>> this is the way to wake up. good morning everybody. welcome to "squawk box" here on cnbc. i'm pick committee quibecky qui sorkin. joe is out this week. you saw the dau break a seven-day losing streak. oil prices picked up. this morning, things are relatively flat. looks like a mixed picture, but the dow futures are only up 2 points. s&p down less than a point and nasdaq down less than five. obviously a lot of people waiting to see what happens with the bank of england today. overnight in asia you did see market gains with the nikkei up 1%. more modest advances from both the hang sang. european markets you'll see there are some green arrows there as well. this is different than what we've been seeing recently. been a lot of concern with

european banks. this morning, things are shaking some of those concerns just a little bit. the dax is up .75%. the cac in france up.30%. the ftse is flat. crude oil picked up. pushed back above $40 yesterday towards the later half of the session and that did help stock prices. this morning, wti giving back about .25. >> 40.60 is like a c minus. >> every time it fulls below 40 m people think ha is going on. we did get numbers on gasoline drawdowns. that helped some of the oil prices. maybe the demand picture not as weak as people have been concerned. >> we'll talk oil over the next three hours. good morning, everybody. also on your agenda today, bank of england holding the policy

meeting. due out in about an hour's time. the bank of england is expected to cut rates and could also launch a new round of quantitative easing so we could get some action around the boe coming up. in the meantime weekly jobless claims out. they are expected to hold right around 265,000. then at 10:00 a.m. eastern look for june factory orders. earnings continuing to rolling out. kellogg and vie kom before the bell. after the bell we're going to hear from activism pliz ard, craft, hiens and linked in. >> $1.4 billion stake in canadian pacific. you might remember launching a proxy battle for that firm. came on this show and talked about it sparking a big turn around in that company. canadian pacific has completed the investment. that is a rare score these days.

unfortunately for bill. if you can check that. last month the firm reported a sharp decline in second quarter profit revenue because of lower shipping volumes. apple, tim cook taking to twitter to announce the company's new milestone. tweeted last month saw highest ever monthly billings in money paid to developers. $50 billion. with a b. >> that's a stun b number. >> it is. cook said apple services alone will be the size of fortune 100 company by next year and has the hardware business growth slows the service business is increasing. you can see the handoff. >> they're doing to talk much more about the service business. it's big, but relative to the larger hardware business. anyway, we told you yesterday about this hacking situation

with bitcoin. now temporarily pausing trading. bit if i an ex . in the meantime we have a developing story out of london this morning. 19-year-old killed one woman and injured five others in a knife attack last night. man was arrested minutes after it. police were called in. he's in customer in a hospital with early indications suggesting mental health may be a factor in the case. investigation is at an early stage. police say, quote, terrorism as a motivation is a line of inquiry to explore. >> let's get back to the markets. the dow breaking a seven-day losing streak. ahead of tomorrow's key jobs number, wondering if that can hold. joining us is joe. lindsey bell who is senior analyst at s&p global market intelligence.

good to see you. >> joe, you're pretty optimistic about what you've seen so far through earnings season. you think companies really do have what it takes to put up some numbers and therefore support higher prices. >> yes. absolutely. in a word, we're bullish. here with are three quarters of a way through earnings season and looks like s&p is tracking around negative 3.5%. that number on its own wouldn't pound the table, but when you put that into context where we've been for the last couple of quarters it represents thaerngs are reflating. >> last four quarters essentially. >> absolutely. it's been eights or nine since we've seen peak earnings on the s&p 500. people pointed fingers at everything from china to falling oil. what they were missing was we were in a declining earnings environment at the time when rates were threatening to go higher. earnings are looking better. >> lindsey, we still do have a lot of finger pointing. china, what's happening with

brexit. what we're going to hear from the bank of england today. what is going to happen with oil prices. which side wins out? >> well, there's certainly a lot of uncertainty in the market for sure. we also are more bullish over the longer term. i think near term though you will see volatility. august and september the most difficult months of the year. >> historically. >> so one-third of all declines or greater occur in august or september. i think if you position yourself at this point in time and some of you know get some money of the table: take your profits. the s&p 500 has hit new highs seven times in the month of july. that's why you saw a pullback. you can find some good buying opportunities here. >> what you're saying is potentially buy here, but you're expecting pull bax and that's when you throw a lot more money into the market too. >> just in the period of volatility. longer term earnings are going

to improve just as joe mentioned. >> there's so much glitter around. it's hard to see the real meat of any subject. you have all this stuff, brexit, china, fed, bank of england all this flittering around. >> that doesn't sound like glitter. i like glitter. >> it's early in the morning. you get my point. forget all that stuff and look at corporate earnings, a stock is supposed to be buying a chunk of future earnings. how are earnings at their core looking? >> at that core, they are looking pretty good. if we're to reduce or eliminate all the nose just focus on three things. number one what's a company earning. what's the interest rate environment like. and what is snn willing to pay for each dollar of earning. >> you're talking about short-term stuff. things like companies that aren't spending as much on capital expenditures. are you a long-term holder or looking for short-term gain. >> i think you bring up a good point. we are long-term holders.

we could sigh four to five quarters of recovery here. that doesn't require a lot of new gdp growth or anything like that. if we don't repeat the first half of last year we almost automatically snap back into positive territory. you typically see in a normal cycle is it represents the end of a cycle. the. >> when a company starts spending on capex companies will typically do is announce share buybacks because shares are getting better. >> that's the funny business on the balance sheet. >> companies like doing buybacks because the reality is you can announce a billion dollar buyback. that's not the point. the point is you're out there doing it. we typically see in a normal cycle is number one buybacks

and. raise dividends because they're more and more confident. the fourth thick you'll see in a cycle is capex. when they start building out for future orders. they don't generally materialize and excess capacity. >> we're not in the final phase yet because we haven't seen a lot of capex. >> probably eighth inning of this bull market. >> buybacks are nice in the sense you get more earnings per share, but it doesn't mean the company is earning anymore or doing better. >> that's absolutely right. in the last five quarters we've seen over 23% of the s&p buying back shares and boosting eps. you could look at it as a vote of company saying look, my stock is under halled. >> doesn't mean you're earning more. >> i have a smaller bigger slice of the same pie. >> yes. >> but the pie hasn't grown. do we see any indication that

companies are earning more money they used to. >> some of the headwinds, oil, some of these headwind that have been the case for the last several quarters are starting to go away. strong dollar is becoming less of an impact. those are the things that are going to continue to go forward. we should be able to see some expansion in margins moving forward. >> what about this decision today from the bank of england just from a very short-term perspective. >> glitter. >> big expectations they'll cut rates. last time they didn't do anything and the markets wobld a bit. >> i think that's a risk to the market today and in the near term. we saw japan disappoint and australia disappointed. this market is dependent on central banking easing which is less likely the fed will raise rates in september. in addition to the weak data we got on q2 and things like that. >> joe, what do you think.

>> everyone expects the bank of england to be the adult in the room. in the aftermath of brexit you ha two days of vicious selloff. then you had the expectations they would solve all thoef political problems through monetary policy and the reality is if you look at the sterling and the sharp drop, it's done a lot of the work of the sprab. if you're an english company today, you're a heck of a lot more competitive in global markets because you're currency has weakened tremendously. just the currency affect alone has done a lot to stabilize the uk markets and our view is if bank of england at some point whether it's today or in future meetings is going to have to stem some of the damage there. >> joe, lindsey, i want to thank you both. it's good to see you. >> we're going to talk tesla this morning. reporting much wider loss on revenue shy of expectations. however the company maintaining guidance to deliver 80,000 vehicles for the full year.

elon musk addressing some of those goals on the conference call last night. >> we're aiming to do a little better than 2,000 in a week in sales and delivery in q4. i people fairly optimistic about achieving that goal. yeah. i think our core business is actually doing quite well. >> joining us now to break down tesla's earnings. you look at those numbers. again they are a miss, right? >> they're a real miss. >> on the bottom line, yes. >> but they were expected on some o level because we had the preannouncement on shipments at the beginning of july. >> right. >> so we know half the street took the numbers down and half didn't. >> you are looking at me like it's not really a miss.

>> i'm saying that at the end of the day, people are expecting this company to lose money and they continue to spend aggressively. we're on the sidelines at this point primarily because we've seen with this company. >> solar city? >> not necessarily solar city. >> we're talking about some of the advanced app d applications they're talking about. the additional vehicles. this company is going full bore accelerating and from our perspective, where is the capital going to come from? they need to show returns for investors. equity investors are justifiably concerned right now. >> when you say the sidelines, are you neutral. >> we're at a neutral at this. >> what do you think it's worth. >> we don't have a price target right now. that's something we're just kind of watching the show at this point. >> as you whach the show, if you're an investor out there trying to figure out whether you should be in or out, how are you

even modeling that price. >> we're modeling a run rate on vehicles at this point. we need to get more detail on what is happening with solar city and the capital needs are. we think the company needs to engage between 11 and $12 billion in capital raises. there's a lot of activity, and, you know, frankly from our perspective we don't have enough information in terms of the production and the cash flow to make an accurate assessment. >> when you look at a calendar in terms of the capital, the next big date for you is what? >> the next dates that we're looking for are details on solar city. we don't expect anyone else to come until and bid for that platform then they have to go through the shareholder vote. >> i'm saying in capital. >> i think it's going to be related to solar city closing. >> you don't think additional capital will need to be raised

to fund tesla straight up. >> they've got over $3 billion in cash right now. finish the solar city deal and talk about the ramp on model three and other activities they're going to announce between now and then. likely fully autonomous driving and raise money on the back. >> this was a company that was hard to figure out and see the future for before solar city. how much does that. >> i'll be honest. it took us a good four days of solid work on our team to integrate solar city and tesla models. you have a technology company that's ramping in the auto industry and now you have sew similar city which we really view as a mix of specialty finance and specialty construction business on the solar side so mixing all three of those into a single model and getting a steady cash flow, you've got a tremendous number of variables. we can put all the pieces together, but putting together a full picture, then the energy industry on the utility side

which is highly related on the return side which is again our real concern on the equity. >> how much did you like this company presolar city. >> i was sue par buper bullish when you add in the complication of solar city and the capital needs and the cap returns you see in the utility industry, that's a big concern for us. >> what happens, elon musk has said he's not going to vote his shares. he'll let the other shareholders decide what to do. >> is there a chance they vote this down. >> i don't think so. folks have -- i mean there's one a conflict of interest for some of the shareholders that are on sew similar city. we expect them to vote for the deal. >> save me and my other bet that's gone bad. >> it's unfair. >> did solar city rule in tesla as a stock? >> i'm not going to say solar

city did that. >> what is it that you're so unhappy about? >> i think honestly i think the biggest strength and biggest liability on the platform is senior management. elon musk is tenacious entrepreneur. the ambition on the platform is too much for the structure right now. >> when you were listening to the call last night. he talked about fully autonomous vehicles. it blows his mind and it's going to come much quicker than any of us think. do you believe the regulations and what took place place in florida. >> there's two loads of information we're getting from the company now. the big ideas and actual details of what's happening and in our analysis we're going back to what are gross margins. beat on gross margins for the second quarter, but still a little bit shy. shipments were a sdoidisappoint

in the first half. let's see what happens and we need to see the leverage on the platform here to get behind it. regardless of what the big ambitions are, if they're are not producing cash the investors are fed up. >> how many shareholders have a conflict of interest. >> we're looking at a quarter of the shareholder base. >> 25%. >> yes. we think those folks once you take out elon's stock that's a rebust base for the voting shareholders from the tesla standpoint. >> you think the other shareholders are getting a raw deal. >> i'm not going to say that. let's see how they execute on this. i have mixed feelings for sure. >> okay. colin, thank you. appreciate it. >> thank you. >> much more to come this morning. nbc news reporting that donald trump's allies including rudy giuliani and newt gingrich are planning some intervention with

him. john harwood will join us next. announcer: they'll test you. try to break your will. but however loud the loudness gets. however many cheese puffs may fly. you're the driver. the one in control. stand firm. just wait. [click] and move only when you hear the click that says they're buckled in for the drive. never give up till they buckle up.

