Transcripts For CNBC Squawk Box 20170428

Trump about how we could end up in a major, major conflict in his words. Did put some pressure, if you see the nikkei, down about 0. 3 . Same with the hang seng. In europe this morning n some early tlading, things are mixed. The ftse is down by 0. 25 . The cac is up by that much. The dax is up by 0. 10 . With crude oil prices this morning, looks like wti is still below 50. Up 27 cents. Tech stocks on the move this morning. After quarterly reports late yesterday. Lets give around up of whats going on. Amazon eps tops estimates by 36 cents. Saying revenue from the Cloud Business, advertising and Subscription Services helping to drive those results. Alphabet beating the street on both the top and bottom line. Strong ad sales sending profits up 29 , despite some advertisers boycotting youtube. And microsofts ref knew ju revenue just missed consensus. Sales of the Cloud Services platform jumped 93 in the quarter. Last but not least, look at intel. Reporting lower than expected quarterly revenue due to an unexpected slowdown in growth in the data center business. Much more from a tech analyst in a moment. That part is somewhat surprising given the growth in the Cloud Business. New high finally for microsoft, series of new highs. Been years and years, remember when it was stuck. Everybody said i would buy short google, buy microsoft. Microsoft was 27 or so. Here they are at 68 now. 527 billion for microsoft. Someone still uses a pc somewhere. All of us right here. All the other things. The first read on First Quarter gdp okay. First read on First Quarter. So confusing. First read on Second Quarter, second read on First Quarter. But this is first on first. Whos on first. Whos on first, exactly. And trump said major major, thats the guy on catch 22, major major. First thing i thought of. I have to control my mind. 8 30 eastern, the economist survey. 0. 8 pf 0. 8 is what you should remember about the First Quarter. Easy to say but hard to fathom were only growing at 0. 8 in the stupid First Quarter which always is either or less. Liesman has done work on this. Its like inventory. I think it needs to be adjusted. I dont know if that reflects the underlying growth rate. There was weather, there is seasonality, which we just talked about and delayed tax returns. The First Quarter employment cost index is out at 8 30 a. M. For those of you keeping score. At 9 45, we had april chicago pmi followed by Consumer Sentiment at 10 00 a. M. Earnings continues today with a lot of big names like chevron, exxonmobil and General Motors reporting before the opening bell. In washington, congress has until midnight to pass a bill to fund the government or face a shutdown. Negotiators at this point are expected to pass a oneweek extension, like a stopgap to allow more time to reach agreement. The whole thing is only for the rest of this year. Yep. A week to get a fivemonth deal . The way things work in washington now, you wonder why people have questions. Democrats say they would reject the extension if republicans pushed for a vote on healthcare reform this week. But then last night House Majority leader, Kevin Mccarthy announced there would not be a vote on the healthcare this week. Not just because of democrats demands, but because they dont have the votes yet. Nope. Spoke to kevin brady about it. He said theyre hoping members can get to yes. But theres more no votes. 15 nos, 20 leaning nos. Undecideds. 28, 22. Lets also talk taxes. The white house planning to slash corporate deductions as part of the new tax plan. Eamon jav javers has more detai. This is what the white house is saying oz of yesterday. A Senior Administration official briefing reporters explaining that slashing corporate deductions is the flip side of lowering the overall Corporate Tax rate to 15 . Look at what this official told reporters last night. He said when you have a 15 Corporate Tax rate, we dont believe you have to give people a lot of deductions. He said a lot of deductions that corporates have taken will disappear. Its just math. I can also tell you i spoke to gary cohen, the National Economic Council Director last night. I asked if you have a situation where some companies now are paying an effective rate of less than 15 . Because they take all these deductions that we were just talking about. I said for those Companies Paying an effective rate of less than 15 , would that be a tax hike . Gary cohn said im okay with that. For some companies there will be a situation where this plan could work out to a tax increase. Politically the thinking here is this. If you go after all of the Corporate Tax deductions at the same time its less of a political fight than if you go after them ones, twos and threes, youre not picking winners and lidz osers, youre saying everybody is a loser, everybody is on a level playing field. Thats the argument from the white house last night. Whether or not that flies on capitol hill and the lobbying groups that defends each one of these Tax Deductions is another question. The full yoquote here from dona trump last night talking to reuters about north korea. He said theres a chance that we could end up having a major, major conflict with north korea. Absolutely. The president also said he prefers to revolve this with diplomacy. Well see where we go from here. I want to talk north korea in one second. On the tax front and the deductions, when people talk about this tax plan being scored. I know its been hard thus far to score it. When people talk about the 15 rate, are they talking about that with no deductions, or is that with the deductions . Based on my conversation with a Senior Administration official last night, they are envisioning almost no Tax Deductions no, no all these outside groups the past days who have been mouthing off about this tax plan is their score based on deductions or not . Exactly. I cant speak to that. Its impossible to score this because you dont know at what income level on the individual side, you dont know at what income level the tax brackets are coming up to. And what the onetime repatriation rate is. Senior Administration Official said last night the repatriation rate, a lot focused on bringing that money back to the United States. The official said that rate will be somewhere between north of zero and south of 15. We were in washington yesterday, eamon. I was lost, what else is new. I was Walking Around where we were broadcasting from i passed by your office. Yes. I went on one side. Took me three, four minutes to walk past to get to the other side of that it had your name there. It does. You can shower if you need a shower when youre at work . You have a fully stocked bar. Who are you . Who are you . There is a shower in that facility, but you wouldnt want to use it. They clean it semiannually. Do you share that office . You dont want to get fungus. Do you share that office . Is that the eamon javers office . Was that Walter Cronkites old office . Ylan mui and i are office mates. Eamon we have to run. I want to understand, the comment that donald trump made about north korea, was that, in your mind, from what you know, intended to send a message or just so happened those reporters were in the room, asked him about it, this is what he said . I think the latter. Just watching donald trump speak over the past four months, he says very much what is on his mind. He says bluntly the thing other people say in diplomatic turns. Its obvious theres the possibility for confrontation. Donald trump speaks in blustery terms, when he talks about it he talks about it in a blustery way that catches peoples attention there. He says if we dont resolve this diplomatically there could be confrontation. The context of it, he did say were trying diplomatic measures first. Exactly. I agree with your assessment of that completely. Yes. Eyecatching because other president s have not spoken this way. But hes saying whats on his mind and what people have known. Thank you very much. You bet. Lets check the markets now. Joining us is steven wood, Russell Investments chief market strategist, also jack caffrey. Gentlemen, welcome to both of you. Lets dig through everything weve been talking about, starting with washington. Steven, it looks like some policy measures are a bit further off. Does that matter for wall street . Thats what we expected. We thought we would get Corporate Tax reform by august, september. A lot of the nonexecutive order regulatory stuff will be pushed off into 2018. Which means from an Economic Cycle perspective you will so he the impact of this being the back half of 2018. So we think it is positive to the economy, to earnings. Just more modest in our assessment about how much and how soon it will be in effect. Jack, the markets keep marching on in large part because of earnings. They impress on a lot of different levels. Right. If we think about the economy as a slowmoving, the slowburning issue, the earnings story has been the positive. As of last night looking at 11 Earnings Growth year on year. 5 surprise. Those are sort of above average earnings gains. That winds up being supportive of higher valuations year to date. Does this make it a market difficult to short. Short it at your peril . I dont get to short. Its not something i spend much time thinking about. From the perspective of people talking about timing, timing will be hard. We look for mid high single digit return for the fullyear in that environment you cant miss a 2 , 3 move if youre talking about total returns of 6 , 10 . If youre waiting for the pullback. If youre waiting for the pullback, you basically need to be invested and almost have a shopping list. What would i want to upgrade into, what would i switch into other than saying ill be a little too cute, maybe a decision to sell, make a decision to wait, make a decision to buy. Steven, what do you think about that . The key here is to lose the u. S. Centric focus. We do a lot of traveling. And personally ive been in a half dozen countries just in the last month. We think the u. S. Valuations are rich. Earnings will be good. Were increasingly suspicious theyll be good enough. By looking global, we think look at europe, look at asia, look at emerging asia. Now is the time to trim. We dont have a recessionary view on the u. S. , but at these valuations, reambulanbalancing globally, we think these valuations are called for. We do have gdp numbers expected today. We dont expect them to be good. What is that indicative of and is that a reason to be cautious . Its not a reason to be cautious. If i could have told you that we would have thought we would have another really boring 1 sort of growth rate for the First Quarter, we could turn that into 11 growth from an earning s perspective, you are finding stories that are finding growth, finding parts of the market that are finding growth. And ef fectively gdp numbers ar backwards. January and february have been slow. March seemed to pick up. You think theres a bit less traditionality in the market when people are talking. We should go back to gnp. Gross national product. Or do 4 and then add it. We could get to 4 if we just change the way we do it. Change the math . Subject to revision. To some extent your first first, second first, third first. Thank you, guys. Lets talk tech earnings. Alphabet and amazon beating the street. Sales of amazons Cloud Business jumping 40 . Parent of google, alphabet, not seeing much pain from the boycotts of major advertisers from the youtube platform which became more of a brouhaha. Joining us now is internet analyst ron jo jshj jshjosey. Which took would you want to own if you could only own one . I think amazon at this point. Though facebook is our top pick. Because . Facebook has a lot of things going for it. More and more advertisers are joining the platform. Instagram is becoming more monetized. Theyre on a good pace for continued growth and revisions upward on earnings. You cant go wrong with any of the three to be completely frank, but facebook is the top pick followed by amazon and google. Hard to complain whats happening at google. Lets talk about google. Were you surprised that the advertising held up given the News Headlines we saw about youtube . Those headlines came out in the latter part of march. We were thinking 1 q would be okay. The question was 2 quk. It Online Advertising grew 22 in 2016 overall in the United States. Were in a massive environment where more and more rad ver tizing is shifting from offline to online. Goingal is al google is a benefactor of that. Can you get a sense with microsoft, reporting their own earnings, amazon clearly the winner in the Cloud Business, how much theyre nipping at im talking about google and microsoft now, how much theyre nipping at the heels of amazon . It is certainly hard to deal. When you have aws growing 43 this past quarter. And you look at by the way, on a 14 billion run rate. Were modeling higher than that for the year. You look at gcp, google clouds platform, theyre just beginning. So they need to ramp hiring, ramp capex, but its many years until you get close to the sale to start impactsing amazons numbers. You cover microsoft . I dont cover microsoft, no. And just george buthe other. You said you like facebook. In terms of advertising play, you like that over google . We do youre seeing Significant Growth on facebook. Its amazing when you think about google, search has been around for 15 plus years, still growing 20 plus percent w mobile being a major driver of that now. On facebook, youre in the early days of social. They have 5 million advertisers, but more and more are allocating spend online and to facebook specifically. A lot of room to grow with facebook. Anybody you wouldnt own in this space . Its really tough. I was listening to your segment prior to this. Frankly, the large caps are working well here. Here in the internet sector. You know, ebay is one that is still in the middle of a turnaround. Theyre doing good things. Were in a wait and see mode. For sure, facebook, amazon, google, its hard not to own any of those. Okay. Well leave it there. Thank you very much. Thank you. Coming up, yew nighted Airline United airlines reaching a settlement with the passenger who was violently removed earlier this month. Unpleasant for this gentleman, dr. Dao. I just want to know how much. 30 million. Come on. I think a court would give him 10 million, 15 million. Ill volunteer. I am. Drag me. No, you wouldnt. You really wouldnt. For 30 million . We dont know how much it was. We dont know how much it was. On monday, an exclusive hourlong interview with former fed chair ben bernanke. You come in here every day for a lot less. Squawk box will be right back. