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tv   Squawk Box  CNBC  May 22, 2017 6:00am-9:01am EDT

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good morning, everybody. and welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernin and melissa lee. president trump just beginning remarks in israel. let's listen in. >> it is wonderful to be here in israel. president rivlin, mrs. rivlin, prime minister netanyahu, mrs. netanyahu, thank you very much. i am deeply grateful for your invitation, and i'm very, very honored to be with you. in my first trip overseas as president, i have come to this sacred and ancient land to reaffirm the unbreakable bond between the united states and the state of israel. rich in hi,
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israel has built one of the world's great civilizations, a strong resilient, determined and prosperous nation. it is also a nation forged in the commitment that we will never allow the horrors and atrocities of the last century to be repeated. now, we must work together to build a future where the nations of the region are at peace. and all of our children can grow and grow up strong and grow up free from terrorism and violence. during my travels in recent days, i have found new reasons for hope. i have just concluded a visit to saudi arabia, where yesterday i
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met with king salman and with the leaders from across the muslim and arab world. and that visit we reached historic agreements to pursue greater and greater cooperation in the fight against terrorism and its evil ideology. my future travels will take me to visit pope francis at the vatican. and then our nato and european allies. we have before us a rare opportunity to bring security and stability and peace to this region. and to its people, defeating terrorism and creating a future of harmony, problesperity and peace. but we can only get there working together. there is no other way. mr. president, mr. prime minister, i look forward to working closely with both of you
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during my stay. we love israel. we respect israel. and i send your people the warmest greetings from your friend and ally. all of the people in the united states of america, we are with you. thank you and god bless you, thank you. [ applause ] >> that was president trump speaking in tel aviv, israel. as you can see, he's shaking hands with both the prime minister and the president of israel. we will have much more on the president's trip in a moment. in the meantime, let's get a check of the markets. take a look at what's happening with u.s. equity markets slightly higher. there are things from the bulls and bears to be seeing this morning. you can take a look at what's
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been happening. right now, we are looking at the dow could potentially post its longest winning streak since the end of february with the gain today. but it's coming off its second straight losing week. the nasdaq is coming off its first losing week in five. dow futures up by 7 points. s&p up by 1.2. nasdaq close to 2. overnight in asia, there were gains when it came to the nikkei up by half a percentage point. hang seng up higher 0.8%. in europe, this morning with some of the earlier trading, we're going to see that the dax is off by 0.3% point. and if you take a look at crude oil prices which had pushed above $50 a barrel on expectations of potential of future cut from opec later this week, you can see right now, wti up by 41 cents to $50.74.
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ford motor company has reportedly fired ceo mark fields. phil lal bow joins us with the developing story. >> not officially, he has been fired. jim hackett will be replacing fields as ceo of the ford motor company. that announcement coming up later today. mark fields, he's not even making it three years as ceo. he took over in july 2014. we'll explain to you why he's being replaced by this man, jim hackett. a one-time member of the ford board of directors. it's all about the stock price. if you looked at shares of ford since mark fields took over in july 2014, it's down 36%, that, despite the fact that the company had its second most profitable year ever last year. and it's going to have a fairly profitable year this year. albeit lower than it was last year. and that's part of the pressure that was building on mark fields when' announced earlier this
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year that they'll have lower profitable for 2017. the other issue for ford and the ford board of directors, is how to convince directors and wall street that its vision for the future of the auto industry is one that will help the bottom line. ford is investing heavily when it comes to autonomous drive vehicle. electric vehicles, smart mobility systems. nobody doubts that the company is making these investments and that they some day will pay off. but to what degree and how much will they pay off and when will they pay off. the benchmarks that have been laid out under mark fields have been extremely vague to the point that many on wall street are saying that this move to replace him with jim hackett to bring in a new ceo may get a bit of a bounce today, guys. but as you take a look at shares of ford versus tesla or really a number of automakers, that split at the end says it all. what will it take for investors to get excited about ford again. a lot are saying it's going to
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take more than a new ceo. it's going to take clear benchmarks on how investors plan to bring in 2018, 2019. it can't be just that we're having a new vehicle coming in 2020 or 2021. >> just to understand there's microsoft and they didn't get into search. but then there's search and they didn't get into -- it's always a new company that sort of takes over. but in the auto industry, i would have thought that the established guys would have had the capital, the technology, the innovation to do what you're seeing tesla. it's weird that a new upstart had the wherewithal to be able to become the -- you would have thought they would say, bmw, mercedes, gm, ford but they're getting left in the dust just like technology companies because they haven't innovated. i think it's that insular detroit culture or something. >> right. the problem is it's not clearly articulated.
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and i hear this a lot not just from people in detroit but automakers as well. they kind of scoff when elon musk says, hey, check out this new video of a new autonomous drive system from tesla. a lot of people with tesla when it first came out with this autopilot system. people were saying, that guy is crazy because there's going to be an accident. something is going to go wrong. it's going to blow up in their face. to the contrary, it has shown investors that's where the country is going. when you mention autonomous companies, i guarantee you very few people are going to say ford is work on one. you hear about tesla. >> it's like a 25-year-old. really are, the millenniali iase along in technology. it's irritating where are the wise, pros, the experienced why
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doesn't that come in with autos? >> because, joe, they're making huge investments there this. and it's how much will ford have to spend in toward keep up with tesla. are they better served not investing. >> and the leeds that tesla has, just by virtue of the miles driven on autonomous system, phil, that's worth the money. you cannot buy that sort of data that puts them ahead. >> you're correct. everybody realizes that's where the auto industry is headed. now it may not be there until 2021, 2025. but it's going there. the days of us saying how much are the automakers making by manufacturing a vehicle, selling it through a dealership network and being worldwide, that's still important. and it still brings in billions of dollars. but investors are saying eventually, that's going to change. and when it does, who's best position. >> phil, is this a situation,
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though, where you can understand them wanting to potentially make a change. but is this a thought-out change? is this a planned one. >> that's the criticism. >> this bill ford who is making the decision? >> well, bill ford plays a big role as the chairman of the company. remember, he was ceo at one time prior to alan mulally. he understands the pressures of running the auto maker day to day. he also understands he's got to position this company for the future. look, bill ford is still relatively young. but he's also somebody who has said at some point i'm going to have to move on and the next generation of fords are going to have to take over. not in the next coming of years but somewhere down the road. and he real iizes he has to position the company in that fashion. look, it's clear under mark fields that the company didn't have a clear enough articulation, i should say, for where it was going to be profiting when it comes to
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autonomous drive electric vehicles mobility systems. >> this new guy hasn't been at ford for very long, right? he was the ceo over at steelcase at 2014. his background is office furniture. seeing the change of the open layout. it's a very different industry from the auto industry which is basically a technology industry right now? >> i think if you look at this, you don't look at jim hackett as a long-term ceo. you look at him saying here's the guy who is going to be at this company for seven or eight years. you look at him as somebody who realizes i have to get us moving in the direction of convincing wall street thatted for will profit in the future when autonomous drive vehicles become much more important than they are right now. and then you have to look at the next tour of executives who will take on a bigger role, bill hen hen henrichs out of ford north
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america. and running ford of europe, it's now slightly profitable after years of losses. those are the people, two, three, four years down the road are go to be running the company. >> phil, thank you. in political news, president trump arriving as you saw, if you were watching at the top of the show, arriving in tel aviv. eamon javers joins us now. >> good morning, you saw the president painting a picture of peace in the region. saying we can only get there by work together. take a look at the schedule in terms of president's visit to israel. he's running 15 minutes ahead of time. expected 7:15 in the morning. he's going to meet with president rivlin of israel. he's going to the western wall. and having a meeting with prime minister benjamin netanyahu. coming directly from saudi arabia where he addressed the leaders of the muslim world. he presented a different vision in terms of islam than he presented on the campaign trail.
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urged those nations to work together in partnership with the united states. here's what he said. >> america is prepared to stand with you in pursuit of shared interest and common security. but the nations of the middle east cannot wait for the american power to crush this element. the nations of the middle east will have to decide what kind of future they want for themselves, for their countries. and, frankly, for our families and for their children. >> the president, though, still dogged by some of the scandals back here at home. h.r. mcmaster, the national security adviser was on abc over the weekend, explaining some of the president's comments. the president was reported by "the new york times" to have said he fired james comey the fbi director because he was a nutjob. and to have told the russians this took some of the pressure of the russian investigation offer the president. here's what mcmaster said over the weekend. >> "the new york times" as you know, reporting here's what the president said in the meeting.
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i just fired the head of the fbi. he was crazy, a real nutjob. i face great pressure because of russia. that's taken off. is that what the president said? >> well, i don't remember exact with what the president said. and the notes that they apparently have i do not think are a direct transcript. but the gist of the conversation was that the president feel it's as if he's hamstrung in his ability to work with russia to find areas of cooperation. because this has been, obviously, so much in the news. >> so, these are going to be the two stories that we see going forward. the president operating on the world stage, trying to do something that no president has been able to do before him, bring peace to the middle east. and at the same time, fighting the scandals back at home. he's going to have to do that while traveling overseas. it's a very difficult and challenging political thing to do. at the same time, you're doing a high wire act in some of the most difficult politics in the world in terms of the middle east, joe. >> yep. pretty good start, though.
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>> yeah. >> you would think in saudi arabia, in the coverage. i was thinking about, you know, what's happening in congress. i mean, did they send over the obama care yet? did it clear the senate? are these guys -- they're kind of irritating. you know what i mean? i know there's stuff going on, all right? >> yeah. >> but they don't have to sit around wringing their hands. oh, my god, what's happening? what about 2018? it's like they got a president right now. if they do something and give it to him, he won't sign it. for eight years we did this, we did that, we weren't government. they weren't government. they were doing all of this stuffer, sending stuff. never got signed. they're like patting themselves on the back. now, if they send something to this guy, i don't care what's going on with all of this other stuff, he will sign it. what's the problem, eamon? >> well, i will tell you what the problem is, joe.
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congressmen are re-election machines. >> exactly. great way to run a democracy. >> they have to run every two years for re-election. they're terrified of doing anything that might challenge em. that, despite the fact that gerrymandering of redistricting have made it that a huge majority of these congressmen are very, very safe in their districts. they don't face significant threats. what they're worried about is a challenge from a primary opponent in their own party who accuses them of not being pure enough. and that is a very challenging dynamic for them. they want to stay in power and they want to fend off that power from the right and left. >> good piece in the journal over the weekend, you probably owe don't read editorials, you guys will get re-elected if you just move forward. if you sit here sand worry and grouse whatever they do, then
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they won't get re-elected. >> that's the presidential leadership, right? presidential leadership is about getting everybody to hold hands and walk forward together. at some point, you have to sacrifice a few of those congressmen. >> look like president obama, there wasn't a single guy left. they lost all of those guys, all of those guys were shackled. they lost them all, almost. thanks, eamon. >> all right. we have news crossing the wires here, an iraq official saying iraq has agreed to a six-month extension of the cuts. iran is opec's third biggest member. we've seen this gain all morning. brents is higher by 0.8%. wti above 50 bucks as well. >> a big question is not if they're going to extend the cuts as they stand right now, or whether they'll increase those cuts.
