the dow yesterday. but these were some big swing as people were trying to digest what this means for potential for a hike. >> if we can. we can look at the prior day at some point. >> watch the tick by tick for the day. >> i thought i saw most of the swings. >> before too, yeah. maybe it is going to be a monday up, tuesday down, wednesday up -- >> there's the tick by tick. >> but it was a fairly erratic day. >> by 210 it went from up over a hubs or 2:15 it was down over a hundred. >> we'll continue to talk about this today but it does look like june is potentially a live meeting at this point. also crude oil this morning. another big swinger yesterday. ended down after being up sharply. down 2%. >> let's talk about our top story this morning. an egyptian plane carrying 66 passengers on crew on a flight from paris to cairo disappeared this morning over the mediterranean. it was flying at an altitude of 47,000 feet when it disappeared in egyptian air space at 2:30 a.m. loik local time. hadley gamble joins on the squawk news line. >> the french merry christmfore saying it officially went missing just 20 minutes before landing. it disappeared around 2:30 a.m. local time here in the mediterranean. they set up a crisis center here in paris. there are 66 people on board the airbus a 320 and we understand that search and rescue operations are under way right now. at least one ship, two aircraft responding. about 130 miles off the greek island of karpathos searching for that flight. they lost contact with the flight earlier today when it disappeared from radar. this is of course one of two non stop flights daily from egyfran to cairo. and slamming social media for miss reporting the situation. airbus tweeted regretting the loss of the flight. search and rescue still under way and we're expecting that press conference in just a few hours from now in cairo. >> we're going to continue to mont they are developing story and bring you updates as we get them. >> lot of concern. >> yeah. >> could be anything though. >> the official investigation in egypt of that russian flight has still not found any particular reason the plane came down. but egyptian ministers admitted -- >> and some organizations have said they were at fault. >> isis claimed responsibility. >> right exactly. usually you get up there and things are pretty routine when you are just moving along. boeings whatever it is. boeing, airbus. >> and the pilots were 6,000 hours of flight time! >> we finally figured they were carrying some lithium batteries. some weird in the hold. >> weird things can happen. >> normally it's not just -- >> i told you. i was on that plane when the engine blew up. in the air. the as tough thing -- >> still a lot of questions about -- >> but in this day and this world. everybody is thinking it. no one's saying it. who knows. but it's -- light's coming now. i guess. or was it a few hours ago. i was looking at twitter and saying it was probably relevant to -- mediterranean is not like the south pacific or something. or indian ocean. yeah. turning now to today's top business story and news about deal. monsanto says it rereceived an unsolicited offer from a german company. might make sense but here we go again with a foreign buyer. >> fairly possible a deal like this wouldn't happen simply because the regulators would say no dice but as a functional rival to the sangenta -- the earlier sangenta deal that just took place a couple of months ago and that is under --. first of all it's very possible if i'm monsanto i'm going to say not enough money and i'm only doing this if you pay more and one of the reasons you need to pay more is because of regulatory hurdles. >> can you just say a and two and. >> a and two just to confuse -- >> he likes mixed metaphors. >> i know. i try to be consistent. >> this way if you do it when you are trying to do it then any mistake you make might have been intentional. then you could yoo use that. >> we all called. >> and tesla, it is going to offer $1.7 billion of new common stock to finance the accelerated launch of its new model 3 sedan. shares cropping on the news last month. elon musk said the company might need to raise cash after receiving 373,000 reservations for the model 3. >> but you have to put money down for the model 3. >> as a result of the strong demand for the vehicle tesla plans on speeding up production to build 500,000 vehicles by 2018. two years earlier than originally planned. how can i see teslas that aren't the model s. i saw one yesterday. and. >> don't they have -- >> they have many models. >> the other one is ugly. >> is it the suv? >> wasn't suv it looked like an inflated prius. >> there is an s and e. >> there was an e maybe. big back end. inflated. like a cheese wedge. elon musk will sell 2.8 million shares of his own and that's worth almost $600 million to him. cisco giving upbeat outlook for the current quarter expect ing. and chuck robbins will be on the squawk on the street today in a first on cnbc interview. >> couple of things going on today. investors getting a fresh snapshot on the labor market stood today. and weekly jobless claims. unemployment expected to drop back after hitting a 15 month high in the previous week. at 10:00 a.m. look for the monthly philly fed survey. stanley fischer and bill dudley will be speaking today also. and walmart and dick's sporting goods report before the opening bell and after the close applied materials and the gap. futures are negative this morning. dow down about 81. s&p down close to 10. the nasdaq down close to 20. right now the dow even before these numbers this morning after yesterday's close, the dow was down for the week to date which would make this on pace for the fourth negative week in a row for the first time since its october 2014. nasdaq closed up about 23 points o. outperformed the dow yesterday. the big question is what is the fed going to do come june. you can see there are red arrows in europe as well. the dax down 1.4%. the cac off 1%. the ftsi down 1.4% as well. asia oent you saw the nikkei ended flat. markets and hang seng and shanghai composite were slightly weaker. oil prices again saw quite a bit of volatility as well. the wti at one point hit a high of $48.95. highest since october 2015. and then ended down about a quarter of a percentage point to $47.24. check out the 10 year note. this morning the 10 year up to 1.87%. dollars down across the board this morning. right now the euro is trading at 112.16. yen at 109.95 and gold prices at this point yesterday hit their lowest since march 28th. down 1255.20 an ounce. fed hawkish on the minutes to the meetings. that was surprising. because the three earlier in the week talked more hawkishly. but we still thought. so to see it in the actual minutes really gave people pause. there is yesterday's action. because it was such a wide range you can't really tell. those are big moves. 17440, all to way to 17,6. and then 17,650. and all the way back down and unchanged and back down and back to unchanged on the close. people didn't know what to do. i want to start with you on whether june is really a live meeting? do you think it is? are they playing us? >> no i think they meant it. i got to say i was surprised as well because at the time of the april meeting we'd had quite a run of weak data. but they were very clear telling us they didn't believe the numbers. they pointed us somewhere. i don't believe that either really. and since the meeting we've had much stronger numbers and that is what we told them was the condition for june. the problem with june is 8 days later is the uk referendum. and i think the u.s. policy establishment is very scared of the risk of brexit. i think we'll vote to stay in but as the big risk and comes very soon after the meeting. >> polls made it soon as if the people voting to stay in the eu have more power in this. >> they have nudged towards that direction. >> you said we'll -- >> friends of my compatriots at this point. i think eventually there will be an outburst of rationality and we'll do the right thing and we'll vote to stay in. we might not. there is a very significant risk and i view this as a strategic risk and a risk to the eu and to nato. and obama went and pleaded to stay in. and -- letter in the media saying please stay in. >> the 10 year is immediately up to almost 1.9 and euro down 112. so the cover that the fed had. i thought they had cover with the dollar that backed up little. that disappears really quick. couple of comments and dollars -- make goldman sachs is right. >> they probably laid the groundwork flow for july. >> that is like cypress or like greece. here we are with a hundred mandates again. there are supposed to be two mandates and that is tattoo too >> -- i'm in your camp joe. i'd really like to -- >> -- picked a wrong day to stop sniffing glue. it is like there is never a good time to do this. >> they should -- >> they should. -- [inaudible] -- take our medicine, bite the bullet, then we can mix them up. >> a bunch of fed people coming out over the last several days saying two to three rate hike this is year which the market has been in total denial about and then the minutes saying if the data are decent we're going to go in june. the minutes did specifically mention brics risk as well. >> part of what they are watching is inflation. and closer to the 2% target. when you have oil prices like this, that's helped things enormously in terms of their expectations on inflation. >> the perceptions are going to move higher that oil has moved up. the -- the pressure is clear to the upside. so they have everything they need. but we do have an elephant in the room eight days after the fomc meeting and it is a binary event. if we vote out it will be a -- mess. >> -- you think the second half is still better for stocks though? >> maybe after the summer. >> -- may. >> may with one of those years again and feds probably give us a little additional ammo to think that. if they are going or the active here in june or july what are the reasons to go long the equity market is tough to make that case. >> corporate earnings will improve whether or not the fed goes up a quarter or a half or three quarters, won't they? can't you place your bets on the corporate sector improving regardless of the fed or not? >> you can but you are likely to get better opportunities. why not wait a little bit and pick your timing. the s&p crossed into the 2,000 range back in i think it was august of 2014. and it's been in pretty much a range ever sense. the only way really to make any money is play the range. so if you are going to go long why don't you wait for the opportunities that i think are probably going to happen over the next couple of months. >> suv. doesn't really look like an suv. >> yeah because it's low. it's not small. >> but it's ugly. >> oh i -- >> is it really a gull wing. >> yes it has gull wing. beautiful car. >> likes oox a prius. >> i take the flip side of that. >> you don't own a car. >> i have eyes and an opinion. >> you don't own a car would you evaluate motorcycles? >> very -- inappropriate -- >> -- like trees and grass aand. >> -- wrong you are. >> -- evaluate women. >> it's been a rough week for retail. target lbrands, dick's sporting goods and jc penney all down over the last five sessions. more from courtney reagan next and walmart's report. back in a moment. ♪ there's no one road out there. no one surface... no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering, shift points, and suspension to fit the mood you're in... and the road you're on. the 2016 c-class. lease the c300 for $359 a month at your local mercedes-benz dealer. heading to the story here, the breaking news of the morning. the egyptian aviation ministry will hold a news conference in about an hour. 7:30 eastern. as you know by now, an egyptian plane carrying 66 passengers and crew on a flight from cairo to paris disappeared over the mediterranean. we'll bring you updates as we get them. >> checking with business. it's been a rough week for retail. lbrands posted earnings of 59 cents a share and while it was better than expected sales were short of expectations. check out the stock. lbrands down close to 5%. and teen apparel retailer urban outfitters beating forecast and same store sales rising by 1%. that was better than expected. analysts look footwork a drop of .4%. obviously the street willing to praise those that beat expectations but pound those that miss them. american eagle rising. the teen retailer says that demand was strong for its airy line for women. that stock up about 14.5%. >> walmart results expected at 7:00 a.m. eastern. the stock down nearly 9% just in the last month alone. >> macy's earnings triggered a retail sector selloff. walmart has lost about 8% since then. but some predict they might weather the storm. apearl has been a weak spot but less than 8% of walmart comes from apparel shoes and accesses combined. gas prices still lower and minimum wage increases are likely to help the core walmart shopper. wall street wants to see that u.s. comparable sales are continuing to improve even if marginally consensus is actually just for a gain of 0.5%. remember walmart already issues longer terms earnings guidance in the fall. factoring that in, consensus for earnings of 88 cents per share on revenues of $113.22 billion. however would be surprising if walmart escapes sales and traffic softness in april that seems to have hit everybody else from macy's to target to home deep and hard to explain what that softness was. a lot seems to be whether target really hitting hard yesterday. t in earnings call ceo saying in some