♪ don't carry me too far away good morning, everybody. welcome to "squawk box." i'm becky quick along with joe kernen and andrew ross sorkin. as investors prepare for a week dominated by the fed, look out, dow futures already 130 points above fair value. s&p 500 futures up by almost 14 points. it's all coming after you see what happened with the nikkei in japan. a gain of 2.7%. the hang seng was also up pretty handily, up by 1.2%. in the early trading in europe this morning, take a look and you're going to see where things stand right now. but again, with all these other green arrows around, you see some of the same things happening. in france, markets up 1.7%. the dax up almost 1.4%. our newsmaker is boeing chairman and ceo jim mcnerney standing by with phil lebeau at the paris air show joining us in just a moment live. first, andrew has a roundup of the morning's top headlines. good morning. >> good morning to you.

leaders of the world's most powerful economies are gathering in northern ireland for a two-day summit. british prime minister david cameron is the host, and he's pushing for countries to share more financial information. leaders there also expected to discuss differences on some of the big issues. syria's civil war, free trade between europe and north america and of course global tax evasion. we'll have a live report from steve sedgwick on the ground in the next hour. unions in turkey, they're on a owuone-day strike over the eviction of protesters from a park in istanbul. police and protesters clashed from sporadically overnight following a weekend of scuffles in the city. nbc's richard engel will join us with the latest in the next hour. also in corporate news this morning, a large activist investor in smithfield foods is pressuring the company to explore a break-up rather than go ahead with that planned $4.7 billion takeover by a chinese meat producer. i don't know if this is going to make joe happy or not, but "the wall street journal" reporting that starboard value says a

broken-up smithfield could be worth $44 to $55 per share, compared to the $34 a share offered by the company. also, we are going to do a little airlines now. boeing and airbus in for a dogfight for orders at the paris air show there. industry leaders are making billion-dollar bets on the next best aircraft. and cnbc's phil lebeau is just outside paris where the air show is, and he's got another first on cnbc interview. good morning, phil. >> reporter: good morning, andrew. and a busy day already here at the paris air show. just a few minutes ago boeing announcing an order for a couple 777s going to qatar airways along with a commitment to perhaps buy seven more. that's just one of many orders for boeing and airbus and busy day here at the air show. i want to bring in boeing chairman and ceo jim mcnernny. also committed to placing an order for the 787-10x.

give me your take on what you've seen so far. >> you've alluded to it. i think there's going to be a lot of wide-body action here. last year it was neos and maxs. this year it's wide bodies. boeing is competing with a very broad product line, 787s, and then up above the 787s, the 777s. and airbus is, with some new products they're bringing to the market, trying to sort of find a position in between us at the high end and the low end. it's going to be an interesting fight. >> reporter: you've got more than 60% of the wide-body market. you have long been the dominant leader there. but the question now is whether or not with the a-350 and you see airbus going after the japanese carriers who have been among your most loyal customers for the longest time, how confident are you going to hang on to japan and keep that from being an area where airbus makes inroads? >> well, we're highly confident. we have a product line that is unsurpassed. we've got more choice in the wide body space.

we have more new technology embedded in all the offerings. all the pain and suffering from the 787, phil, all those technologies are now moving to the 777 or moving to the next generation. derivatives of the 787. and so we're now maturing this lead. we're now reaping the benefits. we're harvesting the hard-fought gains of the 787 experience. and it's going to serve us well over the next two decades. >> reporter: speaking of harvesting the gains, you now want to harvest the gains you've made in terms of manufacturing, growing the profit margin. and you've made it very clear to your suppliers, you're going to need some help here. and they're going to need to come on board or else, quote, unquote, they're not going to be part of the team. what's been the response from suppliers? >> well, we're responding to a marketplace that is a more-for-less world. on the defense and space side, you can see the sovereign deabt and see the finances of most developed countries around the

world. i think a slow-growth economy on the commercial side, when you add up the global economy, there's a fair amount of pressure. we're just working with our suppliers to share both the benefits and share some of the pain of dealing in that world. and we're getting, by and large, a very strong response from our partners. >> reporter: i want to talk a little more about profit margin. carter copeland, an analyst with barclays, was asked about your profit margins. he said lots of companies enjoy profit rates that are substantially higher with far lower risks. maybe it's a cold wall street view, but the company, meaning boeing, has a lot of work to do to be considered best-in-class industrial company. this management is finally taking steps to do it. do you consider yourself best in class? >> well, yes. i mean, i think first of all, we're the largest aerospace provider, and we're the most profitable when you add it up. so we, in the space we're in, i think we're doing well. i think carter's point is when you include and compare our

company with companies in other spaces, he may see some shortfalls. he may see some gains. but the fact is we live in an industry that is a leading edge, high-tech, change-the-world kind of industry. and that doesn't always go as smoothly as you want it to. we love it, though. >> reporter: you've got the 787, as you increase production, where do you see deliveries coming in this year? i know officially you guys are saying deliver at least 70, but is it possible you're going to be eclipsing that? >> well, i think our guidance has been 60 or more. 60 or more. i think the interesting thing was, the battery incident has not impacted that guidance at all and will not impact our delivery stream because we kept producing as we went through the fix. and there could be some upside. i don't know yet. but we're confident we can deliver what we said we can deliver. >> reporter: and i know that andrew has a question back in the studio. andrew, mr. mcnerney is waiting

for your question. >> i don't want to relitigate the old 787 issues. one of the questions i have in retrospect, do you think that the faa was correct in how they approached the issue? meaning did they overstep? understep? given what you knew when you knew it. >> well, i think the faa and boeing share a view that safety for our passengers is the most important thing. and when you learn new information, you deal with it as best you can. and i think we would have liked to have seen the process move a little faster. but i think the faa did everything right. they put us through our paces. we reexamined the technology as we learned more. and we have a very robust fix and a next-generation battery system that i think is going to serve this airplane well for the future and other generations of airplanes. no, i don't have a quarrel with it. and i'm highly confident in the solution we've got in hand.

>> reporter: you now have it back in the air. and you've had no incidents reported to the battery fix that's been there. what's been the internal data, if you will, about the fuel efficiency? are you meeting the benchmark that you set out there with this initial delivery batch, or do you still need to string a little bit more out of them? >> no, actually, i think the data we've gotten so far suggests in a number of places where they've flown enough airplanes so that you can get a statistically significant sample. we're slightly exceeding some of the promises we've made on fuel and emissions. and so we're feeling very good about the performance of the airplane. and of course, the battery incident had nothing to do with -- nor did it impact any of these fundamental promises on performance and efficiency. the full promise of this airplane will be delivered and is being delivered today. >> reporter: i think joe has a question. joe? >> this is a theoretical question, jim. one of my favorite things is when i look at what your

deliveries are going to be in, like, 2033. and i see, you know, 20-year estimates for where the industry is going to be. should we look at those when we can't even decide next quarter with most companies with the visibility is? are those kind of numbers useful at all, or do you have a 30% confidence in numbers like that? >> well, you know, it's interesting, joe. when we look back at the validity of those estimates as long range as they are, they have been pretty close all along. and we've been doing this for 20 or 30 years. and they're not too far off. and the reason they're not too far off, in my opinion, is that our growth does not simply depend on the gdp's gret becaow because we're producing products that produce economics for customers that are compelling enough to replace what they've already got. and so when you have the promise of replacement economics that

drive productivity for the customers, you can be a little more surefooted if you have confidence in the technology about the kind of sales trends you have out there. it surprised me, to be honest with you, how valid some of these estimates were when we went back and took a look at it. i can't promise you for sure in 2033, but it's a better guess than most. >> i'm going to hold you to it. i just want to be there. >> yeah. so do i. so do i. i'll see you on the beach in 2033, joe. >> all right. i hope i'm, you know, not getting wheeled around. >> hey, jim, it's becky. i had a question for you as well. with the widebody, you mentioned fuel efficiency is a huge part of the advantage and even more efficient than you had guessed going into this. we are looking at oil prices that are spiking again, near $100. when you see higher oil prices, higher energy prices, what does that mean to you? does it mean that you're more likely to outperform? or more likely to get orders in the higher fuel prices go?

>> i think the way to think about it is up to a point, what you just said, becky, is true. slightly faster paybacks. the higher you go. until you get to a point where the economy's ruined. which who knows where that is? 150, 160. i don't know. but there is some point where the price of oil begins to impact overall economic growth. i think most airlines and most industrial concerns are sized for 100 to 120. so i'd say within that zone, the payback improves, and everybody's ready for it. that's one man's guess. >> okay. back to just the future, and i'm thinking about how much i'd love boeing to help china move their people around. they're moving, i don't know, 250 million people into cities. they're not all going to fly, but someday they're all going to fly and they're going to have the money. then i think how potent they are

competing in other areas, and i don't know if i'd sell them a boeing jet because i think they'd steal everything now that we see all the stuff going back and for with spygate or whatever you want to call it. that's a tough -- the landscape is very tough for you to navigate, i would think, but what a huge market it is. but i don't want them using your technology. >> well, we're mindful of the dynamic you allude to, joe. obviously, it's a market we cannot ignore. obviously, there is technology we want to protect. fortunately, we live in a world where the integration of thousands of technologies is what our game is. we're a systems integrator. and it's one thing to have identified through a blueprint how a specific technology works on an airplane. it's another thing to integrate thousands of these technologies into something that performs. and that is something that is very hard to duplicate through

any kind of industrial espionage or any kind of cyber identification. i think we're somewhat insulated there, but we're very mindful of protecting our technology. we also enjoy the biggest market share in china. we intend to keep it. >> jim, one last question. i know you have not formally launched the 787-10x, which is going to be the largest version of the dreamliner. but what's your initial indication -- how strong is the demand out there for it? >> the demand is very strong. the launch will be very strong. and you won't have too long to wait. >> reporter: jim mcnerney, chairman and ceo of boeing joining us on a day when they have announced a couple of big orders here in paris. guys, a lot more to come from here in paris. back to you for now. >> phil, thank you very much. and jim, thank you, too. when we come back, we'll head to london and check in with ross westgate. you're right, he is going to be excited. >> maybe even -- >> justin rose winning the u.s. open. >> maybe obnoxious about it. >> he may be.

and maybe he deserves to be. he's also going to tell us what is driving the early trading in europe today. you can see green arrows across the board. and then later, we'll talk markets and the fed. what should we expect from ben bernanke and company this week? a few answers to that question coming up at 6:30 eastern. then at 6:40, a topic important to joe and andrew. the big business of men's grooming. later in the morning, "squawk" will be called into session. outspoken senator mark begich of alaska will join us starting at 8:00 eastern time. stay tuned. "squawk" will be right back.

welcome back. we have green arrows. the dow jones opening 135 points higher, s&p up about 14 and the nasdaq up about 31 point. also making headlines, orchard supply hardware has filed for chapter 11 bankruptcy. and lowe's is set to buy the majority of its assets. orchard was spun off by sears back in late 2011. also, netflix has struck a deal this morning with dreamworks animation to provide original content for netflix subscribers. it's the biggest original content deal netflix has struck and involves over 300 hours of new programming utilizing characters from hit dreamworks movie franchises. that's going to be very big for them given what little house of cards did for netflix. did either of you watch "house

of cards"? >> i didn't. i saw "superman," though. >> and? >> my son love it hd it. >> yeah. >> that's not a ringing joe kernen endorsement. >> a lot of special effects. >> are you suggesting too many special effects? >> a lot of special effects. plus, the villain was the weird dude from "boardwalk empire" that used to whip himself. >> oh, yeah. yeah, yeah. >> settle down. the guy is beautiful. >> the lawman guy. he was the guy. >> he's not beautiful. superman is beautiful. >> no, i was trying to figure out, he was the lawman guy. >> he was beautiful. i kind of think maybe he could have spent a little more money on acting lessons. >> really? >> yeah. although he's so beautiful, it didn't really matter. you know, it did $190 million. so it was good. >> another beautiful man you're about to get to. i knew where your head was.

