i'm becky quick. joe is off today. millions of americans will be starting their day with starbucks and now one of the popular drinks is getting a recipe change. the pumpkin spice latte will now have real pumpkin. although they're keeping a lid on the seasonal offering in terms of when it's going to be released. no word on when they'll start selling the psl. last year they started to show up on september 2nd so it could be just around the corner for when we actually see this. let's focus on the markets this morning. stocks with another big hit overnight. the hang seng down 1%. beijing wants to see a bigger slide in the currency. remember last week the central bank of china sees no further reason for depreciation after it's surprised the global market by devaluing the currency by 2%.

sometimes people have a difficult time doing that but a few months ago the premiere said he didn't want to see a devaluing at all this year. now down by 44 points. s&p futures off by 4.5 and nasdaq down by 10. cac is off by one third of a percent. >> it didn't beat forecast reven revenue above projections. there was a 3.5% jump and the home improvement retailer raising it's fiscal 2015 sales

and earnings guidance. brian joins us in a few minutes to weigh in on the latest results but u.s. comps were strong as well. up almost 6%. the company has now -- had beaten 11 quarters in a row. so it was widely expected it was going to be a 12th and that's exactly what happened. shares of home depot down. pretty good run for the stock as well this year. based on the housing data we've seen lately including yesterday, this was widely expected to be another beat quarter. >> as you mention, they're giving good guidance for the year. they see same store sales up 4.1 to 4.9% for the year. that's what they're expecting. >> bright spot in housing. the story continues. people going out and they're fixing up their houses and they're shopping at home depots and lowe's. >> and not buying clothing.

>> no. >> i remember when he was on your show. >> watching some of this play out, they have not seen it in the traditional retailers this it's way they have in auto sales and dining and home improvement. >> even electronics. you'll buy your iphone before a new shirt. >> the bar was sort of high for home depot given what the stock has done. maybe that's why you're not see a huge jump at least now in the premarket. >> thas strg nbe aoss th board. >> u.s. markets waiting on aey data point this morning. housing starting will be released at 8:30 a.m. eastern time. economists are expected a rise to 1.2 million units and that would follow the surge of nearly 10%. the other item dominating the markets, the price of crude, wti

closing below $42 has been trading even lower this morning. take a look right there. 41.65. another loss of 1%. getting ever closer to $40. >> in addition to home depot, other retail stocks in this morning's stocks to watch. urban outfitters beat estimates with it's quarterly profit but it's revenue and same store sales fell short of analyst forecasts. that's raising new con serns about retailers and prospects ahead. and teen retailer expected to announce today. six new positions will report to the president of the brand unit. also coach upgrade to buy from holden and added to that firm's franchise pick list. the turn around efforts are taking hold along with an expected overall improvement in

the handbag market. are more people buying coach handbags. >> they had a moment and then the downturn. >> it's been bad moments for at least the last year. >> had some difficult tiles. >> so isn't it a fashion thing? does it come back? >> coach, kate spade, michael kors, all suffering through that handbag turn down. >> it's hard when you see 12-year-olds carrying around some of those bags too. it got so popular. it was the yogi bearism. place is way too crowded. nobody goes there anymore. let's talk about sprint. the latest wireless carrier to ditch the 2-year contract. they're offering a lease option and will move to that model by the end of the year. also a new iphone forever program that start with $22 a month plus the monthly service fee which is around $60. that will let customers upgrade to the latest iphone each year

as soon as possible. stock jumping on this announcement. it's up about 15 cents but traded from around $3. up significantly on this news. sprint ceo will be joining us on squawk box coming up in about an hour's time at the top of the 7:00 a.m. eastern time. we'll also be asking him about his twitter war with t-mobile. a lot of people have gotten involved with it. but here's some of the things. straight outta bs. it's a play on the movie straight out of compton. they had a twitter feud after he criticized the all in plan. plenty to talk about coming up at 7:00 a.m. eastern time. >> you have to see the tweets. it's incredible. >> good stuff. >> it's honest. it's authentic. >> is it ledger? >> looking at me for pronunciation is not a great

idea. >> i think so. >> to your point so, many ceos are loath to say anything. >> aren't the rumors screaming at them after they're tweeting like this. >> they probably are to which they're saying so what. >> they're tweeting back. >> let's check on the markets this morning and take a look at where futures are shaking out in this early morning. coming up, what was an interesting day yesterday. dow down as much as 135 points. closed higher by 65 points. the dow would have an implied open 32. some of that is because of what's taking place overnight in shanghai. maybe the volatility is resuming in shanghai. s&p would open lower as would the nasdaq as well. there's the picture in europe. possibly taking that lead from the trade over in china. red arrows across the board from germany to greece and let's show you what happened overnight in

asia. there's the nikkei down by a third of a percent. but there's shanghai down by more than 6%. oil is a big story. north of 41 but closer to the $40 level. closed below 42 yesterday. that's wti, brent, and nat gas on the decline. treasuries of course. the ten year note yield is at 216 and the dollar, there it is, 124 versus the yen. pound sterling 157. gold as well today is up by -- it's a fractional move. did i see yesterday that miller had taken a position related to gold? i have to look that up. but i thought i heard that late yesterday afternoon. >> he made a huge bet on gold. very good eyes you have there.

he made a huge bet on gold during the second quarter. he has now finished the second quarter with 2.88 million shares of the gold trust. that's according to the filing. there you have it. >> there you go. >> as we mentioned home depot was just out with earnings moments ago. numbers looked better than expected and raised their guidance although the stock is still under a little bit of pressure at the moment. also walmart's results at 7:00 eastern time and new read on housing at 7:00 a.m. eastern. joining us to help us get ready for the trading day to come is jason pride. greg hodges is portfolio manager of the hodges fund. welcome to both of you. the numbers we see are pretty good. it tells us that the consumer is spending in certain places. what do you think about how we're doing with the economy and how the consumer is feeling and how that plays out? >> we're in the middle of a

longer economic expansion because when you look at the numbers and the underlying economic data we have yet to reach any sort of indication of excess built up into the system whether it's debt access relative to where we have been before or excess momentum in industrial capacity spending or utilization. they have not built up meaning that there's further to go and at this point in time, markets are maybe a little bit overvalued domestically. cheap internationally. but with that backdrop, this is still an environment where investors should be buying equities and investing in a growth manner going forward in the future. >> do you agree with that craig? >> yeah. you guys were talking about the price of oil. with it having the move like it has it has to eventually really help people. that's a major component. >> we have been saying that for such a long time. >> we have. you make good points about clothing. people aren't buying clothing but debt is a -- consumer debt is at a very low figure compared to where it was 8 or 9 years ago

so that's very positive. >> they're taking the savings from the pump and paying off their credit cards and debt. >> looks so. >> why do you think it hasn't built into the retailer? with the exception of home depot and lows? >> that's a good question. it's so competitive in the clothing space that i think that may have a little bit to do with it. the fact that they keep undercutting each other and maybe there's confusion among buyers of clothing but cars are doing well. home building will be good going forward here. >> what makes you think that? >> you're starting to finally start to see -- and it's been nine years since we've had a real home building boom but there's never been a penalty for not owning a home because rates for the last 35 years have come down and we're probably coming to the end of that. so at some point, there will be a penalty for not owning a home and that's probably when you'll see home building really move

up. but you look at the home building starts, d.r. horton we own in the hodges fund they're starting to make, without even any good news they're starting to make some -- kind of a break out on the charts. >> jason, i know it's hard to argue a counter factual but where do you think we would be if it weren't for the low oil prices and low prices at the pump? we keep thinking we're not getting anything from it but maybe it's saving us. >> i don't know if that has had the effect that it should have at this point in time. i think you look at it, there's low interest rates and low oil prices and a lot of pieces but at the same time you have this overhang of let's face it, just going into '08, '09 the consumer built up a lot of debt and we have been digging our way out of that. that's part of the reason you see this pop up in the retail sales. there's a little bit of tension

and apprehension to do what they should do. this is one of the longest expansions on record and i'm saying it's in the middle of the cycle because we really haven't seen the growth that we normally see at this point in time. >> and certainly even though the jobs picture looks a lot better the mood in america is that people don't feel good about the economy. >> the job picture looks better. we're referring to the unemployment rate down by 5% but you look at the marginally employed people. sitting in part time positions that prefer to have full time positions. the people removed from the labor force and you can see why it's such a mixed picture. this is why as we're looking forward to the coming rate hike cycle we think the federal reserve is going to take a conservative tech. >> meaning not raising rates quickly. or conservative meaning let's

get off of 0. >> get off of 0 but be slow about it. if they're thinking about it normally they think with a very insurance mind set in their head. meaning they think about where the biggest risk lies. if it's to the upside with inflation or to the townside with contracting a reaction, they're looking in saying the numbers are okay but not as good as we'd like them to be. where's our biggest risk. it's actually tightening too fast, too quickly in the market assuming a really rapid pace. if i were them sitting around the table now they're likely airing toward the side of trying to undersurprise the market in the economy just by an ounce. enough to get that point across that we're there. we're going to be raising rates. we're going to defend against inflation but we're not doing it so fast that you guy versus to really worry that much. >> if that's the case, if that's what happens, what's the best thing to do with your money? keep it in stocks? >> yeah, keep it in stocks.

stocks aren't expensive. they're very underowned and where are you going to go? >> but they are at the high side of historic valuations. >> but your typical industrial company is a high evaluation but you can find a lot of good growth companies you can buy at their growth rate. 10, 12, 15 times earnings and that's a cheap multiple. >> you have to frame this right. the market is sitting historically expensive relative to where it normally would sit throughout an entire market cycle but typically this stage of a market cycle the market will sit a little bit expensive because there's needs to be that natural tension of higher valuations against the counter balance of on going economic groethd in order to keep things in balance and in check. that's a natural tension that should exist and probably where the market should sit and should continue to climb that wave, climb that wall over the next

couple of years until we find the economic period. >> thank you for coming in today. a quick reminder for you. go to cnbc.com to track the picks in real time and read their exclusive analysis. >> up next, home depot rolling out quarterly results. minutes ago the stock is on the move this morning. we break down the numbers straight ahead. but first, this day in history.

