good wednesday morning. welcome to "squawk alley." jon fortt, sara eisen and me at post 9. markets once again chasing some record highs, eight straight gains now for the dow, which, of course, hit a record intraday high earlier this morning. that's a 13% jump for the industrials since the election. joining us this morning, paul christopher, head of global market strategy at wells fargo investment institute. paul, it's good to have you today. >> thank you. >> as the debate goes on about how much of this is fundamentals versus political expectations. you think it's the economy at work here, don't you? >> yeah, we do. we have a lot of clients, though, investors who think that, well, gee, if this is really all just about policy, then this rally is riding on thin air. we don't think that's necessarily the case. the economy started to improve long before the elections, just started getting noticed on november 9th. >> we got the s&p now above the average year-end strategist target of 2,364, or just about there, but strategists aren't raising their targets higher. why not? >> what you're not seeing is we're all behind the scenes scrambling to test different scenarios of policy outcomes and how that might affect the market. but at this point, there's no point in publishing anything because there's just no way to know how those combinations will come out. you could have very positive results for the economy and the markets and very negative results. so, it's time really to stay pat. but once -- investors need to know that once those details start coming out, everyone's going to be heading for the same door at the same time. >> all right. want to bring in gabriella santos, global market strategist for jpmorgan funds. welcome. gabriella, you say this isn't a trump rally, agreeing with paul that it's a global reinflation rally. how does that play into what we should expect for the rest of the year when it comes to perhaps, say tech stocks, which have been on quite a run since november after initially selling off? >> that's correct. so, we really believe that this market rally began in the second half of last year as the economic data in the u.s. and around the world really started to improve. and i would agree with your previous guest who said that, really, we don't have a lot of details in terms of the politics. so what we're going off of in terms of expectations is the economy that we have, which is one that's pretty good. so, our expectation for the market overall is 5% return for the next few years, and we really need to dig deeper to find some outsized opportunities with tech being one of them. >> paul, i'm just looking at the discrepancy between the stock market and the bond market. the 10-year yield seems to be stuck around 2.40 right now. as the stock market has continued to make new highs. the data's been good. we got existing home sales earlier this hour, paul, and it looked like it was the highest rate in ten years. so, which market has it right? and is one sort of painting a cautionary signal for the other? >> not necessarily. the bond market is going to be watching long-term inflation. those expectations in the market have been flat. that's why the bond market has been flat in terms of yield. the stock market, though, continues to see some good growth prospects for this year. and look, we think that even though those policy details are missing, investors should still be investing in the cyclical stocks that will benefit if the economy continues to improve as we expect. >> and gabriela, how would you recommend investors protect themselves in this kind of environment? given, as carl mentioned, we're already at about the levels that a number of strategists had targeted for the end of the year. how do you protect yourself to the down side? is it just getting into the cyclicals, or is there a better way? >> so, it's looking beneath the surface, looking for sectors that have higher return opportunities. so, we would agree those would be the cyclical sectors. but it's also about looking a little bit beyond just the united states and thinking what other regions perhaps have higher upside potential? and to us, that's really where the action is going to be over the next few years, and that would be regions including the eurozone and including emerging markets as well. so it's really looking at a portfolio and thinking globally here. >> yeah, gabriela, we've had a lot of discussions really since the beginning of the year about how europe, according to some, is a lot less expensive than u.s. but even today, we're getting a lot of this intraday news regarding french elections and potential alliances. maybe it's less expensive for a reason, right, because of the political uncertainties? >> right. i don't think we can dismiss political uncertainty in europe. the issue is, though, with 19 countries in the eurozone, 28 in the european union, there is never not going to be a year where we have elections. so, it's looking beyond a little bit of the political noise and looking at what's actually happening on the ground with the economy. and if you look at eurozone pmis, for example, that just came out for february, at the highest level in six years. so, separating political noise, which will be with us, versus economic improvement, which is very, very encouraging in the region. >> it's going to get interesting. paul christopher, gabriela sant santos, thanks so. we'll see you next time. >> thank you. >> thank you. the president this hour meeting with secretary of state rex tillerson ahead of the secretary's trip to mexico. our kayla