♪ ♪ good tuesday morning and welcome to "squawk box" here on cnbc. i'm kayla touchy with andrew sorkin. becky joins us with an interview. one we've been waiting all week. what should we expect. >> you know, we've been watching this very closely. as you mentioned this is something that reports have been kind of out circulating about this, but yesterday yesterday it was made official. walmart is buying jet.com. you mentioned the cost is one of the highe esest ever for an e-commerce deal. by the way, doesn't have my plan to make money in the near future, but walmart it may be

worth and here's why. take a look at online sales growth at walmart.com. it's been steadily declining. in fact, for the most recent quarter it was just 7%. that's not bad for a traditional rate retailer, but well below the numbers amazon is racking up in sales. amazon includes aws. it's cloud services business, but doug mcmillen himself back at the time in may when the numbers were announced, the walmart ceo said he wasn't satisfied with the growth so he set up to do something about it. now, backing things up he said he would be investing $2 billion in walmart.com. $900 million this year and $101 billion next year. all of that is to beef up distribution and online offerings. this purchase gives walmart some e-commerce savvy. this comes with the founder of jet.com. mark lore. he would be joining walmart.com

as an executive and responsible for jet.com and walmart.com. he's going to be running the two brands separately for now. if you don't know much about mark lore. he is an long-term vat ran of the e-commerce world. he founded diapers.com. that was an early online pier in that made it big and bought by amazon whaback in twep. he is somebody who knows his way around e-commerce. and his latest venture, jet.com, launched the website a year ago. it came with some fancy a algorithms that helped customers save money a lot of different ways. if you add more than items to your cart it tells you how to get cheaper items. of course all these low prices because it's very competitive with amazon on a lot of cases comes in at a cheaper price than

amazon. they come at a cost. jet.com originally planned to charge an membership fee of $50. that was the only plan to profitability. said that would be the way it actually earned money, but it ended up scrapping the idea for the fee and it's been losing money ever since. the purchase by walmart will give the company a longer run way tom find profit. we're going to be talking about all of this today with both doug mcmillen and mark lowre. that's coming up in the next hour. >> we cannot wait for that. see you soon. in the meantime, here's some of the big stories on your radar today. a decision overnight from india central bank. governor rajan says the policy

stance remains accommodative. meantime back in the states, several earnings to note on today's calendar, expecting results from coach at 7:00 a.m. the one to watch is disney. we're also going to get numbers from solar city, which is to become a part of tesla, and yelp. update you on a story we started yesterday. delta is not in the clear yet. expected to cancel three 250 more flights in morning and delay about 200 more as it continues to recover from huge travel outage yesterday. nearly 900 flights cancelled and tens of thousands of passengers stranded. all this as a power outage in that's which is a major city in the south crippled the company's computer systems. to offer a refund to passengers traveling today and $200 voucher. >> you do wonder in 2016 how something like this can happen.

how a power outage can ground an airline for six hours and then still have ripple effects. >> power outages are going to be more and more common, but you need a backup power source. >> a generator. >> saying on "squawk box" yesterday, they have one for continental 50 miles outside chicago they would lean on when something like that happened. >> just like the new york stock exchanges, mull approximately areas and backups. >> they did have backups that didn't work properly. >> that doesn't qualify as a backup if it doesn't work. >> couple of stocks to watch this morning. gap poersing sam store sales. the clothing company didn't see foot traffic improve significantly. banana republic stores saw sales decline. i have not been in a store in quite some time. maybe it's my fault. biomarin intends to use the profits for general corporate

purposes like clinical trials and expansion of factory. lending club announcing finance chief resigns. ousted the founder and ceo the online lender also report add wider than expected second quarter loss. staffing provider randstad suicide buying monster worldwide. the deal worth $34 million. representing a 23% premium to the closing price yesterday. >> some other stocks we're watching. twilio saw the quarterly revenue jump 70% in the latest quarter which happened to be the first quarter that the company reported as a public company. strong outlook on demand. remembers allows companies like netflix and uber and facebook what's happen to speak and text with customers without having to exchange contact information. inner pipeline buys williams for $1.3 billion.

the purchase includes extraction facilities as well as 260 miles of pipeline. news corp. posting an increase in sales thanks to strong performance in the company's digital real estate business. still the wall street journal earnings fell short of consensus. not necessarily noticeably. it appears unchanged right now. >> valeant earnings out. i want to let you know they backed their full year guidance. are they going to make a giant cut again on the guidance. megais going to bring you the numbers. they do back the full year guidance so maybe a small amount of good news on a stock that is down 91% overall 12 months. >> let's take a quick check on the markets this morning. the futures before the opening bell.

all this may change, but the dow looks to open higher. s&p 500 going between literally the green and red on the streen as we speak. the nasdaq up about a point. let's fly over to europe and show you what's going on up there. not bad, not great. then overnight in asia, we have economic data from china. increasing at its weakest pace in six months. producer price index dropped. crude prices coming off the lows of the morning. trading right now you're looking at wti at $43 a barrel. >> hard to tell if the summerer drums are upon us or not. the s&p continues to notch all-time highs. joining us for a look at where the markets may will heading, alison deans and jayson pride.

we do always note, alison, when he will the markets made a new high on low volume. if i'm an investor at home, i don't care what the volume is. the value of my investments and my savings are going up. is there any reason to worry about the lack of underlying activity in the market. >> what i've been worried about is the the valuation in the market and the macro outlook. i don't see much to drive the market much higher right now. i thought in the segd half of the year you would start seeing positive comparatives and earnings. brexit changed that. you still have the currency head wind and energy still seems to be quite soft. without strong earnings coming in from corporations i don't think there's a lot to drive the market higher. >> what about the idea of the tina acronym. there is no alternative. our viewers hear that a lot. stocks are going to go up here because everything is to grim everywhere else that there's nowhere else to place your

money. 20 times earnings on utilities, valuations be darned. >> unfortunately when people say where else do we go you don't like to tell them cash. tina is to some degree what i've been saying hold onto your equities, but i wouldn't say plow in right now and increase your stake. i would say diversify and start investing overseas which have been the weaker areas. >> but jayson, the head line is that they sore. >> that's like jumping over a leaf. the situation we are in is uncomfortable bulls. i find i funny because i'm sitting as the bull at the table which is unusual here. the reality is that while earnings growth is not strong, earnings are growing. while the economy is not strong, the economy is growing. we're still in expansion at this point in time. however slow it may be, the

economy in korptd profits are moving in a positive direction while you're getting paid less and less on all safe assets. so this -- there is no other alternative. >> to alison's point, if i'm looking at 18, 19, 20 times forward earnings on slow growth sectors, i don't think the economy is growing fast nuch to justify the valuations. >> let's quantify that. we looked at how that work. the average market multiple is 15.3 earnings that's the target we set for the s&p much when we're trading at 18 times, that's above average. should provide a headwind long-te long-term. is not enough to bring about negative returns on a one-year basis so you have a headwind, but not enough to cause a negative return. which means the returns are positive. better than you're getting with fixed income investments. when you push into the upper stratosphere, you hit 23, 24 times earnings. that's when your guaranteed to have a negative return in

equities. so we're just not there yet. even if for defensive slow growth assets. you're not there yet. i think you're in this position what do you do. >> alison, ironically, the highest valued sector is energy because they're not earning. >> i think they're still valued at 50 to 53 times earnings. which would tell you that there still needs to be a selloff in energy if you are buying on a valuation basis accept nominally they have sold off so much. >> this could be the earnings understated right now. people are extrapolating current energy prices and not seeing prices. that's the traf in the earnings. inventory and energy finally coming off. not a lot of new supply coming into the market and you might see energy prices start to stabilize. could go down while the stocks

go up as the environment improves. >> so are they of value here and perhaps even retail of value going into earnings this week. >> you have to look at valuations on corporations on a normalized basis. you can't like at one year. when you look at energy that way, it is more attractive than the broad market. to say it's a value maybe a little bit of a stretch given the run we've had since earlier this year in the energy names. on a relative basis they are attractive. investors do need to take the perspecti perspective, you've got to tilt towards value opportunities out there. there's pretty large valuation gaps sitting out there within industries and sectors and between sectors. >> and the greatest valuation gap lies where. >> energy, but it's down to the stock specific levels within industry and sectors. not picking a seng terror or industry right now. it's about picking individual name sgls i gastro with that--

with that. >> thank you very much. appreciate it. >> we're going to talk a little valeant. valeant pharmaceuticals just out with earnings. missing estimates on both the top and bottom lines. other good news imbedded in there. >> did miss expectations. analysts have been looking for 148. they came in 1.40. versus $2.6 billion, but the headline really is reaffirming 2016 buy the dense which many analyst expected them to lower again. so reaffirming that is ahead of analyst expectations. ceo also saying in the press release they're announcing a new strategic direction for valeant today. not getting a lot of detail. they say that involves reorganizing the company and reporting segments. we saw a few knew executive appointments yesterday. we expect to hear more of that

on the 8:00 a.m. conference call. >> some criticism of who they brought in at least to run strategic communications. not someone who has done a lot of communications work before. background in finance, i believe. also people are going to be looking for a lot of information how they're going to handle the $32 billion worth of debt and how the walgreens partnership is going. last quarter in june, joe said at least on a few prescriptions they were literally taping dollar bills to prescriptions as they were going out the door. losing money on the partnership with wall green sgls on the debt issue, they owe $5 billion comes due 2018. that's the first major debt payment. >> as part of this, is the idea there's going to be sales of assets. >> that is a big question and there's a debate over weather selling assets is the best way to generate money to pay down debt. if they sell good assets they can get good prices for, they're

not going to have the cash flow anymore. >> but people sense weakness and they would have to sell some at buy or sell prices too. >> they can't produce enough cash to actually pay it, right, that's the ultimate problem. >> that's what people are trying to figure out now. by reaffirming people feel good where they are. they're going okay, but we are sort of on that flesh hold. >> the debt has held up okay. i'm looking at august debt. this is down 15% over 12 months versus the equity which is down 91%. let's put that 91% drop in perspective. that's a 12 month drop. for valeant to get back to the level at which it began this year, it would need a 350% return from here. the law of large numbers kicking in not in valeant's favor. the upside, the debt not getting quite so big. >> the analyst maybe you want

the be in here is through the debt, not the equity. >> meg, thank you. appreciate it. >> when we come back, donald trump outlining his plan for the economy, including cutting taxings. renegotiating trade deals. john harwood joins us next with the reaction to trump's speech. welcome to the wonder of the olympic games.

one day, the world came together. a dog, talked. we're decedent from the mighty wolf. a voice was heard. if you build it, he will come. a girl discovered magic. a revolution began. welcome, to the wonders that happen, everyday. welcome, to it all.