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that's something that mark grant believes they absolutely need to do. he's going to join us this morning. let's get back to the market, join us it allison deans, deans. alison, why don't we pick up where we left off with eamon. the idea that congress is not moving on some of the things the president had hoped for. you are saying you wish they would have started with tax reform instead of repealing b i obamacare? >> yeah, obamacare is something that republicans very negative about. but if they really want to impact the economy and actually make more citizens happen i think they should have approached tax reform which is something they promised as well. it would help the economy and jobs. one is pretty kashlolitical and is economic and drive something
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change in a market that needs something. >> when you ask the legislates, they'll say they're doing it this way because they need the savings that they essentially can get from obamacare. paying the taxes as you go. there have been people who said they wish they would have done it the other way. >> i know, part of it is, it allows them, don't they hit a limit on refuse flevenue reduct. my view is 33 would have worked around that easily. >> let's see if they end up changing their plans at this point or not. james, there's a piece out from parthenon fromle ian shepherdson saying he's concerned because he thinks the ned is going to continue to raise rates longer than the market expects it could be enough to push us into a recession in 2019. what do you think about that theory? >> we do think that the fed is going to keep the rates in june.
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the big question for the fed are the things happening in washington or the scandals there, is that crippling enough to derail the market which is the market has -- which the fed has taken generally a negative signal as to whether they should act. now, we don't really think that's going to happen if you look at cases where you have impeachments or resignations in washington. there are really only two to speak of. the nixon resignation in '74 that derailed the markets. but the markets were down already because of opec oil prices. and with clinton, in '98, the markets were down then because of the russian ruble crisis. in this case, the fundamentals are still very strong. you hear that refrain all the time across wall street all the time. we feel that does support the markets here and the fed will probably continue along this track. >> to alison's point, how important is tax reform?
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and how much does is that matter in terms what you're predicting thing s are going to head. >> tax reform is critical from a perspective of supporting 3% gdp growth. but is the legislative agenda going to be crippled and hobbled by what's happened? if they can push through tax reform, we hurt before, within the first 100 days then all this, maybe next year. if they can't get it done in the next 12 months, regardiless of what happens with the rest of the washington story, i think that would be positive. >> alison, are you positive right now? >> i think you're better valuations are investing in europe right now. >> why do you think the market didn't sell off when it had the opportunity -- i mean it sold off and bounced back and down for a fraction of a percent. >> because the fed is going to be raising rates. the problem we have now the
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other options outside there aren't very attractive and people have a u.s. bias towards equities. >> alison and james, thank you for coming in. coming up, the biggest issue in the uk for brexit? we'll talk to the ceo of invest northern ireland next. "squawk box" will be right back. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation?
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the uk holds a general election next month with potentially huge consequences for brexit negotiations but even with additional uncertainty since that brexit vote last june there are bright spots in the uk. joining us now, alastair hamilton, ceo of investment north ireland. into good morning. are you feeling any impact since the budging tech industry? >> no the opposite is the fact. we're feeling the upside. i know we're yet to exit. for brexit, there are key opportunities one is for trade. and what happens with trade negotiations over the next two years, as far as the tech industry is concerned, they're not in northern ireland for access. they're in northern ireland to get access to the talent.
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as a matter of fact, since a decision of june last year through december, we actually did 60% more inward investment projects than we did the year previous. >> why do you think this is? are these u.s. companies mainly? >> yeah, a vast majority comes from the u.s. they're in northern ireland to get access to talent. we are uniquely one of the best parts of the world in joining up the academic institutions, the government and support we give in business and industry. we do it better than anybody else. that's why they're there. >> alastair, no question there's great talent pool, we hear it again and again is because of the tax base there. what do you think about the potential for tax reform here and would that hurt ireland? >> just to clarify the tax position, we dent attract profit centers because we don't yet have a tax proposition. that is attractive to some other parts. albeit the uk is the lowest tax.
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so people are not in northern ireland. they may number the republic of ireland for a tax differential. they're not in northern ireland for tax. we do not have tax sensitive projects. we have projects where people want talent. yes, i think tax reform is coming. it's interesting, you know, in terms of the manifestos in the uk, parties have put out that the conservative party will continue to risk corporate tax. up to 17% by 2020. but we also want to proposition. we always want to stay ahead of the game. we recently pass smed some agreement down to 12.5% the next two years. unique, you combine that talent and academic excellence with a 12.5% tax position, we'll be in an even better position than we are today. >> so, things sound like they're doing great post-brexit vote. but we were discussing during the break that north ireland and
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scotland mainly were stay votes, correct? >> as regions. >> as regions. what are the main concerns for you for the eu and brexit negotiations what are the biggest concerns for you? >> i think there are two sides for this. one is what do those look like post negotiations? we have a very ag industry, and sensitivities around that. but iams also sensitive to the fact an exit from europe we'll be vaulnerable to lows. my mind is absolutely focused on what new u.s. piece can i get in a post brexit environment that will allow me to reposition. today, you talk about cyber security. northern ireland is the world's top destination for cyber security investment. over ten years with a standing start, we are the world's technology center and both of exchanges in u.s. having
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software development centers in belfast. >>lastair, thank you for coming by. coming up, president trump arriving in israel on his second leg of the world tour. here's a look at last week's s&p 500 winners and losers. k wet meeting tomorrow. well wait. what did you think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment.
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>> announcer: welcome back. you're watching "squawk box." live from the nasdaq market site in times square. welcome back, everybody. good morning. let's take a look at the u.s. equity futures at this hour. right now it looks like things are relatively flat. we've seen the markets up. we've seen the markets down this morning. right now, looks like the dow future is down by 4 points, s&p future up by 1 point. nasdaq up to close to 2. top story, ford's ceo mark fields has been ousted. the automaker's board will make the announcement today. fields has been replaced by jim hackett. he runs aed for subsidiary said to be autonomous. and fields took over in july 2014 from alan mulally. since that time, the stock is down about 40%. concerns about profit margin levels versus some of its competitors.
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we will continue to follow the story as it develops. >> president trump making news from saudi arabia on his first trip abroad as u.s. president. the u.s. and saudis signing hundreds of bill s billions of dollars of deals. of note, $110 billion of arms deals. $50 billion of aramco. and planning to create a 40 billion infrastructure investment fund. and general electric reaching a wide deal. in total, the price tag on the u.s./oddcy deals top be $200 billion. we'll have much more on the day, including hearing from commerce secretary wilbur ross, just back from saudi arabia. in the meantime, the president arrived in israel earlier this morning. hadley gamble joins us now from jerusalem with more.
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hadley. >> reporter: hey, good morning, melissa. well, just about an hour ago, the u.s. president arrived here in israel. his remarks with prime minister netanyahu and president rivlin essentially saying there's an unbreakable bond that exists between the two countries and nothing has changed in that relationship. of course, he already did break precedent and make history with a nonstop flight from saudi arabia to israel. that hasn't been done in decade. he raises hope between saudi arabia and the arab countries and israel going forward. at the moment, he's on his way to jd. he has a day planned where hi will visit the holy church of the holy sepulchre, where many believe jesus bawas buried. and the christian city. and he'll sit down with benjamin netanyahu on that agenda no doubt of going forward, going to be talking about iraq, iran,
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isis, much to do about syria. and the israeli peace process. and tomorrow, the president is going toed me with president mahmoud abbas. and a lot of is riding on the fact that something should be done. president sisi was saying even the sheer force of president trump's personality something will be done in the negotiations. guys. >> hadley, we'll talk about hour. we'll talk about president trump and what we can expect from his meeting, the bbc bureau chief who formally ran the bbc middle east bureau. the saudi trip, how would you characterize it, successful? it was expected to be successful, barring any major misstep. but, would you say it went very well, paul? or about as expected? >> i think it went very well, actually. and the speech he gave was a good one.
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is sent out tough messages to the arab world and gave them reasons to say he doesn't really mean me. it went down well. there are tough things that were said, the arab mention got it great on the terror issue. many of those men some the room know that there are people in their countries funding groups like isis. so, i think it went down very well. he managed to kind of please everyone in the room and not upset anyone. and that's really important in the middle east. the key thing with donald trump is, the way he runs his government, the way he actually thinks about things is very close to the ways that many of the leaders in the arab world think. they're also big families with lots of money used to running things their own way. i think in many ways he's got a lot in common with them in terms of style of governance. >> kind of a strong man, crazy ann coulter said you got something like alpha male versus a beta male which they don't expect, which we had before.
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i just read that and kind of chuckled a little bit. but there's some truth to that in jest. there's truth to that, he's like a strong man, almost? >> he is. they will get him in the way they may not have got barack obama. simply because they think the way he thinks. he works from his gut like they do. he feels like he can do what he wants. and in their own countries they certainly can. in many ways he's got more in common with the arab leaders in the gulf than he has with netanyahu. netanyahu is the ultimate politician. his greatest achievement is staying in power for so long. you have this odd situation where israel is the america's closest ally. but in the regions, trump's probably got more in common with the arab world than he is with netanyahu. >> you need a scorecard or diagram who see who's in, who's
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out. because everybody, iran and saudi arabia -- i'm sorry, saudi arabia and israel both are at odds with iran, obviously. so that, you would think, strangely that the interests are aligned that the united states could do -- could be friendly to saudi arabia, and that wouldn't ruin things with israel. but there is a little bit of, i don't know if it's resentment, but maybe it went too well with saudi arabia for israel. is that in the mix, do you think? >> well, the israelis will be very careful about looking at the relationship that donald trump has with the arab world. i mean, this is effectively the wee all hate iran tour, so let's just get along. that essentially sums up what he's trying to say to everybody in the countries that he's visiting. the israelis are nervous because they thought before he became president he would just agree with everything they wanted. he's been more nuanced since he got into power. he's asked netanyahu to hold back on the sentiments.
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the thing is, this is a man who believes he's a good negotiator. with every negotiation, you basically set out your extreme positions and you work inwards. so he said to the israelis you're not going to get everything you want. he said to the palestinians you're not going to get everything you want. and that makes the israelis nervous because he looked at him and said he can't be as bad as barack obama. the thing about donald trump people don't want to upset him. in many ways he's a bit like an arab leader. in the past, america would say, we can't upset these guys, they may do something crazy. in many way, that what israel and arab world thinks of donald trump because they don't want to upset him because they don't know what he's going to do. >> there is risk of entering into, or at least positing what's. happening in the middle east. so many people have tried. some have made the point it's never going to happen because of the two sides.
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is it naive to take up that third rail when you're probably not going to be able to do it? or should he -- is it something that, as a negotiator, you might make some progress on. i guess there's always risks, but he'll be left out -- not left out, or at least derided if if he trice and doesn't get anywhere. >> you think about no one has been wrong when it comes to the middle east. it's the optimists that they face. with donald trump, the thing is everybody has fail bred before . in many ways the bar is pretty low. i think he will basically push both sides to peace talks in the future. i think you'll see that as a big achievement. the problem is, he'll probably get them to yes in terms of talking but there's always a detail that upsets everything in the middle east. and donald trump is not big on details. in many ways it's going to be the people beneath him that have
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to do the hard work and push the two sides together. what they have on their side is that donald trump doesn't like no. that may be a big issue in terms of getting something done this time around. >> paul, thank you very much. when we return, ford firing ceo mark fields. the latest on that storying at the top of the hour. and commerce secretary wilbur ross gives us a breakdown of president trump's first new deal. later, we'll get analysis of the president's trip from richard haass. stay tuned we're watching "squawk box" on cnbc.
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♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing.
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translation? why invest in average?
