. >> announcer: live from new york where business never sleeps. good morning, welcome to "squawk box" here on c nx. i'm michelle caruso-cabrera. andrew will join us from the rio olympics in a few minutes. first, a check on the u.s. markets. futures are suggesting slightly positive open. dow opens higher by 23 points. the s&p by 3 and the nasdaq higher by 10. after that trifecta hit we talked about last week, all the major averages at new highs. shanghai sharply higher. traders pointed to expectations for what else? more stimulus from beijing. meantime, japan's economy slowing down. despite 20 years of stimulus, gdp expanding by an annualized .2 of a percent in the second quarter. that's below market estimates. weak overseas demand taking a bite out of demand. european equities are slightly

higher. slightly. call it almost flat. france is higher by 2 points. oil prices have been moving higher on a report suggesting that russia is in talks with saudi arabia. others about achieving "market stability." crude had a strong -- we're falling a developing story out jfk airport. multiple agencies responding to the airport after a report that shots had been fired. after arriving on the scene, authorities said there was no gunfire. the nypd declaring on twitter that all terminals were searched and cleared and no shots fired. they believe the woman who reported it misinterpreted clapping and banging from people watching the olympic games. >> incident in the mall where people had fireworks. >> they were watching usain bolt last night. it was amazing. >> i did get to see a lot of it

last week. it's all been really great. >> the swimming. katie ledecky, wasn't she amazing? >> she's that solo swimmer. i tuned into the end of that. golf turned out great. i think some of the guys that didn't go were like oh, man -- watching kuchar who won a bronze. he says his chest was bursting with pride. never felt anything like that. justin rose and andy murray, wilfred, golf and tennis, the brits do very well with golf and tennis. when is cricket. he's going to join us at 7:00. >> looking forward to that. knows what he's up against. >> did you read this article in the journal about why they're breaking so many records in swimming? >> partially go pro. because you can put the camera underwater and immediately correct your stroke after your one lane. change your stroke. >> interesting. >> and the pools have gotten faster. there's new technology for pools

that changes the rate of displacement so you get a more still pool as you swim. like a speedboat goes faster in stillwater versus choppy water. ditto to pool. >> here to foredepending on which lane you were in mattered. we're going to get down to my buddy. andrew ross sorkin. the intrepid global -- >> in brazil. >> we're going to talk olympic. andrew, what did we have search straight weeks, who has been saying the market is going higher. maybe she won't come on here anymore. am i right or am i right? did the markets go up after brexit or not, sorks? >> the markets have gone up after brexit. when joe is right, he's right. welcome back from vacation joseph. >> thank you. >> we missed you. >> i get back and you're gone.

>> is that by design? >> that's the way it goes. i'll be back. in the meantime, let me tell you what's going on. you guys were talking about swimming and making a lot of headlines for two very different reasons. this morning, let's get right to it. over the weekend, as you mentioned, four members of the men's team including ryan lochte were held at gun point after the taxi they were riding in by a group posing at police. billy bush spoke with lochte not long after the incident. >> who were you with? what time of night? who pulled you over? >> i was with a couple swimmers coming back from -- we got pulled over in our taxi. these guys came out with a badge, a police badge. no lights. no nothing. just a police badge. they pulled us over. they pulled out their guns. they told the other swimmers to get down on the ground. they got down on the ground.

i refused. i was like we didn't do anything wrong. so i'm not getting down on the ground. the guy pulled out his gun. he cocked it. put it to my forehead and said -- i put my hands up. i was like whatever. he took our money, he took my wallet and then -- >> and that investigation is continuing, guys. we interviewed a number of his teammates just yesterday. and i asked him over the next couple of days that you're here, are you going to change the security protocols, how people are operating around here. everybody said no. seems to imply an suggestion that he wasn't. meaning that he wasn't following whatever those protocols were. we're going to be hearing a lot more about that story over the next couple of days. in the meantime, the other -- this is a feel good headline from the u.s. swimming team. more gold dominating. first with the winning winning the gold.

saturday evening it was quite extraordinary for team usa and olympic history taking the top spot in the 4x100 medley relay. >> we had no idea until we did post race interviews and they told us that we were the $1,000th gold medal. doing it in relay fashion is something that team usa culture is all about. doing everything as a team. i think that was the greatest honor to win the 1,000th gold for usa on a relay. >> hanging with simone was pretty cool. we'll show you more tape from that interview in a little bit. including joe, something you'll find fun. we'll show you what we're doing now. michael phelps marking what he says is end of his olympic career by helping the men bring home the gold in the relay. >> that was fantastic. >> it was pretty great. it was pretty great to be there in person.

? the meantime, look at the current medal standings. usa on top followed by china. and great britain. when willf comesn you can give him that. in the meantime, i should tell you in the next hour, we'll talk olympic spending, how much visitors are bringing to brazil, how much they're spending and what they're buying. here's a hint. i am wearing one of them on my feet. we'll show you that in just a little bit. i was going to say. that's the tease. part of the tease, guys. >> plus, later on squawk, got a one-on-one interview with u.s. women's swimming superstar katie ledecky which was a great and cool thing to do as well, guys. >> yeah. that was all -- >> justin rose? just for you joseph, i'm going to go see justin later today and try to bring you that interview tomorrow. sniel. >> cool. >> he was on a couple weeks ago. >> so many highlights, andrew,

that i don't know where to start. usain bolt was amazing. getting back to you. by the way, i know you're feeling the same type of angst about the disparity, the wealth disparity in the medals. as a globalist, i'm not sure how to deal with that? >> there should be redistribution. should giveaway -- >> too much nationalism. way too much of that. too much with the rich cup tris getting too many medals. i'm sure the president is looking at this. >> what's amazing, joe, it's almost all government supported teams. we're all private supported teams. compared tolet say davos, how are your -- similar, joseph.

>> the size of soap is similar. do you remember how type i that little soap is in davos? >> yeah. >> this one might be smaller. >> the room itself -- >> we've been eating our way through the city. we've done more interviews with more gold medal winners. i got some of gold to hang on myself. we might have shots of that. talking about that inequality. and we have all sorts of tape we'll be rolling out the rest of the week from some pretty fun stuff we did over the weekend. >> you know what else has gotten me, andrew. i have loved every minute. i've been able to watch. i could stay up and watch this stuff. i don't know if i've enjoyed the olympics more. the media loves to -- down from -- it's either here's what it is. it's either people are watching different ways with streaming or it's the stupid millennials, maybe they don't even -- all

their people are the ones winning all these things. are they not watching, andrew? >> joseph, they're watching. 1.5 billion streams. that's all you need to know. that's the number to focus on. i have to say, just coming down here and kudos to nbc. it's such an -- logistically, what's going on here is an amazing operation. it's sort of a remarkable thing. >> you did not have to say that about nbc. far be it for you -- >> i legitimately say that as just a newbie down here at the olympics. there's so many people who have been up early this morning. >> amazing. record revenue and record profits from all of us. >> the revenues -- >> people oh, no no no. >> i think they're watching online. >> you've been reading the scuttlebutt in the press. panic, panic. >> the ratings are down. >> the media, andrew -- let's

not talk about the media. media bashing is getting old. thank you, andrew. more from you later. >> see you in a bit, my friend. >> in a little while. >> i want to see that katie ledecky interview. awesome. >> we're going to do that in the 7:00. >> excellent. andrew, you were like facetious about me. you heard me with the markets. we're going to talk about them now. you finally decided whatever you're feeling, you're going to just do the unconventional thing. >> do the opposite. correct. >> i've been telling you that for five years. >> whatever the opposite. i'm unwilling to call it the trump rally. given the polls, though. can i say that? >> touche. >> we're not moving up as quickly with the close. let's take a look at what's going on. did you see the peso? >> it's getting stronger because hillary clinton is in the lead.

that's great. i hope everybody -- >> is that true? >> everybody's wealth in mexico is going up because of hillary. great for us. let's look at the markets. head of merrill lynch's strategy. steve whiting, citi's private bank, chief investment strategist. the last few times you've been on, you were -- you didn't argue with me that maybe stocks are going to be okay. >> no. i did not. here's the thing. the markets won a gold medal. you've got a triple crush. you've got the s&p, the nasdaq and the dow all hitting record all-time highs. >> you had that ready to go at like 4:00 a.m. this morning. >> do you want to know -- >> the markets won a gold medal. >> the markets want to fight for a gold. >> is that in one of your pieces? >> no. i didn't. you just talked about the olympics. >> will they continue to perform

well on the balance beam? >> here's the thing, joe. obviously the trend in the markets is up. but you have the volatility incompetent decks sta index to get to -- we've been talking about episodic volatility. you've had it in spades this year. although we do see markets trending higher, we do think that you can get pullbacks from time to time and they can be violent. it's really about how to position cliept portfolios over the next five years. >> a lot of uncertainty. i love. that's the new buzzword for the strategists. do they ever need -- >> i was going to say -- >> do they cover their all the time. >> sometimes a certainty goes down and we feel exuberant. this is maybe a little bit one of those times.

we've come so far from '08, '09. maybe we should be worried about what's going on. convergence with zero interest rates, all these markets outside the united states, yield 2, 3 basis points out for ten years. we have all this income producing assets in the united states and europe which you saw was up nicely. government bond yields across all maturities around zero. these incomes want to rise in value. so that's one. reasons why there are so many skeptics of the rally, right? don't see it as fundamentals. low volatility. to your point, it gets people worried. >> it's not growth. it's not sort of this notion that we have this massive runway which we can take off on with lots and lots of years of strong growth and high eps growth and we're depressed now. we can get to some better place. this is valuing the same income

stream of fairly static income stream from here on at a higher level. yes, we will have a little -- >> how long can that go on for? >> that's a very good question. >> or how long can that go on? >> it can go on a pretty long time. the divergences across markets are so great. we went from depressed markets with a long, long way back and have big diverges of cross markets. look at brazilian bond yields, why should they -- these different markets can diverge and converge again. that's a big new trend for a while. >> here's the thing. you have the world essentially at zero. 30% of global sovereign bond have -- that allows investors to take risk. bonds and equities have flipped. bonds are really being priced for price return not income. we're going more and more to the stock market for income for our clients. there's been literally a flip. >> that doesn't make you

nervous? when you say that allows investors, it pushes investors. it forces investors. right? >> it doesn't make you nervous that that flip has happened and that people are reaching for yield in places that normally would seem very risky and crazy? >> it doesn't make me nervous. when we look under the umbrella of a transforming world and look at the long-term things, looking at the baby boomers, how they're going to drive our economy, drive health care, they have a $15 trillion economy. they're spending. they're spending on hospitality and leisure. you also have innovation. and innovation in the digital era where things are progressing at a faster and faster pace. then you have the millennials. whatever joe wants to say about them, they're still a very large demographic. >> all great things. why isn't gdp -- why do we ratchet it down every quarter? are we missing something that -- >> absolutely not. this is why the world is so

confused. we just lowered our gdp numbers again. we think this year we can be about 1.5%. which is the lowest since the '08, '09 period. the problem is the zero interest rate. each though we're still growing, albeit extremely slow. when you look at the rest of the world, we're one of the most attractive places to be, especially when looking at our banging system. europe is trying to recover, but they have issues with their banking system. emerging markets, if there's value within the marketplace on the equity side, there's value. >> keep your money in the u.s. stock market. it's going up from here? >> we still think episodic volatility. trends are higher. it doesn't mean that we'll be at new highs by the end of the year. but there's no other place. tina does exist. there is no alternative. >> four years now of emerging markets.

