>> hi, good morning everybody. welcome to "squawk box." i'm becky quick. along with scott. our guest is rebecca. it's good to see you here. let's take a check on the markets. the u.s. equity futures after kind of a pitter patter day for the markets giving back some gains. dow future are indicated up 50 points. it's been a while since we've seen a move like this. i hate to call this a move of 54 points with the 5 points move or 100 points we've seen. this is a little more action than we're used to over the last week or so. is s&p futures are up 5 points. the nasdaq is up 13. overnight in asia the nikkei was closed for mountain day.

a new holiday began in 2014. part of the move to force people to take vacation days. they don't like to do it over there so they keep making more and more national holidays. this is about encouraging people toll of appreciate japan he's mountains. >> shanghai was down half a percentage point. in europe and some of the early trading there, you'll see most of the markets are in the green. the dax is up half a percentage point. the cac in france is up .70%. the ftse down just .30%. crude oil prices as scott mentioned, look, it's a pretty big deal. iea warning it's going to take a while to work it off. wall street journal says saudi arabia hit output. wti down this morning. >> scott. on the agenda today.

kohl's and macy's reporting before the opening bell. join in the 8:00 hour. then after the bell, nordstroms releasing results on the data front. weekly jobless claims are out. 8:30 eastern time. and export prices for the month of july. among the stocks we're watching today. u.s. prosecutors have opened a criminal investigation into valeant. hid a relationship with a specialty pharmacy company that helps increase sales from insurers. previously disclosed to the office in new york and continues to cooperate. >> what do you think about this? we're talking about fill door. >> says it's not connected to. they basically owned the pharmacy. >> it sort of the existed i think it's fair to say under a cloud of secrecy. no one knew much about that business. that was when michael pierreson

was running valeant. peerson may be gone, but the controversy doesn't appear to be going away. shake shack is under pressure this morning. same store sales at the burger chain grew less than what wall street expected. shares of amarin getting slammed. announced plans for a stock sale. down almost 10%. let's switch to some political news this morning. hillary clinton firing back at donald trump for urnling gun rights activists she thinks to take action against her. >> his causal cruelty to a gold star family, his causal suggestions that more countries should have nuclear weapons, and now his causal inciting of violence. every single one of these

incidents show us that donald trump does not have the temperament to be president and commander in chief of the united states. >> donald trump not backing down. in fact he stayed really with things right in the mode that he's been in this whole time at a rally in fort lauderdale, florida. listen to this. >> in fact, in many respects, you know, they honor president obama. isis is honoring president obama. he is the founder of isis. he's the founder of isis. okay. he's the founder. he founded isis. and i would say the co-founder would be "crooked" hillary clinton. you founder."

cro both campaigns turning sites to the economy. unveiling economic plans and more details to the economic plans and hillary clinton is going to be speaking today about some of her economic plans. and we'll get the chance to speak with donald trump live. mr. trump will be joining us at 7:00 a.m. eastern time right here on "squawk box." >> and in stranger news, the 20-year-old virginia man climbed about a third of the way up new york's trump tower just blocks from here using suction cups before being captured by law enforcement. police removed windows in an attempt to grab the man. put an inflatable pad at the bottom of the tower in case he fell. the climber got close to two officers who were able to grab him. you can see the end of it is right there when he gets to the open window. grabbing the man. pulling him inside as you'll see right there it was game over at that moment. he told police he wanted a

personal meeting with donald trump. we know mr. trump wasn't even in new york yesterday. the man was hospitalized for mental evaluation. he's expected to face criminal charge ifs trespassing and disorderly conduct. >> the metropolitan area. >> crowds were gathered. >> they shut down. >> it's just blocks from here. >> they shut down major aver news in new york from 3:40 until 640 p.m. >> he had a backpack on. you don't know what's in it. >> unfortunately this is a situation that didn't lead to the worst-case scenarios. especially when they pulled him. that guy was barely holding on. there was no safety nets or anything. no safety lines connecting him to stuff. i'm grateful it was just bad traffic. >> me too. let's get back to business news. our next guest says this does not justify the recent bearish

cries. investors should save their worrying. joining us now is jeff. and our guest host today rebecca patterson. jeff, let's start with you. why do you think people spont worry at this point. >> because, becky, i think that the -- i think that the earnings are going to be very good going into the third and fourth quarter. i think the markets are transitioning from an interest trait market to an earnings driven market and i think investors are woefully underinvested. whatever happens in the short to intermediate term needs to be viewed chltd we're seven years into it. they tend to last 10-14 years. my motto is somewhat conflicted on a short-term basis. or a pull back from here into next week late next week which would be the preferred strategy that would extend the rally into september. >> when you talk about a

pullback, what are we talking? a 2-3%? >> no, i don't think it's going to be more than 3-5%. if you look at the historic precedent, going 52 weeks without bettering the previous high water mark and have the equity mark trade out to new all-time high. the historic precedent is the average draw down is about 2.7%. the median draw down is a little bit higher than that. 12 months later the returns are around 3%. >> if you see a pullback, that's the time to jump in and start putting more money. >> we pushed a lot of chips on the table. the call on the show in mid february was the model was calling for a low. we pushed a lot of chips on the table and made a lot of money since then. >> rebecca, what do you think.

>> i think there's more upside for equities. given we've been seeing the expansion for eight years and we are near higher multiples, higher indecision levels. starting to see some wage increases. some profit margin compression. we're thinking about the upside downside risk. let's call it 5 to 7% a year stocks from here and the downside is growing, i'm okay owning stocks, but how far do you want the get over your skis given the risk is aim symmetric. if i'm looking out the next 12 or 18 months, how much do i want to have in stocks. we went neutral equities at the beginning of this year, mainly u.s. that's our biggest overweight and went neutral on emerging markets. let's use pockets of strength like we've gotten this summer magically after brexit and

incrementally take a couple of chips off the table. stay invested. >> you're looking at the opposite. >> i was going to say that. do you not agree with jeff in terms he think this is is starting to be a fundamentally driven raim. we have had others on the set sit and say absolutely not. it's a fed driven rally exclusively. >> i think the fed and interest rates globally are playing a big role. you see it with the dividend yield, but i do agree with jeff serngs improving and should keep improving in the short-term. the dollar headwind, the oil headwind are gone t. u.s. economy has some traction. it's not good growth, but it's good enough. and if we actually get some fiscal spending next year, infrastructure, maybe that gives us another leg. we are seeing the later stages of the economic cycle. the better stocks do, then we get a natural end of the cycle. no one can time that.

>> joyou're not getting ahead o your skis are you in your words earnings are going to be great or good or whatever. they were better maybe we've hit a trough, but by no means are earnings great at this point. >> i think she makes a number of very good points. the strength of the dollar is in the rearview mirror. i do think we're transitions to an earnings driven market. i think the comparisons coming up in the third and fourth quarter are going to look really good especially to professional money managers. i've been np washington, d.c., new york, philadelphia, boston this week and most of the people i talked to are woefully uninvested. >> there's a lot of cash on the sideline for certain. what happens if the fed goes in

september? i still think the market would be completely caught offsides if that was going to happen. >> you're going to get short-term volatility. it's not adequately discounted into market discounts at this point. you get a wobble for a week or two and it would depend on the guidance going forward. i can't imagine we get an aggressive hike. >> not to mention jackson hole is coming up in a matter of weeks. >> week and a half i think her speech. >> going back to just your general thesis for the market. you're saying any time there's higher levels take money off the table. jeff you're saying when there's lower levels put money back on the table. you agree on points, but it's the opposite strategy. >> we've made the gains we've made since 2009 and we see the multiples, we see the forward expectations for stocks, we don't she we're going to be in

the low interest rate environment forever. >> that's the biggest reason, if interest rating were to stay low, would you change your thesis. >> it might extend it a little more and are expecting them to edge up slowly. don't get me wrong, but it could change the timing somewhat. again, no one can time when a recession happens. nobody. nobody has that crystal ball. without knowing that, i want to make sure i protect on my downside. just one quick stat. october 2007 you invest money. you ride it all the way down. you invest in stocks. you don't get back to even until march 2014. i believe. if you had been 60/40 stocks bonds you would have gotten back to even a year and a half earlier so in my mind, i'm thinking all right we've had a great run. it's late in the cycpsyc cycle. >> how late in the cycle are you. that's the obvious part and

debate. >> jeff go ahead and jump in on that. becky, there was a dow theory sell signal that took place on november 21 of 2007. raymond james is the only firm that wrote about it. we raised cash. we didn't get slammed like most people did. nobody can time the market, but if you listen to the message of the market, you sure as heck can decide if you want to be playing hard or not so hard. we sidestepped 2008 and actually on your show, on march 2, 2009 said the bottoming process that started is complete this week and we're all in and we think the new market will begin then and extends. >> if you're talking about a nine inning game. are we in the seventh innings stretch of this bull market or top of the ninth. >> i think we're in the fourth or fifth inning. >> wow. >> that early in the ball game. >> that's where we're different,

i guess. i would say i'm useless on sports, but i guess i would say we're closer to seventh or eighth inning. >> you get the -- >> i know where you're going. >> thank you for joining us today. always good to see you. >> rebecca is going to be with us for the rest of the hour. >> chesapeake energy agreeing to sell interest. it will sell the interest to barnette resources. samsung will acquire da kor. paid $150 million for the privately held firm and hoping the acquisition will boost product sales. >> blue buffalo hiking it's outlook for the year. >> coming up, a war of words on the campaign trail, rhetoric heating up over gun laws and isis. john harwood has the latest for us next. and 7:00 a.m. eastern time

the man himself will join us live. donald trump. stick around. "squawk box" will be right back. [chains dragging] [eerie music playing] [crickets chirping]

[owl hoots] announcer: if you don't fix them, sparks from dragging tow chains can cause a wildfire. and that could be scary. bye, smokey! only you can prevent wildfires.

welcome back to "squawk box." hillary clinton accusing donald trump of inciting violence. john harwood joins us now with more on the haetsed campaign rhetoric, john. >> sure it's an interesting strategy that donald trump has taken. you know, at the beginning of the week, he started talking about economic policy. and republicans hoped he could stay on message, especially after his poll numbers have gone south and battleground states and nationally, but inside what he's been doing in the last couple of days is turning up the heat rhetorically like he did last night. >> isis is honoring president obama. he is the founder of isis. he's the founder of isis. he founded isis. i would say the co-founder would

be "crooked" hillary clinton. >> reporter: i believe that's not literally true. it's a reductionist version of the argument that republicans have made that by the way that he left iraq pulling out u.s. troops several years ago, that led to the expansion of isis. the problem is that it's not particularly believable to voters that he's trying to get. first of all, president obama is very popular. he's over 50% in approval. hillary clinton leads him business 26 points in conducting foreign policy, 11 points as commander in chief. donald trump has been hemorrhaging support around the college white voters. now hillary clinton is going back to the economic message. she's staying on that. she's going to give a speech later today she highlights it will ways in which will donald

trump's economic proposals benefit people like donald trump while she wants to add a tax on incomes over $5 million. hillary clinton is also planning later this week to release her 2015 tax returns and ten years of tim kaine's tax returns. this is new information. no one has reported this until now. she's going to release that return which is consistent with the returns of the s she releas previously. it's an effective tax rate. given around 10 or 11% of her income to charity. all of that is meant to put pressure on donald trump who has refused to release his tax returns and hillary clinton has herse hers out there going all the way back to 1992. >> looking at how mr. trump has

been on teleprompters and getting back to his latest off the cuff remarks and isis comments. how do you think this plays into the debates. weave got those coming up. do we get teleprompter, do we get off the cuff. >> there's no teleprompter at the debate. everything is off the cuff. again, it's hard to tuns strategy. here's the thing. donald trump has an intense base of support, chlorworking class voters is core of it. they are loyal to him. he needs more supporters. he doesn't have enough. he was down by 8 percentage points in our most recent poll. maybe it was nine. i forget. in the average of polls he's down 7 or 8 points. you can't win the election that way. you've got to get more people. college educated whiets have

been a strength of republican nominees. he's losing them right now. college educated white women have been fleeing him in droves. he needs to get those back if he's going to be competitive. we saw a new round of battleground state polls. he's down in iowa, down in ohio. down 11 points in pennsylvania. he needs some help and he needs to add and he needs to pull republicans along with him and they are republican elected officials are not happy with this most heated rhetoric. they're keeping their distance. they haven't broken with him, but this isn't the way to, you know, general elections are about addition not subtraction. he's doing things that result in subtraction. >> john, thanks we'll see you throughout the day. >> you bet. >> live for us in d.c. this morning. don't forget donald trump will join us at 7:00 a.m. eastern time. when we come back, a recap of last night's olympic action.

