♪ >> live from new york where business never sleeps, this is squawk box. >> good morning and welcome to squawk box here on cnbc. becky and andrew are off today. we have some coffee talk this morning. that's why we're playing this music. today's earnings disaster belongs to green mountain. the stock plunging close to 30% on revenues and the company is cutting 5% of the work force. this is a stock we'll be watching throughout the morning. year to date the shares have fallen more than 60%. look at that. it was already a bad chart over the last year and then plummeting. another big story this morning, bill ackman's amassing a $5.5 billion stake in mondelez. the firm making the disclosure

in a defiling that it now owns 7.5% of the food giant which makes oreos, ritz crackers and well-known brands. what's unclear is what the investor wants to do with the company. ackman wanted the snack maker to grow revenue or cut costs or sell itself. mondelez, for its part says they will welcome them as investors in the company. ackman joins nelson peltz. his firm holds a 3% stake in mondelez. we'll show you what's going on now in the premarket trading as a result of this and you wouldn't be surprised to see that they are sharply higher. >> what does he want to do with the company? he wants the stock to go up so he can sell the stock for more than he paid for. we were having a conversation off camera. okay. maybe he sees something that's not being optimized at mondelez the way that management is running things but what he really knows is i have enough

money, $5 billion. i can make a splash and in all likelihood the stock will start going up just on that and then you agitate, you mess around, you do some stuff. is any any different than greenmail? >> i think of it like bankers, right? because you remember kraft used to be with mondelez. so now he's talking that mondelez should rejoin kraft along with heinz. wait, you need to vertically integrate and get bigger. no, no. if you're going to maximize the values and the multiples you have to split up. >> this is just greenmail. if you give me $5 billion let me look through the s&p 500 and i'll pick a company. i will make a splash when i saw i bought $5 billion worth i bet i can make money on that. it's not rocket science once you have the money. >> i was just going to say scott is working the phones right now. he's going to join us on set. he's supposed to be anchoring but he's busy reporting.

>> they're called activists but at another period and time they were called two bit pilots and greenmailers. did you see that? nothing but a two bit pirate and greenmailer and you'd sell your mother out. >> do you decline the existence of activists all together? sometimes they help. >> it's a spectrum that runs the whole gamet i'm sure. that there are really smart guys that can look and see operationally whether there's a lot of flak and whether they can cause something to be done. but i don't know if they're able to pick them better than anyone else. once you have 5 billion you have enough -- money makes money. >> we shouldn't ignore the existence of 3-g. the brazilian private equity firm so involved with warren buffet and they're really being incredible cost cutters and

forcing everybody else in the business to be much leaner and meaner for sure and he he knows them a long time before they became public with this investment in burger king a long time ago. he probably has a lot of insights he wouldn't have before. >> strategically i don't know what you would do. they already made double oreos. >> and chocolate covered oreos. >> where do you go after that. >> mint oreos. >> have you gone to the oreo section of the supermarket. there are so many choices and then they do seasonal versions. st. patrick's day you can get green ones. >> i eat sour patch all the time. that's my biggest problem. >> they don't make you pucker? >> i do. i like them when they get stale too. i ate some yesterday. keurig was one -- >> i always thought that was a fad. >> i have it every morning. it still has green mountain symbol. which is weird.

anyway, tesla hitting a speed bump. better than expected profit and revenue but lowering it's full year forecast to 50,000 cars from 55,000. we'll talk more about tesla in a few minutes. the stock taking a hit on the news down sharply. we said many times that unlike the prius or unlike hybrids most tesla buyers don't buy that model s because -- >> they're environmentalists. >> no they like the car. >> it's a beautiful car. >> maybe $44 oil doesn't really explain it but we are seeing pressure across the board in anything that's sold as sort of a green alternative to suvs and suvs are back and mike jackson told us that. i think you get confused on who you have to interview. you know you have this one right? >> yes, i do. >> his name sal lex hamilton. >> alexander hamilton.

>> you noticed. >> i did. >> alex hamilton. >> we have an analyst coming up named alex hamilton. >> you have to get up pretty early to get past you on something like that. alex hamilton sounded familiar. >> it did. >> i read the book. have you seen the musical? >> no did you. >> it is fantastic. it is the greatest thing since the chorus line. >> are they singing? >> they're rapping. >> they're rapping during the -- >> yeah. it is so fantastic. >> if our forefathers only knew. >> you are going to love it. you will cry. you are so proud to be an american when you see hamilton. >> until jack lew decides to leave andrew jackson on and take -- >> don't get me started. don't get me started. >> and put britney spears on -- oh, no, you have to be dead. we should do rosa parks. >> on the 20. >> on the 20. exactly. >> but we digress. >> fitbit stumbling after it's

first earnings report as a publicly traded company. the maker of the fitness tracking devices had big beats top and bottom lines. margins fell and the company doesn't expect that to improve for the rest of the year. the initial numbers came out and skyrocketed. very violent trading in the post market and then dropping in late trading lower by more than 11% at this hour. let's check on the market. we'll talk more about this. this stock is so interesting and faces so many issues right now. futures right now higher across the board but not by much. let's call it flat at this point. what's going on in europe so far this morning? greece is higher. >> i just read there's no bids for banks over there. they go down a limit every day. >> right. >> but this was earlier in the session. >> higher by 3%. they are going to begin the process now of examining the

banks in greece to see how much of a recapitalization they're going to need. for the rest of europe, kale that flat. wouldn't you call that flat. >> europe is flat. >> shanghai was down a percentage. >> looking flat all over the world here. >> shanghai slightly lower. >> let's show you what's going on with oil. >> 44. >> below $45 barrel when it comes to wti. brent is back below 50 and the ten year note yielding 2.26%. >> the dollar moved around a lot yesterday. it is stronger against the euro, weaker against the yen. $1.08. almost $1.09 for the euro. >> we are just hours away from the first republican presidential debate of the 2016 election cycle. chief washington correspondent. it's not big enough john for the

prompter to have correspondence so it always says correspond and there's a t on the next line. >> sounds like something you can handle joe. >> t. john harwood joins us from cleveland with more. i'm going to set this up a certain way john. we keep going back and forth criminal not criminal, criminal not criminal for the hilary probe for the e-mails. now they're saying it's absolutely criminal. they don't understand why the doj and others are not saying it because it's similar to the sandy burger deal. >> in what way is that a toss to the republican debate. >> because i'm going to tell you, you ready? these 17 guys, at this point i'm

wondering the inevidentability of hillary clinton becoming the first woman president, i'm starting to question that. i always thought maybe the republicans stay winning the house and doing well in congress but maybe they never win another national election because they're stuck in the mud on social issues but if she becomes the nominee and if she is so damaged and her negative ratings so high suddenly this debate, one of those 17 guys might be the next president. that's why. that's why i brought it up that way, john. do you understand my thinking now. >> if every major league pitcher had a wind up that long, every base would be stolen. >> all right. instead of talking about the actual mechanics, do you think that this, number one, she has a negative rating of 50% at this point. she probably will be the nominee, right? you said biden's not running. you said that. >> i believe she will be the

nominee. >> okay. at this point, if this continues, criminal probe, whatever, doesn't it make it very, very possible that one of these guys tonight could be the next president? >> well, of course it's very possible. look hillary clinton has to be regarded as a slight favorite in the general election. >> that's absolutely false. >> why? >> she has her negative ratings going up. >> okay. >> i don't see how you can watch -- now sooner or later there might be sympathy backlash. the e-mail, is it that big of a deal? now it's criminal. where they start to say this is they're piling on and that's what worries me is that that could eventually be the case. >> well, look, we'll see if that's the case but tonight is the night the republican side of the race kicks into a different and higher gear. we have two debates tonight.

one for an hour at 5:00 p.m.. don't underestimate that one because there's a chance for one of those 7 candidates which includes sitting governor and u.s. senator, corporate executive. they're going to have a chance to break out to get them some attention and rise into the top ten. then you'll have a 2 hour debate with the top ten candidates and all of the attention centers around the role being played by the outrageous antipolitician donald trump along with the guys supposed to be leading this fight. jeb bush, scott walker, marco rubio. you have the home state governor john kasich getting in the fight at the last minute just barely making the top ten. i sat down with former two-time republican presidential candidate, veteran debater to talk about what each candidate needs to do. here's what pat buchanan's

advice was to the big players. >> if i were trump, he's a counterpuncher, he's going to have to take each of these things where he has been hit and have a short substantive answer. if i were bush i would challenge trump directly and politely. i would certainly be ready for the sucker punch coming. he has communication skills in a debate. trump is the uber tough guy. rand paul might come out as an anti-interventionist in the middle east. i would try to get back into the mix. >> the perception of him is a certain callowness and youthfulness. he has to deal with his own problems rather than the trump problem. >> ted cruz, what does he do? >> ted cruz. he goes after the senate

majority. no, i do think that's him. i think cruz is one guy that does have potential. >> and don't forget you have also got ben carson, the former euro surgeon on stage. only african american candidate and he's somebody that had a tremendous amount of appeal to the republican base ahead of some people like chris christie and john kasich in the polls. going to be a crazy night and this is kicking off the debate season. ours comes in october in boulder, colorado, guys. >> stick around. let's add to the conversation ben white is chief economic correspondent and cnbc contributor. good morning. >> good morning. >> in your view, at this point in time and it's early, it's not even november is it? >> it's august last time i checked. >> it's a year to the olympics. >> there you go. we're a long way from voting here. >> at this point in time would you characterize hillary clinton as a slight favorite over the republican. >> you're not going to like my answer. >> you think so. >> just on demographics and the

economics she's a narrow favorite. you back that out, the scandal stuff but on the numbers, on the states, on the electoral college and trends of the economy she would be a narrow favorite. >> have you followed this criminal or not criminal situation. >> i've tried to follow it. it seems to bounce around from day-to-day. >> and we don't know whether it's whereby the act of calling it criminal all of a sudden you call doj and say can you change. who knows if there's pressure to pull back on what had previously been but there's word that if the fbi is involved. >> that's what they investigate is criminal activity. >> and remember he was like impressing -- >> sharing confirmation that was classified and that's the question for hillary clinton and if it does become a criminal investigation that's going to make her negatives go higher.

we just don't know what this e-mail scandal is going to bring to her. it's not helpful. is it going to be a campaign and cause biden to get in and shake things up? i don't know, suddenly this debate tonight is important. the next president could be -- >> no question about it. whoever the republican nominee is is going to be close. it's going to be a close race whoever the nominee is. >> john harwood thinks it's a stretch. >> john, you work overtime, boy. i hope you do. you have to get broader to carry so much water but go ahead. >> joe, it's a stretch to say suddenly -- to say that suddenly the debate matters. it always mattered. this was always going to be a close race. whether there was an e-mail scandal or not, hillary clinton is going to have a very tough time winning the presidency. it's not because of that.

