good morning, everybody and welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. richard bransen is no stranger of making headlines for thinking out of the box. he's offering fully paid paternity leave for a full year. we'll get the details later this hour. first let's get to the markets. take a look at the u.s. equity futures today. at this point up by 21 points. markets came roaring back yesterday. s&p futures up slightly as nasdaq is up by 3.5. >> a couple of big stories we're watching this morning. the world bank calling on the fed to delay raising interest rates until next year. kick the can a little further. the institution arguing that keeping rates at record lows

would help avoid financial market volatility. in 2013 the imf suggested that conditions are not right to raise rates. that will just add to the on going debate in this country about what to do. two other central banks in the news this morning, south korea cutting interest rates citing a mers out break and an attempt to soften the blow to an economy already under pressure. meantime new zealand central bank cut rates for the first time since 2011 and flagged the change for more easing. opec is pumping at the highest level since august 2012. this is according to a new report from the international energy agency today and last week we should tell you that opec decided to keep the official production ceiling unchanged saying that the global economic recovery and oil demand justified the high production. >> headlines on greece continued to dominate market chatter. angela merkel said greece told

it's european partners it's committed to intense discussions with it's creditor which have been going on and on and on and both sides posturing as the ratings agencies continue to downgrade downgrade greece. meantime, greece's state television aired the first broadcast in two years. it was shutdown under one of the country's previous government austerity measures. it set off a fire storm of protests. the prime minister called the closure a great wound of his country's bailout and made the reopening one of his priorities. and then the world bank -- they're all developed countries that they represent. so they don't care if they

totally screw up over here. you know who they speak for. i know why we would listen for them on the imf. >> or the imf. >> we need to listen to the market and the market right now -- we'll see if it continues but we're back up near 25 on the ten year today and back up near 1 on the bund and that's where it will get scary if we lose the ability -- if the fed loses the ability to keep rates low. >> rates are higher. it started because rates started rising with the european sovereigns but now there's a lead story in the wall street journal today that talks about the optimism that is kind of playing out about the economy and how that is responsible largely for what's happening too. it's hard to say what the mix is and why it's going this direction. >> for whatever reason but they're sort of just like an ostrich in the sand and they are buffeted by -- i guess anyone would listen to this. you hear christine lagarde to world bank and you can't operate in a vacuum. they should be.

they should be down in a sound proof bunker making the right decisions but they can't and then the market moves a little and they get nervous about that. >> these decisions are being made about politicians that have to worry about their base. a lot goes into every single decision. >> new york law enforcement officials are questioning ebay and paypal on revised user agreements. officials say the company's revised user policies raise issues under consumer protection laws. they would allow ebay and the payments division it is spinning off to contact users by phones for offers and promotions to collect a debt or to conduct surveys. also the founder of spotify says the music streaming building has room for plenty of players. these are his first public

remarks since apple launched it's streaming service this week. >> i can't tell if that's running scared. >> it's setting expectations. if there's a big jump for apple don't panic people. >> there will be a lot of customers like you. people that haven't hit on spotify or pandora. >> it's for the late adopters and if you're already set up in the apple ecosystem i suspect it will be easy. >> do we know any late adopters? >> yes, that's my blackberry. give it back. >> and the ceo of activist wants to come here. >> i saw. you wanted to get botox in your eyes. >> i said i would get it if my eyes before i went on book. >> i saw you were tweeting but i couldn't read your tweets. you couldn't read any of the tweets. >> it e-mails you that you were

tweeting something about me. >> that's an awesome feature. >> i know. this is why the blackberry is dying. i'm connected to the keyboard. >> are we doing needles into your face on the show? >> here's the thing, an due, it's also used for overactive bladder. and i saw a list of things it's used for and i when really? and i don't know where the injection -- noneverything about that specific use but that was appealing. >> you're hoping andrew can do the injections for you. >> where would you, if you had to get some? i think there's an eyebrow something that minimizes eyebrows. >> i'm proud of these eyebrows. >> really and that suit without the belt too. >> today is sere sucker day. we'll talk about it in the chairs. >> people worry that you're not going to be -- you're going to be humble. you are not humble. you have no shame.

nothing affects you. so they should know that. that it keeps growing and growing and growing. >> what? >> the old star trek voyager when out there and kept getting more and more powerful. we really got off track there. go ahead. >> we're going to talk about -- >> hopefully people will see that. you knew we'd go to chairs today and you didn't wear sox. you got no laces in whatever those things are. >> we'll talk about it. it's a whole get up. >> i know. >> it's a get up. >> and the ties can't be too thick and can't have any color but then you'll wear a suit like that. it's just -- unbelievable. >> there was some thought. not a lot of thought but some thought put into it. >> that's what scares me. >> tsa what it is. >> we should tell you a little bit about wall street finance news on the other side of the pond this morning. shares of royal bank of scotland rising this morning.

britain's finance minister announcing the government would finally start selling shares in the bank. that had been a big overhang for quite awhile. in addition amgen winning backing approval from an fda panel. the adviser group saying a cholesterol lowering drug from the company should be approved for some patients with dangerously high levels of the artery clogging substance. >> let's check on the markets this morning as we showed you it looks like the futures are higher again this morning despite the fact that the market was up so strongly yesterday. yesterday the dow was up by 263 points. that was a gain of 1.3%. the s&p up by 1.2% and those were the best days in a month. the nasdaq up by 1.25% and that was the best day in two weeks. take a look at the early trading in europe this morning.

at least at this point it looks like green arrows there as well. the dax in germany up by .3%. even greece which we know has been active and all over the place this morning it's up by about 7%. putting it back above 815. check out what happened overnight in asia. the nikkei was also higher. up by 1.7%. the hang seng was higher as was the shanghai composite. oil prices yesterday settled at their highest level of 2015. crude oil was up about 1.3% after a bigger than expected drop in inventory. you can see it's giving back about 1% of that today. $60.84 is where wti stands right now. the bond market is where all attention was really focused. yesterday you saw the ten year pushing higher. that yield pushing all the way up. it was just shy of 2.5% and sits there right now at 2.495%.

that was an 8 month high for treasury yields and we'll continue to watch that today. dollar index was under some pressure yesterday. it hit a three week low. today it's up across the board. the euro is trading at 11275. dollar yen is at 12360. you'll see this morning down by about $7. $1,179.30 an ounce. >> energy helped yesterday, right? >> yeah. it was interesting watching. plenty of things to watch. keep a close eye on this summer even after the market has been pretty quite and i saw something yesterday about the range of the s&p. it's the tightest range it's been in in years. >> yeah. >> you know off it's high and low for 2015. it's a big data day today. we have weekly jobless claims. retail sales will be important. here with us on set is the cio

of segel bryant and hammer. russell price. let's start with you ralph. you managed mutual funds for a long time. started this company. and 5 billion in fixed income. 4.7 billion in equities. >> correct. >> that scares me because you have to make decisions about all of that money for your klines. >> i have a lot of partners. >> you can spread the risk around. >> but some of the buck at least, 75 or 80 cents of the buck stops here does it not? >> i know. >> reading some of your comments i didn't feel great after reading them necessarily. one of the things we agree on is that central banks could lose control if the economy starts improving and they're behind the curve, rates could dictate when they rise. >> the biggest problem that we think about the market is you

basically had an administered rate and in the global economies for ten years, eight years, and you basically got -- our question is if the economy seem to be getting better why do you have the price of oil? why do you have the price of money? interest rates? why do you have the price of commodities all down? this is six or seven years into a global recovery. there's no real improvement there. companies don't have pricing power and you don't see enough strength in the economy, at least we can't find it to figure out where that's going to be coming from. >> to overcome more evaluations you don see the possibility of growth? overcoming how high valuations are? >> the concern that we have got is that if you do start to see growth that may be what the bond market is sniffing out now and is that going to be consistent

with interest rates moving up? we're concerned about that. >> i read what you said about china too which is concerning too. but do you agee with that? or do you have a different take? >> a little bit differ. i think that bond yields remained so low primarily because of the type of recession we just went through and it was a deleveraging type recovery and we're also at a point where we're still -- i do agree with the secular stagnation view where it's slower than it was in past decades and we're an aging society. there's going to be less demand for credit so interest rates are likely to remain relatively well contained. probably higher than the low levels we see today but along with that inflation has also been very well contained and has been pretty well contained since the early 1980s and that's likely to con in our view. more recently when bond yields have risen some of that might be

capital flows simply because when the euro dollar was at 104 in mid march, since then the euro value has risen and with that allowed the economic data in europe has also improved so we're seeing more capital flow into europe from the united states. >> so both of you sound like you're more worried that growth stays weak than we get behind the curve on interest rates. >> do you think even actually we start doing better globally? >> i'm comfortable with the united states continuing to grow at 2.5% because we're continuing and with that comes continued improvement in the labor market and quite frankly the speed limit for the economic economy today probably is around 3% as compared to historically when most of us were growing up we remember recovery periods could grow 4 or 5%. so the speed limit being 3% before we start to generate inflation.

i think that's positive. we're still generating pretty good job growth. so that's a favorable development for the consumer and i think fundamentals continue to improve in that type of environment. >> the problem with that. i tend to agree with that but the problem with that is that you have seen american companies without much in the way of sales growth in the last six years. nominal gdp is basically the top line for the s&p. you've seen sails growing at 9%. operating profits are at about 14%. that's been a vast amount of cost cutting but at a certain point in here our concern is that if the economy doesn't pick up you have squeezed out most of what you're going to squeeze out and the risk to margins is going to -- could be tough. >> so china, the worst case scenario is china is where we were in terms of property and

real estate. where we were in 2007. >> we know very little about what's going on in the chinese economy. let's start with that. what we can see or what we can infer is that you've had a huge amount of speculative building. there's been a lot of -- there's been -- you have an economy that's shifting from investment and export into consumption an it's going to take -- it's going to take selling a lot of refrigerators to equal building one new city. so from our point of view that transition is probably not going to get managed well. in the meantime you had huge amounts of borrowing there. a lot of it is being dollar denominated which is held by the european banks. if the dollar keeps getting stronger they have a problem repaying that debt.

if the dollar weakens they're going to be able to export to us and keep inflation under control. >> you don't like bonds or stocks. >> that is why you develop asset allocation policies for clients. >> but nothing looks great according to -- >> what we have -- at the end of the day it becomes a market of stocks and you can always find something you want to buy. i would like to but my compliance people can tell me not to. >> you can fire them. the name of the company is segel. >> then i have a problem with the fcc. >> we know that woman hasn't done anything according to he elizabeth warren. people will think i'm saying that. i have to really spell it out. the end of the year here we do

2.5%. what about next year? gdp? >> i think we improve a little bit. >> so easy to say that and then we have been saying that for five years and we never hit 2.9. >> we're talking about semantics really. last queer was 2.4. this year's estimate is 2.5. ours have been drifting higher. we were at one point in the high ones. at about 1.8 for the second quarter but now we're at 2.75. so maybe those numbers end up drifting a little bit higher but i still think the consumer is looking good. the consumer even though retail sales up to this point consumer fundamentals are very good. wages and salaries are growing at a better pace. aggregate wages and salaries between 4.5 and 5%. >> would you change your mind if retail sales weren't better than last month? >> it would depend on the reason why.

seasonal adjustment factors for gasoline, that would be a concern. but if it was really a weakness in key categories that i have been watching and that is home builders and home improvement areas. travel and leisure. if it were areas like that that ally show the consumer confidence levels weaker than what they should be at least in my view then i would be concerned. >> all right gentlemen, thanks. >> thank you very much. >> you're welcome. >> thanks. >> coming up when we return siri chard bransen sir richard bransen wants to give new dads a year off with pay. and life better for city dwellers. those stories when we return. but first here's a look back at this state in history. ♪ ent spontaneously turns romantic why pause to take a pill?