we will bring you the highlights next. plus chinese e-commerce giant, alibaba up in the last six months. tell you what to expect when the company reports in less than an our. take a look at s&p 500 winners and losers. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

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all right. welcome back to "squawk box." cnbc first in business worldwide. u.s. equities this hour. let's have a look. drum roll, there it is. the dow would open higher. nasdaq by 15. crude prices bouncing well over the night. releasing latest monthly report suggesting oil markets will begin to tighten in the second half of year, but the iea cautions the process will be slow as global demand slows and non-opecly supplies rebound. time for the olympicup date. if you went to sleep early, you missed good moments.

nbc jay gray has the highlights from rio. >> reporter: the road to rio paved with gold for cyclist kristen armstrong. making her the only olympic titleist to win three straight golds in the same event. found silver in the green waters of the diving pool. best finish ever for a u.s. synchronized swimming team. women's 4 by 200 relay finished strong. katie ledecky coming from behind for a win over australia. a bit of hisry follows michael phelps every time he divisive in the pool. later today have one final battle with teammate and friend, ryan lochte. >> also on today's olympic schedule, katie ledecky back in the pool swimming the qualifier. she's the world record holder in

the event. golf tees off as well. first time back in the olympics since 1904. chinese he commerce alibaba about to roll out results. eunice yoon. >> reporter: thank just about a half hours time alibaba is going to be delivering report card. we're expecting decedent numbers. expected to be $1.5 billion that's on revenue of $4.5 billion. a jump of 48%. gmv or gross merchandised volume, that's the amount of goods that crossed the site is expected to show a jump of 22%. gmv is used by all e-commerce companies here to try to measure the growth. alibaba has said gmv is becoming less relevant to them because they're pushing into other areas of growth. cloud computing. also the company says it's

hoping to drive more and more business and sales from overseas. so likely there will be a lot of questions about the overseas acquisition particularly in southeast asia and india. both of which the company has been expanding itself business in. now the main theme of the conference call likely in about an hours time is going to be transparency. the company disclosed the fcc is investigating the way it consolidates affiliates including a lo justics company and also the way alibaba reports data and has reported data for singles day which is the major online shopping baa than san antonio day here in china t. company says it's working very closely with the scc for this probe and as of this quarter the company said it's going to be reporting a little bit differently. they're going to be revealing five key metrics including a core e-commerce as well as entertainment and other areas of growth like their food delivery

in order to try to break things out a little more and make things clear for investors and tuns accounting of the company much better. >> thank you very much. it's going to be great to see detail on that. we should also tell you on a policem programming note, chairman joseph tsai will be on. some other head liners from the conference include treasury secretary jack lew. karl icon, steve schwartzman or black stone, don fits patrick from ubs and don miller. you can get more details and tickets are available at delivering alpha.com. >> allah baa baa shares still at 52 week high. there is a high short interest

in the stock as well for some of the issues that you nis weunice laying out. investors are looking for more clarity on accounting, disclosure, and certainly where the growth is going to come from. >> you want to talk to rebecca about the one year anniversary which snuck up this big devaluation in the chinese currency last year that sent markets into a tailspin. >> between mid august and early september we had a 10% pull back in stocks. we've all repressed it. it was china that led it off. it was interesting to me. tuesday a year ago that china announced it was going to fine-tune its currency policy and in the process devalued the currency about 2%. and what's amazing to me while that was a painful reaction because it was new and unexpected to western investors. here we are a year later.

the chinese skurns quite a bit weaker on a trade basis against currencies and the dollar and no one seems to care. that's a great lesson in how the market reacts to what's not expected. to your point on allibaba if we get something unexpected you get volatilit volatility. >> it was also by the magnitude in which they had devalued. it was a huge. >> it was a directional shift. the currency had been strengthening against the dollar since the mid 2000s and suddenly it went the other way. no one knew is thwuone new is t >> it was representative of the chinese melt down people had been calling for a number of years. that was the big stair. is this the beginning of a tidal wave. >> in contrast just overnight the local chinese press which is

pr se perceived to be influenced by the government. >> perceived. >> i'm being nice. >> not doing any monetary stimulus for the rest of the year. i wonder if any of that has anything to do with the u.s. election. i would assume not, but i know overseas policymakers can be sensitive to how things are perceived here. >> at the time, david pointed out this is a directional shift. it's a really big deal and it changed the game. >> sit a whole new market. that last august was an inflection point. when we think about the end of this cycle the next recession of the united states. whether it's a year away, five years away, one thing that's going to be new is how does china factor into it. we may have a very mild recession in the u.s. because we haven't built up a lot of excesses. if this mild recession is the tipping point and china has a hard landing and does devalue,

the little recession could be a big global event. >> speaks also to looking back a year ago, the incredible resiliency of the u.s. stock market. at that moment we were wondering, is this the start of another crisis and the market was able to recover. there was something else months later and the market was able to recover. then there was brexit and the market was able to recover. now we're sitting at new highs. >> its also goes back to how do you manage volatility. when we get the selloff, 8%. 10%. they panic and want to go to sidelines. what you want to do is take a step back and say has the recession risk increased or is this just technical and it's a one off entivent. that's how people get the

immediate owe core returns. >> the u.s. even when it's self induced like our debt downgrade, the u.s. market tends to be the best house on an ugly street in times of crisis. >> the scars of the big crisis, the financial crisis are still there. it's still sort of raw for the individual investor to think back how turbulent those times were the money that was lost and prepare yourself and protect yourself if you think the next big thing is coming. >> absolutely. >> before we head to break, check this out, when nachos attack. a fan at a parlds pirates game last night. tried to take home a fall ball. didn't turn, oh, man. is that salsa. >> is a face full of nachos. oh, man. cleaned himself up all right, though. >> didn't get close to the ball. dropped his beer which is really the biggest issue. oh, is that salsa in the face.

looks like it. >> ouch. >> he got the t-shirt. that was a consolation prize. boy, that was ugly. tasty, but ugly. coming up, developing drugs for rare diseases is usually an uphill battle. t john crowley joins us next. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes.

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>> good morning again everybody. you're watching "squawk box." i'm becky quick. joining us for the rest of the show this morning, wilfred frost. good morning. you're like super man. do you were in new jersey 40 minutes ago. how did you get here. >> if you leave early enough, there's not enough traffic. i wish i had flown, but no,

taxi. >> great to see you. after some pretty minor feigns o losses we've seen all week, this actually looks like news. dow up 57 points. nasdaq up 14. right here onset with a look inside the sector of the pharmaceutical world. >> the rare diseases of course are affecting few people, but turning into quite big business. let's talk about what a quotes unquote orphan disease is. while they are rare, a lot of people actually have rare diseases in the united states. about 30 million americans according to to the nih have a rare disease. about 7,000 rare diseases have been identified. now, over the last three decades. this is turning into bigger and bigger business in the pharmaceutical industry. after the package of the orphan drug act which established some incentive to get into the space.

some things people say are appealing about this space or that oftentimes the interventions can be relatively straightforward trying to replace an enzyme a patient may be missing for example as well as an accelerated regulatory development path way in part because of those incentives put in place. and then finally premium pricing. a lot of these drugs can coast more than $100,000 a year for patient. finally let's take a look at the market size for this. in 2015, estimates the market for orphan drugs is about $10 billion. you can see a breakdown of the largest players there. about 2020 that's going to grow to $18 billion. a big space. a lot more drugs being approved of. let's bring in john crowley. he's his two children were

diagnosed with pompay disease. >> great to be here. >> it's an interesting area. where are you in the development process of a drug? >> so it's actually a really important time for amek as we just reached a major inflection point of the approval of first medicine in europe. drug called galafold. we've gone from idea to molecule to approved drug. major inflection point for the company. >> how much money do you spend to try to develop something, even this specific drug you just mentioned. >> we really focus on great science. we spent over $200 million to develop this medicine. >> what's the payoff on the other side? how much is there a potential to reap as a result of this drug if

it in fact works. >> it does work. the payoff are pr people living with the disease. with that, we think we could build if we make great medicine, we will build a great business. the payoff will come over many years and that's one of the benefits in working in the orphan disease space. >> is there a monetary design of how big the market is. >> there are existing therapies for fabre disease. we're next in line therapy. that is today a $1.2 billion market growing even without amek to 2 b$2 bm$2 billion over the several years. >> what is pompay disease and how are you kids? >> will a rare neuromuscular disease. a program we have in research and development here in clinical studies. i came into the whole bio tech world 16 years ago when our two

youngest children were diagnosed with this rare form of muscular dystrophy. we worked on a first generation that got approved. we're now working on a next generation therapy and the kids now, megan and patrick, that first generation drug saved they' their lives. their 18 and 19 years old now. megan is leaving for south bend this week. going to be a sophomore at notre dame. >> does it make you sick then to hear some of the rhetoric on the campaign trail about the industry your in and what you're trying to do for patients around the world. >> if we make great medicine, you're not going to change lives, you'll build businesses. we can keep investing until there are cures for the diseases. >> what you're talking about is incredibly noble. i applaud it.

what happens with smaller companies the big companies will wait until you have a hit and try to buy the company. your market capitalization is under $1 billion. how do you prevent that from happening. >> if we focus on building a bio tech company. we're in the unique space now. we have an approved drug, but we're also working on a terrific pipeline. stay focused and keep making great medicine and hopefully we'll continue to stay of independent. >> do you see economics on pricing of orphan drugs starting to happen. more drugs aapproved. would you be the third drug for fa bray. >> third in europe. that's right. >> how does that affect to price it 200, $300,000 dollars a year. >> the pricing will be the value you deliver for patients. we've invest instead decade and research and development. hundreds of millions of dollars the for a drug that will help

thousands of people, but it's not an enormous market. as long as companies like ours keep investing in great science, making a meaningful difference in patients. we think the drugs have to be fairly priced and broadly accessible. as long as we're on the extreme in in delivering value to patients. >> you look, the end of the day, you need return on your investment. >> we do. >> you spent a lot of money. just to ask you again, sort of the political climate that we're in, the kind of drugs that you're creating at the price that it will ultimately cost consumers, how do you navigate choppy waters. >> if we keep making medicine that are delivering value to patients. we'll be paid for it. we'll build a great business. ultimately too the system has to afford all the drugs. more commission and more

invasion are a good thing. >> does the public market end up helping you or hurting you. you need financing. you need branding you need to be out there. there's all this risk around the inflection points whether you get the approval or not. a lot of things could be out of your control and the political rhetoric. slam your companies -- not you per se, but the sector around. at the end of the day, are you better off being public or private. >> this is not an industry for the faint of heart. it's important to access significant amount of capital. it's better fortous be a public company. gives us a platform quite fl flankly to come on shows like this and talk about the business and talk about the big vision. we want to grow this to become one of the great companies focused on the rare diseases. we think with a commercial product, a great rnd pipeline, a strong balance sheet and a

tremendous team, we're very uniquely situated and haven't been in a better position as a company. >> thank you for coming in. >> best of luck to you kids as e more from our guest host this morning, rebecca patterson. then the "squawk" news maker of the morning. donald trump will join us to talk about his economic plan, trade, and much, much more. "squawk box" will be right back. ♪ mapping 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.