>> maybe i just, that was why the wind up was so long. with the changing demographics and you go back. >> you have to work on your mechanics. >> no, w would have lost. the recent wins by the republicans would not have turned out that way given the current demographic picture of the country. so it's getting harder and harder, especially when you've got the haves and the have notes. this is the romney point. you're guarenteed 45%. >> it's that percent. >> joe, hold on. look, the 2012 election was pretty closed election. obama won and won decisively but it was pretty close. the country is pretty evenly divid divided. it's very hard for a party to win three presidential elections in a row. all of those things plus the fact that you have very good republican candidates this time

mean that we were always going to have a tough election. we are going to have a tough election. it's not going to be a blowout. these stories about hillary clinton do not help her. they hurt her. i don't think they fundamentally at this point change the race as our nbc wall street journal pollster said the other day this is a battleship that it is going to take multiple torpedos to take this battleship down and we're not there yet. >> that speaks to something and we talked about this before that really said something. after all the e-mail stuff is coming out and has the numbers and the tweet says, you know, hillary clinton i think could go on television and probably kill puppies lying on national television and democrats would still vote for her. that was the tweet. like there's just nothing shaking them from supporting her. >> that's less true than it used

to be. >> her numbers are a little down. among democrats her numbers are down. >> among women they're down. her numbers are falling and she is only a couple of points up on bernie sanders in new hampshire. nationally in a much bigger margin but people are worried about her candidacy and not sold on it entirely. particularly with the left. they don't trust hilary on wall street and other issues. >> if she gets the nominee, bernie sanders voter isn't voting for the right, right? >> no, but do they show up? it's not an absolute certainty that they do. particularly if she keeps getting blown up by these scandals. so the idea that every democrat is going to get psyched up and turn out for her is not accurate particularly if she is scandalized the whole time. she needs the obama coalition to show up and she does not excite people like obama did. >> it's amazing. >> it is a point blank -- guys it is a point blank lebron james slam dunk that who ever is the

republican and democratic nominee, 80%, at least 80%, probably more of the people identified with that party are going to vote for the candidate. that's true both sides. >> it's a done deal. >> hilary is not a great campaigner. doesn't look real comfortable. there's a lot of criticism about total lack of answering questions. the line share went to the clinton foundation that allows them to fly around and, i mean, one thing after another. >> all of that stuff has come out and her poll numbers have only fallen a little among democrats. that's what amazes me. to the point of she can do

almost anything and they'll still vote for her. >> i'm still thinking the first bush has a chance against the first clinton. doyle was a shoe in. romney was going to win. so i'm not the person to ask on this but i at this point think her chances -- i can't believe you could get together a majority unless you got a third party candidate running where someone without a majority wins. that could happen too. >> like donald trump perhaps as a third party candidate. he's not ruled it out. >> right. >> a third party would be -- >> i don't think democrats are debating tonight. >> that's what tomorrow is for. >> react to it. >> i wanted to talk about the donald strategy in this debate. does he go on the attacks? that's the question. >> he says he's going to talk issues, right? >> he is but if he gets attacked he goes nuts. if somebody comes after him, somebody else on the fringe is he going to blow his top and start saying crazy stuff? i hope so. that's what i want to see. >> i don't want to see donald trump making nice.

>> they're all going to try to make a splash right? >> you don't want to hear a donald trump 10 point plan. >> i want to hear a 5 point plan and why everybody else is stupid and knows nothing and jeb bush is not going to go very crazy. he'll try to be presidential and adult in the room. >> i think i saw him characterize trump as a reality show host. >> he is that. >> leaving out -- >> that's one of the things he has done but i'm excited to see what he does. good tv. >> president obama is a community organizer. pick the one thing you can use. >> he's seemingly good at it. >> thanks guys. >> thank you. >> coming up, tesla going around, the tough part of the track. stocks sinking at this hour. we're going to check out the speed bumps for elon musk the ceo and early numbers on apple music. how many people are signing up for the streaming service? will it move the stock? first as we head to break, check out this day in history. can a business have a mind?

a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

cf industries will become the largest publicly traded nitrogen producer. it's inversion in which it will

become a subsidiary of the company domiciled in europe. second one of the week that we see this shift that has this incredible tax advantage because of our prehistoric tax system here. >> they can pay more obviously. the companies are valued more. >> you can make so much more money if your taxes are lower and you can pay more as a result. >> new this morning, usa today reporting that am music landed 11 million trial members including, i've got four in my family, the apple internet and software services also adding after one month the streaming music service has 2 million signing up. that's what i did. $14.99 a month but three months free. july was a record month for the company's app store which did a record $1.7 million in transaction. talk about apple a lot. but i have macs, i have ipads, iphones, app ael music, they have the greatest things in the

world. >> i love it. i have the halo. the watch. i love the watch. >> my son has the watch but i don't. with me it's always strictly been can it get to a trillion dollar valuation. >> i know. >> so i hope that's clear and i don't even base things on fundamentals. you didn't like it and didn't put it in the dow when it's a $9 billion company is it going to double again? is it going to double again? >> it will take a much longer period. >> and again and again and ag n again. >> all right. tesla reporting result afs the bell but the numbers really spooking investors. phil joins us with a look behind the numbers. >> we said all along this is a second half story and the second half will be a tough one for tesla. let's quickly run over the second quarter numbers because

they came in better than expe expected but the street went right past that. there you see earnings per share. the loss better than expected. revenue in line with expectations. maybe higher coming in at $1.2 billion but the key to the report for tesla, what it's going to be doing in the third and the fourth quarter and especially the fourth quarter. it's lowering it's guidance for 2015 deliveries. the new guidance is for 50 to 55,000 vehicles. that's a combination of the model s and some model x. the old target at least 55,000 vehicles they will be stretching or struggling to make. the challenges adding to the assembly line that already makes the model x. here's musk talking about those challenges. >> we do think that it's going to be quite a challenging

production ramp and we only want to deliver great cars. we don't want to drive to a number that's greater than our ability to deliver high quality vehicles. >> the model x deliveries start next month and they'll start ramping up production from there. in 2016, tesla is forecasting that it will be producing between 83,093,000 vehicles. that's the guidance now. as you take a look at shares of tesla, one other thing weighing on the stock today guys is the fact that their expenses, the cash burn has increased dramatically as they're expanding production. essentially making all the changes needed to bring the model x online and as a result there are several questions during the conference call about the ability or the need to raise

capital at this point they have got at least a billion dollars. they say they're okay. but that door was left open during the conference call as a possibility that there could be a capital raise coming in the next six months to a year as they continue to burn through cash. >> potential events to watch for there as they're going to have to execute. thank you so much. >> you bet. >> all right. coming up, former president george w. bush in a picture taking mood. why he had to make a court appearance. >> and as we head to break, a look at yesterday's s&p 500 winners and losers. ♪

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okay. welcome back. i know this morning we have already been discussing or certainly joe and michelle have been discussing this new position that bill ackman has apparently taken in mondelez. $5.5 billion stake. it's his largest position ever. so that's noteworthy in and of itself. about 7.5%. what i can tell you this morning from my conversations with people familiar with his way of thinking, he believes they have products in the right areas where you would want to be in the food industry right now.

those being both cookies and candy. they have no private label competition and they have a big presence in he emerging markets which is critical. 40% of sales are now in emerging markets. i'm told that he views this as a long-term growth company by people that know but that mondelez has meaningfully lower margins than what 3-g has been able to achieve with heinz and what the market expects 3-g to be able to achieve with kraft. 3-g is very well thought of in this area according to people that i've been speaking with, ackman believes that 3-g has reset the bar so to speak in the food industry or really what's possible so the question is is what is ackman up to.

what does he think is going to happen here? clearly it's already been talked about and written about this morning is its really on mondelez to try to fix itself first and foremost but that people say the most likely outcome is an acquisition and that 3-g would be the most likely, that kraft heinz would be the most likely suitor despite all of the discussion about how mondelez could fix itself and it's margins et cetera. as we say, the view is that it has meaningfully lower margins than what 3-g has been able to do with heinz. what the market believes that he can do as well with kraft. >> they used together. >> it's the incredible recircling. >> it's 3-g that makes that

company come together. that's why he justifies putting back together what everybody worked so hard to break apart. >> this is about trying to grow your revenues faster. to grow the top line and how best can you do it. more cost cutting and what the idea has been in the beginning. don't forget that nelson peltz is on the board of mondelez. he wanted that company to do more cost cutting. the idea of an acquisition is clearly not foreign to nelson peltz. i should tell you as well that i spoke with him a short time ago. he told me that he is pleased that ackman sees the value in mondelez. that's as far as he would go in trying to make a public comment. >> when you try to raise margins is it distribution or shelf

space? do you try to make it with your other brands. >> they cut costs and employees. >> it's described to me that 3-g has a reputation of being a cost cutter but that they do it with a chainsaw. they have the most proven track record in this business of achieving results either through cost cutting or through acquisition. >> i was going to say, sun braem. >> the other interesting nugget here that we haven't discussed yet is the buffet angle because of 3-g and heinz and what kind of role if any would a buffet play if 3-g, craft heinz were to go out and buy mondelez. they could do it without him. they could do it without him. that's important.

however, they get a lot more cred and it would be easier with buffet along side. >> where is he now with that? >> i don't know. >> he likes the brands though and we're having trouble seeing innovation there because they already make the double filled oreos and mint oreos. >> they have seasonal oreos. >> they have already made ritz and they put the peanut butter in the little ritzs and put them together. they've done all of this innovation already, haven't they? >> the other thing interesting too. >> you're going to ignore that. >> fine i'm going to ignore it. >> okay. >> but do we know, has -- bill ackman knows 3-g incredibly well. do the people familiar with his thinking know whether he's actually talked to them about whether or not they would buy the company?

>> i don't think that he's had any conversations yet with 3-g. will he at some point? i mean, come on. >> they know each other intimately. >> the other important point is that not to be overshadowed here at all is where throughout it's history it has been 3-g has gone. there's heinz, there's craft. now will there be mondelez as well. >> it would be nice if they retired that name, mondelez. god knows where they got that name. >> nelson pletz himself said that it was the worst name ever. >> in the world. >> and don't forget tying it all together here, remember just last month ackman and peltz were on stage together with cramer at delivering alpha. >> we'll have much more straight ahead. >> i'm sure they never collude

or anything. disney apple and tesla caught in the downdraft. is there more pain ahead with more companies set to report? that's coming up next on squawk box. nsh xçó0

. welcome back to squawk box. nearing the end of another busy week on wall street for earnings. so far the growth rate coming in better than expected with health care, telecom financials leading the stock that have reported so far. 47% have gone down following their report. >> have we ever said something has not come in better than analysts expected? i'm ready to blame the analysts now. >> just now? >> you haven't been doing that for like 20 years? >> no but everybody it's always better. analysts, have you not learned

that you're probably too low? >> manage down. they always manage down so they can beat the number which is leads us to our next guest. but you do like ritz with peanut butter. >> s&p capital iq senior analyst and she does a lot of analysis of earnings season. any surprises thus far when you do it sector by sector? >> i think that you're seeing health care leading the way. they're seeing the largest beat rate, bio technology has come in so much better than people had expected. you saw regeneron, they all had much better results and that's going to continue going forward. the valuations too on those stocks aren't completely out of control. >> on bio tech. >> within the tech sector that's been a little bit of a disappointment. 72% of the companies that have already reported results have beat but the percent they beat

by has been lower than most any other sec tore. >> what do the numbers tell us about? for so long you can just buy the market. i don't think you can even buy sectors at this point. you have to go stock by stock now. >> i agree. here's the thing is we're in year 7 of the recovery. it becomes a lot harder for you to buy the broader market. you have to get stock specific. you have to look at strategic initiatives, find special situations and good valuations. >> is there anything you can glean from your analysis of all the earnings reports that have come in so far that give us any sense of where people should put their money? >> you need to be in the areas where the companies are producing products wanted by the consumer for one. consumer discretionary is

expected to leave the second half of the year and we haven't gotten the majority of those names. michael kors is coming out. >> it's one of the hottest along with health care. >> up 11% on the year. the expectations are high going into the quarter. we have a couple of early retail reporters, coach, ralph lauren, kate spade all did better than expected. >> the bar was low. >> the bar was very low. i look forward to when we get into the heart of things when home depot and lows will be two big names coming out. not until about mid august. but those guys should do well because within retail sales, numbers have been disappointing but there have been bright spots and it's been the home funnishing. the home retailers. also online we saw am is on kill it this quarter. >> good to have you on. we really appreciate it. >> thank you so much. >> coming up has the southwest fully recovered from the housing cris crisis? the ceo of taylor morrison will