comcast. welcome back to squax. the july index from national independent business cam in at 94.6 edging up, but small businesses are still being cautious about investment spending and are having difficulty hiring workers. it is a closely watched metric to get the main street side of things, but at least edging up slightly for the month of july. >> a little bit. just a tiny tiny bit. donald trump looking to reset the campaign. john harwood joins us now and he's got a lot more. >> reporter: donald trump has dug himself a very big hole in the campaign. he tried to dig out of it with his economic speech yesterday. in addition to his familiar criticism of trade deals vowing

to renegotiate nafda, pull out of tpp. he offered two new wrinkles one was affordable child care. the second was altering the tax plan. the new version still would increase the deficit. it still has benefits that are towards up income americans, but now it matches the rates that are being advocated by house republicans. >> we will work with house republicans on this plan using the same brackets they are proposed. 12%, 25%, and 33%. these reforms will offer the biggest tax revolution since the reagan tax reform, which unleashed years of continued economic growth and job creation. >> now, here's how deep that hole that donald trump has dug

is. the new nbc survey poll out this morning shows him down 10% point to hillary clinton. that's two points wider of a gap than last week and took a further blow last night when susan collins from maine said she cannot support trump, saying he lacks common decency and is incapable of growth or change. that comes on top of a letter that was released yesterday by 50 leading national security professionals who said he would be the most reckless president in u.s. history. >> we're going to continue this conversation. now hillary clinton planning to release her own economic plan on thursday. joining us now, john berry. i felt the speech wasn't so bad yesterday. i thought it showed -- he stayed

on prompter which i thought was a benefit for him. i thought how he dealt with some of the demonstrators was not terrible. if you were his communications chief, how would you grade it. >> think how low the bar is. >> life is relative. >> he did not kick any babies out of the rally. you know, he came out with a pretty conventional republican agenda, except for the fact he's against trade and going to throw out all of our trade deals which we know are creating jobs in the country, not destroying jobs. all of these things, nafda is 22 years old at this point requires some revision. fine, so his stylistics were a little bit better than than have been. this doesn't mean this is the person to lead the country. it is good this week we're getting back to the central question of what this election ought to be about: it hasn't been about how you make america great again.

it's how you make america grow again. how you make america grow and fairly distribute that growth. that's what the whole conversation needs to be about. >> the more they actually talk about issues, oddly enough, the better it may oddly be for donald trump, not worse. in that when they go off on tangents. it is worse for donald trump when they stick to message, seems to get better. >> when he goes off it's worse for donald trump. we're going to hear from hillary clinton again about her economic proposals which she's been talking about for 14 months now. >> if you did have to give him advice. >> my advice to both candidates is to keep talking about the economy. stay focused on what really matters to people in the country. >> so to the extent he spent yesterday talking about the economy outlining very specific policies that he would implement, republicans who had previously been on the fence, did he fif you enough to hang

your had on. >> except for if fact there were a couple of metaphor blockers yesterday which john talked about. these national security advisers who are walking away from him, susan collins, another u.s. republican senator. there are people with deep grave concerns. let's not forget the other side of the issue. this is about peace and prosperity. the fact kct that donald trump cannot cross the bar of being the commander in chief and people are deeply concerned about. at the tend of the day, that's what last week was about and the attack on the kahns and the ability to seem like he has the temperament to lead the country. >> he seems to lose when he gets to temperament. >> when it gets to national security. that's not just a temperamental issues. that's how are we going to bring peace to the world. >> the questions about national security arise from his

temperament. >> yes, exactly right. so sure, if he keeps talking about the economy and these issues are not front and center. >> silicon valley wrote a letter. you can't believe that anybody who is underploy instead wisconsin gives a you know what what susan collins has to say about donald trump. >> they don't, but if you look at the economic plan, i'm not sure anything he's saying is going to help him either. >> the okay. i hear all these new york viewpoints and i want to scream. >> i don't live in new york. >> i live in washington, d.c. >> same place. >> i'm heading to des moines today. >> nobody cares what nil liberal elite has to say about donald trump. you know what they care about. they hate washington. they hate the establishment. and so as bad as trump may by and i'm not defending trump. when you talk to people because

i have extensively, that i have say screw d.c. start over. she is the establishment to them. >> do you want to stand at the top of the stairs throw everything up in the air domestically and internationally. >> they do because its hasn't worked for them. it's worked for us because we're wearing nice suits and we're in a tv pseudoowe in manhattan. >> we need to have the conversation. i'm the one we said we knew a growth and fair economy. how we're going to grow and by the way you've had some great conversation starting now about growth. tom freeman had a piece last night. >> i'm not. i'm telling you what others are saying. i'm sitting here in the same studio you are. >> we are all in that bubble. i'm not disagreeing with anything you're saying.

anothing seems to be working for people. that's why we need to have a real conversation about what's going to work and jump start growth in the economy, sustain it, but also make sure it's shared, but a we can't have growth that's sustainable and not shared. >> tell me this though, hillary clinton disagragreeing that she to do the three debates. what do you tell her to do during the debates. they are going be fascinating to watch. it's going to be fascinating theater. >> she needs to stay on her message which is how we're going to make america safe and prosperous. she's got policies she's talked about, but she's going to play off of him because the real question is how long can he go in those debates where his temperament doesn't come into play and he goes off script and do something that seems wacky to people. >> we're going to leave it

there. thanks for coming today. saturday night live, leslie joins scoring an invite to rio. do not miss becky quick's interview with walmart and julio teheran -- jet.com ceo. announcer: alvin and the chipmunks want to remind you-- bacteria can hide in food and make you ill. wow! announcer: but you can keep bacteria from ruining your day

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when a moment spontaneously turns romantic, why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card. can an established bank move like a start-up? it's a question we get from some of our largest banking clients. the face of their business was tellers.

then atm's. today it's their mobile app running on the ibm cloud. across every transaction, the hybrid cloud helps their data move quickly and securely. our clients are building out features and pushing updates faster, on five continents. with the ibm cloud, they can move at the speed of any start-up. good morning and welcome back to "squawk box." new data out this morning showing ceo confidence is on the rise around the globe. according to the latest poll

survey. the second consecutive quarter showing an jum tick in confidence. since a steady erosion began in 2014. by the way, american ceos are the most optimistic in the world second to counter parts in asia. by the way, the ypo is a partner who companies generate $6 trillion in revenue. >> meanwhile, president obama enjoying his vacation in martha's vineyard. the group teed off at farm net golf course in oak bluffs. president obama plans to tee it up a few more times during his two-week family vacation, and, of course, his daughter sascha has a summer job there, as well. >> yes, she does. >> let's talk a little olympics this morning. if you went to sleep early last night, you missed some great

moments in rio. he is in rio and has some highlights. >> reporter: team usa continues to make a splash in rio. lily king swimming to gold in the 100 meter breaststroke. >> so excited and proud to represent usa and get that gold for the country. >> reporter: the americans grabbed more gold in the men's 100 backstroke. ryan murphy charging from fourth to first in the finals. david bediane, and steel johnson finished withvil villsilver. kerry jennings and rafael walsh. >> this is match number two. we have five more matches to win the gold medal. >> swimming won't have to wait that long. they've got a chance another gold in the olympic pool tonight. >> tonight women's gymnastics is

in the spotlight. outpacing second place china by a staggering 10. >> one of the most amazining stories from last night is lily king winning the gold in the 100 meter breaststroke beating the russian athlete who had been disqualified and invited back just hours before the match. it was on the front page\of the papers. >> king got a heat because she gave the finger wave. she did this and then went out and won the race. if you do this, you're going to block the shot and win. >> more power to her. it looks like actressless le jones is heading to rio as well. her tweets feature her narrating or cheering on the events. the tweets garnered thousands of retweets and favorites which did

not go unnoticed by nbc. g jim bell, the executive producer tweeting okay, you're officially invited to rio. want to come. later tweeting in a rio hat captioned rio bound baby, usa. interesting because she quit twitter a few weeks ago in the wake of being trolled by some not so nice people, but of course, showing the lighter side of social media as well. >> has to be happy about twitter. is she on snapchat. >> i don't follow her if she is. we'll have to look it up. >> maybe she's doing stories on instagram. coming up back to school shopping season. it could be make or break for some retailers. talk about the latest shopping trends as we head to a break. quick check on what happens happening in europe markets right now. green arrows across the board. back in just a few moments.

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welcome back to "squawk box." the interview of the morning is 20 minutes away. becky. >> hey, good morning. good morning, everybody. this news that we heard yesterday that walmart made it official going to be buying squet.com for $3.3 billion. $300 million in stock. that what we're here to talk about. we're going to be sitting down and talking to the ceo of jet.com along with the ceo of -- back it up. go back to the top. we'll be sitting down with both the ceos of walmart and jet.com to talk about the deal. there is something on both sides for this deal. walmart is going to be getting some e-commerce expertise. here we go. in its battle to take online. jet.com is also going to be sitting down and getting something out of this. the founder mark lore was an e-commerce pioneer who sold to

amazon back if 2010. what it debt e gets out of this is a owner with deep pockets. all of this comes with a pretty lofty price tag and that's something the street is going to want to hear more about. we'll be getting the chance to sit down with doug mcmillen. yesterday on a dompbs call ceo was vague on the details how this could be impacting guidance. reports on august 18. probably some things they can't say about this. take a look what happened last time mcmillen lowered guidance. he was investing in walmart's future. we knew he would be spending more on investing in stores. raising a money minimum wage for a lot of their workers and making sure they would be spending on e-commerce. the street reacted pretty badly. this happened you can look at the drop back on october 14 of

last year when mcmillen talked about that, the street reacted strongly. went from 66 down to $60 in change in one day. that's a big drop for a dow component. about 10%. you see what happened since then. the share price has been going steadily higher. this has been coming as mcmillen has rebuilt relationship with investors. he is putting up numbers. for the last six quarters in a row, we have seen traffic increases at the stores and there's been positive same stores sales growth for the last seven quarters. walmart will report earnings next week on august 18. today we'll get a chance to hear more about the plans for jet.com and why he's making this bet. we'll also be hearing from mark lore the founder of jet.com who will be joining walmart. lore is going to be running jet.com and walmart.com. the two will be sitting down

with us. coming at the top of the 7:00 hour. make sure you stay with us for that. >> we're psyched for this interview. it's been a deal we've talked a lot about. we love to be a part of it. >> getting in the minds of executives. >> a company that hasn't made money, yes, there's a lot of talk about. meanwhile back to school shopping season is in full swing even though sit early august. some are worried this time could be make or break for retailers. joining us now is matthew shai. before we get to back to school, i want to ask you about the walmart deal. what sort of symbol is this for retail. >> it validates everything retailers are saying and we've been talking about for months and months now which is the renewed focus in which they're trying to adapt to the change in marketplace skpchlt the consumer focus on technology and wanting

product and service where they want it when they want it how they want it. it's a consumer centric play. demonstrates what the walmart team is doing. becky just showed the strong price a stock price and numbers. you have seen the investments in the employees and training programs. this is a big bet, but a great one. >> did it surprise you? >> i didn't know anything about the deal. >> did it surprise you given the history of jet and the fact while it's grown remarkably, it's not a business that's going to make money. >> they're going to get the leader ship team. there is a lot of value there. doug and his team are brilliant. they're doing great things with an enormously complex business. and making progress. i would think this is one more investment that's going be consistent with what they've done already and real validate the strategy.