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all right. welcome back. want to get some final thoughts from our guest host rebecca patterson. you're telling us to be cautious about where we are. what is the biggest risk right now? the unforeseen brexit fallout? the fed? what is it in your mind? >> there's plenty that we can stay up at night about. china to me is always the biggest one now. because it is the world's second largest economy. it's the biggest exporting trade nation in the world. the currency is in a whole new regime that we've never dealt with before. and even though it's still not widely traded, it's going up quickly in the ranks. and so you just don't have transparency. that's why it's such a big risk to me. i'm not overtly bearish on china in the near term. but just the fact that you can't

quantify the risks or timing around it, that's why i put it at the top of my list. >> when you look at bonds versus stocks, which looks more to you? >> nothing gets me terribly excited right now. do i want to buy lots of bonds at 1.5%? no. but we saw last night new zealand cut rates. we're going to get more easing from japan. we'll probably get more out of the uk and across europe. and with that backdrop, u.s. treasury yields don't have a lot of upside. it's hard to see bonds selling off even if the fed hikes. why i think bonds are expensive, i also don't see a near term catalyst unless we had a huge inflation shock in the u.s. for that to go against me. we've been underweight bonds. we've added a little bit to have defense in our portfolio this year. and on stocks, we've been very overweight the u.s.

we've been neutral emerging markets since february. i feel comfortable with that. i'm not getting excited about europe here even with the easing. >> you like wilfred, though, he's a good dude. >> he's not europe. he's uk. >> that's true. >> europe to longer. >> to spread between the u.s. and uk bonds at a 16-year high. >> and the failed gilt auction pulled everything down even lower. >> glad we had you here. >> me too. when we come back, our news maker of the morning is a few moments away. donald trump will join us next live right here on "squawk box." and we'll have another candidate later in the show. libertarian gary johnson will join us to talk about his run for the white house. stick around, "squawk box" will be right back.

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republican presidential candidate donald trump coming under fire for comments aimed at hillary clinton. he will join us for a special interview to talk about the economy, immigration, the race for the white house, and his plan for job creation. markets look to bounce back from yesterday's down day. earnings from big retailers in focus for investors. tom lee joins us with his latest market call. plus we head to olympic park in rio for the latest on the summer olympics. team usa adding to its gold medal lead and overall medal count. we have a preview of what's to come today. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box."

>> welcome back to "squawk box," everybody. this is cnbc, first in business worldwi worldwide. i'm becky quick along with scott wapner and wilfred frost today. we've been watching the markets checking out what's happening. you can see now the futures have picked up a little steam. dow futures this morning up by 60 points. s&p futures up by six and the nasdaq up by 15. we are just a few minutes away from our interview with republican presidential candidate donald trump. we're going to be talking the economy, taxes, immigration, and much more in a moment. first we want to get you caught up with a quick rundown of this morning's stories. >> here's what's making headlines this morning. shares of valeant pharmaceuticals under pressure in premarket trading. thap follows a "wall street journal" story saying the drug maker is undergoing a criminal probe. investigators said to be looking into whether valeant defrauded investors with mail order pharmacy. a number of economic reports

ahead this morning. at 8:30 eastern time we get a look at initial jobless claims. expected to decrease slightly. at the same time we'll get july import and export prices. retailer macy's will be out with earnings in about an hour. expected to post second quarter profits on revenue of 5.7 billion zlrs. same store sales seen dropping from one year ago. earnings just in from china-based online retailer alibaba. earnings per share at 74 cents with revenue of $4.8 million. both numbers above wall street consensus. reported an 18% increase in active buyers and 30% jump in mobile users. merchandise gross volume was up 24%. the results significantly better than expected. up 4%. this week has been a big one for the economy when it comes to what's been happening on the campaign trail. the republican presidential nominee donald trump launched a

refined economic plan for the general election. we look forward to talking to presidential candidates about a range of economic issues here on cnbc. this is our wheel house. in fact, yesterday we spoke to green party candidate dr. jill stein. today we'll be hearing from libertarian gary johnson. that's coming up in the 8:00 hour. by the way, we've invited hillary clinton repeatedly to join us even just this week. she has not accepted any of those invitations. of course, secretary clinton has an open invitation here on "squawk box" as soon as she chooses to take us up on that. one person who is joining us this morning is gop presidential candidate donald trump. mr. trump, thank you for being here this week. >> good morning. i guess hillary is sleeping. >> she has not done a press conference this year. so we've repeatedly put out these invitations. but we are looking forward to hear more on what's happening with the economy. i know this week on monday in detroit you laid out a more

refined plan for what you planned to do. but you also hinted in that speech that you'd be giving more details. can you give us any hints about what is still to come in terms of filling out some of that economic plan? >> well, we gave great detail in the speech. it was well reviewed and well received, i think very. and very -- basically we're about getting rid of massive regulations which are killing businesses and making it virtually impossible. i mean, no matter what you do, it's making it virtually impossible to start new businesses. and a lot of old businesses are being hurt very badly. obamacare is being hurt -- i mean, just absolutely decimating businesses if you look. i've gotten to know so many is small business owners and big business owners over the last period of eight months and i will tell you, obamacare is devastating businesses. i get it all the time. i really see it. i'm sort of like a pollster. i can take a poll of the pulse. and the pulse isn't good because

businesses are being destroyed. they're being destroyed by high taxes. they're being destroyed by obamacare. and they're being destroyed by regulation. and we're doing a lot about each. >> in terms of what specifically? part of the concern from some think tanks out there who ran the numbers before was that your plan would create a massive deficit. $10 trillion to $12 trillion was kind of what the range ran. you laid out more details this week and i know many of the people we've talked to have pointed out that part of this is growth that will help with along the way. gdp would increase. part of this is getting regulation. but can you put your arms around what type of deficit your plan would make? >> i heard $3 trillion. i think it will be much less than that. we'll have a long-term deficit of $3 trillion. i think it's going to be much less than that, but we have to get our jobs started. we have to get our jobs back. our jobs have been taken by so many countries. our jobs have been taken by mexico. mexico is the eighth wonder of

the world. mexico, what they're doing down there. i go to rallies and i tell people there is a man who builds plants. he builds massive plants for automobiles and for computers and for everything. i ask him how are you doing. he said i'm doing great because of mexico. mexico is -- he told me he's the one that used the expression it's the eighth wonder of the world. what they're building in mexico. i said how about the united states? he goes, not so much. not doing great. not doing a lot. where he is building is in mexico. and other places, but mexico in particular. and we're losing businesses to mexico like one after another. ford is building a massive new plant. it's an extension of another one. it just keeps going. you look at carrier air conditioning from indianapolis, indiana. they're going down. and we can't continue to lose our companies. we're not going to have any companies left. >> part of that is wages though. what would you do to make america more attractive to these

companies? >> you can compete within the united states. you can move to other states if you want. you can go out and go from -- if it's the case of carrier, you can go and compete with other states and you'll get yourself a great deal. but you can't just leave the united states and there is no consequence. you have to pay a consequence if you're going to do that. in the case of carrier, they let go 1400 very good people that have been there forever. they move to mexico, make their product, they sell it with no tariff into the united states. so we end up with losses. we end up with tremendous economic loss. we end up with joblessness. we end up with a tremendous amount of people now that can't get any more good jobs. and they will never in their whole lives be able to compete with the jobs they had. so we have to do something about that and it's a very easy answer. when they make an air conditioning unit, they're going to pay something at the border. every time they ship in a unit, they'll have to pay something. when we do that, they're not going to leave in im.

>> mr. trump, it's scott wapner. great to have you here this morning. >> hello, scott. >> the conservative tax foundation says your tax plan will cost $10 trillion over ten years. i wonder if you agree with that number and if not what the actual cost of your plan would be. >> well, i think what they were looking at were the other numbers. i've raised the numbers quite a bit for the rich. we've raised them and yet a lot of the rich are benefitting because of the fact that i've really reduced taxes for business. the business has been an unbelievable reduction down to 15%. and right now we're the most -- well, we're the highest paid. we pay more than any other nation anywhere in the world in terms of business tax. and you can say industrialized world. people like to say that. but pretty much anywhere. we're the highest taxed nation. that's going down into a low category at 15%. also for bringing money into the country, you know, we have trillions of dollars outside of the country.

we're lowering that tax to 10% so people are going to bring -- i think it could be as much as $5 trillion. a lot of people think it's $2.5 trillion. the stated number is $2.5 trillion. i think it could be $5 trillion. we're bringing a tremendous amount of money back into this country which will be used for lots of good things. the money will be pouring back into the country. right now as you reported, right now if you know companies are leaving the united states for two reasons. to get their money, for one thing. and also because taxes are so high. i think this will have a tremendous growth effect. our growth is almost nothing. we're almost flat which is hard to believe. if china goes down to 7%, it's like a natural catastrophe. now we're going down. we're going to be lower than that in the coming quarters. think of it. china goes down to 7% and then what they do is they devalue their currency and take more of our business and they start

going up again. >> sure, but -- >> we're like a whipping post, the united states. we have people that don't understand the system. we have people that don't get it. and we are being ripped by many countries china being the number one abuser. they do it better than anybody else. and by the way, no hard feelings toward china. i have the largest bank in the world there who's a tenant of mine. i have relationships with china. but the fact is china is the great abuser of the united states economically and we do nothing about it. and it would be easy to stop. >> how do you reconcile sort of saying that your economic plan was well received and that it's expected to create the jobs that you've just told us it will when moody's comes out and says that your plan will cause a recession, create far fewer jobs than hillary clinton, and increase the deficit? >> well, it's a ridiculous statement that they come out. i assume they are democrats because it's a ridiculous statement. my plan cuts taxes. she's going to be raising $1.3

trillion in taxes. my plan cuts taxes. we're going to have the jobs, not her. now, i think they might have been looking at an old plan or something. it couldn't be this plan. because everybody says this will create tremendous growth. now, a lot of people think because of the fact that i am going to negotiate trade deals like nafta which has absolutely destroyed us, they think i'm giving up on nafta. i'm not but they have to make it fair. because nafta has ripped the heart out of this country. signed by bill clinton. it's been probably the worst economic trade deal signed by any country anywhere in the world. i mean, that's how bad it is. nafta's been one of the great disasters for this country. it was a deal signed by bill clinton. so they may be talking about the fact that because i'm going to negotiate trade, i won't have any trade and that will lead to jobs. well, the fact that i'm negotiating trade will mean that we're going to make good trade deals. but we are absolutely going to