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switch to at&t and get a $300 credit with eligible purchase and trade-in. jpmorgan playing on lower requirements for credit scores and down payments for buyers of jumbo mortgages. a good sign possibly signaling a new chapter in the

post-financial crisis housing market. on a range of housing headlines, we are now joined by sheryl palmer ceo of taylor morrison homes, a home builder in nine states across the u.s. i have a pretty good feel for -- i won't call it just sun belt states because there's some sun in chicago, but -- >> some sun. >> but florida and the carolinas and california. >> arizona. >> atlanta, arizona. nice places to be. >> colorado. >> most not hot -- >> good markets. >> hot climate but also hot markets for housing. >> yeah. >> almost across the board. >> almost across the board. feel really good about where we are in the overall kind of housing recovery. i think we're in very early stages of what i think is going to be a very long, retracted, kind of multiyear recovery but will probably act a little different than what we've seen in the past. >> sheryl, how long have we been at zerp? >> zero interest rate policy? >> nine years since we've raised

rates but at 0 for six? >> six, seven, yeah. >> if they told you you would think by now the housing market would be exploding and something held it back the past six years because you're just now talking about it finally getting better. is it how hard it is to qualify now? we overshot on -- and banks overshot on how hard it was to get a loan? >> i think that's evolved over the years. what has driven the recovery. but i think for a number of years it's really been about confidence and jobs and -- >> twice. >> that's twice. >> sorry. >> certainly today we have an environment where the mortgage -- mortgages were difficult and, you know, maybe the pendulum swing too far. i don't think that's where we are today. i think people that are qualified, certainly the regulatory environment is difficult and people have had to get accustomed to it and i don't think the consumer appreciates

it can get a loan today. it's had to evolve. people that are qualified that have the income, that have good credit we can get them loans today. >> now we have to start thinking about an interest rate, an environment where rates are rising again. >> we do? >> they are going to rise? >> on mortgages. but no one thinks they're going to rise to the point where it would put a crimp in this at all. what do we get back to -- these are historically low rates. if they were to double or triple we would be back at what is a reasonable mortgage rate. >> by all standards historically we are so low today. i think about affordability today and what would happen to rates when i look at mortgages as a percentage of income we have runway ahead of us. people are buying. our buyers primarily are the first time move up buyers. i think they're a little more insulated to, you know, is it 4, 4.25. i think it's going to be a moderated approach by the fed. >> scott, were you not here for

shri that said sell everything. >> i was here for that. he's been really negative for a while. >> for five years they said rates are going up. you know for a ftc they are going up this time. >> this time being -- >> you foe for a fact they're going up this time. >> what do you mean? i was being sarcastic agreeing. >> it was obvious they were going to go up. >> i was being sarcastic. >> i'm being sarcastic. i was helping you make your point? thank you. >> here's the other thing -- >> still working on mondelez? >> i am. >> we have a show we're doing here. you know. >> and you guys are doing it very well while i work on mondelez. >> here's what must be thrilling you, even as we talk about the fact that the fed very well raised rates in september, long end of the curve doesn't move. the 10-year sets mortgage rates. even if they raise -- no mortgage rates go up? >> i think expectations are we could see 20, 25 bybipartisanss

bipsa year. compare that ten years ago. once again, i don't think mortgage rates are going to have an impact. >> bet land is still cheap? >> land? >> not making anymore. >> they're not making a lot more. >> it went -- that gets crushed when the housing -- >> land is not cheap. it depends on where you are in the country we've focused our business on staying -- >> are you back in the market for land? >> we never lefts the market. >> really? >> never left the market. i think the downturn is when we as an organization did our best buying and that has really helped us deliver a quarter like we saw yesterday. >> thank you for coming in and talking with us. >> thank you. >> all right. coming up, bill ackman's appetite for mondelez what does the activist investor have in mind for the snack food giant? that's coming up next.

. breaking overnight, bill ackman taking a $5.5 billion in snack maker mondelez. we'll tell you what he wants the company to do and how mondelez is responding. media meltdown. shares of discovery, time warner, viacom, disney, all getting slammed over court cutting fears. analyst david bank says what companies are set to reap the benefits. >> shares of fitbit plummeting after its first earnings report as a public company. we'll ask an analyst why investors are selling after the earnings topped estimates. the second hour of "squawk box" begins right now. ♪ zliv from the heart of business, new york, city, is this is "squawk box." ♪ welcome back to "squawk box." not a bad habit.

it's a good habit here on cnbc, first in business worldwide. i'm joe kernen with michele caruso-cabrera and scott wapner. two names, that's enough, you know what i mean? >> thank you for being here. >> my pleasure. >> the bank of england leaving rates unchanged. take a look at the european equities. it seems that will be a headline some day when we talk about either europe or the bank of england, it's always unchanged, isn't it? >> we may not be working anymore. it will be so long in the future. >> what's your middle name? >> michael. >> nice. >> probably me that ever if i was arrested for something. >> scott michael wapner. they only refer to criminals with their middle name, right? >> you know -- >> except for andrew, of course. >> right. >> but you have the billy bob thing down south, a lot of guys are -- they use three names. >> sometimes. >> latin america too. >> yeah. >> but like every time you're, you know, a convict --

>> all right. lee harvey. u.s. equity if you tours. >> james earl. >> oh, geez. >> okay. yeah. had something to do with each other. >> i'm a history buff. >> dow jones now. that's why we're talking about other things because the dow is indicated down it 2. it could change. >> down 3, 5. >> the market change any time. >> the market did pretty good yesterday given disney, 11 times 6 is -- >> disney was 70 points i think out of the dow all by itself. so the dow would have been, what, i think it finished down 10. up 60. >> held on for most of the session. >> it did. because apple righted its ship a little bit. >> it was up sharply but when it closed it gave back some of its gains, up less than a dollar. >> remember also the adp employment being so bad, maybe

no fed rate hike in september. >> i was listening on the morning on the ride in, adp, next thing joe says is futures are up. two more months of ze for the crack at it or method. let's get to the breaking story this morning, activist investor bill ackman has taken a $5.5 billion stake in snack maker mondelez. ackman's pershing square disclosing last night that it holds a 7.5% stake in that company. a spokeswoman from mondelez said the company welcomed pershing square as investors and it would continue to focus on executing its strategy delivering its value for shareholders. i know you guys know that i've been trying to work the phones here. >> work the phones this morning. >> all morning. as you guys have been discussing this and i'm told that, you know, from people who are familiar, that ackman sees what he believes is a great business with brands in the right place. they're the cookies, they're in

candy, they're in all the places that joe, when he wants to raid the cup board and get a snack is going. they have no private label competition, viewed as a big plus. they have 40% of their sales in emerging markets for obvious reasons. that is a big plus. but that the company needs to fix itself. its margins at this point are lower. >> some of the worst in the industry, right? compared to its competitors. >> compared to what -- certainly what 3g has achieved with heinz and kraft, remember that deal, and what the market thinks that they could do with kraft in and of it sf. either fix yourself or sell yourself and it becomes who's the most logical buyer out there and i'm told that, you know, ackman's thinking is 3g is the most logical buyer because they've reset the bar in the entire food industry so who better than 3g to come in and further cut costs and do what

they've done with the other businesses they've been involved with. >> they got a fiancer warren buffet if he wants to go along. >> i think that's a wild card in this. he knows buffet well. goes to the annual meeting. there was a "fortune" cover, i think "fortune" not that long ago that had ackman on it and the title was "baby buffet." all the irony of that and then if you put together -- >> he knows 3g very well from burger king as well. >> extraordinarily well. the other fact is -- >> did you see -- i mean this stock was $41 a week ago and then on -- i'm trying to figure out why it moved up so much on the 30th, reported better than expected results on the 30th and also some articles back then that kraft heinz is still going to be in the acquisition business and then they boosted a buyback but it went from 41 to

45 on that day on the 30th and now it was at 46, indicated almost 50, by far an all-time high. that has almost doubled the lows when down in the high 20s or 30s. >> yeah. >> no one had any wind of this before. i looked at it and said that's a little suspicious on july 30th. >> i'm going to talk to a couple guys who know unusual activity pretty well, that being the najarian brothers. >> yeah. >> maybe we'll have some news on the halftime show about that. that's the kind of stuff they look at. >> that's the show at noon. >> i love it. you have four names, it's judge scott michael wapner. >> you can judge yourself when you get arrested right. ♪ >> i haven't heard this music in a while so it's somewhat comforting. let me finish this quick report. >> if you can do it. >> if i may. >> i can do anything with music. so nelson peltz is also on the board of mondelez.

i spoke with him a short time ago. he told me he's pleased that ackman sees what trian sees when it comes to mondelez. it's important to note as well that peltz in his own right on being on the board of mondelezs has pushed so hard cost cutting, get margins up and he's been pretty darn successful in doing both of those in the way that he's increased margins, cut costs. the question is now what does he see as the outcome in all of this. timing is also important. >> he's on the board. he could influence the outcome whether they should do a deal. >> the timing is interesting. if 3g wants to make a move now, they're going to get it for cheaper than if they wait. that's what the thinking i believe is. >> because in theory the margins, they would get their margins in a better place and, therefore, push the stock higher? >> ackman in the stock, peltz on the board. you can presume at some point they're going to speak to one another, right if you can only

assume that. why not do a deal now when the getting is good and get it for a little bit of a discount as to what you could get before. they could do a deal, buffet doesn't have to be involved, kraft heinz could do a deal in a second, they have the market cap, the ability to do a deal for a mondelez, but having buffet alongside of you. >> sharing risk. >> doesn't hurt one bit. lot more to come on this story. we'll have any more developments certainly through the rest of this program, hopefully today at noon as well. >> all right. some other big premarket movers to talk about as well. tesla, not for mondelez, we would be covering this even more, tesla hitting a speed bump. the electric car company reporting better than expected profits and revenue but lowering its full year sales forecast from 50,000 cars to 55,000. stock getting hit hard. fitbit stumbling after its first earnings report as a publicly traded company. the maker of the wearable fitness tracking device beat on bottom and top lines but the

margins fell in the quarter and the company doesn't expect that to improve for the rest of the year. >> it was knit picky the way that they stock -- >> it sky rocketed first. >> talk about the margin miss was like being knitpicky. the stock had -- what up like 150%. >> revenue -- >> since the ipo. >> crazy amounts, yeah. >> it was ripe for a sell into -- >> talking about the stock performance. >> the stock performance. the nrms were great. the stock performance has been off the shots. i saw bob peck, analyst at sun trust, said people were being too knit picky at the markets. looking for an excuse to sell. people question the moat around the brand. are they going to have a suite full of even more products. >> does the apple watch eventually hurt their business. >> the same way they talk about gopro. right? the bears come out they talk about that. more on that straight ahead too. sorry. >> no problem. shares of keurig green mountain, single cup coffee maker plunging

