2015. and "squawk box" starts right now. >> announcer: live from new york where business never sleeps this is "squawk box." good morning, everybody. welcome to "squawk box." i'm becky quick along with joe kernen. andrew is enjoying time off today. check out the foo fighters fans. 1,000 of them teamed up on a field to cover the 1999 hit learn to fly. rows of drum sets guitars, and vocalists playing the four-minute song. we'll tell you why later. one trading day for the month. here's how july is standing at this point. looks like the dow is up 1% higher. the nasdaq higher by roughly 3%. if you want to check out russ lg, it's down on the month. as for the year to date numbers. the dow is in the red. just fractionally. the nasdaq the big winner so

far, up 8%. check out what's happening this morning. things have barely changed. the dow futures are up about 12 pokt. the nasdaq just under one point. if you haven't woken up there is a full moon out right now. on today's "squawk planner" economic data. at 8:30 eastern, the earnings. the news in earnings big oil will be in focus. among the names posting quarterly rults, exxonmobil and chevron. the weekly bag lyly baker hughes rig count is a number of the rigs actively developing oil or natural gas in the united states and canada. we went up to 70 60 for a little while. everybody came back in.

people predicted that. they didn't need to get to 100. isn't crude down? >> it is. 48.52. they think we could be looking at a three-handle on wti because the fraccers have gotten so good. >> these what? >> fraccers. >> that's werdird. >> they've cut costs. they don't need oil prices to stay high. >> you say it it seems like -- just coming out of your -- you're normally so proper. these fraccers. you know what else is hard to say? foo fighters fans. did that -- did that -- did oil roll? i thought we were at 47. remember when it rolls, it goes back up. >> i don't know. in the meantime some of the other big stories we're watching today. greece is back in the spot light. eu and imf negotiators getting

into an intensive round with greek negotiateors today. they're trying to handle a third bailout. the next diet to watch, august 20th. athens has an ecb debt payment due. i don't noi how they'll pay that. that's the date we're setting. puerto rico is nearing default on debt due tomorrow. last month the leaders warned the island's $72 billion in department was unpayable. we have more from kate kelly in 20 pinminutes. only the global security front, china's watchdog is probing trading. they believe to be heavy speculative selling. china's main stock markets have lost about 30% of their value since mid june. the idea of the selling going on like this nobody was saying anything when the market was rising as quickly. >> i don't know. i saw oil at 47 this month. i still have a quote of 47.55.

in tech news microsoft says the new windows 10 operating system is running or many that are 14 million computers. they started releasing the software as a fruee download. apple tv is reportedly going to launch the next general asiantion of what is known as am tv. buzz feed says the set top box will be slimmer and include a touch pad remote and an operating system that includes siri voice control. google is rejecting an order by france's data privacy agency to delete search results. the right to be forgotten law doesn't apply globally google says. if haved about a similar request from all governments, the

internet would only be as free as the world's least free place. >> we saw that with china this week. china trying to change the way the internet operates in its own borders. >> last year europe's highest court ruled that in-people have the right to control what appears when their name is searched online. stocks to watch this morning. linkedin's earnings and estimates are higher than expected. the company's been spending to acquire businesses and build up sales and development teams. the stock is down by about 7.5%. also, check out electronic arts. it beat the street on the top and bottom lines. the forecast is the problem. the video game publisher shares dropping on its outlook. check out fire eye. that stock is under pressure this morning. the cyber security company posting lowest revenue growth since going public.

the cfo is stepping down going to a prooichlt company. that stock is down about 5.5%. let's look at the markets. a little bit of green. the dow up the s&p futures is up a little bit. the naz dash one of the best performing averages. europe down. france the only -- mostly flat. germany down 0.01%. asia up. shanghai down significantly over a percentage point after some weakness yesterday. that has not affected europe or us so far. there's crude. down 27 cents at 48.52. >> i think it rolled last week. >> is that trading now or the close? i have seen other quotes down 99

cents. we'll watch it. if it is stuck on 48.52, that means that -- i saw it there earlier. 2.28 on the ten-year. this could get a lot more interesting. as we get through august. a month takes about a week now, doesn't it? to get through. >> to get through? >> we'll be at the september. >> i don't know what it is. >> time is speeding up. >> yeah. that's it. it's friday again. but so fleeting. it's hard to enjoy a friday because the monday -- >> friday is the best part of the week. >> no no no. thursday. >> i'm up i'm here. >> getting up is not easy. friday is the hardest day to get up. gold i saw was down is it -- maybe down here. i saw it around 10.80 earlier. 10.88. 10.88 on gold. that -- the right-hand side of

the chart look like almost any commodity recently which, brings up a discussion in its own right in what's happening. it has something to do with this. chi niz chinese stocks with the biggest one month loss in years. and 12 dow components in correction mode. a wild month on wall street. and what can that mean for investors? what can we expect as we go into the dog days of summer? joining us krishna mamani. and steven wood. i think at least you, steven agree with me on september. will be liftoff. >> for fed? oh yeah. >> it's done they want to get

back to where they can use interest rates. raising or lowering fed funds. they can use that to manage what they do. at zero you can't. you have to move on. >> one, they tapered. so qe was put to bed last october. and then two, they go positive. even if it's 50 basis points they could move that. at the least, day can signal. think the fed wants the tool back in the tool belt. >> i think saying that september is a given is probably overstating the case. i think december is more likely. once they do what they'ring looing to do their data-dependent. the data is not strong enough for them to do it in september. you have two more employment data points been if they come in stronger than where the gdp number was, perhaps we have a chance. otherwise, december more likely. >> not that it matters. in the end, is it positive for

the stock market? >> i think it depends why. i think right now, i have a slightly different take. saying that the fed is not as data- data-dependent. we're thinking september. if they're responding to, you know, a policy environment. that's normal. if responding to growth it could be a positive. i don't think this is 1994. i don't think there's an inflation scare. the market could take it reasonableblyy well. >> it's not the chinese stock market. it's the underlying economy that might give the fed pause? >> i think it's the chinese economy that matters. the dollar strengthens significantly. i think the case is it weakens. the dollar tightening for the fed that the fed wants to do. the dhajchallenge with the chinese

economy is it's been slowing and there's no relief. it will probably continue to slow. it makes the fed's job tougher. >> is this a very different task for this fed versus what greenspan was looking at? >> absolutely. and i was talking to ing toing to ing toing to ing toing to stephen earlier. there's a bit ol ref reflexivity. the capital drives the growth. the fed has not had to deal with that. we were leveraging ourselves. whatever flows came over we absorbed them. the impact is not slowing the economy. >> the fed has become a big part of our lives as we struggle to do 2% here. is that as good as it gets at this point?

or, if things change in 2016 are their pro-growth policies that will work again that will put the fed on the back burner and the private sector can once again grow? >> i think we're far from there. >> i don't want to live in a central banker's world. >> none of us can get out of it. old college buddies,and andragy. we called in 2009 we thought it would be a square root recession. >> what is that? >> it's clever. >> oh god almighty. >> mathematics. >> you go straight across. >> i know it's mathematics. i was doing the -- okay. go ahead. >> a ten-year-long cycle of sub trend growth. it's a central banker's world. the bank of japan is quantitatively easing. the chinese are doing a version

of that. i think the central bankers of the world have kept yield intentionally low. forcing investors to think about what kind of risk asset to them is what they need to hit. >> the world is still deleveraging. or wants to deleverage. we need to get to a different level. i think there is a light at the end of the tunnel. think the u.s. has stabilized. europe seems stable. once we deal with the emerging market china, brazil-type issues, i think we'll be at a better place. that requires some slogging through, i suppose. >> what if we the "journal" has a great editorial today. what if something did change. they say, there's way too much regulation. we're going to fix the corporate

tax code. we're not going to be the least competitive rate in the world. >> don't hold your breath. >> will that work? or our economy responds to nothing anymore? >> i think that could be additive. >> what is that? a mealy mouth way of saying -- at the margin? you don't think -- you think it's a hangover? >> i think it's a central banker's world. >> if you're talk about taking growth from 2% to 4% that probably won't happen. >> 50 years of averaging 3.3. the world is that different? >> i think it's a 2.5 to 3.75 world. think that could be the new speed limit in the economy. in this generation it's disinflation that's the issue, not inflation. i think what we're dealing with is a disinflationary world. how do you create growth? >> deflation is -- >> there's not real deflation.