>> you are -- this is working. this is starting to -- >> i know, i know. >> because we are -- did you even -- you didn't audition. did you read at all for the part, eric, national weather -- think, you could go fly up there and look at what's coming. you'd be a much better weatherman. >> he's got the green screen. >> i've got the curly hair that can stick down on the forehead. >> you do. you do. >> well done, eric. >> i think they can give you a suit that will give you muscles and everything. probably. >> i've tried everything you can do. and that's not happening. it's not in the gene pool. not in the fisher gene pool, unfortunately. what are you going to do? how did you guys do at the u.s. open? you were worried about the u.s. open. >> it rained on us. >> but the rest of the weekend was okay. >> it was freezing. and yesterday was weird. philadelphia, it started raining, and then phil hit that beautiful shot in from 78 yards. and then the sun came up. and i said, it's going to be his day. and then it was not his day

again. eric. >> phil, he breaks hearts every time. he finds a way to somehow let it slide by. it's tough to watch. let's get to the forecast this morning here. out on the links around atlanta, this is one of the cities we're watching for you. we've got plenty of thunderstorms on the map, especially south side of the city. that's where the airport is. you're flying in or out especially for the morning. also big storms in oklahoma and texas, severe thunderstorm watches out until 7:00 local time. you see bow echo lining up from tulsa to northwest texas. that's going to continue to move south and east. dallas may be impacted if you're traveling there later this morning and early afternoon. more storms later on today. and some of these out here in eastern colorado affecting the wildfires. of course that's been such a big story. they'll be watching the chance for some additional moisture today. good news for most of the firefighters. so travel hubs today to watch, atlanta, dallas, denver, all dealing with some of those storms out there. maybe dealing with some delays with lightning in the area of all those major airports. and into the northeast, more

rain chances ahead. here today it's main lly interi northeast. philly, new york and boston better chance of rain into tomorrow and also on to wednesday, some record junes for rainfall are looking pretty likely as we head through the next couple of weeks. the tropics, we're watching this area of investigation in the caribbean. quite a few thunderstorms. there's a circulation there. not very low pressure but winds about 30 miles per hour. this may become barry, but it's headed over toward land. land chews up tropical systems. we're looking at a low likelihood at the moment but something we're going to keep our eyes on. joe, becky, back to you. >> all right. f-man. i'm trying to think of what to call you. as a superhero. but thank you. we saw wolf reynolds last friday, thursday or friday. >> he'll be back around thursday. >> he will? it's hard to keep track. i wish we could -- we like all of you, but we do have fun with you two, in particular. we're going to talk about what we just talked about, justin rose won the u.s. open,

claiming his first major. he closed with an even par 70. he was incredibly solid. >> he was. >> in the last five holes. the first englishman to win the event in 43 years. i guess ireland doesn't count. uk. not poland. we had mcdowell win one recently. we had another englishman recently. >> two or three in a row. >> yeah. we did have another that won the open. but not english. rory. phil mickelson carried a one-stroke lead before posting his sixth u.s. open runner-up finish. he was tied in this case with another guy who was so solid, jason day. mickelson and jason day tied for second. i thought that might be a sign. there was a real -- >> it was his birthday. it was father's day. he's played in it now 23 times. this was his 23rd or 24th time. >> it's shakespearean. if you recall, justin rose was

who phil was playing in the ryder cup, and rose birdied to win that match, even though he was down one going into 17, and that's really what swung the ryder cup. this was the last shot that just went by, and then he missed that putt coming back. he tried to make it. and because of that, he didn't finish. >> that was on 13. >> huh? >> 13 and 15 were his shots, right? >> there was the par 3 where everyone was getting birdies and then the other one, he hit the perfect drive. and then he didn't hit it far enough, and it rolled back down. watching that, it was like me standing on a ledge of 50 stories watching him try a sand wedge on the green like that. i could do anything with that. someone might die. meantime, in the nba playoffs, the san antonio spurs beat the miami heat. why is this satisfying? i don't know. 70% of the country wants the spurs to win. that was on grudge. spurs now have a 3-2 lead in the series. i guess that's hoping for the

jupd d underdog. >> plus you feel like it's from the heartland if you're not from an urban area, you're probably going for that. >> people in cleveland, the rest of the country identify with them. >> mad. lebron. >> you know, south beach is so happening. yeah. san antonio. remember the alamo as one of our anchors once said. among the headlines this morning, we have india's central bank deciding to leave its key interest rates unchanged. but policymakers did warn of upward risks to inflation as its currency sags. the rupee touched an all-time low to the dollar last week. >> really? >> it did. it did. ross westgate is standing by if l in london. we know you want to talk about rupees. >> rupees and rosy. >> yeah, he did all right. as you rightly say, the first englishman since tony jackland back in 1970. but the third brit in four years.

you know, it used to be the masters, we went through a period in the '80s and '90s. >> but hasn't won a major since faldo. >> an englishman, no, no. we can spread it out to uk. and ireland. >> now you like the irish. now suddenly. that's what it takes. now you're claiming them. >> when didn't we like the irish? >> i think it was the irish that didn't like them for a while. >> maybe. i don't know. maybe i'm wrong. wasn't there some weird thing going on between northern ireland and great britain? that's me. in england? >> what was it, 1998. >> if you're in northern ireland, you have a british passport. >> really? okay. >> yeah. >> listen. i don't want to start this whole thing again, believe me. i think it's finally better, isn't it? we'd better move on. >> it is. and the president was there this morning ahead of the g-8, is in northern ireland today. the president was there this morning speaking about that very fact, joe, as well about how much better things were than you could have imagined 15 years ago.

>> yeah, i apologize for that. rosey was so solid. i was trembling in the chair. and yet he was still able to pull those shots off. you know, we think it's easy to hit a 5 -- or we don't, but we watch these guys hit 5 irons 230 yards and go oh, man, look, he's ten feet to the right. couldn't he get that a little -- i mean, it's ridiculous what they do, ross. >> yeah. under pressure. and he played solid down the stretch. i guess that's what you need to do. >> yeah. looked up and his father -- >> phil's not far away from tying for number of seconds in a major. how many seconds has he gotten in the u.s. open? five? six? >> six. six runner-ups. >> right. so jack was runner-up seven times in the open. >> really? >> yeah. >> phil and tiger. but look at where some of the best players in the world were 14 and 15 over. how about ernie. ernie always there.

and dufner. i mean, that was exciting. i didn't miss a second. i don't know whether you did, ross. >> it was slightly more difficult with, you know, the time change and stuff. i tried to watch as much as i can. it was gripping. and what a great course. >> yeah. >> fantastic. >> everything's green behind you, too. >> it is green. talk about from the green to the green. 9-1, joe, advances outpaced decline on the dow jones. we've had four weeks of declines here in europe. the ftse down. this morning as we look ahead towards the u.s. open a little later, just up 0.8%. the cac up 0.2%. it's interesting when you break down the sectors, there's no decliners right now. so it gives you a sense that we are up -- resources and real estate. telecom up 2.2%. interesting story coming out in the spanish newspaper "el

mundo." it suggests at&t by the spanish government, was at&t, 80% of their revenues come from latin america. telefonica has denied that at&t were talking about an offer. nevertheless, it's got people a little excited. it follows other news surrounding vodafone. vodafone trying to look to buy cable deutsche, the german cable operator. at the same time, of course, people are still wondering about what happens with vodafone's 45% stake in verizon wireless. vodafone gets about $3 billion a year in dividends which they may chuck into cable deutsche. so the telecom certainly under speculation today as well. as far as bond yields are concerned, really it's all about the fed this week. so we might get a couple of days of less volatile trading. you never quite know with that. but yields are a little bit higher today. ten-year spanish yields just before the 4.6%. we hit 4.66%, which is a six-week high last week.

just below that at the moment. back to you guys. >> ross, before you go, you guys are apparently having your snowden moment this morning. i don't know if you saw this piece. i was wondering how it was going over there. "the guardian" reporting that the uk spied on g-20 allies? >> yeah. in the last g-20 in 2009, "the guardian" was saying that the british government eavesdropped on a number of calls and e-mails from other foreign dignitaries. i don't -- i'm not sure anybody -- is anybody surprised if you get 20 global leaders in one place, that the government hosting doesn't try and listen into what they're talking about? the surprise potentially is that someone's actually come out and managed to say it, maybe. >> they apparently were setting up internet cafes trying to herd you into the cafes so you'd use the wrong computer, so your communication would be -- >> nice. >> pretty good, right? >> i don't know. sounds like "q" probably came up with some little gadgets to

listen in, i think. >> if you're going over to the g-8 now in ireland, you're probably thinking -- >> got to stay off the phone. >> they tapped into satellite phones. you know, it was kind of interesting. they came up with some gadgets to do that. if you're at the g-8 today, your security services are doing a double check on everything. >> i'd just use it. if i thought they were spying on me, i'd spread all kinds of misinformation back through it. >> all right. thank you, ross. do you think, speaking of spying, do you think china has ever stolen any technology from us? i mean, that's laughable, isn't it, to ask that question. >> are you kidding? >> i had someone say -- >> someone e-mailed you? >> tweet idiots. and i don't know why. this guy's going to get blocked. so china would steal? really? china would steal? how rude! is this guy -- was he a -- if i were to say -- >> maybe he's being sarcastic. >> he wasn't. is there anyone who really

doesn't think that they steal technology? >> in the last round of discussions by obama. >> am i going to get sued for slander? >> i'm starting to think that every country is stealing. >> that's what i think, too. there are no good guys or bad guys. the difference in the past -- >> it's i.t. versus intelligence. >> right. you'd be snooping on each other's governments, but you wouldn't be stealing corporate secrets and engaging on that level. and that's where china's been different. >> when you apply for twitter, should not there be a question, do you hereby swear you are not a moron? shouldn't you actually have to put the check mark -- >> you don't even have to do that before you can vote. >> you're right. you don't. anyway. coming up, a live report from northern ireland where leaders of the world's most powerful economies are set to meet for the g-8 summit. plus, we have assembled a market duo ready to tackle the major question of the week. what will the fed do? what will the fed do? that's "usa today." i want to talk about this. >> fed may reduce bond buying.