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Welcome back. Yew knig United Airlines reached a settlement with dr. David dao olently dragged off a flight earlier this month. The terms of the settlement were not released. Im sure the pr value is worth it. Shares of united up about 10 cents. We were in washington yesterday, and it was take your kids to workday. I figure, you know, you mistake your kids to workday and you dismiss it. My son scott is here. That was not going to fly. I hear you. Scott, this is you in 012. Just i havent changed at all. But you on the other hand are almost as tall as me now. Did you when you walked in. I have not seen you in a couple years. Me neither. You have gotten probably seven inches taller than the last time i saw you. Youre a young man now. You look fantastic. Thank you. Theres a reason hes here today, too. Because we can promo the big production in millburn of Little Mermaids. Yeah. Thats tonight, right . Yeah. At the middle school. It will be on friday, saturday and sunday. You got a role in this. And you have a speaking role, too. Yeah. Im in the chorus. We have all different lines. I actually have a line. Say your line. Secure the rigging secure the rigging well done. Tonight is the premiere. Theres 30 tickets . By now, i dont think there are. Theyre sold out right now. Were going to all three. I will see Little Mermaid three times. I like it. I like it already. But, you know, i have seen part of the play, this is like for a middle school, this is a full broadway type production. Youre probably on stage half the time. Yeah that was before we had costumes. Yeah. Now youre all decked out. Ready to go. Our budget was like 8,000. All right. All right. But we have 18,000 now. You made 18,000. Profiting enterprise. We brought it back to money. We have to update your sister is not here. Shes been at every take your kid to workday. She was out until 2 00 a. M. Last night. Boy. Its okay. Because the mother of the day brought her home. It was prom night. Quick followup. We went to a preprom party. Everybody was there right in the center. Blake looks like penelope. Thats paul. That was last night. Shes not here today. Bigger, important things to do. Gorgeous. People do pre prom parties. 150 people. All the parents go to the pre prom party. I want get over the thing he did to ask her to the prom. Yeah. What do they call that . Promposal. I got home. Had some wine. The parents do any excuse to im just thankful. Everybody is safe. Scotts here. Im so impressed with how you have grown up. Oh. Wonderful and mature you have become. Ive been here, like ten years. Watching you grow up has been wonderful. Thank you for coming in. My pleasure. Thank you for letting me. When we return, tacks, heal tacks, healthcare and trade. Well talk with bill daley. And microsoft reporting that its Cloud Business is growing twice as fast as amazon. As we head to a break, a look at yesterdays s p 500 winners and losers. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4 95, you can trade with a clear advantage. Im dr. Kelsey mcneely and some day you might be calling me an energy farmer. Energy lives here. At crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. Whoa thats amazing. Hey, im the internet i know a bunch of people who would love that. The internet loves what youre doing. So build a better website in under an hour with. Gocentral from godaddy. Type in your idea. Select from designs tailored just for you and publish your site with just a few clickseven from your. Mobile phone. The internet is waiting start for free today at godaddy. Welcome back. Youre watching squawk box live from the Nasdaq Market site in times square. Good morning. Welcome back to squawk box. A look at u. S. Equity futures. The nasdaq popping after positive earnings in the tech space yesterday after the market closed. In earnings news, shares of starbucks slipping this morning. Well tell you about that now. The stock down about 5 for the Second Quarter in a row. Samestore sales failed to meet estimates. On the conference call, the new Ceo Kevin Johnson remained optimistic about the rest of the year saying Strong Performance in china and new products like the sweet and sour unicorn frappuccino will help the chain grow Revenue Growth in the second half of the year. Even in the earnings release, they said march and april looked stronger in the u. S. On that note, Kevin Johnson and Howard Schultz will join squawk on the street at 9 30 a. M. Eastern. Third point wants honeywell to spin off the aerospace division. Saying the move would create more than 20 billion in shareholder value. Dan lobe earning 1. 3 million shares of that company. Honeywell said they will look at it. What do you think . Id say that, too. No, i think theyre open to it. Its possible. Why . Does it make sense . Im just saying usually theres an immediate talk to the hand situation going on. This is not that. This does not seem to be that. Maybe its a it has merit. I dont know. I think of honeywell as aerospace. Then what . They left with home automation . What do they do . I have to go through the list. They have a lot. They get a lot of home automation stuff. Yeah. They they spin off and acquire so many different things. All i know, i wont bring it back to that, but ge and honeywell at one point were the same price in stock. Yeah. I wont harp on that again. Ready to go under 29 today. Not honeywell. No. President trump recently announcing his plans to renegotiate nafta as opposed to terminating the deal outright. It was a pledge during his president ial campaign. Joining us is bill daley, head of operations at argentier capital. Served as chief of staff to president obama and commerce secretary under president clinton where he passed nafta legislation. Bill, thank you very much for being here. Nice to be with you all. Yesterday we spoke with wilbur ross, the commerce secretary now, and he talked a bit about what he thinks is wrong with nafta. We heard tough talk about trump potentially pulling the United States out of it entirely. What do you think about the path theyre going down, which is what theyre calling a quick renegotiation . Well, nafta is almost 25 years old. The thought it ought to be updated is not something new. So i no question in my mind that it needs to be yupdated. On the over hand, mexico and canada are two of the top three trading partners. I think this threatening in a Campaign People say lots of things when they find out and get in office life is different. Its more complicated as healthcare, trade and others are. I think its a good sign that wilbur ross is there trying to renae renegotiate it. But this thought that we cancel it, the ramifications for the u. S. Economy would be strong. Its time to be updated. Thats how i would look at it not a renegotiation, more of an update of a 25yearold trade agreement. When we talked to wilbur ross yesterday, one thing he would like to see renegotiated or updated are the rules of origin. He said if you look at what china is pushing into mexico and what mexico pushes into our country, its similar. The trade deficit kind of he said theyre pumping things through. It needs to be tightened on those rules of origin. Is that something you can agree on or are there other areas . 45 that mexico exports is u. S. Product basically. If they put together a car put in mexico, 45 of that is u. S. Products. China, about 5 or less is u. S. Products. If theyre trying to up that from 45 to 50 , 60 , 70 , theres a point where the mexicans may say, look, this is supposed to be about helping to integrate north america, thats what it was about, canada, mexico, the u. S. , trying to get some the American Business community has enjoyed the benefits of nafta, in my opinion so have the American People. Its time to update it, renegotiate it, whatever they want to call it. But this yesterday that was the theme of the campaign, that is to do away with nafta, its unrealistic and i think the administration is finding out thats not feasible nor good for the u. S. Economy or the north american partners. Is there a way for mexico, the United States and canada to renegotiate the deal, walk back and save pace and walk back and say that i renegotiated the deal better for themselves . Probably not. Its obvious they all want to do that. But the mexican economy is one that is very dependent upon the u. S. And canada, which is our second largest trading partner, is most important to us. So, i think its going to be much more difficult than people think. So this idea well quickly if its a quick renegotiation, it will be a minor change to nafta an everyone will sell it as a major change. If its if their attempt if the attempt is to get it done quickly it will be more of a minor change than major change, which would be a step back by the president from his statements during the campaign. Remember, the doing away with nafta was a central part of his campaign, quite frankly. Some of these themes you bring up are similar to what we heard yesterday when we talked to penny pritzker, how interconnected the negotiations are, and how difficult it is to do one thing without having unintended consequences on another side. China is root issanother issue, place we have seen that the president came in talking tough about trade with china, now we need their help on north korea. How do you think we can nerve gate, negotiate the trade issues and Security Issues that we are dealing with . Oftentimes we want to separate them as though theyre different issues. Theyre not. The truth is trade is an integral part of our Foreign Policy. The economic strength of a country is our National Security strength. Its surprising to think the Administration Just found out that china is important to the north korean situation. Thats been obvious from the beginning. For china, the key to their growth obviously is the relationship with the rest of the world and the u. S. The fact theyre intertwined should not have been a surprise to anybody. And thats just the real world. And most people have been involved in it on a global basis, both in trade, economics and security. You know theyre intertwined. Too often, again, those of white house believe in trade have separated the Foreign Policy issues. Trade and our economy is an integral part of our National Security and our economic strength around the world. They cannot be separated. You cant deal with these things. The same goes for nafta. Our relationship with mexico. Obviously the president wants to build a wall, wants to deport all sorts of people back, blah, blah, blah. But thats that gets thought in their politics through the negotiations. You cant separate them. I also saw where the president yesterday talked about maybe doing away with the korean trade agreement. They have an election in less than ten days. The south koreans. This statement may have an impact on their elections. So, i thought the korean trade deal, quite frankly, was a good deal under president obama. Ford Motor Company was in favor. Unions were in favor of it. It passed, bipartisan passage in the congress. A rare thing those days, rare today. Theres consequences of these statements around trade and the economy that are very strong. Though, you know, washington is a different place. Theres a new book out that went back and or looked back at all of the chiefs of staffs who have gone through. Youre one of those people. In the book you say how chicago is different from washington. You said in hick gchicago, if s is going to stab you, they stab you in the stomach. In washington, its in the back. Washington is a different beast. Oftentimes its your friends who do that. That statement alone, makes never want to work in washington. Its a tough town, and quite frankly its gotten more difficult. The ten years between working with president clinton and going back to obama, the town has gotten nasty. Republicans couldnt be seen with democrats, democrats with republicans. Its gotten ridiculous. I think its only gotten worse the last couple of years. Its not good. Not good for the governing of the country. Saw it with the healthcare debacle bill. The tax bill thats coming up is complicated. Must be bipartisan. You cant pass major legislation that lasts and gets support from the American People unless its done there a bipartisan way. I dont see Much Movement towards that in the last 100 