accusations of plagiarism. we will tell you why and remind you about neil kinic. straight ahead. it's july 19, 2016. "squawk box"." >> good morning welcome to "squawk box" right here on cnbc. let's take a look at u.s. equities futures at this hour. you're looking at red arrows. nasdaq looking to open down. as well 17 points and the s&p 500 about 7.5 points off. the dow is riding a 7-day winning streak. one more up day would make it the longest since march of 2013. overnight in asia right now,

you're looking at a bit of a mixed picture. the nikkei has been up there. you're looking at that up 1.37 percent. let's fly over to europe and take a look at what's going on. everything down across the board. you're looking at the dax. the cac off 1%. the ftse off. and italy even worse off 1.5%. finally talking about harold hem. let's talk about wti crude. at 45 .15. he thinks it's going to be going higher. >> on today's economic agenda. june housing forecast to rebound slightly after dipping in may. building permits seen rising nearly 2% last month. as for earnings a business day yet again. goldman sachs is out before the bell. johnson and johnson well. united health just hit moments ago and locking market earnings all of that happens before the

open. microsoft and united continental are out after the close. speaking of which, the ceo of johnson and johnson will join us at the bottom of the hour first on cnbc. as i just mentioned, dow component united health just out with quarter earnings. 1.96. did nar owe outlook for the full year. it now expects earnings between 7.80 to 890. you can see shares up about 3 quarters of 1%. >> united health. you know, financial websites, market sold off late in the session on profit taking and factory numbers out of time. you know, some 26-year-old is writing what happened to the market.

that's no worse than the cause and effect that i see. >> everybody making up their own version. >> that's as good as anything. i'm willing to go along with he recalled harold on that. >> it's one man's view. >> exactly. let's get to politics now. day one of the republican national convention kicking off with a shouting match among delegates. a dramatic entrance by donald trump and then accusations of plagiarism. john harwood joins us now. i'm calling it social media or mainstream media shuffle board. you know when you're playing and you land one on the ten and you're really happy and then the next guy goes and hit there is and that flies off and he's on the ten. the news cycle.

i thi it would have been all about the kerfuffle until this second thing came along. >> joe, which producer wrote that intro for you? that didn't sound like your normal toss to a convention. >> you really think someone writing anything for me? >> no, i was kidding. >> look. >> here's my second intro. >> let's step back. >> you're old enough to remember neil kinic at least. >> yes, i covered that. >> then neil kinic and i do so well. that was more than two paragraphs and he's vice president and then they look back at the college career where it happened again, and, again, and, again. >> look, you're talking about the stuff that ended joe biden's 1988 presidential campaign. let me step back. i'm get back to that subject. republicans had a difficult afternoon because you had that

protest on the floor which the trump campaign did not want to happen, but in the evening is when they really get to control their message. the theme was a make america safe again. a twist on donald trump's campaign. they did it with very emotional public testimony from the mother of one of the victims of benghazi. said she personally blamed hillary clinton for the death of her son. how could she do this to me? and you also have giuliani invoking themes of law and order and safety more animated than he ever was in his own presidential campaign. >> who would trust hillary clinton to protect them? i wouldn't. would you? after rudy giuliani we got the show business. donald trump straight from television comes out. smoking entrance. this was part of the effort by the trump campaign to have

flight plannia trump. he introduced her. show a softer side appeal to women. she was very poised and polished. it was a solid performance, but afterwards, there were quickly questions raised about the similarity between melania's words and michelle obama in 2008. let's watch them back to back. >> barrack and i were raised with so many of the same values like you work hard for what you want in life. that your word is your bond. you do what you say you're going to do. you treat people with dignity and respect. >> from my young age, my parents impressed on me the values that you work hard for what you want in life. that your word is your bond. and you do what you say and keep your promise. that you treat people with respect. >> now, that passage and one or two others raised two questions

about the campaign. one is it's a very small operation. you've got a small number of people trying to turn out a lot of material in a short amount of time. the other question it points to is the one that has been raised about donald trump east business career. how much is facade and what's really behind the facade. when you look at melania trump's speech she praised her husband, but you didn't have many of the aneck dotes that only a wife can tell about a husband. there weren't memorable stories there, but on your point, she's not the candidate and people are not going to focus all that much on this. although this will get discussion today. the joe biden issue was much more series because he was running for the president of the united states. we'll see how they do tonight. they're switching to economy. the theme is make america work again. you'll have speeches from ben carson, and others.

talk about coal country and the people who were passed over. she feels by the obama clinton set of policies. >> i imagine, john, someone obviously assisted mrs. trump and probably wrote a lot of it. she speaks great accomplish, but it's not her first language. that's the way things work. whoever it is might catch a little flak today. the other thing is that social media. >> i think they will catch flak, but like i said, joe, they got -- their staff is not big. you're talking about people who are overworked and having to do a lot of things. >> unfortunately john, we've seen the news cycle on some really horrific things shrink and replaced bid other horrific things. we know how quickly the news cycle goes. one thing i did think of john in social media, there are some snarky comments obviously about

this, but i think. >> that's what social media is. >> but in the entire universe, there's a finite number of sn snarky comments and we'll get to it. in about 24 hours we will have exhausted every comment available in the english language. >> i agree with you. >> then it's done and there's nothing left to tweet. >> they'll come up with something else. >> maybe they will, but there will be thousands and thousands of tweets. >> i want to know about giuliani. i want to know what people said in the hall afterwards. i've seen him like that before. >> why were you watching ever wwe. you know it's not real. >> here's back when it was wwf. >> you're raising the right question about giuliani. i think he was in the 10:00 p.m. hour. that's the hour the broadcast

networks are on. that's when viewership is highest. that's when you can reach out beyond your own base. cable you have members of the same party watching stations that reinforce their point of view. his speech was a little hot for that broader audience. however, given the demonstrations that you had in the afternoon t discontent that many delegates feel about donald trump, it is imperative for republicans to have speeches that you night tunite the party the party. that's what rudy giuliani did in the convention hall. he is going after hillary clinton hard. going after president obama hard. so did other speakers, michael flynn. former head of the intelligence agency. those are things that bind the

republicans together. the challenges, donald trump needs to do that. he needs to grow his vote because he's behind and we'll see when we get to testimony end of the convention whether we have the trump rally and polls that they are talking about. >> john, i suppose we're not going to see speaker ryan be quite as fired up adds giuliani today. probably get more subtlety. >> i'm quite certain paul ryan is not going to have the effect of rudy giuliani. and i can't tell you enough how -- you know, i cover rudy giuliani in 2008 when he ran for president and for a while he was doing very well in the polls. he was a more much sedate sober figure than last night. he was shouting. he was just extremely animated. now that passion can be an asset, but the question is, does it come across as a little scary

to some people. >> right. all right john, i got that on tape. you say in the 10:00 hour. >> i stayed up late and watched the whole thing. >> he's been the daily news has been teeing off on giuliani a bit. he's been outspoken in the last couple of weeks. >> this was more of the way he approached it. the way he -- even when he talked about obama or isis. >> it was like beads of sweat coming. >> i'm sure you have strong feelings about this. >> very strong feelings. >> you remember him walking. >> yes, but i've never seen him like that before. this was more than that. >> little over the top. all right. >> worth a watch. >> you get in front of an audience like that, you get fired up. >> we got a whole group here fired up to talk about earnings. >> the netflix thing.

>> it's rich for you. >> for the people watching the top of the show. >> that's supposed to be a $400 billion market cap by now. >> i never said that. >> i'm not saying you. i'm saying rich greenfield. >> don't worry, but you were very, very bullish on netflix over 100. >> i was bullish last year. it's a monster stock. >> real quick just to catch everybody up who is not -- hasn't been watching the earnings. netflix did disappoint the street after reporting the lowest subscriber growth. the $2 service hike is partially to blame for the led down and anthony is here to talk about it. >> >> what the company addressed

was in the month of april their press coverage and the media coverage arounding under grandfathering of the pricing. so the pricing change drove a more elevated level of churn. given the substantial size of the subscriber base, in the 80 million. a small change in turn or retention level can have a big impact on net additions versus forecast. >> what were your forecast. >> we were in the range of, you know, five to 600 net domestic for the 2 q. my consensus forecast were around 2.5. that was in line with our guidance. we had taken down our target price and took down the estimate for the third quarter guide, namely for international: that we did on june 20. so we had warned and sort of signaled that this was going to be a tough quarter in terms of

our view and i think what's happening this morning is people are saying, well, does this punch a hole into the pricing power thesis so people thought netflix would be able to raise prices from 8 to $10. >> the product was so good and so sticky and everybody wanted to watch every show they were producing. they had unlimited power. >> the product is a good product. it's a fantastic technology. >> but what happened to make $2 be the deciding different for people. >> in april the press coverage and media coverage caused members to be more proactive so before it hit their credit card and their automatic withdrawal, they moved forward and made a change to their subscription. maybe it had to do a little bit with competition. >> did you change your viewer rating. >> we have a buy rating. >> so you didn't change your rating. >> no. >> what about --

>> $110 a share. >> i think with a stock approaching $80 in the overnight market. the market is pricing in a lot skepticism around growth from here. and i think the value of the company is $110 a share. >> been $133. >> what does this say about the pricing power not just of netd felix, but all the competitors, many of whom are now going over the top. as you sort of look beyond netflix. >> i think one thing people don't realize is within that net subscriber addition there's new people signing up and churn. so the percentage of existing subscribers who are disconnecting. the gross numbers are very stable and robust which would indicate it's not really a pricing power issue for existing members. n now, beyond sort of this anomalous event in terms of the

press coverage in april, for new members i think it's also not an issue in terms of the $9.99 price. there may be a jump competition. it's more competition out there. >> amazon prime. >> hbo now, hulu. >> you don't think the business is going elsewhere. >> no. and i think the thing that people should, you know, my view is over five or ten year period that internet video is going to take substantial share from traditional linear video. that market is big enough for multiple players to succeed. we talk about hulu. what will that bind d bundle look like. that's going to be owned by disney, comcast and fox. >> check out the chart. >> so what i think is important to note is they're still very probable. the u.s. existing market is

going to reach their margin targets early. so revenue is accelerating. now the market is going to look at subscribers, but revenue growth went to 33% growth in the quarter. they beat on the bottom line. >> can netflix afford lower the amount of money that they're spending. >> i think that the question around spend is has to do internationally with how aggressive they are in terms of local content in newer markets. i don't think they're going to change the amount that they're spending. they said they wouldn't overall and so the content is not changing. i think, you know, there will be economical in terms of how much they spend on let's say local country by country culturally relevant content specific countries. >> thanks for coming in. >> thanks for having me.