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and with responsive, dedicated support, we help you shine every day of the week. wx, everybody. g-8 leaders are gathering today at a resort in northern ireland for a two-day summit. that's where we find our steve sedgwick. steve, good morning. >> reporter: hey, becky. let's continue on the golf theme. worry at a multimillion-pound golf resort in northern ireland, a great britain, i'll have you. david cameron is hosting the latest g-8 meeting. unlike previous g-8s and g-20s, i think the ambitions are more modest. cameron setting an agenda to

look at trade issues, tax issues and transparency issues. just going through those briefly, hoping for the start of the formal negotiations between the eu and the united states on some form of trade deal which could be worth as much as $100 billion each, 10 billion pounds to the united kingdom according to cameron. the french might be a bit of a stick in the mud on this one. they want to have an exception on their audio visual industries. they're concerned about french cultural identity, not for the first time. on taxation, this could be interesting. they want to stop evasion and avoidance globally as well. so clearly, if they get some form of concrete deal on that, that could have ramifications for individual corporations. and as far as transparency's concerned, this one is mostly focused on like the african nations, for instance, they want to know who the real owners are, rather than the apparent owners of various industries to stop money crossing borders without the authorities knowing exactly who's in control of it as well. there are concerns, though, that this meeting will have disputes

over syria. putin had quite a terse conversation with cameron yesterday in downing street. we understand that putin and obama will be talking about similar issues this evening local time just after 6:00 p.m. that's an issue as well. also concern about the broader economic issues. shinzo abe and david cameron as i speak are holding a bilateral and a press conference thereafter talking about the ramifications of abenomics which have created so much oscillation for the global economy. so a lot of concern on those big issues. concerning the relevance of the g-8 as well. it will be interesting to see if they can get something tangible out of this. i'll hand it back to you. to keep on the golf theme, what i've got behind me is a gentle par 3 and i think possibly this is right up your street. the only slight problem, it's on a little bit of a decline. if you don't hit it straight, you get straight into the water in front to the side or behind. what do you reckon, joe? do you think you could hit your ball onto the tee? >> i'm afraid to say anything, steve, because i think your government is listening to everything you're saying right

now. i'm uncomfortable with that. >> reporter: listening to every single word. >> have you seen any, you know, vans just driving around, just parked for no reason everywhere there? have you seen the actual secret service? what is it called? her majesty's secret service. >> scotland yard. >> reporter: exactly. james bond characters just about everywhere as well. i have to say, i've never seen such security at any event, joe. i mean, it's not just the president's in town. i've been all kinds of places where mr. clinton was previously, mr. bush and others as well. i've been to g-8s in it'dly, g-20s in france and your honor ya. i have never in my entire life sense as extensive security operation as the police by northern ireland. literally every street there is another white land rover and dozens of them. plenty of police. is this about protesters? is it about the fear of terrorism? because of course, the host town and this whole conference was the site of a devastating event

back in 1987. real concern on the security front. but in terms of what they're listening to, i think they're listening to every word. i think that's the delay on the line, joe. >> that's a beautiful backdrop you have, steve. and you know, those don't look like -- >> reporter: this building, that's actually where they're going to be meeting. we've managed to get some pretty good access. there's not many press that got this far. that building behind me -- well, i've got a really good producer. he's a canadian. the canadians don't upset anyone. as you can see this, four helicopters. i don't know if that's -- >> they're coming for you. >> reporter: almost certainly some of the dignitaries. they heard what you said, joe, about listening in. special forces. the sas. yeah. look at that. as i say, we've probably got one of the big leaders arriving. i don't know if it's the president arriving from belfast. it's about an hour and a half's drive for us mere mortals. we've got interesting activity. that's where they're all going

to be meeting. >> that might be the nicest day you've ever had there, too, isn't it? has it ever been like that before? >> reporter: i think there's a phrase that says lockhearn is in part of the year, the rest of the year in lockhearn. >> we've got to go. we're going to lose the feed. that was nice. beautiful, too, wasn't it? >> he didn't see "skyfall." otherwise he would have moved when he saw those helicopters. >> he would have dropped the mike and run. >> yeah. we're going to keep harping on this that they're spying. that's your favorite story. >> that's my story of the morning. did you see the facebook news and the microsoft, how many people are spying on us? >> the numbers of requests that they've gotten. it's something like 19,000 or 20,000 a year that they were getting at some point. >> total conversation. >> no, that's the phone stuff. this is the picking up all the information. >> microsoft in the last six months, 31,000 different accounts. facebook, i think 18,000

different accounts. 10,000 or 9,000 different subpoenas. those are real numbers. i don't know if you say as a citizen on a relative basis are actually low. or do you say in real terms, that's a lot. senator feinstein has been telling them that they should be releasing more information about the number of terrorist plots that have been intercepted as a result. she says if you know that, you may not have as many concerns. >> there's nothing that i've ever sent that i don't care if they look at. i think. i've never given a credit card or password or e-mail to any of those sites that you're on. everything i've ever seen is just -- you can access -- you can just access it freely, which scares the hell out of me because any 10-year-old can access those, too. i've seen things that i didn't even know existed. i mean by accident. markets ending the week broadly. >> by accident. >> whitehouse.com. >> you don't know anything about what we're talking about right now, believe me. you don't know about the things -- i'm telling you.

broadly in the red. now investors looking ahead to the latest buzz from the fed. joining us, chief market strategist from ameriprise. drew think it's not going to be till next year. are we overplaying the whole notion? i mean, the market does seem to be stalled around 15,000, 15,100 or so. we haven't made headway in three or four weeks. can it go high we are this looming? >> yeah, i think it can as long as the fed makes it clearer that they're nowhere close to doing this. i agree with the ubs point of view that it's not going to happen. >> that's the only way it can go higher, if the addict keeps getting his heroin? you wouldn't be long if we didn't -- >> yes. >> really? that's sad. >> well, yeah, the economy isn't showing you that it's robust enough to stand on its own

without the heroin. i think you need both right now. eventually you'd like to see the fed get out of the way for the right reasons, that the economy is improving. so far the data has been pretty choppy here. so we need the fed. and i expect them to make no change in policy. i expect them to say they're not near starting to taper. and i think the market goes higher starting on wednesday afternoon. >> meanwhile, you have been more bullish on the overall market. the economy. not market, but overall economy. why do you think they need to stay around for so long? >> well, i don't think they do. i just think they will. i think if you look at how they've been talking lately and how they've changed their tone, they're talking a little more about i inflation, another reason to keep providing stimulus. i don't think that's by accident. i'd also say that i think a lot of what you're hearing out of the fed is really just designed to increase uncertainty in the near term because what they don't really -- what they can't let happen is for the markets to price in the end game.

they can't let the market price in when tapering ends. they don't care if people know when it begins. if people know when tapering ends, they can figure out the pathway and all the smart people i work with can price that the second after it happens. it will be too disruptive. >> that's why the market is even reacting to the idea that tapering is going to come at some point. it used to be that you'd react to the change in interest rates. that's not going to be the case. when we think the taper is coming. right. the taper is the tightening, and that's going to be the thing that moves everything. >> why do you think that's a better alternative than less certain -- or more certainty but actually knowing exactly what the plan is? >> well, because you can never get out, right? if everyone can price things what you're doing, you'll never be able to exit. if you're priced in $3 trillion in asset sales over some period of time, you're stuck. and bernanke, i think, has figured this out and has realized that the reason people can do that is because he's telling them everything he's going to do. and sometimes, you know, you

just need the man behind the curtain to be the great oz. >> wait a minute. are you suggesting that all we're going to get is subterfuge this time around, then he's going to move and sell $1 trillion and then tell us he did it? there's no way to hide that, right? >> no, but what he can't do is say i've got these trigger points, right? >> right. >> hey, i'm moving away from unemployment. if you notice, inflation's falling. and by the way, if inflation continues to fall, maybe i'll actually buy some more, right? you just have to keep people guessing. and this whole idea that they can go up, they can go down, does anyone really think they're going to go up? >> you think they'll taper by the end of the year? >> no, we're talking about a q1 event. we have the lowest forecast on the street. >> and the highest gdp. >> yes. >> what is your gdp? >> we're looking for 3% next year. and the unemployment should be around 6.3%. >> what day did you say we're going to start going higher, david, again? >> wednesday afternoon. mark your calendar. >> wednesday afternoon. okay. very good. thanks. we'll have you back on.

thanks, david. coming up, we're going to talk about the booming business of beauty. this one's for joe. and we're not talking about mary kay. this is a new industry focused on men. and we might try out some of these treatments when we return. [ male announcer ] with free package pickup from the united states postal service a small design firm can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪

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inch welcome back to "squawk box." the business of men's grooming has gone mainstream thanks to shows like "mad men" and now "the great gatsby." joining us is chris, the president of keels to talk about -- i don't know how i got assigned to do this. joe, you're the one who always said you wanted some of this stuff. >> you're joking, right? you're joking? >> you're looking at me as the metrosexual. the metrosexual is over. do you know about that?

>> i understand it. it's like your hyperbole, joking. it's ridiculous. of course you're assigned to this. where do you live? >> new york city. >> do you have a car? you're on the bike program. >> you could use some of this stuff, right? >> when we take our makeup off, our skin is a little degree. no question about that. my question is going to be, do you have stuff as you rub it on it heats up? >> heats up? actually, i do. >> are you. >> you know where he's going. >> it's too early in the morning to go there. where is our audio guy? he is slow. >> men's grooming, on a relative basis to women's products, growing how much more? >> i think even through the recession, we saw men's grooming still growing in the teens when everything else was declining. it's because mem men have become so much more aware of their

needs, they watch requested mad men," looking at the great gatsby kind of effect in this company, feeling it's okay for me to use them as well. >> here's my question for you. this is a total practical consumer question. you have a product here for $60. what is it called? >> rows architect ka. i would put it in the pricing category, how does this xa irif you go to wall greens and buy that moisture riser, what is legitimately the difference? >> what are you paying for is first of all, we have been around 163 years in an apothecary in new york. we canvass the globe looking for the highest ingredient yevents for your 16. the combination of those efforts you see before you, the fact

that you are not paying for, the only thooim time we put things in boxes is when it's legally required. we don't add anything. we don't want to pass those costs on. we don't do advertising. the ingredient yens are within the products. what's the margin, the cost of this stuff? >> a fair margin. >> the thing is, a lot of supplemental stuff not regulated by anyone so that claims can be made, i think that's the problem with this whole business. your competitors are saying things that the faa doesn't or the fda, no one's looked at. >> it's been around a while. >> the new age stuff, you hear claims that none of it is verified. even half the stuff that gnc sells. >> you have to look at first of all what is someone claiming? we talk about ingredients like the product you picked up, that's an interesting into

irthat grows in bulgaria, you can die. so i think you have to lock at what can a product really deliver? there is only going to be so much. you can spend $66 or $500. >> they are playing the sound. thank you for coming in. we will have to talk more about this. kiehl's. ron: i'm never alone with scottrade. i can always call or stop by my local office. .