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welcome back to "squawk box," everybody. right now it's time for "the executive edge." the price of bit coin hitting a record high. today marks the seventh anniversary of bitcoin pizza day. that's when a programmer used bitcoin to pay for two papa john's pizzas. it's recognized as the first transaction using crypto currency. if you bought $100 of bitcoin on
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that date it would be worth at the $73 billion. >> japan will now use bitcoin for tickets. volumes have gone up tremendously. japan has really been a source of strength for the bitcoin trade in the past month or so. >> that's interesting. >> i was looking at it, on papa john's -- >> they bought pizzas. this is the anniversary of the day they bought two pieczzas. >> that's a pretty good purchase that is good. i like it. >> just the pizza? >> i just heard papa john's, actually. i did. pretty easy to understand. now to wall street's agenda this week, tomorrow, we're going to get april new home sales. that's followed by existing home sales on wednesday, along with minutes from the fed meeting. earlier this month. on friday look for durable
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goods. consumer sentiment. the second estimate of quarter one gdp. more retailers reporting, loews's best buy. and in italy, they're giving castle away. >> why? >> because they got to be refurbished. i heard that and heard they were giving away white castles. >> you were going to go -- >> not that long. >> like this morning -- >> you can buy them -- i don't think. you can buy them at king's at the supermarket. >> really? >> the frozen ones? >> yeah. >> they can't be nearly as good. >> they're not -- >> you know what, it's still great. >> when you show up at 2:00 in the morning that's when they're there. >> that's true. coming up, market watcher mark grant joins us with
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investment ideas. he says avoid investing in europe and avoid anything to do with opec. he'll explain that. a quick check as we head to break on european markets. ftse 100 up by 0.4%. germany is down. cac up right now. stay tuned. you're watching "squawk box." when this bell rings... starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.
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joining us now for a look at the markets, mark grant chief strategist at hilltop securities. and mark, i get all your stuff from southwest. they always call you the wizard. and i'm wondering are you the wizard of lies? like, because that's the hbo madoff special. i think you're the wizard of truths. you're the -- >> i try to be the wizard of truth, yeah. >> you're the wizard -- but wizard is a loaded term now because -- you know what? it wasn't very good. ours is much better, cnbc's madoff, richard dreyfuss. because that's what i said earlier, i'm watching de niro i'm like -- >> and blake tanner. >> michelle pfeiffer was great. but de niro just looked like, i
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don't know, i didn't believe he was madoff. i thought he was like ben stiller's father-in-law or something. you know from meet the fokkers. it was weird. >> the italian version of madoff. >> exactly! exactly! yeah, which, i don't know. de niro. oh, this i read this this morning, felt really happy, mark. the fed is unlikely to return to its precrisis role ever on the sidelines of financial markets. it's never going back to not being a big part of our life. thank god. because i don't want to ever -- i don't ever want to not have take my training wheels off. i always want the fed to be making decisions about how our economy goes. because central planning always works so well. >> yeah, right, uh-huh. what have you been drinking this morning? >> i know! but they can't get out. there's a term for it where any government program instituted during a crisis is never reversed, even after the crisis ends. there's an actual term for that, and this is part of it.
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it's holding us back to some extent, still. >> i agree with that, joe. i think the good news with the fed is that the fed that we've had for the last eight years since the crisis is not going to be the fed we're going to have. meaning that we know for sure that mr. trump is going to appoint four new members to the fed, i suspect. and he certainly indicated they're going to be business people. i think the fed is going to become much more pragmatic, which i'm hopeful about, and positive about, instead of this kind of ivy league economic institution that it's been since the crisis that started with lehman brothers, really. >> so at this point, mark, just looking at everything else, and i don't know whether you want to do the russia backdrop or whether congress ever does anything, where are we in terms of bullishness on the market or the economy? is it all going to work out? or are we going to be dealing with some type of special prosecutor for five years and that's all we hear about?
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special counsel i guess he's called now. >> i love when you ask me these questions and i have seven seconds to answer. >> you've got a minute. you've got a minute. i know. i don't know why we put you on at 54, you know. anyway, go ahead. >> yeah. here's the answer to that. as you know, i was on with you on november 8th and 9th and i said buy equities. i said trump's going to win. i thought it was a good call. i changed my strategy because it's become apparent to me that what you're really seeing is that a democrat versus republican issue, you're seeing an outsider as the president, like him or not he's an outsider, wants to run the country in a business-like fashion and you're seeing all the insiders, the bureaucrats, the lawyers, the lobbyists, the democrats, pushing back because the guy is trying to radically change the system, or to use his words, drain the swamp, and they don't like it. consequently, it's become apparent to me that his plans,
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his visions, in terms of less regulations, less taxes, these kinds of things, are not going to take place any time soon. he's even getting pushback from in his own party and consequently i think the big equity run is over, and you need to employ new strategy to make money at this point. >> all right. well, maybe we'll have you on again this week, because we have these hard breaks to hit. but that is -- that is significant, mark. and at least we got that point out. and that will be, you know, something that i'll remember that you said. so you were optimistic but you can't drain the swamp. swamp doesn't like being drained. >> that's right. >> that's right. >> thank you, joe. >> all right, thanks, mark. when we return, the united states signing new military and economic partnerships with saudi arabia. commerce secretary wilbur ross was on the trip with the president. he will join us with the full breakdown of the deals straight ahead. s my headquarters. this is where i trade and manage my portfolio. since i added futures,
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president trump signing more than $200 billion in deals with saudi arabia. complete rundown of his trip to the middle east is straight ahead. with commerce secretary wilbur ross. he will join us in a first on cnbc interview. big shake-up at ford. mark fields ousted. the details on this developing story straight ahead. and netflix celebrating 15 years as a publicly traded company. a look at who the -- what the company has transformed itself into. remember you used to use mail to get dvds. made no sense. they changed that. second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box."
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good morning, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq marketsite in times square. i'm becky quick along with joe kernen and melissa lee. let's take a look at the futures at this hour. you're going to see that things have picked up a little bit. dow futures up by 18 points. s&p futures up by 2. the nasdaq up by close to 4. we've been keeping track of what's been happening with the treasury market. yields have come under pressure. the 10-year note is 2.52%. and we're watching oil this morning which has rebounded on the idea that opec is very likely going to continue its production cuts. big question is going to be whether they extend those production cuts in terms of how big they are. but right now, wti has picked up another 47 cents. it's sitting at $50.80 a barrel. the u.s. and saudi arabia striking a $110 billion arms deal that could increase to $350 billion over the next decade.
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morgan brennan joins us now with more details and the big winners. morgan? >> hey, melissa. told you this could be coming this weekend. now it's official, the u.s. and saudi arabia striking this huge arms deal on saturday over the weekend valued at up to $350 billion over the next ten years, $110 billion worth of deals becoming effective immediately. still light on details. here are some of the winners. lockheed martin which announced $28 billion in potential new business, including assembly of 150 s-70 blackhawk utility helicopters in the kingdom. also resuscitated deal for four modified combat ships and the kingdom's also looking to purchase the saad missile defense system which raytheon contributes to as a supplier. raytheon also setting up a new saudi based defense arm encompassing munitions and cybersecurity. boeing struck defense and commercial agreements as well, including insure chinook helicopters which had already been in the works also a deal for prospective orders of p-8
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maritime surveillance aircraft. these are the defense derivatives of the 737 commercial airplane. how to think about this. analysts say ship and missile defense sales most likely to hit order backlogs first since they already have congressional approval. but most of these agreements hinge on further government to government talks. what happens then, the pentagon contracts with u.s. defense companies making the timing and actually the surety of those potential sales a bit less certain. nonetheless, when you take a look at these stocks premarket today, they're all higher. you can see it right here with the ita, u.s. aerospace and defense etf up 1.5% premarket. >> all right, morgan. thank you very much. we're going to continue this conversation. the president just arriving in israel this morning. that is the second stop on his trip in the middle east. here's the president earlier this morning. earlier this morning, he was speaking about his relationship and our relationship, the united
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states, with america, this was his second stop on the region, though. he -- it was talking about all of these things with throughout the middle east and just back from the region is commerce secretary wilbur ross. he joins us right now. mr. secretary, thank you for being here today. obviously a lot of deals that were cut in saudi arabia. why don't you lay out what happened, set the backdrop for this, and how these deals were able to come together. >> well, i think the backdrop is that it isn't just commercial deals and it isn't just military deals. i think the most impressive part of the whole thing was the assembly late yesterday afternoon of the leaders of most all the muslim countries in the world, with the exception of iran and syria. that's the first time, to my knowledge that there's been that unified an effort between the leaders in the muslim world, and the united states. and the excitement among those world leaders was totally
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palpable. >> totally palpable in terms of a changing relationship with us? >> yes. and the enthusiasm with which they greeted the remarks. king salman spoke first, then the president delivered, i thought, a wonderful speech, major theme of both king salman's speech and the president's was about terrorism and about the united effort of those represented in the room to combat it. then there were several follow-on speeches by various leaders of the other muslim countries. so, whatever question anybody might have had about, is the bulk of the islamic world un nyad with the united states in this effort, this should put that to rest totally. >> secretary ross, is that because the president said he was not there to preach to people how to live? or to tell them how they should
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be running their countries? that we are looking for ways that we come together? i mean that's a very different message than what we've heard for the past many administrations. >> well, that certainly was the message. a message of unification, and also he made it very clear, as did king salman, that there's a big difference between the islamic religion, and terrorism. and indeed, mostly king salman, but to a degree the president, really emphasized that the islamic religion is not about war it's more about peace, it's more about neighborliness, and we saw a lot of neighborliness, and a lot of hospitality when we were there this past weekend. they could not have been more gracious hosts. >> that also culminated in many deals that had been done, hundreds of billions of dollars worth of deals. some of the big names from the business world that were there doing these deals included boeing, and general electric and lockheed martin.
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how did those deals come together? how long had they been in the works? >> well, those had been under somewhat negotiation for awhile. but as you know, any big military arms deal is a sensitive thing. and as you pointed out in the preamble, it will take congressional approval, in some cases. i don't think that's going to be a big deal. these are our allies, they're important allies, and these weapons, if you analyze them, are as much for defense as for anything else. >> we're watching some video, wilbur, of your boss, in fact, and he might actually step up to a microphone, and then we may have to actually cut you off. hopefully, i hate to do that, but i think you'd defer? be a good idea if you would, probably? >> i certainly would defer. i now have a boss for the first time in quite a long while. >> oh, really? that might be news to hillary. not that hillary -- oh, god, i'm
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going -- >> his wife. >> your wife. >> yes, i think you need to clarify that a little bit. >> i know it. i know it. but not that she's your boss. but that's neither here nor there. hey, so wilbur, this is a question i had. you've got the new -- it's not crown prince, but he's i think deputy crown prince, who seems to be closer to western sensibilities in a lot of ways. in the past in saudi arabia you've had this sort of, in the background, this backing of that -- the -- of the wahabi sect and people always talk about there's this money that goes into, you know, working against all of our goals, probably, the extremist sect. do you feel that that -- that they're starting to de-emphasize that? and really do want to liberalize society? i know women might -- they could be driving as early as this summer, and you know, they had a
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concert where they usually wouldn't have music like that. i mean does it seem like they're moving in that dprekz? and will that work? >> well, i think it's very much moving in that direction. in fact, one of the sessions where a lot of contracts were awarded, there were also some panel discussions. and one of the panelists was the woman who now is the head of the saudi arabian stock exchange. that's a very unusual event, to my knowledge, the first time a woman has been the head of an exchange in that region. and for sure, it's the first time in saudi. and several of the other panels, one of them being on venture capital, also had a very bright, very attractive young woman. so i think on that side of things, clearly there's a big sea change under way. there's no question that they're
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liberalizing their society, and i think the other thing that was fascinating to me, there was not a single hint of a protester anywhere there during the whole time we were there. not one guy with a bad placard. instead -- >> secretary ross, that may be not necessarily because they don't have those feelings there, but because they control people and don't allow them to come and express their feelings quite the same as we do here. >> in theory that could be true. but boy there was certainly no sign of it. there was not a single effort at any incursion. there wasn't anything. the mood was a genuinely good mood. and at the end of the trip, as i was getting back on the plane, the security guards from the saudi side, who'd been helping us over the weekend, all wanted to pose for a big photo-op, and then they gave me two gigantic bushels of dates as a present, a thank you for the prip that we
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had had. that was a pretty from the heart, very genuine gesture. and it really touched me. >> secretary ross, we want to thank you for your time today. >> well, thank you. it's good to be on again. >> crossing just moments ago, ford the automaker will be holding a news conference at 9:45 a.m. this morning. this after announcing it has ousted ceo mark fields. let's get the latest from phil lebeau in chicago. phil? >> melissa, there are going to be a lot of questions at that news conference in terms of why now? this is a rather quick move given the fact that ford is coming off its second most profitable year ever. but the fact that it's having lower profitability this year relative to last year is one of the key factors that likely led to the ouster of mark fields as ceo of the ford motor company. since he's been in charge of the company since july 1st of 2014, the stock is down 35%. who is replacing mark fields? a one-time board member from ford, and a former ceo of steelcase, the office furniture company, jim hackett.
