Transcripts For CNBC Squawk On The Street 20160330

Months in five years. What a reversal to open up just over 100 points. Now lets move on to whats happening overseas, particularly the atlantic sea. The german franks and the ftse. The 10year treasury note, lets take a look at that. Yielding 1. 83 . Not a big move there. Crude oil, man, up one day, down the next. We had a drop yesterday. Now were up 2. 5 . 39. 15. Crude oil kind of stuck in that 35 to 40 range now for a couple of months. Something to be concerned about. Our roadmap begins today with what else, janet yellen sending stocks to their highest closes of the year yesterday. What you care about, where do we go from here. Many people are still waiting on the friday employment datatoo come out. Were going to see two components, boeing and ge and well let you know what theyre doing and why. And apple. Theyre climbing out of bear territory, but the saga from the fbi far from over. Weve got to the very latest. But the meantime, the big story, your macromarkets, theyre poised to continue their upper momentum from yesterday. The dow and s p closing at their highest levels of the year after. And you might have heard this. Janet yellen made some dovish comments. I dont know if this was on your radar. We call this dovish. What she did is get away. Were losing too many manufacturing jobs. We need to see Commodity Prices stabilize because theyre going down. Frankly what she really feels, i think what she says is, listen, were one world. And a lot of them are very parochial. She said, listen, im not going to be parochial. Im going to be dae ta dependent. I totally get we were weaker than they were when they tightened in december. I think shes grown up. I think the people who continue to talk want to talk. They want to be on tv, they want to talk about their region. Thats great. I like to talk. They should get their own show. But theyre not fed chair. If they had a show, what would it be called . Fed up . Thats what i would call it. Heres the problem with the market, if youre a mom and pop and youre in iowa and you have money to invest and you want to be smatter, you want to hear from Bill Belichick, which is yellen. I dont want to hear from the linebacker because it seems like everybody has a different message. Im sure youve talked to people in the real world. The fed is making them more confused and less transparent. Look. I think theres freedom of speech, but there should be ill tell you what. Lets take the belichick analogy is. Lets take it further. I love god to Training Camp for the eagles. Chip kelly, now deposed, he ran pretty quick. There was an offense coordinator at the press conference and what he said was exactly what chip kelly said. He said, who needs this. If they want to make dues, they should move on. Theres dennis lockhart. He moved on. He wanted the titan. Good, good. Let him say whatever he wants. We have one fed chair. The people dont need to be confused in them. Shes good. She looks at the data. Data dependent. Look. The u. S. Dollar is now very weak year over year versus the euro. Whats the matter with that . Why should the japanese take so many cars from us . The yen is stronger. I like them. The emergency currencies are doing well. I know this is going to shock people. The working person. She recognized the rents going up a lot year over year and the health care for the person and recognizes the gas price is not offsetting that and housing is not punching its weight like it used to. I dont know. To me shes looking at the data and making a decision. Briep, we have people working all day to debate that. I think we might. Its like sports talk radio. I think dhip kchip kelly is goi destroy the niners. I dont think hes going destroy the nierns. We could play. We could play sports radio. Its a dynamite thing. I wanted to go into it at one time. You had no power. Nothing. You and i you were talking before the show, this is premakeup, i mean we look totally different without makeup. By the way, theyre like stealing our jobs. Its a great. Just for you because youre all relaxed from vacation and we erie talking about this, i have a gift for you. Charlie evans speak about the rate hike picture earlier on squawk box. The fundsrate chart expected rate hikes in 2016. Now its down to 2. Thats the media. I think that takes on board the global risks and the fact that an accommodative policy seems to be appropriate, but it has an upward slope to it. The median hike is two this year. If the data comes in as expected, then i think everybody would adjust upwards. That sounds like common sense. Except this. I know my College Friends agree. Talking about dot plots. Do 90 of americans out there listening on radio or watching tv or getting a cup of coffee know what it is . The thing i know about dots, its a delicious candy. I had a whole i had an actual crown come off by dots. I was not covered by it. What shes doing is she is saying, listen, heres the way its going be. I like it. Get this. Im in mexico. 120car ksu train passes me, all right . Empty cars about to take all what they make down there to us. 3 an hour. No pollution control. Its a picnic. Theyre laughing at us. The elite sateare saying its g. They have a port. They come up to chicago. Thats all right. Thats all right. They do come around. Im saying i was there where the plants are, harmon, pp kb, going to these places, recognizing theyre having a huge laugh. Ive got to tell you. Ford may want to do it in some of the areas near the border, but the german and japanese and koreans, they know, go to the mexican highlands where the worker make 3 bucks and they dont have any protection or health care. If we say it, were protectionists. ve got two pieces of bad news. Number one, i dont think theres anything the fed can do about it. No. That was mandated by clinton and the republicans loved it. You ought to go to where the cars are made. Its a gigantic move to mexico. Number two, i have to do i violated my own rule about not talking about d. P. S, dot plots. Now that i did, i have to talk about them. Its okay. Its like raisinettes. Remember battleship where you plug in the lights or basically litebrite . Its a fed protection where each fed member believes they will be on inflation and potentially rates. So by charting the path of the dot plots, you could theoretically know where Interest Rates might be, which, by the way, would theoretically then tell you where the economy might be which then may theoretically tell you where you should invest in ibm. Okay, okay. The last part was completely sarcastic. They have the worst one. Ibm is worse, apple, j j. I can raise numbers. Thats why the stock is at 109. Whats important is she just changed the equation. We can Start Talking about lululemon. We can talk about the upgrade apple. Shes giving us permission to talk about stocks and making money, but we insist on monday morning quarterbacking. We incesist on this is like spring training with the mets. Im not playing it. I have to try to help people make money. I have to. Oil is going higher. How is that happening . I dont know. Thats why i said yesterday i was, quote, fed up, because i cant keep up with the conversation. Im just saying we could sit here and talk about the fed and make no money or lets give you the green light and talk about stocks and making money and shes not trying to ruin the market and shes worried about digitalization and employees and wages, she cease so thoughtful, we ought to give her a couple of days before she comes on. Im not calling them clowns because i have Great Respect for them. Lets make some money. Last word, i guess, listen to the head coach, yellen. Dont listen to the linebackers. Shes so clear. Shes the head coach, the owner, shes much more useful than sports. Apple is the stock existing bear market territory. Its now within 20 of its april alltime intraday high of 151. 4. This morning cowen and company saying yearoveryear estimates have bottomed out. Cbs news reporting the fbi every time i say fbi, i want to say it like diehard wants to own the rights of breaking into the i phone. I was doing my piece last week before syracuse and nova decided to shock everybody. I was so desperate to honestly have tim cook on my list but i needed the stock to be up year over year js arc it wasnt. I have to tell the you, this upgraitd 20rks 16, seven times, 2017, eight times earnings. 