get the rest. tonight peter thiel, going to be interested to hear what he has to say. >> had him on before. >> he's going to get hammered by all the guys. >> in silicon valley think it's crazy. >> supposedly love free enterprise but love big government. i don't see any -- >> it's a new breed of democrat. >> what he has to say. >> and everybody else. ivanka. >> watch it tonight but join us tomorrow, "squawk on the street" begins right now. is. good morning. welcome to "squawk on the street." i'm david faber along with jim cramer. we are live from the new york stock exchange. carl quintanilla is live from the republican national convention in cleveland. where we saw some fireworks again last night and he's going to bring us the latest in just a moment. let's give you a look at futures this morning as we get started here on shows. as you can see we're looking for

a slightly lower open. european markets have, well, we've been hearing from the ecb although not much action, there it is, at least the equity markets at this point lower, though fractionally so you have to say. how is the 10-year note yield doing and crude oil, there's a look. 1.6, 1.6. wow. things are getting crazy there. crazy. wti you can see is right around 45, 50 or so this morning. let's get to our road map. it starts with day four of the republican national convention in cleveland. ted cruz was booed, mike pence delivered his speech, and they are gearing up for trump's speech tonight. we will go there live. elon musk is revealing his master plan for tesla. part two, by the way. how realistic are his big-time ambitions for this company? qualcomm, intel, ebay, southwest, and more, all are on the move this morning after earnings. in fact, i mean it goes on and

on biogen, travelers, american express. we will try to get to all of them or as many as we can, give you the numbers you need to know. first to carl at that rnc in cleveland. good morning, carl. >> hey, david, good morning to you guys. fireworks is absolutely right. last night was intended to be mike pence's introduction to voters, but obviously it's ted cruz who is getting the headlines today. he entered here last night to a standing ovation led largely by the delegation of texas where me won, only to be booed off the stage when it became increasingly clear he was not going to endorse the man he once called a snivling coward. take a listen. >> if you love our country, and love your children as much as i know that you do, stand and speak and vote your conscience, vote for candidates up and down the ticket, who you trust to defend our freedom and to be faithful to the constitution.

>> hard to describe what it was like here in the arena to hear the boos of that magnitude. chris christie called it an angry and selfish speech and ann coulter a few moments ago said it was political suicide. newt gingrich had to say to cover and to vote your conviction is to vote for donald trump and largely overshadowed was wa was a very effective, strong, funny and self-deprecating speech by mike pence. >> hillary clinton wants a better title and i would too if i was already america's secretary of the status quo. when donald trump becomes president of the united states of america, the change will be, huge. >> reporter: guys, it's often said that at a convention the only speech that matters is the one by the nominee and that's exactly what we're going to get tonight. donald trump in prime time introduced by ivanka trump. we've heard discussion about what peter thiel may say when he speaks. once again on day four, we're

talking about things like ted cruz, like this rather awkward air kiss between pence and trump last night. that's overshadowing any discussion of what kind of revisions we're going to get to trump's tax policy, this discussion about whether he would really defend a nato ally if it wasn't clear they were cog enough to defend themselves. we'll see if day four can bring stability to this convention in the final day. >> yeah, karl, no shortage of drama but whether it was melania trump or cruz last night, what are the expectations in terms of trump and specific policy positions, if any, that he will give us a little more meat on during his speech? >> yeah. i don't think expectations for that are very high. obviously what the convention hopes and what the trump campaign hopes is that people will see his speech tonight and say, there is the next president of the united states. so there's a narrative actually

being built, jim and david, that amidst the chaos as people call it this week, trump comes in tonight and essentially saves the convention with a speech that exceeds expectations. earlier this morning, joe was equating it to wwe. you need sort of bad guys, you need a final act, you need tension going into what we call the e-block, that final stage, maybe that's something that trump can deliver. but it's going to be very, very important tonight that speech does well. >> carl, two business people speaking tonight. tomba rack, straight guy, been on our show many, many times and then peter thiel. peter thiel, very controversial figure. can we expect fireworks from that man? he speaks his mind and his mind is not in sync with anyone other than peter thiel. >> yeah. i think, jim, maybe you agree, if you had said six months ago who would be speaking on night four, along with ivanka and

donald trump, you probably wouldn't expect peter thiel. it's an extremely highly valuable piece of real estate that thiel is getting tonight. we know about the news he's been in this year, but i don't -- i wouldn't venture a guess on what thiel would say. he could come from all sorts of different directions. >> it's funny. the business people speaking. it's not like we have the heads of major fortune 500 companies, but i got to tell you, i think tonight is fireworks night. too bad so many earnings because i would like to train myself entirely on this. >> what are earnings? >> yeah, i know. >> i'll tell you what they are, man, a pile of them right here, carl, we'll be checking in with you very shortly. >> okay. >> as we said the watch is on to see if the dow and s&p make more history one day after hitting record intraday and closing highs, the dow aiming to extend its winning streak, ten in a row. in year, ecb rates after holding the first meeting since the brexit vote, ecb president mario

draghi says growth risks remain tilted to the downside with brexit among the headwinds. draghi adds the ecb will be in a better position to reassess the situation in the coming months. i am anxious to get to earnings, jim, but any thoughts on draghi? >> no. look i mean this is usual for him. i've seen so many good numbers come out of europe it's almost as if it's like there's two different universes. what the companies are saying, which is that europe gets better and better and then what the central bankers say, listen, germany, step up to the plate, start expanding the economy, do something fiscal, but the actual companies i deal with are all highlighting europe as a strong part of the business. >> still i'm looking at german 10-years, negative, 0.010 up three basis points on the day. i just never get -- i mean, japan, negative interest rates still to me are just -- >> but the companies themselves are -- >> fascination. >> not saying they're joyous but

joy, joy global -- >> gets taken out in a big premium, by the way. >> look, stuck with the four walls of the canvas, europe is a bright spot in almost every quarter. >> let's talk automobiles and talk first about gm and chrysler. gm moving higher after posting second quarter earnings $1.86 a share, well above street estimates. the automaker also reporting its first quarterly profit in europe in five years. >> i'm telling you -- >> raising full year guidance as well. tesla's ceo elon musk unveiled his master plan, what is it called, part two, he is french, master plan part two, that includes expanding into electric trucks and busses, car sharing, solar energy systems, nothing in here about the hyperloop. i guess that was -- he gave that to people to develop on their own. but let's get to gm first because they were very strong numbers, jim, from -- i'm still hearing -- are you hearing the press conference in your ear?

i am. turn that off, please. $2.9 billion, up 157% in terms of net income which was well above last year, although they did have a lot of special items last year. generate a lot of cash flow. it was back in march of '15 where they said we're going to keep our cash position at roughly $20 billion, after that we'll start returning, they returned $5 billion to shareholders by the end of '16 then but things seem to be going well. >> they have a lot of cash and do something so it's not a value trap. i don't know why you need this much cash. you're going to get that, remember that about the hedge fund -- >> i mean automotive cash market securities $21.1 billion, back in march they had said once we get above $20 billion, we'll start -- we'll return but they want to keep a large cash cushion. can you blame them? it's gm. >> no. i thought it was funny one of the great things about the masterful master plan, elon musk mentioned two auto companies that haven't gone bankrupt, ford

and tesla, the funniest line in the whole thing. >> that was a good line. >> a comedic aspect to the whole thing. >> gm, you've given up on a while back. >> i had to because in the end, i, like you, am trapped with the notion of the secular decline of the auto. we have cyclical upswing, but the secular decline has to do with the fact that kids don't get -- buy cars like they used to, uber, the self-drive, which in the tesla call by the way, tesla, the master plan, there's just basically saying listen, bus drivers will not exist. that group of people -- >> it was interesting in his master plan, kind of gives us a sense, this was all how i planned it all along, first we'll start small with the small low volume automobile that will cost a lot, medium, then large, add in solar, and, of course, we'll get to autonomy, partial at first, now and then eventually full autonomy as they rack up more and more miles to test these cars and then