american apparel warning it may not have enough money to stay in business for the next 12 months. saying it's financial situation raising doubts that it can continue as a going concern. analysts think the company may file for chapter 11 bankruptcy protection which would allow it to shed leases for underperforming stores. when you see comments like that from a company the question is are they running out of money because they basically need to tell certain debitors you're not getting all the money you deserve. >> that has been a troubled company for sometime. >> for some time.

where's dov charney when you need him. >> where is he? >> where is he? i don't even dare -- at this hour right now. >> still dark out. >> petco has public plans once again. nearly nine years after tpc and leonard green acquired the company the pet retailer is planning an ipo expected to raise $100 million. they have 1400 locations around the country and had revenue of $4 billion in the latest fiscal year. >> home depot just out with upbeat quarterly results. joining us now on the squawk newsline to discuss is brian, senior equity research analyst. welcome this morning. >> i guess this was expecting. housing story continues to be good. any surprises here? >> no, it's very much an expected report. a very good report but i think the key here is and the conversations i have been having with our clients for the past

several weeks or so there was very much a view that sales could be soft here and what we're seeing in the numbers is they're quite good. the key number is the 5.7% comp. i suspect they'll talk about business strengthening through the quarter. >> stocks down premarket. look it hit a fresh high yesterday. maybe that's not a surprise either. were you expecting this kind of a move? what does it say about where we are now in the home depot story that maybe the bar has just continued to get higher and higher because the results have been better and better. >> that's a fair assessment. but i wouldn't read too much into this early move in the stock. i think as investors digest this report they're going to come away with the view that look, this is another very solid announcement from a very solid company well positioned and the stock continues to grind higher. >> they seem to be moving even further into the business of

servicing contractors. is that where we're going with home depot? >> that's a big push now and there's a lot of runway for them. so i'm sure they'll talk about that more on the conference call today as well. there's a real opportunity for them to better penetrate that pro customer and we're starting to see some success of that already. >> what does it say about how we should view lowe's. is it out this week or is that next? >> tomorrow morning. >> okay. so tomorrow morning. does this mean that lowe's is going to be strong? i would think the bar is a little bit lower for lowe's, yeah? >> typically what we've seen with lowe's and what i expect, i put a report out to our clients saying lowe's will be good but not as good as home depot. that's been the trend for awhile. i don't see any reason for that to change this quarter. >> what's disappointing though? how would you characterize what's happening with the market's reaction? >> it's basically a knee jerk

reaction. as i'm digging through this report this morning there's nothing disappointing. the point made a second ago was a good one. home depot had a big move higher so you probably just have a bit of a knee jerk reaction here. if you look at the headlines they didn't beat eps. it's probably a knee jerk reaction but overall a good quarter. >> why does home depot always out perform lowe's? do you think their management is that much better? >> well, it's a good question and i'll keep the answer short. look, i think the easy answer is home depot is better run. we've seen that for years now. i think -- i've written a lot about this which is an interesting point that i think that lows from a real estate perspective is not as well positioned as home depot. and as the housing market continues to recover home depot is in a better perspective to capture that business. that should shift as the housing

market continues to recover and some of these stores may not be as productive but could be some of the best performers. >> no knock on lowe's performance either. they're neck and neck since last fall. >> i always like to make fun of us on wall street because it's a percentage point difference in the comps. but if you look at these versus the vast majority of retailers out there you have two of the best companies out there performing for awhile. >> thank you so much. >> when we come back this morning is mcdonald's the nation's top place for breakfast? as the fast food giant gets ready to offer the egg mcmuffin all day long. and million dollar homes with a special added attraction. right now though take a look at yesterday's s&p 500 winners and losers.

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♪ good morning, everybody. if you are in new york and just waking up, look out. make sure you bring your umbrella today. it's been a little humid and rainy. that's what we're taking a look at as we sit in the chairs this

morning. it was exciting. storms. get things going. you can see the pictures of times square. we're in the chairs taking a look at the stories that caught our attention this morning and we are getting into football season. it is gearing up. we are watching the camps and watching what's going on getting ready for not only the nfl but also college football and word from the national labor relations board that it will not be taking jurisdiction of the case where the northwestern players asked to be able to form a union so they would be considered employees of the university. in declining to do this, it surprised a lot of sides. some people thought the democrats on the board would say yes that these students could be considered employees as players and that it might change things but it's staying out of this. it's not taking jurisdiction because it would not create stability in labor relations. this is a case where northwestern, a private

university that plays against a lot of public universities is there. it can rule for private universities but it cannot rule for state schools and thought it might create chaos. >> they tried to take the point that it would create an unfair competitive advantage for the schools that were unionized. >> unionizing which i thought was interesting in that that's what they thought of. >> i think that's probably not being 100% fair because the other colleges, the state schools are ruled by boards that generally take the same thing as the nlrb. they realized this is the ncaa and maybe not the place to be wading into things. but the good news on all of this is no matter what's happened this has gotten a lot of publicity and situations have changed. they have raised the stipens to make it easier to perform. these are jobs. >> it's done.

>> over. >> that's it. >> and i feel for the student athletes. they need to be treated better than they are at this point but this would have created such chaos. >> i don't disagree with you on that. >> no. >> okay. i got a story. i want to talk about nannys this morning. and by the way we're not talking about ben afleck this morning. >> this has nothing to do with why you chose the topic. >> nothing to do with ben afleck. >> why would you do that. >> it has to do with work place issues. kkr has made a very very interesting decision. i'm very curious what you think about this because you travel with kyle all the time. kkr is now going to pay, if you work there and you are the primary caregiver, you can bring a nanny with you and they will pay the travel costs. they will pay the entirety of the cost for you to travel with a nanny and your child. now the question is does this become a model for everybody else?

is kkr very profitable, financial firm. netflix has come out with all sorts of very generous progressive things. >> one year paid leave for netflix. >> does that mean that every company in america is now going to be paying for -- >> no but i'm glad to see companies are recognizing that in order to keep primary caregivers around that they need to offer better perks like this. i think it's great what kkr is doing. makes me wish i worked there because yeah i do. i end uptaking my dad is my nani. my father and my son on a lot of business trips because i don't want to be gone for more than a night and not see him. i'm able to do that because he's young at this point. it's huge for kkr. a lot of this has not trickled down yet and the bureau for labor statistics tells you the top 2% of wage earners, 22% receive paid leave but the lowest 25% of wage earners it's only 5% that have these things. it has to happen that way.

by having more companies that are giving things like it this does help and it will eventually trickle down to other areas. >> it's interesting -- >> worth noting by the way, it's unclear how much this is actually going to cost the company because even within the private equity firm -- i don't know if this is whole industry -- there's only 12 women included in the firm's 93 senior professionals. so if you think there's only 12 women who are traveling. >> it's great. it's just a nod to caregivers. there are situations where you need to care for a parent or something happens and it's a nod to who ever is doing that that these are burdens and if you want to keep those skilled employees around it behooves you to be more flexible on how you're dealing with them. >> the last couple of weeks along the work life balance conversation has gone between this and netflix and on the heels of the whole amazon blow up yesterday which continues to be discussed today and is on the

front page yet again of some papers. it's just interesting that that's where now this conversation has gone, really sort of risen up in the last couple of weeks. >> is nobody going to try to channel kernen. if he were here he would say this is completely not market based. this is completely ridiculous and that we lost our backbone as a country and we don't want to work anymore. >> i think you're channelling him incorrectly now. i think he would see this as a descent thing. we'll have to ask him. maybe i'll tweet him and see what he thinks. >> just saying. >> yeah, i know what you're saying. mcdonald's is the number one choice for breakfastarians according to a new poll. >> yeah. >> sorry -- >> oh. so they did a poll or a survey obtained by reuters. these are people that crave breakfast food at any hour. we have the reminisces of a happy meal. that's what that is and i know that because i just bought a

couple the other day and i saw the little mini fry thing and i thought that was cute. these are people that want breakfast at any hour of the day and mcdonalds is going to an all daybreak fast to try to turn around what have been slumping sales. the interesting thing is that subway is number two. >> i was shocked to see that too. >> are you going for the spicy italian sub? $5 foot long? at 7:00 a.m. >> welcome to breakfast. >> yeah. it is the only meal that actually sees an up tick in sales is breakfast. >> it's great that mcdonalds is adding breakfast all day long. that's really important. 10:30 cutoff was crazy for people traveling. so many changes are taking place. >> it's great. we did a little happy meal recently. >> there's like 12 fries that come in here now. >> that's as much as we should all be eating. >> probably. >> but do you know what i was

bothered by? not this so much. because i don't want kyle eating a ton of french fries. >> did you get the batman toy by the way? >> the car. it was good. >> that's what we got too. which was a huge upgrade because he hated the minions. we're glad to see that. >> i'm trying to figure out what the minion actually said. >> we had the minions too. >> yeah. >> very -- i don't know -- >> what bothered me on the menu, the changes that they made was if you want a grilled chicken sandwich at this point you have to pay over $5. you have to go with the premium whatever it is. one of our daughters wanted a chicken sandwich with nothing on it but you have to pay for the -- >> with the bun. >> the bun is good. >> it's too fancy. >> he done down with it though. >> there is no other option because if you want the mcchicken sandwich it's only

fried. you have to pay over $5. >> right there with you the other day. >> does steve watch our show? i hope he's watching. maybe we can deal with it. coming up after the break. we have a serious story to talk about. the aftermath of the horrifying chemical explosion in china. the impact of the deadly accident could have a deeper impact on a number of major industries that depend on goods from critical ports. the details on that when we return.

welcome back. u.s. equity futures showing a lower open. dow would opener lower by 34. also negative following yesterday's big afternoon come back with the dow closing higher

by 67 points. commercial flights between the u.s. and cuba could resume as soon as december. it comes a few days after the u.s. flag was hoisted at the u.s. embassy in cuba for the first time in 54 years. a bill pending in the senate that would remove a ban on travel by americans to cuba. >> the aftermath from last week's chemical explosion in china continues to grow and the damage estimates are into the billions of dollars. eunice has more on the deeper economic impact. she joins us now from beijing. >> thanks becky. the chinese government ramped up it's probe into the port blast. the authorities announced today they put under investigation the top worker safety official here. they also have detained several of the executives at the logistics company that owns the warehouse. they're trying to display a

strong show of force. it's a very important port to china and also important to the global auto industry. several thousands of cars have been damaged. owned by honda and toyota. all of them have seen loss of inventory and also john deere is resuming it's operations later this week. some of the other car makers that have been effected, ford says that they're expecting to see or at least look into the possibility that hundreds, about 100 of their car versus been damaged. so the overall port is now resuming but the situation is very delicate. the focus today was on the clean up. thousands of soldiers on sight and hundreds more heading there and this is after the authorities confirm there had are 3,000 tons of dangerous chemicals on the site and that includes the 700 tons of sodium

cyanide. the rains set in. they're dealing with the rains. they say they're prepared but it's unclear how effective the contingency plans can be. the fears are the impact to the public in a more general way and a lot of companies have been telling their staff to stay indoors, guys. >> okay. eunice, thank you for that report. it's just terrible. it just looks terrible. ihs we should tell you is out with an important on the tianjin blast and the ripple effects. joining us with more on the report, is ihs's global head of sovereign risk. when you look at this terrible disaster and the implications over the next not just couple of weeks but i'm imagining that we're going to be feeling this for the next year or two, no?

