e ♪ ♪ and i have no privacy ♪ live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. check this out. you'll see right now, things are weaker this morning. actually the dow futures have turned around now up by just over 10 points, the s&p 500 is down by 1 and the nasdaq is down by 1.5. the fed upgraded its view of labor yesterday but still suggested there are worries about the slow pace of inflation. the most post-meeting statement keeping the door open. we'll have more from steve liesman many just a bit. aviation experts say serial numbers on aircraft debris found in the indian ocean could help identify whether it originated from the malaysia airlines plane that disappeared last year. if that debris turns out to be

from the missing plane it will be the first confirmation that mh370 crashed into the indian ocean in 2014. the air kraf was travel from kuala lumpur to beijing. consensus calls for gdp to have increased at a 2.7% annual rate. also important today, the government plans to be releasing three years worth of revisions from the bureau of economic analysis. you might remember steve liesman first reported in april that q1 gdp was statistically softer than the other three quarters for the past 30 years. they said it was developing methods to try to address this problem. we'll see if they have. from the economy to earnings among the company's quarterly

result results. procter & gamble's ceo will be joining us. >> i didn't say something about that. >> earlier, just now? >> i thought at the top the show you might have said p & g earnings. >> i would know if i said that. >> i thought you might have said that. >> now you're starting to hear things. >> maybe it's from yesterday. we did talk about john mueller being on the program. he will be on the program. finally, new data research firm zillow reporting home rental prices climbed much faster than incomes in june. we will talk much more about real estate in the next hour with our guest host barry sternlicht. we tape promos before the show. did you do one about procter & gamble? >> that's a good question. >> becky did. >> i did.

you're right. >> i didn't think i was totally crazy. somebody mentioned it this morning. >> we look alake. we have the same hair. >> you get us mixed up. >> it's confusing. >> very confusing. >> in this world, there's no gender. i'm totally gender blind at all times. that could easily happen, andrew. could easily happen. with the futures, you know if you look at -- now i look at futures on my stupid smartphone. >> this morning, dow futures were down by 32 points. >> the futures can be down. the futures were still down just now, down 2 but fair value -- >> i heard it on the radio this morning. >> that's what i mean. futures can be down. the fair value is down 40. >> right. >> implied opening that final -- >> someone to do the math for you. >> we'll talk all about facebook. took it's really weird. it falls.

there was a lot of stuff on huffington post and the twitter feed that says another nail in the coffin for facebook haters. that was on the left wing stuff. on drudge this morning, this i figured out. frequent social media use linked to poor mental health. >> what? >> it leads to suicidal thoughts. i have considered -- i look at it enough i want to blow my brains out. i do. and psychological distress. think about it. is there anything more anti-social than the way everybody is just staring at their phones right now. >> there have been studies that shown people who are on it all the time get depressed. they're trying to make their lives look perfect. >> that's what i mean. >> how can being in love with your electronics -- you can sit in a dark room in your basement and look at social -- that's the opposite of social. >> how is that different than television? >> you're not really interacting. social is what we do every day. >> this is very social. >> what we do every day.

>> don't you get depressed without e-mail? >> that's part of the problem. what if you leave your phone somewhere. i didn't used to have to have something. >> now you do. >> all i needed was oxygen. now -- anyway even facebook which everything was great. it's hard this earnings season to tell whether a stock will be up 100 like google or amazon or be down like apple and in this case facebook posted better than expected earnings. the social networking giant hitting almost 1.5 billion monthly active users, up 13% from a year earlier. they're probably not all suicidal. the company's expenses also grew. it increased spending to boost mobile revenue and future growth. now all the advertising is now three-quarters of it is now spent on people looking at -- >> three-quarters of the advertising growth. 39% growth. >> people are looking at their phone to see small tiny pictures of other people on vacation and

then an ad comes up and they do something based on that ad? no. really? >> really. >> okay. we'll have more from an analyst in just a moment. and china's baidu, the company stock price slid. if you'll recall, we talked about it. andrew finally baidu'd himself. >> i founded some stuff. couldn't understand it but i founded it. got some good pictures. >> you should at least get the chinese phrase for too big to fail so you can recognize that. i bet you it's -- i don't know whether it would be letters or whether there's a symbol that means big or characters. >> i don't know. i actually own a book. they made it into -- i have it but i never studied -- >> you know you open it in the back and go that way? >> i also have them in japanese. i've looked.

it's like looking at something that you don't -- >> like teleprompter. >> kind of like the teleprompter for me. >> reading of any sort. i have to get back to flash cards basically is where we're at. >> this is still you. >> prompter is yours. >> yes, yes. >> i sprayed my hair today, sprayed my contact lens. >> did you really? >> i did. >> i'm hoping it's going to clear up. if not -- anyway. i only have one in like i told you. >> we have contact solution back there. do you want some to fix it? >> no. i have to take it out. xp semicon dulgtkonconductor -- >> it will mess up your mascara. >> xp is set to become europe's largest chipmaker once it closes its acquisition of free scale. >> you've talked about how it's hard to tell what to expect from a company's earnings season. one thing i've noticed is that

the swings seem much wilder than ever before. whole foods is another example of this. i'm not used to seeing 10%, 12% moves in stocks on a routine base us after earnings. >> there's some reason for it though, right? >> whole foods, yes. >> they were on a curve, right? >> if you take a look at the earnings for whole foods, it's down by 11% this morning. earnings revenues same-store sales all missed the mark. guidance is weak. the results were hurt by competition and overcharging scandal in its new york city stores. you probably heard about that. apparently they were routinely overcharging on how much was in a box. if they said it was a pound, maybe it wasn't quite there. >> what supermarket do you shop? king's or -- >> fresh direct. i order online. >> king's is nice. >> yes. >> if i see grass fed i won't buy it. if i see the fu-fu no nothing added, free range.

>> you think i'm a sucker. >> i won't eat -- if i have to pay more for the stuff that has stuff. you should pay more if it has stuff, preservatives, additives antibiotics. i like for gmo. if it's not genetically modified i'm not eating it. >> healthy. >> that's the whole thing. that's the whole faux millennial -- this world we're living in right now is crazy. >> i like the stuff that doesn't have pesticides sprayed on it. >> i know. you have the pesticide thing. you hang your hat on that. you don't want to export oil. >> and nitrates. i'm concerned about that. >> i'm not sure you want to have hot dogs every meal. >> when you're at the beach and you're grilling. >> you don't want to eat 50 or 60 like that guy. >> right. >> from nathan's? >> they don't throw up, either. >> okay, okay. now we're veering off. >> they process it.

>> shares of skechers jumped overnight. this quarter was helped by pent-up demand after the west coast port strike. it also talked about increased shipments of back-to-school items. royal dutch shell reported stronger than expected earnings. stock rising on that news up by 3.5%. among today's other stocks to watch, dep 0. med rejecting the unsolicited bid calling it undervalued, surprise, surprise. they didn't change the ratio. it actually went down. the whole thing makes no sense. sony posting a stronger than expected 39% rise in quarterly profit this morning. driver, strong sales of camera sensors and playstation 4 video games. check out shares of western digital this morning. earnings topping estimates despite a weak pc market that's

hurt retailers. shares of the hard disk drive manufacturer getting a boost this morning, though the stock is down about 29 perfect ers this year. let's get a check on the world markets. things are relatively flat this morning. of course yesterday you saw that the dow was up by 121 points. the s&p was up by about 15 points. markets closed near their highs of the day. at this point the s&p 500 has actually recovered two-thirds of the losses over the last two trading sessions it had from the recent five-day losing streak. take a look at what's been happening in europe. you'll see at this hour it looks like the dax is up by 0.6%. similar gains in london with the ftse, the cac is up by 0.75% and in italy, things up by 0.5%. same story in portugal. in asia nikkei up 1%, the shanghai compass it was down by about 2.2%. oil prices check this out yesterday, crude oil up 1.7% to 48.79, posting back-to-back gains for the first time since

earlier in june. june 22nd and june 23rd. this morning it's up once again. crude oil up to 49.22. check out the ten-year note. it's yielding 2.313%. the dollar at this hour is stronger against the euro at 10 .72. it's up against the yen at 124.31. gold prices this morning, down by about $8 $1,084 an ounce. >> we have already talked a little bit about facebook. that's the stock of the morning and julia boursen covers social networking for us you're not. you're not depressed most of the time. >> no. i don't consider social media a downer. >> you do interact. >> all the time. >> you talked to the cfo. >> i talked to the cfo about the

earnings results. he told us that growing user numbers engagement plus effective ads are drawing growth across the board. he said that facebook's future is all about mobile. >> the real story here is just the core mobile business on facebook. that's what's driving the growth. mobile has been just a phenomenal growth driver for us. we have 844 million people using facebook daily on mobile. that's up 29% year-over-year. we didn't have a mobile business three years ago. and that's now three-quarters of our ads revenue. that's growing 74% year-over-year. we think we have the best mobile ad product out there. >> he was also talking about the potential on instagram. the company announcing they're roll out instagram to more markets in the coming months. >> video continues to be some of the richest and most engaging content for people and publishers. since the start of the year, pages are also sharing more than