being -- since 2011, we've had a deep underperformance. there are spots that haven't had a massive rally. this includes the sector where we are 65% off. where investment is down 60%. >> you're suggesting this is a scenario to put money in? >> we think so. that is a recovery place. the only big industry in the world that is in recession. that has come off substantially and there are trillions of dollars of asset highly correlated to this. some of the places where yields are high. >> that will move some money. >> episodic volatility. what you're saying is we're going higher but it won't be straight up? >> correct. it's going to -- >> joey never use an adjective in front of volatility in my life. volatility was volatility. this is the first year we're

using a term called episodic. >> who is we? >> our firm. >> you guys came up with this? >> bank of america, merrill lynch. >> i love that. >> in a meeting? >> you're all talking and someone said let's call it -- >> episodic volatility, uh-huh. >> wow. >> yes and no. some of the technological incompetent ovations has changed. is this merrill. >> bank of america, merrill lynch. >> merger, correct. >> we're all one family now, joe. >> you're not really more merrill than bank of america. >> we're both and u.s. trust. >> i'm merrill lynch. >> i'm merrill lynch. i'm very proud of that. definitely the thundering herd. >> you worked at merrill.

>> i did. that's what i'm saying. mother merrill. >> thank you. we're going to talk about your nails during the break. nail polish. >> shimmery. >> all the olympians have cool nail polish. new polls show hillary clinton holding lead over donald trump in key battle states. trump is stepping up coverage of media -- >> put it on afterwards? the first stock index ♪ (musicwas createdughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals.

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welcome back. now to politics. if trump doesn't change his act by labor day, the gop should "write off the nominee as hopeless an focus on salvaging the senate and house and other down ballot races". john harwood joins us from new mexico with more. john? >> reporter: michelle, that editorial captures the mood among republicans right now, which increasingly is what do we do about donald trump? he's trailing nationally, he's trailing in the battleground states and he keeps behaving in ways that cause other republicans, like his running

mate mike pence to act to limit the damage. >> are you the cleanup crew? >> i couldn't be more honored to be campaigning shoulder to shoulder with a man i believe will be the next president of the united states. >> you do have to clean up and explain some of the things he says. >> we have different styles. but as i told that little boy, we have exactly the same convictions. >> donald trump says it's the media's fault, that he stays on message but the media distorts his words. other republicans aren't looking at it that way. they're increasingly concerned about the prospects for holding on to the majority in the senate. here's jeff sessions a close ally of trump. >> it's going to be a battle. we're so exposed. we have three times republican incumbent up as democrats. it's going to be a battle. >> reporter: and the question is that "wall street journal" editorial posed is, do the republicans, the national

committee, the big donors, do they steer money away from trump on the theory that he's a lost cause and put it into senate race toss hold the senate. house races to hold the rye app house majority and do they members on the campaign trail go out and explicitly cast themselves as running to be a check on hillary clinton, which of course would presume that donald trump is not going to win, guys. >> john, the down ballot races and stuff, a lot of the stuff, when you're haeg it from certain people -- hearing it from certain people, it's not new. four months ago we had frato in here. there was no way he was getting on board with trump and i'm worried about the senate and down ballot races. the "wall street journal," the editorial board had the same tune all along. never been on the trump train either. i understand -- that's why you

have to separate out, are these people that used to be fully on board that are now saying this this or people saying it all along? there's a large contingent of mainstream establishment republicans that going back a year and a half have been sort of saying the same tune. whether it's actually -- being away for two weeks, john, it does -- it really is sort of energizing and refreshing. i could look at a twitter feed if i wanted to but i didn't necessarily have to and i didn't have to watch cable. you know what i mean? except for cnbc. >> i know what you mean. >> i only tweeted a couple things. one thing that i did tweet was, the eighth wonder of the modern world. this is a quote that i tweeted. the laser focus coverage of what trump says versus what the clintons do. you think that's an unfair characterization? >> reporter: well, i think that

donald trump is helping to make that a reality by his behavior. people are covering issues involving hillary clinton but donald trump draws so much attention to himself, whether it's by design or accidentally. >> it's not what he's doing. it's what he's saying. we've got really good stuff to look at for what hillary and bill have done. but it's like that cartoon where there's a media scrum around this molehill: all these trump comments and behind him there's three mountains, the clinton global initiative, the e-mails and benghazi. the entire immediamedia is look down. that was my point. is that unfair? >> reporter: look, everybody has a different perspective. if you are inclined to think that the clinton foundation and the behavior of bill and hillary clinton has been shot through with corruption and

self-dealing, then yes, you're saying why isn't this a bigger story? why isn't this disqualifying her? but not enough people feel that way right now to put donald trump in a better position. one thing that i would say about what's different -- you were talking about tony fratto and wall street journals and others not being on the trump train, what we're seeing is the battleground poll numbers have widened in hillary clinton's favor that some republican senators are falling behind who shouldn't be behind by as much as they're behind. kelly ayotte has a deficit in new hampshire. pat toomey is losing at the moment to a democrat who has never run for a major office before. that's a problem. even in north carolina last week, hillary clinton had a nine-point lead. richard burr was down by one point. i think few people expect him to lose that race. but it's a cautionary sign that

republicans have to be careful about how bad this gets at the top. >> there's -- at least watching from afar, there's a perception that when there is an opening for the media to get trump on the run, they're very excited about it. almost a giddy necessary. the journal points it out in its editorial too. that the media didn't want georgew bush, ronald reagan to win. you sort of see t the journal's point is that the other guys didn't make it quite so easy for the media to find blood and get blood. sort of go -- >> he's easy to needle, right? >> they didn't want ronald reagan to be president, they did a really bad job of. >> how about bush? >> how about w.? twice he slipped through somehow. i don't know how that happened. >> the refrps to -- >> although, trump is more

visceral in terms of anti-trump sent mimt meant is worse which i didn't think was possible. >> donald trump, the media hated those guys. they're going to hate a republican candidate. you got to relax and focus on the campaign instead. all right, john. you can't take off any time, can you? everybody needs to take off some time. >> after november 8th. >> where did you go? >> i was at an undisclosed location south of new jersey. actually, to be honest with you, matt kuchar, did you see what he did with the bronze. there's a place down in georgia, frederick a's where he was playing golf down that. sea island. it's the greatest place. always hot. >> what's the best round you shot? >> i never -- it's complicated. because i got -- no. i got the family. we only played kind much lame.

but we play nine holes. the kids take a lesson. my wife and i play nine holes and the kids get done and we leave. it's not a full 18-hole thing. so i broke 90. >> reporter: good. i hope you had fun. >> i only played nine holes. >> anyway, thanks. shot my age a couple of times. really? >> nine holes. >> coming up, a busy week for retail reports. we'll tell you what to expect from lowe's, home depot, walmart and more. first, though, before carl left rio, he gave andrew a few tips on covering the olympics. >> okay. so tell me everything i need to know. >> get as much sleep as you can. you're going to be going full throttle all day. when you think your work is done, you want to see events. that's half the point of being here. >> any tips or tricks, special tv things to know. >> don't lose your security lanyard. you've got yours. >> you've got your comfortable

shoes and enjoy it. it's really a once in a lifetime experience. listen, i'm going to go. >> nothing else? >> i'm going to see -- have fun. >> you're leaving me here? i've never done this before. >> w demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest, borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. digital works for banking and financial services.

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we've been hearing so much about how you're a digital company, so you can see our confusion. ge is an industrial company that actually builds world-changing machines. machines that can also communicate digitally. like robots. did you build that robot? that's not a robot, that's my coworker earl. he builds jet engines with his human hands. what about that robot? that is a vending machine, ricky. john, give him a dollar.

. welcome back to "squawk box" on cnbc. first in business worldwide. u.s. equity futures are finding buyers early on in the morning. not up a lot. we'll see as the session progresses up 28 on the dow. up another three on the s&p. where is the s&p. 2184. we had a lot of my friends that come in here that had that 2100

target. just arguing about that -- 2100 year end. >> what are they going to do now. >> it was 2130 and i was saying well, you know, it's 2130 now. they're saying -- they're tending to the market. they have a 2100 target. you know it is below 2130 now? >> yeah, yeah. >> we're bullish. we're in a bull market. are you going to raise it? >> now we're 2185. >> we'll see whether anyone changes that. because i -- maybe it will be 21 by the end of the year. >> episodic volatility. >> episodic volatility, it could. >> i'm going to start using that sniel i know. it's like the new normal now. it's a catch phrase. >> you got to go around corners. a lot of the economies, there's multispeed economies around the world >> there's so much uncertainty. >> moamong the stories we're

watching, google is considering the rollout -- not as easy as you thought, was it? >> cable. >> taking up the ground. we're going to -- going from town to town. >> put comcast out of business. okay. alphabet google fiber unit needs to rethink it's delivery after initial rollouts in los angeles, chicago and dallas prove more tie consuming and expensive than originally anticipated. >> we weren't joking. digging up the ground and laying cable. it's a pain in the tush. >> you play it well. >> time now for your executive edge. big names in retail reporting. home depot, lowe's, target, walmart among them. here's a look at what to expect. matt mcclintock. good to have you here. we talked -- what's up with

target? >> target has -- >> trouble, right? >> i was reading that they can't sell meat anymore. women show up, they don't buy the combustibles or whatever they're called. >> i think some of the problems are more related to amazon and e-commerce and getting traffic to the store. people don't have a reason to go into a big box location to have to find parking, to have to go into the back of the store and have to walk to the front of the store and check out and stand in the line. it's not convenient, right? as the consumer shifts more online and focuses more on amazon, there's fewer and fewer trips target is getting. >> why would i buy any major retailer? >> there are some that have a natural traffic driver. that's grocery. if you need to go and buy grocery, you need to stock up every week, every two weeks, you have to go to a walmart, right? that's where walmart can actually then take that trip and convert you into general merchandise sales, too. target doesn't have that.