it's that prices are not rising because growth is slow. >> we keep going chicken egg thing, you know. >> it's true. chicken and egg. we can't figure it out. if the chinese policy maikmakers in 2009 didn't do what they did, we would be in a much better place. to save their economy, that point, they went down the this path. we'll have to deal with it unfortunately. >> central banker world. i don't want to live in a facebook world. i got a lot of -- i've got a lot of -- >> you have a lot of issue. >> i guess i don't have much choice do? i need to accept the things i cannot change. i have to change the things i'm able to change. i'm going to write that down. oh is that famous? >> things are not that bad. it's sort of you know 2%

growth. >> things are bad when everything in our mind is u.s. against them. income inequality. middle class not getting better. 70% of the people in the country ought to be seizing the day. technologically technologically, we're living better than we were before. >> how about energy production? >> i got a lot of reasons. >> a lot of stories that are very strong. >> once you get beyond the sentiment. things are looking reasonably good. i think technology. there's a bunch of great things. >> interest rates are low. it should be morning in america. we shouldn't feel like we have a horrible hangover. like we've been drinking all night. >> we haven't. we've been drinking for a generation. >> drinking from the monetary spigot. we'll see if that comes home to

roost. maybe we should be saying these are good times. gentlemen, thank you. >> pleasure. >> i should be in a better mood on a friday. >> should be. this is the best part of the week right here. listen to this. breaking news. beijing selected to host the 2022 winter olympics. eunice yoon joins us. seems like 2008 summer on limplympics we just had them. >> absolutely. at the mountains, where the ski resorts are, games will be held there are people dancing in the streets. it's the government that has choreographed the entire performance. they want to make sure it's picture perfect. that's part of the reason why beijing pitched itself as the safe and reliable choice. they said they could draw upon

experience of 2008. they'll be the first city to ho a summer and a winter olympics. they have the capable to have a winter sports industry here. hundreds of millions of people to get used to highs hockey or snowboarding. there is controversy. the winter period in beijing is a terrible time. it's very polluted. it's really dry. there is not a lot of natural snowfall. there have been many locals and other people who have been reallyup set about the bid because they said that this is going to cause a lot of environmental stress. there's a lot of drought in the area. they'll have to create the artificial snow. it's going to put a strain on the water supply. there's also quite a few activists lobbying against beijing's bid because they said beijing never followed through on some of the promises it made in 2008.

the olympics are supposed to be about openness. beijing did open things up a bit. i was here at the time. soon afterwards things clamped up. now, a lot of activists would argue this is one of the most repressive periods in china. if the internet essentialcensorship is strong. there's been a bit of disappointment. the president says the country will follow through with commitments at this time. >> well all right, all right, eunice. it's a long way off. >> 2022. it will be faster than you realize. >> we could be inundated with snow by then. >> i'm looking for any other city that's had the winter and the summer olympics. >> i'm thinking maybe athens had both. >> no, i'm looking at it. >> i mean like 2,000 years

ago. >> they didn't do winter and summer at that point. >> probably not. they don't get a lot of snow in athens. some day, maybe. coming up a scary story from nbc's pete williams. a secret nsa map showing all the cyber attacks china has person perpetrated on u.s. targets. first, a look back at this day in history. july 31st? >> it is. ♪ i shut the door real tight people call me on the phone i'm trying to avoid ♪

xçó0 welcome back to "squawk box," everyone. an nbc news exclusive, revealing just how vulnerable we are to cyberespionage. china alone is responsible for 700 private and public hacks in just the last few year. more now from pete williams. >> reporter: as the u.s. scrambles to learn the extent of massive left the of government personnel records said to be vn stolen by china, nbc news has gotten a class fid report. this national security agency map shows a red dot for everyone successful computer intrusion by china over the past five years. nearly 700 with computer attacks

in every state but north dakota. the northeast corridor from washington to new york is a massive blob of red. and intrusions are clustered around california's silicon valley, the arrowir aerospace rej yons of the northwest. formulas for popular drug and the workings of military and civilian air traffic control systems are looked at. there are some individual u.s. citizens. dl there's no corporate structure out there, no matter how snal a mom and pop organization that is immune from the threat. >> reporter: the fbi is investigating hundreds of cases of suspected chinese espionage. 53% more than a year ago. economic espionage by the chinese costs the american economy $300 billion a year. if there's good news while they're sooiberspying more

intensely. the u.s. has a means to know when they do it. pete williams nbc news washington. >> it's impossible to come up with a number. but that's a big number. 300 billion. on the report last night, there are these nondescript buildings in shanghai. >> how does a corporate entity fry to fight a government coming in and trying to break into their systems? >> i don't know. we should get maybe our government should get -- we should get involved. i don't know. we got our own problems. we got puerto rico in the middle of a debt crisis. kate kelly is here to tell us what's at stake. they're missing a payment soon. >> we're a day away from a big deadline for puerto rican borrowers. including the public finance corporation that is likely to go unmet. throwing it into default.

further financial disarray. the pfc is only one of the players here. in addition to the $58 million it owes three other puerto rican entities ohwe debt payments on the 1st. cofin and and the must pal group are ek pecked to pay. but the other groups investors are less sure of. publicly lyly traded bonds are spiraling. they still could pursue puerto rican issuer in court and make their money back over time. albeit through costly

litigation. some individual investors may not have the interest or capable to do. >> we know this is a huge issue for people in the area. a lot of investors here in the united states own those puerto rican bonds. what does it mean for them? >> short term no interest or principal payments. that's an issue. longer term it raises questions. of course structurally about puerto rico. local officials would like to see chapter nine bankruptcy filings. they would love to have statehood. that's probably a bridge too far. >> have you heard about things they want changed? terrorists coming out of the nation. any odds of those things changing? >> i doubt it. they have a great tax advantage. inverss in investors in their bond get

essentially a tax holiday. if you live there, you don't have to pay taxes that the rest of us do on the mainland and hawaii and alaska. at the same time you don't have full access to federal benefit. you have some. as the local congressman has pointed out, they don't have full access to affordable care. they're in a gray area. they have a lot of advantages. i was talking to a hedge fund investor yesterday. he owns a lot of property on the island. an island economy is always going to be challenged. puerto rico is better off than a lot of entities. tourism is not enough to keep the economy afloat. nay need to develop a local service industry. they're trying to insent vise people to come. so far, the number of people setting up businesses are small. >> seems like something changed. for years and years, they were

seen as relatively safe investments. what changed? >> i think, look they're had -- they've had a lot of setbacks. they're having a lack of full-time job opportunities right now. just when you go anecdotely people complain much more about employment there. i think they've taken on debt to keep things afloat. now you find that the debt service payments are becoming for than they can bear at a time when revenue is falling short consistently. they just issued a report showing that in almost every case, government revenue underperforms where they're expecting. they have this short fall. they do have the money in a lot of instances to pay what they owe to bond holders opinion. it's not sustainable. they said we can't pay our debt.

$72 million. this can't be met. he was able to pay the next service payment the next day or two. that made people feel like he was crying wolf. i think this week end, we see one or maybe two defaults. the electric utility has until september 1st to restructure. that will be a linchpin, too. if they defaulted, thai that would be dire. >> you know carissa goes where the problems are when there's a big problem. >> i'll be there monday. >> we'll talk to you from there. >> it will be hot. >> yeah. remember mcc was in greece. i was in puerto rico. back home we have our own crisis. >> how sit? you do a couple of reports and then hit the pool? >> yeah oh yeah. it's a short day. no it was a 16-hour day. give me a break. >> how's the hotel?

>> do you have a heckler? >> no i'm volunteering if you can go to the pool after work? >> probably. >> what kind of hotel? >> we had a gorgeous view last time. there was a groovy lagoon at the hotel. i never got into it. it was in a pool where you could swim up to the bar. >> that's standard. >> there's diversion to be had. >> a swim-up bar. that's great. >> kate, thank you. see you monday. when we come back this morning, a blue moon. plus, donald trump-mark cuban tickets, could it happen? those stories next. ♪ ♪ isn't it beautiful when things just come together?

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♪ fly me too the moon let me play among the stars ♪ ♪ and let me see what spring is like on jupiter and mars ♪ all right. so bernie sanders had 100 thourk people show up to one of his town halls. and trump in the latest poll is doubling. nationwide. >> the nearest competitor. >> obviously, there's some zit zeitgeist or whatever you want to call it that is considering things that wouldn't have been considered recently in terms of who we would want. >> these are not the calls the media would have made. >> for regular people the normal politician, the political class we're so used to is not

viewed very favorably. to the point where someone asked mark cuban if trump does win the nomination, would you be his vice president? those are the questions that are going around now. and the "shark tank" star i don't mind talking about this. shark, shark, shark, followed by the profiters profit profit. cuban said yeah i'll consider it. after considering it i probably would decide not to do it because i'm not cut out for politics. he parapraised edphrased at least not the way that politics were being practiced right now. if trump were to change the game at some point, his candidacy, maybe i would consider it. >> your point is this is a vote

for not politics as usual. >> right. i was thinking. you don't want to just because you're a little bit disillusion about things. i don't know if you want to go to the point. we've tried that in some other areas. with jimmy carter once. it doesn't always work just to go 180 degrees just because you're a little bit disillusioned at the current time and throw out the entire system and try something new. i'm not sure. but at least the main stream media would never consider a trump-cuban idea. i thought about it. what would they be like? policies? i'll consider it. it's a wacky thought. >> it would be interesting. >> i can't believe politics has brought these two guys together. during "the ben factor" they were sniping. >> trump was sniping at cuban. >> i think it went both way. trump had the more success of

show. "the apprentice." >> shark tank. i want to talk about the blue moon. there's a full moon this morning. you'll see an almost full moon tonight. yeah it's right over your shoulder. if you haven't checked it out yet, the true full moon is happening 6:43 a.m. eastern time. you have five minutes from now. it will be the best view. check ite horizon. we call it a blue moon because it's the second full moon in a month. that onliesy happens about once every three years. it's july 31st. it's a rare phenomenon that you get two full moons in a month. it's exciting. fun to see. you didn't notice it this morning coming in? it was so bright. >> i noticed it in one of my so sojourns in the night to the ladies room. the men's room.

