for brazil. will this dramatic defeat actually cause political unrest for the brazilian government when the whole pride of the nation is all astink on one team? it's a little bit strange. that's what we have going on here, it's wednesday, july 9th, 2014, as "squawk box" begins right now. >> i still can't get over that match. good morning and welcome to "squawk box" here on cnbc. i'm michelle caruso cabrera along with joe kernen and scott wapner. becky and andrew are off today. stocks are coming off a second straight down session. the s&p logged in its biggest drop in nearly one month. however, the futures this morning are suggesting a positive open, albeit a slightly positive one. the dow would open higher by roughly 20 points. no economic data on the docket today. however, we will get minutes from last month's fomc meeting. that release set for 2:00 this

afternoon. some economists are cautioning investors to remember that this fed meeting we're going to hear about took place before june jobs numbers were out. meantime, the start of earnings season is always a driving force for the market, as well. scott has the details on some of the first reports. >> alcoa beating the street on the top and bottom line. the company says it saw strong results in its engineered products business. meantime, it's looking to cut costs. shares are up nearly 40% so far this year and out after the dow last night, results from the container stores. the company posting a better than expected loss and lowered its full year guidance. the ceo pointing out what he calls, quote, a retail funk saying the container store and its fellow retailers are experiencing slight traffic declines in what he describes as a surprising tepid retail environment. shares down sharply in extended trading. a mixed story for bob echts. the food earnings beat expectations, but revenues fell

a bit short. the company cut full year guidance. bob evans is defending itself against activist investor sandell asset management which is pushing the company to split up, and buy back stock. citigroup reportedly nearing a $7 billion settlement to resolve a government mortgage probe. that announcement could come as early as next week. officials have been probing whether the bank defrauded investors on mortgage securities in the run up to financial crisis. joe? >> thank you, scott. >> you're welcome. >> you are welcome. what the hell is the container store and why do i care? what do they sell, containers? >> don't tell me you've never been in a container store. >> a retailer that could only work in america because we have so much stuff. >> that's a microcap, basically. what do they do? you cover everything. >> there's nothing too small or too uninteresting -- >> i don't want to confusing by

the name container store, but they do sell containers. >> i can understand selling cup cakes and crumbs, but -- >> we love the container store. >> is it like a tupperware party? >> pink boxes for all your stuff, orange -- >> let me get this straight, we do the former dow component alcoa, which some people think is a proxy for the global economy, although it's not. it has more to do with aluminum prices pb we go from that to the container store and you think that -- okay. whatever. i don't -- you know what? this is all -- >> well, i mean, a day after -- >> this is below my pay grade. >> when you have the walmart ceo cautious about what is happening in the retail environment, then you have the container store talking about -- >> yeah, let's see, you've got a can happen company that does $100 billion in sales in a quarter and then you have a company that's worth $1 billion total market cap. do you think that's comparable?

>> so we shouldn't even -- >> where do you draw the line? 100 million? >> well, you don't think the ceo has any vision on what is taking place in the market. >> i don't know. how do you extrapolate what's going on in the container selling business to -- is it -- i mean, maybe people store things in a recession and they need more containers. maybe it's counterproductive. >> maybe it's yet another example following walmart of a ceo who sees some trouble in the retail sector. >> i don't know. alcoa goes from 7% to 17 or 15, i would say -- and we get the jolt number yesterday, i'm not looking for weakness here right now, are you? i think this actually is -- is not a time when i'd say things aren't going better. >> they are going better, but i -- i don't know. >> well, the people will factor -- in addition to the geopolitical news in israel, they can factor in that container store story. the israeli army -- >> we did that store just for you. >> thanks. >> do you think it's on the front page of the times?

>> definitely not in the ten points here, i don't think, in the "wall street journal." let's see if we can find it. the container store where they sell basically it's a tupperware party. is that what we're talking about? >> they have hangers, closet organizers. >> let me try and find it. do i look under the or container? let's see. container -- oh, boy. scott, try to find it -- if it's not in the journal, i don't know. can you at least try and find it if it's in here? is it in here? it happened too late? >> it was a good buy. consumer funk. >> the range on it is 25 to 47? i don't know. when did they -- how long has it been around? >> the container store? >> more than ten years. >> i'm embarrassed that you even know what it is. anyway, in geopolitical news, the israeli army pounding the -- we buy containers, but what are

you storing? are you pickling things? >> i like to be aware of all -- >> i know you do on weekends at times. >> the army pounding -- when did this suddenly -- >> yesterday afternoon. >> yeah, i know, but when did the whole -- suddenly along with everything else in the region? >> i know. >> the gaza strip in the region. this is i guess one of those things that they've had to deal with. it seeps ms to ebb and flow. you can never assume that a rocket is not coming, i guess, and that's a tough way to live. eamon joins us now and noer they're talking about possible ground action, aman. >> yeah, good morning, guys. that's correct. there is this growing concern among israeli officials that perhaps an air assault will not be enough to stop the rockets.

that's not just based on what is happening this time around. keep in mind, israel has fought about three different wars with militants in gaza over the course of the last six or seven years. so they know from experience that palestinians have been able to move rockets away from the front lines to keep them concealed and ultimately regroup and over the years keep them supplied. some of these roekts, as we saw yesterday, are now reaching tel aviv and jerusalem and beyond and that's going to away major cause of concern for the israeli system. they have a missile defense system to intercept some of these rockets. they have been using them. throughout the course of the day yesterday, we heard sirens in two of israeli's largest cities. that is an issue in trying to suppress the rocket fire and for emergency medical services, they have canceled summer programs in the south of the country and have put hospitals on high alert. but it's a very different story inside gaza. gaza doesn't have the early warning system, they don't have

the bomb shelters. and years after being under siege, their medical infrastructure has been decimated. they simply don't have the ability to cope with the casualties as a result of the israeli military. this is not a war between two equal sides, the israeli military one of the most advanced, sophisticated militaries in the world fighting against a largely civilian population in gaza and the palestinian militants with their rocket capabilities. but it giveses you a sense of how quickly the issue can escalate. israel has called up 40,000 soldiers. there is a push to invade gaza using a ground force to try and suppress that rocket fire and that is a major concern on both sides, that neither side is prepared to back down at this point. guys, back to you. >> thank you so much, ayman. despite the rising unrest there, check out the markets this morning. the futures suggested a bit of a slight recovery from two days of sell-off.

the dow would have been higher by 24 points, the s&p 500 by nearly 4 and the nasdaq a little more than 10. show you what's going on with the price of oil, as well. wti, $103.42 per barrel and brent is at $108, almost $109. and the ten-year yield ahead of the fed minutes later on today, 2.56%. the dollar -- sorry, i'm sipping my coffee. >> right in the middle of doing the board? >> right in the middle of doing the board. i'm tired. >> what kind of container do you have for the coffee? you're using a paper cup. >> and flat against the -- >> you know, to me -- did i mention, by the way, like nine minutes into the program how fantastic it is to be with you again? >> nice to have you here. >> did anyone notice the overall market yesterday? seemed like kind of a story. not container store level. it looked like it might actually

start to -- >> decline? >> decline a little. >> after what happened yesterday. the "new york times" and the front page asset bubble story. and then i thought it was interesting that the day after the "new york times" said that, "the washington post" -- was it "the washington post" or was it -- >> i haven't seen the post this morning. >> no. it was the financial times, that the buoyant market is actually putting short sellers on the back -- >> it's still contrarian. >> well, that's the opposite of what we saw yesterday, isn't it? >> yeah, but this speaks to the whole contrarian idea short sellers have put on the back foot. that means now would be the best time to be a short seller, right? >> that would mean that the "new york times" was right yesterday. we've got two major institutions giving opposing contrarian -- one of them is going to be wrong. >> yeah. the "new york times" is a little confusing because they said both possible bubble or just buoyantsy, right? they wouldn't declare -- >> you know we're going to go

over the chairs and continue this. >> yes. that's all we're going to talk about -- >> did these guys call you and ask you, okay -- >> to be totally honest with you, i don't get excited about it. >> alcoa is 17, but alcoa is not a dow component any more. they do lead -- it does lead off earnings season. because it was aa and it was like acme or something, the first thing you see. if you're looking for aluminum in the yellow pages, you'll find alcoa. but, you know, i would even argue that real earnings season is probably this friday or when the bank does that first bank day is when we get it. we always mention alcoa because it means it's coming. >> and such a big industrial company that speaks to so many. >> and it's not in the -- but it is important, but it's more specific even than you can't really call it an economic proxy, necessarily, because it has so much to do with aluminum

and box size and all the different -- >> aluminum. >> it's almost a commodity where it speaks to its own, so it's hard to extrapolate. but nothing compares to the container store. we're going to go to jack lew. >> selling mason jars. >> he's going to be with steve liesman and -- >> john harwood? >> and? >> carl icahn? >> and? >> jim cramer. >> and? >> miller. >> there you go. so you did that for me? >> i did. >> now, that's good. >> you see? >> that is significant. >> we have this sympatic arm. >> we're going to do chairs where you have to have the camaraderie and love with fellow people. with andrew gone, i hope you can step into that position. >> no pressure. >> yeah. where we have that type of love

and mutual admiration and everything else. are you ready? >> i am. >> treasury secretary jack lew will be the key note speech on july 16th. and you will be able to see it right here on squawk. but today, he is in china. let's find out more about his trip from eunice yoon in beijing. eunice. >> hey, guys. secretary lew doesn't have those people that you mentioned here in beijing. instead, he has the company of secretary john kerry, who is here in beijing for the strategic and economic die rog, which is a major annual summit between the u.s. and china where senior officials get together and really try to steer this very complicated and important relationship forward. now, these talk res coming at a time when the relationship is very tense. so for a couple of different issues. one is cyber security. the u.s. has accused china of cyber theft and of issues in the south china sea. china has been more assertive there and that's been angering

