Pulling out of correction territory adding to fridays gains following the worst week weve seen in the markets in two years. Christine lagard weighed in from the world government summit in dubai. You compare valuation, you know, from a week ago, theres been a Market Correction off anywhere of 6 to 9 which frankly given where asset prices were very high, its in our view a welcomed correction. And we have observed suddenly despite the volatility the market channels and pipes and mechanisms have worked well. And we also see the financing is still plenty and very much available for the financing of the economy so, you know, corrections happen they were due to happen. And thats where we see it for more, joining us at post nine is citis chief strategist tobias letvowich we have a lot ofthings happen i think the markets were ahead of the skis. Its the olympics. I have to use the winter application. But, look, the sentiment we saw, they have been showing us that euphoric levels have been in place since around christmas time investors kept on buying thinking the economy is strong and earnings are strong. And that model suggests that over 70 probability of losing money. So we were kind of warning investors be a little careful here dont chase the tape and we saw it in exactly the places we thought we would see it in the inflationary data. Most of the work on Wage Inflation continues to suggest were going to see an upward trajectory and as a result, there are certain things you should be doing and shouldnt be doing. What are they if you and where do you see sort of rates going given your view on Wage Inflation. We look at the gap between the unemployment we almost suggest you look at something from 2. 5 inflation to 3. 5 Wage Inflation in the years time. We got a good bump a couple fridays ago. The trend is certainly not your friend and bond yields have to adjust to it. What it really means is you buy value stocks and cyclicals and move away from growth and defenses and thats where investors have liked to be, particularly technology so what are the markers that you are looking for if the market is due a sustained turn down whether its in march, april, may, some time are there specific numbers that youre looking for whether its continued wage growth, whether its inflation and some other metric weve been watching Wage Inflation particularly youve also seen other stuff going on with regards to Commodity Prices so wages are about 60 of corporate costs and then raw material input price is another 10 to 15 then if businesses are looking at 75 of the cost going up, theyre going try really hard to push some of that along to you and i as consumers having said that, its not that the market is due for this massive look it was just thinged were ahead of the skis. We still have 2800 on the s p 500. Current levels plus dividends, youre talking 10 upside by year end people got too excited it is that simple. Ten year, 2. 9 yields today there is this debate emerging whether markets are pricing in 3 yield on a ten year what do you think . I think if people see 3 , theyre going to worry about 3. 25 and 3. 5 sentiment will start to shift to something more worrisome we think north of 3. 25 is where you have to worry about the impact on valuation on the economy. But actually one of the really good things that got lost last week in the kind of jie ragyrat and wild swings is they came out and asked banks, are you easing or tightening . Credit conditions are extremely easy right now for business. They can borrow money easily, even though the feds raised rates five times, weve seen credit spreads come in, financing costs are really attractive and businesses usually grow if you look at that data for commercial industrial loans, usually it is Economic Activity by nine months and very bullish for Economic Activity. Where are you on the euphoria index now . Have things calmed down sufficiently not enough yet. Were tracking positioning i should state up front, were trying to grab your attention with that. You know, we have to learn to do marketing as well as you guys do so if we look at the model, it is trying to pick up nine factors in positioning in markets. So ill give you one example putcall ratio two fridays ago, after we sold off the first data off the Wage Inflation is. 77. That is one of the inputs to the model. This past friday, we were down 180 points, it was. 75 it whats actual was actually lo. So investors still itching to buy here we need a little bit of that enthusiasm, kind of to calm down further. So were still in euphoric territory for the propability of losing money i dont think it will stay there if we continue to have this type of volatility markets. Eventually people will ease off. How do you define that fine line between euphoria and confidence is confidence just informed euphoria in some cases so again, thats where im really careful by defining it. It isnt were measuring a feeling. Were measuring positioning and then market outcomes i always say to people, i dont care how you feel. I care how you act sometimes that gets me into trouble. But the idea is what are the probabilities of outcomes and markets not what do i wish markets would do i think too much of peoples ideas are oh, earnings are good, economy is good, stocks should go up. There is such a thing called a good, you know, a good company and a lousy stock. Thank you thank you very much joining us from citi. Lets check in with carl in pa pyeongchang, south korea exciting day. One of my favorite stories of the day is that if youre a snowboarder who loves the olympics, youre kind of in heaven right now red girard is the First American to win gold at these games 17 years old in the mens snowboard slope style. And then Jamie Anderson wins gold in the womens snowboard slope style. The first woman to win multiple snowboarding gold medals her final run had