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>> welcome back, sir richard bransen bransen's virgin has been known for employee benefits. new moms and dads will be receiving parental leave with 100% of their salary for a full year. that is a big stretch from what most people can consider especially for fathers rights. >> i'm deferring all my comments

on this stuff to jerry seinfeld. >> a line? >> no but he said things have gotten so out of control on college campuses with political correctness and anything else and they have no idea of what they're talking about but it's this world right now and to me it seems extreme that a guy gets to take off a year because he had -- >> i'm not even sure they get that in denmark. >> and the thing is that right now millennials and young people are embracing all the progressive ideals and we're way out here. once in awhile historically people come back a little and sometimes there's actually conservative young people that come around. maybe i'm going to end up like mr. never cracker in monster house and be like all these kids get off my yard. but i just -- hope springs eternal that we just don't all of a sudden no preservatives, no

gmos, no this no that -- >> what i would be interested in hearing on this is how many fathers take it. >> do you see target? they have toys where there's a boys building set and a girls building set. i get it. you don't want to discriminate. but maybe they would be interested in different things than boys. they got hammered. target got hammered by some woman that said you put girls on here. >> i'm of two minds of that. i think you want kids playing with the same toys but i understand that having kids kids like different things. i didn't push my girls into barbies, they liked barbies. >> but seinfeld jerry is not a right wing guy. i'm deferring. i don't understand everything. so anything politically correct i agree with. no one in life should ever be offended by anything ever again

and we need an amendment to the constitution for that. a mother's calling out target for a sign above a store aisle that lists building sets and girls building sets. the website asked target about the controversy. they pointed to convenience and organization that helps customers find what they're looking for. >> when they took away the gender distinctions they got complaints. >> they said they're going to stick with it the way it is right now. >> i don't know. >> we have targets ceo. >> so i went to digger land. this place where people dig, for kids basically all boys. it's racktractors and trucks. >> there should be quotas. we should bus girls in. >> there were a couple of girls here and there. >> the reason i understand the buildings issue is that we have an issue with girls not being interested enough in stem

issues, in science and technology and we want engineering. we want kids to be interested in that stuff. that's where i struck a nerve with that particular issue. these are for the girls an these are for the boys. >> i understand the rational. >> but kids choose what they want to play with. >> if you can't take a single step because there's a land mine360 degrees around where you're stepping then you're never going to step again. so i'm sick of stepping in it so i'm letting jerry seinfeld speak for me on all things politically correct. >> this is another story. no political correctness to this. google getting into a new business. the company has started an independent company called sidewalk labs. the ceo says it aims to improve cities. the former ceo is going to run that company. i think it's a pretty exciting little project. more than a little project. may become a very big project. in the meantime when we come back, how the oil glut is ruining the lives of many workers. plus why i'm not the only one

wearing this suit today. >> you might be. >> i am not. we'll go through the history. first as we head to a break on this day, a look at yesterday's s&p 500 winners and losers. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift?

ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of it. for as the world keeps on searching for healthier... we're here to make healthier happen. optum. healthier is here. new york state is reinventing how we do business by leading the way on tax cuts. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years.

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♪

>> welcome back to squawk box on seersucker day. we're in the chairs and this is my seersucker suit. the great republican senator is responsible for this tradition. he decided all senators and congress people should wear this to kick off the summer. seersucker invented in new orleans in 1909. this is a haskell suit. the first people to sell this was brooks brother and then they reimagined the suit and came back in 2014. >> i always thought of it as aiken ken derby type of out fit. >> kentucky derby, gregory peck to kill a mockingbird. >> that's the last time it was in fashion. >> diddy. matlock used to wear it.

frank sinatra. >> didn't he get run out of down for comments about thurmond? >> ronald reagan used to. jonah hill. dustin hoffman was a big seersucker. >> is this the first one you ever owned. >> i owned one before this. i should say. so i'm trying -- >> bold fashion statement. >> i'm trying to pull it off. joe is more -- the shoes is what got you. but i was trying to give you the full prep. >> i -- >> i thought the nantucket nectars people -- no the vineyard vines folks would be -- >> are you 37 or 38 years old? >> 38 years old. >> i'm not your father. whatever i could have done in would have been in early

development. >> i'm going to have my mother call into the show. >> maybe she can explain where she when wrong. i don't know. anyway it's funny because we were just talking about, you know, being careful with gender issues in a positive light, what might save golf are young girls. it is so hot right now between little girls 6 to 17 years old. it's gone up tenfold since 2010 to 50,000. >> wow. >> meanwhile, the lpga i played on tuesday out at west chester with michelle wi who hits the ball 60 yards past where i hit it. which that's fine. that's fine. i played with lauer who is a great golfer and lynn dowdy who is kpmg ceo and michelle is so good. she won the u.s. open. won her first major last year.

she's phenomenal and the nices person. but it was a great day. but i looked yesterday because i saw the tee times and i was going to watch yesterday but i said wait a minute it's wednesday. but it starts today on nbc -- it's on golf channel. nbc on saturday and sunday. but here's the idea, lpga prize money, $60 million this year. four years ago it was $40 million. so 50% rise. >> which is a reflection of how much more popular it's become. >> how much more popular and there's young girls -- there's pictures in today's journal. they're mobbing some of the stars. >> yeah. >> they're mobbing -- >> show the audience. >> i was afraid they might get a shot of that suit again but they're mobbing their stars and there's really popular stars. jordan spieth is great and that's fine in men's pga but you should see the way the players -- it still bothers me because i swing as hard as i can.

it's not about swinging hard. it's about being good and timing and, you know big shoulder turn. >> got to put your body into it. >> this is westchester and the ladies pga. >> i'm going to learn to play. it's my goal. >> another thing is our talk about botox yesterday. start thinking about where you want it because we'll show some of the tweets that you weren't able to see on your blackberry. >> he's going to do needles right into the face. >> i'm not having needles in my face even though you think i need it. >> because of the lighting. >> there it is. the great doctor for botox. joe is going to drop trow. he thinks he needs it in his rear. >> i have wrinkles in my left glute. but it's unattractive.

those shots, those naked pictures of me that were hacked. you should see how wrinkley. >> you're going to fix it right here. >> overactive bladder. in fact have to go right now. overactive bladder. >> it's a three hour show. >> you make it through the show every day. >> i do but i always say since i won go on facebook until i stick needles in my eyes this might be the tun because the first use of botox was in the eye. >> was it in the eye or under the eyes. >> no to cure a vision problem into the eye ball. so i'm not sure how they do that. >> no way. you would go on facebook first. >> what if he comes in? what would you do? you don't need it? >> i got to think about it. >> i'll try it maybe in my forehead. it only lasts six months i think. >> why? >> you're going to put needles in your forehead. >> people do it all the time. it's a huge business. it works. it makes you look younger.

>> maybe the eyebrows. >> apparently you haven't seen how good mickey rourke looks lately. you too can look like that. >> i'll reconsider. let me tell you about a story on the fron page of the washington post this morning. we've talked about how lower oil prices have been a huge boom for consumers. what we have not spent as much time talking about is what it's meant for the guys working in the oil industry before. a large part of these are are workers that only had high school degrees. this was a huge savior to them. more manufacturing has moved offshore. the story takes a look at some of those workers that got hit very hard and lost their jobs and really are kind of floundering at this point. they don't know where to go from here. points out that since november 44,000 oil workers have lost their jobs and about half of the

riggs have been shutdown over that period of time. you see it now with oil prices picking back up. but this is the hope. we talked about how this was going to be the new american renaissance and energy was going to change things and change things for these workers. it's a great profile and gives you a look at what's happening with some of these workers. if you get a chance check it out. >> we don't think of it in terms of the guys on the riggs. coming up move over billboards an click ads, could this be the next big thing in advertising? amazon's move to put ads on delivery boxes could revolutionize the space. that's coming up next. ♪

implts welcome back to squawk box. the euro deal could be running into a problem. antitrust regulators are set to say that the deal could harm competition and that declaration is likely to come tomorrow. we have to keep an eye on that. also nor scrutiny for amazon.com. regulators opened a formal probe into their e book business. this investigation centers on amazon's move to make share publishers offer terms at least as good or better than those offered to competitors. becky, over to you on more amazon news. >> andrew thank you. as andrew mentioned we do have additional amazon news. the company is expected to deliver north of 800 million packages this year. if you are a customer you will

notice that some of the packages lately are covered in bright yellow ads for the new minion's movie. the question is could selling ad space on packages be a new revenue stream for amazon? joining us to talk about it is the executive editor of ad week. thaupg for being here today. >> thank you for having us. >> i had several packages from amazon and this was one of them. this one came in with the ads. >> did you take a picture of yourself with the box an enter the sweepstakes? >> no. >> there is one. >> is this something that helps make them profitable? >> amazon is $89 billion business and of that about $1 billion is advertising revenue. so it's a small part obviously of their overall business but, you know these packages it's something that you're inviting

amazon to send into your home. much like a magazine so it's just logical that they would figure out a way to put advertising with that. >> i know that amazon though is so focused on making sure lo yis logistics work and run correctly. >> this is a rather limited experiment for them. i spoke to someone inside amazon last night, in the advertising side of the business and he says while this was a very limited sort of thing they tested it and tested it and tested it just to make sure that it would not interrupt their delivery systems. >> cheap or expensive for them to do? cover the boxes? >> nothing. no it's nothing. >> and when you think about direct marketing, i get less direct mail -- >> i get more. >> do you get more? >> i don't get the same type of solicitation. so is this a much more effective

way -- i'm much more likely to throw away the other. >> what's more effective? get a giant yellow box delivered to your house or a postcard. >> but if i get a couple i'll just get used to it? >> one of the analysts we spoke to said less is more when it comes to this sort of thing. the last thing they would want to do is start having every box be wildly colored. >> but they could target you. they could have great targeting. >> absolutely. >> and each day you get a different box, i mean if you're buying stuff on prime the way the sorkin family is. >> they have to offset the cost of prime somehow. >> you say offset because you think they're losing money? >> don't you? i mean 100 dollar prime membership gets you unlimited free shipping. don't you think that's probably -- >> unclear because we have talked to people at amazon about this before. >> i guess it's hard to know. >> it makes them ship more.