>> appreciate it. meanwhile another big company out with results. ibm posting a drop. that marked the company's 17th straight quarter of declining sales. it happens as ibm continues to transition away from the legacy business to focus on cloud services which grew 30% in the quarter. joining us now is bryan white. the 17 straight quarter revenue decline, that's getting the ahe headlines, but they did see 3 .5 growth. do you like that enough to buy the stock here? >> so if you take a look at what they did, they pebeat on the to line. they beat on revenue and on eps. what i would say about ibm here is it's a great yielding stock. it's trading attractive valuation right now and i think the turn around is showing

progress. we saw that last night. >> how much of the growth is organic ibm growth and however is the fact they've been on a deal making spree. >> they said the impact was from acquisitions. >> they had $45 billion in financing debt. how long do you think they'll carry that. >> they've been -- they're generating this year about 11 to 12 billion in free cash flow. they're definitely akwistive. their buyback hasn't been what it has been in the past. i just -- i think if we just step back and look at what ibm is doing. they're backing away from the commodity that's out there in the it world. they're not afraid to do. a lot of companies are. in you go back in history, they've had 11 consecutive quarters of gross margin increase. i don't think you'll see this this year. in the meantime they're investing in big areas, cloud,

cognitive computing, block chain, these big new areas that make a difference in the long-term. >> it might be one of the best, believe it or not, might be one of the best performing job components of the year. >> it went down at the beginning because it was $116 this year and it's not 160. it's up that much because it sold off at the beginning of the year from 130 or so. >> did buffet pick some more up. >> he never fought with both hands. yeah, he's buying. >> he always says he'll buy on a weakness. i don't know if he did when it sold off. >> i was wondering if he picked it up then. >> we have microsoft off the bell. do you kor microsoft. >> he does cover apple, but let's not talk about that. >> apple is a great company.

>> what's your price target. >> 185. >> i'll go back. we'll go back. this is going to be the last guy standing in this market. >> great to see you. when we come back, plenty of fireworks at the rnc in cleveland a. shout fest and then melania trump took center stage, but now facing criticism. a live report from the convention floor up next.

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welcome back to "squawk box." joining us now, conway is a trump adviser and on the other side, taking the opposite position, sara fagen. served as political director.

coming in and getting opposing viewpoints. sara, you're just as good as a democratic at this point. >> i heard that. i can't believe you would think that. i don't think the democrats would claim me joe. >> you've got no country that will claim you. >> swit land. >> you're not backing donald trump. i know that. >> i'm not back hillary clinton either. >> that's the whole point. yes, you are because it's a choice. >> on a scale of 100 i would be much closer to donald trump than hillary clinton for sure. >> anyway, what is going to be remembered about last night? this kerfuffle. we have dozens per day and the time of the news cycle is brief. how long is the episode going to last in this case. >> that's right. joe biden is vice president that's tells you something.

i think this too shall pass. melania trump is not ale po l politician. she's held to a different standard. i don't think it distracts from her message. which is she loves this country. she said quote, the greatest privilege on the planet earth is to be an american citizen. she marks the tenth anniversary of having done so. she talked about what she would do as first lady. just like anybody else, i don't think people will or even should focus on 21 words and what was a probably 15 or 18 minutes speech. we saw very dig if i eed very elegant confident first lady. i think we should remember the theme. make america safe again. most american dos not feel safe. we know we're being attacked

here. our allies and interest and friends are being attacked over there. this can't go on for another four years. that enough should excel folks who want to criticize donald trump to realize what's at stake here. the arizona delegation has these gate t-shirts joe, it says trump then it says supreme court, supreme court, supreme court. all the way down the back. that's the way folks are thinking. >> just your comments in general. were you pleased where the pence selection as vice president? >> well, first, on pence i think it was a necessary selection in that regard it was a very wise choice. the reality is while donald trump has definitely done a good job in coalescing much of the base, there were many religious conservative who is are still very concerned about him and his candidacy and his history. i think mike pence goes a long way in helping bridge that gap in bringing the party together. as far as the speech last night,

i do agree with kelly that melania trump is held to a different standard. she's not running for office. having said that, to me it's much more of a window into the campaign operation. well oiled machines do not make these types of mistakes. you can see how things like this would happen. trump world is a political in many respreects. they prefer to have a small team. who wrote this speech p how did no one vet this? oh, my goodness, thanks for tells us what the campaign is about. if i hear one more anti-trump exbush person go on tv and bash the trump campaign that they know nothing about, it's really a lot since so many of us swallowed so much and we're good little soldiers all through the bush white house, binders of women characterizing 40% of the

country as being lazy or on government. >> i didn't work for the romney company and i didn't have anything to do with that. i did have a lot to do with the bush campaign which was quite well run. >> i'm glad the eight years of them didn't go well. >> none of them went well. >> is that what you're suggesting. >> i did not say that. i'm saying you're saying heads should roll and this is symptomatic. >> this is a big deal. >> this is a republican national convention. >> you just keep talking that will work. sara, if you're telling me that in eight years of the george w. bush administration nothing worth that the equivalent of 21 words from a speech being the same, okay. i'm listening. let me just say that, last night showed through giuliani, through the victims of parents, we are precarious and not feeling safe in this country and secure in this world: that's important.

now, people who want to bash campaign they know nothing about and want to ride they're high horses and there are many of them these days in oppositions, i would just remind them the other reason the pence pick is wonderful because he stood up to leaders of both parties when he was in congress. he voted against the big bush spending plans like no child left behind, med cicare part d. and people weren't happy with that choice for the same reason grasz roots there. >> do you have a final comment sara. i think look, as we move into the next few nights, it's going to be really important you know three things. one, donald trump needs to give a great speech thursday night. this is the biggest moment of the campaign for him so far. he also needs to make sure there's nothing else that happens on the floor like what happened yesterday afternoon. and then third which he doesn't have control over, is what goes on outside. so far it's been quite peaceful

outside. there haven't be as many of the protests as people have expected. assuming that continues, he has a chance to i think get past yesterday which was not a great day and have a good next three nights. >> okay. i'm leading t inin inin inin ii republican and a very. >> joe, i'm probably more conservative than you are, joe. >> of course. >> but the disunity is on the democratic side. we have no equivalent of bernie sanders in the republican party right now. we have nobody who won millions of voters and said hey, i think i'll endorse the nominee and whose supporters will make an equivalent. >> let's keep this going. i don't know why your trying to end this.

>> my conversation isn't an attack on donald trump the character. it was on the tactics of yesterday. yesterday was a bad day for the trump campaign. you attacked kasich. you had a flee o outburst and a speech. >> okay. thank you. coming up, policeman -- no. anyway, that was great. that was fun. >> we're going to be doing this on the half hour from now on. >> coming up drop off in start last year. possible exit strategy for vie come. we're going to tell you about that story straight ahead as well. take a look at the s&p winners and losers.

>> welcome back to "squawk box." it's time for the teexecutive edge. joins us more onset with that story, kate. >> total entity pra knewship rates fell last year. that's after four years of upward growth according to the monitor or gem report for the u.s. the report underscores the idea a main street recovery is very much still a work in progress.

the report is released and is part of a global survey conducted with more than 200,000 responding each year. fell from a 2014 high of 51% to 47% in 2015 overall entrepreneurship peeks among the ages of 35-44. women in this age group saw a spike up yard of 15%. in terms of ethnicity, african-american have the highest start up compared to 12% of caucasian. one thing of note here, the gem report considers entity from neural activity for those worki working part-time and laurnchig a business. normally their numbers higher than other research papers

including those nor the kauffman foundation. this year it's lower. it's a warning sign i think. >> there's no way to measure the side hustle. i find it interesting. you had adam grant on when he released the book the originals it was so fascinating to learn the top successful entrepreneur, even steve jobs, didn't quit their day job to start their company. >> that's the reason too why they say this could be a resettling recession period. people could either be staying in those businesses or might have found employment elsewhere and they're not willing to leave a stable more established job for the side hustle buzz it's too risky. >> what sectors are people actually starting businesses in? the ones that are getting equity. >> this particular report doesn't break down, but i'm sure as you know from squawk alley, just everything is technology based. a lot of retail. i would say what i find most interesting in covering in is there are still people willing to go out there and start a more

main street mom and pop type business like a retail storefront or restaurant. those things are the most challenging and people are still willing to take that on. >> this really is the american story. that's why we got to make sure these guys, you know, small banks are in a position to lend. this is the sad thing that has happened with entrepreneur because it's tough. two out of three fail normally and even when it does succeed, the average dollars are not $60,000 a year. it's not a ton of money. it's not what you think of. this is the backbone of the middle class. >> banks as you just brought up make up for the largest amount of funding. they measure kround funding for the first time. obviously we got some new regulations. i think will grow. >> it's different than anywhere else. it's different over in europe and greece. it's so difficult to break into -- they're so entrenched in

terms of regulations and everything else. i wanted to start an american brewery in greece. basically impossible to start something somewhere else. that's why as far as american exceptional, this is what we need to do. you need to write a column on this. >> what's your side hustle. >> i don't know what that is exactly. is side hustle legal. >> i'm waiting for my big side hustle idea to come in. >> i do calligraphy in my free time. >> etsy. >> just for friends. >> you've got more hustles going on. >> this is your side hustle. >> this is -- that's the sad thing. which is obvious. this is kind of. >> i'm jealous. >> kate rogers, good to see you. coming up the new york city

subway system is getting a $27 billion makeover. more details after the break. as we head to that aforementioned break, here's a quick check on what's happening in european markets right now. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t.