been delayed due to winds but she nailed it today. The u. S. Is now 4 for 4 in snowboard slope style having won mens and womens in sochi and now here in pyeongchang. We always talk to athletes about how theyre Building Careers both as an olympian and after they are finished being an olympian we caught up with Jamie Anderson and asked who is on your wish list of sponsors and why ive been so blessed this year working with United Airlines being a super hero in their campaign and i signed with audi this year im working with Polo Ralph Lauren im working with Procter Gamble im like holy moly how did all of this connect . But dream sponsor . It would be cool to work with like a big solar plant or some company that would deck out my house with sustainable energy. Im all about trying to be efficient. Really . Elon musk, get on it call me can i maybe have a little meeting . Because youre amazing you never know with ee lon th elon, that may happen. The United States with four medals so weve done well in some specific disciplines well see if we can get that overall medal count up in the days ahead back to you guys yeah, carl, it really seems like particularly with the Winter Olympics the endorsement possibilities are where its at for the athletes what is your sense of the Business Savvy that is grown among some of the athletes who get such a spotlight around this time i think i mean, its light years ahead of where it was 20, 30 years ago we talked to apollo ono who exploded on the scene 20 years ago. At the time, said youd come into the games and there was no social media or internet staring you in the face. It was all about your event. And now these athletes are Building Careers as they become famous and were all getting to know them on weeks like this one. So i think the pace at which you build that kind of thing is happening much, much faster now. And sort of on the heels of that thought process, how important has social media become to all the athletes i mean thats a huge part of just building an audience. They have obviously their favorites in jamies case, she loves instagram. Others still talk about snap i think twitter still has that reputation for being maybe a little bit too confrontational to build something that is nice. And thats what youre looking for in the early days in marketing. Yeah, its great stuff, carl. I know its very late there and probably cold for you. But were just loving everything youre sending back our way. So thank you, Carl Quintanilla in south korea see you in a bit. Okay well, the biggest battle in technology or certainly one weve seen in a very long time continues. This morning broadcom announcing it raised 100 billion in committed financing. Behind the 82 a share cash and stock bid to acquire qual come theyre scheduled to meet this wednesday to at least potentially negotiate or look like theyre negotiating the man behind the plan is the ceo. He joined jim cramer and i in a cnbc exclusive in the squawk on the Street Program a little while ago. We also how discussed mthe bid. Nkbi is not will not solve qualcomms problems. Its the broken Business Model that is and if, we said it too, if qualcomm raises the price on nxpi, we made it clear its a clear transfer of value from qualcomm shareholders to nxpi so another walk away. You walk away well preserve all our options. That was actually an important moment because, of course, there are many nxpi shareholders focused on what will happen or wont happen as soon as this week with that on going saga between qualcomm and nxp its a 110 a share deal the stock trading well above that they need 80 of the shares to be tendered to be able to close that deal. They are expected to get approval from the chinese antitrust authorities soon, perhaps as soon as this week you could see this come into play when you have tan saying well preserve the options, hell saying were going to go to the shareholder vote on march 6th. He didnt say well drop our bid. Thats a bit of a shift i thought they would take the economic value out of their bid, perhaps, if theyre paying more for nxp. But, yeah, at least publicly its bate of a shift yeah. And its also important to note, i think, how much of a cultural disconnect there is between qualcomm and broadcom. This isnt just about price for Qualcomm Qualcomm sees itself as this creator of fundamental Technology Behind wireless hock tan says the licensing Business Model is broken a the love people say its been broken from the beginning. People are trying to break qualcomms Business Model and fighting the legal bad lz. The licensing business has always survived and bounced back qualcomm argues its just because they got the patents and smart engineers who are creating the future i dont know if investors are going to buy that this time around, well see. Well see as you well know, it is a stumbling block for qualcomm given that litigation taking place and the fact that the partners are not paying them any longer for the property. That said, tan asked if hes going to close the business down he didnt say initially that will be the case tlachlt that is the expectation over time we know r d is aa key for them they spent so much on r d. How much will qualcomm preserve of that budget is certainly a question do you think as somebody who kafrd m a for many years that the regulatory hurdles for this deal to happen are surmountable and do you think it spurs even more consolidation in the chip business weve seen so much of it already. Yeah, we have antitrust is key to this deal overall. And qualcomm has said repeatedly it is not comfortable with the antitrust implications of this deal and wants broadcom to offer assurances to a hell or high water provision. A Legal Standard committing them to do anything they absolutely have to do to get approval from the various antitrust authorities around the world we asked hok tan if hed be willing to do that and why not he keeps saying this is not going to be hard theyre not willing to go there. What theyre willing to go to is an 8 billion reverse breakup fee. Qualcomm doesnt see that as enough its hard to imagine as they go into the meeting on wednesday that theyre going to make a lot of progress but well reserve judgement for now. Shaping up to be a busy week. Yep still ahead, were awaiting on the president to speak about his budgets plan with a big push to fix the countrys infrastructure well bring you that plus the man behind the campaign to impeach him, billionaire democratic donor tom steyer joins us with his thoughts on the rollout. Squawk alley will be right back right now, the dow up 273 points the house releasing the long waited infrastructure plan this morning aiming to stimulate 1. 