top of the hour, American Airlines Ceo Doug Parker joins us. Squawk box will be right back. We are often told that this countrys roads and britains are crumbling. Theres a difference between needing to rebuild something or simply maintaining it well or upgrading it. Joining us to talk about getting the most bang for our infrastructure buck is jackie hinman. Chairman and ceo of Engineering Services company ch2m. She also chairs the business roundtables committee on infrastructure. Jackie, thanks for being here today. Thank you. I know some of the projects youve worked on have been some really interesting, cool projects. Things like the locks with the panama canal. You have a lot of experience in this area. And how should we be thinking about this debate . Where do we need to be doing maintenance and where do we need to completely start from scratch . How big of a problem is that . If we look at americas infrastructure we are blessed with having strong infrastructure. Of course, it was built awhile ago. So in some parts for example you talked about roads, bridges, et cetera, were on a program of maintenance. We could probably make some improvements. But there are other parts of our infrastructure, water systems, et cetera, that need to be built new. So its a combination of both maintenance upgrades as well as new construction that needs to happen in order to really improve our economic output and improve our quality of life. How do you see this happening . As somebody in private industry, obviously youve seen some of the Public Private partnerships at play. Weve got a lot of discussion about that this morning. Where it works and where it doesnt. How would private industry be able to work with public government, and where are the projects . You know, the projects are across the spectrum. I think as weve heard before i know that secretary ross talked about this a little bit earlier, where we see private financing working best is where theres some sort of a revenue or return stream, of course. But we have also seen a variety of ways where there are different funding mechanism. Joint funding bonds. Financing, et cetera, that works. It really depends on the ability of local government, much of infrastructure through local and state government, as well as in some cases funding from National Governments to make that work. But also an attractive ability for private financing to work. Only twothirds of the states in the United States actually have legislation on the books that even allows them to accept private financing for public infrastructure. So that would be one improvement that could be made immediately. Jackie, good morning. This is mark sutton. Good morning. Hi, mark. Good to see you. Good to see you, too. I had a question. How do you think about the role regulatory reform, theres been a lot of talk about sometimes regulations, and the inefficiency of those get in the way of efficiently doing infrastructure which adds to the cost. Whats your view on that and what role the Regulatory Environment plays in helping these Infrastructure Projects be more economically viable . Yeah, well i mean regulations are important. Right . Whether its building codes or making sure the right kinds of permits in place, environmental opportunities, et cetera. But where weve seen this work best is where regulations have been streamlined in permitting agencies and authorities Work Together on projects. And so there are often a myriad of federal regulations, state regulations, and local regulations that either conflict with each other, or there are different permitting or regulatory agencies that have to have approval to sign off. The best way to make infrastructure most efficiently is when people come together and work in one, joint permitting regime. This has happened many, many times in our country. For even some of the most complex and difficult projects. When people agree to Work Together in one set of ee fish int and streamlined permitting agenda on a fast track basis, it works beautifully. Weve spoken with richard lafrac about that and i know that theres a group thats working on very much trying to do what you just laid out. How much hope you put in that and how quickly you think that could happen. Well, you know, i put a lot of hope in it. We dont need changes to the regulatory or permitting system to get people to Work Together. And, in fact, some of the most complex and difficult projects have been done where there is a will, and where theres a need. Weve looked at for example you sometimes see advanced manufacturing plants come online very quickly, because theres been alignment with the private sector, as well as local, state, and federal opportunities for the creation of jobs, creation of new opportunities about people will fast track and moved through permitting. With all the necessary approvals, of course, to, for example, build a new manufacturing regime. Weve seen very difficult projects, for example where i am now in denver, colorado, an amazing project that happened for nuclear decommissioning, and cleanup of the rocky Flats Nuclear site which is now an Environmental Wildlife reservation. Happened between the federal government, the state government, local government, environmental stakeholders, Building Trades et cetera to make that cleanup happen, and reuse of that land within a tenyear time frame when it was originally scheduled for 50 year. So it can happen if there is a will and a way. Jackie, thank you for joining us today. Thank you so much. When we return, more from International Papers ceo mark sutton. Also at the top of the hour, American Airlines Ceo Doug Parker will join us to talk Infrastructure Spending at our nations airports. And then former labor secretary and dnc chairman tom perez will join us. Well talk jobs, russia and getting the Democratic Party back on track. 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 . You never got the brakes looked at . E girl. 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. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Back with our guest host International Paper chairman ceo mark sutton. Is it cyclical . What is it . We are less cyclical than we used to be. But it still has some cyclicality to it. Really based on the demand profile and since we are as i mentioned earlier a net exporter we are exposed a little bit to currency. A lot less cyclical than years ago. Thats what happened in late 2015 into the first half of 2016. So part of it was that. And the other part of it was we have some unique things in our industry in import materials. So recovered paper is a big source of input. We had a runup because of weve got to go back, not forward. We need two year chart. Threeyear schart. That would be good. But weve had some input materials go up and were recovering that in product pricing. Were exposed to a little bit on the energy front. We generate a lot of our own energy from woodbased file mass but we are exposed to natural gas and as that started to rise in the u. S. We had a bit of a margin squeeze. But were in a good spot right now. Demand is good there we go. Wow. Sorry to interrupt you. Thats okay. So youre 56, cut in half almost. Were you ceo through that period . Through i was ceo through since the end of 2014. So you were watching that going, oh was it obvious what was happening . On the rise . No, after the beginning when that happened it was like, when the stock got cut in half was it mainly the dollar . It wasnt mainly the dollar. What was it . I think it was all relative to the investment choices, the Portfolio Managers have. And so as we were thinking about going through 15 there was concerns about increased cyclicality. There were concerns specific to our industry. But if you look at the s. E. C. And teamaterials index we track pretty close to it. Thats kind of how we measure how were doing not just in our sector but other choices investors have. And of course, we look at a much longer view around some of the investments we make. Becky is still keeping you in business. I was going to say. We talk about a paperless society. I know that i its been tough. Its been tough, right . But if youre sitting unless youre packaging and ecommerce, right . Youre never going to just, you know, even drones are going to deliver packages made out of paper, right . Thats never going to go away. So were 60 to 70 now a packageing company and the paper part of our company is smaller because, as any product goes through its life cycle, digital replacements have impacted that business. But our packaging business is growing across the world. Is that because of ecommerce, too . Its the Fastest Growing segment. But general economic activity, our boxes get peoples goods. We make one in three boxes in the United States, for example. And it gets all supply chain is good to market. And its a very efficient way to protect product as it goes from manufacturer to the consumer. And thats not a huge growth rate in the u. S. Its a 1. 5 to 2 but its a very big market. And the real benefit to customers is the efficiency of the packaging. But it also starts with a renewable Natural Resource and in the case of boxes, 90 are recycled into thats what i wondered. 90 are now recycled . 90 of boxes are recycled, about 65 of paper goes back into the recycled stream. Its a very good Value Proposition for our customers as they think about their sustainability messages and so forth. Mark is our guest host. Hes going to be with us for the rest of the program. We have much more to talk about. Also in the meantime when we return our rebuilding America Special continues with a focus on airport infrastructure. American airlines Ceo Doug Parker will be joining us. Well talk about the nations ailing airports, the air Traffic Control system and several jobs that can help americas economy. Then former labor secretary tom perez joins us. Squawk box will be right back. Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. New this morning, President Trump takes aim at trade cheaters. Commerce secretary wilbur ross, first on cnbc. Were going to try to pin down the causes, pinpoint the kinds of responses that might be made. What todays executive trade orders could mean for Corporate America and investors. Coming up. Rebuilding america, to make it great again. The Trump Administration promising a 1 trillion infrastructure plan, planes trains and automobiles all could benefit. American airlines Ceo Doug Parker is pulling up to the squawk gate. Plus retiring a color . Why crayola is making a change to the classic crayon box for the first time ever. The final hour of squawk box begins right now. Limp from the most powerful city in the world, new york. This is squawk box. I know why were good morning, good morning. Good morning, welcome back to squawk box here on cnbc. Remember what you just talked about. No. The color. I dont. Well well the crayons. Thats all im going to say. All right were here on cnbc, live from the Nasdaq Marketsite. Period. Says in the prompter, in blank square squawk square. I wont say that because im joe kernen along with becky quick. Our guest host this morning mark sutton ceo of International Paper. And the futures right now are indicated down again. The one thing weve seen. We may or may not be in a consolidation or pullback phase here with nine out of ten days down but were getting now its not just every day up. Its not up, up, up, its like we were up 150, then we were down, then we were up 60, now called down. More forward and it seems to be somewhat influenced by the general news cycle, as well, at this point. So if we talk about that and not just stocks we have a pretty good reason for it. Theres the ten year now, 2. 41 on the ten year. In our head lines this morning, President Trump is expected to sign two executive orders today aimed at trade. The first calls for a study of past trait agreements looking at whether those agreements delivered on the promised benefit. The second order is designed to improve the collection of financial penalties against other countries for dumping goods or illegally subsidizing companies. Commerce secretary wilbur ross joining us first on cnbc just in the last hour. There are unintended consequences of doing nothing, as well. So, as to doing something you have to think about it this way. We are in a trade war. We have been for decades. The only difference is that our troops are finally coming to the rampart. In other Washington News the president s former National Security adviser mike flynn has told the Senate Intelligence committee that he is willing to be interviewed about the trump campaigns possible ties to russia in exchange for immunity. Flynns connections to russia are being investigated by the house and Senate Intelligence committee. And spacex successfully launching its first recycled rocket last night. This is the biggest leap so far in the companys effort to try and cut cost and speed up commercial flights. President trump has backed several Major Airline carriers in irefforts to privatize the nations air Traffic Control but the faa and the alliance for aviation across america are pushing back, calling the president s proposal unfortunate. Joining us now American Airlines chairman and Ceo Doug Parker. Great to see you. Been awhile mr. Parker. Yeah. Thanks for joining us. Nice to see you. Of course. Weve got a lot of discussion about air Traffic Control. And, you know, we all have sort of mixed notions about this. I think when you hear about some of the stuff we dont know about you get worried but then you look at the Safety Record and its why would you fix something that is obviously not broken at this point. I guess its nuanced in your view, doug . Its not nuanced, joe. It is broken. We have an antiindicated ap csis tell that costs americans lots of time, and is much worse than we have in other parts of the world. Its safe maybe im just, you know, i dont want to jinx it because its