tausche is in washington with the latest on this one. kayla, good morning. >> reporter: good morning, sara. it will be a closely watched meeting when secretary tillerson meets with mexican president enrique pena nieto and top officials to discuss border security, law enforcement cooperation and trade, among other issues. of course, it happens since the president's own meeting last month was scuffered by a twitter war. the president hasn't tweeted directly about mexico since then, though last week he called the trade situation there severe. joining secretary tillerson will be homeland security secretary john kelly in the midst of a plan to deport undocumented criminals and adding 10,000 new enforcement agents. the 11 million undocumented immigrants in the u.s. paid close to $12 billion in local taxes. that's data from the institute on the taxation and economic policy as of last year. now, legalizing those immigrants, this agency said, would add $2 billion in tax revenue, but it's unclear as of now what the economic impact of the current administration's plan would be. the trump camp has actually explored ways in the past to tax remittances, which actually reached a record $27 billion in 2016. meanwhile, a congressional delegation is using their recess week to investigate border security. texas senator john cornyn will host speaker paul ryan along the rio grande today, and here's the majority whip last night in laredo, texas. >> i believe it's our intention to lead with recommendations to general kelly, to secretary kelly, and to president trump, on how to actually achieve the goal of securing the border, at the same time leaving open the bridges and the important trading relationships that are so important to our prosperity. >> reporter: speaking of trading relationships, as we reported yesterday, the official u.s. clock to renegotiate nafta hasn't begun yet, but treasury secretary steve mnuchin will be meeting the finance minister in the coming weeks. this happens as mexico's central bank will inject $20 billion in currency hedges to support the peso, but all of that, guys, i'm sure will come up in becky quick's conversation with the treasury secretary tomorrow on cnbc. carl? >> that's going to be a big interview, kayla. thank you very much. kayla tausche in washington. when we come back, big news from apple today and its new spaceship-shaped headquarters. the stock making new record highs. immigration's economic impact. trillions in economic growth at stake as the administration rolls out some new guidelines. then later, netflix buying a big project from hollywood. a lot more on their content plans that involve scorsese, when "squawk alley" continues. h. we need your password so we can lock down the system. my password? yes, sir, we need your password. the passwordhat i use? yes, sir, your password. there's been another breach! sir! right. okay. i-h-a... ...t-e-m-y-j-o-b-1. ihatemyjob1? wanna get away? now you can with southwest fares as low as 59 dollars one-way. yes to low fares with nothing to hide. that's transfarency. sfx: clap, clap, ding oh...ncome on...och method! what's going on here? you know how ge chnology allows us to fix problems before they... they slow production, yeah. well, no more catchy business acronyms. wait, we don't need to smooch? i'm sure we can smooch a solution! we just need to "hover" over the candice, problem until... just let it go... hey, sorry i'm late for team building. smoooooooch! that felt right. what's wrong with you!? he's so trusting... i'll send it over to seema mody for a quick "market flash." >> the major indexes may be down, but one stock bucking the trend, shares of valmont, tracking for the best days since 2009. they specialize in irrigation equipment and beat results on its top and bottom line and upped its guidance for 2017. keep in mind, valmont not only an agriculture story, but an american manufacturing play. shares were high, up 13% in early trade, and the stock is up about 40% over the past one year, carl. >> seema mody, thank you so much. as we said earlier, the nasdaq coming off its eighth straight record high as tech continues to play a major role in the recent rally. apple's just one of the stocks leading the charge, hitting another record high yesterday. the company announcing its new 175-acre apple park campus will be ready for employees this april. kate mitchell is partner and co-founder of scale venture partners and joins us to talk about that and more. kate, good to have you back. >> good to see you. >> a lot of cynics look at any company that has a brand-new headquarters and they say that's got to be the top. is this a sign that spending or capex or sg&a or anything is out of control? >> no. i mean, apple, they did this initially at one infinity loop, so this is not the first time they've launched a great, new campus, and with it, breakthrough, by the way, some of the things we have yet to see on this campus is what it's like inside. they focus, as all of us do as users, on employee productivity, and it will be fascinating to see their view of what it looks like now. they don't have some of the challenges others have. i think it will attract a lot of people and a lot of employees, which is a big issue for companies like apple. >> kate, what a lot of people don't know is that apple at one infinite loop has just been desperately overcrowded for years now. they've got employees scattered in small offices throughout cupertino, throughout santa clara, and when you're trying to get a project done, whether it's software or hardware, that's really