days. Famous last words. Sounded like you were talking about obamacare, bill. Talking about a whole bunch of things. Youre right. What you said was right. You cant do it, its not bipartisan and make it last. Thats why were in this mess now looking at what to do with that thing. Youre right. Absolutely. Bill, thank you. Youre one of the good ones, bill. We need to clone you or something or bring you back to get into the mix. Good luck getting him back to washington. I think your son may take your position. I just said i wanted to clone you. Can you say anything better than that . Painless. Just need couple of cells. Ill do it for you, bill. Good to see you. When we come back, earnings alert. The cfo of General Motors, Chuck Stevens, will join us. Then a vote on the healthcare reform which could come as soon as next week. Tom price will join us live from washington. Plus a big morning for Economic Data. We will get the first read on First Quarter gdp at 8 30 a. M. Eastern time. Weve done well in life, with help from our advisor, we made it through many market swings. Sure we could travel, take it easy. But weve never been the type to just sit back. Not when weve got so much more to give when you have the right financial advisor, life can be brilliant. Ameriprise microsoft is weak after the earnings report. The tech giant beat on both the top and the bottom line actually, revenue slightly below expectations. Thats probably accounting for a small pullback from close to an alltime high. Sales in the personal computing unit. A different story for the cloud dizzine business, revenue rose 12 . Joining us is jason fleeceur. What is microsoft, it is always going to be a windows company, isnt it . This is why weve been recommending it for several years now. Its not the same microsoft. Its cloud company. Its a cloud company. Windows is a tenth of the business. Growth is being driven by cloud. In absolute terms, revenues on cloud tied with amazon in the most recent quarter. They narrowed that gap and grew more quickly for the quarter and on a trailing basis. That Cloud Business is doing well. They beat on the gross margin, 51 gross margin in the Cloud Business is a record. Beat our expectations. And you pointed out the personal commuting business is lower, thats true. Surface tablets underperformed. The phone business for all intents and purposes no longer exists. That was a drag on the numbers. But the Office Business that you and i every day, that grew more than we expected. That was a good outcome. So the Cloud Business is not classified as software or is it . Its a form of software, a different deliverable i used to think of microsoft as an annuity with the Windows Business every quarter it would billions of dollars of revenue would come in windows is did you know that, 10 . Windows is 10 . Approximately. Maybe a little more. But on your point, windows was not an annuity. Thats the problem. It depended largely on pc volume. Did balmer set them up for the success were seeing now . Of course. Did he get credit for that . No. Perhaps not. I think sachia and management are doing an outstanding job. But you have to build on what came before. So, this goes back, i think, probably five or six years to lay the foundation for what were seeing now. But the straty egy is clearly working. The fact theyre growing the Cloud Business the way they are, they tied amazon in absolute revenue and grew more quickly from the proceeding quarter. Amazons revenues from cloud were only 100 million from december quarter to march quarter. Our calculation is microsofts grew by 300 million. And the profitability is up substantially. Thats something investors are focused on. Terms of market share on azure, how close can they get is amazon so far away its ill possible . Its a tough comparison. Twothirds of microsofts reported Cloud Business is office. Office commercial, Office Consumer a third is azure. That is approximately a 5 billion run rate. Aws is doing 13 billion plus over the past 12 months. What do they have to do to catch up . I dont know that closing that multibillion gap is feasible. They have to do what theyre doing . Is azure number two or three relative to google . Number two, i think. In terms of absolute revenues against aws. But the real message must be continue to drive that business, increasing profitabilities. Thats what theyre idoing. They have a multiple delivera e deliverable. They can do it in public cloud, private cloud. Music is playing. They got criticized, they didnt do search like google, but they must be doing something right. Thank you. Thank you. When we return, stocks are up double digits since the november election. If youre struggling to find a place to invest, we have you covered with best investment ideas in energy and Financial Services sectors. Thats next on squawk box. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. 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Ceo of Causeway Capital management has a couple of stocks on her list. I mentioned during the commercial break, sevevera phon a stock you like. 2 billion market cap. Small cap category. And left behind by so much indexation and focus on large caps. What we like about them is they are instrumental in helping merchants gelt payments done both on site and moving to online. How much is this a story about a company that you think will have Solid Earnings and a story about it being a take over target. Its a perennial take over target among us who may the m and a gossip game. 18 times earnings two years out. Thats not expensive. So that creates down side protection. This is a very competitive marketplace. They have square and clover. Merchants want to walk around and do everything. We dont have to go to a cashier any longer. You have baidu. Bai dump, as you know about these Chinese Internet Companies they have china to themselves. We may be extolling the virtues of alphabet but we cant get into china easily. Go for the undervalued candidate and you have some down side protection. You believe their numbers . Enough to put them in a diversified portfolio, absolutely. Youre pausing. I dont know if i believe anybodys numbers completely. Anybodys numbers in china or at all in china theres some creativity. That video business, lets look at netflix and apply that to baidu. Thats a fantastic business. Has long growth runway. Finally, prudential . Yes. Dont confuse it with prudential u. S. But the uk based Life Insurance company, tremendous amount of growth ahead and reasonable valuation. Good dividend. Okay. Well hold you to it. Thank you. Appreciate it. Coming up, President Trump nearing the end of his first 100 days in office. Well talk taxes, trade and health care with bob kerrey and eric cantor. News of another delay yesterday. Thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. The power of the Nasdaq Market. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. To be a nightmare does nobody like the future . Cmon, the future. He obviously doesnt know intel is helping power Autonomous Cars and the 5g network they connect to. With this, wont happen in the future. Thanks, jim. Theres some napkins in the glovebox. Okay, but why would i need a napkin . You could have just told me a bump was coming. We know the future. Because were building it. Earnings rolls on. Big beats by amazon and alphabet. Gm and exxonmobil will be in focus. A rundown what investors should be watching. President trump threatening to terminate a trade teal with south korea and warning of a major, major conflict with north korea being possible. The beltway buzz and its effect on business is coming up. Round one of the nfl draft is in the books. Already a surprise move by the browns have some analysts shaking their heads. Second hour of squawk box begins right now. Announcer live from the beating heart of business, new york city, this is squawk box. Good morning. Welcome back to squawk box right here on cnbc. Were live at the Nasdaq Market site in times square. Im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at the futures especially at the nasdaq this morning. Youll see that popping about 27 points higher right about now in large part on the back of some really better than expected earnings reports we got from some Big Tech Companies including amazon and google. Heres whats making headlines. The countdown to a possible Government Shutdown. Lawmakers have until midnight tonight to pass a spending bill and keep the government open. Sources telling nbc news the house expected to hold a vote to fund the government later this morning. The house will not vote on Health Care Bill this week, thats not stopping us, of course, from having the countdown clock. Nonetheless well be keeping an eye on that vote. Shares of starbucks slipping this morning for the Second Quarter in a row. Same store sales failed to meet wall street expectations. On a conference call, the ceo remains optimistic about the rest of the year. Johnson and executive chairman Howard Schultz will join the canning on squawk on the street. There are for you pieces of Economic Data and of course more earnings reports coming up today. The first read on q1 gdp, well talk a lot about at 8 30 a. M. Eastern time. Forecasters calling for growth to slow to 1 from 2. 1 in the fourth quarter. Q1 employment cost index will come out. At 9 45 april chicago pmi followed by Consumer Sentiment at 10 00. A lot of data to chew on. Some big tech earnings that came out after the bell. Alphabet beating the administrate on top and bottom lines. Strong ad sales sending profits up 29 despite some advertisers boycotting youtube. The stock up 4. 3 . Most missing revenue. Laptops weighed on the results. The stock is down but just slightly. Amazon earnings per share topping estimates by 36 cents. Worlds Largest Online retailer saying revenue from its Cloud Business, advertising helped drive the results. The stock is up by 3. 5 . More in just a little bit. Look at the latest in d. C. , looming Government Shutdown, Health Care Reform maybe and more lets bring in two political veterans,erratic cantor who served as House Majority leader now works as vice chairman and managing director of Investment Bank and bob kerrey former u. S. Senator and former governor of nebraska. I think of both of you gentlemen in reference to what were looking at in washington right now and both of you have valuable history and perspective, i think. Senator kerrey, youre from nebraska, so maybe a little bit more normal than a lot of democrats to start. And from a by gone era where your party is not anywhere close to resembling what it did when you were around. Then eric, the reason youre, you know, making seven figures now is because some guy came in from the Freedom Caucus or whatever from that sort of mentality and sort of pushed you out in a shocker a couple of years ago. Which is another reflection of whats happening in d. C. So both you guys can comment on this first 100 days. Eric, how can we be surprised . You cant wrangle these cats in the republican party. Is it trumps fault . Should he take the blame for not doing anything the first 100 days. Or is it a preexisting condition for him . Thats a pretty good description. No. Listen. I think if you look at the first 100 days and if i were the president looking at the administration the first test i think i would hold myself to, did you do what you said you would do. Clearly i think he can say that to his voters. We saw the polls out this week, 96 of those who voted for President Trump said they would do so again. And so if you did what you said you were going to do, what was in your control and you did that, i think its off to a good start. Clearly and i think the senator would agree theres a lot of work to be done in trying to Bring Congress along especially as you say, joe, its a very desparate bunch. Unfortunately the democrats, you used that as a compliment to democrats he did do what he said he would do. But if i would score him, i think the most important thing hes done, hes unquestionably been more friendly to business. Hes given business a signal he understands the red tape, understands the regulation and taken pressure off in that way and its enormously important. You can see that, bob, in Small Business confidence, consumer confidence. Its not down 10,000 points thats a victory for what pun departments said would happen. On the other hand, if you really want to fix obamacare, Affordable Health care act you dont start by insulting everybody who voted for it. You start by saying i understand you democrats voted for this thing, i understand you think it has reduced the number of people without insurance, will you work with me to fix it. If thats your message democrats have insulted anybody who voted for donald trump and they are all deplorables. Half the people are talking about impeachment. Talking about the president s scorecard. If the president wants something done on tax reform, health care, he cant just do it. So youre actually telling me you would try to work with democrats if you were donald trump right now . What possible yes. Which ones . You could work with ron white on health care. He had a Health Care Plan a number of years ago with paul ryan. You can work on tax reform. Put a group of republicans and democrats together you won get the left in the Democratic Party and you won get the right in the republican party. Are you willing to take grounds from broth sides. Let me say this. I dont think youre getting the democrats to work with republicans on tax reform or health care right