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jim hackett is close to the ford family, close to bill ford, and again, was the one-time director of the ford motor company, and was president or chairman, i should say, of ford's smart mobility division since early in 2016. that's the division leading the company when it comes to autonomous drive vehicles, future mobility systems. the types of things that the company has been investing in heavily. the question is how will wall street react to this move? joe spak, the analyst from rbc capital out with a note this morning talking about the fact that this is a company that has really struggled to articulate its vision when it comes to how it is going to profit in the future from these future mobility systems, autonomous drive vehicles. he writes ford's reputation with the investor community, with respect to the secular pressures, is that they are throwing a lot of things at the wall. that's summing it up mildly. many people believe that this is a company that frankly has not clearly side how much money it's going to make, and when it's going to make that money when it
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comes to things like autonomous drive vehicles. finally, guys, want to show you a chart of ford versus fiat chrysler over the last two years. while ford has been investing heavily in autonomous drive vehicles and mobility systems, sergio marchionne has taken a different approach. the approach is, hey i'm ready to make a deal with somebody, whether that's with waymo, developing autonomous drive vehicles, whether that's spinning off ferrari or other parts of fiat chrysler. the bottom line is what do i need to do to move the stock higher. there are going to be a lot of questions at 9:45 this morning when we hear from ford chairman bill ford regarding this move, firing mark fields, less than three years into the job. guys, back to you. >> phil, gm was a target of david einhorn who wants gm to break up into two different share classes, one with a dividend, and one without a dividend. we talked about this just last week about ford and how it's pretty much immune from activist investors because of the control of the ford family. >> correct. >> at this point are there
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certain things ford could do such as spinning off certain units or buying a company or selling parts of its company that are sort of low hanging fruit? >> i'm not sure there are any low hanging fruits out there. unless they take the approach that gm has taken, which is to pull out of certain markets. now general motors made the decision with europe because not since 2000 did they have a profit in europe, they said forget about it, let's throw in the towel there. ford has finally turned profitable in europe, so the idea is that they're going to stick it out there. and in several other markets around the world. rath remember it was just in the last week that general motors has said we're not going to sell small cars there, we're not going to sell in south africa, we're going to focus on those profit drivers for these company. it will be interesting to see whether or not ford decides they're going to have to at least in the near term make some of those similar types of moves. >> okay, phil. thanks. thanks for all that. coming up more on the president's trip to the middle
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east and the economic agenda. back here at home. plus, david bailin global head of manage investments at citi private bank jones us. dear predictable, there's no other way to say this. it's over. i've 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 ♪
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welcome back, everybody.
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president trump may be out of town but the push for economic reform rolls on in washington. joining us right now is douglas holtz-eakin the president of the american action forum and a former director of the congressional budget office. and aaron klein is an economic studies fellow at the brookings institution. gentlemen, before we even get to what happens next with the administration, doug, we've got the budget, going to be revealed this week. >> right. >> and kind of rolled out. what do you expect to see? and how do you think that will play on capitol hill? >> well, what i expect to see is finally the unveiling of the economic assumptions. i think that's the most important thing. there've been rumors that they've got the top line growth rate at 3%. interesting to see how fast they ramp it up and most budgets are put together under the assumption the president gets what he wants. so what are the policies that are generating that faster growth? what do they got plugged in there for tax reform? for infrastructure? a lot of questions about sort of the details of things that he's talked about on the campaign. but we haven't seen yet. >> what do you think it would take to get growth above 3%?
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>> i think you have to do everything. you have to do some legislative reforms to the regulatory state. which has, you know, been out of control. that's been stopped and not really fixed. you need a serious tax reform. i think it would be beneficial if we got some sensible infrastructure projects, worry about just throwing money at this problem. if you do all of those things, but can get a good growth rate but you have to be disciplined and move very fast. >> aaron what do you think? is 3% growth likely? something we can pick up in the next year or two? >> i don't think it's necessarily likely. i'd add to doug's list immigration reform. we have a lot of problems, particularly that seem to be getting worse in terms of bringing high skilled foreign workers in, and freeing up some of our current labor in there. and i'm really looking forward to this infrastructure plan. you know the president's skinny budget proposed a 14% infrastructure cut. yet on the campaign trail, he said he was for more infrastructure than secretary clinton. so i'm really interested to see where the -- where the rubber meets the road on that. >> part of what his infrastructure committee, the committee that's been advising him has talked about is trying
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to get rid of some of the permitting processes or shorten it so it doesn't take seven years to get a major project brought in. would that be effective you think, even if it's less money, in terms of spurring growth? >> that would definitely make a difference. in fact, once you get a permitting process over four years, it's kind of a magic moment because it triggers the next round of local elections, as we've seen, you know, there was a deal to make a second tunnel into manhattan and then when governor kristie got brought in he pulled right back so a lot of these political delays are not permitting but they're state, local government flip-flopping between the parties and new governors with different priorities pulling back. so that would make some difference. but look freeways aren't free. america knows that you need to spend money in order to build things. and so you know, we got to get beyond the idea that there's some magic fairy that's going to build a bunch of stuff for no money in >> the opportunity trump has here to do something different and one time in infrastructure.
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this shouldn't be another let's throw some money and build some freeways. this should be let's find projects that genuinely enhance productivi productivity. a tunnel under the hudson would improve connectivity. there's some dredging that could happen on the mississippi, projects on the ohio. there's a list of things out there that would genuinely help the economy. >> as opposed to repaving roads? potholes -- >> i'm entirely with you. >> -- to make the economy work better and he will be joined on economic performance and so i think that should be a relentless focus. >> i'm entirely with you. look, next generation air traffic control, it's not just the government adding money, private entities need to quip, they need to quip older planes, and the government has to figure out how to incentivize or mandate that. and that's a very, very tough choice. but until we move on to a next generation air traffic control we're going to be stuck on the tarmac. >> doug, what do you think about tax reform and how likely it is this year, or early next year? >> the window is closing. they really do have to get
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moving and move fast. >> because? >> there is a conventional wisdom you can't do it in 2018. that's not true. you look back -- >> just because it's an election year again? >> there's a lot of tax legislation actually passes in election years. but it's still hard to get done. and i think we have yet to see them come to the fundamental decision is are we going to do tax cuts? are we going to do revenue neutral tax reform that might be permanent? and transform the tax code? that decision needs to be made. >> do you agree that, i mean we need to take a look at the headlines coming out of d.c., you can call it chaos, whatever you want, but in terms of the market participants they view it as perhaps distractions to the trump agenda? do you view that the same way in tax reform getting it done is in yep zi when the white house is facing questions about ties to russia, et cetera? >> it's the finite amount of time that the u.s. senate has. it's a very big agenda to begin with. if they're spending time debating things on russia, or other things associated with the president, they're not doing the legislative work. and the work needs to get done.
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>> but the ones that want to debate that are in the minority party. this is what frustrates gop types that you have the majority now, you ought to be able to put something on his desk, because it doesn't matter what's happening with russia, trump will sign what you put on his desk. so why are they so ineffectual? are they wringing their handses? just looking around worried about re-election? they ought to be able to put something together. they put so many things together for the last six years remember and they sent them all to oh, damn, he didn't sign it again. but we -- you know, they know how to govern. >> i would agree with that. >> it's pathetic. >> they're learning how to govern and we hope they learn quickly. >> here's the test. the test is the health care -- >> bit doug -- >> on march 6th they passed out of the house the american health care and everyone is like oh, my god what a disaster. that's a trillion dollar tax cut -- >> in the senate yet though. do you know whether they can
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still do that? >> it's over there. they need to do it. so the senate needs to pick it up and go forward. >> let me jump in here because doug has a key point. which is that the health care cut is about a trillion dollar tax cut. that's what the health care bill is. it's not about improving america's health market. which is has a lot of problems. we spend way more on gdp than other industrialized countries, and we have worse outcomes. >> that is true. we have two major health care bills neither one of which -- >> that's right. you want to get to 3% growth -- >> improve our health care. >> raise taxes a trillion dollars and didn't address it. now they're trying to take back the trillion dollar increase and it doesn't do anything either. but you're in no position -- >> it's a tax cut. >> right in and the last thing was a tax increase. it's reverse. >> neither one addressed the fact we're approaching 17% of gdp for health care. >> i would -- no, no, no. under obamacare -- >> the major thing in here no one talks about are the medicaid reforms. every health market in america is local. these medicaid reforms forced the states to take
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responsibility for the overall budget which means they forced them to manage the care itself. not about the insurance. it's about managing the care so it's not so expensive. >> but fee for performance not fee for service. >> agreed. >> paying for outcomes. >> fee for service is not the way to go. and in point of fact, the rate of growth of health care slowed substantially. >> that was also because of the recession. arguably -- >> no, no, no. >> it happened in medicare, which the affordable care act didn't even touch. that's sort of a fluke of this. there really does need to be some sensible approach on the care delivery. but my point is more generally, the agenda is an economic agenda. the health care act viewed from an economic lens gets rid of all the things the cbo said took 2 million people out of the labor market, gets rid of the burdens on small business. so move on and get tax reform. >> doug, aaron, thank you both for joining us today. >> thank you. >> when we come back, huntsman corporation striking a deal with swiss chemical company clarion.
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then the evolution of netflix. today marks the company's 15 year anniversary as a public company. we're going to take a look at the stock and what is next for the company. stay tuned you are watching "squawk box" on cnbc. billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management. ready or not, here i come.ek.) ♪
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good morning and welcome back to "squawk box" here on cnbc. we're live from the nasdaq marketsite in times square. among the stories front and center, ford is replacing ceo mark fields after three years. that is official now. he'll be replaced by former steelcase ceo jim hackett who is currently in charge of ford's autonomous vehicle unit. ford's stock has dropped nearly 40% while fields has been at the helm. ford has scheduled a 9:45 a.m. eastern time news conference. apple's being sued by a small boston company over the technology used in its apple pay service. the company called universal security registry claims apple infringed its patent for authenticating payments with
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fingerprints. private equity firm blackstone is putting to the a $40 billion fund in partnership with saudi arabia's wealth fund. the fund plans to invest in infrastructure projects primarily in the united states. let's get back to the markets. the futures right now have been sort of above zero, and below zero for most of the session. we are now back up 23 now because we had a fair value of down 7 so the futures are up 16. up 2 and almost 3 on the s&p. up 4.5 on the nasdaq. joining us now is david bailin, citi private bank head of manage investments. you're lucky because we had some stories before you. if we just had bumped in we had jane ready to go. jefferson starship. because -- >> thanks. i look forward to that next time. >> no. that's why i said it. because we're -- we're playing it anyway. marty bailin. but you're not even related. spelled different. the only reason i do this is because i've done it so many times i know it kind of bugs
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you. >> but i did give you -- >> we just had mark grant and i know you watch the show, mark said he was bullish about deregulation, and trump policies, but after watching what's been going on for the past couple of months, he says the swamp doesn't like being drained, it's not going to happen, and he's now saying i'm no longer bullish on equities, because it's going to be hard to get anything done. >> the bottom line is that we really don't need a lot except for some meaningful tax legislation, and there's lots of reasons to believe that the republicans are going to have to do that one thing before midterm elections. granted that a lot of that is built into the stock performance this year. clients have done extraordinarily well being in both the u.s., and non-u.s. markets. but the probability that there will be meaningful legislation, i think, is particularly good between now and the end of the year. >> without the obamacare getting done? >> right. without the obamacare getting done.