sharing. true self-driving is approved will mean you will be able to summon your tesla from pretty much anywhere, writings mr. musk. once it picks you up, sleep, read or do anything else in route to your destination. >> he does point out -- >> and you will be able to add your car to the tesla shared fleet just by tapping a but on the tesla phone app. by the way, that -- that -- >> all seems realistic to me and do it ahead of everybody else. >> my assumption has been uber would be a fleet of self-driving taxis. >> we all know humans are flawed drivers. the problem is, i went to see ford's self-driving their place, their -- near stanford and this involves a level of semiconductor work where you're just flashing 2 million light blips every second. every second to try to figure out whether that's a human being walking across the street, a car. i mean there's a remarkable amount of just technology that's involved, internet of things mentioned in very defensive way

by brian last night on the intel call, how many semis you need, and very defensive. >> why was he defensive? >> because the internet of things and the data center business disappointed. >> right. >> meaning whereas qualcomm, banking on the internet of things eventually as a growth driver had a good quarter. >> they've been saying listen to us, china is coming back and we're going to do the numbers and no one believed and then whoa, they did it. intel was a very tough call. one of those calls where i said -- >> we're actually getting ahead of ourselves. >> really? >> going to go over qualcomm and intel. finish with tesla before we hit a break. this guy i have to give him credit. he puts it out there. somebody, we need somebody with big, bold vision. part two, create stunning solar roofs with seamlessly integrated battery storage, expand the vehicle line to address all major segments develop self-driving capability that's ten times safer, and enable your car to make money for you when you're not using it. >> what can i say when i read it i'm not joking around, i said all of this is what i want,

maybe he can pull it off. >> at least it's refreshing to see somebody say it. >> he's making the car. >> he's sending rockets to space. >> what jay leno said, [ inaudible ]. >> i don't like his financials, okay. >> and you don't like it when he says you're a simulation, but buy yonts -- beyond that give him some credit. there's music in my ear, does that mean he is in control of my ear too. >> means we have to go to break. >> only 50% chance that i'm a simulation. does did not say 100%. >> there's steve mollen cough. >> that's an exclusive. >> we were talking qualcomm. an exclusive interview coming up. futures. there it is. we got a lot more "squawk on the street" right after this.

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man, are we awash in earnings. >> awash in paper, so much cut myself. >> we have a bleeder over here. he's going to be okay. >> there's so many earnings. >> so many. let's get to the chip makers and they are moving in opposite directions. we hit it moments ago.

intel down in the premarket, quarterly earnings were ahead of estimates but revenues were not. slower than expected growth in the data center business. qualcomm results exceeding consensus. the company did sell more licenses in china where it had such a tough time for so long. also strong demand for its mobile chips and by the way we will have that interview with qualcomm ceo steve mollenkopf on "squawk alley" a couple hours from them. >> got to hand it to them. >> imagine he will still be smiling. >> he should be. over the intel, thank you eric johnson from the street. intel's data center groups i have to read this, which supplies server cpus, among other things has long been trumpeted as the growth engine because pc sales have been weak. rev growth 5% annually, at $4 billion. last quarter was 9%. 15% comp at annual growth what they're looking for. they will not be able to do it. remarkable slowdown. >> what's going on? >> two businesses. they give you the units for the

cloud. okay. so say an amazon web service, microsoft. but they make the on premise boxes which you don't -- which are not cloud and this whole shift to the cloud that we were talking about yesterday, it leaves intel behind on the boxes in your own building, and -- but puts them in the cloud. >> right. >> but the cloud isn't being adopted fast enough versus what i think they're losing on the premises. what i felt was the bright spot on the quarter. >> tell me. >> other than altera, that pcs, remember, pcs -- >> yesterday you mentioned it in the microsoft call. they mentioned pcs have not been doing that poorly and again, with intel, one would expect then hp ink maybe is a beneficiary. >> it would be, i would think so. i don't know. notebooks so good dell is private, not that far from concluding its enormous deal to acquire emc. >> let me give intel the benefit of the doubt, they did say listen all of this is transitory, but it's a slowdown. you didn't see that slowdown from plfts. >> right. >> intel, and microsoft will

diverge here. >> right. >> i think that's important. >> i did want to mention, jim, something we brought up on -- was it monday or tuesday? umana, aetna, anthem, cigna. >> you killed humana. >> attorney general loretta lynch and bill bear, the anti-trust deputy, are having a press conference at 11:00. >> oh, boy. >> to announce a significant anti-trust matter. we fully expect that it will be potentially opposition to both. aetna humana and anthem cigna although we don't know with absolute certainty that is the expectation, and we'll certainly be monitoring those. >> can i ask you to kill something. >> the spread in aetna/humana is -- >> obviously -- >> signaling 18% chance. by the way even if they do block there are many people who believe they will sue and they

will win. >> got to get the right judge. >> they will win. anthem/cigna we'll see what their choice is. they will be suing. will they have a tougher case. >> i like you to kill something every day. given the spread i'm being facetious, you didn't kill it but signaling it and people got a chance to get out. rite aid and walgreens the spread here is so big. >> you keep asking me. what i have to do, i have to make calls. >> come on. the other outlet don't do that. >> i have to make calls on rite aid. >> just kill it. why do you let the facts get in the way of a good story. >> a larger context here is deals, large deals, particularly ones that cross borders or at least have international exposure, they are tough to do. >> you're talking about dupont/dow. >> are you going dupont -- >> no. when you speak to bankers the difficulty is not getting them to sign and agreeing on the social issues and, of course, the price, but it's after, it's the idea that what's our road map look like for actually getting approval. it's tough out there.

>> wow. >> and not just here in the united states but whether it's the eu or china, and you're not even dealing as you said, yesterday, with just anti-trust. sometimes it can be the treasury deciding that they're going to -- >> let me ask you on the dupont/dow the merger was approv approved, there the issue is seed concentration. how much of the blockages because somebody complained behind the scenes this is bad. if the farmers went on mass to the justice department on dow/dupont i think the justice department -- >> it's about customers but for us about consumers right. not necessarily -- >> that not solely raise prices. >> your point is a good one, monsanto still yet to sign an mda with bayer. that's a concern. >> da knonone whitewave, bingo. >> softbank, on hold. >> nothing there. they don't own anything. >> excellent. when you pay -- >> are you killing rite aid?

>> i don't know. can i just say i don't know sp. >> that's absolutely fine. >> we got a lot more earnings to get to around the bell. this morning, we mentioned qualcomm and intel, ebay, we got dish, american express, biogen, a joy global deal, and a mad dash. i don't know what you will do here. >> i was going to do joy. >> do it. do joy coming up. we're back after this. was just a bottle.

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all right. we're a few minutes from the opening bell. time for a mad dash. want to talk about a deal we got today, joy global getting bought. >> joy to the world. get up at 3:30, think it's going to be a bad day. i have someone sleep for me during earnings season. i have them sleep for me. i can't afford to take the time. i was shocked, ka not, so buys this. look, $8, $8.90 here. do you mean to tell me with calls so bad, thank you union pacific, giving me the coal numbers, this thing kind of levitated on its own self. hey, guys, who bought the calls here and here. >> jim, 28.30 a share, of course, was a premium of 48% to the 90-day weighted average price. 41% to 60 days. i mean, let's see where the multiples are who here. 11.7 times ebitda. >> for a company that makes coal mining equipment and copper. the reason why this company exists, is they've got

maintenance contracts an it's a fabulous book of business for maintenance and that is supported them for a long time and well run. remember they're a competitor at the absolute height of the coal boom during the coal super cycle ucyrus was bought for $7 billion by caterpillar, still trying to work that off. >> how much did they write down on that one? >> cat reports next week. that stock a hot stock of late. this is a remarkable deal. commodixhod comat, so will be able to sell its over other tractors, but what's important is now you have two big deals from the japanese in one week. >> the arm holdings deal from softbank. >> isn't that incredible. >> it is interesting, particularly near the end. we have the opening bell a few minutes away and as we said many times a lot of other earnings to fill you in on, movement and nxpi huge secondary last night, not moving the stock, so is stay with us, back in a few minutes. hey gary, what are you doing?