now. I think the dye is cast and the use of reconciliation procedure reflects that reality. But theres other areas you can hit singles and doubles. Steny hoyer was on yesterday. He has plenty of bills in his make it in America Program that actually some republicans, they are not offensive to conservative philosophy, trying to go back and address the needs of the american worker. If you can take one or two of those things, try and work with somebody like steny, do some singles and doubles, theres some republican proposals that will help the economy, help workers. If you want to work on education, if you want to work on medical research theres some singles and doubles they can get going on at the same time republicans are trying to work on these very big things that were promises made in the last seven years including what donald trump has done during his campaign. Senator, in terms of trying to do something. When gorsuch got on the Appeals Court it was 982. Youll tell me about merritt garland and all that. The democrats had a right to be mad. Did you see there was not a single candidate in the judiciary that the democrats would have put on the bench at this point. Does that look like a Fertile Ground for bipartisan. No its not Fertile Ground. Thats an example that bothers me. I knew i could find something that you would admit this is not the party you were in. In a lot of ways its not the party i was in. The problem i do think shaerlt a terrific example and i dont think you can say leave it alone. Again, i just repeat, imagine what would happen if the president said i can work with you, lets try to fix this thing. Theres 60 votes in the senate for a fix. Theres 20 republicans. If he says hes working with the democrats. Youre not going to get a single vote from the Freedom Caucus. You guys write a bill, unsurprising you dont get a bill that will get bipartisan support. Senator just forget it. You cant forget it. Forget it when it comes to the Freedom Caucus. You have to change the rhetoric. If the president wants to get democrats to work with him he has to change the language. Not hearing those types of things from schumer. Schumer isnt the president. But when he says heres how we can work with the president on health care. Theres a for you things we can find Common Ground on. Public option. Drug price controls. He gave for you democratic ideas that are much further left than obamacare and those are the compromises. On a daily basis i dont hear schumer. I hear the president. But schumer represents where is he going to compromise on health care . If the president came to the American People and said i know the democrats worked hard on this bill, i know they care about Health Insurance, they want to get more americans with Health Insurance, i want to work with them. I need their help to fix. Im going to fix it. Instead you describe it as a disaster. Describe it as going down the drain. And if you made an appeal in that way, joe, i dont think theres any question senator, what got him elected, what got the house firmly firm ly esconced is what got republicans elected. You look at the numbers. Repeal obamacare. They may not have the majority in the house and senate. They have been chasing that parked car for about eight years now. Democrats very skillfully lets put in another enentitlement that cant be taken back. You put the trojan horse in there and almost like youve like something will blow up. Democrats took a Heritage Foundation idea. They took a conservative idea and wrote all over it. They booby trapped the entire system. If americans touch i want it blows up in their face thats what you got. Stop the pollyannish talk. It wont happen. You wont get this cooperation on hearth. Joe youre right the commitment was made to repeal and replace obamacare. That by definition is not going to be accepted by the democrats. Senator, youre right from a long time ago perhaps if things were different. The set up now is they have to get this stuff done and done through reconciliation. President trump talked about jobs and when you saw secretary munchin and gary cohen talk about tax reform they say the narrative of this program is to get Economic Growth going again, get people back to work. Thats a bipartisan goal here. You can work to see how you can get some other things done, not from these very big items because they are way too contentious and the dye has been cast and the structure is in place. Look we already have debt of 76 of gdp and i think you got to do it in a responsible way. I would love to see the corporate rate come down. I would like to see tax relief that would be stimulative. But if all youre doing is cutting everybodys taxes without any offset, other than that there arent any real offsets. I dont think they are saying theres no offsets at all. Not seen a lot of graunularity on the president s policy. You need growth to get back to revenues coming back in. Theres another unspoken issue here and thats the unfunded liabilities having to do with the entitlement programs. President trump said he doesnt want to touch those. My party has always been about over the last eight to ten years trying to address that. Well see if that comes into that. First order of business ought to be about growth. We ought to talk about people taking risks. You wouldnt go along with this tax plan given the deficits it would create . What was that if you were in washington now you would not be going along with this tax plan . Im certainly for reducing rates. Im certainly for simplifying the code. Im for getting businesses and individuals, big and Small Business back in the game. Certainly i would be for this. The question is how do you deal with growth at the same time look at what were going to do to try to fix the unfunded liabilities and Health Care Entitlement thats driving the deficit. You assume any rational person doesnt like this plan. Hes a republican. Why do you assume he doesnt that speaks volumes natural you think because you think it doesnt measure up in terms of deficits that every normal person in the world who is honest with themselves mate it. You went to math class im glad you defined intellectual and who nest. We all would have a lower tax rate. Its obvious. Thats what the left thinks about trump. Every honest person must think this guy is a clown. Its not a plan. Its just a guideline. We got you in the crossfire. That guy that was walking outside, thats what everybody is doing in both parties. Everybody is flipping everybody else off. That was a perfect metaphor for washington right now. Just nicely put the guy on camera and what do we get . God almighty. Get in a bad mood, guy. Its friday. Thank you, eric. Please a little more intellectual honesty. When we come back investors waiting on Economic Data and earnings mixed on mobile. Well talk markets after the break. Later amazon shares surging. Closer look at the ecommerce giants quarter. Stay tuned youre watching squawk box on cnbc. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. Switch and you could save 509 on auto insurance. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. For years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Is that what it means . I dont know. But it works. It does. Well save that tape. Classic. Nice to see you too, my friend. A busy night at the nfl draft an estimated crowd, 70,000. 70,000 showed up to watch a draft in front of the Philadelphia Museum of art best known for those rocky, famous rocky steps. Theres goodell. Browns selected miles garrett defense man from texas a m. 49ers swapped top picks with the bears. Bears taking North Carolina quarterback. He was only a one year starter for the tar heels. Wasnt considered a top pick. Thats Pretty Amazing. Only one year. Who would have known. You guys take the train back to philly last night . Yes. Did you see how crowded it was in philly . Every where i look the schuykill, everything was backed up. We couldnt see from joseph was asleep. Only for a second. We get on the train together we didnt even sit together. Ill tell exactly what happened. I said come up here, lets sit together. He said no i want to sleep. Im not going to talk to you. Dont worry. I see you three hours every day where i have to talk to you. I wont disturb you. I sat behind him. He was trying to get ahead. He was calling people i heard more crazy conversations coming youre on the phone. Im glad i didnt book myself on the 10 00 a. M. You were trying to find out some stuff. A couple of things. Im going break that news. Lets get a check on markets. Joining me is the lind say group chief analyst. Weve been watching markets. You have these things happening in washington that youre unsure in terms of timing. But you have earnings on the other side of things. How do you add that all up and try to figure out which direction to take things . The way im describing this year you have potential for this monetary tail wind, fiscal tail wind of Regulatory Reform and hope in the ninth year of expansion we can extend this even further. Obviously its still long in the tooth in a mature recovery. On the other hand you have the northeastern tightening with the fed raising rates and other Central Banks pulling back liquidity. Were getting the rebound because of reversal from energy but still late cycle Economic Growth. Again its tax reform providing hope that we can extend this recovery. But janet yellen is behind the curve and try to play catch up. At some point it will matter. What do we think about the economy and how things are going. Well get a gdp number thats below 1 probably. Weve seen this in First Quarters frequently. What im hearing from Business People is march looks like it was better than january or february. Where do you think where we are with the economy . Still media protect growth. Finished 2016 at 1. 6 and need to get 1 . Late cycle. Auto sector which was a major booster to growth is now rolling over. Consumer spending in q1 might be negative. Mike jackson from auto nation was with us earlier. He talked how incentives are incredibly high. They are at the Tipping Point where youre dragging consumers out. Youre not nearing a cliff but certainly peaking. Monetary policy pulled forward a lot of activity. Now were seeing we pulled forward all the activity we can pull forward. At the same time mediocre economy and the fed is raising interest rates. Financially a great combination. The markets in recent months, certainly has been short at your period ridiculo peril. Hopefully lower taxes and regulatory relief will divisive that. Going back to that fiscal tail wind versus the monetary head wind. What do you like . I like overseas markets better because they are cheaper and theyve gone through a bear market. Emerging markets topped out in 2011 and went down for for you straight years. I find better value outside of the u. S. Peter, thank you very much for being here today. Food doesnt measure up for you on the sell off either . I didnt eat it. I want you to know i ate some new rx bars. I had my eyes shut for five seconds and she was going to stiff me. Wait, i want food. Anyway. I didnt know you guys were on the same train. Announcer time now for todays aflac trivia question. In what year was gm founded . The answer when cnbc squawk box continues. 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Talk to your advisor about a brighter financial future. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Results just crossing the wires. Joes microphone is still on, i think, but joe, if you can hear me, your microphone is still on. Yep. Okay. Never mind. Phil lebeau has the results for gm. Reporter this is a beat by a big margin when you look at the bottom line here. General motors earning a buck 72 in the First Quarter versus an estimate of a buck 48. Revenue better than expected coming in at 41. 2 billion versus 40. 72 billion. Record net income of 2. 6 billion up 33. 5 and the margin 8. 2 up 1. 1 . Three Drivers Behind this. North america, were talking about retail sales of trucks, suvs, high profit vehicles made 3. 4 billion last quarter in north america. Up 49 with a margin of 11. 7 . Much higher margins than weve seen in the past from General Motors and really any of the domestic automakers. China had a margin of 3. 9 . Guys, well be talking about Chuck Stevens the cfo of General Motors coming up at 7 50. This was a record quarter. They knocked it out of the park. Thats the strength youre noticing in north america in trucks and suvs. They are in demand. One thing we kept hearing about was these discounts that these guys and subsidies that were happening. Is that not the case in this instance for gm . Reporter General Motors has probably been benefiting the most in terms of when you look at incentives versus transaction prices. General motors has been below where the industry average has been in north america. While they are moving up the percentage of those incentives relative to what people are paying at the dealership are below industry average. Yes they are moving up for gm and for everybody else, but relative to the transaction price General Motors is lower than its competitors. On the bid ask on my screen its indicated a little bit lower than where it closed yesterday. Closed at 34. 54. An ask of 35. 35. Was there anything in the numbers that were little weaker or what were looking at it the board has it indicated higher. Reporter nothing that stands out here. The biggest question thats out there for analysts is when do we see as this auto market starts to turn over, when do we see some impact because lets be who nest. Whats driving gm right now is the strength in north america. Trucks and suvs. They are not seeing any slow down. Thats my mistake. I looked at the number wrong. 