and upsetting a lot of its neighbors who happen to be u.s. allies. now, today on the first day of these talks, the focus has been on cooperation. now, both sides have been playing that up. the chinese president xi jinping has been saying that a confrontation with the united states would be, quote, a disaster. also secretary kerry has said that they're hoping to find common ground. now, one area where they are hoping to find common ground is on economic issues, more specifically a bilateral investment treaty. both sides have been talking about the importance of this treaty and that they want greater access to invest in each other. another area is on a global trade pact for i.t., which would potentially bring down barriers and terrorists for high tech goods. now, in terms of some of the other issues, secretary lew is here pushing for market access issues and for more flexibility in the yuan. but overall, no one is expecting major breakthroughs on those

issues, although they are hoping to see both sides re pair overall relationship between the u.s. and china before president obama makes his way here to beijing in november when he is expected to sit down and have talks with the president of china xi jinping. >> guys. >> eunice, thank you so much. eunice yoon for us. remember, secretary lew will be the key note speaker next wednesday, july 16th. >> you know who else? honestly, this is the most excited pooifb about it, because i'm going to participate for once. governor christie delivering the key note. >> that's huge. >> that is huge. >> he is on and he is -- man, he's very talented and -- whenever you think of him in terms of just interacting. >> he does like to talk. once he gets going -- >> more than carl icahn? >> can it you one thing about

containers? >> yeah, sure. container stores or containers in general? >> many of them, many of the containers themselves use aluminum. one of our viewers figured that out. we do alcoa to give you the aluminum situation. and then -- >> i see. >> you see, that i didn't -- now i sort of kind of get it because a lot of aluminum goes into the container. >> a lot of them are cardboard. >> these are big box stores. they have great big -- >> you've never seen a container store? >> and all they have are containers that they sell? >> yes. >> that's why things like crumbs exist. you see, i don't know -- someone really thought this was a good idea? >> yes. it's so american. we have so much stuff we have to put everywhere and organize. absolutely. it's a very american concept. >> do they sell boxes? >> yes. they sell boxes in every color, every pattern. >> so it could be this small? >> yes.

>> you can keep your fleas all the way to your -- or lies all the way to where you keep huge amounts of stuff you can find -- >> all the golf junk that you probably have at home. >> we have stored a lot of stuff reasonly. it's possible someone in my direct family has gone to the container store. do you burp the containers? >> some of them can be burped, yes. some are waterproof. >> i prefer tuepper ware partie to -- >> anyway, let's go to a break. coming up, the fallout from brazil's horrendous loss of germany. fans may not get over it anytime soon, but the brazilian government is worried about protests and almost about re-election following a huge defeat. south america's biggest economy be accepted by a soccer fan? and a typhoon is heading into japan as we speak. an update on that, next.

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a typhoon is heading to japan's southern most island today with torrential downpours. the typhoon has lost some intensity, but it remains strong and tokyo could feel the effects by friday. in other international news, we're watching the ripple effect of the world cup this morning.

brazil's brutal, brutal loss to germany. questions about whether or not it re-ignites anger among brazilians. protests by the millions last summer and whether they are once again protesting against president bill marusef. the country is on high alert to the new anti-government protests the. joaning us now, jeff from market strategy at ubs. jeff, good to see you. >> good morning. >> the journal has an editorial on it. >> yeah, i know. i read that editorial. >> and the style of the german team, they have to start being careful because they almost -- >> actually, if you watch -- >> military. >> they are. they move across and the brazilians play lyrics. >> the germans say you can't have everything resting on one player.

what do you think, jeff? >> leading up to the world cup, there's been a consensus that the president of brazil needed a successful world cup, it needed to go off with any major problems and brazil needed to perform on the ground because she faces re-election in october and soccer is so important to brazil. is there some kind of connection between what happened yesterday and the possibility of the re-election? >> there is a possible connection. i mean, i think you have the analysis dead right. what brazil needed was the world cup to golf without a major disruption which happened, anyway, and what was needed was brazil to win the world cup. obviously, that is not going to happen. this was a humiliating run yesterday. the concern people will have is weather this will set the protests off again and whether it will reduce the possibly that she is re-elected in october.

football in brazil soccer, i guess, is that important? it could affect the outcome of the election. would that be good for brazilian stocks? >> victory for brazil in the world cup would have been negative for the market because it would increase the chances that he will win the election. early defeat for brazil or in this case a humiliating defeat would be good for the market because it would reduce the chances of his re-election. that is i think too neat in this environment for a couple of reasons. one is this is such a massive defeat, i think it will affect the brazilian psyche. i think it will be a potential negative for investor sentiment from this stroid defeat. secondly, our view is that he will probably win the election anyway. so even if it was a knee jerk reaction, hey, this means he is

going to lose by the market, let's get more interested in the possibility of a change of government, at the end of the day, we think that's probably a very unlikely outcome. >> okay. you think it's unlikely. but what if it did happen? who is the other candidate out there? are they more market friendly? >> they are definitely more market friendly. there are two candidates, nevez and roberto campes who are perceived to be, correctly in our view, to be more right wing, to be more reform minded. the problem we have with that very neat scenario, that you have a change of government, everything looks good is first of all the economy in brazil is very weak. it's growing at probably around 1.5% currently. that's going to be a challenge for whoever comes in to be the new president, whether it's one of the opposition candidates and secondly, more importantly, if brazil is going to perceive structure reform, which is why the market likes these certain candidates, the structure reforms are painful. it's to cut public sector wages,

it's to cut public sector pensions. if you do that when the economy is weak already, you're probably going to trigger a recession. >> we've seen it in europe, absolutely. >> yeah. we're not comfortable at all with the idea that you get a more market friendly government, suddenly everything is okay because actually the challenge it's facing, whoever is the new president in brazil, are very severe, indeed. >> can i push back against that? she runs this country and the companies within it as if she's the ceo. she pushes around valley and pet petrobas as if they should be following her dictate. >> i agree with that. i think you have to make a distinction between getting some of these major companies behaving better if you like and behaving less like government entities. although the government has as ownership role in a lot of these state-run enterprises by definiti definition. it is easier to do, i think, and between that and getting the economy performing better, which is a structural reform issue

which is much, much more -- which is much, much harder. so yeah, a new government can make these state run enterprises behave that dividend is better, policies, less government interference. that's relatively easy. the bigger challenge the new government has is what are you going to do about the economy? inflation is too high and investment is too low. that's a formidable challenge for whoever wins the next election. >> hey, jeff, the gain of the day, if it's an all euro final in brazil, does that -- do people get even madder or should we be hoping for argentina so that the political tensions go down or do brazilians not like argentinians? what are we supposed to hope for for world peace? >> my gut is the brazilians probably don't care who wins today. >> that might cause some tension if it's an all euro -- >> i think an all european final

would be pretty interesting in south america. >> you've got that accent. you know, you -- >> i didn't say that. >> you probably call football, right? >> we've discussed this before, joe. it's got a round ball. >> so who is your team? >> i hate to say its, but i've got family in germany and my daughter's engaged to a dutchman, so i'm pretty -- >> no, i mean when we're not in world cup plan, do you follow arsenal or do you follow who? >> unfortunately my team is knot in the premiership any more. it's not even forest. they're in the second league now. >> gunther. >> really? >> a little umlat. >> no kidding? >> yeah. >> do you have any german friends? >> i don't know, the -- no, i'm not comfortable. i'm a lot of things, i think. yeah, maybe i will. maybe i'll adopt -- you know, it's not -- >> there's whinners.

>> totally they beat chicago yesterday in a double header. >> you know what? i may need to apology guise. i'm looking at the website. this is impressive. >> the caper store? >> it almost looks like it could be what they do with organizing your closet, it could almost be like a housing indicator. >> yes, exactly. >> so this might be. we need to go over those earnings again, i think. and also they have a happy organized home sale going on right now. and their motto is there's a home with a heart inside. it takes take me home, i am yours. i'm starting -- i see why they have a time of locations. i see why you spend rainey saturdays, you go there and mill about, especially if there's a bed, bath & beyond next door. right? >> it's easy to walk from one to the other. what's wrong with that? >> he's recovered. >> you have agreed to assume the

mantle of -- >> in a perfect world, there's chipotle next door. coming up, mr. gloom and doom mark faber says asset bubbles are starting to break. should investors start to worry about the markets or stay bullish? that is coming up next. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line anytime for 15 bucks a month. low dues... great terms... let's close. introducing at&t mobile share value plans... ...with our best-ever pricing for business.

good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with michelle caruso cabrera and

scott wapner. becky and andrew are off today. making headlines, abe is getting caught up in british takeover rules. they're being fortsed to retract comments about its ceo about shareholder support in its bid for shire. yesterday the ceo said he believes investors were generally supportive of this transaction. but uk rules require written statements to make such claims. and it is kind of -- i believe shareholders are supporting it. it seems like, you know, toupt be careful that you earn that position of saying things that -- i mean, i would want to know. >> they do have fairley nuanced rules over there, right? >> i'm sure. >> look what happens with pfizer and everything. >> and boeing announced it has finalized an order for 150 777x planes. the dealer, $56 billion in

prices. emirates, boeing, xm, do they get subsidies? what do we -- you happen, there's a huge -- even in the republican party, there's a huge divide on who is for xm and who is against xm. and i don't know, you don't want any xm, you don't want any subsidies for boeing even though airbus is totally -- >> yeah. right. >> you don't want to help small airlines order planes from boeing even if they're abroad? you'd rather have them go to airbus which is also subsidized? >> uh-huh. >> you would? >> uh-huh. >> you're on the far right. >> i am. i thought bush was too liberal, remember? >> right. the second time. where are you? you can't rate that. you can't rate trade on this, either, right? you don't know whether to go -- >> we go to the container store. >> we buy subsidies.