places we were up double digits. in the northeast we could have been down as much as 90% on bad weather days so really quantifying it to say look, weather really hit us hard. and plus the early spring break so target, for instance, is the second market share for bathing suits and if it's very cold and spring break is early you are not going to be buying -- >> target saying look we beat expectations for the first quarter. warning for the second quarter but we think for the full year we'll make the guidance. >> right. >> so that is why a lot of questions come in but you are watching all this as gas prices go up and -- >> i think it will be very dependent depending on which retailer. for walmart it may hurt more going forward than perhaps for target which has typically a higher end consumer. >> what percentage -- >> it is pretty small. but again both these companies are spending billions trying to ramp up. it is a big need to move. >> thank you. when we return. the latest details from france and egypt. right now as we head to break look at s&p 500 winners and losers. ♪ earning enough cash back from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time and 2% back at the grocery store. even before he got 3% back on gas. kenny used his bankamericard cash rewards credit card to join the wednesday night league. because he loves to play hoops. not jump through them. that's the excitement of rewarding connections. apply online or at a bank of america near you. in new york state, we believe tomorrow starts today. all across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. like in rochester, with world-class botox. and in buffalo, where medicine meets the future. let us help grow your company's tomorrow - today - at business.ny.gov real is touching a ray. amazing is moving like one. real is making new friends. amazing is getting this close. real is an animal rescue. amazing is over twenty-seven thousand of them. there is only one place where real and amazing live. seaworld. real. amazing ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪ welcome back to "squawk box" on cnbc, first in business wordwide. our top story this morning an egypt airplane caring 66 passengers and crew on a flight from paris to cairo disappeared this morning on radar. the plane was flying at 37,000 feet it had just crossed into the egyptian air space at 2:30. the last reported position was 165 miles from the egyptian coastline. and that is all the details that we have at this point. although swirling around once again in the twitter sphesphert. amazon might be forced to switch up content. they could be forced to devote at least 20% of their shows and catalogs to european industry. so if you don't like the government telling you what to do in the united states, joseph, this is that? spades. partially by the way a cultural move. i mean that is large part what's driving this. if you go to france for example, one of the things -- they want local phones both to support the industry but also the people there want local films so it changes the cost structure. >> how did it go yesterday with the zuk, did you hear anything about that?ck, did you hear any about that? >> i saw some blowback on twitter. >> you did? >> yeah. >> a weird exercise. sort of a -- >> a situation like that you are damned if you do or damned if you don't. you either acknowledge it or if you don't have are going to have critics take you down either way. >> you should have all opinions. >> -- >> of course glenn beck was there. >> yeah you and glenn beck. >> yeah. >> records continue to fall this week as another rare diamond is auctioned off. this blue diamond sold for more than $57 more. including fees. but that price crushed the previous most expensive record by $9 million. the christis hasn't identified the buyer but the diamond gets it names from oppenheimer's wife. >> i hope -- was there. >> at the blue diamond? >> zuck. >> -- [inaudible]. >> he should have a seminar for mark. just to -- >> i think mark understands capitalism. >> you would think he would. then explain the sensors of any -- >> it is hard to say that was sanctioned by zuckerberg all the way up. we don't know. >> sanberg? >> i'm shocked. there is gambling going on here. i can't believe it. theranos reports the company has sent tens of thousands of corrected reports to doctors and patients, which means some received erroneous results that may have influenced health decisions. i don't want to do anything based on this information to my temple, you know? >> new technology is great, if it increases the validity of the test you are checking out but if it is noz even up tot the -- >> -- you don't need or don't do something that you do need, you need to be right about -- >> these are massive steps that they are taking. >> so -- this company. >> -- frank reynolds? >> yes. >> you have got to get this right what he said when james grady had already died in the reagan -- >> right. >> whether do you think is gonna happen with this company? >> i don't know. >> they have so much money in cash that they can actually. >> why don't you -- there will be a whole book written on this whole category and. >> well i hope this guy john, how do you pronounce his last name gets a pulitzer and hope he goes off and writes a book about it. he's the guy who exposed this. and great job. >> still don't know how it ends, the book. >> right. could make a good movie. >> i wish it would work. >> so do i. why has she not been fired? i don't understand? >> -- this point isn't she? >> is there a company? >> eor you calling for. >> have a company? >> -- inincendiary isn't he? it is not a company sh she should be fired? >> virtual every element of the thing has a problem. >> the alliance with walgreens is under strain at this point. >> strain? strain? >> they are still doing business at this point. >> yes but they are trying not to be. >> but they haven't yet pulled the plug. >> but they would like to. which ifz surprised by. >> my understanding is -- >> pull the bubble or pop the plug. we got to -- >> nbc's kelly kobe yella joins us from london with morfrom lon. francois hollande has confirmed this plane has crashed. quote, the information we've gathered, plebs of government and of course the egyptian authorities confirm sadly flight 804 has crashed. it is lost he said. he has also offered solidarity for those on board. 15 french nationals and foreign nationals a nationals and the others. french also saying there is no hypothesis to be ruled out. in other words saying the cause cannot be identified at this point. the search also is the focus and we also have this from greek officials via a statement from the greek embassy in cairo. the greek civil aviation authority banning flights in that search area. it is about 130 miles south of the island of karpathos, south/southeast of karpathos, certainly in the area where crete is, south of crete in the mediterranean sea. and also committing more resources to that search. but as yet some eight plus hours since the search began, no sign of this wreckage, no official sign of a possible wreckage from egypt air flight 804. we're hoping to hear from egyptian authorities within the next hour to hour and a half. and of course as soon as we get some more information we'll bring its to you. >> thank you very much. again kelly cobiella, we'll be continuing the hear from this information on breaking news. >> how is this for irony? just a few months ago, it was the republican convention that promised to be louisvilively. bernie's supporters blah blah. the democratic convention, maybe the show of the summer. interesting piece in your paper today andrew. bernie is ready to just slash and burn. scorched earth for the next couple of months. playing hardball with the party establishment. he's willing to harm hillary clinton to get what he wants. more next. & in a world held back by compromise, businesses need the agility to do one thing & another. only at&t has the network, people, and partners to help companies be... local & global. open & secure. because no one knows & like at&t. welcome back everybody. is the democratic party following in the gop's foot steps? bernie sanders supporters are coming out swinging against the democratic establishment, causing the party to start to get concerned about the possible revolt come august in the doc convention. thank you both for being here. morris, let's start with you. really it is your party in the headlines right now that is facing many more difficulties it seems than the republicans. and that is a big switch from what we've been talking about just a fewmon months ago. what is happening with bernie sanders and will he cause a problem. >> he won't cause a problem. the difference is donald trump was a disrupter and he needed to blow up the party. >> you could say the same about bernie sanders. >> i disagree. he's been energizing a base that needs to get out -- >> threats made against the party woman who had made decisions for who was going on the standing on the ballot. >> i don't think that is representative of all democrats so i don't think that we need to dwell on that. >> same could be said for trump supporters who were -- >> i don't believe they were as representative as the republican party as well. so the process is the process. what you have is that bernie sanders people don't understand he keeps winning but he can't ultimately win. they are frustrated. >> he doesn't seem to understand. he's complaint with kentucky even though these rules have been in place forever. >> bernie is independent before so he needs to understand the democratic party rules and regulations but the fact is this. bernie sanders has been good for the process. good for hillary clinton. she needed to be challenged in the primary. if she was challenged i think she would have more difficulties in the general election. i don't think bernie sanders represents the destruction of the democratic party as the way as trump for the republicans. >> trump came in from the outside and he won the primary. he went to the process and he won state by state and won and now he's speeding to the nomination and doesn't have to do what bernie sanders and his supporters are doing. we also in the republican don't have super delegates. we have a a system where votes don't count. >> -- [inaudible]. >> both the systems need fixing not. question about it. >> both convoluted systems that people who haven't been regular members -- >> if the republicans -- >> -- diverted yeah. >> this is not really about washington schultz. this is about the process. >> hillary clinton has more vote b -- >> in this case. >> really easy to defend hillary clinton here and say bernie sanders is doing something wrong. but listen this guy should be a 5% candidate. it speaks to her terrible weakness as a candidate. let's look at her history. you don't get elected to be first lady. she's won two layup elections to be senator. and --. my point as somebody who stands for election. she has a history of being really bad at it. and '08 she was a presumptive nominee going in. lost to somebody who was not well known in barack obama and now letting bernie sanders a socialist challenge her so deeply. >> she's won three elections. two out of three i think is pretty good. there is a collage within the democratic party. >> do you remember the challenge. >> let me finish here. i this think there is a challenge here within the democratic party and for within our candidate. she these to figure out her message and saying i'm experienced and i'm ready is not enough. >> how do you make it emotional? >> first of all she should embrace being a woman. i think it would be something that would krimal -- >> she -- >> you talk about now she should figure who she is? she's been running two years. >> what i said she these to figure a narrative that brings people closer together. >> at this point you need to figure out it out. but at this point. -- >> make america great again. >> the fact is people see themselves in that. it is not about them and our candidates right now spend too much talking about themselves. >> you can speak for your candidate -- >> -- >> no let me finish. talking about changes in america. national security. national security of course the economy and taxes. he's talking about bringing in overhauling the -- >> -- [inaudible]. >> no let me finish. as far as hillary clinton is concerned she's talking about what? her history as secretary of state. again, complete failure. -- >> -- not about talking points -- >> people want -- >> first of all. he's not a threat to hillary clinton because he won't be the nominee. let's talk about facts and -- >> -- [inaudible]. >> national poll that was released yesterday that showed donald trump had a leg up on hillary clinton in the national election. that is the first in the big polls that suggest that. what do you think is happening? >> i think donald trump has a free space right now. he's out there telling a narrative. we still have challenges to get past the process. >> i thought you said -- >> you gonna -- >> you just said bernie sanders -- >> the fact is we have a candidate that i believe will ultimately win in november. there are challenges. this is a marathon not a sprint. there is a process. you will get better but the end of the day the person who wins this will be the person who embraces the people and talks about the future that is aspirational and not demagoguery. >> donald trump has been -- >> dare i say this whole make america great thing has an aspirational ring to it. >> actually has some undertones that are not appreciated in the democratic party. that plays to the narrative what