now. >> good morning. welcome to "squawk box" right here on cnbc. i'm andrew along with joe kernen and kayla tash shi is with us today. we have a very business friday. the first read on second quarter gdp is out. it comes out at 8:30 eastern. expected to grow in the quarter. also 8:30 we get the q2 employment cost index and 9:45 you have to look for the chicago pmi. that comes up at 10:00. dallas fed president is speaking today. a lot of fed heads in other economic watchers are going to be looking at that kind of stuff.

also we have some earnings. chevron, exxon mobile, murk. u.s. equity futures at this hour, little bit of a mixed picture. more the most part down. s&p 500 down 2.5 points. nasdaq is looking up. we're going to talk about some of the tech earnings last night. >> markets had trouble all week. remember the herald ham -- remember during that convention. >> right. >> just about the trump rally. just about seems like every day we went up. the more that comes out of phil philly, the more the market is running. maybe it's coincidence. >> there were earnings. >> they were good except for ford. >> other real things that happened in the world. >> the greatest thing about the market. >> the dacaterpillar. >> you can come up with any

explanation you like. >> just not for nothing, but i don't know. >> what it's worth, it's raining out today. >> maybe that's it. i don't want this tournament to get rained out today. hate that when they have to play 36 holes on a saturday. maybe not. it's early. people aren't teeing off yet. >> you're talking about the pga. >> yes. >> baltusrol. >> the tournament. that's where we're going to go for breakfast. that's the perfect or is quinn slip . >> for people who don't know, the trendiest restaurant in soho. the tournament is at baltusrol. that's a guy's name who got murdered a long time ago. and you called it -- >> it's what's on the brain. >> one of the kids is named dal

fa sar. >> have you ever been there? >> yes, many times. i'm trendy. >> you're cool. >> i used to be -- i much less elite now. i'm not sure why. i've been trending down. >> meanwhile we have other news moving the markets. the bank of japan easing monetary policy doubling purchases of etfs. that was seen as perhaps less of a passage than investors were expecting. they appear to bel disappointed. many were looking for a little bit more stimulus in a post decision news conference at the boj kovgovernor crow da told its meant to address uncertainties. argues quantitative easing has not reached the limit and the boj has room to move interest rates even more negative if

needed. take a look what that has done to the yen. currently surging at the bank of japan disappoints, but on the flip side with the yen, against the dollar, i guess it's up about 1.6%. the nikkei has now come into positive territory. it where i happ it went deep into negative territory. it is now up about half a percent. >> after the bell results from alphabet and amazon sending those shares higher for both companies. let's start with amazon. the world's largest only retailer reporting fifth straight quarterly profit. results beating estimates on both the top and bottom line. the company seeing strong growth in cloud business and an increase for subscriptions for prime program. here is cfo talking about prime day. >> record day for amazon devices. it was a great day for small businesses and sellers.

we saw great year improvement in their sales and more importantly a great day for customers. globally say saved over double what they had saved in prime day 2015. >> the moving of the stock makes him the third richest person on that forbes list. passing warren buffett. it collects precipitation. >> will you explain -- not to me. i know this pretty well. >> the expert on the set though, squall alley over here. squak alley. >> no pointing at me. >> as the expert. >> dropbox, you can get a video on a dropbox. >> think of any business that

needs server space somewhere and processing power somewhere. so if you with a dollar shave club and you have a website and you're processing off o this material, that would happen on aws so it's an amazon service. >> so this has nothing to do with buying something and sending to the person from a warehouse. >> amazon built the cloud for its own business. >> was processing so much business it needed all these servers to store customer data and run it. >> anybody who wants to use it can use it. they sell it as a service. >> you know who also does this, alibaba also offers cloud services. >> he does? it does. >> all good. now let's talk about joe's other favorite company. a misnamed company. ac

alphabet. >> people still say google. >> yes. mobile products came from cla 2 increase in revenues. bottom lines easily beating estimates. >> once again the primary driver was the increased use of mobile search by consumers. benefitting from our ongoing efforts to enhance the mobile search experience. we also benefitted from solid growth and desk top and tab lets search as well continued strength in youtube and advertising. >> we're going to be breaking down all of these results from amazon and alphabet in just a couple of minutes. >> if you didn't stay up for last night's democratic national convention in philadelphia, here's what you missed. hillary clinton the first woman to lead a major party presidential ticket accepted the nomination. during the acceptance speech she made a point to contrast with

republican nominee, donald trump. >> that's how we're going to make sure this economy works for everyone, not just those at the top. now, you didn't hear any of this, did you, from donald trump at his convention. he spoke for 70-odd minutes, and i do mean odd. and he offered zero solutions, but we already know, he doesn't believe these things. no wonder he doesn't like talking about his plans. you might have noticed i love talking about mine. >> we'll have more on the highlights from last night with john harwood coming up in just a few moments. >> let's check on the markets this morning. they are indicated with a little bit of downward pressure today, the dow. not the nasdaq though. this wroub the fourth straight

day of gains for the nasdaq, which that is die verging from what we've seen in the major averages. not a lot. in europe, not bad. >> you have some bank earnings pretty good over there. i think people were surprised by that. suppress test come out later tonight. >> not deutsche bank so much. >> no. >> that wasn't so good. >> oil is getting closer and closer to a three handle. at least it was when i checked this morning. it's got.86 cents to go. then they'll roll it and it will get back above 40. >> the 10-year treasury, were they hawkish comments. no. they were dumbish comments gwen. i've decided from here on out, i will make a deal with the fed. let's just not talk about it at all. when it happens, i'll deal with it. when you finally do a quarter

point, i think we can hanl it. we'll be back at 1%. most of i've been around a long time. usually we're 5, 6; 7%. the world is fine. let's never ask again when they're going to raise. go ahead and surprise me some day. i don't even want to know you're meeting that day. just go ahead and raise it. i'll deal with it. i don't need to adjust any positions. i'm not out over my skis. just do it. let's never talk about it again. do you think -- >> he will be here at 8:30 for you to tell him. >> do you think i should tell him? >> let's not even ever conjecture again. no more fed speak. no jackson hole. just surprise me. add on top o that. once we get a 1% or above, then let's start an earnest debate. >> so important. >> got to get out of our lives.

would you please. back to top earning story. google and amazon both trading higher. join us now to break down the results. one of the monsters, gene monster. senior research analyst at piper jeffrey. how many little monsters running around with mrs. monster. >> just one little one and her name is anya. >> that's nine. how would. >> six weeks old. >> oh, gene. this we did not know. congrats. no wonder you -- look, he does seem more. that apple thing probably didn't make you too happy, but having a baby, who cares at this point. >> so coming on tv at 5:00 a.m. is nothing. you've probably been up all night. >> no one told me about those first six weeks. >> you had no idea. you thought they came out in kinder garden. >> that's what i was hoping in hindsight. >> if you want the give us a

highlights of both report, you know, why don't we -- you know what, let's start alphabetically. how does that sound. alphabet. >> sounds great. so it was really acceleration i think from revenue was up 22% versus 18% last quarter. they had a disappointing march quarter so it was nice to see things rebounding here in the june quarter. i think one of the concerns investors are going to have is they're starting to get difficult comps coming up here in the september quarter. they've changed some add units. increased the size of techs and i think that combination is going to be able to power them through. talked a little bit about that. the take away here is search is doing well for google and got some reason to be optimistic about new ad formats. should be positive for revenue growth. one other quick point for google that's worth mentioning is they mentioned 13 times machine

learning, the term machine learning and i think that's something that's an overused term, but ultimately, i think this is going to have a profound impact in terms of how we use a lot of services and it's pretty clear google is heavy on the gas when it comes to machine learning. >> the "new york times" headline says google silences doubters. have they given us enough of a runway to not be having the conversation about doubting them come next quarter. >> they i think they have. i've covered google for a long time and there's always going be some doubters, but i think that at least for the next quarter they silenced the doubters. the other piece too is there's some room for them to increase their buy back or dividend after the report the september quarter and so i think that's something else that should keep investors engaged here over the next three months. >> when you think about the advertising dollars that have moved, not just to google, but

talked about facebook and video they picked up with this last week and earnings report. we keep thinking all this money is going to be coming out of tv, traditional tv. do you think that's happened yet. >> it hasn't. if you look at the tv budgets, they've been growing. it's a huge pool. i think google ultimately will benefit from that. it really hasn't started. >> okay. let's move on to amazon. t i felt was next in the alphabet. >> so the big take away here is that unit growth accelerated. it was 28% year for year. 27% in the march quarter. 22% a year ago. so small increases, but when you think of the magnitude about how big amazon it's hard to move the needle at all. all those kmaents you had played about the prime day, that positive stuff impacts the september quarter. it wasn't the june quarter.

i think the equity take away leer is they are just putting a death grip on traditional retail. they have taken their same day prime now, same hour, same day service to 22 cities at the beginning of the year to 41. that's taking away instrant gratification. and it's starting to impact their numbers. so i think is a positive. one other just quick side point, the disappointment on the amazon call was their profitability guidance. they outlined that was going to be significantly blow where the street is. i would just mention in 18 of the last 20 kwaertds they've beat their target. it may end up being in line. second is they dramatically accelerated the opening of fulfillment centers in the second quarter. they're going to open 18 this year. opened six a year ago. i think you're going to see this big investment phase. it doesn't change the broader margin expansion opportunity,

but they're kind of compressing into the september quarter which is a good thing. >> you've seen the dating game. you remember those old dating game. new dating game. >> yes. >> okay. you've got amazon, google, and app apple. who gets to a trillion dollars first as far as market cap? still betting on apple. >> i would say apple is the best pick for the next 6 to 12 months. as far as a trillion, it's probably amazon is unstoppable. just to be clear, we don't do multiyear price targets, compliance just want to be clear on that. if you just look at where most positive on apple of those three, right now. if you look at a decade or two decade down the road, amazon is unstoppable. >> this is like what the people faced with who to pick. you just really made a case for

all three. apple near term. you didn't make a case for google, but ann did when she had a chance. i think i said apple or google and she said google. apple and then second amazon. you don't think alphabet gets there. >> you would pick amazon if you're going to go that long-term road. >> that's the one now. they've got the most to move. okay, gene, thank you. you don't have a son. are you going to have more? it's none of my business, but -- where did he go? >> he didn't want to answer the question. don't name your kid eddy, i was going to say. then it would be eddy monster. >> he probably has heard that from people before. >> i don't think so. i don't think other people would bring that up with him. unless he was in like junior

high. then they mooigt haight have. >> blake is a great name. >> it's a great name. >> maybe scott. >> those are perfect names. >> really good names. >> we're going to talk about hillary clinton's big night last evening. she was obviousf course the nom giving her acceptance speech. now the real race beginning. the highlights we'll talk about next. plus we'll check the leaderboard of the pga championship as the rain threatens the second round. squawk returns on this rainy friday morning. check out this day in history. ♪