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>> this week's top story, a two-day fed meeting and the ball is in ben bernanke's court. >> our team of market play-by-play are ready for the fed's next move. g-8 leaders are meeting in northern ireland. meanwhile, in turkey, another night of protests and skirmishes. we'll have a live report from

nbc's richard engel in istanbul. >> taking flight. >> you want me to check the floit? >> why don't you czech it? >> battles at the paris air show. >> we are reaping the hard not games of the 878 experience. >> the second hour of ""squawk box"" beginning right now. good morning, welcome back to "squawk box" on msnbc. it's the first time in a week. anyway, take a look at the futures. we have good news. we have green arrow the dow jones up 22 poupt. the s&p 13 points up. nasdaq up close to 30 points. the headlines, president obama and other g-8 leaders are

gathering in northern ireland. prime minister david camm ron is leading a call for more sharing of financial information between countries to clamp down on the use of overseas tax shlters. will also be a big topic. in other news, apple saying it got between 4 and 5,000 requests for government data. facebook and microsoft made similar disclosers last week. the most common data involved lease investigating roshries or other crimes and searching for missing. the numbers should say with facebook and microsoft were higher, microsoft 31,000, facebook between 18,000. retailer lowe's is set to boy most of the assets of orchard supply hardware stores. follows a bankruptcy file spun off by sear's holding in late 2011. lowe's would pay $2,5 h. million in cash if no higher bids come

in. the feds will be setting a meting this week. our guest host for the next hour is phil orlando, senior portfolio manager at federated. also jason tren? nert, a research partner at s t statstrategus part first. gentleman, welcome to all of you. neil, let's start with you. you are our fed expert t. fed will be meeting this week. everybody will figure out what they signal. what do you think happens on wednesday after that two-day meeting? >> i don't think we will see a significant policy move. i think what ben bernanke will get across on wednesday is a sense that we will taper later this year, but don't think of tapering as tightening. don't think of whatever we decide to taper off bond purchases, that doesn't necessarily tell you anything about the total size of ge 3 or

when we raise short-term interest rates. doesn't mean we are done in terms of stimulating the economy. >> phil, if the fed comes out with a message that says, don't think of tapering as tightping, does that hold any weight with the markets? we had a conversation about how tapering is the tightening. >> two things you got to consider, the market over the last month has been focused on the fact the tapering will start wednesday afternoon. we think there is 0% chance of that happening t. reason is we are in the midst of a nine month economic downturn. the fed will start to taper apromptedly with an upturn, not a downturn. in our view, swens off the table t. flip side of that, which gets to your point, we, the equity market should embrace tapering as a positive. it means the first time in five or six years the economy is officially strong to be able thrive without this excessive

accommodation. so now is not the right time, eventually, this year, later next year, we think it should happen. it ought to happen for the right reasons. >> phil is right, wednesday is the day the tapering begins. it's kind of back in a minute in. is that why the market is up today, because if bernanke says anything other than that, the market sees it as a sign of relief? >> i think that's true. i also believe the market isn't as dependent upon the fed as it might believe. i think there are other things that are going on that are quite positive that have, that would actually support why the market has been up this 84. so i and i would say tapering, if you are still tapering, extending the size of the balance sheet, are you still easing. the prima faciprime, the pri ma sha, it's significant. i think there are other things going on here at the margin that are driving the markets.

there has been a big sector which seems a resector of the economy. >> when washington tries to come up with a budget. will be a repeat of what we saw if december of last year. there is no, nothing has changed since then? >> no, except the budget deficit will probably be around 4% gdp. on a normative basis, it's not good, no one will be line dancing about 4% gdp. it was 10.5% five years ago. so everything, the market, you know, the stockmarket is all about things at the margin. at the margin, some of these things that were big concerns in years passed are getting better. so i think that's really what the market is starting to focus on. again, there will be an ad judgment period, but i agree with our guests, my friends here, that the fed is not a major source of concern. >> neil the fed may not be a major source of concern, man,

this is going to be a big job that bernanke an company have to try and unwind what has been won up to this point, correct? >> absolutely this kind of hot house, all this attention on it. you go back to the joint exec committee a few weeks ago. bernanke was answering questions, doing his best. and the markets, you know, swing 100 points one way or the other, depending on the latest phrase he uttered. they'd love to put out their carefully phrased statement and have people judge. this is a moment where people want to know everything. people will swing based on the latest language is. >> in your opinion, discuss bernanke stick around for another term or is this unwind going to be left to somebody else? >> you know, he wants out. he's tired, all of his friend, people are close to him think he is ready to call it a day at the end of january, 2014, less than eight months away. i think he'll be asked about that on wednesday, i think he will keep playing it col. he doesn't want to be a lame

duck. he needs the make it clear that, you know, i'm the chairman until january 31st and that doesn't change depending on what happens with the next chairman. >> it doesn't change depending on what's happening with the next chairman. if the fed doesn't slow down with qe this year the problem becomes entirely somebody else's to dole with. >> that's true. i think that, said, if you are ben bernanke, you are leaving on january 31st. you get to the zoeb meeting. you haven't tapered yet. your job is not to let that color your view very much. your job is to make the best decision for the economy. whether that means you start the taper on the way out the door or not, are you failing the economy if you make that based on your own legacy rather than the economics. >> phil, jason, they will be sticking around for the rest of the hour. >> and unions now in turkey are on a one-day strike over the eviction of protesters from a park in istanbul. nbc's richard engel joins us from turkey with the latest. good to see you again today,

richard. >> it's a pleasure to be here. things are so erat nick this country. yesterday, if you had asked me how things were going, i would have been incredibly pessimistic, there were tear gas in the sky. now, if you lock around, you would have never have known there were any kind of clashes at all. except for today this new development, several of the major labor unions in this country are the declaring a one-day strike. they've supposed to be marching here in the city, maybe that will lead to clashes. maybe not. some services are slowed down. doctors are reducing their non-essential treatments. some of these labor unions, withry mostly private sector manufacturing jobs aren't working at all. it's a one-day strike. it's not likely to have a major economic impennsylvania. but it's hard to know where this is going to go. i don't think the protesters are even decided where, have even decided where this is going to

go. knack, they're meeting today, if they're going to decide if they're going to continue confronting the police, trying to charge here into taksim square with i has now been cleared of protesters or if they will be holding weekly symbolic protests or they will declare the movement over, which seems highly unlikely. the government is continuing to be absolutely dismissive describing the protesters as terrorists, as sab turs, people who are motivated be i the foreign media, that there is an international plot and conspiracy to bring down this q1. the government is being very dismissive. it's hard to know from where it is going from one day to the next. last night here and all around this area, there were riots. people were teerk apart scaffolding, setting up barriers, lighting barriers on four. now if you walk around, people are shopping. they're back at coffee shops and it feels like a different city. >> that is bizarre, richard.

so the government is no longer saying it's just people who had a few too many beers i guess. now they've moved on to some other calls cause, be you the root cause is obviously a lot more serious than any of that? >> the root cause is a long historic one in this country, which the country is the really divide between those who support the strong government, more islamic government, more traditional islamic values. they're backing erdowant. other side of the argument are more the secular nationalists, the people who have been ruling this country with the military support for the last 90 years or. so so it is a deep and historic divide. the problem is there is starting to be an us versus them dynamic coming from the prime minister. in his speeches, he says he's the prime minister for all turks, not just religious turks. he uses things like we are not

attacking, those people who are protesting. we are the good poem. those are the saboteurs and when you talk to the others, the secular turks, there is definitely a feeling that the government is attacking them. and when you have these divisions in society and that kind of dialogue, it does spell long-term problem. >> all right, richard, let's say we get a little bit of that done in this country ought kashlly. anyway, we appreciate it. good to see you. as we always say, with your history, stay safe, please. coming up, by the mortgage banker association on the bounceback now in rates, what impact tapering could have on the housing mark as we head to break, a look at the futures right now. >> welcome back.

let's look at smithfield foods, starboard value sent a letter saying the breaking up the company yould u would yield a value of 44 to 34 a sharement that compares for the a 33 deal that would sell it to china's sheng way holdings. you are thrilled with this news. >> my guess from porkopolous,

from zane st. xavier. you pa i to watch this show. now you are wondering why you are not getting paid, aren't you? it's a three-hour sentence, unfortunately. these guys are from cincinnati. i find out why it was called porkopoluos. in the 19th century, that's where the pork was produced. >> you need to protect the pork. >> it's in my blood. what are you going to do if you can vice president bacon? what if pork gets really scarce and they say, oh, no, our sweet and sour pork is much more important than your bacon? >> that's a big problem in this country. the other thing, being serious, hopefully, it doesn't, it's not a way if to start selling stuff back. >> right. >> you are okay with it now? >> i'm fine with it. >> were you always fine with it? >> i think it's good for pork farmers. >> i'm okay with it, too. >> it creates a stable market for them. >> sales were down about 17%

buus russia and china researches. >> why don't go over and try to buy pork producer, you wouldn't want a pork producer. go try to boy china. >> you are ha free market guy. >> you can't do it over there. i am free market. we got to make it fair. >> a different free market. >> one of the largest pork. one of the largest groups is phil continental graen. they're not pushing for it. here have you the activists, i money why, do we think the activists are going to do better? >> they are breaking it up. >> i think 40 to $50 a share better. if you think it exists. conte has been in there forever. >> what's interesting is they need that brand.

>> i don't know if there is value there. meaning i don't know if you can get to that price. >> in chosen. what do you know about? in there smithfields, can i say this on the air, smithfield is not the best managed company in the world. the idea that you are keep mismanagement and brake up the company and somehow get more value. >> okay. >> just between us girls. >> sorry, i have to say, when it comes to mna, i'm listening to him, not you. >> i would, too. are you the person that doesn't want to sell natural gas. we can be exporter. >> that's different. that's a natural resource. >> bake isn't not a failure resource? >> no. >> ribs? >> you can make more. >> pork chops. >> you can't make more. mortgage rates have been on the rise. means fewer americans are opting a refinance of their loans, david stevens is the president and ceo of the mortgage banker's association, he served as assistant secretary of housing and fha commissioner in 2009. i thought people were doing this

because rates were moving up, it was their lost chance, they're not? >> there was a little panic refinancing over the last couple weeks, overall, mortgage applications are down 28% from a year ago, driven mostly by refinance, purchase applications are up almost 7%, so, ye, i mean at some point, everybody has refinanced who can at 3.5 to 4sh, now we're a little over 4%, there is not a lot left refinanceable in the market. >> that shows you how sensitive even a slight backup in rates is and why so many people are paying so much attention to what the fed does. when we hear things leak this, that probably makes a fed hesitant to do anything too quickly. >> well, look, you just had a person talking about this on the previous clip. i think, you know, all bets are off when it comes to the fed. let be real at some point the fed has to stop convening. you can only buy your debt so long. mortgage mark, i keep telling

people, quite frankly this rise in rates is a seen of a healthier economy. we should by a plauding the rate increases as long as it stays within some sort of a stable rage. it's reaction. suddenly the markets move, we see mortgages overreacting. those are like those turbulent moments we have to be kog fisant of. at the end of the die, you know, we expect mortgages to level off around 4% by the end of the 84. that's still amazingly low interest rates. 4.5 by the end of next 84. so we got a great market to buy in, i think refinancing was going to run its course, for the nondistressed population, that's sort of where we are right now. >> i just wonder, the housing industry you would say can withstand any of this, it's on a solid footing at this point. it's not anywhere near it was, it's on a solid footing. you don't have any consternation about the next 12 months, it will show gradual improve him,

no matter what? >> we virtually expect gradual improvement. $590 billion correct year, stable, steady growth driven by still low interest rates and, you know, an international incident or energy prices or some sort of sudden shock to the system can certainly throw things off, but right now, we're on a stable growth for home prices and keep in mind, home prices dropped 35% from peak to trough during the recession. we're still at below peak levels in terms of home price growth, so there is a lot of room here, a lot of pent-up demand in the housing system. >> what should the downturn be, should you need an 800 score to get a jumbo? where should beon that? have we overshot? >> i think we're at the risk of overcorrecting. this downpayment thing i find interesting because you can control for low downpayment with

good quality underwriting. what got this country out of whack here over the last decade is we were doing no documented loans non-amortizing mortgage products to no downpayments. system doesn't work. can you do 3 or 5% downpayments if you control for credit writing, good fico scores. you don't have to make eight pairier to homeownership. you need to make sustainability the requirement to get in. i think that's where we need to be focused. >> real quick, what should the mortgage deduction be? what's the right number? >> look. they lowered it to a million dollars in total interest. that's not really appealing to a lot of people. i think this becomes a political argument. i hear people talking about not lowering it from a million dollars, it may be 750. that's not going to do anything to irs revenues. there is not a lot to be gained in that level. it focuses on too small a percent annual of the american

public. so the core heartbeat of american housing is between 100,000 and $200,000. that's where most of the interest deduction occurs. if you start cutting into that, uma may cut no housing. keep in mind that on the average home sale in america, that creates four jobs in about $40,000 in tax revenues for a community. so we need to be careful about robbing peter to pay paul. at the end of the day, if there's going to be real tax reform, serious tax reform, broad-based to lock at all the overall picture, mid should be in that, mortgage interest deduction. when houseing is one test beckest stories, i think that can be a bit ricky. >> david, we appreciate it. thanks for your time this morning. see you later. coming up, we will have more on boeing this morning. the paris air show and the outlook for the airlines sector when we return. oh, he's a fighter alright.