40% more videos. this quarter we updated our news feed ranking to help people see more of the videos they care about and also begin testing new options for video monitorization to help partners build their businesses. >> the company warned that its revenue growth rate will slow in the next few quarters but it also narrowed and pulled down expense guidance range and said capital expenditures would be lower than previously projectioned. we'll have more about facebook coming up in the next hour of "squawk box." >> stick around. we'll talk a lot more about this. we have an analyst, equity strategic. thanks for being here this morning. >> sure. >> this report was pretty strong. was there anything in it that concerns you or was this good news all the way around? >> well, certainly it wasn't the roller coaster we saw from twitter the day before. an interesting point that came out. joe's point was that 46 minutes a day from users are spent on facebook. >> the average engagement rose. >> 3% of our day that's used on

cross-facebook properties which is huge. investors initially were spooked on the fact that the cfo noted that growth would slow in the back half of the year due to the large numbers as well as fs head winds. if you look at the constant currency growth it was up 50%, faster than q1. ad revenue is growing 55%. no other company in the ad space is posting this kind of growth off of this kind of base. the fact that they're able to grow this fast along with the fact despite the investments their margin went up over q1 i think it was good news all around for facebook. >> can i ask you a metric question when people talk about hours spent doing this stuff? >> yes. >> if i leave a tab open with my computer with facebook up but not looking at it does that count? and if i'm on a facebook app on my phone, i don't close it, really close it out.

on a phone it's hard. you have to do that thing when you slide it up to get rid of it. plus, plus. if you left it going but not actually on it, does that count? i've always wondered about this. >> i don't think so. what they're talking about is the actual engagement. they put out that people spend 21 minutes per day on instagram, scrolling through picks of your friends and family. >> that's amazing. >> we're talking about a lot of time. there was initial skepticism on what the numbers mean. in reality, there's no other company tackling the $600 billion ad market. they are able to post this kind of growth and they have more growth levers than any other company in the internet space aside from amazon. there's even too many to count. >> you should do that get rid of it and then erase your history. you should do all of those things typically. >> yes. >> yesterday we had -- >> like a private viewing. >> yes yes. >> there's a place right over here. it's not the greatest neighborhood, yes, for what

you're -- yesterday, scott mcnealy was on. i still look at these things as overpriced advertising. it's like a media company. it's advertising. i never saw the whole market for advertising never seemed this big. look at what networks are valued at or whatever. he made the point that it's about metadata and it's about knowing all this stuff about 1.5 billion people. exactly what they do exactly how to -- how did is that finally work itself out to where companies capitalize on that to make money? i still don't see it. i can't figure it out. you would target them with exactly what they want and they'd always buy like robots? >> that's one of the reasons facebook has been investing in artificial intelligence one of the reasons why r & d spend doubled. >> there has to be something else. >> analysts are saying facebook is like google was seven years ago in terms of being your

interface for the web. before if you ever wanted to do anything job line you go to google. now you do everything through one of the facebook papapps. >> it looks like facebook and google have been the two who have consistently gained. >> the idea is that the whole market is growing. these are sort of the films within which you interact with the rest of the web and facebook. facebook is about the mobile web, google about the desktop. >> what they're doing with the publisher partnerships, buzz feed "new york times," they're personalizing the content you want to see, promoting engagement promoting discovery. i think -- a whole part of that interest graph. if they can get you to engage with that con ten, place an ad against it for you to -- >> i still don't see the dollars changing hands into someone. >> the future is brand advertising, where is it going to be? it's on mobile.

89% of users are on mobile. 76% of their ad dollars are on mobile and what companies in the world are in the best position for mobile? really, facebook you can easily put that at the top of the heap. with their growth levers instagram and all their new messaging categories, messenger. their going after twitter with realtime, youtube with video. they're going after commerce and oculus and gaming. the sky's the limit on this one. valuation wise, it's not that expensive. it's 16 times ebitda which is a down to the peer group at 19 times. >> yesterday we spoke to an analyst about whether it gets bought. would someone like google swoop in and pay something like$30 billion for the company? >> i don't think it's in google's dna to do that.

they just shut down google plus france. for instance. they need a ceo. we'd like jack dorsey to come in as ceo. >> you would? >> absolutely. he has a product background. he has the credibility because he's a founder. >> what are the chances that that happens? >> i'm crossing my fingers. he's still saying i want to be ceo square. you can't be ceo of both companies. you can have a sales guy, a strategy operational guy or a product guy. we want a product guy. we came away positive yesterday because it was the first time we ever heard that much cohesive explanation into what twitter's mission actually is and what their challenges are. that was refreshing and the candor was as well. >> zero user growth on 300 million versus 13% growth on a facebook that's already at 1.5 billion.

>> right. but if they didn't have a destination, they didn't have the wide twitter explanation before, now at least we're getting that picture and a road map to get there. if the new ceo follows the same logic that jack dorsey laid out, then i think twitter canning a decent turnaround. >> if you look at instagram and facebook and just facebook's mobile presence, i mean facebook is more -- a billion more mobile users than twitter has users in total. >> yes. >> with some of the things they were talking about on the earnings call how facebook has made all these gains and the following of public conversations and figures, you mention news on facebook. is facebook stealing twitter's thunder? >> i think slightly they're starting to, especially with the realtime and trending and all that they're trying to do with instagram. what are the trending images around the world today? that's huge. a lot of people go to twitter for that. twitter needs to figure it out. if they want to be the de facto realtime information destination on the web and mobile they have

the information. it's all about organizing it and how you present it. >> one more question. i have to be quick. can people -- i'm not on facebook. people that are on facebook if someone is not a friend and checks out their facebook page then later that person might get something that says hey, maybe you should be friends with this person. can they let you know someone checked your facebook page out? people do that clandestinely? >> i think linkedin does that. facebook doesn't. >> facebook is doing it too. i don't know this personally but someone told me that weird people from their past that there's no way anyone would know they know these people if these people didn't look at their page. >> they don't have a random connection somewhere? >> there are algorithms to basically figure out who you're connected to. >> they don't know they're outing these people that are spying on you? >> it's just trying to -- not

linkedin. >> i have not had that experience on facebook. had it on linkedin in a big way. i have to study it. >> thank you. julia julia, right? >> thanks joe. >> she tweeted yesterday. i see you left out joe squawk for a reason. >> your twitter handle is not joe kiernan. >> you have to call dorsey. >> if you don't hit the twitter handle exactly you miss the person. coming up, the forward f-150 gets mixed crash test rules. here's a look back at this date in history. ♪ nobody's gonna get hurt so what's the big deal ♪ ♪ something about a truck in a farmer's field ♪

♪ something about a beer ♪

welcome back to "squawk box" this morning. a new survey finding nearly two-thirds of countries face significant cyber attacks on a daily or weekly basis. the report put together was put together by accenture. the 9% of executives polled said their companies randommy attacks to test their systems on a regular basis. not enough testing going on to

really figure out what's going on. it's bad. we know it's bad. this proves it. >> we told you about other testing that's taking place in the auto business. ford's aluminum sided f-150. the smaller supercab version did poorly when it came to one frontal crash test. the insurance institute says that aluminum is safe and performed well. in other auto news it pays to talk tesla. owners and buyers of the model s is eligible for a $1,000 bounty if they take advantage of word of mouth referrals. buyers get a discount off of the purchase price. owners get credit toward the purchase of another car or parts and service. ceo elon musk describing the program as a guerrilla tactic. eventually the system could be

cost effective for tesla. musk says it costs about 2,000 more to sell a model s through a company store than directly to the customer. coming up imf head christine lagarde in an interesting move but not surprising says yeah we're totally behind china's efforts to manipulate their market and ban short selling and actually just banning selling by anyone. sounds good to us. first as we head to break, a look at yesterday's s&p 500's winners and losers.

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♪ go big or go home ♪ ♪ go big or go home ♪ ♪ go go go big or go home ♪ ♪ go go go big or go home ♪ welcome back to "squawk box." imf head christine lagarde is supporting what she calls china's efforts to calm its stock market played down the declines saying the market was still up 80% and that there's no reason why the chinese currency shouldn't become a rival to the dollar based on totally manipulating their markets. just for me, it seems like it's the latest example of the imf sort of taking -- i don't know if i'd call it a socialist stance but they're definitely

different than we with here in certain ways in terms of letting markets decide what to do. i mention a couple other instances. she's been sort of putting herself into the discussion about whether yellen should raise rates. saying don't raise them in 2015. it's way too early. in the greece situation she's saying restructure the debt forgive the debts, you germans are too stingy. in this case the kye these at this point have actually banned selling by large shareholders as with the dumping case. >> they're printing money to buy stocks with. all these things seem like not great things if you want to let markets decide where things should be. but one more point. there is a notion that we don't want any more near-term pain ever. >> right. >> markets never clear anymore. we don't ever take any pain near term because -- but longer term it seems like we have a harder time making gains eventually.

the systems never clear. a good thing to flush the system sometimes. let things go where they need to go. they have a firm foundation. when you are kicking the can down the road just so there's no long-term pain. >> i agree with you when it comes to china and when it comes to telling yellen she shouldn't be raising rates. >> with greece. >> looking at constituencies when it comes to greece i understand why she's saying it. in reality, there's no way those loans will ever be paid back. before she commits more imf money to it, she wants them to say basically this is reality. when it's the imf money being put into this, it's ridiculous to think you'll ever get paid back. >> the imf money, they've already been stiffed. they don't expect money back. >> they are expected to be part of what's going on with these great bailouts again and give more money in again. she's like wait a second why don't we call it what it is here.

we're never getting this money back. >> this enables them not to pay it back the next time. we contribute into the imf fund. >> no. >> reminds me of the united nations in a way. >> you're right. >> right wingers hate the united nations. >> she's got all of -- she's got a very different situation. >> this is the issue. >> a lot of people say that that the markets never cleared and one of the reasons we have tepid growth now is because the markets were never able to clear. >> i'm on the other side of that, which is to say if we didn't do that it would have been politically unpattalable. unemployment wouldn't have gone to 10%. it would go gone to double. >> i miss dsk. just for a lot of reasons. >> those french leaders. >> strauss-kahn. >> you miss him for the daily stories. >> i miss that italian guy, that premier, too. >> berlusconi. >> for his economic prowess.