♪ for decades, investors have 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.

friday morning.

new jersey meanwhile, which is a state next to new york, is getting the same type of weather that's going to impact play at the pga championship at

baltusrol a golf club where it may be raining down there too. i have to tell you a story about who i was with ten, 12 years ago. before the martha stuart ipo with her and sam. >> together. >> yes. after the first round, jimmy walker is in the lead after five under. he's ahead of martin kaymer, ross fisher, mill yan know and grill low. i would try to b european. and hend rick citizenson. people were surprised he shot 65 yesterday. he was just looked like the same guy yesterday. baltusrol held up really well against these guys. wind picked up in the afternoon and things good even drier and nobody -- i think 68 might have been the best round, which would be two under. i told you yesterday, my

daughter, she's got blisters and everything. they had these pairings before it started. yesterday she had jimmy walker was her thing today. he hasn't been playing well at all and he's leading the tournament. >> does she know golf well enough. >> she is exciting. she was throwing some terms around last night. it was cute. they were sort of mixed metaphor talking about being even par or under. we made sure when you put things up, red, was the number that means under. it's usually a bad thing if you're under red. it's a good thing here and you put up the black numbers when you're over par. she goes, i know that, but jimmy walker. can you believe that. it's fun. it's going be much drier. the scoring might be better. >> weather could get a little better. >> pretty bad weather for philadelphia where hillary clinton had a big night last

night. chef gave her sepds speech at the dnc. john harwood joins us from philly. pretty subdued introduction from her daughter chelsea. >> it was a subdued introduction. look, she had a very difficult task last night. she's not a natural public speak speaker. she went after her objectives in a workman like fashion. she sland hermotivations. she saluted her rival, bernie sanders. she reached beyond her own party. >> i will be a president for the republicans, the democrats, the striving, the successful, for those who vote for me and those who don't. for all americans together. >> reporter: now, one bottom line of this convention was

trying to disqualify donald trump as a reasonable choice for president. she got some help earlier in the convention from people like former new york city mayor, mike bloombe bloomberg. here's how she sought to discredit him. >> imagine if you dare imagine, imagine him in the oval office facing a real crisis. a man you can bait with a tweet is not a man we can trust with nuclear weapons. >> now, perhaps the most powerful single moment of the entire night or even the entire week came from this father of a fallen muslim soldier with the righteous anger of a parent. he ripped donald trump's proposal to ban the entry of muslims into the united states. >> donald trump you're asking americans to trust you with

their future. let me ask you, have you even red the united states constitution? i will gladly lend you my copy. >>. >> reporter: now, this was a brilliantly executed convention from start to finish. the question is how much does it or the previous convention in philadelphia, chexcuse me in cleveland, how does that affect the race. we have a very particularized country. wall street journal poll before the convention, hillary clinton with a 5% lead. the lead we find in the next couple of weeks will tell us a

lot about where we head going into the debates this fall. >> thank you. we're going to continue the conversation this morning. hillary clinton and tim kaine will hit the road today. pennsylvania and ohio. donald trump heads for california. for more on all this, let's bring in alexis johnson, democratic strategist, ron christ christie. thank you both for being was. the question i wanted to start with is this. on the economy, they are going to hit the road and start talking about the economy. hillary clinton saying last night in the first 100 days she plans to pend more money, what sounds like a massive stimulus passage. unclear how she's going to do it. do you have any details or sense of what she's planning to do? >> reporter: no. i think the big word last night was infrastructure. i think that's something that democrats have been trying to push now or should be pushing now for the last eight years.

i think that is the real challenge of putting america back to work. so i think that her point getting at things like income inequality, talking about word like infrastructure, i think were signals to a lot of the democratic activists and the movement base that this is where her energy the going to be and that's going to help get support come september and october. >> one other question before i get to ron, really about bernie sanders. a number of times last night both in the introduction of hillary clinton by her daughter and by her herself, she used the word progressive a couple of times and then in another point thanked bernie sanders and tried to bring bernie sanders's people with her and said we hear you. your issues are our issues. is that lip service or real because that's one of the big issues that a number of independent voters are trying to understand. >> no, i think it's absolutely very real. i think that what she communicated last night, i think

it was a very solid speech. what she did was kind of map on or mirror kind of the way she will approach a presidency, the way she will govern r govern and it was i hear you. i will bring you in. we will figure out a way to merge this fogt. as opposed to i can do it alone which i think was coming out of the republican convention and i think then it really will kind of give her a sense that the movement is holding her accountable in so many different ways. actually multiple movements that are going to be holding her accountable. she understands she doesn't have that flexibility to move forward without cultivating that base in a strong way. >> am i crazy to think and i know you're on the other side of this, but cultivating the bernie sanders crowd makes it harder, not easier for her to win because that independent crowd looks at him and says that too far. >> no question about it. if you look at where the electorate is right now and

independents and those folks who are sitting on the fence. they don't want to see the country pulled left. it's the whole progressive bit. we've had nearly a trillion dollars of stimulus. what have we got for that? about 2% gdp growth. we had an increase in taxes and what have we got? unemployment. >> she's very, very scars if the specifics, but says trust me, put me in there without specifics. >> is it easier for trump to cater to that voter because it's perceived as a move to the center or is it seen more wildly off base from where his core is. >> a lot of people have their minds made up against clinton. one of my favorite cartoons when i was a kid was spy versus spy. do people trust the old clinton that we've seen on the scene for 35 years or do they trust the

new clinton we've seen versus donald trump. i don't know at this point with all the baggage we've seen and broken promises over the last 7 and a half years. whether or not we should give her the keys to to car, and, in fact, let's have somebody else even if it is donald trump drive the car for the next four years. >> are you surprised at the embrace, not just of obama and some of the social policies, but on the economy. she praised him on the economy. and then suggested that she wanted to continue that. sort of curious where you come out on that. >> look, with all due respect to ron. i'm not sure what he's talking about in terms of unemployment, we're at record lows here and i think that it's about getting to kind of core issues around income and equality. the fact the great gains have gone to the top 1%. 90% of gains have dwoen to the 1%. that is the core trends she's

trying to get at. this is not sustainable to build a economy for an entire america. we have to do better there. that's part of the issue that she's kind of bringing along with bernie, but affirming the fact that under the obama administration, he did stabilize the banks. he did stabilize the economy and brought down unemployment in a very strong way. painting a portrait that america is actually on the right path, there's no question about it. >> i think that's exactly right. it's a portrait. it's a portrait of where america is and a portrait of how people feel. we're at the worst point we've been in nearly 40 years f. you look at the so-called recession recovery we've been in for the last 85 months most of the folks are doing part-time job. if you look at obamacare the promises made there and look at the millions of people who are losing their coverage from the of course united healthcare anthem. people aren't feeling this portrait of what we're hearing

from the democrats. >> what comes next in terms of it's always hard to say with donald what comes next. in terms of the next inflection point. the next couple of weeks they're going to hit the road and then we get to the debates. >> this is going to be fascinating. the next couple of weeks it's going to be brutal. they're going be beating the daylights out of each other. i think the american people want to hear what are you going to do. what is your vision? what is your change that this country is going to bring about by putting you in the oval office. >> okay. alexis, thank you. ron, thank you. >> thank you. great to see both of you. appreciate it. >> coming up, two weeks vacation -- no, no. >> that's for you joe. >> starts tomorrow. >> for me personally. >> for you, you can, you know

what, ti what. the market is getting ready for the gdp data. and even more. of the 21st ce, the earth needed to find a new way to keep up with the data from over 30 billion connected devices. just 30 billion? a bold group of researchers and computer scientists in silicon valley, had a breakthrough they called... the machine. it changed computing forever. and it's been part of every new technology for the last 250 years. everything? everything! this year, hewlett packard enterprise will preview the machine and accelerate the future. see star trek beyond.

>> welcome back to "squawk box." we're joined now by joe. he's a principle at besmer trust. you know or friend, rebecca. >> yes, i do. >> what do you think of this latest move? i wouldn't say she thought the market was definitely staying with it is or going down, but i don't know if she's been buying it with both hands. >> no. >> what about you. >> we're neutral equities.

we look at the markets and the rally we've had. we think there's certainly some support factors. we talk about a come daytive monetary policy around the world. we can talk about okay stabilizing economic data. the earning season hasn't been too bad. you look at valuations and you are to ask yourself how much further can this rally go. >> who you're saying there are support and resistance factors. >> that's novel. >> that would be different mhow >> i think ultimately you think about your weights, your overweights and underweights and reach some conclusion based on where you think the data is pointing. >> that sounds like a ben franklin close. that's what i do when i can't make a decision. then i count them up. i try to weight them. if one is tries as important. you have to count them twice. >> i don't think you get more negatives than positive.