this is support for tcs shares. >> if you don't think we're going the trade the container store -- >> you are today, aren't you? i saw you message egg over there. is there a big segment today your xliening with the guy with the ponytail? >> i blew it up even bigger since you reacted. >> facts change, i'm willing to change my opinion. you were right. you were right, i was wrong. >> can you guys mark this moment? >> apple has lost a patent change in china. a beijing court ruling against upholding the patent held by a chinese company. apple had taken that patent to court. the decision clears the way for the chinese company to continue its own case against apple for infringing intellectual property rights. by the way, did you know na, that they don't play the music

any more, the people's court stuff? >> for you. right, what happened? >> i don't know. >> and you know -- >> we were right in the middle of a story and you totally stopped. >> i keep waiting for it to kick in. >> i love that, that you do that. that you're secure enough to do that, that work. and you know what? we don't have the right audio guy. i don't know if you can find -- he's been on vacation for two weeks. there it is. >> isn't it much easier to read a story when that's playing? >> you know what, though? you used to do it, you sort of thought we were making fun of your name and -- >> no, i like it. >> it's branding. >> wapner. >> why don't we play the section from rainman where we hear time for wapner, time for wapner. that would be good, too. >> we can do that. >> no one has any idea, we should probably roll back.

what were you talking about? >> perfect. in other media and technology news, amazon is stepping up pressure on hatchet, the e-commerce giant is proposing they keep all the ebook revenue. they've been in contract dispute for months. >> do you want us to do -- to give that information to halftime report? >> that they can play it during -- >> they've never done that on your show. >> no. >> just here. yesterday, after -- people were making something out of a 40-point move on monday and i thought it was weird. yesterday we started thinking, maybe we are in the middle of -- maybe a short-term, inter-mead i can't knowat term, you never know. it's what everybody has been looking for for three years. >> the funk. >> you never know. another down day for the markets tuesday extending the pullback

from last week's record highs. but we're still -- we're just a little bit below 17,000, about 100 points below. markets just skittish as we head into the second quarter earnings. are they just pulling back with the normal small consolidations? joining us now with more is jim dunigan, chief investment officer at pnc in philadelphia. $130 billion under management with assets and on the economy we have nariman behravesh, chief economi economist. jim, i don't know how many times you've been asked this, whether it's the start of something other than an ordinary pullback. i'll ask you again, do you think it's the start of anything other than an ordinary pullback? >> i don't, joe. and good morning. i do think as we get to these new round numbers, 17,000 on the dow, maybe 2000 on the s&p, investors will get a fear of heights here and we'll see some consolidation. but i don't see the makings of a

possible pullback. i don't see the makings here of anything more than some consolidations at these levels. >> do you think we have seen the highs for the year? do you think that the game from here on out in 2014 will be sort of harder to come by or -- i mean, where are you on that? because rates -- we are getting closer and closer, presumably, to when rates finally go up. that is a great question and a question on the minds of many investors. you know, after a very quiet first half, up 7%, i do think we continue to grind higher. i do think we will see new highs for the years. you know, we have an improving economy. we saw that in the job numbers. i think that will continue. midterm elections, which are typically after elections, positive for the markets. so i think we will see new highs above 2000 for the s&p before the year is out. so continued gains ahead.

modest gains, but gains ahead for the markets. >> nariman, that employment report is a pretty big number. and then the jolts number yesterday, a lot of these things have some people thinking that the economy is starting to do a little better, but they worry that that means the fed might do something at the beginning of 2015 in terms of fed funds. what do you think? >> well, i think you're right, joe, that the economy is doing a lot better. and the first quarter was a very weird quarter, a lot of funny data. but if you look at the jobs numbers, very strong. five months over 200,000. that's an awfully good sort of run here. probably continue along the same lines for a while. as to the question whether does the federation rates, you know, we and others have been saying mid 2015, maybe september or something like that. i think chances are now. higher they'll be early 2015. i doubt very much they'll go for

a rate hike before the end of this year, but certainly the spring of next year, i think the likelihood of that increasing quite considerably. >> and do we -- people then invest. does that make us happy or sad? do we get nervous when they start or do we say finally getting back to normal? >> well, i think this has been long anticipated. so it's like, what a relief, they finally did it. the same thing happened with the tapering thing. initially, markets got jittery. but when it happened, big deal, markets shrugged off the initial part of the tapering and subsequent tapering. so i think it will be very similar this time around. >> really? so after all of this, after five years of all this fed action, it's not going to cause any consternation because we know it was coming? >> exactly. the anticipation typically does.

but rates are still very low. they're not going to be any rush to hike rates on some kind of continual basis. >> it's okay. they don't need to? what if we start cranking in the economy and, you know, wage pressure, what if all that actually comes to -- we're going to have krueger on today, allen krueger for two hours. he's the guy that said the wage much has much less flack than people think. wage rates are still very low. so from that perspective, the fed doesn't have a worry. the cpi numbers have been bouncing around, food prices, energy prices. i think the fed will look past those. that's not where the worry would be. it would be wages and so far nothing. >> jim, i'm looking in the notes this morning and we had a, you know, considerable debate and discussion yesterday regarding the front page story in the times about asset bubbles.

you say you do not think the economy policy we've seen has led to any asset bubbles? is that true? >> i don't think there's asset bubbles in the equity markets. at this point, when you look at characteristics of what a bubble would be, which would be overvaluations, they're certainly not overowned. you don't see -- you see some euphoria. but there's some asset classes that possibly are in those areas, money flows in certainly. but not as i look at the equity markets from an asset bubble. you look at where we are with asset bubbles, a lot overowned and risk income as you go forward. but certainly on the equity markets. >> okay. gentlemen, that you can. nariman, appreciate it. did you nigan, thank you. don't be nervous, jim, $130

billion, it's only money. >> it's a lot of money, though, under management. >> he looked calm. i don't need that kind of -- you know, you? stress? >> yeah wsh pomt. >> with great power comes great responsibility. reagan said that or spider-man -- no, spider-man's father or uncle? yeah, uncle ben. not the rice guy. one of the world's richest men is being forced to bow to government reform in mexico. we're talking about carlos slim and was going on there with america movil. as we head to break, a quick check off what's happening in european markets right now. as you can see, they're negative. we needed 30 new hires for our call center.

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welcome back. carlos slim has announced america mivil is ready to cut assets to cut its share in mexican telecoms to below 50%. next, why teenagers are growing up more conservative, supposedly. this was yesterday's piece in the "new york times" by david renoff. we talked a little bit about it. but i had time to read it in detail and i was kind of r on osl, maso after reading it. the guy is always right with the progressive very naive slant, but this sets new heights for -- i mean, you're kidding, right, with what he's saying.

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we didn't have anything for you guys there. becky, andrew. >> you are here today.

>> once you get going. >> i keep laughing to myself here reading it and, you know, we understand that a fair minded person could think that the euro style the social welfare state is something to try to achieve. i think the president to some extent would like to steer us more in that direction. that's fine. the new york sometimes i times, obviously, a lot of people that work there in both the opinion pages and elsewhere feel maybe that's the way to do things. i understand that's fine. this is david leonhart, he was born in '73. i think i was a senior in high school, a junior in high school. he's very, i think you read him before on obamacare. he was on board so i think he's looking in horror as it's possible that some young people might not just be knee jerk liberal. he point out it did happen in the past with reagan even after the '60s.

some kids became conservative again somehow. anyway, at this point it's happening again for some reasons that are unfortunate. because they're totally out of democrat's control. this time around, in the simplest terms, the democrats control the white house and the senate at this time when the economy just happens to be in this. >> just happens to be that. >> in the book. in fact, he says, with the advantage of being right on all social issues, the democrats, they had with this disadvantage, however, comes a funny kind of problem. the democrats are the majority party when the company just happens to be in a bit of a funk. now, it's true the republicans are rocking everything, he points out, that would help this funk and the president, it's not his fault he can't get anything through, hen he goes and sed says the problem is, a lot of the kids these days, many of the problems obviously have their roots in george w. bush's presidency. they were born after that. so they don't know that everything that's happening right now. >> is bush's fault.

>> is because of bush. they say, think about the people born in 1998 the youngest eligible voters are too young to remember the bush years and all the excitement about president obama, they're coming of age with the democratic president who seems unable to fix these problems. >> i like your horrifying tone, he's horrified. >> they're conservatives, they don't realize that nothing obama or the democrats have done have been self inflicked. auto disincentives to work or productivity, none of that stuff matters. >> health care reform. >> in the beginning, he's funny, he goes, most kids usually are liberal because they care about the poor, which as you know, republicans do not. they don't want to economy -- a good economy doesn't help lift people out of poverty so it just the whole stance. i thought it was route do you

live if manhattan? >> i do. >> everybody that lives if manhattan, this is really right on. >> i live where you live. >> that's right. you live in montclair near the sopranos old house, right? >> was that near there? >> i don't think it was in montclair. >> it was. the actual house they filmed. i don't know if they were actually supposed to live there. >> yogi, i loved him. i think his wonderful wife carmen recently, she was so nice this week. >> we are talking lebron going back to cleveland. >> johnny manziel, and the republican national convention. >> coming up, israeli forces they are trading rockets and our guest host is on the way to the set alan kruger, he's got some

issues with the fed's strategy and the jobs report next. chocolate is very individual.

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is good morning, welcome to "squawk box" on cnbc. i'm joe concekernan, becky and w are off. the former chairman of the white house council economic advisers allen krueger, currently t at princeton university. how old are your kids, scott? >> five and eight. >> that's young. he's young. we love him. >> i was in princeton for the first time not that long ago. >> beautiful. >> it is cool. >> a beautiful school. >> if you need a tour. >> you are good with economics, too. >> i am available for a you are to. i don't know if you foe this princeton was once the capital of the united states. >> right.