it's not a destination for grocery. >> they do sell grocery it is a large part of their revenue. but there's weakness there. why is that? >> roughly 20% of the store is grocery. but they don't have the full grocery assortment that you will get at a kroger or walmart. it's a i happen to be in target, i'm buying a basketball. i need eggs, i'll pick them up at target. to convert that and hak them a loyal stock-up shopper in grocery, target has to steal that business from kroger or walmart. that's a really tough task. they're making efforts and buying more perishables. so is walmart and costco. >> you have it weighted underweight and a target of 65. joe, that works. right? >> you think it's going to 65. >> i do. >> the only overweight you have is home depot. >> home depot is in what i would

call a sweet spot right now. housing prices are accelerating. people are paying more. they're selling their houses. housing is worth more. as a result, they're happy to invest in their home. as a result, they're going and hiring pros to fix up their home to sell it for a higher price. >> why do you have a neutral and -- i would think they would both benefit from all the trends you talked about. >> they both do. historically, home depot is in a better position with the pro. they made a change six months where they extended more credit to pro customers. the pro who shops there does not have to pay home depot back 60 days after they purchase something. that's working capital. free working capital that people who don't have that money to sit on their credit card can then go and do more and more work. that's a very unique competitive advantage. >> financing itself in a key driver. this is the year, though, right, that retail has -- it finally

happened, right? we thought this time was coming that the retail paradigm has completely changed and it's never coming back the way it was, does it? >> i think that the death of retail is generally overstated. retailers don't die quickly, right? i think that's what we've seen last week with the department stores and the response. the market going up. macy's was up. kohl's up 17% on earnings. i think a lot of people overstate the downside. these retailers are still relevant. it's not like people wake up tomorrow and say i'm only going to shop at amazon. the consumer doesn't change happens quickly. it takes time on the margin. the retailers that are able to create compelling reasons to come into their store such as walmart with grocery and other retailers. they're noft out of the game. it's the other retailers who have a steal business model from the '90s. you're probably going to see worse and worst results over

time. >> matt mcclintock. thanks for joining us. >> we'll go to andrew in rio. we'll find out. okay, guys. the u.s. swim team seemingly unstoppable. i sat down with katie ledecky to ask her that question. we'll show you that in a little bit. first, they flip and they flop. they go off the shelves here in olympic park. that's when we come back in a moment. 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. understood, brake bias back 2 clicks. giving them the agility to have speed & precision.

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it's week it of the olympic games and andrew ross sorkin made his way to rio. andrew. >> reporter: thanks. big business with more than half a million visitors coming to rio. you may ask how much they're spending and how many are here? what's going on, it's probably no surprise. according to visa, the majority of travelers are coming from the caribbean and latin america. 30% from europe. if you can believe this one, 15% from north america.

visa says that tourists during the olympic games have spent twice as much per visit than regular tourists during the london summer games. u.s. visitors spent nearly $175 million, joseph, talking about inequality. the french $125 million. the australians nearly $50 million. you might be asking yourself what they're buying here. a lot of half ana flipflops. they may be trading in running shoes forefoot wear made here. the brand synonymous with them was born right here in brazil. halfiaanss. the brand has grown to a global footwear powerhouse. >> they don't say i'm wearing

flipflops. >> the north american director for the flipflops. >> for the past decade, got to learn the brand and took a pair home. we grew organically, internationally. >> since 1962, 3.5 billion pairs of the flipflops have been sold around the world in a combination of 500 company owned and licensed stores. that's 220 million pairs a year. >> we produce about eight pairs per second. >> that's an olympic pace which may continue as the rio games bring more attention to the made in brazil brand. >> guys, in a little footnote, get the noek, these are my feet right now. if you want, i can bring you guys -- here. a pair, if you want. these are the official ones guys. they have olympic ones in the mega store here. send me your shoe size. if they haven't sold out, i can pick up one or you can get

flipflops for politicians given the flipflopping. >> sore skin, sorkin. >> i'm trying. >> i know you watch the night of. seeing your feet, do i need to see your feet after seeing john turturro's feet? >> look at these pretty feet. there are people who like feet. >> i know. that's why you shouldn't do that. >> what's the problem? >> my feet have been massaged on television. >> i remember unfortunately. >> that ceo went bankrupt unfortunately for him. >> the thing is, here's the thing, andrew. with every fetish, there's like two to tango, there's people that like to look at feet and people that like to show off your feet. you are like weird. you're the other side of the sick fetish. >> do not want me to show the feet. i said this is a visual medium.

>> jublia. >> some swimmers -- >> very olympic. >> what's your size, joseph? >> depends on whether they run big or small. like an 11. all right. you got bigger feet than me, fine. >> will has bigger feet than me. >> he's a strapper. >> come in here bragging about your feet. >> i know what it means. it means you wear big socks, big deal. >> i've been on for ten minutes, got a free pair of shoes. ionic security is a startup for companies protecting itself against hackers. amazon, the founder of that company and the ceo, he joins us next.

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welcome back to "squawk box." amazon and goldman sachs putting big money behind startup that aim to protect companies from snoops. cyber security platform ionic security raising capital funding. the company also striking a deal to integrate data protection into amazon web services cloud framework. joining us now the founder and ceo. thanks for joining us. >> good morning. >> this the headline of this. instead of securing devices, you aim to secure the data itself.

what does that mean? >> what that means basically is that when your device is secure, that's great, so long as all the information stays on the device. i don't know how many apps you have on your phone but i have a lot. they take that and send it somewhere else. once the data leaves, they have no future role in the security of that data. ionic makes it secure regardless of where it goes. >> a company missing a trick if not securing data themselves. >> absolutely. we are living in a world that's never been more connected, distributed. if you're focused on the infrastructure you control you're behind the times. >> at goldman sachs mentioned recent investors. they were one of your clients. they are now one of your investors. is that a sort of trend you're saying, that kind of thing? >> a lot of longtime customers have been bullish on the concept of data centric security and they decided to put the money behind that not just use the

product to help the company be secure. >> what's your relationship with the u.s. government if they would come to apple and demand information. what do you do? >> best case scenario, we can tell them where the keys are but we have no access to them our selves. >> i don't understand what that means. >> to protect data you use encryption. there's been a lot of talk about encryption. we help companies that protect data with our platform generate those keys but we never are in possession of those keys. when the government comes to us i can say goldman sachs has keys to that data you're looking for, you should go talk to them fl there's nothing we can technically do to give access to keys. >> you don't know how to unlock those keys. >> that's correct and we can prove that. >> in the past you've been critical of facebook saying it's too open with the way it uses people's data. is that true? still a point of view you have? >> i'm critical of any application that takes my data and does things with it that are not transparent. facebook over the years that

been kind of in the position of taking information and distributing it much further than you are kind of aware of at the moment you initially share it. oftentimes you'll upload a for the oor the -- photo and a friend of a friend of a friend comments. >> that's worth a lot of money -- that's worth something to me that i'm not being compensated for on facebook. they don't pay anything for that they garner all that without expenses. >> they have expenses. >> i don't see -- the person the information is about doesn't see recompen recompense. >> something has to be done or stay off facebook. >> it started as individual technology i built for myself and friends. it was designed to disintermediate ability of facebook to do things with my data unless i specifically say yes. we do it today for companies.

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summertime surge. markets hitting record highs and crude rallying on speculation of a supply freeze. we'll get you ready for the week ahead on wall street. >> the great trade debate. companies gearing up for deal that could affect global business. david will join us on his take. first on cnbc. >> andrew taking carl's place at the olympics in rio. have fun. >> carl, you can't leave me here. it's only day -- are you out there? carl? come on, carl? anyone know where carl is? carl! carl! >> live from rio, "squawk box"

begins right now. >> announcer: live from beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" on cnbc first in business worldwide. i'm joe kernen with michelle caruso-cabrera and wilford frost. you were embarrassed what i said, it was snarky. >> i'm not saying i agreed but i laughed. >> what did you say? >> just a moment. talking about the futures this hour. they have improved with the presence of mr. frost here. up 31, 3153, s&p up 360, nasdaq

over 10. oil prices strong in some perverse way support equity prices. in recent months hasn't been that way. i really don't see why it should. we didn't welcome you. you came early. >> i kind of just slipped in. the viewers might have been confused. >> you were supposed to be here at 7:00. i congratulated you earlier on justin rose. >> andy murray. >> he wanted to win that. he said he wanted to win that even before he went. it was so great watching. you see the chip on 18? >> i did. >> ended up winning by two shots. >> but simpson had to try and make that put. kuchar almost could have gotten there. >> he was very emotional. >> it is the olympics. so -- andy murray. those two great things. >> farrah. >> brexit.

you're on a roll. >> you're doing great. >> you're on a roll. these are all great things. >> joe, brexit was in june. >> starting the momentum towards this. yes. >> i'm not sure if that's quite the link but we'll take it. we'll certainly take the perform arena ance. double gold. cycling. >> others in olympics besides united states. >> there are. >> she's upset that cricket is not in it. the brits wanted tennis and golf but got to be wearing white and be ougn the lawn outside the summer house. why not cricket? why not cricket. >> it's definitely a sport but should not be an olympic sport. neither should soccer. i don't think tennis or golf should be but we'll take what we

got. >> in the headlines this morning, a multi-billion dollar real estate deal has been struck this morning. maa, this is real estate investment truck specializing in apartments. it's buying rival apartment reit. focused in sunbelt states. post shareholders will get $0.10 of maa share for each share they own now. heavy trading in apartment deal. pentagon cleared boeing's kc-46 for production. key mile tonight for boeing program which experienced a series of delays. that's an understatement. we're talking decades. it was originally expected to be approved last year. suicide squad topped box office, $45.8 billion in ticket sales. box office did see prices drop two-thirds since debut weekend but still enough to keep number one spot. animated "sausage party" came in

second. jane wells did stories about "sausage party" last week. who else. >> let's head back to rio. andrew sorkin there covering the break we got to see what he was wearing on his feet. now, which item of clothing. >> i'm done on clothing today, guys. if you want to go back to the feet, we can show you feet a little bit later. there are serb viewers w-- certain viewers into that. we'll show you tape. a number of remarkable races. the biggest one last night. usain bolt still the fastest man in the world. he won the 100 meter for third straight olympics edging out the american by just .08 seconds. beating his chest before the race was over and going into the signature pose where he goes into the archer thing like he's shooting a bolt of lightning in the sky like it was all over. then we should talk a little basketball. team usa basketball closed

preliminary round undefeated thanks to win over france. it wasn't so easy. carmelo anthony spoke after the game. >> i think defensively we just got back to our principles, stuck to our principles, talk and communicating, trusting one another on the defensive end. offense, we're not worried about that. we got to trusting one another and playing fun, having fun on the basketball court. >> went 100-97. check this out. this is from will, andy murray winning gold for second straight games. he's the first person to win two olympic gold medals in singles. happily we'll be seeing him in new york at the u.s. open which begins in a couple weeks. there's the medal count, u.s. at 26 gold medals, china and britain both tied viewing at 15 together guys. we'll have a lot more including an interview with katie ledecky later this hour.

joe. >> all right, andrew. are you going to be there? when is your flight back? >> you want me back that soon? you miss me that much? >> it's two weeks. weren't you gone -- >> i know. >> we have not -- i'll be okay but i miss you a little bit. when are you going to be back? >> i'll see you in a week but i'll see you a lot more over the next couple of days. >> it's like we're together. >> we can e-mail. call. that kind of thing. >> carl blew you off. where did he have to go so quickly. >> on his way to the airport. >> okay. all right. >> a lot of traffic around there. >> okay. because there was a camera -- he treated you that way with the camera on him. what if the camera hadn't been on him? very brusk. >> i know. our attempt at humor. >> is that what it was. it was supposed to be funny.