>> impactly tied. >> depends where you look around the world. within the united states there's clearly room to move higher. you have to temper expectations. you have to recognize the bull lk of the earning moving forward has to come from earnings growth. >> we haven't had any advance in the market in two years. >> that's not true. you take a look at the markets to date. >> 6% in two years. >> we have been churning. you include dividend though. it looks a little bit better than that, but where's the alternative. we look at assets around the world and this is how we're left. >> if question stay at zero longer we don't worry about multiples contracts as interest rates go up. this is the only place really best house in a bad neighborhood. you have the strength of u.s. companies plus dividend yields. i don't know if the -- it's fine if you want to be either neutral or negative, but i don't know. it seems like maybe ben franklin

will put you in buying stock. >> i think it depends where you are in the business cycle. if you think about how long this economic has lasted and you compare to the average cycle. you have to realize we're nearing the end. >> we need to decide whether business cycles, do they end of old age or policy mistakes? >> i think it's difficult to say what is going to make the business cycle end, but we're seeing signs of stress. we're seeing profit margins start to roll over. that's an early indicator. >> is it because companies are reinvesting in their business and hiring people. >> they are hiring people, but wages rising is again one of the many signs that suggest -- >> we were told it's not rising quickly enough. we're told that all the time. and, certainly, input costs don't see to be rising in terms of commodities. oil is going back down. >> commodities, but the you think about running a company you're biggest cost is going to

be wages. >> people are seeing wage gains. >> we're finally seeing wage gains. >> is that a 12 month? i mean, when you say next recession is coming. >> typically as you start to see wages rise, in is one factor. a lot of things you have to consider. i'm not saying the next le session is around the corner. it limits your upside. limits your gains. as we look at the world today we see some further upside in the equity market. >> then what do you? >> leave nit in cash? >> that's an option. equity markets relying on earnings, relies on earningsing to drive the bulk of that. and clients who can afford the liquidity offers a bit of options. >> private assets like art, boats. >> private equity in particular. >> have you looked at this -- this is a ground breaking idea.

this thing call comcast stock. it's been called a safe port and global storm. >> are you familiar with that concept. >> i've heard of it. >> hit another new high yesterday. >> are you familiar with that? >> it's defensive in growth. we're joke reasonable degring. >> it's the only stock we're atoo loud buy. >> that was a joke. & in a world held back by compromise, businesses need the agility to do one thing & another. only at&t has the network, people, and partners to help companies be... local & global. open & secure. because no one knows & like at&t.

(ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store.

we'll have to wait until monday to see if universal pulls off the box office win when the aforementioned, we were just talking about comcast reported this week. it was pointed out last year for universal was the biggest year for any movie studio. the first one to hit. >> i think they had a minnons last year. >> it was a big number and it's

tough to repeat that so the comps are harder. usually you'll see things go down, but pets was good and we'll see whether born. we're also going to be talking about rio. >> date night tonight. we're going to see jason born. >> date night. >> i'm taking the wife. we're going to the movie. >> i haven't heard of that, date night. >> that was blind date. >> tina fa and steve car rel was date night. . chocolate raisin. we're that family.

i shouldn't say this. maybe we'll get busted by security. we often walk into like duane read and load up on the candy, stick it in the pockets because the candy is. >> why am i not surprised. >> anyway, we're going to talk a little more rio in a little bit. >> and quickly just, merck is out. merck revenue beat the bottom line beat as well so we'll quickly tell you that before we head to break. giving credit where it's due, shares of equifax shading at an all-time high. ceo will join us after a quick break. we're creating the operating system for industry. it's called predix. it's gonna change the way the world works. ok, i'm telling my brain to tell the drone to get you a copy of my resume. umm, maybe keep your hands on the controller. look out!! ohhhhhhhhhh...

you know what, i'm just gonna email it to you. yeah that's probably safer. ok, cool.

>> quickly americaed merck making 92 cents a share, and receive beat estimates 9.4 versus $9.7 billion what the street was looking for. the company also affirmed its guidance for the rest of the year and we'll break down the report in the next half hour of "squawk." equifax trading on all time high, on track for its eighth positive year. joining us is rick smith, ceo. the stock is trading up because you reported earnings this week largely better than expected, 20% revenue growth.

what would you acredit that to? >> it's great to share the story. i would say it's largely driven by transformation of a company. as you know us as a credit reporting agency and go back ten years ago, 85% of all revenue was selling credit reports in america. today that number is less than 35% of our revenue. we've globalized the business and built unique data assets and invested heavily in analytics. 1 to 2% kind of growth to what you saw this year of 20% growth. >> not only do i know you're a credit reporting agency but i grew up down the street from you guys on your peach tree street headquarters so i drove by that sign fairly often. one would think the conventional wisdom is credit reporting does better in a down turn because more are worried about the credit and trying to see what it is but your stock is up 300% in

the last five years. how did you do that? >> thank you. it's a result of what we just talked about, unique data assets and the fact we're global now and we have the world class technology and analytic platforms allows us to innovate at levels we never could before. we've been building, 50 to 75 new products every single year that we never built before, solving problems for customers that we couldn't solve before. what that's done is added about four points of incremental organic growth to our company each and every year. second thing we've done, our margins, our margins have expanded dramatically over the last five or six years as you just alluded to in the earnings report yesterday. margins were up 160 basis points over a year ago. >> the big contract that you won recently is from the uk government, which i think very few companies would be able to say in this most recent quarter given the volatility there. is that a sure thing? >> yeah, it is, it's a great

contract. it's a contract we've been working on for about a year and a half, an analytics platform, equivalent to our irs, where they have obligations owed to them. we can analyze the debt owed to them and help them improve the collectability of those obligati obligations. we don't collect it. the brexit has had no impact on that. >> where do you see volatility as you become more of a global business, rick? >> latin america right now is going through some tough times, brazil, argentina, going through tough times, we're still growing nicely down there but there is volatility. you saw in our earnings report yesterday, latin american business once again on constant currently growth, some 13%. solid growth but volatility across that part of the world. >> what about here in the u.s.? you have a big business advising companies on how to comply with the affordable care act which has been in the crosshairs of

this years election. what are your views on the election cycle here in the u.s. and how that can affect your business? >> two great questions. we're so proud and something you don't typically think of when you think of our businesses. we built a sas platform to help hundreds of customers around the u.s. become compliant with the affordable care act and said in our earnings call, business was up 200% over a year ago. as far as the elections go, we're nonpartisan here, it's an interesting time for our country. he we watch your show every day and can't ignore that element of the point of our history right now as a country. our hope -- my hope is leader of a business, we have a congress that can work with the president and adjust regulation, overregulation, address unemployment, get this country growing again. >> a lot of ceos would share that baseline view. we appreciate you joining us on "squawk box" this morning.

>> rick smith of equifax of atlantic. tech giants surging. which is the best buy? we'll jump into that discussion when we return then a "squawk" exclusive, the first on cnbc, results from mike jackson, he'll join us at the 7:30 a.m. eastern time. we're back after the short break.

the race for the white house, hillary clinton accepts the democrat party's nomination for president. >> i accept your nomination for president of the united states! >> now the focus turns to donald trump and the campaign trail,

the latest from philadelphia is coming up. alphabet and amazon beating the street, both on the most and jeff bezos surpassing warren buffett. more on both of those companies and tech earnings straight ahead. and it's national chicken wing day. >> find out where you can score free wings today as "squawk box" continues right now. ♪ >> live from the beating heart of business, new york city, this is "squawk box." ♪ >> welcome back. first in business worldwide tackling the biggest business question, do boneless wings count in a chicken wing eating contest. >> it would be too easy. but i like them better. >> less work, yeah.

we had some, wasn't that this week? >> just yesterday. >> two days ago. two or three days. can't remember day to day -- >> it's friday. >> that's one day we do know and kayla, the futures have been down most of the morning, we'll take a quick look. we did have a merck report now down 31. it's been a tough week during the dnc, kind of week where markets took notice if we do do all of this additional stuff, grow government, that in stark contrast to the trump rally we saw last week, right? >> making it political, as somebody said -- >> i waited a whole hour -- >> i think you also mentioned it in the 6:00 hour. >> did i mention it in a serious way or not? >> i'm highlighting that everybody has their reason -- >> harold hamm started this and came out and said it's a trump

rally and you brought up ten different times in a sar donic way. >> other comment ators said the rally started post brexit but can you -- >> nigel rally. >> we'll be watching shares of cigna, reporting profit of $1.98 per share, well below estimates of 239. the company is cutting the full year forecasting, worst than expected results in the group disability and life insurance business and right now, you can't see it there but we will see where that stock ends or begins the day. the new york fed asking the philippine central bank to recover $81 million stolen by hackers in february. that $81 million belonged to the bank of bangladesh which has an account held at the fed. reuters reporting it was mostly launderred through the

philippines casino industry. the government set to release first quarter -- take a first look at second quarter gdp, 2.6% annual growth rate, up from 1.1% -- >> that gets confusing. first look at second quarter. >> a second look at the first quarter, right? i mean, it matters. >> the atlanta fed cut its estimate yesterday. >> i saw that. >> atlanta fed, if in the last couple of gdp quarters it was higher, and got it down to almost zero. we watched the atlanta fed. they seem to be ahead of everybody else on forecasting weakness. why does it take so long for everyone else? do you know? >> no. maybe they have aulse on a different part of the economy -- >> big airport. >> earnings -- aren't you from atlanta? >> i am, just told the last ceo, i grew up down the street from his house. >> today that was?

>> i heard that. >> what day is today? >> earnings out this morning from dow component maerk, raised the lower end of the full year guidance, expected 2016 profit of 367 to 377 per shape compared to estimates at $3.72. >> a developing story to tell you about, two police officers have been shot in a san diego neighborhood. a suspect is in custody. there was no immediate word on what touched off the violence. police searched the area for suspects and urged residents to stay indoors. the shooting comes with law officers around the country on alert following the killings of officers in dallas and louisiana and baton rouge. if we get details we'll bring them to you. >> john harwood joins us now with highlights from philly. john? >> reporter: andrew, hillary clinton at her convention last

night outlined an ambitious domestic agenda, including things like expanded social security, affordable child care for all and said she was going to pay for it by taxing wall street and the super rich because that's where the money is. >> i believe american corporations that have gotten so much from our country should be just as patriotic in return. many of them are but too many aren't. it's wrong to take tax breaks with one hand and give out pink slips with the other. and i believe wall street can never ever be allowed to wreck main street again. >> reporter: she also emphasized her credentials on national security as a former senator and secretary of state and donald trump's absence of experience.

