there. so much more to talk about, but i hope to check in with you over time. >> i hope so, too. david, appreciate your time. >> bob bakish, ceo of viacom. carl, back to you for the start of "squawk alley." >> good stuff, david. thank you so much, david faber. it's 8:00 a.m. at twitter headquarters in san francisco, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ good thursday morning. welcome to "squawk alley." jon fortt, sara eisen and myself at post 9. dow's up 101. record highs for the dow, the s&p and the nasdaq, as yields and retailers are climbing. we've got this meeting between the president and key airline executives in washington, d.c. for that we'll go to phil lebeau. hi, phil. >> reporter: hi, guys. i want to bring in gary kelly, ceo of southwest airlines. thank you for joining us after coming out of a meeting with the president. give us a summary of what you talked about. this meeting went on longer than you expected. >> it went on -- it was a very good meeting. we talked to the president and his staff. it was a very engaging dialogue. it was very much focused on tax reform, regulatory reform, but primarily infrastructure investment, both for air traffic control and the airports. so, it was very dprks very exci excited about the prospects to improve support for aviation going forward. >> reporter: let's talk about that because we heard some of his comments at the beginning of the meeting. he basically said you have old equipment, airports that are outdated, need to be updated. how quickly do you honestly believe that he can free up the funds on a federal level so that we actually see the airport infrastructure projects begin? >> i have no idea. you know, at this point, what is exciting is that aviation has the attention of the administration, i think more than any that i've worked with, and that's very exciting. we're just getting started. i'm hopeful that over the next 60 to 90 days that working with this staff we can come up with some actionable items. but today was a very general discussion and nothing very specific. again, the encouraging thing is that the interest is there, and we'll be looking for opportunities to get some things done. >> reporter: with the discussion, did it ever come around to talking about the growth of the gulf airlines, the persian gulf airlines, and the concern that a lot of domestic carriers have about that traffic and what it might be doing to domestic airlines? >> well, the focus was solely on tax reform, regulatory reform, and infrastructure investment. >> reporter: did he give you a homework assignment? all the ceos. did he say, i want to meet again, let's say in 60 days, and talk a little bit more and you tell me what you need specifically? >> yes. and mainly, he turned to gary kohn to lead that effort. and so, among the trade association that southwest is a member, i'm sure we'll have some committee assignments and get to work on that punch list. >> reporter: a lot of people are concerned that you have passenger facility charge. all airports have it now. and a lot of airports are saying, look, this is a burdensome tax, and it hurts traffic, it hurts the consumer. airlines, on the other hand, say look, you've got to pay for the infrastructure here. could it be that someone will be paying more in the pnc charge in the future? >> oh, no, i think the airlines are pretty well aligned with the consumers. the industry is heavily taxed, overtaxed. 21% of every ticket goes to taxes and fees. so, there's plenty of money out there. we just need to make sure that the money is directed to aviation and spent wisely. so, no, we don't want more taxes. if anything, we want less. and i'm hopeful that that will be a part of the discussion of overall tax reform. >> reporter: there are a lot of people who say, if you're going to fix the airports, it will take years for this to happen. how quickly do you think we actually see some of this money plowing into airports? and some of these projects actually seeing some shovels go into the ground? >> you know, there are billions of dollars already being spent at airports around the country. southwest alone is involved with projects at l.a.x., new orleans. >> reporter: right. >> we just completed a new terminal in houston, dallas love field. we've got a ft. lauderdale project under way. so, the good news is that we're not at a standstill. we are making progress. and the opportunity to actually speed that up in the future i think would be very welcome. so, i think the biggest opportunity, though, is to speed up the modernization of the air traffic control system. >> reporter: which you talked about. >> we believe there is about $25 billion of waste annually with the system that's currently being used. so, that's where our focus is. that's where the airlines for america's focus, is and that's where i think you can get the biggest bang for the buck. >> reporter: does that mean you scrap the current next-gen systems that have been implemented over the last several years and start from scratch with a new system or do you think you can build off what's there now, just fix it? >> absolutely build off of what we had in place. i think there is near unanimous agreement that we need to modernize the air traffic control system, and that's step number one. we need to convert from the old ground-based radar navigation system to satellite-delivered gps and get back to the days where we have shorter trip times. it's less greenhouse gas emissions, it's less gas being burned, and it's