johnson and johnson earnings just out. revenue also beating forecast. also the company's outlook of 663 to 673 compares to an estimate of 661 and previous guidance of $6.53 to $6.58. almost the midpoint of that you can get to where the analyst were. a lot of times that's how they get the numbers. the cfo of johnson and johnson will join us at the bottom of the hour. first on cnbc, but johnson and johnson at this point, looks

like that will be an all-time high for that dow component. >> there were complaints at the time and supposedly from some of the johnson family as well about well and now this is johnson and johnson is back. we have a new installment of summer red stone saga. he was given good reason to resign when he and four other directors were removed from the board last month. that's according to a letter from his lawyer that said he's prepared if necessary to invoke a clause that allows him to resign if changes don't meet guidelines in his employment agreement. sent a similar letter to the

company. both men said they only intend to leave in red stone changes are upheld by tdelaware court. all seen as potentially the way out. we will see the next installment of this great soap fascinating. >> the lawyer finding the way? r in and out of that language. >> johnson and johnson just out be quarterly results. dominic karuso brings the details. that's first on cnbc.

johnson & johnson out with quarterly results. joining us now, cfo of johnson & johnson. also a member of cnbc's global council. it's great to see you. i've asked before on what changed, whether it's a management style or a -- an attention to detail or what. tell us as far as johnson & johnson, is it a pharmaceutical company? is it a consumer products giant? is it a medical device company? or it's just an overall health care company? >> good morning, joe. good morning, joe. thanks for having me on. and yes, our businesses are

performing well and we're all three of those things. and overall we're focused broadly based on human health care. we believe that's the right way to approach a health care environment where we can access growth no matter where it is across health care. and our second quarter results are very strong across all three businesses. continued momentum and pharmaceuticals with robust pipelines going forward. gaining share our consumer and making good choices to expand market leadership. and our medical device business is improving. we're undergoing a restructuring and accelerating there. we've raised our sales guidance this morning and raised our suggested guidance for the year. >> when you have, like, eight different things that aren't even brand names anymore, they actually are names for the -- what it actually is. like i need a band-aid or wow, you could use some listerine, andrew. or -- i mean, who knows.

baby powder. what are you talking about when you say baby powder. you need some benadryl? i mean, look at that, kayla. that's -- you watch business news in the morning, you watch "squawk box." so it's similar to that. >> it is. >> so that's the consumer side of things. for pharmaceuticals, it's a little bit different but you've had some milestones in the last quarter that are going to boost that business in years to come too. >> we're proud of the brands that many know johnson & johnson by. but a big part are medical devices and pharmaceutical business where we continue to launch new products, build robust pipelines. i think we have a good innovative cycle at the company and we're proud of the growth that's showing and all businesses are progressing well across their markets gaining share and improving profitability. we're happy with the results this quarter and we're off to a

great start. >> and revenues are up even with the dollar. has that started to moderate the currency head winds? >> they have started to moderate. maybe 1.5 points. but operational sales growth is about 5.3% overall. and when you cut through acquisitions and devesttures and other changes in the business, growth is about 8% which is very strong in a health care market that's growing approximately 4%. >> what is -- what's the biggest prescription drug for j & j and do you have any off-patent issues coming up in the years to come? >> well, we have several patents that expire in the years to come. but we have a fantastic product for the autoimmune disease area. that patent expires in september

of 2018. but there are similar products that are being approved by the fda and one such product has been approved by the fda. our guidance does not anticipate any early launch of a biosimilar product. >> you know, that was a senticor drug. were you there for sentoxin. have we cured sepsis yet? >> i think sepsis remains a challenge for the health care community. i was there many years as the cfo of that company. we went through that cycle but then we developed a strong autoimmune business founded on technology. and we were pleased to join the johnson & johnson company. >> that was mostly remicaid you mentioned. you go way back. we go way back. when was the last time somebody

said sentoxin. probably 20 years. and synergin. what was the name of that drug? >> that's old news, joe. >> it is. but sepsis still kills people. and it just is -- looked like it was going to be easy to cure and it wasn't. anyway, dominic, thank you and we hope to see you again. that chart is unbelievable because you can just stick a needle in right where -- or stick a tack where gorsky started. >> thanks for having me on. coming up when we return, we are gearing up for goldman sachs getting ready to roll out quarterly results. and the delegates showdown at the rnc. we have the highlights from the shout fest and mrs. trump's debut on the big stage. "squawk box" returns in a moment. you're here to buy

day one of the republican national convention is in the books. ♪ >> from convention for chaos to the speech controversy. speechgate. >> you work hard for what you want in life. >> got it all covered from cleveland straight ahead. earnings front and center. shares of netflix getting crushed. a bounce for ibm as it beats the streets. and we're waiting for dow component goldman sachs to report this hour. plus fly me to the moon.

space meets silicon valley. pet peter diamondos is here and brings some special guests. next on "squawk box." ♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box." i'm andrew ross sorkin along with joe kernen and kayla tausche. the futures at this hour are looking a little down after what's been pretty good couple of -- well, more than a week now. dow jones looks it will open up down eight points. the s&p 500 off about five points. >> futures are off their lows of the morning. part of that is because of earnings we have been seeing coming in. in the headlines, johnson & johnson earning 1.74 per share for the quarter. revenue also beat estimated when the company raised its full.

we do have one economic report on the calendar. june housing starts out at 8:30 eastern time. new housing construction expected to be up 0.9%. and volkswagen is facing more legal trouble. three states are planning to unveil new lawsuits against the automaker today. they're said to involve accusations of environmental law violations and defrauding regulators. of course interesting to see the lawsuits follow potential settlements for volkswagen. but that story is far from over. day one is over of the republican national convention. it's in the books. and after a harsh primary season, donald trump's general election campaign officially opened with a warm -- it says here warm and personal validation from his wife melania trump who kicked off the convention by assuring voters

that the candidate has the character and determination to unite a divided nation. >> if you want someone to fight for you and your country, i can assure you, he's the guy. he will never, ever give up. and most importantly, he will never, ever let you down. >> but it didn't come out -- come without some controversy and eamon javers joins us with more. good morning. >> reporter: good morning, joe. they're getting ready for day two here at the q in downtown cleveland. still plenty of time to dissect all of the sound bietss from day one. and that melania trump speech is getting all the attention this morning because of accusations that it sounded strikingly similar to the speech that michelle obama gave back at the democratic national convention in 2008. let me play for you the two chunks. first, michelle obama in 2008. then melania trump in 2016.

and you can decide for yourself if this is the same speech or similar thoughts and ideas mashed up together. >> barack and i were raised with so many of the same values, like you work hard for what you want in life. that your word is your bond. that you do what you say you're going to do. that you treat people with dignity and respect. >> from a young age, my parents impressed on me the values that you work hard for what you want in life. that your word is your bond and you do what you say and keep your promise. that you treat people with respect. >> reporter: so paul manafort the trump campaign aid is out on television this morning. he says there is no cribbing of the michelle obama speech. in fact, these are common ideas that are out there in the world and people who are making speeches particularly first lady hopefuls will kind of use all of

these same ideas. that controversy is going to dominate the morning here as people sort of dissect that and figure out what to make of it. whether it really matters at all what a future first lady has to say. but take a look at the day two lineup of speakers here. we've got a chart showing you the political figures where the theme is the economy. paul ryan the speaker of the house. that should be a dramatic moment because he was a guy who was reluctant to endorse donald trump. then mitch mcconnell, chris christie who lost out in the vice presidential sweepstakes to mike pence. and ben carson. political highlights of the day today. also we'll see more of the trump family up there speaking on the stage. donald trump jr. and tiffany trump. and i can guarantee you that campaign aides have to be going through the speeches googling line by line making sure there are no other similarities to obama family speeches. >> not deciding whether it's the

same speech. we're deciding whether it's the same paragraph. >> reporter: right. >> it certainly shifted the conversation away from the "60 minutes" interview. >> i didn't know there was a big conversation about that anyway. but it was -- for this morning it will be something that people are talking about. >> reporter: and joe, here's the thing. i mean, donald trump is not a politician who has been subject to the usual rules of politics. for any other politician there have been career killing gaffes that donald trump made that has not killed his career. every moment of controversy has played to trump's advantage because it gets him more attention. we'll see whether that happens here. because it's the wife, it's not the candidate. >> right. it's the wife and they are -- it is sentiments that -- i mean, all put together it looks like the speech writer whoever wrote melania's speech, it looked like -- if i ever give a graduation speech, i'm going to look at previous -- i was supposed to but didn't.