>> donald trump says and this is a quote, i know more about isis than the generals do. no, donald, you don't. >> reporter: just like president obama hillary clinton went after donald trump for his statement that i alone can fix our problems. she made the point as president obama did that this is a american enterprise, something drawing in average neighborhoods and average people all across the country. and that's a stronger together message she's going to try to sell over the next three months, guys. >> thanks, john harwood in philly. alphabet and amazon out with second quarter earnings after the bell yesterday, both companies beating big on the top and bottom lines, joining us to break down the nubds and all things tech, michael graham, senior analyst and patel, the

editor in chief. good morning. >> which company do you want to talk about first? >> i want to start with alphabet. i'm not used to calling it alphabet, it's still google in my mind. eventually we'll get it. >> a great brand name, you can change it -- >> just randomly. but i think there's two sides to the alphabet story, it's hard to look at earnings without looking at samsung which did incredible this quarter. primarily on the strength of mobile in the 6 s-7. and then if you think the platform wars are kind of shaken out and kind of over, then you look at what's happening in terms of distributing content on the screens and there google has two of the most important icons on your phone, right? you open the browser, you'll do mobile search, google doing a great job of owner search and everyone is moving towards video and google has a ton of

challengers around youtube but there's still youtube. they've got two major icons on the phone. big kpeter, facebook. >> google maps isn't bad either. >> they own -- >> i use google maps and ways has taken me where i don't know where it is. >> they are letting it die and fold into google maps but that's the next big battle for a consumer services company, how do you get more icons to the mobile screen and battle facebook? and their enterprise business is doing better. >> michael, when the company is trying to make money through mobile through software on mobile, the hole that people like to poke in the stock, they still make the majority of the search revenue from desk top even in 2016. >> that's changing rapidly. the big story from earnings in terms of financials was that the mobile search business did

really well. they effectively increased the ad load on mobile. and that resulted in a lot of extra revenue for them. the key for the stock last night and this morning was that core search revenue growth accelerated to 26%. it was 20% last quarter. and early last year slowed down to 10 or 12%. that accelerated growth -- >> they can't keep adding. >> no, they can't. you know -- they can't. not indefinitely. >> well, they are constantly tweaking. they understand search really well. they understand the behavior of their users really well, so they are constantly tweaking and pricing is still going up, which is a good thing for them. but i think really it's that core website's revenue growth helping the stock and getting investors more comfortable. the other thing about the stock, the valuation is pretty reasonable. most of these tech titans when they slow down from 20% top line growth to the low double digits, they tend to retain a pe

multiple. if you put that on google earnings, you get $900 stock something like that, still a pretty reasonable valuation as well. >> nilay, the metric that people value amazon on has been free cash flow. they haven't been a profitable company and it's been so hard to predict and compare quarter over quarter. we have five quarters of profit, we'll be profitable this year. >> everyone is wonder when bezos will flip the switch, it just happened. it's kind of interesting, that revenue is coming from aws, the software business is still really good. we don't think about it being a great business but they add sales force and get incremental revenue, every other part of the business we have to invent a drone that will fly stuff around and reinvent logistics and delivery trucks. the physical side of amazon that we think is being amazon, obviously there's a lot of opportunity there but it is

their software business that's now defining them as a business. >> and it is that software side that is contributing to the profits and to the margins? >> aws will be half of amazon's earnings by 2020, which is an amazing statistic when you consider they just started it a few years ago. >> how much cover is it giving them for all of the other investments? >> actually the ecommerce margin story is firming up. the domestic ecommerce margins were almost 6% in q2. the international margins are still quite low and they guided margins down for q-3 which kept a lid on stock. >> do you think there's going to be pressure on them to split the company in two? >> i imagine -- >> if it ever gets to the point, you know what -- retail business is a great business, let's just -- but they don't need to be together. >> there's one person in charge of amazon and it's mr. besos and he may want to split the company up one day. one of the things that's driving

this high valuation for amazon is that they've demonstrated they can do scale based incubation of huge businesses. aws was born out of nothing and became a big business. the next thing that everyone is focused on is logistics, are they going to create another ups or fedex? i think they will. that helps have faith that the long term growth can be extended for a long time. >> is it possible he says i'm going to flip the switch back the other day? >> he has a rocket company to worry about. if he flips the switch and throws amazon into that type of turmoil, he won't be able to fight elon musk to see who goes to mars yet. he's going to keep plowing those profits back into the big moon shotty stuff like drones and new businesses, i don't think they are going to kill the revenue.

>> both stocks up sharply. we appreciate your time this morning. >> thanks. >> when we return, we're going to run through merck's numbers, out with results just minutes ago, barbara ryan will join us after the break. check out the futures quickly and they are down about 30, dow down and up again on the nasdaq, three straight days. every year, the amount of data your enterprise uses goes up. smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions. with a different kind of network that delivers the bandwidth you need without the high cost. because you can't build the business of tomorrow on the network of yesterday.

[rock music playing] [music stops] [whistle] [rock music playing] [record scratch] announcer: don't let e. coli mosh with your food. an estimated 3,000 americans die from a foodborne illness each year. you can't see these microbes, but they might be there. so, always separate raw meat from vegetables. keep your family safe at foodsafety.gov.

mer . merck just out with second quarter results. barbara ryan of ryan adviser. barbara, we talked about merck for an awfully long time. there was a time when it got cheap after the vioxx problem. buy it for yield. it still has a great yield. it's already moved pretty well from 48 up to almost 60. is it a capital gains stock now or still a yield stock? >> i think merck is transitioning to a capital gains stock. obvious obviously, all of farmers generate a lot of cash and pay out 75% of that in the form of dividends and share of purchase.

i think you'll always have that benefit. but i think what's really important to note here, number one, merck beat the quarter modestly on revenues and 2 cents on earning, bumped up the low end of the guidance range in the quarter. they've been consistently doing that. why are they doing that? one of the drivers of that is new products. more great news for their pd 1 inhibiter and i am mun no oncology driving a lot, whether it be merck or bristol. beat estimates for kaytruda, the results this morning small cell lung cancer, people expect it could exceed 6 billion by 2020. they also launched a new hcv

drug which did 112 million in the quarter. more than double the previous quarter. they've been active in business development, they have an mba filing for new diabetes drug for the end of the year and interesting new mechanism in alzheimer's disease in development as well. the company has emphasized they are focused on business development and have been doing transactio transactions. beyond the yield there is a driver of value here, although these are big companies so you're not going to get the kind of growth you would get in the small more leveraged biotech. >> we know about the aging population and we know about how quickly health care costs go up, there's hospitalization, there's doctors, all kinds of things that go into it but there is pricing pressure and will be. we've got an election coming up. who knows how everything plays out with drug prices.

but does the opportunity for drug companies to maybe be the best deal in town in dealing with chronic diseases like alzheimer's or diabetes -- bless you or influenza or allergies. >> or looking into a bright light. >> that causes a histamine response. these demographic things, does that offset the pricing pressure we're going to see? it would be nice if we could handle a lot of these chronic diseases without hospital stays, just by using a pill. >> yeah, absolutely, i mean, we're always going to have political pressure on this industry. it's an industry that has done so much good but it's also as a result of its productivity and investments in r and d been relatively successful. we have to remember, this is a long tail business, it's very, very risky. and returns have to be over time

commence rat with that. people talked about the same things in 1982. and was really evolved is the head room for new innovation and returns on innovation and pricing for products has really come from genericization of the older drugs and that happens in the form of patents expire but also happens over time as you get markets crowded with a lot of drugs that are similar and managed care has the opportunity to use one against the other. even hcv, we see a lot of competition in merck coming in, pricing has been coming down as there's been more competition. i think that really has been the key driver and i really don't see around the world that changing all that much. if you look at europe where you've got a one payer system in

the government which everyone is fearful of would occur here, these drugs like the immunooncology agents are priced competitively around the world. i think the market will determine value and you point to the critical issue. if these drugs save lives, reduce hospitalizations, and improve health care outcomes whether it be metrics of pure outcome for patients or costs, then that's the basis on which the industry is going to have to price its products. >> i'm worried we're running out of names for drugs though, barbara, one of the things -- you said a couple of them, they are so ridiculous. do they use a scrabble thing where they put the letters on and throw it out there and then -- >> i think you'll be amazed at what a difficult process it is -- >> i know it is.

do they have a vice president of new drug names that comes -- >> i think there are companies and agencies and all kinds of things that go into that. you point to the point that there's so many drugs too that these companies just from a regulatory standpoint have to have drug names that are somewhat unique and specific and not like others because then people get confused and a patient could get prescribed the wrong drug or change one letter on the prescription and it comes out very different. it's complicated. >> some of them are not so good. others ones -- there would be money to be made for making drug names that sound kind of cool -- >> i think that's always the goal. >> like hep asaj is good. >> or remember all of the dwarfs -- he had to come up with all of those, aragorn, how cool

is he? morguen sen. >> barbara, thank you. >> thanks for having me. have a great weekend. >> when we come back, getting ready in rio, an update on preparations for the olympics in brazil. at the bottom of the hour, mike jackson of autonation will talk results and race for the white house. which country has won the most fifa world cup titles? the answer when cnbc's "squawk box" continues.

>> now to the answer to the trivia question. which country has won the most fifa world cup titles? the answer, brazil. >> fireworks lit up the sky over rio over the big stadium last

night, part of a rehearsal for the olympics opening ceremony, one week from today. details are still secret but one volunteer said that preparations were going well and you can catch all of the olympic action on the nbc family of networks, starting next week. >> it's going to be big. >> you weren't around when this happened when there was a delay -- got to go. but carl was there and they weren't allowed to show it and it happened while he was talking and they were unable to reference what was going on. >> we won't have that problem this year -- >> no, we won't. that's going to be quite an opening. you know who's supposed to be there, gis sell. >> the largest auto retailer in just a moment.

it's time to discover that in a lexus suv... ♪ ...there's no such thing as adverse conditions. ♪ come to the lexus golden opportunity sales event this is the pursuit of perfection.