>> really? >> iam told it's in new jersey. people think. >> and it's pretty. >> it's pretty. they think about it. but the reason i'm excited to have allen here, do you hear we talk to you all the time. there is no slack in the work force yellin doesn't believe you. >> i think the more data and you were kind of an outlier at the time. it was also something that people wanted the fed to stay full bore didn't like the stuff you were saying at that point i think the economy isn't where they want it to be for 2014. did you get any calls complaining to you? >> i heard some complaints. >> i bet you did. we will, i just wanted to have you, it's nice to have people that are right number one, also, we got to figure out when the

fed raises rates for the first time they can be earlier, based on what you are saying. >> i think the fed has been closely monitoring the data. >> you are being nice. >> we will go back. have you been watching, scott, we have been talking about him a lot. i want to see how you got to that data and which, there are sectors of the job market that are much tighter, that's a part of the data, is it not? >> i have been following the unemployed for a long time. what i found is the longest say they have more out the door in the job market. that's what we have seen in past recoverys. we have a lot unemployed now. they say they can be following the exact same path they followed in the last recovery

they withdraw from the labor force. >> you think we have this pool out there. you say it's basically half of what it is. >> some go back to school, eventually, they will come back to the labor force. it's a growing group of prime age men who aren't working. that group has been growing. >> is eight part of the benefits? >> she is leading you down, you don't want to go where she is taking you. i don't think you have gone there in terms of the disincentive of all these people on disability, people on food stamps, you heard that you feed to make $50,000 a year to leave the benefits you are getting by not working at all. then you got to put on a suit, shave, get some child care. >> did it work? >> it's easier to stay home for some 92 million people, isn't it? >> i think they would prefer to

work if there were jobs available. i think the longer they go unemployed. >> you don't think there were incentives from these? you think people want to sit at home? >> i think there are you really think that? >> i do. >> if you got to make more than 50 and it's an 85% track record to go back to work. i think everybody wants to -- >> i don't want to suggest that. >> they want to set their alarm clock again? >> i think that they have a lot of self dignitary they want to work. >> do you remember how bill clinton got flack because it does bring dignitary back. >> to be on welfare, you had to actually get a job. they were forcing people to work. it was very different than what existed before and has been now partially dismantled by president obama. >> i don't think that that's correct but it was a much stronger economy in the late 1990s, you can't forget how that helps to draw people.

>> that's another topic of debate. >> you can make 50,000 or 1300,000 that is the dignitary of being alive. i think people around the world are realizing that. i think it's unfortunate. >> you do understand, if going to work means you will make more than when you receive benefits. it's actually much more beneficial to stay home. it's an economically rational decision to make. >> they're not on it's into the an easy existence. >> we got to go to other stuff. we found out where these prime age men are. >> not so much. there is a funk. >> allen says he has paid for things at the container store, you, yourself, have not been to

one. >> he will not admit to one. when i said bed, bath and beyond you said sign me up. >> i have written checks for my kids. >> rockets exploding over the gaza strip. the contributor for the "wall street journal." josh, what is the latest this morning after we saw this erupt late afternoon here in the united states but fight time there in israel? >> well, this morning we had more rockets up from gaza into central israel. the israeli army said it shut down at least two rockets over tel avivened israel has renewed palestinian mill and thes commanders it says are integral

in the hamas rocket launch and they have been attacking residents in ga za. the death toll is continuing to rise in the strip the israeli army confirms for the first time hamas has in its weapons n 3023 rocket capable of reaching about two-thirds of the israeli population centers with a range of 80 miles from the gaza strip capable of reaching jerusalem beyond tel aviv and out in the south. >> it looks like they're setting up for a full scale going back into gaza. is that what we will watch here with the israeli army? >> that is what they're trying to signal. the cabinet yesterday authorized 40,000 reservists call ups. they have already put in two infantry division on the border.

but it's a mixed bag forisse ral. many israelis know that hamas has the advantage when israel is on the ground in the middle of the urban population centers where hamas has embedded much of its capability. israel knows when it sends its troops if there, there will be casualties. there will be risks of kidnapping, abductions of soldiers, hamas height might have the upper hand so prime minister netanyahu will think, give this one a very good think before he orders that. so far he hasn't done that. >> you work for the "wall street journal." so just like when here at cnbc, we are always looking to see if there is some kind of market connection. do you find one here? i'm thinking the markets are saying, here we go again. it's been for now decades.

>> yeah, i think there has been i think there has been a little bit of a falloff in the israeli equities market. but we haven't seen the israeli sheckel weaken significantly and i think that people in the market are used to this. i think they think that eventually there will be a cease-fire even if the government is saying today it might take a week. they saw there in 2012 with hamas, be every that in 2009 and if 2006 with hezbollah, israel not a month war. it didn't affect the economy significantly. >> all right, thanks for joining us on the line. >> thank you. >> michelle in the headlines this morning, shares of alcoa rising in pre-market trading. they beat stills by 36 cents. revenue walls also above consensus, though alum number prices have been weak. alcoa has been able to ramp up

sales in its downstream business which sells products like truck wheels and fuselages, citigroup is said to be close to a million-billion settlement. dow jones saying they can settle charges related to sales of mortgage securities ahead of the 2008 financial crisis. a deal could be announced as early as next week. pfizer has a class action suit accused investors about the safety of celebrex and extra pain killing drugs. merck withdrew viox if 2004. pfizer pulled bextra a few months later. celebrex is still being sold. >> no word on the container store? >> it has a quinn martin, i see, you don't remember a quinn

martin production if san francisco? am i dating myself? >> you don't remember back then? it works very well. >> it worked well for you. more of the aaron spelling. >> exactly, 9023130 we date ours. >> now you say it was your pass. >> "love boat" fantasy island. you are telling me you didn't watch "fantasy island". >> come on, friday nights at 130:00 or was it saturday? >> you can give me the container store, don't give me the fantasy island stuff. >> "mad about you.". >> one ting i want to ask you, there were a lot of hot spots

brewing. >> yes. >> are you discussing? she's our chief international correspondent. she goes to these places can you talk about it. what the next? >> i think there are next dangerous. >> if we see lashlg scale like last summer, absolutely. >> gaza? >> absolutely. >> ukraine, you don't know what he will do. >> we are always looking for something with a business marketing equity. we discussed this. >> you are taking people behind the curtain sort of seeing how we -- >> crack the editorial process? >> he's a chief international correspondent. there is a lot happening. >> when we return, value market will be happening. why investors may be able to find big names in the financials and tech sectors.

more "squawk" is next.

♪ >> michael douglas. welcome back. no michael douglas. >> i can't work with that. >> checking the futures right now this is not a quinn martin

production. he never heard of him. he had a top show 21 straight years including the fbi and "streets of san francisco" "barnaby jones" when you got the blank stare, you are really playing, i you a sumd the role. >> making headlines short selling. i thought it sound like this michael douglas, wall street, fatal attraction. >> "streets of san francisco." >> honestly, you did not know jed clampett was barnaby jones. >> i knew he was breakfast at tiffanys. >> oh the father, the husband. he looked like the father of audrey hepalbertan. short selling fell to its lowest level since the collapse of

lehman brothers. that's the lead article one in the fp this slow meltup has short sellers on their heels at this point. market data showing hedge funds sharply scaled back their bearish bets. the drop suggests the industry is still unwilling to bet against the rally at this point because there is an expression. you probably know it from halftime. it's like the ability to stay short depends on how much one, you can't stay short forever as things are rising, right? you can lose unlike a long investment. can you lose two and three times your money. >> unlimited amounts. put some money on it. >> what about you want to turn in some market fundamental also? >> physically turn? turning no you to market fundamental also, our next guest many are focused on whether the s&p will cross the 12,000 level. the head of the u.s. intrinsic

value equity team and a global asset management division of ubs. our guest host alan kruger is still with us as well. michelle, joe and i were talking about these gentlemen opolitical risks we have seen, we have seen this before, though, flash points, the market may get a little nervous takes a pause. will we see that? >> it's escalated i think much quirk than anticipated. i'm in the a geopolitical expert. i would say if you go back to the '80s and the 90s, that was not a time without geopolitical risks. there were quite a bit of things going on, not all good. i would say right now it wouldn't be the primary focus from an evaluation perspective.

>> how would you say this pullback. >> we had a pullback. it doesn't feel like there is much fear in the market. >> it speaks to complacency for weeks. >> and there could be. >> that said, i don't think the market's really rich. i think it's trading around fair value. it has had quite a rally. you have to remember where it came from. when you look, i think within sectors in the cross sectors, it really is a time for i think stock selection because there are opportunities there but i think when there is complacency you don't get the differenceship that you normally get. >> it's hard to find the market. many experts say the market is fairly valued, however you want to put it. so where are the values if there are some out there? >> i think the values, the big financials, they are not loved by the market or the federal

government. the city is trading below tangible book. i think it's a company where the situation is where will they place the bets? you point out the financials have disappointed. >> yes. >> the environment that they're operating in both from a regulatory standpoint and a sheer where we are. >> when that normalizes, people forget, that's how banks make money. if you get any kind of loan growth, which we should start to see the banks have a tail wind there. >> what object the fact that we are solidly talking about fed losing interest rates sooner than it being pushed back.