i'm going to look at previous graduation speeches. i will look at the themes that people touch on. are you old enough to remember neil kinnick? >> reporter: i am not. >> that was biden's guy. >> reporter: right. >> he said i'm the first guy to go to kabul. i think that was more than two paragraphs. i mean, biden is the guy today going, i just wish this didn't happen. >> reporter: that was a campaign killer for biden. >> they we want back and checked the college records and there was a history of plagiarism as well. >> reporter: i think people are going to judge melania trump on a curve here. she's not a public figure, politician herself. she's not used to talking in public. she said she wrote most of this herself with as little help as possible. so if she did check of previous first lady speeches and borrow a phrase or two, a lot will let that slide. unless we see more of it this week. >> i doubt you'll see more of

it. >> reporter: yeah. they're going to be working google overtime on those speeches, i think. just checking to see any of those lines. >> all right, eamon. andrew needs to switch gears now. >> we are going to switch gears. nice segue. >> you don't even know how to drive a clutch. >> i do. not very well. >> what about on a hill? >> can be tougher. we do have a switch gears though. the big news this morning shares of netflix, they are getting hit hard right now. take a look. down 12% right now after announcing sub viber numbers fell short. julia boorstin joins us this morning. >> reporter: they come in lower than wall street projected. falling short of he 2.5 million members projected. saying while it's adding as fast as expected, it's losing more of

its existing ones as those price hikes kick in. and it says it will continue to feel those losses. >> people don't like price increases. with the increased revenue, we're continuing to invest in better and better content. so that's what makes us feel very strong and positive about the long-term and that this is a short-term phenomenon. >> reporter: the higher prices did boost the earnings 9 cents versus the 2 cents projected while revenue came in line with projections. now, ceo hastings ended the investor call last night apologizing for the stock volatility saying the big picture is very much intact. saying their big investments are paying off and will continue to grow. back over to you. >> all right. thank you. the futures are pointing at this point to a lower open after seven straight days of gains for the dow. down eight points on the dow.

the industrials and s&p closing at -- here's a new word -- at crisp all-time highs. we could say fresh. we could say record. we could say new fresh record highs. joining us now is ed campbell. and we keep -- we have a digital staff now. we keep writing stories about billionaires that say the market shouldn't be at these levels. you're not the billionaire i don't think yet. >> no. not a billionaire. >> billionaire in training. is this -- if the trump rally notwithstanding, are these new highs warranted? >> i've been surprised by the -- >> uh-oh, so you were wrong. >> the strength we've seen post-brexit. >> do you have a s&p target for the end of the year? >> we don't do targets but i think it's priced for mid-single digit returns from here. so the rally that we've seen post-brexit has been driven by expectations for easier central bank policy.

as well as the recognition that the brexit shock is going to be more of a local shock than something that sinks a global economy. do we deserve to be at new highs? i think it's a little too much too fast. i think it gets tougher here. >> fast? it took two years of going up, going down, of hitting support levels, testing resistance levels. a two years we break through and it's too soon? >> well, we've been in an earnings recession for that period of time. and the expectation -- >> we're coming out of it? >> the expectation is that that session is going to end. if you look at the earnings per share numbers sequentially, the first quarter was probably the bottom. and then things get better from here. >> you're making the case -- >> one of the things i would say

is a positive thing post-brexit is, i thought you might see the dollar take off again. and you haven't seen that. that was a big headwind that sort of pushed us into this earnings recession. and the fact we haven't seen that certainly makes the case for the rebound being real. are there other place where is you can get better bang for your risk buck? i think so. one of the places we've been touting is high yield bonds and emerging market debt. you've got the s&p 500 up 7%. so i think those are areas where you can get equity-like returns with probably less volatility. >> but you've seen everybody chasing high yield bonds. the inflows have been record levels last few weeks. what's the chance that turns, that there is a correction. >> if you look at where high

yield spreads are, they've come in as of late. as you point out, there's been a lot of flow there. but i think if we don't get a u.s. recession which is something that we don't expect, we don't think the default rate is going to spike to a level that makes these unreasonable. so you're still paid for the risk you're taking. >> all right, ed. thank you. appreciate it. >> thank you. >> it drudges. gets a lot of views. >> he does. he does a nice job. >> seen the duvall patrick speech and then obama from 2008. side by side. >> is the suggestion -- >> it's not a suggestion. at the time they said it's just words. but their words are all kind of the same. but i don't know. i guess things like this happen. >> we'll keep talking about it. >> this morning we are. we're definitely going to talk about it.

>> you definitely are. >> his or -- well, that's just to counteract your talking about melania. it had been the kerfuffle. you're ready to go fwook the "60 minutes" interview. google start-ups for the first to land on the moon and high deaf video images back to earth. we're joined by an astronaut. and later a new call on citi after gushing nearly 30%, crude seems to have stalled. "squawk box" will be right back. e used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20.

♪

now you can watch nbc's coverage of the rio olympic games live at home or on the go. welcome back to "squawk box." entrepreneur scientist and noted futurist dr. peter dimondis is here. he joins us as co-host for the next couple of hours. the clash between what he calls linear thinking and exponential worlds. he joins us now with marcus shingles. the first female private space explorer traveling to the international space station. so we'll have to hear about that experience and what you're working on now. let me just ask you an xpriz question. when you've teamed up with lots of different companies, a lot of companies that watch this show,

is it better to do this as a foundation or why aren't some of these companies doing this themselves? in terms of fundamentally. in terms of incentivizing it. >> andrew, i'm pleased to have our new ceo on. you want to take that one? >> my previous career before i was at x shprize, i worked with the crowd to disrupt industries. so xprize's model is we use the crowd. but we're really focused on solving grand challenges. sometimes they're one in the same. if you look at original xprize, it led to the launch of the private space industry. they didn't realize there was a there there until xprize demonstrated there was. >> are businesses too small bore? >> i think the concept here is

that individual small teams are so empowered right now. they're empowered to do only what large corporations could do 20 years ago. but they're willing to take bigger risks. where if a company puts up a large prize to solve hunger, education, water, energy and a thousand teams compete. we get as many as hundreds or thousands of teams competing, you don't need to have all of them. you have one win and the winning results, you know, sort of go into society as a benefit. >> what is the biggest most mind boggling thing you know of any team working now? >> a lot. >> well, we have the google lunar xprize which has been running for years. we're at a point now where we expect in 2017 we're optimistic because two of the teams competing had launched contracts. this is essentially to do a lunar landing as a private citizen. and two of those teams that have

launch contracts to get their robots up into the orbit, to get that lunar landing to take place. >> $30 million purse from google put up for that. we have qualcomm's triquarter xprize. to build a hand held device for the consumer that can diagnose them better than a team of doctors. elon musk funded a global learning xprize. teaching kids around the world how to learn. >> doesn't use theranos does it? >> no. not yet. >> it seems that's a ways off, i think, just a hand held device. >> for the diagnostics? >> yeah. you'll need blood. >> it could be blood. it could be sequencing. it will be diagnostics from ai. these are all things coming from -- it's converging technologies. >> i have a space question for you. in the space race, who's

winning? >> definitely spacex, elon. >> why? >> he started earlier, has bigger funds available to him and took bigger shots. it's a big passion of his. his primary objective and focus right now. so i think he's putting a lot in there. >> what is he capable of doing that bezos is not? >> focus on attention and time and funds to it. i think jeff is also very passionate, but he's taking it at a much slower pace which is his style. i think he will succeed also, but i think he's just a little did it behind. >> is there a dark horse in this race we don't know about? >> well, there's dozens of small companies. in terms of companies that got the capital to actually deploy hundreds of millions, who are passionate about space in the

early '60s and gave up on nasa getting us there. >> we talked about driverless cars. there have been results that they're funding flying cars. what do you know? >> a lot. i can't talk about it. >> i bet you do know something so tell us something. >> when we talk about what the future of transportation is, we're going to have autonomous ubers. right? they will be coming quickly. it's the next five years i think we're going to see -- i've got a model x and model s with autopilot which i love and it's getting better every day. >> you keep your hands on the wheel. >> i do keep my hands on the wheel. i may check an e-mail once in awhile. don't tell anybody though. >> given what happened you don't feel any anxiety about that? >> it's under what conditions you do that. but my hand is on the wheel. and warnings come up here. the future of transportation is going to be autonomous cars in

the next two to five years. we'll see fall autonomy coming on -- >> when do you think the public accepts full autonomy? people ask now in america there's about 30,000 vehicle fatalities. they say could we get that number to be half. if i tell you there are 15,000 fatalities and they were going to be a function of the computers not doing what they're supposed to do, i'm not sure the public is going to like that. >> you can make up any number. the case is we never measure the lives saved and time saved by the autonomy. but you're right. it's going to be a conflict of the past and new breakthroughs. i mean, we're also working on a whole set of xprizes in vr. you're going to be telepresencing yourself there. >> we're going to continue this conversation.

so this is going to be terrific continued conversation. >> so you know things about cars versus planes? >> i do. >> and yet you still every time you get on -- >> but this goes to the issue. i don't think that autonomy vehicles are going to be accepted by the public until it's down to 500 a year. >> i know. it's 35,000 a year and you're still -- i want you to work on that. coming up citi making a bullish call on commodities. to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think. but the best place to i bestart is in the forest.tter.

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go ahead. you want to do it? all right. when we return, we're going to talk commodities and citigroup's new call for 2017. and empowering technology. we'll talk.