>> yeah. this is not just a stoppage. it's a man-made disaster, environmental, social and political consequences. it's very very dangerous stuff. the concern is if it gets into the water table that's very difficult to manage. it may only carry about 3% of china's international trade. the problem is can the authority manage this? they have reputational risks at stake here. who owns the warehouse? was there a failure of health and safety and environmental standards. if not, are they going to upgrade them? where's the accountability? can they conduct an independent investigation here? and no, the reputation of the authorities at stake here now. >> but when you talk about the reputational damage, do you see foreign businesses saying i

don't want to do business there then. >> you know, this thing shouldn't really happen. with lessons be learned? will there be cover up? we know they may have connections to politics? . everyone wants to see an independent investigation for the truth. and they want what they're going to do in terms of policy measures and environmental health and safety. these have always been great concerns in china and they can't really crisis manage this. can they finally reduce the number of these incidents happening. these are the greatest concerns for business as well as the local population and we're all watching. >> help us with this. eunice walked through a number of companies that will be impacted by this at least in the short-term. when you think of the biggest losers in this case, who should we be watching for?

>> you mentioned the car companies. what we at ihs have reported is there are at least seven pharmaceutical production line companies in the vicinity of that two mile radius effected by the explosion. so it isn't simply a port. it's actually a production area, industrial area and pharmaceuticals is pretty important here and in terms of care to staff the authorities and the corporates will have to be very careful not to resume production until they're sure there's no risk to health. >> we appreciate your conversation this morning. thank you. >> coming up a special edition of million dollar homes. one of the stars of bravo's million dollar listing new york will help us pick the best value for the big pucks. coming up at the top of the hour, sprint's ceo first on cnbc

after the wireless carrier gives the two year contract the boot. squawk box returns in just a moment. 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?

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office depot officemax. gear up for school. gear up for great. >> we are back. cnbc's popular "million dollar homes" is back. we're checking out multimillion

dollar waterfront homes. in round one, we're at seaside at the jersey shore and we have the villa going up against the oasis. >> just steps away from the atlantic ocean. balconies over look the lush landscaping on this tenth of an acre property. a grand entryway leads into a full sized wet bar. upstairs in this 4,300 square foot home the kitchen opens to the dining and living room area. there's four bedrooms and 3.5 baths. out back, a spacious veranda for outdoor entertaining. price tag 2, 449,500. >> just over a tenth of an acre, the home spans across 2,600 square feet of living space with ocean view balconies on every

level. not into stairs? take the elevator. second floor kitchen has high end appliances. there's an outdoor shower. ocean front living can be yours for 2,599,000. >> that's a hundred grand difference. joining us now is ryan, the star of bravo's "million dollar listing new york." what's going on down at the jersey shore. most people think hurricane sandy. where are we now? >> they also think ocean and parties and beer. >> i still think snooki. >> there was a giant beer bottle when you walked in the front door in the hallway. >> to each their own, right, in terms of what they view as valuable. as a real estate broker i get that all the time.

they nail down properties and say, ryan, which one do you think is better? we get to put houses together and let them battle for it. my first day in 2008 was the day that lehman brothers filed for bankruptcy. it was day one for me. i would take buyers around. i had to come up with an idea on how to help them. i would break them down by their deals. so that's how i look at it. then i kind of balance it out between the two. so the villa is nice. it's had three price drops recently which they don't go through in the property package. it's also on a very, very, very busy street. you have to cross ocean avenue before you get to the beach, which is a very, very busy beach. it's big if you want to have big parties. and ocean front oasis is smaller but it has the same bedroom count. it's in a much more private

beach. if you want to go to jersey shore and get away from the city or just have relaxing time on the sand, in my opinion ocean front oasis is more bang for the buck. it also doesn't need a full gut renovation. >> i was getting the impression that you were leaning that way. >> if you said three price drops? what did it start at? >> it started at 2,749,000. it's now at 2,449,000. >> you don't look at that as a great discount? >> no incorrect pricing from the beginning and not using a broker who knows what they're doing. >> what are taxes? >> taxes on that one are $26,000 a year. they're higher compared to ocean front oasis which is 17,000 a year. >> you said something interesting about selling. when you see price drops, you

don't look at that as a discount or something else. you look at that as a bad broker. >> in my opinion because this is what i do all day long. i look at price drops not as an indication of a deal, because a list price means absolutely nothing. what means something is the strike price. where it closes and where it sells. you know something was priced right when it sells in 48 hours in a market today or at an amount higher than asking. you're not getting a deal. >> i've seen a lot of price drops. is that because people think housing will turn in the market they're in? >> of course. they watch cnbc and everything is awesome and they should get a lot for their property. >> it's still maybe a buyer's market at this point? >> not really. i think that sellers can become a little too excited and they'll read about all of the new construction in the city or in their area and see that steve on the corner just got this for his house when he got that because

his house was newly env lly ren and isn't on the beach with people pumping their fist with beer. >> good point. >> ryan, thank you for coming in today. it's great to see you. when we come back this morning, we do have another big hour of "squawk box." our guest host is ben leer and first on cnbc interview with the sprint ceo after they dropped the two-year contract and more on the twitter battle with an arch rival. "squawk box" will be back in just a moment. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger.

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walmart getting ready to report results. >> where millennials are going to get their news. >> if you talk to most americans

and particularly our generation, they don't necessarily -- >> we check in with co-founder of mic. it already has 22 million monthly readers. >> sprint ditching the two-year plan. the wireless carrier joining some of its rivals and unveiling some new plans. the ceo joins us first on cnbc. second hour of "squawk box" begins right now. call me maybe. welcome back to "squawk box" right here on cnbc first in business worldwide. i'm andrew ross sorkin along with becky quick. scott wapner is in the studio. ben is here and we'll spend time with him talking about what's going on in tech land. maybe you have various views on evaluations that are out there.

let's tell you about news. home depot matched estimates with profit of $1.71 per share but revenue on same store sales beat forecast and home improvement retailer raised sales in private guidance for the full year. we'll get lowe's earnings tomorrow morning and government out with july housing starts at 8:30 eastern time. economists looking for 1.7% increase following nearly 10% jump in june and china shares tumbling overnight. the effect on u.s. stock index futures appears to be muted. things down but not terribly down. dow opening off 22 points. s&p 500 off about 2 points. >> walmart's numbers that are just hitting. i only have headlines at this point. i haven't actually seen the full release. i can tell you at this point it looks like same store sales for the quarter were up by 0.9%.

remember fuel is acting as a huge deflationary pressure at this point. we'll look at those same store sales numbers. up 1.5%. these are just a few headlines that are coming in. i don't have the full release. i'm not sure if you have seen anything else from it. >> no. i'm looking as they updated their guidance as well. >> it looks like 108 is the number that they're looking at. second quarter fiscal earnings per share of 108. street was looking for $1.12 a share. that would be a miss. they are also talking about updating guidance and it will take me a moment to look through and find where that guidance is. >> guidance to 440 to 470 from previous range 470 to 505. >> if you look at that and they're now talking about the full year numbers, 440 to 470

brings down substantially what had been the high end of that range before. they had it up at 5.05. street was conservative. it was looking for $4.77. that's the view among analysts. they are looking for 93 cent to 1.05 for the third quarter. it will be a miss for the third quarter as well. not seeing improvement. this is more than just a second quarter miss. it looks like third quarter will come in below that, too. >> this is part of a long trend story here. we sit around talking about how fuel prices will go down and everyone will rush off to walmart. it's just another example of how this sort of conventional wisdom has gone sideways. >> fuel prices coming down. labor market improving. would seem to be a total winner environment for walmart. it's a winner environment for amazon. >> the question becomes is this

an operational issue or something else going on? >> in t second quaer they say they were pressured by currency fctuations d not something you necessarily think of first when you think of walmt. th ao talk about how u.s. mains, walmart u.s. margins we low and meinstments in customer exrience. this isherieft pss release i have ever seen. >> no quotes. no nothing. >> you'll be waiting to hear much more on the analyst call later today. this is basically just a very quick bullet point situation. they say total revenue was 120.2 billion. that's better than the street had been expected on constant currency basis it would have been $124.5 billion and they talk about e-commerce sales. globally increasing by 16% on a constant currency basis. again, this is very brief. you do have a new ceo there who is in the process of changing the way they do business.