the. welcome back. the cash to iran story continues to come this morning. they denied it was a ransom

payment. the timing drawing skepticism however because the delivery of the money made in swiss franks and euros was around the same time of the release of american prisoners. payment was disclosed back then with the white house saying it was a settlement of a 37-year-old dispute that was wrapped into the iran nuclear deal. however some says timing and means of payment was a return of hostages. cash was delivered on wooden pallets by a private plane. said the payment was made in pallets of cash simply because the u.s. does not have a banking relationship with iran. in campaign news, a new nbc report says donald trump's allies including rudy giuliani and others are planning an intervention with him. let get details right now with john harwood. >> reporter: we're not sure exactly what this intervention will consist of or whether it will materialize.

yesterday i had an exchange of messages with newt gingrich and asked him after that report whether he was going to be part of such a thing or whether it was taking place. and he said no. we don't really know. what we do know is there is extensive level of panic and unease with republicans over the state of donald trump's campaign. and the reason is very simple. the bottom is falling out under his candidacy. if you look at the polling numbers. take a look at this new fox news poll nationally. he's down by 10 points. 49 to 39 to hillary clinton. then look at swing state new hampshire which have is where you've got a critical senate race. he's down 15 points. 47 to 32. when you start getting to the 32% level in key states, that is a reason for your party to be ekts dreamily concerned. other new polls out this morning show him falling behind by not

quite as much, but double digits margins. republicans are trying to i didn't go figure out some way to get to donald trump and stop him from doing the destructive things that force him to fall behind. all that stuff is not helping him and it's certainly not helping his party. >> john, hwe appreciate you. more throughout the morning. coming up a new retirement crisis in the works. 64% of millennials say they won't be able to save $1 million in their lifelifetime. take a look at s&p 500 winners and losers. ♪

♪ rangebound.

hi, and welcome back everybody. here's your stock market set up this morning. looks like a mixed morning. dow futures are slightly higher. now they turned a little bit negative. you get the idea, basically flat this morning. european markets may be a better indicator. a bit higher today.

watching the european banks out there. that's been the big story. in italy i know that italian bank stocks maybe not high on everybody's watch list. it's no zika, but it is important. >> the bank of england today, the ftse has just gone negative, but right around the flat line to your point waiting to see what the bank of england does. >> we wait for a rate hike here in england in about a half an hour the decision coming out. we are expecting not only a rate cut, but potentially stimulus from the boe. >> right now it's time for the executive edge. paul ryan jumping into the zika funding debate this morning. writing a piece titled drop the politics, put health first. couldn't agree with him more. he said the white house turns a blind eye to this. demands for funning, calls for more aggressive mosquito control. points fingers at democrats knowing full well the democrats

are being reinstructionists. cutting funding for planned parenthood they knew wouldn't pass with senate democrats. both sides refusing to pass a clean bill and deal with the issue at hand. paul ryan does not call for congress to get back if session and deal with the outbreak that has lapded on the shores. >> i think the sad part is itst it's not going to happen. >> a clean bill. >> any bill. do you think a bill is coming in the next week or two. >> they would have to come back from recess to take care of it. >> it's not going to happen. >> the big problem is when you hear what's happening in florida, right now governor scott says he is using $22 million of state fund for this, but there are women who have gone and asked for tests, women who are pregnant and can't get the test. so obviously there's a problem on the ground that hasn't been fixed. >> in less serious news, but it has to do with kim kardashian.

blackberry may have lost the biggest supporter. it used to be becky quick, but now kim kardashian loyal to the brand buying hold models on ebay. her latest blackberry bold broke and she's not taking it well. she took to twitter to her fans to see if she should try a new blackberry twice or try a new phone. samsung responded suggesting she should use their phones. >> my guess is she got phones sent to her. >> immediately. >> after the endorsement from kardashian shares of blackberry rose slightly in yesterday's session. >> seriously? >> i will say this. it's like calling it the trump rally. i'm just going to -- the stock going up and kardashian irrelevant. >> i did test the blackberry prif. it's a pretty cool device.

i don't like android as an operating system. i'm used to iphones. android is always doing stuff. always loading in the background. as a physical devise, it's big. got a great camera. battery lasted a couple of days. i'm not promoting it, but the device was cool. >> look, still with the really old one, but i do love iphone too. iphone and blackberry has blown it. hay really ticked me off in the last couple of months. >> why. >> it doesn't link to the internet properly. i need an iphone to do. >> keyboard. >> battery life. >> no, not on this one. >> with an iphone you've got abc. >> always be charging. >> it's like people at airports huddled around the outlets like smokers used to be. now they're sitting with the red battery syndrome. >> it's why it's a good reason to call two phones anyway.

>> millennials could be on a brink of retirement crisis. say they will never accumulate a million dollars in savings over their lifetime. sounds like a lot of money, but if people are retiring at 65 and expected to live well beyond that, you do neat a lot of cash on hand. multideck retirement is bigger than you might expect. all of this is according to a new survey by wells fargo. joins us right now is joe ready director of retirement and trust at wells fargo. he is the author of the survey. how many millennials did you talk to. >> we spoke to 1 hourks millennials and five hundred hispanic millennials. >> in terms of what they are telling you, by the way, these are people between the ages of 22 and 35. is that what we're talking about? >> that's correct. >> in terms of what they think they need to save versus where they are right now, what did you

find? >> majority 65% said they would never be able to save $1 million and 32% said they actually would be able to save $1 million and we dug into that a little bit and those that said they can't, only 1 third were saving 5% and seven% were saving the needed 10% or more and we contrasted that to the i cans and there's a big difference. two thirds were saving 5% or more and 20% were saifzing 10% or more and also a pretty big income gap between those that said they can and can't. 20,000 median income versus 53 -- >> i hate to interrupt. we lost your video right now. ly tell you that part of the survey showed that six out of ten millennials actually are saving for retirement right now. that's the bright spot in all of this. again, these are people between

the ages of 22 and 35. the question is how this matches up to other general races who have gone before because obviously that's a difficult time to be saving money when you're not necessarily at your peak earnings. anyway, we thank joe for his time today. if we can get him back, we'll do that j nus a bit. in the meantime shares of 21st century fox under pressure this morning. we're going to dig through the earnings report of the company and show you what lock plan murdoch said about roger ailes departure from fox news. quick check at what's within happening ahead of the bank of england decision. that decision again expected in less than half an hours's time and we will bring it to you when it occurs. stick around. "squawk box" will be right back. &

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s&p 500 off 2 points and the nasdaq off close to eight

points. little olympics news for this you morning. the open sceremony is on friday the u.s. women's playing opening match against new zealand last night. strike early in the first half. carly lloyd rises and scores on a header to put them up 1-0. alex morgan would add another goal until the second half. the reigning world cup champs going to be playing france on saturday. the opening sceremony airs. >>. in the meantime nike is getting out of the golf business. stop selling gloves, balls, and other equipment just to focus on shoes and partnerships with pro golfers. move comes as the golf industry is strig lg. golf is the smallest category for nike. gaining a rise because of the

following of tiling tiger woods in the meantime adidas reporting second quarter earnings. revenue up 7% in may. adidas said it was looking to sell the business which includes the taylor made brand. >> nike has been associated with several big name athletes throughout history. lebron james, michael jordan. nike first signed jordan to an endorsement more than 30 years ago and he reportedly still makes $100 million a year after that shoe deal. mad money, nike co-founder told jim cramer it is not easy trying to identify the next michael jordan. >> we use a very sharp pence and will we pass on endorsements from time to time. there was a great soccer club in europe. we said there's too much. not worth it so us. you can read about a lot of

money for endorsements including michael jordan, but he's worth it and so is lebron james. >> knight who retired as the chairman back in june says the company has the eye on the olympics as the ultimate athletic contest. considers the games to be the fashion runway for nike. coming up, we're going to dig through the fox earnings. i don't do this show very much. >> we have a lot going on. i was in brain glitter. the stock is under pressure in morning. we're going to tell you why later on. general kin gener "squawk box" awake and ready. we'll be right back.

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welcome back to "squawk box." 21 century fox reporting after the bell. earnings topped expectations on revenue that was a basically in line. dividend boost in a $3 billion buyback. results coming two weeks after rogers ailes announces resignation from fox news. lock la lachlan murdoch addressing the

dparltture. >> took up the responsibility of leading fox news as chairman and acting ceo. throughout this process, we have moved quickly and decisively to protect the business to protect its employees and to protect the unique and important voice fox news broadcasts. there is no one more dedicated or more able to transition fox news to new leadership than its founder. as acting ceo, he joins an existing team that is extraordinarily strong and equally devoted to success. the fox news channel is on track to have its highest rated year ever. >> joining us right now to talk about this is barton crock analyst. you looked at those earnings, by the way, fox news, great earnings. the other pieces of the business may be a little less so. look, i think their eps, the headline looked better than

people were expecting. that included a nonreturn tax item. look, they've got a very strong political cycle right now that's driving very good advertising growth on the physical examination news channel right now. i think in a very good cycle in terms of getting paid more the tv stations. they've got an interesting international growth with india. you have the regime change. two sons coming in and resetting the bar on a couple things wall street came to expect from fox. they' the other is these guys have had a lot of tax benefits that have been important for the eps and urging people to assume those go away. they're not going to be captures those like they were. there's a reset on earnings per share and a stock that would perform is struggle to be interesting despite the

business. >> sort of larger thing going on which is that the two brothers seem to be -- maybe this is the sort of short-term versus long-term. they're not going to manage the earnings perhaps the way the stock and company was manage ds private e previously. is that going to be a good thing and rather than use that money to manage the stock price, are they going use it on things that create more value. >> i think this is one of the that i think so that fox has wrestled with historically. not always an inquire at the light price and i think that what these guys have to show, lachlan and james, they are clearly building up. they're holding back on share purchase. they're signaling they're interested in using it. also signaling their discipli disciplined. they did not walk for the big bid at time warner. we'll see what they do, but

they're positioning themgss to be a consolidator. >> to take this and try to hit the ball, what do you want them to buy? >> well, look, i mean if i was to be a fantasy baseball for tv network, all of them should be consolidating. i think they should be rolling up content and developing critical mass they can take direct to the consumer without having to rely on cable and netflix. i don't think fox is looking to do that. . so honestly, i don't know, could they think of running sky again if the political situation eases. maybe. another look at time warner if the stock is appropriate, maybe. it's a big question right now. >> separately let me does you about this. it's clear we have work to do on the film studio. some of the major releases did not meet expectations and we're starting the year with a bit of a hill to climb. who do you hold responsible for that situation? >> i hold the film business