been years, right, since one of those horrific head line grabbing incidents. Either midair or really anything. So it just makes maybe its a false sense of security. Thats what i mean. We dont know how much better it could be because, you know, we dont have have all the input that you have. Nothing about this is about changing safety. We no one cares about safety more than the airlines themselves. And indeed, if what were talking about is just taking the operational piece of the faa, the atc system outside of the government outside the u. S. Government and putting it into a not for Profit Corporation the operation would still be regulated by the faa. It has nothing to do with safety whatsoever, and indeed other countries that have done this have seen no change whatsoever in safety. Certainly thats what this initiative is about, being much more efficient and having much better much fewer delays, much lower flight times, having airplanes in the air less long today, you know, to fly from dfw is about 30 minutes longer than it was in 1979. Scheduled flight time. Simply because we have an atc system that hasnt kept pace with the rest of the world. And if we could get it outside the u. S. Government and put it into a not for Profit Corporation, federally mandated, not for Profit Corporation where we could get bond financing and put in place the capital thats necessary, but just cant get done in our current governmental structure that has annual appropriations, and makes it hard for change, and makes it hard to make big investments, this will make an enormous difference for all of us. So thats what youre talking about then. You dont youre not privatizing it. You want to finance it with bonds. And the people that are on the that oppose this, what are their salient points . Well there arent many anymore. As more as more people learn about this process were getting less and less opposition and were encouraged to hear that secretary chao is learning what theyve put in place. In general we feel some opposition from the general Aviation Community not for any reason other than they fear this would increase their cost. There really isnt much opposition other than those who just like to see big government. And if we can get this moved out of the government funding process. Its much more about governance than anything else, but putting into a place where we can make the investments. We are shovel ready on this project. The technology exists, and its being used in 60 other countries around the world. This is just about putting in to a system whereby we can get that financing put in place and not be subject to any old appropriations process. Thats pretty funny, though. You said theres not that many people left, just people that want big government. I think she won the popular vote. You sure theres not that many people left that want big government, doug . Look what i said about no im kidding. But there are people that think the government is the answer to everything. So you do have some but it would be sorry, 100 billion, thats what is needed here . That much . Yeah, probably. And the kind of investment, again, were just not good in our government process about making those kinds of capital investments. But certainly we are within commerce. And this is a commercial operation where we put it in a not for Profit Corporation well be able to raise financing through bonds. We the airlines, will pay it back over time through our operations, and thats the only way we believe after years and years of working on it that were going to be able to get this kind of technology put in place. Doug, the question that we need to see something updated. Two questions for you. How long do you think it takes once you get approval on it to actually get something up and running . And how do you put it in place with an Airline System that is so heavily taxed, and so heavily utilized on a daily basis . Well, first off, it will take years. But again, the technology exists, so well see gradual improvement over time so the sooner we can get started the better. As to youre right we are overtaxed as a as a industry. And certainly not looking to increase our tax burden, but it wouldnt do that im sorry, i didnt mean a tax from that perspective. I just mean, a industry this is the equivalent of trying to update a bridge when you still have a quarter of Million People using it every day. How do you handle this, putting in the new system, would they run side by side for awhile . Logistically, how does that work . Yeah, logistically, certainly would be transition. But the Current System can just be upgraded in many cases to use the lanes that are in place and reduce separation, and still be incredibly safe, and to use technology that exists. And again this has been done. Were not plowing new ground here. Other countries have done this and were behind. Ive heard people say a few years ago at least that the gps system that you have in your car is better than the systems used to track planes at this point. Is that true . Well in some sense, yes. We have controllers passing paper strips around. We have not invested in technology as technology has advanced. And the result of this is, again, because we dont of course do anything to compromise safety for business, the result is just longer and longer delays. I was in new york a couple weeks ago when you had that big snowstorm stuck there and i was one of the first flights out, one of the first scheduled flights out we got back to dallasft. Worth 15 minutes earlier. Not because of winds, simply because we didnt have to sit on the tarmac and wait to leave behind a number of other airplanes out of laguardia that happens every day. And because it happens every day we schedule it into the airline. Customers dont even realize that they have this oh, we realize. Flight times have gotten longer and longer. What used to take two hours and 15 minutes are now scheduled for three hours. Exactly. Thanks. Have you seen a pickup in this will help us fix that. Have you seen a pickup in business since the election, doug, that you would attribute to consumers being more confident . We have seen we indeed have seen a pickup in demand since the election. Im not sure exactly what to attribute it to but there has been a pickup in demand since the election. Even buffett you werent at usair then obviously but you know the story, im sure. He even this you guys i do. He even thinks you guys could make money now. But then when we have gordon on hes already ready for somebody to start doing something stupid. And then everybody else does it. But you think you can keep it going this time and actually be a profitable industry . Absolutely. Weve entirely transformed the business. The investment from Berkshire Hathaway is a good example. Those are smart people who indeed have been burned by the industry back when gordon was around. But understand that were entirely different now. We have a Business Model that is efficient. And