just a more efficient use of everybody's time. >> reporter: less congestion. >> absolutely. >> reporter: will you be back here again? >> absolutely! >> reporter: all right. >> if i'm invited, i'll come. >> reporter: but nothing's set right now? >> nothing's set right now, but i would be surprised if we're not back in about 90 days. >> reporter: gary kelly, ceo of southwest airlines joining us after meeting with president trump, for what, more than an hour? >> more than an hour. >> reporter: talking about airlines, airport infrastructure and a bunch of other things. back to you. >> great stuff from you, phil. thank you so much. phil lebeau. the wire's reporting the president will sign three executive actions today, one targeting drug cartels, one targeting crimes against law enforcement, saying that it's a signal to gang members and drug dealers. meanwhile, we had amazon announce more than 2,000 new full-time jobs in california. earlier this week, intel's brian krzanich was at the white house, announcing plans to invest $7 billion at an arizona fan. henry blodgett is here at post 9. henry, you put that all together, plus a dovish fed, plus maybe some harmful tax policy not happening. is this the perfect storm? >> well, this is what a lot of folks who are not strong on social -- that's not why they're voting for trump -- are excited for trump. he is actually listening to the business community, does have some good ideas, if they're executed. so, i think infrastructure spending in particular, that's got to be exciting to pretty much every american, if we can figure that out, figure out how to help planes and flights shorter, so that's good. a lot of folks are watching trez trump, saying i wish he would focus on this and stop with the tweeting and other things. >> and if you're talking about american manufacturing, these jobs at intel are exactly the kinds of jobs you want. robots are not going to completely take over the operation of a factory. i think it's important to point out, though -- a number of people in the united states as well. so, you've got to view these things in context. it's not necessary ily just tha. also on amazon, some of those costs were what hit them in the quarter. so yes, they're expanding, but also not quite necessarily as good as intel jobs, qualitywise, at their distributions center. there's a reason why intel encourages people to continue their education and do what you really love, if it's not working in the distribution center? >> and yet, amazon spends all of its excess profit on hiring people. that is great, and building infrastructure. maximizing profitability in other companies means laying off as many people as possible. so, i think both of these are good. both companies are taking advantage of positive advancements like this to say them right in front of president trump, which seems to work. you're either on his side or against him. you don't want him attacking you, so it's smart. >> but does it move the needle on jobs? we get the jobs report every month and whether it's 100,000 or 200,000, that's net job creation. this economy creates more than 5 million jobs per month and loses a little less than 5 million jobs per month. how many of these happy press conferences and announcements can there be to actually get real job creation? >> from the big picture, they're irrelevant. on the other hand, we're at least focused on this issue. we actually don't have a jobs problem in this country. the unemployment rate is where it should be. we're almost at full employment. the problem is a pay problem. we have too many jobs that don't pay enough, and that is another thing that president trump has talked about. we haven't seen a lot of action there. but ultimately, what we need to do is actually take, get some companies to reinvest some of their profits in paying people more, investing for the long term. that is what will fix the economy. >> your point about the social discussion versus the market discussion, it could not be more disparate right now. >> that's right. and again, i think there's a lot of noise around the presidency created often by president trump himself, and i think his approval rating, or rather, his disapproval rating, would be much better for him if, in fact, he were to rein in the social stuff and the tweeting. >> do you think there's a strategy right now on the tweets and the white house visits for investors? i'm looking at the s&p industries, airlines are doing the best, up a little more than 2% if we watch the ceos parade in front of the white house. yesterday with nordstrom, initial tick down, then finished, what, higher by a few percentage points. what's the strategy for a tweet or a visit to the white house or an announcement on jobs? >> i think on tweeting, we've been talking about this for a couple of months. one thing we've learned over the past couple years is we can get used to pretty much anything. and there have been so many statements that if we didn't have this long transition period of getting used to them, you would just be absolutely floored by them, but people are beginning to tune them out and take them in stride and, okay, well, don't pay attention to everything he says and don't take the pronouncements, in fact, seriously, necessarily. i'm not sure that's good for the presidency, but it is happening. at the same time, he is listening to a lot of business leaders, even behind closed doors ceos will say the same thing -- we sat around the table for an hour. mitt romney didn't do that with