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you're watching cnbc, "squawk on the street." we're live from the financial capital of the world. the opening bell will ring right about now. ring that bell. [ applause ] here at the big board, that is a provider of farm suitcle development manufacturing services celebrating its ipo today. at the nasdaq, unifor freedom, fighting for human trafficking, campaigns, workshops and fund-raising. we haven't talked broader market this morning. start off there, jim. given i mean the earnings parade. >> up for nine straight dow days. >> yeah. >> i will say, i was out with a buddy of mine known 30 years in the business, used to do quite well covering retail and we were both saying the same thing since we've been in business so long, david, the volume is insanely low. it's insanely -- there are stocks i don't want to talk about that are up because there's so little volume it

simply is wasting people's time. >> right. >> i look at stocks like 3m and the first few minutes there's like no volume whatsoever. these are companies that david, i would have done when i was at my hedge fund, i would be buying more in the first hour than is trading for some of these major companies. >> changing nature of the market run by algorithms with etf buyers on the end of things. >> capitulation monday after brexit that was it. the last heavy day. i am astonished, yesterday the second lightest day. i am astonished how few players there are, how few -- i want people to understand this market has gone up on some of the lightest vols i have seen. that doesn't mean that the bid isn't for real, that the joy bid isn't for real or the arm holdings, but the bids are the only thing really for real. unless you have a company like a valeant trading millions of shares, be you just don't have the interest and it's important to point out, even a stock like amazon, it's run on very little volume.

i just want to point that out. if you get another shock, you'll find that these buyers disappear. they're only in there like every day and buy a little bit and then when -- they -- and they move stocks. >> you mentioned amazon which i was going to go to on the goldman report. start with ebay. there's amazon. do amazon first and then ebay. ebay is up a lot. amazon, a goldman report this morning that says we expect further revenue acceleration, margin expansion, we'll get the results on the 28th after the close by the way. they're looking for $29.4 billion. and, of course, we expect 58% year over year growth in amazon web services in the second quarter. compared to 64%. it's slowing. >> growth is slowing. there are some comps, some data the other day that showed that it was only about 11%. i think that -- i said last night on "mad money" listen, this is not necessarily the when you come in and buy amazon after a big run. but amazon is doing well. david, on that xpi secondary you

fly, my travel trust owns it, the private equity guys are down to 2%. >> nothing. and xpi -- >> it's worth doing it. 10 million shares, goldman did it overnight. talked to a couple guys who bought it. what's interesting on the deals that were a private equity deals originally the overhang from p/e is essentially been eliminated. cpg and blackstone gone. >> i'm glad you brought it up. nxpi is the company that is the most auto semi and when you'reliening to -- you're listening to elon musk you have to understand because they bought free scale they are the semiconductor for autos and the internet of things is in the auto. that is the feel, i know you've emphasized it. i don't know if people realize how big this is. the auto market not pc market, the auto market is what's driving other than data centers and their intel i said data center not that strong. auto is everything. and i think that people are underestimating the power of what could be a multiyear secular trend to have more tech in your auto.

>> so many chips, of course, as you say. >> so many. >> that will underpin to a certain extent the thesis of masa son when they spent 33 years of ebitda to buy arm holdings this week. not auto, necessarily, but the internet of things and the fact that chips are simply going to proliferate in our life, that being in the way that we're connected to everything and everything is connected to the internet. >> so stay in -- when it comes to longer term trends i like, the humanization of pets and the auto makes of autos -- automation of autos. >> what was the first one? humanization of pets? q. >> strongest es theme. >> you got to -- i've never heard you say that. >> the number of pets who sleep within your bed versus not, is up dramatically in the last few years. this is from one of the greatest stocks of our time. >> what are the implications of the humanization of pets? >> treat them like human, have health care, that's the labs, they report next week, feed them better which is this blue buffalo and smuckers, you --

they need more equipment at the veterinary, that's henry shine, this is a remarkable great secular trend for baby boomers. david, the number, brazil is insane, one pet per person down there. keep in mind i'm looking for secular trends that are not going to bag you. that's the strongest in this entire market. the humanization of pets. thank you john ayers from the labs to explain that to me. >> that's a first. i'm sure i'll hear it again. i want to look at ebay because actually the stock had been -- >> it had been weak because a couple bad quarters. >> strong over the last month and kind of moving up into this earnings report and it was a good one. there seems to be the hope for a dividend. perhaps as soon as october. look at ebay, up over 9% this morning. they repurchased half a billion worth of stock, they approved additional repurchases, but it's this idea also that you'll get a dividend. i think -- is he joining us? is the ceo coming on the show? >> he is coming up.

>> yeah. he's coming up? >> that's what it said on the graphic. >> it did. >> i just read the graphic. >> got it. >> but it was a strong quarter for them. >> it was. let's talk -- i'm going to match you with that strong quarter and give you a weak quarter, union pacific. agriculture down 3. chemicals down 5%, auto down 13%, industrial projects 13%, intermode al 16%, coal down 27%. the stock had been red hot from the '60s to the '90s. >> he's going to join us as well the ceo of union pacific. >> he's terrific. by the way, biogen, big change there. >> biogen, do it. >> big buyback. scangoes is out. that matters. i have to tell you that's a company that had been cut in half, stock has been cut in half. there's something to follow. >> biotech has been on the sell list through much of this year. >> it has been and maybe this deal we haven't mentioned yet, got a bid last night that's a company that has potassium regulator a lot of retail investors were in and that's

good news. united rentals making a comeback here. >> it is. >> looks like the orders are better for the rental company for caterpillar. >> moving through them here. just mentioned the ceo of biogen stepping down and move on from there. >> if i don't do it like this i have the best one 6 of all, dominos, patty doyle on last night, domino's completed its ramp from 140 to 120 when people lost face, and patty doyle blows it away with a comp number versus 6.4%. the technology pizza company. you can order it through your apple watch and your twitter and order it through facebook. >> i'm aware. >> it's darn good. >> it is darn good. people don't believe that but i order -- hold the cheese. it's unbelievable. >> a look on mad tonight. >> denise morrison. >> campbell's. >> you got a great lineup tonight. >> david, i work my butt off to get -- >> you do. you work it hard. >> success, just all like my wife being angry with me.

>> it's not ephemeral. it's been long running for you. >> appreciate it. >> speaking of success or lack thereof, dish did not have a particularly good quarter. >> no. >> match your whatever that was and raise you a dish. >> that was -- >> down about 3.5%. the problem here is subgrowth dropping to new lows. it's interesting, though, because when they have lower subscription numbers their acquisition cost for getting new subscribers goes down and higher cash flows. >> yes. >> but you can't keep losing subscribers. this is a spectrum play as we know. >> they allow to be in that spectrum -- >> talking about it so long in terms of the spectrum. charlie ergen, waiting for you to tell us what you're going to do with it all. i've given up asking. although i love talking to him. >> if you go disappointment, southwest air, you match my dish and raise me a southwest. >> revenue per passenger very bad. >> down almost 10%. >> increasing the capacity 5.6.

that is not good news, going to send the airline group down. a key group in this rally. focus on that. >> what i want to stop you for a second -- >> dunkin' brand -- >> wait wait wait. southwest. what was the key problem? >> fares were down. >> fares were down. >> yeah. >> is that competition? >> i think so. they've decided to come in underneath a bunch of airlines, particularly in texas, and succeeded in doing that. these are fare wars, david. remember the old days of fare wars they're back. >> they are. >> not that on any plane i've been on. >> bad sign for the overall industry. they are always the leaders. >> overcapacity which is a negative read for boeing. honeywell announced quietly announced layoffs the other day. >> wide body is doing it. southwest air is domestic. now the thesis is listen you can't just say it's terrorism overseas making people travel. this is having people reevaluate and rerate the group on the fly. and it's being a negative

rerating. >> honeywell tomorrow. >> tomorrow end on pulte, elliott and pulte settled, three directors, although they still have the feud going on with the family. >> that feud is very -- >> about a new ceo and when that will happen. >> williams. have you seen the pipeline companies come back. kendrick morgan did not report a good number and indicated the dividend is not going up. stock is barely down. the area -- >> very good performer this year. yeah. >> people love the oils. chevron and exxon report next week in the mid teens. mid teens. >> great years. >> yes. >> unbelievable. core labs on last night the scientist for oil, saying it's a v-shaped recovery, oil will be at 60 bucks. i bet limb a steak dinner, he bet me a steak dinner. i don't know. i don't know, what he thinks. >> where would you go? sparks? >> for steak. i thought you were asking me my view on oil.