>> when you say you, me, market i think if the fed will surprise, it will surprise the rise. >> is that the right thing? >> you foe this guy here? >> you know his work, right, maybe you will say it. you are still nice. your work shows that they're behind the curve and you say they're behind the curve i think. >> they have been very transparent. >> the economic data has to be so strong for them to raise. they're not going to do it. >> there is a lot of good economic data and if you were in a time capsule and you showed someone a historical place where fed funds usually are tad say they can't be. >> i think now the fed feels there is no harm. the harm comes when money is free, you have poor allocation of capital. if you say, where is the

misallocation right now? >> where is it? >> look at the ten year creating it. whatever that is. >> we have this global fight to safety. >> does it worry you? >> is it dislocations? are people going to be on the wrong side of this? >> i think they'll be on the wrong side. i don't think investors looked at it move from three-and-a-half to a four and ten year on and bo portfolio. >> right. it can move fast. >> then equity investors who said i have to move back to the exposure, they're in the pseudobonds, utilities are trading at high multiple, low growth. it's frightening. >> thank you. we will find out how you got to this more specifically a. lot of people say it's people getting old and retiring or why their participation rate is going on. something else. >> we want to work. >> coming up, why where the united states ranks when it

comes to financial literacy. we have hemmed at times and for old tv shows and a lot of different things. "squawk box" will return in just a moment. financial noise financial noise financial noise

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. >> we can do this all the whole show. >> coming up 21 years of this? >> the new jerseyty. >> what is this from? >> i can't remember. >> coming up, staying home and letting the help come to you? that's the focus of the baby boomer er series. >> the media conference is speaking of a hot series from the '70s. >>

welcome back to "squawk box." it's 7:30 on the east coast. 99. making headlines, the number of people rising in the latest week. the increase happening, it kicked up slightly. acura is recalling more than 2013 and 2014 ilx vehicles. they need to be replaced. acura says if it is parked with low beam headlights on, they

could melt plastic components. the senate intelligence community approved the cyber security bill. they encourage them to exchange packing attempts and cyber security threats. the new media landscape takes center stage this week, the conference hosted by allen and company. kayla is there and joins with us more. good morning. >> good morning to you, scott, the sun valley mediafest began in ernest. tiny jets in monita hayley, idaho, with some 12300 mobiles from the tech and media landscapes to mix and mingle. this year can it includes mark zucker berk, media titans and social media execs jeff weiner, dick costola of twitter. nick woodman is here, a newbie, apple's teddy cook andrea hoo

ceo marissa meyer, some repeat attendees are notably absent this year. uber ceo and venture capitalists. sun valley is one of the few conferences that count as work also alibaba. i think it would be safe to say he has a few busy weeks ahead as they gear up for that all important ipo. panels on education, politics, philosophy and who could deliver and he was talking about a cap stone panel. a joint interview of warren buffet and jeff besos. why does any of this matter? beyond this beautiful mountainous vista behind me.

what happens in sun valley doesn't always stay in sun valley. this place sews the seeds for consolidation footing cable. we will bring you the latest. back to you. >> you have to go to the pio the pioneer, a great place. >>. >> reporter: best potatos if town. >> you get the surf and turf. >> and hash. we serve great hash. >> i was thinking when you flew in there, that's where bergdahl is from. right there. i think they probably have signs and stuff, ten miles and haley, right, that was where bergdahl was from and bruce willis. i saw browse willis. >> i have to say, most of the signs here are hailing the olympic athletes.

there were several gold medallists that hosted and that's the talk of the town several months later. >> that's good. you have been there, you have been there tonight. or you don't know the pio. >> reporter: to the tineer? we haven't gone this trip yet. we have stayed close to our kniting or lives to be able to talk to as many people as possible. >> exactly right. thank you. >> all right, kayla. >> i bet she has been to a container store. >> she probably has. >> i v. i love the container store. >> see. >> you know, i don't know how many times apparently. >> not enough to stay i was wrong. i said it. i've never sit, i've already said it to you in your second day here. >> i enjoy hearing it so much. >> how, you know, for someone that didn't know michael douglas, where he got his start.

>> i few the michael douglas thing. >> how money smart are u.s. teams? >> a new international study finds american 15-year-olds right now are just in the middle of the pack, behind china, belgium the czech we public poll. in latvia, one in six didn't reach the baseline level of efficiency and financial literacy the countries at the bottom, croatiaia slovak republic and italy. i don't think if i were in italy, i don't think i would be studying finance either. our guest host this morning alan krueger is headed to d.c. for a briefing on the literacy report. is that true? >> that's true, this afternoon. >> watching "squawk box" might help. a bunch of different purchase suits, how important is it that

we're starting out? >> i think it's very important. you know, i think kids are dealing with.their whole lives, making decisions about how long to go to school, whether they should take out loans for college. i think you could trade some of the financial crisis to awful financial decisions that people made. so having a more financial aid literate public i think helps the economy. >> when i look at this, for example, supposedly american kids are less financially literate than chinese kids, but they're only looking at shanghai. >> that's right. >> there is a billion people who live in deep poverty in china. i mean, is it right to compare the united states where every kid can go to school for free versus what's happening in the hip lens of china? not necessarily, right? >> i would discount the numbers from shanghai, but i think the general thrust is we were in the middle of the pack that's not so surprising. that's where we do in math and reading on these and most kids

who take financial literacy in school take it later in high school. this provides us a baseline, they will be doing the international test. this is the first time we have internationally comparable data for teenagers. >> so what are you going to decide today? what is, this is the last of what we will talk about. how should we move forward on this? >> i will teach financial literacy as american literacy. >> exploration, economic vehicl vehicle. >> it doesn't look like a textbook. >> it has nice illustration. >> color. >> yeah.

this is after quinn martin. i'm sure his shows were black and white. >> i think economics will excite kids about financial decisions, they get very excited about playing the stockmarket game in high school. they learn about going for risk but just teaching them the concepts is a helpful start. >> en(fewership is something they are trying to have for the ages. it's such a great thim thing. maybe you can't count on the big company giving you a job for life. therefore we need to inspire more small business creation i think. it's exciting. people can do it. right? >> i agree with that they will

invest in 34013ks. i have a wonderful set of interviews with jeff besos, what he was thinking ability, what his path was. there are many different paths to becoming an ent (fewer, i think teaching students what it means to be a start-up business. how businesses behave in the economy, what banks do. >> you think post-crisis people are spurred would be it comes to financial stuff? >> i think it's extremely difficult. i think people tend to put them off which is one of the people we face. i think the government can do. >> you know the poor lego movie

the name was lord business the yogi bear movie was a guy trying to take over yellowstone park. if cars 23 it was an oil company. it's constant. we talked on the fugitive. the movie that was made, it was an unskrup lus drug company, it's constant. it's non-stop. i don't think kids grow up thinking business people are good people. i think they think it's much more noble to be something else. >> we have a funny attitude towards business. >> i don't think it helps us with the guy you work for in the white house. >> we have the first business school. >> we used to embrace it for business than other countries do. i think people like to be their own boss. that's a part of the american individualism. i think we continue to have a lot more. >> in washington, you do hear a lot of times they feel comfortable standing up for small business. a lot of times you can't find

anyone that says, yeah, i'm for big business or large corporations. i don't know, it's where we are living at this point. anyway, appreciate it. coming up, we continue our special baby boomer series with a higher rate of illness and an aging generation of boomers. the cost for long-term care can be tremendous. the option, staying home. the ceo of homestead joins us, later, a burger beat down with the ceo of wendy's the sec largest food cane, bringing back one of last summer's most popular offerings that interview is just ahead. "squawk" will be right back just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own.

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. we are continuing our baby boomer effect series. we will talk about aging americans, whether it's making plans for yourself or your parents, where they're going to live or being taken care of. it's a major decision. domenic brings us more. dominic chu. >> we will start with the real estate side of things. the ameritus corporation.

the shares are up nearly 50% just this year alone, making it worth about $13.35 billion over the last five years. it's up 80%. there is brookedale living, same business, it's worth about $34.35 billion. it's up 2380% over the last five years. they are merging to create a huge health care player. 1,100 centers between the two of them. one of the biggest players, though, a real investment trust health care read is up 19 billion up 82% over the course of the past five years that lags the broader market. then there is the home health care services side of things. the bigger players here are names like gentiva worth about a half a billion. it's struggled flat over the last five years, these guys are the struggle from kindred health care. they're trying, haven't

succeeded yet. another one, enson group up 36% year-to-date. a larger company worth about three-quarters of a billion. it's up 3230% over the course of the last five years. these guys did a spin-off of their properties into real estate investment trust. then there is kenmed worth $1.37 billion up 23% year-to-date up 133023% over the past five years. can you tell this is a very bill demographic trend. all these companies are trying to merge, spin-off, create some kind of action all to position themselves better for that aging population in the next five, ten, 15, 25 years. >> the baby boomer effect we are calling it. thank you. >> i know that company. it sounds like a chemical company. it was. they bought a hospice company. i think my parents are gone now.

i remember they do hospice as well as home health care, dom, it came a much bigger part, chem-ed bought the whole thing out what did you say $1.37 billion. >> it's in cincinnati. a cincinnati-based company. >> absolutely. >> they got more from a hospice provider became basically a home health care company instead of a capital company. i think that's the way it works. >> that's great information. thanks, john the leading trend in this space is staying home and receiving care at homestead of moving to a retirement community, for example, what people in the industry call aging in place joining us is paul hogan, it's a private company, not publicly traded yet, maybe, it provides non-medical assistance in the home. >> thank you for having me. >> the trends are going your way the demographics are going your way? >> certainly tailwind, we have

130,000 or more people turning 65 every day here in the u.s., around the world, we're a lot of organization. we have over 1.1 million every week turning 65. 85, 90% want to stay in her to own homes, so, absolutely. >> what do you provide so they can stay at home? not medical, basic making dinner or? >> well like companionship. house keeping, medication reminders, personal care, hospice support services you were mentioning earlier. >> you don't necessarily go to hospice in the last year of life, there are things you need to be there all night long, don't you, taking care of when bed pans, all that kind of stuff, right? it's 24 hours it seems like it's so expensive, i don't know how, when you get towards the end?