donald trump's ultimate narrative will be. >> when we come back the latest on the egyptian flight that just vanished overnight. we're going to talk to an aviation expert when we return. my mom loves giving me advice. she even gives me advice... ...about my toothpaste and mouthwash. but she's a dentist so...i kind of have to listen. she said "jen, go pro with crest pro-health advanced." advance to healthier gums... ...and stronger teeth from day one. using crest toothpaste and mouthwash makes my... ...whole mouth feel awesome. and my teeth are stronger too. crest-pro health advanced... ...is superior to colgate total... ...in these 5 areas dentists check. this check up? so good. go pro with crest pro-health advanced. mom's right...again! welcome back to "squawk box." we have to get back to our top story of the morning an egyptian plane carrying 66 passengers and crew on a flight from paris to cairo disappearing from radar early this morning over the mediterranean. earlier the president of france said that flight has officially crashed. joining us is aviation robert mark, publisher of jet whine. when you heard the news, what did you immediately think? lots of questions and speculations swirling out there. >> i think the first thing we think is significant is the fact that the crew did not acknowledge the transmissions from the creek air traffic controllers that said, okay, it's time to switch radio frequencies and talk to the folks in cairo. they just didn't answer, and they disappeared shortly after that. that's not good. >> what does it signal to you? dare i use the "t" word which, of course is terrorism. >> well, it signals to me that the crew was either unable to answer because of some mechanical failure or because something had already happened that was unfolding as they were being called. but in either case, they never responded to the call. >> when you look at the history of both the plane itself, an airbus, as well as these pilots who apparently have a lot of experience, 6,000 hours, what does that say to you? >> well, i think we can probably rule out the fact that it was a pilot-induced problem, i mean, because of inexperience or anything like that. but the airbus has a -- the a-320 has a pretty good safety record, but i think we're going to have to look into the issues like we saw in the middle east not long ago when somebody slipped something into the cargo compartment. for an air plane to disappear in mid-air at 37,000 feet, it doesn't leave too many options. >> robert, when there are mechanical problems or, you know, we talked about sometimes there is an engine problem or an engine can even explode, but are the pilots dealing with the situation at that point so fervently that it's possible that they were unable to communicate at all because they're dealing with something for a couple of minutes? it seems like no matter what you're dealing with you can sort of at least answer and say mayday or something is going on. unless it happens in an instant. is that typically the case, no matter how busy they are dealing with something, do they try to respond? >> usually. if it's something like a case that you mentioned, an engine failure or some mechanical issue, the pilots are always there, first of all, to keep the airplane operating safely and protect the passengers and the rest of the crew. >> right. >> and honestly, too, we don't think that much about getting down to the ground because there is nothing anybody on the ground can do to help us if it's some in-flight issue. >> but you do want to let people know -- just so this exact thing doesn't happen you would want to let people know. they would say mayday or something, we've got problems? >> sure. once the emergency is dealt with -- it usually takes a minute or two to figure it out, get it under control. but if it's catastrophic, there is no way. but usually, yes, they would call down and say, listen, we've got an engine failure. we're going to start our descent now or turn around or do something. >> robert, thank you very much. when we come back we're awaiting walmart earnings. "squawk box" will be right back. ♪ ♪ for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. and that a tired dog is a good dog. [ dog barking, crashing ] so when you need a dog walker or a handyman, we can help you get the job done right, guaranteed. get started today at angie's list. ♪ ♪ (singing) you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck. breaking news. an egyptair flight from paris to cairo disappears over the mediterranean sea. we'll have the latest details on this developing story. retailers on the ropes. target missing the mark. now it's walmart's turn to report. we have the numbers and the instant reaction straight ahead. war of words. >> he is using the "washington post" for power so that the politicians in washington don't tax amazon like they should be taxed. gop presidential candidate donald trump taking jabs at amazon's business practices. now ceo jeff bezos is firing back. >> that's not an appropriate way for a presidential candidate to behave. >> the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. it's thursday! andrew. weeks go really quickly. especially when you're having fun. >> yeah. we're having fun. our top story of the morning this morning unfortunately is more of what we've -- we haven't been inured to it yet, we don't know what this is, but it's not great to wake up to these things. this is you. >> okay. this is not fun. so let's get to the news. an egyptian airplane carrying 66 passengers and crew on a flight from paris to cairo disappeared over the mediterranean. last reported position was 165 miles from the egyptian coastline. last hour president hollande of flans said the flight had crashed. egyptian ministry will hold a news conference. first, before we do that, let's get to becky. let's get to the futures quickly and show you what's going on. we're looking at the futures, guys. we have seen them under pressure this morning. walmart, the dow component out with earnings of 98 cents a share, better than the street had been anticipating. street looking for 88 cents a share. >> look at it go. >> you're now talking about walmart up 4%. 4.25%. sales numbers $1.15.9 billion. comp store sales for the first-quarter up 1% versus estimates up .5%. the earnings per share outlook. the company is saying for the second quarter, where many retailers including target have gotten in trouble. the outlook is 95 cents to $1.08 a share. the high end -- the midpoint is well above what the street was anticipating. again, the stock looks like right now it's up by 4.5%. this knee-jerk reaction. we have seen lowe's and home depot give that back later in the day. these are strong earnings guidance. >> we said it was amazon. maybe it's amazon and walmart. there are times in tough times where people go to get better deals, right? they might not go to a target or -- target more than macy's but walmart does better than some of the dollar stores. >> 55% of what they sell is groceries. you're looking at a staples retailer. >> how good are they online, walmart? >> not as strong as they would like to be. i was able to speak to walmart's cfo this morning. he said e-commerce growth of 7% for constant krucurrency is not what they'd like to see. they're continuing to make fundamental adjustments moving this forward. they're spending billions and billions of dollars. 7% growth in e-commerce is not -- >> the do you futurw futures ar back. >> down about 88 points this morning. most concerned about the next time the fed will be raising interest rates. walmart a dow component up by 4%. the dow futures are down by 56 points. >> i want to know how they did it. >> we'll find out more in a moment. jpmorgan's retail analyst is here this morning. chris, you have been looking at the numbers. what are your thoughts? >> it's impressive. think about the sequence of events. department stores missing. torgt ca target came in yesterday down. people will walk away from this. walmart guides to one again in the second quarter. >> same store sales? >> i think people walk away from this saying two things. number one, walmart is getting better. the initiatives under doug mcmillan, the fresh initiatives, in-stock initiatives and clean initiatives are getting better. the most important piece is the hug to the market. the consumer. everyone is fearful that we're going off the cliff given the deceleration you're seeing in most other retailers. >> in april things slowed down for many of these retailers. >> many. >> i spoke to walmart's cfo and asked him that specifically this morning about the april performance. i said a lot of other retailers had seen weakness. is that what you saw? >> he said we didn't talk about it and we don't talk about monthly performance but it was a pretty good performance throughout the quarter. so perhaps it was different for walmart. >> that's one thing where the release is a little light. they give brief color on some of the issues pointing to what chris just mentioned. they talk about how they are anticipating 1% same store sales once again. they talk about momentum in many parts of the business. and reiterating that 95 to $1.08 is what they're looking for for the second fiscal quarter. we used to look at walmart because it's 10% of all retail sales to try to get a feel for the consumer. >> 116. 116. multiply it by 4. you are at half of -- not a b. you have to start using the "t" word. maybe the q word eventually for walmart. a quad. half a trillion dollars. just for argument' sake. for amazon for a year they'll do 130 billion. they have a 330 billion market company. walmart does almost as much in a quarter. >> the question is can they grow that. >> i understand that but the simple price to sales for the company. >> i now argue amazon is a completely different company. >> you don't need to argue that. obviously. >> it's not even a retail company gnoanymore. purely based on revenue and how you make money. walmart has small margins. no doubt about it. >> amazon sometimes has lower margins too. >> exactly. but the way it's -- one valued at less than 200 billion. the other 330 billion. >> the cfo told me they accelerated the prices. if walmart is offering lower prices, what does that mean for everybody else? >> it's not good. because of the wage investments and the investments they made in e-commerce to try to catch up to amazon they have been holding back on price investment. they've been waiting to annualize the price investments. >> you mean price cuts. >> lower prices to the consumer. >> exactly. >> they're starting now and that accelerates into '17. you'll be worried about grocery stores. walmart is a quarter of all grocery dollars in the u.s. >> i don't see how you grow walmart, though. >> 1% is heroic. they grew traffic 1.5 in the quarter. that's an amazing number. >> we keep talking about amazon and whether it's a proper comp given the aws business which will now become its own juggernaut. when you think about amazon's ability to make market share ultimately from walmart or your view that maybe -- i don't know -- that walmart will ever take market share from amazon. >> is it a different shopper or the same? >> 55% of sales are grocery. that's tough. selling fresh food to a consumer via two-day shipping. that's tough. >> amazon is on prime now, city, though. >> yes. >> that's where this -- >> yeah. >> two, three, four years out. >> look at that. >> want to look at shares of target today. chris did just point out that if they are -- >> walmart up 8%. >> -- putting in price cuts for rapidly it could hurt target. that's not the view of the street at least immediately. target shares are a little higher on this too. >> we weren't looking at that earlier. >> if you look at the competitors across the board, they may see this as better news because walmart is not signalling that it's the consumer collapsing yet. they probably haven't heard about what them bringing price cuts in faster. >> i asked him that. we had a brief conversation. he said he thinks there are several things working for the consumer. lower fuel prices still, even if they are going up. unemployment, interest rates are still low. but there is still an air of uncertainty keeping the consumer from being as bullish as they'd like to be. >> chris, how do you look at walmart shares right now? would you buy into walmart shares here? >> we've been saying basically since the gutting of numbers back in last october, stock went down to 59. we think fair value is 68 to 72. obviously the ability to sustain 1% comp probably looking at the high end of that range. >> so you might take your earnings -- you might take your stock expectations up based on what they're saying today? >> looking at where they came in versus expectations. their guidance above the mid range and guide in the street up on comp. >> what courtney said about the cfo, what he said about the consumer does it give you heart about retailers at large or is this a walmart specific story? >> i also cover home depot and lowe's. home depot did great. what walmart and home depot and lowe's show you that, if you are aware where the consumer is and you're executing, you can do well. >> when was that? six months ago? >> it was in october. >> he was on here. it was all rosy. we asked him all these questions. he didn't cop to any of them. and it was a horrible report. >> it was the analyst day. he left here and went to the analyst day. >> they lowered guidance based on what they were doing. >> that was in october? >> october. >> what is it now? may? >> what did he change? >> i told him. mcmillion. doug mcmillion. why not. >> '16 estimates down 20% from two years ago. he gutted the numbers. that's step un. >> expectations were pretty low. >> change two letters it could be mcbillion. why be mcmillion if you could be -- he is driving traffic. >> when he spoke with us that day, he didn't give us numbers, but he said they were investing for future growth. all of these things -- that made sense but it was a much bigger investment than the street expected. >> i am not surprised but he has it going, right? >> yeah. >> it's a pretty impressive report, again, because of the size of walmart. 