>> retailers at large have struggled to capture that digital consumer and there aren't many companies out there to buy. no others to buy of a certain size if they want the buy into that capacity. how are they doing on their own building this organically. >> that's interesting. we have this conversation all the time. the narrative is how bricks and mortars is losing at the expense of online. the largest e-commerce platforms the top 25 are bricks and minor car company. retailers are online and huge e-commerce players, but the amazons and two or three other sites get a lot of attention. if you stack that up, bricks and minor car retailers are overwellioverwel overwellingly the largest in the marketplace. >> 92 percent is still done

brick and mar and minoordar. >> when do you see that tapering off? it's easy to go from a small base. now that it's bigger, when do you see it rolling over. >> there's still plenty of room to grow. at this point 7 or 8% taking place on e-commerce side there's still room for growth and forecasting 8 or 10% on the online piece. >> as a washington buy the, want to weigh in on the election here? are you nonpartisan? do you take a view eventually? >> we doe not take a perspective on the presidential elections. we are involved in the congressional elections and a few state elections. in the house and senate races. our platform would be consistent with what we've heard generally speaking about there should be tax reform. we are very troubled by the

comments about trade. you know, the arguments against trade that we've heard from the two candidates have made for great politics, but terrible economics, but they're great political talking points. and right now they're appealing to the people that they're trying to get. if you look at donald trump's campaign, the places he has to win are the places in which that argument and bryan said it very well in the last segment when he was talking with your previous guest, if i grew up in ohio, my parents are from the same part of the world. >> what town. >> north ohio. east of columbus. >> those people are going to find it an appealing argument. it's terrible economics. >> why has nobody done a terrific job of articulating that piece of it. >> the biggest challenge when it comes to trade, the negative consequences are very visible on very few vocal people.

and the benefits are diffused across the economy. it's hard to quantity if i. >> now that we have bullet points laid out, it will be interesting to see if we have retailers whochl would realistically be able to bring jobs back to the u.s. and produce goods here. >> comprehensive tax reform is something we're in support of. we think that is the northwest likely prescription to fix the economy. infrastructure investment. you look around the country at the roads, the bridges, the ports. we can't compete nlunless we do reinfrastructure investment. >> is it still going to be that bad. >> the consumer is in a very good place. we've been talking about that for monthings and months. home prices are very good. in different segments you see retailers doing well. customers are spending.

consumers are healthy. >> we argued because a contacts of mine runs a retailer. he says when people are buying houses and cars they are not buyibuy ing jeans. >> the recession and recovery is consumers can do one thing at a time very well. they can do the big ticket investments or discretionary. they don't do both simultaneously. we need an economy they can do both at the same time. >> it's nice to see you. >> nice to see you all. >> coming up, mail call, united states postal service set to release quarterly results this morning. notice we didn't say earnings. it's unlikely there will be any earnings. tell us what to expect and how much you're going to lose. as we head to break, shares of coach, slightly on revenue. "squawk box" returns right after this.

6:53 in the morning. seems like a good time to play a game. this is called how many billions of your taxpayer dollars will the post office lose this quarter? united states post office set to report its third quarter results just before 9:00 a.m. morgan brennan here with perhaps some of the answers. >> yeah. two things to that. the first is, that's the

question. it isn't weather the usps is going to report a loss. it's how big that loss is going to be. and how much that will be tied to the business of delivering the mail. the usps does not actually take taxpayer dollars. expect another quarterly loss. but much of that will stem from a congressional referendum. if you exclude that controllable income grew 84% in the second quarter on higher package volumes. and new initiatives including grocery delivery. is the profit still rising for controllable income? is the usps taking more market share from u.p.s. and fedex? and are costs continuing to rise for the postal service? lastly watch for blowback from the expiration of a surcharge on things like stamps. that should also add to the losses. the postal service which doesn't get taxpayer dollars, this is a

larger story. this is an attempted turnover story. so far that strategy is in the right direction. that's up from $3.3 billion in 2011. as i mentioned, a lot of that tied to amazon. >> but interestingly, the price of stamps went down recently. first time in like a hundred years. and the post office couldn't have been happy about that, but how much does 2 cents really matter to the bottom line? >> we'll find that out today because it's part of that surcharge that expired in april. they say the loss could be in the hundreds of millions of dollars. >> and there is a taxpayer dollar element. no, they don't get dollars. however, when you lose multiple millions, that money has to come from somewhere. >> yes. this is a quasi governmental agency. there is a ton of costs involved in that. and they have been able to cut prices, cut prices over the last several years to take market

share whereas a u.p.s. or a fedex would never be able to do that. >> what do you think a stamp should cost for real? >> $1.50. i think whatever it takes to cover your costs. lower the costs. >> do we know what the actual cost is? >> i want to say it's 49 cents. it just dropped. >> no, no, the actual cost of what it should be. has me post office ever come out and said the cost of getting this envelope from here to there is "x"? >> i'm not aware of them doing that. but that's a good question i will see if i can ask today. >> what if they want to keep volume highs and they raise it to $1.50. >> posted first quarter profit of 873 million euros. >> that's because it's a bank. >> deutsch post? japan post is. >> they have all sorts of functionality. they're not a mail service as far as you can -- i mean, they're doing so many other things besides delivering the mail. nice to see you.

coming up, walmart buying jet.com. becky's got the exclusive coming up after this.

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why walmart's spending $3 billion in its fight to take on amazon. an exclusive interview with ceo doug mcmillon and ceo marc lore ahead. gene sperling joining us with his economic outlook and whether he thinks the fed should rise rates next month. and burger king. why the fast food giant is putting a twist on an american classic. as the second hour of "squawk box" sizzles right now.

is. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm andrew ross sorkin along with kayla tausche and brian sullivan. becky will be joining us with her interview with doug mcmillon and marc lore. in the meantime the futures at this hour, dow looks it would open up 16.5 points. nasdaq 3.5 points. and s&p 500 up marginally about 0.75 of a point. valeant did miss on the top and bottom lines with the second quarter results. however, it did also reaffirm estimates and reannounced an organization of the company's reporting unit.

stock up about 7% in the premarket trading. and small business sentiment at its highest of the year. the group says small businesses remain very cautious about sales and hiring. and check out shares of coach. the luxury goods maker earned 45 cents per share for its latest quarter. that was 4 cents above estimates. are revenue slightly below forecast but there was a rise in north american comp sales. that's the first time in several years coach has been able to increase north american comps. it is time now for the interview of the morning. let's get out to becky quick who is joined by walmart ceo doug mcmillon as well as jet.com ceo marc lore. becky, over to you. >> thank you very much. i am here at jet.com headquarters in hoboken in new jersey. you know the news on this. walmart announcing officially yesterday it is buying jet.com for $3.3 billion. $3 billion in cash.

another $300 million in dollars and shares of walmart. right now we are sitting down with walmart's chairman and ceo doug mcmillon. thanks for being here with us today. >> good morning. >> so a lot of people looking at this deal and you can see something from both sides in this. jet.com gets something out of it. you get something out of it. but the first question is why. what attracted you to jet.com? why'd you decide to do this deal? >> from a walmart point of view, we're serious about e-commerce. we want to service customers in the way they want to shop. as we've been watching jet.com grow, we've been playing close attention to their ability to scale so quickly that an opportunity to hear more about how marc thinks about retail. we're like minded in many ways. >> why isn't this something walma walmart.com could build itself? you talked about in the last fiscal year you're going to be spending $2 billion to invest in

walmart.com. what did the have that you needed? >> sometimes it's an and, not an or. we've got a great team work on e-commerce. we talked about the fact we needed fulfillment centers. we have gotten to the point where marketplace is starting to scale in a different way. so we're on track there and we're going to achieve higher growth rates. but we have even higher expectations and standards about what we ultimately want to achieve. and the jet brand adds to the walmart portfolio. around the world we operate 74 retail brand names. we have a lot to serve customers. jet's customer profile, the brands they offer are acretive to walmart. >> can i stop you right there? you mean acretive -- >> from a customer profile point of view, jet's going to be additive to the walmart offer. and there are some things about

jet.com from a design point of view, an offering to the customer from a price point of view that enables them to be even more empowered. and a smart car and other technology that enable you to build a basket in a different way. so from a business point of view, basket economics are more attractive to us than unit economics. and that's one of the big thing that attracted us. >> so you're talking about the algorithm. if you go through jet.com and get a tube of toothpaste, you'll get a price. then you get laundry detergent you'll get a different price on both because they're shipping together. >> it reminds us if walmart were starting today building an e-commerce, some things jet did we would have wanted to do. they've done it from scratch. now we can help jet be successful faster. other things will enable jet to have synergies. over time as the technology, the platform's worked through, we'll

have a chance to take them and grow faster than we would have on our own. is our idea to ever blend jet.com or walmart.com? >> the brands will always be separate. we'll make choices on the back end. >> the part of what you talked about is just some of the long-term guidance that you're giving people. i know yesterday on the media call, several reporters asked what's this going to mean for guidance? and you said, we'll answer that a little later. i get you're in a quiet period right now. what can you tell us about this? >> when we come out on august 18th we'll forecast the rest of the year, update guidance for the rest of the year. if you look at the last quarter, our most recent results is our u.s. business has continued to get stronger. we were up in the supercenters. a 1% comp. that kind of strength where now we've been running positive comps for seven quarters. that kind of result, i think, is something to point to.