>> supposed to be funny. >> totally misinterpret thad. thanks, andrew. >> see you in a little bit. >> among today's top political stories "wall street journal" says if donald trump doesn't change his act by labor day, the gop should, in the journal's words, write off the nominee as hopeless and focus on salvaging a senate and house and other down ballot races. donald trump campaigned in ohio while hillary clinton will appear in pennsylvania with vice president joe biden. >> now to the markets, nasdaq on its longest weekly streak since 2012. with us chief market analyst and cnbc contributor, good to have you here. >> thanks, michelle. >> i know you're a big skeptic of stimulus in the world and central banks of the world and all their intervention but in the face of that, what else do you do but buy u.s. stocks? that means to be the answer considering where yields are.

>> economic fundamentals in rearview mirror in terms of stock funnel fundamentals and interest. bond and jgb. >> japanese government bonds. >> there's signs over the past couple of weeks that people realizing negative interest rays and the amount of bonds they can buy. there is a story in this review that the bank of japan is doing that maybe they might even backtrack from negative interest rates. so when people go to sleep at night and wake up, they should be looking at jgb yields. that's a potential canary. >> if those go up, all the others could go up as well which could make stocks less compelling in terms of gdp strength in the united states. >> clear every equity investor staring at interest rates. not looking at economic data,

five quarters in a row of earnings declines, looking at interest rates and using that as an excuse to buy stocks. therefore everyone should be focused on interest rates. japanese bond market from what we've seen over the last couple of weeks is the most important global market we should be watching. >> more than gobble rates. they have brought down global rates in the last few weeks. >> post brexit plunge in interest rates then obviously facilitated by what bank of england did. just over the past month we've seen japanese interest rates go up. we've seen central banks who want to depress their currency, seen the reverse new zealand, reserve bank cut interest rates, going up. continued signs of central banks losing control of things they want to direct. i think that's what we should be focused on. >> if they in theory throw up their hands and cry uncle and stop this what has been monumental policy experiment, that could be -- we've been asking for years, how does this all end and what makes it turn.

when does the moment come? in theory we're getting there in your opinion. >> after japanese went to negative interest rates. >> i know exactly what you were going to say. when they went to negative interest rates, the currency went up. it was crazy. >> japanese banks are getting killed. european banks, that index is down 50%. how do you have a healthy economy when banks are under stress. >> japan getting worse? that has a big effect on u.s. >> our buy market correlated to european buy market correlated to jgb. even when ten-year japanese jgb went from minus 29 basis points to 5 basis points in just a week, we saw uptick in european interest rates. we're all in the same bed together. >> we're going to let you go but everybody look at your screen. peter saying that move, which is pretty substantial in the right-hand side of the screen

could be the harbinger of the turn that happens in interest rates, which would be meaningful for stock based on the idea there is no alternative. thanks, peter. >> might be a good idea to wait until it's a positive interest rate. >> got to get to zero first. >> it's -- >> we went from minus 29 to minus 5 in three trading days. >> all right. >> i'm just saying we have to keep our eye on it, that's all. >> still to come on "squawk box," donald trump laying out his plan for the economy. we'll talk to one of the members of his leadership council. you're watching cnbc first in business worldwide. 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.

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futures pointing high. dow caught up by 30 points. a trifecta of new record highs last week on thursday. for the week as a whole, performance relatively muted. flat for dow and s&p up a quarter of a percent. >> donald trump and hillary clinton laying out their respective economic plans with fierce criticism of each other's ideas. joining us now john mcnabb, a member of trump leadership council of business advisers and director of independent oil company continental resources. good to see you. it's a little bit strange. i was reading, looked at the summary, a behrens piece, confer

piece. >> hillary's world. >> the markets are comfortable with hillary because she's such a moderate the way she's going to eventually lead. i recounted a commercial that i see that she's running on how she's going to create jobs. she's going to take everybody at the top, including corporations and individuals at a certain level that have not been -- it says on the commercials they have not been paying their fair share. so she's doing to make them pay their fair share and take all that money that she raises and she's going to create millions of jobs. so she's going to take the money from corporations, then the government is going to create millions of jobs and everything is going to be great. i don't know why people can't point to how fallacious that entire argument is and why trump, he should not be talking about the media maybe, not be talking about some of this other stuff and ought to be pointing directly to that. >> absolutely, joe. first of all, shovel ready jobs

we know about those. it didn't work. >> a trillion dollars. >> exactly. the way you do that, and if you think about what hillary is going to do, she's going to raise taxes. we already have the highest corporate taxes in the world. and about a trillion dollars worth of regulations right now saw $740 billion that's probably low, 20 per family in the u.s. you think about the obama record and what i'm hearing from dnc, more of the same. >> i guess their point is don't really believe what she's saying, she's going to govern like her husband. that's what people are saying. even republicans raising the white flag saying i give up here, it's inevitable here, they think she's going to be a centrist -- i saw progressives are worried now they are going to be betrayed.

they are worried -- >> according to republicans how dare she. >> she's going to actually govern from the center. but i don't -- >> there's no evidence of that at this point new york city. >> i think what you think is in centralized planning like the soviet union, and actually with china today, they do create jobs because the party runs the country in china. so they actually do that. in this country we don't -- governments don't create jobs. a government can create more beaurocracy. that's the only way they create jobs. >> don't you need to pay for the salary of the people that the government creates? don't you need private sector jobs? then you need taxes -- they need to pay taxes on what they earn in the private sector to support government jobs. >> absolutely. so what i think about that is it's kind of funny, the job creation engine in america has always been small business. it always has been. right now that's not happening.

i ran a bunch of small businesses, started a bunch of companies. and so with dodd/frank, i don't want to get into that, but i will talk about dodd/frank and regulations because both of those create a negative impact on small business. >> you advise donald trump, right? >> sure do. >> do you think that he could be talking about -- i mean, supreme court, that's in the back of everybody's mind, republican as well. you've already got that. don't you think if he would stick -- i think people want to secure southern borders. i don't think you have to be considered anti-immigration to want to secure our border. >> absolutely. >> if he was just focusing on that and cutting corporate taxes and getting rid of a lot of regulations and stifling small business, do you think that would help? >> absolutely. >> tell them to do that? >> we have done that.

>> are you frustrated? we read in the paper close supporters are frustrated about his inability to stay on message. people like you have told him this and he doesn't listen. >> he's talking to people that we don't talk to all the time. i think he's waking up america. i actually believe that. i think he's waking up america. the people who aren't getting polled, i was in percentage where i grew up, and the state is not in very good shape because of what's happened with coal. peel are scared. people are worried. >> a way to harness that plain speaking, he's very blunt about things, there's a way to harness that to show what we need to do to get america back to work in terms of all these reforms for the last eight years, in terms of the private sector. if he was just as outspoken, maybe some of these going after individual entities that he's mad about for some reason. >> the media. >> the media, he's running

against hillary in the media. >> he told the show he wasn't concerned about the polls. do you think he should be concerned that? >> i think he should. i'm not sure how valid the polls are. look at brexit, seven points up, not going to happen, lead by three, a ten-point switch. "l. a. times" poll in july hillary clinton was ahead for one day. one day. so now what is it august -- what's the date, august 15th. >> a long way to go. >> things change very quickly. but hillary is such a flawed candidate in so many different ways. >> absolutely. >> it's his to lose. >> i agree with that. >> not now. >> hers to lose. >> originally as a candidate before we knew who the republican gop nominee was going to be, it was that person's to lose because she was so

vulnerable. >> done studies you've had eight years of one party, 0% think it's the wrong direction, for anyone who has a a '66% chance to win. >> they are each other's perfect opposition. if you think about donald trump he's not a political speak kind of person. he's a business guy, business guy or gal, whatever, but everybody speaks that language. i do. i'm a little sarcastic. i can get that way. >> i know. >> that's part of who he is. he's not trained in political speak like the other candidate is. >> right. that appealed in the primary. >> that's right. >> john, thank you. >> coming up, an $800,000 piece of graffiti for your wrist. >> uh-huh. >> we're going to show it to you next. first on cnbc interview with ceo david abney, great trade debate. "squawk box" will be right back.

luxury watch spri slowdown in sales, one company seeing record sales. robert frank jones us with this

story. >> that's not a luxury watch. awful looking thing on her -- >> that is not why. >> the englishman is wearing the luxury watch of course. >> the reason why it's largely china and swiss watch sales down 16% in june largely weakness in asia but maker of world's most expensive watches they can't keep up with demand including for its piece of graffiti watch. makes the most expensive watches in the world with average sale price of $185,000. the newest model marks a new extrema piece of graffiti for your wrist for $800,000. called rm-6801, a collaboration with french street artist. instead of tagging trains and walls with spray cans, he used tiny air brushes to cover each

part of the watch. >> he goes around the streets, hits advance, bridges, big illegal art. >> exactly. >> he's making only 30 of the watches and they are already sold out. while the luxury watch industry is slowing, he can't keep up with demand. >> we can't satisfy everybody. the watch business is very much turned into volume. people are obsessed by volume. i'm not. >> they make only 3200 watches a year. that compares with rolex and some of these other companies that are making hundreds of thousands. so this big question for luxury companies, whether it's ferrari, do you go exclusive or mass this. company is showing the smaller the production, the higher the qal, the more successful you'll be. but they are really only a couple of companies in the high-end of the watch business that are growing. >> when you increase the price

and demand goes up. >> yes. a lot of these companies, the big question is do you go small and toward the high or mass. this just shows -- >> i don't understand why some make the mistake of being more ubiquitous. the minute you're more ubiquitous nobody wants you anymore. >> the temptation is to monetize. you do make a lot of money an a lot of volume for a short period of time and then it's over. >> then you're in the discount rack of t.j.maxx. >> you see my members only jacket i still wear. >> pierre cardin edition. >> what i love, he's a french entrepreneur. >> not france, that's what happens -- >> he lives in france but his company in switzerland. >> thank you, robert. >> thank you, guys. >> the great trade debate. ceos in high alert. a new agreement could impact local businesses. david abney is going to make the case for free trade next.

first let's head back to rio for a look at what andrew has coming up on "squawk box." andrew. >> thank you, michelle. olympic gold medalist katie ledecky on fire in the pool in rio. i sat down with stanford bound swimmer. we have that interview coming up right here on "squawk box" when we return. ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...)