>> we're now about an hour away from the government's look at second quarter economic growth. economists expecting an annual growth rate of 2.6%, that would

be up from the first quarter of 1.1%. facebook could owe 3 to $5 billion in additional taxes, facebook disagrees with the irs's view on this issue. this was previously known but the amount of tax liability was not. earnings reports from two oil giants ahead next hour. we'll get exxon-mobil and chevron, both said to report, exxon is up first at the top of the hour followed by chevron 30 minutes later. >> autonation second quarter results missing on the top line but on the second line. now joining us in an exclusive interview is mike jackson, chairman and ceo of autonation. typically autonation executes pretty well. but you are obviously working in an environment that everyone else works in. we talk about both things. we assume that you executed

pretty well. >> thank you, especially since our 25,000 associates efforts resulted in an all time record eps 1.08 for the company and that took expense control, managing inventories and we had a great customer care business and we had a share repurchase opportunity early in the year that we took full advantage of and repurchased 9 million shares this year our share count was over 100 million shares but the environment was tough. retail sales for the auto industry were 2% down, early january it would, that the auto industry is plateauing at the high level. some are managing it better than others. >> the incentive issues you talked about at ford yesterday. >> the average for the industry is an increase in 13% incentives. in order to achieve a 2% decline in volume. if you had increased incentives, the volume decline would have

been larger. ford motor company raised incentives 28% year over year and others are below the 13% level. different companies are managing it differently, but the industry is gradually getting its head around the idea that it plateaued at a high level. you can still make a lot of money particularly with the mix so heavy towards trucks, almost 60% of the business is trucks now, we're all very high profits but you have to manage the business differently. we're better positioned -- whole industry is in a better position than six months ago, our inventories are down 77 days down to 70 days -- >> late last year you raised the first warning. >> first week of january when i was on here with our year end sales report. >> a few warning flags that people have been raising about the credit that consumers are using to buy cars, jamie dimon

has chimed in. are you seeing any cracks in auto lending? >> no, the availability of lending is terrific, default rates are mins xul compared to historic levels -- >> ticking up slightly. >> there are some players in the subprime overly aggressires who pay the price for that. at our business, only 10% is subprime and we work with very -- lenders in the business for the long term and disciplined. but if you take the total auto industry all the way from pay day places to people with credit scores over 700, it's in good shape. this was jamie's point, there are individual players who are being overly aggressive in subprime and will pay the price. i'm not here to name names on that this morning. systemically there's no risk in auto lending. >> and wouldn't be any contagion. >> that's correct. >> totally different but it is a regulatory question, we saw each other recently and talking about

autononous vehicles, what's the possibility you start seeing state regulators or federal regulators try to step in, not necessarily on tesla but new features we keep hearing about where car manufacturers are starting a semioug-autonomous level. >> we hope it's a comprehensive approach -- it's coming. i think it's going to be good. they are very forward looking and very progressive and understand these new technologies can save thousands and thousands of lives if done correctly. they are not trying to stop it but they see after the tesla accident as a for instance ks you need a regulatory frame. the debate in the industry, it's ironic, you have google on one end of the spectrum saying use

professional drivers and don't put it in consumer's hands until it's fully proven out and they have the most comprehensive sensors that are very expensive but it is on road to autonomous and tesla says let's put it in consumers and call it autopilot, even though it's not, it overpromises and under delivers and there you have accidents waiting to happen. most other manufacturers are somewhere in between. it's premature to call itself driving autonomous autopilot. it's coming -- you'll have different capabilities. >> will it be set at the speed limit? >> you look at the tesla accident, for instance, the computer knew it was on an unsafe road, by unsafe i mean

oncoming traffic was allowed to turn in front yet allowed the system to activate. >> that's a programming issue. >> not want to drive? >> i love to drive. i love to drive -- driving -- >> i have seven speeds and a clutch. do they have things that you don't have to shift that automatically -- people that buy seven-speed cars don't want someone else driving for them. >> joe -- >> yes, mike. >> one of the joys of life along with food, is driving, i'm a passionate dynamic driver. but there are moments if i need to do something else -- if i want to do something else and stuck -- >> can i use that line next time i get pulled over. i didn't intend to speed is what i'm going to use. >> it wasn't my intention. >> you can't be convicted. >> stop and go traffic where you're coming in and maybe want to make a phone call, autonomous

will be very beneficial. >> are you of the vie that 20 or 30 years from -- illegal to drive on roads? >> you mean illegal? >> i wonder to the extent we get the vehicles it would make it difficult. it's a great business opportunity to create driving clubs where -- >> part of the america character, character is freedom, freedom of choice to go where you want to go, when you want to go and how you want to do it. >> any freedom any way so -- >> freedom in america will remain -- >> 16-ounce drink. >> the joy of driving -- >> no, no, freedom is overrated, believe me. both of us would like to see whether 40 years from now what's happening on the roads, right? >> i hope to be there. >> so gm, better in europe and big suvs because they blew out numbers and ford missed them. >> gm, it's how you manage this market. gm is taking a very disciplined approach. they are not overproducing.

they are not jamming vehicles into fleet. they are not overincentive advising for a market that's not there, where the incremental doesn't bring you anything. i tip my hat to gm, they've adjusted to the market the fastest and quickest and running it the right way. you see it in the results. >> all right. >> is that used, action jackson. >> that's used. >> you can call me mike. >> under promise and overdeliver -- >> good way to go through life. ceo over 15 years. that's one of the secrets. >> great seeing everybody this morning. >> thank you. when we return sluggish cable business could be holding the stock back. we'll run through the results and talk media trends after the break. it's national chicken wing day. tasty bites mean big business for many restaurants around the

country. a list of deals and where you can score free wings in a moment.

. welcome back, cbs beating the top and bottom lines on

shares this morning. you can see where things stand right now. in the meantime, let's go over to julia borsten in los angeles. you're seeing the stock there, 54.19. >> the best second quarter earnings ever were bolstered by big jump in fees from star trek licensing and pay tv providers and even though advertising revenue declined in face of tough comparisons to last year's big sports events. ceo was extremely bullish about advertising increasing in the second half of the year as higher up front ad prices kick in and on stronger political advertising. saying it's impossible to replicate the reach of old fashioned tv ads. >> significant dollars flow back to broadcast television. they realize what we've been saying for a long time, digital buys are more powerful when they compliment television buys, not

when they replace them. >> moonves revealed the showtime and cbs all access apps have 2 million subscribers, equally split between them saying this is ahead of schedule. also made a pod shot at hbo now, which reported 800,000 subscribers in february. showtime has more major hits and moonves would not comment on the drama surrounding the controlling shareholder redstone or on a possible recombination with via come, saying cbs is complete as it is. >> can you stick with us for a little bit? >> sure. >> we'll continue this conversation right here and we'll talk media buzz and a lot more. brett harris is research analyst, are you happy with those earnings? >> absolutely. the earnings were great, a big part of it as julia mentioned was from the "star trek" as i

understand indication deal. and the over the top products was a very good surprise. >> as an owner of this company, how much of the bet is on cbs proper versus what could happen or not happen with cbs and potentially viacom, the conversation that didn't happen on that call. >> there is speculation and potential for some sort of catalyst beyond earnings growth. that being said we own the stock because we think it's the best positioned media company for the existing ecosystem. >> you talk to investors in both of these companies, a lot of people don't want them to get together but sort of expect ult natal matly they may. >> when they split up everyone thought viacome would be the faster growing company and cbs had more traditional assets, they have so vastly outperformed that it really is in many ways a

testament to the leadership of les moonves, there are a couple of comments that the strategic flexibility and impressive about cbs, the fact that the traditional ad business is doing very well and direct to consumer businesses which moonves referenced when he revealed new subscriber numbers for the showtime products. i think there are a lot of people who think that moonves would be a great leader for the two companies combined but at the same time, viacom's business is struggling so much it would be a mess for cbs investors to have to have those assets as well. >> do you agree with that? >> absolutely, yeah -- >> if there was an announcement tomorrow there was a deal, would you sell the company? >> it depends on the price, right? at some price any deal is a good deal. >> is that the right deal though for cbs? arguably the deal for cbs has always been time warner? >> yes, from an industrial logic

perspective that combination makes more sense. time warner doesn't have a major broadcast network, cbs does has the number one broadcast network. we thought that combination makes perhaps more sense. >> less moonves talked on the call about the political season coming up and the ad load they are pushing through affiliates is already incredibly strong into the fall. coupleing that with how they've been able to compliment the coverage of the political season, how much could that add to bottom line? >> i think generally rough numbers, the political cycle for cbs is probably $200 million of revenue, just roughly speaking over the course of the year which probably falls to the bottom line. there's not a lot of incremental costs associated with that and cbs all access, it's an ad supported over the top service. they know who's watching and it's a younger demo and advertisers do like the targeting aspect of online video as we heard on the facebook and

google call, online video is the next big part -- next big step up for online advertising. so cbs with the all access platform could be in a very advantageous position coming into this political cycle in addition to just its core stations. >> you mentioned the idea and it was really less talking about the idea of it as long as these things compliment but don't replace. isn't there a moment when we're talking about ott, which they have to -- they will replace? >> absolutely. so they talked on the call about how so far they believe subscribers are only coming from broadband only households, the 15 million people who just have broadband connection. eventually the ecosystem will migrate from traditional paid tv to pure over the top but that will take a long time. we expect pay tv declines of 1 to 2% per year because at the end of the day the pay tv product gives a lot of value, 200 channels, lots of content,

it's a question of getting the use interface into the xfinity platform. >> what we've heard moonves and others talk about a lot over the past three months since the last quarterly earnings, the fact they are seeing tv dollars migrate -- away from traditional tv to digital are migrating back because they say advertisers feel like they can really only get the reach of television from television ads and they feel like there's stilg a long ways to go before digital advertising really catches up. they are pretty bullish that tv will remain a position of strength for some time. >> okay. julia borsten in l.a., not eveneven 5:00 in the morning. >> do one of you two xfinity. >> i live in new york city. greatest city in the world -- >> all of the other things, all

of the other drawbacks from living here, that might be one of the biggest ones -- to xfinity and beyond. >> have you been to paris? >> did you try to go back to the farm after you've been to paris? >> once i've seen it you can't do it? >> xfinity, i would love to get xfinity -- >> it's a time warner cable deal had gone through. >> what was the deal i wanted to happen? >> i live in future. >> comcast buying time warner -- >> i'm not even going to mention the ice picks and subway in your eye that can happen. you have to have -- >> who wants to get a place in new york? >> where are you right now? >> beating heart of business. >> national chicken wing day. we'll tell you where to find great deals on chicken wings. >> there's what i think right there. >> the numbers and street reaction straight ahead. bear market territory yesterday, take a look where it is now,

crude down just about 37 cents a barrel. "squawk box" will be right back.