17, 18 times earning. This is a rather unbelievable situation when what theyre saying when this stock was down nobody downgraded it in the 1990s. If you want to overlay a chart, overlay the Chinese Market over apple. Believe it or not, its one for one. When the Chinese Market came back, apple came back. I believe in the iphone 7 and what tim cook is doing. Maybe the watch isnt the greatest thing. Maybe the 7 will be waterproof. That would be terrific. But the stock is so darn cheap it trades like a caterpillar. There you go, caterpillar and apple. Theyre going down and am is going up. Growth is slowing. Thats why its growing. I love that. Thats why i have a show. I love that talking game. But we can see the dollar reverse substantially. If you go over tim cooks last call, which nobody does because thats not as good as listening to fed guys. They make it easy. They have a little conference buchl if you go through the very long apple call, youll realize theyre heavily weighted to a weaker dollar. Theyre headed to a weaker dollar. Theyre getting a weaker dollar. Janet yellen is helping tim cook. Yes. She wants that. And thus helping investors make money. She wants that. She favors better times. Maybe she thinks 2 gpdp is not enough. Maybe shes seen those trains i have from ksu. Hey, guys, stopt running those trains all night. Ive gotten to sleep. Quickly. Ge. We put it on the list yesterday. New position. Another asset disposal. This time 485 million. This was an industrial with the best single organic growth than anybody. Theyre away from the government. They can raise the dividend. Youre looking for cheap stock. Look for ge. Do not forget the j js. The news that you gave. Ge continues to evolve. Exactly. Heavy industrial, also heavy industry, correct . I wouldnt say that. Onefifth. Okay. Remember, lets quarterback what the feds said. Thats something to do that required zero homework. No. I realize i could sleep to 6 30 if i just talked about the fed. I tried to figure out the sonic and restoration. My apologieapologies, my apolog. Ill continue to sticking with the fed because thats so easy. There. Okay . Welcome back. Mexico . You want food trains filled with cars . Go ahead. Be my guest. 3 an hour. No health care, no solution. Jim, im just a fillin, but the only dots were going to talk about are the candy in your crown. Coming up meet the manager. Yes, lets do that. And where hes putting his money. First todays movers including one retailer is stretching a little bit higher this morning. Theres your hint. Its terrible. No. They sandbagged everybody. More squawk on the street live from post 9 in stretchy pants when we come back. The first stock index musiwas createdoughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Ngo to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Megan is home doing yoga. Last saturday, she was shopping here. [ indistinct shouting ] bulk from boxed didnt only save megan 33, bulk from boxed saved megans saturday. [ pop, screech, doorbell rings ] boxed bulksize shopping delivered easy with no membership fees. Download the app and get 15 off your first order with code bulk. And well get to the opening bell in 12 minutes. It looks like the opening bell is going to open hire and were on pace for the best in five years. Thank you, thank you. If you go back to january, a lot of people sold, why . Because the commentary was so goes january, so goes the rest. All of those things when i hear that or if you look at the historical stuff, the markets dynamic. If anyone said januarys bad so the rest of the year is bad, that made people sell. I apologize if i was part of that. I dont think i was. I was on the today show. If i didnt point blarng say this is nonsense, i made a mistake. Well, its been all year in three months. I feel like weve got a quarter with 12 months. January was terrible, february was okay, march was great. I say great because its one of three best months in five years. Look. Except for october 11 and october 15. I long j j. Theyre fantastic. Hes saying, do i need to do that nonsense anymore . Now we have the euro. Last year it was 107 a year ago today. 113 this. I was saying fxe. I dont want to confuse the viewers at home. We should have talked about another head coach. I should have use ned metaphor besides Bill Belichick because he says something. My bad. Up next, its jims mad dash. It looks like the dow is going to open up more than 100 points. Later, its a big interview, former Lehman Brothers ceo erin callan talking about her powerful book, leaving wall street, raising a child. She said she leaned in too much. Lets leave you with good news here. The markets look like theyre going to go up. More squawk on the street coming up. Before a movie star unwittingly gave you a global product endorsement. And millions of women everywhere decided, i love that shoe. And the companys data center handled the spike in traffic without any drama. Before all of this. Cdw orchestrated a Scalable Software defined Data Center Solution using vmware nsx technology. Scalability by vmware. Orchestration by cdw. Everhas a number. Olicy but not every Insurance Company understands the life behind it. For those whove served and the families that have supported them, we offer our best service in return. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. All right. Welcome back to post nine. Lets go to individual names. Jim, what are you focusing on . I was on a conference call, working through it. Its rather remarkable because mcdonalds has blitzed through this whole industry. They did not hurt sonic. They hurt pop eyes. Jack eerks they decimated. Here, good value meals. Good expansion. He said, listen, i p ee going buy all the stock i can. He sure did. Value. Thats what the customer wants. Their comps are up massive. So up 18 . I know bob came out. Hes a good analyst. Sonics. Heres my favorite. Beef prices are down big. People forget. That speaks well for mcdonalds which is going on this to 130 almost in a straight line. All right. What else are we looking at on the mad dash . Carnival here. A little kudos to arnold donald. I was a little concerned about caribbean and zika, but theyre talking about things being up big every year. Bunker fuel is down big. Looky. He said this time, theyre well ahead of the prior year with slightly higher prices. It looks like zika is not each a factor. Lets listen to the radio call. Its up 4 . I did not think it would happen. I thought, well, caribbean would be down a little. Using a lot of fuel, although fuel has come up. Be karel. Fuel has come up. True theyre still buying fuel when it was at 26 bucks. Thats a good point. Youve got four to six weeks to load up the bunker. We have one more before the [. Restoration hardware. I did not like that conference call. It had a lot of existentialism. Im looking for higher numbers. Why is lululemon up . Because the guy sangbags. Hes a great ceo and the come story is terrific. Another one that the analysts, i did not see coming, it was pvh. Very pvhlike. It looks like theres still athletic aparm being bought. A lot of good quarters tore. But did i mention theres a fed governor somewhere who wants to speak somewhere. Fed governor. Stocks are on the rise. Were back after this. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. We believe in the power of active management. Anagement, we actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Doing small gigs,side gigs. Gig gigs. Quickbooks selfemployed helps me get ready for tax time. To separate expenses,i just swipe. Its one hat i dont mind wearing. [passenger] i work for me. And so does quickbooks. It estimates my taxes,so i know how much stays in my pocket. And thats how i own it. [announcer] stay in the flow with quickbooks selfemployed. Start your free thirtyday trial today at joinselfemployeddotcom. From icy ocean waters. To your wildckitchen counter. Mon. When you cook with incredible ingredients. You make incredible meals. Get your first two meals free at blueapron. Com cook. All right. Youre watching squawk on the street live here. Looks like a solid day. Jim, indicated futures up, up, open up more than 100 points. We need to see the drug stocks dissipate. They have not been great. Lets talk about bowie. You can look at this two ways. One, theyre streamlining, or, two, theyre stream like against airbus. Do we really think that boeing makes a worse plane . No. And this is kind of what janet yellen is looking at. Listen. The compareton advantages of the United States really are getting crushed. Boeing makes a firstclass plane. Im still waiting. Is that a future prediction of demand . Are they concerned about a slowing economy . The new airbus this is a cool story. Lockheed martin selling 12 blimps for 450 million. I know theyre called hybrid airships. There was a show on last night. For some reason this is what i watched. Were going back to the 30s, jim. Whats interesting here, you know, att at 39. Rbc updates target for verizon. 