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

welcome back to "squawk box." stories front and center a fresh read on the housing market. national association out with august read 10:00 a.m. eastern time. expect it to increase slightly from july. twitter said to be speaking with apple about bringing twitter app to apple tv. it would allow nfl games to be streamed by twitter. in a market where speed is usually the essence, nasdaq seeking to slow things down, plans to seek s.e.c. approval of new option of function that says would give traders better chance of having trade fulfilled.

users would have orders prioritized if they agree to not cancel for approximately one second. the idea to let investors avoid high-speed trader who often cancel dozens of orders for every trade they actually make. there we go. >> i've gotten you to speak american before. >> you have. >> you can do it. he can. this is all -- >> he can, just like -- he won't do it. but twitter was meant to be said american. say it to me one more time. >> english? twitter. >> as opposed to. >> twitter. >> what i got the whole time was water, a glass of water. got a laugh for me. >> that's why you're in good shape. just to enunciate like that, i think your core, it's unbelievab unbelievable. anyway, what do you buy for your car in case you get in a wreck.

>> insurance. >> insurance. >> what did i say. >> insurance. be accurate. talk like me. great. >> i say soccer now which i get a lot of grief for. >> what did you use to say. >> football obviously. >> yeah. >> you have received pronunciation, right? rp. >> i don't know what that is, no. i just speak how i speak. >> mom is spelled with a u. >> exactly. >> i'm learning a lot. a lot is rubbish what we're talking about. >> garbage. >> the great. >> waiting so patiently, aren't you? it's fun, though. isn't he classic? the great trade debates heating up on the campaign trail. trans-pacific partnership could impact the way global companies do global business. morgan brennan joins us now with more. she speaks pretty good darn good

american. >> so do you all. >> we all do. >> is that an accomplishment? >> yes. >> okay. i'm american. all right. this is one issue that both presidential candidates agree pob. this is trans parveg partnership. both donald trump and hillary clinton, despite helping negotiate it oppose tpp. the massive trade agreement which still needs to clear congress has become a lightning rod owned trade and globalization has eroded jobs and manufacturing in general. one company is urging lawmakers to pass this, ups, the 12 country pact would reduce 18,000 taxes and tariffs and establish needed guidelines for cross-border ecommerce and quote, unquote, digital trade. open borders means more business for companies shipping more goods across them. ups argues historically with past trade agreements that has boosted u.s. exports within its shipping network and led to

stateside hires. last quarter international segment grew fastest. operating profit up 11% in that division. sixth straight quarter of double digit gains and daily volumes jumped 4%. ups has a lot to say. >> it does, indeed. stick around joining us now david abney, ceo of ups. ups is sponsoring a trade event in atlanta today. david, thanks very much for joining us. very good morning to you. we just heard from morgan you expect tpp to increase exports specifically by how much? >> we expect exports to be increased by tpp similar to what we've seen in previous agreements. in those agreements we've seen exports increase by 20% on average and there's nothing to make us believe that this would be any different. >> david, what's the main driver for that, particularly for ups.

it's related to red tape of customs until we get these types of agreement in place? >> it's a combination of things. it reduces tariffs. it certainly cuts out a lot of red tape, delays in customs borders, which no one wins when you have those delays and it opens up markets to u.s. companies, especially those small and mid-sized companies that have a great difficulty exporting under today's complicated process. >> david, it's morgan. it's great to speak with you again. >> hi, morgan. >> hi. the way this election cycle is shaking out, it looks like tpp has the best chance clearing congress lame duck section after election. if that doesn't happen, what does that mean for ups's business moving forward. how much have you factored in passing of tpp for your business

and in future quarters. >> we have not factored in additional volume due specifically to tpp but we see we have a real opportunity right now. the administration is pushing this. it's made it a priority. they, in fact, gave the 30-day notice of intent to act just last week. so now we believe there's a good opportunity between now and the end of the year. there's a lot of support for tpp, a lot of support for trade. it may not be just as vocal as what you hear from some other sources. >> david, it's michelle here. the election has made clear while everyone agrees free trade can be very beneficial and may ultimately add at the macrolevel to jobs in the united states, we've discovered through the election that there are losers from free trade who have not

seen wages rise in morne a decade. some key jobs left the country. compared to past situations they haven't been able to find new jobs or better jobs. some are making the same amount of money they have inflation adjusted debates that they were 20 years ago. how do we solve that? what do we do about that? that is why free trade is in the cross-hairs. >> well, let me make two points about that. first, there's a lot of reasons why jobs have gone away and income has been tempered down a little bit. trade is one of the sources that gets blamed but you have automation. you have all kinds of process improvements, productivity improvements. i think trade just gets thrown in the middle. all of our research, and we think we have a pretty good perspective, and when you look at other sources of information

such as pew center of research, it also shows that trade is good for the american worker and we believe that. we believe it will create more jobs. but that being said, we know some people do get displaced. we do not take that lightly. we're in full support of training program both public and private to help these employees be prepared for 21st century jobs, which are a little different than the jobs prior to this global economy we're living in today. >> the focus for you today is tpp. there's been a lot of criticism about nafta as well with both candidates saying they could potentially revise that agreement. obviously we have the brexit situation and new trade paths that can get renegotiated on that continent. how much of an impact could some of these other agreements have on ups as a business as well in light of the fact we're seeing such overall criticism and

changes in the global trade perspective? >> well, trade is working well for us. nafta has certainly worked well. it's increased trade between us and canada and mexico. i think the key point for tpp, though, it was designed for 21st century trading, and there is a chapter that's devoted just to small and mid-sized businesses that's never been in any other trade agreement. there's a chapter that focuses on ecommerce. ecommerce was really not the force it is today when nafta and others were created. there's more labor productions, more health and safety protections. this is a much improved agreement that would like to really give my recognition to the u.s. tr and their group, because they have negotiated with 11 other countries a good agreement here.

we think we'll benefit both employees and companies. >> david, i want to switch gears here for a moment. there's been a lot of focus on amazon. we've talked about this before building out its transportation and logistics infrastructure. there was the article in the "new york times" just last week noting that amazon is looking to do that to supplement its package delivery as volumes increase, continue to work with companies like yours, like ups and others. but drone delivery has been a big focus. amazon has been getting all the attention there but you're looking into drone delivery as well. >> yes, we are. first i'll just talk about amazon. very good customer of ours. we think we have a mutually beneficial relationship and we continue to build upon that. talking about drones, drones autonomous vehicles, automation, any of the technology changes that are just rapidly being

developed, we have a team. we're focused on making sure that we take advantage of those opportunities. here with drones we are right in the middle of a test with the vaccine alliance and zip line, a california company. we're actually going to be deploying drones to deliver in remote areas in rwanda and we're in the middle of starting that process right now. so we're very excited, and we think it has a lot of potential for us. >> david, thank you very much for joining us this morning. much appreciated. morgan, also, many thanks. >> coming up, another big night at olympics. andrew ross sorkin with all the action in rio. andrew, what have you got coming up? >> when we come back, we caught up with world record holder katie ledecky. she's going to join us after this break. in the 8:00 hour, you don't want to miss this, official

timekeeper is omega, since 19 2. the ceo will join us talk about brexit, europe, fancy and expensive watches and a lot more when we come back from rio in just a moment.

. welcome back to "squawk box" live here in rio. the men and women's u.s. swim team they have taken on combined 33 medals in rio, 16 of them gold, dominating across the board. one of the very key players katie ledecky who will soon be headed to stanford. >> it's been an incredible journey. you know, it's every day hard work and dedication that has paid off for this week of competing at the olympics. >> what is it about u.s. swimmer that have allowed this team, and you specifically, to excel in ways that are clearly so far above and far beyond everybody else? >> i think we all have a unique bond with each other. no other team has that same type of bond. we are all supporting each other. we are all having fun together and feeding off of each other's

energy. >> do you ever say to your self in the past 24 hours, maybe i should go pro? >> no. i haven't thought about it at all because i'm really excited to go to stanford and compete on a really elite college swim team and have those teammates to also be my classmates. i think that's doing to be a special couple of years at stanford. >> have you gotten calls from agents, sponsors, managers, an e-mail from anybody? >> no, because i can't and i don't want to talk to them. under ncaa rules that's not really allowed. it's understood this is what i'm doing and i'm enjoying what i'm doing. >> do you have to now think about your self as a brand? >> no. i'm not professional right now. i've been amateur. >> even long-term. i'm not talking about a brand in terms of being a professional today but when you look at michael phelps and the iconic status you are now at globally

people are talking about you, it's unbelievable, do you have to think about your self different than you did 24 hours ago? >> no, i'm katie. i don't have to be anyone different than myself. >> how do you set a goal? >> take time off, refocus, get that excitement back. >> do you think you say to your self we're going to go after this thing next? >> sure. i'm going to set some really big goals again. i'm not going to stop until i reach those. >> i've got to tell you guys, she says she's an amateur but she is a pro. not only does she know the rules, when i asked that question she was down and knew exactly what to say. she has become a brand whether she likes it or not. i'll tell you when she walked into the studio, guys, i don't know if we've had him on the air her uncle is john ledecky. he brought american apparel public. i don't know if you remember him, u.s. postal service owns the islanders now, bought it

from charles wang if you remember him from ca years and years ago. so a terrific time. >> also founder of u.s. office products. he used to be on cnbc all the time back then, john ledecky. >> exactly. it was pretty extraordinary to spend some time with a world champion. we have some music coming on so i don't know if you can hear that? >> andrew, was there an element of star struck-ness there, her meeting you. >> i can't hear what you're saying honestly. >> her meeting you. >> did she even know who he was. >> no. though we did have a couple athletes who claimed to be billions fans. i did walk into a couple of rooms and either the athletes themselves or the managers came over and had questions about bobby axelrod, which was kind of fun. >> i was going to ask questions about her, watching that, when

you meet in person, watching her domination and meeting her in person, i think there's a bit of star struck-ness. >> yes, she's amazing. >> the other thing, andrew is, in addition to obviously being innately having something different, they have to get up in the morning and jump in that cold pool and swim for like six hours. i've tried to swim in the past, a mile or something, to get up and do that every morning to get to that level takes a lot of commitment and drive and everything else. >> pretty extraordinary. and giving up millions of dollars. if you think of what michael phelps has gone on to do professionally, by going to school she is giving that up. i do imagine we will see her in tokyo in 2020 and beyond. she will be a pro if she isn't already. >> great stuff, andrew. thank you. see you next hour. coming up, today's top stories including update on deadly floods in louisiana.