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>> welcome back to "squawk box." we will be getting a fresh snapshot of the housing sector. the national association of home builders is out with its monthly sentiment index expected to come in at 45 for june, that would be up in may. also in the news this morning, netflix has struck its largest ever original content with dreamworks animation. dream will be producing over 300 hours of original programming, starring characters made famous by movies like "shrek" and "kungfu panda."

finally, "man of steel" topped the weekend box office with $113 million in north american ticket sales. joe and his son helped with that a little bit. it was the biggest ever opening for the weekend for the month. >> 3d. >> what did you say? >> 3d. >> so four tickets. >> $51. that was before the popcorn. >> okay. we're going to geopolitical news now, protesters clashing with police overnight in istanbul, turkey. cnbc chief correspondent michelle caruso-cabrera johns us with more. >> let's start with turkey, violent clashes there over the weekend after they cleared the square in question t. video is pretty incredible. we can roll it any second new. you can see what was happening over the weekend. richard engel who was on a half an hour ago says it is quiet there, except for the fact there will be union protests. the clashes came after the protesters refused to leave.

they offered to have a vote and the kours decide on whether or not there would be the redevelopment of a park in central istanbul, it was the whole nexus, the beginning of the protest about 18 days ago. now, of course, it spread to issues related to the prime minister. it's unclear where this goes from here. the square has been cleared. one of the protesters do from here? we will have to see how it plays out. it is a big unknown. let's see what happened in iran over the weekend t. moderate ha san rwani won over the week t. slate had been approved by the governing country. he won by a far larger marginch he campaigned on the economy, remember the irani currency has been plummeting. in the past, he seemed more

moderate in terms of negotiations when it comes to iran's nuclear potential and attempts to be a nuclear power. this is a celebration in the streets after his win. president obama is in ireland for the g-8 summit. they will discuss syria. they were hoping to discuss tax evasion. they will try to figure out what to do over there. it was late on friday, the president decided they were going to provide arms to the rebels, not anti-warplane, anti-tank military, possiblies, no-fly zone at this point. a lot of critics say it's way too little too late. nearly 100,000 dead. we are learning from the gardian that said all the scoops from the nsa the g-20 sum the united states used these -- >> i know u.s. was in on this. >> apparently knew about it, yes. and were spying on members of the g-20. >> i don't know if they were funneling people into internet caves.

>> have some coffee. >> use our computer surface. >> exactly. do you fall for that if are you trading state secrets? >> you go to a gmail account from an internet cafe, how does that work? >> how do you have a choice? do i want to get on the hotel internet the only option, i asked people, please the secret service here are so lazy, they're not going to have the ability to cover you. i think it would be different in the u.k. i think they have a lot more staff to follow you. >> were you corresponding with sensitive information down there? you would worry about what you were saying in cuba? are you a spy? >> no, i was worried about saying stuff that would got me kicked out of the country. like it's a tyranny, it's oppressive. >> that would be a shock. they don't know that down there? >> it's amazing. we have freedom down there. it's all our fault. >> every car is like 60-years-old. >> and the american cars still run well the russian cars 20 years old are falling apart the

american cars are still running. >> wow, do you have any reservations? >> to leave? to go to one of these places? >> syria, iran, turkey. >> i would love to go to turkey. turkey seems to have calmed down t. price of oil is one thing. >> it's like one day -- >> one day is great. >> tear gas next day. >> having coffee. right. >> right. >> i like consist tear gas, joe, before i'm going to go. >> you do? by the way, it's a long flight. by the time you get there, have you to be able smell it, right? >> right, exactly. it hangs around for days. >> the price of oil hasn't moved on all of us, by the way, it's the only indication of the markets. you look at iran, you will be jumping into it. the states said they will be getting involved. will draw. >> russia, too. >> and watching that, you did see crude oil spiked almost $100. that's a part of our next conversation, joining to us talk more about currency and energy prices is mark chandler the

global head of brown brothers, and on oil, matt smith from snyder elect trek. matt, this is the story that has driven oil to these prices. if you watch what's happening in turkey, what's happening in syria, how this will draw in iran and others, how do you add this all up as a trader? >> well, the thing was on friday, there was a couple key technical levels around the $97 mark. those were broken. now, really, the, we're looking up at $100 and even higher. and this has all been driven, as you say, not by fundamental also, but geopolitically driven. turkey is less of a concern, obviously, syria is a concern with the recent escalation in terms of not just violence, be you in terms of armamentes supplied by the u.s., by russia. there is a net bearish impact as well. i believe there will be a stealth impact in terms of the election result in eastern. >> a bearish impact on energy

prices you mean? >> yes, potentially. >> more mod root? >> yeah, exactly. in comparison. there is, he obviously set a low bench marc there, in terms of diplomacy in terms of potential progress in terms of nuclear talks, this is something i believe is positive for easing the tension for and ultimately will have a moderately bearish impact on crude prices. >> so that means you see crude prices changing around what range? >> i believe they're going, the high last year sort of in may was about 106. we were 110 in february, 2012. that's probably the high we'll see this year, i expect. the low potentially, the 90s plus the 85s. we have been trading from may to 90 to '98, that has been a comfortable range. it's been geopolitical tension which popped us above that now.

so fundamental also, the prices should really be between the 90 to 98 range. >> it's a big difference from 110. where do you think we are more likely to be on that range in. >> the high end, unfortunately. >> mark, let's talk about the dollar, you think that 4x traders have gotten carried away with this fed tapering talk. you think it's too soon to get to that point? >> excuse me, yes. i think the fed will not taper this month in june, it will not taper in july, either. many are talking about september. i think consensus is now october. i wonder if not the fed doesn't do better later than that. i think this week, three things about the foc meetings, three components of it. first the statement, little change, maybe tweaking the worry about inflation. maybe not somewhat lower than the fedex pects. maybe they dropped the word somewhat. more importantly, it would be the federal reserve's forecasts. i don't think we'll see any sign, you know, acceleration of the economy from the fed's expectations. >> right now i think it's 2.6%,

the expectation is higher than most economists on the street. >> i think there might be tweaking down of the fed's growth forecast, maybe tweaking down to this year t. third component of the foc meeting is bernanke's press conference, there i think he tries to stress the fact that the difference between tapering a and tightening, not giving us any date, a few months he gave us in may. i think he will be very circumspect about what tuned i kind of genes he gives us about future tapering. >> phil, if mark is right, we do see the fedding hamper down its economic growth expectation, what does that do for the market? good news, ultimately, stay stick around longer? >> bad news is good news, if gdp estimates from the fed come in, that reduces the likelihood they will taper sooner rather than later. the inflation forecast, it was phenomenally interesting. the core pce the personal consumption expenditure index the fed's preferred measure of

inflation is 1 running 1.1% year over year right now. the fed told us their trigger is 2.5%. we have light years away from that. personally, i think the fed is more concerned about deflation and inflation than inflationary precious. >> bullard has gotten much more dovish than he had been before. he has been a hawkish member. he is suddenly sounding much more dovish. >> absolutely. the fed has this mandate in employment. if you have inflation, no inflationary concerns. so why would the fed taper, you know in two days? >> right. i don't think it's happening in two days either, jason. >> no, listen, i agree with phil, the inflationary expectation, other kind of very preferencetial indicator that the fed takes a look at. those have also weakened meaningfully over the last couple of weeks. so there is really little pressure on the fed. i tend to agree with you, there is more concern about deplation in some ways than inflation.

so there is very little pressure on the fed to do much of anything. it seems to me. and again, i this i bernanke, in my view, uses a football analogy has been calling audibles to the other side of the field. i mean, he's giving people a playbook. he's telling people exactly what to do. yet, there is a lot of expensive experts, you know, hammering about what everything, what is going to happen, but i think he's telling you 6.5% unemployment, 2.5% inflation. i think, all the rest of it, frankly, you don't have to make it as complicated as a lot of people seem to be trying to make. >> our guest hosts will be with us. matt, mike, thank you very much for your time. >> thank you. coming up, boeing is announcing new orders at the air show. with eheard earlier in the him practice, a recap of his comments and reaction from an analyst the one, in fact, we were talking about with him. that's next. (announcer) scottrade knows our clients trade

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>> taking the futures up 104 points on the dow, the s&p. >> down a little bit. >> a little bit t. s&p has called up 12, i'm trying to see where that would put it. >> we started the day, it was up 134, 135 points. >> s&p futures were up. >> basically between 1,600 and 1,690 on the s&p. you know which way it will break out? >> on the high side. >> the high side? >> yes. >> nice. >> i was on what i guess a few months ago, he hit our 16 full-year target. >> you raised it.

>> so my boss established a 2000 target on the s&p looking out 18 to 24 months. you discount that back, that would get us into the 1,700, 1750 neighborhood this calendar year. so we thought we'd have a little bit of a console takes here, maybe come off 5% or so, over the back half of the year. >> do you still do this, the targets, jason? >> we do. although our target at the beginning of the year was 1,638. which again didn't seem like much. it seemed-roic at the time -- it seemed heroic at the time. >> when did you raise it? >> we raised it probably at the end of april 1,740. >> april they were 1,600. >> right. the problem now, though, that if you are -- if you are discounting future cash flows by almost negative real interest rates, what's the proper multiple? i mean, phil and i could

probably come to within a pretty good estimate of where earnings are. the problem is, when you continue to have very, very low interest rates, everyone is flying blind as to what the multiples should be. i really think there aren't a lot of alternatives for investors. it's the key to the markets which i think are very much in play. >> we will pause on this conversation and talk about airlines. earlier in the program, we spoke to boeing's ceo who was opt mick about the zwret-maker's prospects. >> i think a slow growth economy on the commercial side, when you add up the global economy, there is a fair amount of pressure. we're just working with our suppliers to share the benefits and some of the pain of dealing with that world. we're getting by and large a very strong response from our partners. >> let's talk to a boeing analyst who is attending the paris air show this morning. carter copeland is covering global aerospace. go remember to you i want to set up what i think is the battle

going on in paris, which is what is the a-350 versus the boeing 77x. who is the winner? >> you know, i don't think there has to be a winner and loser in this battle. i think one of the things we find in the wide body market stood there is sufficient demand for the fuel replacement airm airplanes out there. i think the demands have differentiated enough from an investor's perspective, both companies can produce sufficient airplanes to make a lot of money. so i think the air show is going to see a lot of competitive joking with both boeing and airbus claiming they have the better product to address the market space, but i think both companies can actually come out with both products as successful investments for each. >> based on what you are seeing there, at the air show, if you had to buy one stock, which would it be?