heard some complaints who say that it is a reflection of what's happening with their own numbers and pressures they are facing themselves. >> the impact of rising wages, walmart earlier in the year in january or february announced they were going to raise wages. that's something to consider. >> i wonder if that's what they talk about with investments and customer experience. i wonder if that's what they're talking about. you need to hear more. >> the other thing is that some states shifted their tax free shopping ahead to august from july. >> that's not mentioned here. >> that's the point i'm making. you don't even expect them to get a bigger bump on that as you go further into the year as they're taking down the range. >> let's look quickly at shares of walmart. walmart and home depot both reporting this morning. you can see walmart at this point is down by 2.5%. let's check out shares of home depot. reported earlier this morning

had strong numbers that came in in line with expectations and raised the sales guidance and earnings per share guidance for the full year. that stock initially was trading lower but you can see it's picked up. it's up by half a percent. walmart is down by 2.5%. that's a dow component and that will put pressure on the dow futures. take a look right now. down 2.5%. dow futures when we came in were down by 44 points. stands about there at this moment. s&p futures are down by 4. nasdaq is down by 10. we should also talk about sprint hanging up on two-year contracts. the third wireless carrier to do so shifting to an all lease model and a new program called iphone forever. it allows customers to upgrade to the latest iphone as soon as it becomes available. joining us right now first on cnbc is sprint's ceo. thank you for joining us today. >> thanks for having me this morning. >> you have a big job. market likes what it heard about this leasing model that you're

moving towards. this is a tough task. you are now the fourth carrier in the united states in terms of the number of members signed up. this is a huge task you have ahead of you. how do you plan to change the direction the company has been headed? >> it's been one year i started and we are happy with the progress we achieve in one year. we have gone from loses several hundred thousands of customers to adding 3.5 million customers that came into sprint last year so one of the most important goals we had was to stop losing customers. we made significant improvements to our network. we have improved is it dramatically and now we have tied at&t as number two from a voice and calling percespective. we're making great improvements in network and customer

acquisition and our goal is to change the way american consumers will get their mobile phone. we've done a lot of research. we've talked to a lot of customers. what they told us and one of the most frustrating things in this industry is the fact that new technology gets released every year. there's an iphone that's been released for the last few years every single year and galaxy and they sign a two-year contract and most customers cannot get their phone when the new phone comes out. we're changing that. effective immediately. >> at a lease price of $22 a month, do you make money or do you lose money? how are the finances of that program? >> you have to take into consideration what we're doing. if you're a customer, now you have the ability every time there's a new iphone you just go to the store, drop off your old iphone and pick up a new one and that's included in the rate plan of $22 a month. now, how can sprint make money? we're putting together a company

and it's one of the largest refurbish refurbishers. so there's a huge market for customers that can't afford to buy a new iphone but would love to get their hands on a device that's less than a year old. >> it's great to see you. full disclosure, we're old friends and i'm the head of his fan club. the question for you, $22 to me seems like a lot. you go into the store, you pay $199 as a one-time thing. for some reason i know that seems like a lot up front. $22 to know that you're paying that every single month just as a number, when you did the research on that number, how did you get to that number? >> $22 is actually the cheapest and lowest cost to own or to have access to an iphone. our competitors are at $27 or $30 a month so this is $6 to $7

cheaper than anything in the market. the 199 is a thing of the past. consumers used to pay $199 for a phone but they used to pay a much higher monthly fee. one of the great things about the industry is we have them bundle up. cost of the service which with print you can start at $40 a month to have access to certain amount of data and then for $22 a month you have an iphone that pretty much every single time there's a new iphone that comes out, you don't need to pay anymore. that is included in your $22. the idea is we're bringing the latest technology to all of the customers at the most affordable price of $22 a month. >> when you say $22 a month, if i upgrade every year at $22 a month how many people do you to sign up to make money just on that leasing structure? >> $22 a month -- >> you make money just on me? >> $22 a month you can upgrade

as many times as there is a new phone launch. >> is that profitable for you? if i sign up and pay you $22 a month, you're not losing money on that deal? the iphones cost $800. >> we figured out a way at $22 a month how to make money and how to be part of the new economy, the sharing economy in which that phone that comes back after one year has a new life and new customer that in the past couldn't afford an iphone. >> when you think about the money and revenue that you need to pay for upgrades to the network, i know you spent a lot of money, $2.2 billion just in the last quarter, and then you look at who you're competing against, at&t and verizon, which obviously have a lot deeper pockets, how do you think about competing with them strictly just on the network? >> i mean, you know, as we expressed in our last earnings goal, we have a clear plan on how we'll build our network.

one of the advantages that we have is we have 200 megahertz of spectrum. so with that, we have figured out a way with the help of our parent company to massively intensify our network and do it in a nontraditional way and be able to do it smarter and be able to have a competitive network. what do i mean by competitive? if you look at where we were a year ago, we were dead last. we were fourth in every ranking. when you look at the rankings that came out, we're number two now tied with at&t. we're number three and narrowed the gap to at&t and verizon and we made it very clear, we know what we're doing in the next two years sprint will be number one or number two in every network from network quality. how can we do that? we have spectrum. that means capacity. if you look at most of the other carriers, especially those that live in new york, you know how difficult it's getting to make a phone call or get a data

session. that's because there's a lot of congestion on the network and there's lack of capacity. when you have 200 megahertz of spectrum, it becomes your competitive advantage. >> what you've done to this point is great but in terms of having additional resources to put into this, there are limits as to what softbank can put back in because of creditors they're dealing with. are you looking at five years down the road still being able to put massive reinvestments back into the network? >> i look at it different. we have softbank's full support as we disclosed. we are doing a different type of how you build a network with a leasing company so there is less requirements from sprint's perspective. we have worked very hard and have a clear network plan and have financial resources to build this network and once and for all we'll unlock the value and potential of spectrum in

order for us to offer the greatest experience to the american consumers and we have financing lineup in order to get it done without going to the debt or equity markets. >> where is this thing going with you and john ledger? another tweet today, straight out of bs, you guys are just going to end up taking it out back or what? >> just having fun i guess. we keep it competitive. every single time we launch a new plan it seems to bother him. the difference is he's been insulting everybody for way too long. we just keep it fun. >> what i love is how authentic it is. he doesn't call you up and say get off twitter or is this considered a marketing strategy? >> it's not a marketing strategy. it's just -- you know, we keep it competitive. it keeps employees excited. beating up on our employees for

way too long. that's over. we're back at winning customers. we're just not going to let anybody continue to insult sprint. sprint is doing well. sprint is on a path to recovery. we don't like it when somebody insults sprint. i guess somebody like john we have to talk to him on the same language that he understands and that he uses pretty well. >> we'll see if he has any response. good to see you. >> same here. thanks for the time. >> great to see you. good luck. we'll talk to you soon. in the meantime, coming up when we return, we'll tap into the world of tech startups and unicorns with our guest host. these unicorns aren't really unicorns anymore because there are so many of them. does he think valuations of these firms are getting too high? you know where i stand on that. back in a moment.

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x1 sports app right here. ah jeez it's so close. he just loves her so much. do it. come on. do it. come on! yes! awww, yes! that is what i'm talking about. baby. call and upgrade to get x1 today. ♪ >> take a look at the futures. dow looks like it will open 47 points off and nasdaq 11 points off and s&p 500 off 5 points. we had a situation over at walmart. those shares which reported just moments ago. walmart's bottom line was lower than expected but revenue did beat estimates. retail giant cutting full-year earnings guidance and that stock down 2.5% in morning trade before things get started. >> joining us right now is our

guest host this morning. ben, thank you for being here today. >> thanks for having me. >> you are somebody that knows your way around what's happening with new media and some of these new media technology valuations that we've seen recently. we definitely need your help to help us figure out whether this makes sense or not. andrew has specifically questions on this. we have seen some deals that really put things into the stratosphere. what's happening? >> some new unicorns as you said. i think that it's a great time to build a new media business right now. there has social media the way that people discover content. there's a new breed of content creators who simply have sort of social at the core of their dna building important brands incredibly quickly and everyone is seeing what's going on with television and traditional media companies and as consumers are

shifting their consumption behaviors, there's an opportunity for new, really big businesses to be built that actually can be worth billions of dollars. >> these new media companies have a way to tap into younger people who don't watch television the same way and are going on their devices, maybe not computers. they're on their phones getting their media for a lot of this new information that's out there. >> this is short form video. a new way of consuming content. these companies are mobile first. they're social first. they are truly built for a different kind of customer. i think that what you're seeing is these traditional guys who have been very slow to really adjust to digital waking up all at once saying tv is actually changing the dollars are going to shift and we need to move now and so there's a lot of money that's going to come into digital media in the next few years. >> the hard thing is trying to pick winners in a situation like this. winners who have longevity. how do you stay with this group and is it more than just having

a key man? >> thing it's more than a key man. there's a thousand people at buzzfeed today. hundreds of amazing contract creators. reaching 200 million people a month. they have built a brand that will be lasting. today it is sort of manifests itself in sort of very digital content, you're going to see buzz feed creating feature-like movies and you'll see it expanding and using that brand and using the audience they built to justify the valuation they have today and valuation they'll have in the future. >> let's talk about the math. >> last time i was here buzzfeed was $800 million and you said it's crazy. now six months later they're double. is there frothiness around

investing in these companies? yes. buzzfeed is one of the -- >> what is multiple of profits that this $1.5 billion valuation suggests. >> it's not being done off private but off mind share and off the fact that -- >> i remember mind share eyeballs. i remember that. 1999. it wasn't a good experience. >> buzzfeed is a real business doing significant revenues growing quickly. >> the question isn't it a good company. the question is the valuation -- >> let's put it this way, if you look at this from comcast perspective, comcast has not been particularly aggressive in figuring out its digital strategy. you would say these guys are in trouble because they haven't done much in digital and two weeks later they own a chunk of the most important businesses on the planet and this is good money that comcast is putting out there. >> so many of these digital

companies in an odd way want to be in traditional movie space. vice wants a network. >> that's a traditional media business. a vast majority of revenue comes from the hbo deal. >> but when you look at the underlying numbers, that's the piece that's interesting. you look at buzzfeed. will they do feature length films or traditional media because that's where the money is. when you look at their tradition alib traditional business, that's a tough business. >> they will be leaders in the digital space and take advantage of the fact that television has a ton of money in it. hollywood still has a ton of money. they'll use the brand they built way less expensively than the traditional guys to go and take advantage of these other situations but in the long run when tv continues to deterior e

deteriorate, they'll be in good position. >> are they buying into content or the mode of reaching these people? >> i think it's both offensive and defensive. defensive because you don't want to miss being a part of the big, most important companies but it's offensive because these guys have figured out how to communicate. >> we'll continue this conversation. stick around. "squawk box" will be right back. y new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.