35. 25 to where its trading versus 35. 54. Its higher. Thank you. Reporter these are very strong numbers. Well talk with Chuck Stevens in a few minutes. You know the story with gm, what have you done for me lately. They are posting strong numbers and delivering. Yet generally speaking investors are shrugging. Breaking news. Battle between qualcomm and apple heating up over royalties and lie sensing agreements. Jon fortt has the details. This is a big one. I might be going too far apple is exercising its Nuclear Option in this argument with qualcomm over payments on its technology but this is pretty close. Apple basically informing qualcomm it will stop paying all together the payments that its been paying since it started making phones that cover the technology that qualcomm has in iphones and ipad, think about the wireless connections right now, lpe, the way you get broadband data on your phone and on your ipad. Qualcomm gets payments from people everybody in the industry for that. Apple thinks its unfair, unfair qualcomm charges a percentage of the selling price as the payment here and they are fighting back in court. But apple has decided to stop paying the contract manufacturers that payment and the contract manufacturers say if apple doesnt give us the money qualcomm we cant give you the money. The revenue impact half a billion dollars. Qualcomm thought they would pay something. Apple said were not paying a cent. The eps nongap impact also significant talking about 15 to 30 cents here on eps. Okay. Jon, we appreciate it. Well keep an eye on story. In the meantime i want to talk about amazon because their shares are soaring after rolling out strong profit fps company earning 1. 48 per share. Also beating the street coming in at 35. 7 billion. Michael olson is joining us covering consumer technology, ecommerce for pipe er jaffrey. Where do you think the stock goes . Higher. This is another good quarter. Another step in the right direction ultimately towards a trillion dollars. We did have to revise our numbers higher. Margins were better. When we look out to the guidance, the revenue guidance was in line. Margin guidance was a little bit below. The street will give them a free passing q2. Anything that makes you nervous about this company . If you look at margins in the second half of the year, the free passes will be over. They dont have a get out of jail free. So the margin guidance has to be better for q3. The reason is margin comparisons for q3 and q4 are easier than last year because of the increase in investment that they put in place in q3 last year with adding on more investment and fulfillment with india and doesnt. This is a company that used to either have razor thin profits or no profits at all and everybody gave them a free pass then. Are we at a point thats no longer the point of the game. Considering they guided margins below for the Second Quarter and the stock is moving higher, were not quite there yet. Thats the Inflection Point were making the case were at. In the second half of the year margins do need to improve on a yearoveryear basis. We, the good news is we expect that will happen given the fact that its unlikely well see a significant increase in expenses to the degree we saw in the second half of last year. Do you have any anxiety they are getting into businesses or new places that may not work . Jeff besos says one of the great things about amazon they try a lot of things. They have a new lexus product that will take you what you look like in your clothes and whether youre fashionable or not. Have you seen this . I dont want to know. Do you know what im talking about. I do. I dont trust my fashion to alexa at this point. But they have proven themselves to go into new areas and do well. Some areas will fail. But theres a lot of other potential strong areas of growth, like grocery that they seem to be pretty consistently pushing towards. We talked about this earlier with another analyst you could own amazon or google right now or microsoft. Which would you do . The only one i cover of the three is amazon. But its also the one i would focus on. Okay. Michael, well leave it there. Thank you. Dont want to dictate to siri. To this day what she couples. Im seeing some things very obvious. Nine out of ten times you know exactly. The stuff they come up with not in anyone verse. Nothing would surprise me coming out of your mouth. Can you imagine the clothes that siri would come up with matching you oh, my god, look at her. Playids and stripes. Its a camera. Youre supposed to twirl in front it. Alexa does this make my butt look big. Thats what it is. I do worry about that. Supposed to tell you if youre fashionable and keep images. Its for women who want to share what they are wearing every day. For men . Could be for men. If its for men you should do the programming. Because every day youre like look like somebody thank you. I like her dress. Thank you. Weddinglike today. Pure. Yeah. Summer. Spring. Coming up, congress has its hands full as health care, tax reform and government funding takes center stage. Well talk to congressman tom reed of the house, ways and Mean Committee after the break. Playing the bird again. No reason. No reason. Just that he gave us a bird. If you missed it. Here are the futures. Squawk box will be right back. Welcome back to squawk box. With tax reform, hearth reform and potential Government Shutdown on the line congress under pressure as the first 100 days of trumps presidency comes to a close. Joining us with more is member of the house ways and means committee, tom reed. Will the Government Shutdown be averted. It will. Were working hard. Well have to do a one week extension. The agreements are coming together. Well keep this government up and running. Will we have this conversation again next friday . We may have to have another conversation but at the end of the day we get through it. Move on to health care and tax reform. Is there any chance that someone tries to throw in some Monkey Business between now and next friday given well push it off and who knows what happens. Of course its washington, d. C. Thats why im working in a bipartisan way to get other alternatives. We have democrats taking some leadership roles to avoid a Government Shutdown. Realistically youve done the count. Where do you think the repeal and replace of health care, aca stands right now inside the house weve been working the last two days late into the night and were getting very close. Its going in the right direction. We can move this bill sometime next week is my goal. I think we get there. And then deal with the senate. You got to do the tax reform question. The same way. Andrew has got to ask you. Congressman, you couldnt, if you are intellectually honest you couldnt possibly be supporting this tax proposal . As its currently constructed. You must be against it because any intellectually honest person would by definition be against this, this travesty. What im fundamentally against is the broken tax code for the American People. We got to move forward. Where were leading in the house and engaging now in the white house and push the senate back too. Congressman, when you looked at that plan, which its one piece of paper, a page, did you look at that as a plan or looked at it as Something Else . You wouldnt approve the plan as that one page stands today, would you . Of course, being on the committee, working on these issues for seven years, the details matter. But putting the paper out helps a great deal because it gives us some guidance. Can you look at the proposal from the white house. A lot what were working on in the house, well do the whole tax reform for everybody in america because thats right thing to do. Does it have to pay for itself . With growth and dynamic scoring it can get there. At the end of the day im concerned about the deficit. Have you seen any math that suggests you can get there with the numbers that are currently being put out there . Obviously getting into a 15 rate is very difficult in a revenue neutral way. That doesnt mean you give up trying. Doesnt mean you dont keep engaging the debate. Congressman, the answer during the break was dont even score it, just do it. Thats what i was told. You didnt like that answer. Only because everybody was past couple of years we would have these fix the debt campaigns. We spent ten trillion dollars. Everyone is now saying deficits dont matter. I dont know. Lets hope that common sense not the and about counters out of washington, d. C. Dictate some of these fundamental policies. We need and about counters, i guess. We do. But you do want to know ultimately that you would be able to create enough growth it would pay for it . Absolutely. Thats the goal. Growth is the corner stone of solutions. Just relax. It will. By the way have you ever looked at tax revenue even in the reagan years, tax revenue as a function of the tax rates did not do unfortunately what it was supposed to do, right . Thats where we are today. We have the highest revenue coming in for the u. S. Government. Its a spending equation when we talk about the deficit and the debt. The deficit every year we raise the debt ceiling because its almost like night follows day. My only point is, we can blow it on one, you know, one party wants to blow it and the other party wants to give it a shot to stimulate some growth. Grow the pie and hopefully be more to split up at that point. Im not saying you can lower the rates. I think lowering rates is terrific. The question is how far down can you lower the rates. I talked about means testing, social security. You have to cut all sorts of things but nobody wants to even have that conversation. How is this supposed to happen . Initially you do this, maybe in his first term trump do you this. The second term you work on the deficit. People at home, you know, that are horrified by the whole presidency talking about a second term is anyway congressman, washington is fun. Its fun to washington. I dont know. How about this. The president serng Political Capital by bringing members down to the white house. As a business person i can appreciate that. Whole new concept given whats been happening down there. Actually talking to congress. You go to lunch with schumer ever . I work with our senators quite a bit. Okay. Congressman, thank you very much. Thanks. When we return, gmc Chuck Stevens joins phil lebeau. And then tom operation, well talk Health Care Reform in the president s first 100 days. Squawk box will be right back. Hey. Pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. For years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Gm reporting results earlier in the hour. Phil lebeau is back with a special guest. Reporter lets bring in Chuck Stevens, cfo of General Motors. Huge quarter. You beat the street bay wide margin. North america is the story. Did you well in china. But north america is really where you guys are seeing exceptional strength, correct . Absolutely, phil. North america generated 3. 4 billion in profit, 11. 7 margin, both q1 records. We continue to see strength of our product lunch, continued cost performance. Strong pricing. And overall were very, very pleased with the performance in north america. This is exactly the kind of start we expected to the year, which will build upon and help us achieve the commitments we made at the beginning of the year. Reporter square that outlook with what were hearing from people that look at the auto market and say incentives are rising. You got longer, takes longer to sell vehicles thart on the lot right now and inventories are backing up for the industry overall. What is it you guys are seeing that doesnt square with the concerns that are out there on wall street . I would say one of the key factors for us specifically is the strength of our Product Launch cadence. Last year we started with important launches with cadillac xc 5. This year were entering the heart of that with the chevrolet equinox, the gmc terrain and chevrolet traverse. Were very optimistic around our Product Launch cadence. Our truck strategy continues to produce Great Results and, in fact, in the First Quarter we have favorable carry over pricing which was largely built upon the strength of our trucks. The third point, phil is we continue to stay intensely focused on costs. We know Market Dynamics are becoming more challenging as we reach a pla into the industry and pricing has become more challenging as well. Thats why were so focused on cost and we have very strong cost performance in north america in the First Quarter. Chuck lets talk about gm financial. You guys brought in about 300 million. Your revenue was up 39 . A lot of concerns in the market right now about the subprime market and that we continue to see overall a juicing of that market and that its going to come the home roost within the next year or so. Any concerns . Ill talk specifically to gmf. This is a good question. Within gmf if you look at our subprime business its been relatively flat. We havent increased the business in the past several years. While the last strong market, more players came into the subprime market and thats where were seeing the exposure and risk. But specific to gmf weve been very disciplined from that perspective. That was their other competency when he purchased americredit. Gmf versus