i said why is it so bright in here? i was able to find everything easier. >> no lights on. >> i don't have to find anything. like so many men, i now sit. >> you don't care? >> i now sit in the middle of the night. >> do you really? >> it's just easier. >> oh, the things i learn about you. >> better than trying to -- no any way. >> and i'm sure penelope appreciates it. >> andrew's people come over. the co-founder of stripe joins us next. a company valued at $5 billion. "squawk box" will be right back. i'm sitting here. [ howling ]

welcome back. americans are expected to spend about $90 billion through mobile devices in the year 2017 the no surprise that digital payment startup stripe has inked a deal with visa. the latest value is about $5 million. visa is an investor. and partner. hay tend to accelerate stripe's international expansion. john is the co-fonder of stripe. thank you for being here this morning. >> it's good to be back. >> john i have always thought of stripe as a competitor to credit card companies. that's clearly not the case. maybe you can ekxplain how you work together? >> we're not a mobile wallet. what stripe is doing is building a software platform for internet businesses. if you're starting the next big

thing. a kick starter or an uber or a spotify, you need to accept money from your customers, you could use stripe. and so what this partnership with visa is about is that honestly, credit cards are not that well optimized for the internet economy. we would like to work together to improve that. >> you take a fee and also -- a flat fee and a percent of the purchase? >> that's correct. we charge 2.9% plus 30 cents. part of that is the credit card exchange. part of that stripe keeps. >> that was my question. there's not double-charging going on? >> correct. so stripe and visa both get paid out of the 2.9% fee. the big opportunity we see here

is around 2% of global consumer spending today happens online. the remainder is offline. that's clearly shifting. you can argue about where that will end up. 30%, 15%. it won't be 2%. as all that spend moves online lit move online through e-commerce services like fit bit, kick starter. twitter and pinterest are getting into it. it will be through the on-demand economy. services like insta cart and uber. with the internet services we're going work with visa to make credit cards work better for those. improves the customer experience experience. improving the security of credit card transactions.

>> a 2.9% transaction fee doesn't seem like much for a one-time, $10 on purchase. but $10 1,000. it seems like it could get unreasonableable? does it end at some point? >> at a certain point, stripe would offer discounts to some users. >> your biggest competitor would be paypal? >> paypal would be a competitor as well as merchant banks. the biggest -- the biggest service that stripe is probably replacing is businesses having to build things themselves from scratch. if you go talk to any internet businesses, they have to write a ton of code just to get the business part up and running off the ground. traditionally, it was much harder to start an internet business than an offline business. it seems flipped on it head.

often times, stripe is replacing the code that other companies have to write themselves. >> we have been talking about political candidates. some of them are using stripe for fund-raising, too, correct? >> yeah that's right. if you think about it political campaigns are in a way like not unlike technology startups. they have to build very broad, very capable tech platforms in a really constrained amount of time. they have between now and less than 18 month ifss from now to get everything built. donations are a core part of their success. how well they can reach donors and respond to new trends. like recurring subscriptions or apple pay. we're happy to have hillary clinton and jeb bush using stripe. >> thank you, john for joining us. talk to you soon. coming up, the ceo of

universal health services is will talk about the firm's quarterly results. and the impact of the affordable care act and recent projections for health care inflation back on the move. squex "squawk box" will be right back.

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universal health services posting a big beat on both the top and bottom lines.

shares of the hospital giant have also been on a healthy streak, and trading jest below the all-time high. alan miller ceo, and finally settling into the ceo job, alan. 37 years? is that right? >> that's right. it takes a while to really get the hang of it. >> getting used to the office and everything all the responsibilities. >> exactly. >> feeling comfortable now? >> yeah. >> good. the reason i bring that up is these are good results and you've been consolidating the number of hospitals you own. i can't imagine trying to run 300or whatever acute-care hospitals and knowing what's going on but you are someone i would come to to talk about what to do with health care and what the state of the -- i won't call it the industry but the situation that we're facing. alan, better for you, the aca? you get paid now, and that has

happened. you get paid for a lot of people you used to care for, and it was questionable, so many of the people coming in are able to pay through the aca, and that's good right? >> right. that's very good joe. there will be many millions more that will have coverage as the rest of the program rolls out. it's good for the providers, for the people who haven't had coverage before. there's a lot of winners in this regard. >> the thing i was alluding for was a recent cms study that pointed out last year we were back above 5% in health care inflation, 5.5% and then over the next ten years -- and this is probably conservative looking at a 5.8% annual rise and they say it's due to the coverage expansion provided by the aca, and also an economic

recovery and an aging population. >> that's exactly right. >> i'm sorry. go ahead, alan. >> no no i was saying the three things. our population is aging, as people age, they need more help more treatment. that's not going to be able to be stopped. that's just how it's happening in america. >> it's going to be scary, because that means within the next decade we were hoping that the amount of our economy of the gdp that we devoted for health care, that we could take that down like other countries in other parts of the world. that will increase what we spend from 17.4%, to almost 20%. we're still heading up to a place where premiums are going to rise faster than wages, and we'll have this huge entitlement problem that i don't know how we solve it. >> what you really have to look

at is, if you economy picks up -- we've had a poor economy for a number of years. it's limping along. if the economy picks up, we'll have more people working, generating more gdp, and it won't be as big a problem. i certainly can't tell whether that 20% is accurate or not. what we want to focus on is the economy. if that happening, then the other things will take care of themselves. we do have an aging population. the country is also growing, and more people more coverage so more expense if you look at the standards. people are living longer and living better. >> we hear the drug industry argue that hospital stays, like going to a universal facility is expensive and drugs take care of that. yet the biggest rise in medical

costs last year were drug costs and specifically this hepatitis hc treatment. what's the real lowdown on prescription drugs. do they help chronic diseases not cost as much or do they end up costing more because they're so expensive? >> joe, i'm not a clinician, i'm not a pharmacologist. i really wouldn't have a good pin on that-- opinion on that. i can talk about the facility we just hoped in anchorage in honor of chris kyle which we're very excited about, in support of our veterans. i think you know about that. >> that's the first one named for him. >> it's a great honor to be affiliated. >> we appreciate your time today. good luck. >> thank you. thanks, joe.

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guest host eric cantor is here. the former house majority leader weighing on the economy, support for paul business and the race house. athletic apparel makers nike and underarmour trading near all-time highs. we'll talk sneaker wars and the footwear frenzy with an analyst. hollywood on pace to set a record at the box office fueled by summer blockbusters and rebooted franchises. >> i've not heard of the old vacation. >> the new vacation will stand on its own. how about some tunes?

the second hour of "squawk box" begins right now. ♪ time for the beating heart of business new york city this is "squawk box." >> welcome to "squawk box." this is cnbc first in business worldwide. andrew is off today. our guest host this morning is eric cantor vice chairman of molis & company. welcome. it's great to see you. >> great to be back on this friday. >> we like how your tie is matching. >> very purposely coordinated. >> leaders usually lead because they're decision makers in this case leaders are following, you're following the purple. >> joe you're leading the fashion trail here. >> yeah yeah. >> all right. good. as a decider, i'm going to do the headlines. news just breaking beijing

selected to host the 2022 olympics. it's the first city to be selected for the summer and winter olympics. i'm still worried about the raw sewage down in brazil but i don't know how do they deal with that? >> well i think that's going to be complicated particularly for the people who are rowed. apparently there were some reports of people who were already there practices, olympians who have gotten sick. they've had vomiting and diarrhea because of issues with the water. >> raw sewage like rowing in a toilet which would be hard you couldn't even turn the boat. a new version of the apple tv is coming in september according to a new record from buzzfield. it's supposed to have a new remote, and a new app store, but it will involve siri who i

think is a smart ass, i find her very annoying. >> do you know melissa lee actual le interviewed the voice behind siri. >> no she was perfectly reasonable. i think maybe you mumble do you enunciate clearly? >> and the stuff when you dictate, you think, really? that's what you think i said? it's the final trading day of july, the dow nearly 1% higher. the s&p up about 2% and the nasdaq is higher by roughly 3% single digits before now -- wow, that looks like the temperature increase that we saw that set the global record last year, 0.02%, which really doesn't counseled, does it? now we're down 98.

oil, by the way, i was right it was down 47 and change i think it's still down. >> 47.62. >> which is different than 48.5. i had just checked it as i prepped to be up to speed. >> down almost 2% again. we should talk about the volatile week on wall street. tirr moil in chinese stocks a flood of earnings not to mention what's been happening with oil prices. joining us to explain some of the mood swings is mike santoli, yahoo finance's senior columnist. joe just said whoopee, but for the year it's been down. >> it's been volatile but only within this tight range. people get a bit excited and that's been the pattern for five months. 40 days since february we've crossed 2100 during 40 days on one way or another, so maybe

something is about to change? i don't know. to me it tells me -- one of the maybe slight positive things is we spend more time in the upper part of this range than the lower part. we've threatened to break up more often than down. i don't see it necessarily changing now that earnings are through and summer is here. we had a guy yesterday, and he pointed out that he thinking people are waiting to hit the sell button they're nervous. >> i think it's good that probably a net positive in terms ofment, but i get a sense it's late. the market doesn't owe us anymore, but i guess i could see both sides, and of course everyone is talking about the majority of stocks has not participated. facebook and amazon together have added as much market value as the entire energy sector has

lost so you've had that offset where they have basically just barely made up for the cyclical commodity-related stuff. >> that was his other point. unfortunately if you're even looking at classes, if you're somebody who owns a facebook you probably own some of the chinese stocks too, and you've not fareed so well. >> no though i would say one of the consensus trades was europe over the u.s. japan looks like a bull market. those are up 12%, 15% more than the s&p 500 is. so by the s&p doing nothing, you've had that kind of giveback from all those years of outperformance in the prior years. >> it would help if apple would move again, and since it was announced, i think it was about 760 billion market cap, yesterday, 696, below 700 billion. how many times did it double? and then they finally decide when it's at 750 billion --

>> i'm still mad at them. >> i'm talking about the dow. >> but the s&p has gone nowhere with apple, so obviously they're kind of -- >> you don't think it's more than coincidence that the beloved stock in the world that everyone owned and that everyone said -- >> it's not a coincidence. >> but everyone said ten times earnings, so therefore it's in your birthrite to get another 40%? you know they couldn't think of any reasons why it wouldn't double from from where it was. >> the biggest stock in the world rarely doubles. >> all right. go up in oil -- >> that's not our major problem. you know when apple sat out, you've had -- again the facebooks, which is now the new universally beloved -- >> at least i can go to 500 billion without -- i don't know how you squeeze -- things don't grow on the tree.