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>> welcome back to "squawk box." this is cnbc. we're just about an hour away from the latest data on housing starts. economists look for a 1.7 increase in july after june's 9.8% jump. the treasury department says that overseas purchases of u.s. treasuries rose to the highest level in 16 months during the month of june. labor day air travel is expected to be up 3% this year compared to a year ago. the trade group airlines for

america says that when all is said and done, summer season travel will reach an all-time high. scott? >> walmart's bottom line was lower than expected but its revenue did beat estimates. the retail giant also cut its full year earnings guidance. with us on "squawk" news line. stock is down more than 3% is guidance cut. is that the most important thing to focus on this morning? >> i don't know. it's important. it's a pretty significant guidance revision for walmart. we're talking about $4.55 at the mid point of the new range. streets around 4.75. 20 cents less where the street is which is a big deal for a company like walmart. there are some factors that they talk about that they expect to pressure earnings that they haven't talked about at least in a long time including inventory

shrink or theft at walmart u.s. so it's important. i'm not saying it isn't. however, there are some positives. i'm not recommending the stock. i do think it's a little oversold down here. there are some positives particularly the better than expected sales at walmart u.s. comp is 1.5%. >> traffic decent too, right? >> not too bad. up 1.3%. so that's an acceleration from where they were in the first quarter. puts them to where they were in the fourth quarter of last year, which was a pretty solid quarter for walmart. the traffic is looking better. >> here's what walmart ceo doug mcmillan says. business is improving not as fast as we would like. the market clearly is looking at what's taking place in the short-term rather than give walmart the benefit of the doubt that they can make improvements they're trying to make for the longer period of time. is that the right view that we should have? can walmart get it right?

you would figure the environment should be one that's good for walmart. low gas prices improving labor market. what's the issue? >> i mean, i think it's just the earnings pressures. it's the margin pressures. it's that shrink i just mentioned. there are some pressures on pharmacy margins which is a big negative that could take a while to work through. target is planning to sell its pharmacy business to cvs getting out of that business. it's a big business for walmart. people don't like to see that. again, the sales trend is getting better but it is a very mixed print. it does suggest that they're seeing some benefit from what they're doing with wages at the store level. the better traffic number, for example. it's just a very mixed print. it's just visibility on earnings have slipped even as it improved on the top line. >> patrick, if you think it's

undersold here, why aren't you recommending it? what would it take for you to say now is the time to buy? >> yeah, i mean, i just -- it's trading 13, 14 times or so, 2016. sentiment is cautious. i'm looking at traffic, becky. as i mentioned, the trend is getting better there. so that's been a big focus of mine over the past one to two years or so. i have to digest this. there's a lot of moving pieces. i didn't expect those pressures on margins that i just mentioned. there's a lot going on. i would say my initial reaction is i'm encouraged by the traffic. a little more concerned about other things though, too. it's a tough one. >> you have margin cut. you have guidance cut. you have a stock that's going to be down 20% year-to-date by the time the market actually opens today. it's not a great story to try to tell today even as you try to

find some positives. thanks so much. we appreciate it very much. >> sure. >> we're going to continue our conversation about tech. more than 100 private companies are now so-called unicorns. we're joined by an investor who has seen several generations of frothy markets. founder and managing director of graylock and ben lerer is here. i was making the point before that we called them unicorns but we can't anymore because there are so many of them. >> first of all, we have to correct. i'm with graycroft. >> both are pretty good. what is your take on what's going on? he's very positive. he's so happy about all of this. i'm a little less so. >> ben is a star in this business.

having started thrillist and being involved with buzzfeed, it couldn't be more exciting. i think one of the most important things about unicorns that people have lost track of is they are in a position now where the only exit opportunity they will have is going to be a public market. there have been secondaries now but that can't keep going on. at some point they have to go public. when you get out in the public, you get scrutinized like scott did and analyst on the phone what happened with earnings this quarter and what's traffic and margins? that's going to be the defining moment and we'll find out how many of these can be sustaining. >> are these companies ready to go public? i'll remind everybody that just yesterday, a take under because they were bought at a price below ipo price. >> you have to have a lot of earning power and you have to have a lot of revenues.

everything has to continue in the right trajectory to justify extraordinary valuations. >> are you talking about uber? >> uber happens to be there by itself but others are catching upp up quickly. >> pinterest may be getting up there. >> they are a $10 billion valuation. i think those are -- once you get into the 3 billion, $5 billion evaluation you'll have to be tested by a public market at some point to get your exit. >> what about the media guys? those guys that are part of the comcas comcast/nbc universal family. >> they are making investment for strategic purposes. they need exposure to that market. you have to be able to get to the mobile market and that's the fastest way i can think of. >> some looked at carnage, i guess you could call it, of

late, of some of these other names. very well thought of startups that have, poof. do you feel like we're in an inflection point at all for this kind of conversation that we've been having for many months. >> the way it's going to happen is inflection point. you had it about a year ago and everybody got nervous. now, you will see visibility -- whatever it is, one of these extraordinary valuations is going to come up short and you're going to see this next round of valuation whether it's a b round or c round to discount and people are going to start getting nervous. it hasn't happened yet in my opinion. i think we're still in a very strong growth trajectory. >> what we have seen is traditional media companies get hit pretty hard after bob came out and made comments at walt disney about what they were seeing with espn. it rippled through traditional media industry. will you see that media industry and new media get ruffled at the same time or is it one wins and

one loses constantly? >> i hope not. in my opinion i don't think tv is going away. i don't think your jobs are in danger. certainly not in the near future. there is more of and more of a convergence. moves by nbc, cnbc, is a good indication. >> what inning are we in? we talk about baseball in the markets. when you think about venture capital, you having lived through a number of ups and downs, where are we? >> first of all, everyone has been predicting this apocalypse for the last year, year and a half. there's no question that valuations are excessive. anyone says otherwise is kidding themselves. on the other hand, it just seems to perpetuate itself. we're faced with this challenge every single day as i'm sure ben is. >> are you guys putting money to work? >> of course. >> here he is talking about being frothy. >> we put money together. >> here you are saying we're in -- i don't know what inning frothy is.

i'm assuming seven, eight, close to nine, why put in now if you think ultimately a year or two from now we'll see down rounds. >> you can stage your money a little better. you can make more bets. you can diversify the kind of investments you're making. we're playing the managed economy. the new economy. the ones we're hearing about. we have an investment in minneapolis. we're investing outside the major cities. i was in minneapolis last week. a company that called when i work that manages scheduling and attendance for part-time workers. there are millions in this country. we have companies that a company here in town which i know sounds mundane but it's cleaning and servicing and being an outsource for your office manager. not that they'll put office managers out of business but there are thousands of small business, millions who need services and --

>> that's not a technology company. >> technology isn't the only thing. it has to have technology in order to manage the people and schedule them and get that functioning. it's not something you just do on the back of a notebook. >> let me ask you quickly, i'm assuming you know or have met jeff before, yeah? >> i bet jeff once at a film festival. only time i met him. i certainly follow amazon. >> i bet you know amazon well. your reaction to the story that everybody was talking about over the last few days? >> when you have the thousands of employees he has, sure there are always people, i gather, from the article i read that they interviewed 100 people and there are probably another 1,000 around that might say the same, i think he's tried to build a company and develop a culture and in the process it's difficult. what he's doing is why you are reporting about walmart having problems. young people, children, grandchildren, are all buying online and the mobile economy they don't even -- i was amazed.

walmart's traffic is up 1%. that's probably good that it's not down. >> exactly. >> one and only, alan patricof. >> coming up, stocks you need to watch. plus you'll meet a former investment banker that is attracting big backers and millions of readers every night. the story of mic.com. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

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>> let's look at stocks to watch this morning. home depot matching estimates on the bottom line with revenue and same store sales beating estimates and raised profit guidance. drug maker esperion will move forward on their cholesterol drug. becky? >> up next, a startup that's figuring out how to get the 80 million millennials interested

in politics and news. that's right. millennials. they don't just watch cat videos and youtube. there is much more happening and we'll find out all about it with our next guest. also, later, the state of the consumer. the nation's largest retailer reporting a short time ago. we get the word on the street and talk consumer sentiment in just a bit. "squawk box" will be right back. you totalled your brand new car. nobody's hurt,but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it.

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welcome back to "squawk box," everyone. more trouble for american

apparel. the company warning it may not have enough money to stay in business for the next 12 months. in an s.e.c. filing, american apparel said its financial situation raises doubts that it can continue as a growing concern. analysts think the company may file for chapter 11 bankruptcy protection which would allow it to shed leases for underperforming stores. >> there are now 80 million millennials across america so it's no wonder that traditional media publications are looking for ways to court these young newsees. they are looking for political content for this hard to reach group. here on the set right now is the co-founder and ceo of mic. he left an investment banking job at goldman sachs. and with us is our guest host ben lerer. when you think about politics

and news, there's a lot of competitors out there. a lot of traditional folks and then you have buzzfeeds of the world which i don't think you're competing with, maybe you do, i don't know, is it in this environment given everything that's going on, does it remain an independent company? where does this go? >> it's an exciting time to build a media company. you have $69 billion in tv ad spend. you have $4 billion in video ad spend. so it's about building an independent media company and building a lasting brand. >> what's the brand supposed to be? >> it's news for young people who want to be informed and know what's happening in the world. >> how is that different than "huffington post" for example? >> their average reader is well into the 30s. our average is 26. millennials see the world differently. we're all about them. >> do you think just how would you -- it's really difficult to put broad characterizations on this group. how do they lean politically?

i noticed that opening story today on mic is if you're asking whether bernie sanders can beat hillary clinton, look at these charts. >> it's a big generation. 80 million people. globally 2.5 million people. you need a segment more carefully. speaking in broad strokes, this is a generation that cares deeply about social issues. so they lean left on those questions. but on economic issues, they are still undecided. they don't really know how they should fall out on health care and taxes and those questions so you need to dig in to get to the answer. >> who do you think is your biggest competitor? sort of to andrew's question but the way you view what you do and who you're doing it against. >> i think who else reaches our audience on a regular basis. it's not broadcast news. it's not traditional cable news. for us it's a set of digital companies that are also building brands with young people. for us the goal is be the most trusted and most credible brand.