1% comp. >> after everything else that just happened in the past two weeks besides home depot and low's. >> to stand out in an environment like this. german drug and chemical maker bayer made an unsolicited bid for monsanto. neither has made public the proposed terms of the transaction. smant monsanto shares are sharply higher in pre-market trading. we'll see if this becomes a regulatory issue. also watching shares of dow component sisco systems reporting a quarterly profit of 57 cents per share. the network equipment maker raised full-year forecast partly on growing demand for its security related products. a busy day on the economic calendar. 8:30 eastern, the weekly initial jobless claims as well as the latest philadelphia fed index. at 10:00 the conference board is out with the april index of leading economic indicators and we have a number of fed officials who will speak as well. the egyptian aviation ministry will hold a news conference at 7:30 eastern time, this after the egyptian plane carrying 66 passengers and a crew on a flight from paris to cairo disappeared from radar earlier this morning over the mediterranean. hava gamble joins us. >> reporter: what we understand right now at least is that french authorities are opening an investigation to find out what actually happened to egypt air flight 804. president francois hollande says it appears the plane crashed and nothing can be ruled out as to what actually happened. this was an airbus a320. it was carrying 66 people when it disappeared about 20 minutes from landing. apparently it disappeared from radars and greek authorities r leading search and rescue operations 130 nautical miles off the greek island of karpathos. we're waiting on egyptian authorities to come to a presser to speak about what they know so far. this is the third such incident that has happened to egyptair in the last year alone. a big hit, of course, for the tourism industry there, guys. >> hadley, thank you. thanks for the report of the we'll check back later. i can see all the department store ceos are like, darn, walmart! they had them all blamed on the consumer. it's not us. then target. >> and the weather. >> it ruins the whole narrative. you worry -- someone was able to do it. it's not the consumer. >> maybe the consumer who plays to their particular retail front. yes, you're right. this is a standout in a retail season that has been a little more difficult. yeah. narrative was working. it's not our fault. nothing we could do. >> walmart is 10% of u.s. total retail sales. >> i mean that's -- you could even see the market getting a firmer tone -- the demise of the consumer based on what you heard. ramping up production for tesla's model 3. and elon musk is raising cash to do just that. line his pockets little bit. $600 million. another titan of silicon valley, facebook chief mark zuckerberg meeting with conservatives to talk about trending politics and how they do things at facebook. as we head to break, check out the futures. now down just 38 instead of 80. "squawk box" will be back in a moment. welcome back to "squawk box," everyone. we have been watching the futures this morning. they've been improving after the news we just got from walmart. the dow futures were down 80 points below fair value and are now down by 37 largely because of what walmart said. earnings per share beat by a long shot. also beat in terms of revenue and the same store sales guidance. the guide ins that they're giving for the current quarter, the midpoint, well above where the street had been anticipating things. as a result, walmart shares, a dow component, up by 10% today. single handedly bringing up a lot of these issues and helping to improve the dow overall. >> almost, what is it, 45 points or so. >> that's a lot. >> 80 minus 45 is where we are now. other news for you. tesla announcing a stock offering to ramp up production of the model 3. phil lebeau joins us. >> this has been anticipated for some time that tesla would do an equity capital raise. that's what happening. tesla raising $2 billion, selling a number of shares at a price point that ultimately works out to about 208.81 per share. 9.557 million shares. the $2 billion, $1.4 billion coming from tesla selling stock and the remaining 600 million comes from elon musk as he sells shares. he is exercising stock options there so ultimately increasing his stake in the company. it's all about this vehicle, the model 3. it goes into production in july of next year. first deliveries according to tesla happen by the end of next year. what you want to focus on is the number for 2018. tesla plans to deliver among the model 3, the s and the x, 500,000 vehicles a year by 2018 in order to get to that level of production. they're going to have to add at least two more production lines, not to mention an additional paint shop, stamping, everything that goes with expanding your production. that at the end of the day is the reason they're doing the capital raise. yesterday after they announced this you saw shares of tesla under pressure. it will be interesting to see what happens today guys as investors digest the news. but this is their big step. we'll see whether or not they can go from planning to actually executing this increase in production. >> phil, i don't understand why it came as such a surprise to the street when you saw the number of orders and pre-orders that were coming in for this. >> right. >> that's a positive to see the pre-orders coming in. you have to have some way of dealing with that. >> it's been telegraphed. yeah. becky, it's been telegraphed. the question becomes whether or not they needed just $1 billion in order to expand production or did they need 1.5 or $2 billion. some are looking at this and saying, $2 billion? you only needed $1 billion in order to expand production, but they also need a cash cushion. they'll use some of it for other activities. of course, you have the bears out there saying they're not using it for other activities. they're losing money right now and as a result they need to keep raising money in order to have more money on the balance sheet. so that's -- that's the argument from the bears. the bulls sit there and say, look, they have to do this in order to meet the 500,000 target. >> there are bears. talking to wapner yesterday, seems like a smart guy too. did they lose a couple of key manufacturing guys right as they were ramping up production? >> two of them. >> a long-time audi executive is now coming in as the head of manufacturing. >> phil, do you see the model s all over wherever you are? they're everywhere here. >> yes. yes. >> how many suvs have they sold. >> small number. you will see some in california but a small com. couple of thousand between the end of last year and this year. >> i didn't like it, though. i like the ss. thanks, phil. coming up. war of words between donald trump and jeff bezos. bezos is firing back and he's not laughing. facebook politics. ceo mark zuckerberg meeting with conservatives in what's being called a productive meeting. two polar opposites getting together and talking over differences. more on those stories when "squawk box" returns. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. 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(announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer6 coming up, an update on the egyptian flight that vanished over the mediterranean. we'll talk about that plus the impact of the fed minutes on the markets and what it could mean for a possible interest rate move possibly in june. dow looks to open down about 45 points. but we're also getting some boost on walmart stock this morning. we'll talk about that too when we come back. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. lease the e350 for $499 a month at your local mercedes-benz dealer. welcome back to "squawk box," everyone. among the stories front and center this morning, we have been following this story closely. investigators trying to determine why an egyptair flight disappeared over the mediterranean sea. french officials saying the plane crashed with 66 passengers and 10 crew on board. walmart shares jumping in the pre-market trading after the retailer came in with earnings of 98 cents a share for the latest quarter, 10 cents better than expected. revenue and comp store sales being forecast but the big news may be the forecast for the current quarter where the midpoint of the guidance and above what the street was anticipating. that was different than target yesterday and home depot, lowe's. you see walmart shares are up 9%. that's a dow component so it is helping the overall markets. the labor department is out with the weekly look at initial jobless claims in about an hour from now. they're expected to drop to 272,000 from the last week from 294,000 in the prior week. bitter battle of words this morning. amazon chief jeff bezos firing back at donald trump. the gop presumptive nominee said last week the online retailer has huge antitrust issues. trump said bezos is using the "washington post" to influence congress not to tax amazon like it should be. bezos defending the company at an event hosted by the "washington post." >> my view is that's not an appropriate way for a presidential candidate to behave. i am -- i am very, very comfortable with all of amazon's approaches and behaviors the way we pay taxes, the political positions that we take are very focused on our business, and i think highly appropriate. >> okay. fed -- the fed leaving the window open for a june rate hike if the-second quarter data improves as expected. steve liesman joins us with more now. oh, no! i wanted to ask you something. >> just ask me! you know. i could ignore you or answer your question, whatever you want me to do. >> okay. tell me why the walmart consumer is different than all the other ones we have seen recently, and -- >> my mother would correct me and say different from. >> different from. okay, fewer, lesser, whatever. you're bogging the system down. >> i know. >> the other question, is it the old sort of the dollar store phenomenon that in tough times those places do better? >> you're not holding anything you didn't hit me with. courtney brought up the idea, well, you're paying higher minimum wage to these workers and they have more money in their pocket. >> which workers? >> walmart. >> they're buying from their own store? >> i would like to ask walmart will employee purchases. it strikes me as interesting. that's one. two -- >> the big discount. >> the best part about this is that the national economic data showed that the consumer is spending. everything was out there, which said the consumer should be spending. more jobs. you had a little bit better wage growth. >> what's wrong with the department store? >> i'm not dana telsey in a lot of different ways. >> how come walmart didn't lose more to amazon? >> walmart has done well. >> 50% of it is grocery store sales. >> they've done a huge electronic push. >> go on to your report you gave me. >> i think we have to, by the way, stop talking about amazon and walmart in the same sentence because aws is now a huge component of that business, the cloud. >> please do. >> nice to see you. >> this is what i deal with every morning. they give me battle pay, joe, in my contract. the fed folks surprising the markets in the release of the april meeting, which revealed that the fed is considering a june rate hike. this is significant because the market read the statement from the april 27th meeting and thought the chance of a june rate hike actually declined, suggesting the fed -- something of a communication problem here. in fact, in the wake of the statement, fed funds, futures, and the two-year note both declined showing investors thought there was less of a chance of a rate hike. now we learn they were thinking something different. the minutes said, quote, if the economy improves it would be appropriate for the committee to increase the federal funds rate in june. now attention turns to whether the fed will hike in june. goldman sachs is doubtful. we continue to see the odds of a june hike below 50% for two reasons. the two reasons are brexit and they say the fed won't hike because as long as the market is not pricing in the future -- the future rate hike. jpmorgan also skeptical saying there is not enough data for a data-dependent fed to make a decision. few of the big wall street firms are buying the june rate hike idea. stephen stanley writes i am confident they'll raise rates in june saying they'll have enough confidence from the rebound before the meeting. here is my subjective check list. i think may jobs has to be greater than 150. several fed officials have said the mark for keeping the unemployment rate steady is below that number. >> we've had a lot of economists say it's going to drop. >> i think one -- i'm pulling 150 out of a hat in the sense that, well, what is a number that would keep the unemployment rate unchanged but also a politically acceptable number. >> out of the hat. that's what you call it these days? >> that's where