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welcome back to "squawk box." among the stories front and center, we're about an hour away from the june housing starts report. consensus forecasts calling for a rise of 0.9%. also the afternoon earnings watch. continental and discover financial. nsters pulled about $21.7 billion from actively managed funds. this is according to the morningstar. that was back in the midst of the financial crisis.

at the same time index related funds contracted $29.2 billion. >> all right, harwood. john harwood joins frus the republican national convention. i can't believe you think other people write my intros. here's my latest. people need to watch us every time you're on from the beginning. because we extend the story. we extend it each time. here's my extension of the story. someone messaged in here that she wasn't aware that you could plagiarize a cliche. so let me just work this on you for a second. my parents always told me that i need to work hard to get where i want to go. they told me that my word is my bond. that i need to always remember. and they also told me to treat everything with dignity and respect. now, was michelle obama the first person to say these three cliches in 2008? >> reporter: well, i agree with you that a lot of that is cliche

material. the problem is when you have the same set of cliches in the same order in a r an identical speech. >> i hear you. did you go back and watch the president and match up his words to patrick's words in 2006 to that speech in 2008? it's the same situation there. >> reporter: here's a distinction i would make in those cases. i would say that melania's is more similar to what joe biden did. you're talking more about yourself, your family, the story. what president obama did with patrick was he lifted a rhetorical device in his speech. he was called out for it by hillary clinton. she called it plagiarism. the difference is when that happened, president obama at

that time said should have credited duvall patrick. in this situation, paul manafort incredibly the chairman of the trunk cam pain is out saying it's craze z si to think that melania trump cribbed the words of michelle obama. nobody beliefs that. if you have one first lady having essentially an identical couple of sentences in another speech on the same occasion, same purpose, it's not credible. >> we'll see what happens tonight. i don't know whether we're going to be talking about this tomorrow. >> i doubt it. >> what if -- if we asked you for a preview yesterday, we probably wouldn't hit the big points that happened last night. can you take a shot at what we're going to be talking about tomorrow morning? >> reporter: well, there are a

couple things. first of all, they're going to have the roll call and donald trump is going to get nominated tonight. question about whether or not there is any static during that process. you know, yesterday when the convention sources were quashing the disside-- we'll see if it d. secondly, you're going to have a shift to the economy from national security, law and order at home, a shift to the economy make america work. you've got the coal state going after hillary clinton, going after the democrats for their environmentally economic policies as harmful for what she calls flyover country. you're going to have ben carson. the former rival to donald trump give a speech. and you're also going to have some of the congressional leadership. that's in the earlier hour that

has smaller viewing audience. >> all right, john. we must move on. did they tell you in your ear? >> reporter: they did not. i'll take your word for it. >> while you're talking they tell me we must move on. i don't understand. >> reporter: wait. wait, wait, wait. hold on, joe. on this show you tell them what to do. they don't tell you what to do. everybody knows that. >> i can't hear you john. they're yelling. i'm not kidding. >> that's why your shoulders hurt from carrying the cable industry, right? >> exactly. after soaring over 30% to begin the year, crude has dropped about 8% in the second half. but the commodity will continue to move higher, our next guest believes. ed morris who is bullish on commodities in 2017. ed, welcome. >> good to be here again. >> high are we not going to have a july selloff yet again? >> i think this year is different for a lot of reasons.

the supply is tighter. we are drawing inventories. but there's not a lot of new incremental supply to come into the market. we had iran increasing by 800,000 barrels a day. there's not much more to put in the market. and meanwhile while capital spending is going down, that's what brings markets to balance. >> do you have to operate under the assumption that the dollar will have a lid kept on it. >> so far the post brexit dollar against emerging market currencies is stronger. and certain the drag on most is very strong. so i say it's more of a dollar inflection point, temporary probably than it is the underlying supply and demand balance. >> what would surprise the market? what from a supply perspective could we see that might be

unexpected? >> there are a couple of things on the supply side that are bearish that are unexpected and a few things that are bullish that are unexpected. we have a chunk of oil in what's called the neutral zone owned by saudi arabia and kuwait. it shut down because of the family and tribal dispute. so that's it in terms of potentially bearish news. meanwhile we live in a world with a surprisingly small amount of -- >> i have to interrupt you quickly because we are getting numbers from goldman sachs hitting the tape. it looks like a big beat. $3.72 is the eps. i believe it was $3 per share expected. stock is up about 1.3% in the

premarket trading. net revenue, $7.93 billion. and annualized return on average shareholder equity 8.7%. that is a closely watched metric for holders of these bank stocks. certainly goldman is going to see a lot of the trends we've seen hitting other banks. namely a big trading boost because of the brexit trade during the quarter. >> makes that point saying that despite the uncertainty, that was right in there at the top of the release. net revenues did you say on invest banking? that was 11% lower than the second quarter back in 2015. but 22% higher than the first quarter in 2016. >> of course gold man is one of the market leaders in advising on mergers and upside writing ipos. that activity ground to a halt in the quarter.

and saying underwriting revenues were $993 million. that was 17% lower from the second quarter of 2015 because of significantly lower activity industrywide. of course you had asset-backed activity. but also had rates coming down. a lot of companies that wanted to refie. >> worth also noting they brought their operating expenses down in the second quarter. that's 26% lower than the second quarter back in 2015. they brought their total staff. a reshuffle of what's going on there. >> one thing analysts had pointed out before this hit, goldman could be susceptible to investing and lending and that that could be a more troublesome detail for the company. investing and lending, revenues for $1.11 billion.

that was 38% lower from the year prior. and certainly that decrease, even one of that magnitude, was largely expected but interesting to see that that did come in here. >> when do they start talking about their new retail business? think we're going to start hearing about that ever? >> potentially once they get it off the ground. will be interesting to see what inning they are in that. certainly we're going to keep going through the goldman report here. ed, before we let you go. i'm curious. we've heard a lot of these banks start talking about the strength of energy companies, the low interest rates we're allowing companies to refinance to shore up their capital position. that the price of oil has stabilized. what's the corporate outlook for oil where it is now? >> well, it's pretty good. the other aspect of it you didn't mention is this has been an incredibly deflationary environment. so the costs of extraction have gone down. and the shale was done 30%. they were done 20% in deep

water. probably another 30% to go in deep water. another 15% to go on the shale place in the u.s. so there are aspects of it that make it easier to do more with less money. >> we appreciate your time this morning. thanks for coming in. ed morse. coming up, the future of health and medicine with united therapeutics ceo and guest host peter diamandis founder of xprize. here's a few highlights from the kickoff of the rnc in cleveland. we will be right back. >> the race will be hard fought all the way to november. there will be good times and hard times and unexpected turns. it would not be a trump contest without excitement and drama. >> donald trump is everything hillary clinton is not. and when it comes to the threat posed by radical islamic terrorism, he will not hesitate

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welcome back to "squawk box." take a look at where the futures are trading right now. dow is currently having an implied open of up four points. that's certainly better than the negative territory we had been in earlier this morning. the s&p would open down by five and the nasdaq down by 15. of course we've been getting earnings throughout the morning. most recently goldman sachs which we want to give another check on because it is close to the flatline. it's down just fractionally. but it has been up about 1.3% on earnings. the bottom line was a very easy beat. $3.72 versus $3 a share. revenue and investment banking beat institutional client services. net revenue there came in just light. investing in lending was better

than expected though down about 38% from last year. andrew, you were talking about comments about the pipeline being thin. >> as an m&a deal guy, they were talking about the transaction backlog which effectively means deal pipeline. decreased compared with both the end of the first quarter and the end of the second quarter 2015. so for those of you expecting an m&a boom, goldman sachs has been at the top end of advisers for at least a decade now if not more. this is indicative, though, perhaps of what's going on in the corporate board room which means perhaps they pressed the pause button for now. >> compensation is lightly above. non-compensation expense is pretty much in line. fixed income currencies and commodities, that's the space people have been watching because of the flurry of activity around the brexit vote. that revenue up 20%.

you're seeing goldman sachs still at this hour just below the flat line. >> yep. initially traded up. not now. must be that compensation expense, andrew. >> always the compensation -- you got to watch that ratio. >> i want to see that taylor swift ratio. did you see that? $170 million for a year. >> kardashian -- >> kim made 50. doing what? the kimojis? let's bring back our guest peter diamandis. also rakine. now that we've got sirius xm squared away. it's hard to imagine -- you really are a renaissance woman to go from sirius to this.

but initially it had to do with your daughter. you started a biotech company to try and help her. >> yes. i was happily at sirius. there was no medicines approved. now several years later i'm happy our company has got four medicines approved by the commission the fda. thousands of patients and my daughter thankfully is alive and healthy and working at our company. >> do you want to start with therapeutics for the prospect of the company as a whole or just overall sort of xprize type of futuristic -- >> well, about 99% of what i know is about united therapeuticed. >> then we'll talk about unmanned helicopters. >> i'd like to fly helicopters too. >> i thought you want to fly without pilots. >> well, we want to fly the helicopters with organs to save

people's lives. one of the part in the pipeline is replacement korgans. >> but these are not going to be autonomous? >> ultimately i believe they will. the next step will be the self-driving helicopter. >> there's a million people who die a year due to in stage organ failure. artificial organs that can save lives per year. >> exactly. we're proud of our partnership to manufacture organs in a way that anybody could have a kidney, a lung, a heart on demand when they needed it. >> so, i mean, united therapeutics in terms of the --

the artificial organs could dwarf that potential. >> i think you have to with the company look ahead. you've got to look around the corner. today our business is all about pharmaceuticals. but in the 2020s, i think you're going to see a transition just like there was from small molecules. in the 2020s it's going to regenerative medicine, tissues, beyond cell therapy and whole organs. so our company is well positioned. we own the u.s. arm of what was the dolly the sheep company, the roslin institute. and i think we're well positioned in 2020s -- >> they're not monolith. you're not going to create a brain, probably. what's the easiest one to do? kidney? >> i think kidney is the low hanging fruit here. so -- >> i can't imagine a liver. i can't imagine a -- lungs? >> all of them are doable.

and have already been done and tested in baboons which is a model for the human. so we have hearts at the nih now our hearts last over two years in the baboons. so hearts are doing very well. >> still on target for 2 billion by the end of this decade in revenues? >> for our pharmaceutical business we just crested $1.5 billion. and the pharmaceuticals are growing. >> do you use stem cells from the recipient or just try to overcome the rejection? >> so there are multiple ways to go. one way to go is to overcome the rejection by modifying the pig genome so it will produce organs that are human friendly much as in the past decade heart valves help people. now we've advanced it to the whole corgan. but the next step we're also working on is to create what's called an inducible plueripotent

cell. and that work is going on today. >> it's interesting to hear you talk about by the end of this 2020. how hard is it to get people excited about a technology a decade away? >> fortunately for us we have the blessing of having a robust pharmaceutical program. so the investors are very excited about our pharmaceutical business which revenues and profits have been growing 11 of the past 12 years and past several years. so they're very excited about our current pharmaceuticals. there are far sided investors that say, hey, i have a chance to get in on the -- you know, the amgen before it was amgen. or get on google before it was big. >> really early. >> we definitely are early -- >> you're very early. and amgen was just a molecule.