>> yes. >> for his other prowess. >> yes. the fed is also a big market story this week. let's bring in drew matusz. >> he's trying to will it into being here. >> so am i. >> it's kind of half willing it and half thinking that yellen believes that she should do it to regain credibility and for the markets to regain credibility. you are -- you're now deputy chief u.s. economist. >> a long long long title. >> at ubs. >> who's the chief economist. >> morrie harris. >> you have your eye on his job? >> eventually. i can wait it out. >> he's like 70 by now, late 60s. >> no. >> how old is morrie? he comes on here. >> this is going to make for an uncomfortable morning meeting. >> that's not my intent. forget it. forget we even talked about that. you think september? how high is your degree of confidence and why aren't fed

funds discounting that? >> i don't think the markets have been listening to yellen. the biggest tone shift in janet yellen's conversation is she started talking more about the risks of waiting too long rather than the risks of going too early. for me that suggests september. although i will say, if you go 20 years from now, if it matters whether we went in september verse urs december, we're all doomed anyway. if we can't stay 25 basis points you've made this point several times. if you can't take 25 basis points, what are we all doing here? >> nothing she said yesterday, it all seemed to play in? >> it all seems to play in. people are hung up on the inflation idea. they're not targeting inflation. they're targeting expectation of inflation. they might as well be targeting what they think the population of unicorns will be next year. they can make up any number. i'm an economist. you can make up any number and build a model that will defend that number. for me it's what does the fed

look at to figure out whether or not inflation will happen. they'll look at the labor market. all these people grew up in wage spiral times. they look at wages. their model would rely on unemployment. as long as your unemployment rate keeps drifting lower and employment stays healthy, employment growth stays healthy it seems to me thak they'll move in september. >> we're eventually going to tighten. it's been the least -- the worst kept secret in the world that we'll tighten. i don't see the dollar going higher when they finally tighten. i see the dollar weakening when they get started. that means we don't need to worry about commodity prices going further down. when we start tightening, that marks the end of the commodities rallying. >> i think things will move more than we expect. i think they tend to move in a better direction. when you move the rates higher the confidence impact will be great. if they don't move rates higher the markets will look at that

initially they'll be like that's fantastic, they didn't move. then they'll look at that and say what do they know what we don't? i think what you want here is that smart person in washington telling you everything is getting back to normal therefore, they can get back to normal too. >> sternlicht just walked by. is he lost? does he not have a car or driver? >> he's lost. he's lost. he walked to the other side of the street. he pointed over here. you can't find the studio? >> i thought you were pointing at the guy waiting -- >> you can't find this studio, sternlicht? look at him. >> he's like how important is this interview, right? >> if we had morrie harris it might be. >> you are the ones that had him out there with the leaf blower. >> yeah right. >> did you want andy griffith or

barney fife? >> love you. >> you'll get there. you're not even 40 yet, are you? >> i'm not worried about it. >> i'm not worried about it either. when we come back this morning, we'll be talking oil. shell, the latest energy jean to the slash spending plans amid low prices. we have a call on the commodity when "squawk box" comes right back.

welcome back to "squawk box." crude falling sharply in the last month, down now more than 17%. goldman sachs has this to say about oil sell-off on the "halftime report."

>> we got our evidence, throw out of the last four weeks they've kicked up drilling. last week they raised drilling and oil, 21 rigs. the highest level since april of 2013. this reinforces our bearish story. we continue to maintain our near-term target of $45 a barrel. >> we have the founding partner of again capital, cnbc contributor and he's actually been right. that's pretty good. >> this time. >> for now. for now. >> for now he's right. >> so what the heck is going on here? let me go here. we talk about china all the time. how much of this is a china story, how much is an iran story or is this something totally different. >> it's al part of a big soup. for the oil market we're watching the china situation. i've been hearing how the chinese stock market crash doesn't affect anything doesn't count almost. it's going to affect consumer confidence there. that's an anecdoteal story from

your cnbc asian correspondent. if we see things like that automobile sales coming down that hurts the outlack for oil demand growth and gasoline demand growth going forward. it's a big part of the problem that's already there. i talk about china being the swing demand center the way the saudis are the swing producer. it's a big deal for the oil market what's beginning on there. so is the iran situation. we are already seeing china step up and buying iran cargos the floating storage that i've talked about with you guys it's ready to go. >> it's going. >> yes. >> where do you put the price at let's say christmastime? >> christmastime we'll probably be rebounding off of new lows off the mid-to-low 30s thapt. >> we have a lot to go. >> we have a lot to go. we'll take out the march lows 43 and trade down at the 30s in my view. >> what's the tipping point? >> the catalyst is the global glut of diesel fuel. the saudis have stepped up and

ramped up their refining capacity, so the have chinese and they're flooding the asian market right now. >> because? >> you hear analysts come on all the time talking about this golden era for refiners. i'm seeing recommendations left and right to buy the refiners. you're still making 30 bucks a barrel turning crude into gasoline here. they're all going to rush into it. you see the tirppping point, just the way crude hit a tipping point last year. >> the weekly numbers from the eia have been showing a rapid decline, the monthly numbers are showing an increase. what's again on. >> jeff curry alluded to this. it's a confused data set at times. the rig count has been fluctuating. yesterday in the weekly report there was, for us a huge drop in crude oil production in the u.s. 145,000 barrels. that's quite a bit. it was an eye opener. i'm trying to see if there was pipeline maintenance or

something that affected that number in the week. it's not unlike other data you get from the government in terms of the shorter term numbers then get revised up our down. i think net/net at this point we're still not seeing much of a decline in output. that's the bottom line. even yesterday's surprising number, i bet we'll see a rebound in that as well. the thing is the shale producers need to produce money whether it's very profitable or not. they're scrambling. they've bent the cost curve tremendously whether it's from shipping costs on the rails or other things or even day rates for the gulf of mexico rigs have come down tremendously. they're hanging in there by a thread. we haven't seen the breaking point yet. there will be a big washout, that's why there will be a price collapse coming yet. >> thank you. >> thanks. coming up the ceo of american power, this is the company behind the real estate and the real estate investment trust to make your wireless device work. ♪ it's hard to look right at you baby ♪

. second quarter earnings are below street expectations and revenue is slightly below and coming to expect sprong growth for the rest of the year. jim is ceo of american tower. i just hit up the market cap for the he can of it $41 billion.

it's been high as 106. four or five six years ago, it was 20. five times in an reit that it's the structure of the animal to own the big cell phone towers. >> yeah that's right. >> well the primary really estate and have been since 1960 when they were first put into affect. we're basically on the ground floor to have mobile technology industry. we provide the transmission support for the cell phones to work. >> you build them or buy? >> we buy them or build them. we bought 5,000 last time that the i was with you all. we buy them in bulk and operate them and lease them. it's a leasing business. >> so there are external factors

that caused it right? it was accounting or what was it? >> a couple of straight line lease accounting and that's pretty complicated activity. noncash. >> you can talk to me as an accountant. no don't. >> foreign currency affects us. >> you have 96,000 towers now. >> we're on the way to 100,000. >> okay. over 100,000 not another hundred thousand. how much is here? i see that you're buying towers all over the world. >> we have been deliberate about it. we're 40 percent u.s. site based, but about 70 percent u.s. revenue base. so the mature towers in the united states that's growing at seven or eight approximate percent of the organic growth

are being complimented by the 40,000 towers outside. they grow faster around a 10-12 clip. they're going to go for longer. the countries that you mentioned and india and brazil all of those are five to ten years behind the u.s. in the technology deployment. the pattern is the same. we're going to four g in five or ten years you will see mexico have full 4 g coverage and then ten years from now india and countries like nigeria. >> why does it make sense to have verizon have you manage them? >> well it's a cost center for them and into a profit center. we will take it and up it up for commercial leasing and turn it

over. >> how many families can be on a pole? >> so two to flee. the international market itself are between one and two. >> do any of the cell phone companies try to compete a competitor from being on the same pole? is that a thing? does verizon say we want to be on this pole but at and t can't and we will have better coverage in this area. >> well there's a why would i pay my competitor to use the real-estate. it does make natural sense to get those assets out of the pry tear environment and into a commercial leasing environment. that makes perfect sense again for trust to own them and lease them verses you know. >> you only go to dah mack vera si. >> yeah.