5850. People wanted yield and grouchlkt we need to see it involved with tech. We need to watch nxpi. A lot of downgrades. And dont forget broad come, which is now veanother. The university of women celebrating. T tv lands first. Lets get back to the markets again. If youre just joining us, welcome. Hello in bali. Were waiting for some of these clearing prices. I cant say it enough. This is going to be one of the best months for the u. S. Stockmarket in five or maybe ten years and theres all these stats going back to the 30s. What do you make of it . Its a weak dollar. We said, hey, should we change stocks . They defi fivfine ge why . Its not good stocks. Its like verizon. You dont chase up. You get ate ber opportunity. But janet yellen is basically saying, listen, all the things that have hurt kb holmes wasnt up. They had a 19 book value. Im sorry if i said this before, for those of you just waking up, apple is up that. I like the i foeciphone 7. They call it the echo effect. I presume like the halo effect. They take it out of bear territory. Its no longer down 20 from its high. Technically does that matter . I think that whats going to happen is estimate stocks are cut. I do believe when you see this thing at 8. 7 times 2018, what it says is the Service Revenue at that point, it could double. You see it shake up as a pandora. This is about apple taking a share. This is about you paying the apple bill every month. The analyst who talks about it being a one product company, no. Once you have an apple cell phone or pc, you pay apple every month and thats going to be the story. Im urging them to tell that story. Im happy to tell it. It doesnt bother me. But at eight times earnings with an unbelievable Balance Sheet im wondering. Speaking of my own media habits, i wonder if people are valuing that side of the business. My kids, theyre buying programs on itunes. The History Channel shows the vikings. Maybe better than game of thrones. If you wanted to buy the new season, i looked it up on apple tv. Apples going to get a slice of that. You can watch it on the History Channel. Theres a migration. Were in this business. But i do wonder because everyones waiting for the hardware apple tv. I wonder if people have not valued that Little Black Box they sell but its all the content you can access. They never look at their bills. I looked a my verizon bill and i can cut it, thank goodness and my phone bill, i cant cut it. Am computed that quarter. The stock is up big. Were seeing some of the Commodity Companies do better. Im focused on brazil. Dont focus on technology. Im looking at these great industrials and saying you can raise numbers on all of them if you can report if they can see some stabilization in china. The Chinese Market was going down every day. Wi talked about it every day. It doesnt matter. Like i said, overlay china with apple. I think the fed trumped china. If we didnt have the fed commentary, china might get some support. I know everythings a lot. I think the audience knows this by now. There are no scripts. Lets focus on this. Theres a Company Called marriott. Its bidding against the Chinese Communist party. Enbang. We let that happen. We let them come in. Enbang is the communist country and theyre going to get star lets look. Do you feel like were getting back to a point where i should whisper this earnings matter. I need to go on a conference call. Do earnings matter anymore again . We can nip the matter because we set the tone. Ive seen this over the period when i worked for every single network. We set the tone. If we choose to focus on the fact that its going to help them, we can help people make money. We went through everything. Retashlgs housing. Talking about this market the last few years which is no matter you could find the greatest company in the world thats going to make its investors rich and everybody you can parade on to talk about it, well, its just the fed. We dont want to fight the fed. No, we dont. Marty is telling us dont fight the fed. What shes giving you is a window. Shes giving you a gift of liquidity. Right. Lets take that. A lot of companies are financing. Lets do that. Youve done great. Thank you. You have rbn. Theres only a couple of counties making under 40. What happens . Okay. Soy for stealing your rusty by the way. Im not a market analyst like you are. Im just reporting. There are companies, and there arent money, that are profitable at 40. Chevron is under 40. Pie nier, resources, sheffield. You like sheffield. Yeah, but again, im not recommending names but bakken is tough. If youre going to invest anywhere in oil, i will not say where to invest but i would say the cheapest cost is in the permian basis. Its a different perm lodge cam layer. When people say stop fracking, i get it. Take the politics out of it. People are going back to drilling the old vertical wells because its cheaper. Heres the worry. If Oil Continues to move higher, there are over a thousand what they call ducs, you might see prices go up and down. It was like the housing market. It was weak. No one sold their house. Home prices went up, people started selling their homes which drove prices back down. Lets say you were in the gold business. Lets say you were in the copper business, the oil business, lets say you were in liquidity and youre freeport. They make it, i think. They make it. Its better. Freeport is a helluva story, is it not because freeport is a company thats up 35 down 47 over 12 months and carl icahn famously got into the stock about six months ago. I would presume and probably scott walker knows because he talks to carl, under water on that trade. Oh, yeah. But listen, barclays sells with a hold, not a trade, which is interesting. What youre get are Many Companies leavered to a weaker dollar. Dont forget, all these Tech Companies have a huge business. Huge. Im not a big currency guy, but what youre saying is an incredibly important lesson which is about investing lessons. It tends to be unconventional and not all that wise. I couldnt throw something here at the stockmarket and have someone tell me why the euro dollar parody was coming and the stronger dollar was a guarantee and the easiest trade in the world. Now what weve seen is were talking about suddenly the impa impact of a weaker dollar. Right. When everybody said the dollar was going to go nowhere. The exact opposite has happened. When we talk to Tech Companies on mad money, in many cases theyre stronger than the United States. I think theres an expectation that the European Countries are going to have to deal with the european refuchlkt i know where if you to italy or france, its a little too cheap. Japan doesnt know how to grow and i dont know if i would want any of their paper, but i see a lot of things happening that tell me the dialogue remember, the narrative is about to skbin. In two weeks were going to have to listen to earnings. In earnings, year over year, theyre going to have to say, you know what . Were doing better. Not nearly as hee as people think going on a forward basis. Again, i dont want anybody to chase here because yesterday was the yellen rally and then the euro, which was stupid because they shouldnt have moved up on this. There are only 31 or 32 central bank around the world easing or actively involved in some sort of credit stimulus. Thats a huge story. People are recognizing the dollar got a little too strong. With janet yellen saying, listen, the dollars done going higher, guys. Shes just giving you that. That would hurt u. S. Manufacturing. Talk about us manufacturing, it sounds like a little boift politics right now. Were going go to bob. Right now apple up 2. 5 , mcdonalds doing well. Caterpillar doing well. Cocacola is down. Sonics and beef is very, very good. Lets go now to a man who is always filled to the brim with effervescence, bob pisani on the floor. Thank you, brian. Let me talk about the effects of the dovish speech. Its all over the markets right now. Take a look at what happened in japan your night. The yen strengthens, the dollar weakens. The nikkei was down. Including the chinese yuan gained on the dollar. Weak dollar tends to help emerging markets. So the een which did very well in march, had a lot of inflows. The biggest sitting at a hire. Europe is trading. Thats more of one to watch,riskon. Bmws and daimler are up. The Italian Oil Company up 3 on the better oil and the banks lend credit like here in the u. S. Are lag. The weaker dollar is also helping commoditiys overall and youre seeing some of the nice moves up. Angloamerican is up nicely about 10 . Glencore is up, bow la den. You can see the effects. Here in the u. S. , same story. Energy is leading. Nice to see financials. There are 52week myhighs. At t, Johnson Johnson and coca colast. Were essentially heading to the highs. Essentially were flat if you look at the s p 500. Volatility is collapsing. Its near the lows. The bad news is we keep point ought the earnings perfect. Thats what were going to be occupied within the next few weeks. Its dismal. Earnings down 8. 