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>> do it without that -- >> i think when the cbo comes out with the actual assessment of obamacare, it's not likely to be passed in its format that was put forth by the house. and the senate may very well not take it on materially, either. they're going to focus their attention on tax reform balls it has an immediate impact on the u.s. consumer, an immediate impact on tax policies that will affect earnings for u.s. companies, and potentially on the competitive of the u.s. and all of that is still positive. a lot of it as i said priced -- >> you think they can get it through -- it's amazing, we've got like eight political parties now, got four different ones on the democratic side. you've got about four on the republican side. can they do it in a nonrevenue neutral way? will republicans -- will the conservative republicans allow them to do that? >> you saw the most recent proposals by trump. which really are, in fact, very conservative proposals. that cut basic democratic, you know, programs in order to fund some of the tax reform. and that means that the democrats will be isolated and not voting obviously with the republicans.
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which raises the question of whether or not the republicans can get together on some basic tax reform. and the answer to your question is yes. you can come up with things that aren't entirely revenue neutral now, but over that ten-year time frame they can. so we remain in a situation where, with that anticipation it is still important that clients remain invested, we've seen more money invested in the first four months of the year, if you take a look at net inflows. they've been the largest they've been in the last 30 months, in the last four months. so i think that investors are reacting to what they're expecting to realistically happen and are not taking a look at the sort of head line activity, political activity. they're separating that from the economic activity and they're behaving in an incredibly rational way. >> do you view the market action last week as glass half full or glass half empty in that the equity markets basically finished the week down just a fraction of a percent? you take a look at some of the safe haven trades, the bond etf, gold, yen versus dollar, they all finished higher by more than 1.5% on the week. >> yeah.
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i mean everybody's looking at all of these giant market dips as buying opportunities and for the moment that is actually true. we have to see which areas within the economy will be benefited. and clearly the bond market, you know, with the u.s. ten year trading at 2.25 is telling you not to expect a whole lot in terms of the net value of the package. but that's creating a fairly benign environment and companies that can grow are being really honored. if you take a look at the difference between growth and value stocks you see growth indices are well above 10% here. you saw the hong kong market now is up 14% for the year. so there are pockets of areas where if you can find growth you're going to see prices do very well. >> continue being in tech? >> that's right. and more importantly, continue main maining your portfolio. i mean we do expect clients are going to rotate outside of the united states for the last half of the year. there's no doubt there's more value in europe and the emerging markets than in the united states. but for clients who've traded they've done far worse than clients who simply invested and continued to asset allocate.
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>> all right. david, thanks -- >> pleasure. >> you're very welcome. >> still to come the latest on the shake-up at ford. plus, the president continuing his middle east trip today. a look at what's on the agenda coming up. as we head to break let's take a look at how we're shaping up for the u.s. session here after what had been a tumultuous week. the s&p 500 looking at 3 points at the open. dow looking to be up 25 points. nasdaq up about 5. you're watching "squawk box" on cnbc. you think traffic's bad now, the future going to be a nightmare! does nobody like the future? c'mon, the future. he obviously doesn't know intel
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in deal news this morning huntsman and switzerland's clariant are combining forces in an all-stock deal to create a global specialty chemicals giant worth about $14 billion. the company will be called huntsman-clariant and will be listed in new york and zurich. joining us peter huntsman, ceo of huntsman, obviously. welcome. good to see you this morning. >> very nice to be here. thank you very much. >> happened quickly. but it's been something that -- that perhaps the two companies have been thinking about for how long, would you say, peter? >> well, i first met with my counterpart with clariant about eight years ago. and it seems that since that time either we've been going
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through restructuring or they have or we've been assimilating an acquisition or they have. and right now just seems to be an opportune time. both of our stocks are trading at a very high level. and i think that we have completed restructuring, we're both generating near record amount of cash. and this just seems like a great opportunity, and a great time to deal with this. >> stocks have done well in spite of what you would probably concede is a pretty tough global operating environment with huntsman revenue down year over year. it's tough to find revenue growth. pricing is difficult. so, seems ripe for companies to get together and pull their resources. >> well, it is. the chemical industry is a bit unique in that we're so dependent on crude oil based raw materials. so while our volumes have increased over the last several years, because of the price of crude oil coming down, we actually have seen an improvement in our margins, improvement in cash flow,
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working capital, and an improvement in our volume. so this doesn't necessarily reflect on the top line growth on revenues. but it's last couple years have been very good years for us. >> would you say it's not necessarily like, what's the word everybody's looking for, a chair till the music stops, but everybody else seems to be consolidating both geographically and for cost savings, and you two weren't the last around, but it certainly is a pretty good fit. like yin and yank. >> well, acquisitions are always easier than mergers in my opinion. mergers take a lot of finessing. they take personalities that come together. particularly near the top of the organization where senior managers, as you say, when that music stops, there's not going to be two ceos. there's not going to be two cfos. and so forth. and so there are changes that have to come to an organization. and then that kind of cascades down through the entire organization. and this was certainly a time where, in both of our careers,
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and in times of our businesses and so forth, it just seemed to work out quite well at this time. >> peter, obviously cost savings is one driver in this deal. and your companies are targeting $400 million in annualized cost savings. but some are pointing out that this might take some time because this is going to be done through restructuring, partly through improving procurement, for example. and it's going to cost $500 million in a one-time cost. so when will shareholders see that cost saving target? >> i believe that we'll be hitting about half of that off 12 months. and we'll be hitting -- we should be at a run rate of $400 million of cost savings by the end of the second year. we've -- we've assimilated over 35 different acquisitions over the years, over the last 15, 20 years. and clariant has done likewise. i think we're both very experienced management teams of being able to assimilate and being able to attack these. the $400 million number, too,
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many mergers or acquisitions come up with a synergy number that is kind of a industry composite or average. this number is actually arrived at between the two management teams over the last two or three weeks, coming together, and looking at the organizations, looking at where we have costs, and raw materials, and logistics and warehousing and so forth, third party contracts, services and what have you, and this actually was a beginning of a bottoms up exercise in the organization. so, we're already starting to map out and look at this, so certainly by the time we close, which we estimate to be in the fourth quarter, we ought to be hitting the ground running very aggressively here. >> peter, mr. copman has said plastics and coatings will be an integral part of the company but it could be sold to fund further acquisitions? what other areas might you be considering looking at? >> well, we'll have a -- we'll have a stronger balance sheet because we're taking our
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pigments and our additives business, about a $2 billion revenue business, we're taking this to the market in an ipo this july -- august time frame. with the proceeds of that will actually lower the combined debt of huntsman-clariant to where our balance sheet is actually stronger than -- statistically stronger than huntsman stand-alone or clariant stand-alone. there's going to be almost an immediate benefit to our shareholders. and i think our number one priority is going to be to look at bringing the cultures together and look at bringing the synergies, achieving synergies for our shareholders. but certainly we will also be looking quite aggressively at how we use that balance sheet to further consolidate and further expand our technological footprint around the world. >> is there a size of a deal that would be off the table, then? i mean, could you see making a deal as big as the deal that you're announcing today with that stronger balance sheet? >> i -- i would never say never.
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we'll just leave it at that. >> would you say you're never going to go into politics? that your brother -- you might say never there, right? you just said you'd never say never. >> i would say never to never in that instance, particularly going to where he has gone -- >> but you're already backing down from your pledge to never say never. >> that is certainly when it would come to doing the sort of public service that he's doing, i have a great deal of admiration. that's just something i could never do. >> i hear you. we need those people, but i don't understand those people. but we need them. anyway. >> we really do. and he's a true patriot that way. >> right. all right, peter, thanks for your time this morning. appreciate it. >> bill, thank you. always a pleasure. >> by the way, shares of huntsman in the premarket just took a leap higher by 1.5% during that interview. >> that's what "squawk box" did. >> up by 7.8% and climbing. ford ousting ceo mark fields. joining us on the "squawk" newsline jamie albertine. great to have you with us.
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>> great, thanks for having me, good morning. >> this is an opportunity for ford and jim hackett. so what do you want to see happen? >> yeah, absolutely. we had a meeting with, along with 20 of our closest colleagues recently in work with mark fields, and other senior leaders and the message that we tried to convey to ford was that, you know, there's sort of two things investors want. can you protect the house? can you show that you're more resilient now in a downturn than you were prerecession? and then secondly you know, how are you tied to the secular tail winds that are really exciting for companies, particularly suppliers, like a harmon or a mobile eye, how does ford somehow leverage what they're investing in to get the incremental investor excited about it. and you know, i'd be remiss, a colleague who's a u.m. superfan mentioned to me that jim hackett as well is the one that hired jim harbaugh at the university of michigan. you have a constituency of investors that went to u. of m. that might be incremental now
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just for that reason alone. it's tying resiliency and secular tail winds together that really is the key we think for ford. >> does this cause you to be more optimistic on the outlook for the stock price? >> i think initially. i think we need to see and hear, and this is i think proposed as we're looking at it. this is not yet been released by ford. but we expect at 9:45 in their conference call that we'll have more details, and more definitive view on the transition. and we'll hopefully get from jim his vision, his message, and how they, you know, all the investments they've made in smart mobility, and there's certainly a scattering of them, you know, how they all tie together to drive. big money is big great and how are you going to make money on it? the message is going to have to stay on point with respect to that. >> jamie, thanks a lot for your time. we appreciate it. >> thank you. >> consumer research. ford shares are up 2.4% premarket. coming up the evolution of netflix. the company debuted on the nasdaq 15 years ago today.