that can be profitable in good and bad times. Were seeing that today. In the last few years. Weve produced profits here at American Airlines that arent just records but more than double what american produced in its entire history. Its just an entirely different business and one we expect is going to be profitable through good and bad times. Youd still argue that its not a zero sum game. Your gain is not the consumers loss. People i hear it argued a lot that because the slots are so hard to get that its really not a truly competitive market. That real free market, competition doesnt occur in the airline industry. Thats obviously not accurate. Were intensely competitive business. Airfares have fallen over time. Not increased. Were just able to do better by our passengers. Able now to take people all around the globe and do it more efficiently and still be intensely competitive but have a Business Model that works because were able to provide the utility our customers are looking for. Doug were almost ready to go here. So hub and spoke is still i guess its a combination. Would you ever buy a jet that holds 800 people or Something Like that . Or thats just not feasible . Well, its not in our current planning horizon. Were really comfortable with the fleet we have in place. We are indeed a hub and spoke carrier and were extremely good at that. Its a large competitive advantage of ours. We can connect people around the globe more efficiently than other airlines can because of our network. But were pretty happy with the fleet we have in place today. It looked like we were going that way for awhile and i dont know i guess if you need enough people to go from, i dont know, beijing to new york or something it might make sense but youre not very nimble. Im thinking about that in light of boeing versus airbus and who made the right decision. Look, again, we are we have happy with the fleet we have in place. Indeed, we are in fact upsizing our fleet size. But not moving into new aircraft like youre talking about. Happy with the fleet we have in place. I dont want to board that airline or try and get off of that thing. I cant imagine. Buy american then, joe, youll be happy. Yeah, yeah, yeah. You know, dont have to twist my sarm. Just give me one of them upgrades or whatever they are. I know. Actually, whatever. Anyway, im kidding. Thank you. Appreciate it. Well see you again. Thank you. Thanks, joe, thanks becky. Thank you. When we come back this morning, newly named dnc chair tom perez. Well get the Democratic Partys take on the Trump Administrations first new months on the job. Plus personal income and spending. And then later nebraska Governor Pete Ricketts joins us with this plan on rebuilding america. Stay tuned you are watching squawk box on cnbc. Pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in Blood Pressure. Do not drink alcohol in excess. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. 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 . Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade welcome back to squawk box everybody, weve been talking about trade, infrastructure and jobs this morning. All of these topics are at the intersection of washington and wall street. Joining us right now is the new dnc chairman tom perez. Tom, weve been looking at all of these issues this morning, mr. Secretary, and just wonder is there room for compromise between the democrats and the republicans when it comes to Something Like infrastructure . For decades weve talked about that, as a bipartisan issue. But now that were actually getting down to looking at some of the details it seems like there could be more differences than we thought between the two sides. Well, infrastructure done right can be winwin. Dwight eisenhower was the person who brought us the interstate highway system. But frankly, when i was labor secretary and we were working on this issue, it consensus was elusive because the republican plan, you know, simply didnt met the test that we felt was necessary. Infrastructure needs to create good middleclass jobs. Infrastructure bills that are frankly a tax break, that Fund Projects that are already going to take place, thats not infrastructure. Infrastructure bills that contain policy riders that are going to gut prevailing wane and other protections for workers, those are not valid infrastructure bills. Infrastructure that doesnt account for the needs in flint to address the water crisis, and the need in Rural America to build a broadband infrastructure. Those are the Infrastructure Projects that we need to move forward on. So wed love to have infrastructure done right. But as you look at you look at the president s budget that was submitted, its hard for me to be optimistic about coming to consensus on infrastructure when you see such a dramatic cut in funding for basic infrastructure maintenance. We spoke with secretary commerce secretary wilbur ross this morning. He said things in three buckets. Projects that bring a lot of revenue to the table. He doesnt think we need Public Private partnerships there. Things where there is no revenue. Thats got to be government stepping in to do it. Then he said there are some potential area that are fairly high risk and he sees Public Private Partnership Working the best. Would you agree with that assessment . The challenge that i see with that is that when i look at what is being proposed its all about tax breaks for its not an infrastructure bill. Its a tax break bill. Its a tax credit bill. And what that results in is youre talking projects that you would otherwise already do but i think thats the question. Are these projects that you would already do or are they prongibilities that bring so much risk that you would not necessarily see the private sector we have to ask the question in any infrastructure bill, what does this do for flint and other communities like flint . What does this do for Rural America . Areas that need to have a broadband infrastructure so that they can transform their economies for the jobs of the 21st century. And those will involve public investment. Those will involve you know, making sure that we are, you know, putting workers first, and i support those efforts. But again, when i look at the president s proposals i think youre putting things in terms where there could be a little more gray, a little more compromise in some of these areas than maybe youre laying it out. I understand that thats been the pubback. That these are all projects that are simply tax cuts but there is a little more nuance in it than that. I dont Call Building a border wall an Infrastructure Project. Granted. Lets take that off the table. But when you look at bridges and tunnels and some of the other things that could be fixed along the way, its not necessarily areas i mean those seem like areas where you should be able to get a lot of support. You look in the mav yath years ago when you had the bridge collapse in minneapolisst. Paul