7 . Look where its was january 1st. You see the big differential. It keeps dropping here. This would be for four consecutive quarters. Thats the worst. Heres the problem. Try correlating this with the stockmarket. It sounds like bad news. It sure fieels weird to me. We turned to them. It hasnt happened very often. Only four periods where it declined in the s p 500 going back to 1990. And we asked them what happened in that period and six months later. s very inconclusive. The average return has been 5. 7 and essentially its the same even when you ask about that current pureed you. This obviously happened in 2007, 2009. It happened in 2000 during the dotcom bust and, brian, the problem is the reason its inconclusive is you have things Like Central Bank intervention that kind of muck up the waters a little bit and make it very, very difficult. So its certainly not good news that were seeing consecutive declines in earnings. Brian, back to you. I think it was well said. Mucking up. Bob pisani, well get to you in just a bit. Due out in 30 minutes. Lets get a check at what oil is doing with bertha coombs. Hi, bertha. Hi, brian. Weve seen oil extending those janet yellen relief lally gains. That was a nice reversal yesterday if you were long oil. Youre going to seesawdy arabia and kuwait saying they were going to join the field. Nonetheless, it was really something that jarred the market with a lower dollar. We saw that turnaround and then we got numbers from the Petroleum Institute that were a little bit bullish. We saw it. The expectation for today is that well see a build of about 3 bill barrels. The other thing that was up was a drawdown of 300,000 barrels at cushing according to those api reports. Well see if thats confirmed at the bottom of the hour coming from the government. As far mas metals, the rally cae in gold. Today weve got to a mixed picture. The dollar is weak but were seeing gold a little bit flat at the moment. Silver has been advancing on the day. We will be back with those inventory number, brian, at the bottom of the hour. Back to you. Well look fooifr foofrd though that. Its the only dow stock down. Theres an unfavorable trend when it comes to sew 2k56789 dan for evide forest whos defending the lgbt law despite a backlash from companies. Squawk on the street. Well be right back. Are you new to medicare . Thinking about retiring . Do you have the coverage you need . 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Call to enroll today and enjoy these benefits and more, like smart ways to save and tools to help you stay healthy. Most plans also include part d Prescription Drug coverage. Your healthcare needs are unique. Thats why, with over 30 years of medicare experience, well help make things easy to understand and guide you every step of the way. So dont wait another day. If youre new to medicare, or retiring, call now and talk to unitedhealthcare about our plans, like aarp medicarecomplete. Lets get you on the right path. Call unitedhealthcare today. Whens the last time you had a coke and a smile . Maybe for a while. Soda consumption is down. The total volume of soda consumed fell 1. 2 laugh year compared to a drop of 9 in 2014. That now continues. Its been a multiyear slump. It comes out when cocacola stock is trading at an alltime high. Cocacola doesnt care what they sell you as long is that sell you something. Theyre hedged in the euroand yen, so dont make that your play. I was listening to wofford and sara this morning. Dr. Pepper doing largely domestic. Watch the constellation brands. Theyve got printing money. So if you want beverage, stick with beer. Beer and tequila doing wellsome. Tequila is doing incredibly well. Dr pepper, snapple, a little weak but up 13 in the past months. Thats kind of the little i know theyre not that little. The little soda and tea company that could. Theres a soda tax debate in philadelphia. Think i those things are ongoing. Big soda tax. Business came back. Soda is on the wrong side of history unfortunately. There you go. Were going to take one more quick break and when we come back, stock trading with jim and find out whats on mad money tonight. Heres a tease. Huh . Giant pandas with regard to Interest Rates. Well make the connection. It will make sense, i promise. Squawk on the street will be right back. Okay, im there. Im there. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Squloort. Welcome bachlkt solid day for the dow. Were seeing solid gains across the board. Lets talk about two individual names. Jim, in stock trading, what are we looking at . First with valiant, theyre asking for forbearance. What happens with valiant, as soon as they Start Talking, immediately the stock goes up 1, 2. Then forbearance on default and they report on july 30th and they come back and say, why do i need that . I can go back and buy bristolmyers. Valiant, we reappraise everything. Immediately someone comes in and buys it. They do what i call collaring the tape. Then people come in and buy it. They say, why do i want a company where main or maybe not the financials are going to come out to. Me thats a sub optimal situation. Let me put it a little more bluntly maybe. Youre guessing. Theres a little guesswork. No. Youre guessing. Right. Youre flipping a coin that the financials are going to come in as they have previously stated they would. As of now no executive has sign thad form to the s. E. C. Putting them at risk for liability. I think so. Remember, they have a determine cological business thats being eviscerated. They have a business thats on tuomo logical. Im still amazed about carnival. Lets end on a high note. Shake shack. This very interesting. Shake shack is going to glow into its multiple at some point. Have very few same sales in their whole calculation because theres not a lot of shake shacks. But those who love shake shack are never going to stop anyone from buying the stock. The analysts there like the prospects for growth outside manhattan. Shake shack still part of of new york city. Theyre putting them everywhere. Look at sonic. If they put them everywhere, theyre not special. I love that sonic put it together. The last time sonic was on it, they said, listen, were going to put it together, nobody listened. It was in the 20s. Mad money preview. We talk with marty mucci with paych paychex. And then lamer tom ryan with Service Corporation international. Thanks for talking with me. I have people following me on twigger. Now youre giving me the business because you know im not a fed head. Its a pain in the a. You have to get up early. Its so much easier to slop. You owe money in the fed jar. Dont forget. What you think is 1,020 jobs taken away. Conjunction junction. On power lunch, bill gross will join us. Hell tell us why Capital Gains are rare like giant p. A. N. D. A. S. , not very good at replication, reproduction. Well leave it there. Bill gross at power lunch. Coming up, the Top Hedge Fund manager of 2015. And tomorrow on squawk on the street, an exclusive interview with canadas new prime minister. Justin bieber and justin trudeau, they rank. Dirty seeker. Im a belieber. You get taylor swift and Justin Bieber and justin true i do. Whoa. Squawk on the street. Were back right after this. Good morning. Welcome to squawk on the street. Lets show you this rally. Were in the middle of triple digits. 131 points. The janet yellen celebration continues. The s p 500 up. The dow and s p closed at a high. The nasdaq up a full percent. Even wti crude joining the party, almost 3. 5 . Heres our roadmap for the next 60 minutes on cnbc. Stock getting a boost after yellen and adp. Find out how you should play it now. Plus trump threatening legal action over the charges against his campaign manger. Well talk with his campaigns spokesperson and the Top Performing Hedge Fund Manager of 2015. Hell join us live to tell us where he is investing now. Coming up later a first on cnbc interview, the Lieutenant Governor of North Carolina, dan fore forest. Hes going to explain why he thinks the new backlash on the law is undeserve snoods were up 120 points on the dow. Stocks are higher as investments seem to welcome the soothing approach to a hike in Interest Rates. Where should you put your money to work now . Joining us now. David, let me kick off with you. What should investors make of what janet yellen did yesterday. I think we rose 98 points on the dow yesterday. 