"squawk box" will be right back.

we're following developing story out of jfk airport. multiple emergency agencies in response to a report around 9:30

last night that shots were fired. i don't know if it's developing at this point. i think we know at this point there were no shots fired. that was determined by authorities after they arrived on the scene. nypd declaring on twitter all terminals searched and cleared, no shots fired according to reports. officials now believe the woman who initially reported the shooting misinterpreted clapping and banging from people watching olympic games as shots being fired. >> that was usain bolt, i'm sure, about 9:30. about right. protest over police shooting in milwaukee turning violent overnight one fire started not far from bp gas station set ablaze in the first night of protest. demonstrators gathered several times over the course of the weekend. this comes after officers killed 23-year-old who fled a police traffic stop on foot. last night protesters threw objects at police. milwaukee police reported several rounds of gunfire. at least one person shot.

national guard had been activated earlier yesterday but they were not called in to engage protesters overnight. >> in other national news deadly flooding in louisiana this weekend. the federal government has declared a major disaster for the state. officials more than 20,000 people have been rescued from their homes or vehicles. more than 10,000 people are staying in emergency shelters. four deaths are being blamed on the flooding. officials are warning people to stay inside and not to go sightseeing. when we return, we get you ready for a new week of trading on wall street. citi's global head of managed investments will join us for the full hour. "squawk box" will be right back.

xxxx going for gold. andrew in rio with action. >> live from rio. the final hour of "squawk box" begins right now.

>> first in business worldwide i'm joe kernen, michelle caruso-cabrera. andrew sorkin will join us from rio. futures this hour up for most of the morning, 34 points above fair values. you can see implied open at least. s&p up 4 and nasdaq indicated up 10. a rally last week in oil. that helped give positive sentiment to equity markets globally and oil while it's down today it is just under $45. >> let's get to rio. no loss of steam there. andrew sorkin covering that for us. andrew. >> reporter: what a weekend it's

been. some background music. the people from rio pumped that in. that's nice to sort of lay a bed under what we're talking about. of course it was an amazing weekend. usain bolt winning last night. we got to see michael phelps in person, quite extraordinary as well. his last race winning as well, obviously katie ledecky before. i'll tell you what was really fun, talking to some of these athletes and talking to them specifically about what they plan to do afterwards. we caught up with gold medalist michelle carter track and field star, won for shot put. her father in 1984 won a silver. she has some pretty ambitious plans for life after the olympics. take a listen. >> i always thought about having my own product line. i always thought about having a salon. i have a great salon idea i'm thinking about going forward with. i think this will definitely help moving forward some ideas i

have. >> another entrepreneur there. some other careers after the olympics. we decided to see what sport olympic athletes would play if they didn't compete in their current. part of a segment "ask the athlete." ♪ ♪ >> i think golf. it just looks -- it's a very skilled sport, i guess -- coming from swimming, it doesn't look too physically challenging to us. i think as a swimmer that's very appealing. >> to rugby. after watching rugby the last couple of days i'd like to try it. i'd like to try it now even though i am an olympian in wrestling. not too many people have gone to olympics in two sports in the same games. maybe i can do it in 2020. >> if i wasn't swimming i'd love to play baseball. i played hoops grog up, big bulls fan. >> i've never played tennis in my life but i think i would be a

good tennis player. i'd like to play tennis. >> if i wasn't a fencer, i'd like to play soccer or tennis. also, the uniforms are cool. >> i claim a little tae kwon do myself this afternoon. if i wasn't doing this, maybe that's what i'd be doing. >> andrew, they have a commercial with lindsay vonn talking about this exactly, where she's trying to do summer olympics. she's no better than the rest of us doing these summer olympic things, but she's such a great -- i took this a step further thinking about the balance beam, because most of the great gymnasts are not that tall like simone. it seems i'd like to be shorter if i was trying to do that. think if the volleyball people were on the balance beam, it would be a disaster. some of those ladies on the chinese team, they are like 6'5".

on the balance beam it would be like disaster. i thought about it, and it just -- i got nervous thinking about the number of broken boebs. >> there are certain body types for certain sports for sure. >> me on the balance beam would be disaster. >> yes, you on the balance beam. >> uneven bars you could reach. >> where it hits other people in the waist. >> anything gymnastics related would be the end for me i think. >> not even the rings. >> you've got to be pretty strong for that. >> that's why you get the gold medal. the things they can do. >> golf. >> no, not golf. >> golf. >> no, psychologically -- >> ping-pong. >> i can't believe people can run four-minute miles. i also can't understand why we can't tell how fast they are going watching the ladies yesterday in the 1500 meter, whatever it was. they look like they are just

sort of cruising. you could not possibly go 100 yards. >> the track for me is the most exciting to watch. >> it's all great. >> it's all great but you have to have a favorite. >> i like winter and summer. i can't pickets. i guess i like it all. >> you like it all. >> great to work at cnbc with the olympics. >> we have it until 2040. >> also primarily soccer. you're a big fan. >> really? i hadn't noticed. >> i've got some ideas for soccer. >> i know but we haven't got time for that. we have to move on. back with andrew. >> use your hands. >> goalkeeperk only goalkeeper. apartment reit post properties being bought by rival maa in a $4 billion stock swap. the two companies with apartments in sunbelt states. that stock up nicely 12%. water treatment company holding scene us for $1.7 billion in

cash. census start meters data analytic services for various utility industries. food distributor cisco reported quarter profit of $0.64 per share, $0.0 above, revenue in line, around about 5%. >> stocks trading near all-time highs. mike santoli joining us with what's happening beyond headlines. hi, mike. >> stocks have gone to this record level on some of the lowest volatility ever. taking a closer look on how calm these markets have been. by some measures in the last four weeks, calmest in 5 years based on daily range. what's going on here? obviously you had that huge rebound post brexit overreaction to downside. people got very defensive. just as economic data got better, oil firms up, earnings besh expected. this has all basically fed into the idea that markets are stable

and fed outlook remains stable. vix below 12. have you people coming out saying is it too quiet, calm, investors complacent, expect shock. evidence not clear we ought to expect things bad because things have been so calm. the future returns over the next few months once vix gets below 12 as it's been lately are not different than when it's a good deal higher. volatility on expectations of how much the market is going to move. we should expect some kind of jumpyness into late august, september, but i don't think that really means it disturbs the trend all that much. a lot of people pointing to jackson hole speech by janet yellin late next week that might be one of those times everyone comes together and says do we have to rethink. calm markets surprising, everyone geared up for higher volatility, everyone buying low volatility stocks because they were afraid of broader market erratic behavior that hasn't

happen. that's always the way it is, right? as soon as we're expecting nasty stuff it doesn't happen. i don't think, though, it means you have to run away for the rest of the summer. >> mike, we've had a lot of discussions, and you were around for a lot of them. people -- two years ago people were more bullish than they are now, like three, four months ago. i kept saying if you've had 18 months of a rolling direction, where you've been able to sort of build a base, why are you less bullish now after treading water for two years? they talk uncertainty and this and that and valuation. >> there you go, valuation. >> all the sale side people are wrong when they are in the same camp. you could almost feel this was going to go higher. >> i don't think you could say everyone is bearish. everyone expects more upside. official targets around level we're trading at or lower. i do agree with you -- here is

the linchpin treasury yields at 1.5%. you would executive when economic outlook brightens and a little higher risk appetite, you would expect rates to go up in stocks contingent on low rates to maybe sell off a little bit. that hasn't happened. kind of everything has worked and that is allowed the market to have a gentle rise to new highs. >> we have people saying 1 1/4. in the global bond market where we are, if half is negative, we're not going up from 1 1/2. >> i'm not saying you have to but that's clearly an important ingredient to what you've seen. you want to look to maybe does the fed outlook start to look slightly more hawkish than basically universal opinion nothing is going to move this year. >> i'm glad you got the hell out of barron's. hillary great for raising taxes on corporations, raising taxes on individuals, more regulation, climate -- it's like the market is going to go up based on all

that. >> i appreciate your concern about my association with barons. >> good move. >> joe, what's the market saying since polls have gone up. >> huh? >> what's the markets saying since her polls have gone up. >> it's been a seven-week rally. for all of july trump was up. i don't know. whose do you -- >> okay. that's the current tracking poll? okay. >> one thing i do know that's up is the peso doing really well now since barron's candidate is doing well. anyway, thank you. >> rat leaving sinking ship. >> i don't know why i'm laughing, it's not funny. >> totally in the tank for hillary. does sound like bail out. he is at citigroup, private bank, global head. you like that intro better than -- >> i do like him now.