30% on weak revenues and the company is cutting 5% of its work force. year to date, shares have fallen now, more than 60%. >> see, it's not single cup. i make a whole pot. >> you can do that on a keurig? really? >> little bigger thing you put in. >> i like the little brew. >> takes too long in the morning. countdown is on for tonight's gop debate. the head of the fix the debt campaign and a cleveland-based ceo are calling on the candidates to address the nation's debt and share their plans on what they will do to fix it. joining us now with more is mia mcginness, president of the committee for responsible federal budget and sandy cutler chairman and ceo of eaton. thank you to you both. and i know you're probably seen this and been troubled by it, but the economic recovery and i guess the sequester allowed us to have slightly lower deficits for the last couple years and

maya, we don't talk about this much anymore and the problem has not gone away. >> right. the good news, of course, is that the economy is recovering. but that's led the decline in the deficit to have politicians of both parties and the president kind of emphasizing oh, the deficit is coming down, we don't have that much of a problem. when, of course, the reality is that our debt still twice as high as when we went into the economic crisis, twice as high as our historic average, fastest part of our budget is interest payments not what you want to see and on an unsustainable path and one thing we know is that you're going to have to have presidential leadership to move forward on this issue. it's difficult and has tough policy issues. we're focusing on how during this campaign season we get the candidates to address this issue, acknowledge the problem and talk about what they would do. >> there's ways to make it clearer what we're talking about

too, maya, no one wants to cut, you know, to cut outlays and cut services, but unless you do it, the people that are -- that will -- that are going to be hurt in the future are the people you're talking about hurting right now. you can't get your debt under control, all these social services will be -- you're not going to be able to do as much 15, years from now if you don't take care of it now. >> one of the most troubling things is that there is an ongoing kind of argument that we can delay, we don't need to get this done quickly, no urgency in the problem, when if you don't reform the big problems like social security and medicare, the people who will be hurt are the people who most depend on them and those are changes we these to phase in gradually and need to get started now. the trustees of the programs tell us that's what we need to do and we continue to kick the can. >> sandy, you run a big -- you run eaton and your balance sheet is one thing and no one is saying the federal government needs to completely match

liabilities and assets, but like a company, but i mean, deficits do matter. that is a -- when they said that, that was not true, that was a faux statement. >> if you look at the big countries they've got a debt problem. we have a $13 trillion debt problem in the united states, it's about double than what it's run historically starting to squeeze out so many of the important issues we've celebrated as americans that make this country a great place, education, fa structure, r&d. our concern is unless we start to address these issues now, the long-term run rate puts us in a difficult spot. you were talking about interest rates. we're in a period of normally low interest rates. as these rates start to increase, that interest service on that debt becomes enormous and puts further pressure on the things that differentiate our country. >> usually the market would have

responded to something like this, the vigilantes would be back in a big way. why do you think they're not back yet? why do you think there isn't a lot of upward pressure, i guess on a lack of demand from maybe the financial crisis, but it doesn't look like the markets are worried that much at this point. >> you know, i think there's a sense of exhaustion around this subject. there have been a couple very big attempts over the last couple years to deal with the budget and frankly we didn't get there as a country, and i think people have backed away from that on the assumption it's hard work. it is hard work, but the prize is enormous for the country. if we just think of the theory of the game, we should have run up larger deficits at a period of terrible recession. that is one of the functions of the government, is to provide that stimulus. the real question is, if we don't solve this deficit now and start to bring down the debt, what is our capacity as a country to provide that cushion the next time we run into a period of economic weakness. it's not only an issue for today, it's a very important issue for this economy through

the cycle. >> sandy, scott wapner, i would like to ask you quick before we go, we've talked this morning about bill ackman taking this new position in mondelez in which nelson peltz's name came up in our conversation today for obvious reasons, given he's on the board. you're the lead director on the dupont board. the most recent quarter was not that great. sales were down double digits. do you expect mr. peltz to make another run at the dupont board? >> i mean, that's obviously up to nelson we've got a koords yal, proactive, construction discussions with nelson and value him as a shareholder like we value all our other shareholders. >> do you think he'll launch another fight for board seats? >> it's up to nelson. our conversations are constructive as they are with other major shareholders and we remain committed to the stray strategy put forth for the country. >> we're going to go but be back at trillion dollar deficits in a couple years by all accounts. do you have a number that you

use, can you add up social securi security, medicare, all the entitlements and the national debt? do you have an actual number we don't really, you know, there's different estimates, what do you use? do you use 70, 100? what is it? >> the unfunded liabilities, the promises we've made are around $70 trillion. it's mind boggling how big it is. just the debt today, the $13 trillion debt we owe to the public, the $18 trillion debt in total, those numbers are mind boggling and the thing i hope we hear from candidates when they debit it, this is linked to every important economic area there is from growth to economic mobility to competitiveness, so i hope they talk about it. >> yeah. hopefully. i don't though. it's on late too for people that get up early. thank you, maya and sandy. appreciate it. good luck. godspeed. >> thank you. >> coming up, media stocks slammed over court cutting concerns. we'll talk to david bank next. new numbers on july layoffs.

perhaps giving an early read on tomorrow's employment report. bill ackman taking a snacktivist stake. we'll talk to an analyst about that as well. a number. ery auto insurances but not every insurance company understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

cbs reporting after the bell the company posting adjusted earnings of 74 cents a share, 2

cents above estimates. revenue also beat and listen to this, cbs announcing the price for a 30-second super bowl ad this year, 5, starts with an "f," not four, $5 million up a half a million dollars of last year's rates. the ads will stream on-line at the same time they air on tv. guess deflategate isn't going to affect whether we watch the nfl or not. >> not the super bowl. >> i don't think so. >> no way. i can't wait for week one. >> i want to see your phone, by the way. can i see everything on your phone? would you let me see everything on your phone? >> why do you want to see it? >> are you out of your mind. >> i would destroy my phone out of -- i'm talking about brady. i would do it too. no way. you're in the -- i'm not giving you my phone. would you give me your phone? >> no. >> just hand it to me for a second. >> i'm going to give it to my systems who will destroy it. >> fear and anxiety. >> i always destroy my phone like every three months.

>> do you honestly? >> no. >> some do. >> lindsay graham did. remember? probably missed that too, right? >> what? >> fear and anxiety. >> trump gave out his phone number. >> michele destroyed her phone this morning twice. viewers have heard it. fear and anxiety about cable court leading to a stunning meltdown for media stocks on wednesday. i got david bank here and i'm excited because i saw some of your comments earlier. you can move that up. i'm not going to read it. move it up. some of these -- here's david bank, at rbc capital market. very sharp declines after some of the stocks were leading the market. >> yeah. >> i think disney was the biggest. >> yeah. >> dow winner this year. >> yeah. >> go back three or four years, it's up a lot. people knew about cord cutting. >> all-time high. >> and knew about -- this is not something that just happened. >> that is correct. >> yesterday. and a lot of times sharp

corrections are moving stock from weak hands to strong hands. my question is, was that the top that we saw two days ago and we're now going to be in an extended decline because of cord cutting or do you think eventually all these stocks hit new highs? >> well, i can tell you that yesterday was probably one of the most challenging days media investors have ever had literally. every stock basically down 10%. >> we need to know -- >> maybe media analysts too. >> it was pretty -- for analysts as well. >> instead of high single digits for cable they said mid-single dij its but then said a lot of other stuff like it's moving slowly, we don't see a big move over the next five years, skinny bundles. >> but really, is any of that a particular huge surprise and frankly, i think bob iger had kind of made comments like that in fairly public forums before. >> what happened to the market psychology?

>> what i think happened was, disney is probably of all these stocks the one owned most by generalists globally. global pms, exposure to consumer discretionary, huge part of the bench, you own disney, it's been a great performer. i think the media, the average media investor, and probably even the average u.s. consumer, knew that there was some vulnerability to the cable bundle. >> been talking about it nonstop, talk about it every day. >> when it hits the global portfolio manager, that wow, even disney, which is thought of as more of a -- >> consumer product. >> even espn is vulnerable, you think if the gold standard is vulnerable, maybe everybody else is vulnerable. the struggle i think a lot of media investors had was, we've known that the rest of the universe is somewhat vulnerable. the multiples had compressed. a lot of these stocks actually looked like reasonable values where they were, and then you

just got slammed. people, it was the kind of psychology where there went a level, there wasn't a -- it's a fire sale, it's a fantastic opportunity to buy what i always wanted to buy. there was no price. it was simply, i feel like everybody else is selling and i don't want to step in here. >> what was the most overdone sell-off yesterday in that space? >> i think it was time warner. time warner came on, they actually beat the quarter, reiterated full-year guidance and there was some confusion as to their long-term guidance language and the stock was down 10%. and time warner, of all these stocks, is the most probably insulated from a lot of the concerns that are going on in the ecosystem and i would also say cbs, okay, what's the concern that bob iger brought up? it was the bundle, the skinnier bundle, the evolution of the bundle. cbs's one channel, there is no bundle, right. stock down 5%.

>> it's just that that's -- >> one channel, no bundle. >> traditional tv. how many times, was it mark, he was smart, these demises get greatly exaggerated. >> correct. >> at times. and we have some guys that aren't like you, that follow it that are saying sell every media stock and put it all on netflix, i'm paraphrasing but that's basically -- is netflix a trillion dollar company because it will have all the market cap of every other media company? >> i'm not going to speak to netflix. i can tell you, though, that if you look at what's on netflix it's largely being produced by all these companies that just got annihilated yesterday. they must play a pretty important role in the ecosystem and the concerns are not a -- i don't think -- we've done a lot of work, i mean a lot of serious work on this topic, and i think these are -- these are really marginal shifts, right, in consumer behaviors is that we're seeing in the numbers. they're not -- it's not a

landslide of cord cutting that's going on. >> it's glacial. that's a word i us. >> it's glacial. >> not often when you see, what, fox, disney, discovery, time warner, all in a single day get pummeled by as much as they got pummeled. >> right. >> it's stunning. >> when you think about what the long-term answer is, and bob iger tried to argue, we're going through cord cutting, things are going to start going over the top is the phrase that's used. you got to have the products that people will actually buy. espn, in theory, is one of those products, right? >> so first off, the work we've done would indicate the average consumer really doesn't have a vested interest in going over the top for all its content. if you combine, if you try to create your own synthetic bundle with all these over the top, netflix and hulu and hbo over the top and amazon and pay a higher price for your internet access, you really don't come out ahead. so i'm not -- i'm not with the average consumer is going to completely go over the top.

there will be some of this that occurs. >> your name is really bank? >> it really is. >> can you lend me some money. >> you can bank on it. you can take it to the bank. >> can't say joe, i'm not a bank, because you are a bank. >> that is true. you've got me right there. >> are you systemically important? >> i'm too big to fail. that's exactly right. >> coming up, breaking news on jobs. we'll get news on july layoffs with the challenger report right after the break. time now for today's aflac trivia question. when did the redesigned $100 bill begin circulating? the answer when cnbc's "squawk box" continues. ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea.