>> yeah but i definitely use amazon as the first place i go look online and if i don't find what i want there i go somewhere else. >> there's people like me that abuse prime like you do. >> sort of like an all you can eat buffet. >> but then there's other people that are just, you know eetdating a little bit at the buffet. >> what do you think about the marketing practices overall. they made a splash in the past and they're good at generating headlines. >> absolutely. they love that. they love for us to be talking about how innovative they are and nobody has done this before. they obviously have advertised their own products on boxes but never have they sold to outside marktd marketers. last year they got a lot of press -- they sent a nissan as part of a promotion with nissan they sent a nissan to someone in an amazon box. so that was written about last

year. this year it's this. so they love this sort of thing. >> well tony thank you for coming in today. we appreciate you. >> thank you for having us. >> good to see you. >> facebook holding an investor meeting today. shares rising 25% in the last year as the social network looks for new growth opportunities. we have an idea for mark suk zuckerberg. and don't miss scott mather. where is the bond market going and how do you play it? watch scott mather today at noon. you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records

for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.

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welcome back to "squawk box" this morning. facebook looking to further expand its platform globally after new reports it earns the majority of ad revenue now overseas. let's bring in victor anthony. good morning to you. >> good morning. >> what do you want to see this afternoon? what do you need to see? i know you're bullish on this company to begin with. >> yes. always have. >> always have. >> yeah. >> what are you hoping to see this afternoon? >> well i'd like to see some more updates on user traction not just on facebook because you know facebook is a platform. but instagram. the last reported number was 300

million. as well as messenger the last reported number was 600 million. >> all you care about is user numbers or the monetizing of the users? we heard in the past two weeks we're starting to see ads emerge on instagram. first time they tried to monetize that. do you need to hear more about that? >> you want to get the user numbers up. what facebook plans to do is drive these additional platforms for a billion users. then really laying it on adding on advertising. instagram has started what i've been seeing they started to push ads more aggressively. i'm seeing a lot of mcdonald's, all state, state farm high quality brands advertising on instagram today. they're starting to push that aggressively. >> do you think that's going to work? because i'm on instagram and now i'm seeing ads. takes away a little bit from the experience, no? >> i think you'll get used to it. it was the same sort of

situation with facebook when it initially launched. but then they started adding ads and video ads as well. you'll get acclimated to it and get used to it. you'll start seeing ads you like and are endemmic to what you do as a person. >> there was a news report out that overseas revenue is now more than 50% of facebook's business. >> which is not new. they give that every quarter. >> they typically give that every quarter. seemed to signal it was new. the question then becomes in terms of expanding that business overseas, do they have to get back into china? >> well i think they will get into china at some point. i think china's government at some point will let into the market. >> is that five ten years? is that modeled into anything you do? >> it's not. you're talking five-plus years. but still 7 billion-plus humans on the planet.

>> is there another company, a chinese company, for example, that now owns effectively the facebook market, if you will socially in china? >> there's more companies in china. but i don't think anyone really owns it. >> you think if facebook just opened up shop they would just take the business all over? >> from my understanding speaking with the chinese citizens facebook is an iconic american brand similar to apple. you know apple has competitors in china. the chinese consumers really really crave apple products. so i think, you know the iconic american brands they gravitate towards those. so i think facebook will have a market position in there if they were allowed to enter into the market. >> we've talked a lot about twitter over the last couple of weeks. people just trying to figure out how twitter can live up to its potential. do you think it is living up to its potential? do you think it needs to do more

like facebook? what's your take on it? >> i think the biggest issue with twitter is just the user growth. that has stalled. they need to figure that out. they launched many different product iterations. which could ultimately combine. i don't think it will happen any time soon. the modernization piece, with some head winds recently. i think they could work that out over the next several quarters as well. i think the potential for twitter is enormous. >> long-term bigger opportunity for twitter, facebook or no? meaning, if twitter gets its act together given where its stock is relative to facebook you couldn't see that going on a big run? >> it could, yes, if it gets its act together. it's becoming one of the biggest platforms in the world. probably one of the most powerful because they have the facebook platform instagram, what's app, and messenger.

it's not unique. but you're looking at today just 3.1 billion possible people looking at these facebook platforms almost every single day. >> victor thank you for coming in. >> thank you. >> you can friend joe on facebook. not yet. >> not facebook. you can follow him on twitter. >> we're still working on him on facebook. you're on facebook? >> almost every single day. as an analyst i have to be. but i enjoy it. friends all over the world to interact with. you should join. >> there are reasons, right? >> when's the last time you were on? >> awhile ago. yeah. awhile ago. when we come back we'll have more of today's top stories including why the world bank wants to hold off on raising rates. and strategist mark grant and jonathan golub will sound off. first as we head off to the break, check out the futures. big day for the markets

yesterday. green arrows again today. "squawk box" will be right back. e financial noise financial noise financial noise financial noise

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u.s. stocks coming off their best day since early may. a flood of economic data today could move the markets. and greek negotiations threaten to stop the rally in its tracks. what to expect from the trading day ahead. opec is pumping oil well above its target rate isn't cutting back production. he's here to tell us why the company is doubling down. and a slam dunk for nike. ♪ the company going on offense locking up nba apparel rights for the next eight years. >> we're on defense. >> oh yeah. >> whoa. i don't play defense. all right. you're going to have to listen

to mike on this guys. >> we'll tell you how wall street is reacting. the second hour of "squawk box" starting now. ♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. let's look at futures as we see what's going on with markets this morning. dow looks to open 30 points higher. s&p 500 up a little over a point. nasdaq up 5.5 points. this after the dow had its best day in a month. among our top stories at this hour, opec is pumping at the highest level since 2012. that's according to a report from the international energy agency today. yesterday opec decided to keep its rate unchanged saying the global economic recovery and growing oil demand justifies the

high production. opec producers have surpassed that target by 1 million barrels a day. we'll be talking to the ceo of enerplus coming up. and amgen winning backing from an fda panel. the cholesterol lowering drug could be approved for some patients. the green light despite pending data on whether it reduces heart attacks. we make the time to write in. we talked about the competing drug yesterday from -- would that be too much? we had regeneron on yesterday and the panel also voted for that drug. >> the difference with this drug is this is only one dosage versus the two regeneron has. which he thought would actually give him an advantage over this one. >> right. but both have -- and it lowers the ldl significantly for people

with normal statin. >> lowering ldl, is that enough to prevent heart attacks? >> it seems to make sense it would. we have a couple other tech stories front and center this morning. new york law enforcement officials are questioning ebay and paypal on agreements that would allow robocalls. raise issues under protection laws. the new user agreement would allow ebay to contact users by phone for offers and promotions to collect also on debt or conduct surveys. also this could change the telecom game. elon musk's spacex has now asked permission from the s.e.c. to test beam high speed internet from space using satellites. that's according to to a post. the tests are to begin next year. it could be another five years before the planned global internet network he's thinking about is running.

and apple may soon allow users to block ads from the iphones and ipads. a new guide for developers detailing the changes to the safari internet browsers including those that can block pop-ups, cookies, and other content. it could be a big blow to publishers. admits google lost out on $6.6 billion to ad blockers last year. but this is in consideration with tim cook at apple when it comes to privacy, not trying to allow the -- allowing the users to be used for advertising. and a news alert. china's former domestic security chief was just sentenced to life in prison for accepting bribes and abusing power and revealing state secrets. reports out of europe giving investors a hope for the end of greece's debt.

michelle caruso-cabrera has the latest. >> hey, joe. thanks so much. there's a big meeting late last night between the leaders of greece germany, and france. still no deal once they emerged. only statements saying everyone agreed to work even harder. this all comes as we get more economic data. unploinlt unemployment there is rising. above 70%. we're getting down to crunch time because june 30th is really the key day. you'll recall that greece has said they're going to wrap up all the june payments to the imf and pay them on the last day of the month. it's more than a billion dollars there. that's not all that's due on june 30th. that's when they've also got to pay pensioners and civil servants. that's also the day if they don't have an agreement in place, their current agreement fails and that in theory

triggers an action from the ecb. so the ecb could get tougher. it could trigger things like capital controls. we'll have to wait and see. that's the day that really matters. if you think about the way this process works, remember, any agreement they come to they have to move through various parliaments. as we get closer and closer to that date, the tougher it's going to become. there's all this talk about a partial dispersement. they need the full dispersement they've been waiting for a year because look at july. more than $3 billion. then when you go to august there's yet another payment to the ecb of more than 3 billion and they need that money or else they're going to have some serious issues with default. this time around it's probably going to be significant beyond symbolic reasons. >> thanks. let's get more on the markets and all this as investors look through the headlines. given the latest news on the

german 10-year. here on set mark grant from southwest securities and jonathan golub at rbc capital markets. he's also here to promote rbc's first-ever charitable trading day for youth bank. you should tell us about that first. >> yeah. so today all of the net trading revenues from our cash and electronic business are going to an organization called you think which does interested work for young people in new york through 57 or so local charities. so, you know if we have a good trading day, it will be more money for underprivileged kids here in the city. >> hopefully you get a little extra trading today. >> we hope so too. all the buzz that's been going around the shob about it people are psyched about it. >> all right. switching gears to mark. as i recall you still thought