me. that's one of the things i heard recently. so -- >> sitting around a table -- he's hearing. whether he's listening or not, we'll see in the policy. >> fair enough. come down to the policy. >> these are live pictures here of the white house. of course, you see now attorney general jeff sessions to the president's left, along with the vice president. sessions, of course, sworn in. and along with that, some of these executive orders the president is signing tied to drug cartels, crimes against law enforcement. take a listen. >> very important. they're all important. >> thank you all very much. jeff, i know you're going to do a fantastic job. good luck. [ applause ] >> on the wires, sessions says "a rise in crime in the united states is a dangerous, permanent trend," says "we have a crime problem in the united states." we'll keep our eye on all of that. we were mentioning the president's tweets. speaking of twitter, shares taking a hit today. the company beats estimates on the bottom line, but sales fall short, the outlook below estimates. they saw their slowest quarterly revenue growth since going public, ad sales down year on year. this is jack dorsey on the conference call this morning. >> the whole world is watching twitter. while we may not be meeting everyone's growth expectations, there's one thing that continues to grow and outdates our peers, twitter's influence and impact. it's been hard. it will continue to be hard, and it's all worth it. twitter changed the way the world communicates, and we'll do it again. >> henry, our friend, josh brown, this morning said if you can't grow advertising in an election year, you don't have an advertising business. is that too harsh? >> look, the problem for twitter since they have come public is people assumed that they will be the next facebook, and anything less is a disappointment. and i think what we've learned over the past couple years is twitter's actually much more of a niche than facebook, but it is doing something that no other network is doing. facebook, because it's a little bit more focused on features and it's slower to deliver, twitter is the realtime news network. they ought to be able to build a good business around that. it's a question of how big the business is. one of the things that's going on in advertising is they are transitioning away from an early product to what looks more like a tv advertising product. >> henry -- >> it's good, but it's going to take this transition. >> you're being really nice. i mean, this quarter's a train wreck! i mean, if you are a news network, i mean, there are news networks that are actually making money and growing revenue, traditional news. this is awful. yes, daily active user engagement was up, but monthly active users domestically flat, revenue down. adam bain, who had a lot of credibility with wall street for growing revenue, is now gone. i mean, this is really bad. the whole idea -- when the president of the united states, the most powerful person in the world, is using your platform as his primary communications tool and he's controversial and people have to keep looking at it every day, you're in the headlines every single day, and you can't grow revenue, that's a broken model, isn't it? >> it is certainly not a good quarter, as we have seen in the stock price. what i am saying is the process is that twitter is finally recognizing what it is, and ultimately, what it is has value. we don't know exactly how much yet, who will they can develop it as a news platform, but i think there is a potential for them to transition from buy button, which is crazy on twitter -- doesn't make sense -- to tv advertising, people checking to see what's going on, seeing a clip of the game or news or what have you. we need something like that. >> can we go back to speculation of who's going to take it out? it has value there, can't monetize -- >> that's the price, clearly. it is the hope that someone will come along and take it out. but stepping back from that, unless you think their revenue will collapse from here -- it's about a $3 billion business, a $12 billion market cap. 12 times value. it's not growing, but finally when they get the excess cost out that went to we're going to be the next facebook, they ought to have a pretty decent profit margin. they don't have any content costs, unless they want to move into the nfl, which they did last fall. >> as recode argues today, they have survived. they've survived for a decade or more -- >> and as a user, nobody offers what they offer. you want to figure out what's going on, what people are saying about if? >> why don't advertisers increase their spending on it? >> they do. the problem for twitter has been expectations from the beginning. >> do a search/replace for this conversation, swap out twitter for yahoo! and it still makes sense. >> yeah, one of our folks at business insider, one of our commentaries have branded twitter the new yahoo! several years ago. it's not a good thing. >> thanks for the reminder. henry, good to see you. henry blodget. when we come back, we'll get a live report from the heart of today's nor'easter in a moment. the nba making a big bet on e-sports, teaming one one of the biggest video game-makers. we'll talk to commissioner adam silver and more later on. much more on twitter as the stock is down. "squawk alley" continues in a moment. ni...y! lle alout ucinglen ons sttegies. optiontrade. t lp otrtring with onlyri won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. and if you