difficult. they're going to keep one infinite loop and also open up apple park. how much do you think this could improve their productivity now that they're going to be able to keep the bulk of all their employees at these two campuses, which are just a couple of exits along 280 away from each other? >> well, as academics and companies like apple have shown, collaboration is the way you get to success. it's the best and most important thing in terms of creativity. it's to share ideas with others. and their ability, and i think that circular shape is indicative of what i think a lot of us will expect to see inside. this chance for engineers and all of the people across the company to really begin to brainstorm on what's next. i think it's going to jump-start the employees. i think a lot of going to work is how you feel when you come into a place and who you're interacring with. i think it's going to be a great shot in the arm for them. >> yeah, the great talent race in silicon valley. that's what it signifies to me, kate. i wonder with some of the hurdles coming from this administration, for instance, on immigration, something silicon valley has been hitting so hard, where apple stacks up, both in that fight on immigration and in attracting the best talent versus some of the other major competitors. >> actually, you know, tim cook has taken the lead, i think, with his own personal communication about his lifestyle and taking the lead. i think he has both said i'm going to collaborate, obviously, with governments at hand, and he should, but i think he's, as they have for a long time, really taken a lead on being inclusive and thoughtful. so, i think they're going to be particularly attractive, obviously not just because of their campus, not just because of the exciting changes and the new apple iphone being announced coming out this fall, but i think a lot of it is the culture of where you work. and tim cook in particular i think has taken a very public stance, and it all starts at the top. and you know, people put up billboards on the freeways around here simply to attract employees. i think apple couldn't do better than what they've already done with tim cook's leadership on that. so i think that's going to be really critical because it is a talent war out there, and i think he's going to get a lot of the best people. we're all going to have to work together on this whole issue of immigration, and we obviously care a lot about it in silicon valley. and it's great to have somebody like tim who is at the forefront of that discussion. >> yeah, tim has a nice blog this morning talking about some of the details, including a theater that will have jobs' name on it. moving on to snap, kate, evan spiegel pitching investors in new york city yesterday ahead of the ipo, addressing concerns about spending, lower user growth and competition. susquehanna today takes a pretty cautious tone ahead of the ipo, largely, they say, because of competition from facebook and instagram. a few moments ago announcing a feature whereby users can add multiple photos or videos in one post. of the list of things snapchat has to convince investors of, is dominance, or at least ability to compete with facebook, one of them? >> you know what, absolutely, and i think that's one of the challenges right now. you saw that their growth slowed when instagram stories came out, for example. it's very tangible. given the world they're operating in right now, they have a nice brand, but obviously, that's a huge market power with their big competitors. so as their product stands today, i think that's a somewhat challenging issue, and it's been raised by people contemplating buying the shares. i think if you're buying the shares, you're believing in evan spiegel's future view of the world, and he's already made a statement that this is all about the camera. they've launched spectacles. they're very interested in hardware. i think much like when facebook went public, mobile was yet to become as significant as it has for them. i think if you're buying snap shares, you're believing in evan's vision for the future where they're going to be building a bigger mote versus their competitors. i think a lot of it will be about augmented reality. you've seen the success of pokeman go. that's what you have to believe going forward. i think if their product road map was to stay where it is today, i think that would be smpg to worry about. >> i want to bring in farhad manjoo of "the new york times." farhad, good morning. picking up this conversation about snap, a lot of people will compare this to facebook, if only because they're going to be competing for some of the same digital advertising dollars. but i've underestimated snap and other people have gotten in trouble for doing that in the past, but when you look at zuckerberg's bench, he's got kevin systrom running instagram, he's got jan koom running whatsapp, david marcus, all of them ceos in their own right. doesn't snap have a big hill to climb here? >> yeah, i think they do have a big hill to climb in two ways. first, on product. i mean, i think snap is just one of the most inventive companies out there. they're creating sort of new ways to use social media, you know, better than anyone else. the problem for them is they're being copied, and then the ways that facebook is sort of copying them is often kind of extending what snap did and making it, you know, translating it well to the facebook and instagram and whatsapp audience in a way that really kind of undercuts with what snap is doing. you know, snap's user growth