>> free market. so what percentage of cover did we obtain at this point. if you could just go like a magician or something. how many more towers would we have around the world? >> we could double the tower count over a long period of time. >> we need that. >> it's an opportunity. >> there's perfect coverage for everybody. >> not at the same time. the technology is advancing. it's like a water system. the more water that you put through, you need more pipes and valves. >> how many things do you make the towers look like? >> we have cacti in arizona. >> do you have any that look real? >> they look like real towers. >> they look like towers with

branches. >> thanks jim. >> thank you. ♪ every auto insurance policy has a number. but not every insurance company 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.

earnings alert and they set the report. we will bripg you the numbers with the company's ceo. what do a billion and a half people have in common? they all used facebook and many of them logged on a mobile device. raising the priegs target on the stock. he joins us straight ahead. tech evaluations gone wild. seeing it in the market and why he is holding back on the new investment itself and start ups. the second half of squawk box

begins now. ♪ live from the beating heart of business business in new york city this is squawk box. >> welcome back. first along with joe and becky quick on today's watch list here is what is going on. there's a first read and that happens at 8:30. economic growth picking up and fighting consumers and calling for gdp to have an increase at 2.7 on an annual rate. take a look this morning as we flip that around and open up higher and it keeps it between the red the green and the nasdaq has it a couple of inches from now. chinese stocks finished like the first session in a long time and it's steady with a sell off and it fell 2.2 percent and that's

actually a lot better than a lot of days taking place this week. >> 2 to the 2 gets.2 gets your attention. >> yeah. >> we had -- it was done 1.7 and now 2 to the 2 percent here. >> 2.3 would be something to talk about. dow and procter & gamble is reporting a dollar and that's a nickel ahead of the expectations and that's 17.79 billion and we have to figure out. it's just slightly point 978 and that's not bad. we're going to talk to the procter & gamble ceo in just a few minutes and get the organic growth that they were talk about in sales and how a multinational

like pg and e give us a look for 4 x concerns and exchanges and how they fair around the world. also we talk about the latest ag finally handing the reigns over and i had -- >> we will have a lot more on procter & gamble. >> okay. let's talk about the other top story that is we're focussing on this hour. facebook beating wall street expectations. 1.49 billion monthly active user and that's when it comes to mobile. both of them were better than kperp expect

they were expecting. check out facebook and there are people looking through numbers. you see the shares down 1.7 percent. we will talk to analysts at the bottom of the hour and get more from him. we're looking at shares of whole foods today. the guidance and no good news on this and the competition and the pricing scandal and that's where the auditors and the prepackaged world and also royal dutch and a trend that we saw and cutting jobs and spending on the floor. earlier this morning it reported stronger than expected earnings. you could see it gained 4.7 percent. >> we will get to this story in a minute.

the organic gouth was at one percent and the net sales was down 5.3 skpers the company downgrade to six. this was the fortyurth quarter and that was actually down two percent from a year ago and it was called flat to down low single and a lot of those things are more or less in line with what we were looking for and now it's turned around and it's 22 cents and we will get a lot of information information. it was the decline of 9.2 and it

was zero in the most resent quarter. >> they're giving guidance for 2,016 and they're looking for organic sales to be in line. >> yeah. >> and they're also talking about foreign exchange. they expect that's going to be a head win. as a result they're looking for the sales to be down and low dipths veshss 2015 and some of what they're talking about this is the planned exit and several categories that they announced this summer and they're going to account with the changes. >> yeah they kept the ugly business and got rid of the beauty business. maybe there's value there. did you see star wood numbers just went by. star wood hotels. somehow he found the way here. thank you. we will be with your in a second. people say that you could go back and run the company because they added hotels quickly

enough. >> yeah. >> we will come back to you. developing story this morning. is it the missing jet. the cable story and one of the biggest story last year. the serial numbers found could help find if it's from the plane. if it turns out to be the plane, it's the first confirmation that flight mh 370 did crash into the indian ocean after vanishing march 8, 2014. we know it was traiflveling to beijing. this was way over near madagascar madagascar.

>> that's the way that ocean tides would carry it. this is the only missing 777. >> yeah and the boeing people looked at the pictures the see and it seemed matching. i think there was a suitcase or something found. we should also talk about what is happening in china. it's created deep concerns on the state of the economy. what does that mean for the u.s. market and investors wanting to get to work on u.s. soil. joins us for the next hour is the capital and ceo and his company has $44 billion in assets. >> great to be back. >> you're someone that's figured how to make the most of chinese investors that are looking to put money to work here. earlier you sold that to chinese insurance company. that's the most that anybody's

sold here. >> it's going to be a great long term investment. it's on the political unrest and also by people's thoughts of instability in their own markets. developing in china today it's a two double edge sword. some think if the market is going to fall we will see a halting of the chinese investment that the company companies will not feel as rich and they will not be defining the pace. others say that it forces them to want to get the money offshore really fast. >> that's what i would think. >> it's across the world and they're the price leader for property. we were the lend er and you saw other trades.

all the company and construction company are chinese players. their attitude given the way that it's organized is that they will do better on the deals than the treasury. it's a two percent concern, and if you take the attitude it destroys the markets. i think that people upds estimate and people building and thinking that they can sell to them. all of them want to build the nicest property. in the residential market it's like in new york for the housing market and/or range county. >> how does it end besides badly? >> this is ending one it feels like. in the normal course if china holds the place, it's the beginning. there's not an ending in the high profile deal that you hear about. it's the beginning and what ends

is the economy crash. those guys were buying everything. everybody marked them ton trade. i think that it will land. the government could em employed and . companies don't have to trade. >> you said that it was the first inning. i am trying to understand the time. >> i think that the purchase was a cow bell going off and it's front and center and not hiding and saying that i am going to buy this property. whether it's the chinese or the koreans or other middle easterns this capital is very very early. it's coming in a way. the chinese market is in new york right now. the high end. they're buying the biggest units

and they don't like others and paying allot rotlot of attention to them. the chinese market is going to be fine and it's going to continue to come in here. it's all yield. when they say things that people don't realize, if rates at home are not low. they're five percent interest rates. they're really diversified and told by the government and they said to diverse identify yourself. they're huge and have little exposure. they're changing markets and everybody wants new york. we get calls weekly from the eastern and particularly clients that want to buy a property in new york. it's a feeding frenzy. >> if they follow the leader they will follow each other. after that it's like okay it's open season and we can go in our own. it's not a bad thing.

it's just when property becomes a proxy for the bond market it's hard for real-estate guys to understand value. >> there are a will the of things on what he said and the idea that they're not interest in the u.s. treasuries any, is that an implication? >> well i think that has big implications on the u.s. if they have a market. will they start to sell the treasuries. yeah it could put tremendous pressure on it. we're still running what a 400 or 500 billion deficit. it's big and it's going back up and we need the guys to be healthy. i think of the players -- i came from a real-estate mogul out in chicago, and would be of the ceo's of the company said you're in the point of "the cycle" where stupid people are doing

stupid things and getting it. "the cycle" is over when the smart guys do the good guys do the good things. >> you look at the eur oorks and they're below. i don't know what they're going to try to do. it's the competition. >> it's close to our credit worthiness and it's not nearly. what are they -- and china cannot afford to sell. >> maybe they will and buy the stocks. >> that's the interesting question. >> for a while they were buying and hiding the personality.

that's an interesting situation that we uncovered. >> you see green span says that nobody talks about entitlements anymore. he says that we're close to move by grace. we forget about it. the definite is on line. we have these huge entitlements. we're paying a lot of attention to what is taxing and taxing and taxing. people will move and make the problem worse. they're taxing them. it's going to end. somebody is going to do something. it's going to be donald. i tried to get him to come on and he is headed to the british open. >> i talked to him last night. >> we used to him on trump tuesday tuesday tuesday. >> someone decided that was a bad idea. maybe he says things that are not politically in line with the

thinking. yeah, we would probably like to have him on now. we have rick perry on. >> yeah, he's having fun. >> you saw what mark said we were not had a politician say things that are not scared. we had a politician sniffle for saying that all lives matter. that's the state for the u.s. politics. >> it tells you about the state of the country. >> i don't know what he was thinking. >> all lives matter. come on matter. >> barry is the host for the next hour. first proctorer & gamble. ceo will join us next here on cnbc. stocks down 15 cents. we will talk to panel list gene. he just raised the price on the stock. in fact, the number of mris has increased by ten percent a year.