>> whether it's hospice, families are under pressure with children and parents. >> it seems like it will be interesting where you can do 1300 at once, how do you compete where you have a lot of beds where one nurse or health care giver can serve as 130, 20, 30 people? >> we have a lot of help from the consumer. that's what they want. they want to stay at home. they have a bit of resources and have some family support. you combine the two. you will be well off. >> the latest. there is a supreme court, there was a woman last week or the week before on whether they would. >> what was it, unionizing or? >> home health care workers. >> it will cost a lot more. >> the whole once again availability will shrink because you have to medicaid more. >> ours is private paid how much

do you charge? >> our prices vary, 15 to $26 an hour, depending on where you are at. >> the average client asked for how much? >> 15 to 20 hours a week. that's just enough to keep them at home for quite a long time. >> you can get a 24 hour care at home. >> how expensive is that? >> that depends what part of the country you are in. it's about the quantity, not so much the quality. >> that can be anywhere from six to 12,000 a month. >> can you do this alone or as many of your competitors are doing looking for strategic opportunities? >> well, the nice thing ability franchiseing, we are a franchise organization. we're in 13,3040 franchises in 17 countries. it's a little hybrid.

you get local ownership. so you get people that have equity in the company as they build their businesses. >> how are you assured quality? >> we have a ram we worked with, several partners, j.d. powers to measure the satisfaction of our client and our care giver and that's layered on top of the selection process, the training the supervision and the support services we provide our care givers. >> all right. thank you, paul. >> i like that aging and price. i think "squawk box" is going to be 20-years-old i think like next year. i have been sitting here. you look at the 25-year and you see someone aging while they're. >> the shoulders get a little more. >> the wrinkles, the hair, you'll see. "fast money" is you are aging in place. are you aging in place as you are sitting there right now. >> it's better than the alternatives. >> it is. >> all right. coming up, thank you so much for

coming on. we appreciate it. coming up, more on the markets, fixed income, jeff rosenberg whether join guest host allen krug tore talk fed, interest rates and more. later, it's burger time. it's before 39:00 in the morning, wendy's will give a boost by re-releasing the pretzel bacon cheese burger. we have them right here on set. yay the company ceo joins jane wells in the next hour to talk about them. . up next on "squawk box," don't start your day without knowing the names that can make you money. joe has your list to watch next on "squawk box" right after the break.

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okay. let's take a look at some stocks to watch this morning. we have been telling you about alcoa, ushers in the earnings season, it's reported better tan expected earnings in revenue. stock has been getting back to levels it hasn't seen if years. the company says it's looking to cut the alluminum smelting segment t. retainer store, the retailer is lowering its full 84 guidance the company ceo warning of what he calls a retail funk as traffic declines and consumers are not spending to buy containers. >> he said he would like to focus on that on containers

store and garmin downgraded to sector performance, they cite potential head winds including the potential apple iwatch. which is, what is garmin sells? >> gps. >> gps. so that iwatch will have a gps component. i guess. >> i saw the samsung earlier. the paper yesterday. >> coming up, black rocks, jeff rosenberg, off to sun valley and allen and company media conference, tim armstrong is ceo of aol. he will join us live. kid: hey dad, who was that man? dad: he's our broker. he helps looks after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not? dad: it doesn't work that way.

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welcome back to "squawk." i'm joe kernan along with beck qui quick and andrew ross sorkin. >> alan krueger, a former council of economic advisers chairman and professor of economics at presenceton, are you alan krueger? >> i am, indeed. >> your fame was spelled wrong. that's the first time. andrew is not here, becky is not here. scott wap fer from halftime. i should introduce you first. michelle caruso-cabrera will give you the headlines, thank you for getting up and educating me. >> really. >> educating you over the container store.

>> the school in me. >> i may go later today. >> did it say the story of the day or did you ad-lib that? >> i ad-libbed that. >> you knew it was good. >> making headlines, boeing announcing it has finalized an order for 1350 triple 37 explains from emirate's airline the deal is valued. citigroup is reportedly nearing a settlement to resolve a mortgage probe, officials have been probing mortgage securities in the run up to the financial crisis. we continue to watch the typhoon yesterday with torrential downpours. homes and streets were flooded. the typhoon has lost some intensity. it remains strong, tokyo could feel the effects by friday. >> in geo -- sorry, scott, a

positive start to the earnings season. >> you did it. itis like tiger was age do that. >> i really was thinking. two days, a positive start from alcoa, it's taking center stage from investors, our guest host continues alan krueger from frins princeton. it was quite endearing to see you exchange business cards. >> right at the top from the very beginning. >> it was nice, allen was featured in the last minutes and his paper he talked about all morning is absolutely critical for the debate we are having and the marks. >> we haven't focused. we started the top of the show, yellin knows exactly who this guy is. all the people in the federal

reserve i mean they're probably naming his name quite a bit. it matters. >> in the paper, you were pretty circumspect act not describing the policy, the macroeconomic policy that implications for the fed of your conclusion being on the margins are not affecting the outlook for labor market there is a lot of labor slack. it should be much tighter. is that the policy you should draw? >> you said they're fine, they're not behind the curve. >> i have been kaurks i'll tell you why, there are a lot of factors. some of the shocks have been on the upside which have been raising inflation like we seen with energy and food. the fed thinks their transits, they may be right. they may not be right. i would focus more on clear signs of inflation i tried to

stay focused on the economy to stay away from the policy because i knew the paper would be controversial. and i also think the fed has mr. inflation worked for so long, we have been below 23% for so long. it's okay to be a bit asymmetric in terms of overshooting a bit. i think they'll still have the capacity to contain inflation if it goes up two-and-a-half, 3%. so i don't think they're behind the curve yet. i think they're getting closer. >> i heard them use the word crimp you know the fed is supposed to be independent politically. but there is an election coming up. the economy is still not where people want them tovenlt it's in the best interest to have them full boar continuing. when a former white house obama administration official, you know, basically says that they're behind the curve, they don't like that, they don't like hearing that, it means they will hold back and they don't like the investor process.

i think they're mad at them. do they take your calls anymore? >> they're very cordial. >> cordial. >> you didn't see his farks you said behind the curve. >> that is a question that begs asking. it's absolutely the question. >> to the topic of today the fomc minutes the market is on edge that the fed is getting behind the curve. there was a bloomberg article yesterday ab comparing janet yellin to arthur burns. >> they don't have a tv service, do they? >> the point is if you are seeing that kind of stuff banddied about, there is a lot of uncertainty in the economics. >> do you think they're behind the curve? >> i think alan's work is very important in that the separation between the long term and short term, if you look at it from short terrell, there is no slack.

>> does that mean they will be raising rates faster or go longer and as a result by on inflation? >> what do you think the response is going to be? >> here's the thing, in the bond market following june's fomc meeting in the statement, it was a very benign statement and the market is very convinced that it's going to be low for longer, so is the market going to be surprised. there is a low hurdle for that surprise because bond market yields are so low in the front end of the curve. yes, i think the market is going to be surprised. but it doesn't take very much given the 237b8 place ency. we talk a lot about financial stability. the question of the minutes, the financial complacency get a higher degree of focus this time around t.bis report. some of the stuff from the boe, mark carney and his commentary, whether or not that was discussed. there was a lot of complacency. the biggest source is shifrts around federal policy. >> is there a shift at the end of the year reach 3%?

>> it certainly should if you have the kind of economic data and recovery recent data have been suggesting. you are always asking me about the ten year, i come back to say it's not the ten year you should be worried about t. two-year interest rate is 50 basis points. we're talking about normalizing interest rates, that's 350 or 34%. the much bigger increase? interest rates to worry about. >> what kind of recovery are we talking about? >> that's noise from the first quarter. >> hoich is good stuff and the 2378 or -- >> scott's points are good i think you will see the fed looking at the data and saying, hey, ma ib the second quarter data is really recovery from the first quarter? let's see water going on in the third quarter. >> what i keep coming back and worried about, if the bond

market puts its foot down to the fed, it feeds to be here they take things up much quicker than the fed anticipated. then i see europe and i think everybody's got cover. because over there, nothing is happening it doesn't matter the vigilantes won't move. >> europe is very different, draghi, it's to add qe. in the u.s., we're pulling back. the bond marks can't overreact because they're waiting for aal from the fed. the issue is will you ever get an issue from the fed? in july, it will be more interesting. >> can we bring up the chart of the two-year yield again? we can. >> let's bring in the long run had before. >> it's still low, still bouncing around. >> still markedly different from

the ten year one, that's a kos lapse? >> that's right. you see that curve, you see we are breaking through certain key levels. the higher rates in the two year is the bond market trying to say, hey, we're getting a little bit worried about wlornt we're mispricing the first time period of liftoff? is it really going to be as late into 2016 as we thought? if it's not. >> 1615 or 16? >> 15 into the early part of '16, so markets are moving a bit more forward. that's what you are seeing. >> first quarter '15 is not concensus now. >> it should happen based on what we are seeing. >> i think so. >> i don't agree with it. >> your work says that. >> i think my work. >> you do this great work. you won't make the next leap. >> that's why i asked him the

question. >> i'm not ready to spike the ball in the end zone yet. since i work on that paper the data have come in i think more supportive tan people have expected. >> the logical conclusion of what your paper said. >> i think the logical conclusion is it should be moved up from where people are thinking if it moves up to the first quarter. >> there is another conclusion which is critical or another question, is monetary policy the best tool to address long-term unemployment? >> i don't think it is. >> i said on the show it's not. i said i'd like to see a tax credit to encourage employers to hire the long-term unemployed. we had that a few years ago. i think that would be much more effective. monetary policy is a very blunt instrument instrument. we are facing multiple problems. 20% express some form of depression. the longer they are unemployed the more they face a job. i think if congress could

arguments it would be much more effective. >> what are you going to do? >> have you lunch. >> can we have lunch like at michaels or something? >> what were you planning on? we saw you do it. >> so we balance work. he gladly gave you his car. it's good for you. >> there are a lot of stuff in the paper. i had a few questions. we were trying to replicate the results. >> not yet. you know, there is a great tradition of exchanging business. i was in asia. it's remarkable. i have never gone to asia and come back with business cards of mieen own. i never bring enough there. high school students have business cards there. >> cool. good timing. >> i'm glad we can bring you guys together. >> let's take a look another futures after yesterday's down day on the street.

it looks like we will have a snap back off the open dow jones industrial average would open about 52 points higher right now. at least that's the implied open, s&p and nasdaq would follow suit. nasdaq off its worst die in more than a month. there is energy, how the complex looks today, crude, brent, both falling. >> that gas is down as is gasoline so that is how the pick shaped up. "squawk" will be right back. >> coming up, we head to sun valley, tim armstrong ceo of aol joins us to talk online media and more and later, a "squawk" exclusive with the ceo of wendy's, we talk about how they are planning to eat up the competition. "squawk box" is coming right back.