one stock we'll be watching this morning -- >> if you will appreciate and the animals -- >> i think i just did. >> you see they can play

anything. >> they are so good. >> anything. >> they take requests. >> every time i'm here they seem to be playing the same song. >> that background music goes with just about anything, any occasion, or it's like a wine, goes with anything. >> summer water what they call it. >> one stock we'll be watching, the company formerly known as rubbermaid. six cents above estimates and revenue beating forecasts, new we will's results, ones it acquired when it bought jargon corporation. you normally think of it as they own tup per wear but they also own sharpie. >> attention chicken wing fans. every day it's something. today it's national chicken wing

day. whether you like your wings hot or covered in barbecue sauce, you're in luck, plenty of deals available. 28 billion additional bone-in chicken wings are expected to be e eaten in 2016. how does that feel for chickens? there must be a better way to do this. i talked about that about, in a genetically modified way -- why couldn't they have six wings. there's no reason they couldn't, six wings for each chicken. >> there's someone working on that in a lab somewhere. >> first thing i want to do, according to the national chicken council, 1.3 billion are eaten during the super bowl sunday alone and here's a roundup of where to snag free or discounted wings, buffalo wild wings half priced wings and hooters is offering all you can eat traditional wings and bone less wings for $14.99 and $12.99

respecti respectively. wing stop five free classic wings and east coast wings a coupon for five free wings. my question is -- >> hooters. >> here are the producers. >> here we go. >> i'm afraid to say anything. >> in reference to chicken wings or chicken breasts or anything, i'm afraid to even go there. >> there's a hooters just down the street from here. >> my question is the two kinds of chicken wings, the kind drum stuck or other kind, which do i prefer? which do you reach for more frequently? >> i go for the drum stick. >> i go to the other one. i think they are better. i think the drum stick is tougher -- >> drum stick you can do with one hand and napkin you can do it more cleanly. >> to get between the two little

bones but it's better than the gristle you get with the -- i'll also get rid of gristle if i do the gm o thing. >> this is where you can trust the weatherman, when it is raining and they forecast a rainy day, that's when you can -- but we'll see whether they get this round in today but it is the pga. trade is a hot button issue. we'll talk to john engleer, about the race for the white house and trade deals and exxon-mobil, earnings are expected any minute. the numbers straight ahead. bend me shape me, any way you want me

as long as you love me, it's alright bend me shape me, any way you want me... shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store. [chains dragging] [eerie music playing] [crickets chirping] [owl hoots] announcer: if you don't fix them, sparks from dragging tow chains can cause a wildfire. and that could be scary.

bye, smokey! only you can prevent wildfires. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

earnings alert, results from oex on and chevron hitting the tape. numbers and what they tell us about the global energy markets coming up. >> politics and the economy. >> that's how we're going to make sure this economy works for everyone not just those at the top. >> hillary clinton versus donald trump, which candidate is better for the economy and corporate america? we're going to ask business round table president john engler. >> grubhub drifrs could competition from amazon and uber eat into the company's profits,

the ceo joins us as the final hour of "squawk box" begins right now. ♪ >> live from the most powerful city in the world, new york, this is "squawk box." ♪ >> exxon coming up. welcome back to "squawk box." exxon just hitting as we thought it would. i see one number, hopefully there's no charges or extraordinary items, 41 cents a share is what i'm seeing as the bottom line number. that would be below the 64 cent estimate. i don't know whether there's something that is in there that we need to add back in at this point. they have a miss of that size, revenue in the current period is

$57.7 billion. that also looks like it might be shy of expectations and the company says that the reduced earnings reflect sharply lower commodity prices and as we heard from one of the other big oil companies we recently reported, both lower commodity prices and weaker refining margins. if you want to think back to the glory days, the company do you remember sorkin what they used to earn in a quarter? >> i tried to make this point when we talked about apple and you were mad and said i was full of beans and things. but exxon used to earn $10 billion in a quarter. and it seems like a pretty stable business, the earnings quarter 1.7 billion, you can't

amortooiz -- it looks like a miss, 41 cents. if i look quickly, because i want to go back a couple years. >> the management commentary what you're looking at that say it is a volatile industry environment but they are focused on business fundamentals and cost discipline and advancing selective new investments across the value chain for long term shareholder value. >> they used to earn well over $2 a quarter and they are earning 40 cents and they used to have even the revenue number was much larger. for exxon you have to see replacing reserves and production and all of that kind of stuff goes into it and times like this, you do the other stuff, you're not obviously trying for -- to have the same level of profitability. >> recalibrating. >> and hibernating of sorts. >> exxon, do we look at the one-year chart? the time to buy it was long before oil recovered.

it was -- how far down? got down to 50s, got down to -- what's the low for the year? got to 66 though. $66 and its recovered all the way back where it was well above 90. it's already made its move back up even though oil looks like it could go back below 40 again. >> we'll keep watching that and you have other earnings as well. among the other top stories, amazon shares rising after the company posted better than expected results. seeing strong growth in the cloud business and increase in subscriptions for its prime programs, stock is up better than 2% in premarket trading. alphabet looks to be a winner today. beating street on a 20% increase in revenues, driven by a strong video market for youtube. that stock up more than 4%. and facebook says it may owe 3 to $5 billion in additional taxes. this is a result of an irs investigation into how the social network transferred its

assets overseas, that stock is down fractionally in the premarket. >> another stock to watch today is barclay's and the story behind a big jump, wilfred. >> stronger than expected earnings mainly due to lower costs, here's jess staley earlier. >> in about the second quarter, our core business of the trans atlantic consumer corporate bank generated a return on equity of 11%. that's one of the best returns i think of any bank in the world. our core business did quite well. the second part of our strategy for this year, to accelerate the closure of noncore. so that we go into 2017 and we'll begin to have clean air to prosecute the strategy of barclay's which we feel very good about. >> shares up sharply today despite earnings falling by one

third. highlighting how low expectations were following poor european bank results elsewhere this week. barclay shares had been down sharply year to date as well. the focus today switches to the spotlight on deutsche bank and italian banks which rallied from low levels on talk of a private bailout for bmps. here is staley talking about the health of european banks more widely. >> the european banker sector is challenged. if you look at the top 12 banks across europe, that's not healthy for the financial system, that's not healthy for the european economy. >> overall european banks are getting some surprise reprieve today ahead of stress test results, they are due at 4:00 p.m. eastern time. guys? >> all right, wilfred, thanks. other stocks to watch back here that we're looking at, in line

quarter for ups, earning 1.43, matching revenue slightly above forecast. company says one significant drag on revenue growth came from lower surcharge rates on fuel. abbvie, 6 cents above wall street revenue and raised its full year guidance, results driven by 17% jump in sales of humira rheumatoid arthritis drug. >> let's talk a little politics. the political events are now behind us and debates are a few weeks away as we begin to ask which candidate is best for the u.s. economy. the business round table warns ceo members are concerned that neerng candidate shares views on trade. john engler, good morning to you. >> good morning. >> you heard hillary clinton last night, just want your first impressions on comments she made both around business, talked

about tax inversions and talked about a big stimulus plan she wants to pursue in the first 100 days. >> i think the good news is the inf infrastructure agenda that mrs. clinton and mr. trump talked about is timed right. interest rates have been at historic lows for a decade. we ought to get busy on fixing america. that's good. along with that, we think will be the largest workforce training program in history perhaps. we don't have a workforce prepared to do this work today. that's one of the ways that you help workers get back to work and come back off the sidelines into the workforce is have something for them to do. and that's necessary because we've had a slow economy. and one of the reasons we are advocates for trade, we think that also helps to pick up the economy so there's bits and pieces to find but it's been slim pickings in some of the policy positions in the two

platforms. >> i was going to ask both sides against tpp, something you're for. there are questions whether there are cracks in those views, meaning we heard earlier this morning that maybe hillary clinton would ultimately be for tpp later. i don't know where you think you are, or if you think donald trump would ultimately switch his view. do you think one is more persuadable than the other? >> i'm not sure. i've said that being from michigan, i'm sort of used to people running against trade issues but the reality is after elections are over, generally people recognize that trade is an important aspect of american economic growth. the trade -- the transpacific partners got 500 million customers we can access by dropping 18,000 tariffs and intellectual property and tech sector is a big winner in the last couple of weeks and financial services sector has come out in support of this. we think there's a lot of

reasons to be for this. but we're also sensitive to the idea that not only does competition from around the world but also the deployment of technology mean that people in jobs find those jobs changing and some places disappearing and they need to be retrained and allowed to do something else. what would that something else be? part of it ought to be doing the work in america that needs to be done, fix our infrastructure. >> there's a lot -- >> so just reading notes here, you're xrup you housely, not just nonpartisan, but scrupulously nonpartisan. >> it is hard given my background. >> let's talk bernie and all of the platform -- all of the things in the plank in the democratic platform that were from a socialist. >> right. >> so the business round table

has no preference whether it supports a socialist plank noncapitalist plank, a different economic system that's an aj ma to capitalism. maybe the next pope can be an atheist, john? >> it's catholic, i don't think that's going to happen -- >> i don't understand, seriously. would you support a socialist candidate? can you say you like pro-growth strategy or is crony capitalism so part of business now that you'll -- it doesn't matter where you're getting your -- >> joe, the difference is and the chamber is a good example of somebody that their strategy and their structure is their active in politics. i've got 200 ceo members, each of those ceos with their companies have their own political action efforts and they get involved as an organization speaking for them collectively, we let them do the

politics we don't do it. that sort of is my -- those are my marching orders, when i'm hired to head the roundtable. >> should not have accepted the position. >> well, look, i love the policy aspect. that's why i'm very comfortable getting out and talking about the importance of trade. we're all in on immigration reform. >> it's not just trade. we need a different tax system in terms of territorial -- we need a lower tax rate. we need less regulations, we don't want to grow sub2%. >> we've been very critical of the administration and the tepid underperformance of the economic so-called recovery. we're limping along at barely 2% gdp growth. additional 1% is $3 trillion in revenue. >> you have a chance to double down on all of the same policies -- >> we give them the facts and

let the voters decide. i think there's a -- i'm from the midwest, the midwest is going to be a critical region in this election. i can tell you there is a deep sentiment for change. i think that's the challenge that secretary clinton has is that's not much change coming there. and you -- i don't know. we're going to see a very tight election. i'm happy to take a break and go to the olympics and we'll see what the fall looks like. >> i like putting you on the spot, john xbl. >> no, no -- >> i know how you feel, it would be hard for you to be scrupulously nonpartisan. >> it is and when i see people like my successor ms. granholm because we had eight years of it with jennifer granhom. >> we appreciate it. >> the demand for on demand delivery, online food ordering

site grub hub feeling the heat as amazon and uber start to deliver. we'll talk to the ceo matt maloney after the break. "squawk box" will be right back.

keeping the power lines clear,my job to protect public safety, while also protecting the environment.