responsible. this is a business notoriously difficult to manage. couple of company haves done great. disney has done great. they've puts huge capital into buying to be a distributor for "star wars." they could have looked at that. disney has bought pixar. and they have bought marvel. fox hasn't done that. so i think in this environment, you need to bet big on franchise tent poles and that might mean acquiring some ip. i don't know there's much left to acquire at this point. >> let me just return as we end this conversation on fox news for a second which is to say, when you look at -- given the cash cow that is fox news but you also look at the politics of the murdoch brothers relative to their father, what do you think fox news looks like 12 months from now? >> my hope is that it doesn't

look a lot different than what it is today because it's a great business. whatever your politics are, it's a great business today. what i'm worried about is will that happen. they've got to hang onto talent. they've got to renew some of their big stars or bring in good people to replace them. they've got to create a workplace environment that breeds success. it's easy to be successful now because the political cycle is unlike anything you've seen. you get good ratings if you fall off your chair. when it slows down and you have to work harder for numbers, where will they be? i'm more nervous about that now. >> barton, we appreciate your time and perspective this morning. >> thank you. >> thanks. all right. well, outside of that, we are just minutes away from the bank of england's latest rate decision. steve leisman here to tell us what to expect. do we get a cut? stimulus? both? neither? >> so the expectation is for a 25 basis point cut. but the market seems to be very

divided leaning towards no new quantitative easing. i want to make it about this one guy here mark kacarney. the darling of the central banking community, the governor of the bank of canada. and renowned for steering the canadian banks through the crisis experiencing losses that were not expeesrienced here in e united states. much smaller financial business. but he's regarded of doing a good job so much he was put in charge of the basel stuff about financial stability. that's all -- he's been chairman of that. so here's a moment where he is really going to be leading rather than sort of being in a secondary position on the global stage. we look for to suggest about th impact of brexit that we didn't know. so they have to be very careful. >> in other words, it makes

sense they would go ahead and cut rates and save stimulus for a further -- >> exactly. with the right language. which is something carney has been an advocate for. >> this is a i have a bazooka in my pocket and i'm willing to use it. >> has called for using a sledge hammer in this case. and yet markets are pretty calm. so here's a couple other things that we're thinking about when it comes to the bank of england. this is the first major test of a central bank, a major central bank that it's experiencing a shock at the zero lower bound. so this notion what if the u.s. -- >> what does that mean? zero lower bound? zblit means we've cut rates to zero -- it used to mean we've cut rates to zero and can't go any lower. now we can. so it's a question of what a bank like england does when you have a shock to the system and you've already sort of near zero. you go further lower, additional quantitative easing. one thing i want to point out, and with due respect to joe and other who is have said there's

been no brexit impact and it's not that bad, well, take a look at what's happening to, say, for example, uk bonds versus u.s. bonds. there has been a major adjustment in the financial terms around a huge decline in the uk 10-year versus the u.s. 10-year. you've had an adjustment of interest rates. take a look at currencies, okay? the uk, you know what happened to the pound because you're planning your trip to england right now. you can see relative to versus the dollar, it's fallen much further. what there has not been is systemic risk. why is that? britain voting to leave the eu shows what's wrong with the european monetary union. you have a union where you can't adjust with independent central banking policy. you can't adjust with a currency. but the things that would be the safety valves, the things that would ease the pressure on systemic risk, they don't exist.

but there are problems there. however, for right now it's not systemic. >> i will say this. england is the best performing stock market, major european market this year. only behind hungary, luxembourg, and slovakia. is that because there's this expectation of easing and/or stimulus? and if we don't get it -- >> you raise an awesome point, brian. which they'll front the boe here. >> apparently they already are. >> i think if anybody among the central bankers is good at gaming the market, it's going to be carney. i think he has the most experience in the market of any central banker out there. but as we head to this thing, there's a question as to what the market expects and need to deliver. there's going to be an inflation forecast as well. coming up when we return, we're now just minutes away from the bank of england latest decision. the outcome and instant analysis when "squawk" returns.

and later, the battle over zika funding. we'll tackle the questions about the virus and how to stop it. tokyo-style ramen noodles.

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breaking news. the bank of england decision on interest rates. a rate cut is expected. their first since 2009. we have the decision and the market reaction straight ahead. did the u.s. pay ransom to release hostages? why jenkins thinks the trump campaign needs a refresh and should take to the airwaves. plus, containing zika. federal health officials struggling to get rid of mosquitoes that may be carrying the virus.

dr. scott gottlieb joins us to discuss concerns and what the government should be doing to stop zika from spreading. as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with andrew ross sorkin and brian sullivan. joe's out this week. we've been watching the futures and waiting on that boe decision. you can see right now the dow futures have just picked up some ground. they're up about 16 points, up ten points from a moment ago. you can see the s&p futures up by 1.3 and the nasdaq is down about 1.3. this just out. they did cut the rate. 25 basis points. we're talking about the bank of england cutting its rates as expected by the markets by 25 basis points. take a look at what's happening in currency markets.

you can see right now the euro is at 1.1134. the pound at -- >> they also did qe. >> okay. this is the big news. quantitative easing. >> i'm reading reuters headlines here. >> 63 to increase bond purchases to 435 from 375. they say most members are likely to cut back further rate cuts to near zero in 2016. this is the guidance we told you could be coming if incoming data is consistent with the forecast. i haven't gotten to the forecast yet. they voted 8-1 to buy $10 million of sterling investment. oh, corporate bonds. so i'm sure that's inclusive of -- >> non-financial investment grade bonds. >> that's a pretty big deal there. so they're bringing out a sledge -- i would say this is beyond the expectation of the market here. so we're talking about -- >> they're taking the sledge hammer to dry wall now.

>> is there anything down from a sledge hammer? 475 is just shy of that. the total asset of the purchase could increase after the august decision. >> by the way, here's another headline. the bank of england also sees rooms to expand all measures. there are more arrows in the quiver as well. >> could we call this the brexit bazooka? >> there was an adjustment in the outlook for growth. and all of this flows from that. soit flows from the idea this is an inflation mandate bank. so let's tell you -- i could tell you what happened to growth because that's in front of me here. not much change in the outlook for 2016. from the may forecast. but 2017 now has been downgraded from 2.3% to just 0.8%. and they had the same forecast for 2018 from 2.8% to 1.8%.

i'm sure the inflation numbers must have been down. >> that brings up the second part of what you had warned, steve. that the market may look at this if there's quantitative easing and enjoy it. but maybe the bank of england knows something that the broader market doesn't which is why we saw stock futures pick up but not by much. >> they had a scare last week and it raised questions as to whether or not it was worse. now, there were some people who said that's just the initial knock on effect of the uncertainty and it could get better. and what i don't know is is this a policy and i'll have to read about this that adjusts with the data or a commitment to do this? >> the ftse was down by 0.1% before we saw this. now up by 0.5% point. so stocks reacting positively to this news while they get their head around how much stimulus is here and what the concerns are about potential growth.

>> and there's three quick points i would like to make. "a," it's the first rate cut by the bank of england in seven years. "b," it appears that the market anticipated this and those who -- i hate to use this term -- front run the market did well. the ftse up 8.5% in the last three months making it the best performer of any european stock index. then if you look at the shadow rate, not just the effective rate. sort of the effective rate that people are paying on the shadow side of things. underneath the headlines. this should take it to negative. in a sense. when you factor in everything else. the headline rate is going to be 0.25%. but when you look at everything else, you're probably going to have negative real interest rates in had england now. >> yeah. absolutely. >> we hear about negative rates in certain -- denmark's had them for awhile. this is england. >> i think what we're seeing

here is carney either met or exceeded expectations in every place where the market was looking for it. he met expectations on rates. i think he exceeded it on quantitative easing and adding in new schemes for buying corporate bonds. it looks like he exceeded it on forward guidance. saying another rate hike is coming down the road. i don't think the market was expecting all three of those. we'll see how it reacts. it looks like the pound weakened further. >> it's reversed some of the gains. obviously to see what happened to the guilt as well here. >> "squawk box" live from london next week, i sense it. >> really? >> they say it's coming right up. i have it here if i put my glasses on. >> kumar is one of the guys like to follow. we have him on "power lunch." smart guy. he says you can't offset brexit impact through monetary policy. so at least one person is doubtful this is going to do anything to help any negative impact of the brexit. >> that's 12 basis points.

i think we went into this before. 80 that's what we had. so that's a move. so it might tell you that, you know, some of it was anticipated but definitely not all of it. >> steve, stay here. we have a lot more to talk about this. we have market guests joining us now with reaction to this. mark lehman is the president of jnp securities. josh fineman from deutsch asset management. let's talk about the market reaction first. are you surprised, first of all, by the depth of some of these measures? >> i think like steve said, it was like everybody was expecting. the shocking part is how the markets move. that's a big move on an expectation that was relatively in line with what people thought. >> were you expecting quantitative easing? >> you had to expect something. there are so many things that are going to inflict the market for some time now. i think they've done that. and obviously markets are acting rapidly. >> so where would you land on this? would you be a buyer of british stocks?

would you be a buyer of any of the other issues? what would you do with currency too? >> i think -- i've been saying it all along. i think a lot of these moves are pointing to a slowdown in europe and a slowdown and colossal change in what to expect over there. i think it's going to point you back here to the states. what i expect would be a good 2017 for the markets on our side as well as the ipo market. >> because this just takes -- there is no alternative scenario and funnels it down even more? >> i think you run out of things to do on the economic side and you point to things on the innovation side. we are second to none here. >> let's talk about what we're hearing from the bank of england in terms of the forecast for growth. do you agree with what they're laying out now? >> they downgraded the forecast. i would agree with that. there's worries about the impacts of brexit. i agree they did just as much if

not more. the forward guidance is a big deal. they're saying essentially, look. we've downgraded growth. if things turn out that way or worse, we're here. we've got more arrows in our quiver as you said. they've got other things they can do. i agree it's not likely to offset the entire impact of brexit, but it's a cushion. >> i think one way to think about as a former foreign reporter how to think about and understand other countries is put yourself in the same shoes. let's say janet yellen right now, there was an event in e the u.s. and all of a sudden the forecast turned to either near zero or negative. and that's what they were facing. now, i will point out that somebody i've known for a long time, an american who sitz on the bank of england's board which is something we don't do here in america. there's something to be said for it. she was reluctant on these issues. she was saying don't panic. at the same time the forecasts i've read from most wall street economists, i saw negative

numbers for next year. huge whacks to the gdp. >> the stimulus works better if you try and prevent some of those declines from happening in the first place? >> it's a huge lesson, they think, from the financial crisis. some that is still debated. but the first is to act early as you pointed out and the other is to act strongly. when you don't do that, you leave stuff on the table and the best basket case case for that is europe. that they have been behind the curve on bank stress testing, on stimulus, and they're just now trying to catch up. >> and i think you can go way back to what they were really behind is remember when our markets collapsed as did theirs. we made our banks raise equity. and they did not. >> and they're still just dealing with it. it's crazy. >> we made every single one of our banks raise equity whether they liked it or not. >> but with respect to the u.s. one of the things that's over -- it's been hung over the u.s. market is this question of first

systemic risk from europe and/or from britain from brexit. what does this do to that part? and then also just the absolute accounting part of it which is that britain's going to grow more slowly. europe's going to grow more slowly. that's going to hurt the u.s. how do you handicap those? >> sure. i think it's not too bad for the trade effect. u.s. exports to oil of europe, 3% of gdp. even if you shave some off of growth, the u.s. is manageable. if financial conditions tightened like the first couple days after brexit, if that would have continued that would have been problematic. that has reversed partly because of the monetary responds. >> do you think this is enough then. >> i think it's enough to cushion the blow and keep the effect on the u.s. to be modest. >> does the ecb have to respond? does the ecb now have to cut rates or further stimulate their

economy -- >> i don't know if they have to respond. >> it's a terrible race to the bottom. >> yeah. the ecb doesn't have much to go in terms of already negative rates. they could do more on the qe side and i expect they probably will. the impact is less on them. >> andrew, i would add to what you said. race to the bottom. we thought the bottom was 0%. but apparently now there's a subbasement. >> it's a bottomless pit. mark, you pointed out that you think this is going to make u.s. stocks more attractive. if you look at the u.s. reaction to this, stocks have risen but only slightly. if you look at the dow futures, they're only up by about 18 points i think right now. 17 points. >> i want to answer that, becky. because i think the risk to the u.s. was only to the downside. incorporating what josh was saying, the effect should not be great and the major effect is through the financial channel. that's true, there was risk if england didn't do enough. i don't think there was upside if england did more than enough. >> what do you think?