the 10-year was headed to one or below. you still think that? >> no. i've changed. >> can you tell us? >> i'll tell you now. >> i get a lot of correspondence from you. i could have used that. >> the first place, as michelle was just talking about, we have greece which is a serious problem. in my mind it's not just greece it's really you're talking about whether the european union is going to continue on in the same form that they are now. what i think took place was so the 10-year treasury ran up to 1.64. and then what happened was the ecb said we're going to quantitative easing. then you have the front run of that trade. then what happened was the ecb told all the european central banks greece is probably going. and the european central banks became liquid. and reversed the trade. all the people that put the

money in the trade sold and here we are at almost 250. and now it's a good question what's going to happen. >> really. so you don't -- you're not going to say we're coming back to below two. >> no. >> now, is this because of something that we should be happy about? or is it the fed losing control? >> well my thesis is we're living in wonderland. i've said it a number of times and i've written about it. wonderland is a place that's controlled by the central banks of the world. so we have the fed with 4.5 trillion the central bank of china with 5 trillion mario draghi with more than 2 trillion now, 60 billion a month. and he's saying it's unlimited. it could go on -- >> but rates have been going up. >> that's because in my opinion, greece is about to go. they're going to default. and draghi told all the central banks in europe get liquid. get really liquid. >> you did send a note out about

that. maybe a couple of weeks ago. >> and so they've sold off and then the failed trade, it was one of the biggest fail trades of the last decade. so everybody's pulled up. now you're in a very interesting place. either when greece goes there's going to be a fight to quality. but since we're living in wonderland, the other possibility is the ecb could tell the other central banks, sell more get more liquid and yields rise. i don't know which is going to happen. >> you just said greece is going to default. tell us more about that. everybody says they're not going to default. you're going to get a zero coupon for the bond. and it's going to kick the can. with default does the grexit come? >> that's a separate question. with default, does that mean they necessarily leave the european union? and i think that's unclear at the moment. >> i mean they're kind of in functional default right now. they're going to pay back money

they owe. >> that's what they've been doing b for years. >> is there a difference between an actual default and just what we know as a default? >> there is a difference. >> you think they're going to take actually the more -- >> i think they're out of money and i think europe's fed up with them and i don't think they can get through more money -- >> when though? when? >> the next 30 days. >> no one else thinks this. >> i'm in the minority view. >> you don't think this. >> as an equity guy, the real question is how much do we care at this point in time. i go and speak to institutional investors and there's a clear belief that they're going to get this money. you know, my gut tells me what you do is if you think this trade is going the way you say, you load up on risk because the central banks are going to be so panicked that this is going to create some kind of a contagion they pump a lot of liquidity in and you basically -- it's a risk

on trade and it's a great opportunity to make money. but you're really in the minority view on the call. >> i agree with you. i'm in the minority. but what else is new? >> all right. so yesterday we noted that the market was unchanged for the year. and ever since we really started getting close to even talking about, you know the inflection point where we stop easing. i don't know whether you call it tightening, but we made little headway. we got 230 points yesterday, but i don't know how long that lasts. do you think we eventually break out higher and do high single digits of the year or something? >> yeah. i do. i mean earnings look like they're going to continue to be good. everybody talks how this is a zero earnings year, but that's all because of weak oil. earnings outside of oil is -- looks like it's going to be close to 10%. so i think it's going to be a good year. basically we're hovering around flat. not flat we're hovering around all-time highs actually.

1% off all-time highs. we're complaining the world is coming to an end, but things don't look so bad for equities. valuations are okay. >> mark going back to what's been happening with treasury yields rising part of it is likely what you talked about with the european banks trying to get liquid. there's a story on the front page of the journal saying part of the reason that rates -- that yields are riseing is because there's so much optimism from the standpoint. how do you break down the good news and bad news in those rising yields? >> i think there's truth to that. there's been a lot of optimism. and earnings certainly have been decent. the issue there, of course is what is a strengthening dollar going to do to the entire market? i think the ecb is trying very hard to get the parity with the dollar. and i think one of the -- >> they're doing a less good job now than they were a month ago. >> that's true. i think the focus has shifted from getting the dollar down to greece and what it might do.

and then the other political issues in spain and so forth. but i think that the central banks and europe are quite concerned about what greece -- it's not just greece. it's what it could do to the european union. and i also share that concern. >> you know becky, if you look at -- you talk about things going better in europe more optimism. the economic surprise numbers are telling you that things are actually -- investors got ahead of themselves with expectations on the back of that. the dax is down roughly, now down a little less. close to 10%. so you know there was this belief that just chase wherever the money is being printed. and i just thought that unless you actually believe that qe is going to get put to good use in europe, you could be looking at a big head bank. and right now it doesn't look as positive as perhaps some folks would like to believe.

>> i'd like to make one more comment because i think it's relevant. i've been talking with a number of guys. i'm up here on my boat i've had them over. some of the brightest guys. prior to 2008 the street had -- this is according to fed data. they had $145 billion liquidity. we're down to $28 billion liquidity. so while dodd-frank was set up and passed to protect the large financial institutions when you have that little liquidity in the market you have a move. and there's nobody to take the other side of the trade. >> so volatility could get a los worse. >> a lot worse. >> all right. you always are an outlier. if it comes to pass that might not be good. i mean you don't know at this point how it would react to that, do you? would you raise cash right now? >> yeah. i think being in cash or being in fairly liquid situations is

at least with part of your money certainly for big institutions. and i have seen a number of institutions that are raising some cash in the short-term. remember, it's not just the greek default. it's the possibility of all the greek banks going out, repos, the inner bank lending. you could just see massive problems in the banking system even though the european politicians say everything is fine. >> really everybody thinks it's just great. enough nuclear material for a bomb now, supposedly. so that's the -- obviously we can't worry about that. but these are things that are on the radar screen that you can't talk about. >> you're talking a matter of weeks. we've been living with this story for years, but we're now in my opinion down to the -- >> you can't let italy and other ones go. why you don't just let greece go back to drachmas and devalue and everybody will go there and visit.

it's what always happens. there's a year of pain but it comes back. this is like water torture. because of jerry seinfeld i don't even say chinese water torture anymore. there must be something wrong with saying that so i don't say that. i just say water torture. >> next you won't wear socks. >> that really takes some serious stones. >> he's not wearing socks. >> hey. come on. >> we're on the boat. >> becky doesn't have socks on either. >> you have the boat up here? >> yeah. it's in liberty land. >> you're just hanging out on the boat? >> yeah. i've got bloomberg. i'm on there. >> think you'd be more buff if you rode all the way up here. >> well i have a captain. >> he's got the whole team. coming up silver car is a service looking to disrupt the car rental market. phil lebeau giving it a test drive at o'hare airport. he'll join us next. and then producers blowing past targets. we'll talk to the ceo of

american driller ener plus. and the company just announced an increase in production. also a huge slam dunk for nike. the company signing a deal to become the exclusive apparel provider for the nba. we'll tell you what it means for the stock when "squawk" returns. any understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time?

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welcome back to "squawk box," everyone. in our headlines this morning, jawbone filing a suit against fitbit. the new complaint argues essentially all of fitbit's wearable products violates jawbone. obviously a tricky time. because of this ipo. but in a statement to cnbc fitbit says since inception fitbit has more than 200 issued patents and patent applications in this area. fitbit plans to vigorously defend itself against these allegations. >> i got back on the jawbone bandwagon. >> i see. >> you know what happened? i missed knowing. i missed all the data. and now i have -- >> really? >> yes. and the software they have is amazing. >> why did you stop? >> i thought it was too much. then also there's a thing on the new one that's harder to do.

>> did you e-mail the founder? >> we did. but i also got into it. >> back on the bandwagon. >> so you don't have an apple watch yet. >> i think i wait for version two for that don't you think? i actually like the -- the reason i wear this is for the sleep. but the watch, you can't do the sleep because it has to be charging overnight. >> you want to know your rem and all of this stuff. >> do you alter your behavior? >> yes. if i see bad trends i cancel stuff. >> if i'm tired i take a nap. >> this is interesting to me. and i don't need to tell you why. but what is the longest stretch you actually sleep with rem sleep? >> rem is only a 90-minute period i think. >> all right. so what's the longest -- >> just sleep sleep? i can go eight hours. i mean not on a weekday because

we do this show. but on a weekend, i -- >> eight hours? >> yes. >> no catheter? >> no. >> no kidding? >> but i can -- well if i was allowed to get up and go to the bathroom but go back and sleep another three to four hours. >> believe me i can go back to sleep. i have to. >> in the meantime let's talk about cars. rentals, there's a new up and comer in the car rental business looking to shake things up. phil lebeau joins us now. he's in o'hare airport. he's got the story behind a new company called silver car. phil? >> andrew we're always talking about start-ups that are disrupting traditional business models. and that's why we are here. just a couple of miles away from o'hare airport. this is the latest location for silver car. you might be saying what's silver car? look at everything behind me.

these are silver audi a-4s. that's all they rent. is started out of austin texas, three years ago and now have ten locations around the country. the business plan is straightforward. they believe less hassle when it comes to renting a car in know whag you're going to get. you do it through a mobile app. either a concierge service will pick you up at the curb at certain airports or you have to go off location. the cost between $59 and $89 a day. but the founder says the key here making it a hassle-free experience for those who are renting. >> it's a customer experience designed that has the customer really focusing on getting to their car accessing their car and getting on with the travel. for us that means spending less time dealing with counters and lines and people and paperwork. more time just helping customers get into their cars. >> take a look at the ten locations around the country

where silver car is located. and this is the first one really to the north in the united states. most of these are in the west and in the south. but silver car is expanding aggressively. expects to add two or three more locations this year. and as you take a look at shares of the traditional rental car companies, we're talking about hertz. restating earnings. going back over the last year or so. then you have avis who has been underperforming the market. while silver car is trying to disrupt this business, there are a lot of people with corporate accounts and the easy location close to the airport if not on airport property that's going to be tough for silver car to crack that dominance that the traditional rental car companies have. they're trying to do it by saying you always know what you're going to get when you come to these silver car locations. you don't have to worry about going there and finding out they don't have what you thought you were renting. >> phil thank you very much.

you heard -- actually i'm not going to ask you. we're contemporaries and some things need just to go unsaid, i think. thank you. for that report. >> count your blessings, phil. >> count your blessesings. be glad. coming up a closer look at today's top global stories including a rate cut, a warning from the world bank, and that vote on trades. ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay.