and then you see what happened yesterday in atlanta on i85. I mean, this is a quintessential illustration of what happens when you dont take care of things. Weve got bridges and roads across this country that are so old that if they were people theyd be on medicare. Maybe it shouldnt get bogged down in saying are these, you know, is it going to create the right kind of jobs. Are we going to make sure the unions are taken care of and that we dont have any negotiations for, you know, for contracting it out. Who does it. Isnt the priority is getting the bridges fixed and the roads built. Its nice to get jobs as part of it. And thats always been the democratic mantra that its a job creator. Private sector is probably a better place to create jobs. But, i mean we do want the infrastructure fixed, too, right . I mean, we get bogged down in all the arguing about whether its a tax cut or whether its not, and it just seems like its selfdefeating and were going to end up with nothing good. Maybe thats why nothing got built for the last eight years. Historically weve been able to build roads and bridges in a bipartisan fashion, create good middleclass jobs. I was out at a military base in the Pacific Northwest recently. And i was labor secretary. It was a project labor agreement. The project was building a very sensitive infrastructure item on that base. It was coming in under budget, and on schedule, in partnership with the defense department, with the labor with labor support, and it was creating jobs, it was doing everything you want to see done. Infrastructure done right can be winwin. But unfortunately we have theres some folks that are frankly on an ideological mission. I do not want to have any ability for someone to get a prevailing wage in a job. The Vice President led the effort when he was the governor of indiana to repeal prevailing wage. I think thats bad public policy. We dont want to create minimum wage construction jobs. And so and we dont need to. Thats the bottom line. Can i ask you about the dnc . Youre draining the stwamp. You drained the swamp. You asked for everyone to resign by april, right . Well, every time almost every time a new chair has come in they have asked for resignations and were involved in a process right now im not faulting you for doing it. Look at what happened. I know it was the russians fault but the stuff that they actually smiened a light on wasnt very flattering for most of the people in the dnc. Do you think Bernie Sanders would have been the nominee . Would that have been better . Listen i focus on the future. But what we know now is that the involvement of the russians in the United States election, the involvement of the russians and potentially the Trump Administration i was talking about whether youre going to change anything is it still going to be superdelegates . Will it be done that way from now on with the dnc . Can you pick the nominee why go through the primary process if youre going to pick the nominee . The American Voters are going to pick the next nominee and we have a Unity Commission they didnt last time, did they . Oh, come on the American Voters picked the nominee in the primaries you kind of thats why your last chairman had to leave. Well listen, we have a lot of challenges in the dnc. And were and heres the good news. You look out across this country, and you see the remarkable outpouring of grassroots support. The reason why they pulled this Health Care Bill last week was because 70 years of lies timely caught up with them and the reality that the Affordable Care act while not perfect is a jobs is a life saver. And not a job killer. And people calling up republican offices to say, you know what, the Affordable Care act is helping me get treatment for opioid diction. Helping me get Prescription Drug medication. So you know lies do catch up with you and thats what happened last week. I hope not. The consumer, skwrk skwrk will be right back. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential experience exciting offers on sales event is here. Our most elevated suvs ever. Get up to 2,500 customer cash on select 2017 models for these terms. Experience amazing at your lexus dealer. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. 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. Welcome back, everybody. Person income and spending just crossing the tape. Jim, the numbers, please . Gas weve had a spring of pretty decent data, it would be comforting for us if this is good as well. As expected. Personal income we were expecting 0. 4. It comes in as 0. 4. The division was up a tenth. Personal spending comes in down a tick. 0. 1. We were expecting 0. 2. Dont see a rigs on that yet. Real personal spending comes with negative 0. 1 last time was negative 0. 3. It was up a little bit. Not as good as expected. S ps were down 3 when we started this. The ten year was 2. 42. Up a little bit, 2. 4225. So not much of a market reaction. Even though these are relatively important. A week ago, two weeks ago, if the data was weak, we could say to ourselves, you know, perhaps were looking at a new economic ideology now and these reflect the old ones. Now after what happened last week the markets a little more suspect of the real progrowth policies so were paying a little more attention to these numbers, stock markets have lost five ticks since i started talking. All right, jim. Thank you. The National Governs Association says a list of priority Infrastructure Projects to the white house last month. For more on where these stand lets bring in Governor Pete Ricketts, republican of nebraska and a member of the National Governors associations Economic Development and commerce committee. Welcome. My head is spinning now trying to figure out how to do this properly. Its amazing that this is a partisan issue, too, somehow. And i just think we need to fix a lot of these things, and put the politics aside. Can we do that you think . Well i think thats really what transportation bill offers the opportunity to do get that bipartisan support. Our u. S. Senator deb fischer has talked about how we can bring together that bipartisan support maybe in a tax bill that would help draw in some republicans and democrats both. It is certainly something that we need to invest in. Here in nebraska weve taken initiative when the federal government wasnt doing these sort of things, last year we passed the transportation innovation act that will invest 450 million in our roads and bridges here in the state. As a state that relies on manufacture and agriculture, its important we have the infrastructure to get our goods to market. When the federal government hasnt been picking up the ball weve been stepping in as states, nebraska is not alone in trying to make some of that investment so we can continue to make sure weve got the proper infrastructure and grow our state. But even the notion that youre saying right now, that is that the states can do it and then