>> head of managed investments. >> that's my favorite, head of managed investments. i want the head of unmanaged investments. >> we don't have that job. >> bailout overseas -- sorry, balin overseas, over $60 billion in client assets. you heard mike santoli talk about this. does the market ever do what people are expecting? it sort of confound. >> confound consensus. everyone saying there's doing to be disaster on the horizon. there are these sort of disasters but they turn out not to be big enough catalysts. that's exactly what happened. you said about this bear market, almost a rolling consolidation over the last 15 minutes starting last summer. >> retailers down 50 and 60%. people more bullish. >> about 40% of stocks gone down 20%. look at low volatility and think to your self, what is really going on. what's going on, lower rates for

longer. you are going to have stability in the u.s. with modern amounts of growth. you've seen employment statistics come in pretty well. it looks to me like you've got relatively slow growing but clearly growing economy. >> so you talked about consensus and how consensus always confound people. suddenly lower for longer is consensus. you heard mike santoli talk about jackson hole. we had peter on highlighting big enough in the japanese ten-year yield, still negative but away from the bottom. >> that's right. >> once the consensus is -- i mean, for years we have -- decades, interest rates are going to go up. done nothing but go down. now everybody agrees, yeah, interest rates staying lower for longer. is that the new consensus to risk? >> i don't know but it is the reason. this is a long-term policy in place for a long time on the part of central banks.

putting aside japan. >> they are always wrong, not even right medium term. >> they have driven the policy, created the trading environment we have. there is really no data to suggest they are doing to change their policy of keeping rates where they are. >> even if rates do stay low, should there be a different implication for what it means for stocks in the u.s. if the reason rates are low here is what's going on with central banks around the rest of the world, not here. the fed might not hike but certainly not actively easing, rates are low. is that less supportive or should it be less supportive than the last five years, for example? >> clearly u.s. had policy decisions mitigated by what's taking place overseas, lower growth and shocks to foreign markets. the best case rates rising in the event emerging markets did very well and had oil prices raising $15, $20 from here and had an overheated economy. again, that's possible. that would indicate higher rates but that does not look like

what's on the horizon now. >> s&p 500 at the end of the year? >> probably 4 or 5% higher than it is here. citi's view is that we're not at our peak view. markets up 9% since brexit took place. >> by s&p 500 or stuck within it going to outperform. >> we would tell you to buy the market. there are certain sectors that might do better but in general buy the markets. >> you said market up 9% since brexit. have things been underestimated in terms of that? certain not uk, bond yields low. but everything recovered as if nothing happened. is that an underestimation? >> certainly chief economist, strategist for citi took a look at the data, when you have a regional event, in this case a subregional event you typically do not see giant contagion take place. we have not seen a country leave eurozone before. that economy uk is going to have to readjust and it is, we've heard time line for

integration -- departure from european union and our feeling is it will be managed well by british union as well. >> subregion. >> i didn't mean to call them -- >> your own region. >> no recession? >> none on the horizon. >> goldman kind of said something last week about that? >> right. they are all hinting at this idea that something very bad will go wrong in china and they are trying to figure out what it was and what that would trigger. that's going to be commodity related and export related. that's what the current worry is but mitigated over the last six months. >> talking about japan if that's canary in the coal mine, if that's positive, yields in japan. wouldn't that be a relief for us after 20 years of watching sort of the intractable deflation problem japan had? >> what japan has are so many structural issues demographically in terms of what their economy is and relationship with china in terms

of where its exports go, it's very hard to see the scenario where japan rallies. >> peter's point earlier was because of structural issues they give up on monetary policy experiment because that doesn't fix what ails them and that leads to rise in interest rates. >> which could definitely happen. the question whether they coin and do massive stimulus. they talk about helicopter money idea but what they are really talking about massive spending at very little cost to the government that spurs the consumer and they simply haven't done that yet. >> i see. you're with us for the whole hour? >> whole hour. >> manages products. >> i'm supposed to unmanage. >> coming up good news for flyers, bad news for airlines. the new report says it will get cheaper to take to the skies. a new report on which companies will get hit the hardest. that story next.

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.

good news for flyers, bad news for airlines. predicting airfares will drop more. phil lebeau joins us with details. phil. >> if you're looking to take a flight this fall, now is the time to do it. you're going to see lower airfares if you haven't booked

your flight. what we've seen over the last years a steady decline in airfares. this comes to us from airfare analysis website hopper. basically what you're looking at july, $232, guess what, it's going to go down 8% for the fall. that's good news for those of us flying, not good news for airline hurt passenger per seat mile. third quarter most airlines, depending on the carrier, they are expecting passenger revenue to be down year over year between 3 and 6% of the part of this you can blame on continuing decline in jet fuel prices. this biggest cost they face, good news they have to pay as much. jet fuel costs keep coming down. as it comes down it also means more carriers, look, we've got empty seats. we can drop the prices further and that's what's weighing on passenger per available seat mile of that's why when you look at airline miles a lot of

skeptical airlines have seen a bottom in revenue. that's why stocks continue to trend lower. the expectation, by the way, is that we would see bottom in passenger revenue in the third quarter. now i'm starting to talk with more analysts saying not so sure that's going to happen. it's always a weak quarter. maybe we see that bottom in the fourth quarter. guys, back to you. >> phil, that you showed at the top was for domestic fares, u.s. flights or global phenomenon? >> you're noticing on the international side as well. they are comparing on international side. notice internationally obviously flights to europe, nor flights there than they are to asia. starting to see carriers saying, you know what, pulling back object frequency to europe. so you're still going to see lower prices. perhaps decline may not be as great domestically. >> we'll take that, phil. thanks very much. coming up adele with a chance to perform at one of the biggest events of the year.

we'll tell you why. first a look at rio and what andrew has coming up on "squawk box." andrew. >> joe, as you guys were watching swimming you probably see there was a time keeper keeping track of this. it's omeetingo since 1932. we have the ceo joining us live from rio after the break.

for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives,

they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪

bad news for adele fans, the singer saying she was asked to perform at the 2017 super bowl. she declined the offer. pepsi said they never invited her. at a concert adele explained saying the show is really not about music and i don't dance or anything like that. fans were upset about the news, booing after they heard she was saying no. they are denying an official invitation was ever put on the table for adele. saying in joint statement we've had conversation with several artists about halftime show. however, we have not at this point extended a formal offer to adele or anyone else. ic -- i think she said -- she said maybe after my next stop. i don't think she took it off the table forever. reminds me of when the vice president, these guys saying i'd

never be vice president. the other said you weren't asked to be. >> she's not that upbeat halftime atmosphere. everybody is crying. >> that's true. some of her songs more uplifting. >> the next story? you know what i can't find about american socialists, they love owning property. bernie sanders just bought his third home. >> he's got some nice ones. >> latest purchase blowing up twitter verse, sanders closing on $575,000 lake side home in vermont complete with pebble beach and views of the green mountains. it is sanders, did i mention, third home. social media quickly taking to twitter with allegations about how sanders may have gotten funds to buy the house. >> wow, i don't think we've ever seen a socialist or progressive do what i say not what i do, have we? this is unheard of. >> but he started the revolution. >> during financial crisis, prior to it. >> i didn't hear the question? >> who was great house flipper before housing crisis.

>> pinocchio -- elizabeth warren? >> you used pinocchio, really going to do that? >> coming up, hillary -- and bail out. hillary clinton making her pitch for the economy. you're going to wish i said it. one democrat says the party isn't doing enough. he'll join us after the break. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face.

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welcome back to "squawk box." here is what's making headlines. ibm won a seven-year deal to provide cloud services for business software company workday. the deal follows two recent analyst reports which questions ibm's ability to compete with the big players in the cloud services market. japan company stalled raising questions about abenomics. gross domestic products expanded

at barely acceptable .2%, well under forecast. it was a big week. i was wondering, how do you know when the japanese economy is stalling? >> it's been there forever. >> don't you need to be somewhere else. >> no recession, on the upside. >> to stall. >> they are 0.2. >> latest this morning 10:00 person eastern housing, tomorrow july housing starts and building permits. income equality and social justice big themes at the democratic convention. next guess argues they have turned their back on the issues and middle class past. tom frank author of "listen, liberal" or whatever happened to the party of the people. contributing editor with harper's magazine. good to see you. i need to be educated what system we need to try to aspire to. i've got wilford frost here.

he's from the uk, he's from london. whenever i talk about american exceptionalism, i talk about america-otracy. whatever your father did, become a landowner. you shouldn't hate rich, they are self-made. now i'm finding from your notes america otocracy. >> it's a way in excusing income inequality. you look at the top, this is a criticism i would level at democrats as well as republicans but these days i'm mainly talkitalk talking about democrats. democrats look at people on top and say people doing so well, that's because they deserve to do so well because they have --

you know, they went to school. went to the right school, got all as, graduate school. it's a way of rationalizing a system that has left a lot of people behind. i don't have any problem with people doing well, of course. my problem is always in the other direction. >> but i saw where you kind of make the point that maybe it's because people work harder that they get ahead. maybe it's just because they are smart. if it's just because they are smart, that doesn't mean -- >> or lucky. >> but that doesn't mean it's okay for people who aren't smart. >> exactly. >> but then i think of the whole way that, you know, in a world where there is scarcity and where, you know, there is competition for limited amount of resources, the way you allocate capital to where it's treated the best, so that everybody eventually gets lifted up is for it to go where it's actually productive.

i can't imagine competing -- i can't imagine global companies competing with a bunch of people who don't know what they are doing and don't want to work hard. there would be no competition and no one would do well. >> that is a very nice way of looking at the world and i remember learning that, too. if you look back at, say, the record of the obama years when you have one of the most liberal -- a man who is the most liberal of all possible presidents and you see that the labor share of gnp has declined and declined and declined while he's been president, this is not really because the workers are less productive now than they were before, they don't deserve it, they are not as well educated as they used to be before, it's just the way power works. >> i'm confused. we just had the most liberal president for eight years going as far to the left as we've seen and it hasn't resulted in the outcomes you wanted. >> exactly. >> so the failure there is what? why did that fail?