>> if that's our biggest problem we're okay. if apple was over-owned. >> it's not that it's a problem. it's a symptom of what we're talking about. >> and it's been a narrowing of ideas, and people crowded into the same stuff that seemed like it didn't have hair on it. >> what's the sense that you again from talking to people on wall street right now? >> i think there's an extreme awareness of so much volatility out there. i think that certainly what we are hearing is in the large-cap arena, a lot of activity. obviously our clients are very active not just at the large-cap level, but we're also sigh an indicator that the regulator ares impacting the extension of credit so credit reliant deals are taking a bit longer to close. i think it's reflective really of this boom we're seeing in certainly sectors, in certain regions of the country are really just that and it's not

widespread and i think -- i know that our clients are wary of the volatility but still looking to see where there's some opportunity to grow. i know that you know there is a common theme on this show about the lack of growth. i think when we look at things from the macroeconomic geopolitic, that is going to be the theme of the rest of the campaign season. that would be the outlook for business leaders as well. >> there have been a couple booms, right? but this is what i real earlier, and have been arguing with people for a while about -- they say trying growth strategy is old, and that that's what we've been trying i say we haven't tried growth strategies listen to this -- unprecedented new regulation has hamstrung finance, health care coal and power, education and many more but two, tech and oil and base escaped it because there hasn't

been any regulation. >> just wait just wait. net neutrality. >> that will kill that one. >> you'll see the restriction. absolutely. that is the problem. i think that you know people are frustrated. a lot of the anger that's out there in the public debate today and politics and in washington stems from the fact there's been stagnation of wages, very little growth. time to find some other way to do it. >> there's a couple here look -- here's 1992 to 1997. we averages about 3%. >> let me show it to everybody else. you can play along on page 810 of the journal at home. >> were a 3.3% growing economy. maybe we can never do it again. >> here's the last seven years, struggle to get between 1 and

2%. >> something would indicate we have to try something new. >> they say it's a hangover from the recession. we have a lot of excuses for why, and whenever you say why don't we try less regulation and lower the corporate tax rate they say, no we tried that in the '80s and '90s, and all we got was a financial crisis. >> if they raise rates in september, is it a problem? >> i think whenever it happens, the market will be very prepared. no way you'll go this long without a surprise. i think you could have have nervous anticipation of it but when it comes, it's okay. the bick picture concern is a lot of is is the sense that it's coming late. the cycles far along is lower than the past beginnings. the financial markets have obviously gone a long way and the profit cycle, just the general corporate psych the have

advanced a long way. that's the reason not so much that they can't handle higher rates. just that we used up a lot of the fuel. >> isn't it a sign -- and the private sector can stand on its own without the coddling and the training wheels? it will be if it happens. >> it will happen in september and the market will go up. >> that's the way, the end of qe, a lot of people said we can't handle it without qe and we did. >> mike we appreciate it. good to see you. and we'll have more from eric cantor through the show. and coming up we'll talk politics with the former house majority leader. and then movies like "jurassic world just "the avengest q. and "minions" pulling in big bucks. jennifer jennifer boorstin. >> it's julie you're twitter

handle is not -- >> and you can find it -- >> it doesn't always come up. she got joe kernen's hair when she tried that. we'll talk sneaker wars with a closer look at the apparel companies, u.a. and nke. more and more, data is visual. in fact, the number of mris has increased by ten percent a year. and a radiologist might view a thousand images to find one tiny abnormality in shape,

contrast or movement. because it's so challenging a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day.

more now from eric cantor. you know i guess at the time when you said i'm not going to be walking around these has dealing with all these great people, and you had to go into the private sector but now can't you look around and say -- like an outsider and go wow, it's like a zoo, isn't it? and this election is unbelievable. bernie sanders, donald trump, martin o'malley? >> it's pretty unbelievable. >> gilmore. >> yes, my fellow virginian, but i've been ten months with a terrific team and people just very interested in results. you know the definition of success is pretty absolute any private sector right? everyone can set aside their own ambition and ego, and we're going to focus on return and

making a little profit. >> people get in trouble when they don't perform and there's accountability. where is there any area in accountability? is there accountable in the oval office? >> there's so much ability to finger point and blame, consequences for one's action much more defined in the private sector. when you're in the political arena, there are so many variables and things that people can point to. i mean the discussion about growth and having a discussion about policy and people blaming geopolitics or the volatility in marketplaces and that's the cause versus let's focus on what we can do to fix the problem. i think when you see the politics play out for the next 14 months until the election. i think we're in a phase of people and candidates demonstrating that they understand the plight of working

middle-class people in this country that have not seen an increase in wages, who have really not seen a brighter future. but i think what we'll see over time is real leadership step up people and candidates who are willing to say, hey, here's how we're going to solve the problem, and i agree, joe, it is high time that the people of the country see an accountability on the part of leaders. >> eric is that your way of saying read leaders will step up over time you don't think trump will hold on to the lead he has in the polls? >> i think donald trump has been very effective at standing up and saying hey, i get what people are going through. you know he can say some outrageous things you know i think some of the language that was used vis-a-vis the immigrants, very diadvicive very ugly and not a sustainable kind of rhetoric but when you see the debates next week you're going to begin to see two tiers of candidates.

you're going to see the top five in there beginning, jeb bush and marco rubio, and others talk about maybe their solutions, begin to lay out their policy platforms for the next year but i think eel have those at the bottom tier start to at least say, hey, i'm here notice me which again adds that entertainment value to politics we have seen so much of lately. >> you never know that's why people watch debates, but there could be a sentence or just a moment and suddenly someone gets thrust into the limelight, and we have no idea out of 17 or 18 one or two all of a sudden you start talking about them. that's the way it's happened in previous elections, but you start out strong -- remember we went mccain and then he fell out of favor, and then came back in, same thing happened with kerry for a while. was it the howard dean -- >> right, the moment. >> you never know.

it's not over until it's over. jimmy carter and bill clinton, total no-names that somehow got -- >> but you look at the elf lice of that and the campaigns that occur. you'll see some blips. ultimately, though with all the noise surrounding elections, you're going to see leadership ultimately prevail and someone get the nomination that has the ability to empathize with people's plight over the last seven years where we've seen such a difficult time for the working class in this country, you'll see somebody step forward policy proposals that actually can solve problems. >> it comes back to the same old argument -- do you out of the plight of the middle class people? do you solve that with redistribution of what we have? or do you try to grow the

overall pie and rely on trickle down. people say we've tried that and it doesn't work all the growth gets centered in the top 1%. >> listen wreef not had overall growth in our country for weeks and months and years now. the growth that has been historic, over 3.2% it's just not happened right? so no one can deny that fact. so let's try something different. that probably will be the most compelling argument. you can't be satisfied with what's been going on. >> wage growth has not happened at the middle class, and hasn't happened at the lower level probably why the rich have gotten richer. >> i would point back to the growth. in a growing economy, that's when workers become valued and company versus to vie for the valued workers. stock market doesn't have anything to do. that's fed induced.

>> but those are assets -- you have to have assets. >> most people are not benefiting from that and honestly if you look at the prescriptions of hillary clinton and sores who say we have to help people we have to mandate businesses raise their wages, that is not the fix. clearly that's an artificial act you are trying to impose on people. again a lot of room for substantive and policy debate here. i think it will be a real test for our political system. >> that's the thing, people have says all of the fed action hasn't caused companies to invest for the future hasn't caused equipment expansion. the trickle down can't come from the government. >> i don't think the fed could have done anything to change that.

40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.

well reports on the death of the movie industry has been greatly exaggerated, and julia boorstin is here to say why this year may have been the best -- >> universal is number one at the box office this year but it's the total box office up

8.5% from last year. this can't easyily be the biggest user possible mission impossible, which opens today, is outselling all previous mission impossible films, and "vacation" amount it seems to me to reboot has already grossed $4 million appear opening went day. the biggest -- thus far, joe, i hear you already saw mission impossible? >> i did. you know about an hour after i saw it it was sort of like eat something chinese food. there wasn't a lot of pop, but tom cruise, if if you like tom cruise he's doing all of his own stunts. a lot of action and it's cool, if you sit there to try to

figure out why this things was under a bunch of water, the only thing it was down there is so he could hold he breath for three minutes. i didn't love it as much as jurassic or minions. >> thanks for coming in. >> my pleasure. when we come back. patrick mchenry.