that's why the news of interviewing president obama last week was a big move. he was interviewing with fareed and then mic. those are moments that make mic trusted. so what we see is two things happening in the market. one is the long tail is going programatic so unclassy sites on the internet and same stuff on cable tv that's been automatic for a long time, that's going programatic and cheap. on the premium side, you see a move across mic, buzzfeed. that space is getting more and more coveted. >> we talked about this off camera. with the huge concerns about traditional media that played

out in the stock market over the last several weeks where people thought they are losing viewers faster than expected, the street started to punish them for that. what does that do in terms of kind of adding fuel to the fire for those who are scrambling around looking for a new partner? >> i think those traditional media companies during the week when everyone's stock tanked, there's conversations in board rooms where they look at each other saying what are these guys at mic doing? what are these guys at buzzfeed doing? chris is right. there is a market for premium content right now in a digital mobile first short firm video environment that companies like mic understand and traditional guys need to learn how to understand and so i think there's a very bright future. >> do you look for a dance partner? >> we're always dancing. for us it's about building an independent brand. >> you're a former banker. you know about valuations. take your own valuation out of the mix for a second and just tell me as somebody who actually knows the numbers of your own

business and you know i assume some of the numbers of some of these other businesses, does it make sense to you? >> in the media space it makes sense. >> make the case. why? >> so gawker leaked buzzfeed's numbers a week and a half ago. you see 50 to 150% year over year revenue growth. over $100 million a year business. when is the last time you saw pure play digital media business get to $100 million that quickly. it's impressive. what's going to stop these businesses from growing? if so many tail winds behind us and then if you compare us to the rest of the digital ecosystem, we're undervalued compared to ubers and those businesses which are valued on 20 to 50 times revenue. >> one of the things we were talking about in the last hour is this idea that digital only businesses desperately want to be oddly enough in the analog business which is to say that you see vice, huge part of their

revenue coming from hbo deal. you see buzzfeed trying to get into tv. how do you think about that? >> we think where the audience is. we're less bullish on tv than probably these guys are because we're exclusively focused on 18 to 34 year olds and those people cut the cord. so for us we think about where is the netflix for news, i think i saw the news last week that comcast is launching this new platform watchable. a group of partners, we're one of the partners, so those are types of spaces and investments that we're focused on. >> you guys are making money? >> we're making money. doesn't mean profitable but we're making money. >> interesting. >> he was getting happy. thank you for being with us. >> thank you for having me. >> good luck with you. a quick stock to watch this morning. home depot reporting earlier this morning matching estimates with adjusted quarterly profit.

revenue and same store sales increases did beat forecast in the home improvement retailer raising its sales and profit guidance for the year. the stock now higher by more than 1% in the premarket. still to come, breaking data on the home front. housing starts for july just minutes away and data and market reaction. we have that straight ahead and the national sleep center says adults should get at least seven hours of sleep a night. did you get seven hours last night? start a mattress firm casper looking to help millions do at a fraction of the cost. we'll tell you about the backers. do they own those? we'll talk about that. the company's co-founder joins us in just a bit. and the incredible rush of the mercedes-benz you've always wanted. but you better get here fast... yay, daddy's here!

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startup casper on why names like ashton kutcher and leonardo dicaprio have brought into his bedtime story as the final hour of "squawk box" begins right now. >> welcome back to "squawk box" here on cnbc first in business worldwide. with becky quick and scott wapner in for joe. dow opening up about 55 points and s&p off five points and nasdaq off 12 points. looking at european markets right now, we'll flip that board around and you'll see red arrows. everything across the board down. down marginally. in large part coming off walmart earnings which becky will talk about. >> let's get you caught up on some of the stories that investors will be talking about today.

we do have july housing starts data. that's coming out in just about 30 minutes. economists are looking for 1.7% increase after a nearly 10% jump in june. the white house is working with cuba on a possible resumption of commercial flights. according to "the wall street journal," those flights could resume as soon as december. and the environmental protection agency is expected to release new rules calling for a 45% cut by the year 2025. >> new stocks on the move including home depot reporting better than expected revenue and same store sales while increasing full-year profit and sales guidance. second quarter earnings matched estimates and walmart missing estimates by 4 cents with a profit of 1.08 per share. the retail giant also cutting. >> joining with his reaction to walmart earnings is bud with

raymond james. bud, these numbers are disappointing. it's not often that you hear a big dow component coming in with a huge miss like this warning the rest of the year isn't looking great. this is a situation where it's a new ceo. he's trying to turn things around. how much credit do you give him at this point? >> well, look, we're seeing it on the sales line, becky. we're seeing good sales. sales better than expected. comps in the u.s. were up 1.5% with traffic driving that about 1.3%. so that's the good news. i think his plan is to improve comps and improve sales particularly in the u.s. but elsewhere as well. we're seeing it in sam's as well. earnings will ultimately follow. they are being pressured right now by expenses and the disappointing fact in the quarter is probably guidance taking that down by 30 to 35 cents from where it was in february. >> i think part of the issue has to be that walmart has been

struggling with just trying to get out of its own way. there are other factors at play here. we know that people aren't spending the same way at least not in the traditional retail outlets. they're doing things like improving their homes, maybe paying down debt. and then you also have things like amazon that's factored in. what do you think is really happening and who are they competing against, bud? >> well, they're competing against everybody. look, their e-commerce sales were up in the quarter and strong in the u.s. as well. that was good growth for that. there are investments being made throughout the business to improve sales. neighborhood market comps were up 7.3 in the quarter. they are competing against everybody. walmart when you're as big as walmart, you look over every shoulder. >> the stock has come down significantly. would you buy it here? >> yes. that was the basis of a recommendation we made a couple months ago or a couple weeks ago. we think the stock actually is

fairly attractive -- very attractive here. and i rarely am able to bottom tick a stock recommendation but for walmart the risk reward here as a stock seems to be overwhelmingly on the reward side versus the risk side. >> when they talk about lowering guidance for current quarter and lowering guidance for a full year, it could be a while before you see changes get any traction. >> that's right. it takes a while to turn a big ship like this. sales is first. i think doug says in his comments if they win with a consumer, they'll ultimately win with shareholders. i think that's right. that's vintage walmart. when you look at when walmart started and with sam walton, it was always about sales first and earnings will follow as they learn how to manage costs better. they're doing things with the suppliers. they're going back to some old traditional walmart ways putting more pressure on the suppliers for pricing. >> is that a good thing? >> taking less from suppliers in

terms of advertising and rebates and cutting print advertising so they're doing the things that they need to do to make sure they win with the consumer and ultimately they'll manage their way to better earnings. still returns on capital the way they calculate was still healthy by any which way you want to measure it. but compared to expectations, which is what we all look at in the very short-term, it's a disappointment. that's where opportunity lay for investors who are willing to be patient and with a stock like this and a big stock, you really need to have patience and look at it as a longer term investment. >> you mention they are doing things like putting additional pressures on their suppliers. i thought of walmart as being almost cut to the bone in terms of how it was operating. is there more fat to cut? is that something they can actually get a little additional advantage from? >> i think over the last couple of years they've gotten away from some of the things that they are traditionally known

for. they are trying to levelize the terms between suppliers and go back to things that made walmart walmart for a long time and maybe they got away from a few things over the last couple years that changed. but the first thing is to always win with the consumer and their price differential may be in the old years was in the mid to upper teens level and that's gotten into high single digits. i think their ceo wants to see that widen again and those are things they're doing. first thing they have to do is improve performance in the stores and they've done that. they are adding 8,000 department managers done by early fall and they've increased the wages. those are putting cost pressures on in the near term. >> bud, thank you. >> let's talk about housing right now because housing starts for july are just a couple minutes away. another piece of the data pie that the fed will feast on as it thinks about what to do with

rates next month. joe is here. chief market strategist at u.s. trust bank of america private wealth management joins us to discuss what to make of all of this. what do you make of all of this? do walmart numbers or home depot numbers tell you anything? >> not necessarily. there's a lot in e-commerce space you have to take into account. the u.s. consumer is in good shape. unemployment rate will come down below 5%. more income through wages. u.s. consumer is driving. >> why do we see a mixed picture on retail side? you see home depot do okay. walmart not doing so well. nordstrom doing terrifically. >> i think nordstrom is doing well. high end consumer is doing better with housing and stock market in general. home depot tied to the housing market that's home improvements. i see that picking up around the country. lower end waiting for that wage boost to come through. oil prices as a tax cut.

we'll see how that plays out. it should provide more income. >> if you look at the u.s. in a vacuum, you might think the fed would tighten in september. >> absolutely. >> okay. but then you got to think about china. >> right. >> so what do you think that janet yellen is going to think about china? >> she's going to realize that china will settle at 5% to 6% growth. china is pro-active about stimulating the economy. the bigger worry is other countries attached to china aren't doing enough to pull their own weight. 15 years ago, five countries were in the market. now 45 countries do. we need those economies. that's what yellen needs to see. we need to see those economies stimulate. >> your clients with lots of dough sitting there if you had dough on the side, what are you supposed to do right now? >> we are putting money in defense. defense contractors like like water infrastructure build out.

avoiding emerging markets. >> you would go near energy right now? >> with a long-term -- across the spectrum. whether big oil guys. >> chevron or exxon today if you are 10 to 15 years out. >> it's a fossil fuel driven economy. that's not changing any time soon. we see pockets of opportunity. we're looking at some interesting opportunities in brazil for instance there will become a point soon where that's a buy. >> i have heard before it's so -- as in brazil it's so bad it's good but it's gotten worse. not only from an economic standpoint but now there's political turmoil over there as well. >> that's when we get near the end. it's the beginning of the end when you see that. the turmoil in the streets. brazil will come back. it's the negativity, that as an investor wants me to look at it carefully. >> would you buy technology? >> we like technology. we're overweight technology.

>> break down the space. >> i like large cap technology leaders with a lot of cash on their balance sheet. digital economy globally, it's growing. there's at least 4 billion people that were logged on the internet. that's coming. we see tremendous upside. >> where does it bottom out? >> below 40. we'll see. any time i see headlines $20 oil, that's how i feel better we're going back to 50. >> okay. pretty incredible. we'll leave the conversation there. thank you. >> thank you. >> great to see you. all right. news just out from our parent company. nbc universal, nbcu making $200 million strategic investment in buzzfeed as part of the deal the two will explore partnerships. >> i heard that might happen. we have a guy who knows about this. he's right here. >> nothing. >> you know nothing? >> i know a little bit. i know what you just said. >> that's good to know.