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from mail order dvds to content creator and streaming service, a look at how the company has transformed is next. "squawk box" will be right back. year a
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but we've got the get tdigital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something you can actually remember, instantly. add that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to 15 years ago netflix's ipo debuted here at the nasdaq with a share price of $15 a share. fast forward to today and the content powerhouse as
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transformed the media landscape and is disrupting the production space with award winning original content. here to dive deeper into the future of net flex is senior media and internet analyst at instay net. good to see you this morning. >> thanks, good morning, melissa. >> in your view the biggest limitation to netflix or the biggest possible hurdle is total addressable market in terms of broadband access? that's fascinating. >> netflix is a market leader that has global scale. so the way you would think about the answer to that question is what are the limitations on the size of the market and are there limitations around share of market. you've got over 4 billion people that still don't have internet access. i think a lot of the models, line included, have netflix getting to 150 million subscribers, in the next three, maybe three to four years. why can't that be a lot bigger in a world where you have almost 2 billion for facebook, a billion for youtube. the market share question is the question that people want to ask a lot about competition, and amazon, and we just sort of think that the market, as kind
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of -- we thought about it, is big enough for definitely multiple over-the-top video streaming providers to succeed. >> but isn't just not that the market is big enough that you have to assume that consumer's wallets are elastic when it comes to spending? the market may be big, but doesn't mean that we as consumers each want to pay for each of the services that are out there. and so therefore beer going to be limiting what we purchase. >> yeah. i mean, i think that is a great question. i think that people are frustrated with the linear tv experience. so we think about how much we pay for linear tv, and the price value relationship there on the margin is not keeping pace with all the value, all the content that netflix is delivering for their most prevalent price point which is $9.99. >> i'm a big believer in netflix at this point. and i wasn't before. i was a skeptic. but now that i'm on board with it and i see how much my kids watch it and we use it not only on the television and the computers, and the rest of these places. but to melissa's point if you look at the online world it's really google and facebook that are kind of winner take all in
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terms of the advertising dollars that go that direction. is it going to be the same story for the content providers? >> i mean i think in terms of technology and over-the-top video, machine learning, and personalization, all the things that are great about netflix so it's interoperable across platforms, it's on demand, these are all things that are important and driving the value of netflix. people say hey anthony you cover the fang and when you think about the dominance of facebook, amazon, and alphabet, you know, is netflix as dominant as those other three? and i would say that people often discount the importance of global scale. so you have 150 million subscribers in three years and now netflix can afford to pay more, a lot more than hbo for example, for content because they're amortizing the cost of that content across a huge global scale. >> we've got to leave it there. thank you so much for coming by. >> really lucky because we're tossing to the president. but i was going to have a what app question for you and we
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would have played that. you're lucky. the president i think is ready to make some comments now. yep. it's already started. let's listen in. >> israel will do everything in its power, in order to assist you in this mission. israel appreciates america's leadership and your administration in the action you took in syria. there are red lines, as it happened in syria, that must never be crossed. there is a price that must be paid by those who violate the most basic values that makes us human. further action must be considered in face of the horrors that is still taking place on the other side of our border.
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mr. president, the jewish people return to the historic homeland after 2,000 years of exile. we created a miracle. it's a technological miracle, and economical miracle, a human miracle. and even during our most difficult time, we never gave up on our dream of living here in peace with our neighbors. we reached a peace agreement with our neighbors in jordan, and with our neighbors in egypt. but we have not yet achieved our mission of living in peace with our neighbors, the palestinians, and the rest of the arab world. our destiny, palestinians, and
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jews, is to live together in this land, mr. president. we must build trust, and cooperation between us. but in order to achieve these, we need new ideas. new energy that will help us move forward together. we can have here an oasis, an international center, a start-up land, silicon valley from the jordan to the mediterranean. but we must be sure that we don't go to sleep with a dream and wake up with a nightmare. with iran, i see some hams now our borders. in order to dream we need to be sure that iran is out, out of our borders, out of syria, out of lebanon.
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i welcome you, and i welcome your willingness to help us move forward. we want to move forward, mr. president, we want to move forward. and we must do it together. together with america. thank you. >> thank you. thank you very much. and shalom. i'm honored to be in the great state of israel. the homeland of the jewish people. i'm awed by the beauty and majesty of this sacred and very holy land. president rivlin, mrs. rivlin, thank you so much. thank you. thank you for opening your wonderful home and welcoming melania and myself to your amazing country. and that's what it is. it is an amazing country. what you've done is perhaps has
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virtually never been done before. when my first trip overseas i've come to this ancient land to reaffirm the enduring friendship between the united states and the state of israel. and it will always be endured. and that's number one for me. we're not only longtime friends, we're great allies and partners. we stand together always. this moment in history calls for us to strengthen our cooperation, as both israel and america face common threats from isis and other terrorist groups to countries like iran that sponsor terrorism and fund and foment terrible violence, not only here, but all over the world. together we can work end the scourge of violence that has taken so many lives here in
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israel, and around the world. most importantly, the united states and israel can declare with one voice that iran must never be allowed to possess a nuclear weapon. never, ever. and must sees its deadly funding, training and equipping of terrorists, and militias, and must sees immediately. on those issues there's a strong consensus among the nations of the world, including many in the muslim world. i was deeply encouraged by my conversations with muslim world leaders in saudi arabia, including king salman. who i spoke to at great length. king salman feels very strongly. and i can tell you would love to
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see peace between israel and the palestinians. many express their resolve to help end terrorism, and the spread of radicalization. many muslim nations have already taken steps to begin following through on this commitment. there is a growing realization among your arab neighbors that they have common cause with you and the threat posed by iran. and it is, indeed, a threat. there's no question about that. i thank both you and prime minister netanyahu for your commitment to achieving peace between the israelis and the palestinians. i also look forward to discussing the peace process with palestinian president abbas. young israeli and palestinian children deserve to grow up in safety, and to follow their dreams, free from the violence
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that has destroyed so many lives. the united states and israel can also bring safety and greater prosperity to our people through stronger ties of trade and commerce, already our two countries do a great deal of business together. we have a strong foundation on which to build an even closer trading relationship that benefits both of our countries. i'm going to try and narrow that trade deficit just a little bit. is that okay? >> god bless you. >> he wants to keep it the way it is. i understand. today we have so many incredible opportunities before us, and my hope for this visit is that we seize every single one of them. i am thrilled to be here on behalf of the american people. i know israel and america share the same goals and i have great confidence that we can achieve
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tremendous success together. we can achieve all of our goals together. president rivlin, i look forward to working with you, and to seeing more of the sacred land and getting to spend time with the remarkable people of israel. thank you very much. thank you. >> that was president trump. obviously. speaking with the president of israel in jerusalem. he's -- you gotta admit he's kind of funny at times when he'll -- right in a setting like that. >> very formalized, diplomatic setting. >> but that's something that he -- he's going to push wherever he is. and that -- >> right. >> right. and they always, you know, and then he always leaves it with, you know, it'll be okay with you, right? what's the guy going to say?
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you know. >> of course, he quickly says of course he'd like to leave it the way it is. not understanding that this will be discussed at some point along with the rest of their agenda. they're going to the old city. they're going to be visiting the church of the holy sepulchre, visiting the western wall and meetings later with prime minister netanyahu. >> let's bring in former u.s. ambassador to israel daniel shapiro. he served under president obama. daniel, good to have you with us. don't know how much of the speech that you caught. >> good to be with you. >> how do you think trump is doing so far on this trip? >> i think he's doing just fine. he's demonstrating a strong friendship, and commitment to israel's security. that's always important for any administration, any president by coming here so early in his term on his first trip. it's quite meaningful, and in his meeting with the palestinians, it's to try to move toward restarting peace talks between israelis and palestinians. that's going to be a tall order
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because we know how much distrust there is between both sides. we know there have been waves of violence, expansion of israeli settlements on the west bank. so palestinians and israelis are not necessarily ready to talk to each other but neither of them are going to want to say no to this new president who has a bit of an unpredictable streak and that may work to his advantage. >> so you actually think this could be a positive that he is unpredictable when it comes to navigating what has really beguiled so many presidents before him? >> well, i would say it could cut either way. obviously you need experience, you need knowledge, you need this. and his team is still getting started and learning the details and the depths of the complicated issues of settlements and jerusalem and terror, and refugees, and borders, and security. that's going to take time. on the other hand, i can imagine that neither prime minister netanyahu, nor president abbas, wants to be the leader who so frustrates president trump that the next morning he wakes up and sees on the president's twitter
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feed a nasty tweet criticizing him, that leader, for not being cooperative. so it gives him some leverage if he's savvy and effective in knowing how to use it. >> the president's already met with president abbas last month, i believe in washington, so what did we learn from that visit that we can carry over to his discussions in the region, and his efforts to -- to actually, you know we just lost ambassador shapiro, i believe. he was joining us from jerusalem. we'll see if we can get that shot back up. but again we were just talking to him about the president's visit to israel today. >> mm-hmm. well, i don't know, are we -- are we efforting? how's that? >> that's one of the worst tv words. >> isn't it just the worst. >> it only exists in tv. >> but you'll see people just at the end of the day, you see a lot of people -- >> we're efforting. >> looks like we're going to probably not attempt to effort that. >> it's okay because right now, all eyes are on today's top corporate story.
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>> going forward. >> a big shake-up at ford the company firing ceo mark fields after three years. let's get over to phil lebeau. phil? >> thank you, becky, we'll hear more details about why mark fields has been ousted from ford. that's coming up at a press conference at 9:45 this morning. we expect that bill ford, chairman of the company, he will be at this press conference. we also expect that jim hackett the new ceo is likely to be at this press conference, as well. mark fields removed after the board of directors met on friday. and if you want to know why jim hackett is taking over, take a look at shares of ford under mark fields. you have to go back to july 1st of 2014, since then shares of ford down 35%. so, what's jim hackett going to do and what's he going to say? it's unclear at this point exactly what he's going to say. but you can bet that there are going to be two areas that he is likely to address in some fashion today, and again this is our speculation based on talking with sources within ford, as well as with analysts and what they expect to hear. one of them is a clear focus on the growth plan at ford.
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where are they going to really drive the profits in the near term as they move towards the future? look for trucks to be a greater emphasis. and then how are they going to profit on mobility investments? ford has sunk a lot of money into autonomous drive vehicles, electric vehicles, and wall street has said it time and time and again and it is one of the complaints they had about mark fields' tenure as ceo, where's the money? where's it coming from in the future? don't give us some ball park of when an autonomous drive vehicle is coming, tell us how you're going to profit. finally shares of ford versus s&p 500 over the last two years, and this really shows you why there's been growing complaints, really, from investors from ford. they had their annual meeting two weeks ago and they were all saying the same thing, is the ford family aware of how bad the stock is doing? bill ford said at that meeting, yeah i know how bad the stock is doing and we know we have to improve and that is at the heart of the decision to oust mark fields, jim hackett who is the former steelcase ceo, and a former director at ford, and in
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charge of the mobility systems division, he will be taking over. guys, back to you. >> phil, jim hackett does not have an easy job. when you're talking about just going out and convincing the street things are better. things are better. well, you still need a plan that kind of lays out and answers all the questions the street had been looking for. >> right. >> in terms of profitability they were profitable in part because they were investing in some of these things for the future. >> well here's the issue for a lot of people on wall street, becky. they spend a billion dollars buying a.i. intelligence company, they've invested heavily and continue to invest heavily in autonomous drive vehicles but it's never been clearly articulated how that's going to be monetized and when shareholders will see the benefit. that's the frustration that a lot of shareholders expressed during the annual meeting. they were saying this is great that you're working on autonomous drive vehicles but when are we going to start to see the payoff? and that's going to be the challenge for jim hackett? >> all right, phil, thank you. very much. >> you bet. >> joining us right now on the
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"squawk" news line is jeff sonnenfeld, he is senior associate deal at the yale school of management. he is also a cnbc contributor. and jeff, you are used to corporate shake-ups like this. what do you make of this one? >> i think this one is really disappointing. it's a shame. three years is a pretty short time frame to judge performance. just it's not even three years, just short of three years, and i think it used to be we would give ceos a five-year time frame to see what they could do. and i think mark deserved that. especially looking at the track record. this is a board that should know better, and frankly, this is not the board. this is the ford family. and they should know better. >> how much of this is just the stock price being frustrated with the stock price being down? >> well, this is a problem with dynastic family wealth in a lot of companies right now we've seen it with the old publishing newspaper chains and others where the family's growing larger than the wealth is expanding. and as that is getting thinner they're getting anxious.
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and that capital we've seen it at dupont, at newspaper empires and things. it's a shame. they should have been more patient. this is a family that has less than 2% of the stock, maybe a little more than 1%. and, they control 40% of the vote. they could have -- they could have looked at the long-term, and the way forward program that mark pioneered, that bill ford rode and allen rode that was mark's turnaround plan. they didn't get projections, just like phil saying when are they going to make money on this new technology investment. people were pressing the same queue on the way forward campaign. mark delivered that over a year, almost two years earlier than what they were predicting in terms of returning ford to profitability earlier, he turned around europe, and you know i just think that it's a shame. you look at tesla, they're selling 70,000 vehicles, losing money. ford sells 7 million cars and makes money. coming off of the second most profitable year in the entire history of the firm. there's something wrong here.