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retch came in just a bit short. topping estimates, shares of that company have been trading near 16-year highs. the strong dollar as well. however its ceo says the company is well positioned to take advantage of the improving housing market.

an attempt to entice the band to play. hbo programming president announcing the series will go at least eight seasons. the series grew 20 million people in the previous season and by season 8 there should be like two of the people you are familiar with left.

don't tell me. don't tell me. back here in the united states congress is getting ready to head out for the summer recess, awaiting them the highly anticipated vote on the iran nuclear deal. joining us with what we can expect is congressman patrick mchenry also the chief deputy whip. thank you for being here today. >> what do you say to that? >> i think it's a false premise.

his work is within the democrat parties so he can't overright his zito. just simply because it doesn't mean that all of the democrats in the house and the senate will go along with that false premise. >> you're the chief deputy whip where do you think things stand right now? >> in the house, republicans are nearly unified. that's nearly all you can ask out of republicans is to be nearly unified. i think we have a strong group. we need 43 democrats in the house. is the case will have been made by folks understand the contents of the agreement that we will be right on the edge of actually

being ability to override the president's veto. >> what happens if you're actually successful? what do we do now with the european partners who have said they would like to end this embargo? >> look we've had a sanctions regime with iran effectively globally the last two years, and that brought them to the table. i think we'll return to the past fewiers. i think it would have a strong impact on the iranian economy if we returned back to the sanctions regime that we had in place.

>> again that is something we have relied on europeans to stick around with and part of the argument with going ahead with these talks is that wasn't going to be held together. if that were to fall apartnership, that partnership, then what do you do? >> if we return to our sanctions regime, they would have to make the tough call on whether to trade with the number one economy in the world, or do they have -- trade with a very small country on the global scale? what we have heard is we cannot have 535 secretaries of state. i'm reminded of seeing john kerry during the last administration act not only as secretary of state as the united states senator, but also secretary of defense vice president and president. so the fact that congress has a say, an opinion is very much in keeping with our constitutional

checks and balances. we have to exercise our right on behalf of the american people in the united states congress. i think we'll have democrats along with republicans to stand firm against this bad agreement that will call the them to have weaponization of their nuclear technology. >> hey patrick, eric nice to see you. >> great to see you, eric. we miss you, by the way. >> hey, listen i know you're there doing a great job counting those votes. i know you talk about the job the president's got ahead of him. it's a false choice being set up. it's either war or this agreement, what are you hearing from some of the colleagues on the otherside of the aisle? i know there are a lot of very,

very strong advocates for a strong u.s./israel relationship strong advocates for a strong america at trying to stop iran from its nuclear quest. what are you hearing from them? what are you hearing from the leaders like yourself on the other side of the aisle? >> they hate being put in this box. that's number one. please let's not vote on this. please let's hold off. it's a tough choice i acknowledge that but when we're looking for 43 democrats in the house, we can count very easily well past that of those committed to israel committed to a strong national defense, and there are some reasonable democrats in the house that will come along, but their initial reas -- >> if that's the case,

congressman, what each of those individual congress people hear should be very important. what do you think they'll be hearing when they go back to town has. >> i think they're going to say stand with israel stand against iran, stand against a bad agreement. once the american public more deeply understanding this idea that if we want inspections, we've got to wait 24 days. after iran giving us approval to go into a set group of areas. i mean, i don't think the american people will like this. things like those details, not being allowed to go in for 24 days i assume you were opposed to this deal before

that. is there a deal that could have been reached that you would have signed off a? >> yes. there was a way to move forward, but you can't simply give sanctions relief on day one in the hope of future action from a -- you know a deceitful and deceptive regime. the fact that you're going to have the flow of well over $100 billion for an economy that's flailing on day one is deeply problematic. that doesn't actually help stability in the middle east. it actually will help this regime flow that money into extremist groups whether it's in syria or around the region. >> congress plan mchenry we really appreciate you joining us. thanks for having me. >> it will be interesting to watch. it's an amazing time. >> it's been losing some public support, too. >> that was why the president

made that call yesterday. schumer's in a hot spot and it's an amazing thing. listen very likely a bipartisan majority will disapprove this resolution. if the president goes forward and vetoes and trying to implement. >> he says he'll do that. >> that is a significant event, and think of what it will mean for hillary clinton in this election season because she will not be able to extract herself from the position he will begin these discussions that led to this deal that's so troubling. >> when it's announced and dancing in the streets in tehran, as they say death to america and death to israel there's something optically wrong with that. no one was dancing in the streets here. >> no this is not a perfect situation situation, we know that, but the priority should be to get the best deal possible and not get this deal through. all right. a closer look at the sneaker wars athletic apparel makes lying nike and underarmour

trading, which stocks can jump higher and run faster, when we return.

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highs. what is kicks those stocks into high gear. susan anderson covers the athletic footwear space, and susan, we may be calling this a sneak are war, but this is much more than just sneakers. this is about an entire lifestyle and the way of wearing apparel. correct? >> yes, i agree. what is driving the strong sales trend is the shift to ath-leisure. i think that's helping to drive these strong trends. the two names that come to the top of the mind is nike and underarmour in this arena? >> correct. nike is obviously very established in the footwear market. underarmour is coming up and i think they'll continue to take market share. >> it's fair to say you like both stocks but why do you like underarmour better? >> no nikes it's more of a

valuation. more like 24 times that. for underarmour, we see much more runway for growth over the next 5 to 10 years. and a lot of this is driven by footwear which they right now have very small market share in versus nike. for underarmour, about 2% of the basketball football market share and about 5% of running versus nike over 90 percent for basketball, so i think under armour has much more room to grow over the next ten years. >> who do you look at at other competenttory for. obviously they have such a huge market in the athletic wear space. >> no definitely. you know the weaker players, which we call it right now. the adidas the pumas, they're all competitors. because they are a bit weaker both nike and underarmour can do well and then also continue to

take some market share from the weplayers. on the women's side of the business, not just in sneakers but apparel also which continues to be very hot and everyone is trying to grab market share you know you can look at players such as lulu. >> anything that concerns you potentially for nike or under armour? just in terms of the broader marketplace, anything out there you would be worried about? >> no we continue to see very strong trends in athletics, particularly in the back half and for back to school. i think this is an area where kids are shopping it's going to continue. i think sneakers will be very hot. there's a number of new basketball launches coming out, and i think the two hottest up-and-coming players will continue to drive their footwear sales. >> susan, thank you. >> great, thanks. all right. among some other stories that we're following this morning, ge may by shipping $10 billion

worth of cease now that the import/export bangly shuttered at least until september. requiring support from an export credit agency appeared ge is working with such agencies in cunning to finance the deals, with much of the production going from ge plants in those countries, including canada the uk france germany, china, and hungary. you might know on wednesday boeing's chairman announced a similar strategy so some of this coming home to roost. coming up -- >> listen it's not like these companies and folks have not said they were going to do this. there's a real ideological struggle about the proper role of government in washington. this is really the focus of the debate. >> says chronny capitalism or something to help us make sure we compete with other nations fairly. >> given the fact there's not an even playing field, that's where

i think you have to start the discussion. we as limited government folks in this country under our constitution should say, maybe it's not the proper role of government. however, if you've got competitors doing this it's incumbent upon the administration and the trade rep to make this an sure so we can wind down these banks so we're not put at a disadvantage. that's what we've been trying to do for the last 18 months plus i think in this country unfortunately the administration has not made it enough of a priority and feels that it's fine to allow government to continue to do it but immelt and others have said this is what will happen if you tie our hands behind our backs while our foreign competitors don't have to do that. taking in the entirety of the situation, i would think it's smarter for us to have a phaseout plan while we don't disadvantage american-based multinationals. you saw the numbers. billions going overseas now,

jobs that we need here will go elsewhere because of this action. >> yesterday there was more talk and bipartisan talk about tax reform through corporate tax reform. our friend from boston saying my company is worth 16% more to a foreign buyer right now, and we're causing -- i mean i know you can go to congress and say let's tax these not let them do these inversions but that still makes headquarters takeover targets. because they can pay more our companies are more valuable based on the tax rate. >> absolutely. that's why it's imperative and i think tax reform on the scale of comprehensive is needed but we've got to get started. there's a lot of folks in washington talking about it. coming up call it the keurig for cocktails. the soma bar mixes drinks and it's controlled by your smartphone.

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this guy is answering all my tough questions. we can put a man on the moon, why haven't we done this? it's call a soma bar. it lets you craft custom orders right from your phone -- >> what? >> that's weird.

cranks out drinks in less than five seconds, and then you can have another one five seconds. the couric for cocktails got its finding, after just a few weeks, already it looks like it will have to play with the big boys trying to get into the space like sodastream announcing it will launch digital dispenser. here is dylan prosello. we already talked about it. what does this one make right now? and can you customize it? immediately i asked for a margarita. not yet on these, but you do have a way. >> we can make over 300 different cocktails. it's controlled via wifi, and i can control it on my smart phone, a tablet so i can make a cocktail when i've driving, it's ready when i get home. >> don't start programming it on

your way home. >> also you can make your own drinks, so if you have to customize drinks change drinks that's totally up to you. >> this is self-cleaning? >> yeah we developed self-cleaning technology so every time you switch from one cocktail to another, we have an internal flushing system so you don't get crossover taste. >> i can't believe this all works. >> 300 drinks depending on what's in the side? >> and you have to fill those up and put them in. >> what we're looking at doing is eventually doing a disposable version eventually for what we caused the soma pods. >> is this brave new world? >> it's a bit like soma, yes.