i have no idea. >> the steak. >> that's my job. >> i don't know if i would go to sparks. >> i'm going to sparks. >> really? the old standby still in brooklyn there. >> really? >> don't you think? still got to -- that's still the best. >> i love brooklyn. >> you know what i'm talking about. >> yeah. williamsburg. >> yeah. >> williamsburg. we don't need to give advertising. to bob pisani. talk about a man that knows restaurants in new york city, right here. right there. there he is. >> i've had a few at sparks steakhouse as well. great place to go and real institution here. what's a bit of a problem today much more mixed earnings picture, yesterday unequivocally positive, a little more on the mixed side today. the misses and i think jim is right about southwest, the problem with southwest is the challenging fare environment. they specifically cited that and they had a miss and revenue guidance in q3 is below expectations. sherwin williams complicated, a small miss, guidance lower, because of the valspar acquisition complication things.

not getting a pass for that, but that certainly was one problem. i think the earnings beats overshadow the earnings misses. intel did have a beat, bear that in mind, they are lower because of the data center revenue, gm the story of the day, 1.86 and 1.52 in estimate, an enormous beat and the guidance is higher as well. that's a big story overall. qualcomm did well. ebay did well. they beat and raised their full year sales forecast and united rentals was a fantastic number overall. more in a moment. gm beat may help move the dial on earnings. we're still down on earnings for the second quarter. 3.8%. that was last night. gm is so big, that we could get close to 3% today. i still think it's a small chance of being positive for the second quarter, very small, 20, 25%, gm is helping things overall, looking positive for q3 and 4 here. big industrial company, very big in oil drilling and refrigeration, we're at 52-week high yesterday.

the guidance is light but i want to focus on the comments on the oil business. halliburton, came out, talking about something similar. oil q2 the low point for oil, stabilization, recount, higher oil, will improve their results in the second half. so they're coming out and saying things better too and jimmy was referencing core labs there yesterday. the other company i want to mention united rentals, huge beat, and affirm their full year guidance. the largest equipment rental equipment in the world that they're particularly big in construction, utilities, and lesser extent the energy business overall they were very positive on all their activity and they're mostly a u.s. focused company. they came out and said solid customer activity on both the east and west coast of the u.s. at the same time emphasis on specialty rentals continuing to pay dividends. this is a comment on the overall construction and utility and lesser extent energy business in the united states. finally the ipo business continuing to do well.

i was hoping path thee yon would open but we're waiting for indications on that. pat theon the world's largest contract drug manufacturer. all the biotechnology stocks we talk about the ipos generally are not making the drugs, they contract them out to path thee yon who makes the drug for people. the price talk was 21, 20 to 22, it priced right in the middle at 21. the key point is the ipo business has been doing great recently. all the big names that have come out, twilo, bats, line, u.s. foods, advanced pierre food holdings, trading above their initial ipo price a signal sort of green light, if you will, to the rest of the ipo companies out there, that things are holding up, ipo business is open. the dow down 24. david? >> thank you very much, bob. >> let's lead to the bond pits and check in with rick santelli at the cme group in chicago. rick?

>> hi, david. of course mario draghi really didn't put forth much new. really anything new to put forth? he's going to have to print more paper in he wants to buy more paper. on the corporate side he's buying, but boy, the supply really is an issue and everybody is highly aware of that. our own peter bookfar, a contributor has been writing about core rhoda, maybe helicopter money isn't coming either. no matter how you slice it it's slow motion. starting to see a reversal of some of the risk on moves but not big. look at intraday of 10s, you can see rates climbing a little bit. i think that's directly correlated with the press conference and lack of any new information. yes, jobless claims were down but they didn't move much and philly was weak. one week chart of 10s is important. testing the top of the range. we haven't closed above 160 yield since the 23rd of june. you know what that was all about. bunds, right in their backyard a bit of different picture. lot of action but ended up about

exactly where it started and the same is really highlighted in the euro versus the dollar. good volatility right back where it started. the dollar/yen after mentioning core rhoda and the notion that helicopters may be grounded look at the dollar/yen on an intraday there is some movement. not -- what i'm after is the july 1st chart. the dollar is crawling back, look at how small those moves are. we've really crushed volatility in some of the currency trades and maybe that's the area to pay most attention to if there's any surprises, especially from the u.s. central bank which the next meeting everybody is going to be focusing on. david, back to you. >> thank you very much. rick santelli. >> point out that the joy global bid is putting a bid under everything, caterpillar, deere, any one of these big machinery companies. that's why the market is not down big. cat has really the star here. >> the joy global bid helping

them. >> wanted to point that out. >> up next, we're going to have the heated comments from ted cruz and go line to cleveland as well where carl will have the latest. and tomorrow on "squawk on the street," exclusive with lulu lemon ceo, laurent potdevin. >> starting to go up a little high. i liked the stock. i want to be careful. one trick pony. when i spoke to sara, let's be sure. >> that's 9:00 a.m. tomorrow. thank you for the pronunciation helper, mr. cramer. >> whatever. >> we got a lot more coming. stay with us. (speaking japanese) 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

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welcome back to cleveland and the republican national convention. we're getting our first sound from senator ted cruz this morning after that speech last night at the convention in which he decided not to fully endorse donald trump. at a breakfast this morning talking to some of his delegates he said, i did not say a single negative word about donald trump. i don't intend to say negative things about him in the future and went on to say although the media, he argued, would love him to. some of the delegates did ask

him to support the party and trump saying we need to stand with you, you need to stand with us, but in the words of cruz, i'm not in the habit of supporting people who attack my wife and attack my father. he went on to say, i'm not a puppy dog. one last note he did go on to say he will play close attention to what the campaign says every day from now until november. this, of course, once again in a series of events that overshadowed the intended effect of the convention overnight. on a side note, david, actually we have a piece of the sound from ted cruz that's coming in. take a listen. >> i'm not going to get into criticizing or attacking donald trump but i'll give you this response. i am not in the habit of supporting people who attack my wife and attack my father. >> you'll recall in march, donald trump said he would, quote, spill the beans on ted cruz's wife heidi and even went

so far jim and david to suggest that cruz's father might have been involved in the assassination of john f. kennedy. paul manafort for the trump campaign said tonight will be more upbeat, more personal, and certainly that is the overall intent of conventions to provide positive energy. see if we get that when ivanka and donald trump speak later tonight. >> yeah. quite something, carl. thank you. >> it is quite something. >> it is. >> yeah. >> carl, i got to just ask you point blank, i mean, is there an unreal sense in that place? i mean is there a sense that anything can happen? i mean it feels like it's the least scripted convention i've seen since '68. >> you know what occurs to me, jim, i think it lays bear the pageantry and almost fake nature of conventions in modern political history. this is a real convention. i mean what we're seeing is people react organically to

events as they happen. it's like we've been unplugged from the matrix, the conventions we're used to have been complete -- lack of spontaneity, prepared, this is it sort of -- >> made for television. >> this is the room where it happens literally in the sense we've come to know it. >> great way to put it. they're all coronations where all you did was figure out what song they would play. you have "we are the champions". i wish i was there. i was not there in '68. i covered a lot of conventions. this one is worth covering. most of them are like okay, let's gin up a story. this produces a story every three minutes. >> and i think it does put pressure, perhaps, on democrats next week to provide something other than a coronation from the president to hillary clinton. there remains speculation we could get a vp pick from hillary clinton as early as tomorrow. or next week. but already we're beginning to hear about what kind of tone they're going to try to set for philadelphia after, obviously, an eventful week in cleveland. >> yeah.

rocky. >> carl, thank you. >> rocky theme. >> i caught the hamilton reference from mr. quintanilla. you have to see the musical still. >> through december. i'm trying to move up in the cue there. >> carl will be joining us again in the next hour. i did want to update our viewers, anthem cigna, we don't know humana aetna but the paperwork has been filed by the doj to block the merger. not a surprise in any way, shape, or form, of course. the deal announced back last july, so let's call it almost a year ago to the day, and it called for $103.40 a share in cash and 5.512 shares of anthem. the spread enormous. both stocks trading as though they were independent companies without the prospect that they would get together in many ways, jim. but it is the anticipation certainly that people i've spoken to they will go to court to fight this. they've also been having issues of their own, anthem and cigna, being on the same page.