the other participants our credit performance is significantly stronger and has remained stable over the last couple of years. Again that goes to the core competency of the gm Financial Team and discipline around subprime. Our growth has come from the expansion of our cap negative strategy in the prime and near prime business over the last 12 to 18 months. Reporter chuck, one last question. The president is talking about lowering the tax rate for businesses. If it comes down the proposed rate and they are talking about 15 what kind of an impact would that have on General Motors . I would say generally, phil, were supportive of tax reforms lower tax rates for consumers and businesses will drive long term benefits for the economy. I would say theres obviously the details thus far have been at a very high level. So very, very difficult right now and theres a lot of uncertainty on trying to quanti quantify it. Reporter Chuck Stevens, cfo General Motors andrew on a day where they knocked it out of the park. Well above the estimate of a buck 48 a share. Thanks for bringing us that interview. Health and Human Services secretary tom price will join us right after the break to talk Health Care Reform and fortunates first 100 days. Check out the futures. More Market Reaction straight ahead. Box will be right back. Lets go, shes a dog. [ whimpers ] find pingpong. Find your awesome with the xfinity x1 voice remote. Thats amazing the health care battle. A vote for reform might come next week. Well talk to President Trumps Health Secretary tom price. Tech surge. Strong earnings from alphabet anticipate amazon looking to drive the nasdaq to another record high. A check up on trumponomics. First major snaps out of the president s economy as final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen here with becky quick and Andrew Ross Sorkin. The futures right now have been mixed. Now down to on the dow jones up, two two in change on the s p and nasdaq very strong with tech earnings that were very good at least late yesterday. Treasury yields now in the two three to two for you. Well see on the ten year. 2. 307 where we are this morning. We do have a few tech stocks surge after reporting earnings. Amazons earnings topping estimates by 36 sense. The worlds Largest Online retailer said its revenue from Cloud Business, advertising and Subscription Service helped drive results. That stock is up by 3. 7 . Googles parent alphabet beating the street. Strong ad sales sending profits up by 29 . This comes despite some advertisers boycotting youtube during the quarter. You can see that stock is up by better than 4. 4 . Different story at microsoft. Revenue missing. Sharp dope in sales of its surface laptops and tablets weigh on the companys result. But Cloud Service jumped by 93s and that stock has turned positive. Slightly weaker. Around the flat line. Still near an all time high. Exxon is out. Reporting 95 cents a share which looks to be above by ten cents of estimates of 85 cents a share. Upstream was 18 million. They lost money. Upstream. Thats expiration, downstream were finding another this uss. Im sorry, u. S. Is a loss. Downstream net was 290. International upstream was much better, net was 2. 27 billion downstream 824 million. Revenue below the 63. 29 of estimates of 64. 733 and the stock is indicated higher of 73 cents. A lot of times you look at production too to see, production was 4. 15 billion boe per day. We got to tell you about another story this morning. Shares of qualcomm are under pressure. News out in the last hour. Chip maker cutting its profit forecast. It no longer competes any patent licensing revenue from the iphone in the Current Quarter as a result of that bitter battle between qualcomm and april p. M. Well bring you more on that story. I dont understand all of this. They are saying they wont pay the middle man, so the middle man wont pay qualcomm. Apple should stay out of it, they are not a party to this. Its your battle with the middle man not apple. Isnt there a technology piece . If apple says im not going to pay the middle man, the middle man has to decide to continue with the contract or fight. The contract was never with apple and qualcomm makes that point again that they should stay out of the mid. It. Were not giving them known pay you. Fair enough. This must be a big story. We brought on a really m and a, like expert reporter. Maybe the best known. Shares of honeywell jumping this morning following news that dan loeb is seeking a spinoff of the aerospace unit. I cant believe this. David faber. This must be hey faber, you and honeywell are like you made your living on honeywell and you know what i did. Youll talk about this now. I went back and i found the day that merger collapsed between ge and honeywell. Im looking at the prices. This is weird. This is weird. Honeywell is 130 . And im looking at ge was 49 when that happened back then. When was that, joe . I have a date of july 3rd, 2001. Im looking at eu, mario monte killed the honeywell merger. Honeywell up 99 cents that day to 35. Ge down 69 cents to 49. Suddenly honeywell is 130 and ge is you just brought up a very interesting question which is why is the activist in honeywell. Right. And not the other name. But the activist is in honeywell and its dan loeb but not a typical campaign. Not nasty in any way shape form. He showed up in february. They have been talking since then with this idea that, by the way, is not new to some of the long onlies that have been in the stores honeywell trades at a lower multiple than its peer group because penalized to a certain extent by aerospace which has had its share of at least difficulties over the last couple of years. Difficulties by the way they say will be growing out of as they made investments that honeywell will start to pay off in aerospace and poised for performance. Its that multiple arbitrage that mr. Lobe is focused on. The new ceo has brought in advisors from Goldman Sachs and center view and they are giving this thing a very serious look and will do so for the next few months. Not something that will get resolved overnight or in a matter of weeks. It will take some time. They are giving it a fairly dispassionate look in terms of what it means for the company. They wont do it if it means giving an arbitrage of a few points. They are dubious about the idea of it adding 20 billion overall in value. But they are kind of constructive on it. This will be interesting to watch and see where it ends up in terms of the process. Again, this is not a particularly arrested Shareholder Base that honeywell has. Loeb knows that. Hes not writing nasty letters. Not engaging any of those tactics. Even dow chemical, where he felt the governance was not particularly strong. Joe, to your point which im glad you made, i mean this has and about great performing stock under the leadership, of course, david cody who just stepped down. They dont have anything to complain about and loeb knows that. Done mean hes not willing to engage and that they arent willing to engage. Everybody seems to be on the same page and certainly not something i would describe as nasty. Well see whether it ends up with an actual split or the company decides were better off hanging together and we do believe better performance to come for aerospace. Looking at that monitor, we dont have to say anything. Look at that. David, im reading this article. Nostalgically. It says the collapse of the deal have many analysts think iing tt they will bring back larry. Then dan loeb said the statement from ge made no mention of plans of ceo jack welch. Remember when this was happening sydney dont know. You and i were, i think you and i were working together. You could put a two shot us back then or right now and its virtually indistinguishable in my mind. Virtually indistinguishable in my mind. I agree except for actually better, sharper. Wisen. Already, faber. You couldnt believe it when i said he was here. Oh, my gosh. Im here every morning. You guys want me im here for you. Im here every morning. Thats a change. Youre right. It might be. We think that. Thanks, david. The house will not vote on a Health Care Bill ahead of President Trumps 100th day in office but it might come as soon as next week. Joining us now is health and Human Services secretary tom price. Mr. South america thank you for joining us today. Thank you very much. Lets talk about this newest Health Care Plan. We know it wont be brought in the next day or two, the votes arent there radiate, but you know this vote, you know the bill very well and you know the house very well. Do you think the votes will be there soon for this particular piece of legislation. I think they will. I think they will because of what folks in the house and senate and across this land appreciate in the individual small group market, the market that was targeted is not working. You have a third of the counties in this nation where theres one insurer providing heart coverage. Some counties where soon they will have nobody, no Insurance Company offering coverage on the individual and small group market. Its not working. What we got do is make it so it does work. Thats the secret that will bring this bill across the finish line. Trying to figure out how to make something work. Everybody has a slightly different opinion how to make this work. Which is where you run introtrouble. If you get a piece of legislation that can pass the house because it brings the Freedom Caucus in do you risk having a bill that the senate is not going to want anything near what that bill is going to look like . How do you combine all of those different voices on the hill and try to come up with something that is something you can actually get passed from both houses. Its balancing act. At the same time what people appreciate the Current System is failing. Its not working. Look at the medicaid system thats so important from the vulnerable population in our nation. You got more and more individuals, more doctors, more providers bailing out because they cant practice within that system. So this is a system thats not working for patients. Thats what we need to concentrate on. We can concentrate on government and shores but we need to concentrate on patients. If we keep our focus on fashts well get to the right answer. Thats what i think congress will do. Secretary, you bring a lot of different thats this. Not only youre a former congressman but a doctor by training and you understand how things work. I know the doctors i talk to they say part of the problem is its complicated to keep up with all of these things and they cant spend as much time with their patients they are trying to figure out regulations and computer part. Why so many smaller doctor offices combining because they cant got it alone. We need those doctors to use that Computer Technology to make sure were stream lining the process and bring down health care costs. How do you combine those two realities. I spoke to a group yesterday therapy gathering in washington, d. C. Calling the health data palooza. A group of over 1,000 individuals trying to make certain were using health data, Health Information technology in the wisest way. You and i know and the folks that are watching when they go to their Doctors Office oftentimes they are still in the 20th century or even before, they are still working with paper and pencil as opposed to the Remarkable Technology that now exists out there. Think about the apps available for folks to able to know in realtime what much of their Health Status is. We need harness that information and harness that enthusiasm and move in a direction that empowers the patients to engaging this system in a way that improves their Health Status. Thats one of the things the president is desirous of. Make certain we move in the direction where we use Health Information technology and technology itself to be able to empower patients. Mr. Secretary, as so many things in life its a little bit crazy. People start to see the possibility that obamacare gets taken away and suddenly the approval which was never above 42 goes up to a majority and like 52. At the same time that emboldened democrats to put forth the narrative that its not failing and that there are organizations saying that it is viable. So at this point, when you take that away an entitlement or change it, theres going to be people that may lose insurance. That may lose insurance. At the same time maybe you reinstitute freedom of choice. You put it back in the patients hands. You might do all these great things, you know, on the big picture that are the right things to do but youre not going to get any coverage on that from certain members of the media. All youre going to get is people who lost insurance and theres a political price to pay for this. Why do this . There is going to be you may lose the house, the republicans might lose house to. Who knows what happens when you do this. Very cleverly done by democrats because youre in a pickle now. Ill tell you who was in the pickle. 