you pull things out of. >> sorry. >> throw it at her, not me. >> here we go! we have guests here. >> unemployment around 5%. second quarter tracking gdp i want to see 2% plus or minus. stable market. as everybody knows, we listen closely to fed vice chair stan fisher and bill dudley at 10:30. we'll see if they push along the idea of a june rate hike. it's very interesting. it would have been more interesting -- never mind. >> 150 seems like a low-ball. >> you have to get used to that number. >> a low bar. >> it's the right bar. it's the bar that keeps the unemployment rate either steady or slightly falling should be the bar for the fed to raise rates. not -- >> you said it could be even below 150. >> it could be. 200 is too many. i don't many too many jobs. it should not be a sustainable rate, by the numbers. we have a really smart guest here. >> steve? >> yeah. >> can you stick around? >> i may can stick around. >> bring in julian -- they have to put that in there or i would have -- julian, u.s. equity and derivative strategist at ubs. did you get anything out of that? >> absolutely. the fed has taken the narrative back from the markets this week. the markets are now coming towards the fed for literally the first time in a year and a half. as we see this morning from the world's biggest retailer, the data is starting to validate it. >> hmm. i want him to do it, obviously. i am still the spoiled brat traders didn't win yesterday. they tried. we closed down only three. someday you've got to let the fed do what it needs to do to normalize, don't you? they can't do this every single time and whine and sell stocks and everything. immediately the dollar started strengthening again. oil down today. immediately you see things that could adversely affect equity markets and does that still give the fed -- they still watching the markets? >> they're absolutely watching e markets. >> stable markets is a pre-condition for the june hike, joe. two ways the dollar strengthens. one from people flying to the security of the dollar and another, because of relative interest rates. i think the fed is ready to accept some of the latter but doesn't want it to come along with the former. that you have -- stable global economic environment, people aren't scurrying to the protection of the dollar. >> from that token, the relative dollar weakness of the last six, nine months has actually been a tail-wind for the fed in doing what they're doing and moving the markets toward them. and the biggest takeaway from yesterday's trading action for us was that the financials performed well. and we think that's all part of the narrative of raising rates. and when you start getting some interest margin at the short end it's a big positive. >> you are already seeing the world love 1.8% and -- compared to what they can get, which is negative. if it looks like they're actually going up. >> another quarter. >> -- people would come in more. >> which would drive up the dollar. >> do we expect rates to go on the ten-year bank above two if they raise? >> if i'm not mistaken, julian, you've seen the flattening. you're going to have the short end come up a little bit. the long end come down a bit because of that phenomenon. people piling -- and i think it's okay. >> it's a different flattened yield curve. >> right. >> we don't think we're going to flatten too much from here. quite honestly, part of what else has happened and certainly oil has been a part of the story over the last several months, inflation expectations have started to creep up. i think there is much less concern about that being disanchored. ultimately that boosts the long end as well. >> let's talk about the environment in which the fed would be hiking. investors need to think about both sides of the ledger here. so the fed going up a quarter perhaps in june. perhaps. maybe july. maybe another quarter this year in december. if you have walmart earnings the way they've been going, if you're printing two or even 2.5% gdp and job growth is keeping unemployment stable at 5%, you should be getting compensated for the extra quarter point and some. it's not the disaster that if you only look at one side of the ledger that it looks like. >> no. that to us is how the next leg of the seven-year bull market really starts to get under way. the economy normalizes. rates normalize. and you know, it's -- >> a load off everyone's mind. >> julian, are you troubled by the idea that we all walked away from april thinking june was not on the table and the fact that they were talking june and not putting that into the statement? >> no, because they had to do that to essentially really get the markets to believe that two hikes are coming this year. we don't think it's going to start until september. we think june is unlikely because of the vote in the u.k. on the 23rd among other reasons. but maybe july is on the table. maybe, after the first week's worth of data, the employment report in july, you tell the world you're going to have a press conference at the july meeting. >> they know they're going to do it again. if they don't do june. something could come up. then the election. they don't like doing it during an election. >> jackson hole. big meeting. >> you're not related. you sure? going way back. >> way, way back. thousands of years. >> you trying to distance yourself from rom and ari? >> it's been a tough city the last couple of years. >> julian, thank you. when we come back, nothing has been ruled out concerning the disappearance of an egyptian air flight with 66 passengers and crew on board. a live report from paris and we'll talk to an aviation investigator about what could have caused the crash. the futures have improved drastically through the morning. down 80 points early on and now the dow futures down just 22 points. a lot of this just because of walmart's gains after the better than expected earnings report. stick around. "squawk box" will be right back. you wouldn't order szechuan without checking the spice level. it really opens the passages. waiter. water. so why would you invest without checking brokercheck? check your broker with brokercheck. welcome back to "squawk box." looking at the futures this morning, still in negative territory but improving greatly over the course of the morning. at 6:00 a.m. eastern time the dow futures were down 80 points below fair value a lot of it on concerns about a potential fed rate hike in june. that's been overtaken a bit by news out of walmart this morning that was better than expected. the dow futures down by 21. look at walmart shares. up 9%. they've been up as much as close to 10% this morning. a gain of $5.50 for the dow component now trading at $68.65. well off the lows you saw back in october. we'll be watching this but they beat expectations on every metric for the current quarter and raised guidance. the med point is well above what the street was anticipating for the second quarter. the egyptian aviation ministry holding a news conference after an egypt airplane disappeared from radar over the mediterranean overnight. keir simmons joins us with more on the developing story from paris. >> reporter: andrew, good morning. the news now from the greeks. remember, the plane flew from paris. it was going to cairo so it flew substantially through greek airspace. the greek defense minister saying that the plane made several swerves before it disappeared. another translation of what he is saying is that it dropped 22,000 feet and then spun before it disappeared. so it's -- there is some confusion every exactly what the plane's movements were in those final moments, but there is now a multi-national search in the mediterranean to find this plane, to find answers. relatives are at this hotel here at charles de gaulle airport in paris themselves waiting for news. the french president, francois hollande saying that they can confirm that the plane has indeed crashed. 56 passengers on board. and 10 crew members and security. it took off from here at nine minutes past 11:00 last night, was set to land in cairo four hours later. it disappeared around half an hour before it was supposed to land. adding to the confusion, andrew, the reports earlier this morning, we suggested it had issued a distress signal. the egyptian military now saying it did not receive a signal like that. aviation experts that i have been speaking to pointing out that it is possible for a plane to disappear like this, to not issue a distress signal and for it not to be caused by something like an explosion. of course, six months, seven days since the attacks here in paris, there is a real fear that something here has happened that may be terrorism related. andrew. >> keir, thank you for the report. we'll continue this conversation with an aviation expert right now. anthony roman the founder and ceo of roman and associates a global investigation firm. you hear the news. you hear about the swerving now. perhaps no distress signal. do we use the "t" word, terrorism? >> i don't think we can say that right now. it has to be in the mix. we have to consider it, but there is some precedent for an aircraft behaving like this, particularly the a-320. an american airlines flight out of jfk was lost with all hands after takeoff due to rudder sensitivity. the same thing happened to an a-320 at air asia, it received numerous warnings of rudder problems. the co-pilot mismanaged the problem, the aircraft stalled, pitched up, went to the right, went to the left and then all hands were lost on the aircraft. so there seems to be some issues with the rudder on this aircraft. whether or not it's been corrected since that time remains a question. or whether or not the pilots were issued new instructions on how to manage the rudder sensitivity is up in the air right now. >> anthony, to the extent that you are talking about those other incidents, in those circumstances was a distress signal sent, do you know? >> no, i don't believe distress signals were sent in either of those circumstances. so it would mirror what happened here. however, on the other hand, could a small bomb, you know, create enough of a structural failure where control becomes difficult? yes. could the cockpit have been penetrated due to flight crew poor security, allowing passengers to come up into the cockpit? that's a possibility. so we're beginning to narrow down the possible causes, but right now there is insufficient information. >> how big of a plane is this? i know there were 66 passengers and crew aboard. in terms of giving us a bit of a visualization of how big of a plane this is. >> it's a medium-sized airliner. it can carry anywhere between 150 to 180 passengers, depending on the configuration and travel about 3500 miles with fuel reserves. it's quite a capable aircraft with a tremendous safety record. and i don't mean to mar its reputation at all. there has only been 12 fatal accidents in the aircraft since 1988, and many of those were pilot induced, i'm sorry to say. >> given that we do seem to have some satellite imagery and they seem to have some information already on this flight, how quickly do you think we'll learn more about the circumstances that led to its fall? >> well, that depends on how quickly we locate the flight data recorder and the cockpit voice recorders. those are going to be critical in understanding what happened to the flight. the flight data recorder will let us know whether or not there were any problems, how the pilots managed those problems with their control inputs. the cockpit voice recorder, naturally, will let us know how the pilots were communicating with one another, and we would be able to hear various noises of switches being activated and we could identify the various noises that occur. >> just to understand, because we have to run, if you are the tsa this morning here in the united states or security abroad, are you taking any additional steps or measures before hearing ultimately what may have taken or not taken down this plane? >> well, i think they have to. i think we have to err on the side of caution. i think that tsa will be beefed up. i think we will see more national guardsmen present at the major international airports and probably the local police departments that support airport security will issue overtime orders and we'll see more activity. >> anthony, we appreciate your perspective and your time this morning. thanks. coming up, playing facebook politics. mark zuckerberg meeting with conservatives. more on the big meeting coming up next. facebook ceo mark zuckerberg meeting with more than a dozen leading u.s. conservatives. the social network's editorial practices have come under fire after a former contractor anonymously accused editors of deliberately leaving conservative news out of facebook's trending topics. zuckerberg is defending facebook's practices but acknowledges that many conservatives believe it is politically liberal. in a post, zuckerberg says i know many conservatives don't trust our platform surface is without a political bias. he wants an open conversation about how we can build trust. a facebook spokesperson says the meeting was constructed -- using that word again -- and some of the attendees called it productivity. church and dwight shares jumping. the british consumer products company is planning a $23 billion bid for the maker of arm & hammer baking soda. that follows talks that proctor & gamble would make a run. advanced auto parts reporting a quarterly profit $2.51. the auto part retailer announcing the departure of its chief financial officer, and sales force.com beat estimates by a penny with quarterly earnings at 24 cents a