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procter & gamble reporting the earnings minutes ago. the company goes famous in more than 150 companies and just announced new leadership this week. here to break down the quarter john moll er and a member of the cnbc counsel is there one thing

that was worse or better than what peg and e forecasted? >> well in some pretty tough markets we have made the ladder choice and we picked that up as well. the share is up 12 percent of the year and that translates to the tremendous cash flow of the productivity of the year. this is the kind of things that's enable to list us for the 50 consecutive year and only six companies to have done that. >> in terms of the dollar the last quarter the way that it affected the net sales was much worse for the first three

quarters? >> yeah, there's no escaping the fact that there's a big impact of the top and bottom lines and the quarter is nine points on the top line and 14 points on the bottom line. again under that is the constant currency is holding up extremely well. >> have you -- when you try to figure out what is happening in commodities and how that's going to affect the business in terms of input toss as well as how the sales are going to be in different parties of the world, what do you see there? is it a financial phenomenon? >> well, i am not in that area but there's a macro and you know picking apart one element of the income statement is difficult to do. as you indicate there's a cost impact but the lower commodity is having a lower impact on the

lower resource heavy economy whether that's russia or the middle east. that in turn has an impact and of course there's the relationship with the currency so it's a tough metric to sort through. generally we see commodities as a slight tail wind in the ree sent quarter and going forward. >> passing the baton last time and it did not go well last time. was it different this time? what can you tell me about the gentlemen picked the run proctor and dpam and gamble. >> well, i have worked with david for many years. we worked together in china and the 90s. we worked together to build the strategy that david is going leave the execution on. i am confident in the leadership. >> if you headed to say how is

procter & gamble. what is going to be the key driver in the future? is it trying to get prizinge pricing right in the areas? what is it that the gentlemen needs to manage through? >> well first consumer at the forefront and all was every way everyday. innovating to develop products that serve consumer in a way that's a positive value for them, and then we have just made two major choices that are going to impact the future significantly going forward. one is productive and efficient and you look at the last four years and nonmanufacturing down 22 percent. same site down 20 percent over the last three years. we're taking that same thing through the balance sheet inventory sheet and that all provides financial resource to innovate and to grow the top

line. second move is focus where the market leader is a category and it's a port folio. it's level the company and have performed better than they have on the top and bottom line. over the last year we have moved out 60 percent of the brands and all of the complexity around me and we think that's a great trade and a good play. now we're going to run the play of foe cushioncussing the energy. >> john i have no idea of the sales growth in 2016. the range is down slightly up to the single digit. at this point you don't know if they're going sell less or up five percent or six percent. >> i think that you're quoting the earnings share numbers joe.

there's a lot of volatility there. >> fiscal year. >> well the range that we're giving for organic sales is flat to low singles. we fairly think that's a modest and low range. we expect to grow sales next year and operating profit and build margins. we expect to have a tremendous cash flow. >> it says down slightly. there was not an earnings. organic sales went down slightly to up mid-conditions for fiscal year 2015. >> we're going to grow organic sales. >> okay. all right. i'm going to cross that out here. maybe i will send this person -- no hope for the reds.

i don't know what to think there. any way, horrible. it's hard to watch. it's hard to watch. >> i have to agree with you. yeah, i have to look forward to the bangles. thank you. >> thank you joe. >> all right. coming up squawk box news result and liquor sales coming up after the break.

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where he will come back to "squawk box." among the stories that are front and center cardinals posting better than expected earnings and revenue. shares are up and you can see just over one percent. also con koe results and beating the consensus. it's the forecast and it's from $11 billion to 11.5 billion. in squawk news there was flat sales. they saw volume decline in the

new york america regions in the bright spot. not with the american whiskey sales and sales declined in africa and asia. we have the new data from the un says that it will pass china as soon as expected. they say that india will catch up by 2022. both are expect today reach 1 ht 1.4 billion people. coming up quest host and the facebook managed the expectations in every category. he raced the price target and asked him how high the stock would go. take a look at the features. ♪

♪ every auto insurance policy has a number. but not every insurance company 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.

welcome back finding high levels of contamination and that's going to pose a problem for swimmers and voters competing in the next year summer's olympic games. some training there have already fell ill with fevers and vomiting and diarrhea. they ensure that the water is going to be safe for the athletes, but the government does not test for viruss. >> let's talk. uber feeling the concerns on the margret. let's talk about possible bubbles forming with a guy that invested in a number of the guys. we talked to you about real are estate and then tech. you have states and lift. were you thinking about this whole thing. is that on your mind the past week? >> i have done a lot of early stage investigating.

>> we have pinterest. would you sell? >> well for an individual like myself it's say and spray. i think some of the companies will be material contribute ers to the company going forward. many of them will days disappear. you miss the numbers, and it's better to miss them in private. there's so much capital, and it's me putting a little bit of money into a pinterest. it's fidelity and that's the equivalent of me putting in five grand. we can not put that in early stage. it has to be the late stage. they're jumping the gun. >> so will those guys get

burned? >> yes. >> so the public investor will get burned when all said and done? >> yeah there can't be too many 50 billion companies. that was getting up on the cycle cycle. >> what is it -- do they run out of capital and all of a sudden. >> i am hoping that microphone o peers are friends with the hedge fund community. people are just nervous. there's nothing in the markets across the board that i get e-mails and credit from the managers and they're trying to sell $4 million in bonds and they can not get bids. there will be something if it's iran or isis. something will freak people out and whether it's china or they do something crazy or one of the interesting features of the

world today is there are two big things. >> you're talking of the public markets. >> i think they're all connected. what we're paying for stocks and if there's too much it's looking for returns. you buy the treasury but uber at $50 million. that gives you a little bit of exitment in excitement in your life. it's too easy too. the company is worth 5 billion and the next day 10 billion and then five days 18 billion. it's awfully fast. it does not happen in the public margret. a lot of what took place and the companies ultimately went out of business because they ran out of money. they were doing everything at a loss. >> most companies are still burning capitals. >> there's a point to have the faucet stop. >> i am with a lot of them in the first question and how much

money are you losing and going share. some things is a losing share and the markets you see this with a whole foods being chopped up and they have a great green section organic section. you can get it delivered to your house. it's real. uber is a great company. >> right. does the evaluation of air make any sense to you on a logical basis. do you say five years from now there's a power or a force that's worth a 5th of what it is today, or do you say that i wish that i had money in this thing? >> well we can justify how to adjust them and come up with theories. a company like uber worth 50 billion, when? i was in france when they were blocking the roads. >> yeah there's a story today

to find an employee. it's come out in the political campaigns. >> yeah the unions are coming back. >> how does that change the situation. >> if you're not a contractor. >> there's a llt of opportunity. i think that it's actually one of the greatest things of the economy. they're putting together the guys and they come together and the local guy is replacing management, and it's going to work. it's going to be a great company. it's for a great guy and fantastic. a lot of the companies are great because the kids can build amazing companies. tell us tonight that these are great channels. what happens is that price line gets 16 new guys. they buy them or lose. the market does not appreciate how fast. if there's no barriers the

companies can completely take them out. so with the work day it takes apart the s&p and what the box does. it's changing the playing field very fast and guys with the half live may have changed. it's the capital market system until we figure out you how to change it. >> i don't do that anymore. i know that the rounds are at the $50 billion level. >> but does not seem like you're sitting around with cash waiting for some moment that you think is coming. maybe you are. >> i am getting more liquid. i do think that. >> you have been talking about the liquid over the past few years. >> i was talking about it but not doing it. >> but you're doing it now. i am lightening up on the portfolio. >> so we're going to talk about the dollar. it's super important. you look at the travel markets

and that's the dollars and it's a dollar 30. that was 94. the most important travel ers to the united states are canadians. it's not europeans. we have a business sale going on in canada and everything is free. the brazilians are the impact of the part of the markets. the currency was just halved. not only is it halved. we have friends worth 2 billion and it does not feel rich. he is not buying 14 apartments and sighing theeeing the slow down. >> you see what they're adapting for many reasons and one of the collapsing and secondly safety. this world we went and how far can the rates rise.

that's the single most important one that an investor can make. do you think that rates can rise. they will go up and that won't matter in september. it's good because somebody might save a penny. long term if you think that they're going up, you can halt that and worry about p multiples and evaluations -- it's expense expensive to hold gold and you have an alternative. so the dollar and rates are so important right now to the investors. >> we will come back to continue the conversation after the break. thank you for that. when we come back facebook trading is lower and b analyst have expectations and we're going dig through the report with gene and maybe barry will weigh in. back in a moment.

seriously? you're not at all concerned? about what now? oh, i don't know. the apocalypse? we're fine. i bundled renter's with my car insurance through progressive for just six bucks more a month.