that's one -- and it did. it went from $1 a share to $1,000 a share. >> it was the first biologic. >> i know. how far off are you talking about a transplantable organ that would be commercially available? at least a decade, right? >> i think it's less than a decade. we'll have the first organs in patients before the end of this decade. before the end of 2019. so i would say, you know, fda approvable around 2023. >> you're working with the best innovators in the world. working on even 3d printed organs? >> well 3d printed scaffold for the organ which is kind of the skeleton for the organ. then we cellularize that. so there's no rejection whatsoever. >> we got to go. you want to weigh in on the election, ten seconds? >> no. >> no? smart woman. >> easy out. >> for purposes of innovation,

you have a candidate? >> i really -- i focus on our shareholders, our company. my candidate is science. >> fair answer. >> thank you. appreciate it. you're sticking around. >> i am. coming up, we've got much more from our guest host xprize founder peter diamandis. we just heard from goldman sachs in the last 30 minutes. we've got street reaction in just a moment when "squawk box" returns. that no one would ever notice me. but i knew i could be more. that one day, i would make people smile. [woman speaking indistinctly]

coming up, your money, your

vote. the republican national convention in full swing and not without controversy. more on the buzz from cleveland in just a bit. plus dr. craig venter is our special guest. we'll talk innovation and science when "squawk box" comes right back. ♪ the first stock index was created over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks.

earnings central triple play. goldman sachs, johnson & johnson, and united health all out with quarterly results. the reactions straight ahead. controversy in cleveland. fiery speeches and plagiarism accusations. >> that your word is your bond. that you do what you say you're going to do. >> we'll tell you what to expect from the second day. and the race to space is on. >> loaded for speed! go! >> but forget the rocketship. asteroids could be the key to unlocking the economy. a disrupter that has landed four missions on mars. the final hour of "squawk box" begins right now. ♪ live from the most powerful

city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with kayla tausche and andrew ross sorkin. the futures are down single digits now. the dow is actually up less than a point. the s&p is down five, indicated down five. and the nasdaq down 17. markets at this hour have been marked. they had been down i think all of them over 1%. and now a couple of them are down less than 1%. >> earnings and more earnings. goldman sachs beating on the top and bottom lines. the stock had been up as much as 1.6%. now it is back in positive territory. some light revenues for equity

fixed income, currencies, up 20%. some comments about a transaction backlog decreasing getting attention this morning. certainly follows the trend we've seen. it will be interesting to see from goldman executives. also talk to a banking analyst in just a minute. johnson & johnson revenues beating the street. the company also raising its full year forecast. the stock is up about 2.5%. and the third dow component of the morning. united health. the insurer topping forecasts driven by strength in its pharmacy benefit management business. and its tech and consulting divisions. that stock up about 0.75%. monsanto -- can we show that quick? this news just coming out. monsanto saying it views buyers reviewed proposal insufficient

to have deal certainty. those two had been talking for quite some time. there were reports they were closer to the deal, to a confidentiality pact to move in earnest forward. monsanto saying they remain open to continued and constructive conversations with bayer. and the bid on the table at least as we last knew was about $125 a share. netflix we talked about before shares getting crushed following weaker than expected growth. and cutting on the stock this morning. we're also watching shares of yahoo this morning. suggested earnings falling short a penny. everybody on the call last night waiting for marissa mayer to say something. she did not say.

she said up front at the top of the call that they were nopt going to say. they were still working on that. we should get details about where all that stands in the next couple of days. despite a 17th straight quarter of revenue declines. starting to show signs of paying off. we talked about how that stock has been one of the year winners. >> joining us on the "squawk box" news line, marty mosby. marty, this is now the fourth or the fifth bank that we've seen reports so far for the second quarter. what stands out to you? >> well, what we're seeing is the rebound and income that we expected. we're going to look at about a 10% increase for the group as a

whole. so what we're seeing here is a 25% beat on eps driven by the revenues. >> the debt side was blockbuster. the equity side was very, very weak. do you think that will continue -- those two sides of the coin will continue to balance themselves out for the bank? >> well, i think the equity side was affected more by the uncertainty that you saw with brexit or even when you get in the first quarter, the hangover of what was happening with people thinking of the uncertainty of a possible recession or a downturn in economic growth. so that was still kind of working its way through. i think we'll see that bounce back in the second half of the year. we saw currencies. we saw fixed income because rates were so low that people were taking advantage of that. it really was just a dynamic in the market. we don't think the equities will be -- kind of equal out moving forward. >> trying to manage expectations.

the core bread and butter for this bank. >> it is. investment banking is, again, affected by the uncertainties. as you start to see some of that uncertainty stabilize. we'll see that pipeline starting to bounce back. but you had things happening in the second half of the year. if you look at the revenue, producing $10 billion of revenue in the last five quarters. they're still below $8 billion. they're on the lower end of their revenue range. if you look at the comp ratio, it's high in the first half of the year, goes down in the second half. if you take those two things into consideration, what we would expect is moving from here back above $4 per earnings per share. and the 7% in the first quarter back towards 9% to 10%.

>> trying to figure out how they're going to be reading this quarter stock just went positive again. so we'll see how it opens this morning. but marty, we appreciate your time today. >> thanks for having me. >> marty mosby from vining sparks. now to the broader markets. there's a chance the s&p 500 could make a new high each day in a week for the first time since 1998. mike santo lee joins us now. hey, mike. >> hey, joe. i don't think that's one of the more significant ones. on the surface a lot of differences between the market's mood and trajectory we've had to this point. i think it makes sense to look at some of the echoes of that year, 1998. both today's market and that market, entering the eighth year of a bull market that started having to absorb global shocks. u.s. market now and then were seen as a safe haven. back in the late '90s people questioned why you would invest in foreign stocks.

stock valuation -- official gap earnings. if you care about those, that's something something in the market. i think the significant factor for the outlook right now for the market is the fed back then was easier, was more stimlative than the u.s. economy seemed to be because they were listening to the global fears. that arguably is what's going on right now while the u.s. economy looks a little bit better. i'm not calling for a rerun of the 1999 bubble. i don't think we have the inputs for anything like that. but it is a sign of how markets get at this point where they just start going up based on, okay, it's a little bit better and there's a lot of liquidity and we're going to try to get back in. >> the fc call it not so much a sign of risk on as much as nothing else on. >> while we've excluded every other possibility, i also see every reason to get back to stocks right now for different camps. there's the dividend camp. you have that working for you.

there's the earnings you're going to get better camp. there's also the feds are going to be our friend forever. all these things seem to be working in favor. any one of those things could fall away at a certain point. but it seems like right now people are finding reasons to like a level they hated a few months ago. >> two years ago they were ready to keep going up. they consolidate for two years and have a rolling correction. and take all that time with some fundamentals catching up with stock prices. then we finally get to the point it goes to new highs. ready to embrace it two years ago. not now. it's huge nature. >> it is. >> and by the way, there's a fourth reason. that's the technical guys that say we got a breakout. >> how about this? it might be better to listen to those guys than fundamentalists that only tell us what we know. >> it's possible. although a lot of those guys hated this market in february. they're saying key levels were broke. >> with technicals that can

change quickly. >> yes. technicians basically say i'm telling you what the market should do. when we return, a disrupter tackling the ultimate disease, aging, which happens to some people. i haven't seen it yet. we'll tell you what it means. i've been here 25 years. apparently it hits everyone. the future of health care -- all about the hair though. as we head to break, here's a check of netflix. stock falling sharply on weaker than expected subscriber growth. those new glasses? they are. do i look smarter? yeah, a little. you're making money now, are you investing? well, i've been doing some research. let me introduce you to our broker. how much does he charge? i don't know. okay. uh, do you get your fees back if you're not happy? (dad laughs) wow, you're laughing. that's not the way the world works. well, the world's changing. are you asking enough questions

about the way your wealth is managed? wealth management, at charles schwab. [music] jess: hey look, it's those guys. shawn: look at those pearly whites, man. [music] bud: whoa, cute! shawn: shut-up. jess: are you good to drive? shawn: i'm fine. [music] [police siren] jess: how many did you have? shawn: i should be fine. jess: you should be? officer: sir, go ahead and step out of the vehicle for me. shawn: yes, sir. bud: see ya, buddy. today, shawn's got a hearing, we'll see how it goes. good luck! so, it turns out buzzed driving and drunk driving, they're the same thing and it costs around $10,000.