134 today. Would you have expected more . So i wouldnt have expected more, but i think that janet yellen delivered the message that the market was looking for. You know, coming into 2016, investors were worried that the investor ters were going to hike four times. We were never of the view they were going to accomplish all four hikes and frankly what yellen said to the market, listen. Were going to go fast and move cautiously. To parody what youre saying its not huge because the fed dots anyway . I think the fed dots come into question. I think whats more important about yellens comments yesterday, she acknowledged the global risks and acknowledges the inflation in the u. S. Has looked strong particularly on the core side, but there could be down side later this year and all of that warrant as very cautious approach. They have kept the plates spinning. What they want is easy Monetary Policy. Jacques, youre in an interesting position, famed bond holdings. People are worried about the economy and clearly have been able to not be as concerned about the fed. Your chief Investment Officer scott wrote yesterday about a religious fervor, a zombie of the economy and basically the rate situation we have is a hiding to nothing. How do you now weigh in if there what you got yesterday. I think janet yellen is also concerned. I think the message was very clear. She wants inflation and Inflation Expectations higher. Shes not convince thad the recent pickup in u. S. Inflation will last, that it is for real. And she noted that theres a slippage in longterm Inflation Expectations. So i think the fed will try to do its utmost to bring inflation up and thats the best way out of the zombiefication of this economy. Theyll want to have the economy run a little hot to have the inflation overshoot 2 ever since they undershot the target in 2012. I think what your chief Investment Officer is saying this has become counterproductive and its not working. What is your analysis of that. How do you feel about what is going on . Well, i this i the problem is that the longer you keep Interest Rates so low, the bigger the risk that Inflation Expectations actually drift lower. And i think they understand that. They would like to raise Interest Rates burke they think they can only do this if and when inflation has started to rise and is actually overshooting the target. So this is where i think youll see much more talk about them allowing an overshoot of inflation. You had Charlie Evans on your show earlier today. He said its symmetric, which means he would believe it to be above the target about half of the time. Theyve been below the target all of the time. So now is the time to talk inflation up, to let the economy run a little bit hot so that eventually we can get out of this very low Interest Rate situation. David, i wonder where this leaves us. Of course, you have the eegzs from the higher dollar. All of that seems to be pretty helpful but stocks not looking cheap. Of course, profits still on the slide. Where do we come down on that . I think the profits are the keep. When you look at equities, theyre looking at it. Investors dont seem to be comfortable paying 16 1 2 times forward earnings. We need to see Profit Growth richardson at the aggregate level and growth somewhere in the 3 to 5 range. That puts us in mid digit and a lot of it looks for outward inflation. Yellen talked about inflation. Core inflation is a very, very sticky thick. So even at 1. 7 . This along with 2 Economic Growth could finally lead to the nominal growth were looking for, a pickup in revenues, and an acceleration in earnings put a price on stock prices. David, theres one area of markets that become very concerning and thats emerging markets. Yes. Now that were not soern canned about Interest Rate rises, does that mean they have a whole new life . I see 37 million went into the hedge funds last month. Thats the highest level weve had in almost two years. Is that what you would basically steer people toward now . Do you think theyll come back . I think well see a Monetary Policy not only from the Federal Reserve but the bank of china could add more risk. We do see more money pouring into the markets. Sometimes theyre cheap. For longterm investors who can stomach the volatility, theres time. If your time horizon is the next 12 months, i dont think its going to be that smooth a ride. Thank you both. Up next on the show, donald trump now threatening legal action over the charges again his Campaign Manager and he, john kasich, and ted cruz back off their pledge to support the republican nominee. Well talk with Donald Trumps spokesperson when squawk on the street comes right back. Ader o. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. Woman man yes. A newspaper . Woman its quaint. Man did you read about this latest cyber attack . Woman yeah, i read it on my watch. Man funny. Woman they took out the whole network. Man they had to hand out pens and paper. Woman yeah. Man could it happen to us . Woman no. Were okay. Man we are . Woman yeah, we brought in some new guys. Man what do they know that we dont . Woman that you cant run a country with pens and paper. Its not just security. Its defense. Bae systems. So all three gop president ial contenders backing way from their pledgers to back the republican nominee, whichever it could be. One of them presumably. Maybe not john harwood has more on that in washington. This is clearly a uturn for donald trump, john. It is. Although not a surprising one given the twists and turns it took to get him to that pledge. But that cnn town hall, last night, was notable mostly for Donald Trumps Campaign Manager against battery charges filed by a Florida Police department and is defensive himself over that skirmish hes been having with ted cruz over their wives which many consider unsavory and also childish. I thought it was a nice picture of heidi. I thought it was fine. Come on. I thought it was fine. Shes a pretty woman. Youre running for president of the United States. I didnt start it. I didnt start it. With all due respect, thats the gum of a 5yearold. Thats not the argument of a 5yearold. You would say that. Thats the problem with the country. As you mentioned, simon, donald trump said he was not going to abide necessarily by his pledge to support the republican nominee. He said hes not being treated fairly by the party, and for their part both john kasich and ted cruz did not commit to supporting donald trump if hes the republican nominee. This discussion is pretty abstract at the moment. The rubber hits the road when we find out whether or not one of these people can get a first ballot or second ballot nomination or whether we have a protracted standoff in next world seriess primary in wisconsin will go a long way in determining if thats donald trump, guys. All right. John. Well see what happens tuesday. Thank you. A big question. What impact will charms against trumps Campaign Manager Corey Lewandowski will be and what about scott walkers endorsement of him on tuesday. Joining us now National Spokeswoman katrina pearson. Good morning. Good morning. You defended mr. Lewandowski who made headlines yesterday. He was charged with simple battery. Hell keep the job even if he doesnt beat the charges. Most would be suspended or out of a job. Why is the Trump Campaign not suspending him . You dont ruin mans career just because people want you to. I think now that the Police Surveillance video is out there, its clear that the allegations that mr. Lewandowski forcefully grabbed her and through her to the ground clearly shows he didnt. Youre saying he will beat the charges. Yes. This is one of those things where mr. Trump is going to stand by mr. Lewandowski. He did nothing wrong. This was a press scrum. This is a reporter who crossed the secret Service Threshold where you could also see two secret Service Agents reached out to her not to touch mr. Trump, and she did, in fact, grab mr. Trump. So no, theres no need for him to lose his job. Its clear why his rivals would jump on this politically but do you deny that theyre calling it personal attack a salts and attacks i dont. We are also talking about senator cruz backing black lives matter, moveon. Org and domestic terrorist bill ayers and calling it what it is. Its a simple attack against mr. Trump and his