>>. >> you have to look at the -- it's liberalism of the rich. the problem is this is not franklin d. roosevelt liberalism, not lyndon johnson liberalism. barack obama and bill clinton and i would suggest hillary clinton's liberalism is a very different species. this is liberalism of the rich, martha's vineyard liberalism. >> that's where he is right now. let me ask you another question, when it comes to dividing the nation's resources to do the most good for the most people, the market or the government. what's better? >> there is no -- you don't have a pure system either way. >> i'm not saying but let's go -- >> we live in a complicated world in which the market -- >> the answer in your world, what would be the best way? >> well, i think one thing we should do differently right now is enforce antitrust law. just give you an example off the top of my head. we have these laws in this country. it's not in order to create a

market system, not to create a system where people have to play fair, markets have rules, right? if you don't enforce the rules, all sorts of crazy things happen. have you monopolies popping audiotape all over the place, people using market power over one another. you have lots of unfair competition out there. >> is the market good or bad? >> it just is. look, that's just a sociological fact. >> is it good, evil, necessary? >> the market just is. we have to have rules. you can't just allow people to do whatever they want. markets have rules. >> you can get rid of markets. soviet union got rid of markets, venezuela got rid of mark, cuba got rid of markets. should we get rid of markets. >> that would be crazy. that would be -- >> what policy do you think obama should have pursued given what was going on with congress that would have created the outcome that you're interested in? >> well, i think when obama was first elected, he had a historic

chance to do -- to be a transformative president. as he said so many times on the campaign trail back in 2008. he had the public behind him. you remember the enormous rallies. all those people who showed up for his inauguration. he was massively popular figure with winds of history at his back. he chose instead on the main issue facing the country at the time, which is what to do about wall street. you remember in 2008 the bailouts, that sort of thing, financial crisis. he chose to essentially on that issue continue doing what bush administration was doing, you know, to just continue going along the same path. no transformation, no real change at all for a number of years. i think that was a mistake that we're doing to be paying for for a long time. >> thomas, even if the view you outline is the correct path to deliver the best future for the united states, are you being realistic in because bernie sanders has just been defeated in a vote amongst just left side

of political debate anyway. jeremy corbin leading to serious issues for just the labor party. that's not opening things up to the right -- what you're outlining is not realistic, never going to lead to someone being in office. >> one of the issues i've been working on my entire life is opposition to nafta and to a lot of trade agreements we've been signing over the years. for once, all the candidates out there opposing them. truth be told, our president barack obama also opposed these trade deals back in 2008 but immediately reversed himself upon taking office. this year there's overwhelming outrage against these things. there's all sorts of outrage out there in the country. the problem is, of course, channeling it and defining it in a way that's doing to have a positive result. >> thomas, i don't know, i think maybe people think the banks should have been nationalized or broken up or something but i

think he used his -- the wind at his back to sort of take 17% of the economy spot government coffers with health care. he squandered all that good will on obama care which we now see there's not -- i don't know what events are going to happen if they have no insurers left in any of the exchanges. that was redistribution. that was something i thought you would have applauded because it leveled the playing field for people in terms of health care but i think he squandered all his political capital and turned it into something we're going to have to fix or change and also poisoned the water. you wonder why congress didn't do anything the next eight years, the way that was handled completely poisoned the political atmosphere. >> look, i'm not going to disagree with you on that. i think emphasizing obama care what the president did rather than continue to work on the

financial situation, i think that was probably a mistake. i'm not as -- i'm pretty negative about obama care, liberal. i don't know if i'm as negative as you are. i do think it was poorly done and it is something we're going to be paying for for a long time. it did distract us from the really important and essential -- >> the far left of the world would have the government taking over the banks, running the banks. is that something you would support? >> no. you're asking what i think he should have done back in 2008, i think a lot of these banks -- i think he should have unwound some of the bailouts, i think some banks should have been forced to difficuvest, put in receivership. this happens all the time, smaller banks constantly putting into receivership. those standards should be

enforced. you can't let your ivy league buddies, classmates off the hook. you have laws against various things, have you to enforce them on wall street as well. if you have laws in this country they have to be enforced regardless whether the people who get punished are your friends or not or went through the revolving door with you. >> thomas, i wasn't sure about the interview, but i liked it, i like you. we got obama from both sides over here and over there. you were a conservative in college. >> did you do it in reverse. >> i think you could be more successful like arianna, she made $300 million with "huffington post" or something. is that why you did it, to sell more books? do you really believe this stuff? >> i haven't become a conservative. >> in college. >> that was a long time ago, believe me. >> you actually knew what was

right and correct at one point, and then you went over here to this other side. was it for money, like arianna? was it more expedient? >> going to the left for money? is that what you just said. wait, that's an interesting idea. >> anyone ever rising up again. i'm going to put my money in tax-frees and not worry about anything like limousine liberals. it was fun. we appreciate you coming on. hope to see you again. >> my pleasure. >> see you later. >> still to come on "squawk box." this morning's biggest movers plus much more from andrew in rio. >> like arianna. >> one official time keeper at the olympics where every tenth of a second counts. the ceo of omega joining us on "squawk" live from rio after the break.

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box." right here live from rio. we're talking watches right now. it's everywhere, the pool, track, omega seem to be omnipresent. we're marking 25th time omega has served as official time keeper of the olympics back in 1932. the question is why is olympic sponsorship important and does it pay off. we have the new president and ceo of omega. this is his tenth visit now to

the olympic games as ceo. we thank you for being here. >> good morning, andrew. >> what is it about the olympics for omega. why do this? >> you just mentioned it. first of all, our role as official time keeper, we have dna at omega of being best in time keeping. already 16 world record, more than 40 olympic record. timing all the time for all these athletes. so it's very important for us. >> it is expensive to do this, to put this on for omega and for all the sponsors paying something in the order of $100 million. >> i have to say we love to sponsor. we're the only one that has a key role to play. we're at the service of athletes, more than 600 tons of material. this is also something that makes omega special. obviously the partnership with ioc and olympic games is something we cherish. this whole spirit about positive, about achieving things we share also with our values. >> speak to the economics of it. you come here.

the brand is everywhere. you have your own olympic watch that's now released. how much disblg cooes this cost? >> $4900. we did it just for this. >> how much olympic watches ku look and say peg it to here. >> limited addition, 3,016. a brand that does more than 650,000, the whole inspiration of the olympic games it will pay off. having seen that on television or real life, people will remember the watch. whenever they buy it, they remember about this tremendous company that was the witness of all these successes. >> last olympics, though, if i remember, the marketing dollars were put on reasoned in terms of a loss. that was one of the explanations. >> you have to think about the bigger picture for us. it's really something that is part of our dna and that we're investing. from that point of view, there's

no loss. >> how do you think about the smart watch business right now? even tag is getting into the action. >> i don't compare smart instrument i call them with beautiful swiss made omega watches we're producing. we're well-known for beauty, precision and some kind of a soul. there's not one omega with no soul. smart instruments have no soul. they are like phones. >> you think that will never happen from omega. >> you should never say never. for the time being we prefer to have swiss watches rather than instruments with a swiss name. >> impact of brexit on your company. >> we are selling everywhere in the world. we have more than 30 affiliates in the world, here, brazil, the impact of brexit is quite positive for us in terms of -- we haven't changed the price in london. we have a lot of tourists visiting london and buying our

watches because they want to buy it for the rest of the time. we continue to sell very well our james bond limited edition on cmaster in uk. quite positive. >> buzz aldrin was here. >> came here and was thrilled. we were with him in the stadium. he was so amazed about seeing his fellow american winning like in swimming and meeting with the champion. he's a big fan of the olympic. >> between having brand here at the olympics and james bond, which is more important? >> i think the olympics in our dna since 1932, you mentioned it, only one time keeper. james bond shares exactly the same value of achieving things, of being some kind of a hero and also being a universal champion. so both of them somewhere have a lot in common. one thing is at least very sure, that's omega. >> congratulations. >> my pleasure. >> thank you. >> guys, when we come back after the break, business at the box

office. we'll talk about it from new york sony targeted adults in a raunchy r rated theme. did it pay off? we'll tell you about it next. ♪ ♪ announcer: they'll test you. try to break your will. but however loud the loudness gets. however many cheese puffs may fly. you're the driver. the one in control. stand firm. just wait. [click] and move only when you hear the click that says they're buckled in for the drive. never give up till they buckle up.

. welcome back to "squawk box." "suicide squad" topped the box office followed by newcomer "sausage party." a raunchy r-rated comedy from sony. julia boorstin joins us with more with a straight face. julia? >> trying to keep a straight face. "sausage party" had the best ever debut for an r-rated animated movie and the biggest august opening ever for an animated film. the a run chi comedy about food products trying to avoid being eaten written and starring seth rogen grossed $34 million. that's about twice what was expected. and the film reportedly cost just $19 million to produce. sony's columbia pictures sharing the costs, but even sharing the profits this gives a much-needed boost to sony which is lagging with 7% studio market share so far this year. now the studio scoring such a big win by allocating nearly half of its marketing spending on-line.

compared to just 12% on average. this is sony's largest dijal marketing ever, buzzfeed, snapchat and youtube to drive buzz. "sausage party" came in second to "suicide squad" the u.s. box office performance dropped by nearly 70% in the weekend on negative reviews and word of mouth but "sausage party" should hold up better. it has an 82% critics rating on rotten tomatoes compared to 27% rating for "suicide squad." >> thank you very much. >> what -- >> julia, what is it about? >> "sausage party"? >> yeah. >> i did not see it. i would like to see it because i'm hearing such great things about it from my friends. it's an animated movie about food products from the grocery store that are brought home to someone's house like for a barbecue and it's about them trying to avoid being eaten. they realize they're going to be eaten and sort of a moment where they try to escape. >> sounds so bad it's

unbelievable. no way i'm going to see this movie. >> people seem to like it. >> i think it sounds great. >> sausages actually have -- okay. i got that. because they're made from the animals so the animals aren't trying to survive. they're dead and they've been put into the sausage. >> this is not about animals, but the food products. >> the animal is dead and put into the sausages and the sausages don't want to get eaten. >> way too deep. >> cartoon. >> didn't look like a cartoon exactly. >> animated. >> right. >> there we go. julia, thank you very muchp. >> there we go. okay. >> still to come the biggest movers. "squawk box" will be back in a couple minutes.

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welcome back. final thoughts with david, still with us. david, we spoke earlier about the fact that you think stocks can hedge higher the rest of the year. what about protection in portfolio. still worth buying bonds? >> we like bonds and if you think rates will stay low, we like munis, we like preferreds, things to get real income in low interest rate environment. the most important thing that investors have to do is sort of stick with their asset allocation and not sort of try to time this market. that's what this last 15 months

has shown. you follow the plan. >> all right. thanks, david. good to have you here. >> thank you so much. >> before we go, andrew ross sorkin, live in rio, what do you have for us tomorrow? >> thank you, michele. as the second week of the olympics here in rio get under way, i've got a little ping-pong to show you, officially called table tennis, but i actually went one-on-one with a u.s. olympic table tennis player. you're seeing a little bit of our action there. it gets worse. >> your form is great. look. >> right there she's giving me an opportunity to sort of, you know -- >> being very kind to you. >> back and forth. very kind. it gets much worse, but -- >> look she even -- >> you will see. >> were you betting on that? >> just -- well no no. we got the whole thing tomorrow. we'll show you the full on. it gets a lot more intense than that. >> every one of her shots back to you hit on the center line

exactly in the same place every time with -- just so you could hit it. >> yeah. she was being nice. tune in tomorrow and see more of that and a lot more here from rio. >> be safe. see you tomorrow. join us tomorrow. thank you. >> i will be here. "squawk on the street" is next. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen and mike santoli at the new york stock exchange. jim and david out. futures are up as we kick off a week that will keep those of us not on vacation becausy. retail earnings, fed minutes, and inflation data and more. stocks off the record highs of last week. europe stey