the federal governments role primarily is regulatory, people would have a some people on the other side of the aisle from where you are would have a problem with that. They want more federal involvement. Well, thats where maybe we just have to beg to differ on that one. Because i think that the states are going to know best about what to do. I mean, weve got some of the cleanest air in nebraska. You know, we are stewards of the land, because we depend on agriculture. So we want to take care of the environment. Were not going to do anything to endanger that. What we think is best is to give the states the opportunity to really manage it, for example, nebraskas applied for an assignment to get more flexibility from the federal government on regulatory issues and Environmental Issues. Were passing some legislation to be able to do that right now. Frankly, we know whats going to work best in our states. Thats where wed like to have that flexibility from the federal government. So we think thats a good thing. And where we would like to see it is just more help from the federal government on transportation. It is something that will help us grow our economy if we have that proper infrastructure. And im sure youve probably talked about a lot of the Different Things when it comes to the assessment of how much money we need to invest in our infrastructure nationwide. Well what type of help are you talking about . You just need additional money, governor . Yeah, i mean some of the things that the Trump Administration has talked about with their trillion dollar investment over the next ten years, in different aspects of infrastructure to be able to, you know, invest in our country i think thats a good thing. And again if we can put that together in a tax bill or Something Like that, to be able to get that bipartisan support, i think weve got the opportunity to build that coalition and get a bill passed. You think the governors are going to be i mean i would think governors might even, you know, in the pecking order, be above, you know, the house and the senate on this. Do you feel like that thats youre getting your due respect on this . I would defer to governors on how to do that, bring them all in and figure out how to do it that way and then talk to everybody else. Well, i would agree with you 100 on that. I think the governors really have it going on. But you even know where everything is, dont you . You drive over the potholes. I dont understand why it wouldnt be you guys. But its not i dont think. Because the federal government loves control. Actually, you know, actually thats a great point. Because lets avoid the mistakes of the obama administration. When they went to their Shovel Ready Projects what that really did was it went toward essentially maintenance projects. It really wasnt done strategically because it was done in a hurry. We need to be thoughtful about how we make this investment and make sure its going to the things that are really going to be longterm effective to growing our economy. And thats where you do want the governors to weigh in on this. Because you know, the thing about governors is we actually have to get things done. Were held accountable for getting things done because thats what the voters expect of us. So well put together the plans that are going to work best for our states and thats where, again, were looking for that cooperation from the federal government. And i will say that, you know, on a different topic, were talking about health care, even though the Health Care Bill didnt pass, i will tell you that we have seen much more communication with the federal administration and the governors seeking our input on what this Health Care Reform should look like, and wed like the same sort of opportunity from transportation, as well, because again i agree with you, i think the governors know best about whats going on. Were the ones held accountable for getting things done. So come to us because we know what we can do best. Talking about rate brain, left brain thing, i just noticed with the dnc chair perez, that theres a way you can look at infrastructure. I was thinking we need to fix all these things, and for the good of society, and you know, everythings run down, but sometimes the democrats, its really about a way to create government jobs, almost, seems to be the priority, and then you know, what actually happens from doing the Infrastructure Projects is almost secondary or third. And along with that comes, you know, you cant try to have, you know, any type of holddown wages or get things in on time or maybe scrimp on, you know, try to get the best price on tears, its all about just you can dig holes and fill them back up if all you wanted to do was create jobs and you dont even use tablespoons, use teaspoons and you can employ even more people. But you understand thats sort of the dynamic that goes into this. Should we look at it as a way to create federal jobs or should it be to do the needed repairs on all of our infrastructure . Because the private sector should create the jobs. Its good that they come from this, but that shouldnt be the primary reason, should it . No, not at all. Youre exactly right. Thats where it gets back to my comment about lets be thoughtful and take our time and be strategic about the types of projects we want to do so that they really add value. Again the problem with the Previous Administration when they went to Shovel Ready Projects is that they were in a hurry, and it was more of a jobs program and ended up just being maintenance. Wasnt really strategic about where we applied those dollars. And thats what we want to do is we want to make sure were being good stewards of the dollars for the taxpayer. I can tell you thats one of the thing the taxpayers in my state want me to do. They hold me accountable for making sure that we spend the dollars wisely. And so we should be doing the same thing for the federal government with regard to that. Again this gets back to why we as states, we want to have that flexibility. Give us the responsibility. Were not trying to shirk any oversight here but let us have the freedom to be able to invest those dollars the way we think its going to be best employed in our state. And give us the freedom when it comes to streamlining regulations, environmental reviews. Ill tell you, you know, one of the things we just had. We got a south beltway project in the city of lincoln, and the estimate has gone up by 50 in part because as time goes by. But in large part because of the Environmental Issues that weve got to overcome. Bridges have to be longer to avoid wetlands. Weve got beetles weve got to be worried about. Things like that. Again, give us the flexibility in the states to work around some of those things and well come up with Better Solutions that will be more cost effective. Yes well create jobs but were going to make investments that really help grow our economy. All right, governor. Before you