as we think about how we use the strength of the company, starting the strategy as we did with making sure the supercenters were strong, the investment in people, the investment in structure. the improvement we've had in inventory management. our inventory is way down which helps us be more productive. all of those things are sequenced in a way where we can step out and make a more aggressive e-commerce. we want to have a strong e-commerce business and then put those together in ways that customers want us to. >> the last time we sat down together was in october of 2015 just last year. we had a conversation like this where you talked about the long-term investments that walmart was making. later that morning you went and had analyst meeting and gave the guidance for the full year that we hadn't seen at that point. and that guidance caught the street a little off guard. because to make those investments that you were talking about b it was going to cost more than they had been

anticipating over several years. that's when we saw the stock drop about 10% in one day. is there going to be a surprise like that next week? it's one thing to understand long-term investment, it's another to hear about big numbers and how that may impact short-term guidance. >> i just can't talk about that unless we release earnings. it's important to remember we've got a lot of moving parts in the company. across all of these different businesses. i think you'll just need to wait until august 18th to hear what we have to say about this year. then in october we'll talk about a longer term period. >> if you had to generally look at the economy, we get numbers all the time. the one real strength in the economy has been the consumer. it looks like consumers are spending to us. could you give us a broad outline about what you see with the consumer in america? >> yeah. if you go back to first quarter results, i think what's encouraging is how much we saw across business segments. we saw growth in food, fresh

food, apparel, general merchandise. other than that we were performing well across the board. that's what a supercenter's for. you know, from shopping. when you come into a supercenter, you could knock out a big basket and cover a lot of categories. i think what we've done with pricing, where we got started with some price reductions, the improvement we've made on service, our associates and our store managers are doing a great job improving our stores week to week. and our customers tell us they see it. >> in terms of lower gas prices, my guess is it helps your customer maybe more than just about anybody else. because we have seen gas prices that have fallen below $2 in some places. how much of an impact does that have? >> we joke we can't get them all right at the same time. we've got currency pressure now. we've got help from fuel. food is deflating, i think first quarter we were down about 60 basis points on food deflation. we'll never get all those things lined up in our favor at the

same time. but low fuel prices do help. and hopefully we'll see those stay down for awhile because nast what our customers need. >> we're going to talk a lot more about jet.com. marc lore is going to be joining us in two minutes. before we get to that, i would like to talk to other broader issues that have been out there. what we hear constantly on the political trail is two candidates who have walked away from free trade. it's a different mood in the country than it used to be. i wonder from your perspective, when you hear candidates talking about ripping up trade deals with china or slapping tariffs on things, how would that impact walmart and what's walmart's take on that? >> yeah. i think it is good for the country for us to be thoughtful when we have these discussions and be specific. in the case of tpp, the one area that walmart would benefit is selling beef and pork into japan. and because of the changes that have been negotiated, our farmers would not have the same tariffs attached.

so prices would be lower in japan. so there'd be more demand for u.s. production. so when we talk about a trade deal, let's talk about the specifics. when you hear something like that, at least for me growing up in america and caring as much as i do, that would be good for the company why wouldn't i want to do that? these sweeping statements about what's good and what's not is something we need to be careful of. >> also the other side of trade is when you have people who are benefitting from it, you're always going to have some losers too. some people who lose out and feel like they lost jobs or wages as a result. many of those people might be walmart shoppers too. how do you look at the whole thing holistically zm. >> i decided to be in retail than an economist for a reason. so we're going to lower prices for everybody and try to make it easier on everyone. >> minimum wage has also been a huge issue. that's something that walmart's been out in front of. what have you seen with higher minimum wages and what do you think about that part? >> i think the wage increase we made was a necessary piece of

the puzzle. we wanted to make sure our associates knew how much we appreciated them, how much we respected the work they were doing. and it fit in this overall plan of making the supercenter strong. so we're really pleased that we made that investment. now we're on kind of the tail end of that large incremental investment in position for next year without quite so much pressure from that aspect which is nice. >> what have you heard back from the associates as a result? >> a lot of gratitude. it's great. maybe sometime you should go to the stores with me and meet our associates. they love what they're doing. i get a ton of feedback on e-mail and facebook. i'm really proud of them. >> doug, if you will stay with us for just a moment, we'd like to bring in marc lore as well. and we'll talk to him about what he gets out of walmart and how you two met. that's coming up, guys, in just a moment. walmart ceo doug mcmillon will stay during the break. when we come back, we'll be joined by marc lore as well.

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good morning, everybody. welcome back to "squawk box" here on cnbc. we are live at jet.com headquarters this morning.

we've been talking about walmart's acquisition of the e-commerce site for $3 billion in cash and $300 million in stock. once again we are joined by ceo of walmart doug mcmillon. and we also have jet.com's founder and ceo marc lore. thank you for being here. >> thank you. it's good to be here. >> now, you two -- before we even start, i want to back out a bit. if you could take a slightly wider shot. i want you to see what happened. doug walked into the jet.com headquarters in hoboken and he cashed in his walmart clothes for a pair of jeans. mark on the other hand showed up in a blazer and in a pair of slacks and marc you said this is unusual you forgot to wear a belt. so you went a little walmart on this. what happened here? >> come on, man. this is where we're going. >> marc, congratulations.

this is not the first time you have built something that has been acquired by a retailing giant. the last time you founded the company that was the parent company of diapers.com, quincy. and you sold that back in 2010 for over half a billion dollars to amazon. so when you started with jet.com, did you have that kind of formula in mind again? >> absolutely wasn't thinking about that. we have a very clear vision to reinvent e-commerce and we were all guns blazing. it wasn't really until i met doug that we just saw it as an even bigger opportunity. >> when did you two meet? >> it was probably in the spring. we were introduced by one of our board members that used to work there. i think we hit it off the first day. we started talking about these amazing plans we had. >> we've got this conference room in walmart called the quail room. will there's a white board in it. we were both sketching out on the white board we could do this

and it would work this way. it went from there. >> what was on that white board? >> we can't tell you. >> give us a little bit of insight about what you can do together and what you bring to the table, marc. >> yeah. i think walmart's got an incredible set of assets. i was impressed with the foundations they'd built. they've got great people there. and i'm looking forward to building on top of that, bringing our unique smart car technology and some of the brand positioning after the urban millennials. we've also been able to track some brands that maybe we could introduce to walmart. i think it's a perfect marriage. >> mark, you have done all this. but you've been losing money pretty consistently now. you're not the first one to do that. jeff bezos did that with amazon.com for a very long time. you were at the point to go back for more financing. why this deal instead of additional financing? >> i think this allows us to

accelerate our growth trajectory, the cost of goods and all the assets they can bring to jet is going to make our overall experience better in the financials. >> when we talked to you on "squawk box" a year ago just as you were launching jet.com and putting it out there, your plan at that point was we'll charge a membership fee of $50. people will love it. they may $99 for amazon prime. and that was your key to profitability. you got rid of that about three months in. do you think you could bring back a membership fee? or is that not something that works well? >> it's not something we're looking at now. the financials proved it was better without one. >> is it build you and they will come? >> e-commerce is a scale game. you want to get as much leverage as you can on your fixed infrastructure. as you get bigger, cost of goods goes down and more leverage. >> what happens with walmart behind the scenes? i guess part of that is having a lot of stuff already on hand.

part of it would be what? working with vendors too? >> i think it gives us scale almost overnight. because they're doing hundreds of billions of dollars of revenue and have incredible purchasing power. i think the store network is a powerful asset for any company to leverage. >> we've looked at our mutual dc's to mark each other's operations. it's a lot of back end stuff we can do together to accelerate in addition to the ideas. >> the front end you already said, doug, you're keeping jet.com separate from walmart.com. but the back end, how soon until you can combine those things? >> that'll take some time. the technology platforms are different. that will take time before we show the customers something we want to launch. people are going to walk out of here this week and look for things to be dramatically different and that's going to take time. there's the cost work, freight

rate work we can take on as soon as the deal closes. but there's going to be a quiet period for this as the government reviews the deal. >> let me ask you two, in terms of how you will measure the success or failure, what are your own measuring sticks maybe that you've given to the board? how do you figure out this is working? what are your goals? >> we have a growth number in mind. as you would expect. but customer satisfaction is the first thing that comes to mind. one of the first things i did when i first started talking to marc, we want high customer satisfaction scores. and that's not easy to do. there's a lot of attention to detail to deliver things on time in the way that we expect to deliver them. and marc's done that and i think together operationally we're going to provide a better customer experience. >> part of what you've done to keep your customer happy is if you don't have something in stock, you soo concierge service

that will go out and buy it elsewhere. >> it's what sam walton would have done. seriously. >> whatever we need to do to make the customer happy. >> what are some of those measures and how far will you take it? >> i think it's customer service, we made a big investment there in salt lake city. people there are amazing and we look for high quality people and we empower them to do whatever's necessary to make the customer happy. >> marc, part of your experience is when you sold to amazon.com, you actually went to work for a couple of years too. why'd you leave? and what's your relationship with like with jeff bezos at this point? >> i haven't really talked to jeff at all. it's a different relationship this time around. it's backed on trust. which is one of the core values and we spend more time together so it goes up. i'm committed for the long haul here. this is a different experience

for me. i can't tell you how excited i am to sort of help doug and the board and the team, everyone to crush it. >> are you going to be staying here in hoboken? what's your plan? >> i'm going to be staying here as my permanent place to live, but i'll spend a lot of time down in san bruno. >> and do you have another idea in mind? is there something else cooking up? because you're obviously the guy that -- >> i have lots of ideas. but they all have to do with crushing e-commerce with walmart. >> doug, anything else you want to say to the street before earnings next week? >> no. i'll wait and share information then. thanks for trying again. >> one more thing. you said you had a growth target in mind. can you tell us what that is? >> no. but knowing where we're trying to get to is really important. and in our case, we've got these 28 countries, this different store formats around the world. we've got a growing business in china, mexico, canada. and what we hope is that those

markets and our leaders in those markets are going to continue making progress on e-commerce. but marc will focus on the united states for walmart and jet. hep us innovate in ways we wouldn't have alone and faster. we're going to take those ideas and put them all over the world. and that's kind of the opportunity that i look at president one of the things that's caused me to be excited about this. >> is it fair to say you are gunning for amazon? >> we're gunning for the customer. >> okay. gentlemen, i want to thank you both for your time today. we appreciate it. thanks for letting us come in to sit down with you. >> thank you. >> andrew, back over to you. >> thank you, becky. thank you for bringing us that interview. when we come back, former director of the economic council gene sperling will be our guest. we'll talk to him about all things election. and burger king turning a classic into a burrito. which areas of the country will be on the list. "squawk" returns in a moment.