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welcome back to "squawk box" this morning. among the stories that are front and center general electric's $12.4 billion euro deal could be running into trouble. antitrust regulators say it could harm competition. that likely to come tomorrow.

spotify saying the music streaming business is big enough for several players. and suggests his firm doesn't have to be number one. the comments coming just days after apple launching its own streaming service. >> a weird comment. we can lose this. we'll be okay. the world bank is calling on the fed to delay raising interest rates until next year. the institution argues keeping rates at record lows will help avoid the kind of financial market volatility seen during a taper tantrum of 2013. god forbid some traders don't like this. the imf has also suggested that the conditions are not right. i think they should butt out. that's me. south korea cutting interest rates citing a mers outbreak and an attempt to soften the blow to an economy already under pressure by slack demand. and house republicans are planning a vote tomorrow to give

president obama fast track trade negotiating authority. a vote today on aid for workers. hurt by trade deals seen as democrats to vote for the trade bill on friday. >> south korea cut interest rates because of mers? >> one of the mitigating factors, apparently. >> wow. okay. when we come back this morning, oil prices rising nearly 5% in just the last week. even as opec surpassed its production by more than a billion barrels a day. we'll talk to the ceo of enerplus. that's a driller that announced an increase in oil production. as we head to break, take a look at the u.s. equity futures.

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welcome back, everybody. enerplus spiking on news that it's increasing production guidance and cap-x spending for 2015. meantime, oil prices settling at the highest level for the year after six straight weekly supply drops. joining us now with more on this news and where oil prices are headed is ian dundas. he is the enerplus president and ceo. ian, thanks for being here today. >> appreciate the opportunity.

>> so you are zig ing while everybody else is zaging. >> i don't think we're doubling down. we put out a press release yesterday that had two points in it. first and foremost we just announced strong operating results. we'd come into this year with operational momentum that continued the first half of the year. so production was strong and high in guidance. that's always a positive story for investors. as you mentioned, though we also modestly increased our capital. i think that drives strong production growth but more importantly strong funds flow growth and helps our financial metrics. i think that was a positive thing in the context of our business. >> but my point is that all of the majors exxonmobil, just about every one of the major oil companies we looked at has talked about cutting capital expenditures and says they will be cutting production for this

year. why are you looking at this differently? >> i think -- let's go back to the beginning of this year. our company like many others reacted quite quickly to this crisis the industry found itself in. with falling prices and we were absolutely convinced that our primary goal was to maintain our financial strength. and we came into this market moment in a very good position. strong financially. we had a hedge book good portfolio. our primary goal was to maintain that financial strength and assure the focus was on shareholder returns. we cut capital exceptionally aggressively. we even went so far as to defer the completion activities on programs where we had already sunk a portion of the capital. it made no sense to us at that moment to complete these high rate wells largely in north

dakota oil wells. it made no sense to complete them where we hadn't seen cost improvement yet. oil was falling and a tremendous amount of uncertainty. now fast forward to this moment. we have seen costs come down. in the first quarter it was a solid 15% across the board. >> that's how much it cost in terms to drill a well? >> across the board. our gna costs and operating costs, if you look at the picture, we've seen improvement. and that's continuing. so cost improvement. now we have better economics we're dealing with. we've also seen the price of oil come up a bit. but more importantly we now have an ability to hedge some of that. so we've got a position now where we've got this highly kmek activity. we've got a strong balance sheet. we can afford it. which is part of the equation. came into this with a really modest amount of debt nap incremental spending is driving good metrics for us. i don't think we're doubling down.

we're not making this bold call on oil. we just have an ability to hedge really powerful economic turns in this market. >> is it more fair to say this increase really is just less of a cut than you had originally anticipated? it now looks like you'll be spending an additional $60 million. how does that compare with your initial plans? >> we -- again, i don't want to come back here but the history is important. as we came into the end of last year and oil prices just kept falling like a knife, we cut very aggressively. at that point our idea was not to drill and complete wells. then we cut again. i guess we're bringing back a bit of that additional capital. it's still a significant cut. it is significantly less than what we would have spent last year. >> okay. that clarifies the situation. but you are looking at wti now trading around $60.

do you think that's the new floor for oil pricing or could we look at south of $50 again? >> it's a confusing time in the oil market for sure. you've got strong competing forces. we're seeing really bullish signs in terms of demand for oil. see it on the natural gas side as well. you've got a lot of geopolitical moves out there. and then there is this inventory of uncompleted wells in north dakota that could bring low hanging fruit in the market. i think from our perspective, this is just going to be a situation of continued volatility. it's really not our call. it's not how we think of our job. to manage risk and capital really clearly. i would say it's difficult for us to imagine sustained $50 world without seeing significant

additional improvement on the cost side. >> i know it's not your job to try and figure out where oil prices are. nobody can anticipate what's going to happen with that. however, i do know your expected rate of return for these completions of wells when you exclude the money that has been put in for drilling early on is about 60% when wti is at $60. what happens if it goes to $70, $80. what happens if it falls back to $50 and below? >> yeah. so these uncompleted wells are somewhat confusing to people because there is some of this sunk capital. and so we're talking about these not full cycle economics. 60% rate return obviously is more robust. it's pretty strong right now. the break even supply cost on this kind of spending is in the low 40s. the way that we are dealing with that price uncertainty that exists is a hedging program for us. so we've increased our hedging

program in connection with the spending activity. we've had hedges in the back half of the year and into next year as well. structures that we're using now give us some floor protection in the $60 range. and we can participant to a point if prices rise. >> but you would say that it's fair to say that the moves that you've just announced show a little bit more confidence in the market than we had four or five months ago? >> i think that's fair. i think it shows confidence. i think you put it in the context of our company, though which is we have a strong balance sheet. so we had financial choices available to us. this decision to defer completions was -- we saw economics at the time. we saw economic returns that were, i guess, modest at the time. it just didn't make any sense to us to do it. we thought there was a better idea to make money. so is there more -- is this is

broad phenomena? i think there are other producers in this situation. our position in north dakota is in the top quartile of the play so that helps our economic returns markedly compared to others. i think there are some signs that are somewhat more bullish. i think we're dealing with less uncertainty than the front end of the year. >> thank you so much for joining us today. we really appreciate your time. >> i appreciate your time too. thank you. coming up when we return another move nor nike. scoring an official uniform deal with the nfl in 2012. now they've locked up the nba for the next eight years. we're going to tell you what it means for the stock when we return. later today don't miss the chief investment officer at pimco. he's on the "fast money" half-time report. we're back in a moment.

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so why would you invest without checking brokercheck? check your broker with brokercheck. ♪ welcome back to "squawk box" this morning. nike will become the exclusive on-court uniform and apparel provider of the nba in a new eight-year deal beginning in the

2017-2018 deal. financial terms on the deal have yet to be disclosed. joining us with more on what this means is the footwear and apparel analyst at bbmt capital markets. good morning. >> morning. >> they haven't disclosed the terms of the deal so we don't know how much nike is paying for this great privilege. the stock actually ticked up on this news but how do you weigh it? >> well, you know, the rumors are it's about $125 million a year in additional marketing. this was largely expected. they lost a lot of deal recently to under armour. so they had to box them out and paid up significantly for this contract. >> is there money to be made on this? if you're paying $125 million, is there money? >> the license and apparel business is a tough business as demonstrated by the fact that four or five have turned over this contract. >> so people think of this as a

lost leader for the sneakers and other parts of the business? >> correct. demand creation. >> one other thing going on is they might change the uniform. we're going to see the nike swoosh. so there's clearly value in that. >> viewership is up across the nba. internationally viewership is up. it's a significant marketing coup. but they're not going to be the only logo on jerseys. it's rumored they're going to sell ad space. >> nascar style. >> soccer style even. >> what's that going to look like? >> you know, i don't know. usually it's been very conservative. but we'll see. >> when you think about how this all looks, there was a period about a year or two ago and adidas did it where they wore not just the jerseys we know today, but briefly had sleeves. will they look the same? >> it's possible. but nike's star player lebron

was giving pushback on that because it hurt his shooting game. i think whatever lebron wants, he will get. >> looks kind of like a soccer jersey. >> it's what lola wants is lola gets. right? >> yeah. lebron also. >> lebron too. more than lola i think, at this point. >> what does this mean for adidas? >> adidas is going to return potentially to profitability in the u.s. this is part of the drag on their earnings. they lost about $6 million on this last year. >> real quickly because it's fun to speculate. what kind of companies do you think will be all over these jerseys? >> coke mcdonald's. i don't know. >> and is there huge money in the nba? >> sure. it's going to be another revenue stream. adam silver said it's inevitable at this point. >> and does nike redesign all the jerseys once again? making more money? >> similar to what they did we the nfl, yes. >> it's been successful for the nfl. >> and did a great job in the

women's business as well. >> thanks for coming in this morning. >> every game i think has been a record this time. >> viewership? >> yeah. with cleveland and golden state which just shows you -- >> it's lebron. >> it's lebron. >> it's lebron. it's cleveland. he's back. all those things. >> if it wasn't lebron, if it was just this -- you know -- >> but it wouldn't be. because then they wouldn't be playing. >> anyway, thanks for coming in. >> thanks. when we come back this morning, some movers ahead of the opening bell. we have a list of stocks to watch after this. and at the top of the next hour a report on zombie foreclosures. homes that haven't been repossessed yet. the homeowner is gone. why the numbers are increasing. we'll get to that just ahead.

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let's take a look at some stocks that are moving this morning. lululemon founder chip wilson and his family are sharing the entire stake in the maker. >> what? >> yep. follows disagreements between the company and wilson. >> wow. long running disagreements. i guess it shouldn't be all that surprising. >> it's more than just yoga wear. it's more than just yoga wear? is it not? is it just yoga wear? >> well they have some men's stuff i saw. yeah. there's some other things you could wear casually but not -- >> it's like athletic wear.