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welcome back to zwaux making headline, celgene shares are coming under pressure, the experimental arthritis drug fail to meet the main goal the drug ru drug is designed to treat a type of arthritis that expects that affects specifically the spine and that's a stock. you watched that over the years?

>> celgene, genzyme. >> both of those became big market. skating billion. remember it was solidimide then a blood cancer drug took off. skak billion. gilead is the other one that has just, what's the market. >> stocks that had big, big runs. >> gilead doctor 133 billion. >> market cap. it's a lot bigger than the container store. >> i wasn't going to say that. it was implied. a billion dollar company that you have been beating me over the head with all morning long $1333 billion. that's okay. >> the conference taking place in sun summit if sun valley, kayla is there. she brings us a special guest this morning. nice to see you again. >> reporter: you guys may not

know container store. i know you know aol. tim armstrong as the conference kicks off late last night with a bar-b-que, first panels are today what are you most interested in learning? who are you most interested if talking to today? >> i think first and foremost this is a great opportunity. it's an event where you can find threads across all the industri industries i spent a lot of time listening. it's a great opportunity to run into literally probably hundreds of people. to see or hear. it's a fantastic event. >> you have said aol is making a big push into live event streaming. we know text disrupts we know some conferences that get live streams, where will aol users see this content and why is that the right content?

>> four years ago, our theory was that the center of media and tech following really where culture meets code will be the futd of mobile and the as specs of higher band width. you see the entire industry leaning towards content. we invested specifically in live video content. we are number one in women's lifestyle right now as a company. i think you will see us continue in investment. very heavily in video. the future of mobile and from our standpoint, context and consumer will ride on all the distribution platforms. i think when we mix that with advertising, that's a powerful place to be. we're excited about it. >> as consumers stream set tops and televisions, who foots the bill for that? a distributor or the content company?

>> i think it will end up in the offline world, the distributors will make.from consumers from offering distribution the content will provide great context. we're in a period where there is a lot of discussion. really there will be great content companies that get paid great content and i think that game is just starting. that's the first inning right now. i think the changes with multicast and mobile, you will have a numberal shift, twice the amount of video content, that's a really big opportunity. >> where is aol as an advertising company? i know you made a push into ad tech. now are you competing with some of the biggest ad agencies around on that. there is also word on the street you could move into native ads, water the truth there? >> we were an early company

investing in the mechanization, terrorizeing is a trillion dollar industry globally less than 10% is mechanized with machines to really trade in the marketplace environment. aol is one of only a couple companies that has a full solution in advertising end-to-end, which is the planning of advertising all the way through the analytics. even we just acquired a company recently which does attribute shun modeling. the internet bought the the attribution and the longer maker quote about half my advertising works, i'm just not sure, there is two or three companies, aol is one of them that are getting closer and closer to 1300% of my advertising works. i know it all works. that will be a big fundamental change in the next decade. >> it all sounds good. it's definitely a along-term

play. i know investors have been frustrated with earnings over the last four-plus quarters. you are in a quiet period so we can't talk specifically about numbers. do you feel that sailing will start to be smoother sometime soon? >> i would say as an investor, i'm a single share holder. and we can look at our track record, aol when we spun out was down 20 or 30% quarter year over year, we are back to growth in terms of revenue and profits. i think if you look at the amount of cash we have been able to give back to shareholders an invest in the future. few look at it, we had record earnings as a company for the last, you know, couple years and not many people expected us to get back to growth. if you look at the businesses we're if right now. which are in video, we're in mobile. we're in global content. those are the businesses getting talked about at sun valley the week. with realso one of the companies that partners with everybody. we have partnerships with every major internet company and the

major offline companies as well. we want to be the world's best at distributeing culture and code together. it's a big opportunity. for investors, short-term investors will focus on short-them things. if are you a long-term aol shareholder you have done well and you think you will continue to do well. >> reporter: we were talking during the commercial break how we consume video, what devices we use, you have a samsung and you have a blackberry and you said mostly every ceo has one, do you hope the company turns around and they should get back to the b-to-b model? >> i think the nobody activity is big i have an iphone, they are excellent for the web viewing, entertainment video, those type of thingsism i use those two phones every day t. blackberry for seems to me a you till. if you look around sun valley and your studios, you see people

that have to do utilities. i understand from a value standpoint, i hope blackberry does as well and it's a great utility device. i love my samsung note. i love my iphone, but this stuff about blackberry is the future, hopefully, it will be driven by youtive. i don't know what their plans are. i will be happy. >> have fun at the conference, thanks for an early morning visit to our set here. we will catch up with you after evenings if a couple weeks, too. >> coming up, another day, another auto recall. this time it's a japanese auto maker. details after the break. later, wendy's offering a few twist on plet sell pretty selz, "squawk box" will be right now .

welcome back to "squawk box." acura the luxury division of hondas recalling investigation to replace their hal ogen projector beam headlights. the manufacturer says if it is parked with the low beam headlights on, they could melt plastic components resulting in a fire. there was one fire reported but there were no related crashes or injuries. coming up, more from our guest host princeton professor alan

krueger plus a pretzel bacon cheese burger. wendy's is bringing back the burger. we will hear state from the ceo.

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. welcome back to "squawk box." ahead of the wednesday open, dow component american express says card spending and balances have been improving for the industry as a whole. we are watching shares of reynolds american it may become a part of the reynolds for $75 per share. check out american airlines, they say revenue per available seat pile will increase 35.35 to 36% this quarter compared to a prior range of 35-to-7%. it says increased capacity will increase as it increases to more larger depths. >> you said wednesday, it is wendy's day. >> it is spelled like that. >> that's the next segment in.

>> tomatos. >> a salad, burger. >> allen, you got to meet jeff. you get a burger. >> we're on a roll here. >> let's get back to our guest host this morning. alan krueger. you have some really important substances stuff or talk about what we were talking about on the break? >> i want to talk about the container storm i'm serious in a way. >> you are. we were talking michelle says that i saved you from her, what what you were going to have an ideological onslaught. >> it's a strong statement. >> how are we? we are fine, we are on the same page in a lot of things. >> you said my support for entrepreneurialship. we asked you, does the president, when you are meeting with him.

he supports the private sector, entrepreneurialship. you say he is moderate in terms of all these things? >> i have been with him. we met with companies bringing jobs back to the u.s. the president said what can we do to help you bring more jobs back to the u.s.? nobody complained about regulation, nobody complained about taxes. they said we need better infrastructure and training. >> when they're not in the room, they all complain about it. >> what is the territorial system, what about our tax rate? even on a everybody else moved out in front of us. the president po posed corporate tax reform. he wants this at a minimum tax. >> that's the dynamic, of course, what we call loophole i

don't think we will see. you can look me straight in the face and say the demonization, pick an industry. >> you didn't. >> there it is. >> you didn't build any of that stuff. none of that ever struck you as sort of demonizeing business or anti-sector, are all these government solutions wrong on thi this? >> the financial sector had taken irspribl risks and the president preserved our system. >> that doesn't answer the question, you didn't build that, that embodies the attitude of whether or not he believes in ent (fewership and business. i think that's why we are skeptical. >> i don't think you understand what he means by that. there is a whole ecosystem.

we depend on each other to get products. >> they should be present for that. >> the highway trust fundch we need to collect taxes to do it. >> would you admit congress gets tons an tons of money for infrastructure. yet we don't get infrastructure. >> congress is not allocating tons and tons. >> before they were willing to actually allocate it to things we need. >> i thought you dodged this bullet. that was the whole point. >> he saved you in the first block. >> i will save you again, i'm sorry, you are right the consumer, what itself the story? is the consumer sluggish? >> you go, go. >> people say the economy is the underlying economy is getting better. we're going to have a good quarter from a gdp standpoint. that's clear. yet, wal-mart, u.s. ceo says the

consumer is cautious t. container store, even though they're not a tremendously large market cap company. >> only in the billions from says people are in a funk. i've heard that from other retail ceos privately. what's the story and how good is the economy really if the consumer is struggling? >> i think the story of the whole recovery has been that the consumer has been struggling. few look at consumer spending in this recovery compared to other recoverys, especially consumer spending on services and discretionary goods has lagged behind. what's been strong has been durables. automobiles, the numbers, 69 million is rather remarkable. if you look at adorables as a whole, they have been strong, i think a good part of the explanation is so much wealth has been destroyed during the financial crisis. we're back up now to the level of wealth the country had in 2007 and, you know, this is seven years later, we got inflation and we have population

growth. so worry far behind where we might otherwise be if it weren't for the drop in housing prices and the financial crisis. >> and scott for years we have been talking about the high end that's going great. >> sure. >> the low end not. this seems like it's continuing. then that plays into the disparity and wealth that wal-mart is having problems, tiffany is not. i don't know why, then initially with the container store, i think companies when they have bad quarters, a lot of times you never know when target was having problems, they'd say it was the consumer when it was target. i never know when they're using an excuse on the overall economy. we are under the impression things are percolating now with the economy and every time you hear about a sluggish consumer, it begs the question, is it specific to the company or is it overall? >> well the gdp numbers show sluggishness on the consumers. we don't foe what it is. >> it's broader range. >> it's broader than target.

you look at the consumer, it is sluggish. >> how is the fed thinking about the consumer in the way it makes its decisions? >> i'm sure it is thinking about how the job market comports consumption. it wants to see more wage growth. >> up next on the wendy's day, look at that. someone wrote this, wendy has some nice buns. >> jane wells is going to explain. you can't get me on this that was in the teleprompter. so, sue me. >> here's the deal. wendy's is now the number two chain and it is spending hundreds of millions to transform itself into what? we talked to the ceo live right after the break.