have more than one liberty mutual policy, you qualify for a multi-policy discount, saving you money on your car and home coverage. call for a free quote today. liberty stands with you™. liberty mutual insurance. welcome back to "squawk alley." check out the markets, triple record highs right now for the dow, the s&p 500 and the nasdaq. and we are at session highs right now. all three are up a little more than 0.5%. there's some talk that corporate tax reform could come soon from the trump administration. the dollar's up. and treasury yields are higher as well. so is oil, all contributing to this rally. meantime, forecasters are expecting as much as 10 inches of snow in some parts of the northeast. thousands of flights have already been canceled. hundreds more have been delayed. and the snow continues to fall. the weather channel's jim cantore's in plymouth, massachuset massachusetts, with latest. jim, looks windy there. don't see a lot of snow. >> reporter: yeah. we're just getting into the wet snow. remember, we started our day yesterday at 52 degrees, like new york city 62 degrees, so incredible warmth. they've crashed down. they've already got 9 inches on the ground. it's still coming down. we're obviously still cooling down here on the massachusetts coastline. but look at plymouth bay, absolutely rockin' right now with wet snow coming out of the sky and huge wave action. we just passed high tide about 2 1/2 hours ago, and you can still see how agitated this is. now, the damage has been done. we saw rain change to snow in philly. they saw some good accumulation there. up into eastern pennsylvania. albany, new york's got double-digit snowfall. new york city, as we mentioned, long island, snowfall rates of 2 inches an hour. that will rotate in through here later on. but right now it's kind of a wet snow. and of course, if you're on the upwind side of that, you can see how it's kind of sticking because it is so wet. on the other side, it's actually dry on this log right through here. so, wet snow on this side, dry on that side. it's interesting, you guys were mentioning twitter and talking about twitter just a while ago from a business standpoint. for me, i would tell twitter, what the heck's going on in the weather? you wouldn't believe the hundreds, and i mean hundreds of reports of thundersnow with this particular storm. it's going to be known as the thundersnowstorm, which is lightning and thunder with snow. it's not super rare, certainly, but the amount that we've had with this particular storm makes it one for the record books, especially given the kind of warmth that we had yesterday in new york city. we've never had 6 inches of snow after a record high in new york city, so that will be interesting to see what happens. either way, remember what i said, we're 35 now. we started at 41 this morning. the road surfaces are fine. they're fine here. but as the snow comes down heavier and the temperatures drop below 30 and 32, then we're going to have big problems on the roads. tonight we're supposed to be about 15 degrees by 11:00 p.m. talk about an ice skating rink. that's what this place is going to be. sara, back to you. >> we've got a ground stop at kennedy right now, jim. we know you're a monster on twitter @jimcantore, almost 750,000 followers for jim. >> #thundersnow, already trending. when we come back, e-sports, talking to adam silver and strauss zelnick. and later, more on twitter's free fall, down almost 10%, but the dow up 117. your new , pi wrongrancy. wiut necar acemen, e yollhellubaclpr fo tay. liy stanh u dow's up 134. many things coming together here to create new highs for the dow, the nasdaq, the s&p. first time all three have set intraday highs since late january, january 26th. mike santoli, i have no doubt, is watching this closely from the nasdaq. your thoughts today, mike? >> you know, carl, i think seven or eight times in the last couple of weeks, the s&p 500 sort of made a high for the day around that 2,300 mark that had been the old high. so the question was, was that a ceiling or softening up that level? and i do think that nothing really broke during this long, calm period. we've gone sideways. maybe we're still in that calm period, just kind of nosing above the upper end of that range. but i do think that because nothing broke, the credit market didn't really, you know, throw any kind of a tantrum, you didn't see any other stress in the system. it was just a matter of what was going to be the next catalyst. so, perhaps today with this talk about the president moving along some kind of a tax package, i do think it provided a little bit of an excuse to say, okay, maybe things are going to move forward. i think this market's very hungry for any excuse to raise earnings estimates going out a few quarters, or at least prevent them from eroding very much. and so, that could be the cover story here for a market that basically has been very dif dent. not sure if it could break out of this range. >> two things stand out, mike. certainly, the rallies are much more powerful than the sell-offs. yesterday the dow was barely done. what's interesting in today's action is the leaders are retail. if you look at the dow right now, nike and walmart are leading the dow. they've both been at the bottom of the list. perhaps border adjustment tax, bets that it's not going to happen? >> yeah, i do think that the market is at least trying to sort that out and, basically, perhaps coming to the conclusion, if it's playing the probabilities, that