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welcome back to "squawk box" here on cnbc. among the stories front and center this morning, things are still tough for delta fliers today. the airline expecting to cancel another 250 or so flights today and delay another 200. this as delta tries to recover from the huge travel outage yesterday. it says it's trying to reset its operations. opec says it will hold talks at an energy conference in september as it looks for ways to stabilize the market. several opec members want to revive the idea of setting new limits on oil production this fall. crude prices are in the green again this morning. up about half of 1% on september wti. brent for october up about 0.3% of. small business sentiment is at its highest level of the

year. the index came in at 94.6. that edged up just slightly from june's reading. but small businesses are still being cautious about spending and having difficulty hiring workers. we're going to talk about the whopper-urito which is a mashup of a whopper and a burrito. it's trying to lure back those who cut back eating out. it will be offered at $2.99 for a limited time in all locations. beef, tomatoes, onions, lettuce, and pickles packed inside a flour tortilla. queso sauce replaces the mayonnaise from the hack burger. so that's -- and i don't know the calorie count. >> it's not out yet. i just tried to find it because i thought that would be interesting. but remember chipotle is getting into the burger business. they're rolling out tasty burger. >> because what we needed is

another burger chain. >> which by the way chipotle's already in a fight with a place called tasty made. >> why not just buy five guys? >> is it for sale? >> everything's for sale at a price. >> that's right. your name is trader. it's german. market maker. we know that. >> that's why i'm doing what i do. >> there you go. whopp-rito. donald trump came out promising reform that has not been seen since the era of ronald reagan. >> we will work with house republicans on this plan using the same brackets they have proposed. 12%, 25%, and 33%. for many american workers, their tax rate will be zero. these reforms will go for the

biggest tax revolution since the reagan tax reform. which unleashed years of continued economic growth and job creation. >> hillary clinton now set to roll out her economy plan. by the way, also in michigan. joining us now gene sperling. he was the national economic counc council director under bill clinton. what did you make of yesterday's speech from donald trump? i imagine not much. >> well, the go with the flow of the program, i think you can say it was the whopp-rito of tax cuts for the top 1%. >> filled with a lot of stuff and delicious? >> i think a lot of things that for 99% of people they wouldn't think were particularly good for them. and let me just explain why. he tried to make a deal out of while he was joining some of the republican, some of the republican strategy. but think of -- consider two things. number one, his tax rate for most well off americans would be

15%. in other words, if you have any business income, any pass through income, any esquire income whether you're a corporate law partner, hedge fund which he said they were going to raise their rates. he would be cutting all of theirs to 15%. so for over half of the fortune of -- excuse me. for over half of the 400 richest americans each year, he would be actually cutting their rates on much of their income to 15%. >> hold on. can you just explain that for a second given that that's going to be the personal -- the personal income tax rate at the highest level would be 33%. unless all these partnerships -- >> no. i mean, andrew -- >> exactly. nobody in the forbes 400 pays themselves an ordinary income. you know that. >> well, let's just be clear. 15% would be -- it wouldn't be the rate that you pay because you were doing tax avoidance.

it would be the rate you would be paying under donald trump's plan. if you're a passive investor in one of donald trump's estates, if you get any passive income, any type of business income at all, you'd be 15% rate. so enormous amount of the most well off americans, people who make the most in our country, would be paying 15%. this would be lower on the margin. millions of middle income families would pay. >> can you just explain how that would work? if you're a private equity executive who currently gets a pass through and is using the capital gains -- what you've described and others have described as a loophole in this instance, how are they going to pay? >> if you are somebody who today would get income, ordinary income as -- that you would classify as business income, if you were in the top 1%, you would pay 39.6%. if you had capital gains, you'd

pay 28%. under his plan all of those people would pay 15%. they would be paying a lower rate on the margin than millions of middle income people who have to pay their payroll taxes or have a regular tax rate. when he goes out and says i'm going to 33%. that's smoke and mirrors. he is creating a road map -- >> i want to correct something i hear all the time which i think is either purposely misleading the american public or what. what ask the average middle income federal net effective tax rate, gene? middle class families. we always hear, i'm going to pay less than the middle class family. what is the federal income tax rate? 5%. 5%. >> that depends on structure. >> that's -- >> hold it, hold it. you're having me at a guest on the show. let's explain what marginal tax rates mean to people. what you're paying at the marginal tax rate. if you get a bonus and make

$55,000 or $60,000, middle class person, you may well be paying 20%. and still be paying payroll taxings on that. so you would be paying significantly more on your bonus as a middle income person at the end of the year than somebody who would be getting a $5 million bonus who might be a hedge fund investor. >> absolutely. agree. both of my parents are accountants. i've talked with them endlessly about this. i want to end the whole thing about the middle class tax rate. i'm not say they should be taxed more. let's be honest. rates have come down for everybody over the last 30 years. in fact, they're at 50-year lows. >> yeah. but -- >> so if we want to pay for stuff we want to to do, when is any politician going to be honest and say tax rates may have to go up on everyone. >> what is donald trump doing right now? let's give another example. he would pay -- he would cost our government $270 billion. $270 billion over the next ten

years in his plan because he would eliminate the estate tax. do you know that you don't pay one penny on the estate tax if you are a couple in a state of less than 11 million? so he would spend $270 billion in the middle of all the wealth inequality we're facing to eliminate an estate tax that would benefit how many? two out of the top 1,000 estates. you have to have over $11 million as a couple in the state to even pa i a penny of the estate tax right now. donald trump in the middle of saying he's for struggling working families decides that we should spend a quarter of a trillion dollars so that families like his can leave hundreds of millions of dollars to their heirs and pay zero and have $270 billion doing that instead of funding infrastructure, manufacturing, and jobs. >> okay. gene, we appreciate your time as always and your perspective. and we look forward to seeing

you again very soon. >> thank you. meantime, when we come back, a behind the scenes look at the hollywood talent agency on some of the biggest stars. "powerhouse" author james andrew miller is going to join us next. take a look at futures. we are in the green looking up. back in a moment.

team usa making a splash in rio picking up two more gold medals in the pool. last night lilly king swam for gold in the 100 meter breaststroke. after a slow start, men's basketball turned up the heat on venezuela winning 113-69. in beach volleyball, three time olympic gold medalist kerri walsh jennings and her partner april ross won. and a look at the medal count. the u.s. leans with 19 overall medals tied with china with 5 gold a piece. more "squawk" after the break. at citi, our business isn't training athletes. our products don't keep muscles warm, and we don't design prosthetics.

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welcome back to "squawk box." greed, ruthlessness, empire building, and personal betrayal. it's real life for one of the most secretive corporations. a new tell all making waves today. "powerhouse." we're joined by the author james andrew miller. good morning. >> good morning. thanks for having me. >> one of the things that's fascinating about caa and this is about all the agencies. this is everything. but i'm thinking of morris as well. is the role of private equity. given we're a finance show to some degree. >> right. >> when you look at what's happened to both of these agencies over time and the money that's been put in and taken out, you think to yourself what do they look like in the future? are d.o. they now just become

sports agencies? is that where the money is? where's the money now in hollywood? >> tpg with caa and silver lake and others, i think they got smart because this is really a content play. >> when we talk now about -- in terms of talent agencies. >> they're big corporations that have access to lots of different things in the technological front and the content universe. so these companies are using this in a way there. is there a winner in this? >> i'm not sure. i'm not sure. it depends. william morris is playing for different rules than caa. one of the co-chairs of wming, he doesn't care about money in a way. he wants to amass a powerful company.

i think petroleum wme before caa. they're not in a hurry. they're much more patient. >> you've got some amazing stories in here. delicious ones. >> anything that surprised you? there's so much palace intrigue about these companies but the personalities are as large as you would think they are. >> the most surprising thing was just hearing from these people. by definition agents are supposed to be silent, invisible. it's all about tom cruise and barbara streisand and sylvester stallone. you know, you quietly take care of them. so the idea of having -- hearing from them in the first place was kind of new. i was so glad so many people participated. >> how many calls did you get from people during the fact checking process that begged you for certain stories to be taken out? >> well, that's a hearty perennial. that happened with "snl" and espn. >> help us, here. give us some examples. >> there were, you know, like literally dozens. i think that sometimes people

sit down and they talk and it's on the record and then they go home and they talk to their spouse or they think about it afterwards and they want to shove toothpaste back in the tube. >> how buck was ron meyer's life. you wrote he had some vices. he had some gambling debts to some, we'll just call them serious people. >> he's one of the most complex people i think i've ever encountered. he lives in the deep end of the pool. he has this heart of gold and by the way, you know how many people told me in an interview, ron meyer is my best friend. there's like a hundred people that think they're ron meyer's best friend. so -- but he -- >> i think he's my best friend. it's very complicated too. i'm one of those hundred people. >> there you go. he -- >> listen, sometimes the greatest people are the most flooring. >> it's amazing what he's constructed for himself. he's an honest guy.

he's beloved. he survived six owners as chairman of universal. he's been there longer than at caa. >> who's the most impress ivica rkt in the book for you? >> maybe meyer. maybe meyer. >> because of longevity. >> it's not only that. it's art and commerce and transparency. when i talked to him about the gambling because at some points it did affect caa. >> he was honest about it. that's why i brought him up. >> it's like he's just going to go there. he's totally transparent and honest. and really good at what he does. >> all right. one of the big questions about the agency business given the amount of private equity money in it now is whether talent is still going to go to these agencies or goes to other places in that so much money is has been taken off the table by some of the founders. then the question of course becomes does the current group -- is there still an opportunity for them to make --

>> the easy answer is if they go public. there would be enough money. when these guys go public, that'll be fun. but in terms of the clients, the funny thing is when you talk to jennifer lopez and sarah jessica parker and eve ra longoria, it's about perfume lines and their brand extensions and they call it that. and the clothing lines. so these big agencies have this huge value proposition to these actresses which is -- it's just not about what you do on a movie set anymore. we're going to get you into all these other businesses. >> will there ever be competition against them? >> there's a lot of different agent sis out there doing well right now. i personally think in the 41-year history of caa, this is the most competitive climate. there are many that koultd succeed. >> how will this all be remembered? >> it's a micced message. i think he was in some ways an incredible visionary. he made a lot of caa clients

very rich. and then, you know, he got too close to the sun. >> mike's a viewer of the show. thank you for coming in today. >> thanks. when we return, team usa picking up two more gold medals in the pool. we've got more highlights. we'll do it after the break. and then later, grading the trump plan. we're going to be joined at the top of the 8:00 a.m. hour. "squawk" returns with all that in a moment.

let's get down to rio de janeiro and the olympics. carl quintanilla joins us with the latest buzz. what is the buzz? is it phelps face? finger wagging? >> i saw kayla tweeted the face moments ago. it is largely about swimming. the u.s. won six individual swimming medals last night. five of those by first-time olympians. take a look at lilly king. 19 years old. a sophomore wins the 100 meter breaststroke, a world record. a day after she criticized the doping history and sanctions and still being allowed to compete. here's what she said after she won. >> do i think, you know, people who have been caught for doping offenses should be on the team? no, they shouldn't. it's just something that needs to be set in stone that this is

what we're going to do to settle this. there should not be any bouncing back and forth. >> another rookie, ryan murphy wins the men's 100 meter backstroke. the streak goes back to this event in atlanta in '96. murphy's going to attempt for two more golds. and we are in brazil an emotional win as brazil gets its first gold. lightweight judo wins an emotional win. she jumps into the stands afterwards. she lost in london, guys. after that loss was bullied on social media. some called her a monkey that should have been kept in a cage. after this win she said all i can say is that monkey that was supposed to be in a cage in london is now an olympic medal winner. congratulations to her. the medal count goes like this. 12 medals -- u.s. now in the lead at 19 including 5 gold. china 13, japan 10, russia 10.

and a lot this afternoon this afternoon and today. women's gymnastics and a lot more swimming including michael phelps who is going to go for the 200 meter butterfly against his rival chad le cloe of south africa. he lost that event in 2012. they've not gone head to head since then. it's going to be a big day for phelps. phelps face aside. >> we're referencing this michael phelps face because the guy is the most unbelievable champion of all time. but we're showing the video of carl right now. that's his biggest rival who's a south african swimmer sort of was dancing and smiling in front of phelps ahead of a heat. and if you zoom in, phelps -- i mean, he is -- >> that is a scowl. >> it's like revenge of the sith or something. he's in the hooded thing just scowling. and if you google michael phelps face, it's the number one trending topic on twitter. he's intense like he literally just -- like he wants to eat the south african rival. he's just hungry.