. >> time to talk burgerers, wendy's bringing back the pretzel bacon keys burger. we're going to do this but you will thank us, the home of wendy's headquarters, she has a special guest. >> go ahead and eat, joe, while i talk. i am with the ceo.

thank you for joining us, we sewer appreciate it. >> you are in the middle of what you call a brand transition, part of it is seen in these stores. you are doing a home makeover. it has a chipotle feel. what is wendy's, is it panera meets burgers and frosties, what are you? >> jane, we're the cut above brand. we have been that 45 years and about great fresh state ofing fruit from day one. we will always think about that. when you think about that in the context of our competitors, we are giving an experience, can you see with the great tasting food. we do it at a competitive price. you put that into the context of the new excecompetitors you mentioned one in your comment we're giving great value to them. >> how do you do that? these prices are at all time highs rbc capitals says wendy's

has the most to lose. minimum wage going up, how do you do that, when you make this makeover and you make eight chipotle fast casual experience, how do you do that? >> you are right. beef prices are at levels, beef costs are only 19 to 20% of our overall commodity basket. >> that's a lot. isn't it? >> that's if same proportion of chicken. so we have a balanced commodity basket which helps us a lot. our margin guidance is three to 16, eight. remember that's on top of trooen 15, four last year. when you look at the trajectory we have been on, it's been extremely attractive. >> are you going to raise prices or have you? >> we have kaen taken some price increase, we are sensitive about that. we don't feel we should pass all the costs along to the consumer. we have done a great job of taking costs out of the business. doing that in a way that doesn't impact the consumer.

>> let's talk about the pretzel bacon keyes burger. you brought it back. >> phenomenal. >> it drove same store scales e sales up 3,%, suns took it all off, same sales growth bell e fell below burger king. you brought it back. if it's a winner, why mess with success? >> this is one of the ways we learn what the profile is for consumers and because there are operating implications in terms of complexity of operations, because this is a quick serve restaurant. we have to be able serve fresh hot food on a quick basis. so we have brought the pretzel bacon cheese burger back. some say will we keep that and we have a little surprise later on. >> all right. a little surprise later on. you are moving to a much more franchise business model. 85%. is that going to go higher? >> yes. we finished selling 3418 company restaurants the first quarter of this year. we are at 85% and as we talk

about system optimization. we feel because we are substantially a north american restaurant company. we have to provide the growth and set the example for our franchisees. we are doing that with image activation with reinvesting in terms of our pos system you are likely over time to see that percent annual decline. >> how much does it cost? i think another 2300 stores have this by the end of the year how long is it going to see the impact of all this money on same store sales growth? will they see it afterwards? you see the impact of this upgrade instantly t. average investment on our ultramodern standard design is 3450 to $3500,000. those restaurants are up in the

130 to 20%. they are seeing the impact immediately. when you look at a new build or a scrape and rebuild where you level the restaurant we're seeing a 25 to 35% increase in sales on those, significant intree intreess. >> joe, you talked about 20% beef, when the% chicken. jane, i'm surprised you didn't ask what is bacon. you have done the bacon bowl, the go see pigs in iowa there is bacon on this sandwich. you are bacon obsessed. >> i am, exactly. bacon is more than beef. you've got it on everything. on cnbc.com later today is there some suggestion? maybe we should throttle back on

the pig a little bit or is it so hot you may have it on everything to succeed? >> our apple with smoked bacon is absolutely fantastic. you will continue to see us both on salads as well as on sandwiches. >> you had your contract extension for one year. that's a little different and what does that say and what sort of benchmarks do you have to see? it seems a little unusual. >> no, i have a fantastic relationship with nelson peltz and the board of directors i'm very exited to their success. >> guys did you want to say something real quick? >> alan krueger wlorks is, of course, a famous economist

commented on how yummy the bacon was. >> they have good stuff, too. >> you. >> you also brought up the square hamburger. >> but, jane. >> you got the pretzel bun. >> jane, have you found a food that bacon does not go with? that you were going to try to do. i'm not willing to say out of hand it doesn't go with ice cream. there must be a bacon ice cream. >> of course, people put bacon on top with a car pell sauce. >> right. have you found something? >> bacon and milk. bacon and milk would be gross. >> i'm not convinced of that. bacon and mayo is pretty good. >> a bacon milk shake? >> i don't think there is any, anything you can come up with anything. i put it on tuna fish. >> that's natural. >> that has a salty sweet, bacon

and broccoli is good. >> now you're overdoing the pig. >> gene, that was great, thank you. >> thank you. >> she did a thing that showed bacon bowls. >> they advertise them on tv. yeah. >> that's overdoing it. >> you can make bowls of bacon. >> yeah. >> we went full circle. >> you are right. >> coming umm. jim cramer from the new york stock exchange, "squawk box" will be right back. e

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let's get down to the nokz stock exchange where jim cramer joins us now. jimmy, you know, we had a long history together. earlier, we talked about twin mark and came up with the fugitive. remember that stuff? >> well, that was before -- it was a tough drug. the only if they switch, obviously, the data made it happen. i expect them to raise numbers, and it turns out it was a bust, so mcgregor, used this for a long time, strong sell, reincooperating in dublin, who knows. >> could do an inversion. when you work -- we could be married. >> that was a tough set of data, and, you know what? seems like richard was nuts in that chicago hilton, but he had the right data. >> i don't want to embarrass the judge, but he asked me, jim,

whether the fugitive movie was based on a tv series or something, and -- >> really? production -- you know 1:00 eye? that is not about swiss alarm clocks, but the eighth air force. >> and a one arm guy. >> the bad guy. >> maybe in the finale. >> he found him on a chicago subway. >> hey, jim, happy birthday to your pop. >> oh, thank you, pop is 92 dead, thank you so much. >> good genes, good genes. >> thank you so much. >> the container store -- >> the retail funk, the funk that exists at the container store but not other stores? this company came public and disapointed since. it's kind of -- they are still telling a story about opening store

store, but this is the disappointment i wish they said was negative, but they stuck by it. conference call. >> did he said it was a consumer or specific to the store or consumer? >> broad retail funk, thought it was the weather, but it's the customer. blame the customer thing has never been a really great thing. customer loves the bay don -- customer loves that pretzel role thing. the numbers just went down furiously when they took it off. which was one of the finest things i've eaten. >> that's right. >> darn good. >> the nation turned vegan after they took that off. no, it's retail funk. >> first three go down smoothly of these things. didn't they? >> our wendy's is nice, john. i don't know if you went to the remodel -- it's beautiful. >> i was going to mention that. >> watch world cup there. >> those machines where you get

a caffeine free diet cherry that mill la coke and it comes out. >> heaven, man, just heaven. i love it. >> we were the first customers when it reopened. not kidding. >> thanks. >> this is you, isn't it? >> oh, you go ahead. >> we may play some. what investors expect from the fed minutes and the economic outlook for the remainder of the year, and on "squawk on the street" former governor of new mexico and pot businessman gary johnson hon to discuss his latest endeavor." squawk's" comes right back. need. so prepare your car for any road trip by taking it to an expert ford technician. because no matter your destination good maintenance helps you save at the pump. get our multi-point inspection with a synthetic blend oil change, tire rotation,

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let's get back now, more with alan, new jersey guy, final thoughts. we have a minute and a half. do you foresee anything coming fiscally from the congress in the next remainder of the president's term? what would you like? >> of course, it depends on midterm elections. >> the economy, as we see, is doing better than people expected, probably a few years ago, and so, i mean, do we need

to do anything, or -- i'm not talking about corporate tax reform. do we need stimulus, infrastructure? do we need raising minimum wage, in your view, that's what we should be doing now? >> i think infrastructure investment takes a lot of sense right now putting construction workers to work and help the economy in the long run. >> the demand is missing that? >> missing there. >> government should step up? >> i think immigration reform, tremendous missed opportunity. doesn't seem like it's going to happen in the near term. that's unfortunate for the u.s. >> what would that do to jump start the economy? how would that work? >> in a number of republics. we'll face a labor shortage. look at the demographics, and we'll be a labor short economy. we are facing demand constraints, and just bringing more people, consume more goods, need high school workers, comprehensive immigration reform taking people out of the shadows help them pay more taxes. it's a total no-brainer looking

at this. >> consumer services, too, that's for sure. >> right. >> makes you wonder. that's always the question, i guess. >> well, the congressional budget office concluded it creates more jobs, and we have to do more to help the middle class. minimum wage is part of that. >> thank you. enjoy your burger. >> thank you for joining us, and "squawk on the street" is next. good wednesday morning, i'm carl quintanilla with look who is back, jim cramer, good to you back, jim. david faber at the new york stock exchange. good morning to have jim back as alcoa unofficially starts earnings season. pun iring action in the momentum names, we will see fed minutes this afternoon, get a sense of what yellen and company think on inflation, europe is mixed and