>> you know, we actually are representing both stocks. i think right now, there is a lot of elements at beauing that we like a lot. manly, the lower rick profile associated with having the 787 be beyond the kind of development risk the a-350 still face, also the boeing company will put off a lot of cash flow over the next several years, they have committed to very high levels of capital deployment. i think in this interest rate environment, that really favors boeing. you know, as an attractive investment. >> typically, there has been a lot of military presence, in terms of some of the stuff that they show off there. this year a little less so? >> oh, noticeably less. i think we've got a significantly smaller number of defense executives, defense firms. i think the impact of in a budget pressures in the u.s. and in other nations around the world, mostly in the developed economies, you know, have the presence of the military

companies down pretty substantially here. said, you know, all of these companies have a pretty big emphasis on international sales and growth in international sales some we still do see a decent presence here, all looking to sell military goods into, you know, the growing defense markets in the world, which tend to be in asia and the middle east. >> carter, beyond military, just broadly speaking, given the international presence there, do you have a sense of where most of these planes are going to be sold? is there one area that seems to be hotter than the other in terms of interest and what they may say about the local economy? >> yeah. it's really interesting, you know, to say that, you know, is commercial airspace a proxy for the global economy? i think we are seeing a divergent marketplace where in the developed markets, where we have seen a substantial amount of replacement demand, much larger than normal, a bubble, to replace old airplanes with new more efficient airplanes. that has been the source of

strength and developed markets, where economies have been more sluggish. we have as you would expect, growth demand coming from all of the growing economies around the world, obviously led by china, the asia pacific. in places like the middle east and places like latin america and other areas around the world, we see a growth demand, a tale of two halves. within ear ro space, one of the things these companies are benefitting from is the fact that this generation of products in this fuel environment offers such a compelling value proposition that even though the economies aren't growing as rapidly as they once did, they're selling lots of airplanes. >> carpeter, we will leave it there. appreciate it. >> thanks. >> all right. when we come back this, mo, we will be welcoming senatorbook bark begich as our guest host. we will ask him about all of it. at 8:10, the ceo from the

paris air show will be back. "squawk box" will be right back.

>> take a look at some stocks to watch, smithfield foods, it is a tough on the day on this, activist starboard value says the company should be broken up. these people are patriots, really, rather than sold to a china firm. >> patriots? >> patriots? how about stick-up artists? >> man, we definitely have a

differing opinion here, sha na. these guys show up after the fact and decide it's enough because they have long-term investors. >> i tell you what, you go over to coin, if you can buy anything without sharing it and giving you all the information. >> i'm going over there and eat some bacon. >> don't do that until the smithfield stuff they have over there. the stuff they have now i don't recommend? cincinnati, it's fine. anyway, starboard puts smithfield's value at 44 to $55 a share. >> it has to. it bought in after the fact. hello. >> the $34 a share price. right. >> you want to talk about short termism? welcome right here. >> and you eat pork. >> i'll have a shrimp and a -- then i'll drink some milk. i get in a lot of trouble. >> you are a christmas tree, too, i don't know what you are. are you are an enig ma wrapped

in bacon, yeah. anyway, netflix struck its largest ever original contracting. >> it is trading up. >> now it's moving. what is it? >> i was going to say, they any nickel a share in a quarter. that's why maybe it's not moving. it's at $200. netflix struck its largest ever with dreamworks, based on the popular movie character. chevron downgraded at jeffreys outperformed the stock relative with peers if recent months, that's about it. >> phil orlando, jason trenner, our guest hovths thank you for coming in. wednesday is the big day? >> it will be a disappointment. nothing is going to happen. >> maybe the market will take a nose. >> absolutely, good news, bad news, bad news, good news. >> it's cable tv. it will be a big deal. >> scott pella says cable stv a

joeblg joke. i read that. >> anyway, when we come back, we will talk with senator mark begich. plus this year's fed meeting, likely to be a market mover. we will tell you what to expect when "squawk box" returns. th [ music playing ] e help the gulf recover, and learn from what happened .

senator mark begich of alaska. heal weigh in on emigration. we talk tourism with minnesota senator. and the ceo of dow component united technologies. the big question this week, what will the fed do? we will bring you a preview of the analyst's meeting with na shan sheetz. third hour of "squawk box" begins rit now. [ music playing ] >> welcome back to "squawk box" here on cnbc first on business worldwide, u.s. equity futures have been up all morning long,

still triple digits, barely now not 9982 on the dow. >> huh? >> that's close enough. >> we'll round it up. there were positive things happening in asia and in europe a. lot of green in europe. there's the hang seng is doing well. japan is rebounding a little bit to shanghai's. in europe, a lot of green, it was very green behind west rossgate. >> what is west rossgate? >> it's either. it's ross westgate. it could be west ross gate. >> that would be a good name. >> probably is one. let's talk about some of the big events we have been following this morning, president obama an other g-8 leaders are gathering in northern ireland with syria, free trade and taxes expected to dominate the agenda. they are trying to clamp down on the use of overseas tax

shelters. and in turkey, unions are on a one-day strike over the eviction of protesters from a park in istanbul. police and protesters clashed spore radically i don't have night. this follows week scuffles. but all of these protests began from. also in corporate news, netflix struck a deal with dreamworks animation. this is the biggest original content deal that netflix has ever struck. it involves over 300 hours of programming and movie franchises. >> the senate continues to work on balancing the budget, but how many senators took pay cuts or furloughed their staff in response? our next guest did. alaska senator mark begich is our next guest host the next hour. i'm trying to put everyone in a box we can understand. an alaskan democrat, i don't know what you are, you are more democrat than a republican. if you are, why don't you become

a republican? >> you know, alaska democrats are very different. we support development. >> anwar. >> and have great debates with guns. >> guns. >> we support the strong military up there. we're also -- >> that's because you can see when putin takes off, you can watch what's happening. >> sure. >> you can watch what's happening. >> from his window. >> you are experts on russia, because of where you are. >> it depends on where you are. the state is big. i have this thing about logos, i was looking to see if you included alaska and hawaii in the freight states. so many companies don't do that. so when we overlay alaska onto the lower 48, you lay it on in size, it stretches from california almost to the east coast from minnesota almost down to the gulf coast in size. it's huge. >> are you closer to a pelosi democrat or to a rockefeller republican? >> probably a rockefeller republican. >> you are? >> alaska is unique. i was born and raised there.

you live in a different world as i tell people all the time, a very urban city, you know, people don't get this about, i was mayor of anchorage with almost 300,000 people. you could literally walk a couple blocks from downtown, incredible hotels, go king salmon fishing. actually, catch real fish. real fish. then walk a couple more blocks, drop your fish off to get sliced up and ready and fileted and then walk up to the performing arts center, about a $100 50 million -- $150 million center. today it will be 84 degrees in anchorage, no humid. okay. is, actually on climb change, we are ground zero. i mean, we have -- >> but you have one of the coolest winters you ever have. >> coolest winters. we have reached records in our temperatures. >> we got all your cold weather and rain. >> we are balancing it out, finally. we're getting good weather, i

pine, right now, again, alaska is a very unique place. within i go back home, i sent my wife back home friday or sunday and they report to me. they send me their texts. my son says, guess what the temperature is here? guess what we're doing today. there is nothing like it. for us to say we're a democrat or a republican, alaskans like to say, hey, we're alaskans, these are our views. we have libertarians on the issues. >> you do, you see bloomberg, does bloomberg, have they done anything to you yet? >> not yet. >> planning on it? >> democrats have voted against, so he's going to spend, this guy is a billionaire in new york. >> yep. >> he's going to spend money on trying to undercut you in alaska? does that sound normal to you? >> no, i'll tell new alaska, one thing we don't like is outsiders coming in to tell us what to do. >> billionaire flying around -- >> expla plain to viewers what the argument is --

>> our arguments aren't stupid. >> it's an argument against guns, he literally looks at everybody, democrat or republican on the gun issue. >> for you and him it is. >> an argument against guns. it's not even, it's against guns in general. feinstein would have -- we should outlaw guns completely. sho would you. >> i would say that's fine, larkins, a new york mayor. >> he's going to try to get you not elected again. >> i would arc you this. >> he's a democrat. he's not -- >> senator, you can probably help him, bloomberg advertising. >> i would say to mayor bloomberg, why don't we focus on what we can do. for example, i've argue you hadded since day one on this debate in this country there are over 600,000 mentally, people who have been deem by the courts men toolly incompetentt. >> until they are 21? >> even the people over 21, if they're unstate law, 22 states don't report. 600,000 people in this country

right now should be in the background connection that are not. >> senator, do you understand this perspective comes from a very different place than where you are coming from. >> right. >> if you look at take two areas, three areas, mentally incompetent, deemed by the kourkts 600,000 people, under federal law, habitual drug users 1.4 current people that should be in the system. then you take, just let's just take the store that sold the guns to the mother in newtown. they did it legally. store had 500 atf violation, 500. they didn't pull the license until three weeks after we requested from atf information on us, the mental health. i proposed the bill, supported by not only the mental health providers nra and vice-versa. >> this was seen as the lesser of two evils from gun proponents at that point. can you brit up as a separate

legislation? >> absolutely t. mental health piece is critical. >> how would a bill hurt your constituents? >> i will give you one simple example. in rural alaska, if you never been. >> i have been. >> have you been to rural alaska? >> pretty rural. actually on my way to an island, so, yes. >> so you know it's fairly remote. if i'm in a village you and i are sitting there, we're neighbors, i want to sell you a firearm the odds the way it works now, i would have to get a back ground check from you, there is no gun dealing in that village. so i have to go online, which by the way is almost impossible to do in most remote vigils. we don't have high speed broadband. let's assume you do for a second, go online, pull down the form. you can't do it online with atf. you have to pull the form down, if it fill it out, mail it in and wait. that's not going to happen. that's not realistic for a person with a three, four month season, for example, aun hunting

season, they want to go out and do sure hunting. that's an example. universe am, i government you examples where the law today isn't even enforced. why don't we focus on what we can do. i gave you an example, 2 million people currently not in the system with two simple changes that i believe are bipartisan that can move us to deal with this. look at this latest case in california. the gentleman was denied background checks. he had mental issues a mile long. he built his gun. so let's focus on what we can do to have a direct impact. >> let me ask you a question. >> a simple bumper sticking sounds good. >> do national laws not make sense? here's the question. we're going, would certain things make more sense for alaska? but you can see, for example, in alaska or new york or new jersey orca. or other places making more sense in terms of that issue?