>> right now we have it primed for a moscow mule. >> can you make a screaming or gasp? just kidding. >> you cannot believe i said that. >> so yeah let's get and make a moscow mule for you. this is vodka, lime juice and ginger beer so kind of a favorite cocktail right for you. >> it kind of sounds like keurig. >> it does. >> again, for the margarita, it needs -- a good marg gritta needs that foam on top. >> you can put -- we have a static mixing technology so it does take all of the ingredients, through the well and it mixes it for you. >> there's foam. >> that's the kind of foam i'm talking about. you go ahead. >> you can try some of those, too. >> that's pretty good. >> what is this? moscow mule. this would be for liesman.

>> what's in a moscow mule. >> lime juice, ginger beer and a bit of vodka. >> not bad, right? >> this is amazing. >> you can preorder them on our website. we're going to be going into stores if december. >> they retail for? >> $429 a bit now, $449 when we go into stores. >> wow. okay skt we've got to go. i put about ten different things? >> ten different things? >> for the sweetener, agave, and sweet and sour real lime juice, and, um what's the -- i don't use the triple sec. >> i'm not sure. but for this we all put in all fresh ingredients as well so we recommend.

>> thank you. we appreciate it. >> thank you. >> take these three. >> all of those right there. >> i need one of the these the day after the election. >> there you go. >> cheers. >> cheers everybody. we'll share. >> thank you so much. when we come back we'll talk about crowd funding with eric cantor and cherwood knights. plus a bubble forming in wine country? josh limiten has a special report on rapidly rising home prizes, coming up. you total your brand new car. nobody's hurt,but there will still be pain.

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bear sighting. new data shows we'll go inside the numbers straight ahead. plus want your kid to be successful entrepreneur? the next mark zuckerberg could be bunking there for the summer. high flying real estate prices in san francisco and the valley now hitting wine country we'll find out what $32 million can get you right now in sonoma as the final hour of "squawk box" starts right now.

live from the most powerful city in the world, new york. this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide. eric cantor is here as a guest host. we have some exxon numbers that we want to bring to you quickly. if the dollar is clean, it's below, law 1.11 is the estimate that people were looking for. it was $4.2 billion is what the company earned in the second quarter, and i think earlier in the discussion i was having with you, eric we were talking about when companies make a lot of money, you think you can amore advertise it forever into the future. exxon used to earn $10 billion in a quarter. this is 4.2 billion, so earnings do go up and do go now, as we know, but that is the number. revenue i have 74 which is

above the expectation of 73.803 as we always do with exxon, and there are people who know exactly what they're looking for for upstream and downstream but the upstream number is a loss in the u.s. the second quarter upstream number is a loss of 47 million. that's -- and here's what the company says it's a higher downstream and chemical earnings were more than offset by the weaker upstream realizations and lower asset management gains. there's comments from the chairman and ceo, who says -- we are delivering on our investment and operating commitments across the integrated portfolio, but they say the quarterly results reflect, also demonstrate the strength of what he calls their sound operations superior project execution, one things they talk about is the capital expenditures plans, that they're looking for spend --

>> and we should look at production and what they -- but for the year exxon -- exxon is expected to earn 446 for the year but they missed by 11 cents here so i don't know whether they're still going to earn that but they earned 8.42 in 2011 and i think they used to do $100 billion in revenue pretty consistently too. used to make $10 by on, now they're making $4 billion and doing 75 billion. >> i don't see any update to the guidance here. i'm still scrolling through about 27 pages of this. >> look at that chart. >> roe reflects closely with crude oil prices over that same period of time. >> the yield now 3.5% but that's a small consolation to anyone that bought it up near $100 or over a share, and there's crude, which is fareed

even worse. >> actually yeah that chart looks pretty good when you compare it to a straight-up crude chart. >> but no one likes to lose 17% of their crude. i can manage my own money and do that, i think. >> i wonder how that cap ex number stands up to quarters past. >> exactly. >> i think the trend of cap ex or the lack thereof, is indicative of what's going on in corporate america, if not elsewhere, and it's evidence i think of an unwillingness to undertake risk that cap ex involves, though it's hard to blame them when it comes to the oil companies. all of them have -- it's hard to blame them. >> exactly right, but i think in other sectors, it is an alarming trend where you see an unwillingness to put forward real cap ex.

it speaks to the lack of confidence in the future. i think, joe, that goes back to your point always about reinstill confidence. >> i'm a billion in buybacks in the second quarter, and they'll do $500 million in third quarter buybacks, and obviously, you know, people have made the point they were paying a lot more in this most recent quarter, probably paying higher prices for the buybacks whether that makes sense or not, to reduce outstanding shares. they do talk about the crack spread has been really has been a positive thing for all these companies, because gasoline prices stayed relatively high. they say downstream earnings were helped by stronger margins, but the upstream hurt by as you said prices in lower liquid and gas realization, but not too bad -- no it actually is down. >> 1.6. >> yeah. we'll continue to keep an eye on it and see how it

continues to react. >> maybe you could call some of your democratic colleagues that you recall and the ones that want to do the windfall profits, you know when they were making a lot of money, because the oil price rise had nothing to do with what they did, so you really should have taken some of those profits back. maybe they would be willing to help out. >> some type of credit to give back. this is not the lower crude was not their fault, either. >> still not losing money. what did you say $4 billion? >> right. >> that's a more reasonable profit for them. that's a fairer profit just? general. >> wait a minute, you've come up with a novel approach though. if you're going to be intent on punishing industries when they do really well why not reward them when they're -- let government go in and decide everything. >> we're looking into the -- there's an investigation into the airline industry is finally making money. >> now they're all colluding.

>> yeah it's not fair they're making money. >> don't we want them -- >> there's some people that want everything to be not-for-profit utilities, and then they won't be the greed incentive. that's just one part -- right now we have an expert to talk about how investor sentiment has been faring. pessimism actually serves to the highest level in two years. you've got to wonder what is at the top of minds of -- charles is the journal editor of the american association of individual investors, charles, it's kind of stunning news. what did you find in the latest survey results? >> we had a huge jump in pessimism, jumped above 40%, which puts it at an unusually high level. over the last six weeks, we've had three weeks where bear sentiment has risen or fallen by double digits. i think there's a lot of

frustration with the markets, so we've send had more volatility in stocks and i think that's feeding on fears among some investors who are concerned there's going to be a bigger drop in stock prices coming. they're sort of looking at valuations, concerned about valuations concerned about earnings growth. i think right now among reported companies, we're looking at second quarter growth of about 1%. and so -- it's not among all investors, but i think there's a lot of investors just kind of concerned that maybe stocks have moved too far upwards and there really isn't a catalyst to continue pushing prices lier. it's not just a pessimism surge, but that optimism plunged. do you seeing the two things move hand in hand like that? >> sometimes, and we've seen optimism stay below average for quite a long period of time. one thing that's been remarkable this year and even last year as we've been seeing high levels of neutral sentiments and seeing some people shift out of the neutral into pessimism, some

weeks we'll see optimism rise but the one constant has been the neutral sentiment, that feeling of i'm not sure which way the markets are going to go. that seems to be the bigger constant, and even last year we saw neutral sentiment stay at high levels for an extent the period of time. >> charles, sometimes we say that investor optimism is exactly the opposite of where you think the markets should be headed. when people are optimistic that's when you should worry. when they're very pest missic, you should feel like it's a good time to buy. do you think that this time around investor sentiment is actually an accurate peg? >> we won't know until the future. historically when we have seen low levels of optimism that's been correlated with better than average returns. the s&p 500 has averaged on a median basis has a 7.1% return six months following an unusually low optimistic sentiment reading.

it's also done well with neutral sent -- so if the historical trends hold up it's a good sign for the markets when people are afraid to buy, that usually depresses symptom prices. you have that fear. i don't want to lose any more capital, so i don't want to put money to the markets, but obviously there's been a lot of other things at play here. valuations, the macroenvironment, whether or not earnings improve in the second of the year so it's not certain, but we have seen that link in the past between low levels of optimism and better market performance going forward. >> charles, thanks for joining us. >> thank you. joining us to talk more about these things david blitzer, s&p 500 indices managing director chairman of the s&p 500 index committee. we feel like it's been volatile but you look at the chart, it's such a narrow band and it's

flatlining. >> we haven't done a damned thing all year. it's just flatlining. have you ever seen anything like this? can you tell us would i in your view it's been happening? >> um i think a lot of the news has been overseas greece china, all this kind of stuff. there's been relatively little news on the financial side. people are a bit nervous about earnings. it's almost a year since it's gotten down to these numbers. so i don't think there's been anything to really push stuff around. the economic numbers, you know yesterday's gdp was nice but actually it was slightly below expectations. so there's nothing to create a big move in the market at this point, and we've been waiting for the fed either forever or for a long long time and each time they have a meeting, it's the next meeting.

now it's september, the next meeting. so there's nothing to push it around. you know earnings are getting a bit soft. the p. is a bit high so the pessimism comments don't surprise me but we need some big bang. >> if we were playing songs that were popular the last time the fed raised rates, we would be amazed. nine years. millennial, they don't even know the group we would be talking about. nine years since the last time there was an interest rate increase. i don't think i would have believed this. if you told me that nine years ago, i wouldn't have believed it. >> no. there hasn't been a lot of movement or the movement that's been in the u.s. in the last couple months is -- i won't say politics but mostly donald trump more than anything eggs. he dominates the news you know he claims to have $10 billion.