>> i agree. and i think you're -- i don't expect a rapid reaction, but in terms of corporate earnings, in terms of the kind of numbers i'm expecting from the companies here, you're going to want to be here. i think you'll see an ipo market that has been waiting to see what happens with our markets and waiting to see what happens with the elections. i think '17 could be a surprising year for the ipos and the hope for our market we haven't seen. >> and by the way, we do have a lot of companies that are international companies that do a lot of sales in europe. what's been interesting about this earnings season is that i think the stat i read yesterday was less than 40% of the companies have mentioned brexit or europe in their conference calls. and of them most of them were saying they hadn't seen anything yet. even the mentions were so far, so good. >> so i think that tells you what i think we're all saying here. the impact although real is probably muted, less than a lot of people feared. and i think going through 2017 i think you're going to be wanting to be in u.s. equities.

i think that's going to be a continued thing. >> i would say a little bit more patience here. i don't know that there's -- >> patience the bad news is coming? >> patience that bad news is possible in the sense there's perhaps an initial reaction to investment and hiring through the first uncertainty, what just happened. and then there's going to be a reality that sets in. and that reality, i mean, wilfred's done a great job on this. our reporter who's been in england has done a great job. but the idea of what happens to the banks over there, what happens to the economy. what does it mean -- when you talk about an economy that has a much larger gdp through imports? that 1.31 on the pound is a real thing in a way that's much less meaningful in the u.s. we make and get a lot of our stuff here. we're less reliant on foreign imports than in england. things that are coming from abroad are now more expensive there. so there's potential impact on investment and the consumer. >> and for our viewers who may own stock in companies based in england -- >> they're going to translate it

back your way. >> or a bp or a shell that has a huge sort of corporate domicile in london but sells a lot here. that sterling dollar translation is going to make it more difficult. >> dialing back financial armageddon is a big deal. that's important. but there is still real effects to the economy. it's like i said, not everything is a bubble. things go up in price. and down in price. we've lived in this age of, you know, we grew up in the '60s with the nuclear armageddon. we live in an age of financial armagedd armageddon. >> we're in a world of media armagedd armageddon. i think it's more that. >> blame the media. here we go. >> it's either the greatest or the worst. >> but it's not just the media. that's from the leaders. >> that's true. >> and we were told by all the people supporting the stay campaign that it would be financial armageddon if we fell out.

we haven't seen it. >> like i tell my -- with stocks, they're rarely as good when they hit new highs. just february stocks made lows, the s&p was at, you know, 181 and people were running for the exits. people were saying here comes the big one. >> you're right about this. i want to say this though. in the media we react a lot to what we're hearing from market participants. and people have traded this financial armageddon for a long time. however, i want to point out you've made a lot of money trading against armageddon. >> true. >> that's the way people have made money by understanding, "a," policy makers when they go through all the other options figure with the right solutions figure it out. i want to quote who said the end of the world happens only once. it's a trade you have to time carefully. >> yes. >> or not at all. >> i hate more the ones that we were the ones manipulating it all or that we're puppets. one of the two. >> i don't blame you guys.

>> i think it just exacerbates your highs and your lows. >> thanks, guys. >> thank you very much. steve, i am glad you were here today because this was very important. when we return, we're going to talk oil markets extending gains this morning following a large draw from inventories. prices right now showing you wti crude now back up above $40. $40.75. we're going to talk crude prices after the break. and later dr. scott gottlieb on zika in america. he'll join us at the bottom of the hour. medical doctor from cleveland clinic, watson, let's review the electronic medical record of the next patient.. no problem. it's a pretty huge file. done. sorry for the wait. that was quick. as part of our research, i also compared lab results with notes about prior treatments, then cross referenced it with thousands of medical journals. and i get the benefit of much more data, and a lot more time to plan the best treatments. i stay focused 24/7 and never sleep. you sound like a lot of medical students i know.

welcome back to "squawk box." things now headed up. we started in the red, now in the green. dow looks it would open up 33 points higher. nasdaq up about two points. also some earnings out this morning from viacom. it beat estimates by 4 cents. quarterly profit $1.05 per share. also beating network revenue declined during the quarter. the film division posted strong growth. big ackman's persian square saying it will divest its stake in canadian pacific. i think it has divested that stake. it was set up through three banks. you may remember three years ago ackman's firm launched a proxy battle and sparked a turnaround at the company. this has been one of his very

strong performers ackman saying since pershing -- this has been one of his big winners. last month the firm reported a sharp decline in second quarter profit and revenue. by the firm, we're talking about ackman's firm, not canadian pacific. i take that back. back it up. actually in the second quarter we are talking about canadian pacific. lower profit and revenue because of lower shipping volumes. all right. let's talk about oil now. oil holding around the psychologically to some important $40 per barrel level. right now crude oil is down slightly. crude, though, closed up more than 3% yesterday. that actually was its best day in three weeks. still, though, we're in the low $40 and it remains in bear market territory. joining us to talk more about it is jacques quso.

we like to say that we like big round numbers here in the media. is $40 important for any reason other than it's just a big round number? >> no. it's really not that important. i think you need to see which way things are trending in the market. what we've seen since 2011 has been a strong correlation between oil price and inventories between oil and refined products. and what the market is looking for is an inflection point to say, okay, our inventories building or drawing. we thought we had that earlier in the year where we had a few data points showing drawing of data points. but we saw them building the last few months. >> because it's a bit of a confusing number we got, i believe it was yesterday. which is that we saw inventories draw down. but also gasoline stockpiles draw down more than expected. but is that gasoline drawdown more on the refined product side? they've got their own storage issues and that inventories are

getting bigger for crude oil the commodity? >> you really need to look at both of the numbers together to get the true picture. and so what we've seen is in the second quarter of the year, there was a lot of refinery maintenance. that meant less oil process, less gasoline. and the opposite is going to happen in the third quarter where we will see a draw down of soil inventory. but also in terms of oil price, you should really look at both numbers together. >> one of the reasons we talked to most major public companies in america across "squawk box" and all the cnbc platforms, is they don't want to tell you what their break even number is. some of them give you a hint or reveal it on their conference calls. when we look at $40 versus $43 a barrel, i have argued those $3 don't make much difference to the companies at least that we have spoken with. would you say there's a meaningful difference to the balance sheets and income statements between $43 and $40 between keeping companies alive

and having them go down eventually. >> in the big picture, probably not. and so that has kind of cleared out. now companies have responded by taking down their cost structures. so there's an element to that. and of course oil costs are very different every place around the world. so, you know, it's really hard just to find one pretty number to throw out there to make everybody happy. >> okay, quickly. is $40 going to bankrupt most oil companies? >> no. it definitely should not. >> jacques russo, thank you. >> thank you. when we return today, tesla falling short of estimates in the latest quarter actually reported a wider loss than had been expected. what elon musk said on the conference call about his master plan is up next. and then trump allies plotting a candidate intervention after a disastrous 72 hours.

holman jenkins going to be here to talk about that. a lot of mixed stories about this, whether it's happening or not. newt gingrich has said he's not part of an intervention. plus we'll get thoughts on the $400 million question. did the united states pay iran ransom for hostages? "squawk box" will be right back.

coming up, columnist holman jenkins from the journal is going to join us. we'll ask about the $400 million cash payment to iran. plus while donald trump's campaign needs a, quote, refresh. and later the growing zika concerns. the mosquitoes are harder to exterminate than expected. dr. scott gottlieb expresses greater concerns in the u.s. take a look at u.s. equity futures. dow now up 53 points after

quantitative easing, if you will, in the uk. we're back in a moment.

welcome back to "squawk box." among the stories front and center, the biggest story of the hour, the bank of england cutting its key interest rate by 25 basis points. it's the first cut in seven years. also stimulus measures including a corporate bond buying program and the stock market is up as a result across the board. back here in the u.s., we're going to be getting weekly jobless numbers in about an hour. economists expecting 260,000 claims for the last week. virtually unchanged from the week before. and finally, the donald trump campaign having a negative effect. visits to trump named hotels, casinos, golf courses apparently down 10% compared to a year ago. the hardest hit properties, new york's trump soho hotel and the trump taj mahal in atlantic city. that casino now owned by carl

icahn who announced it will be closing in september. brian? breaking news on the state of unemployment in america. according to the latest report by challenger gray and christmas, july job cuts rising for the second month in a row. jumping 19% over june. in all employers planning to shed 45,000 jobs. john challenger joins us now. john, it sounds bad. 45,000 jobs, a 19% jump from june. how bad was it? >> well, certainly the cuts were up. now we've seen two consecutive months of cuts that have been rising. but may was a low number, the lowest of the year. so we're coming up from the bottom. but we really saw heavy cuts this month was in the energy sector where it looked like another round of slowing down reacting to oil prices started to happen. >> yeah. 17,700 cuts in the energy

sector. so you're looking at, i'll just call it roughly a third of the job kets. this is the most since april. is really is this energy is different from every other sector of the economy right now kind of a story? >> no question it's right there at the bottom. oil prices continue to be depressed. there are some signs that it's stabilizing. not only oil prices but rig development seems to be stabilizing. in fact, it was even up a little bit. maybe we're starting to see the bottom there in energy. but those big oil companies, conoco phillips made a big cut this month as well as the equipment companies like halliburton continue to cut jobs as they react to the real amount of business they've got to handle. >> yeah. 17,000 jobs total lost in texas. not all of those of course energy. that'd be all the energy jobs. quickly, i was not as surprised by oil and gas. i was surprised by the number of jobs lost in what you guys

factor as computer. what does that mean and who's losing their jobs here? >> we saw 49,000 cuts in computers for the year. almost 10,000 in the month of june. there was a big cut by microsoft as they continued to realign after the nokia deal. that's been an ongoing story. so the cuts were there. but computer is a volatile industry. so just there are always winners and losers so you see heavy cuts in that industry periodically in certain months when things happen. >> all right, john challenger. a pleasure. i guess even though it was 45,000 jobs lost. thank you for coming on. >> thank you. we're going to talk politics this morning. the trump campaign having a rough week with reports that some key republicans may be planning a, quote, intervention. joining us now is holman jenkins from "the wall street journal." we thank him for being with us. i said to you during the commercial break what are you

rooting for to happen now. because you've oscillated a little bit about how you feel about the donald. >> you asked me what i thought would be the optimal outcome. i think you mean optimal outcome for the country. i'm guessing it would be a narrow hillary victory with republicans in control in congress. >> does that mean that you're -- i thought that early on you were rooting for donald but you didn't think he could get there. >> i was rooting for donald to change his shtick a little bit, to change his appeal. to show he had the discipline to be a president and a rabble-rouser among a certain amount of the country. >> let me read you something. seth clarmin yesterday who's historically voted for republicans is added to the list of billionaires for clinton.