go i want to settle up on that debt we made yeah, wheres my ribs . Theyre coming. Did you see my we follow each other and you never answered until timely i see it today. So im going to send you some montgomerien ribs that are unbelievable. Three minutes on each side. Youve got to use the montgomerien sauce and heat up the sauce. Youve got to heat up the sauce, all right . Okay. Youve definitely got to heat up the sauce. But you won, and the tournament beforehand, and then you didnt go creating sort of disappointed me in the tournament and x went much further. Did you see it . I feel like i kind of won. I think you maybe owe me something. Im not sure im not sure thats the way that works. I think you actually have to make the bet to be able to collect on it. You cant just make stuff up afterwards. Did you watch that game . The one that we bet on . It was the last ten seconds. It was horrible. It was horrible the way creighton finally won and then they didnt really show up for villanova, either. Right . All right. Right. Yeah they kind of checked out after that. Okay but thats history. Who is your pick for the tournament now . Were going to do it again next year. Oh, i got North Carolina. I hope South Carolina wins, too. Because some people still have gonzaga and i want them to lose. Governor thanks, good luck and theyre on their way. Checks in the mail. They really are. Thank you very much. Thank you. When we return, the ceo of s p global joins us on set. He chairs the Bipartisan Group on infrastructure and has a few words of advice for washington about making private Public Partnership work. You are watching squawk box right here on cnbc. What powers the Digital World . Communication. Like centurylinks Broadband Network that gives 35,000 fans a cutting edge game experience. Or the network that keeps a leading hotel chains guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. Businesses count on communication, and communication counts on centurylink. 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. Welcome back, everybody. President trump is looking for a trillion dollar Infrastructure Investment for the country to be financed with both public and private money. Our next guest says that there is plenty of demand from the private sector but that the government needs to take some steps to make it actually happen. Doug peterson is the president and ceo of s p global. Hes also the cochair of the Bipartisan Policy Centers executive cowl sill on infrastructure. And doug, what does the government need to do . First of all, the government needs a vision. And needs a pathway. Ive been watching the show throughout the morning and hearing discussion, is it about jobs . Is it about growth . And i think its about competitiveness. And competitiveness should be at the top of the list, along with jobs and growth and you need a vision, the federal government needs to play a role in it, especially because one of the biggest hangups on infrastructure is permitting. Its an incredibly slow process to get something under way. And we can talk more about that. But, you think competitiveness should be at the top. How does the u. S. React outside of permitting to make sure that it does that . We need to have a program that looks at the Major Economic infrastructure, roads is part of that. We have a lot of discussion about roads. Id add to that ports and airports. Broadband in particular. One of the huge complaints weve heard all morning long is that this proposal, by using tax credits to get private money to come into this, is really nothing more than a big giveaway to the rich to line their pockets to do projects that they would do anyway. How do you convince people that thats not the case . First of all, its a proposal, its not really a fullblown law yet or something we can really comment on. But let me take a step back and talk about the size. A trillion dollars is just a down payment. The work we did at the bipartisan policy center, we estimate that theres a need of at least 3 trillion to 5 trillion over the next 10 to 15 years. And a trillion over the next ten years is just a down payment. And if you want to look at no argument that the country has needs that are massive. But again to get any sort of bipartisan support how do you convince people that this is the right way to do it and again this isnt just lining the pockets of people who will be doing projects anyway . If you look at who are the investors going to be in these types of projects. Its Pension Funds, its Insurance Companies, and what are Pension Funds . Pension funds are teachers, nurses, firemen, policemen, people who have their longterm savings and theyre looking for a home for those savings, and infrastructure is probably one of the best Asset Classes for Pension Funds to invest in. So we can have a program where our own Pension Funds, that benefit all of us in the long run, are investing in assets which benefit i understand its not a law yet. But some of the plan as it was laid out in the campaign, as weve heard about it here, is that there would be tax credits to some of the developers for doing these things. Doing projects that they might not do otherwise. Wilbur ross laid out this morning theres a need for that if you put up 6. 5 billion in spectrum for First Responder program like they did yesterday with at t, at t put in 50 billion. How do you make sure that youre picking projects that are not projects that would just get done anyway . Well, there are a lot of projects which are going to get done anyway. But what is the difference of getting something done in eight years versus two years . Theres a big opportunity to accelerate our Infrastructure Investment, and one of the things we talked about in this bipartisan policy sector was this permitting issue that i referred to before. Today it can take eight or ten or even twelve years for permitting. If we had a pipeline of projects, both at the state level and federal level. We had a permitting process that allowed simultaneous, sequential, simplified permitting. We could have a pipeline of investments that we know thats coming on line and have the contractors, the designers, youd have the banks, youd have the financial takeout, and there might be projects that we build anyway but it would be a lot better if theyre built in a two or three years instead of eight or ten or twelve years. I agree with all of that. But back to the central premise of the question you need tax breaks to do that or do you just need the two sides working together. Do you need to give Developers Tax breaks . One of the challenges in the tax breaks, you have the classic example of some projects just dont have good economics on their own all the way to the spectrum where they do. But you want the same people to be interested. Just like in a company like mine we have no return projects and high return projects and you want the capital to go in and overall, you maintain your infrastructure, and you protect