word. there's looters running wild out there. covered for theft. okay. that's a tidal wave of fire. covered for fire. what, what? all right. fine. i'm gonna get something to eat. the boy's kind of a drama queen. just wait. where's my burrito? [ chuckles ] worst apocalypse ever. protecting you till the end. now, that's progressive. facebook shares falling in the premarket and posting a top and bottoms earnings and facebook reported monthly activated users of 1.49 billion and here to join us with more on

what is going on julia. >> yeah one-half billion users. >> users is better than dollars. actually, dollars is probably better. >> the company beat them and it comprises over three quarters of facebook is over 844 million people use them everyday on cell phonings. now there are three areas and investors are watching and the first video add that's starting the boost the results and they're starting to make the impact of the quarter. they're also watching when the instagram addss are coming and they roll out and the format and not being careful to disrupt that experience. so what is weighing in on the stock is rising and that's the

expenses in the -- the costs are doubling. it tightened the forecast as much as 60 percent down to 65 percent. he said that it would be a year of heavy investments and hiring rnd. andrea andrea andrea? >> okay. let's bring in gene. what do you make f of the additional costs in terms of the r and d that they have been spending? >> well i am surprised that's highlighted as one of the reasons. that's something that they outlined and they tightened up the range. i think that there were two things that were said on the call at the same time. one was on the ex pensions and the second was the ceo to expect the the ad growth and i think he was just trying to do the expectations. that's probably the growth and the other factor that maybe

impacting the shares today. >> when you think about instagram and the other thing that is they're doing, is that fast enough to make up for some of the other things that may be slowing in terms of the growth on that end? >> they're doing a great job of balancing the core news feed product and just being slow so to answer the question it's not coming very fast but it's working and they're doing great with the numbers. there's another segment that i am very passionate about that i would throw you in there too. here is version two and version three comes out beginning of next year. it's going to be a profound ship as investors. we're all on the reality stream. >> what about messenger? there was a question on what messenger could mean in terms of

revenue. he said sit tight. we're working on it. when do with you think that we will start to see money from messenger and what's up app starting to impact. >> probably 2017 or beyond. 2016 is instagram. they have 700 million messengers and 960 million daily users to put that into perspective. they want the add business to be organic that they have had in news feed. they're not charging but charging and chunommunicating with the consumers. an important aspect is that engagement is important and is that starting the weigh. last night they gave a metric for the first time and the average time was 44 minutes a day. if you multiply that that's $740 million a day and that's

really strong. >> there you have it. thank you. you got them back. you're not even spending them. >> in those 47 minutes don't include what's app. >> you spend 47 minutes on facebook a day. >> i don't have facebook. i have instagram. >> that counts. >> i am in the family. >> more from barry and the brazilian oil industries. david is here with an analysis right here at the top of the hour.

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back to the guest host and star wood capital chairman and ceo. one thing that we talk about a lot and that is that we talk about the recovery that we have seen in both sides just like everything have an explanation for 50 years average 3.3 percent gdp growth and now we don't know if that's gone for good or whether two percent is the maximum. we don't know if that's because how deep the recession is or because we're doing something wrong. the political environment matters for us. how coyoudo you see it right now the

political environment? >> well, i think that the decrease in the rate of the country i think that it's very much a high education system and that's failing. that's one of the key issues in politics for me is who is going -- even though that the states and that nis palties and the education system. leadership from the top and people that have reformed the education system like the jeb bush rise very high in my regard regard. that's how you fix the symptom. the disease not the system. you treat the americans and train people and technical schools for the jobs that are available today. there are important jobs and higher jobs. >> we can double what we spend on education and get nothing for it.

we have o changeto change the way that we're doing it. >> yeah we have a ridiculous visa system that we send the towns and schools. we want them and send them back to other countries so they can compete with us. >> so what was that a jeb bush endorsement there? >> well i think highly of jeb. he is impressiveive and honest. he put out seven years of tax return compared to hillary that's hiding 55,000 e-mails. >> can you explain the obsession with donald. >> yeah. don't underestimate him. i was talking to people in the state and they say that we thought it was a joke. americans are so fed up with the scripted guys that don't sound awe authentic. they want to shake it up and be a good time for the candidate. you can not get in the system.

donald is a third party assistant. i don't know what kind of party that he is in but it's in the party right now. the company just wants change. the donald says that i want to make the country great again. they completely believe him. it does not sound like a script. america is ready to shake it up. >> and when he announce that had he did not have anything wrong down. >> yeah, sounded like it. >> don't you find it endearing. you worry about trump. why are you worried about trump. don't worry about him. it's not going to affect him. he is not your problem. he is not your -- not the new york time's problem. >> is he your problem? >> i am saying either way. if he is anyone's problem, it's the republican problem. democrats could not worry. they should be happy. they should be happy. they should be happy. >> here is the end, there should

be good republican candidates. mark rubio is really good. >> thank you for being here. >> thank you. making a call on bank of america. ceo is the right man to manage the $2 trillion in assets. sit right tight and squak"squawk box" will be right back.

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breaking news on the economy. the latest data from the government just minutes away. we're going to have the numbers and instant analysis coming up. a bold new call on the ban of america. we will hear from one that says that the stock may double. the details straight ahead. presidential hopeful and former texas governor rick perry taking on too big to fall. >> i want to be really clear about something. if i am elected president of the united states, we will not bail out a single bank on wall street. not one. >> he will join us live to talk about wall street reform economy and the competition as the final hour of "squawk box" begins right now.

live in the most powerful city in the world, new york. this is "squawk box." welcome back to squax box everybody. i am becky quick along with joe and andrew. take a look at the futures this morning. things are barely budging after two straight days of games where the s&p managed to make up 3/5 of what it lost over the past five trading sessions where this was down. take a look at the stories that investors are talking about this morning. economic growth is seen picking up and helped by the consumer spending and houses. consensus calls to encrease a 2.7 percent. posting resulting in the last hours and earnings beating and revenues fell short. here is how proc tarter & gamble ceo

desired it to us. >> the earnings per share sup 11 11.7 and that's free cash flow duct tif of the productivity. it's just -- >> despite that the shares are trading lower. you can see that it's a decline of 2.7 percent. >> right. >> the dow was up. >> yeah. we also have a developing story. aviation numbers found on the debris found in india ocean could help explain if it's the missing plane. >> seems unusual that it would be on the other side of the

indian ocean accept when you look at the current that's clock wise. you can draw a very nice anticlock wise circle going up the coast and southern indonesia. >> if the debris turns out to be the part of a missing plane, it's the first indication that the plane vanished. it was traveling to bah shing with 239 people on board. okay o. among today's other big stories and stock stories. we can tell you about facebook. social network hit 1.5 billion monthly active users. the company's expanse grows as a boost to mobile revenue and here is what ceo had to say aid and abet. >> it's the richest and most

engaging content t and since the start of the year the paging are also sharing more than 40 percent more vieddeos. this quarter we help today see more that we care about and testing the options for the monitor the help the partners build business. >> facebook analyst sharing his take on all of this earlier on "squawk box" this morning. >> nobody else is posting this kind of growth off this base. the fact that they're able to grow this fact and despite the investments, i think that it was good news all around for facebook. >> looking to open down two percent. >> on some other stocks and news this morning whole foods is getting hit hard. missing the mark and guidance was also weak and hurt by tomp tigs and a scandal in the new

york city. sketch ers jumping the sport's shoemaker and posting better than expected earnings and sales. the quarter was helped by the demand following the west coast strick. it's still affecting things and increase shipments of the back to school items. in the deal rejecting the bid and calling it inadequate and arguing that it undervalues. it raised the stock offer for the second time now at $33 a share. earning season at the half way point and it's time to check the score card. here to take us inside of the numbers. let's take a look at this. right now as of yesterday 263 of the s&p stocks have reported the numbers. we have seen an earnings score card that was in line with how we see the playing. among what's reported 263 of

them and beating the average analyst and that's just in line with this time every quarter. eight percent has met in about 19 percent have missed the analyst testament. that's how we stand on a front here. if we look at the real sectors that's driving the growth. this is what we -- when we say blending this is accounting for all of the socks and companies that have already reported actual nuclear ers and if the company left to are report in line we will see financials show 20 percent earnings growth. that's pretty big. we were expecting about 15 percent to start the season. as for the worst, it's no surprise here. we were looking for a 63 percent earnings declines and now showing 57 peshs. energy is dragging things down. on the revenue side -- this is why the story is less optimistic

optimistic. up seven percent and a little better than what we thought it was going to. health care is hot and energy is the worst one and down by about 35 percent. that's just in line with what you're expecting. if you take a look at what we're looking for if everything comes for the ek pexations and total s&p earnings growth is going to be up 8/10 at one percent. it's modest and we were expecting three percent decline. that's the positive point. becky, sales still show weakness and if everything comes the s&p shows nearly four percent and the sales decline over the same point last year. back over to you guys. >> don, you make it clear when the leader is up seven percent and the decline ers down that's a hard thing. thank you so much. he was just showing the weaknesses that we were seeing. beyond that the energy markets

are still focused on the deal with iran and the slow down in china. joining me with more on this is dan with chairman of i hs and the author of quest and the making of the modern world, and dan the two issues both china and additional supplies have really spooked the markets. what do your think about it? >> well that's happening on all commodities and supplies are several months away. the other thing is what's happening right now. since the oil price collapsed began late last year saudi arabia and united states and iraq have added to the market and demand is up and so the here and now is also weighing on the oil market. >> we spoke to john earlier this morning and he thinks that it's prices to drop once again to the low 30s by later this year.

here is why he thinks that. it's not just what is happening with the issues around the globe. he say that is the frack ers and the producers that you see here have been able to rely cut the cost coast and they're producing the energy. >> i think that's one of the things that's surprised is how resilient and the fracking has been. they're cutting the cost of wells and they're focused on the high productivity. that's why we saw that in our papers. >> would you expect to see the oil prices drop as low as 40 cents a barrel? >> well we have seen that

happen in late 2008 but we're kind of thinking low 40s is where we're thinking and the next two quarters are going to be a testing time for the u.s. and around the world. you see the super majors are all announcing the cut facts and spending and indeed and jobs cutting cost. this is running through the industry, but it's like a second leg down. the crisis that people thought was going to come at the beginning, is now in the second-of. >> that's kind of different than what we have seen from people that are in the industry for a long time. how long do you think that it will take before you see the upward pressure on the sfliez. >> well we think two quarters going into next year and they're you're seeing the cut backs.

not what you have in the united states but the big products and you will see a tighter market and it's two or three years down the road. what you have to remember is that this is a business and we're in the down pardon of the cycle right now and the resilience and they're continuing to push the production up and protect the market share against the day when iran does come back into the market. >> dan, thanks for talking to us. >> thank you. up next on squatk box. i am proposing a new agenda for wall street reform. one that will do far more and it will end the bail out. >> the former governor will join us this hour.