david cordoneny, ceo of cigna wanting different things than joe swedish the ceo of anthem. >> i know that the -- i want to know how they feel about at affordable care act. it was losing money on the ones. didn't apply to all of them. >> 11:00 is when loretta lynch and mr. baer are scheduled to speak, so about an hour from now. and again, looking, humana shares the anticipation is that also will be but at this point doesn't appear that has been filed as of yet. we'll let you know. that one, you know, many people say, jim, is going to be interesting. he if they do, that they have a very decent chance of succeeding and in fact when companies actually fight, in court, often times you get blocked, you walk away, you're done. that's the typical response. but when you fight, you would be surprised there's a much higher

percent of success of the deal closing than you plight anticipate. >> can you give me -- >> anti-trust experts told me 70% of the time when companies do fight which is infrequent because typically they don't but when they do, they succeed very often. >> justice can sometimes overreach or the ftc. p. >> i've already seen what you have coming up on "mad" but worth mentioning again. >> domino's is expleading higher, denise gave a -- denise morrison gave a presentation which showed slowing. the company has been a horse. nick pinchuck, the credit not just the tool side. the credit side. questions raised about whether they have too much credit they're giving in jim grant. give jim krefds credit. he does rigorous work. >> raises similar question on credit. >> cigna jewelers sells jewelry.

>> right. >> all right. i'm looking forward to watching. campbell's soup especially. >> they've done good natural organic. >> stocks that are popping like united rentals. wrong stocks are popping, the transports, no. >> yeah. jim, thank you. thank you. >> all right. >> see you later. coming up an exclusive with ebay ceo devin whenning, giving a nice boost to that stock this morning up over 9%. we're back after this. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future.

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♪ good morning. welcome to "squawk on the street." i'm sara eisen with simon hobbs and david faber at post nine at the new york stock exchange. carl quintanilla with us from the republican national convention in cleveland, ohio. we will get to him shortly. first a look at the markets. that nine-day winning streak for the dow jones industrial average coming to a halt. or at least a pause for now with the dow down 37 points. s&p 500 under a little pressure as well along with oil. technology, though, continues to lead. >> breaking economic data, leading indicators are out.

rick santelli has that in chicago. good morning, rick. >> good morning. the june read for lei leading economic indicators up 0.3%. arguably a little bit better than we were expecting. it's the second best read of the year, april 0.6. that's the high water mark. no revision on last month, sequentially following a down 0.2. for the june read on existing home sales we're going to head east to diana olick. diana? >> rick, existing home sales in june, up 1.1% to a seasonally adjusted annual rate of 5.57 million units. that's slightly ahead of expectations, but may's numbers were revised down so it comes out in the wash. still this is the strongest level since february of 2007 according to the realtors but add this could be the high point for the year because they're starting to see the foot traffic slow down. sales are up 3% year over year. the problem here, though, is sales could be stronger if

inventories were not so weak. inventories in june down 5.8% year over year to 2.12 million homes for sale. that is just a 4.6 month supply. this is the 13th straight month of year over year declines in inventory. homes are flying off the market. days on market 34 days and that is pushing prices i r higher, 247,000 is the median price, up year over year but a big divide, seeing sales of homes on the low end, that is $100,000 and below, very weak. falling 9%. but the top end of the market, $1 million plus, coming back strongly up 13%. and the realtors say that is thanks to the stock market gains. now distressed sales falling 6% of all sales. the first time buyer, though, stepping back into the park at 33% of june home sales the highest in four years. that's a good sign. again, sales up 1.1% in june.

back to you guys. >> all right. diana, thank you very much for that. diana olick. it is day four at the republican national convention in cleveland, ohio. with me at the quicken loans arena our own john harwood on day four of aftershocks here. we will get to some of the policy discussions that are happening, but first, we just heard from ted cruz a few moments ago regarding his speech last night. what's meaningful here and what's not? >> political conventions need to show the country, the broad electorate as you head towards november, they can manage themselves, they're coherent, that they're united, they've got a plan, and the images of chaos and disunity here go against that. we'll see what polling shows. you don't know. it's an unpredictable year. many of the reactions we've predicted to things that happened to donald trump have not materialized but this goes against what every political strategist hopes to have from a national party convention. >> if you just missed it, ted cruz this morning at a breakfast

explaining his refusal to endorse donald trump last night. take a quick listen. >> i'm not going to get into criticizing or attacking donald trump, but i'll give you this response. i am not in the habit of supporting people who attack my wife and attack my father. >> now that goes back to a controversy about 17 weeks ago, an eternity in politics, but some sense not that long ago, in which donald trump said he would spill the beans on heidi cruz in his words, talked about cruz's father. was it -- is this revenge? how hard is it for cruz to have held this for so long? >> couple things. first of all politicians are human beings and ted cruz reacted the way he did to some pretty strong stuff that came from donald trump. politicians are always contemplating about their futures. ted cruz wants to run for president again. he does not expect donald trump to win this election. and so he's trying to position

himself for republicans who are opposed to trump that he was the guy who stood up to him. the other factor is, things that cruz has already said make it difficult to endorse. ted cruz at the end of his primary campaign, said that donald trump was utterly immoral, a pathological liar, a serial philanderer, those are things that put you pretty far out there on your assessment of a human being. now he didn't repeat any of those things last night. but everyone knew what he was saying when he said vote your conscience, vote for someone who stands with the party's principles. ted cruz thinks of himself as someone who is the guaranteor of conservative principles and values and that donald trump is not. >> things we're not talking about, mike pence and his speech and the interview with the "new york times" that trump gave regarding support for nato allies. >> the latter is much more important. mike pence gave a solid performance last night, he showed why he was picked as donald trump's running mate. he's a conservative that is

broadly liked within the republican party. but donald trump called in to question, as he had earlier done on u.s. debt, the full faith and credit of the united states in national security. he did not say or he declined to say that he would automatically come to the defense of nato allies against russian aggression. that has been a principle of u.s. foreign policy, unbroken, since world war ii. and that is a pretty dramatic break that has everyone basically with experience in the foreign policy world, shaking their heads today. >> so tonight, what does trump need to say and can he provide a relative sense of stability that makes him look good after this crazy week? >> it's going to be a hard job. the good news for donald trump is that most of what matters in a convention comes in that speech in the 10:00 hour tonight accepting the nomination. donald trump will have a text.

does he stick with the text? does he go off and respond to the various criticisms on the melania controversial, on ted cruz, on the nato issue he raised until "new york times" interview. that was a major thing stepping op his message here. but he's got the opportunity, if he has a good text and can convey a sense of command, competence, stability, to try to persuade more americans that he's capable of serving as president of the united states. >> our coverage begins at 10:00 p.m. eastern time tonight. you will be there. >> you bet. >> simon, david, sara, back to you. >> come back to you in due course. thank you very much. the european central bank's policy meeting since the uk voted to leave the european union, everyone forecasted they would leave interest rates unchanged and probably their existing plans for qe. steve, this sounded to me like a remarkably undovish draghi today. pouring cold water to the ext t extent -- >> hold on.