could suffer because of the product side of it. and then on the other side, i mean, facebook just has this huge lead in the digital ad business. and so, you know, it has all these contacts with the advertising industry to get those advertisers, you know, not exclusive. it's not like the advertisers won't go with snap, but it's, you know, it makes it much more difficult for snap to kind of stand out, both on the product side and on the advertising side. so i do think it is pretty difficult for, you know, for what they're trying to do. >> finally, guys, uber's ceo, travis kalanick, holding an all hands meeting at the company headquarters yesterday following allegations of sexual harassment and gender bias at the start-up. employees who participated in the meeting reportedly calling it "honest, raw and emotional," adding they were taken aback by kalla nick's response. we covered this a bit yesterday, farhad, kara swisher, but impact on culture at uber right now. >> i mean, everything i've heard suggests that it's bad, that morale is low. you know, this incident follows, you know, several weeks of people talking about whether kalanick would or would not be on the presidential advisory committee. lots of employees were upset about that. and there was that delete uber meme, which from what we know sort of hurt user numbers, at least in the u.s., by a lot. and you know, i think the question for uber is, like, they have this brand that no one sort of gives the benefit of the doubt to. so, every story like this that comes out kind of hurts them in the long run with users, like with their, you know, like what people think about the company when they use the app. and it's just an app, right? it's just software, and people can easily choose a competitor. in every country they serve now, they have a well-operating competitor, and people could easily switch drivers and users. so you know, i think this is a long-term problem for them. the way that people feel about the company is a long-term problem for them. >> how big of a controversy is it, kate, for a company that is arguably one of the most successful start-ups and largest start-ups in silicon valley that is potentially bracing for an ipo, that is valued near, what, $70 billion i think was the latest, kate? how big of a deal is this in that sort of rise to a public company? >> it's a huge deal. no, it's absolutely the right question. and i think, you know, the doubters in the valley are saying, gosh, his reaction was really his concern about the success of the company going forward. was it a real concern about the issue? you have to, you know, give him some benefit of the doubt there. i will tell you, it has been a wake-up call. susan's letter ricochetted throughout silicon valley, and i think the smart ceos have been using this as a teaching moment. and culture starts at the top, and we need to be -- it's a talent war that we're in. you need to have the best people focused on doing the right thing, collaborating for success, as we just talked about with apple's new campus, where you have that kind of infighting, a lack of inclusion and a welcoming environment, it is not the recipe for success. and i agree with farhad that that's affecting how we perceive the company and its public persona. it's been a big issue. i think it could be a challenge for them going forward as an ipo. i think in many ways it's a gift to the rest of silicon valley to remind us we all need to still focus on this issue and doing the right thing, much like facebook's been doing recently with many of their newest policies. leadership starts at the top and he's got to take ownership of it. >> kate, how many wake-up calls does silicon valley need? and by no means am i just singling out silicon valley here. it's a problem everywhere. but we've got sheryl sandberg leaning in, we've got all the issues around marissa mayer's ceo tenure and the criticism that she endured there that people saw as gender biased. it seems like there is a wake-up call every year, yet people are still asleep. isn't there a deeper issue here? how do you fix a culture that's eight years old? uber turns 8 next month -- that's behaving this way? >> we'll watch what arianna huffington and eric holder and many do at the top there. but i think you raise a really good point. i mean, this has been a long-simmering issue. it starts in the graduate schools now in computer science. and i'll tell you, it is going to be something that is going to be -- that we need to stay focused on, because i agree with you, it's a topic that hasn't gone away. i think one of the things you're finding is in the last -- starting with sheryl sandberg's book, by the way, it's now a topic that is regularly covered. i cover it a lot and talk to a lot of men and women on the topic and people of all minorities, status, et cetera, that all need to be brought into silicon valley for us all to stay competitive in the u.s. and again, i think partly with the discussions around immigration letter now so front and center in everything we do, this topic isn't going away and we have to keep talking about it. i compliment all of us for being here raising the issue for those of us that are listening. again, this is not being about good, it's being about smart and the best way to build our companies and being inclusive and thoughtful is important, and i think, therefore, it's a question for companies that haven't shown yet that they can do it and uber's still in that category. >> yep. kate, farhad -- by the way, farhad, good piece in the "times" regarding the news flow. good to see you guys. >> thanks. >> thanks so much. >> thank you. and when we come back, why walt mossberg says roku, apple and google aren't changing fast enough when it comes to television. plus, first it was twitter and the nfl. now facebook might be getting into live sports streaming. "squawk alley's" back right after this. runs on intel? that ride share? you actually rode here on the cloud. did not feel like a cloud... that driverless car? i have seen it a. intel's driving...the future traffic lights, street lamps. business runs on the cloud... and the cloud runs on intel. ♪ i wonder what the other 2% runs on...