press says he has 2-point something, but apparently it's -- >> you know what the top song was in 2006 -- ♪ so you have a bad day ♪ ♪ so you had a bad decade of growth ♪ >> basically. we probably need something positive to happen or you need the earnings to cooperate to get any movement upward at all. >> and i don't think -- at this point i don't think you'll get earnings to cooperate. >> brutal s yeah think thought oil would be 110 and they missed by 50%, so that's the problem. >> right. what's your multiple right now on next year? is it 18? >> yeah probably about that. i don't think a lot of earnings growth is built into that. 18 sounds a bit rich from my point of view. the top of that the comment

about six points to pessimism, 7% return if that's an annual rate that's the long-run return on the 500. i can't get excited about that either. under the service, the huge numbers spin off, huge amount of m & a activity and that kind of thing, you still have buybacks going on and research i've done in the past buybacks are because they have a lot of stock options, the options get exercised, they have a lot of di didilution. they buy it back. i would agree they ought to invest the money instead of buying their own stock, but i think if i were a corporate executive, i would want the safe route, too. >> are you ready to cop to putting the hex on apple?

he put it in the dow. >> every time -- every time we have this conversation. >> where was it when you put in it in the dow? >> i obviously don't remember. >> i can tell you, because i think at&t is up nicely but -- did you put aig in the dow? or selfwere yew predecessors? >> i think that was one of our predecessors. the story with aig is much more intriguing, and so on in that lehman brothers collapses, treasury steps in and owns i think it was about 85 90% of aig. at that point in you read our rules, we should have tossed it out. within a week of fannie mae and freddie mac being taken over and we essentially said the largest insurance company invite world out of the 500, it would be a bit disruptive so we

didn't.but that's the advantage of people instead of machines running indices. >> how about google? >> what about it? >> too expensive to put in? >> the price is too high. it won't work unless you change the arithmetic on the dow. nobody wants to do that. then it just leaves comcast if you had any sense. we don't comment on specific companies in general, or when we're sitting in their offices. [ laughter ] i've got within more question. one more question joe. watching the people this morning on the remotes and looking at me when are you going to get a better tie? >> you don't like it? >> no i like this kind. >> i can't tide those. i don't know what happens. i keep trying. i can wear a clip-on. i'll do that. >> i won't challenge you. >> i'll give you my clip-on hair. >> no you're not donald trump. you can't fool me.

>> thank you. when we come back this morning, priced out of wine country? why soaring real estate prices are raising red flags, which "squawk box" comes right back. can it make a dentist appointment when my teeth are ready?

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this time we are headed to the wine country of california. josh lipton joins us with the big ticket real estate story. josh? >> reporter: well, becky, i'm standing here in the most expensive home on the market right now in sonoma county which is seeing this boom in real state prices thanks in part due to all that tech money. this home is 20,000 square feet five bedrooms 12 bathrooms, wine cellar home theater, infinity pool. the price -- $32 million. in fact whilers have their pick of megamansions in the area. there are now more than half a dozen homes on the market priced at $25 million or higher. >> san francisco's market palo alto's market is very strong. prices are pushing up

dramatically, and we're feeling as a ripple effect some of that up here but it's increasingrms of intensity. so when those markets goop is it lags a little bit, but then we ultimately boom, too. >> reporter: mean those homes priced north of $1 million are up nearly 90% year over year according to sotheby's if that $32 million price tag seems a bit much, we are told there are already several prospective buyers in silicon valley. >> who wouldn't want a five bedroom house for $32 million. josh thank you. when we come back, eyeikea. understands the life behind it. those who have served our nation.

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ikea is going deep into the woods. ed swedish furniture company bought a forest in romania, using 530 million cubic feet of roundwood. >> what, just cut it all down? >> i'm sure they replant. >> i'm sure. it's the tragedy of the commons, when you don't -- >> when you don't take care -- >> when there's not private

ownership. that's why it's hard to find fish anyway. >> ikea said it would use some of the wood to use the material more efficiently. they recently bought other forests as well but this is the first time it will manage its own forest management. we have details on a selective sleep-away camp designed to encourage a young business leader. i wonder if they have bug juice. did they have bug juice? >> they did. >> though there are places -- >> it looks like green slime. and we want to hear from you. what story is grabbing your attention this morning? tweet to us and use the the #keepsquawking. we'll read your responses and share the best of the bunch at 8:50 eastern time. 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. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day.

yeah this morning we are looking back at some of the songs that were at the top of the charts the last time the fed raised interest rates. this is "you're beautiful" that was number four. "bad day" was number one. >> what was the best movie, "sound of music"? [ laughter ] eu and imf negotiators are beginning an intensive round of talks to hammer out the details of a third bailout. this needs to be done by august 20th when athens has an ecb debt repavement that's due. the signing of the finance mystery's decision and that's expected to happen. also in corporate news uber will be investing a billion in india in the next nine months. it says it will use the money to improve operations expand into newer cities and develop new products and payment solutions.

>> well it was the -- where did it go? just seconds away. it was the best picture that no one cause "crash." >> oh, yeah. seconds away from employment cost index, and let's get the number right now from rick. >> well joe, that broadest measure you just referenced is up two tenths which is one third of what we were expecting. so on the employment cost side on the biggest expense for most balance sheets it's moving up moderately. many would sigh that move more aggressively. japan did get a whiff of inflation preopening equities obviously are down a bit. we see that yields are rather well behaved, a lot of debate going on. puerto rico will be the big story for the weekend, and michelle will keep us in the loops on the story that never

goes away in the form of greece. reply is done for the week. the auctions didn't go badly. in the end it was fascinating, everybody was whining about how the first and second quarters didn't do what they were suppose to do but over an annual basis it was supposed to work out. we got all those revisions, and it seemed like as the journal pointed out, we lost more than we gained but boy i could jump higher than that. back to to you. >> wow. we are just looking at chevron numbers just crossing the tape. it's giving our heads a bit of spin. it looks like 30 cents is the diluted number. if that's correct it looks like it could be matching up. i want to dig through and figure out -- >> included in the gain. >> were impairments of 1.96 billion. >> but a gain on asset sales of

1.8 billion. don't compare this to anything right now. it looks like there's a lot of moving pieces. >> gains and losses. >> yes. >> or gains and charges. >> here's what i can tell you. decreased earnings in the quarter by about 251 million. that compared with the decrease of 232 million earlier. it will take us a while to go through it. >> the effect of the lower prices, that's not a charge but impairments and other charges, 2.6 billion more than offset gains. so you get theoretically you have 800 million of charges, but i don't think you can use lower cruise prices and actually call that a charge. yeah it's 30 cents. they earned 2.98 in the year-ago period. >> they sea multiple efforts to improve future earnings are under way. we are getting our cost structure down through renegotiations across the supply chain, and by sizing our

contractor and employees workforce to reflect lower activity levels going forward. they're going to be laying off people, not using as many contractors, actively managing a smaller capital program, which again goes to cap ex. we did hear from exxon mobil earlier. thecht they had dropped their capital expenditures by -- what was the number? so farseeing a lot less cap ex particularly in these big oil companies. >> the upstream loss was less than 100 million. 2.3 billion here but then the company is able to earn 2.96 billion on downstream earnings. so -- the loss 2.2 upstream. hey, you know what? every time someone comes in and forecasts earnings, they'll say anything but energy. this is what they're talking about. the energy and multinationals with the strong dollar.

this is that component where s&p is absolutely going to be reflected in the numbers. which dragged down the s&p 500's earnings gain for the quarter. >> kind of unbelievable. >> the revenue is 40 -- i don't know if we can compare the retch new numbers. a lot of times you can't. the estimate is 31 and they had 40, so i don't think that's the apple apple to apple comparison. they say the cap ex first six months compared to 19.6 billion in the corresponding period for 2014. it does sound like they'll be cutting things even further from here. >> 251 million foreign currency. hurt by 251 million because of foreign currency effect. >> we'll watch chevron and continue to watch exxon mobil shares as well. in the meantime that so-called gig economy, it has come under siege.

there are lawsuits pressuring ride services like uber and lyft that rely -- lux valet is among the list to make the switch. the parking service will convert hundreds of contractor toss employees with benefits. joining us is curtis lee, why don't you describe what luxe valet is. >> sure. yeah luxe is basically the best way to park. no longer do you have to circle around the block. you select the destination you want using our app, we will deploy one of our valets to meet you, greet you, take your care, park it at one of our safe and secured lots and when you want the cac back just use the app again, select the destination, and we'll deliver the car back to you. >> you have hundreds of contract employees you are -- or contractors who you are talking about converting into full-time

employees with benefits. why did you do this? >> at the end of the day i think we are like a people business to some extent. the valets are effectively the main people that are interacting with our customers. if you care about the customer experience you want the best trained valets the most coverage, and under the 1099 contractor model we had it was just difficult for us to train employees -- sorry, train valets and do all the things we needed them to do. >> were you having trouble to get contractor toss show up? part of the advantage of the gig economy is people set their own schedules on when they want to workivities yeah i think it works well for companies like uber. i any for us we're still in the earlier stages of our business. so there are like certain hours of the day, you know that we

didn't have the best coverage. that kind of dedpraded the customer experience. with this this allows the deep coverage that we need. >> how much more will this cost you? >> you know we have done our own analysis. it's not a number we share, but less than what the pundits say. that's only because when you think about the conversion the work-related expenses is really what gets some of these companies in hot water, right? it's really expensive to reimburse cars, gas, things look like that but for us there's a lot of those work-related expenses, so it's definitely smaller than i would say most of thinks our businesses. >> as somebody who started a start-up, and obviously you're in a different situation, what do you think about the gig economy, though? do you think it's here to stay? what do you think about the political pressures? hillary clinton saying she's worried about what it means for a full-time job for people down

the road. >> yeah i think it's a balancing act. i think there's no kind of right side. i think -- like when i think about the on-demand economic it's definitely here to say. i think as it relates to companies like uber the flexibility of being ability to log on and log off whenever you want is a clear advantage. coming into this studio i made it a point to take all uber. i was talking to the driver and he said there's no way i want to be an employees. he gets to log on whenever he wants, and i think there's a stat that also is out there that basically says that 80% of uber drivers work less than 15 hours a week. so they do have other jobs that provide benefits for them like health care. so they're not that concerned about -- as concerned, i would say, as a lot of the politicians are making it out to seem. >> curtis thank you for your time today.