you said undovish. didn't see it as hawkish but not dovish. >> he didn't sound ready -- i mean -- >> that is the way i see it. >> plays out the possibility -- he didn't do that today. >> when you look, for example, at yields what you see, simon, is yields ticked up a little bit. they didn't really get -- they left policy unchanged in the wake of the brexit vote and basically said the european union will reassess the situation in september when it's got more data, new forecasts on the impact of britain leaving the european union. draghi said brexit is a headwind to the eu economy and said the ecb will watch the post-brexit economy very carefully, and use all available tools if warranted and said the growth tilted to the downside. but he added that markets have showed, quote, encouraging resilience in the wake of brexit. take a look at yields here. up just a couple basis points as the market may be expected a bit more panic or concern in draghi's voice over brexit, but you can see it's only a couple

basis points. it's on my left. i keep looking in the wrong place there. like the bank of england the ecb is content to wait until there's real evidence of a need to provide further stimulus. simon? >> okay. steve, thank you very much. all right. we're also keeping an eye on the stock market right now. just show you where we are on things. the dow is down 46 points. a loss is accelerating breaking the nine-day winning streak. ebay going the other way up 10% at a record high. reporting last night earnings that beat the street's expectations, posting its second straight quarter of sales gains. our josh lipton at ebay headquarters and joins us with a special guest. josh? >> thank you, sara. and devin wenig thank you for joining us today. >> welcome to ebay. >> devin, about a year now since that split with paypal. sara mentioned a reaction in the stock this morning. investors like what they heard. you guys raised guidance, so confident about the rest of the

year. has ebay, with this report, devin, turned officially some kind of corner here? >> i try not to get too hung up or hot or cold on short-term market reactions. a year ago, this was a basketball court and this facility we're sitting in is sort of evidence of the plan we laid out to say, we want to run ebay for the next decade. we want to be an enduring technology leader and a disrupter and we would focus on building the foundation and differentiating what we do. and a year on, we're starting to accelerate growth in the business. that plan is starting to take route. i wouldn't say we've turned a corner. we've made progress. we have a lot more work to do. but i'm please at where we are. >> let me ask you aside from the fundamentals, investors liked what they heard with capital return. the board approving the additional 2.5 billion stock repurchase authorization. how do you think about capital return looking ahead and is a dividend next? >> we're disciplined about the

way we allocate capital. one of the great strengths of this business is it's got high free cash flow, high return on equity and that's a great lever to have. it's one of the ways that we can create value for our shareholders. if we have excess capital we said we will return it to shareholders. but it's part of the way we allocate capital. we also are quistive when we can accelerate our strategy which buy companies. we did several of those in the last quarter. we buy our stock back when we think it's at attractive prices. we will keep doing that. and how we allocate that capital and how we return it to shareholders, we'll constantly evaluate that. right now, we like where we are. and the fact that we were able to reduce the share count at attractive prices and now step in to better earnings in a better share price, that's a way that we reward our long shareholders. i'm pleased with that. >> let me ask you heading into that report i know there was some analysts who high looitsds brexit as a possible concern given your exposure to europe,

to the uk, so far you've seen impact from that? stew it's a few weeks. it's early. what's interesting is most of the impact is through the weakening pound. and as the pound has weakened, we've actually seen exports in our uk business go up. that's been slightly offset by exports in our u.s. business going a bit down because the uk is a big trading partner of the u.s. but there's been very little impact on the domestic economy in the uk and, in fact, there's been any impact it's been marginally positive. >> when we talk about trends, technology trends, i thought it was interesting on the call last night you talked about artificial intelligence software. when you think about ai software, what's the impact of that going to be on your industry and how is ebay sort of positioning itself to capitalize on that. >> when i think of ebay's 20-year success run, i think that what we were good at is understanding these big platform revolutions, the first the internet itself, the second was

mobile, and ebay was early and really took advantage of those platforms. there are few more coming. artificial intelligence is the next platform revolution as is virtual and assisted reality. and we are planting the seeds right now to ensure that ebay is not only relevant, but a leader, disrupter, in artificial intelligence. some of the acquisitions we've done are world-class teams of both data analysts and engineering capability that are going to allow us to use this incredible data set we have. we know exactly what hundreds of millions of people are shopping and browsing and buying. and the ability to target and personalize that, and build an incrediblebly personal commerce experience, i think is the future of commerce. and because of that, they're going to be a few winners that can take advantage of that technology revolution and we will be one of them. >> hey, devin, it's sara eisen at the new york stock exchange.

>> you had a question. >> yeah. yes, good morning. devin, wanted to get your take on something we heard from warren buffet this morning, berkshire hathaway chairman and ceo, came on to "squawk box" to talk about his message, his common practice principles, the common sense excuse me principles he's presenting in conjunction with other high-profile ceos. listen to what buffet said about his recommendation on guidance. >> i think that guidance could lead to a lot of malpractice. it doesn't have to. but i think if the ceo goes out and says we're going to earn $1.06 the next quarter, i think if they -- if they're going to come in at $1.04 there's a lot of attempts to find a couple extra pennies some places. it doesn't necessarily have to be the ceo. sometimes subordinates want their chief to look good and there are ways that you can move earnings toward the end of a

quarter, sometimes even after the end of a quarter, and i think that guidance, guidance is -- i've seen guidance produce some bad results. >> so devin, i'm wondering if you agree with that, if you think that the pressure of short-term forecasts should be eliminated and whether you would be on board with that? >> i mean, i think probably two things implicit in his comment. one is, whether or not you manipulate earnings to hit guidance. obviously that's a governance matter and i think what we care about is transparency. i think guidance can be a good thing because we're trying to provide transparency to our shareholders. but the other important point that i think he's making is that companies can be too short-term oriented and i completely agree with that. i took over as ceo of ebay a year ago, and one of the things that i said to our investors, our employees and our customers is commerce doesn't move in 90 day increments.

this is a technology company. and we're going to run this company for the next decade. and i don't hesitate to make decisions i think are in the best interest of our stakeholders even if they're not friendly in a 90-day period. i think we can be transparent and issue guidance but also run businesses for the long run. i'm not afraid to do that at ebay. >> simon, i think you had a question. >> yes. if i may. devin, you will have seen, of course, where we are with the election and we've got the rnc playing this week and the dems next week. what do you make of the election? what's at stake for you and for your company for the business for the work forces from what you see on the stage? >> you know, we try to stay out of politics. we're trying to run a technology company. we would like certainty. i think that -- that's probably what you would hear from a lot of ceos. a period of instability or uncertainty through the fall probably isn't good for

consumers and we're a consumer business. we would like clarity. political clarity. certainty on pols. we would love to see progressive pols for technology. we would love to see policies that recognize that businesses like ours are fueled on immigration, and that sensible trade policies are great for u.s. companies that are multinationals trying to export goods and ebay is a big one like that. so we stay out of republicans or democrats. that's not our business. but we do think that pro-trade policies and pro-immigration policies are great for technology companies and we're going to deliver that message and we hope both parties adopt it. >> devin wenig, thank you for your time. we' appreciate it. >> thank you. >> back to you guys in new york. >> thank you very much. josh lipton in san jose. a big show, we'll sit down with the ceos of bbt and excel services and union pacific within the next 40 minutes. talking earnings, state of the economy, politics and more. it's a beat for qualcomm.

the ceo of qualcomm will join "squawk alley" at 11:30 eastern. stay with us. you're watching "squawk on the street" on cnbc. .

want to update everyone on the objections of the doj to the

two large hmo mergers that have been in the works now for over a year, humana and aetna. aetna's plan to purchase humana for $125 a share and 0.8375 of its shares. the doj filed the lawsuits against that deal to block it and also has filed to block anthem's plan to buy cigna announced back in july of last year, july 24th of last year, called for $103.40 a share in cash and 0.512. you will see if you do the math, that neither one of the acquired companies is trading anywhere near the potential takeout price because, of course, the expectation has been for some time that the doj was likely to block anthem and cigna and probably likely to block humana and aetna. it has done so. now the question is, will both companies, will they all go to court and try to fight and see if they can actually get a court

to agree with them these deals should go ahead? i would point out as well that cigna has come out with some comments, interestingly, not a joint release with its partner anthem, but a separate release, doesn't read particularly well for its hopes in light of the doj's decision we don't believe the transaction will close in 2016 and the earliest it could close is 2017. if at all, cigna says. they also go on to say they're evaluating their options consistent with their obligations under the agreement. the agreement does call for them to fight in with anthem should anthem choose to do so. we'll see what anthem says. but the expectation that i've been left with from all these companies is they will go to court and fight the doj. simon? >> okay. general motors up 3% reporting earnings this morning. profit more than doubling. phil lebeau is digging through those and joins us live from chicago. phil? >> simon, the question whether or not we see gm shares getting close to or perhaps once again