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nasdaq down by seven and a half. dick is boolish and calling for the stock to nearly double in the next few years and now arguing that ceo bryan is the right man to lead the company. dick joins us right now. good morning to you. there's been a lot of questions on what is going on at the bank of america about the missing and issues inside about some of the turnover. why is he the man? >> well if you take a look at the record it's been great. when he took over bank of america, the company was a basket case and that was almost bankrupt or maybe was in many regards. certain was insolvent. in the period that's about five years the company is not insolvent. bank of america has more common equity than any other company in the united states and it's sitting with this staggering

amount of deposits and trillion work. it has 2.5 trillion at merrill lynch. this new guy who is the new cfo of the company is not sitting in charlotte. he is an old security analyst that followed the health care industry and working out of new york. so on one hand he shifted the focus of the bank away from being the retail domestic bank into being a domestic banking company and that's over seas opportunities. about a year ago it was costing somewhere between 18 and $22 billion a quarter to run the company. it's now costing 14-15 billion a quarter. that's a $7 billion savings. this company has changed and stronger and healthy. the outlook is incredibly strong. i do believe that it will double in the next two to tree years.

>> what do you make of the ceo bruce. there's a lot of speculation on why he went missing and some of the stuff with the feds. there's a report out that suggests that he had an interest in heading the company, and that's why we got the boot. >> he could have been booted. people do not tepid to understand that the banking industry is naturalionalized. it's so much banks have to go o and tell them what they're doing and the government is going to slap their wrist or say okay do a little bit more. if they do not have the ability to work with the government. that's not been the case of bank of america. you have to go and you have to have a guy that can communicate with the government because the government is running your

business. >> i am a huge fan, but the question is why are you not hodding bryan accountable. >> he is accountable. there's no question about the fact that he is acountable. he is for the fact that bank of america has been defrauded in buying in company. if you put on balance the things that he has done right, he has gotten rid of 70 to 75 portfolios or small business in the company. he has built the capital and got rid of the big litigation issues. at a huge cost but got rid of the issues. he is shifting the focus of the company away from the retail banking to investment banking. he has overed up the over seas market. he has done a lot of things that make this company very successful. yes, you're exactly correct. he is just as guilty tazas the cfo

for failing the stress test. he never should have accepted the merger because there was a fraud there. >> okay. bank of america verses the other big souping markets. if you had a dollar where do you put it? >> bank of america. it's selling at a 25 discount from the cash value. the book value of bank of america is 100 percent cash. you sell off the assets and pay down the liables and you get a huge pile of cash and the stock is selling at a 25 percent discount to that pile of quashcash. makes no sense whatsoever. >> thank you so much. up next the rental prices are rising across america. there could be some relief in certain places. we will show you where next. former texas governor issues a new challenge to donald trump.

>> he said that you do not belong on the debate stage and tested your ""brain power ", wald you say to trump. >> let's get a bar out there and see who does more pull ups. [ applause ] >> the republican candidate is going to join us live on set. in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can.

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climbing in june and the rate fell to 6.8 percent and that's the lowest since the 1980. there's a lot of median prices that slipped month over month in the new york and washington areas. uber has a new plan to get drivers on the road. the ride sharing company is launching the own auto leasing area. this is an effort to sign up for drivers who would not otherwise be able to get a car. under the new pilot program they can get a three year auto

release. i >> well, a lot of the guys in new york and it's just different. >> well you would not need to lease the car. >> you would need one of those rick saws do they still have them. >> yeah, absolutely do. >> you can get it on an app. rick will come and get you. >> that's the guys name in a movie. >> okay. >> i have not. >> putty from sign field. >> okay. we're going go. coming up next the breaking news and the first read on the economy's performance and the report is just minutes away. we will have numbers andalalysis

after the break. a part of a cnbc report. take look at the future. right now you have the dow down 33 points and down to ten points off and the s&p 500 is going to on the floor done five points. ♪

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welcome back. making headlines a few study showing that more are picking to live at home after college. this despite a row cover erie in wages over that time. i manage that has to do a lot with things. i don't think that's somewhere. i think that it's closer to that. petco considering going public once again. it was taken private in the

1.8 billion buy back in 2006. that was taken out near the top of the market. >> for them does it matter where you are when you're on your stupid electronics? >> no, be be inin the basement. >> you can do it in the closet. you could live the rest of your life in a closet on facebook. auto news ford's f-150 getting mixed results in the crash test. you have to get someone out to look at the pictures. what if everybody sent pictures of themselves on facebook. they have to go out and pretend that they're doing something. >> yeah to make everybody envious envious. >> it got top five ratings, but the smaller super cab version did poorly on one frontal crash test. the insurance institute said

that it's safe. the truck is more expensive to repair. if you get into an accident, you're likely to have out of pocket and higher insurance premiums in the future. >> now, let's get to rick. here we go. first look at second gdp. my hats off to atlanta gdp. last quarter did get an upward revision. we know that it was down and everybody was expecting all of these issues to work through the system, and it moved up to six tenths. let's go through the internal. if you look at personal consumption, it was two percent. that's about a half percent more than we were looking for. personal consumption and quarter

over quarter and up 1.8 percent. let's look at the jobless claims. the last was 255,000. we talked about seasonalities with regard to lay offs and you think that they would figure it out over time. it's a seasonal that comes back. there are changes. 267. it bumped up a dozen. just a bit over 2.26 million. let's look at the aftermath. 75 bases the points on a two year. why did i pick that one. it's not only the high yield for all of 2015 but it's marching back in time towards last year, and it's only a few bases and points away from the highest yields since 2011 and short rates are associated with let me see, the fed. now also keep in mind if you take a one year kind of view they settle at 66 basis points last year so now they're at 74.

a 30 year bond at 275 last year and it's a 301, so the big steepening is giving to near term flattening and that's going to expect. of course with regard to the fed, i don't think that the debate is going to be when they tighten. item that it's going to be this year. the issue is the new song and dance that will start shortly is that we're going to keep it small. we're not going to do it again. we're sorry sorry sorry. back to you. >> thank you. >> steve is here and digging through the numbers as well. what do you think? >> well they're not bad numbers. we had three percent, so a bit of a miss. it comes with a nice little package and that upward revision which changed signingss which changed signingssigns, right? it went from a negative to a positive. it's part of something that we talked about and that's the first quarter revision.

looking at the second quarter here and the final sales of the buyers and 2.2. the pce pricing index and up in the core and up 1.8. i have to look at that and i do not have that right in fropdnt of me. the consumer spending and the good spending up 7.3 and i'm guessing that's autos and everything. business is falling and it's reflecting. what else is the houseing investment. exports okay and government is 0.8 percent. remember that big scare that we had in the first quarter, growth punging 2 to the 1 and everyone afraid that something was a misin the economy. turns out that the data was amiss. it's announcing with the long data today that it's regular revision in the past three years and also a correction on how it adjust the data following the series of the cnb stories that

raise questions. overall it revised and ending in 2014. that's right in line with how normal revisions are with a sharp reduction you can see there in 2013 that was the biggest reason for the decline. also taking the first steps of changing the way that it calculates to account for it in the quarterly pattern of growth. here is some of the biggest quartly revisions. we talked about that first quarter in 2014. that was revised up and now showing a more manageable and understandable decline. it found a problem in the third quarters over the three careers and revising downward in a big way in 2012 and 2014. also it's new waves of seasonal adjusting and federal expense

spending or consumer purchases. this will improve the data and make it less volatile and that's news to market. all of the quarters over the past three years are in closer to the average. the average came down and also the individual quarters either reduced or in the case of the first quarter revised upward. still work to do. this is a revision in the past three years. we found a huge difference over the past six, and a persistent problem over the past 30 years. it's a problem that was confirm confirmed by many. they say hey, this is just the first of three phases of looking at how it calculates, so more changes to come in this area. not that growth is higher or low, but how it's distributed and everybody is so afraid of what could happen in the future and that's really important that they get this right. >> yeah, steve it strikes me that i am not sure how to feel

about this. the highs were not as high. what is this telling me? >> well my hat is off to the bea in this regard. there was a problem pointed out. they took serious action and it's a little bit troubling that they did not know it or see it ahead of time. they saw it and counting the u.s. economy is a really really hard time. just $17 trillion worth of commerce and there's all kinds of things that happen. it's funny and they have government employees and government spending. it's interesting that it ended up being uncertainty in there. i think the way that you should feel is what we also say here is do not take one number. when possible look at the changes changes. people are so nerve usous on the trade. >> on that let's take the numbers. >> life long decisions now.