5 trillion in new investments over the next sen years. Joining us tom steyer, founder of nexgen america. You said that lawmakers need to submit a list of demands to the president and the republicans and not budge from it because youre saying President Trump wont stick to a position and let that play out. Hes not a fair negotiator what are a couple of those points and how will it affect this infrastructure plan well, lets start with the whole idea of rebuilding america. You know, i think theres a sense that if we spend a lot of money that the spending of money in and of itself is a good thing because it creates jobs and, you know, it basically gets the economy going. But the truth of the matter is that as an investor, i know that inst infrastructure is another word for investment so making an investment in and of itself isnt a good thing a good thing is smart investment, the kind of things that actually move the country forward and let us all prosper so when i think about what we should be talking about, we know we have to make investments in infrastructure than will be profitable for a long period of time i know if were going to do it, it has to be sustainable, build the clean infrastructure that will let this country compete suck s successfully for decades to come and be the creation of innovation so give us a couple specifics. What are two things that you think would push us in that direction . Well, i think one of the Big Questions in the United States is going to be how we generate and use electricity. So for one thing, we should definitely be rebuilding the electric grid around the country to make sure that its very adaptable and that we can put in we can move electricity around the country really well and that we can use clean energy from different parts and ship it to other parts of the country. So thats one thing we need. I think another thing that we definitely need is we need to connect this country economically in the way that the highway system did in the 1950s. And that means people have to be connected through broadband. The basically every community in this country needs to be connected to the silicon valleys and the new yorks and the chicagos and the austin, texas so everybody has a chance to be hooked into the growth and not cut off and separated and isolated tom, i want to dig into this idea of Infrastructure Investment a little bit more given the fact you have a history in alternative investing and private equity banking and looking at this blue print we have from the administration that shows a streamlining of the regulatory process and thus cutting down time it would take for a new project to be sort of brought online, it looks like there is more possible alternatives for financing and then, of course, you put that on top of what is a lower tax base, doesnt that sound like a pretty good return on investment for a lot of private guys that maybe otherwise wouldnt be stepping in here . Well, lets just unpack what you just said. Getting rid of environmental protections that ensures Peoples Health and longevity, is that a good investment . To get rid of it so that people with build things that pollute and make people dangerous. That doesnt sound like a good investment to me lowering tax rates on corporations so that their bottom lines are bigger but in fact so that we take money away from the government so that normal programs are going to have to be slashed over decades to come, that doesnt sound like a smart idea to me so when i think about something, i really think we should be taking a longer view we should be betting on the American People. And we should be asking ourselves what really creates prosperity in america . And to me, what really creates prosperity in america is the productist and success of the American People. So everything that i do would be based on the idea how do i make americans successful tom, so youre touching on something that as an observer kind of puzzles me im not hearing a really clear economic narrative out of the Democratic Party right now thats really going to push them ahead perhaps in the midterms. A lot of antitrump, antirepublican stuff. But what is the positive pro active economic narrative that the democrats you think need to take up in order to have success in november . I think its two very simple points the first one is you have to ask what is going to make a successful country in the 21st century . The answer is going to be the organization of productive, well educated people in that country. So if you look around the world, its not going to be based on natural resources. Its not going to be based on centralized big companies. Its going to be based on the people of that country being competitive around the world so number one is invest in the American People. This budget does the opposite. Every Single Program that delivers health or education or opportunity to the American People will be cut and secondly, we do need to rebuild this country we absolutely need to rebuild this country but the question is do we do it in a sm