there will be some form of corporate tax relief but that the prospect for border adjustment tax, which would affect retailers much, is a one in three or one in five shot or however you draw up the odds. but i think, sara, it's one of these situations where the market, as it's gone sideways for a while, has found other sources of support. it hasn't all been about that kind of cliche trump trade we all talked about for the first five weeks after the election. in fact, if you look at the new highs list, it's been a very 2015-style large-cap growth, including tech, type of leadership, and not just today. today it is the retailers and the consumer leveraged stuff. but i do think it tells you something, that the market has kind of grabbed for something in the absence of the obvious cyclical catalysts that we were getting used to, such as higher treasury yields. >> hey, mike, vix is close to a ten handle. you retweeted something you wrote a long time ago in "barron's," when that was your old gig, about how you're supposed to behave or think in periods where volatility seems to be dissipating. what can we say about that right now? >> look, you've had a few of these long stretches, carl. in fact, this one we've had now where you haven't had a 1% daily loss in something like 80 or so sessions, that goes back to about 2006. the mid-2000s were a similar situation. the main thing to take away from a low vix is that the market itself has been extremely calm. so, the actual displayed volatility of the market has been well below what's indicated by the vix. so, that's not really telling you anything you didn't already know, which is the market's been really quiet. it doesn't in itself say we're too complacent. all that being said, it kind of says we're hovering near the highs. it doesn't seem as if you really are going to look at this as a position where you're going to launch off from in a very aggressive way, but you know, it's sort of a net positive that you're able to hold the highs when volatility's been this low. again, i don't think we're at a point where we're launching off into some new major up leg, but could be wrong. and as i said, very little damage under the surface that's really been weathered. >> yields at 2.48 on the 10-year, has goldman sachs and most of the dow, again, 28 points all by itself. we'll leave it there, mike. thank you. mike santoli from the nasdaq. straight ahead on "squawk alley," jack dorsey says 2017 will be all about simplifying ad products on twitter. it's not doing enough to help the stock this morning. we'll talk about that. and later, an exclusive look at the secret lives of the super rich and horse jumping. our robert frank will have that story when "squawk alley" returns with the dow here up 138 points. e,l s, thetuhamaers? thhi, e,l s, yo fince ure. ho you s ts?yododot. partr atses ments e,l s, thfortun0,d,an ihterso toso what mamorganantanley i'm courtney reagan, and here's your "cnbc news update" at this hour. construction of the dakota access pipeline under a north dakota reservoir has begun, and the full pipeline should be operational within three months, according to the developer. the army granted energy transfer partners formal permission to lay the pipe on wednesday. a powerful, fast-moving storm sweeping into the northeast this morning. up to 15 inches of snow is expected in the northeast corridor. more than 3,400 flights have been canceled, mostly in new york and boston. the faa announcing a full ground stop at jfk airport here in new york. police in central germany say they have detained two known islamic extremists in an investigation of possible plans for a terrorist attack. the names of the men, a 27-year-old algerian and a 23-year-old nigerian, have not been released. former new york knick charles oakley was removed from madison square garden last night after he scuffled with security, this after yelling at knicks owner jim dolan at the knicks/clippers game. he was taken away in handcuffs and charged with assault. the knicks released a statement saying they hope he gets help soon. that's your "cnbc news update" at this hour. back to you, sara. >> courtney reagan. courtney, thank you. we are counting down now to the close in the uk and across europe. let's get to seema mody, where it looks like we've got a rally following in our footsteps there. >> exactly right, u.s. stocks hitting record highs and the european broader market on track for a third straight day of gains. the conversation shifting from politics to earnings and the health of european corporates, starting with france's socgen. earnings beating expectations. operating income more than doubled, helped in part by lower provisions for bad loans. another french company, sanofi, also up sharply. the drugmaker and its partner, regeneron, won a stay of an order that would have blocked the two companies from selling their cholesterol drug in the u.s. now, sales had been blocked after amgen won a trial in which it accused sanofi and regeneron of infringing its patent. shares up about 5%. on the down side, thomas cook, a uk-based travel company, posting a wider quarterly pretax loss and warning that concerns over political turmoil and terrorist attacks may continue to hamper the business. finally, new data showing germany's trade surplus in 2016 hit a record high of $270 billion. that's basically underlining germany's reliance on exports. and you know, it could lead, guys, to further criticism by the trump administration, which has already accused