(car horn) know you have a dedicated adsoand team who understand where you me from know you can craft an investment plan as song yo♪r values know that together, with theuidance and support of your you caestablish a meaningful legacy dedicated pnc wealth management® team. ♪ netflix reportedly teaming up with one of the biggest names in hollywood. new reports the company's buying the worldwide rights to scorsese's upcoming film "the irishman," formerly with paramount. the film is set to debut in late 2019. it will reunite de niro with al pacino. it's funny, we've got the oscars this weekend. not unthinkable that netflix could be up for competition in the coming years. >> explain this to me, carl, because netflix had "beasts of no nation," idris elba, could have been a big film, didn't do that well. is this their chance for a do-over? do you think they'll go theatrical with this release as well as netflix, because they're spending a lot of money? >> a lot of money. i don't know we have terms on this deal, but the fact that they took it from such a large studio, an echo of what amazon's doing, and amazon has real oscar aspirations this year, not next. >> apparently, they'll do something like a backwards, "benjamin button" style, make them look younger, hence the big budget. it shows netflix is changing the content game, not just distribution, playing $6 million this year, more than last year, and not just coming in original shows but movies, too. rewriting the script here literally i think for producers and agents and actors. >> the hot, new thing, scorsese movies with pacino and de niro. still to come, why one study says the president's illegal immigration crackdown could cost the u.s. economy as much as $5 trillion over the next decade. "squawk alley" back in a moment with the dow up over ten points. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a livperson right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. i'm contessa brewer with your "cnbc news update" at this hour. iraq's government sanctioned paramilitary forces made up mainly of shiite militiamen, are launching a new push to capture villages west of mosul from isis militants. iraqi government forces took a hilltop area overlooking mosul's airport. the body of an egyptian cleric convicted of plotting terror attacks in new york has been returned to egypt for burial. omar abdel rahman died in a u.s. federal prison over the weekend. convicted of planning terror attacks against the united states. he was linked to the 1993 west bombing. calphalon is recalling 2 million knives because they can break when you use them. they were sold between august 2008 and march 2016. the company received more than 3,100 reports of those knives breaking and more than 24 reports of cuts to the hand. according to bankrate.com, the percentage of americans with more credit card debt than emergency savings has grown 2% to 24% over the past year. only 52% say they have more money in emergency savings. that's unchanged from a year ago. that's our "cnbc news update" for this hour. let's get right back to "squawk alley." >> contessa, thank you so much. let's get the european close here. what a day, especially in france. seema mody's got all the details. hey, seema. >> a lot of politics, carl. stocks are mixed in europe, but the economic story continues to improve, this time on the inflation front. the eurozone just posted its first month of rising inflation across all its member states. italy sees its biggest rise in inflation since 2013. so, say bye-bye to deflation, for now. also in focus, german sentiment in business is climbing. the german stock market hitting a new two-year high and back above 12,000. in stocks, unilever on the rise after rejecting a takeover offer from kraft heinz, the consumer giant now announcing that it's conducting a review of options aimed at boosting shareholder value. investors had been urging unilever to assess its costs and structure. shares up over 5%. in the uk, lloyds posting its best full-year profit in a decade, thanks to lower provisions. it also unveiled a special dividend payout. now eyes on whether the uk government will prioritize its efforts to offload its remaining stake in the bank as the company's financial outperformance continues. alcor saw strong operating demand in germany and the uk, which offset weakness in france, but a lack of guidance for current year weighing on the stock. meanwhile, they have named former french president nicolas sarkozy to the company's board. he will be in charge of its international strategy. so down but not out. on the topic of french politics, growing concerns over front national party marine le pen's support ahead of the first-round election in april. moments ago, french center risk politician bayrou seen as a heavyweight proposing an alliance to manuel macron. sara? >> seema, thank you. the trump administration out with two sweeping new immigration orders, promising to swiftly support