keep trading. i am not an isolationist. and they probably think i am. i'm not. at all. i'm a free trader. i want free trade. but it's got to be fair trade. it's got to be good deals for the united states. i was asked recently what is your definition of trade. i said make good deals for the united states. and ideally make great deals for the u.s. so we will be redoing some of these horrendous, like, i mean, horrendous trade deals that have destroyed new york state. you take a look at what's going on up there. that have destroyed pennsylvania, that have destroyed michigan. look at what's going on in michigan. i mean, the car companies that are moving to mexico in particular. i mean, it's unbelievable. i'll stop it. hillary clinton can't stop it. she doesn't have a clue. >> mr. trump, let's talk about the corporate tax plan that you laid out. because you're right, the united states does pay much higher corporate taxes. lowering that probably not as big of a deal in terms of

revenue we bring in because corporate taxes are only about 10% of the united states revenue. but when you lower the corporate tax rate to 15%, there is a loophole that exists in this existing plan that would allow wealthy people who have llcs, s-corps, to funnel their earnings back through that so they will be paying a personal income tax of 10%. how do you start that? >> as you know in two weeks we're coming back with additional information and additional details. and we may end many of the loopholes that are currently being used. we are as an example getting rid of carried interest pitch is the darling of wall street. >> right. >> we are going to probably get rid of -- i mean, we are going to get rid of it. it's inappropriate. but what we have done is lowered the tax rate so that even if people lose carried interest -- and this is for business and by the way, we've also lowered the rate very much for the middle

class. look, we're going create an economic engine that hasn't been done since ronald reagan. and reagan did something very similar and it was a great success. but he did something very similar. we're stagnant. we are a stagnant growth. we are doing nothing. take my friend the man who builds the plants. i mean, he knows better than if i went out to the wharton school and asked them to do a study, it would take a year. the man who builds plants can tell you in 25 seconds what's going on. he understands the market better than anybody. he's part of the market. and the growth isn't coming here. it's going to other countries. and the growth is going to mexico bigly. >> so is it fair to say you would not allow individuals to use that loophole to go ahead and have their carry through income going -- >> we are looking at that very strongly. it will be reported on within two weeks. >> wilfred frost here. good morning to you. >> good morning. >> in your businesses, you've used leverage in the past. when you look at the shape of

the yield curve for u.s. treasury debt at the moment, how low interest rates are, is this a moment for the u.s. to borrow and spend in order to stimulate growth that you spoke about infrastructure spending? are you happy to boost the balance sheet? >> well, i've always loved leverage. as becky can tell you. i've always, you know, respected leverage but i've always loved it. but a country is a different thing. however, with that being said, the interest rates are so low, i mean, the numbers are so low, that yes this is a time to borrow and borrow long-term. so that we have the money and rebuild our infrastructure. we could have the money -- we have things we have no choice. our military is very depleted. extremely depleted. people don't like to talk about it. our military is absolutely depleted from all of the different things we're doing and nobody knows where they are, who they're fighting. i mean, our people don't know

anything. we have people that have no idea -- they're in so many different locations. nobody knows what's going on. but depletion is the word that keeps getting used. we have to fix our military. we have to take care of our vets. it's a disaster what's going on with our vets. and the veterans administration. we have to fix our infrastructure. our country's infrastructure is in horrible condition. worst condition it's ever been in. bridges are in -- i mean, in dangerous shape. i think 50% of the bridges are actually in dangerous shape. when you think of that, that's incredible. where they could fall. roads, tunnels, hospitals. i mean, everything. we have to fix the airports. our airports are like third world countries. you go into some of these beautiful airports, you go into dubai and you go into different places throughout the world and you see airports that are unbelievable. that we've never had in this country. and then you fly into la guardia or you fly into l.a.x. or you

fly into kennedy, any of them. you fly into these airports, it's like a third world country. so we have to fix our airports and our transportation system and our trains which are, you know, a hundred years old. we have trains from a hundred years ago. those are the good ones. and you go to china and you go to these other places and you see the bullet trains. >> how do you pay for all that, mr. trump? >> so we need to fix our country. we've spent so much money in the middle east. $4 trillion they're saying now. that means we spent more than that. but we've spent all this money in the middle east. and by the way, we are now further away from something happening in the middle east than if we did nothing. had we done nothing, we would have been in better shape in the middle east. we spent $4 trillion -- and we are right now much further away, i mean, like not even close, much worse shape than had we done nothing. >> how do we pay for that?

and is it going to be public money? is it private money? and as wilfred just asked, what level of debt to gdp would you feel comfortable with? >> well, you could have combinations of private money. basically you're going out and borrowing money on the united states to rebuild your infrastructure. it would be infrastructure money. and maybe there's ways of giving additional, you know, credits to people that buy these bonds. frankly the interest rate would be so low. >> that sounds a lot like larry summers. >> normally you would say you want to reduce your debt. and i would like to reduce debt too. the problem is you have a military problem, you have an infrastructure problem, a tremendous infrastructure problem. and you have other problems. and also, the asset is your rates are so low. what's going to happen when the rates eventually will go up and you can't borrow, you absolutely can't borrow because it's too

expensive? it would destroy our balance sheet, totally destroy the balance sheet. so you'd be paying so little interest right now. this is the time to borrow. >> mr. trump, you said you would at least double what hillary clinton wants to spend on infrastructure. that would imply some $500 billion. a half a trillion. what is the exact number you are willing to spend on infrastructure? >> well, you need a lot more than that to do it right. now, i'd also make sure that we use the proper procedures. because when you take a look at things, when you look at what we build, there's a hospital -- a recent hospital i won't say where because i don't want to insult the people. but they're great people. i just left three days ago. it's a va hospital. it's got a $1.2 billion cost overrun. that's an overrun. the hospital should cost half of that price. they have a $1.2 billion cost overrun. everything we build has a cost overrun.

it's all cost overruns and a mess. it's always trauma and trouble. because they don't know how to build. i would employ things -- as an example, i'm building the old post office on pennsylvania avenue. i was the one, i was the successful bidder. i went out to bid. we're one year ahead of schedule. we're going to open in september. we're a year ahead of schedule and we're, you know, under budget. so i built it under budget. i built it ahead of schedule. and it's -- you know, that's, like, routine that you have to do. when you look at these public works projects or big highways, they come in for two and three and four time this cost of what they were supposed to come in at. you look at a hospital where they have a $1.2 billion cost overrun, it's insane. so one of the things we have to do is we have to make sure we have strong contracts, we have strong contractors and give them out properly. right now they're obviously not giving out contracts properly

because everything that comes in comes in way over budget. you rarely see a job -- a federal job, a federal project come in under budget and ahead of schedule. >> mr. trump, your friend carl icahn called into my program at noon the other day and reiterated his support for you. he thought the speech that you gave in detroit was in his words, right on. but at the same time he said and i quote, he's a smart guy and i think he understands the mistakes he's made. he was referring to the controversy over the chan family of a few weeks back. i'm wondering if you're willing to admit the mistake you made and clarify the comments you made on the second amendment regarding hillary clinton. >> well, on the second amendment, everybody came to my defense because there was nothing said wrong. i'm talking about the power of the voter. nothing was said wrong, and only the haters tried to grab onto

that one. and it was very unsuccessful. we're talking about it has tremendous support and tremendous power at the voting booth. and that was all. as far as mr. khan, i think it's been said by everybody. i think that's been very well talked about. that's been put to bed a long time ago. >> sure, but do you agree with your friend carl icahn that you made a mistake? >> you'll have to define what a mistake means. i mean, we're not here to talk about that. we're here to talk about economics and talk about finance and here to talk about our infrastructure. but it's been put to bed for a long time. and i don't think there's any reason for you to reopen it. >> mr. trump, let me ask you. i'd like to return to this issue because it is something that's in the news right now, but before we do, i want to talk more economics. there is a lead story in "the wall street journal" today that its story is about how there's a home buyer shortage out there

and how renters in this nation, a lot of the middle class are missing out because they are not able to participate in the price gains we've seen in the real estate market. there's much less supply, 200,000 fewer homes being bought than we would normally see at a recovery at this point. and i just wonder what you think about that as somebody who follows real estate so closely. the journal article also ties it back. a lot of the supporters who have gone to you and to bernie sanders before when he was in this race are mad that they haven't been able to participate in this economic recovery that we've seen in home prices. what do you think -- >> they should be mad. and many people and i talk about it at my rallies. many, many, people -- it's very sad, beck ki. they're making less dollars today than they made 18 years ago. and in many cases they're working harder and two jobs. it's supposed to be the opposite. they've gotten older and are working harder. many of my people at the rallies, last night i had a

rally of 10,000 people. that's not even a big rally for me. and there's tremendous anger at what's going on. i mean, people have worked hard. they've worked smart. but through so many different reasons including obamacare which has been an absolute jobs killer. you know, it's put people in part-time jobs which they've never had before. but they're working harder than they did 18 years ago and making less money. it's a statistic. and it's very sad. the other thing is, i guess, home ownership is down to a point where it's the worst it's been in 51 years. used to be the great american dream was a home, as you know. and homeowner ship now is down to a level that's incredible. 51%. so 51% -- i mean, if you think about that, it's the lowest level that it's been in, i guess, 51 years. you know, that's not the american dream. the american dream is to own a home. and yet percentagewise we have

fewer of them. it's supposed to be the other way around. it's a devastating chart. it's a devastating number. i've seen the number up on your boards. but you take a look at that number, it's just crashing down over the last five or six years. just a crash down. and people would love to own a home, but for some reason they can't. now, the reasons are the reasons we're talking about. >> donald, back to scott's point, though, we have had several of your biggest supporters who have come on our air this week to talk about your economic plan who said that they love your economic plan, they think it's a big winner. that includes carl icahn, steve forbes, larry kudlow who's talked about all of these issues. but all of them said they wish you would stick to the economic message. they think the issues you brought up along the way are unforced errors. what do you tell them? >> well, i don't think i've made too many errors. look, i've beat 17 people. i started with 17. i now have one person who i think is pretty close to incompetent, hillary clinton. i think she's pretty close to incompetent.

take a look at "the washington post" story about hillary clinton from two days ago. i couldn't believe they wrote it because they never write anything bad about her. so they wrote a story about hillary clinton was a disaster as a senator from new york. she promised everything, delivered nothing. she was going to create a wonderful economic boom in upstate new york. same words she uses right now. and she not only created no boom, new york state, upstate new york, and various other parts she was talking about became disaster areas. and they are a disaster area. people have fled. businesses have left. they've gone to mexico and other places. it's a disaster. and then they compared that with my record which was done by steve quaso where i rebuilt the grand terminal area when i built the hyatt. when i did trump international hotel and tower, i was there first. i got it going. and so many other areas.

and i mean, it was a very nice story. but i've done a lot. and i've done a lot in terms -- they even mentioned the skating rink which was open for -- which was closed for seven years and they had spent $21 million trying to do it. and i had it fixed up in four months and opened and i have it to this day. and it's a tremendous success. i mean, it's a big difference. but hillary clinton, that "washington post" -- everybody ought to get that story and put that aside of her phony speech she'll make today in the afternoon. read that story. two days ago. she was a disaster for new york. she put in virtually no bills. the only bills were naming of a building and something that didn't matter much. like very, very unimportant. got nothing passed. and all of her talk about upstate new york and all of her talk about revitalization was a total catastrophic event.