>> it's pretty athleticish. >> seersucker? >> no seersucker. but it's light and airy. it breathes very well. it's cotton. much better than -- >> i'm waiting. i haven't seen anybody walk by this morning in seersucker. if you have it on show it off. >> becky, i had this horrific memory that i think my high school senior yearbook shot is in seersucker. >> god bless. >> there may be a way of getting it. >> we're going to get the seersucker suit. i know it. >> see, i'm not too -- you know too totally embarrassed. fedex added to citi's focus list. the analyst points to the benefit of fedex accelerated aircraft retirement plan. and harley-davidson has been downgraded. the firm is citing an underwhelming acceleration in demand. leaders of the delta pilots union approving the tentative labor agreement.

it approves a vote for union members. and men's wearhouse, the clothing retailer signing a deal with macy's to operate tuxedo rental stores. >> i used to rent tuxedos. but at that particular store actually. >> really? >> yeah. >> i bet you never rented one of the light blue ones. >> never rented the light blue or midnight blue. >> that's another scary memory. >> do you ever accidentally get a midnight blue like steve martin did in that movie "father of the bride." he thought he had a black tuxedo but it was blue. >> the better one is ben stiller in "something about mary" where he's totally caught in. remember that one? that look. you remember? >> no. i have to admit i don't. >> it was painful.

gets caught totally. >> when you went to the prom did you have ruffles on your shirt? >> i think maybe. it's a long time ago. that's what i said. these things happened 40 years ago. over 40. if this shot in the seersucker when you see my hair, i may not show it. if i show you and you think it would embarrass me too much you would tell me wouldn't you? >> sure. trust us. let's give an update to a story we told you about earlier this week. burger king reportedly paid $200,000 for the king to appear with the american pharoah trainer bob baffert. jill baffert said the money will go to causes for jockeys and racehorses. coming up it's a big day for economic data that could move the markets. we're less than 30 minutes away from that number and jobless claims and import prices. we'll have instant market reaction. plus, tim love will join us.

he's an award-winning chef and star of cnbc's "restaurant start-up." we're going to ask him about the burger bubble and whether there is one in fast food casual dining.

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time to buy before rates rise? a spike in mortgage applications showing signs that borrowers want in before the fed makes a move. find out if you should be playing the real estate markets now. happening this hour the state of the consumer. jobless claims and import price data will surely set the tone for the markets today. we'll talk investor sentiment and find out if the economy's in better shape than originally thought. and is there a burger bubble brewing? eating up shares of restaurants like shake shack. tim love is here to talk industry trends and whether or not you should be putting money to work in the sector. "squawk box" serves up another hour of must-see tv. the final hour begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box."

>> welcome back to "squawk box" on seersucker day right here on cnbc, first in business worldwide. we're just now about 90 minutes away from the opening bell on wall street. look at the futures now after a great day yesterday for the dow. dow up about 48 points. nasdaq looks up 11 points. s&p 500 looking to open about 4.5 points higher. also check the markets in europe at this hour. we've seen a pretty good situation with everything up -- well, the dax and the cac up almost a percent and the ftse up .5%. let's get to a story. economists looking for a jump in retail sales after the disappointing number in april. those numbers will be out in just about half an hour's time. also european regulators are set to warn general electric with its bid for alstom could

hurt competition. >> i thought that was done. >> i thought it was too. >> so long. i thought they did enough. >> they were making sure they were making huge concessions. >> with the company itself and employment and everything. still not -- and they still got -- >> they've got more to do, it sounds like. we should also tell you about china. the chinese former executive securities chief has been sentenced to life in prison after being convicted of accepting bribes. the new administration in china is trying to weed out corruption. this is just the latest step in that. >> it was another big buy when energy prices were really high. and people said it looked like another, you know maybe a buy of it. maybe they're like yeah yeah yeah, it would harm competition. we probably shouldn't. we're glad you noticed that. yeah. we didn't think about that. maybe they're looking for them to say no. no? >> they're always looking for them to say no.

let's tell you about some other news this morning. new york law enforcement officials are questioning ebay and paypal on revised user agreements. "new york times" reporting that officials say the company's revised user policies now raise issues under consumer protection laws. the new user agreements would allow ebay and the payments division spinning off to contact users by phone for offers and promotions and also to collect debt. or it says to conduct surveys. got another call from someone trying to do a survey at our house last night. nobody ever calls except my grandmother calls the house. everyone else calls the cell phone. anyway alibaba's jack ma is on a visit to the u.s. this week. in an exclusive interview with david faber, here's what he had to say about the company's stock price less than a year after the u.s. ipo. >> when they go up i'm not excited. when they go down i never depressed. because this is how people look at and what we should focus on

is our business, our customer. because what are you going to do? you're going to go on the street telling people my stock is too low? or too high? forget about that. just focusing on creating business. >> okay. and shares of alibaba up about 31% since the debut. of course off of the high. few more stocks to watch that are on the move this morning. krispy kreme posting better than expected earnings. comp sales were up and the company pointed to improving profit margins. jetblue reporting that its load factor for may was nearly 86%. half a percent from a year earlier. and shares of box jumps right now. topped estimates and the company is raising its full year forecast. and we should -- we had mr. t on and we didn't get him to say seersucker. >> he did say sucker. >> he did a couple of times. but we didn't know you were

going to do that. should have been thinking ahead. >> yeah. he said he'd come back. i'm very excited about. switching gears for a quick minute, the manhunt for two escaped killers expanding from new york now to vermont. david sweat and richard mathis escaped using power tools to cut through a steel wall and bricks. we talked about this earlier in the week. the vermont governor saying the search has expanded to his state after information came in that the two may have discussed vermont as a getaway location. law enforcement from new york and vermont are now working together to try to find the fugitives by going door to door and setting up checkpoints. zombie forclosures, those are homes in foreclosure but the bank has not repossessed them yet. they are trending up. many of these homes still have good value and could be great additions to the tight market. so what is the holdup? diana olick joins us now with

more. good morning. >> good morning, becky. and the holdup is getting better. banks are getting ever-more aggressive in annihilating these zombies. that's where the house just sits. there were just over 127,000 zombies at the end of q2. that's down 10% from a year ago. that's one out of every five homes in the foreclosure process. but the number of zombies is increasing in some markets you might not expect. these are high-price markets. like new york l.a. houston, philadelphia, and boston. and that's because as home prices rise and these markets have already tight inventory, banks see a fantastic opportunity and the former homeowners know it. >> they've been able to stay in that home and maybe fight foreclosure for three to five years. now the bank is coming back with the proper documentation and the homeowner is seeing the writing on the wall that i'm going to have to leave and move on with

me life. >> so these homes actually prevent great deals for buyers. and there is huge demand for cheaper homes. mortgage applications to purchase a home jumped over 10% last week. even as interest rates spiked. that's because buyers are trying to get in before the rates go ever higher. becky? >> diana, the homes he was just talking about, though, are homes that people are still living in even though they're in the foreclosure process. that's a little different than zombies? >> no. he was talking about where they've left the homes in these higher priced markets. that's why we're seeing more zombies. that's because these prices are priced $200,000 $300,000 when the banks repossess them. because prices are getting so strong the banks can now sell them for more. that's why they're getting them through the process more quickly. >> why was there such an explosion in zombie forclosures? was it there were too many for them to handle?

>> the problem was during the housing crash, these houses were worth so little. you were seeing them listed for $40,000 or $50,000. remember the robosigning, all of the documentation issues. these houses were sitting up to four years at a time. now the banks have all their ducks in a row. they know they can get good value for these homes at auction. they're moving them through more quickly. people are vacating and getting out. they are sitting vacant. but sitting vacant for less time which is good for the market. >> thank you so much. in the meantime why don't we turn our focus to the sharp jump in interest rates and the rise in mortgage applications that went along with it. borrowers are rushing to buy homes as rates climb. mortgage applications were up 8.4% last week. that suggests there is a fear that rates will move even higher. david blitzer is chairman of the s&p 500 index committee. david, does that sound right to you that we have seen this jump in mortgage applications because

people are looking at higher rates? or do you think there's something else going on? >> i think it's much more rising prices. prices are up 4% to 5% over the past year. i think that's what's driving it. over the last year they are up substantially, but mortgage rates haven't moved that much. we're talking about 10 15 basis points. you can go across the street and get back 10 or 15 basis points. so i think it's rising prices more than anything else. we've been hearing about consistently for two or three years at this point. and people looking at that and they want to buy before the price gets away from them. so we see more interest. >> do you think this is the spring we've seen the return of should we say a seller's market when it comes to housing? >> it's getting there. you know in the background we -- the continuing problem with housing is we're not building enough new homes. and we're getting a little bit better, but we're still not anywhere where we should be.

housing starts are running around a million. but the buildings is much bigger than it normally is. and the ratio of existing home sales is way off. >> although i would think that would be a good thing. we had such an over-supply that a lot of people said we're going to have to watch this run down for several years to come where we get the supply and demand picture back. so it's not so far out of whack. >> i don't think it is. i mean i hear a lot of questions and comments about inventory shortages, low inventories, all this kind of problems. i think what we saw in the boom bust period and the glutton and so forth was not necessarily finished homes. but builders who would take land, put in the plumbing put in the water supply the sewage the electricity. then they'd stop and wait. >> getting neighborhoods ready to go. >> builders don't like to have finished home in inventory. they like to have land in

inventory. they'd rather not put the money into building the house until they can have the sale lined up. we had pictures of arizona with mile after mile with homesites with nothing but a few cinder blocks in each spot. >> so are you saying that it's still something of a seller's market at this point? >> i think -- >> or a buyer's market not seller's market. >> it's -- first it's gone back to big question about where you are. in the peak of the boom and bust, everything went up and crashed together. we're back to a more normal thing. you've got hot cities cold cities, so so cities. san francisco, prices are going up. 5%, 15%, 20% over the last 12 months. that's very strong. chicago, cleveland, detroit, the prices go up at all, that's a surprise. so it varies a whole lot. area like detroit, you got a lot of empty houses whether they're

zombie homes. maybe zombie banks can't close in situations like that. but there are some very hot spots where there's a lot of activity. >> you make a good point though. rents have risen substantially in most metropolitan areas. >> that's right. and behind it you seem to get millennials which is the great buzzword of demographics this year so just as soon live in a center city. it's more exciting. it's more interesting. it may be closer to their job. then get married, set up a nice suburban home with a two-car garage and the rest of pit. that's not so hot these days. >> thanks for joining us today. >> thank you. when we come back stocks surging on decent economic data. and investors feeling more positive about the nation's economy in the second quarter. we'll talk investors sentiment. we'll do that next. as we head to a break, check out the lineup for the rest of the hour including more key economic