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red wine. that's what i keep trying. stock watch. philip morris. the company says it was impacted by shipment declines in certain markets. expects growth to be skewed towards the second half of the year and the fourth quarter in particular. chipotle upgraded to outperform. the firm sees better customer traffic as well as future benefits from the chain loyalty program. in other corporate news, three u.s. states are expected

to announce new lawsuits against volkswagen today tied in the automaker's diesel emissions scan pl maryland, new york, massachusetts are seeking civil penalties. last month 44 states reached a partial settlement with vw worth more than $600 million to solve existing and potential customer claims. separately the head of volkswagen u.s. saying just this morning that the company will build electric cars in north america by 2020. volkswagen is considering several sites including tennessee for the production of those electric cars. the stock is down about 2% though it looks like that's the close from yesterday and not this morning. continuing our conversation this morning on the future of technology and the quest we all want to live a little bit longer if not joe wants to live forever. craig venter is here part of human longevity. also known as one of the first

scientists to sequence the human genome. good morning. >> good morning. >> how close are we or how far are we away? >> we're learning that we're a dna software driven species and software determines everything about your life. including how long you're going to live. if you're a male between 30 and 74, 30% of you will not reach the age of 74. some of that's due to cancer and heart disease. but now that we've sequenced over 30,000 genomes, we're doing one on average every 15 minutes. we're finding there's errors in the genetic code that disappear out of the population at different ages. in other words, people with those errors die. >> so the question is, though, given mutuals like crisper and other things like that, are you going to be able to rewrite peoples' genetic code that are currently alive? doing this effectively to create designer babies that will live

longer later? >> i think that's the same fantasy we had about 20 years ago with gene therapy. of how do you get the right changes in different cells. no. i think all these targets we're finding are going to be pharmaceutical targets of how to change them so that the people with those genetic changes don't die. it's one of the most surprising findings we found. just looking at the whole genome and billions of data points just certain markers disappear early on from the population. and they're all heterozygotes. just one gene is enough to help you have a larger life span. >> people live old enough to put them back in the gene pool. >> they do. because that happens early on. >> so that doesn't help. so we cure cancer and heart disease, we're still going to die of old age. and what have you found out with all the great work you've done

over the past 20 years, what's the most novel or a-ha moment of aging. >> if you asked me 20 years ago asking about the human genome, i would have said you get sequenced once and that's good for the rest of your life. i think the biggest surprise we found early on is that it's changing every day. we can actually predict your age from sequencing your genomes. we're exposed to radiation, chemicals. so we're fighting kind of a losing battle of just changes across the entire code. >> have you completely gotten rid of all the superifilous -- >> we did that in a simple bacteria.

the genome rather than does do really important stuff. >> craig, talk a little bit about what you're doing with revolutionizing the health care. >> we're combining the genome we the test of mri imaging, ct scanning and for people that are coming in, everybody that comes in they come in healthy. but 40% of them were finding major disease. the difference is we're finding cancer at stage zero, stage one, sometimes stage two. where it's totally treatable. in contrast to what we get through a comprehensive cancer program, we have three women right now in their 30s with stage four colon cancer. so it's really satisfying when we discover it before its spread. it's 100% treatable versus what medicine does now.

you detect it once you have symptoms. >> you walk into the hospital saying my god i've got this. but it didn't happen that morning. it's been going on for months or years. >> we get 1.3 million new people with cancer a year. some had it for years. >> you find it's a -- >> it's a combination of sequencing the mri imaging and tests we're doing. >> for each different cancer, there's a different marker for that first mutation that leads down the road. >> some of us have genetic risk for cancer. cancer is probably 50% directly inherited cancer. and the rest is from environmental changes. but we're making discoveries in heart disease. i mean, things across the board so it's the most comprehensive physical you can get. and thus far everything we found has been actionable. it's been treatable. >> what's the cost of that? >> it's not cheap. it's $25,000. >> and a day in la jolla. >> and a full day in la jolla.

and it generates data. >> which by the way you have a machine learning team there that does the analysis of that data in a way no human doctor could do. >> you look out five years from now, dna sequencing is down to about $1,000 now. >> when you do it at the high level we have. so it's sort of a trivial cost compared to the rest. >> on the whole, how much more expensive is it to live much longer than we do as a society currently? >> when you look at the cost of medical care which you guys have covered going up double digits forever. if we convert it into a preventive medicine program, these people we're finding with stage zero, stage one cancer, one gentlemen in mid-50s came in. he was going to go on a european vacation the next day. we found a large tumor under his breastbone. a week later he had it surgically removed using the mri

data we had. as far as he knew, he had cancer for a week. a week later he was cancer free. >> how many different cancers are you able to detect with this -- there's some you aren't able to detect. >> we wouldn't detect blood cancers with the techniques. >> with the dna techniques, how many cancers do you think you have cover snd how many are there? >> we predict cancer risk, not absolute cancer. >> the mri you see the mass. >> that's right. we combine the dna with the images. if you have cancer, we sequence the dna in the tumor. we isolate the t-cells from the tumor. and we can get those back to the patient we can develop cancer specific vaccines for that patient. >> given the cost if you can afrtd it, at what age would crow do this test? >> so, you can't do it too young

because somebody has to be able to tolerate an hour in the mri machine. young kids aren't great at that. we predict your face from your genome roughly age 18. so i think if you come in probably early 20s, early 30s, it creates a baseline for you for the rest of your life. >> and if you look out five years from now, this $25,000 cost comes down to? >> well, the cost is imaging. it's the cost of all the technicians. so it's not clear how much -- >> so we might be -- it doesn't become much more scapable. >> sequencing will be next to free in the future. it's everything else. these are not cheap machines. but we have a version of it that we think we can do for less than a few thousand dollars. the two most important things are getting the genome sequence combined with mri imaging. with the new mri imaging we can

detect and diagnose cancers without any contrast media at all. >> real quick swb there any argument to be made that people are going to go and do surgeries that they don't necessarily need to do as a function of this? >> so that's the myth from like 20 years ago when ct scans and things first came out o. now with the new imaging, we can detect prostate cancer from the image versus benign prostate growth. so the technology has changed to really eliminate that problem. >> if people want to learn more, where do they go? >> human longevity.com or the health nucleus.com. come spend a nice day in la jolla. >> very cool. thank you. pretty awesome. >> it's amazing. we're going from a world where health care sort of retrospective. you get it at end stage.

and now where it's preventive. >> we appreciate you bringing this conversation to us. thank you, both. when we come back on "squawk box," a red flag for the housing market in the hamptons. luxury home sales are falling sharply and we'll tell you by how much.

♪

coming up, breaking economic news. and we'll head to cleveland after a night of chaos set in on the floor. take a look at u.s. equity futures now back but just a little.

we're just seconds away from june housing starts this morning. before we hit those numbers, do you want to do it? the futures now looking down. but they might switch up on us. steve leisman is here. >> looks good. u.s. june housing starts 1.18 which would be beating expectation. may might have been revised down. back me up in the back there. i'm not used to doing this. this is rick's job and he does a great job at it, i'd like to say. looks like may was revised. so a little -- so it's a much bigger percentage increase. let me look at all the important here. and i'm looking for permits 1.15

versus 1.15 consensus. and 1.136 in may. two good numbers in housing. if i had a second here while rick was talking and bifing the bond numbers, i would be looking at the table to see where it was good and where it was bad. i've got it now. it looks like you had up -- i'm sure that's a rebound from a negative number in may. down 5% in the midwest. down 3% in the south. up 17% in the west. now i would look at the split between single family and multiple that looks like single family was up pretty good. multiple up as well. so both of them were up. so across the board, good housing numbers. they took a bit of a tonic to the disappointment we had in the home builder sentiment.

been addition to the economy. we did see some weakness in the june construction. one of the things we're looking at right now, if you see the mortgage rates, it has come down, it has paid for people to go back and refie. we are still running -- you have to say this every time. during the -- just before the financial crisis we were doing 2.2 million units at an annual rate. now we're doing 1.18 million. so there are a million fewer homes being built than at the bubble. so who knows what the right level was. we're still running four or 500,000 homes below what is any reasonable average of where we should be. this speaks to a huge social issue of get ready for this, joe, because this is probably going to happen to you. kids living on parents' couches. and i guess they're getting married. >> wow. >> and who knows. even having children and living on the couches. >> who knows.

>> i mean, there's an emerging -- >> futon. >> there's an emerging literature about this group of people and what's going on and when will they ever move out. >> i know. both my kids -- one's 14 and one's 16. they're still in the house. >> they could be out working in a textile mill at no minimum wage. >> i was trying to get them a job, multi-generational homes. >> can i ask you a question about the literature with health care right now? >> i might answer. >> do your best. robert gordon who's a big skeptic says we're not building the things that change the world as they used to. they're not the same as running water, the automobile, and even the airplane. and he says all this computer stuff, it's not doing what it did for us in the past. >> he's wrong. >> the latest incarnation of -- >> leave that aside. when he does show a chart and looks something like this.

it's the cost of adding a year of life. and it goes along, it goes up and then it skyrockets. and i think the number now is over $100,000. that to add an incremental year of life, we're bumping up against a cost basis here where to add that extra year, it becomes economically prohibitive. >> two points. imagine you're at the peak of your career, you're generating revenue and forced to retire. so increasing the human life span is going to have a huge economic impact on gdp of a nation. the second thing -- >> can i interrupt you there? that's really an amazing fact. we have completely misunderestimated aging in this country when it comes -- yes, i know. the idea that old people are not efficient is wrong and they're living longer and working better. so that's another thing. i'm sorry. go on. the other point. >> the other thing is in the next five years we're going from

about 1.8 billion people connected online in 2010 to 5 billion, maybe 8 billion people if google loon and viasat and facebook and qualcomm are connecting the globe. we have 5 billion new consumers coming online around the world. right? they're coming online not like you and i did on aol. >> i'm skeptical how you're bringing this back to health care but i'm running with you. >> it's an increased rate of innovation. increased rate of discovery around the world. >> because of connectivity. so it's the device -- i'm going back to the device you talked about. it's going to allow people to be more creative and productive globally. >> bet back to the notion it costs so much to bump up a year of life. >> i think that i'm not sure where he gets that number from, but adding year of life if you're ill, sure. but if you're health y i, then

you're productive and adding to society. >> thanks. turning to politics now. the veep states are officially over. chris christie speaking out on the "today" show this morning. >> truth is that i never expected to be chosen. the fact is that over the course of my 14-year relationship with donald, he knows i'm going to be there for him and he's be there for me over the course of our relationship. listen, matt. i don't want to sugar coat it. of course you're disappointed. if you compete for something like i did, you'd like to be picked. i wasn't. you go to bed and wake up the next morning and get on with your day. >> and donald trump is expected to officially win his party's nomination at the republican national convention today. joining us now from the convention, former oklahoma governor keating. good to see you. >> thanks. >> did you endorse trump and when? >> my twin brother gave me a