more of those living here illegally, but what's the true economic cost over moving undocumented immigrants? a recent paper from the national bureau of economic research suggests it could be as high as $5 trillion over the next ten years. and joining us, the report's co-author, queens college associate professor of economics frances ortega. thank you for joining us, professor. >> good morning. glad to be here. >> you really dive into the various industries that could be affected, both in terms of output and employment. who's most exposed here when it comes to cracking down on illegal immigration from an economic perspective? >> well, in terms of industries, agriculture, construction, regional hospitality are in the industries that have the highest concentration of undocumented workers, they could see employment fall by over 10%. they could take a big hit. but i'd like to emphasize that undocumented workers are really spread throughout all sectors in the economy. >> so how do you tally up the economic cost when you get to that $5 trillion number? >> yes. so, there are about 7 million undocumented workers in our economy. that's about 5% of employment. and our analysis predicts that if we were to lose those workers, gdp, u.s. gdp could fall by 2.5% to 3%. that's a big number. that's like the whole economic contribution of the state of massachusetts, and it amounts to this about $4.7 trillion over the ten-year period. of course -- >> francesc -- >> sorry. >> sorry, go ahead. >> if income falls, if gdp falls, federal taxes, federal revenue will also go down. and our calculations say it could go down by as much as $1 trillion over a ten-year period. so if we're going to keep current services at their current levels, then we'll have to make up for that lost income. >> francesc, how much of the impact is from actual deportations versus workers just not coming in the first place or choosing to leave just because of the stress of this new political and policy environment? >> yeah, both things will have similar effects. in our analysis where workers lose, they show up to work, they produce in whatever industries they are employed. so, if we lose those workers either because they are deported or because they don't show up to work because they just hide for fear of deportation, the lost income could be about the same. >> have there been other countries where your hypothesis here has been put further into practice than the u.s. has? >> to my knowledge, there hasn't been in recent times a serious discussion about deporting such a large number of workers. so, really, we don't have a lot of actual data to go by. we have to rely on analysis. >> you're talking about such big numbers to our economy and our labor market, francesc. i wonder why the market doesn't appear worried, hitting new highs every day. economists haven't forecast down their forecast for this. do you think it's because they don't actually see it happening? >> well, so, we have to see exactly what are the -- what's the translation of the new executive order and the new legal changes, but probably we wouldn't be talking about -- the president is not talking about deporting the full 7 million workers. it would be a fraction of that, to the extent that it's not as many people, then the economic costs are going to be scaled down. >> like lopping off the equivalent of a massachusetts economy from the u.s. thank you for joining us, francesc ortega. we're going to continue to watch this. >> thank you. >> as we talk about how these immigration orders come through and the economic costs, potentially. when we come back this morning, walt mossberg on the future of television and facebook's plans for potentially streaming major league baseball. dow's virtually flat. rick santelli, what are you watching? >> i'm watching all the markets. and i'll tell you, we've had many discussions today alone on cnbc regarding the relationship between stocks and bonds. we're going to do a little counseling on that relationship after the break. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medire doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. 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[ maouncer ] jo the mlions of people o have already enrolled in the only mecare supplemen insurance plans endors by aarp, an organization serving the needs people 50nd for generations. remember, all medicare supplement insurance plans help cover what medicardoesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds plans that will be here for yo now - and down the road. i have a lifetime of experience. so i know how important that is. i'm scott wapner. coming up, the return of the activist investor. karl akon and others are piling into new positions. why now, and should you follow them? plus, the semi index up 60% in a year. today, one analyst has a list of names he believes will jump even higher. and one of our traders buying up shaurz shares of a broker today. is it the right one? we're going to debate the name. the best of the bunch as well. schwab, e-trade, td ameritrade and others. "the halftime report," carl, starts in less than 20 minutes. see you there. >> we'll tune in for that. thanks, scott. let's go to the cme group and get "the santelli exchange" with rick. >> good morning, carl. you know, i was going to talk all about the big negative rates in europe, how their two-year note traded minus 90 basis points, how there's huge distortions going on and how the policy in europe is just ticking. how's it all going to end? and we're going to continue to monitor that, but i heard