20 individual members who say no. The people in the pickle are the ones with the Health Insurance card right now but they cant afford the care because their premiums are so high or the deductible is so high. The reason this will work is because what the president has outlined and what we believe so strongly nobody ought to fall through the cracks. Wasnt seamless system between medicaid, the market and individuals and medicare. The imperative is to make certain we have that seamless system so we dont pull the rug out from under anybody. The Current System is failing those in the individual and small group market. Its failing many of those in the medicaid market and failing folks that are trying to provide the care out there. So change is difficult. I understand and appreciate that. Its hard oftentimes to harness the Critical Mass that it takes to bring a bill. Mr. Secretary, the cbo and others have suggested that it may not be failing in the way its been described. Yeah. The cbo actually said that right now for you years ago right now would you have twice as many individuals covered. The fact of the matter is the Congressional Budget Office isnt looking at the entire package because thats not what they are charged to do. They are charged to look at very specific, small pieces of legislation that are not entire health reform. Thats why you get this partial information. That oftentimes spooks people. As a package this is a huge improvement over the Current System. Lets talk about the latest tweaks that have been anticipated. The initial rub than is legislation i know is still in the process of changing. The initial rub on that new legislation that brought the freedom cause sues members along suggested people with preexisting conditions would be paying much more in some scenarios under this plan. Is that true . Well the fact is as the president says nobody with a preexisting condition or nobody should be priced out of the market if they get a bad diagnosis. What were seeing is significant challenges in those individuals that have preexisting conditions. They have the card but cant get the card because the deductible is high. We want to create a system thats responsive to patients that make site that they can get the care that they need and desire. Thats the goal. Now, again, as i said change is tough. No doubt about it. The currents system is failing those patient and if we continues down this road well have more and more upheaval within the market itself and the voices are out there that say we cant continue down this road. We get louder and louder. Doctors that cant participate in the system will get more and more. Thats the crisis thats occurring. Secretary price, very complicated conversation. We hope you join us again to talk more about this. Look forward to it. We may need you next week, mr. Secretary. Well see. Whats your phone number . Im just kidding. Youll be hearing from us. Appreciate you coming on today. Have a great weekend. You too. Dow coming up on squawk box we just heard from tom price on the future of hearth in america. Next well talk to dave brat. Stay tuned youre watching squawk box right here on cnbc. It is President Trumps 99th day in office. Joining us right now to talk about health care and tax reforms congressman dave brat a member of the Budget Committee and the Freedom Caucus. Good morning to you, congressman. Good to see you. Were trying to understand a couple of things. One is where health care goes. Potentially next week. What do you think well see and what are the numbers that youve seen in terms much who is on your side show . Yeah. Theres still some outstanding votes but i think they are right there. I think will have the votes and more to do with scheduling over a friday and saturday, getting people back here is like herding cats. The amendment we offered is a choice. Right. It doesnt compel anything. So states that wish to take the choice and optout of some of the regs they can design what they want. Once everybody gets a handle on that, you can stay with full obamacare, liberal states, conservative states can do what they want. Choice in economics is good. Long standing conservative republican position. We usually dont want the federal government running our lives. Right . You guys are financial show ten years ago we ruined the Housing Market by offering, trying to take banking from doing banking. Now we took over health care and now letting insurance do insurance so its in a death spiral. Everything the fed touches right now is insolvent. Medicare is insoldier vents. They are driven by health care costs. We have to get the price down. Obamacare and our original bill focused too much on coverage issues only which is crucial, obviously. Got to solve that problem. You also have to bring the price down. You have to be when we went to college, youre all in my ballpark, i can see who is on the other end. Back in those days you swruft went out and bought an insurance policies for thousand bucks for the whole year. Now its a thousand month. Congressman youre standing at the fault line, if you will, of where this bill stands. Which is to say ultimately, ultimately will you be okay if obamacare is not repealed because it doesnt it doesnt address the issues youre talking about . Well, im personally not okay but, you know, we get kind of a bad rap in the Freedom Caucus for not compromising. We compromise tremendously. Its a federal structure that maintains all of obamacare regulations. Thats the main cost driver. We went along with entitlement, nonrefundable tax credits, we went along with 10 billion in the pot for risk pools for the states to cover preexisting conditions. So weve kmd on acompromised on this. We want latitude to bring the price down. The scheck it right. Everyone has the Health Insurance card but they cant use it. When you go in the deductibles are prohibitive. If you cant use the gold plated coverage you have what good is it . Congressman are you prepared to support the tax plan that Trump Administration put out this week . I got to see way more on it. I love that they included the individual part. You have to do the c corp, s corp and middle class american forgotten man. Hes got all that in there. Youre talking 3 to 7 trillion dollars deficit. If they package it with repatriation where you bring back a couple trillion and, you know, kind of keep the deficit damage to a minimum. Im willing to forego some deficit pain. Whats the deficit damage what pain are you willing to accept. Last year our deficit was 600 billion. So, this year it will be that plus whatever the tax piece is. So well have to see. The devil is in the details on stocks policy. If you get Economic Growth of 3 or 4 and looks that promising we have to tell the next generation, i just told the insolvency of medicare, social security, we have to tell the kids you better get to be pro business, pro capitalist. Well prime the pump. Well get this economy roaring. You better dive in and get everybody in the labor force. Thats the key. We dont have everybody in the labor force and we got to do that. We got have a pro business mentality. All i can do is cheer lead. I taught college kids for 20 years. We have to pump them up so we get Economic Growth. Then deficit instead of going up, up the deficit levels out with 3 home runs, 3. 5 growth. If we get there were in better shape. I think theres a larger debate. Well leave the conversation there. Coming up First Quarter gdp about to hit the tape. Well bring the numbers. Not even supposed to be 1 . Maybe it will be. On monday dont miss squawk box newsmaker former fed chair ben bernanke our guest host starting at 8 00 a. M. Eastern time. An interview you can only see right here on cnbc. Squawk box will be right back. Good morning. Welcome back to squawk box right here on cnbc. Were live at the Nasdaq Market on times square. Exxon earnings topping wall street estimates profit more than doubling from last year. General motors beating the street results driven by strong sales of its profitable large pickup trucks and crossovers in the u. S. Athena Health Shares getting hit hard. The company that provides Cloud Based Services for the industry falling short. Also lowering its full year guidance. That stock is down, almost close to 18 . We havent even opened. Wow. Just trying to see thats our buddy, bush, right . Jonathan bush. Got it up to almost 5 or 6 billion dollar company. 4. 8 before that selloff. Shake up at uber. The executive at the center of an ongoing legal battle with google selfdriving car unit will no longer lead the ride sharing companys autonomous driving condition. It alleges anthony stole selfdriving technology while working at the company and brought it, brought that technology over to you per. Whats the latest on travis . Hes got like a handler or something, they hired someone. Coaches and helpers and hes trying, to you know, says he wants to be a better manager, a person. His First Quarter gdp is a couple of seconds away. Lets get to rick for those numbers. Reporter here we go. Expecting a number around 1. 6. We ended up a bit more 1. 8. First look at First Quarter 2017 gdp up. 8 of 1 . This follows, of course, the last quarter at least based on the final look last time what were trying to put together is how many quarters will it take to get to some type of average that looks better. Only time will tell. If we go through the internals its up. 8. Im sorry, folks. We have to start over. 8 is the employment cost index. Up. 7 is gdp. That follows 2. 1 and the consumption is. 3. Much less than what were looking for and follows 3. 5. Pricing index hotter. Were expecting 2 last look was 2. 1 and up 2. 3 and personal Consumption Expenditure quarter over quarter a biggie is up 2 following 1. 3. Once again employment cost index that was up. 8. Gdp. 7. Were looking for 1, some looking for less than 1. Markets response . Not responsive. Were to 301. 10. Were down roughly down a cent. This was pretty much as expected, joe. The real key as i said is what the final few quarters of 2017 will do to the average that we just established with the up. 7. Back to you. Pretty sad, rick, you did. 8 and then you had to revise it a tenth of a point. We already had a revision. Thats 12 of the totally. A tenth of a point is 12 of total gdp. Thats pathetic. If it was 4 , it would be half a point at 12 mistake, right . God almighty. 7 of a percentage is lets bring in steve liesman. I got a couple hes in washington. Rick, my idea we can go back to gnp. Or i think we ought to do like europe and add each quarter together. So well start at. 7 and next quarter if we do a one and add it up to 4 after for you quarters like they do over there. It works, actually, joe. The best way to think about the growth rate of the economy is to average the quarters. A couple of things. First of all, i want to take a little victory lap here. Cnbc rapid update much closer to the number than the atlanta fed which is part of our survey. They were 02. We were at 08. We averaged together all tracking forecasts on the street. Couple of quarters in a row weve been spot on using the wisdom of the crowd just to let you know. Second thing every economist we had that we poll every economist i follow says ignore this number it does not show the true state of the economy. Next quarter they are looking or this Current Quarter they are looking around 3 . Thought to be a big inventory swing in here. You have tax receipts doing pretty well. We cant quite get our brain around why you have this Weak Consumer Spending with High Consumer confidence along with decent wages and employment going on. This could be this perennial weak First Quarter data we had. The street has been looking at it. I dont know im any smarter than the collective wisdom of the street. Its a big bet to say that weak First Quarter doesnt show the true state of the economy. Youre like an expert on that First Quarter. Like a nobel prize in economics on your First Quarter work that youve already done. If not a nobel could i get a friday off or Something Like that. We need you on fridays. Especially that first friday. What about soybean male . Meal. Im looking for i dont know if rick has it. Look, what we want to see is all this confidence that you and your buddies joe are so excited about when it comes to the new administration. Need to have that show up in capital spending. Were not seeing it. Go ahead guys forget this rhetoric i love the president , i love the plan. Go out and buy some equipment. Go out and build a factory. Do some of that stuff. Hire folks. Thats the thing that will get the thing going. We have a chance. Everybody looks at a 3 growth this quarter. And who do we have on monday . Bernanke. Hard to build a factory in 100 days. A crappie factory. We thought we could Pass Health Care legislation. Joe, i have to mention that with all the economists im reading as well, because of whats happened with health care and i think because of this sort of lacking detail in the tax plan, they are reducing their probability of how much this stimulus comes this year. Thats part of what were seeing in the commentary and, by the way, you look at the ten year. What is it 227, to 30, whatever it is right now. I think thats showing some concern about the amount of this stimulus. All right. Steve liesman, thank you. Joining us now chief economist at deutsche bank. More importantly cnbc contributor, which si think thats on your business card. So you just heard steve. We arent supposed to think that we arent supposed to think were in a. 7 economy. 