visa to come. he's the chairman of the campaign in oklahoma. i went through other candidates. certainly i'm going to vote for donald trump. the alternative is no good for me or my state. this is quiet on the western front. it will be alive and kicking this evening and tomorrow. but i'm here actually to talk about affordable housing and affordable rental housing for the foundation. we're focusing on those things that are really important that obviously there's a lot of noise and a lot of angst, a lot of activity here coming up. it's going to be fun. >> so your brother -- you're somewhere between your brother and a never trumper. >> no, well, i would say this, joe. i started off with jeb. then it was scott. then i voted in the oklahoma primary for john kasich. but trump's our guy. and when you consider the alternative, there isn't an alternative in my opinion. and i think as this convention

evolves and unfolds, there'll be more and more people that will have a higher comfort level for him. but obviously for a number of people it's been a tough slog. but we'll see. i thought last night was really handled very well. we will wait and see. but i'm going to vote for trump. >> so you agree about securing our southern borders. you think maybe even a wall -- maybe it's a figtive wall. but one way or another, you think we need to control immigration, make it legal immigration into this country. have i got that right? you're with trump on that? >> well, joe, in my past i've supervised a big chunk of the law enforcement establish lt, the immigration service border patrol spoke to me. we were even contemplating a ditch, not a wall, because we have to take control of our borders. particularly in a time now with

terrorism and people slipping over with whatever they've got. i think the debate is healthy. and i think people want to come to the united states and should be able to come to the united states during a regular process. but just to open your borders and be flooded you have no earthly notion who they are, we've been debating it since the '86 act, if you remember. the immigration reform act. we really haven't done anything about it. >> so you're pretty hard core on immigration. why were you a bush supporter and not a trump supporter right away? >> i knew jeb very well. i thought those governors who understand the governors, and jeb bush was a good governor. jeb's a fine guy. so we'll leave it at that. but the debate will begin and must begin because we have a lot of problems with respect to unrestricted immigration. >> governor, question for you.

this goes -- it's a banking question given your former role. republican party has no adopted a policy platform that includes reinstate iing glass steagall. do you agree with that? >> i think there should be a debate on the subject of glass steagall to erect a higher wall or remove a wall entirely. that's policy to debate. but i want to know what are the asset sizes on the institutions. and are we going to cut our nose off to spite our face in some of these arenas? i don't know. both democrats and republicans abdicate reinstating glass-steagall. >> the democrats want to what they say fix or modernize dodd-frank. i don't believe hillary clinton

has said she wants to put that back. in fact, i think she said the opposite. am i wrong? >> no, i saw this morning -- i was doing a little preliminary work before our conversation here and i saw a statement that the democrats didn't want to reinstate glass-steagall. >> but like dodd-frank, we've been killed. basel 3, the bell jgians tellin what to do. democrats and republicans need to come together under the new president's leadership and resolve them. because we simply can't tread water. >> governor, you finally ended up with kasich, you said. he's not going to be there. it's in ohio. he signed the pledge. does he take your phone calls? does he -- is he, you know, somewhere where he's not taking calls? has anyone tried to talk to him? >> i really have no idea about that. but if you're the host governor,

you ought to show up. i believe that. certainly he's disappointed and has some significant disagreements with our nominee, but the host governor should show up. >> up in cleveland, up in ohio. like a petulant little child or something. it's unbelievable. anyway -- and i'm from ohio. embarrassed to admit. thank you, governor. appreciate it. >> thank you, joe. when we return, the race to space but forget the rocketships. asteroids could be the key to unlocking the solar system. we've got a pioneer in the asteroid mining space just ahead that's going to be joining us here on cnbc, first in business worldwide. oh watson, your japanese is very good. thank you. (speaking japanese) exactly. i can understand nuance, context and idiom in seven languages

to help companies all over the world with everything from retail solutions, to banking, to cyber security. (speaking japanese)

forget landing on mars. the future of space exploration could include mining asteroids for natural resources to use back on earth. joining us now chris luwiki. and our guest host continues to be peter diamandis. what would be the most valuable thing that we don't have here that we're in short supply of that might be on asteroids or you don't know? >> the potential is greater than that. planetary resources was founded to create an abundance of materials we'd need.

we've been living on the earth with all the resources and we'll continue to need that in space. and we're creating technology to help us measure those resources, characterize how many there are. and we're deploying them in earth orbit. >> it's not necessarily mining. from space looking at how much of something we have left whether it's oil or whether it's fields. what about other minerals? can you -- rare earth metals, can you get an idea of how much is left in the earth's crust from space? >> what we're doing is improving on taking a picture from space. >> there's florida. >> yeah. but we have the ability to look at florida and say there's toxic algae in the water supply. and we can look at the spectral supply of that measurement and be able to monitor and manage something that previously was unknowable or unseen. >> how do you do that with oil

fields? you can see into the oil field from space? >> well, there's a lot of different signals that we help advise the systems. exploration we're using termographic signals. in the financial world we can actually track and monitor not only global supply and global storage, but global production by looking at the signatures you get when a machine is on or a motor is run pg. >> right now all the satellites are looking at the earth during the day. the light hits the earth and it goes up to image. the sensors, if you have a closed top oil tank it's been heated during the day. at night if it's full of oil, it cools off slowly. we look at the earth at night and it's like a thermal inertia. so chris is here talking to the hedge fund managers about can we predict how much oil there is, new product around the world. or yields of crops.

>> in places you can't easily get access to. a lot of the most secretive and kind of opaque information is in all of those countries around the world -- >> iran, iraq, china. >> exactly. and from space, of course, we can look at anything and everything all at once. that's the power of this. >> the makeup of a asteroid, do you know what it is? i'm getting back to your original idea. >> certainly. nasa has done a lot of great work exploring the solar system. we know from missions i helped run and from meteorites -- >> how would you mine? it wouldn't be manned. when is -- we just heard we're going to have new organs by 2019. are you going to mine an asteroid by 2019? >> we're going to visit an asteroid by the end of this decade. we're getting support from not only the united states government in passing a law last year, but also the government of luxembourg has taken an interest in this new industry. >> wow.

>> luxembourg. >> then it's going to happen. >> they've committed a core of billion dollars support. president obama signed into law last year an asteroid act that allows private ownership of materials taken off asteroids. the primary project is for fuel. hydrogen and oxygen. the shuttle main engines use those. there's a market place for water and fuel in orbit right now. >> do you know which asteroid you're going to mine yet? >> there are millions in the solar system. we've got our favorite list down to about ten. they are near-earth asteroids. they pass close to the earth on a yearly basis. few people know these are the easiest places to get into once you get into space. this is how we're going to settle the solar system and move our industry out into space and turn the current industry into something bigger. >> wow. increase the size of the pie. >> could you take him with you and leave him up there? >> everything cea's a possibili.

>> okay. thank you. when we return, jim cramer is going to join us from the stock exchange. we're going to get his idea of the biggest movers. back in a moment. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.

make sure you check this out, season two of cnbc's "binge," focuses on the stars and creators of shows. carl quintanilla spoke to the ceo about the next big changer in video stream. >> it's not necessarily a horse race anymore because it's the -- a broad fill, so it's not amazo anymore. it's the dark horse we haven't seen yet, that's what's going to really change the game. >> don't miss "binge," season two. apple, hulu, and you tube, the only way to get it. you have to stream it over the top. >> you can get it on cnbc.com, too. >> you can't just watch it on the air. it's not like you can tune in at a specific time. >> are you guys in the show? >> we are not in the show.

>> but carl's in the show. >> okay. >> argue with the man. if we're not in it, he's not going to watch it. thank you. let's get down to the new york stock exchange. jim cramer joins us now. we are -- i didn't notice, jim, did you see ibm sneak back from one 116? >> i thought a lot of people might call it a breakout. cognitive businesses started doing better, finally are ahead of plan. but there will be other people, including software businesses that aren't just that good. it's a real tug of war. the stock has moved up a lot. it wouldn't surprise me if the stock does nothing. not a bad quarter, not a good quarter. >> how about gold january mman? >> we need to know more. gold janua go goldman has to give you color. people were trading gold

januarimgoldman on the quarter. i saw the stock up big, and down. i need to hear more on that one. at ibm, we have everything from last night, and i do think people are going to say not as bad as we thought. goldman, i think the bar was set very high by the previous companies reported in that group, wow, they've done really well. i wish the press would recognize how well they did. >> ibm up 34% since the diamond bottom. >> netflix is baffling. >> ibm, impressive. >> netflix is baffling. it just -- not really explainable. it's inexplicable. the un-grandfathered -- new world that you can't spell check, always wary of those. this is just a bad quarter. there's -- sure, it was a bad quarter. it's their first line. >> and you haven't talked about yahoo, have you? >> yahoo is just in temporary bands. there's nothing going on until

they sell the company. it was a quarter that was just okay. i mean -- >> do you sell the stock? what do you do? >> you've got to wait. she made a case the intellectual property will be better and a lot of stuff has been written down already that you may want to buy. she did not make a compelling case that this company it's undercurrent of all of these companies, the same thing. i think facebook and alpha book are e v are eviciriting them. it should be the subject of what happened innia yahoo. they have a lot of nice cash. they fired a lot of people, but they got beat. i mean, it's okay. if we were in sports we would say, they didn't make the playoffs. >> i cannot believe -- you love talking about yahoo. >> i'm just waiting. >> it feels like the five stages

of grief. >> it is now. >> finally acceptance. >> right, acceptance. >> we'll see when they get sold. can a toothpaste do everything well?

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we want to thank peter deamandes. somewhere between fiction -- >> there is all real stuff. >> we're creating the future. >> a twinkle in time. >> how did i do with my job interview? did i get the gig? >> i that what this is? >> i am going, there's no question about it. >> we've got to go. nice to see you. >> not that -- any way, make sure you join us, "squawk on the street" is next. good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla, with jim cramer, the earnings heavy weights, goldman, j and j, supers are weak as the dow tries for eight gains in a row. europe's sentiment misses badly, and the ten ye