getting back above that ipo price of $33 a share. a blowout quarter any way you look at the quarter for general motors beat the street by 34 cents. revenue coming in much stronger than expected at $42.4 billion. why was revenue so strong and why did they beat earnings? relative to what analysts were expecting. look at north america, the strongest market for general motors turned in great sales in the second quarter and those were retail sales, where they are pushing a higher transaction price. by the way, second-quarter profit margin of 9.3%, almost 2% better than in the second quarter of last year. you don't see that very often in the auto industry. cfo chuck stevens talking about why the second quarter was so strong. >> a $3.6 billion of profit and 12.1% margins and a profitability in europe, we made money in europe for the first time since the second quarter of 2011, those were the two biggest

drivers of at least my assessment of the beat versus consensus. broadly speaking we had strong performance around the world. >> and gm is expecting that performance to continue for the remainder of this year. in fact raising its full year earnings guidance by a quarter of a share to a range between 5.50 and $6 a share. point out simon, most analysts expect gm for the year prior to raising the guidance at 565. we will see analyst notes after the conference call which is going on right now show t show higher guidance from the analysts as well. back to you. >> okay. thanks, phil. when we return, on the show, it is a big beat for bb&t bank reporting record revenue up 18%. we'll speak with the chairman and ceo kelly king next on the show. ♪

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regional bank bb&t reporting a quarterly profit of 66 cents, beating estimates by a penny. joining us now to discuss the results, bb&t chairman and ceo, kelly king. welcome back, kelly. good to see you. >> thanks. glad to be back. >> so plenty of doom and gloom around the banking stocks this

year and you post 18% revenue growth for the quarter. what drove it? >> well, we were very fortunate to conclude one of our major bank acquisitions during the quarter, a company called national pen in pennsylvania, we also closed on april 1st a significant property and casualty wholesale insurance business called sweat and crawford. two acquisitions which helped propel growth during the quarter and good organic growth. it was a good quarter. >> and yet, net interest margin, i mean we saw it rise year over year, a theme in the back earnings, but down from last quarter. and this is the big worry, those lower for longer interest rates. what's your expectation at this point? >> i think we're all trying to settle in to the reality that we may well be in, you know, lower for longer, we're planning for that. we're operating our business that way. now personal observation,

though, is that it probably won't be as low as long as most people think. i recognize that there's a lot of global kind of negative sentiment now about brexit and many other factors i think some of that is a good bit overstated. you know, the underlying strength of our economy in the united states is very good. we're still operating at 2, 2.5% real gdp growth, really good job growth, good strong consumer sentiment, housing market good, auto market good. i personally think by the end of the year the fed will probably raise at least one more time. barring any major unforeseen negative circumstances. that will begin to improve margins. i think we're at the bottom. we can operate okay if we stay at the bottom but we're planning for that but expecting and thinking that probably will get a bit better. >> the other pocket of the economy where you do business is, of course, in mortgages with

housing. now that mortgage rates are back to historic lows again what are your expectations for that business for the rest of the year? >> it's going to be very strong. as you know, the 10-year is at almost an all-time low. that drives a huge amount of refinancing. so refinancings are up substantially and frankly, the purchase market for new families buying new homes is up substantially over the last few years. so combination of strong refinance and strong purchase market, both very well for a strong mortgage market for this year and frankly into next year. >> mr. king, as you know, there are investors who believe that there will be money to be made some of the smaller banks as we move through the cycle because of the lower for longer and the lack of profitability and need to consolidate. as an acquirer already, would you agree with that sentiment and where do you think people are likely to be able to make money on that m&a if, indeed, it is to occur?

>> well we're out of the m&a business for right now, to be clear. we've done a lot in the past and long term it's an important part of our strategy but we're out right now. an awful lot of pressure on smaller institutions today, lot of pressure on companies our size, and so i know that the companies in the smaller tier are really struggling. certainly some will be able to make it and some will choose to make it. but i do believe an awful lot will choose to consolidate, to try to gain the scale advantage necessary to deal with huge increases in regulatory costs, technological cost and a slow economy. so i suspect that long term investment in small institutions could be very good. >> on that note ahead of the elections are you doing anything differently in terms of planning or decision making ahead of what looks to be a heightened period of political uncertainty in this

country? >> well i think it is unfortunately a heightened period of uncertainty and that won't likely go away until after we have the final election. you know, we're not running our business any differently. we try to do the right things every day to support our clients and communities and shareholders so we try not to overreact to the short-term phenomenon. i do think, though, as we go forward, a bit of the uncertainty will begin to subside. it's already a bit more certain today than it was a few months ago in that we know who the two candidates are. as we get closer to november, i think the certainty will begin to subside. and then frankly, after the election, i believe that a lot of the uncertainty will subside, a lot of business confidence will return, and you will see a lot more investments which is what we've needed over the last seven or eight years in our economy. >> all right. kelly king, thank you very much. we will see. the chairman and ceo of bb&t.

>> and when we return we will be at the fourth day of the rnc. donald trump taking center stage in cleveland tonight with the keynote address. we'll talk to his energy adviser, president and ceo of excel services, next, on cnbc. announcer: when they test you, stand firm and move only when you hear the seatbelt click that says they're buckled in for the drive. never give up till they buckle up.

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good morning. i'm sue herera, your cnbc news update at this hour. southwest airlines says it has fixed computer problems that caused hundreds of flights to be delayed and canceled. long lines around the country this morning as the company spokesman said it will take some time before the airline resumes normal operations. libya says isis has been broken and benghazi is close to being liberated. a libyan army commander says an islamist militia had been hiding out in the outskirts of the city but forced to retreat. a florida fugitive back behind

bars. murder suspect deanne ta resiles was arrested at a motel in west palm beach. six days escaped while in custody at a broward county courthouse. russia last its appeal against an olympic ban on its track and field athletes. the decision announced by the court of arbitration in switzerland. 68 russian athletes seeking to overturn that ban. that's the cnbc fuse update this hour. back to you in cleveland. >> thank you very much. welcome back to "squawk on the street." we're coming to you live from the republican national convention here in cleveland. tonight, it's donald trump's big moment and a chance to make his case to the american people. last night running mate mike pence accepted his nomination for vice president. a moment which has largely been overshadowed by former trump rival ted cruz. joining us is trump supporterer and energy adviser donald hoffman, founder president and ceo of excel services. >> good morning, carl. pleasure to be here. >> let's talk policy to start.

you're on the trump leadership council. advising on energy. we've heard some comments this week from harold hamm, mike pence last night about coal. how do you define trump's energy policy and where is it going. >> we're current establishing a sensible energy policy with mr. trump that values all of the different energy assets in the portfolio of energy capability. what we're doing is measuring the strengths and weaknesses of each of the assets because they're not all created equal and working out ways to develop a policy which is senseble to ensure that the citizenry of this country has a policy that relates to the sources of energy which allows for affordable, available, reliable, and environmentally friendly energy. >> where are we strong and weak? >> well, none of the assets are created equal. you have certain strengths and weaknesses of coal, oil, nuclear, which i am a nuclear engineer and, of course, i have a passion for that, but also for wind and solar, biodegradables and gas. we have to acknowledge and recognize as a result of that,

we need to be able to evaluate each of the consequences of including them in certain aspects of the energy policy and others that we're not. >> pence last night his line was donald trump digs coal. so what would happen to volumes o do you think, traffic volumes, rail traffic, production? >> i believe that mr. trump is wanting to utilize coal to the extent practical but he recognizes the environment could be effective. we're looking at ways to acknowledge while coal is an important asset in our energy portfolio we must be aware of what it does to the environment. neck nisms to make the -- mechanisms to make the coal cleaner and ensure we're establishing policies that recognize how we can do that. >> a lot of this is getting overshadowed by what cruz didn't say last night and trying to say again this morning at this delegate breakfast. what do you make of ted cruz? what would you say to him if he were here right now? >> i would say mr. cruz, it's my understanding you like the other candidates beginning to go through the nomination process agreed to support which ever candidate was nominated and you

did not do so and it's disturbing to see he was not willing to support donald trump. had he been nominated he would have fully expected mr. trump and every other former candidate's support. >> his argument that pledge was adbri gaited by the attack on his wife and father, said he didn't say anything negative about trump last night. is that legitimate? >> well, it is legitimate in the sense he didn't say anything negative about trump. he was vanilla related to his comments. i believe he did somewhat a disservice to the republican national convention and party because he did -- cruz has established or inconsistent of those with the republican party and mr. trump. so it would seem more appropriate for him to have endorsed and rallied around and had the opportunity to continue to influence the policies and the processes and the goals of the republican party. >> this isolates him you think effectively. >> to some extent will isolate. it's sad to see that.