germany of being too dependent on foreign demand and a weaker currency, sara. >> everybody's jealous of a trade surplus right now. seema, thank you. seema mody here on the floor. let's get back to the white house this morning. what a busy morning, the president meeting with key airline executives, talking about regulation, competition, infrastructure. eamon javers standing by with the latest there. hey, eamon. >> reporter: yeah, hi, carl. the president was in a chatty move this morning when the wranglers tried to pull the press out of his meeting. he insisted he wanted the press to stay and film the rest of the session, so one of the moments we saw was this conversation from the president talking about the air traffic control system and just sort of mocking it for being inefficient. here's what he had to say. >> we're spending billions and billions of dollars. it's a system that's totally, you know, out of whack. it's way over budget, it's way behind schedule, and when it's complete, it's not going to be a good system. other than that, it's fantastic. [ laughter ] >> reporter: other than that, it's fantastic, the president said. he also said he thinks that the head of the faa should be a pilot, carl. so, that might give you some sense of where this administration is heading in the weeks and months to come. >> all right, thank you, eamon. i'll take it. eamon javers. twitter, meanwhile, reporting an earnings miss. take a look at the stock right now, down just about 10%, over 10%, despite a very active president on the platform. the active tweeting hasn't been able to turn things around for the company in terms of users or revenue, so what will? joining us now, eric sheridan and mark mahaney with rbc. good morning to both of you. mark, i'll start with you. this quarter, a lot of things not to like -- the domestic monthly active users flat, ad revenue down. it appears that the leaky bucket problem that twitter has had continues. anything positive that you see, maybe daily active user engagement? >> so, one positive, one negative. the positive is you see rising engagement levels. so, they say this was the third quarter in a row of accelerating daily average user growth, so at least the users they have, which are flatlining, at least seem to be becoming more engaged with the site. the real negative to point out and what they were up front about is they're seeing much more competitive pressure for video ad dollars, and they listed all of the other social media networks. that problem is probably going to intensify. we now know that twitter is growing ex-growth, i.e., their revenues are going to decline this year. whether they can get out of that spiral is an unknown. >> and eric, now they've got to worry about snap inc. with its very popular snapchat product that's going to be throwing out more and more data as they prepare for an ipo. we'll have even more information about them later into 2017. how do you see twitter turning this around? >> yeah, i think they're really going to struggle to turn it around. i think at the end of the day, the message coming out of the call was that twitter is likely going to be a smaller, more streamlined company over the medium term. they talked about either decommissioning or de-emphasizing some products around direct response advertising. they talked, as mark just said, about pivoting more directly to video. but the competitive intensity around video is only going one way. we, frankly, haven't even seen yet in 2017 facebook's best efforts with respect to video. that was a big topic on facebook's call last week, a key area for investors for them. the competitive intensity on video is only going up in 2017, and it's going to be very difficult to turn around that momentum into that competitive intensity. >> mark, have you ever seen anything like this, where we talk about a company so often, it's so impactful, the president is using it, it has so much value, and yet, they can't figure out how to make money off of it? jon brought up yahoo! maybe, earlier. are there any comparisons? and if so, what's the up shot? >> yeah, i think jon's comparison with yahoo!'s a good one. you could go back 10 to 15 years and talk about aol, but this happens. i mean, there's always fashion risk in this industry and i don't know what the solution is for twitter. my guess is in order to really grow the base, you're going to have to dramatically change the user interfarks and therefore, probably piss off some of your core users. that's really the choice they face. and when they talk about stream-lining ad products, that just makes it sound worse. so, i am not sure what the solution is here. i guess we did ask the question on the call about whether there was a negative effect to user and engagement growth due to the president's use of twitter. i don't think really that it's known. i don't think twitter knows what kind of impact that's really having, other than it's obviously not having a positive impact. >> eric, is it time for jack dorsey to hand over the ceo reins to somebody else? he's running square still. you've got this bad quarter with the stock down now more than 10%, at least at this point in the trading day. they have not managed to have stability in the management ranks, much less what's going on with the product fundamentally. is it time? >> it's a constant question we get from investors around jack dorsey splitting his time between two companies. i think no one thinks that's the best solution here. but the opposite, which is what