>> when you look at traditional media companies getting involved with new media companies, again, it's not just the content they're looking for. they're looking at a way to reach younger viewers and readers and i just wonder how you incorporate if you were advising one of these big media companies, how would you tell them to incorporate that new media? >> i think you need to -- i think a big part of it is dna of these new companies and way they think about a world where the first screen is the mobile device. they think about content not being distributed through basically being crammed down people's throats but being discovered because people love it and people share it. it's just a new way of thinking about content creation and consumption. i think you have to think about -- if you're a big traditional company, you have to grow these things outside of the infrastructure that you built and making investments in companies like buzzfeed is a good way to learn, to see, to have some skin in the game but also to not sort of inflict the

culture that you have built and the way you think of modernization. >> where does it have to be from outside? >> there's a way of doing business at these traditional companies that generally can be really oppressive and they can ultimately make companies fit into traditional modernization schemes that aren't what the future has in store. >> real quick. valuation. when you look at valuation on buzzfeed, $1.5 billion evaluation, you look at strategic investors investment differently than you would a straight up venture capitalist. >> i do. strategic investor can afford to pay up more and they have more to gain than just the return on capital. i think -- >> do you say to yourself is that a real valuation or not? >> at the end of the day it doesn't really matter because the money came in and congratulations to buzzfeed. i think that valuation -- look, they raised less than a year

ago, maybe a year ago 800 million. we said this is -- is that a real valuation? turns out it was a real valuation. sitting very pretty right now. i think in another year we'll have another fun conversation about this. >> okay. when we come back, we'll talk about the race to rebuild america's infrastructure. more than $3 trillion worth of improvements needed by 2020. we'll take a closer look at the nation's pipelines and show you who stands to be the winners and then later, we have heard from home depot this morning the company raising sales forecast on strong demand. the government ready to report housing starts data. we'll bring you those numbers and talk housing in just a little bit. we're back in a moment.

welcome back to "squawk box." one of the biggest challenges for the u.s. oil industry has been moving oil around now that production is at 40-year highs. so how is the industry working to get oil everywhere it needs to be? cn >> reporter: good morning to you, andrew. so much of the focus has been on the keystone pipeline and oil it would move and jobs it would create. those are headlines we see. what people don't realize is that pipeline expansion projects, new pipelines are being built domestically within

our borders that require less regulatory approval. what's interesting about these projects is they are moving more oil than keystone would. let's take a look. one of the country's largest pipeline companies investing $44 billion on infrastructure projects over the course of the next five years. in illinois, the company working on three projects. the southern access extension is one. the cost, nearly a billion dollars. job creation, almost 1,000. it will connect to line 61, which is undergoing an upgrade. together they'll transport 1.5 million barrels of crude per day when complete. this is one of two pumping stations that will operate the southern access extension. it takes five or six months to lay the pipe in the ground, it takes a year to build this. >> extending a pipeline takes three years. it's a massive undertaking. >> this year $7 billion is going to be put in the ground.

it's part of a growth program and it's really just providing that connectivity and market access for our customers. >> watch your step. >> even an environment of low oil price, pipeline infrastructure projects are moving forward. it's a long-term strategy and it's all about access. >> the customers, shippers that transport are looking more long view, 10, 15, 20 years and not just a short view and even when the prices are down, the industry still needs that connectivity and that market access and maybe even more. >> so part of the infrastructure story in this country is pipelines expanding them and also part is power grids and transmission lines. we'll talk about those throughout the day and new power plants like the one behind me running on natural gas. we have all of these stories and all these angles covered for you guys. back over to you. >> thank you so much.

coming up, a new tool that can help you estimate whether or not solar panels will save you money. details are coming up next. meantime, let's look at futures this morning ahead of key housing data. numbers analysis is just ahead. s&p and nasdaq will be down. we're back after a quick break. , but first, we have a very special guest. come on out, flo! [house band playing] you have anything to say to flo? nah, i'll just let the results do the talking. [crowd booing] well, he can do that. we show our progressive direct rate and the rates of our competitors even if progressive isn't the lowest. it looks like progressive is not the lowest! ohhhh! when we return, we'll find out whether doug is the father. wait, what?

welcome back. a cool story. google is unveiling a new tool called project sunroof and it uses high resolution aerial mapping to help you calculate your roof's solar energy potential. the website figures out how much sunlight hits your rooftop throughout the year taking into accounts like roof orientation, shade from trees and nearby buildings and local weather patterns and then estimates the amount you could save if you installed solar panels. google says it hopes to expand the project to additional regions in the coming months. i you don't have solar panels on your roof? >> i don't. >> i have a building. i don't know -- it's not my

building. yeah. >> i do get things in the mail a lot. when you walk into -- i don't know if it's the universal type thing but when i walk into home depot out where i live in new jersey, there are solar people sitting there waiting for you to come in and pitching you on how you might be able to get solar panels for free. >> i think that has to do with tax rebates that come along with that. >> "wall street journal" is reporting that the u.s. postal service is ramping up same-day delivery of everything from bottled water to fresh fish. the move comes as its new post master general tries to better compete with fedex, u.p.s. and amaz amazon. they want to expand grocery delivery and offer sunday delivery as well. three bills were introduced with the aim of lifting a ban on the postal service shipping alcohol. >> you have to lift that. >> it's more than alcohol.

i have a postman at my house every day. if they brought they something i wanted rather than just junk mail, that would be fantastic and a great way to utilize the existing system already there. >> junk mail wouldn't seem as bad with a bottle of wine. >> i was thinking groceries. but okay. in what will be his first performance since becoming seriously injured in a crash, comedian tracy morgan is returning to nbc's "saturday night live" this fall. on october 17, he'll host the show that launched his career. it's his first time back since his car wreck in june of 2014. the comedian tweeting yesterday, stoked to be going home. nbc also announced that miley cyrus would hoopen the 41st sean of "snl" on october 3. housing starts for july just a few minutes away. we'll bring you the numbers and chairman of petri partners will tell us which companies are preparing for sustained low oil prices.

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welcome back. let's look at the futures this morning. we've been watching things.

we've seen red arrows throughout this morning. things have gotten worse. right now you look at dow futures down by 66 points. again, we'll tell you why in just a moment. part of this is walmart came out with earnings. we'll show you what's been happening with that stock this morning. in the meantime, look at what's been happening with the ten-year note. it looks like treasuries, 1.64%. a huge direction. which direction the yields are going to move. we expect the fed will potentially raise interest rates just next month. also take a look at what's been happening with oil prices. right now 41.79. it's down about 8 cents this morning. a huge crushing move we've seen if you look back to september of last year. questions people starting to wonder if you'll see a three handle on wti any time soon. look at stocks of two major retailers how they're faring this morning after their quarterly reports. first of all, good news. home depot coming up with numbers that matched estimates on the bottom line beating on

every other metric. look at that stock up 1.4%. home improvement retailer raising the forecast for the if you will year and this tells you about the return of the housing industry. how people are fixing things up. that's where people are spending money they've been saving at the pump. let's look at where they're not spending it by not as much as analysts had been expecting. walmart missing bottom line estimates. revenue did beat forecast. walmart talked about a lot of different things that came in. part of it was margins in u.s. stores. also, they said some of it was improvements they were doing for customer experience in the stores that they had been putting more money back into things. take a look now. walmart is a dow component as is home depot. walmart down $2. that's putting additional pressure on the dow. you can see the last trade at 69.87. new ceo in charge there and he has made some progress. analysts we've been speaking to today say give him time but he's not going to get that this

morning. at least not in the immediate reaction from traders. we should also tell you we're a few seconds away from july housing starts. waiting for this number especially after the news that we saw from home depot where things looked better than expected. rick santelli is standing by at the cme in chicago. rick, take it away. >> our july read on starts is 1.206 million. that's definitely not only a new high for this section of moves that we've seen comping all of the way back to 2006 in terms of starts. last month also saw a revision higher from 1.17 up to 1.204. this really is solid number. if we look at permit side, 1.119. now that's a bit of a disappointment. let's look at it more in terms of percentages even acknowledging that we raised starts a bit higher. it's up 0.2 of 1%. if we look at permits, which had basically a very subtle revision, it's comping down 16%.

16.3 from its last read. so we want to monitor that. starts, as i said, you're looking at numbers we haven't seen since 2006 just to put a face on it. 1.20. the handle is now going to comp back to october of '07. 1.26. do remember whether you look at permits or starts, both of these were well over 2 million before the credit crisis. so definitely there has been improvement and in this case in july starts more than permits. we want to be definitely acknowledging the fact that we're still whether you look at these metrics or new home sales, existing home sales, all down from precrisis levels. what did interest rates do? around the 216 and 217 which is note wor noteworthy for a relevant reason. we haven't closed below the yield.

that was 2.75. we're currently 2.83. back to you. >> there you go. thank you. for more on the dow, let's get to steve liesman saying nice things. you seem to have a smile on your face this morning. >> it's a good number. 1206 brings us back to the level of october 2007. 1.2 million annual rate before the bubble burst. we're now very slowly climbing our way back and climbing our way back largely through a huge rise in multifamily housing which could be because of a whole bunch of things. people prefer to rent. we may have underbuilt rental units over a period of time we were overbuilding single family housing units and a change in demographic taste and a change in how people want to live their lives. so just a quick word on the permits. 16% decline. not very much to worry about. i'll tell you why. there was an expiration of a

huge tax break in new york for developers and that ran out in mid june. there was a surge in getting permits. you had a 60% decline in permits in the northeast. my guess is the bulk of that comes from. so we're having a slow climb back. we have housing. i like the home depot numbers. they go right in line. the idea that you were talking about earlier where are people putting that extra money from gas and that extra money from greater employment in the economy. going into housing, it seems like a better place to put your money if you think about long-term investment and where you put it. i want to talk about the rise of renter nation. there will be a report later today about the surge in multifamily housing in some major u.s. cities and whether or not it's a bubble or too much or did we underbuild? look at that dip there that follows the huge surge. you can see we were tremendously underbuilding multifamily housing. the other thing that's interesting about this chart that rick pointed out is we're well below the peak.

hey, was that a healthy peak? hard to look at a number like this all of the way back to 1990, my first job out of grad school was covering the housing market and i drove in through a bunch of cow pasture and out through a bunch of apartment buildings in foreclosure so when i got done with that job. what's the right level of housing? from a regulatory perspective, what we care about is how this thing is financed. you don't have a bunch of bubble type assets on the books of the banks such that they are potentially at risk if the bubble bursts. so to my mind when i look at that chart and see a nice, slow steady climb back. you would like to see housing surging and there's lot of disappointment in the economy but for the long-term, i rather see a long, slow rise. >> so you have a month until the fed is going to meet. the most critical meeting that we can remember at this point. >> except for the last one. >> we have september -- right?