the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.

welcome back. we're one week away from the opening ceremonies in rio. team usa will be decked out in ralph lauren sportswear, navy blazers and red and white and blue striped boat shoes. ralph lauren partnered with 40 u.s. manufacturers to make the outfits. the sportswear marks a change from the london summer games in 2012, layered athletes in ties and dress shoes. so -- >> little revolutionary. >> yes. >> what was it that one year where people didn't like it, had the -- >> that one year? >> silly berets. >> was that ralph lauren that year? roots was the canadian company that did -- >> in and of itself, canadian company. >> one of the highlights of watching the opening ceremony. >> for the u.s. it was a

canadian company, right? >> it might have been. >> that's not going to happen any more with president trump either. kidding, kidding. fireworks lit up the sky over rio's stadium last night. part of a rehearsal for the olympics opening ceremony one week from today. details of the ceremony are still secret but one volunteer said preparations were going well. you can catch all of the olympic action on the nbc family of networks starting next week and cnbc coverage begins on august 8th and seriously, think about it, you never really -- i don't know if you need a director to decide what to show because you can show everything if you have all of these different channels, you'll never have to select, do we go to beach volleyball or -- we'll show it out. >> and some of that i'm sure will be on cnbc too. >> some of it will be on cnbc but you can -- nbc can use all

of its platforms to deliver more olympic coverage than ever before. >> than anybody else? >> than ever before and anybody else. if only you had xfinity and you don't. and you pump your own gas too? >> i do, unless i go to jersey. >> i'll leave the lights on for you. the ceo of grub hub joins us, the growing competition to eat his lunch. stay tuned. you're watching "squawk box" on cnbc, first in business worldwide. americans are buying more and more of everything online. and so many businesses rely on the united states postal service to get it there. because when you ship with us, your business becomes our business. that's why we make more ecommerce deliveries to homes than anyone else in the country. the united states postal service. priority: you

with usaa is awesome.

homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and i'm a usaa member for life. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life.

grubhub reporting a record amount of ordering on its site but facing competition from the likes of uber and even amazon. recently launching its own restaurant delivery service. joining us now is matt maloney, ceo of grubhub. today it's down a little bit and we'll get to that in a second but normally we think of the best quarters for food delivery being the snowstorm system. what was it about the second quarter that hubgrub did so well? >> absolutely, typically we see our biggest growth in the fourth quarter and first quarter but we just posted our best quarter in a year with seasonal head winds as well as you just mentioned

accelerating competition. i think we've been making the right investments over the past two years and rebuilding our technical foundation and it's really yielding tangible results in terms of 37% year over year revenue growth. >> it's not just people are getti getting lazier and netflix rolled out new shows -- >> we're delivering for hundreds if not thousands of restaurants across the country and seeing restaurants we deliver for produce more orders per restaurant than the restaurants that do delivery themselves. that in itself is incremental orders it's been building and we've been doing continuous product improvement, making the product better and easy to order and putting the right features in front of the right people at the right time. we've done a lot of effective marketing. a big rebrand in the first quarter. spend spent a lot of money, done that strategically and it's all

paying off right now as you said in the second quarter that is typically down sequentially from the first quarter. >> you added about 24% growth for your users and added a ton of new restaurants. what was it about the pitch in the quarter that caused the growth to be so high? >> i think again, it was getting more people to be aware they can order online from their favorite restaurants, that's the marketing, it's capturing eyeballs and transitioning those to orders, that's the product itself. the fact that we have so many more restaurants, it's because restaurants don't really want to do delivery. we can come into communities across the country and say, look us do that for you. we'll do that for a cost that's less than what it will cost you to do it yourself. i think they all work together and we just blew out the quarter. >> in the big cities, a lot of the restaurants are going to some of the newer platforms like caviar and well known chefs are start ig their own apps like maple and like muncherie.

will you have to change your economics to keep people on the grubhub platform instead of going somewhere like caviar? >> we haven't. we just posted our strongest quarter in a year with as you say all of this increasing competition. we think we're going to win because of our sing you lar focus on connecting hungry diners to their favorite restaurants. we have the most competencive network, the two you mention are single restaurants, you don't have the opportunity to order from all of your favorite restaurants from those two platforms, we have 44,000 restaurants and nobody can compete with that for the next five years. it's extraordinarily hard to sign up that many individual mom and pop restaurants on a contract where we fulfill a meaningful part of the service for them. we have the lowest diner facing fees and we have the singular focus on this experience on this purpose and we support it all with our incredible customer service.

i just don't see anyone else can catch up. >> you merged with seamless a couple of years ago to tackle competition and the question always comes up whether you'll have to do another deal, buy one of these competitors. a couple of years ago people were saying maybe when yelp was for sale, that merger would have been a good fit. any deelsz in the pipe line? >> no, we have no material deals. we're very confident in our ability to compete and win in the current eco system. we've been buying smaller rds, restaurant delivery services because they have v-1 technology, we can take assets and restaurants and diners and drivers and drop them on state of the art logistics and see hyper efficiency out of those assets. that's the kind of deal we like to do, something that's extraordinarily creative for shareholders and extraordinarily creative for logistics and scale and continue going forward as fast as we can. we're doing this better than anyone else at the scale unmatched in the industry. that's where we are. >> stock giving back a little

gains and a couple downgrades, but strong quarter, up 25%. matt maloney, we appreciate you joining us today. >> thank you for having me on the show. >> you should buy stub hub, it's a -- more than solar city and tesla, more of a no brainer, isn't it? >> chicago groupon, i could come up with a great list.

stephen king, the master of suspense and the macabre. i enjoy keeping people up at night. my analysis shows your stories are actually about human connection, even love. great storytelling needs drama and empathy. my cognitive apis can help any business better connect with its audience. you should try writing a book. find a remote hotel. bring the family. i do not think that is a good idea.

welcome back to "squawk box" breaking news, second quarter, exactly as expected up .6, sequentially it was up .6 the last look. drum roll, please, remember, everybody was looking for over 2% except for atlanta and they were closer. 1.2. half what the street was looking at. i could never figure this out. atlanta gdp now pretty much puts all of the parts -- why many would disagree with their view, they are looking at 1.8, even they were on high side. our last look on first quarter gdp which was 1.1, we lost the

big handle, now only up .8. .8. now let's look at the internals, if we look at consumption, that was 4.2, a little light but that's based on expectation. it's definitely a little heavier than the 1.6 we ended up with our last look. if we look at what's going on with the personal consumption expenditure, quarter over quarter, that's 1.7, lighter than the 2.1 in the last look and 2.2 on the general price index. cut through all the numbers there, it really is light. what's fascinating is, if you look at -- this was supposed to be the quarter that averaged out with all of those anomalies and it is an averaging out week. third quarter hasn't been the best quarter. in the last 11 years i just quickly looked pay close attention to growth and lack of

productivity. back to you. >> thank you rickster. steve is here. >> 4.2%, that's worth about 3 percentage points, i'm doing back to the envelope when it comes to positive growth, everything else was worth minus 2. i'm seeing a bigger decline in housing investment down 6.1% from being up 8% on the prior quarter. i'm seeing business investment overall down 2.2%, that must have been worse than expected. the trade gap, let's see, little better, government purchases down 0.9% after having been positive in first quarter. you have the consumer in this economy on this side and everything else. this is a much weaker number than expected. it's a disappointment. along with today's data on the

second quarter, the government reporting regular annual revisions to data that go back three years. not much change overall but the government confirming our research that the first quarter has been understated. take a look, the economic analysis for first time acknowledged the broad finding of cnbc's work, the problem with first quarter seasonality goes back three decades. the associate director for national economic accounts telling reporters they'll review the long history of gdp because there's some evidence going back as 30 years for residual seasonality. that's the term the bea uses that shows seasonal patterns still exist even after the data has been season aly adjusted. here's one chart to show you what they are talking about. focusing on the past years, bea making several improvements how it calculates the number. the result you can see revising some of the weakness. the average over the past three years, 1.2% before the most

recent data up from 0.5%. you can see what was gained in the first quarter taken away in the second. why does it matter? a big change to the first quarter 2015. you remember that was a time where the negative gdp number creating worries about recession and fed holding off hiking because of weakness. here's what the numbers look like. minus .2. that's been revised up to perfectly pedestrian precisely average growth of 2%. the second quarter revised and first quarter 2014 also revised up as well for 2% swing. the changes an revisions they were warning about this number and all of the numbers, you can't take any single quarterly number by itself. you have to average growth and it provides greater accurately. up or down on this number today, plus or minus 1.3% in terms of subsequent revisions. joe? >> i was talking about you earlier and didn't know you were going to be on the show and

andrew reminded me. i have an offer for you. >> which is what? >> sort of an addendum to what we've been talking about the next rate increase. i want you and the fed to agree -- let's do it this way, we're not going to mention it ever again until it happens and when they finally do it, i don't care when it is, i will take the consequences -- >> okay. >> hold on. i don't even have to do it on a scheduled day. let's just agree to never say another word about when they are going to hike and whenever they finally decide to do it, go ahead and do it, tell me after it's done and i'll deal with it. >> let me ask you a question. on day when fed governor x speaks -- >> they can't speakmore. >> i can't get them not to talk. >> this is a big agreement all parties involved. >> the dome of silence around the parties involved. when you finally do it just do it. >> you want to go back to the

old day where we imputed fed movements from the movements in the monetary aggregates and divine oracles. >> when it mattered if we were at 6%, 7, 12, we're at zero. i'll deal with 1%. tell them. >> thank you. no more. >> if she'll agree not to talk. >> don't you think we can handle it? what's the worst -- if someone is on the wrong side of trade i'll cover it. >> you're in the camp of hear no evil see no hear. if we don't talk about it it doesn't exist as an issue? >> no, the next quarter point -- you go to the terminal pricing. it doesn't matter. just do it or not do it but don't talk about it. >> i will ask. >> if they agree, i'll agree. >> steve, thank you. >> diane is not going to agree with me. you wouldn't have anything to talk about if we just wait for them to just do it. you love all of this fed speak, you love -- >> no, i actually --