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because at scottrade, our passion is to power yours. now the answer to today's aflac trivia question. when did the redesigned $100 bill begin circulating? the answer, october 8th, 2013. we're just one day away from the jobs report for july and a new report out this morning shows that job cuts are soaring. the highest level in nearly four years. here to take us inside the numbers, john challenger, ceo of challenger gray and christmas. they measure the number of announced layoffs. good to see you.

give us the breaking news here. >> well, we've seen almost 105,000 job cuts announced in the month of july. that's the highest in four years. it's really driven by big cuts in the military and the u.s. army in particular. >> is that the sequester essentially? >> that is. it's a continuing draw down of the military. we've seen some of this going on. those are, again, over 50,000 people coming into the job market and there has been much more effort by companies, by employers realizing not only they want to do their civic duty of hiring these people but getting often young people with very strong leadership skills. >> we see the number two sector for layoffs, this surprises me considering the boom in tech shares, computer layoffs numbering 13,000, almost 14,000. what's going on there? >> we saw big cuts from companies like microsoft and

qualcomm and intel. so, you know, we're in an economy, remember what warren buffet says in his annual meeting, he says, i don't know of any company that, you know, has a policy says they're going to hire more people than they need, so even in a very strong economy with unemployment low, companies are taking action and their businesses change to get their work force levels right. when you're in the -- in an economy like this with unemployment at 5.3%, in many ways, these workers are fuel for longer growth, better growth, maybe this period of expansion will continue longer. companies do feed these people. >> redeployed to better position. the price of earning declining sharply, see it throughout the numbers you brought us this morning. >> so true. we've seen now 78,000 plus oil related cuts for the year, so if there's any sector in the economy right now that's kind of going the other direction, it is

oil and energy. those -- that drop in price is certainly good for consumers but it changes the dynamics of the industry. >> yeah 8,000 job cuts announced due to the decline in oil prices. thanks for bringing this to us again. >> thanks for having me. >> all right. coming up, a major sports wear maker is considerings the sale of its golf business. we'll tell you why after the break. we'll talk to an analyst about bill ackman's stake in snack maker mondelez. "squawk box" will be right back.

welcome back to "squawk box" on cnbc first if business worldwide. among the stories, fertilize maker cf industries will buy netherlands based oci's north america and european global distribution businesses, that deal worth $6 billion clubts about $2 billion -- including about $2 billion in assumed

debt. a new holding company which will be headquartered in the united kingdom. coca-cola will combine with two european bottling companies to form a new company called coca-cola european partners and as part of the deal the new entity announced a ten-year bottling agreement with coke. the bank of england has left its key interest rate unchanged, however it signaled a rate hike is likely in the first half of 2016. played that music through your entire read. i don't know, the market is going down, better watch music. but -- >> you didn't like it? >> i didn't. we could have played -- if we're going to play music through your entire read -- >> absolutely missed opportunity, right, now they're trying to make up for it, right. this is better. it's not -- >> might have to pay for this every time we play it. >> you can rerack the whole thing and i can read it again. >> let's not. >> cf industries -- sports wear

company adidas is continuing options for its golf business struggling particularly in the u.s. the firm hired an investment bank to discuss the possible sale of tailor made or smaller brand adams. i'm sure you know this, ashworth. >> i do. >> tailor made sales fell 26% in the second quarter. it's hard, that business. you know, the planned obsolescence. how do you make the driver bigger, smaller, white, titanium, make it this, change the shaft, but how do you change it -- >> like the fashion business in some ways. >> new sets of clubs literally every single year. >> how do you market them? what do you say that's different? if your swing just is bad anyway, nothing -- take my word for it, nothing helps. >> blame the new set of clubs. you buy a new set every year. >> that's an idea. >> fore! >> coming up, snack giant mondelez getting a boost this morning. reports overnight the

billionaire activist confirmed, we've confirmed, the hedge fund has built a $5.5 billion stake in the company. we'll talk to an analyst about his move next. ♪ can a business have a mind?

a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

welcome back. bill ackman taking a bite out of mondelez, amassing a $5.5 billion stake in the snack maker, making it his largest position ever. >> the last position of scale for him was, if i remember correctly was zoe ettist" which was $2 billion a couple years ago and this -- that was at a time where his fund was already huge. >> right. >> this has more than doubled that. >> right. >> amassed a war chest for sure and he can move the stock dramatical dramatically. >> mondelez. >> and he's done well over the last couple years certainly in the market. >> but there's -- these guys have to do well every year as you know. he obviously thinks this is

going to be a way to take whatever return he gets on $5.5 billion, the entire fund is probably going to be somewhat dependent, its return this year will be dependent on how this works on. working out already. >> of course. >> $3. the stock gets the immediate pop as you would expect. as you would expect. >> two bit pirate -- >> joining us on the newsline with more is alexa howard, research analyst at sanford bernstein and company. good to speak with you this morning. your reaction first and foremost to this massive position by ackman? >> so i guess it's not a huge surprise. ackman has been involved with kraft in the past. he's been following this story about the margin expansion opportunity on the mondelez side of the business since before the kraft foods company split back in 2012. he got out of it at some point, but now he's coming back in. we've had nelson peltz who

started to look at this opportunity the margin improvement back in 2012, and i think ackman's realizing that now is the time that a lot of this will bear fruit. he's got lots of levers. >> peltz bogeing on the board h already achieved sort of a one-man band, one-man wrecking crew, whatever you want to say, the ability to get costs down and certainly to grow margins, not to where i think either gentlemen, that being peltz and ackman think they can go from here, but peltz has already done some of the work for ackman in a sense, is that fair to say? >> i think it's fair that the company is already on the way to major margin improvement over the next two or three years. yes, i guess ackman is sort of picking it up where it's going to become much more apparent to the investment community that this is really happening. they've started the process,

we've started to see margin improvement over the last 18 months or so, but it started to accelerate recently and over the next year with lower costs, reductions, supply rationalization and product range, i think that's a huge improvement beyond what people are expecting. >> in my conversations this morning, sort of ackman' way of thinking here is, great brands, i'll list some of the brands for those who may not know, cadbury, of course, clips ahoy, or yos, dentype, nutter butter, ritz, sour patch, tris cut, trident, household names all the way down the board. can mondelez -- this comes down whether mondelez can fix itself or whether it's going to have to sell itself. what's the more likely outcome and then my follow-up to that would be, if it has to sell itself who would be the most likely buyer? conventional wisdom would seem

to suggest it would be kraft heinz, 3g, et cetera. >> it's a very fair question. at the moment, they're pedalling hard, they know the pressure is on not only to get after the margin opportunity but get the top line going again. they've got great brands. there's a good chance that they are going to see very good improvement over the next 18 months because of this outside pressure, but you're right, if they do skip a beat at some point, i think it's very possible that somebody could step in. and you're right, i mean it would be a very strange sort of turn of events given the split that happened from craft a couple years ago, but kraft, heinz and 3g may be looking for a bit more growth a couple years down the road. kraft and heinz. >> if it were to be put on sale how much should it go for? >> as you say it's a great set of brands. i think generally the control dreamiums in these kind --

premiums in these scenarios has been going 20 to 30% to whatever the prevailing stock price is. if the stock is currently trading at a 20 times forward p/e multiple or maybe a little higher than that today, then you would expect to be seeing that kind of a control premium put in to persuade shareholders to make the move. >> if an acquisition was the most likely outcome, would one happen sooner rather than later? we discussed this earlier thinking that it would more than likely happen sooner or kraft heinz would obviously have to pay more if they waited a substantial period of time perhaps? >> here's the dilemma. kraft heinz has only cemented the kraft deal so their leverage is fairly high. they may be looking to do some other moves in the near term. they're probably not going to be in a position to do another major move like this for another 18 months, two years, so it might be a little difficult to

get something to happen in the very near term and the question is, over that next 18 months, can mondelez deliver performance to such a degree that they get out ahead of where kraft heinz might be willing to go after them. >> yeah. interesting stuff. alexa, thanks for jumping on the phone. we appreciate your insight this morning. >> absolutely. thank you. >> all right. alexa howard with sanford bernstein senior food research analyst there. >> coming up fitbit shares getting slammed. the wearable device maker posting an earnings beat as a public company. we'll ask an analyst what is dragging down the stock next. we want to hear from you. what story is grabbing your attention this morning. tweet us @squawkcnbc use the #keepsquawking. we'll read your responses and share the best of the bunch at 8:50 eastern time.

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wearable tech giant fitbit seeing swings after a blowout second quarter. the stock first moving higher by about 5% since the numbers and then take an 15% dive afterhours. ahead of the report fitbit up 160% from its ipo price of 20 bucks. here on set to take us through the quarter is alex lahamilton, not alexander hamilton, senior analyst at spqr capital. >> i look good for my age. >> your name is not alexander. >> no. >> your parents stopped at alex.

>> they did. >> that would be really cool. >> i would have a little more leverage walking into restaurants i would think. >> get into the broadway show for free. >> i think you still could. >> listen, you bought the stock going into this quarter. >> we bought it at the ipo, bought it going into the quarter. what else do people want. we had a fantastic quarter by any measure. >> stock gets hammered. >> eps blown out. why is the stock retracing? sequential gross margins were down from last year. we were down about 460 basis points for three reasons. one, was foreign exchange. two, was ramping up production to meet demand. you know, those were the two main reasons there, right. these are high-class problems. and the other one and the other reason and apparently they all contribute to the quarter equally, was the fact that they had three new products in the quarter. basically they did not get the scale that street wanted but you haven't given this time.

the stock has only been public a month and a half. >> you say you bought it into the quarter. >> going into the quarter. >> so like literally in the last few days? >> yes. >> why would you do that for a stock that was already up 150%? >> confidence. one of the things i talked about when i came on to talk about the ipo is something that nobody really talks about, management team. management team was excellent. management team was actually very professional on the call yesterday. they sound like they're very seasoned and they've been running a public company for ten years. why up 150%? garrmin sort of preannounced from all the trends that we've been seeing, they've done a really good job in penetrating. one thing they announced on the call yesterday which i thought was unique and gave me a lot of confidence, they said, of the fortune 500 they are into 50 of them already. >> explain that relationship. do they give them out to free to employees? how does that work? >> corporate wellness program. >> buy them? >> buy them. >> full price? >> subsidize them for their

employees, make them cheaper for the employees. this is not one of the companies that they announce by my wife works for johnson & johnson, they have a huge corporate wellness program, encourage fitness, you mon storg your blood pressure and anything that's going to make them fitter is a good thing for them. >> i think about this company a lot. i used to wear a fitbit and loved it. then i got the apple watch and it has almost all of the same -- >> you didn't need it anymore. >> i will say this, i miss the fitbit software. >> yes. >> way better than the health software on the iwatch, on the apple watch. >> that's what i hear constantly. >> here's the thing, though, the elegant piece of hardware stays, the software can be modified. i believe apple will get far better software to match what was the functionality of the fitbit software. aren't you worried by a threat by a much bigger player who -- >> there is, but remember, this is a nay sant business. it's always hard to sit here and

analyze nascent businesses. this business didn't exist, i don't know, a year ago and they've grown exponentially. their only viable competitor is not apple, mondelapple is a sep thing, garrmin has been having issues, they are going and creating an ecosystem such as apple did. they have scales that are going to, you know, talk to this. >> the scale talks to my watch, by the way. >> wear this, you can -- the software allows you to talk to other friends. how many steps did you do today? how much weight did you lose if they're building this ecosystem and probably going to make acquisitions going forward. one of the acquisitions that they made was fit star which is basically you can get on-line personal training, so they just really once again, why did we buy the stock going into the earnings report, management at the end of the day i think is fabulous and they really have their pulse on the business. >> management is great, it's james park, is that his name? >> james park, yeah.