he writes that in his words, in the last several days, his actions over the last several days are so shocking in our democratic society that it's simply unthinkable that donald trump could become our president. is it unthinkable to you? >> i don't know if it's unthinkable. i think a lot of people have their personal brands at risk now with donald trump. so they're trying to protect themselves. it's a little bit disappointing to me because i don't want to see a wholesale flight from donald trump. i don't want him to perform so badly that he brings down the gop and the republican house and senate. >> if you were in the intervention and went down the street to trump tower to visit with donald trump, tell him what? >> stop tweeting. we're going to start doing some tv commercials that paint you as a serious businessman who gets things done. your rallies are not going to be so free form. i mean, everybody can benefit from the advice that political consultants give. it's not always bad. and he could benefit from that. >> holman, part of his appeal

has been that he is not a phony. he is not somebody who's managed and follows these rules that we've all set aside. i'm throwing this out as a devil's advocate here. people respond to him because they believe that he is -- you're getting authenticity from him. he is reacting, telling you exactly what he thinks. they think politicians are so fake and say one thing and do another. >> he's got those people. they're bought in. it's the other people, the people who are on the fence, the skeptical ones. those are the people he needs now. he's not going to lose his fan ifs he makes a more serious -- >> the more you have business people who have historically been republicans or voted for republicans, meg whitman earlier this week, others. or even you look at michael bloomberg, does that help him or hurt him? or rather help hillary or hurt her in that? and then there's another

contingency, we just hate the establishment. the idea that billionaires want to vote for hillary clinton means she must be in the pockets of them. and that would help donald trump? >> there aren't enough of those people. it helps hillary because her whole campaign shtick now is i'm not donald trump. you cannot take a risk on this crazy person. i'm your only choice. >> it's amazing how this seems like a mandate on donald trump at this point. we haven't heard much at all about clinton or any of the things happening. you don't even hear quite as much as you expect about this $400 million payment. >> yes. not even donald trump's policies anymore. it's his personality. his character. that's the whole campaign issue now. >> but isn't part of that his charm? in a sense that -- honestly, i mean that. because in this age of politically correctness and you hear people railing against it. people in the media say he screwed up when he said this. in some ways the people who like him, maybe they'll like him more

if he, quote, keeps screwing up. he's doing what they're sick of which is this sort of liberal media driven politically correct environment that they just completely and utterly reject. >> and as i say he's got those people. if he could just marry that talent, that knack to the other features and qualities you need in a president like discipline and judgment, think of what a powerful force he would be to bring a country behind a set of policies. >> the reason you're not supporting him is because he won't follow the rules on these things or because you don't like who he is and what he represents? >> look, i'm an analyst and a critic. not a supporter of anybody. >> but really, is this window dressing or is this hard core you take issue with where he comes down on political issues, what he's said? >> i disagree with a lot of his policies. i don't take all that stuff all that seriously. what i want to see in this campaign is a guy whose judgment i'm willing to rely on once he gets in office. >> that's the question i have which is at this point in the ball game, he's almost as much a

known quantity as hillary clinton is. to the extent you think he has discipline and judgment or if you were questioning whether he had discipline and judgment, is it not clear? >> he's 70 years old. he's done a lot in his life and accomplished a lot of things that normally you need discipline and judgment to accomplish. so i think there must be another dimension to donald, but i'm not seeing it. >> okay. holman jenkins, love seeing you. >> thanks. we should point out the opening ceremony for the olympics doesn't come until tomorrow, but the games in rio are already under way. the u.s. women's soccer team playing their opening round match last night. the u.s. striking early the the first half and then adding another goal in the second half. and that's how the game would end. the u.s. winning 2-0. up next for the reigning world cup champs, the u.s. taking on france. that comes this saturday. the opening ceremony for the entire olympic games airs tomorrow right here on nbc nap is at 8:00 p.m. eastern time.

when we come back, federal health officials saying crews in miami -- >> she did what i did -- >> are struggling to get rid of mosquitoes that may be carrying the zika virus. we're going to talk to dr. scott gottlieb after the break to talk about how we can stop the spread of the virus and what you should be concerned about. futures at this hour are looking a little higher. this comes a the bank of england cut rates as expected by 25 basis points. but also added additional quantitative easing that the market wasn't necessarily expecting. that has given us a little bit of a pop in futures. we went up ten to now up 42 points for the dow. s&p futures look like they'd open up about four points and the nasdaq by close to five. stick around. "squawk box" will be right back.

we have got to take you now to london because bank of england chairman mark carney is starting a q&a portion of their press conference on why they cut rates and added stimulus. let's listen in. >> is there anything the government can and should do? >> well, the first thing, emily, is that obviously we can act quickly.

and i think the bank has acted quickly across from contingency planning of the fbc. and now the actions of the mp kr rks. sop monetary policy is more nimble and it's appropriate that it's the first responder. clearly the biggest elements of the change are structural. and monetary policy has to take those structural changes into account in setting policy but it can't really do anything about those structural factors. so the biggest issues for government are those that they've acknowledged. which is the importance of the negotiations with european allies on the new relationship that will be developed. the importance of having a productivity plan comprehensive productivity plan for the country. and it's within that context or it's those decisions and those

policies which will really be the determinants of the long-term prosperity. what we need to do in that context and in advance of those decisions is to provide the appropriate stance of monetary policy to ease the adjustment. we're governed by a remit. in that we are setting the right tradeoff about getting inflation back to target and supporting output. and we i think have pretty clearly outlined in the report and with this decision how we see that tradeoff. and where we can provide support. >> governor, you in the inflation reports do not see the uk having a recession. is that as a result of the action the bank has taken were it not for what the bank has decided today would the uk have faced that recession? a lot of people were concerned about in the run-up to brexit. >> well, first is to reemphasize

how you started the question. which is our central forecast is for a relatively modest or period of growth that initially second half of this year we described it will be little growth in the second half. but positive growth the second half. that's the central expectation. and then that growth would pick up over the forecast horizon aided by monetary policy. important as the transmission starts to come through. growth would pick up. but to levels below that expected in may. so that's the central expectation. if we hadn't taken the steps we took today, we do expect output would have been lower, unemployment would have been higher. and we would have achieved a poorer balance in terms of returning inflation sustainably to target. and foregoing output. now, with all forecasts, there are risks on either side. it's possible the growth could

be a little stronger. it's possible growth could be a little weaker. we have in the actions that we've taken today by acting through multiple channels with the coherent policy package, we have improved the economic outcomes for this country. there will be less unemployment. there will be more activity. and there'll be a greater prospect of a successful adjustment to the new realities that the uk faces. >> we've been listening in to mark carney laying out his reasons for why the bank moved today. the bank of england cut its interest rates by 25 basis points that had been anticipated by the markets. they provided additional quantitative easing. and those are new ways of trying to provide some assistance to the markets that was not expected by the markets. but as you just heard from mark carney, he says they did this because if they hadn't, they thought the economy would be worse, unemployment would be

higher. they are now thinking in their economic forecasts, the latest forecasts that there would be relatively little growth in the second half but that is still growth. so they are hoping that this will provide a cushion. however, he also says the biggest changes out there will be structural. he said monetary policy can't do anything about that. that is for the government to decide how to work their way out of the eu. so again, a lot of these things just talking about this. markets had been reacting today. the ftse at this point is up. it was down just before 7:00 a.m. eastern time. that's when the bank came out with the surprise moves. you can see at this point that stock market has moved by about 1.5%. we've seen other moves where the gilt, the 10-year uk bond has seen its yield drop significantly. it went from about 80 basis points you can see right here to 0.667%. that is a pretty big move.

we'll continue to monitor how this will play out in markets around the world. meantime, we've also been following the story of zika. paul ryan jumping into the funding with a piece called drop the politics, put health first. he said for its part, the white house puts a blind eye to all of this. it asks for more money while sitting on unspent funds. senate democrats block that authority. it points fingers at republicans saying they know democrats are being obstructionist. that is true however the republicans have piled on to this as well and making sure they were politicizing things. meantime, no funding coming from congress. right now we're joined by dr. scott gottlieb who has been following this very closely. and scott, why don't you lay out for us how big of a concern this is now that we've actually seen 15 cases of zika that have been transmitted in miami.

is this something we can stop the outbreak? how concerned should we be? >> some isolated outbreaks was inevitable. florida is a state that's most vulnerable because the mosquito that transmits tends to dominate in those regions. this is imminently controlled. florida seems to be doing a good job of getting a hand on the local outbreak. you should be able to quell the continued spread. i think what's more concerning here isn't the fact we're going to see isolated outbreaks which should be containable. but the profile of the zika infection itself continues to get more worrisome as we learn more about this virus. >> what do you mean? >> well, if you look at some of the subsequent studies that have been done, there might be a higher rate of fetal anomalies especially for women pregnant in the first trimester and become infected. initially we thought the rate of

microcephaly was about 1%. now there's some suggestive evidence it might be higher than that. you start to worry any virus powerful enough to have that kind of effect on a developing fetus is probably having other impacts as well that we're not detecting. the infection itself is more concerning than we initially thought. our ability to control outbreaks should be within our reach. >> all right. i want to dig in on both of those points. first of all, on the idea we are able to detect zika and able to track it. what we've heard is that they still haven't found a single mosquito in this area that has the zika virus. even though we know there are 15 people who probably contracted it locally. that worries me that we're not very good at testing this or finding zika even if it's other populations. we also know that pregnant women who have gone in and asked to get tested have been told we don't have the test, it's not available, you can't get it now. that leads me to worry about the underreporting of the cases of zika. one out of five people who get

zika get signs of it. until two days ago, they were not required to report asymptomatic cases to the cdc. how many cases do you think we actually have? >> probably more than are being reported, certainly, because of the reasons you outlined. the testing isn't very good. the test to detect zika in humans haven't really been forward deployed the rapid tests you would want. you need to go to special clinics to get testing. it requires very specialized handling. so a lot of doctors don't want to do it. what we need to do is go to the field and capture and test mosquitoes. it was very effective at spotting early outbreaks with nile virus. virginia is doing it. new york is doing it. other states are doing it. the fact we haven't seen mosquitoes infected with zika suggests maybe this was a small outbreak. and the immediate steps they took to try to abate the

mosquitoes might have been effective and killed the mosquitoes, that one pool or few pools that were infected with the zika virus. i suspect that they're going to get a handle on this. >> that's -- we've been talking about zika literally every day as a number of other media outlets constantly. i just want to understand -- not that we shouldn't be taking this very seriously, but are we talking too much about it? are we talking too little about it at this point? >> i think the bigger risk for subsequent summers, this may become a concurrent problem. i think this is going to start to wane as we approach the end of the summer. i think the states most vulnerable like florida have taken good measures to try to control the outbreak of this. this particular mosquito was almost fully eradicated when we combatted yellow fever in the last century. we have the capacity to

eliminate the mosquito if we want to. florida does a good job of mosquito abatement. >> when you hear rick scott say we're open for florida, we're open for business. if you had a family, would you travel to florida right now? >> if you had a pregnant woman? >> look, i personally wouldn't be concerned about traveling to florida. i think there's other parts of the world including puerto rico right now which has a much worse problem with the spread of this infection that i might be more concern traveling to. i think florida is safe. i think miami's safe. i think the state is doing a good job. they'll likely get control of this initial outbreak. there might be a few other small outbreaks, but i think they'll control it. >> let me ask you about what you mentioned before. the idea this disease is different in terms of its impact. right now they're saying pregnant women should be concerned. should you stop worrying the day after you give birth? is your infant child okay at that point? >> yeah, again, you know, we're still learning a lot about this virus. it's a relatively new virus.