>> yeah. these guys obviously have a deep history. he lost to him in this event in london. and after that le clois said it was going to be like ali/frazier. it's no surprise. as phelps said last night, he does his thing, i do mine. this is where the drama gets thick. >> carl, it was a pleasure, buddy. thank you very much. >> see you, guys. coming up, donald trump unveiling more of his economic plan yesterday in detroit. are the tax rates that he is proposing viable? economist douglas holtz-eakin is your guest. and right now the markets could make yet new highs of the s&p 500. another day, low volume. "squawk box" returns right after this.

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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)

a "squawk box" exclusive. the ceo of walmart speaks out on the consumer, the economy, and the retailer's dl to buy jet.com. >> from a walmart point of view, we're serious about e-commerce. your money, your vote. donald trump makes his pitch for

making the u.s. economy great again. but did he make the grade? >> these reforms will offer the biggest tax revolution since the reagan tax reform. >> we'll have a veteran washington economist and former cbo director douglas holtz-eakin. plus nick cannon joins us to talk music, business, politics, and much more. >> i'm hungry. where he money at? >> the final hour of "squawk box" begins flight. ♪ live from the beating heart of business, new york city. this is "squawk box." >> i'm andrew ross sorkin with kayla tausche and brian sullivan. becky quick will join us in a couple minutes with highlights of her interviews with ceo's of walmart and jet.com after that merger. dow looks it would open higher

21 points. s&p 500 up about 1.5 points. and the nasdaq up about 6 points. also look at wti crude this morning. we're looking at $43.15 so things have rebounded a little bit. making head lines this morning, valeant pharmaceuticals fell short of estimates. however, the company is backing its full year guidance and shares are rising on that news. up 8.25%. coach topping estimates this morning. online sales giving coach a boost to its quarterly comps. first time in three years at north american stores. yor weejen cruise lines taking a big hit this morning. earnings of 85 cents per share did top estimates. however, its forecast for the thrust of this year and next year came in below wall street current consensus forecast. company says geopolitical events, maybe zika who knows, dampening. that stock is down in the premarket. let's get back to becky

quick in hoboken, new jersey, with highlights from an interesting conversation about exactly what is driving that deal. >> you have the retail giant from arkansas with its basic retail approach to making sure the consumer getting every day low prices. and that meets up with jet.com which is looking to do it with a millennial sort of audience. they're doing it from this flashy jet.com headquarters we're sitting at here in hoboken. you saw those two cultures collide here on camera today. check it out. when these two sat down, doug mcmillon came and he was giving up his walmart uniform to show up in jeans so he can fit in here. and the jet.com founder was

wearing the uniform. the gray slacks. he said he was so uncomfortable with the whole thing, he forgot to wear a belt. so these two are trying hard to merge these two cultures. in fact, these two companies kind of need each other. walmart has been trying to take on amazon.com and really built a huge online shopping site through walmart.com. but it has seen growth in online sales slow over the last six or seven quarters in a row. in fact, the most recent quarter had -- when you match what amazon has done online. jet.com has been growing rapidly. it launched a year ago and they've built up a big subscriber base. a lot of customers who have been coming in, but they've been losing money steadily to do that. both of these companies are getting something out of this. when we talked with marc lore earlier, he told us what he gets when walmart comes to the table. listen in. >> e-commerce is a scale game

and you want get as much -- cost of goods goes down and you get more leverage. >> walmart again gets a lot out of this. marc lore is a cyber space retailing pioneer. the guy who built the parent company of diapers.com and then sold it to amazon back in 2010 for over half a billion dollars. he's been able to do this a few times. he's going to be running both jet.com and walmart.com and the two of them talked a lot about the ideas they have back and forth. of course the big question from the street is what does this mean to guidance? when are we going to get an update on that? and the answer is not yet. next week the company is reporting earnings on august 18th. they are in a quiet period right now so can't talk a lot about what comes out of that. but we did get the chance to talk to doug mcmillon generally about what he's seeing in the economy. we know consumers have been the one bright point that we've been seeing time and time again. doug talked to us a little bit about the pros and cons, what

they're getting out of this. and here's what he had to say. >> we've got currency pressure now. we've got help from fuel. food is deflating. i think first quarter we were down about 16 points in food deflation. we'll never get all those things lined up in our favor at the same time. but low fuel prices do help. hopefully we'll see those stay down for awhile because that's what our customers need. >> we did talk a little bit about politics with doug as well. and mcmillon said really he's been trying to stick out of it and stick to retailing, not politics. but he did talk about minimum wage how they have already raised wages for their associates which has cost them money to do but he says it's been worth it. also talked to them about trade. and that's a huge issue for walmart. he says he thinks people need to be very specific when they talk about what happens with trade because there are a lot of areas where we are helped by those open trade policies, both candidates have moved away from

trade. and that has been a concern as well. andrew, i'll send it back over to you. >> thank you, becky. awesome interview. great stuff. meantime, we're going to talk more politics. donald trump rolled out his economic plan in the motor city. john harwood joins us with some reaction. >> donald trump has dug himself a big hole in this race. tried to get out of it with the economic speech in detroit yesterday in addition to reiterating his desire to ditch nafta, ditch the tpp. he added two new wrinkles. one was a tax deduction for child care expenses. the other was a revision in his tax cut proposal. it still would add to the deficit. it still would confer disproportionate estimates but now it matches more with members of his own party with whom he's been losing support. >> we will work with house republicans on this plan using

the same brackets they have proposed. 12%, 25%, and 33%. these reforms will offer the biggest tax revolution since the reagan tax reform. which unleashed years of economic growth and job creation. >> here's how deep that is for donald trump. that's two points wider a spread than last week 37 he suffered an additional blow when susan collins posted an op-ed saying she will not support trump that he's incapable of change or growth. and in addition to that, 50 leading republican national security professionals published an open letter saying he would be the most reckless president in u.s. history in condemning

his candidacy. >> thank you very much. so what grade would we give donald trump on his economic plan? i guess it depends on who the professor is. right now it's douglas holtz-eakin. he is president of the american action forum. you're not going to give it an a-plus are you? you can't be that much homers. >> i gave him a d-minus before the speech. now he's moved himself to an incomplete. we don't know what his tax plan is anymore. the old plan is off the website. so it's gone. what he said is i'm going to use the brackets from the house task force and that's a step in the right direction. i don't know how much of the rest of that tax plan he's adopting. if he were to say i'm going to take what kevin brady put together. that's fantastic. that's a bold growth oriented tax that supporting saving and investment. it has a territorial basis. it's everything you'd want to put into a tax reform for the 21st century. but i don't know if he's there. you just can't tell. >> what are you anxious about? did wha piece did you hear

yesterday that you didn't like? that's what i don't understand. it sounds like you actually like it. >> i like the brackets he went to. i think they make sense. he talk about expensing. that makes sense. he hinted at border adjustability. that would be a huge step. but he didn't just say i'm going to follow what the house republicans put together. he said we're going to work with their brackets. there's this sense of incompleteness. he also has this tax on the $2 trillion off shore that i can't tell if that's a voluntary repatriation or if that's just a tax. >> have you graded the house plan? >> i think it's a great plan. >> and what does that cost over ten years? >> it's revenue neutral. with the growth. it loses about i think the tax had it on $1.8 trillion. >> and what do you calculate trump's plan would cost? >> i don't know. it was at $10 trillion before which is unthinkbly large. now he's gone toward what would be $2 trillion static and neutral. >> well, the child care deduction is something people

have a hard time putting a fine point on. i'm curious whether you think -- it's a more innovative benefit than we see from the gop. how much thunder does that steal from hillary clinton? >> so sort of on tax policy principles, it's a weird cay to go. right? because most of the people don't pay the income tax. >> see, if you have a deduction, you have to pay taxes to deduct from it. so it needs to be a credit to help low income people. >> right. and it's a fixed deduction if what he said is accurate, you get to deduct the average cost of child care. it's not your expense, it's the average. so it's ral bigger personal exemption for every child you have. it's a very weird thing. so let's move away from tax policy. >> in theory it works and in theory no estate tax works even though such a few percentage of people actually qualify for that. >> professor holtz-eakin left

the room. now let's look at the politics of this. he's campaigning like a democrat. democrats say, okay, target the constituent sis. let's give them something and see if we can win. he gave an olive branch to the republican establishment. he's got these blue collar workers who desperately he needs their help. so let's be against trade, against immigration, steal everywhere. you know, this is just constituency after constituency. >> can i ask a question on carried interest? it's an issue we talk about a lot. we were having a debate with gene sperling on this. if you were in the private equity industry or hedge fund industry and hold your asset over a year which people don't always seem to describe. long-term capital gain. you would be paying what rate? >> 15%. >> 15%? but i thought it would be passed through at the 33% rate. no? >> so most of these guys are pass through entities. they're being taxed on

individual and tax. and tax is going to be at the corporate rate, 15%. yeah, it's ordinary income. but the ordinary income tax rate is now 15%. >> fair enough. >> i'm not sure he knows that. >> well, so you saw the interview with gene sperling? >> i saw pieces of it. >> i pushed back on the idea that people say the rich pay less than the middle class. that's not true. you have to factor in deductions. and i wasn't sort of defending rich tax rates. here's my issue. i want to be clear about this. people say you favor higher taxes. no. with what clinton and trump and pretty much every politician in the history of time has done is get elected by offering to give you stuff. that's just normal. politicians don't get elected by taking away things. when are we going to have any politician of any stripe, any party, whatever who says if we want all these things, america, we're going to have to probably raise taxes on everybody. because the numbers don't add up.