i'm disturbed he chose this path. >> one last question on the nato discussion. you travel to russia a lot. >> that's right. >> trump's discussion his words to the times have some arguing that it's telegraphing to russia and bad actors that nato is vulnerable. why is that not true? >> there are some aspects of nato that are vulnerable. it wouldn't be appropriate for me to answer all those questions. what mr. trump is trying to say a number of things that need to be fixed. i don't believe he wants to expose any kind of vulnerabilities as much as he wants to ensure that our allies understand we are going to work with them to enhance and improve the mechanisms they have providing for their defense. >> really appreciate your time. a rare tv appearance by you. thank you for coming in. >> it's a pleasure. thank you for having me. >> catch our live coverage beginning tonight at 10:00 p.m. eastern time with ivanka and donald trump taking the stage. simon, over to you. >> see you shortly, carl. coming up on the program, a big warning from buffet. what the sage of omaha has to

say about the state of affairs of public companies and ahead the ceo of union pacific the largest railroad in the country will join us in the wake of their results. remember these stocks have been flying on the idea that we may be bottoming out on the declines.

legendary investor byron buying stocks at record highs. find out in a wide ranging interview at trading nation.cnbc.com. more "squawk on the street" coming up. their results. more "squawk on the street"

their results. more "squawk on the street" tomorrow on the show don't miss our exclusive interview with the ceo of lulu lemon trying to edge out the competition from nike and under armour. this is his first television interview and we will have it for you tomorrow 9:00 a.m. eastern time. one not to miss. meantime some of the world's

biggest ceos including warren buffet, met in secret to find ways to improve corporate governance and talk about the sorry state of public companies. well, today they published an open letter of their recommendations on a range of issues from stock classes to board practices saying companies shouldn't feel they have to offer short-term earnings guidance, for instance. here's what warren buffet had to say about the meeting that was recorded by our own andrew ross sorkin earlier on "squawk box." >> we didn't necessarily come to euna nimty on every point and point that at the beginning of our statement. that there are a variety of companies that may have different constituencies, that may operate under different pressures, may have different beliefs about it, so that this is not saying that if you don't do this you're dead wrong or anything of the sort. it was -- it was to give encouragement to companies that really felt uneasy about giving guidance to perhaps have a little more backbone about it. i personally think that's a very

good recommendation. but i don't think it should be mandatory. >> part of the goal is to encourage companies to go public. buffet did suggest he does understand the appeal of private companies wanting to stay private longer these days. have a listen. >> i originally would have preferred berkshire hathaway to be a private company and over the years, my view on that has changed 180 degrees. i enjoy having berkshire being a public company. i enjoy having -- i don't know if we have a million shareholders or even more, but i like the fact that people put their trust in us and that we treat them like partners and they feel like partners. >> buffet one of the high-profile names, guys, that signed the letter that has been published in a series of newspapers. larry fink, who is a long-time -- for a long time talked about how companies need to stop the short-term thinking, think long term, there was actually an activist investor on the list as well, jeffrey from value gen. coca-cola gave up guidance a long time ago, being a key

holding of buffet, i believe they did. >> they give forecasts. >> but i don't think they give published guidance. >> independence of board rooms and away from the ceos and as soon as you go through the bank discussions with jamie dimon or moynihan no, they can become chairman as well. secret meetings, really? >> well, i think the point was they wanted to start a conversation and a debate. >> this has been going on for decades this type of conversation hasn't it? >> yeah. i mean to a certain extent the idea of all the things, yeah, but i'm surprised they didn't focus more on adjusted numbers, which we've seen more and more of and i know buffet has had issues with. doesn't seem to be something they came out with a conclusion on. just these constant adjustments that make it very difficult to really understand what the underlying is and being judged on things when actually your earnings are not what they appear to be. >> coming up on the program we'll speak with union pacific ceo lance fritz. they came through with earnings

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. union pacific reporting mixed results today saying the stock was hurt by freight revenue. the stock has hurt in a lot of railroad companies in anticipation that the stock could be bought out. we welcome fritz. welcome to the program. >> thank you, simon. >> you're clearly beaten by earnings by a penny from last year. are the freight earnings beg beginning to bottom out in your view? >> we are still facing some of the same headwinds we faced in the last four or five quarters. natural gas pricing, replacing coal for licht,elect. a strong u.s. dollar. shale energy and we are seeing improvement. that's encouraging it.

seeing it in grain and construction products and industrial chemicals and lpg. those are optimistic signs. >> we were hearing 10 minutes ago on the fromprogram how dona trump is increasingly surrou surrounding himself with energy policy peoples and word that hamm could be the next energy secretary. and the aim seems to be coal in what they're saying. what would that mean for you as an industry and your business? >> let me start by saying in this presidential cycle, we're not picking sides. when we look at presidential candidates, one thing we care deeply about how they position the american economy and embedded in that is what they do for electricity weights. our perspective is coal has a

place in electricity long-term. it is clean and getting cleaner and an abundant source of energy for the united states. we're pretty bullish on coal aside from the fact natural gas is replacing it for a generation. >> what about the price of oil? how does that feed through? >> for us, participating in the she' shale energy revolution, fra fracking, our original shipment is declining but they're a very small portion of our overall shipme shipments. we think an active robust shale energy economy is a good thing for the united states. it diversefies our energy resources and it creates jobs. >> can i ask you about the -- clearly, with the falling

volumes, your main aim has been in part to cut costs and you're beaten by a penny as a result today in your attempt to absorb that and move on. we also have the derailment in oregon last month. they got a lot of headlines. derailments i understand are relatively rare. however, there is now a conversation with some of the authorities about raising the guard levels and obviously increasing the costs and making new braking systems for the industry. can you talk us through what the implications are for you with that? >> let me start by saying there is no connectivity between our efforts of connectivity and world class safety operation. we are pursuing world class safety and making great efforts towards that. you mentioned the oregon dera derailing and we regret the impact we had on the local community. having said that the emergency response was exceptional.

the equipment all reacted the way congress intended in their most recent legislation. as a result, the impact on the environment was controlled ti t tightly and we union pacific stayed with the community until all issues were addressed. we have a firm amount of work in front of us to rebuild trust bonds with the communities in the gorge. we run a safe efficient operation and we're making great strides year-over-year towards an incident-free environment. >> i just wanted to ask about one piece of the economy you touched on freight shipments of autos and trucks. what do you think for the rest of the year? is this slow down going to pick up speed? >> i think the most recent numbers i've seen is something like 17 1/2 million units for the year.

what we're seeing is our auto parts penetration, that is our growth in shipment of auto parts for union pacific is pretty substantial. it's growing in the second quarter. we grew that by 9%. in terms of the impact on finished vehicles, we're seeing growth from mexico, but in total, we're seeing a mixed impact on us and it's very specific by the plan. >> we leave it at that. we've run out of time. good to see you. lance fritz joining us there, the ceo of union pacific. >> we send it to john fortt with a look at what's next on squawk alley. good morning. >> carl is in cleveland at the republican national convention and we will pick up there to see what to look forward to today. tesla has announced a new plan but is it too big? the stock is down. indices might be flat but chips are not.

in t inte intel is down and we will have exclusively on squawk, the ceo coming up.

i'm bertha coombs life at the justice department in washington. attorney general loretta lynn set to give a press conference filing suit against both the aetna humana deal and sigma merger saying these four fomps would provide too much concentrationen the insurance industry bringing the five largest insurers effectively to three and giving them tremendous power. deputy attorney general says there's no reason to put the dynamic in the market at risk by having this concentration. i will speaking with him following this press conference live and be sure to tune in on the "halftime report" when we will speak exclusively to ceo mark bertie lin