and all the literature that's come out seems to suggest it could have a more profound impact on particularly the neurological system both in developing fetuses and babies and children as well as adults. some suggestive evidence it could cause demallination of cells in adults. you see the effects of microcephaly. even though the greatest risk is in the first trimester, i would be worried later in pregnancy as well if a woman would get infected while she's pregnant, it could have some impact on the pregnancy. it could be subtle and not detectable until much later. i don't mean to be alarmist, but i think the virus itself is concerning. we should be able to control it. this should not be a virus that becomes epidemic in the u.s. but even within the scope of outbreaks, we should be able to quell them quickly. we need to be testing the mosquitoes that way we can get rid of them. >> dr. gottlieb, thank you for joining us.

when we return, more on the decision from the bank of england to cut rates. markets moving on that news. then congressman -- we have a congressman peter hoekstra joining us to talk about the race for the white house. plus believe it or not, it is back to school season. a roundup of retailers and rumors that walmart may be buying -- not just rumors. "squawk box" returns in just a moment.

breaking news. the bank of england cutting rates for the first time in seven years and pumping $79 billion into the economy. analysis and global market reaction is straight ahead. get your shopping bags ready. it is back to school season. >> oh, back to school. back to school. to prove to dad that i'm not a fool. >> spending expected to hit more than $75 billion this year. we're going to break down the retail winners and losers next. all that plus giving up on golf. >> why didn't you just go home? that's your home! are you too good for your home? answer me! >> we'll tell you why nike is ditching clubs, balls, and other gear as the final hour of

"squawk box" tees off right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box," everyone. this is cnbc, first in business worldwide. i'm becky quick along with andrew ross sorkin and brian sullivan. joe's out today. we are less than 90 minutes away from the opening bell on wall street. we've been watching the futures this morning and they have picked up ground over the course of the last hour since the bank of england said it would not only be cutting interest rates but also adding additional stimulus through quantitative easing, even the purchase of corporate bonds. the dow futures up now 42 points. that comes from relatively flat before that news. s&p futures up by about 3.5 points and the nasdaq up by 4.5. if you look at europe, they have been decidedly more strong. the ftse is where most of this

has played out. the bank of england having a direct impact on what's happening there. that stock market went down from by about 0.1% to up 1.5%. in france the cac is up. the bank of england cutting interest rates for the first time in seven years also injecting another $79 billion into the economy through an expanded stimulus program. steve leisman joining us with more. you broke the news. we had it at 7:00 a.m. you've had an hour to digest it here. >> it's still going on. because mark carney is speaking at a press conference. they met and apparently exceeded the market expectations announcing a series of measures in response to brexit, the decision by british voters to leave the european union. called it a, quote, regime change and said monetary policy cannot fully jaup receive the brexit shock. but the bank of england will do whatever it takes as necessary in monetary policy.

>> we cannot immediately or fully offset the economic impacts of a large structural shock. however, monetary policy can support the necessary adjustments of the uk economy. during a period of heightened uncertainty. >> so the boe also cut its inflation and growth forecast. markets reacted around the world. look at what the british pound did here. i don't know if we have that. do we have that chart? there we go. the pound getting pounded. we've been able to say that over the past month or so. then a reaction in the 10-year gilt. we went in at 80. we're not 68. yeah. still right about 11.5. i don't know if we have the full screen with the total measures on it. but i can tell you what they are. 25 basis point rate cut was the first one. added additional quantitative easing. it did this $10 billion small

but kind of indicative of corporate bond purchases. then suggesting further cuts ahead. saying we're going to do whatever it takes. some early reaction from the street. christian duha saying the package is quite excessive. over at pantheon they're more spect kal saying we doubt it will do much to stimulate the economy and they think that the boe is still not on track to admit inflation forecast. remember they're just -- they're supposed to just follow inflation and inflation targeting banks. so this is a big deal. but i think the net result of it is to remove risk for the u.s. if you just think how does it matter to me, i think you can see that in the markets this morning. >> okay. thank you, steve. let's tell you about corporate headlines out this morning. earnings coming out just now on viacom. beat estimates by 4 cents with quarterly profits of $1.05 per share. revenue network -- i'm sorry.

network revenue declined during the quarter but the film decision had strong growth. we'll talk more about them in a couple of minutes. also tesla with a wider than expected loss. revenue also missed estimates at $1.5 billion nap was almost 30% higher than last year. despite tesla sticking to its ambitious plan calling for nearly 80,000 cars in 2016. bill ackman's pershing square is going to have a stake in canadian pacific. launched a proxy battle at that firm sparking a turnaround. in is a statement saying canadian pacific has incredible -- since 2011. check out the five-year chart of canadian pacific. as donald trump stumps in florida, relations between party leaders and the trump campaign are reportedly anything but sunny. decisions not to endorse house speaker paul ryan's re-election

bid reportedly didn't go over well with reince priebus. and now some republican leaders are planning an intervention with the gop nominee. for more with this, let's bring in pete hoekstra who served as a chairman of the house intelligence committee. congressman hoekstra, some of these reports about an intervention may be overstated. newt gingrich himself has shot this down. from where you sit, what's your read on what's happening with the campaign right now? >> what i'm seeing happening with the campaign is not any different than what happens in a campaign process. a poll came out showing donald trump down. there were some -- he had some bad events over the last 72 hours. people get together, they strategize and move forward. what you have to realize here is the trump campaign and the republican party goes up against the most sophisticated machine out there, the clinton machine. they've been around for 26

years. and we need our best game face. we're going to have to run the best campaign the republican party and the trump campaign have ever run if you're going to be successful. so yes we need to ratchet up our game face to be successful in november. >> sticking with the game face analo analogy, it seems most of these issues are not inflicted by the clinton machine as you've called it. but these are unforced errors. these are things the candidate probably has done to himself. >> i mean, i take a look at an issue i know quite a bit about which was all of the discussion about the e-mails and donald trump saying maybe we ought to go to the russians. and you get someone like leon panetta coming out saying this is almost treason. number two the russians probably do have hillary clinton's e-mails. as do the chinese. >> it's not just democrats that

have jumped on that. there's a conference right now taking place of hackers in las vegas. there's a conference of people who have been out there for 19 years. they are libertarians. they tend to never support a candidate, haven't in the 19 years of this conference. but they're doing fund raising for hillary clinton because they say if they say the things donald trump had said, the government would be knocking on their doors. >> i don't think that's true. >> it is true. >> we know the russians hack in every day all day. the chinese do. wikileaks do. the hackers do. the hackers, if they go in, sure it's illegal. but for them if they had come out and said the russians are hacking in and they probably have the e-mails, they're just stating facts. >>. >> congressman, do you believe what donald trump said about the khan family is acceptable? >> i've gone back and taken a lo look. to say the khan family, i'm

disappointed they were at the convention. that's fine fop get in a debate with a gold star family, that's just a mistake. you don't need to go there. >> but what does that say about his judgment? >> this guy fights continually. his judgment is not that great on some issues. he doesn't have the instinctive response saying i'm going to walk away from that issue. what i'm going to focus on is libya, the obama/clinton strategy to embrace the muslim brotherhood. it just says his antenna for political sensitivity isn't where we need it to be. >> what does that say about his ability to govern? that's the larger request e. you're watching longtime republicans start to come out of the woodwork and say his judgment is ultimately unacceptable. >> no. this is a political judgment about making a statement in a campaign. when you start talking about governing, this is what he should be talking about.

because obama and clinton especially on foreign policy have shown an inable to govern effectively. yesterday the president again came out and said, you know, we made a mistake in libya because we didn't plan for the aftermath of what was going to happen after gadhafi was gone. that is a disastrous policy and has had disastrous result ifs for the past four years. >> you yourself referenced that fox news bulletin that came out yesterday showing that hillary clinton was up by 49 to 39 in the latest poll that they've run. what do you think the trump campaign needs to do right now to reboot and kind of change the game? >> they've got to get focused on the real key issues. it is foreign policy and the real difference is how he would do with isis and how obama and clinton have dealt with foreign policy and created an environment where isis is created. they need to talk about how his

programs will grow this economy at a quicker rate and put more people to work and increase their incomes. they need to be talking about what, you know, hillary clinton is talking about raising taxes. he's talking about reducing and simplifying taxes. there are clear differences between these two campaigns. you need to be focusing on the global issues, the big issues, and not the small ones. >> congressman paul ryan. if you were paul ryan today, what would you be doing? >> i was with paul ryan on tuesday night. paul was very calm in dealing with the comments from mr. trump on tuesday. he's putting forward a positive message, a positive agenda for where america needs to go forward and be talking about we can implement this positive agenda if donald trump is president. that's exactly what paul ryan is doing. >> do you disagree with trump's decision not to endorse congressman ryan? >> you know, the -- again, it's

an unforced discussion. we shouldn't be talking about this. he should have just left that issue alone. governor pence came in and endorsed paul ryan. it's clear paul ryan is going to be the speaker in january. and what donald trump needs to do is recognize that he needs that relationship with paul ryan in a constructive way if he's going to want to move the agenda forward. he's also going to need the policy -- you know, the policy knowledge that paul ryan brings. they actually compliment each other very nicely and what they now need to do is recognize they each have strengths, they got to play off each other in a positive way. and they can both be very successful in november. >> congressman hoekstra, we want to thank you for your time today. >> thank you. on deck, viacom reporting its quarterly results posting a beat. but all eyes on the redstone

battle. they are raging. but as we head to break, let's get a quick check on shares of viacom. they're up about 1% on that beat. but again, it's all about the lawsuit. it's all about "squawk box" right after this. (speaking japanese) oh watson, your japanese is very good. thank you. (speaking japanese) exactly. i can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. (speaking japanese)