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>> so what next? obviously the street is kind of the problem at this point if you're looking at this from the family's point of view, from the management's point of view, what next? and who do you think would be somebody who would communicate that message? >> well, you know, jim hackett is a very, very good guy. he did a fantastic job at steelcase and he's been leading this smart mobility program. he's not a guy who is undermining mark. in fact he was mark fields' ambassador to silicon valley. you know, you don't find many examples where somebody comes in off the board to turn over and run a major unit. i think the last one i could think of was jack welch getting silas kath cart of illinois tool. in this case he got a guy who stepped off the board hackette to run their new division and now hackett is put in charge of the whole operation. it's quite a bit. i think he's not known as being a big external communicator. mark was so gilded and gifted at
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that. i think it's going to be a bit of a stretch. and they're retooling their marketing operation the same time, and of course there are ripple effects in terms of who's in charge of what for operations with farley taking over marketing which i don't know how strong a move that will be. hopefully it will work out pretty well, and i, i, i, i just think that this is -- you look at companies, you know, think of names, allen coleman at dupont, claus kleinfeld of alcoa, mark fields, you could put together an incredible roster of industrial strength that's just been really undermined by this kind of short-termism. >> okay. jeff, thank you for your time today. it's good talking to you. >> sure. >> when we come back, charting the markets. we will talk technicals, ctig's katie stockton. you are watching "squawk box" on cnbc. i count on my dell small business advisor
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welcome back to "squawk box." among the day's top stories, huntsman and switzer land's clariant are combining forces. it's an all-stock deal. it will create a global specialty chemicals giant worth about $14 billion. the new company will be called huntsman-clariant and will be
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listed in new york and zurich. clariant makes aircraft de-icing fluid, pesticide ingredients and plastic coloring while huntsman's chemicals are used in paint, clothing and construction. what do you think of that name? >> very creative. >> good name huntsman-clariant. >> better than mondaleez. >> it is. an iraqi oil official said iraq has agreed to a six month extension of the opec production cuts. opec will meet this week to decide whether to extend those cuts and oil is at i think about a one-month high back above $50 up 62 cents today and the u.s. and saudi companies signing deals worth hundreds of billions of dollars over the weekend, as america looks to strengthen business ties in the region. of note, a $110 billion arms deal with saudi arabia effective immediately. commerce secretary wilbur ross joined us in the last hour to talk about the arms deal.
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>> it will take congressional approval in some cases. i don't think that's going to be a big deal. these are our allies. they're important allies. and these weapons, if you analyze them, are as much more defense as for anything else. >> among the other announcements, $50 billion of energy related deals from saudi aramco the price tag on these u.s. saudi deals topping more than $200 billion. coming up, talking technicals. btig's katie stockton will tell us what she sees in the charts. as we head to break happy ipo-versery. the joint made its ipo debut 15 years ago today. we'll talk more about that. ♪
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take a look at the technical aspect of the markets right now joining us is katie stockton. he's chief technical strategist at btig and the last time we were on, i think we were testing some near-term support levels that held, and you would think on the s&p we might get down,
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and go below. that did not happen. here we are back at 2381 or so, which is like the mid point of the recent range. and if we look, i don't know a six-month chart you'd see we've been treading water with the backdrop of all this political stuff happening. >> that's a good way to put it. treading water. it's essentially a consolidation phase. if you look at the s&p 500 it's taken the shape of a triangle pattern which tends to be an interruption in the trend, not a reversal of trend. so i think it's right to assume eventually we'll see new highs for the s&p 500. meanwhile there's room for a little bit more of a pullback i think. just to work off the short-term overbought conditions that have set in as of last month. so i think that's what under way right now. >> if we were to get down to that -- we're looking at the chart. that would take us down well below 2300 if we got down anywhere near initial support. do you think that's likely we go back under 2300 again?
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>> the initial support i'm looking at is about 2340 based on the triangle formation. secondary support is closer to 2280. i wouldn't rule that out. i think it's probably much more modest than that. and i say that in part because it reminds me a lot of 2013, where we really just saw shallow pullbacks and those were enough to refresh the uptrends. momentum is still quite strong. even though the rally has been criticized for having narrow leadership, the breadth is actually quite strong behind the market if you look at the advancers and decliners, things like that, it's actually quite strong so even if they're not as big of contributors to the gains, most stocks have participated in the uptrend which is a good thing. >> that's bullish. >> yes. >> and since the trend usually isn't disturbed by this triangle pattern you mentioned what's the eventual objective on the s&p? >> for a breakout to occur we need to see clear that the march high was final reaceance, around
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2400. once we get through that level the leveled move projection from that because 2640. >> this is -- it's like a fantasy. >> but 2400 has been huge resistance. >> it has. >> we could go way up to 2400 and then we'll back right off of it and that high was actually just 2405. >> right. >> we haven't gone too far. >> widely followed level and that kind of adds to its importance as a resistance level and would add to its importance if we see a breakout at 2640 is really assuming that same trajectory of the current trends, which is pretty steep actually when you go back to the november lows. so that's all -- >> you get the feeling that before we do that, we might test some near-term support levels? i mean that's asking you to get very fine with your projection. >> i tend to be short-term oriented. i'm looking for a test of perhaps that 2340 level and to me that would present a buying opportunity. i'd love to see on the sector front, rotation out of tech and
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into the likes of the industrials and financials which are far more oversold on a relative basis. i have -- a bit of a contrarian view on yields. i think yields will actually bottom in that 213 area and then resume higher. so i think that bodes well for financial outperformance. >> the 10-year. >> the ten year. >> all right katie thank you. quick summary. i have a pretty good feel, i think, right now. we'll see. >> good to see you. >> when we come back, president trump kicking off the second leg of his first foreign trip. council on foreign relations president richard haass will join us next right here on set. "squawk box" will be right back.
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♪ good morning and welcome back to "squawk box" here on cnbc. live from the nasdaq marketsite in times square. let's look at some stocks that are on the move this morning. general electric shares are higher in premarket trading. ge is among the companies signing new deals in saudi arabia over the weekend. with $15 billion in agreements involving power, health care, and energy.
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amgen shares are under pressure. the biotech company is not expecting its experimental osteoporosis drug to win fda approval this year. that follows a trial which showed a higher rate of heart related issues. big drop, disappointing for that company. networking equipment maker siena has been upgraded to buy from hold. the firm says ciena will benefit from improving market trends as well as new products and recent contract wins. >> ford firing ceo mark fields after three years at the helm. the company will hold a news conference at 9:45 a.m. eastern time. joining us now to discuss this move paul grasseo. paul, great to have you with us. what did mark miss in terms of -- when you take a look at the stock price of ford versus gm clearly ford is lagging a number of financial metrics. was it mark fields' fault? >> well, in once sense it was.
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i mean look he's the ceo and the ceo has to take responsibility for this. that's where the buck stops. you can't say it's all his fault but he's the guy that's responsib responsible. now i think if you compare ford with general motors across town, gm is doing a lot better job of deciding where it wants to play in the legacy auto business. so it can free up investment dollars to invest in the high-tech economist connected ride sharing future. you know general motors has gotten out of russia. it's gotten out of opal in europe it's gotten out of india, it's gotten out of south africa. ford hasn't made those kind of tough decisions and still envisions itself as really a global player. i think by contrast general motors has played its pretty smart in making decisions on where to invest in the legacy business but where also not to invest. >> right. >> that friesz up money for investing in the future. >> i go the way, paul, ford just officially announcing that it has appointed jim hackett as its new ceo. >> okay.
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>> it says to strengthen operations, transform for the future and so mark fields is officially out right now. do you think ford should focus more on its core auto business in order to -- i mean before talks autonomous, before it talks mobility, transforming itself to a mobility company which is what mark fields has done really consistently lately, that it should really focus on its bread and butter? >> i think it's been trying to do both. and i think the problem is it's hard to do both without making some decisions on where you want to play and where you don't want to play. i mean, honestly, does ford want to play in the luxury car space with lincoln? they say they do but that's a big investment. at the same time they're putting billions in autonomy, and connecting cars and all that sort of thing. so i think it really requires some very tough decisions, it says look we have a limited pool of capital to invest. here's things that we can do without, and here's what we're going to get our biggest bang for our buck. another interesting thing, i think is, you know, ford has now
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fired three of its last four ceos. jack nasser, bill ford jr. of course bill fired himself. alan mulally was not fired but now mark field was fired. it's pretty interesting, actually. >> i was wondering about the mulally legacy at this point, paul, and what you think. i guess the narrative had been that he really had ford set up to flourish, and he was able to move on at that point. is that true? this was all mark fields? or was that a loser that was really sort of on the precipice of doing really well? >> well it's hard to take anything away from alan mulally's turnaround job, joe. but look, you know, the stock price really started flattening out in alan's last year or so there and continued to get worse under mark fields. i will say that allen's stellar
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performance over those years gave mark a very, very tough act to follow. and the stock price just did him in. >> i think the further we get away from true detective the first year when matthew mcconaughey had all that goodwill, because he was so cool. >> yes. >> and now i watch it, and i do think, i don't understand these ads for lincoln anymore. i mean i used to give him the benefit of the doubt. but now i don't know. >> right. >> do you agree with that? >> well, i do agree with that. i think lincoln is a dubious investment for ford. now i understand the rationale that it will be big in china and that sort of thing but that's a long-term prospect. it really is. the other thing i think it's worth noting another person who's leaving ford today is ray dave the global head of pr. and on april 3rd put a post on his facebook page citing a study
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by an independent think tank saying that ford is now the global leader in self-driving cars. which i thought, you know, i know ford is very interested in it. and it's investing heavily in it but i'm not sure i'd call it the global leader. that was exactly the same day, by the way, april 3rd, that tesla passed ford in total market cap. so, you know, there was a little bit, i think of, you know, believing your own pr there going on honestly. >> what think tank was that? that's what i want to know. >> well it was out there called nagigant. i don't really know them. >> interesting to see where the funding comes from. paul we've got to leave it there. appreciate it paul ingrassia. >> coming up, coming up, something's coming up. in the meantime, becky, are we -- are we -- i think we're -- >> yeah i think we are going to take a look at some live pictures of president trump. this is on a visit to israel today. right now he's arriving at the church of the holy sepulchre.