candidacy. So were not going to pay too much attention to that. Again, this is a competition. Mr. Trump is winning and mr. Trump will receive the delegates to win the nomination. If he doesnt t other big news is john harwood just mentioned last night hes backtracking on this pledge to support the nominee no matter who it is. Can you give us a little more insight as to why trump has changed his mind on this . Oh. Sure. This isnt backtracking. When he did sign the pledge, he said as long as the party is treating him fairly. Theres been quite a widespread of News Coverage where you have an entire antitrump movement consisting of party elites that are out there trying to stop trump from winning the nomination and even democrats. I dont think thats fair when you have a person bringing more people to the party, new people to the party across all factions of the Republican Party and theyre trying to stop him anyway. All right. I want to talk about the economy. Were not hearing enough about it, all of the insults back and forth over the campaigns. One factor that a lot of economists that we talk to on cnbc and investors are worried about when it comes to the trump policy is on china. The fact that hes pointed the finger at a china and has threatened high tariffs on chinese goods imported here in the u. S. Can you walk us through the policy, how realistic some of the parts are and why you guys arent afraid of a trade war with the second biggest economy in the world . Sure. Theres a reason why they question the art of the deal to understand where hes coming from when he puts those types of things on the table. You to reany gauche yalt these issues. Manipulation is a very big problem. No one denies that currency manipulation isnt a problem and it needs to be addressed. We are spends hundreds of billions of dollars in deficits even when it comes to trade and that is a problem whether youre looking at shipping goods across countries or even jobs for that matter. Mr. Trump is saying the policies we have in place right now are hurting american jobs and the economy and we have to renegotiate some of these things. If we have to get tough and talk about things like tariffs, which, by the way, the Obama Administration has done on things like solar panels, then we have to do those things to remain competitive. But many say you cant hes not talking about across the board. Youre absolutely right. Hes not talking about across the board. Thats just a number he was talking about because of some of the tariffs we pay are taxes we pay in response. There has to be some level Playing Field moving forward if were going to remain competitive. Can you also give us an update on who donald trump is thinking of nominating for treasury secretary . Is it still carl icahn who hes named in the past . Carl has said yes, lets said no. He has a lot of respect for carl icahn. He believes carl icahn would do a very good job. None of the people hes talking about really care about the notoriety or the money. They want to help america. We keep forgetting. Hes the only candidate not receiving a government paycheck. His entire life and legacy resides on the success or failure financially of this country. Katrina, why does trump not spend more time talking about Hillary Clinton. The email setup was extraordinary. It seems to undercut her arguments. I mean is the calculus here that he can wait until really just before the convention to turn his attack on trump . Because if you listen to kasich and people like that on clinton, if you listen to kasich and people like that, they would argue theyre best suited in the polls to beat her at this stalk. Is he missing a trick there to a certain extent . No, not at all. Reagan was ahead in 1980. Trump, hes trying to win the republican primary. The Republican Party doesnt have super delegates that completely ignore the will of the voters some of hes been attacked by 16 candidates so nar. He has to fight back against the meade yarks against the lobbyists, against the special interests, against his own party for crying out loud. His focus is to win the nomination and go after Hillary Clinton wherever he can. Katrina, thank you for speaking with us. Katrina pierson. Coming up. Joseph edelman. The Hedge Fund Manager. Find out what hes investing in now. At mfs investment management, we believe in the power of active management. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. I am a technological breakthrough. This morning i read over 4000 articles on leukemia. In less than a second. speaking japanese i can understand euphemisms, idiosyncrasy and complex metaphors. I know every detail of every public Quarterly Report in the last 20 years. And im just getting warmed up. Hello. My name is watson. Together we can outthink the limits of whats possible. Welcome to the cognitive era. This just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card soda consumption continues to decline. In fact, new data Shows Americans are drinking the least amount in 30 years. According to beverage digest, soda consumption dropped for the 11th year in a row. It dropped 2 . Worse than the 0. 9 slide from the slide below. Pooh customers are worried about the sugarfree ingredients. Two winners in the soda category, sprite and fan ta, which actually saw growth during the year. Both are run by cocacola and dr pepper actually took the number four spot in terms of bigger soda brands. The upshot here, americans are continuing ditch sodas in favor of bottled water, juice, and teas. Thats why cocacola is trying to diversify, offering mini cans where they can get higher prices. The stocks are fine because theyre defensive and the companies have pivoted. They receive seen this trend for a long time. Now theyre squeezing more money from less soda in terms of prices. Pepsis also good the cushion of fritolay. In a market where, yes, theres major slowdown going on, but were still drinking, listen to this. 400 cans of soda per person per year. That is the annual per capita data on soda consumption. Somebody has a big portion of my share of that, but, yes, its a pretty stunning amount. Honestly, you mention the sto stocks. You mention theyre defensive. They absolutely are. We saw this play book with the Tobacco Industry where some of the best stocks have been tobacco stocks where you basically had constant annual declines but you had pricing that was making it up and, of course, the declines in soda consumption are significant but not as dramatic as tobacco. You wonder how expensive these stocks can get. Theyre turning soda water into other machines. I think thats a good point as soda gets taxed around the world. As part of the british budget, theyre going to tax the a. Of soda the companies are going to have to pay and transfer it onto the consumers. Is it sugared soda . Sugared soda. See. Its interesting simon only drinks sparkling water. Im pretty much in that category. Its the tide of Public Opinion has turned against them. They have to somehow raise prices on a limited number of people. In the meantime First Quarter earnings are right around the corner . What should we expect . Dom chu has more. Youre not going to depress us, are you . I wont. Im very impressed. Im going to switch to sparkling water. I drink a lot of soda. That explains why you look as good as you do and i have a ways to go here. Lets take a look at earnings. Its a dismal one. Heres the reason why. Were talking about what possibly could be the Third Straight quarter of earnings declines. If you look at that, the last time was the financial crisis. According to the company that composites the data, the First Quarter 2016 are for 57 drop in earnings on a yearoveryear basis. This is the First Quarter of 2015. Meanwhile sales declines are still going to be there as well. It could be the fifth straight quarter of sales declined down by 1 if all expectations come to fruition. Now, energy is a huge part. We know oil prices have declinet a lot. If you hypothetically strip out energy and this is just for perspective. If you strip out the energy component, earnings are still slated to fall by nooerm 2 . But, again, 6. 9 , 1. 