2 which is pretty crummy. Steve is right q1 has been very weak. We thought, actually our guess is that government might fix it because some of the seasonality is in defense. You thought they could adjust for that. They havent. Its been distorted by the very latester passover. But the general trend is okay. Having said that, if youre looking at 2 gdp thats still really poor. No matter how you slice and dice it, very weak recovery. And i have to think this will give the administration, congress more impetus to make some good policy to get that growth rate closer to 3 . Well what do we need to do . Because its been stubbornly 2 or ble felow for a long time especially for people who have a horse in the last administration. They would love it if 2 was the maximum and cant get boift and say we did our best. Do you think it can get above that . First of all, the deregulation is important. It takes a while. We got a lot of people need to come in various roles. They havent filled a lot of these spots in treasury, even the fed the supervisory role hasnt been filled. I would not downplay the fact that a more business friendly environment over time will help. What we need, joe slower Corporate Tax rates, lower individual rates. I would run the economy hot because its funny. If you look at the last eight years weve had more than doubling in debt to gdp and it wasnt because my conservative friends hate when i say this not because we overspend. Spending has been quite weak. Its one thing i would agree with paul krugman. Very little growth. Gdp is weak. Our share of collection is soft. We need Corporate Tax reform. Everybody is now an expert on gdp. Its population growth. Plus productivity, right . How do we get people incentivize business. Then you get productivity up. Household immigration. The reason we havent had strong wage growth, i believe you can pull some of these people these discouraged workers, people on disability back in. I believe you can do it. Apparently, i kept her up all night. She said the future freaks her out. How come no one likes me, jim . Intel does just think of everything intels doing right now with artificial intelligence. And pretty soon ai is going to help executives like her see trends to stay ahead of her competition. No more sleepless nights. Were going to be friends im sorry about this. Dont be embarrassed of me, jim. Im getting excited about this we know the future. Were going to be friends because were building it. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. Whoa thats amazing. Hey, im the internet i know a bunch of people who would love that. The internet loves what youre doing. So build a better website in under an hour with. Gocentral from godaddy. Type in your idea. Select from designs tailored just for you and publish your site with just a few clickseven from your. Mobile phone. The internet is waiting start for free today at godaddy. We are rating the first 100 days. Well talk to andy card. Stay tuned youre watching squawk box right here on cnbc. Remove your 67 corvette. D my vette . Its just a gall bladder you dont have. Aflac paying you cash, so you might have to sell that sweet little muscle machine just to cover your rent. More funny juice. But my papa gave me. That. Car. What do you wish you had . Aflac. Ohh, i love doing that. Health can change, but the life you love doesnt have to. Keep your lifestyle healthy with aflac deartheres no other way to say this. Its over. Ive found a permanent escape from monotony. Together, we are perfectly balanced, our senses awake, our hearts racing as one. I know this is sudden, but they say if you love something. Set it free. See you around, giulia welcome back to squawk box. Joining us now former white house chief of staff andy card. Good to see you, mr. Card. Youre a faithful republican but you work for w. So we know no love lost between a lot of the bushs and President Trump. Were trying to figure out what your perspective will be. How do you grade him on 100 days. It is on a curve or how do you grade him . I would grade him in three categories. First is the president well organized and taking care of and not losing his luggage and is he going to the office and are things working. White house itself is functioning well for the president. Policy formulation, thats another job that the white house has developed policy. They dont have a good process in place and as a result they had unintended consequences to some of their policies and some of the policy is being defined by the unintended consequence. They need a good solid place, policy in place. Reince priebus is starting to make sure people have input into the policy process so you discover more consequences so fewer of them are unintended. I like the National Security team like Rex Tillerson is doing a good job, nikki haley is doing a good job. So on the get things done side of things, the communications has been outstanding. Donald trump has been a great communicator. That doesnt mean that the communication has turned into results but hes woken people up so more people are paying attention. Hes also shaking things up which very important. He wants to be a different kind of a leader in washington and wants washington to respond in a dir different way than they have in the past. Overall im giving him a strained b plus. His follow through is not great. He doesnt actually make the transition to governing well. Doesnt lead by inviting others to be part of the solution. I think hes starting to get there. Clearly the toughest job in town is being the speaker of the house and paul ryan gets an a for effort certainly but boy is it hard to herd those cats that are in the republican party, never mind the challenges of building a kind of Coalition Environment where you get the democrats to be part of the solution. A lot of working to be done. Good news is donald trump has shaken the sum. He said woe. He promised us woe. I just want to get the economy growing fast quickly. I want to get those tax cuts in place. I want to make sure he gets the infrastructure bill passed. Thats what we need in our economy. The environment is poison and every time i say well obamacare poisoned it somebody else tells me no iraq war poisoned it. Before that bill clinton did something. Its a long history of how we got to where we are right now. But that was my point is there are constraints. In terms of the Freedom Caucus whatever created or spawned the tea party and the far right, i dont know who could have gotten an Obamacare Repeal through. Im not sure that you take points off for that. I agree with you. In fact, im glad that the Freedom Caucus has been invieptd by paul ryan to be part of the solution and evidently they are working hard right now to be part of a solution on the health care debate. They got to pass something because obamacare is broken. But you cannot repeal it without having something in place to meet the needs of health care in the United States. So thats the reality. Clearly, people who serve in congress have got to recognize they dont come there just to be contrarians, they got to be part of the solution as well. So understand the problem. Get rid of the problem. And work on a solution and do that together. Part of the roll out i guess maybe youre talking about the original immigration order and then i think about that and the most recent one, the sanctuary cities. Andy, the latest judge i think is like almost i dont know. Giving money i think to raise a couple hundred thousand for barack obama. Judges are activists now. Its Pretty Amazing the environment we find ourselves in. Him not to sure could you have done anything about that either. You couldnt have. Donald trump is doing the right thing by putting these executive orders. Hes invited congress to do its job. Getting the job done in congress is tough and donald trump has acknowledged that the presidency is tougher than he thought it would be. He has made some big changes with executive orders. Some have been challenged in the courts and will being challenged. Its a normal part profit sees. The important thing is he needs to get more people in his government to help him. Hes got to get the process of nominating information be the number two, three, for you, fire, six, seventh person in his departments. Senate has to be a partner in getting these people confirmed and into positions they need to. The bureaucracy has to work. And were way behind on getting the team in place to help the government function. Well we want Donald Trumps leadership of optimism to be contagious and grow the economy and by the way the world is paying attention and the world is a troubled place too so donald trump has to Pay Attention to that. All right. Were running tight. You said ryan is starting to get to, almost sounding like its a new team. Most of the people working at the white house did not Work Together before. So theyve come together for the first time. Theres a lot of them. You got bannon and then jared. I believe the president should have people around him that that he wants and trusts, i would not have picked steve bannon or suggesting he hire someone he cant fire, thats his soninlaw and his daughter. But lets make it work. Im an optimistic. Im willing to be skeptical, but i dont want to be a cynic. All right, good, andy card, thank you. When we return, well head down to New York Stock Exchange and jim cramer will join us live. Dont miss squawk box on monday. Well have former chair ben bernanke. Thats at 8 00 eastern time. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh. And i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. You never got the brakes looked at . E girl. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading Companies Lead with digital. Get down to the New York Stock Exchange and jim cramer joins us now. We talked intel earlier this week, jim, and then everybody else, i mean, microsoft, google, and amazon. Those things are all cranking. Intel a little disappointing i guess. Well, i mean, intel threw cold water on their own idea. They said that personal computer is not that good. I think if you back out some of the seasonality, i dont mind that stock. It looks like right through the altera business isnt that good either. Microsoft told a good story. I know people are worried about the surface, i think thats a mistake. I think alphabet was better than amazon if only because alphabet we had heard so much about how people are upset about the advertising against the hate crime articles and the porn. And they really explained that away. I dont think its a problem. Amazon and alphabet really stole the show. I guess the nasdaqs going to be strong. Jim, did you do you ever go to the summer what is a paradox . Is that a camp or something . Yeah. What state camp paradox. What state was that in . That was in adirondacks. Wow. Thats harkening back. How many years did you go there . I went there for i think five years. Its where i learned to do some climbing. But surprised that came up other than when youre looking at Richard Rodgers who wrote the camp song. You ever had any paradox beer . No. I have some for you. From someone i would love that. He went to camp with you. Who is this person . Its a secret. Its a person that i have i have some beer for you. Will you serve it at at san miguel for cinco de mayo. Bring it down. Ill leave it out at englewood cliffs. Youll have the starbucks gang on. What do you think . I think that starbucks has some questions to answer about how quickly theyll fix this mobile pay issue. I know that theyre quite confident, but at one point howard asked on the call, glass full or empty, i think investors are saying glass half empty. We have to figure that out. Are you Glass Half Full or half empty at this point . You can reserve judgment, its okay. Right, i have to. Because frankly, the market is already saying forget about it. But april was stronger than march. Theres its a very complicated story because you dont want to be in the mosh pit when people have mobile pay, they cut in gronfront of you. Great. All right, jim. Remember how to make a lanyard . Of course. I made hundreds of lanyard. I won the archery award. I did, thanks, jim. Wow. Thats not easy. Ft. Scott. See you at the top of the hour. Squawk box will be right back. Over hereno ver here dog barking whoever threw it has to go get it. Not me somebody will get it. dog barking anyone can dream. Making it a reality is the hard part. From the b2 to the upcoming b21, Northrop Grumman stealth bombers give america an advantage in a turbulent world. And were looking for a few dreamers to join us. Thithis is the new new york. E . Think again. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov for decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats 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. Welcome back to squawk box. I want to show you a quick chart and some breaking news right now. Time inc. , the magazine publisher behind time and People Magazine and Sports Illustrated which had been in talks to sell itself with meredith and other private equities this all initiated originally because a group led by Edgar Brofman had tried to buy the company. Following a review the board will continue to pursue its Strategic Plan effectively suggesting or saying that the process is over. Youre looking at that stock dropping close to 20 on that news. We could almost buy that. In large part because whats the Market Company there was a premium built into this. Its like 1. 4 billion. We could do it. I would only buy it to close it down. Beckys the chairwoman. Guys, join us back here on monday. Right now, time for squawk on the street. Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at the New York Stock Exchange. A lot of push and pull this morning. The final day of the month. Strong investment, but a weak consumer. Looks like tech earnings are split as well. Amazon and google are up. Intel and microsoft are down. Oil recovering a bit on day 99 of the trump white house. Road map well begin with tech stocks climbing mostly in the