share. sales force also raised its full-year forecast on increasing demand for its cloud-based sales and marketing software. when we return, the walmart surge. more reaction to the retail giant's latest results that has the stock on the rise this morning. up by almost 10% at one point this morning. we'll check it out when "squawk box" comes right back. . breaking news. an egyptair jet from paris to cairo believed to have crashed after vanishing from radar. the latest on the search and early investigation straight ahead. walmart earnings top estimates, defying weak results from rivals. is june really back in play? the fed minutes catching the markets off guard. up next, breaking economic news on jobs as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. our top story this morning an egyptair jet from paris to cairo vanishing over the mediterranean see. french president francois hollande telling a press conference that the plane had crashed but saying it's too soon to speculate on the cause. a live report from paris in a few minutes. other top stories. walmart beating the street in its latest earnings report. the giant reporting earnings of 98 cents a share for the first-quarter. ten cents better than street expectations. same-store sales increase twice what had been expected. guidance for the second quarter better than a lot of people on the street had been anticipating. as a result walmart shares up by more than $5, a gain of 8% for the dow component now trading at 6840. the u.s. equity futures have benefited greatly from the walmart gains by themselves. the dow still down 31 points. earlier we saw it down by 80 points. s&p futures down 5.5 and the nasdaq down by 10. joining us to talk more about walmart and specifically the consumer is the manager director at raymond james and associates. good morning, bud. the question this morning -- >> good morning. >> -- we're trying to understand is, to the extent that we understand what the consumer is doing, which we thought was terrible versus what walmart is doing. >> well, we've seen a couple of the reports in a last few days that actually say the consumer is spending what the consumer wants to spend on. walmart spends -- walmart consumer spends a lot of money on the basics and the innneeded necessities of life. walmart sees those customers every week. with 55% of their sales basically in the food area. that consumer is benefiting from i think a lot of things that walmart is doing inside the stores, which is very pleasing to see. >> you know, one of the analysts that we talked to earlier this morning was talking about how they ultimately -- they're keeping prices low and everybody else in the space, whether you're target or others, needs to watch out. you agree with that? >> well, that's going to -- we're actual we're -- they're going to increase or accelerate investment in price. they talked about investing several billion dollars in price in the second half of the year. it began late first quarter according to the news this morning. that's very interesting. walmart always does that. they sell for less so people can live better. >> steve liesman posited an idea earlier, this concept that walmart is now paying its people better and maybe some of those same people are spurring the sales. does that make sense to you? >> oh, of course. i mean, those people are also walmart consumers, and walmart is treating its people better by paying more. the second increase in minimum wage went into effect just a few weeks ago. and that's -- that's going to help. the people in the store are acting better. there has been some change in organizations in the store, the way that the company is managing their stores that are also helping their scores. their consumer scores, they said, in their conference call this morning, in the transcript, that scores are going up. we see that in the stores. we have seen better performance in the store by the associates and we also see the fresh wall look better as we walk in and do our weekly and daily store checks. >> bud, how excited should we be about these earnings when it comes to thinking about the broader economy and the state of the consumer, though? >> walmart is a big piece of the overall retail side. but remember, even for walmart, they talk about areas of improvement. e-commerce and gross merchandise value for the e-commerce business is an area to improve. they have about 10 million skews online but it hasn't grown fast enough for them even though the u.s. has grown better than the overall e-commerce area. e-commerce is an area of focus for them. overall, walmart is making their customer better. they're really improving the customer experience, and that's the exciting part that i liked about what i see happening in the stores. you have to improve the performance in the stores. >> seems like, if it's groceries they're moving into, do we look at them as half grocer? aren't margins horrible in that business? the stock is not back to its best levels. if they become more of a kroger competitor or something, i don't know. isn't that a lower-margin business to be in? >> well, it's certainly a lower margin than the historical fleet average. it's been a business they've been in now for more than a decade, probably two decades. that's not new news. walmart is the largest factor in the grocery business. that is not new news. it's an area of importance. what it does for them is it also improves traffic in the stores. traffic has been up year over year in the comp traffic for six consecutive quarters. that's really good. you have to take care of the consumer and walmart does that. >> bud, we appreciate it. thank you. >> thank you, andrew. bud bugatch. developing story. egyptair plane carrying 66 passengers and crew disappeared from radar early this morning over the mediterranean. hadley gamble joins us now from paris. hello again, hadley. >> reporter: hey, there. good morning, joe. essentially what we have heard over the last several minutes from greek defense officials, essentially the minister coming out and saying that, as the plane was flying in egyptian airspace, 20 minutes from landing it began to make sudden swerves. they saw this on the radar before the plane disappeared. we've also heard from french officials earlier today. they say they've opened an investigation into what exactly happened. french president francois hollande has said they can't rule anything out just yet. as to what happened to this airbus a-320. we have a picture of an airbus a320 registered to egyptair. this is the one that crashed that came off line in 2003. the picture is from 2014. that may be the plane that actually went down. this is interesting, of course, because when you talk about egyptair, officials waiting for the press conference. we're waiting for the minister of aviation to come out with more information about what exactly happened. we know there is a search and rescue operation in the mediterranean under way. the greek officials opened a crisis center for the 15 french nationals thought to be aboard. for families here in paris. hoping to give them more information as it becomes available. >> hadley, thank you, again, for that report. who knows how long this is going to take to sort out. to the markets. new report finds 32% of investors are looking to exit riskier bets in hedge funds. many of them are said to be opting instead for another alternative asset class, private equity. joining us now scott spurling. can you say the hedge fund loss is p.e.'s gain or there by the grace of god -- if you don't continue to outperform -- >> all of our obligation is to fulfill expectations of our investors, and the investors are looking to alternative asset classes to provide the returns that they can't find in the public markets. >> right. >> hedge funds are a hybrid in that sense because obviously they're largely investing in public securities, though some of them do a broader range of things. and there are, i think, last count, 3,000 or so hedge funds out there, maybe more. and they have a broad range of performance. and i think people are focusing not just on the entirety of hedge funds but also just the nature of how broadly they invest. >> i think we're starting to realize that there are no, you know, that nobody has a midas touch every year with hedge funds. >> right. >> can you do better consistently in p.e.? in private equity? >> i think what prevent equity has had to do is evve the model in a way that's required significantly more investment in the firms and expansion of the investment staff because we need to be able to look for things that others aren't finding or to be able to enter prices that make some sense in terms of giving yourself the ability to see multiple expansion on exit. the second is that we know that we have to buy companies that give us the opportunity to improve the fundamental operations of the company. so we're all investing or many of us are investing in the operating group. >> hedge funds -- they're passive. they have to hope things get better. you can actually go and manage it. you should be able to do better. >> right. the hedge funds -- their argument would be we don't pay big control premiums and we're just out there buying. what they're buying oftentimes is dependent on what the level of the stock market is. we're trying to avoid that. as an industry i think we made those mistakes in the '06, '07 question. >> it's not living in the public markets in the same way, private equity. one. two, i wonder whether, if we think we're at peak hedge fund land, $3 trillion, everybody chasing too much of the same thing, same strategies, whether we are in the same boat in private equity land. >> that's a great question. the difference is we are trying to buy three to five companies a year that we spend an enormous amount of money and have an enormous staff really focused for us on three verticals who are each trying to find one good deal to do. so the nature of the task is different. and in some ways you can avoid the frothiness of the specific marketplace by what you're looking for. that's not to say that we are not affected by the overall broader market. the other piece of it is, you know, given where the sec has been, we're all very careful, the mark to markets are much more appropriate. >> how much harder today than it was ten years ago? the low-hanging fruit is gone. the ability to make those types of -- what's a new reality? >> the business model is not as good as it was when i started 30 years ago because 30 years ago it was like a lot of perhaps where some hedge funds are where you had a handful of folks who go out and buy, sellers didn't realize that, if you use leverage you can drive enormous equity returns. that was different. it's been that way for over a decade. in fact, probably about 20 years. so we have had time to adjust, and we've particularly made those adjustments over the last 15 years where, in order to put the same amount of money to work, we need to -- we need to have much more manpower. we need to invest much more. and so the business model, as a firm, may not be quite as good, but it's still a pretty darned good model for generating good returns. >> you look at hedge funds, private equity. they're both more crowded spaces. >> yes. >> is there another area of innovation where there aren't as many players yet? >> well, i think what we're doing is we're seeing innovation -- i can only really speak to our industry more than hedge funds. >> some people call it financial engineering, by the way. >> right. so what we have really seen is a movement to more fundamentally improving companies over the last decade. partly because we have to. i mean, if you buy something and you want to sell it for a lot more, you either have to buy it really cheaply or you have to buy it at an appropriate price, let's call it, for what you are buying knowing that you can make it a significantly better company in terms of its revenue growth rates and the profitability of its business model. so a lot of the focus that we have is looking for good industries, because the one thing we know it's hard to change is an industry. now we start with not necessarily the existing management team, which is what we used to do, find a great management team and glom onto them and let them take you for a ride. to some extent that's a public equity model. now the model is find a really interesting industry, maybe ahead of some others, maybe not, but find an interesting industry, an asset that has at least the capability of becoming a great company, and then we know that we can help that company both improve its management team if necessary and then improve its fundamental operations. again, it's -- it's something that you have to do and you have to innovate in that way. and so, it requires very deep domain expertise and relationships. so you're investing, again, a lot more in that area of sourcing. and it requires a lot of investment in people who can help a company and a management team get to the next level from an operating perspective. >> so you would -- i mean, you would argue that you can maybe stack the deck better in the p.e. world so that you won't succumb to the same pitfalls that the hedge fund players have fallen in? >> we've all made mistakes. >> it's possible pension funds could say we don't want either and go back to bonds. >> the average return in private equity has beaten the s&p by four to five basis point. >> if you take out the last decade -- >> even the last decade the performance has been extra -- very strong. >> on a relative basis. >> before that -- >> -- talks about is always the -- >> that's a 13.5% or so average