8 decline, thats how much energy is affecting things. Were forecasting a 99 drop in the earnings. If you take a look at revenue growth, it is. The sectors you want to focus on besides energy. Take a look at these. Technology. A 5 drop in earnings. Financials, the second biggest. The third biggest sector up nearly 4 1 2 . Its the biggest one out there, sa sara, in terms of gains. For all the sectors, i tweeted out the story. We can see most are profit for declines. Back to you. Lower than expectations. Dom, thank you. Straight ahead, the Lieutenant Governor of North Carolina will be joining us live to discuss the controversy surrounding the states new discrimination law. Why he says the law is actually antidiscriminatory while many corporations disagree. Well be right back. Before the band separated over unknown creative differences. [ crash ] and reunited three decades later for a tour that sold out in three minutes. And your cisco hybrid cloud handled millions of ticket orders without breaking a sweat. Before all of this, [ crash ] the experts at cdw orchestrated a cisco hybrid cloud solution. Scalability by cisco. Orchestration by cdw. Welcome back. Im bertha koochls we saw a crude build of 2. 3 Million Barrels. Thats smaller than the original estimate and actually smaller than the numbers we saw from the american Petroleum Institute last night. As far as gasoline, it shows a decline of 2. 5 billion barrels, more or less in line with the numbers we saw coming from the api. Distillates were down about 1 Million Barrels or so. Im looking for the number for cushing here. Thats one of the areas that really helped in yesterdays report. It looks like here we had a slight decline in cushing of close to 300,000 barrels and thats something that is bullish because cushing, oklahoma, is a delivery point for wti nymex crude. Lets head back over to sue herera. Thanks very much, bertha. Heres whats happening in this hour. A french man thought to be in the advanced stages of a plot against france is set to be charged today hchl was detained last week when authorities found a large amount of explosives and weapons in his apartment. A hin egyptian is being hel after commandeering a plane after a feud with his former wife. Theyre creating an underground frozen barrier of the recommended fukushima plant. This is in an attempt to contain leaking radiated water. And the death toll from a skraemts street drug crisis continues to grow. Six people have died, 28 have been sickened by a powerful drug going around the city. The drug is a form of fundamentali fentanyl. It attacks the heart and the lungs. Frightening. Ill send it back to you. The business backlash surrounding the lgbt facing more this week. American isles, pfizer, many, many more sending a letter calling for a full repeal. Yesterday we spoke with the senior official who has also opposed the law. We were surprised by the law. As we mentioned, we have thousands of employees in North Carolina. Significant presentation and operations. Were part of that community. We will make sure that we have the dialogue. The governor has been quite pro business for the last few years weve worked with him. The opportunity is for dialogue and we must do what is right. Barrett, we dont believe it should have any impact on our qualities of our employees. Dan forest, good morning. Thanks for joining us. Good morning. Thanks for the opportunity. What would you say to tim cook and Mark Zuckerberg and that gentleman at bayer and the leadership of one of the biggest corporations in your state who have all come out objecting to this new law. I would say read the bill. Thats first and foremost. They havent read the bill. Quite frankly, to set the record clee your leadin called this the antilgb tbill. Lets back up and set the record straight on what happened in charlotte. The Charlotte Council against their legal counsels advice, against a lot of folks went beyond their Constitutional Authority and passed an ordnay d ordinan ordinance. It created a loophole that allowed men, sexual predators, people that perhaps are pedophiles to go into a womens bathroom, to go into a womens locker room, to go into a womans shower facility and to make that legal to do that. You know, governments first and foremost priority is the protection of citizens, especially the protection of women and children. And thats all this bill did. These critics crying, they havent read the bill and ive talked to many who admit they havent read the bill. But the critics say the upshot of that is requiring transgender people to stick to their birth certificate in order to enter a bathroom no matter how they dress or how they identify. Is that wrong . Well, listen. Lets back up and talk about what the bill actually did. The bill is an antidiscrimination bill. It was the first public antidiscrimination bill in the states history. In fact, it goes beyond federal policy for antidiscrimination. Its very interesting to me that, you know, there was no clamoring about discrimination prior to the charlotte ordinance and after we do, that all of a sudden, North Carolina is this discriminatory state. We just said men cant go in wills bathrooms and shower rooms, but, listen, the Business Community has the right to do whatever they want. This bill doesnt prevent them from having one bathroom or the nba from doing that in their arenas. All it said is in public facilities and Public Schools that you have to have bathrooms based on your birth certificate gender. Mr. Forest, i have read the bill, house bill 2, ive got it in front of me. On the one hand it does explicitly discriminate against transgender people. Nowhere in the bill does it explicitly discriminate against transgender people. It doesnt happen anywhere in the bill. It defers to the birth certificate on what bathroom you should go into. Lets leave that to one side. It also provides for the ability to have a single staal unisex facility anywhere for anybody at any time. The bill provides for that. This really freed up business. What the Charlotte City council said, you know what Business Community in North Carolina, you have to abide by what we say. You cannot put male or female on the bathroom wall. Let me speak. But the community is free to do whatever they want. Just to come back to hb 2 which you think people havent rate, which i have. It seeks out treatment for favored treatment. You look at those who are defended against discrimination and you say anybody who you do not die fine as being able to not to be discriminated against has no case in law. So by excluding those, they cant sue in the state. So it is actually deferential treatment to the Lgbt Community in addition to what its doing to transgender people. Absolutely not. This antidiscrimination bill is broader than federal law and anybody theses being discriminated against still has protections under state law and under federal law. They have the right to go into court and the state of North Carolina and be protected for that discrimination. Listen. The Business Community in North Carolina has loved North Carolina for years. Its one of the Fastest Growing states in america. Charlottes one of the best business communities in the nation. They rank North Carolina number one in the nation for best place to do business, best place to start a business. Best place to live, best place to raise a family. If we were this a great discriminatory community in North Carolina, none of that would have happen and North Carolina wouldnt have been growing the way it is. Let me ask you, sir, where are you getting your legal advice now from . Because your attorney general said hes not prepared to prosecute cases saying it was a national disgrace, and certainly any School District that implements hb 2 is going to be in direction contradiction of title ix, which leaves them open to huge liability and loss potentially of 4. 5 billion of education. Thats a nice leftist lie that youre perpetrating there. That doesnt exist at all. Your attorney general would disagree. Our attorney general has disagreed with everything we even done in North Carolina. Our attorney general is using this to run for attorney general. Our attorney general needs to step up and do his job and defend women and children from predators in bathrooms. Listen, 70 of north carolinians agree with hb 2, and i think it may be more than that. I talked to Business Leaders who say they havent read the bill, didnt know anything about it. Ive traveled, met with audiences ever since we did it. I said, please, if theres one person in the audience who did agrees with this, tell me why you think its okay for women to walk into womens restrooms and shower rooms and locker rooms and i havent found one person who said its okay. Let me look at the economics. Certainly its down from the crisis, but at 5. 