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welcome back to "squawk box." you are listening to me talk about the brits moving the pound this morning. it's down 1.25% after the bank of england's first interest rate cut in seven years. also an expanded stimulus plan. the euro down. if you're a british company selling around the world, this is probably good news for you. and trust me, a 1.25% move in currency is actually a big move. much more on that story still to come. meantime, viacom out with quarterly results. julia boorstin looks at the quarter and what it means for the sumner redstone soap opera. julia. >> good morning. viacom reporting moderately better than expected earnings. and adjusted earnings per share

of $1.05. they're in the midst of a legal battle between redstone and doman. he is under fire for his management of viacom. ratings trends in all of the company's networks showed sequential improvement and the company completed a successful ad period. the result were impacted by the ninja turtles sequel. this comes on the heels of reports that talks to settle the legal issues have fallen apart. now the question of who controls viacom's future, dauman or redstone will be decided by judges in three states in october. a massachusetts judge will hear philippe dauman's mental competence. will hear fred selerno's suit.

and in california a judge will hear redstone's action to replace viacom's directors. on the earnings call which starts in about ten minutes, two key issues are in focus. one, dauman's plan to stake in paramount. and two, any update on a potential settlement between dauman and redstone. sumner redstone used to kick off viacom's earnings calls calling philippe dauman a good friend and a genius. we haven't heard from him in a few years. he certainly would be using that language. >> i think the soap operas have nothing on this. i guess the conference call will be juicier. >> i think the prepared remarks, we can predict what it's going to be. but the q&a session could get interesting. i used to look forward to the sumner redstone opening comments because the praise he would give

dauman was so over the top. you could hear him blushing in the room. now it's a different story. >> we talked about this machiavellian move by the daughter a few months ago getting him to say redstone was competent because it benefitted dauman to do so. now dauman having to switch and saying no, no, no when they let us go off the board, that means they're not competent. i mean, this is playing out -- i mean, it's -- i don't know what hamletian? shakespearean? >> certainly shakespearean. it's fascinating. and we've really seen sherry redstone who was running national musements but not a public figure in a way the media executives are. she's now playing a real role in this. she's having a huge influence on what happens with the future of these two companies. viacom and cbs. >> i'm guessing the settlement talks would have been a good thing. at least you would get some sort of clarity. uncertainty seems to be the worst thing that could overhang

this and having to wait for october for the lawsuits. maybe a bit of a concern on the street? >> yeah. absolutely. i think that the uncertainty of all of this is an overhang for viacom. and the fact there are three lawsuits means that there was more of a chance of settlement. at least that's what i've been hearing in terms of why there were those original settlement talks. it's not like there was just one lawsuit and they'll leave it up to the judge. for both sides to think about trying to come to a compromise. but dauman really does not want to leave his position running viacom. and even though he would get a massive golden parachute, she still doesn't want to give up that role. so we'll see how the street reacts to the earnings call today. and if they have any commentary or more insight. >> okay. thank you for that. we will be watching and listening. when we come back, the latest trend in silicon valley that has workers trading unlimited snacks for fasting and smart drugs to hack their brain. we have the details after this.

welcome back to "squawk box." there's a new trend in silicon valley and it involves fasting sometimes for days and smart drugs. josh lipton is in san francisco and he's got that story this morning. josh? >> well, andrew, the trend is known as biohacking and it's increasingly popular among tech workers trying to improve their

stamina, memory, and mood. tech workers take supplements known as nutropics sold by start-ups like san francisco based nutrobox to improve concentration and stay awake. they can contain herbs and biochemical components. i recently spent time with biohacker aaron ing who told me these pills do improve his concentration. >> i used to have bad attention problems. i found this has improved my attention dramatically. like, i can focus on problems i used to be able to get really easily distracted by and things like that. i think my memory's a lot better too. >> ng says he spends about a hundred bucks a month on these supplements. he's not the only one that's excited about this market. 17 start-ups targeting the brain with different products and solutions have now raised some

$460 million. in addition to some, some employees fast every week because they think that improved productivity. one founder i spoke to, provigil designed for narcolepsy to stay alert. another founder i know swears by vegetarian capsules called neuromag. the movement does have its skeptics, however. dr. candy serunis at ucsf says there are no high quality trialing proving that they really do improve cognitive function above and beyond what a healthy diet and regular exercise do. guys, back to you. >> what'd you have for breakfast, josh? >> you know, i was excited to try some of these supplements and see what they would do. but after talking to candy, i decided maybe for now just stick to an apple a day kind of thing. >> we will leave it there. thank you for waking up.

>> it's 5:25. i bet he didn't eat anything yet. >> i know. but he could be on one of these drugs. biohacking. that's what they're doing out there, the kids. anyway, thanks, josh. the kids. >> what's that doing to the -- never mind. all right. let's recap our top story of the morning. the bank of england cutting its key interest rate by 25 basis points. that is its first interest rate cut in over seven years. the boe also announcing a series of stimulus measures including a new corporate bond buying program. that last bit was a bit of a surprise to the market ts. we had seen the dow up 30 points above fair value. it's giving back some of the gains it got after that was announced. dow futures up but by only about 25 point. and the nasdaq up by almost 1.5. in europe the gains for the ftse have been decidedly stronger. bank of england making these decisions. the markets there, the ftse up by about 1.3% right now. the dax has given up some gains.

now up by about 0.6%. also take a look at the move in the pound. pound had given back the gains it had seen early on. that probably came as the bank of england was talking about its growth outlook. it did cut the outlook but is still looking for growth in the second half. when we come back, we have breaking economic news. we are a few minutes away from the weekly jobless claims. we'll bring you those numbers and the reaction next. at work or at play, you're unstoppable. nothing can throw you off track. oh hey, she's cute. nice going man. things are going great for you. you've earned a night out. good drinks, good friends. yeah, we can go ahead and call this a good night. wait, is that your car? uh oh. not smart. yeah, i saw that coming. say goodbye to her. ouch! that will hurt your bank account.

you're looking at around ten grand in fines, legal fees, and increased insurance rates. i hope you like eating frozen dinners. alone. let's try this again. smart move. because buzzed driving is drunk driving.

welcome back to "squawk box." we have some breaking news. initial and continuing claims. initial claims -- well, not much. up 3,000. 266,000 was released last week. it stands. so up 3,000 to 269,000 new number. the 2.4 million and a little bit lower. a little above 2.14 to a little below. obviously the news of the day is mr. carney firing off a bullet in my opinion at an enemy that you can't see yet. i don't know how the uncertainties of brexit will be addressed by any of his actions

and i think many thought the uk in their economy thus far dealing with it rather well. a lot better than many would have said on june 21st or 22nd, that's for sure. even though the pound is down, it had a 1.29 handle. so we haven't challenged that. obviously pointed out the ftse is doing better. i'm interested on the fixed income market. come on, guys. we have boones back at minus ten. gilt yields are in the 70s. yeah. this is going to fix the uncertainty of negotiations with germany. makes no sense to me. but i'm not the one pulling the levers behind the curtain. or kind of chasing the dog out of the room. you know, toto. back to you. >> rick santelli, thank you very much. you can stick around if you want. we've also got steve leisman here. we're also joined by michael

hanson senior global analyst at bank of america. we're going to let you respond to rick in a second, but i want can to ask the claim numbers. bank of england is the news. claims make any difference? >> no. >> good. let's move on. >> it does make a difference. i agree with that. i think this 269,000 number is right in line with strong job growth. and that's -- you have this issue of the firings not going on. >> we've had this number up -- i'm saying it's been this trend for months. >> it's important because it sets us up for tomorrow we're not going to be talking about boe. we're going to be talking about the jobs number. that's going to be transcendent. looking for 179. i want people to get ready to get your gatorade, get on your easy chair, and -- >> is this -- >> it's gatorade. get ready to -- get ready for 8:30 tomorrow morning and the coverage on "squawk box." ding. now we can talk about bank of england. do you mind? wanted to get that out there.

>> nice promotion. >> it's a tease. >> bank of england is a big deal. a lot of people were expecting monetary policy is out of bullets. they made it clear they're not at this point. the market was anticipating they do something. i think they give a lot of forward guidance. so that in conjunction with the fact they're talking about additional fiscal support. everyone's been looking for a slowdown that's going to come. it's no surprise they went preemptive on that. >> that's the key there. rick's criticism well taken. the idea that it wasn't there. so what they're doing is what they're calling preemptive easing. before you respond, carney already responded to you. he anticipated santelli. let's listen to what carney had to say and then we'll listen to what santelli has to say. here's mark carney addressing preempting rick's question. >> if we hadn't taken the steps we took today, we do expect output would have been lower, unemployment would have been

higher. and we would have achieved a poorer balance in terms of returning inflation sustainably to target and foregoing output. >> so rick, there it is. your favorite argument. the counterfactual. the floor is yours, my friend. >> yeah. you know, if i would have picked 36, 42, and 19 i would have won the power ball. listen. >> what were those numbers again? >> what they're doing on the rates, you know, it's a spit in the ocean. that isn't the issue. the issue is the continuing notion of quantitative easing, the expansion into corporate as small as it may be. i don't know what makes draghi, carney, corodo, bernanke, janet yellen, fisher. i don't know what gives them the foundation to think they have such a vision from the top of the mountain. none of their forecasts are right. they talk and sound like market timer retail brokers that just opened up an account down the street with 500 bucks.

just none of it adds up. and you know what? the damage to -- see, central banks were supposed to be nudgers. but when you're on the fringe the way they are, they aren't nudging. they aren't having an influence the way they used to. they are literally forcing the entire global financial system to recalibrate, rebuild. i don't know what gives them the authority to do that. >> so one of the things carney said is that when you act early, you have a chance -- and i wonder -- i'm going to throw this question to michael. in a sense this is more like the u.s. qe-1 in the sense you get there and they're acting before db obviously qe-1 came a little bit late, but when it came it came relatively forcefully. and i kind of agree with some of what rick said there. the idea of chasing the market further is much more difficult. but if they do this right, they get ahead of it. and if they're wrong, they can dial it back. >> that's fair. i think they're not trying to chase the market, per se. i think they're trying to --

it's very clear as carney said, sort of supply shock. we see it coming. right? there's going to be negotiations for some time on the trade front. as you point out they've got flexibility going forward. that's key. >> all right. >> did i tell you to tune in tomorrow at 8:30 for the jobs report? >> here tomorrow. >> me. that's not the reason. tune in for the number. coming up, a new read on the growth of start-ups and small businesses in america. plus ready or not, it is back to school season. are you looking at, steve? we're going to break down the potential winners and losers in the retail space. you are watching -- yes, don't forget it -- cnbc, first in business worldwide.

welcome back to "squawk box." the kaufman foundation out with its start-up activity report for 2016. kate rogers joins us now with the results. >> good morning, andrew. well, a new report from the kaufman foundation finds levels of entrepreneurship amongst women and millennials on the rise in 2016. the foundation start-up activity report for 2016 finds the gender gap is closing in entrepreneurship with women making up 40.6% of new entrepreneurs compared to men at 59.4%. millennials accounted for 25% of

new entrepreneurs up from 24.7% last year. but this number is still below what it was in 1996 when the index started at 34.3%. researchers point to a student debt being a big factor, of course, in this slow growth trend. another good sign here, more start-up founders are considered opportunity entrepreneurs meaning they're launching businesses because they see opportunities in the marketplace to do so. not because they're unemployed and doing so out of necessity. women are also more likely to be opportunity entrepreneurs than men. now, overall the start-up index climbed in 2016 for the second year in a row translating to about 550,000 new entrepreneurs each month during the year. this data, though, shows a different trend than a recent report we highlighted on this show highlighting slower growth in start-ups. however, kaufman, this foundation may view entrepreneurship different than other researchers. they don't count you as a business owner until you finally

quit your full-time job. >> thanks. walmart is in talks to buy 1-year-old online discount retailer jet.com. jan kniffen is a cnbc contributor. jan, these reports are really interesting. the idea that walmart thinks it's not got enough traction going in dotcom. could certainly help boost them. do you think it's worth the price? >> whether it's worth the price or not is a really good question. it's hard to imagine if this works for them, they would have paid too much. when i look at it, walmart has to win against amazon. amazon is the biggest threat to walmart. if jet will make them much more competitive than amazon, they should buy it. jett's not making any money. jet doesn't show signs of making money. >> and jet's plan was to charge a membership fee. it was going after the sam's club. $49 a month instead of $99.