return, or return for the median versus 11-plus percent over the last decade. now both significantly out-perform the alternatives that the -- the plan sponsor world has to invest in. whether it's public markets or real estate or other sorts of things. that's the case for how to do that. the fact that over that long period you've actually seen some sustained level of out-performance, i would say would give us some hope that that is something that we can continue to do if we don't mess it up. >> we'll see about that. >> we'll see about that. >> thanks, scott. >> thank you. when we come back, why a top money manager is betting on beer, lights and storage. we'll get louie's stock picks. cnbc will be right back. make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives. ♪ ♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck. this morning we're homing in on what's working now with one of our own squawk portfolio platinum portfolio members. louie navellier anyonjoins us. the second best platinum performer this year. thanks for being here today. >> an honor. >> you're sticking with the bets you told us about in january. in part because we've been looking at defensive stocks. does that tell us overall you still think we're in for a rather difficult stock market and economy. >> earnings get better but unfortunately s&p sales will be negative for the sixth quarter in a row in july, and the earnings will be negative for the fifth quarter in a row. >> you believe that? >> absolutely. it's -- it's still the dollar's headwind hurting the multi-nationals and commodity related companies. we want dividend growth, positive sales when the market doesn't, positive earnings. i don't like to pay too high of a multiple for stocks. >> you just mentioned the dividend growth. i know this isn't on your list. jpmorgan raised its dividend to a 3.1% yielder. that caught our attention. >> i am an ex-banking analyst. the flat yield curve does not facilitate profits for financial. they are value stocks. i am a growth manager. >> constellation brands you picked. a situation where the company did boost its dividend recently. >> correct. and also that's corona beer sales. robert mondavi wine. they have premium brands, which are selling well. >> we have talked about it before in down-cycles how some of the alcohol brands manage to hold in there anyways. is this a bet on that? or you're simply looking at the other characteristics. >> constellation should be concession resistant. >> what's your problem? two-year plays are a pure recession play for public storage. booze is recession resistant. we're not in a recession. things are going better. the fed will raise. we'll be up 2.5%. leishman is ecstatic. we're in flush times. >> the fed will not raise in june because, on the cpi we had labor costs fall. we're not hitting on all cylinders. the spike in energy prices is temporary. energy will go down in the fall. it always does. >> you're bearish economics-wise. >> there is all the uncertainty because of the election. so we -- we'll probably rally going into election because the candidates will suck up to us. the truth of the matter is business spending is very uncertain. we're not hitting on all cylinders. i don't think we're going into recession but i think we're treading water and not hitting on all cylinders. >> when do we start hitting on all cylinders? a new president? >> whenever they inspire us. we're waiting for that to happen. >> are you feeling the bern? is that what i am hearing? >> since i am from california i wouldn't be surprised if bernie won california. but i mean, you're supposed to vote for whoever inspires us. i realize they're not there yet. >> how much do you think that will actually impact the real economy? >> when the candidates run around and suck up to us, no matter what side of the fence we're on, it will lift consumer confidence, it will lift investor confidence. the typical presidential election pattern you rally in the summer months. we're waiting for the suckup phase. >> can i make an argument, historically, looking back to 1928 in the eighth year did have when you know the incumbent can't get the job again, that the stock market has ended 2.8% down. and every other year, by the way, it has ended up. >> i am not arguing with your argument. earnings has troughed. the s&p yields more than the treasuries. there is some strength out there. it is a shockingly narrow market. our dividend grader only wants the top 9%. the stock grader wants the top 11%. there is a silver lining critical path i am trying to follow. >> where do we tip up not down? even if we're going sideways now, which way does it tip after that? >> it should rally after the election. every president we give 60 to 120 days. after that it will be another matter. >> you said him. >> i don't know. i -- of course, hillary is bringing out bill. it's very -- it's going to be very entertaining. but it's obviously unconventional. if trump has a secret weapon it's probably the fact that his friend runs the "national enquirer." >> the total systems, in the payment processing space. >> very strong sales and earnings. payment processing with retailers is very good. they make a lot of pre-paid cards. this is a cash economy out there. a lot of people like pre-paid cards. they have the sales and earnings. they had a surprise. i am president i am pleased with them. >> trump as the "national enquirer" and hillary has everybody else. >> it will be interesting, but it's -- you know, obviously trump has to -- >> every other publication. >> trump has to suck up to women. >> i would rather have every other publication on the "national enquirer." >> trump should host wheel of "fortune" for a few weeks. pat say jack is a republican. he needs grandma to vote for him. i don't think he did enough reality tv. maybe if he does "wheel of fortune" that will help him with grandma. the women will swing the election. that's what he has to do. that's his job. >> louie, thank you for joining us. >> similar hair cut. >> to pat? >> a little different. >> full head of orange air. >> pat's is blonder, sort of. whitey. breaking news for you right now. involving insider trading case. u.s. attorney holding a noon eastern time conference to announce an insider trading charge against well-known las vegas cam bler billy walters and thomas davis. the case involves the 2013 spinoff of white wave foods from dean foods. insider information was allegedly given from davis to walters and walters allegedly used the information to generate $32 million in profits. breaking economic news and weekly jobless claims when we return. you're watching "squawk box" on cnbc. thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? u do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. freshly made in the tokyo-japanese tradition, each batch is small. special. unique... every bowl blurring the line between food...and art. when you cook with incredible ingredients... you make incredible meals. fresh ingredients. step-by-step-recipes. delivered to your door. get your first two meals free blueapron.com/cook. when we return we have breaking economic news. weekly jobless claims. plus, debating the big market question of the morning. is a june rate hike back on the table. u.s. equity futures. "squawk box" will be right back. . developing story this morning. officials are investigating the presumed crash of an egyptair flight into the mediterranean sea. egypt's civil aviation minister says it's too early to rule out just technical failure or terrorism or any other cause at this point. it is time for weekly jobless claims. rick santelli, the numbers, please. >> 278,000, joe. from 294,000, of course, the big jump last year. a lot of reasons going on. teachers' issues. it's elevated a bit. planting a bit above 250. we didn't come down as quickly as some had thought. continuing claims 2.15 and change. this is realtime. down 1.8. expecting a number around 3%. down 1.8. figures in. if we look towards historics here, down 2.8 was february. that's where we are comping to. last month was minus 1.6. maybe the biggest story or one of the biggest stories is the dollar strength after yesterday. makes perfect sense if the fed putting meetings on the table and, of course, what's going on with all the rest of the markets and demand in corporates and what may go on with pricing in corporates and europe an quantitative easing in that sector. the biggest story people are buzzing about today, japanese. will they raise taxes. is their economy strong enough. more importantly as the article in the journal today points out, how do we get out of everything? that's the notion. they own so much more than other central banks do from etfs, in individual areas. big customers in the futures of the s&p here at the cme. getting in is easy. getting out is a lot more complicated as our central bank has figured out. back to you. >> well, that's -- we have been talking about it all morning. it's funny, rick. everything is funny at this point with the last -- what we've seen from the fed for five years. but it's like, people are saying, yeah, june, june, june. might be june. everybody is saying, but it's not really going to be june. it might be june, but we know it's not going to be but it might be. it's going to be july though, maybe, unless it isn't. don't you think, if they wait again, rick, they can find a reason -- if they don't do june, something can happen between now and july, for sure. >> well, i tell you, joe, i fell into maybe let's call it the same trap as everybody else on this floor, maybe 7/8 of everybody who was awake paying attention to the minutes yesterday. everybody saw the first headline that it was basically on the table, it was likely. very few read more than that before all the markets moved. count we guilty too. but if there are caveats, as many have said this is a loosey dynamic and they pull away the football it will add to the damage. credibility of all central banks is dented big-time no body shop can fix it with a lot of time and bondo. first of all, i think that the world deserves better than being treated like children with these word games. either do it or don't do it. i like the bit of a surprise factor yesterday. that was the most impressive aspect of all. they need to follow through! >> it's almost shakespearean. janet yellen. almost hamlet. agonizing and procrastinating. almost something. a ghost talks to her. and now it could be brexit. >> we need a rules-based system, joe. something you put on a piece of paper. everybody looks at the data. they actually have to use their own brain, and they follow the dots and sing along. if it lines up the way the paper says, you do it. if it doesn't, you don't. all this subjectivity takes control of the markets from the participants to the top of the pyramid and they don't deserve it. >> just remember, they really might do it now in june, except they're not going to but they really might except they're not going to. that's what i got out of it. >> if you want to see me burst blood vessels if the data race stays as it is, all these many years later, even at 2%, it's better than 0 where rates basically were. they need to do it. >> all right. thank you. rick santelli. joining us to continue this conversation is steve liesman. he is now -- he was here. he's gone downtown and is live at the nyse and on the set is michelle meyer. the deputy head of u.s. economics at bank of america merrill lynch global research. steve, you heard what rickster had to say. you might have heard in the car on the way downtown mr. navellier says june will not happen. >> for the record, the car i was in was a subway car, andrew. you know that's the most efficient way to get downtown. >> it is. >> first of all, pretty good movement on the claims number, suggesting that maybe that spike up we saw was related to the temporary factors. that's the first point i want to make. maybe the verizon strike is a factor, the timing of the calendar was a factor. some other issues were in there. let's see if it does indeed settle down in the 270 range. that will give you the suggestion of a jobs number for the month of may that will be in the 180, perhaps 200,000 range which is enough for the june right hake. philly fed a disappointment. other numbers in recent other regional pmis ticked up. this is not following through. outlook remains positive but the current activity index seems to be hurting right now. hoping for a rebound in manufacturing. not happening especially with coming off the dollar. the fed specifically is telling you you need to be aware and on your toes for the possibility of a june rate hike. i think, you know, a lot of people are kissing it off. i can't disagree with them entirely. let's see what happens with the may employment rart aeport and tracking gdp numbers at 2.5% right now. those things are in line for a possible rate hike in june. especially if the brexit polls show it won't be close. >> you have a view here, michelle? >> i agree with steve. it's possible they go in june but that's not our baseline. >> what's the percentage in your mind? >> i think the market is pricing in probably about right, saying 30% to 40% probability of june. >> they might go. they won't. >> yeah. it's all data dependent. that's the brilliance of data dependentency. >> i don't see why you get credit for putting the "might" on the table when everybody knows they really won't. >> i think what the fed is trying to do is tell the markets that they have options. they were not pleased with how the market was pricing in june earlier in the year, saying very little probability. they're saying, no, it is