your margins. How do you think about that in the terms of drawing interest in these kinds of investments . The way i look at it is, this is one of the tools we need to have. I think that having tax breaks or having incentive for infrastructure investing will get things moving. But its only one tool. If you look at, as i said, the size could go from 3 trillion to 5 trillion. A trillion dollars is part of it. We need to have a program as well that brings private sector financing for the infrastructure world, whether its through concessions, its through operating contracts, its ways to have new approaches to private sector financing, ownership, et cetera, in a sector. Thats the way were going to get this whole thing going. Im not opposed to the tax benefits. I think its one of the tools. And thats why if we only talk about one aspect of infrastructure program, which is just these potential tax benefits, were going to lose the opportunity to talk to the big picture and talk about competitiveness, growth, jobs, the things that are going to really get america growing. Okay. Doug thank you for joining us today. Thank you. All right, when we return, jim cramer will join us limp from the new york stock exchange. The futures right now are a little bit lower. But they moderated. Down ten points on the you do, 1. 25 on the s p, 3 on the nasdaq. Youre watching squawk box on cnbc. 11 years. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. The newly advanced gle can see in your blind spot. Ok lets call his agent. Im coming over right now. [ dinosaur roar ] onboard cameras and radar detect danger all around you. Driver assist systems pull you back into your lane if drifting. Bye chief. Bye bobby. And will even help you brake, if necessary. It makes driving less of a production. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. The power of innovative thinking. The power of 100 of the worlds top companies. 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. Welcome back, everybody. Crayola retiring its dandelion color from the 24 count set. Thats why we had the song earlier about dandelion. The Company Posted the announcement on twitter a day earlier than they planned to do it. Dandelion is the first color to be pulled from the 24 crayon box set in the 100 year history. It will be replaced with a new color and it will be announced any minute now. Its National Crayon day. Theres actually someone, somewhere, in an office deciding what to do with the crayons in the box. And they came up with like that guy that does the dow component. You know . They actually have a job for deciding who goes in not a bad job. Who goes out. So that yellow is coming out, huh . Yellyellows coming out. Dandelion. The greenish yellow one. Greenish . Wow. You know all the colors. I thought maybe you know, maybe just lost the election. One of the people using the crayons in color books. A lot of people bought crayons im not into coloring books but we make the paper for some of it. Its infrastructure day, cramer. Tomorrow is april 1st so dont get fooled if someone tries something on you. If you know its april 1st, then keep it in mind that someone may try to do an april yeah, its happens constantly. People put out whole false newspapers that day. A lot of fake news from failing papers. Yeah. I said the same thing, jim. That nowadays if they do one of those newspapers where its an april fools edition thats not that much different than other dates. No. Its fake every day. Every day is april fools day when it comes to the lot of the media these days. Yeah. I referenced some of our past you know, sort of come into our own about labor and damico and the previous conversations we have had. Now im thinking of infrastructure. There are things that the government needs to do that you dont make a profit. And maybe we just need to bite the bullet, raise some gas taxes and fix some bridges. It cant all work with money. No. I mean, i asked gary cohn, the economic adviser, 500 billion, make americas roads great again. John damico has all the numbers. 4 trillion puts a lot of people to work and it makes us into the first world country. Right. About ten reasons why it might be a good idea. And there are, you know, you can prioritize them. But doesnt matter. Different sides of the aisle have different priorities. But we need to fix them. We need to create some jobs and it will make us more competitive. Anyway, jim, you playing along with this infrastructure thing today or is it just us . Well do some. Tr got a bid. I have scott wapner here. Well hit a bunch of different tips. What do you mean, wapner is there with you . Hes with you on the show . Yeah. Ready to rock n roll. I bought an alarm clock. Well get it done. Thats exciting. Man, i might stay here and watch that in the greenroom. Why not . I dont want to go home. Ill miss it on the ride. Thanks, jim. Well see you in a couple of minutes. Then later on dont miss ceo john chen, live at 11 00 eastern. Youre watching squawk box on cnbc. Adios, honey, hasta la vista, baby. singsongy im a fat guy in a little coat. Fat guy in a little coat. That rug really tied the room together. Any questions . Bueller . Bueller . Stream all your entertainment. Introducing at ts new unlimited data plans. Plus, get the amazing new iphone 7 on us. 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. i moved upstate because i was interested in building a career. I came to ibm to manage global clients and big data. But i found so much more. its really a melting pot of activities and people. applause, cheering new york state is filled with bright minds like victorias. To find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin. Welcome back, everybody. Our guest host is International Paper chairman and ceo mark sutton. We have talked about a lot of Different Things with ip and with transportation and infrastructure but ive been waiting to ask you about something called fluff pulp. I didnt know what the name was, but its in high demand in my home. What is it . Its the moisture retention inside of absorbent one and the number one youre talking about is baby diapers. But its a new business that we have really doubled the size of with the acquisition of warehousers fluff pulp business last year. Its a Great American Success Story because we have the right trees, the right Land Ownership rules. Its a renewable resource and the demand really the product makes peoples lives better. The demand is growing 4 to 5 a year. Thank you for being here today. Thank you. Happy to be here. Were back on monday. Stay with us. Squawk on the street is coming up next. Squawk on the street, im scott wapner with jim cramer live from the new york stock exchange. Carl and david are off. Lets get you set up for the final trading day of the quarter. Look at the futures here, implied open slightly lower across the board. Lets get you over to europe as well. Mostly flat markets over there. Theres a look at the dax, and then the ftse