>> yeah, he is also a former federal reserve board economist, it does make you question any of the numbers on an individual basis. >> well to steve's point it's good that they're addressing the problems. i think what we see in the first half of the year looks good. we were looking for 2.4 and we got 2.3. we got it to the first quarter. the first half looks a little better. i would say the picture of the economy looks reasonably different. one thing that i would add is that the revisions is past and further, you know, enhances the concerns and the economy. it's just the long run trend on the growth and does not look too good right now. >> let's take what you said right now and it feels like a good economy. try to match that up with the political environment at this moment. we have been talking this moment how donald trump is tapped into something in the economy and

dissatisfaction. that's something that if you ask people like 30 percent of americans feel like we're headed in the right direction when it comes to the economy today. how do you match that up? >> well, the labor market is doing well. coming back to the productivity. we have job growth or you're not going get the wage growth and how you address that from a policy perspective is really difficult. it's easy to say that there's problems in the economy. i think that personally it's hard to say how do you fix it. >> a couple of things come out and if growth was 2/1two one and you now we're running amove it and then incorporate in the answer if you don't mind the statement from yesterday. are we on track for september now or off track. where are you? >> i think that a stronger core

piece would say it towards september. in the last few weeks and it's reflected and that's also going to be pretty important. >> nerd a strong number. next friday i think that september is looking likely. i thought the statement that we saw yesterday is showing it opening the door. all that we have to get through the door is two good job numbers. >> not a good inflation number? >> well i think that it's going give another push. i think that certainly matters. >> okay. you in there. >> moon cuss ers at the bitter end. >> the mud puppies. >> you're not doing this to promote my show, but to mock the name of my band. >> what is it doing at the same time. time? >> exactly. any press is good press. >> before you go we have to ask you one question. you were not at the table, but you have made the argument over and over again that it has to

tell the markets in advance what is about to happen before they do it. you know that you have said that. >> they said that they did not. i disagree with that. i don't think that the -- i think that the fed wants to bring the market along with it. i would maybe if i was on vacation in august have my short wave radio with me to listen to our coverage of fed official speaking. in the market is too far behind where the feds want it to be, there's ways for them. >> do you really -- >> yeah i want to talk to rick perry. >> yeah, that's a great point for the governor of texas. who is coming up? >> rick perry. >> presidential hopeful rick perry taking on too big to fail. we will talk trumdonald trump drive. he is going to join us on set.

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former texas governor rick perry laying out his economic plan and ideas for wall street and arguing that he will not bail out a single bank. he joins us and we want to talk about your peachspeech in just a second. the media and donald trump go together like peas and carrots. we're no different. i want to talk about the comment. they were asking you some questions that he was doing the ability and you challenged him

to a poll up challenge. i would just like to say that andrew challenged me to a push up challenge. >> we did one earlier. he claims he won. >> i want a rematch. >> with cameras. >> any time. >> you did 30 and i did 40. you were whining and saying that we needed to ogo to back. >> that does not mean that i am going to be a better president than him. that did not answer the question, did it. that was just a macho question. >> the response was in response to a silly remark and i made a silly response. the americans are looking for solutions. not this back and forth. they're looking for people that have executive experience. i know how to secure the border. >> governor some people are looking for someone that will

just not put his finger up and fuel the way that the wind is going every time. i am not saying that you do this but for the first time in 50 years a politician is saying things without worrying about repercussions and how it's going to be taken. this guy is so plan spoken that it's taping in. >> there's one thing about being mart and taping into solutions. i am a governor and do not live in a reality tv world. i have to deal with reality. when the border was overwhelmed back last sum skper themer and the federal government said that they were not going to respond a certain way, i looked at the president and said if you don't secure the border, we will. texas will. we had literally in the river and we saw a 74 percent decrease in apprehensions. i know how to secure the border. personal aviation assets and

flying to brownsville. >> the field will be takingen to the lowest common denominator. huckabee to me that looked like what can i say? i am going to think about it and then i am not going apologize for it but i am going make it really controversial. he brought up the holocaust. that's so that he would be on fox news and take the air away from donald trump. everybody has to do that to get some traction. >> i don't think that they do. americans want to see somebody that has the experience of running a really big entity. we're the size of canada or australia. this is a big economy. did a good job of it between ' 07 and 14. we're going to get past the side of this and say this we're looking for someone that can get this country back working.

we want someone getting across the table with putan that knows how to send the message. >> you matured and got smarter. you were democrat. you know where i heard that? on jeopardy. they said which former governor was democrat. >> i never met a republican until i was 27 years old. my mom and dad were farmers. i lived in a house that we did not have running water until seven or eight years old. it was after i went into the air force and flew as a pilot that i met people that admittinged being republican. then ronald reagan came. >> i want to get you started with andrew for a second. the media at this point has

characterized the financial crisis as being 99 to 99 and half percent caused by wall street. not by a government that wanted to get -- >> i don't think that's true. >> it was -- >> everybody was flipping houses houses. >> let me see. it was wall street that caused the financial crisis. >> one of many fathers, and i think that the media respects that. >> the reform bill is franks. >> i know both of them guys. >> do you know how he was in the whole thing. he gets to put out the fire. >> i don't need to look at me. i did not write it. >> okay. that was a great speech and brings it back home to what caused the crisis. >> it's important for us as americans to not get distracted

from all of this television and reality. it's important for us to realize that listen we live in a world that celebrity matters, but we need solutions. we need somebody that really understand how to get this country back on track. now i will tell you that i am incredibly optimistic of the country. think that the best years are in front of us. we're just a few policy decisions and leadership from the best america that we have had before. north american energy needs to be at the center of that. more energy and known reserves in that region than all of saudia arabia. bring corporate tax down and raise the wages and send a message to those manufactures that we have driven offshore to come back into the country and put regulations in place with an epa that's not a job killer and we can create a manufacturing

renaissance like america that's never. >> you want premise is trying to create longer-term think sng. >> this is crazy. we know supply side xhix work. in my home state, you keep regulations wise and thoughtful and predictable. you have a tax environment that allows people to keep more than what they give to the government and you can have a renaissance but you can't if you are going to raise their taxes. >> i thought this was not just a capital gains raising of taxes across the board. this is a higher rate that you will pay if you are not going to hold ton something. >> rich people pay a higher rate all the time. >> this is the same old story we get out of the democrats. if hillary clinton is elected president, we get a third term of barack obama. i'm telling you, i'm not

satisfied with 2% growth. as a matter of fact i'm not even satisfied with 4% growth. we can do better than that. you cannot overtax, overregulate, overlitigate and expect the americans to go down. >> supply side growth didn't work the last ten years. >> show me. that's not the policy. >> this is going to be a show me, don't tell me election. when it gets back to my background, whether it has been the gritty way i grew up as a boy on a dry line cotton form wearing the uniform of this country or being the chief executive of the 12th largest economy in the world for the last 14 years, i have a unique set of background and, experiences that make me uniquely qualified to be the president of the united states that can get this country back on track. >> you got it down. you ready for the debate? >> i'm ready. >> you're in. >> bring it. >> i would expect some big rating. i know we are talking about, it

is not reality tv. those debates could use a little touch of reality tv to make them a little bigger. >> there is going to be some big ratings. >> what we have now is reality t vcht. what america needs is somebody that lives in the real world and has real world experiences. >> who do you think your main rival is for getting to where you want snob. >> i think it will be a governor. we will have had eight years of a young inexperienced you states senator. >> that doesn't narrow it down? >> it really does. jindal kasich, christie. >> i think it will be a governor. i think people are looking for that executive experience. who do you want in the front seat of your airplane that's going to fly you from here to london? >> you want that highly experienced individual. nobody on that stage, nobody has got the experience that i have

of running a major entity. we are talking canada or australia, that's the size of our economy. wisconsin, about the size of greece. >> thanks again. >> when we come back this morning, jim cramer from the new york stock exchange. stick around. "squawk" will be right back. you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

let's get down to the new york stock exchange. jim cramer joins us. we watched procter & gamble. the stock has been trading down. what did you think of the report? >> everybody is looking at the organic growth. that was poultry. you compare that to unilever and you say, geez what happened here. maybe it is emerging markets. right now they are in some sort of product cycle transition where they are getting rid of some divisions and a little bit of disarray. this is a great american company. unilever has the strong dollar in their favor. these guys have the opposite. it skrusjust was not a stand-out quarter. i expected better. they didn't have it. >> the guidance on organic

growth was not that impressive. the ceo said we are trying to be appropriately broad and make sure we are giving something we can hit. >> i think they can beat that number. kimberly is a little bit better. these consumer package goods, we can lump them all together. unilever was good and an emerging market. if you watched it and read it you said proctor still has a lot of work to do. i think they would agree. i think they would say, we still have a lot of work to do to get organic growth back to where it used to be. >> that does it for us. squt "squawk on the street" is next. need to hire fast? go to ziprecruiter.com and post your job to over one hundred of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free. go to ziprecruiter.com.

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good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer and david faber. q-1 is revised up much like what the fed signaled. free markets slightly weaker. ten years hanging just below 2.3. oil near 49 and shanghai did fall 2%