and the voters of new york saw that and they were not happy. >> mr. trump, i appreciate you're sticking to message. i've seen your article. i read it. but you're doing a good job of sticking to the message, but you have had republican senators and congressmen who have disavowed you because of some of the other comments that have come up this week. how do you even work with these people if you are elected? are you going to -- >> well, i have a lot of support within republicans. but whenever somebody doesn't support me, it becomes a bigger story. you know, i just -- look. when i won when i beat these 17 people because there were really 18 if you think. when i beat the 17 people, i wasn't exactly making myself popular. and i wasn't an insider. i was an outsider. because of the fact -- i used to be like establishment. and then when i ran, i was the opposite of establishment. and i beat these people very badly. all right? so all of a sudden -- and that's

when i did best. frankly, when they were fighting me, those were -- >> sure. >> -- that was when i did best. >> but you do realize this is a different stage now. >> we have a lot of support. >> i know and i see it at your rallies. but this is a different stage, mr. trump. >> no. so many other senators are supporting me. we actually do. but you have some people that as an example, the list that signed, these are the people that got us into iraq. these are the people that got us into all of the messes we're in in the middle east. these are the people that have us in an economic condition where china has literally ripped the heart out of us. where china's taken so much money that they've rebuilt themselves and they're building massive military complexes in the middle of the china sea. these are the people that represented us. they know they're not working for me. i don't want these people. these people did a terrible job. and they know they're not getting jobs from me so they'll go to the other side. >> but if you look at the

polls -- >> whatever happens, happens. i'm giving it straight. i don't know that it will work because i'm a non-political person and i'm proud of that. but i'm giving it straight. >> mr. trump, you said -- >> i've done a great job and now i'm doing a good job politically. i came from this massive field of professionals, all governors and senators and people of vastvast talents and now i'm down to the final person and and you notice the polls are closing up rapidly which is fine. don't forget, she has spent hundreds of millions of dollars on advertising. you know what i've spent, becky? zero. >> but you've lost some of the republican women. the latest poll from "the wall street journal" shows it's 72% of that. mitt romney had 90% of that group and didn't win the election. >> we'll see what happens. i have a whole group of people out there that people don't even know about. at the rally last night i had

10,000 people. if hillary had that rally, she would have had 200 people if she was lucky. i don't know that translates to votes. in theory, it should. but i don't know it translates into votes. what does translate into votes is she's done a terrible job as senator from new york and totally -- and by the way, totally documented in "the washington post" article. she's done a terrible job -- >> mr. trump, i would ask you -- >> that article it was a long detailed, very, very strong article. she'll be making a speech and saying all the same things she said about new york and she left and it was a disaster. in fact, it cost us a fortune because of what she did. it cost us a fortune. it cost us jobs. she's a negative. >> mr. trump -- i want to ask you -- >> you have to look at that in light of her speech today. >> i want to ask you about the rally last night in florida that you reference where you called the president of the united

states the founder of isis. you said it repeatedly. president obama is the founder of isis, he's the founder, he founded isis. do you think it's appropriate to call the sitting president of the united states the founder of a terrorist organization that wants to kill americans? >> he was the founder of isis, absolutely. the way he removed our troops. shouldn't have gone in. i was against the war in iraq. i was totally against it even though sifs civilian so nobody cared. i wouldn't have gone into iraq. that was a horrible mistake. one of the worst mistakes of our country. we've been paying the price of it for years. but he was absolutely the founder. in fact, he gets in sports they have awards he gets the most valuable player award. him and hillary. she gets it too. i gave her cofounder if you really looked at this speech. i think you probably did. but he and hillary get the most

valuable player award having to do with iraq. and having to do with the isis situation or as he would call it isil. he calls it isil because nobody else does and probably wants to bother people by using another term. whether it's more accurate or not. it's isis. he was the founder of isis and so was she. i call them cofounders. >> not only do you not think it was an issue -- >> because of the way he got out as bad as it was when they went in, they should have never gotten in. he shouldn't have gotten in the way he got out -- he shouldn't have gotten out the way he got out. it was a disaster what he did. >> but how do you think -- >> is there something wrong with saying that? are people complaining that i said he was the founder of isis? >> i'm wondering how you think that's going to play in some battleground states. >> i don't know. whatever it is it is. look, all i do is tell the truth. i'm a truth teller.

all i do is tell the truth. if at the end of 90 days i fall in short because i'm somewhat politically correct even though i'm supposed to be the smart one and even though i'm supposed to have a lot of good ideas, it's okay. i go back to a very good way of life. it's not what i'm looking to do. i think we're going to have a victory, but we'll see. >> look -- >> pay for play and all of the stuff that's come out over the last couple of days which is basically selling jobs. and many other things. that's the least of it. what she does is illegal. she's done many illegal things. e-mails, that's illegal. she wiped out 33,000 e-mails. i don't know. you know, they tend to have a different standard. if anyone else knocked out 33,000 e-mails, they would be in a problem like you wouldn't believe. she knocked out 33,000 e-mails. she got away with it. frankly i think it's her single greatest achievement as a politician. getting away with that. because other people, their lives have been ruined.

she got away with it. >> mr. trump -- >> 33,000 e-mails and they say oh that's fine. >> some would point out -- >> i'm telling you. new york state she was a disaster. as secretary of state she was a disaster. you take a look at libya. you take a look at what she did. i'll tell you this. if barack obama had it to do again -- he'd never say this other than to his wife -- if he had it to do again, he would have never chosen hillary clinton to be secretary of state. because those decisions have been a disaster. the line in the stand. so many decisions. crimea gone. he talks about crimea, the talks about the ukraine. >> let me ask you if i could -- >> during his administration. trump will be friendly with putin. i think it would be great. number one, i don't know putin. i couldn't care. i don't know putin. but i think it would be great if the united states actually got along with russia. which we don't. but on his watch, crimea was

taken. and, you know, nobody mentions that. >> let me ask you if i could quickly before we go, you mentioned earlier how polls were i believe in your words tightening yet the new nbc/"wall street journal" marist has you trailing in battleground states such as iowa, ohio, and pennsylvania by wide amounts. how do you close that gap? >> just keep doing the same thing i'm doing right now. at the end it's either going to work or i'm going to, you know, i'm going to have a very, very nice long vacation. >> mr. trump, we want to thank you very much for joining us today. we do appreciate your time. >> okay. thank you very much. >> thank you. as we mentioned, we have invited hillary clinton repeatedly to join us on "squawk box" again as recently as this week. the secretary has an open invitation to join us at any point. coming up at 8:30 a.m. eastern time, we will continue our focus on this presidential campaign and the issues that matter the most. libertarian candidate gary johnson is going to be joining us to talk live about his race

for the white house and what he plans to do. scott? let's get you caught up on some stories front and center today. alibaba reporting revenues of $8 billion. above wall street consensus. the e-commerce giant reporting an 18% increase in active buyers and a 39% jump in mobile users. gross merchandise volume up. shares of kohl's sharply higher. that's higher than wall street estimates. comp store sales were in line. and the company cut its full year outlook. one more big report still to come before the opening bell and that is macy's. results are expected at 8:00 a.m. eastern time. the company expected to post second quarter profits of 45 cents per share on revenues of $5.7 billion. same store sales seen dropping 4.5% from a year ago. also believe that terry lunde again is going to be joining us as well before this morning is

over. and still to come on "squawk box," reaction to the donald trump interview. you just heard from both sides of the political aisle. and then tom lee will be here to discuss the latest market looks. take a look at futures right now. we're up about 60 points on the dow. 6 points for the s&p, 16 on the nasdaq. we've had some losses in the ftse 100. just below flat. the rest of the markets doing up nicely. here's a look at major currencies as we go to break. the pound suffering 0.25%. a bit of dollar strength across the board today. "squawk box" will be right back.

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just minutes ago, presidential candidate donald trump sharing his plans for the economy. >> my plan cuts taxes. she's going to be raising $1.3 trillion in taxes. my plan cuts taxes. my plan's going to lead to growth. we're going to actually -- we're going to have the jobs, not her. >> joining us now to talk about this is democratic strategist john ryanish and betty mccoy. it's great to have both of you with us. >> thank you. >> lieutenant governor, i'll begin with you. what do you think of some of the things that mr. trump said? i think we're still looking for some specifics in terms of numbers, what the tax plan will cost, what the infrastructure spend will be. >> well, it's a very promising plan. tax cuts, regulatory relief urgently needed. fair trade and unleashing energy production. so for important. the most important feature of his plan is reducing corporate

tax rates. when he promised that no business in america will pay more than 15% of their business income in taxes, the fact is that american companies are taxed to death. we pay almost the highest rate in the world. even after all the deductions about 27% which is far higher than most other countries. >> sure. moody's has looked at the plan. they say it will cause a recession, increase the deficit, and create far fewer jobs than hillary clinton. >> that's what the headline says. let me point out moody's analytics made it very clear that hillary clinton's plan will produce no increase in business investment. now, let's look at what's happening in our economy. we have sluggish 1.2% growth despite robust consumer demand. why? because for three quarters we've seen business investment

decline. right? that is pushing us toward what you might call a business recession. we need business investment. this reduction in corporate tax rates is absolutely what's needed to do it. in fact, hillary clinton the going to raise business taxes to pay for a huge public works program. that's a throwback to the 1930s. or to obama's shovel ready -- >> although trump said he would do the same thing. >> not by raising business taxes. government cannot spend our way out of this. we need private sector business investment -- and there was nothing in hillary clinton's fair growth plan about growth. nothing. >> i think if you want to create business confidence, you don't have a disaster at the top of the ticket who creates utter chaos theory. if you want to talk about lack of confidence, it's having a dumpster fire in the white house

who is unpredictable -- >> you're not talking about the economics because you can't. the fact is your -- >> the economics and taxes for the ultra wealthy which has destroyed the middle class. you can't talk about building the middle class if you're going to talk about cutting taxes for millionaires and billionaires. and if trump talks about his tax plan and $1.3 billion tax breaks goes to the upper class. >> he said he's going to close loop high schoholes on that. >> there are parts of that plan, sure, those are fine ideas. that is a way to give some money back to the middle class and increase consumer confidence and home purchases there. but that's not the entirety of his plan. and an unpredictable force is not a way to create confidence in our economy. >> listen to this rhetoric. this election is a choice between economic growth and class warfare. that's exactly what --

>> it's between stability and n instability. >> hillary clinton's fair growth plan would slash gdp by over another hundred basis points. it's already down to 1.2 growth. and cost the nation 311,000 private sector jobs over the next decade. her proposal is simply a throwback to the new deal. more and more government spending rather than business investment which is what we need. >> and to lift us out of the great depression was bad because? i don't think anybody who's not a news max columnist would ever say it was a bad thing. >> you can call me names, but this is a debate between cainsian economics and other economics. and the facts are on the side of supply side economics. >> i think if you look at what mainstream economic theorists and what voters support and who voters are flocking to is the answer as to who's winning this argument. >> all right. good stuff. thanks for being here.

when we come back, tom lee on the markets plus an update from rio and the summer olympics. also coming up at the top of the hour, macy's ceo terry lundgren will join us. "squawk box" will be right back. a good car has to maneuver quickly. that's also true of a good car company. people have always bought cars. but we saw an opportunity in sharing cars. so we moved fast and launched car2go in 29 cities, all around the world. doing that required dozens of data centers, designed for speed and performance. we built our business on the ibm cloud. because that's what the ibm cloud is built for.