>> well, there's a lot of different issues like that. i can give you, i mean, for example, one of the issues, you know, if you want to talk oral an gas exploration. we have been doing fracking, for example, for years, decades, that's different on the east coast a. lot more debate, more populated areas. how you manage it is different. >> what is it that makes you a democrat? what are the issues that they can decide to be? >> i think the issues. >> aren't there certain thing about the democratic party that drive you crazy? >> well, yeah, and the republican party and the independent party. can i go through the shopping. >> what are the key issues that are you a democrat? >> here's the things that i focus on the you want to kind of say the alaska democratic view. it comes to labor issues. when it comes to individual rights, civil rights. as i said, we are libertarian. we have a streak. you talk about all the nsa -- >> do you think there should be public union? >> i do believe that. people should have the right to collective bargain. in mine, when i was a mayor.

wait a second. let me give an example. when i was mayor, we had 3,000 employees. 600-plus were nonunion. okay. the rest were. people in my view have the right to do collective barring nepg. if they say no, then they say no. but, as a manager, i'm going to tell you something, as a manager of a city of 3,000, to manage and have a collective baker anything agreement. >> they can give you a campaign contribution. then you can negotiate the next contract with them, which gives them. >> you know what, if that's what drives your decisions in politics. get the held out. >> you don't do politics very closely. another guy here. >> let me give you an example, within i came in as mayor of anchorage the first thing i didment we had a deficit, a heavy deficit. you talk about a problem. halfway through the fiscal year. so what did i do? the first thing i went to is the labor union, said you have to give up your wage increase, some of you were promised. and go to a wage freechltz they

had a problem with getting them to agree to it. actually utilize some of the media folks. i remember this, knocked on the back door of a tv studio and said, hey, i got a story for you, unbenoents to my communication director, i was on my way out of town that wevenlthd i said, i got a story four. if i do not get the wage decreases and freeze them, i will furlough them for a week. guess what happened the next monday? sat down, negotiated contracts. got what i needed out of it. the end result is i got people working and if you look at anchorage, uhl actually, business week, when the crash occurred, it was business week who cited anchorage, alaska one of the first citys to come back from the economic downturn. because we had a stable system. so bargain you can argue, education, i'm a public education person. i don't believe in the voucher system. we have an incredible system in anchorage, alaska, where you can

have a public charter school but it is public education is the key. >> you don't think there is any problem there? >> no, you got to hammer down on them. >> they're powerful, they elect all the democrats. >> i will show you time and time again where i've sat down with these groups and fixed out a solution. here's what happened. a lot of times. >> we will go to break. >> go make some money when we come back. >> we got i. we saw what we will do guns. >> we will do unions. >> we will do abox abortion, unions, gay rights. 23 will do all these things. we will do what we have to do immigration. >> i did notice. >> have you had an illegal immigrant in alaska? >> number one. >> anchorage alaska. >> number three. >> anchorage. >> number four, seattle, queens new york. we are the most diverse. >> how do you take up three spots? >> because we have ten strikes

we're small. it's very interesting data. >> the senator there with his own these, coming up, cnbc exclusive interview the ceo of dow component united technologies when we return. .

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box," 44 countries are gathering at the paris air show this morning. they are competing for new business and billions of dollars in orders. joining us is phil le beau. he has the ceo of united technologies, phil, take it away. >> thank you, becky. you talked about orders. a few weeks ago, they announced with the if you regional jet offered soon, it is securing an order for $300, including options for that regional jet and what engine goes on those jets? it will be the brandt whitney air turbo fan. a man happy to hear that news the ceo of united technology, louis chenevert, what did you think of that news? >> thank you for the opportunity. this would be a great show t. buzzer at the show is fantastic.

the launch of the new jets, if you are a fan, a truly game changing and efficiency in noise reduction. so this is a great day for us. >> we were talking about before han about consal days ago amongst suppliers. you are past the incorporation of goodrich, how much consolidation is left to go when you look at that supplier base? >> our acquisition has been fantastic. we announced im integration a year ago. the people have meshed well together t. savings for the customer are coming through. it's been a transformation like united technology. i think there is necessity for more technology in the industry. we invest a year in technology readiness and new product for our customers. you need to have scale to do that properly in future. >> you have a number of components on the new a-350 which made its first flights, when it comes to markets, that will be a big boom for you. what kind of buzz are you

hearing about the demand for wide bodies right now in the world? >> globally the demand for airplane is fantastic. if you look at 5% rpm growth driven by replacing of older plate as well as urbanization, so there is no doubt that long distance travel willing demand a lot more narrow body. we have a lot more content on the 350 an boeing 787. when all these customers succeed and there is good demand, basically our company and shareholders do very well. >> yet se same time, we are far along in the cycle, we see people say production rates are as high as they can get. you think there is room to go here. >> i think this will continue at this momentum, it will be decreasing demand, regional jets as well as wide bodied airplanes. >> a decade or two? >> people are urbanizing at a rate of 30 million people per year across the global. then the world wants to connect.

there is a good need for face to face, people want to travel. >> put this into perspective for audience, you have been there what now over 20 years. put this into perspective, how much more fuel efficient are the aircraft engines built today tan 15, 20 years ago? >> the latest generation, we've announced 16% better fuel than it replaced now. if you go 15 years, are you probably looking at somewhere around 30 plus percent better fuel efficiency, remember this better after the noise, noise is important for communities and airport. so this is truly game changing technologies. >> louis chenevert, ceo, united technologies, fresh off a big announcement announcing orders for 300 of these new jets powered by the pratt whitney air turbo fan enjens. guys back to you. >> it's great to have him on. i don't know if he has been on. that's a good relationship.

we hop you cultivate, phil, do what you got to do. keep it all above board. get him on here, bring him, willia? all right. coming up. >> i will. >> coming up. >> he says he looks forward to it. >> really? >> aye! >> open invitation. anyway, coming up, senator, we used to have -- george david on all the time, remember? the old united technology. >> yeah. >> anyway, what is that senator amy kklobuchar is joining us coming up. woe, that's your age right there. here's the former director of the fed's international financing. read between the lines. >> no, i didn't use that one. just the one. a lot can happen i. ♪ xecution,

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. . >> welcome back to "squawk box," everyone. "man of steel" took in $125 million in north american ticket sales. that was also the best ever opening for a june movie. it topped the $110 million mark set by "toy story 3" in 2010. sony's "this is the end" was

second, "now you see me" from lion's gate came in over the weekend. when we come back, we will have the latest state survey data and talk to nathan sheets about this week's fed meeting. right now, the equities futures have been up all morning, triple denl it gains for the dow. s&p futures up almost 12 points. "squawk box" will be right back. a talking car. but i'll tell you what impresses me. .

>> welcome back to "squawk box" him ahead of this week's big fed meeting, a run-up for the marks this morning. steve leisman is here anna than sheets, the former director of the fed's international finance division. rick santelli will joan us in a couple machine with the empire state survey. gentleman, welcome to you two on set today, it's great to see you both. >> glad to be here. >> nathan, we are trying to figure out what to make of the fed this week. you probably know better than anybody, what is the

conversation around the table? when they kick thing off tomorrow morning? >> i think the key question is about communication. at the jec testimony, bernanke was clear if the economy could u would recover, they'd taper at some point. my best guess is likely in september. i would think at the press conference, they willry-affirm bernanke's jec comments. with that said, i think they will put them into better context. specifically, i think he will emphasize the tapering is not a reduction in the quantity of stimulus. it's only a slowing in the pace of new stimulus. i think you will also emphasize that monetary policy is going to remain highly accommodating for quite a while. >> one of the conversations we have been having around the table is tapering tightening? the market certainly seems to think it is, the fed is saying,

no, it's not really. so do uconn vince do you convince them? >> the reality is that tapering is still adding to the balance sheet even bringing it down to zero would result in the fed maintaining a highly accommodative balance sheet and interest rates. so all of that is not tightening the question becomes -- >> it's not infinity. >> there's two things, first after all the question becomes, does the reality of tapering, which is still adding to the balance sheet overwhelm the expectation? in other words, they're still taking duration off the market. the question is, does that then take out the concern of the market that what's going to happen in the future? >> it really is the signaling of fact of tapering that's contractary. i think that's what you saw incorporated in the prices after

jec. i think that's what bernanke will try to press back on. we will be removing duration from the market. we will continue to put downward pressure on long-term interest rates. it's still a long time away before you need worry about hate hikes. >> nathan says everything is relinet on the economy. we have numbers that are out. rick santelli has those numbers what do they tell us? >> 7.84, better than expected. it is the best number since march 9.24 and february 10.04. en in the less, we are locking for an unchanged number. we did get a slight tradeoff of that, you know, interest rates didn't move on. that so not a lot of market movement. everybody seems to be continuing to eye the dollar yen which is trading under 95. not a lot of jbc volatility last night. several housing numbers, of course, this week, pay be somewhat enlightening.

the first of several important numbers this week was better than expected. it doesn't seem to have been paid attention to this early mon by many traders yet. back to you. >> all right, rick, stay here for part of this conversation, too. >> the details were not so great. new orders fell to-6.7. the employment gauge got worse. the number is better than expected. some of the details encouraging. >> we are looking to see what the fed says, if anything, if they change the economic goods outlook. i think 2.6% is where the feds are. that's higher than the consensus, steve? >> for the second half t. full 84, yeah. not the second half, most economists are looking for a pickup second half. >> i think that's right t. fed's forecast has been about 2.5% for a while. and most economists, including them, i think, are expecting 2% in the first half, which suggests something like 3% in the second. and it's important that anything they say about tapering is

conditioned on that forecast. and if the economy doesn't pittsburgh up as they're expecting, as i think we will see, they are continuing to expect, then there won't be tapering. it's all data dependent. >> i think there is a couple technical things, they're not on the fundamental issue the inflation outlook, which will be a part of the forecast we are getting, the extent to the which fomc pebs are concerned that inflation outlook is trenning down into a place that they'd be uncomfortable about. the second one on the exact other side. >> he didn't hear it. >> okay. >> on the exact opposite side, is the issue of the federal reserve going in an buying. >> i've given up. >> you've given up. >> i saw them say -- >> everybody says it. i think it occurred t. exact oranges you can't say opposite. it's not opposite enough if you just say -- >> because it's 180 degrees. >> 180 degrees opposite.

>> 1 european-and-a-half it's opposite. >> epped soically, you don't stop the battle. it hurt me, joe. >> i'm sick of this. >> let's keep fighting. >> what i want to say, which feeds you, right, it's the exact same argument. it feed noose rick's area of expertise the western of the fed that it goes in, buys an increasing share of the issuance of the treasury with the deficit and the needs for the treasury coming down, that the fed comes in. >> a bicker part of the market? >> i don't know if that's a trump card. in that that trumps everything, that the fed will feel like, wait. we need to do that, no matter what the needs of policy are. it's not. they were cool buying 100%. >> i think so. the key point, where it's different than mgs is there is an enormous stock of this stuff. >> let the pie flow, so to speak. >> if they're buying $500 billion a year of treasury, the issuance is $400 billion a year, they're cutting into the stock

by 100 become, i don't think that's creating huge distortion or huge risk to mark functioning. i don't think that will be a deal breaker. >> rick, we heard this from alan greenspan a week and a half ago, raising the possibility that, look the fed may be acting as if it has all the time in the world. now there are these stories about concerns with the bond market potentially rising up in europe again. i just wonder how much of a sense of that you get. how much it feels like there could be something on the move or if that is not something you see at this point. >> you know, i think all world markets and all major developed economies aed some extent to emerging economies, their interest rates affect the psyche of the relative safest. i disagree with a lot of the issues this morning in a subtle way. yes, it's about the data, it's the fed's interpretation about the data, a, i think they will move that goal post. the second thing is just because are you at a time where beanie babies are popular, you have a

garage full of them. you think, oh my good, i'm rich. they're going for so much money and i have a garage full, it doesn't mean that the overall sense, no matter how large of a position the fed holds in treasury, that is the key in my opinion. they could still see their value move a bit lower. everybody down here's favorite expression is tipping point. all the fed's activities are seen in a way that the marks can still come to some type of point that moves rates in a direction, counter to the fed's strategy and one last thing, call a tapering, calm it rate, calm it whatever you want. but on this floor, they don't distinguish between rates and less quantitativesing. it's different forms of tightening. they say it's all about the fed's liquidity. no matter what you call it when you move it, the market will at some point potentially penalize you for. the beanie babies the garage is the fed, now i think it's a