but they gave that up pretty quickly. that was the only place they were going to be making money. sop they're selling a lot of this stuff giving discounts for these things. it's made customers very happy. but obviously not something that a shareholder would look at and say hoorah. >> every time i price out jet versus amazon, it's 18% to 22% cheaper than amazon. >> 18% to 22%? >> i priced one out on a whole basket that was 50% cheaper than amazon. >> i need to be shopping on jet.com. >> they lose money religiously. >> that's it. >> on i believe every item. but walmart will change the pricing architecture as they take it over. walmart will want to make money. but it gives them an immediate entree to a customer base. >> is that part of it? understanding the online back end? >> amazon's model which is we'll beat you on price cannot fight against jet because jet prices out of the basket.

and their crawling engines cannot find the pricing. they can't really price against them. walmart's buying technology, they're buying the base. i think if they pay 3 billion bucks for it, that's probably more than it's worth in the outside world. but it's certainly not more than it's worth to walmart if it works. >> to walmart it's worth way more. >> i think eventually you probably don't. >> run under the walmart or jet brand? >> i think you run under the jet brand at first and learn how to do it. then you start merging the business. will they always run as two separate things? i doubt it, but they can do that for a long time. >> i think the four of us need to start a company using this new model. we talked about this the other day which is this. this is so many different companies now, there was box.com i think that we had on. >> same idea. >> basically get an idea, get a couple hundred million or a billion in venture capital

money, burn through it but build up a giant customer base and then monetize hopefully for more. and basically have a subsidized loss leading business that you need a corporate benefactor for. the four of us are going to start a business. the first product, hair care. >> this guy, by the way, this guy who has done this with this latest did -- >> is this the diapers guy? >> diapers.com guy. >> just lose a ton of money but other people's money -- >> amazon bought him last time. >> amazon bought him last time for $545 million, right? >> "the wall street journal" positioned this sale as a failure for jet. curious. >> hard to fail when you'd sell out for $3 billion. >> the second piece, isn't it failure for the e-commerce business of walmart? doesn't this suggest they couldn't get it done for themselves? >> not at all. i think it's worth fighting the battle and they keep looking for ways to be more competitive against amazon. because going forward, they have to win online.

actually, you know, i'm the guy that says all the time 5% of non-restaurant retail will be online by 2030. if you believe that and you're walmart, you have to win online. so they have to keep trying things until it all works for them. and they need to make money at it. unfortunately amazon doesn't need to make money in the retail side of their business. that makes it so much harder. but if they can get a platform that works well against amazon, that's a win. >> but if walmart raises the prices at jet.com, will those customers still be there? >> you know, walmart has a very sticky base already in their business, right? they have $500 billion of sales and they have every customer in the country, basically. jet has a pretty good base itself. and you don't have to necessarily be the cheapest every time to win. you have to be able to reach the customer and give them what they think is a good deal. amazon's not always the cheapest either. >> but amazon i know will get it there if it promises me tomorrow. two days from now if it promises two days from now.

does jet have the same infrastructure built up in terms of being able to deliver? because honestly that matters more to me than even the price. i know i want it here by tuesday. i want it here by thursday. nobody else, none of the retailers would promise you that or even follow through on the promise if they try to make it. >> jet is pretty good at it. nobody's as good as amazon. amazon's out front. but this is a giant handicap race, right? there's no secrets in what's working. so if you've got a good base and all the money in the world and you're willing to invest it to be competitive against amazon, you can get there. amazon's got a great distribution system. walmart's got a great distribution system. they've got 3,000 distribution points not counting their distribution centers themselves. they're closer to the customer than amazon's ever going to be. if they want to use that to be competitive with jet or with amazon -- or with walmart.com, they can make that happen. they can be as fast as amazon.

the question is can they afford to be as fast? >> another big winner we didn't talk about, ups. somebody's got to be delivering all these packages. maybe it's uber. >> amazon does a lot of it themselves. >> drones. >> who's going to be the last mile delivery and make it work. if it's uber, that's huge for them. >> you see the ads for the postal service? they say they're doing all the digital distribution. >> usps should be the last mile delivery. they've already got the system. it's too bad it doesn't work a little better than it does. >> i'm going to give my postman a big shoutout. they deliver on sundays. they've been delivering packages on my street on sundays. so a rare shoutout to the post office. >> you must be buying from amazon because that's what they're delivering on sunday. >> they are. how'd you guess? >> jan, thank you. we'll have you back to talk back to school. coming up, the bank of england cutting rates and announcing stimulus. first rate cut in seven years. we'll get reaction from london

coming up. jim cramer will have his take on what is on his radar as well. meantime here are your u.s. stock futures right now. we're indicating a mildly higher open. we're back after this. can a toothpaste do everything well? this clean was like - pow. it felt like i had just gone to the dentist. it just kind of like, wiped everything clean.

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. all right. back to your top story of the

morning and that is actually overseas. the bank of england cutting rates for the first time in seven years and injected another $79 billion into the economy through an expanded stimulus program. jeff cut more joining us live from our london newsroom. jeff? >> yeah, hi, very good morning to you. this is really taken the park by surprise. and it's also had some people scratching their heads and just wondering whether economic conditions here in the uk economy actually justify the very radical action that the bank of england has taken. 25 basis points reduction was pretty much baked in. that was pre-signaled by the bank at the july meeting. but it's the 70 billion pounds of bond buying that has taken the market by surprise here. we didn't think we were going back to the bond purchasing program we saw in the wake of the global financial crisis but the canadian that runs our central bank here mark carney

making it very clear in the press conference they see this as a preemptive measure to prevent the uk economy from flirting with inflation. very dramatic reduction in the growth forecasts. this is an economy that printed 0.6% gdp for the second quarter. that -- they're now projecting for full year 2017 we'll be lucky if we do 0.8%. and therein lies the argument that bank has made here for the dramatic steps its taken today. back to you. >> thank you for that. we appreciate it very much. we want to get down to the new york stock exchange where our good friend jim cramer joins us now who may have his own views on what's taking place across the pond and how it may impact folks here. >> we're about oil. they can do whatever they want over there. we are just not responding to that. oil breaks through 40 we go down, stays above 40 we'll go higher. it's back to that algorithm again after being absent for the month of july. i follow what's happening over

in uk, fascinated by it, know that carney wants to get that economy restarted preemptively but it's not what's driving things here. what's driving things here whether oil can hold. >> jim, what do you do with tesla? >> try to get a model 3 i guess. it's exaspate p per rating, jpmorgan has a fascinating piece, it started the year for a gigantic earnings per share number an looking for a loss. the conference call is funny, like a parody, like a marks brothers. conference call. honestly, i mean it's extraordinary. >> what's going to happen? >> doesn't matter. there's people who love the car and buy the stock. it doesn't seem to matter. dom chu was talking about it's the amazon of autos. i don't know if it's that. i think it's just kind of people shorting a stock and the sellers don't come out because the sellers believe in the car. the stock is not up for the year, gis that's a saving grace for those trying to value it. but the conference call is

just -- one point he said listen if we didn't have to spend all the money making the new cars we would be making money. where's henry ford? honestly, if we didn't have to make cars and we could just sell cars, we'd be profitable. i don't know. >> i hear you. >> now it's the old cars he's talking about. great, if we didn't have to make the mustang we could just sell the mustang how great would that be. it's -- it's just a funny conference call. i think he's having a great time. he's kind of like running for president of tesla, know what i mean? >> fichblgly, want you to weigh in -- finally want you to weigh in on the red stone family saga and viacom. >> seems listen we're getting closer to make it so les moonves has to write a check to us. when we get to the finish line les writes a big check, ruins his stock but we do well. there's a lot of comedy today. you need a rim shot to go over these quarters. >> well we will be playing a lot

of rim shots, i'm sure with your gang, starting at 9:00 on "squawk on the street." >> thank you. >> we will see you in a couple minutes. >> when we come back we have your list of stocks to watch ahead of the opening bell plus nike is getting out of the golf game. we will it el you why. stay tuned. you're watching cnbc. first in business worldwide. ♪ what's the value of capital? but what's it cost to modernize a school district? what's critical thinking worth? a basketball costs about fourteen dollars. what does it cost to build a new sports arena? what's team spirit worth? a telecommunications system isn't cheap.

what's it worth to talk to your mom? what's the value of one more tree? a forest? a walk in the woods? what's the value of art? art open to the public. the value of capital is to create, not just wealth, but things that matter. morgan stanley. capital creates change.

welcome back to "squawk on the street" -- "squawk box." the bank of england cutting its key interest rate business 25 basis points, first cut in more than seven years and announced a series of stimulus measures including a new corporate bond buying program. the futures are up on that news. jim cramer not taking too much away from at least here in the united states. the dow looks like it would open up 18 points higher. we were in the red two hours ago before the news came out. s&p 500 up now just mar nally. giving up earlier gains. at one point likely to open up over 50 points. you're looking at what's going on in europe, those -- everything is in the green now in large part because they function of the news we heard over there and then finally, let's take a look at the move in the pound. maybe take a look at wti crude. at least here that's what most

seem to be focused on. the pound at 1.313. we told you earlier about viacom's earnings beat. we've been monitoring the conference call. here's what fell leap dueman said a few moments ago. >> last week courts in massachusetts and delaware rejected motions to dismiss, allowed the discovery to proceed, and scheduled trials to take place in october. we view these favorable court rulings as positive steps that move us ahead to a resolution. >> shares of viacom up this morning. you're looking at that up almost 4% and we were talking to jim earlier. is this all just setting itself up for a sale? >> that is really interesting. >> he was deliberately reading that legal document. you could hear him, and we believe the -- okay. nike getting out of the golf club business, balls and other gear. they will sell clothes and tiger woods will remain on as a some sort of an ambassador tore for

the brand but the balls and clubs are all gone. thanks for having me three of these last four days. >> thank you for being with us this week. monday, tuesday, today. by the way, people can check you out later today on "power lunch". >> that does it for us. make sure you join us tomorrow. don't forget the jobs report. "squawk on the street" starts right now. ♪ ♪ sending out an s.o.s. >> good morning and welcome to "squawk on the street." i'm david faber with jim cramer and we are live right here at the new york stock exchange. carl quintanilla is on assignment in rio. how are the markets doing, you ask? let's take a look for you this morning. does look like we will have a bit of a higher open at this point. europe, you just saw it if you were watching andrew sorkin, it is higher, of course. the bank of england being one of