you're sort of suggesting, of maybe making yet another change also doesn't seem like a good solution, because i think bringing in an entire new regime to run the company, starting all over again into the competitive intensity we just spoke about in terms of the fight for digital -- >> but they've got a new regime every three months, it seems. people are still quitting. they haven't stayed with jack dorsey, by and large. >> that is fair. i think change at the top would likely push out any turnaround in this company out into 2018 or beyond, and i think when we lay out the competitive intensity in the industry, facebook and google are going to continue to grow at very fast rates and continue to innovate. and i think that would leave twitter further behind at this point. >> well, many of us are users. we wish them the best. eric, mark, thank you. >> thanks, jon. as we go to break, take a look at where we stand just two hours into the trading day. dow close to session highs, up 124. record highs for every index on your screen. rick santelli, what are you watching today? >> well, i'm watching the reversal in treasuries. and you know, carl, i know that politics is fun because it interacts with markets, and everybody's enjoying trying to handicap the relationships, but sometimes it gets us off the wrong scent. there's things going on in europe affecting treasuries, and that's what we're going to talk about after the break. ♪ i'm scott wapner. today on "the halftime report," the dow, s&p and nasdaq all hitting record highs after president trump says we'll see a tax plan within a few weeks. will that be enough to take stocks to the next level? plus, twitter battle. wall street's biggest bull, biggest bear both here to make their cases on that stock today. and after last night's garden fight, we are holding court on msg stock. one of our traders says it's a value play, but there's just one thing preventing him from buying it. find out what that is, noon eastern on "the halftime report," sara. quite a scene last night at the garden. >> oh, yeah. we've seen that video. scott, thank you. we'll see you then. let's get over to the cme group, rick santelli with "the santelli exchange," as bond yields and the dollar make a move up here, rick. >> they absolutely do! and that's exactly what we're going to talk about. and as we talk, i want you to look at intraday of our 10-year, really it's a 24-hour chart of the bunds. now, granted, our 10-year's kind of zoom, zoom, zooming a bit, although it's ground that we've covered quite adequately. it's like a well-worn slipper, and bunds doesn't look as aggressive, but definitely up side. the reason i bring it up is, is because other sovereigns in europe, like spanish 10s, italian 10s, french 10s, they're all moving down. and the real issue here is, is that we all think it's rather interesting and it's kind of an interesting game, and i've seen traders do it for decades, to try to relate what's going on in the world and pinpoint exactly what's making various markets move. now, i can't tell you all the channels that are affecting treasuries, but i can tell you a channel that not many are watchi watching they ought to watch, and that's the effects on our markets from europe, okay? so, now, let's remember, we've seen the difference between high-quality bunds and the lesser-quality southern economies, whether it's the french economy and their 10-year, the spanish economy, the portuguese economy, italian. they have all widened, meaning the difference has gotten wider. okay, let's go to my board a minute. we know that the bunds are the highest quality in europe and we know that europe's going through, as we are, political issues with elections coming up, populist issues, credit issues -- think italian banks -- and mario draghi with the big quantitative easing 747, the runway's getting shorter and shorter. so, when i look at 10s minus bunds, what's fascinating is, for the most part, for months it's kind of held 200, and it's been rather stagnant lately, okay? and as i was referencing, if you look at a one-year chart of any of the 10s outside of bunds, they all basically look like this. now, here's where it gets interesting. look at the next two charts on your screen, okay? one is the 10-year u.s. overlaid with the italian 10-year up to november elections. boy, they're like on top of each other. now, look what happens after november. and this is really the crux of the matter. let's go back to my white board, okay? now, that chart you just saw post election, they were diverging. they were the most correlating directly. they were correlating exactly the opposite. so, what we saw was italian rates are doing the opposite of 10s. that's because of the spread going on between the good quality and bad quality in europe, which means relative value trade that pushed our yields down may have very little to do with what's going on here and a whole lot more of what's going on in europe. jon fortt, back to you. >> rick santelli, thank you. more "squawk alley" with nba commissioner adam silver after the break. you do all this research on a perfect car, then smash it into a tree. your insurance company raises your rates. maybe you should've done more research on them. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call for a free quote today. liberty stands with you™. liberty mutual insurance. the nba making a big bet on esports, professional video gaming. joining forces with video game maker take two interactive. i spoke with adam silver and strauss zelnick and what the goal of the partnership will be. take a listen. >> it's a whole new parallel universe. the idea here is it's based on the same bricks and mortar model of a league we currently operate. but it opens up an entirely new world. so rather than being dependent on a limited pool, even though a global pool of players who have a certain physical prowess, this opens up a league to virtually everyone, regardless of your age, sex, height, ethnicity, nationality. everyone is on equal footing. the structure will be very similar to the nba. so rather than having the clippers, we'll have the e clippers. we'll have the e knicks. and the notion is these teams will draft just like in the nba, they'll be drafting a different set of players. no existing nba players will be involved, but they'll be drafting the best gamers who will then compete in a five on five competition. and there will be full-time employees of this league and competing against each other. sometimes in remote sites, sometimes in actual nba arenas, where people will come and watch the competition. >> i know, but are they nba players? >> this is the way to go with this esports -- it used to be in games, the challenge was to get the game to resemble real life from player attributes to facial expressions. this is a whole different take on fandom. >> it's such a great question. you know, we are proud of the fact that the nba 2k game is a great simulation of the game. an extraordinarily realistic simulation. but in the last few years, we've also added these powerful story elements, where we track players and their stories. and we have turned the experience from a simulation experience into a lifestyle and entertainment experience. specifically with regard to competitive gaming. look, this is already a half billion dollar market. the expectations are it will be a billion dollar market within a couple years. and we together with the nba have already set out to see how consumers would feel about this. in our first tournament, the road to the finals, we had over 2 million matches played for a $250,000 grand prize. right now, the all star tournament is going on. something like 500,000 teams are playing, again, for $250,000 prize. so we have seen that people are incredibly excited about competitive gaming and it's our collective view that what consumers are looking for is a professional league with professional players with a sport that's beloved. a sport that won't come and go. a sport that will only grow in popularity. so we're just thrilled to be part of what we believe is going to be a very significant enterprise. >> and mr. silver, you say that you don't have commitments from the 30 teams yet. you expect about half to participate in the inaugural season. how do you frame the business model for this? is it in a share of the game's revenues with advertising on top of that? somehow are there sponsorships? how do you expect that to evolve? >> well, first of all, in terms of commitments from nba teams, the only reason we don't have actual commitments is because haven't asked for them yet. we presented this concept to all 30 teams and all 30 teams said they were interested. i think it's just a question in terms of the logistics for our teams and putting the resources against this league. how soon they'll have their e-version of themselves in this league. it's my expectation that ultimately all 30 teams will participate. >> so to be clear, sara, you could be the michael jordan of esports in the nba. it's a parallel universe. just the best e player wins. we'll see how it works out. >> not basketball, but maybe video game basketball. >> my money is not on sara. i'm sorry. >> if she's playing me, she's probably going to win. >> i'm good at video games. >> record highs for all three indices. we're back in a minute. horses jumping over the fences at break net speeds on south beach are worth millions. but some of the young women riding them are worth billions. that's steve jobs' youngest daughter, eve. she's competing against jennifer gates. her dad, phil, the richest man in the world. >> for gates and jobs, it's a friend friendly rivalry. this is serious business for bloomberg, dr. of michael bloomberg. he's watching from the vip section. >> every rider will take a couple falls a year. this is the sport. it's something that i think has always made me stronger. >> that was just a preview of a new edition of one of our favorite shows, "secret lives of the super rich" an exclusive horse-jumping competition at miami beach. robert frank. don't get to here from georgina bloomberg very much. >> no, we don't. exclusive access we got. just think about the daughters and the families that were in that ring. the daughters of steve jobs, bill gates, michael bloomberg, bruce springsteen, and in the stands,elle mcpherson. i can't think of a richer sporting circuit than show-jumping. monaco, cannes shanghai. $50 billion worth in the ring. not a cheap sport. >> no. we can't wait. "secret lives of the super rich," 10:00 p.m. pacific. let's get back to "the half." at hq. carl, thanks. welcome to "the halftime report" i'm scott wapner. more mile stoejs for the major average as with all time highs. with us for hot you are, jim lab lebenthal and steve weise. we have josh brown -- yeah, josh and joe terranova, our snow wimps. are you guys there? >> yes. >> you guys all probably huddled up by the fire in your pjs. i'm going to start with the guys who made the effort to come in today. like the rest of us. steve