good -- >> i thought you seed rubine. >> beanie babies. >> marco rubio babies. >> i think the idea that the fed could, the price of bean fibabies could go up or down irrespect of the number in the garage. >> i think ten years ago, my kids used to have beanie babies they would hear about were huge money, everybody is paying hundreds of dollars for them, it's not true today. what changed? >> nobody wants them anymore. that's a different -- rick, thank you very much. steve, thank you very much. >> the expression of the flow of bean fibabies into the garage, pushes the stock of beanie babies in the granl. that's the debate we are having. i love to put nit beanie baby terms. >> rick, thank you, nathan, thanks for coming in, appreciate it. >> steve was the single-most important thing? >> the single-most? >> another one of the

single-most. >> yeah. isn't if there is only one? >> somebody has to do it, joe. somebody has to hold the for the down on language, otherwise, it will go off, will you say, lol, walk off. lmao. >> what's your forecast going forward? >> that's what you guys did it for her. >> bear out through the nose. botn. okay. it's time to talk a little chinese. we will talk bacon. we will talk chinese bacon no less. activist, investor starboard value is lobbying smithfield floo foods to explore a breakup than go with the planned sales to a chinese meat company. joining us is starboard's jeff smith. he sen at letter to smithfields today. good morning, jeff. >> good morning, how are you? >> let's walk through exactly what are you suggesting here. i know you want to correct the record on one issue, i believe. we were e-mailing ab this

before. why do you think this company is worth more than the current deal on the table? >> yeah, andrew, i think, you know, we have been looking at the company for a while. we had a position before the announced merger. just to be clear, our letter isn't meant a to get the company to stop the transaction in and of itself and we're not necessarily against the transaction. we just believe that the company didn't necessarily look at the alternatives of selling the company in peas as opposed to selling the whole. >> and so your suggestion that the company is worth $44 a share, if not more, comes from where? this is the second worst performing food company in the country. >> yeah, but isn't that a part of the opportunity, andrew? >> i could argue, it's a part of the kun opportunity, also one of the great challenges. what i don't understand and i made maybe a flippant remark earlier, you did get into this transaction, initially my understanding is you also bought a lot more afterwards, no? >> sure.

that's absolutely correct, andrew. to is issue here isn't necessarily whether this transaction provides better value than if it were a stand alone company. we're not looking to make the case that the deal should be broken up, the company should operate stand-alone. in fact, that's kind of what's happening today if the merger goes through the existing management team will operate the business. >> you want to kick out these managers? >> we don't want to do either of those things. what we want to do is to determine whether there is more value to be had, if the company were sold in pieces. unfortunately, or fortunately, there is a deal on the table already. so, there has been a price set, with i is $34 per share and today the only way that that deal can be overcome or more value can be had for shareholders is if there is a secure proposal. the challenge is, we've identified and had conversations with some and we believe there are many others that are

interested in the pieces of the company for what woeld add up to more value than the whole. >> the two other big bidders for this company have walked away, why do you think they've done that if there is so much value here? >> again, andrew, we are talking whole faen company bids. the difference we have saying is there are interesting parties for the pieces, if you add them towing even after considering men maltax leakage, you get the substantially higher value. >> can you explain why conte group, one of the larger shareholders, which pushed for this initially have walked away in in there we have a lot of respect for folks over at continental grain, just because this deal is good and certainly better from where the company was stayeding on a stand-alone basis doesn't necessarily mean it's best. so from our standpoint, again the only way we believe you can get to a substantial proposal here is if there is some way to piece together the buyers of the pieces.

so someone has to be able to stand out and say, hey, we own a large stake in the company. if you have interest in pieces of the business, contact us. and if we can put you together, if we can marry the components together and that slekt collectively creates more value per shareholders, that's something the company would have to consider. would be a secure proposal. >> we got to go in a sec. you alluded having talked to potential buyers. can you tell us what those buyers and the pieces will be? >> it's a detailed letter. >> the buyers, though. >> we have not disclosed to the potential buyers who some of the pieces are, we continue to speak to them and others, i don't think they would like their name disclosed unless and until we put the whole package together. >> you would suggest those. >> our capacity as a large shareholder with a large economic interest in there you would suggest a hard ask out there? those are real buyers? >> there are some real buyers, more interest every day. i received more this morning.

there is interest in the pieces. we don't believe the company necessarily looked at doing it in that manner. we believe, if there is enough interest in the prices for enough value then that would be in the best interest of the shareholders. >> is there a banking division? i might -- what about pork chop? because either one of those, i'd like to put together. >> especially the bacon side of things. >> listen joe, if you have a dollar menu you want to put on the piece, let us know what you want to buy. >> you didn't split it up into a bacon's division. >> there is a package meats division. >> starboard jeff smith, thanks for calling in this morning. appreciate it. coming up, making america a better place to is have it. things you know about. >> i don't know about much. >> emanates a couple questions here and there. >> wasn't he good? thank you. up next, minnesota senator, dynamite. zblo now you will hurt me here. >> who is --

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dynamit . trillion in economic output in 2012, could we be generating more with visa waiting times. joining us to talk about the effects on the u.s. economy. senator amy klobuchar, the vice chair of the joint economic committee. we appreciate you coming on. >> i am doing well. >> the whole time during break,

they were trying to butcher your name. >> it's a slo vennian name. can i have one word? klobuchar as they say in the iron ranks of minnesota, chloe butcher. >> excellent. >> i would note that is where mark begich's relatives are from. our dads grew up 20 minutes away from each other. >> amy, tell us, in terms of decreasing the visa wait times, what is it now, what does it do to the economy? >> well, it varies by company, 16% loss in the international tourism mark since 9-11. every point we gain back is 76,000 jobs in this country. that's why it's so important. one of the things we realized five years ago, if you are in shanghai and want to come to america and spend $5,000 another the malls of america or bloomington, minnesota. >> or travel to alaska. >> you want to do that, it would take you 95 days for a tourist

destination. three days to go to london. we have been working on speeding up the time. we gotten some improvements. brazil down from 100 days to two days. every point we campaign back is 76,000 jobs right here in this country. with the immigration bill, we've included the got book, which we have been involved in as well as senator rubio and schumer. it sets guidance for the secretary of state for how quickly they have to get these done. it is a profit center for the government. not only does it bring money no business. it also costs a lot to get a visa. not for our citizens. and so it's actually a profit center for the government and the more work we can do the more we gynejobs and money. >> you alluded to the immigration bill. is it going to pass? >> i truly believe it's going to pass. you look at the momentum. senator ayotte is getting on board. i'll excited about the bill.

it means more adventures, more signs. i called grove norquist as a witness to do that. he said it reduces the debt. it reduces the debt by bringing more jobs and people into this economy that can make things. >> senator, we have been talking a lot about the fed, with the meeting tomorrow that ends on wednesday, the market is focused about t. last time ben bernanke was before you, you asked him about the dual mandate and would he do anything differently if he no longer had that dual mandate. which is worrying about inflation. it didn't seem to me as if he gave you a clear answer on any of those things. what do you think? how do you think the fed has done? >> well, i think when we're at 7.6 unemployment, everyone knows that's not wherewant to be.

i know they will be deciding what they will be doing with that. overall the within i ask the question there are some people that want to eliminate one part of the dual mandate, they think we should do that by statute. i don't think that's a good idea. i was mandate, it's not that they've gotten better results than we have, and i think he pretty much sent the message he didn't want do something sudden to create a sharp contraction in the economy, he didn't think congress should do that, but congress should be doing its job bringing the debt down and doing more things to foster jobs. i thought what he said made sense because he was basically saying we only have so many tools, we're trying to be responsible but you've got to get stuff down on a bipartisan basis. >> appreciate your time. >> great to be on. have fun. >> yeah. we're trying to have fun, right? made you laugh, but it was okay. >> it was good. she gave definition all ways. >> we got a million different

ways to say it. >> sob people pronounce it klobuchar. >> got to be northern minnesota. >> like fargo. >> start week off right up next jim cramer on stocks to awatch ahead of the opening bell. a better life for your family, a better opportunity for your business, a better legacy to leave the world. we have always believed in this pursuit, striving to bring insight to every investment, and integrity to every plan. we are morgan stanley. and we're ready to work for you. are proven to be effective pain relievers tylenol works by blocking pain signals to your brain bayer back & body's dual action formula includes aspirin, which blocks pain at the site. try the power of bayer back & body.

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jim cramer joins us now. i said netflix earned a nickel but that's not their run rate. about 40, 50 cents a quarter. i did the math. give them five quarters a year. say it's $2 a year. it's up ten bucks on this today. where do you stand on that now? is it -- >> this is a stock that is love by youth, joe, and i don't have youth in my pocket anymore. but i think that people believe that netflix is either going to be taken over by someone who definitely needs the 29 million subscriptions or it is just every bit of good news verifies the fact they're in for the long haul. this move started with the disney deal, when they were at 70. i've got to tell you, joe, it's one of the most magnificent short squeezes, even more exciting in some ways than tesla. >> so that -- there were some other stuff in that.

but on the day they did report a nickel, i forget how much it was up that day, people at home that aren't experts and don't do valuations, you know, a nickel a share, $220, that seems weird, doesn't it? >> i think it's an enterprise valuation situation. said apple wanted to own it because they wanted to social and media oriented it could be done, microsoft could do it. both companies are set in their ways. microsoft did buy skype, they hadn't monetized but it's not not dead weight. you can quickly get 29 million subscribers refinance the debt and have a powerhouse when it comes to entertainment under your roof. it is not happened yet. what the company's saying is, hey, what we're going to take over the world, i can't get away, i can't -- i can't refute it. this story can't be refuted. >> jim, real quick, bacon news, a view on smithfield's?

>> i listened to that interview, thought it was very interesting. i think the chinese get it. >> we'll leave it there. >> we're all the poorer for that, jim. hopefully not. anyway -- >> thank you, guys. >> see you later. when we come back, our guest host has been senator mark begich. we are going to give him last word when "squawk box" returns. ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. hurry, before this opportunity cools off.

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let's get back to our guest host, alaska senator mark begich, for the last word. senator, we have not talked about the budget but last week senator corker told us things have not really changed, we're facing the same problems we faced laughst time around when talking about budgets and where they go. >> i'm not sure we'll face the same battle on debt issue, the republicans, especially of the house, learned their lesson you don't use that as a tool. it's a high risk. >> the senate is beginning budget at presequestration levels. >> the differential between the senate appropriations and what the house has, about $100 billion differential. you get there? the two appropriation levels are talking. maybe that's not the big news, because they're talking and

figuring out a solution. senate passed a budget. the house passed a budget. people like me were banged on for three years saying pass a budget, we did. no one wants to do it. why? it will be in public. >> thank you very much. >> thank you all very much. >> a lot of fun. gin us tomorrow, "squawk on the street" begins right now. good morning. welcome to "squawk on the street." i'm david faber with jim cramer and scott wapner. the fed is taking center stage this week, and the act this morning indicates investors hope the central bank wasn't pare back on stimulus in the near term. how we'll star the day or a sense how it's going to hope for us. green across the board and a significant rally, at least, at the open, at least indicated thus far by those futures. how did europe do? that would be important. a lot of green on