housing. you have to put walmart into the conversation, too, maybe. china. are they going to go or not? >> did you get an ex-gas number? >> 1.5%. >> they are rising. >> 0.9% with gas. 1.5% without gas. >> i looked at numbers for expectations for consumers among economists. second quarter right now it looks like consumption rose 2.9%. that was a good number. gdp was reported 2.3. now running at 3.4. so we didn't really adjust our sense of how well the consumer was doing after that first report and the disappointing number. now they are also looking for 3.4% in the third quarter. i think we have to be careful always when a company reports. what they say in economics is antidote is not evidence. a company -- now, walmart is not

just any company. i agree with that. >> 10% of total u.s. sales. >> i agree with that. what we know for sure is we have way more consumer expenditures on services. you think about how you spend your money. i have legitimate questions as to whether or not the government captures that spending in a timely basis in the services sector compared to good sector. you also have potential very interesting deflation in the good sector when it comes to what's happening in china that we haven't even seen yet. if you think about this devaluation devaluation, i was surprised to see that their profits didn't rise because of lowering costs. >> they cited foreign exchange as an issue for them which i never would have thought. >> negative issue. >> that may be because they're selling internationally. >> not to question how they do

reporting, they miss and then they pile stuff in. >> talking about full year. >> you have to think they have something to benefit from the strength of the dollar. >> you know how much they had in sales last year? >> i heard 120 billion for the quarter. >> yes. >> i annualized at that 500 billion for the year. >> half a trillion dollars. >> i did the math on the way in. that's 10% of what consumers spend. >> what is the percentage -- >> i'm at 60 now. i came down a little bit based on what's happening from china. i need to hear from the fed folks. i hope to hear about how china is factoring in. joe talked earlier today that he thinks china settles out. they have $3 trillion in reserves. they have the money. we also know they have the know how to solve their problems. i don't think there's a lot of concern that china is greece

over there. >> looking at december now. >> there is a big debate on the street. i will tell you that my number was 75. it's come down. it may come down again. >> okay. >> let's turn to our guest host this morning. ben lerer is the ceo of thrillist. sits at the intersection of not just content, a media company, but commerce making sure that you are creating demand and then selling things directly to people. you think that's the way of the future and that content companies can't necessarily survive on their own. >> i don't think -- as we've said this morning, i'm very bullish about content in general. i think that one of the greatest assets that any media company has is access to its audience. at thrillist we built an audience and relationship with them and realized there was an opportunity to leverage that relationship to build a retail business. so we bought a very small retail

business years ago called jack threads which operates independently of thrillist but we have build our own biggest advertiser on the back of the relationship that we have. >> how big a piece of thrillist is now -- >> from a revenue perspective, we generate more revenue through jackthreads than through advertising. what i think that tells us is relationship we have with our guys at thrillist is very real, real enough to build a big retail business on the back of it and take that trust and leverage it into -- >> why wouldn't more advertisers take advantage? if they can say, look, they are able to build an entire business off the back of this e-mail. >> that's a great point. our media business has been doing really well. i think that's partially because of the connection to retail that we have. it's also because as you guys know a lot of dollars are coming

online and they are seeking out publishers who know how to talk to this mobile first digitally minded consumer. >> you said thrillist had revenue of almost $1 million last year. where are we now? >> we're above that. >> are you keeping this business independent? >> that's the plan. like chris said earlier from mic, everyone is dancing. everyone is talking to everybody right now because it is a pretty exciting time to be in media business. >> get in while the getting is good. depending on what side you're on. >> we're having a lot of fun and have big expansion plans on both sides of the business. >> nobody answers that question saying yes. you're on tv. maybe if someone sees you they can give you a call. >> no need to call. >> we may call any way. >> we are going to continue this conversation with ben in just a

moment. when we come back, oil falling close to a six-year low. we'll tackle what's driving the move lower and arctic ambitions. what does oil dutch shell's approval to start drilling in the arctic ocean mean for the industry? as we head to a break, look at crude prices this hour. still below $42. off lows of the morning. 41.94 for wti right now. "squawk box" will be right back. everyone loves the picture i posted of you. at&t reminds you it can wait.

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crude oversupplying concerns are rampant and will top the discussion in denver. more than 100 oil and gas ceos are attending. joining us from that conference, tom petri, chairman of petri partners which advises many of these firms. nice to see you. >> good to see you. thanks. >> we closed below 42. seems like 40 is a formality. what's your view? how low do we go? >> you know, all of the evidence on geopolitics point to it going quite a bit lower. the lower it goes, the better the bounce i think. and we're setting up for that putting in that bottom. those who talk about the old low of '09 in the mid 30s, you can't rule that out. what's real clear is that old adage that the best cure for low oil prices is low oil prices and we're in that zone at this

point. this is not a long-term sustainable proposition. >> is it a supply or a demand issue or a little bit of both? it seemed as though everybody has been saying it's oversupply and oversupply and now we're getting more of a read into what's happening in china and other economies and maybe it is a little bit of both. what's your thought? >> it's definitely a bit of both. it's been supply up until recently. the real concern that causes people to air on the side of a lot lower from here is uncertain uncertainty. china has mishandled what's gone on there and that's compounded the situation and certainly compounded concern about demand. >> given what you do for a living and fact that you advise

oil and gas companies and i think it was yesterday or the date before we had a firm which went bust. what's the outlook for that part of the business or do you expect more bankruptcies? are you having conversations where you think there will be a lot more consolidation among weaker hands getting snapped up by those strong and sense opportunity? >> very definitely the case. i think there's a restructuring that's really dictated. when you cut the price of oil by more than half, you set up those kind of conditions. companies that were only moderately levered six to nine months ago are finding themselves more than moderately levered. they are overlevered. one way or another they have to work through it. we had presentations yesterday from some companies that have really hedged well so they have $80, $90 oil for this year and actually some pretty good protection for next year.

other companies are not in that position and that is going to create some force restructurings. sometimes it will involve prepackaged bankruptcy. sometimes it will involve mergers and really the pattern in mergers the last couple years and we've been involved with a number of those is stock for stock where one looks at what can be done to combine complementary assets and ensure the better exploitation of those over the balance of the decade. >> as for the price, what role do the saudis really play here and where is that going? >> well, there's no question but what a year ago the saudis were getting a lot of pressure to consider an emergency meeting. in my view from their standpoint they played it very well. they put it off and put it off until thanksgiving of last year. they then precipitate d when

russian were unwilling to participate and it's my view that they are surprised that the prices overshot on the downside and that it has not had the impact on u.s. or north american production that they might have expected. i think there's a limited period in which they can continue to pursue that strategy. my judgment it's probably 6 to 12 months. if i'm dead wrong, it might be 18. we're now in territory that sets up, i think, powerful self-correcting forces within a reasonably good time frame. >> tom, i appreciate the conversation very much this morning. we'll see you soon. >> thank you. >> when we come back this morning, jim cramer's take on walmart and other market movers this morning. we'll check in with him after this quick break. while every business is unique,

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pitcher mitchel last night. in the top 0of the second hit i the face by a line drive up the middle. luckily he only suffered a nasal fracture. there it is. right in the kisser. could have been worse. it was only his third major league start. welcome to the big leagues, young fellow. >> wow. glad he's okay. let's go to jim cramer. jim, we've been going over the walmart numbers all morning. love to hear your take. >> i think mcmillen has to invest a lot. the place, i don't want to say it was run down but they didn't spend in all the categories that nordstrom did or home depot. you have to spend to be able to stop amazon and to be able to find the categories people want and install the technology. walmart has not done that. they're investing it now. it takes a long time to turn

things anderson, even if it's just on the culture. i think the culture is out of date. he's doing his best. i don't think the stock is going to get hit that badly. you're going to get a 3% yield. it wasn't like this is the first time that they've disappointed. the yield should keep people from selling the stock. it's below $70. tgx is home goods. think about this over and over again, people investing in their home. when we listen to the home depot conference call, they're talking about how people aren't spending on their home anymore. they're investing in their home. she's going to say the spend is above the gdp level. it's important to listen to that call. it's always the most brilliant call of any retailer. >> also important to listen to jim cramer. we'll see you on "squawk on the street" in a few moments. >> when we return, ben lair, an investor in mattress company. we'll talk act the start of the success and getting a good

night's sleep, which we all need. we'll return in a moment.

>> casper taking the sleep industry by storm. it launched last april and raked

in $1 million in sales. host of celebs along also. onset a well rested, co-founder and chief operatining operate o casper. thanks for coming in. this is a mattress. can people see what's going on here? there's a mattress in this box. there's a california king in this box. >> yeah. you can fit any size mad rettren the same box. >> you're trying to revolutionize this. >> the key philosophy is that you need one. we developed one perfect mattress. we spent thousands of hours with prototypes. >> the s your mattress better

than the serta or is sealy? what's the difference. >> we know that memory foam sleeps well. it's supportive, but generally it sleeps hot and people feel like you're getting stuck. adding latex keeps it bouncy so it's still good for sex and it sleeps a lot cooler. >> he just said that. that's okay. you said there's only one. you only make one? you can't get it more mattress? >> the idea is when you go to a hoe hotel, do you ask for a mattress? at a good hotel with a good bed. our philosophy is you can make one perfect mattress. the idea where you go and lay on 20 different kind of mattresses for ten seconds left. you have 100 days to try it. >> what percentage return it? >> very few. >> and the cost has to be high

for you for a return. >> it doesn't come back to the box. we come and pick it up. >> but you don't do a box spring. >> we don't yet. >> or a spring. >> it's just a piece of plywood with fabric on the top. >> what's the turnover? everyone says you're supposed to get rid of your mattress every ten years? >> it's actually more than that. they're fully warranteed for ten years, but a lot of people change them most of the time around life events. >> how much do they cost? >> $850 for a queen. >> what's the price comparison? >> it's about a third of a normal one. >> free shipping around the country. we'll get it to you in three to

five days via ups. >> and you -- it's not a water bed. >> this is the fastest growing company i've ever invested in. >> we have so much to talk about but we have to go. we'll have to have you back and maybe this thing can explode onto the -- >> thanks for being here. >> good to see you. >> that does it for us today. right now it's time for "squawk on the street." ♪ >> welcome to "squawk on the street." i'm counarl quintanilla with dzhokhar tsarnaev dzhokhar tsarnaev -- jim cramer. >> the ten-year here around 218. housing starts here an high. walmart misses but home d