>> the numbers don't add up. >> the middle income federal tax rate is 5% after deductions. the rich are paying less. everybody's paying less. so who's paying for anything? >> the kids. at some point -- >> grand kids. great grand kids? >> i'm going to give you a future. this economy is not growing and and there's no growth in the clinton tax plans. let's be honest. the economic plan to nowhere with a promise that it's eventually paid. that's it. it's going nowhere. trump's got the right message. it's growth. but it's incoherent. he could do a lot better. that's what the kids need. >> i know you have a -- >> hillary's got a d-minus. terrible. there's literally -- there's $1.3 trillion in additional taxes. we're averaging $100 billion of regulatory costs a year. this administration has 600 major regulations. >> they get full moratorium is a good thing then? >> it'd be a good idea to take a time-out and figure out what you want to do.

it really is damaging this economy. think about it. $100 billion tax increase every year. if people knew that, i think they'd be like, i'm not sure that's a good idea. and she's promising to do that again. she's doing it in taxes. >> we need to be honest that if you want to do some of these things it's okay but let's be clear. even 100% effective tax rate on the richest 1% or 5% isn't going to put a dent in anything. so the tax rates which have been going down for everyone, but they have been for everybody on the rich and poor and middle class have been going down federally. someone's going to have those raise those. >> so here's the problem. hillary is promising to raise $1.3 trillion in taxes. but she's also promising to spend $3.5 trillion. if you're going to raise taxes, use it to balance the books rather than create five new entitlement programs.

that's a bad place for us to go. we need to do better. trump, he's got a chance to do better. but he didn't hit -- he didn't sort of lay it out yesterday. >> when are you coming back? >> well, i'm your personal grader now. when do you need me back, andrew? >> i want to the when you can give us an actual grade. >> i would love to see what their plan is. i went to the website to see what their plan was. >> when the real plan is out, come in with the grade. >> you can find it ar kooifed. i'm a dinosaur. >> i'll send it to you. coming up, a sweet smell for investors. international flavors and fragrances shares jumping more than 130% over the last five years. the company's ceo joining us after the break. but first check out the dollar this morning. earlier today the pound hit a one-month low against the dollar on new talk of easing in england. that's where we are right now. stay tuned.

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welcome back. we have some news justululem

lululemon. the resignation. and the background expertise had been questioned. the founder of that company chip wilson has blamed her -- i don't know by name but blamed a number of the longtime board members for some of the problems at the company. meanwhile international flavors and fragrances or iff delivering better than expected earnings. revenue growing 3% year over year. profits up 11%. iff shares have outperformed the s&p up more than 130%. that's over the last five years. joining us now is the company's ceo and founder. >> great to be here again. >> when you went on "mad money," you brought a personalized fragrance. i'm not going to give you a hard time for not bringing them because i know it's an early morning. but talk a little bit about how your business has changed and the personalization business, who's willing to pay for that? >> what we see in fine fragrance

that people are willing to pay a premium for some of these fragrances. you see also with the celebrity fragrances, for example. and what is really important, for example, for some of the premium fragrances are our natural ingredients. that's one of our strong suits in iff. we have a nice facility in grans where we basically research and manufacture some of the natural ingredients. >> what are the most popular natural ingredients right now? and how quickly do those trends change? >> till rose oil, patchouli are really big. if you want to have one kilogram of natural rose oil essence, you need four metric tons. >> where do you get them from? >> from turkey or bulgaria. then you produce the rose oil essence. >> obviously you're an international business. you have vendors and distribution facilities all over. how do you manage in a global

economy where currencies are so hard to hedge for and volatility is pretty much everywhere? >> that's actually a very good point. because i'm in international business for over 40 years. the volatility we see in different markets is unpreced t unprecedented. i would say the best insurance company for -- insurance policy is to be in many geographies. make sure you can balance your business very well which we can do. we do 50% of our sales in the markets. then a wide range portfolio where you can see growth in areas where you see the growth. for example we acquired last year a company for active cosmetic ingredients. that's a market which is really booming right now. >> you know, the fragrance market in general, fragrances feel like something that a consumer would purchase when times are good. you have a little bit extra disposal income and want to go out there and get something special. that's not necessarily mandatory for anybody. why are you seeing growth in the

emerging market? all we hear is how people are tightening their pursestrings and don't feel good over there. >> that's true for the fine fragrance. but many of the other fragrances go into fabric softeners, detergents. these are things people need even in the bad times. that's where we had the big business in. it's all our consumer fragrance business. that's where you're a little less volatile on the economy. >> i just finished a book called "the dorito effect." do you know of this? >> no. >> it's about flavors. you guys are huge into food. huge. you make us taste things because taste is 90% smell. i get all kinds of crazy flavors now in stores. how big of a market is food for you guys given there's 75 different flavors of pringles? >> for us it's around 50% of our business, it's flavors. >> hst half. it's huge. >> that's huge. and it's growing as well.

because here the emerging markets are helping. we see more consumption coming. >> what's the higher margin? >> it's even. it depends on the area where you're playing. for example, fine fragrances is a high margin business or active cosmetic ingredients. but you see it on the food and beverages. you have good margins as well. and dairy is a big topic right now in the u.s. yogurts are really taking off. you have so many -- >> and you guys are in there. >> absolutely. >> so the 75 different flavors of greek yogurt -- >> some are our you ares yeah. >> what's your biggest gross market? >> yeah. submarket. >> dairy is good. active cosmetic ingredients on the fragrance side. and in terms of growth still the emerging markets asia is an important piece of us. you might be -- >> and their flavor profiles, i hate to use that term, are very different than ours. >> very different.

we do around 5,000 consumer interviews every year to find out whether the vietnam flavor for yogurts or for fabric softeners are different than italy. >> fascinating. you'll have to come back. andreas fibig with us. coming up, breaking economic data productivity and numbers coming up. indicating yet another all-time high for the s&p 500. and we are back. this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade.

coming up, breaking economic news. first as we head to break, take a look at u.s. equity futures. they would be in the green. >> nice. >> stay tuned. you're watching "squawk box" on cnbc, first in business worldwide. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov

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welcome back to "squawk box." we're now just seconds away from second quarter productivity numbers. rick santelli is standing by in chicago. how's the numbers, sir? >> wow. not good news. a drop of 0.5%. we were expecting a number the mere opposite. we were expecting a number up half of 1%. that follows down 0.6%. that was your look at first quarter. if we look at unit labor costs, they should be a little higher with the productivity number. they are up 2%. that se sequentially follows 2%. our last look down 0.2% was down 4%. so down 0.5%.

i have to go down, well, 0.6% the negative read. with a high water mark last year. no number in my opinion is more important than productivity. truly. we pay attention to jobs because of the correlation to growth. growth is somewhat calibrated in productivity. and that calibration has been significantly off. and there's a lot of jobs and a lot of gdp, of course, that gets lost in the bigger perspective there. interest rates haven't budged much. 160 seems to be the high water mark. the top tier data comes later in the week like retail sales. "squawk box" gang, back to you. >> thank you. we have steve leisman here. >> rick is 100%. nothing tells us more about how we're going to live and whether

wier going to be in the future than with productivity. we have been puzzling in the decline of productivity in the age when kayla is the anchor of a show about technology. it's to the point we have a whole segment on cnbc that business is -- technology business is so important. >> i was wondering where you were going with this. >> and you mr. sorkin are heavy involved talking all sorts of techy things. yet all of this tech amounts to nothing when it comes to what's happening. what's happening is there are a couple of explanations. we have brought on a bunch of workers recently. these may be young folks that have no idea what they're doing or they're less productive. along with the retirement of older folk who is are more productive. >> but ama also not know what they're doing. >> but they didn't know what

they were doing the same they didn't know they were doing before. >> for 30 years they did nothing well. >> i'm not sure that's true. we're finding that older workers may be -- come at me kayla. i'm setting you up. >> i try to just be well behaved and get invited back. >> michael bloomberg said it well in an interview on cnbc a couple months ago. he said globalization or trade i think he said isn't killing jobs. technology is. >> but where is it in the data? if it's technology -- first of all, the jobs numbers have been fairly stunning. 255, 292. it's hard to imagine businesses bringing on more workers at a more rapid rate. so they're bringing them on. yet what we've had is we've had seven, eight years of underinvestment in the economy. and so what they apparently don't have the tools. the thing is it doesn't pay to have the tools. that's what we don't know. one of the things that happens, when was the last time --

>> can i ask andrew a question? >> sure. >> steve was talking, but you can. i don't understand, but okay. >> do you see a day when "the new york times" or somebody else will be half automated written stories? >> "the washington post" is using robots to post about the olympics. >> i would assume in the next 10 or 20 years by ai, sure. why? >> i wonder where the job is created there. >> where the job is created by the -- >> the idea is supposed to be i lose my job as an anchor to max head room. but then i work manufacturing or designing or selling max head room. that's supposed to be how it works, no? >> what about hal as the anchor. hal the computer from 2000 -- >> it would lead us to doom. >> it could. >> but how does technology improve output? i'm sure you saw the neil irwin piece in "the times" over the weekend. he argues that the reason why we have such low growth is because the output of the average worker

per hour has not increased the way it should have. >> so imagine for a very simple example, you are a lumber jack switch a great vision in my mind. >> i've never been a lumber jack. >> imagine you are and you're swinging an ax. and somebody gives you a chain saw. what happens to your output per hour? now, the difference in today's technology is to use brian's example. the first example i gave you improves your output per hour in a big way. but we still need you wielding that chain saw. now along comes some technology -- >> we have a robot -- >> -- that does not enhance the work of the worker. it replaces the work of the worker. that's one thing. on the other hand we have seen all of this technology out there, the iphone, the internet and all this stuff. i think it was back in the '50s

was said computers everywhere except in the output. here's one thing to think about. when a technology comes along and it replaces output, then we're all living better but the measured accounts show we're living worse. let me explain. take wikipedia, for example. you used to have this vibrant business called encyclopedia britannica. >> you hoped dad bought them all. >> they sold books. now wikipedia is out there for free. but their output has gone down and everybody's knowledge has gone up. so therefore, technology does not show up in the output and yet we're living better. so those are some of the issues. >> and a lot of people writing -- >> ann in the back has had enough of this. shut up, steve. >> it's lovely to have you. these are big things -- >> you probably have a lot of hate mail from millennials about