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let's get a pulse on investor sentiment.

latest survey shows optimism plunging to a two-year low and pessimism surging. charles rockland joins us now with more. charles, this was pretty interesting. yesterday morning we were talking about the market was done for the year. having trouble making much headway. and we said never short a dull market. that's an expression people use. you could sort of feel that drop in optimism over the last three weeks as the market sort of trended lower. you could almost feel it happening. but your numbers confirmed it. >> yeah. i think there's a lot of concern. if i were to sum it up i think there's two concerns. one about the volatility. people trying to guess whether or not a market top at least over the short-term has been established. and i think there's also just on-going frustration with valuations.

for people who are value investors, it's a tough market. when you look at relative valuations over a five-year period, it is very tough. and so i think there's a lot of people trying to figure out what's going on. a little bit concerned about what's going on in terms of market direction. and obviously until yesterday we had a market that was trending down for actually several days leading up to yesterday. >> a lot of people follow this. in the old days the the best thing really to look at. because the market would always seem to do whatever people weren't expecting it to do. but when optimism falls down to 20%, pessimism rises. it doesn't mean it's going to happen right away. it can be there for an extended time. is there a number like a 20% number you just showed which is well below the average. the average over year. but what is the absolute lowest that gets where you're expecting an imminent bounce that's sustainable that goes on for a couple months. how low would that have to go?

how high would pessimism normally go? >> the interesting thing when we've looked at the summit survey, what was the number you had to see at a given point in time, and what we found is pessimism is really not that strong an indicator. it's low optimism. really once their deviation below meaning that if we took all the typical readings and looked beyond that range, so any bullish sentiment below 28% and any mutual sentiment reading above 40%, they're both bullish. in the past 84% of the time when we've had neutral sentiment be unusually high or optimism be unusually low, we've seen the markets rebound. not only rebound, but also have higher gains than average for what you would see for the s&p 500. so there's no guarantee that history will repeat but in the past we have seen a pretty strong link between those two numbers and market performance. >> okay. bullish, you said 20%.

we're at 20% after yesterday. and then neutral, people have been neutral for a record ten weeks, 45%. above 45% for a record ten weeks. that's more important than pessimistic, neutral combined with optimism? >> yeah. it's interesting. really high levels of neutral sentiment. low levels of bullish sentiment are correlated. when we see high levels of optimism we see the market underperforming a little bit. but when we look over the history of the survey the market has trended up. it started in 1987. and that's always a difficulty when you're looking at shorting is that you don't just need to be right in terms of your call. you need to be right in terms of your timing. because over time the market does rise. so it's really that low level optimism when people are afraid to buy. people don't think stocks are going to rise. but also when there's just a high level of uncertainty where people really aren't sure where the market's going to be headed next.

>> like all these comments these common comments too. because we hear all of these. all our guests say all these things. interest rates remain at historic lows which makes now a good time to finance acquisitions acquisitions. we always hear that. indicates that stocks may not be overvalued given how low rates are. whenever you hear all these things and it's sort of dogma, makes you wonder how long that lasts. companies have too much cash. they need to buy back stock or declare a special dividend. these are all just sort of -- if we make a little button to press, these are all things our guests say when they come on. >> yeah. i think there's a little bit of frustration among investors. they're looking at the corporate cash. i think they're concerned about how the money is being spent. a lot of our members are retirees. but when you look in the past in terms of corporate mergers and daniel has done research into it

showing that ceos tend to be over-confident. then you see some of the big writeoffs occurring later on where companies overestimate good will. there is always some concern. but i think people are also looking at the broader economy. they're looking at wages and they're looking at these corporate balance sheets and wondering why isn't some of that cash not only going in terms of dividends, but also filtering down to wages. maybe that could help the economy as well. >> yeah. all right. i wond like to be you know just the perfect contrarian indicator but someone's got to do it. you've got to look at things and do the opposite. but it works pretty well. we appreciate your time. keep us updated. i bet you that changed a little bit after yesterday's big move. thank you. >> thank you. >> you're welcome. do you prefer a seersorkin or a sorksucker.

>> i go with seersorkin. it sounds cooler. >> yeah. coming up when we return architects in the netherlands may have made the most beautiful mcdonald's in the world. we'll show you pictures after the break. and data about to hit the wires. retail sales and import prices. those are key numbers and we've got them just ahead.

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check this out, everybody. a company called my architects in the netherlands was hired to replace the ugliest building with one of the coolest. what they came up with is probably the fanciest mcdonald's in the world. the restaurant features a grand spiral staircase and a golden facade. the two-story structure is on one of the most popular shopping streets in the city and it looks more like an apple store than traditional mcdonald's. mcdonald's has occupied the site for 45 years but used to be housed within a structure that once served as a cigar shop. now it is a beautiful modern facility. we're going to talk more about burgers, fast casual dining trends and the food business with cnbc's newest contributor.

the co-host of "restaurant start-up" tim love will be joining us in a little bit. >> as a rule they're nice in europe. >> very nice. >> people don't know they're supposed to feel bad about going in there. they don't have the same self-loathing we have here about it. >> over the last 20 years you mean? >> jim gaffigan he's hilarious. he was -- there's some routine he's meeting a hooker in mcdonald's and he's not worried about meeting -- he's saying i don't know if someone saw me in mcdonald's. not he was meeting a hooker but he was in mcdonald's. >> it used to be mcdonald's in new hampshire that was supposedly -- i remember going there years ago that had metal cutlery and cloth napkins. >> the one on the river boat in st. louis which is no longer there. that was fancy too. >> pretty fancy. in washington news the house voting to repeat -- i'm sorry -- to repeal meat labeling laws which were backed by consumer groups but the move

came after canada and mexico threatened $3 billion in trade sanctions. the world trade organization said country of origin labeling, the rules that are on beef pork, and poultry discriminated against imported meat. and apple may soon allow users to block ads from the iphones and ipads. a new guide for developers are detailing changes to the safari internet browser with extensions that can block content. could be a big blow who rely on ads for revenue. estimates that google lost out on $6.6 billion just last year. as we said earlier, very consistent with what tim cook has been talking about for its users. in other tech news google is getting into a new business. company starting an independent company called sidewalk glad. saying it's looking to improve

cities. when we come back, we have some breaking economic news. we have jobless claims coming up. also retail sales and import prices set to be released. we'll bring the instant reaction after the break. right now as we head to a break, take a look at the equity futures. green all day moving up modestly. dow futures up about 45 points. s&p up by 4.5 and nasdaq up by 12. stick around.

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welcome back to "squawk box." breaking news. we have retail sales for the month of may coming out exactly as expected. up 1.2%. and last month ended up a couple of tenths richer than it started out. it was a goose egg. stands at .2%. that's the headline. go through the internals. take out autos it's still nice. take out autos and gas, up .7%. so not bad. let's go to initial jobless claims shall we? 279,000. that's a slight rise of 2,000 to a slightly revised 277. on a month over month basis they were up 1.3%.

hotter than expected year over year. they were down 9.6%. wow. yes. down 9.6%. as large as that sounds we're expecting 10%. if we look at revisions to last month, there were some revisions. 1.2% is a common retail sales number. why do i say that? because we've had retail sales up .1% in margech. then several up .2%. it breaks a streak of ten minus numbers in a row. yes. it breaks that streak. the aftermath, dow futures are still up. single -- well double digits. up 13 points. we see rates have come down and moderated a bit at 245. but let's not lose sight of the fact that friday's close was still the highest in a little over eight months. so we back filled a bit from a 250 test. andrew ross sorkin back to you. >> thank you, rickster.

steve leisman is also on the set. he's trying to do some number crunching while rick's been talking. >> this is expected as rick pointed out. one thing we look at closely is the control group. this feeds into gdp. it was also up as expected. 0.7%. the slight revision to april helps a little bit. but it doesn't change the basic story that we have come back from the negative numbers. in fact, i don't know if you guys have been following, but first quarter gdp, the tracking data that we have is back to around flat right now from the minus 0.7%. >> celebrate. >> right. you don't want to get too excited and so you haven't had a massive comeback from the first quarter. it looks like you're running 2.8%, 2.9%. lucky to get 3%. be careful. the number this month is flatter by a rebound in gasoline sales. you had prices come back again. but you had pretty good numbers across the board when it comes to discretionary.

clothing up 1.5%. sporting goods 0.8%. it went along with the number we saw last friday in the jobs number when we saw hiring. >> new on yields for eight-month highs? >> where is it? >> i saw 2.54%. >> i have it right here. but i need my glasses. i got 2.45%. >> did they write the wrong thing down on the -- >> i don't know. i've got the bund at .89.89%. not the big snapback we had last quarter by along the line with average growth over the first a of the year. because you want to just take the two, divide it in half. and then hopefully we do 2.5% over the rest of the year. >> okay. they're going to have to --

>> is that what you have? >> reuters is going to have to -- reuters says 2.54%. i think it's 2.45%, right? >> i think that's right. >> can we pull up a chart of the 10-year and just take a look. >> maybe it's a little relief in the sense that people thought a hot number could bring the fed back in a little more quickly. >> need to be careful. it makes a difference. let's bring in jim iuorio. he's also a cnbc contributor. one thing we were talking about earlier, jim, was that we talked to these guys that compile the sentiment data. and before yesterday bullishness had dropped like eight points. optimism had dropped eight points. you can feel it over the past three weeks as the market has not really done much. you could feel that. but to get out of this trading range, the sentiment numbers changed so quickly that that's what keeps us in the tight range, i think.

i still don't have a firm grasp of whether we break out the new highs in averages or whether we head lower. you? >> the range is amazing and how tight it's been. it's actually historic. and what i think is the way we break out of it is that the fed manages to convince us that one, yes they're going to go in september. then they're going to couch that with all kinds of dovish rhetoric convincing us they're going to wait for some real serious traction before they go. now, this number i think kind of plays into it okay. we all sit around and look at the number and go okay it's not bad. that's exactly the good kind of number from the stock market. what it's going to do we know they want to go. they've told us they want to go. they want to prove to the world that the market doesn't control them, that they control the market. they're going to go in september. we also want to be assured of nothing is going to happen where they raise rates quickly. thing chugging ingging along at this rate is good. the consumer credit number from april, i think the whispers in

retail sales was higher than what we saw. people look at the stock market and think nothing's happening. look at the bond market. everything is happening. we've gone from 1.9% to 2.5% in about six weeks. there's big moves afoot in rates. >> really are. what did -- did you say which way we break out or are you avoiding that? >> i'm not avoiding that. i think we go out to the upside but it's going to take a little bit of time for the fed to convince us they're going to stay even though raise rates once. i think we go to the upside. i think it's going to be in about a month and a half or so. but i'm watching. if the futures traded 20 today, i think perhaps the move was happening. >> okay. all right. trying to figure out this christopher lee stuff. it's all over the place. but our crack producer saying he's not. i'm reading it everywhere that

he is. and even seeing it on twitter that the man who brought the count back to dracula. also a huge lord of the rings guy. huge fan. and do you remember those fights he had with gandalf? >> the white wizard. >> yeah. but he must have been -- if that was like six, seven, eight years ago. he was 93. >> i had no idea. >> doing pretty well. anyway. greco? why'd you tell me -- oh, now it's official. thanks. so he is. we mourn his passing. >> 93 years. >> he was 6'5"? >> yeah. he was tall and -- you know what hard to forget. bella logossi. he was frightening and he made a lot of money in the horror

movies. with the long white hair and the white robe when he was making the orcs walking around with the orb. he was actually a bad guy. we just didn't know it. when we come back this morning, a legal battle between one of the oldest payroll providers in the country and a start-up. the ceo of zenifis. and then is there a burger bubble brewing? cnbc contributor and co-host of "restaurant start-up" tim love will be our guest.