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in the old city of jerusalem. they go from here on to the western wall. so this is just a series of places all within that old city of jerusalem. and they will be -- >> -- sitting u.s. president to visit the wailing wall. interestingly. >> all right, now coming up we're going to talk to cfr president richard haass about the president trump's first overseas trip. that's coming up next. ♪
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welcome back, everybody. president trump arriving in israel today. joining us right now to talk more about it is the council on foreign relations president richard haass. he's also the author of "a world in disarray." richard, thank you for being here today. >> thanks, becky. >> so far, trump is getting some very positive reviews of the trip as it began in saudi arabia, and now his move to israel. what do you think? >> well it's always good to keep expectations low. he stayed totally on script in saudi arabia. there was no freelancing. there was no improvisation. the saudis were determined to make this trip a success. and in some ways because he was not barack obama, he was a long way towards succeeding. plus he came out with a very tough line on iran which is exactly what they wanted to hear. and he wasn't picking on them. he wasn't basically saying you've got to change your politics, you've got to open up and so forth. so he didn't lecture them. he was tough on iran. and he wasn't barack obama. that made for a very successful trip. >> what is our relationship with the saudis and with so many others from the middle east at this point? how would you characterize it? >> well, come out of a difficult
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period. but it's still strategically important, saudi arabia still produces one out of every nine or ten barrels of oil in the world. they're our partner to some extent in the war against terrorism. and that's what the president really wanted to do was expand that zone of -- of cooperation. but saudi arabia is the most important sunni arab country in an important part of the world. and right now one way or another we're connected to them in yemen. in syria. throughout the region. and the real question is whether you can expand that relationship and figure out a way to push back against iran which is really seen as something of an imperial power. >> rouhani won re-election over the weekend in iran. what does that set us up for? are we on a collision course with iran at this point? >> it's interesting, a few weeks ago the saudi deputy crown prince who is increasingly emerging as the future leader of the country talked about the possibility of saudi arabia taking the war directly to iran. for the first time you had a saudi leader talking about direct confrontation. and they're fighting all sorts
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of proxy wars in places like syria, increasingly in yemen, united states is on the side of saudi arabia. so i don't think we can rule out. look, you were nice enough to mention the book "a world in disarray." it's possible the middle east could get worse. one of the ways it could get worse is an escalation of indirect and conceivably even direct saudi/iranian confro confrontati confrontation. >> but we can now, in the list of allies in fighting the war on terror, we can unequivocally put saudi arabia as an ally. >> saudis have come a long way from the days in which all sorts of saudi individuals were giving money kind of through the widows and orphans fund and all this money was ending up in the wrong hands shall we say. the fact that the king was talking about stopping the flows of money from individuals suggests to me a more assertive government. that said you've still got a third of that society that is either underemployed or unemployed. way too many young saudi men spending their days online. they are vulnerable. there's an argument that society has to change a little bit
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because it's as important as it is to cut off the flow of funds you've also got to cut off the flow of recruits. >> i know saudi arabia is trying to make this transition from an oil economy. we have an opec meeting coming up. what are they're solutions? what should they be doing in terms of cutting production, extending production? >> the transition to an oil economy, the so-called vision 2030, that's a long process. and you've got a lot of powerful conservative forces against it in this country. and to make saudi arabia a real non-oil based economy, you have to open up an education system, give women more opportunity. lots of pushback. i think in the short run, the saudis are going to try to hold the line on the production cuts, the problem is what's going on in this country is more than offsetting. i don't think opec, i don't think the saudis more broadly have caught on to the fact that this really is a very different energy environment. >> in terms of the u.s. saudi dynamic does the economic situation in saudi arabia change that dynamic at all as it's transitioning away from oil? we've seen oil revenues lower and lower at this point. so the view that u.s. is going
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to invest in saudi arabia and vice versa, i mean, it's even more important than ever before. >> yeah we'll have mutual investment saudi sovereign wealth funds will be investing here. we'll be doing things there but i wouldn't exaggerate it. the reason the president of the united states goes to saudi arabia is not because of high tech. it's not because of anything else except energy. and the revenues that that generates. and increasingly the strategic importance of saudi arabia. whether it's sunni, shia, iran, saudi, this is united states is essentially now hitched its wagon unequivocally to the sunni side. barack obama was interesting -- interested in developing ties much more to iran. he was thinking that the nuclear agreement might set in motion dynamics in iran that would make it a very different country. what i think donald trump is basically said huh-uh. we're going to be close to the saudis and the other sunni countries egypt, the uae and so forth. that is who we're going to make as our strategic partners here. >> you think that's the right decision? >> i think it's a little bit too one-sided unless they change more. i thought it was interesting the secretary of state did at least
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open up the possibility of having some communications with the iran. i think we got to be wary of iran. and rouhani's victory doesn't mean iran's foreign policy is going to change any time soon. but iran is a really capable actor. it's a real country with a real economy. i think we got to be careful about in some ways taking too much of our sunni partners and not taking iran seriously enough. in particular i'd be very wary of getting involved in yemen which has all the fixings of a southeastern vietnam. >> all right. richard thank you very much for your time today. >> thanks, becky. when we return, jim cramer joins us live from the new york stock exchange. we'll get his take on today's top stories, including the ousting of mark fields at ford. meantime take a look at futures. we're looking to open higher across the board. s&p looking to pad 3.5. nasdaq higher by 4 points.
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all right. some comments from bill ford. ford needs speedier decision making, a reimagination of the business model. bill ford said that the company needs hard actions to address underperforming parts of the business. and that the new ceo needs to re-energize the company. let's get down to new york stock exchange. jim cramer joins us now. how many times you try and turn
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around a company like ford, jim? i guess you can never rest on your laurels? >> no, i guess. i mean, look, as phil correctly pointed out, the stock price was at 17, it's gone down and down and down. and i know that mark fields, when you speak to him, mark fields is always throwing cold water on a bullish thesis. i tried often to say look, won't this second half, could it be very good? there were areas that were always underperforming. but you know what? he had a difficult situation. he was told to develop an autonomous car. he's told to be a worldwide guy. you do have peak auto in the u.s. and the u.s. is really where ford has made its biggest strides. so, it's kind of an impossible situation. i would have liked to see a little more time for the man. i think he was doing a lot of good things. i think he was doing everybody's bidding. so i mean, could -- >> -- an impossible time frame? >> yeah, i mean i just think that this is a huge company. they gave him a handful, the rest of the world kind of turned
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down in the interim, and i thought that he was doing his best and kind of making some strides. i was not surprised, because on the stock price. but everything else, i mean maybe look, if you just judge a guy by the stock price i guess he had to go. but wow, i mean the guy was a very forward thinker trying to do a lot of right things and i'm just surprised that's all the time you get in corporate america these days. >> my question was, was it really when fields took over from mulally, was it really in as great a shape as we thought it was in? or did ford go -- yeah he took over from mulally. >> yeah. >> was it in as good -- ford was prior to mulally, fired himself. >> it's a great question to ask. gm and ford are both really challenged. gm got out of europe. ford didn't have as big a position in some of these other places. i would say that mulally got out before we started thinking that autonomous cars were in the here and now and they just cost a fortune to develop. i think ford has to cast a slot
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with waymo. they need to be able to use waymo's blueprint because that's what fiat is doing and fiat is way ahead of everybody. >> all right, jim. we'll see you in about ten minutes. thanks. right at the top of the hour. up next it's been a long, strange trip for the grateful dead. a new documentary gets an exclusive inside look at the in iconic band's legacy. we better bring liesman on for this. we'll be right back. are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit and keep your lifestyle healthy. aflac!
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just came over to the house one day -- >> phil's house. >> we were trying to come up with a name for the band. >> and wandering around randomly. picked this dictionary. >> i just opened it up. and literally the first thing i saw when i looked down at the page, grateful dead. that's the first thing i saw. >> and that was a clip from the long strange trip, the first comprehensive documentary about the grateful dead. because if you remember anything you weren't really there. hard to find a documentarian for the dead. because you're having flash
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backs or something. anyway, its features a look inside their legacy, 50 years after the grateful dead's debut. joining us are the produce es of "the long strange dead." cnbc's grateful dead -- >> senior grateful dead correspondent would be the title. joe, please get that right. >> kid. but if you were there, you might have a hazy memory, right, no? you know what -- do you remember clearly? >> i remember pretty clearly. yes. i do. >> very clearly. >> how many concerts do you think you saw? >> enough to appreciate them. i don't count exactly. but i think it's an amazing band. the first time we have been able to tell a story about it. we took a really -- we didn't want to pin anything on what the grateful dead was. so we took a really approach -- kind of a wire type approach, a lot of people from the family kind of explained who they are. and then the audience can make their kind of assertation of what they think the band is.
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>> the director of the film who unfortunately couldn't be here, you know, the reason we won with -- went with him, he's an amazing storyteller. if you watch the film -- if you're looking for a concert film you'll be disappointed because it's a story about people. the way amir films he leaves it open ended. it's up to you the audience to think about what you think of jerry garcia, what you think of the band. deadheads like us. >> talk about how bizarre this whole thing is in the following way. first of all, you begin with an audience. 50 years after the band started of a hard core audience of two to four million people or something like that of deadheads that are out there today, five decades after the band began. that's before you ever get to perhaps attracting other people to this story which is just an interesting story of a band that lasted for three decades, when most of them break up after a single hit. >> i think the most amazing thing is that their story hasn't been told so the timing really worked out on this one. there was a line in this one
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where alan tryst, jerry garcia's best friend back in the day, he said don't do anything of the grateful dead. one of the biggest obstacle, in getting the people in was getting them to participate. the timing was right. we figured out how to do it with the grateful dead. >> why is the timing right? what happened? >> they just wanted -- i'll let alex to this, but they wanted to tell their story. we had the right team. alex, they know as well. the director as well. that was it. >> yeah, this is one thing if you watch the thing, you will see they never wanted a camera on them. they felt like they were just part of the audience. so what makes us any different than our audience? we are part of this audience, why film us? let's just enjoy the moment. >> how long did it take you to get access to the dead? did you have to court them for a very long time and what was that process? >> it was a long courting period. it is a lot of trust being build
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over a long period of time. it is a great filmmaker aher barlive. and martin scorsese came on board and after they got over he wasn't the director, they began to trust the team. >> you could have talked to liesman, couldn't you have gotten on board pretty easily? >> you learn in the movie which is what i have encountered knowing bob weir over the years, doing what is expected and wanted of you is the opposite of what they do in the entire grateful dead family. what you find out in the movie is that they try to make a documentary of them in 1970. and the band dosed the entire film crew can lsd. [ laughter ] so what you see in there is you see the shots of these guys that had never taken lsd before essentially doing in and out of shots. >> you guys didn't get that treatment, did you? >> no. >> i don't think anybody drank the water around the film set is the idea. but i wanted to talk about something else, which is a business related part of this. you guys came along and you have
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marketed this and sold this a completely new way. this is not a film going out to the theaters but it's kind of in the theaters, it's on amazon and you're doing something on the 25th, explain that. >> i'll let alex explain the amazon distribution, but we started as a 90 minute movie which elongated into the four hour kind of whole play. and we saw making of a murder happen on netflix and "the jinx" on hbo and alex let us go that length and let the director go that length and then amazon picked it up. >> yeah. we showed it to some traditional distributors, but mainly we looked at people like amazon. and we found out that they were the most interested and the not passionate. they really understand the power of this. they understood there's a build-in audience of deadheads, music lovers, scorsese lovers and find out about the film that it's really a story and not a
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concert film. and what really appealed to me, i didn't come into this to make money. it was really to bring the story to the world in a sense. and amazon has incredible distribution. on june 2nd when this comes out on amazon video, it will be in 220 countries. i mean, how do you get that distribution through any other channel? i don't know. >> and what's amazing is that when we go and look -- we'll do a theatrical starting thursday. it will be spread in one night throughout the country. friday, for the weekend in new york and l.a. to qualify for award season. then it's not box office we're looking at subscriber growth. so it's a whole new paradigm of how you're looking at success in the market. >> yeah. we already sold the film. we're done as filmmakers. >> you don't get anything extra for the additional -- >> no. a soundtrack which comes out on 26th, but that's basically it. >> you didn't get in this to make money.
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but was amazon willing to pay what they'll get out of this? >> i think we're happy with the deal. amazon is happy. it was a fair deal with everybody. the better they do, the happier we'll be. we just want to see this out there in the world. >> eric, alex, thank you. 9:00 coming up soon. "long strange trip" will be in theaters this week and make their debut on amazon prime. i know this was a labor of love for you. >> me too. >> an unbroken chain between all of us. anyway, make sure you join us tomorrow. "squawk on the street" is next. ♪ good monday morning. i'm carl quintanilla with jim cramer and david faber. a steady week with multiple fronts. the president in israel, the second leg of his overseas trip.


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