>> what about ecosystem? i don't care how great the management is. >> ecosystem is fantastic. they're taulking about the software they have, we can share our data and stats and getting people involved in the software a little longer and we all know how that works. you stay on longer. you're eventually going to buy stuff. >> you're obviously a believer in the stock and you put your money where your mouth is. good luck. >> thank you. >> all right. see you later, alex. >> thank you. >> fitbit ceo is coming up on "squawk on the street" 9:30 eastern time. >> there you go. >> coming up next here, gop candidates sounding off on social media. we're going to talk strategy with the man who ran mitt romney's digital campaign back in 2012.

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snack attack, activist investor bill ackman taking a $5.5 billion chunk of mondelez. will he push for a sale of the snack maker? the latest on the big investment straight ahead. >> fight night in cleveland. how presidential candidates are using social media to help pave the road to the white house. former digital director for mitt romney is here to share the secrets of on-line campaigning and winning over millennials.

>> plus, will streaming the music to apple, the stock bruised down close to 10% in the last month. will the tune service help ease the street's pain? the final hour of "squawk box" begins 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. i'm joe kernen along with scott michael wapner and michele caruso-cabrera. 90 minutes away from the opening bell on wall street. futures right now are up, be up 35 points. those are the best numbers i guess that we've seen among the best we've seen for the session. checking out the markets in europe which had been flat most of the session. they now are green across the board. but -- >> greece is positive. >> small gains.

and greece is positive up almost 3%. >> that's the huge move. >> it's the affects comp. >> athens exchange. >> did you see that building when you were there? >> yeah, i've been there. >> that's cool. >> not -- it's on the outskirt. not pretty. >> doesn't beat the balcony overlooking the square. >> people beating each other up -- >> usually works for a backdrop. >> more compelling, yeah. here are the stories that investors will be talking about. we're about a half hour away from another round of jobs data. the labor department will be out with jobless claims at 8:30 a.m. eastern time expected to increase slightly. bank of ek gland left its key interest rate unchanged but signalled a rate hike is likely in the first half of 2016. the first debate among the republican presidential candidates is set for tonight. the ten leading candidates will face off at 9:00 p.m. eastern time. seven others lower in the polls will be in an earlier event at 5:00 eastern time. >> the dow extending its losing

streak to five trading days. where have we seen most of the weakness? dominic chu joins us with a look at some of the biggest losers. i know disney is one of them. >> disney is one of them. a big move down yesterday. but it's not yet in correcti territory. apple is. these are names people are talking about with whether or not there are compelling enough values to buy the dip. we thought about this idea of taking a look at some of the other blue chip stocks in america. the dow companies in correction territory or worse and we want to know from viewers whether or not any of these stocks represent a compelling buy. so take a look overall at some of these names. you have apple, intel, we have a matchup there. caterpillar versus exxon, ibm versus american express, procter & gamble versus walmart, all of the stocks, right, are in correction territory or worse. we're showing you some of the charts here. ibm, american express see on a year to date basis the momentum is not good.

what we would like to know is, is there a case to be made for buying some of these types of stocks. so we would love it if you guys would tweet in with the #buy the dip for all the match-ups. we want to know if apple is better than intel, we want to know if exxon is better than caterpillar, ibm is better than american express or procter & gamble better than walmart. all of the stocks carry dividend yields north of 2% with the exception of american express and apple. all of them have compelling valuations in terms of their overall market to stock valuations. throughout the course of the day, guys, we will whittle this down with viewer tweets an hopefully yours with regard to getting this group of eight down to four. later on in "squawk alley" we'll present those four. later on in "power lunch" down to two and by "closing bell" we hope to have one stock that viewers and tweeters think in this group of eight is the most compelling value buy given its set of circumstances and yes, we know maybe some of these stocks

aren'ts the most attractive for everybody out there, but if you had to make a pick, guys, which one would it be. they've got some great individual stories. hopefully you will tweet in. remember, buy the dip hash tag, we'll count up those throughout the course of the day until we get one. back to you. >> like crowd sourcing. >> it is crowd sourcing. and we got some great viewers. they're all financially savvy, know what they're talking about. we want to know what they think. these are great stocks that are blue chips. they just have bad charts that may be due for a turnaround. see if they have any opinions as to which are the best bias. >> thanks. i would like to think "squawk box" is where this started with the apple versus exxon question, right. >> it is. >> on monday or tuesday. >> but that started over a month ago with andrew where i made that point and i wasn't comparing exen to apple, i was comparing. >> we've whittled it down like dom asked. two -- exxon for an apple.

>> buy the company twice. >> yeah. >> well, in addition to those slumping dow stocks, the street also focusing on oil's big drop and tomorrow's all-important jobs report. so here now is mary ann bartell's chief investment officer of portfolio solutions at bank of america, merrill lynch and joshua fineman, at deutsch asset and wealth management. nice to have both of you with us. mary answer. >> -- mary ann. >> good morning. >> your outlook for the jobs report how will it frame the way we should be thinking about the stock market today. >> we're all trying to figure out what the fed is going to do in september and some of the data coming out is a little weak. some are concerned the report is going to be weak and the fed will be on hold. in fact, the bond market, we have seen yields come down. technically on the ten year we've almost broke down. i think tomorrow is going to be

an important day. what i'm just starting to hear is that people are concerned that there might be a government shutdown? september and -- in september. >> joy. >> i know. so if we start seeing that in september, that could weigh on the fed. >> okay. so josh, you're the economist in the room. what's the outlook? >> i think the fed is getting closer. they haven't made any decisions yet, i think it's going to be data dependent. i think most likely they're going to start this process later this year. i agree tomorrow's report is going to be important to inform that judgment. i don't know that it will be decisive necessarily. my own hunch is that they do start moving in september, but it's close call. but i'm more confident even that they will start before the end of the year. >> not to go down a rabbit hole but the ten-year yield going down because they fear the market is going to raise and too early or the market is saying the economy is not good enough and hence they're not going to raise? >> i think it's the market saying that, you know, probably are going to raise before the end of the year but probably

going to go real slow and short-term rates will stay low, inflation will -- very, very slow to creep back up to target. i think global factors play in here too. the slowdown in china, lower commodity prices, all of those suggest that hey, even if rates start to rise in the u.s. it's probably going to be a low and slow gradual process. >> we're not saying that the markets has to wait until september to do anything. is it going to continue this sideways sort of churn? >> the market never stays sideways. it's going to break up to the upside or break down. so what i do -- >> ween now and the fed in september? >> probably. >> what's more likely then? >> to the upside. the reason why i say that is if you look at all the different sectors, consumer staples just broke to an all-time high. consumer discretionary recently all-time high. financials, look very, very good. i've never seen a market go down when banks were breaking out to the upside. the pocket of the market that's weak are the cyclicals and

commodity stays space. energy looks ugly, materials, it's ugly. materials look ugly. industrials look ugly. >> how important is apple's success to the overall market success? >> what people love to do is compare apple's chart to the market. right. it's a big component to the market. if you really look at apple technically, it has a very minor breakdown. it's not a big breakdown. it's not meaningful. i think people are overreacting to what's happening with apple. >> you're saying that even if apple continues to decline. >> the market is still going to go up. >> it's in correction territory. the market can go up. >> i looked at the nasdaq 100 and i looked at the nasdaq composite. there's nothing wrong with those particular indices where apple is really very, very present. i don't think that apple has broken any major type of trends. so if it did i think it would be a bigger concern. i just think people are just trying to figure out what's happening with the market because we've been just sideways

going nowhere. utilities are getting better -- >> when you have a 10-year at 216, 217, 220, of course you want to go into utilities in yield plays. >> a lot of our clients at merrill lynch all they keep asking for is cash flow in their portfolios. look at utilities they're down on the year, the index is yielding 3.8%. we don't like the whole -- we think a lot of the utilities are overvalued but there are pockets where we think clients could probably add to if they're looking for current income. >> what about energy? it doesn't feel as though the economy or consumers even though discretionary stocks have performed incredibly well, that consumers are getting much of a bump or they're doing much with it. maybe i should say better. they're not spending the savings that they're getting out at the retail stores. >> there's still some lingering caution on the part of households. i think some of it reflects still lingering scars in the prices. people still a little on the cautious side. the other thing to keep in mind

the economy is doing better, but its rate of growth by historical standards is still pretty subdued. i think that reflects lower potential growth. seems the economy can't grow as fast as it did in past cycles. ask households their expectation of incomes down the road and they're off the bottoms from the recession but they have not fully recovered. i think all of that plays into this notion that, you know, folks are a little bit, you know, more circumspect than their spending decisions. >> good to see you. josh and mary ann, thanks a lot. investor bill ackman's pershing square taken a 7.5% stake in mondelez international and sources close to ackman tell me he thinks mondelez is a great business that an acquisition of the company is the most likely outcome. ackman joins fellow activist investor nelson peltz as a mondelez stake holder. >> this.

attractive man, great salt and pepper hair. >> not that there's anything wrong with that. >> long luxurious eyelashes. is he bigger than a bread basket? >> is he talking to you? >> i don't know. >> coming up, a look at how the presidential candidates -- i don't know who it is. i'm asking. just asking. could be him. >> i was waiting for mary ann to respond. >> does this person use letice. >> the girls now. >> presidential candidates are using social media to win votes. who's doing it right and which could use help on the web. later, another piece of the jobs puzzle. jobless claims data out one day ahead of the government's july employment report. you know i wasn't talking to mary ann. se the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions.