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welcome back. despite the weak market showing yesterday, our next guest says he still expects the s&p 500 to gain up to 8% by year end. joining us is tom lee, managing partner and head of research at fund strek global advisers. good morning to you. >> good morning. >> thank you for joining us. still bullish but if we look at where bond yields are, is that not a bearish signal? >> yeah. i mean, low bond yields means markets aren't pricing inflation and slow growth. but i think a lot of that the low yields reflect the search for carry. i think the switch that we're starting to see is i think it makes sense to think about growth trades. that's why commodities are working. that's why equities are working and i think some of the economic data is supporting that. >> but oil prices have slipped in the last couple of weeks. now stabilizing around the low 40s. the fact the equities have continued up during that, is that an encouraging sign or is it a precursor for something

worse to come? >> i think it's just more noise. i don't think oil and stocks have to be, you know, joined at the hip. i don't think oil sort of easing here is a negative sign for equity. so i think in general the story should be in investors' minds that earnings looks like the earnings recession is ending. estimates are actually rising now. i think inflation is underpriced in the markets. and that means if you think about it on balance you should be buying equities over other asset classes. >> i think wilfred makes a good point in the way he asked the question about whether these low yields are a bearish sign. yes, fundamentally you could say that, but you could go back for the last eight years. and that's why the rally has been as hated is because people wondered whether the bond market is telling the real story over the equity market that the world is going to end, that bad things are going to come and yet the equity has gone up. >> the difference is this time

we're not expecting more easing from the bank. that's why low bond yielded in the case. >> sure. let's put a few things in context. >> lack of liquidity? >> there are folks who argued bank intervention is the reason it's gone up. but qe hasn't played a role in markets for the markets in the last year and markets have done well. in 1990, bond yields stabilized and in 1990 after huge declines from '82 to '90 and there were a lot of investors who thought the bull market was going to run out of steam in 1990 and they missed the biggest ten years of returns in the stock market. it's strange to see negative yields, but the number of yields slavrn shrank in the past month.

does the u.s. have to get to negative rates? i don't think so. >> is the risk around the election underpriced? >> i don't know. i mean, i think it's -- you know, it's -- look. i'd say at the end of the day, both candidates are really going to lead to fiscal stimulus. and as you know, there's a lot more chatter globally. that's actually good for markets. and it's good for steeping yield curves. so we'll see. >> we'll see. >> there's a lot that's going to happen between now and november. >> thanks for joining us. >> thank you. switching gears to the olympics. the american team continuing to lead in gold and the overall medal count in the summer games as well. last night the u.s. was victorious in the pool and on the basketball courts. our very own carl quintanilla is in rio and he has the highlights. carl? >> reporter: good morning, becky. you're right about basketball. that's the lead this morning for us. u.s. men's basketball had it pretty easy against china and venezuela in the early rounds. but last night a closer call versus australia facing nba

players for the first time the men win 98-88 after trailing at the half. carmelo anthony becomes the top u.s. olympic scorer surpassing lebron james. he was asked about that last night. >> you said just let it come to me and it will happen. >> i mean, of course i was conscious of it. my teammates was, you know, making sure that i was aware of the situation. but tonight was just one of those nights when i told you the other day i wanted to let the game come to me, take the shots that was given to me, take the opening shots. and just kind of play basketball. >> reporter: swimming, the other big story. katie ledecky anchors the freestyle relay. u.s. wins gold for the fifth time in the last six olympic games. ledecky now has four med dals, three of them gold. she has more total medals than any olympian here in rio and more prelims for her tonight.

finally, golf has the next four days to make up for all that negative chatter returning as an olympic sport after 120 years. bubba watson watched phelps earlier in the week. martin kaymer said this is the greatest moment of my life. medal count still looks good. u.s., 32. china, 23. japan, 18. at this point in london the u.s. was trailing china. not the case now. and tonight a lot more women's gymnasti gymnastics, rowing has ground to make up after the weather caused delays, judo. and team g.b., wilfred, had a good outing last night. they called it wonderful wednesday as you guys up your medal count. >> i'm very aware of that. thank you for bringing it up. because the table we showed up only topped the top five and we're sixth. >> if you added the sixth, they would be in there. we've been watching everything that's been happening.

and it seems the biggest crowds are turning out at the pools. is that the sense of it. that's the feel from home. >> reporter: we did make it to gymnastics. it was pretty full. but if you had one event to get to before you had to leave, you would try to do swimming. the timing works and it is the quintessential spectator sport. >> and the basketball team was there a couple nights ago. carl, thank you. we will see you in just a little bit. when we come back, terry lundgren the ceo of macy's will join us to talk about his quarterly results. and gary johnson will talk to us about our interview with donald trump. stay right here. "squawk box" will be right back.

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♪ back to you news makers and news breakers. republican presidential candidate donald trump on "squawk box." >> we're bringing a tremendous amount of money brought back into this country which will be used for good things. >> up next, libertarian candidate gary johnson. johnson joins us with his pitch for business and the economy straight ahead. plus earnings alert. retailer macy's rolling out quarterly results. ceo terry lundgren joins us first on cnbc as the final hour

of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with scott wapner and wilfred frost. joe and andrew are off. we have been watching the markets and if you're paying attention to this, markets have been indicated higher all morning long. dow futures up 55 points. the nasdaq up by 14. we're also keeping a close eye on oil prices because the news that opec countries keep producing full out, nobody wants to be losing market share and of course all of that additional supply puts pressure on crude oil prices. they're down by 14 cents this morning. when it falls to $40 or below, that's when it has an impact on

stock prices. donald trump says businesses are being destroyed by taxes, obamacare, and regulation. the presidential candidate joining us on "squawk box" earlier this morning. >> we're losing businesses to mexico like one after another. ford is building a massive new plant, it's an extension of another one. it just keeps going. you look at carrier air conditioning from indianapolis, indiana. they're going down. and we can't continue to lose our companies. we're not going to have any companies left. >> in the next half an hour, gary johnson will join us. he's running for president on the libertarian party ticket. in earnings news, alibaba beating wall street estimates on the top and bottom lines. reporting an 18% increase in active buyers and a 39% jump in mobile users. alibaba executive vice chairman joe tsai will join "squawk on the street." that's at 9:00. kohl's earnings and revenues

topping estimates. same store sales were down by 1.8% but that matched analyst consensus. macy's rolling out quarterly results beating on the top and bottom lines. courtney reagan is here with the numbers. >> that's right. so may sis putting out their second quarterly results. it looks like a strong quarter for may sis with earnings per share coming in. this compares to what analysts were looking for. $5.866 billion nap compares to estimate is of $5.748 billion. also beat comparable sales. we do have the numbers down for comps down 2%. macy's is also reiterating its full year earnings and sales guidance. and making other announcements including that among real estate that they've been exploring strategic options for. they're going to close 100 stores of their current 728 saying this is a proactive decision. most of these stores are cash flow positive at this point.

it does represent about a billion dollars worth of sales. macy's is also exploring options for four different downtown flagships and negotiations as well to sell the men's store in san francisco's union square for redevelopment. now, there are some updated features that they're going to be adding to a number of the other existing stores including new venn tor shops, adding to stylist programs, infusing stores with technology, as well as continuing to invest online. so the financial impact of these changes, topline sales will be somewhat smaller in order to grow comp sales more quickly. this is a quote from the release and generate stronger profitability. there will be a $241 million charge. >> thanks very much. stay right here, folks pop ta--n the premarket before these earnings were released it was trading at around $35 and change. on this news, the stock is up to

$37.12 in the premarket. that's an increase of 9.5%. these numbers just hitting. fortunately we are joined by macy's chairman and ceo terry lundgren. thanks for being here and congratulations. >> thanks. good progress, becky. >> there's a lot to dig through. you beat by a big margin. you're sticking with your guidance for the year. maybe this news about closing a hundred stores soon by the beginning of 2017 you're planning on closing a lot of these. that is a big action. why? >> because we're a company that doesn't sit still. i think you know that. you've seen us through the years. whenever there's a setback in the company, we've been first in the industry to take an aggressive stance at moving us forward. that's just part of it. by closing a hundred stores, which is never easy, we're getting out in front of this. here's the facts. in the united states there's 7.3 square feet per human being of retail space. okay, that's just ridiculous when you consider that in the uk

it's 1.3, in france 1.7. we have five and a half times the number of retail physical locations in america per capita than any other country in the world. and so there has to be a rationalization. and we're not waiting any longer. we're taking the stance. we're going to still have as courtney said, over 530 stores in all of the key markets. when we're done with all of this. but we also as i think most of you know, we have the third largest internet company in america in the categories we sell. we're only behind amazon and walmart. so we are very, very developed and we're benefitting from the fast pace of online spending as well as the rest of some of these countries. >> what do you do with additional resources? put that in to boot the remaining stores? into the internet operations? what happens with the money you can then redeploy other places? >> it's money. it's inventory. it's people. all being forced back into those

remaining stores which are really critically important to us as well as the digital business, the mobile technology investments we continue to make to get out in front of that. they will all benefit from a smaller portfolio. >> i heard a statistic yesterday that department stores as a group, those sales are below what they were in 2000. i can't imagine any other time where you've seen 16 years decline in total retail sales. is that because of the internet? >> i think partly that. but you vals to remember that from 2000, we made big structural changes after 2001. we changed the names in 2008 the financial crisis came. we restructured. we had the best five years of our history. so what we're just doing now is doing another bold move. and i know it's interesting. you go back, dial back our

industry, every five to seven years something major happens. and this is one of those times again. and we're taking this as an opportunity to separate ourselves. >> speaking of bold moves, you're leaving early next year. you are macy's. no? >> listen, i've been doing this now for 13 1/2 years. it will be 14 years by the time i turn over the ceo. 14 years, that's a long time. i figure it's certainly longer than the average fortune 500 ceo. >> second thoughts? >> no second thoughts. >> you also don't have to be the one to close the stores yourself which is a nice thing. >> here's the thing. i'm going to be here. my heart is going to be here when i'm not physically here. this is a company that's been so important to me personally. that's why frankly we're not waiting around to do these -- to make these big changes. i want to do them while i'm here. i want to help us position for great things in the company. i want him to be in a position where he can lift off opposed to

having to deal with issues. >> there's been some criticism that some of macy's problems have not been cyclical but structural. but this last quarter sales got better month by month. is this a changing of the tide? is it getting better? >> certainly it is. you just said it. but may was better than the first quarter. by the way, first quarter was challenging. all retailers that had too much inventory going into the fourth quarter. you may not remember, i do. 74 degrees in new york city on christmas eve. so we all had too much inventory. we spent the first quarter getting that out. we're now in good shape. may was better than the first quarter. july was much better than june. so consistently getting better and it's definitely related to the investments that we made after our mom 2.0 strategy was thought through in early january about how we're going to respond to the changing consumer. >> you're making a lot of changes and new initiatives at macy's. what is the most important? is it backstage, is it the real

estate transactions, is it the digital transfusions into the stores? >> it's never just one thing, courtney. so you have to be able to walk and chew gum in this business. i think the biggest thing what we did was we decided to invest in people and putting more people back on the sales floor in advance of the performance of the business. so it was a bet. the most -- in a retail business like ours with so many stores, the biggest expense you have is your sales force on your floors. so investing millions and millions and millions of dollars back into that business before the business turned was the biggest bet we placed. placed that the beginning of the second quarter. i'm watching what we call our magic scores. every single month b now improving going in the right direction. i think that has had the biggest positive impact. and by having a hundred fewer stores, we'll be able to intensify that talent back into the remaining stores. >> terry, let's talk a little

bit about the holidays. because the fourth quarter is the biggest time for the retailers. that's what matters most. you mentioned last holiday season all the retailers came in with too much inventory and the weather didn't corporate. july is when you think about next holiday season. are you going in with low inventories and will that in turn create a slower or lower sales holiday season? i mean, you can only buy what's in the stores. >> exactly right. this i can assure you. there will be enough inventory in our stores. i always -- my dream is i'll come into the store and they'll say, we're sorry, we sold everything out. there's nothing left. i dream about that day, but it's not going to happen. we will have inventory. i promise you the resources will back us up. >> will it be less inventory than last season? >> definitely going into the season it will be less. >> it was the sales prices you had to offer. >> the average unit retail was down so sharply that's career.