>> $4.09 is what chevron was supposed to earn a year but 1.16 in the quarter, and they only earned -- any guesses what they made in 2011. >> for the year? >> i think it was 10 had the 14. >> that was 2014. 201 1 2011, 13.14. 2012 $12.57. 11.09 in 2013. >> this was all because of the hit on the overall price on crude and the foreign exchange. >> you don't talk to secretary clinton anymore. that could be something to run on, a way to help the oil companies. >> foreign exchange i don't

think affects them. no but -- >> this might be something she proposed windfall profits -- >> the reverse. >> shareholders are suffering right now, aren't they? >> an emergency package. >> we're not fair enough. we want to do windfall profits on -- [ laughter ] >> i'm just trying to do it for fairness. you want your kind to be a successful entrepreneur? >> it's only fair. >> we'll business a camp for business leaders in the making. next. you know your denture can look like your natural teeth. but, when you eat tough food the denture moves. oh no!

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citi the season for summer camp. kate rogers joins us with our favorite. kate good morning. >> hey, good morning, becky. kids that do want to become the next mark zuckerberg are attending a two-week summer intensive programs where they come to hone their business plans. >> well you're probably wondering, why do we do it? we want everybody to have a safe community and environment. >> the idea is to help kids with big ideas learn how to hone their pitches, market network and talk to investors. this year's start-up program has kids from all over the globe from hong kong to dubai, as well as the united states.

>> they're eager to explore the world and they're curious. we gets students who are curious, and taking on age-appropriate risks as well. we don't want kids who are just going to come here and do things like everybody else. >> today they're going to be pitching their ideas to a panel of judges at mass challenges a local boston-based accelerator program it has a wide array of different programs and actually a few famous faces have attended in the past. and 12 of their students have landed on various forbes 30 under 30 lists this year alone, so who knows, maybe the next big thing will be in this crowd pitching their ideas today. >> i think it is good. i never thought about it at that age. i wish i would have. you heard those people if you're thinking about it, you can't probably do it.

>> there is a study that has shown, and warren buffett has quoted this -- the earlier you show an interested in business and making money, the more likely you are to succeed. >> and there are i got a bit involved with one, it even does it in urban area -- i forget the initials entrepreneurial education and spirit in neighborhoods where you wouldn't normally think of it. it's a much better way than just expecting you to be you know kind of sort of taken care of you know to actually get excited -- >> you are teaching the value of capitalism entrepreneurialism and that has become controversial. >> definitely i think it was the university of new hampshire or something, they were worked about using the word american to describe something because of the negative connotation, and

they wanted to get it out of the -- i mean anything you see from a college campus these days, just believe it. condie rice can't speak -- you can't so "american sniper" even though we had a guy earlier name a hospital after chris kyle. >> is that different from what you remember in college? >> we had real causes back then. unjust war and a draft. actually i was not -- i just missed the draft. nymph, three years after the jobs act was signed one of the last pieces to be implemented is crowd funding, the subject of eric cantor's opinion piece on cnbc.com with more on the democratization of capital is woody nasi did eric get it right? did the leader get it right today? did you get to read his piece on cnbc.com? >> i haven't seen it yet, but

i'll be sure to look at it after this. >> i'll tell you i agree that you know it was a very rare moment. there were some bipartisan coalescence, and we really got behind this notion that we need to provide small businesses not just select sectors in our economy, but everyone access to capital in order to grow. that was what was behind the jobs act. you know what do you see, or what may surprise you about where we stand now as far as implementing the act? >> well there were three parts of the jobs act that related to crowd funding. you one we worked on title 3, which is not into effect yet which allows uncredited -- to get into the marketplace, we've seen a tremendous opportunity for startups and small businesses over 2,000 offerings have already taken place. over a billion has been raised.

when you think of that in terms of innovation and what that that means for jobs for our country, it's a wonderful thing. we're frustrated that title 3 hasn't gone into effect yet, but we still have promise. >> what have you hearing about the objections? i know there's been letters written to the s.e.c. prodding them to try to put the rules out as far as crowdfunding. what are you finding the critics saying or what's your sense for why the bureaucrats are dragging their feet a bit? >> my feeling personally is the s.e.c. probably hats bigger fish to fry and this isn't a priority for them. the objections we first heard were fears of fraud. if you look at what's happens in the marketplace globally everyone else in the world is taking what we did and implementing it right now. the arts for why you shouldn't do this globally are not there. the fact that the s.e.c. might have bigger things to deal with i don't think is the reason why

we should be moving forward, because small businesses are the number bun creators and that is where innovation begins. >> i couldn't great more. in a twist of fate mullis oond company was an emerging growth taking advantage of some provisions in the growth act, and the growth is facilitated in part by the spirit of the jobs act. so thank you for your interest and i hope we'll see the s.e.c. and the bureaucrats there finally get off the dime and try to put these rules out so we can have small businesses competitive again in this country. >> i agree, it's about time they finish the job. wen again, too much red tape and regulation. it's too hard in and out. >> right. i mean it's just a fact that we want everybody to have the potentially to earn success. when we come back this

morning, facebook's plan to bring the internet to far reaches of the world. here's a hint -- it involves drones, big ones, too. "squawk box" will be right back. two trains leave st. louis for albuquerque at the same time. same cargo, same size, same power. which one arrives first? hint: it's not the one on the left. the speedy guy on the right is part of an intelligent system that creates the optimal trip profile for all trains on the line. and the one on the left? uh, looks like it'll be counting cows for awhile. so maybe the same things aren't quite the same. ge software. get connected. get insights. get optimized.

welcome back everybody. this morning we asked you to send us the stories that have you buzzing. no now it's time for us to share some of your responses. facebook giving us more details about the plans for drone-based internet in the sky. the company wants to reach the 10% of the world's population that lives far away from cell towers and land lines. the solution is drones. the drones are the size of a boeing 737. they will be launched by helium balloon balloons and will be powered by the sun and circle more than 11 miles above the earth. one squawk fan tweeted no drone, too creepy. how will i know it's not a spy cam. kevin from texas tweets facebook is thinking outside the box or at least seems to be. joe, these things are supposed to float back down after about three months of being there to be refitted. >> they're the size -- but they

don't weigh because they're powered by the sun too. yeah. a cloudy day would scare me. i mean. >> they're above the clouds. >> do you think about drones? i hear about don't worry about cars that drive themselves. then there's flying cars. it was on drudge. >> the information now that is out there on all of us andin the private sector as well as the government, we are in a new norm. this is -- i think, just to allow everybody access to be able to communicate via online, it needs to happen but -- >> do you think there's going to be enough jobs for herbeverybody when everything is automated. >> it's a real mind shift. we have to go and think about how you innovate. it goes to what this show is about. growth. how are we going to grow this

economy and get people into jobs in this new digital age. i'm an optimist. >> and listen up one direction fans that all watch "squawk box." the group dropping a surprise single overnight. look at harry's hair now. i only know the one. >> good job. >> it's their first release as a foursome following the departure of zane maddic which i'm so not over. reaction on twitter was predictable. one user saying this song literally dragged me down and off my bed and now i'm having a sob fest under my bed. that was me this morning. bestill my beating heart. >> coming up guest host erik

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former majority leader and you have a prediction about the election. this is going to shock a lot of people. >> absolutely. no. look, the country has, i believe seen seven years in one direction, not a lot of results. >> not the group one direction. >> right. not a lot of results. wages stagnant. growth anemic. time far change and to try something different. i think a republican will win the election. it's a messy primary. 17 entranltts but hopefully discussions on how to solve problems. >> the country kind of got

pushed fatigue from w. so eight years of the president and after that you're telling me that another bush could be running and maybe in the -- it's so weird. you replace bush for obama and obama for another bush and running with a clinton. great to have you. >> thanks. >> that does it for us. time for "squawk on the street." ♪ welcome to "squawk on the street." i'm quintanilla with sara eisen, simon hobbs, and david faber. we close out the month of july with the dow hanging onto a 77-point gain for the year adding into the month of august. bonds are the story today as the q 2 employment cost index is the lowest gain on record and a sign that there is virtually no inflationary pressure after six years of zero rates.