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social media companies are ramping up their political digital tools. twitter even releasing its own suggestion on who would make the cut. for tonight's gop debate based on how many mentions candidates have. i've seen some of these numbers.

donald trump leading by a factor of 7 to 1. candidates are dedicating more of their budgets to increase their presence on-line and joining us now to discuss the role of social media in the race is zach movefit, co-founder of gop digital technology firm called targeted victory. he was also the digital director for mitt romney's campaign in 2012. if you were to just rank the different social media platforms, zach, in order of importance or utility for these guys, how does it go? twitter first? >> it's probably facebook first. i think twitter is good within the communication space but facebook has the size and scale and toolsets more than anyone else and twitter and youtube up there. i think you're seeing snapchat starting to make a push this cycle into millennials. >> tell me how it's worked and go slow, so facebook, how would a candidate use facebook? obviously won't be getting to me but how would a candidate use

facebook? >> i think the way facebook's primarily leveraged is through photos and video and then also being able to target your message to specific audiences. you build out a large following and then you can use the ad tools to really kind of make sure you're on people's mobile phones. >> don't you have to be a friend or something? you already like the guy that you're following, don't you? >> well, only if you're on the organic side. what we've seen with facebook is the organic is only about 8% of reach. the advertising to insert yourselves into people's conversations and lives and shows up into their lives. advertisers can play a massive role in this cycle. >> that's why i said go slow. i think i got what you're saying there. and i saw someone is doing something with senanapchat. saw it in the notes. how would that work? what's the utility of snapchat? >> i think snapchat is just -- it's more of a millennial generational component. it's another platform that's being utilized at scale with people under the age of 35 and you're starting a new conversation probably to people that you traditionally are

missing otherwise. you're not catching them on broadcast. maybe not even using the other social networks but snapchat hits a demographic that lets you get your message out. >> do you add up the total? we're looking at who has the most followers. the total social media, add up all the platforms to get those numbers? >> i'm sorry. i can't see the numbers. >> yeah. maybe it was just twitter, but a lot -- when -- the fast and furious six or seven came out and i saw total numbers for three of the actors that were in that film, and they were -- they added up everything, instagram, twitter, all the imprints that they got, i figure that's what we're doing here or maybe just twitter followers, but that doesn't mean that donald trump, that's not responsible that he has the most followers, why he's getting 26% double anyone else, though, right? >> i don't think so. >> it's a symptom of it, not a reason for it. >> yeah.

somewhat self-select. >> [ inaudible ]. >> yeah. it's more of the output of it. that's right. probably also 1 to 5% of people who are engaging at scale and twitter is a great platform and donald trump has figured out a way to drive his message through social media without always having to do live events. social media is a great platform for him. >> what donald trump says live is not much different. he says some amazing or at least on twitter he says what's on his mind. i think we've got one. take a quick look. rick perry failed at the border. now he needs a new pair of glasses to see the crimes committed by illegal immigrants and that's all in 134 characters. you think these guys have staffs putting these things together, don't they? you think that's donald himself? >> i think it depend s with donald it's probably harder because to your point they're aggressive statements and i'm assuming he has a role because

he has to own them if it comes to him. sometimes you see candidates put their initials at the end to show they had an active role versus the staff sending them out. that's kind of up for debate who is the final person who pushes it out. >> zach, you probably have just opinions on things other than social media. can you -- you're gop related with mitt romney. can you comment on the dichotomy and just in the country on the impressions of donlz trump? we know how the mainstream media feels about donald trump and how the left feels about donald trump. "the huffington post" puts it in their entertainment section. doesn't seem fair in you're getting 26% of the vote if you're a businessman and viable candidate. i don't know where i would put "the huffington post" -- >> does the right love donald trump. >> the editorial board came out against him. >> got regan in him, giuliani. there are people on the right that you heard mark cuban not even on the right --

>> in the nbc/"wall street journal" poll even a large number of republicans think that he was hurting the party. >> yeah. but there's others saying it's not hurting the party. i don't know. i just know how the mainstream media feels about him and they would like to put him in a clown suit which makes the enemy of my enemy love him if the mainstream media hates him. what do you think, zach? >> i think it's one of those things that's why we have a long process. it's a gruling two-year process but at the end the right people tend to come out. if he can sustain for long periods of time i think the role of social media has allowed him to bypass traditional media and gives him outlets to talk to millions of people and seems to be resonating. he's at 26% in the polls. whether or not he's able to stay and maintain and grow that's that's the challenges. is there a cap growth there? he has every right to be on the stage and a part of this process. we will see. i think social media plays a role in his ability to get his message out and speak directly to people which probably wouldn't have happened ten years

ago. >> it's just that i don't think very many people really consider the possibility he could be the even actual nominee -- eventual nominee. >> it's so early as well. >> they're just waiting for the bond market to go down. waiting for him to implode. and if it ever did happen where he just suddenly did, him against hillary clinton, i think the left loathes donald trump about the same amount that the right loathes hillary clinton. so that would be quite a -- i don't know how that would end. >> it would be an awesome debate to watch. >> it would be -- probably think it's -- >> super bowl like numbers. >> anyway, thanks, zach. >> yeah. >> thank you. >> coming up, rio, one step closer to getting ready for the olympics. now less than a year away. the city prepares for a game that's not been part of the olympics since 1904. we'll have the details next. ♪ you're watching "squawk box" on cnbc.

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let's look at some stocks to watch in today's trading. the maker of power generators missed estimates by 9 cents with quarterly earnings of 50 cents per share. revenue below estimates as well. the miss came amid what the

company calls a record low level of power outages. keurig green mountain reported profits of 80 cents per share but revenue was below estimates and the maker of single serve coffee systems lowered its sales forecast and would cut 5% of its work force. stock is getting hammered down 30%. fertilizer maker of industries will buy the european north american global distribution businesses of the netherlandeds oci worth $6 billion excluding assumed debt and will become a subsidiary of a new holding company headquartered in the united kingdom. did i read that even close to correct? excitement building for golf in the 2016 summer olympics. it will be the first time the game has been played in the olympics since 1904. international golf federation officials have deemed the course in rio all but finished. ta doesn't include features such as the clubhouse and area roads where work still continues as it

does on a lot of the different facilities down in brazil. the igf is hoping to plan an event to test the course in the first quarter of 2016. i don't know anything about it. who the architect is. >> i don't knowing about it is. >> i'm sure there's a lot of great golf courses in the world. >> they're building it. >> i want to say it was -- >> do we know? >> it wasn't norman, was it? >> i don't know. >> i don't know. i got to look it up. >> going to go down to brazil? >> no. i'm afraid of the water. they scared me enough. the raw sewage. >> not the only thing to be worried about. >> gold medal predictions? >> it's a little early. >> for golf. >> spieth. >> but it's something that you get one bad bounce and don't get the gold medal. it's such a -- seems hard. >> who? >> gill hans. >> i don't know. >> he won the selection over nicklaus norman and player. >> no kidding. wow. >> that will be fun to watch.

got to admit. will it be like a match play? probably be -- >> i can't wait for it. i think it's going to be awesome. >> probably like one of those wgc deals, right. ♪ >> all right. you got to read this now, scott. it says judge wapner. >> he did the renovation on the blue munster. >> he did. >> when we come back -- breaking news on the jobs front and don't forget to send us the stories you're buzz about this morning. we will talk about what has you squawking. seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out,

within a few city blocks. working with ibm, they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.

welcome back to "squawk box." rick santelli here. live in the floor of the cme with breaking news. current read on initial jobless claims, 270,000, basically in line. we're splitting hairs here. last week's 267,000 remains unrevised. several weeks ago we had a 262,000 i believe. which is somewhat the low going back to the early 70s. but, if it's going back to the early '70s i wish we had the same type of labor force participation and other metrics. it's still an important issue. 2.555 million with regard to jobless claims on a continuing basis that are a week in arrears. if i look at what's going on in

the marketplace post that data things are the same. dow futures up about 22 points. that doesn't represent, of course, fair value. that's futures perspective. we're still under 2.30 in terms of 10-year note yields. the scrutinized small maturity 2-year note yields flirted with 76 basis points. we haven't closed above 74 basis points solidly since 2011. maybe it's an indication that the fed fund futures don't look at percentages, keep it simple, contracts going down, that puts more of a fed tight nng play in the minds of investors and yes, november and december contracts, closed at the lowest level since mid-june. michele, joe, back to you. >> all right. thanks, rick. steve liesman on the set. >> i don't know. >> you're missing for the first half hour of the show because you were on the phone. maybe he thought you weren't. liesman is here. what do you think? >> last piece we got before the jobs number tomorrow and it suggests the claims number is in

line with the number of roughly that the economists 215. we have a board showing what we're looking for tomorrow. non-farm payrolls 215, 223 was the prior, unemployment unchanged at 5.3%. average hourly wages something we'll watch closely up 0.2% is the expectation versus unchanged. here are five indicators that i look at relative to the jobs number and what we have so far. these are all relative to consensus. ism manufacturing gives you a number that would be below consensus. adp below consensus. ism services very strong. the claims would be right at consensus in that 220,000 area. one thing that's a big swing factor is going to be state and local hiring. we think it's on the upswing after having run below consensus for a long time but now we think it could be hiring going on at the state and local level. >> any more fallout from the powell on yesterday, fed governor, sitting fed governor, on the set with us, versus lockhart the day before, who sounded more hawkish than powell

did. >> a lot of chatter about that yesterday with lockhart suggesting that september was a done deal. and then powell was sitting right in this chair yesterday and joe, you were there, we went at him three times on this and the third one was a little bend on it where he said the time is coming, the fomc said, but he would not say september was a done deal. the question was powell undoing it, on different pages when it comes to making up your mind on september. >> why do they have to be in agreement anyway? >> they don't. we're just trying to read the tea leaves, understand the signals. >> sometimes it looks like they almost deliberately cover -- one says one and sometimes the other seems to say the other. >> one the right side of the mouth, the other the left side of the mouth. >> this is more insight, joe, you can go to sleep now -- >> please don't. >> they have different -- they have different task masters. lockhart doesn't really have to be beholden to yellen, whereas powell as a governor does. >> one is a governor in

washington. they're on the same floor in the same office. a governor doesn't get ahead of chair. a president doesn't care. sort of rhymes. >> all right. >> all right. >> that's kind of important to know, isn't it? that's not bad. >> that's good. >> i think santelli was not saying hi to andrew because he doesn't know who's here. the dis directed at andrew not you. he doesn't know -- it's like the country music song, if your phone doesn't ring that's me not calling you. >> that's an interesting spin on it. >> feel better. >> i do really. >> apple releasing -- have you heard that song? your phone doesn't ring -- >> it's me not calling. >> releasing some numbers this morning that could calm investor fears about growth at the company. josh lipton joins us with numbers on apple music and the app store. hey, josh. >> hey, joe. i just got off the phone with eddie, apple's senior vice president of internet software and services. eddy walking me through new

numbers. on the app store eddy cue telling me the app store did $1.7 billion in transactions. now that is a record and i asked eddy what are some of the reasons for that record and he said they had the largest number of customers transacting on the app store ever. he talked specifically also about continued growth in china, largest number of customers transacting in china he said ever. more and more customers in china going to the app store. i also asked him about the average spend per iphone user in china on apps. because that to me would be an interesting and important economic indicator. eddy saying quarter by quarter, the average spend by chinese ios customers in china does continue to grow. of course greater china end credibly important engine for apple. you saw it last quarter, revenue popping 112%. eddy noting they have 1 million developers in china now, building out that ecosystem, more developers, more apps, more

consumers. turning to apple music, eddy telling me apple has signed up 11 million members now to apple music. importantly, the question really is how many of those 11 million can they convert to paying subscribers once this free trial month ends. eddy saying listen the feedback in his words has been overwhelmingly positive. he's excited about the numbers. i did ask him about some of the complaints we've heard about the functionality of the service. duplicate playlists and the like. eddy telling me we certainly had some bugs, he said, we had been really seeing updates very fast, we are addressing the issues as fast as we can. of course all this news coming as apple's stock has been under pressure. the big concerns for investors, can they grow iphone shipments in q1 in 2016 and whether that china business really does continue to boom. eddy cue this morning sounding a real note of optimism and confidence. guys, back to you. >> yeah, that is the key thing that we're watching when it comes to the iphone. the music is interesting and certainly adds to the whole

ecochamber, whatever they call it, the halo effect. thanks, josh. take a look at shares of sea world entertainment. the florida-based theme park company reporting earnings of 22 cents per share excluding items, well short of estimates. revenues missed expectations. sea world said a decrease in attendance of 1.6% was due to the timing of easter, higher rainfall in texas, and brand challenges in california. okay. when we return, it's debate night. republican candidates get ready to rumble in cleveland. will there be a magical moment? preview of the big topics and how opponents are preparing for donald trump next. checking the futures, right now, green across the board. dow would open almost 18 points higher. ♪