that's where the opportunity is. >> so there's two messages to take out of this. for the street the message is lower inventory is good news. you won't have to sell more on discount. for consumers, buy early because there's less inventory there. you may sell out of the hot items. >> that's always the case. but i would also say, look, we're a promotional department store. we've learned value is really important. that will never not be part of the macy's formula. >> so we will see sales? >> you'll see sales, but they'll be planned sales opposed to reactionary sales because we have too much inventory. >> planned sale is where you mark up and know you're going to bring it back down. >> planned sales is when you work with the vendors saying here's the reality. let's do it up front. >> i don't care what you say. you're not going anywhere. you're going to be sitting out east watching the sales trends. >> speaking of the sales, the handbag designers haven't been happy with those. if they say count us out.

we're not part of that anymore. >> here's the reality. they have to make adjustments, too, just like we have to make adjustments. you're hearing michael kors and coach make their adjustments. i applaud them. more vendors, not necessarily that particular one initiative but looking at the whole subject, they have too many points of distribution, they're in outlets that are doing more business than in their main stores in some cases. not those two in particular. but look at the total landscape. all of those vendors have to look at that and say where do i want my brand to be positioned five years from now? we have to think like that. but we're going to look like five years from now. i applaud the companies like kors and coach. >> what do you think about figures in the banks earnings over this quarter they were very strong in the consumer departments. do you think that can continue or are you concerned this quarter is like a one off borrow driven bounceback? >> no. the consumer's been spending. they've just been buying automobiles and buying home improvement. they've been paying for medical

expenses and all these things that are not sold by me. so i think this is good news. because they don't need another car now. right? we've had record sales of cars. they don't need another car. they don't need to fix their home anymore. right? home depot's been awesome. so it's my turn. it's our turn. >> what do you think about the walmart/jet deal? >> you know, i think walmart's trying to figure out how to avoid getting caught in this idea of just low price. and i think in our case, you know, our response to this is more and more products you're going to see is going to be only available at macy's. the fact we're the largest seller of these brands allows us to do that. our smaller competitors just can't do that. we can buy up all of the purchasing power required to run the minimums for a handbag or for a shirt line or whatever. and that gives us a unique opportunity to have only at product. so walmart does it in a different way but a lot of their

merchandise is sold in other places. >> terry, donald trump told us earlier we're going to build an economic engine that hasn't been seen since ronald reagan. do you welcome some of his economic plan? cuts in corporation tax? >> certainly we're not competitive on a worldwide basis on corporate taxes. so i do totally support that. when you think about fair trade and free trade, come on. the consumer demands it. and so we have to respond. what i always try to do, i'm called a chief customer officer in our company. i try to put the customer at the center of the decisions we're trying to make here. we need to think like that as a country as well. and the consumer wants to have a good value. you can't force it to have a higher price because it's not made in the most competitive country. so i think free trade, fair trade, and corporate tax initiatives that are going to make us competitive is going to be the thing that's going to keep businesses here. >> terry, i want to thank you for coming in. by the way, folks, check out

shares of macy's again. it was up 9% since you started talking. it's gone up a little bit more since then. up 11% last number. last tick at $37.75. thank you very much. we appreciate it. you come in good news or bad. thank you. >> you in charge of one more quarter? >> i'll be here fourth, first, then executive chairman. you're not going get rid of me too soon. cou . >> we don't want to. courtney, thank you b. when we return, we'll talk to the ceo of american petroleum institute after the break. more still to come. you're watching cnbc, first in business worldwide. what if a company that didn't make cars made plastics that make them lighter? the lubricants that improved fuel economy. even technology to make engines more efficient. what company does all this? exxonmobil, that's who.

we're working on all these things to make cars better and use less fuel. helping you save money and reduce emissions. and you thought we just made the gas. energy lives here.

donald trump joining us on "squawk box" earlier this morning covering a wide range of topics including terror and isis which he says president obama founded. >> he was the founder of isis, absolutely. he was the founder, absolutely the founder. in fact, he gets -- in sports

they have awards. he gets the most valuable player award. him and hillary. i mean, she gets it too. i gave them cofounder if you really looked at the speech, i think you probably did. but he and hillary get the most valuable player award having to do with iraq and having to do with the isis situation. or as he would call it, isil. he calls it isil because nobody else does. and probably wants to bother people by using a different term. he was the founder of isis and so was she. i mean, i call them cofounders. >> heated campaign rhetoric has overshadowed certain economic positions from the candidates. but on the issue of energy, billions of dollars in profits and investment are at stake depending on who wins in november. joining us now with a look at what's on the wish list is jack gerard the president and ceo of the american petroleum institute. good morning. thanks for joining us. do the energy companies, your clients, do they welcome

corporate tax cuts? >> well, we think we should have tax reform here in the united states. as you know, we pay the highest corporate rates. but more importantly as we look globally, we need to make the u.s. more competitive. one thing we have been competitive is in the realm of oil and natural gas. as we look at the politics moving forward, we're hopeful we move beyond the personality of the candidates and start working on the substance or the vision of how we continue the american energy renaissance which has brought such benefit to our consumers. and to us that's an important discussion. we're hopeful we turn to that at some point and really have a substantive dialogue as to how they see the future of energy in the united states. >> jack, which of the candidates the presidential candidates does have a better vision in that area? >> well, it's interesting. because we haven't heard as much as we believe we should surrounding the energy equation. specifically oil and gas. but if you look at a couple of

key areas, there's a stark difference. if you look at the platforms of the various parties, there's a dramatic difference as it relates to regulation. currently the current administration has imposed over 100 pending regulations on the oil and gas industry that we're forced to deal with. of course those raise our costs, it adversely impacted consumers. in the case of mr. trump, his view is we need to look at the arena to know we're not imposed cost. so we think that conversation is a good one to have right now. and we are very confident the american public shares our view that lower energy prices are positive to them. aaa has pointed out that since the american energy renaissance began, the average consumer has saved over $500 a year because of lower gasoline prices. the approach to energy moving forward will make a big difference if that energy

renaissance continues or if we derail it because of excess regulation. >> mr. trump has also had rhetoric to support the likes of the workers in the coal industry. is that something you support? it'll increase energy output, of course. but is it artificial support or does it hurt other competitive parts of the industry? >> our view is we should have a true all the above energy approach. the coal industry, the oil and gas industry. solar, wind, energy efficiency. we need it all. unfortunately the current administration is trying to put their finger on the scale and pick winners and losers. that's not good for the country. that's not good for energy. specifically not good for the american people. so our hope is moving forward. let the market play out. we shouldn't have governments intervening in markets trying to dictate. all you should do is look at the discussion around climate

change. there's been limit conversation about the fact today the united states leads the world in carbon reductions. we're at near-20-year lows. that was brought to you by abundant clean burning natural gas primarily. not by government regular. >> the idea of not having governments involved, are you going to get opec not involved in it? they're the ones that keep pumping and creating the pressure on prices. >> well, if you look at it globally, the geopolitics have changed. and the reason they've changed is many people are trying to hold onto what markets they have because the united states and our significant increase in production has changed that dynamic. our view is don't intervene, don't interfere. we'll get through this down cycle. what we need is stability. but we need thoughtful policy ls moving forward so we don't unnecessarily hinder the u.s. opportunity to really expand through exports and other ways

to improve the united states energy security. >> jack, thank you very joining us this morning. much appreciated. >> thank you. >> jack gerard. coming up, donald trump giving us his plan right here on "squawk box" in the last hour. we're going to fact check what he said next. and later libertarian presidential candidate gary johnson will join us. you're watching cnbc, first in business worldwide.

coming up, breaking economic news. plus libertarian presidential candidate gary johnson gaining traction in the polls. we'll get his pitch on the economy coming up next. as we head to break, let's take a look at u.s. equity futures. we're called higher to the tune of 51 points for the dow. we're back in just a couple minutes. you're here to buy a car.

welcome back to "squawk box." breaking news. initial continuing claims, of course, it's thursday. also our july read on import prices. import prices were up 0.1%. less than the expected down 0.4%. last month, though, boy did we get a revision. from up 0.2% to up 0.6%. in terms of jobless claims, we dropped 1,000. from a slightly revised 267. originally reported at 269. now stands at 266. if we look at continuing claims, continuing claims 2.155 million. if we consider what's going on in the markets with low interest rates, of course, bank of

england yesterday their buyback not garners the investor letting go of the securities that they were looking to purchase on that reverse auction. the aftermath, not much has really changed. we're still toying with 50 basis points on the gilt. and of course all the negative interest rates in europe, keep an eye on the 2-year. the negative yield was over minus 70 basis points. it's starting to get close. back to kbrou. >> rick, thanks for that. steve leisman is also on set with us. steve, your reaction? >> just real quick, the jobless numbers continue to be in the zone that suggests strong job growth. a lot of people say that's the best indicator out there. the import price number is curious. they had a big jump up in oil prices in the prior month. this one the table right there. so i'm not quite sure what's

going on there. maybe some incipient foreign inflation pressures that are worth following. but you did have the capital goods, motor vehicles, and consumer goods decline while non-petroleum imports ultimately went up because of an increase in food, feed, and drink. you were talking about donald trump which i think is interesting. we did some fact checking. i want to go over some bullet points. the first thing is this issue -- we had a question about how much infrastructure spending donald trump would do. he had said half trillion. and then we had one of his advisers here, larry kudlow walk back that number. and now he said the u.s. does need to spend more than half a trillion on infrastructure. he did not say if he would spend that. >> although he did say -- one of the things larry kudlow had mentioned was the idea of public/private partnership. donald trump made it sound that is one way. >> so the total cost would not

be that much to the government. >> he did not clarify that this morning. it sounded more like public funds he was talking about. but he also said in two weeks we'll hear more. >> without criticizing the actual plan, what you keep hearing from economists is give us more numbers so we can evaluate them. the other thing was he offered no actual cost for the tax plan when scott asked him. he did come back the this thing, he thinks it's less than $3 trillion. >> he threw in at one point when i told him $10 trillion, he said $3 trillion. >> that's closer to the ryan plan cost and his plan is different. he has the infrastructure spending in there. ryan has an import tax in there and an export credit an all kinds of stuff. so it's very hard to do. the committee for responsible federal budget to know to be straight down the line. says donald trump please give us numbers. that's what they're saying. a couple little fact checks here. u.s. does not have the highest corporate tax rate in the world. it's just not true.

in the developing nations, it's just sort of in this middle. >> who has the highest? >> japan? >> i think finland? i'm not really sure. i have the chart here somewhere. here's the thing about donald trump. he is invariably directionally accurate but factually challenged. is what i keep ending up saying. this is the right call here, but the numbers are wrong. let me give you another example. homeownership has declined. but it's down to 62%. not 51%. i'll give donald trump a pass on that. because it is the lowest in 51 years. he seemed to carry that over. anyway, it's just not accurate. i'll give you one more. he talks about obamacare and part-time work increasing. part-time work for economic reasons, these are people who want to find -- who want to work full-time but could only find part-time work, that's down by some 3 million people. that's where you would -- >> that's the ubers of the world. >> that's where you'd expect to find the effect of obamacare. like i want full-time work but

because of obamacare, i'm getting only part-time work. but part-time for non-economic reasons which is people choosing to work part-time, extensively that is up. so i don't know which one he's talking about or where the evidence is. there is a bunch of anecdotal evidence out there that employers have cut back hours to get under some of the thresholds of obamacare, it just doesn't show up. >> steve, thank you very much. folks, as you know, preparations are under way for the presidential debates in the fall. and governor gary johnson is making a mad dash to be part of it. johnson is running for the presidency on the libertarian party ticket along with his running mate and former massachusetts governor bill weld. if his support ticks up to 15%, he will be on the debate stage with hillary clinton and donald trump in september. governor johnson served two terms as republican governor of new mexico. governor johnson, we want to thank you for being here with us today. >> thank you always.