something that diverted my attention. i heard a couple of guests today talk about all the relationship issues going on between stocks and bonds, and a number of times i heard, well, you know, inflation's flat, and then the topic would move on, just brushing that aside. i'm not sure i agree, and there's plenty of other channels that involve pricing. so, let's go to the board. on inflation, i'm not sure i agree it's flat. just let's take five-year tips, okay? if we look at where five-year tips are and take the on the run five-year minus tips, it's 201, the break-even, hottest since 2014. take the 10-year minus 10-year tips, it's a 203, running the hottest since september of 2014. i don't know, that doesn't seem flat to me. let's look at our most recent data, about a week and a half ago. it was for january on cpi. 0.6 month over month change on that and ppi. on cpi, it was the biggest month over month change since september of 2012. for ppi, february of 2013. i could go more on ppi, but i found cpi more compelling. if you look at year-over-year headline up 2.5%, that's not flat. and 2.3 on year over year core, that's now 15 months in a row 2% or higher. 2%, of course, is that arbitrary federal reserve level that they consider important. i don't know, legislation just says stable prices. all right, but there's a lot of other things that affect what's going on between this relationship. and when we talk about investment buyers, yields may now have gotten juicy, especially when you look at minus 90 basis points in the european two-year. so, what does this do? they actually pushes rates down. less hedging! that 3450e7means as stocks go u there's not much selling in treasuries because of let nervousness in stocks. think vix here. that pushes rates down. overseas rates, the relative value trade. it might not be pulling one for one, but it's pulling nonetheless. that actually brings rates down. and central bankers, their balance sheet's still bloated, qe still being done at many central banks, runoff, u.s. federal reserve's still buying? that's going to keep rates down. so, let me think here. what's actually going on? it seems the one camp you might need to pay the most attention to, growth and change. on change, think of all the trumponomoic, and on growth, the data's gotten a lot better. you have many arguments while growth's well-behaved, you see it heerks but i don't think inflation's one of them. joan fort, back to you. >> thank you, rick santelli. back then, he was treasury secretary designate steve mnuchin and shared his views on the economy here on cnbc in november. >> our most important priority is sustained economic growth, and i think we can absolutely get to sustained 3% to 4% gdp, and that is absolutely critical for the country. to get there, our number one priority is tax reform. this will be the largest tax change since reagan. we've talked about this during the cam rain. wilbur and i have worked very closely together on the campaign. we're going to cut corporate taxes, which will bring huge amounts of jobs back to the united states. >> well, now the rubber hits the road. tomorrow at 7:00 a.m. eastern, becky quick sits down with mnuchin, now the treasury secretary. a big interview you don't want to miss. we'll be right back. the whole wheelie thing. what do you mean? i just got this baby to get around the plant floor. right, but now ge technology monitors eve machine. yeahitrings massive amounts of information right to u. so you don't need that. well, makes me look young yeahitrings massive amounts of information right to u. and uh..."with it." time to move on. oh i'll move on... right into the future. ..ackwards you're going backwards. not just on your little thtablet, my friend.und us! itwith directvnd at&t,tream live tv anywhere data-free. join directv today starting at $35 a month. no extra monthly fees. welcome back. roku, apple, google, amazon, netflix, just a few of the tech companies trying to revolutionize tv. but our next guest says while consumers are streaming on mobile devices, tv, it's not there yet. walt mossberg is the executive editor of "the verge." welcome, walt. interesting column, provocative, i would say. you talk about you want more unbundling, but let me push back on that. i don't get to say to netflix, ah, i don't want to watch all the netflix shows, i only like a couple of them, so i only want to pay 2 bucks a month. isn't everybody bundling in one form or another? we don't get to pick everything. >> we don't get to pick absolutely everything. you're not paying per show, joh. but netflix is not a collection of networks. it's a collection of shows. and so -- and it's a huge collection of shows including an immense back catalog. one of the interesting things i learned at the code media conference last week which helped give rise to this column is people want a combination of new and back catalog just like they do with music. so, yeah, obviously we're not going to get to complete total a la carte but we're a long way from that when we talk about the cable box today. >> so, walt, isn't there a question of who gets the power in sort of the streaming friendly digital entertainment world of the future? is it going to be apple and amazon who get the payment and then decide who gets distribute or is it going to be people closer to the content actually getting made? i can see dangers either way. >> well, yes. somebody is going to get the power. right now all the power or most of the power is in the lands of the studios actually. some of it is of course in the hands of the cable providers. i