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welcome back. herbalife shares are higher, sharply. the company reporting adjusted earnings of 1.24 per share that beat expectations. revenue also topping estimates and the company raised its full year guidance. there's a look at the stock up 8%. joseph. >> speaking of ackman, right. that's -- that's above where it's been recently. back over 50, wasn't it? >> good quarter. >> down in the 50s. >> after being way up, way down. right. >> all right.

the first republican primary debate that's tonight? >> so i've heard. >> it's in ohio and the race for the nomination is wide open. according to the latest poll numbers, but everyone will be watching the candidate at the center of tonight's stage donald trump leading in the polls and proving to be this election's wild card. a flame thrower to boot. dan senore co-founder of the policy institute here, former adviser to mitt romney and paul ryan and president george w. bush. see the pictures of w. yesterday. >> that was great. >> it was great. showing up at jury duty. did you see this? >> uh-huh. >> fantastic. >> what? >> i pay attention to a lot of things. it doesn't have to be in your wheelhouse. >> you have things to do. >> so talking about trump is just -- it just -- it's amazingly polarizing. >> yes. >> in just the media in general. we take ourselves very seriously, as does the rest of

the mainstream media. it's kind of funny to watch, isn't it? can you strip it all away and tell me, what does it mean? >> even if people think that trump is a clown and that he's an inentertainer and reality tv host and performer and not actually a professional politician, the issues that he's tapping into are not clownish. but he's actually speaking what's on people's minds. you know, if you are living a life of economic anxiety and insecurity and growing stratification and fears of america's role in the world and diminishing role in the world, he is talking about those issues. so he's -- the issues are resonating. he's become this sort of unvarnished voice for addressing issues that are on people's m d minds. it is easy to be dismissive of trump because he is an entertainer by profession, but the issues he's talking about -- >> shouldn't be dismissed. >> does the analogy that has just been very quietly positive by certain people, does the

analogy of regan was a clown, regan was dismissed, does that -- is there any analogy there whatsoever with donald trump? could he be elected president? >> i don't buy regan. regan served as governor of california. >> okay. how about jesse ventura. >> hold on. regan was governor and regan spent several decades writing, thinking about, talking about big issues. >> minnesota, this guy came along -- >> we have a state this crazy -- >> professional wrestler. >> we do -- >> arnold schwarzenegger. >> there are a lot of examples of these kind of celebrity phenomenon candidates getting elected in statewide races. that happens all the time in this country. it's never happened at the presidential level. i think the voters, both the primary electorate and general electorate voters, are more discerning about who they elect as commander in chief. >> we didn't elect a celebrity in 2008. >> he was a celebrity too but serving the united states senate, served in the illinois

state legislature. i'm not defending obama but i'm saying we don't typically elect people to president who never served in elected office let alone have the background of a donald trump. >> what strikes me is on the right there are people who have disavowed donald trump. wall street editorial board totally disavowed him. on the left we haven't seen a single democrat disavow bernie sanders and say hello folks, we are not socialists. they can't do it. it's amazing. the right is at least divided about donald trump. >> the current far left can't find any differences between -- >> there's another problem, take trump out of it it's an impressive field. in 2012, there was mitt romney and then a bunch of candidates who you didn't think could probably make it prime time if they made it to the general election. serious questions about a lot of them. 2016 we have this amazing field. two term governor of ohio, two term governor of louisiana, two term governor of missouri.

marco rubio. an impressive group of people. >> who has the biggest chance of stelling in of the spotlight from trump tonight? >> none should try to. i mean that. they should not try to get into a back and forth with trump. the best way to try to steal the spotlight to get into it with trump. the debate is about trump. the way to get in on the action is try to get into a back and forth with trump it's a loser's game. >> earlier i was accused of a convoluted premise that i put forth. all i said the latest thing on hillary maybe it is criminal, if it's the fbi maybe it is. there are sources saying it has to be. it's like a petraeus or sandy berger situation. >> the petraeus thing is very analogo analogous. >> so my point -- >> look what the justice department did to petraeus. >> her negatives are rising and even among her supporters they're nervous. the reason the debate tonight has gotten much more important now we really think that one of

those people could be the next president because she's not -- she's no longer a slam dunk. >> if you took -- >> then i was told she still has an advantage. >> i think she's a flawed candidate. if you took the name hillary clinton out of the discussion and just an litically as a political professional, an litically looked at her data, rising disapproval numbers, really bad numbers on relatibility, on trust, does she care about people like me, this is data that screams of a candidate that the voters view as completely out of touch, of another world, of an elite status that we haven't seen before and i think -- we don't say hillary clinton she's so strong and the clinton machine it's inevitable. but when you look at those numbers, that's terrible data. >> this is important because one of these guys could be the next president. >> not only could one of the guys be the next president but i don't believe the field we see today in the democratic primary is going to be the field a year from now. in other words, i think there is -- something is going to happen. i don't think her numbers, if

they remain where they are, are sustainable. someone will get -- she may get the nomination but the race will get shaken up. we're fixated on the republican field because it's entertaining. interesting stuff is about to happen on the democratic field whether or not biden gets in. she is too wobbly right now given all the swirl around her. >> hard to come back with her political skills. >> are bad, right. she is not -- she's not bill clinton. he was a natural. he was the natural. >> i know, i know. >> who has the most to lose tonight? i don't put -- i don't think trump has anything to lose because most didn't expect him to be where he is now anyway. >> right. >> who has the most to lose? >> i think if any -- any -- if you are on the receiving end of a trump attack, right, which all of them should be prepared for, he will be permanent offense, people saying is he going to rein it in tonight, look presidential, i don't buy it. i think every -- every successful engagement he's had in the media has been him on offense. he will be on offense tonight.

if you are on the receiving end of that offense, do you respond? do you have a good one-liner to go back and forth on. do it with humor not with outrage. outrage is hard to pull off, particularly a guy like trump. the one who most to lose is whoever gets drawn in a back and forth with him. the ones who have the most to gain are jeb bush and marco rubio. on the real right like huckabee, cruz, trump is going to be suffocating them. the voters that appeal to them, he is much more entertaining and attractive. but jeb if he can come off as presidential, sort of above it all, not getting drawn into it, the adult in the room, that -- he would come out well. marco rube why is an undervalued stock. his numbers have come down. he's been eclipsed by the attention around trump. i think marco -- >> who could be the dark horse? kasich? >> marco or kasich. >> christie? >> there's back and forth and ugliness and mud slinging tonight and someone like a marco

or a kasich doesn't get drawn into it when people get tired of the mud bath and they're looking around saying that guy is kind of interesting and he hasn't been drawn in. >> someone who doesn't dismiss trump, the chances he could be the gop nominee right now? >> 20%. >> less than 20%. >> i just think -- the republican primary electorate has a history of, you know, experimenting in the primary process before they actually go vote. >> it's early. >> interesting candidates. >> so early. >> voters actually have to go to the polls. they want this so badly. after two terms of obama, and the risk of a third term of obama here effectively with hillary,ing they will not roll the dice on a candidate who can blow up in the general election. >> talk about iran at all. >> the issue ain't going away. >> it's not. >> you're just like a hardliner on iran. >> it's unbelievable. >> what he said yesterday, what obama said yesterday the people chanting death to america are the ones that want to kill iran the supreme leader of iran says

death to america. the iranian revolutionary guard they're not the fringe. >> someone who loves america, jim cramer. car. one send it wasn't there and the next second...boom, you had your first accident. now you have to make your first claim. so you talk to your insurance company and...boom, you're blindsided for a second time. they won't give you enough money to replace your brand new car. don't those people know you're already shaken up? liberty mutual's new car replacement will pay for the entire value of your car, plus depreciation. call and for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch to liberty mutual insurance and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance.

. let's get to the new york

stock exchange where jim cramer joins us. less than a month ago, your sitting between acman and pelts. >> have you guys ever gone after the same one? sure enough, acman says, we both did cadbury. it was almost like he was trying to throw you off the set. the last thing you felt was, well, with they are doing cadbury, doing mondelez. you follow the discourse, they are talking about heinz, kraft, giving the capacity of doing things, beeg buying some of these things. the idea of putting them back together, it is too smart not to. it should have never been separated is how they looked at it. >> is it a little early at this point. they just finished with the other deal. they have to work on the

contin integration. >> i think these companies don't think like that. we have to keep the momentum going at all times. we are ready for this. you need an international distribution arm. this is the new form of activism, michelle mondelez wins either way. 10% of the company by guys that want to see something happen. the stock is up 2.5. it should be up more. >> jim, look forward to the fitbit interview and so much for. see you in a few. >> when we return, things that have you squawking this morning. you'll have a couple of minutes to send us your favorite. make sure to use the #keepsquawking. we'll be right back. can it make a dentist appointment when my teeth are ready?

♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver?

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because they're getting comcast business internet. comcast business offers convenient installation appointments that work around your schedule. and it takes- done. - about an hour. get reliable internet that's up to five times faster than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. this morning, we asked you to send us the stories that have you buzzing. now, it is time for us to share some of the responses. one of the questions we asked on twitter was. are you going to cut the cord or keep the bundle? slim tweeted. we have cable.

it is the cash cow. another tweets, as long as cable is more expensive and more annoying, it will stay that way. >> i'm petrified of the thought of it. >> because we live on it. it is our salaries. >> i'm afraid of a world where i wouldn't be able to need all the channels. i need more content, in fact. so you don't have fox news channel or cable? so you don't watch the debate. where during final four, you don't have trutv. more is better. >> when big events happen, people start to stream them. i lived without cable for roughly six months. >> do you see how long it takes kids. a rehab camp for kids that are

addicted. it takes them six months to get them off the things. >> mine would take six years. ? they are attached. >> i hope there is no. i really hope we never find out if there is anything harmful to your eyesight. apple music landing 11 million trial members including me and the three people in my family and the dogs. the company also says that after one month, the streaming service signed up 2 million for the family plan of $14.99. it has changed my life. i download it every david crosby solo album. i am going through these weird phases. on top of that, july was a record month for the company's app store which did a record $1.7 billion in tracks action. so many things i have missed over the years. >> why download if you can stream on demand. >> i do it through apple music. make it one of my favorites. make it available offline and

now i have it available on my phone. >> do you use pandora, spotify? >> i don't know how. >> it has been fun. >> it has been real and real fun. >> i'll see you next week, maybe from another country. >> who is going to be here tomorrow? >> becky. >> and you? >> i'm out. >> "squawk on the street" is next. >> sleep in, sleep well. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber from the new york stock exchange. a big morning of movers, tesla, physical bit and bank of england making some noise. ten years up and oil within $3 of its lows for 2015.