>> folks,ly warn you in advance, there's about a three and a half second delay. it's not the governor's fault. it's just the satellites between here and there. be patient with us. governor, i'll try and not interrupt you on these issues. we'll do the best we can. it is difficult with the three and a half second delay. let's talk a little bit about your campaign. you are hitting numbers that we have not seen a third party candidate hit in quite some time. all the way back to ross perot. 9% in the polls is the last i've seen. where do you see things standing right now? when do you have to find 15%? and how do you expect that you might get there? >> well, by all our analytics, we are going up. i think in the last three weeks we've doubled our social media reach. so really optimistic that we will get to that 15%. presidential debate commission

says you have to be at 15%. they don't really set a date. right now the issue is that all of the polling asks about trump and clinton and then 99% of the media reports only that top line. trump and clinton. i think if we were included in the top line, johnson/trump/clinton, we'd be at 20%. a lot of that has to do with how polarizing the two of them are. but that's the issue right now. we need to be top line on the polls. that were the case, i suggest to you we'd be at the 15% tomorrow. >> let's talk about some of your plans. what you would intend to do. there are many people in the country who don't quite know enough about what you would do. part of the libertarian plan is to cut government spending by 20%. how would you do that and are there government agencies where you would not cut funding across

the board? >>. >> well, bill weld and myself have pledged that in the first 100 days we would submit a balanced budget to congress and that would involve in 20% reduction in federal spending. of course, you can't do that without addressing the entitlements medicaid and medicare. i think those two functions have to devolve to the states, what i call 50 laboratories of innovation and best practice. and you'd actually see best practice that would get emulated. you'd also see some failure that would get avoided. we do also need to reform social security. not cut social security, but reform it. and that would be raising the retirement age for one thing. that would also involve a very fair means testing. means testing should you get back more money from social security than what you paid in given a certain level of income, i think that that's very doable, very fair. and you can't balance the

federal budget without reducing military spending and that would not be compromising our national defense. but the pentagon itself says that we could cut u.s. basis by 20%. i'm going to extend that to foreign basis also. and that really -- 20% reduction in military basis, 20% reduction in military spending back to 20% overall reduction in federal spending. i think that it's very doable and that it's a big issue facing this country right now. entitlements, pension funds. huge issue facing this country that nobody seems to be addressing. >> let me ask you, susan collins and mitt romney, two republicans who have said they won't support donald trump have said that they like your running mate but they're little concerned about you because of your stance on drugs. would you consider changing your position on cannabis. your position is what?

to legalize it across the country? and would you consider changing that to win some support from maybe some mainstream republican who is are looking for a different candidate? >> well, becky, this is a position -- tell the truth. if you tell the truth, you don't have to remember anything. and this is a position that i've had since 1999. legalizing marijuana. we have tens of millions of americans who are convicted felons that but for our drug laws would otherwise be tax paying, law-abiding citizens. and right now 58% of americans support legalizing marijuana. so which side of that issue do you want to be on? in 1999 when i came out in support of legalizing marijuana, 30% of americans were in favor of that happening. looks like i might be on the right side of this issue long-term. >> what do you think about the job that janet yellen is doing at the fed right now and what

would you do if you were elected? would you put any changes in place? do you like what the fed's done today? >> well, i understand the federal reserve being the lender of last resort, but i'd like to see this dual mandate taken away. full employment versus inflation. i think that they work against one another. i would return the federal reserve to the mandate of taking on inflation. and i do support an audit of the federal reserve. it might just scare the world with regard to the assets that they hold and what those assets are and how significant, in fact, they are. >> mr. johnson, just quickly before we let you run, who would you vote for if you had to vote

for donald trump or hillary clinton? if you couldn't vote for yourself, couldn't vote for the green party candidate, who would you cast your vote for in this election? >> well, since 1971 the start of the libertarian party, there has always been a libertarian candidate for president, so i'd vote the libertarian candidate for president. first libertarian candidate for president that i voted for was berglund against reagan. the second term because reagan blew the lid off of deficits. he talked about smaller government, but i didn't see it when it came to spending. so i really am a small government guy. when government is smaller, it takes less money out of my pocketbook. that's money i could be spending on my life opposed to government deciding what's best. >> governor johnson, we want to thank you very much for being with us today, again apologies for the delays with the satellite. we'd love to have you back

another time maybe in studio or when you're closer to us. but we do appreciate your time today. >> great. always. thank you. watch you all all the time. thank you. >> appreciate it, governor. by the way, folks, we've been talking to the candidates this week. we had donald trump on earlier this morning. yesterday we had the green party nominee who joined us as well. we just heard from governor johnson. and we have invited hillary clinton repeatedly to join us on "squawk box" again as recently as this week. the secretary does have an open invitation to join us whenever she's available. we should point out later today independent presidential candidate evan mcmullen will join "closing bell." up next, highlights from rio. here's the medal count. united states with 32 goals. ahead of china and japan. a report from rio is next. but before we head to break,

here is donald trump on "squawk box" with his economic pitch. >> the interest rates are at -- so low, i mean, the numbers are so low that yes this is the time to borrow and borrow long-term so that we can have the money and rebuild our infrastructure.

♪ team usa adding to its medal

count last night with big wins in the pool and on the pavement. carl quintanilla is live with all the highlights. >> reporter: yeah. swimming a big story. but cycling sometimes flies under the radar. not today though. kristen armstrong wins the third consecutive time trial gold. get this. she is now the first american woman to win three straight golds in a single individual event. only eight women have done that throughout olympic history. absolutely amazing. one disappointment last night, men's gymnastics. a tough run as sam mikulak finishes seventh in the all around. this has been a tough category for the u.s. men. something that chris brooks talked about after the event. >> honestly, it went well for me. i qualified in 19th place for me. and a couple countries had guys ranked 17th coming in. so i knew i had ground to make up. i was cruising through doing

great routines. i knew i needed to have a cushion going into floor and horse. they're lower scoring for me. but it was absolutely an amazing honor to put that uniform on and compete one more time. >> reporter: and congratulations to him. tonight, guys, buckle up. it's phelps versus lochte in the 200-meter individual medley facing off for essentially the last time. they've competed against each other for 12 years now. this is them in the semis last night. unbelievably either phelps or lochte have won this event in 12 of the last 13 major international competitions. that's going to be huge. medal board goes like this. u.s., 32. china, 23. japan, 18. coming up in the next hour, guys, we're going to talk about the business of michael phelps and what his value is to endorsers as he is so dominant at these games but obviously on the cusp of his final olympics. that's coming up on "squawk on the street." guys, back to you. >> hey, one question, carl.

the difference with phelps and lochte, you think phelps is going to pull what he pulled with le clos the other night where he wouldn't look at him? turned his back the whole time? maybe not quite as much drama between these two since they like each other? >> reporter: yeah, they're old pals and competitors. they're roommates here. there was a lot of discussion about that look that le clos was giving and people trying to calculate how many fractions of a second that might have cost him. >> yeah. >> reporter: would he have been even closer if he just kept his eye on the wall. >> yeah. you forget that sports is a mental game, not just a physical one. and that was proof positive of all of it. carl, thank you. we'll see you in a little bit. >> okay. folks, when we're back on "squawk box," jim cramer will join us from the stock exchange. check out the futures. dow up now 61 points. s&p futures up by 6.5 and the

nasdaq up by 15. stick around.

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let's get down to the new york stock exchange. jim cramer joining us now. jim, you had some retail stuff out this morning? donald trump on our program a

short time ago. what are you focused on today. >> i like the fact that dynamic nature of some of these retailers, terry lundgren said we're not just going to take it, take top action even closing stores that make us money. that's what i've been looking for from some of the american merchants who seem to be taking it on the chin. doug mcmillon took action with walmart and how his stock was rewarded. matthew boss, the trading call from jpmorgan, get him on -- get him today, i'm not kidding, scott. this guy had an amazing call saying buy macy's into the low. this was a good call and what are happening some of the guys, even calls, they're all saying it, listen, we see it, we're not idiots, not going to let it happen to us. i like it. they're taking back the story and going on offense. >> the street's believers. macy's up 9% before terry sat to my right now the stock up 14. let me move you to one more stock before i let you get ready for the show. shake shack, has a cult

following but the stock is getting destroyed. >> each store, the stores are valued at 14 million per. you know, i mean paer in ra which has a slightly less sales, less sales per week but is the highest value in terms of 2.5 million average unit slol uml volume you can't get this valuation per store. the call was not well received. people on the call directly questioning the math that the company was delivering in terms of the delevering of the labor force. wit a very contentious call people didn't see coming. >> i don't want to forget about -- >> the company, the stores have less value per the market gap. >> i was going to say, i don't want to forget about alibaba. you guys have joe tsai. >> david said who's going to have the best quarter of the year, i will get the ceo on. me i have guys on, like real estate investment trust. >> don't sell yourself short, jim. we'll see you in about five minutes or so. all right. jim cramer and the gang at the

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alibaba earnings first on cnbc, alibaba's joe tsai, china cloud services e-commerce, instant analysis for investors, "squawk on the street" 9:00 eastern on cnbc. >> i just keep doing the same thing i'm doing right now and at the end it's either going to work or i'm going to have a very, very nice long vacation. >> that was donald trump joining us earlier this morning on "squawk box." we talked about a lot of different issues. he talked about some of the challenges he's faced and said look, he's going to keep telling things the way he tells them. people will like it or don't. he made that comment. and also said, if it doesn't work out he has a good way of life and he will go back to that too. >> he was basically saying, before that answer, that he wasn't too concerned about the polls, which i think is a bit

rich because during the primary campaign he was hitting his opponents over the head with the fact that he was ahead in the polls. the only other thing i bring up on this is, he also mentioned lots of people at my rallies, might not be showing up in the polls and that was the theme with the brexit vote as well. >> i wonder if there's truth behind it. we'll wait and see. bit rich to say the polls don't matter now when he was saying the polls mattered in the primary contest. >> a lot of economic issues too. covered ground with him. this is supposed to be the week for economic news. not only from the trump campaign but from hillary's campaign. hillary clinton will be speaking this afternoon and i know that's a conversation we will be carrying here live. but yeah, a lot of ground that was covered. a lot to dig into. and hope you guys check it out. >> yep. >> let's give you a final check speaking of check it out on the markets this morning. where futures are. looks like a decent open on wall street. some retail news from macy's perhaps helping things about. alibaba was a beat as well. the dow jones industrial average

with an implied open right now of nearly 60. crude oil, yeah we're watching it because we always do and it has a tendency to sway the trade throughout the day. a look there. >> all right. gentlemen, thank you both for being here, scott and wilfred, great to have both of you here. tune in for scott later today. join us tomorrow. right now time for "squawk on the street." ♪ good morning. welcome to "squawk on the street." i'm david faber and jim cramer, we're live from the new york stock exchange. carl quintanilla is live at the olympics in rio and, of course, will join us momentarily. we got a couple big names this morning that we're watching. alibaba, and macy's. both moving, both up as you see sharply on earnings. we're going to have plenty on both including an interview with alibaba's vice chairman joe tsai a moment from now. another look at futures. you heard scott talking about the market overall and see it is