5 , its higher than the national rate. If you look at under employment, the bigger maerks whist measurer 11 in North Carolina, higher than the national average. Youve got some economic discress at elevated levels and now you have major corporations bashing your state. They havent threatened to pull out but that could come next. You have other states like new york who are banning state visits to your state. Are you really willing to put the cost which could be billions and more jobs at risk here . There is no cost. This is a big fantasy. It happened in houston when houston had the same ordinance. Same cast of characters. They were saying that were going to pull out. Houston is still in business, still doing fine. Listen. We have a great economy in North Carolina. Since weve been in kroul, weve paid down state debt by over 3 billion. We cut tarkss by over 3 billion. Corporate knicks tax has been cut in half in North Carolina. Personal income tax has gone down. Weve paid unemployment insurance. A bullion dollars in reserves. Weve put a billion dollars in the rainey day fund. All im saying is youre risking it. People love North Carolina and theyre going to continue to love North Carolina regard lgs of this. Well see about that. Lieutenant governor, thanks for making case. Dan forest of North Carolina. Coming up on the program, the Top Hedge Fund manager of 2015 joins us here at post 9 about his strategy and whats ahead particularly with health care. Squawk on the street will be right back. [dad] i wear a dozen different hats doing small gigs,side gigs. Gig gigs. Quickbooks selfemployed helps me get ready for tax time. To separate expenses,i just swipe. Its one hat i dont mind wearing. [passenger] i work for me. And so does quickbooks. It estimates my taxes,so i know how much stays in my pocket. And thats how i own it. [announcer] stay in the flow with quickbooks selfemployed. Start your free thirtyday trial today at joinselfemployeddotcom. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov as the president ial primaries drag on investors seem to top taking notice but will politics become the big driver of the market. We discuss. More squawk on the street coming up. Welcome back to squawk on the street. Up 15 points overall for the s p 500 as the market sends yesterdays gaines. S p 500 Technology Sector is leading the way hire as you can see there today. Up by over a percent. Tech is the s ps most heavily weighted sector. Lifting name, technology, financials, tech is one of this months best performing sectors, up 10 just for march. Simon, the yeartodate gains just shy of 5 . Back over to you. Interesting. In contrast they have not participated in the recent rally. Its lost a quart e of its value so far this year. So is biotech poised to move higher . Joining us is joe edle marngs ceo and best performing Hedge Fund Manager of 2015. Good morning. Good morning. Your return last year was 55 . 51 . 51 on the biotech market. Yes. Its a health care general let care fund but its principally biotech. How did you perform so well . We had good stocks. We had sur rupp tarks neurocrine, trow pin, a private Company Called aserta that we vested in that we did well. Second biggest investor there. That was probably the biggest return in probably the history of pharmaceuticals. Whats the experience so far this year . How do you see the market . Its tough. Call it 50 from the high, but we see some very good values on the long side. Its a bit of a cliche, but i think youre going to have to be more of a stock picker because theres a lot of resistance to investing in the group as long as the political environmental, you know, perception of that. Where are you . First of all, i think hydro prices are a good thing, which is very different. Because youre an investor . No, not because im an investor at all. Its basically a risk reward question. Drugs are very rif yk sky to de. If youre trying to develop a drug for alzheimers, its very risky. The greater the reward, the more people like me will invest. Apparently she does not agree with you. Well, shes wrong. I understand the idea that high drug prices in general youd rather have them low if you could, but theres a balance. The problem is valiant went around buying up old drugs and raising their prices, so it kind of right. Valiant doesnt invest in r d, but lets talk about the variety majority that invest in r d, so the more money they tend to make, the more they invest in r d. Sure, sure. And you have drugging aimed at small populations where if you couldnt invest, those drugs wouldnt be around. Talk about risk and reward. You invest in a limited number of stocks. You know the science very well. Youre obviously making educated bets on exactly which drugs are going to be approved and work and things like that. If youre an average investor, i think we track the bbt which four stocks are mature. Four big biotech stocks. How should an individual investor go about applying themselves to this market, this sector . First off i would say i kind of look at the investing as a bit of a poker game. I say if you dont have the skills, you should invest. Thats reasonable. Too some extent its money changing hands, but there are some Higher Quality ones that i think you could invest for the long term. Big cap ones or the ibb index. We principally focus basically on midcap, smaller cap companies. Do you want to throw out some names . Sarepta you mentioned. Yes. Were very bullish on it. Its a very controversial name. The drugs either going to be approved or not approved. Its for muscular dystrophy. Yes. Its going for something called accelerated aimprovement most believe it wont get approved. I believe it will. Didnt they turn down biomarins drug . It was a bad drug. It was toxic. It didnt work or produce any of the target protein you were trying to make. This is a disease caused by a lack of a protein. The insurer rallying on the news that a judge has ruled in favor of the Insurance Company. Remember, the company went to court in order to remove its systemically important designation that it had been given by federal regulators, the judge siding with metlife saying the judge cannot call it a systemic important company. What it means for metlife is it will not be subject to oversight by the reserve. The shares are rallying today. Take a look at the other insurers because they, too, are rallying. Take a look at metlife. Ai gi and General Electric was one of three companies, not a bank, nonbank company that was designated when it received this designation. Rallying on the news. Good news for that company. Thank you. Up next, what its like to be so rich that you have the option to match the decor of your private jet to your ferrari and your porsche and rolls royce. Well take you inside the secret lives of the super rich, next. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. You know youre rich when youre worried about matching your private jet to your collection of luxury cars. More on that as we gear up for secret lives of the super rich on cnbc. Its all about customization. We caught one the Real Estate Developer to look at his custom cars and matching gulf stream 4. The ultimate toy is his 17 million gulf stream 4. Customized to match the cars. The real input i had on the plane was the colors up on top and the ferrari that you see down below. My two favorite colors and i had to incorporate them in the plane. How much did it cost to paint this plane these cool colors . About as much as somebodys home. Thats crazy. No joke. Even the seats in the ferrari desired the design for the plane. If it looks good in a car, probably looks good in the plane too. By the way, each of the seats in that plane cost 55,000. He loves porsches so much hes building a tower with a private elevator just for your car. Thats truly living the high life. How else would your car get up . Needs its own elevator. We will be watching and youll catch a glimpse of more cars, more collectibles on secret lives of the super rich. Okay. Lets send it over for a look at squawk alley this wednesday morning. How are you doing . How am i supposed to think after that . He is formerly with the obama campaign. Well figure out how he is influencing that companys ride for growth. Also boxs ceo arron to talk apple. And the review of the iphone. Well find out more coming up on squawk alley. Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. To make the world a more beautiful, colorful place . Ob at ppg we think thats something we all need to do. We create, invent and formulate amazing paints, coatings and materials. So we can make the world run faster, stronger, fresher, smarter, cooler, lighter, greener and better for the next generation that comes along. Ppg. We protect and beautify the world. Its 8 00 a. M. At uber headquaters in San Francisco and 11 00 a. M. Here on wall street. And squawk alley is live. Welcome to squawk alley on this wednesday morning. And welcome good morning. Also