just think it's inevitable. when you see the cable subscriptions falling. like i said, they're not collapsing but they fell significantly in the last quarter, in the last couple quarters. so change is coming. i'm just really impatient about it. and what i want from the point of view of a consumer is what you kind of have in this rather brilliant heck of a product called cavo, which was you pick up a remote. you ask for any show on any of your boxes, on any of your services and it just comes up. it handles, you know, knowing what's on every box at any one time, what you've been watching. it doesn't matter if it's a live show, a dvr'ed show, streamed show, if it's something you bought off amazon or itunes. and that's what i want. >> who is behind that company and who in general, water, is leading the charge for this? for a while it looked like ap e apple. who should we watch? >> i think you do have to watch apple. the read i got from eddie's statements even though like every apple executive he doesn't tell you what their product plans are is. they are just playing a long game. they're waiting for the studios to become more amenable for changes in consumer behavior to come around and they're going to keep at it. keep at it. and the key to this really is unbund unbundling. i'm going to say something now that is going to sound crazy but i don't think it's crazy. i think a lot of the tv networks, the general purpose ones. not like cnbc where you know exactly what cnbc covers. but the general purpose ones, i think have outlived their usefulness. the whole concept of a general purpose tv network means nothing. would it matter to fans of st. night live if it moved off nchlt bc to abc? would it really matter? i seen -- >> you're talking about broadcast networks that have three letters essentially, you think that they are dinosaurs? >> i do. and i also think some of the cable networks are dinosaurs, too, if they're too general purpose and they don't have a personality or focus. so for instance, i don't know what t bs is. i know some shows on t bs that i watch but i can't tell you and i bet if you go out on the streets of, you know, any city in the country say, what's the personality of tbs? nobody knows that. and that's a basic cable network. >> but to make that -- >> not just the broadcast guys. >> to make that leap, walt, though, would mean that no one would ever come home and just say, what's on? i'm going to turn on the tv and find out what's on. you're saying that kind of linear appetite is dying. >> i -- totally is dying. i know that i never do it anymore. and i'm not exactly a millennial. i don't know about you, john. in our house we look at what have we got recorded on the dvr. what's on real core apple tv, whatever, that we might want to watch. usually we're in the middle of bi binge watching something and we watch something from there. >> i'm a millennial and i watch the evening news. and millions of americans watch the evening news. that's going to be valuable for these networks slo s as long as have the advertising model in place. >> of course it is. but you will still be able to watch the evening news if we go to a show-based model because that's a show. so if you want the nchlt bc eve news, i'm not going to take that away from you. they can do six versions of it and you would love it. >> well -- >> i'm just saying the bundle is the problem. >> got it. >> the great unbundling continues. thank you, walt mossberg. >> thank you, guys. great conversation with walt. we'll get the later on snap when "squawk alley" comes right back. yes, sir, we need your password. the password that i use? 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(cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley as snap commutes with investors, evan spiegel needs to convince them not only to buy $3 billion worth of shares but shares with zero voting rights. >> snap is selling about $3 billion worth of shares all of them nonvoting. it will be the first time a company goes public offering zero rights to shareholders. yesterday's road show lunch investo investors brushed it off saying snap's nonvoting stock is similar to structures that have become founder among led tech ipos. we took a look and the results are mixed. the success stories include google, facebook, linkedin and box, all up quite substantially since the respective ipos. google and facebook have created nonvoting shares of their own in recent years and yet their stocks continue to rise. but when things go wrong at companies with dual class structures the performance really suffers. gopro and fitbit, all founder led companies with multiple classes of shares. each of them are down forethan 60% since their ipos. before buying shares in snap's ipos investors need to decide whether cofounder evan spiegel and bobby murphy who will can't control 88.5% of the voting power. that is why the in-northern meetings with snap's management are so important this week. guys? >> explains how wide the road show has been, leslie. thank you so much. let's get of wapner and "the half." ♪ >> thanks. welcome to the "halftime report." i'm scott wapner. our top trade this hour return of the activists. why carl icahn, nelson peltz and others are suddenly swarming again and what it means for investors and your money. with us for the hour today joe terranova, steve wise, brothers najarian. we begin with the markets and why big name investors are back and battling with the country's biggest companies if latest example, carl icahn's reported new

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