data dependent. if the data comes in strong, if the head-winds abate, we intend to normalize further. it doesn't mean that they have to go. it's a very -- >> michelle, i just want to ask you. i made a checklist this morning. i said jobs north of 150. gdp around 2% and i said inflation, core inflation, the p.c.e. north of 1.5%. what's your checklist look like? if you said here is what the world needs to look like if the fed is going to hike? >> i think -- that's about right in the sense if you want job growth covering where it is, around 200,000 or so. inflation needs to see signs of heading higher. to me, i think the big question is how do they judge the shocks. how worried are they about the head-winds coming out of the global economy. the june meeting is right before the u.k. referendum. that's a risk factor that could move the markets. are this uncertainties coming out of the emerging markets? how worried are they about, in general, the health and functioning of the financial system? these are the unknown variables. that's why they want the flexibility. >> i point out that they made a point, both in the minutes and again in the statement, to say the global head-winds had receded. >> that's right. >> you see talk in the minutes that they're less worry. in fact, they said that they were down-grading the concern about that in the minutes to really give that impression. i'm not sure that the global situation is really quite on the boil the way the fed had it earlier this year. >> steve, i still think -- let's say all your conditions are satisfied, that would give them the might, but they still won't, right? >> i don't know, joe. i'm trying to figure out which side you're arguing here. >> i want them to do it but they won't. they're too feckless. at the slightest thing they're scared. >> look, let me give you a little tale of the tape. when eric rosenkranz says i'm worrying about risks. i'm seeing the commercial real estate market in the region be too speculative and he says the market is not prepared. he is a confirmed dove. he is saying i think the quarter point is a piece of insurance that i want. guys like john williams. good friend of janet yellen. took her place as san francisco fed president. he is saying two or three times he thinks the u.s. economy is fine. when i hear those guys talk, i hear division on the fed, i hear people who are crentrists who cn talk to yellen and say we should put this quarter point in. >> i don't know. >> we'll continue this conversation another day, as we do every day. >> steve, did you get a -- was it crowded on the subway? >> no, it was nice. i took the r train. >> you didn't get a seat did you? >> i sat. i read the paper. it was humanity, man. >> you weren't doing the man-spread, were you? >> it was close. i had my legs crossed, but i was reading the paper. beautiful think. >> you had your legs crossed. all right. i had a horrible visual. i am not man-spreading. >> you are. >> i am not on a subway. where is my turtle sound? were you man-spreading, liesman? thank you. i asked for the mating turtles and got nothing. when we come back we'll hopefully get to jim cramer and talk to him about the this walmart news and find out exactly what happened when we return. welcome back, everybody. some news this morning on an insider trading case. u.s. attorney is holding a noon eastern time news conference to talk about announcements of an insider trading charges against well-known las vegas gambler. an inside information that was allegedly given by davis to walters. walters said to have used the information to sen jagenerate $ million in profits. the news story this morning missing egyptair flight. kelly cobiella joins us from london. good morning again, kelly. >> reporter: good morning. we are now closing in on 12 hours since this search began for egyptair flight 804. it disappeared over the mediterranean in the early hours overnight, about three hours into the flight with 66 people on board, 56 passengers, seven crew members, three security officials. we have heard just in the past few minutes the egyptian minister of civil aviation saying that the search is focused around the greek island of karpathos in the southern aegean sea close to crete. he want talk about the radius of the search but said it was closer to karpathos than it is to egypt. no sign as yet of that plane or any confirmation on what happened to it. we do know from u.s. defense officials telling nbc news they have no intelligence at this point or satellite imagery to indicate the airliner was the target of a terrorist attack or that it exploded in flight. egyptian officials sticking close to the line that they will not even call this a crash until they find some sort of debris but saying it looks as though this plane has gone down. none of the parties involved at this point talking about potential causes. the paris prosecutors' office has opened an investigation. the egyptians have ordered an investigation as well but saying that all theories are still on the table. crisis centers have been opened at the paris charles de gaulle airport as well as the airport in cairo for family members of the folks who are on the planes. but again, they are not getting much information either because we simply don't know yet what has happened to this plane, where it went down, where that wreckage is. a number of vessels now involved in the search, including greek planes, ships, helicopters, egyptian planes and ships as well, and the french have offered assistance. and we now understand that a u.s. navy aircraft is also joining the search. so we'll keep an eye on this, guys. but as yet, no update in terms of where this plane is, whether the wreckage has been identified, only that the search is focused on that smaller area close to the greek island of karpathos. >> okay. kelly, thank you once again for that report. let's bring in gordon bethune, former ceo of continental airlines and a cnbc contributor. i knew you would be on yesterday at 3:00 yesterday, gordon. obviously you were going to be on to talk about the tsa. great to have you here just to get your insight on what has sort of leap-frogged that story for us. in your view, at this point -- and i know you are a pilot. you fly around on -- usually on boeings i guess. >> yes. >> any insight at this early stage that you can give us, not knowing any more than anyone else? >> no. there is absolutely nothing. they need to get the cockpit voice recorders and the data recorders to really know what happened. it would be pure speculation on anyone's part. i wouldn't do that either. >> pretty safe plane. have you flown at a-320? >> one time as a demo flight. i was a boeing pilot for many years, still am, i guess. but i stuck to boeing. >> we had a previous expert on talking about -- you remember the rudder issue? there were some rudder issues years ago, though. he was talking about things that didn't seem very fresh, in my memory, jfk, american airlines flight. >> that was an airbus and they over-compensated with the rudder and lost the vertical fin and lost the airplane. >> it's possible it could be nothing. in this day and age people take credit all the time. you are probably already seeing things on twitter alluding to something, i am sure. >> it's idle speculation. no one knows, and they're just talking. it doesn't mean anything. >> well, let's talk about the tsa, because -- >> yes, sir. >> i am not surprised at your answer to this. you think that if you had really good managers that knew how to administratively operate what needed to be done and you had the whole system, you could redeploy people to chicago, you could look at peak hours. if it was a private sector where you had a boss who would notice if you lost money would it be different than just throwing money at it like government agencies always do? >> absolutely spot on. this is a kind of a production staffing modelling issue. they need to reallocate the resources where they were. i think they have full-time people in little parts like rockport, maine, with ten-seat airplanes when the real jobs should be in chicago and new york. unless there are labor issues or labor-contentious issues, this didn't happen overnight. they have people who profile now, i guess they call it. whether those are used optimally, i would have some doubts about that too. they need a good manager is what they need. >> gordon, one question, though, in terms of the allocation of resources. we know that on 9/11 many of those passengers who then went on to overtake the planes, the terrorists who were involved with that came in through smaller airports like up in maine, places where they didn't have a lot of security and maybe that's part of what the tsa is considering too. >> there are standards you have to follow. it's much more rigorous now than that era. and that was contractors with various degrees of intensity. so you're right. anybody can get sloppy. i am not accusing the tsa -- i think they're professional. and the people go where they are assigned to go. as joe mentioned, it's an allocation of resources. do you need -- these are not part-time people that run eight-hour shifts. it's airports and say rockport, maine, when they could meeting 200 seat airplanes at jfk. i would look at what changed. the volumes of passengers is not dra mat beingly different. -- dramatically different. >> yesterday it was early morning and still had the huge lines. by the middle of the day, it was -- they were gone. where is the contract right now? i was trying to figure that out yesterday with the tsa. they were trying to radify it. it was supposed to be ratified by today. is there -- this is not any weird -- they're not shenanigans, are they? >> i don't know. they haven't said they were. there is no impact that i know of. >> yeah. >> but having been in the business as long, they send you messages in a different way. so this may be a message from the union. but you're right. the airlines publish the schedule months in advance. you know when the volumes of passengers are going to be there. christmas comes this time every year. those are predictable loads and populations. >> gordon, could we ever properly privatise the whole thing in a meaningful way? >> i think you could. it just like you made it all government. but, you know, at least there is an escape valve where cities like san francisco and kansas city uses private people. but they work to the same standards. apt mally, as you know, it would be better run privately. but that's not the way of the government. >> all right. gordon. next time, you know, you got a plane and can you fly. just come back here. we don't need you in, you know, it's easy for you, isn't it? >> i would be glad to come any time you want. >> okay. good, we'll see you on set next time, gordon. >> when we come back, jim cramer joins us live from the nyse. we'll get his take on the top stories including walmart. stick around. get down to the new york stock exchange. did you know he was going to he had the answers? >> he did talk about the need to have a better, happier employment force. he talked about the need to be able to have better execution. he has both. that's in terms of bringing people in. and converting them to bigger shoppers. they're sitting there making more money per square foot of the place. he said grocery they could dominate. he's doing a great job in grocery. >> so what do we know now about everybody that was saying, hey this is our luck? it's happening to everybody. this isn't our fault. all the other guys -- mall based department stores wasn't obviously as positive as it was for walmart, right? >> let's remember, walmart was where it was -- it was at $68 before. i don't want to take anything away from them. they're making much more money per sales than i thought they co. int could. we're seeing a minimum wage consumer as steve liesman points out doing more shopping at dollar tree, they're doing more shopping at walmart. doing less shopping at kohl's, macy's, jcpenney and target. target may be a bigger loser than i thought. >> you would have thought that while they would be gasoline disposable dollars, they would have done that. they did more to keep more from that than they are from the $2 increase in 2% of the population. aren't they? >> look, you and i can talk. we both know health care costs went up huge. it's just an guess. >> we'll see you in a couple minutes. don't miss cisco ceo chuck robins will join squawk on the street. olay luminous illuminates skin with pearl optics science. your concert style might show your age, your skin never will. with olay you age less, so you're ageless. olay. ageless. . we just talked about jim krayem better walmart. dick's sporting goods had a better quarter. they're below street forecast and dick's see's comparable storm sales down. you see it is near the low for the year and advance auto parts falling short of estimates. they did not meet the expectations. and that it's moving to improve itself with some urgency. >> let's take one final look at the markets this morning. the futures this morning started out down by 80 points. dow futures are still down by close to 60 points. s&p 500 futures off by eight. nasdaq down by 17. that does it for us today. now it's time for "squawk on the street." >> good thursday morning. welcome to "squawk on the street." there is no shortage of news this morning. watching this plane crash of an egyptair jet over the mediterranean along with earnings news, fed speak, futures are lower. europe, watch. that the pound at a 3 1/2 month high on the polls. oil in the red after coming wi a

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