>> you were hanging on every word of liesman's six minute report -- >> i always hang on every word's of steve's. we're still on tepid growth and that is an issue. you're right, i actually have some sympathy for you, joe, because we're tired about talking about rate hikes when it's not going to happen for a while. i think the fed is sidelined until the end of the year. there's a lot of reasons for that. i think the domestic economy has checked the boxes but the reality is they are still hedging downside risks and this report suggests maybe we should. consumer is doing well, they snap back into the second quarter but where's business? and at the end of the day, you've got to have both of them coming together. they are worried about productivity growth and talking about business and investment falling short and transit tri problem. the research i've done, this goes back to before the crisis. we've fallen short on profit share relative to investment as

a share of gdp since 2006. we really not been putting much into our future for a long time now. >> diane, as far as the regional feds go, what makes the atlanta fed such a soothe sayer on gdp? >> they are adding numbers up really well when they are coming in. i was getting 2%, worried about 1.9. this is a weak number and we all translate the data, it's pretty straight forward what you miss on, what are the revisions to the previous data which now look like they were down. the trade is a headwind, that's not going to go away. with lower oil prices a plus to the u.s. consumer but how does it hit us on the other side on investment. that's where the weakness has been since oil prices have come down. that was one of the silver linings to the oil price boom, the boom in the oil industry in the u.s. and that's just not there. >> we used to wait year after year for us to start going into

that next like second gear or third gear. now, i thought this next quarter -- because -- atlanta did it a couple times last quarter, kept going down and down. i thought it was all going to be front end loaded to this quarter and we're going down again. now we're downgrading quarter by quarter. >>ness really worrysome. the downdraft in growth. the break between business sector and consumer sector, you have to narrow and hope it's in favor of growth instead of not in favor of growth. inventories are weaker. that does set us up for better but manufacturers are not having an easy time out there. this is not the most conducive business environment, but at the end of the day the world economy is not very hospitalable to us as well. >> part of the ten years haven't had a rate -- one rate increase, i guess we were going up for

part of that but there has been a good five or six years where we've talked a lot diane, a lot of hot air. we could have been -- i could have learned french. i could have -- i could have been reading -- >> doing something else. >> reading classics. could be an expert bridge player -- >> instead of being -- worrying about fed speak. the reality is, think about it even in a more global context, the bank of japan disappointed some. i'm not really sure bank of japan wants to go that much further negative. i think that was a bad call. think rer rethey are reluctant and they are close to helicopter money. you're talking about the fed trying to raise context and rest of the world trying to ease further and monetary policy has run out of ammunition. that's not something the federal reserve would say but it's up to fiscal policy now. and we need both reforms and we need a change in fiscal policy. we need to break the gridlock in washington. >> piano lessons, i could

probably be pretty good over five years instead of if he said that, donnelly said this, i don't know, maybe now we're at 70% for october or 30% for -- all of that time, there's so much things that we could have done. you know who i blame? liesman? >> you still got good ratings, right? >> it's fine. >> maybe it didn't hurt so bad. >> it's a good life. >> think of every friday when we're jobs friday when it's like the end of the world on what's going to happen. not one increase, one diane. >> keep your focus on the horizon and you'll do better. >> what other things would you prefer to talk about in that time? >> i'll do things, i'll read the classics. have you read the classics, do you speak french? >> do you do that onset? >> instead of worrying about the fed. >> when we come up, oil giants

exxon-mobil and chevron with quarterly results. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits.

fidelity -- where smarter investors will always be. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you.

morgan stanley. welcome back. chevron just out with quarterly numbers but they are a bit muddy, they lost 78 cents per share for the second quarter but it's unclear at least so far what number to compare to the consensus estimate of 32 cents per share profit. we do now that chevron's loss was its largest since 2001.

while we're on subject of energy, exxon-mobil reported a profit of 41 cents per share, well below estimates of 69 cents. revenue was also below forecast. crude prices and refining margins hitting exxon's results. >> chevron took a $2.1 billion worth write-down, saying i am pavement was based on assets where expected oil and gas production expected to be insufficient to recover costs, base irkally money losing investments. >> and nearing $40 a barrel. you know what? you said this. just thought about this, this after surprise builds in crude and gasoline. the you i'm referring to, a cnbc contributor saying that 45 to 50 was just a midway point on the move back to 60, 70, whatever it

is going to be. you said we may go back down below 40. >> they are making too much of this stuff, too much gasoline and pumping out too much crude oil. interesting on the chevron earnings, in a down turn they are going through like this, you'll see them through everything in the kitchen sink in terms of writing stuff off to get balance sheets levered for an upturn in the next year or so. for now, we're heading back down. we'll go as low as $35 -- >> is there anyone who barely hung on last time who won't be able to hang on this time? or the weak players have been sort of -- >> i think the next tier up is what you'll see in terms of more bankruptcies. i do think this downturn, i'm not a permanent bear on oil prices but this will be the knockout blow. you'll see a series of bankruptcies. >> what didn't lahappen last ti, they are still vulnerable. >> you're seeing the rig count go back up and hedges go on in

the market. even if they can keep the creditors at bay, that's what they've done a lot of these companies. >> but the creditors for now for the past few months have seemed to be at bay and bank executives said fact that oil prices were in the 40s an capital markets were relatively friendly kept a lot of these companies in business? >> no doubt about it. it was a very hopeful analysis. i was in the minority saying it was going to go back down. everyone thought it was behind us and market was balancing and things were clearing, i couldn't come up with the numbers everyone else was coming up with in terms of overproduction. whatever we lost in the united states, the iranians came racing back to the market. the chinese are in the process of doing to the refining industry what they've done to the steel industry. they are about to double their exports again of refined fuels and they are going to flood the market. this is a jobs program for them and they don't seem to take the real economic consequences of this into account. >> so demand has been static or not? >> demand in the united states

has been terrific. we had record gasoline demand -- >> how about over in china? >> china demand has just been okay. there's a falseness to it, if i can say that. a lot of the crude oil they've been buying on the open market is going into their strategic reserve which is just about full. the other red herring that you hear about is indian demand from india. it's not a big enough number to move the needle really on the global supply/demand equation. i think there's been way too much emphasis on india being in the asendancy, being a demand center like china is. they are a decade or more away from that. >> you feel we're going in the 30s again? >> i do. >> we don't -- >> take that -- >> not 20s, do we? >> i think we're entering a vicious cycle now. the refining margins are starting to get hit. they are going to dial back

operations. they are going to reduce runs at the refineries and maybe close longer than they would have and that will cause the crude oil back up again and oversupply globally to build up. >> so you extrapolating that we have another -- that takes everybody else down, a huge leg in the broader market? >> if it's not demand -- >> i think this is mostly an oversupply situation. i don't think this is any kind of indicator -- >> makes no sense when stocks are correlated to oil, it really doesn't? even though it has been. >> unless you saw the global economy cratering -- >> cheaper input should be better -- >> like having a bumper corn crop. you can only make so much of it into stuff. same thing going on in the energy space. >> this time around maybe it will be good for -- you won't sell stocks every time it goes down. if it's not demand related -- >> hopefully they'll see lower

gasoline prices stimulative to the economy. >> the dnc is over, right? >> anyone can find their own reason. we return, jim cramer joins us from the stock exchange. as we head to break, look at where futures are. the nasdaq has been the lone ranger in the green. that's still the case. you're watching cnbc, first in business, worldwide. ♪ on my front porch swing 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.

welcome back. let's get to the fork stock exchange. jim cramer joins us now. jim, we could talk, mobile, exxon, chevron. or alphabet, amazon. >> i got to tell you, it's a tale of two sticities. i can't believe how much exxon used to make versus what they made. chevron, the charges are bad. the alphabet call last night by ruth was very, very strong. it said, look, we're going to cut back on expenses. on capital expepd churs. she didn't say that, but the

number one very big. they make a lot of money. a lot more than people realize. it's selling at the same price as the average stock. much less than a clorox or a colgate. you just had the guest talk about oil being down. it's putting a damper on the market. europe seems to be doing better. >> let's go back to alphabet for a second. >> sure. >> what is going to change that is going to give it a difficult multiple? to the extent you're right, when are investors going to wake up and do something about snit. >> it was a mid teens grower. now it's a 20-plus grower. youtube has to start monetizing. both companies don't give you the transparency we would like. amazon says, we're a fly wheel. take it or leave it. the fly wheel thing. when you see the machine

learning coming through. and the search being better. when they start monetizing youtube, this stock will go up a couple hundred bucks. >> okay. jim cramer. great to see you. see you in a couple minutes. coming up, we'll talk about the morning's biggest stock movers. check our european trading right now. stay tuned, you're watching " "sq "squack box." bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest,

borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. digital works for banking and financial services. lets talk about how digital works for your business. ♪ you've wished upon it all year, and now it's finally here. the mercedes-benz summer event is back, with incredible offers on the mercedes-benz you've always longed for but hurry, these shooting stars fly by fast. lease the gle350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. the first stock index ♪ (musicwas createdughout) 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.

all right. let's get a -- whoa. >> that's not you. >> no. um, at least, oh, there. >> that's better. >> go back to her. >> any way, a final check on the market. i'm holding up okay. >> you are. you're holding up well. >> gosh darn it. you have to work out. you do. i don't know if i mentioned that if john oliver is watching. but i have a trainer. >> it's not your first rodeo. >> no. not my first rodeo. you met him. >> trainer. >> yeah. >> oil take a quick look. are we below? chevron and some of the big movers. >> i want a rematch on the pushups.

>> you have a trainer now, though you never cop to it. >> he has a whole health regimen. >> he does. you had your body fat tested. it was like, 6%, right? >> we should talk about it over at the equinox. >> what's the ams to ams comparison? you were like a 14 or something. >> yeah. if you can get under 10%, that's like, the holy grail. >> i think jim fix died running a marathon. you can overdo this, right? >> this is true. this is true. >> dangerously overmuscled. >> i don't know about that. >> stocks to watch. sorry. >> we looked at chevron. exxon. made some money. >> made $1.7 billion.

they'll get their other stuff in order for the next time. eventually, it does go back up. >> a good weekend to everybody. >> a good week end to everybody. thank you for hanging with us. >> i won't see you for calm a c of weeks. >> enjoy your vacation. >> simulcast it on ms while i'm gone. >> we'll talk a lot about donald. join us on monday. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street." we're going wrap up the month of july today with two shockers. second quarter gdp, a big miss of 1.2. only half the estimate. and bank of japan leaves kiwi and banks unchanged. flattish action in europe. oil down six straight