now. >> i love millennials. i'm the one that said they're no different than anybody else. >> he and i don't do this show much. we're tired and jacked up on caffeine. >> steve does this show all the time. speak for yourself. let's talk olympics. >> you want me to talk olympics? >> brian. >> i'm trying to move this along. >> ann is so angry in the back. >> it's fine. and now back to the olympics. carl quintanilla who is live and in person joining us now from rio. that's not a backdrop. you actually got on a plane and went to brazil. >> yeah. i mean, try getting max head room to do that. this a special skill being here in rio. guys, there are some areas where the u.s. is just so dominant and we'll start this morning by talking about women's beach volleyball. kerri walsh jennings and her new teammate april ross beat china in straight sets late last night. 21-16, 21-9. their 23rd straight olympic win in that event. they should advance to the round

of 16. pool play finishes today. it's not going to be easy, though. brazil is 5-1 all time against walsh jennings and ross. i'll tell you what else isn't easy. men's gymnastics team competition. on the floor some of the men fell off the bars, out of bounds on the floor. they did rally to finish up from eighth place to fifth which is essentially where they ended in london. japan did win gold there for the first time since '04. better news, men's synchronized platform diving. they win silver. david boudia and steele johnson nailed their dive. johnson is 20 years old, overcame a terrible injury when he was 12 years old. he hit his head on the platform, narrowly avoided death. he broke into tears after finishing yesterday. here's david boudia talking about how they worked together. >> we had to develop a

partnership. steele and i have done that. we've become really good friends over the past four years. just created a brotherhood where we can rely on each other. i think that's any partnership whether it's your marriage or your synchro partner, it's important to have that kind of relationship. >> congratulations to them. we're going to get the women's equivalent of that event tonight. there's the medal count. u.s. in the lead with 19. china 13. japan 10. then later today, not just diving but judo, fencing, weight lifting, even equestrian individual and teams. >> i want some on the ground color. what events have you gotten to see yourself? have you gotten a chance? i know you've been busy. >> none yet. none yet. and i would temper your expectations for next week, andrew. because you're going to be working 20-hour days. >> no night caps on the basketball team's cruise ship? >> no. it's all work, work, work. we are going to try to see some women's gymnastics today.

and then friday night, we're not on the air saturday. so friday it is all systems go. we're going to try to get to as many events as we can. >> we're looking forward to it. carl, thank you for that. appreciate it. >> okay. when we come back, we've got nick cannon. a rapper/investor/social activist -- and host of "america's got talent." he's going to join us on the set to talk entertainment business and why he went to both the democratic and republican conventions. ing the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪ energy lives here.

welcome back to "squawk box" this morning. here's what's making headlines this morning. former fed chair ben bernanke says fed watchers should focus on economic data and less on commentary by fed policy makers. he says the nid now sees rate normalization playing out over a longer time frame than previously thought. and gap posting a smaller than expected drop in quarterly sales but july comps did come in below street estimates. results have been popularly weak at gap's banana republic unit. shares down 3.5% in the premarket. and opec is planning to hold informal talks next month amid recent weakness in oil prices. those talks will take place on the sidelines of an international energy forum event that's taking place in algeria. there have been mentions this week of a possible output freeze by the cartel.

but so far nothing official has materialized. we're psyched for our next guest here. he is known for az acting, rapping, and hosting "america's got talent." and when nick cannon is not performing, he's running incredible entertainment as well as being the chief creative officer of radio shack. but beyond business and the stage, he's also very involved in politics. and the race for the white house this time around. joining us is nick cannon. you want to talk politics first? >> we can talk whatever you want to talk. i'm here for you. >> but you've now been to both -- you were at both conventions? >> right. >> why'd you go to both? >> one, i just felt like the presence of our urban communities and even our disenfranchised communities weren't really being represented. i had to get out there and everybody's there for the pageantry of the presidential race. but it's like are we speaking to the issues that we're concerned with in the community? >> you walked out of both of those and felt what? >> to me -- again, i felt like

there was a lack of attention on, you know, criminal justice reform and things that may be more concerning to the urban communities. >> you don't want to get too political do you? >> not really. i mean, we can. >> which candidate do you like? >> i'm really not a fan of the two-party system. i never really been. i'm absolutely going to vote. my vote is more focused on local elections. i truly believe that the presidency is a popularity contest that we all know. it's like the week before the super bowl, you got to jump on a bandwagon and figure out. >> have you spent time with either candidate? >> i have. and i believe i'm going to get the opportunity to speak with them directly and interview them. and again, my questions are going to be, what are you doing specifically for the youth and the inner city. >> is there anybody who you think has done a better job than the other? >> the lesser of two evils right now. neither one of them have

convinced me. >> a different question now that you're an entrepreneur. >> uh-oh. >> in addition to being an entertainer. >> right. >> is there one you think is better for the economy? or for your economy? >> i'd say the one probably better for the country because it is, you know, that person's representing our country globally, i'm going to say it would be amazing to have a woman represent america. that would be outstanding. it shows that -- it's about time. you know, they've had women leaders all over the world and, you know, for america not to have one yet, i think it's well overdue. >> more broadly, though, what could politicians even do to make life better for entrepreneurs? what do you need? >> what do we need? >> make your wish list. >> if i'm representing the small business, you know what i mean, a plot of those issues when it comes to empowering the community. so as a community activist and someone who's always trying to offer jobs for people in the community, more benefits and

that sense to where it's more opportunities and breaks to be able to provide and put that money back into the community opposed to just the top 3 %. >> you've been very outspoken about black lives matter. >> yes. >> what do you think of people that talk about this all lives matter hash tag? >> it's so interesting. it's a serious matter to where people can take something that starts super innocent, a cry for help, and find a negativity in that. you know, of course all lives matter. but, you know, we wouldn't have to say black lives matter if all lives mattered. we're pointing out an issue. i often say it's like the save the whales. nobody gets mad and says, hey, what about all the other fish swimming in the ocean. no. we're saying save the whales because the whales are in danger. it's a cry for help. >> it does feel that in race relations we're more divided than ever. why do you think that? >> i think people for so long were so afraid to discuss race. people were so afraid.

yeah, we're all different. there's nothing wrong. when you implement hate into those differences and you truly don't understand it, then that creates more separation. >> do you think there's more hate now? >> i don't know. >> i don't think so. i disagree. i don't think they're worse. i think we're arguing at the table. >> yes. >> it used to be that grandma you didn't like was over there and you never talked. now you're hashing out your problems, it's going to take awhile. would you agree with that? >> i would definitely agree. i feel like people need to come to the table and discuss it. that's the only way you get past it. when we swept it under the rug so long, that's why it's -- >> it's uncomfortable, don't bring it up. >> it's, no, let's talk about it and embrace the differences. that has to do from classism to racism, whatever it is. every discussion needs to be had. i think we're at a place now because of information and technology and we have the ability to voice our opinions. now everybody's talking about it and we're getting into it. >> what do you think the most effective voice is in that debate right now? >> honestly, i can't pinpoint a

specific, but i definitely believe the youth more than anything. they're the ones that are -- one, they're such a clean slate and they're like we want the change. and, you know, it's a way to actually figure out, all right. well, my parents may have thought this but we want to move past this and we want to get to it. so how do we do that? it's very reminiscent of the civil rights movement. but i feel because of technology and the ability and the power these young people have, it's going to implement change in that same way. >> okay. this may be a hard question. >> uh-oh. >> do you think that donald trump is a racist? >> i believe the system that he represents is a racist system. i believe there's an elite mind-set. i don't think he's saying, oh, don't do that. but i feel like what he represents is something that doesn't speak or help the overall american. >> on youth, last time you were here, you were trying to bring back some cool to radio shack. >> and we're doing it. it's amazing. there's so many things.

we have some really kocool headphones. my incredible bluetooth headphones i had here. we're bringing music back to the radioshack. i'm amply fieing. >> i don't even know if there's shack in radioshack. if you look even right there, we're doing a lot of the events in harlem, we were giving out product, we were bringing entertainers and young people in the neighborhood electronics store. with my brand, incredible, we're bringing entertainers, young people and jump amplifying all the experience that a consumer doesn't have. >> and we see you talk about criminal justice earlier. >> yeah. >> what message do you send to the youth of america? a lot of it, you have to send a message you have to do it on your own in this country. >> i always say self-determination, self-motivation, and self-generation. we have the ability to do it all, you know, if we wanted a

record deal, back in the day or if you wanted to be on television, you had to find someone to do it. >> and davis had to like you. >> now you can go on youtube, and radioshack and whatever you need to film and shoot your own videos and become a star overnight. because everybody else -- will said you can't do that, you have to be able to motivate yourself and implement it on your own. >> and final question since you're mr. social media. snapchat or instagram? >> with the news stories? >> two weeks ago, i probably would have said snapchat, but instagram came in with the stories. >> yeah. >> the stories kind of -- they're all different though. i use all of those platforms, you know. i'm on twitter to do my rants and to -- i have more followers on twitter but instagram i can make my spoken word, poetry every sunday and have the ability to put videos up. and snapchat is quick. >> what happened to that guy's neck? >> i was just happypunctured.

>> he had an item that was down into his abdomen. the arrow was supposed to hit that. he was on fire. now he has a little bruise. if that would have punkered his neck, that would have been bad. coming up, we'll check up with jim cramer on the day's top business stories next.

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let's get down to the new york stock exchange. jim cramer joining us now. i love the tweet, somebody asked you, you said you took that lunch in 1983, it was great. >> i got in trouble when i went to goldman. i had my jacket on the chair and no one had known i was gone. you don't take lunch on wall street. it's an obstruction. >> even in this market, is it okay to take lunch in this market? >> if you're a loser, absolutely. if you don't care about gross commissions, go to just salad, you can get in and out in just a

second. >> what's on your radar in a market that let's be honest has not exactly had screaming headlines, got a lot of interesting substories under there, what's hot for you? >> the valiant joe papa is saying everything is sup superfragalistic. it was all about brent saunders saying why you could buy back 10% of the company, it was a big yawner. we've got a fight at wayfair. people don't understand the gap number is not nearly as bad as last year. a lot of equity offerings to be able to buy personmien. we've got to big deeper. >> if you say scoop stack, the two big acnironyms i'll be happ

>> and oil is as cheap as saudi, $2 a barrel. everybody else is going to lunch. what do they have, burger king, burrito? let's focus. >> not for the faint of heart. >> yes, sure, fine, take a pay cut. see you later. coming up this mornings' biggest market movers, be right back.

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welcome back to "squauk," the dow will open up 1,900 points higher and the nasdaq up about four points. thank you for being here. join us tomorrow, "squawk on the street" joins us right now. good morning, we are here at the new york stock exchange, carl quintanilla is at the olympics in rio and he'll be with us in just a minute. you just saw the futures, we're looking for a slightly higher open. european markets, how are they fairing at this market? largely positive, in fact