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welcome back to "squawk box," everyone. we've been watching the futures this morning and they have been trending higher. even after yesterday's big gain. right now dow futures up by about 47 points. s&p up by over 4, nasdaq 13.5. in our headlines this morning, shopify to integrate with facebook. payroll processing adp filing a defamation lawsuit against hot hr start-up zenefits. claiming they blocked thousands of their customers from activating their accounts. zenefits also claiming adp started selling a competing product within an hour of them filing the suit. adp responding in a statement that zenefits was pulling sensitive information including unmasked social security numbers

and employee banking information in a manner that did not comply with adp standards for data security. joining us with more on this hr battle if you will is parker conrad. he's zenefits cofounder and ceo. a newly minted unicorn. i'm not taking sides, but i love zenefits. they've changed the game. it's a fascinating issue and a fascinating battle because it's really going to perhaps change the back end for so many small businesses. thank you for coming in and talking to us this morning. >> thanks for having me. >> help us with this. you're hearing what adp is saying. you guys had your service, it worked to some extent with adp but they're saying the whole time it shouldn't have worked and you guys are doing pretty bad stuff. >> first off, i want to say there is nothing wrong with our security. you know, and i think a lot of what adp is doing, there's an acronym for this in silicon

valley called fud, fear uncertainty and doubt. a standard part of their playbook when dealing with a new market entry is to sow fear uncertainty, and doubt to customers. saying wait a second don't you want to buy the product that's been around for 50 years? and when you have a new company that's more cost effective, more compelling, that's the way you attack it. that's what's going on here. >> so just to -- for everyone to understand what's happened here you had the software in the service for two years. it worked with adp software. and then all of a sudden got cut off. the question is what happened you think, between the time it was working well and after? >> so really what happened is adp is scared. because zenefits has this service that makes all of this stuff around hr and compliance

and benefits and payroll really effortless for companies. and historically we've worked very closely with adp on the payroll side. we have an adp sales rep who sits with our team who helps sell adp payroll. and they got scared that i think in this new world with zenefits' growth, maybe adp isn't the center of this universe anymore. without warning they shut off our access that our clients had provided us to our payroll systems. you know, we didn't get a phone call we didn't get anything. and we've been trying to restore access ever since. >> let's tell you what they're saying. they say zenefits approached adp back on june 5th and despite being offered a chance to talk to adp's ceo, zenefits decided to launch a public campaign perhaps what we're talking about right now to defame adp. what do you say to that?

>> you know we spent several days trying to work things through with them. you know i had a conversation with their ceo on saturday night. i said listen you know if you guys are -- they said there's a spike in activity. i said listen. we don't see that on our end but show us what you're seeing. let's get our engineering teams on the phone to work through this. if there's something there, we want to know about it. we want to make sure it doesn't happen again. you know what he said to me? he said you're going to hear from our lawyers and really hear from us on monday. and our offer still stands. we'd love to talk with them. what we really want is we want this to work for our customers. because the saddest thing about this whole thing is adp in their efforts to go to war with zenefits what they're doing is attacking their own customers who rely on zenefits to handle all of this administrative work and payroll like setting up employees and dealing with deductions and all this other stuff. we do that for them and now that's been cut off. >> just so we understand though, in terms of what the

zenefits service offers are you a replacement to some extent for adp or not? >> zenefits does not do payroll ourselves. what we do is we are basically an hr administrator. so the thing about this is it's really standard for companies that use adp or other payroll systems to basically appoint a third party administrator for their payroll. it might be a bookkeeper, an hr services firm an accountant. we interface the same way every other accountant or bookkeeper or anything like that does. adp has a system for doing this. their client can set up an administrator account for these firms. that's what we do to this day. any adp client can add anyone they want to their payroll system as long as it's not zenefits. >> just so we understand when they say that you're -- the allegation they make is that you're pulling what they say sensitive information, unmasking

social security numbers and employee information. are you treating the information any differently than they do? >> absolutely not. first of all, zenefits we do have social securities in our system. but we have that because we need that to do the work that we do for our clients. so when we enroll an employee in health insurance set them up with hsa account, we need their social security number to do all those things. that's the way the system works. all of our information is encrypted. everything whenever it's being transmitted is transmitted over a secure connection. and employers understand this. employees understand this. most of the time they're actually entering their social security numbers into zenefits and we're the ones who are going into adp and setting that information up in the payroll system. >> do you see a path to a solution here between -- so you guys can actually work together parker? >> you know my view on this is we will do whatever it takes to restore access for our customers. so, you know, everything is on

the table in our conversations with adp. we want to work with them and get this up and running. so far when we've talked to adp, every time when we've tried to have a conversation with their technical teams to figure out a solution here, every single time the answer has been talk to our lawyers. you're going to hear from our lawyers. you're really going to hear from us on monday. >> all right. parker, we wish you the best. we hope that a solution is in hand and something gets resolved. it's a cool service. thanks for coming on. hope to see you next time you're in new york. >> thank you. >> thank you. when we return we dig into the food business and talk burgers, summer hiring and more with the co-host of "restaurant start-up" and cnbc contributor tim love. meantime, check out the futures still trending positive. dow up 53 points now after a gain yesterday.

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welcome back everyone. the fast casual restaurant business has grown remarkably fast, and shows no signs of

slowing. according to the national restaurant association, restaurants are expected to add 522,000 jobs this summer. that would be their busiest season. new york california massachusetts likely to make the majority of those hires, according to data. many will come in the fast-growing sector of fast casual restaurants and a big -- take shake shack, for example, up 250% or more than 250% since its ipo. right now we'll bring in our contributor tim love the co-host of "restaurant start-up." happy to see you. >> happy to be here. >> how would you gauge the overall restaurant business at this point? there are some great start upnumbers, but i've heard from restaurant owners who i know who say that we're not back to the level of 2007. >> i think 2007 was a really big year. there was a lot of money in the market, and a lot of people

spending money. then it took a big of a tank but people are pretty confident. they are spending it differently. we don't see a lot of fine dining restaurants opening up as you mentioned. it's like fast casual fund with exciting new flavors, so you spent $15 $20, have a really nice meal and tails new food trends. >> what are the new flavors? >> fresh has always been the chelately. a lot of people talk about it and you see especially the old fast-food chains are trying to get into the market of understanding where your food comes from. there's been a lot of push for that and we're getting back to the basics, we want food covered the real way. >> taco bell is testing a show in chicago to see how it playing to serve alcohol. >> you know i'm a fan of

alcohol. i don't have anything against it just adding alcohol to a restaurant doesn't make it better or make the sales better. people go to restaurants for one reason. that's to enjoy the company of other people and the food wine, beer alcohol are adds to the experience of who you're with. we settle things over the dinner table every day. good things bad things everything happens over the dining room or the lunch table. we make deals at the table. we separate deals at the table. so the restaurant just provides the atmosphere around where that happens. so you've got to be careful when you think you're just going to add beer will make things better. chipotle has alcohol, and their sales are great, but alcohol really has nothing to do with it the owner just wanted something there, because he liked margaritas. that's the way some things happen. >> what's more important? the atmosphere?

>> i think mod, atmosphere drinks all play equal parts. when restaurants like shake shack going public it's two different dynamics. people buy stocks in trends just like they go to restaurants in trends. so they're sitting around the same card table talking about it. the one owns it the other three go buy it. one person says they like the restaurant, if i talked about a restaurant today that was really cool most likely one of you would be there in the next week. that's how things move. when you combine the two, it gets confusing, i think. that's why you see shake shack move like this so much. >> is there anything emerging that we don't know about it? >> apparently somebody is doing something like a hot dog on a burger. >> no new chain, no new type of -- people talked about they were going to do -- they were going to be doing fast casual pizza where you could get it quickly, but make it right in front of you?

people talk about a sushi chain? sushi never actually works. >> sushi is expensive, first of all. >> it doesn't hold. >> it doesn't hold for a long time. burgers are never going to go away. it's fun to to see something like a cheeseburger and a company like shake shack take it and make it quool again, or five guys, making it cool again. it's the same cyclical thing. a great burger will always be a great burger. everybody in america who is american wants to have a cheeseburger every once in a while at least, and it's a matter if you can get enough people to eat them. >> i would love to talk longer so please come back. >> yeah. when we return stocks on the move and don't miss the chief investment involvement from pimco. we'll be talking about where the bond market is headed. watch scott mather later today

at noon. "squawk box" will be right back.

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sit rick shares jumping, elliott management has taken a

7.1% stake in that company, to present a plan which it says will increase shareholder value. it does say it makes the request with tremendous respect for the work management has done to date. >> bring your sticks t david led bert will be here the greatest teacher in the world. >> fantastic. make sure you join us tomorrow. "squawk on the street" is next. good thursday morning. welcome. i'm carl quintanilla, with sara eisen. david faber will make his way here in a moment. jim cramer is off today. retail sales are solid on just about every metric. interestingly, the ten-year d