right now. good morning, everybody. we're ready to go. hope you are too. s&p futures off by 1.5 and the nasdaq down by i don't know because that board is bigger than usual and it's being covered. overnight in asia, see where the nikkei has been setting things up. closed. shanghai was flat. and the hang sang was down. if you take a look at the early trading in europe. yooel see at least at this hour, things are relatively flat. dax is up .25%. france cac is flat as is the ftse in lond.

if you check out crude oil prices. crude was all over the place yesterday. it did end the day up. see it's up 31 cents right now. wti at 45 .14. nasdaq closed at a new high for the year yesterday. >> let's get you caught up on some of the other big stories we're watching. notable comments coming from san francisco fed president. cue the star warz music. repeating calls for gradual interest rate hikes saying it makes no sense to get back to a pace of steady increases sooner rather than later. the economy is in his words in good shape. fed policymaker criticizing the central banks approach of targeting low inflation saying that method gives the fed too small of a buffer to fend off shocks. it is yap big day. thoeld holding product event. expected to unveil latest product lineup at 1:00 p.m. eastern time.

we talked about it. the focus of the event on the new iphone 7. the phone likely to have a faster processer and more pressure sensitive button, higher -- more pressure sensitive. this is the details. higher quality camera with a dual lens. that is the coolers part about this. and possibly the more water resistant with removal of headphone jack. in addition to all of those, apple expect to refresh lineup with new mac computer, apple watch and softwareup date. get a live report from san fran at the bottom of the hour. >> more pressure sensitive home what. >> button. >> we're going to get to this in jups a second. you've seen the guest list today. >> yes. we have michael dell on. i'm very excited to talk to. >> what are we talking about. >> his new book. ufo. >> what john williams music should bethen play. >> star warz .

>> >> close encounters about aliens. i forgot he even did that. >> have to really visit hang together, you remember the -- >> i forgot he even did that. >> that's what we're going to get. >> you missed my do you remember simil . >> the fire that broke out at a gap distribution center was intentionty set. no employers were harmed. investigation still underway. has a contingency plan in place and working across network to serve customers. >> believe no employees or employers were harmed. >> it has been hurting their ability to keep up with things. that's part of the things they warned about in earnings last week. >> the question on the next one,

did he decide to buy chipotle, make the order from the u.s. open. fr from. he's there sitting right next to the tv like he sits next to brad gilbert. and he is right there, just hi. >> hedge fund, taking nearly 10% check in chipotle. joins us now with more. he's hard to miss with that main of white hair. he's in the long. >> you have hair envy, joe? >> no, i have eyelash envy. he says their natural. i don't buy it. >> let's talk about chipotle. $1.2 billion. that's how much they bought the stake for. now the second largest holder after fidelity. bill iekman.

bet against herbalife. ackman's looks for troubled brands. says the chipotle has a strong brand. they have an enormous growth opportunity. trying to win back sales and customers after a string of food safety concerns. salmonella, e. coli and trying a lot of difference things to get people to eat there once again, free food give aways, free kid meals on sunday and free drinks for students. even introducing a new loyalty program. sales haven't come back to what same store sales down 25% last quarter and howard who is renowned restaurant analyst he says that giving away free food doesn't bring people back. a reaction to this purchase, chipotle says we welcome their investment.

we appreciate the confidence they've expressed in our brand and a strong growth opportunity. a lot of analysts note last night actually say pick agomckm will be coming in and pushing renewed direction for chipotle going forward. >> all right. susan. thank you. just thinking about some of the synergy with bill ackman. valeant. >> it was nora -- >> don't even say nora virus. that's the cruise virus. >> it was something popping up in a lot of places. chipotle says they have a plan in place. going to be centralizing food operation. they were sourcing locally. it's going to take a couple of years before they actually get that in place. >> all the things that happen in chipotle, does it result in the

or manifest itself the same way. >> i'm not an expert, but yes. >> do you know, sorkin? is it like a mad -- is it throwing up? >> no, i don't know. >> i think it's both. >> there's a new company called dos toros. in california now taking over the country. >> yes. >> it's a mexican place. >> can't be too many. >> but people nice to have some you don't get sick with, but there can't be too many. >> i think chipotle is going to come back. >> the question becomings once people change their eating habits, can you win them back? that's the huge issue. >> baja fresh has benefitted. you will see competitors jump? >> we should point out on a related note, bill ackman is leaves canadian pacific's boards after four years.

raking in $2.6 billion for hedge fund. this announcement comes one month after sold remaining shares in canadian pacific freeing up $1.5 billion of cash. wonder if that was directly plowed into chipotle. only held 7, 8 investments. speak pg of well-known hedge fund managers, we have a block buster lineup for the sixth annual delivering alpha conference coming up. produced by cnbc and institutional investors. more details are available. we're getting excited about this. take a look at the lineup just around the corner. make sure you check this out. on today's economic agenda, we have a couple of things going on. labor department putting on monthly job opens. that comes out at 10:00 a.m. eastern time. includes stats not normally detailed. 2:00 p.m. get the fed's latest

facebo beige book report. joining us now to talk markets, head of merrill lynch wealth management and ceo of fl investment management company. hey, guys. >> good morning. >> what are you thinking this morning. >> i'm happy. feeling good. >> why are you happy. >> i had two weeks off. >> that's one thing, but we're coming back to what people thought would be a tough market. >> the last time i was on, joe and i were talking about the olympics. i said the markets wanted a gold medal too. you had nasdaq reaching all time record highs. i think the nasdaq has won the gold medal. not many people seven years were forecasting an all-time record high. markets are up substantially since the lows of 2008, 2009. you have nasdaq up 300%. s&p up over 200%.

the trend is up. we're going into a seasonal period. can you get some volatility? absolutely. as we go into the fed meeting, as we go into the election, we can get some volatility within the market. the trend of the market still up. >> likely is. >> lead story in the wall street journal is talking about how some european firms are able to get negative yields on the bonds putting out. what does that tell us? investors are so interested in safety on some of these issues? not even striding for yields. how is the storck market going o slow down? >> i don't think it will. i think it will continue to move. september meeting coming up with the fed. if you look at the market, it's been bifurcated. higher yielding names doing well. companies like amazon and facebook still able to continue to move higher. it's left a certainly degree some of the middle of the market behind. start to see catchup. >> you think the markets are all

going higher. the guys who are lagging will catch up. >> i think you'll see rotation and the market a bit higher. also look overseas. >> are either of your worried about multiples too high. >> i think you're about to say out of control. >> i was. >> i don't view them as out of control. higher than normal, but look where interest rates are. even a quarter point move from the fed shouldn't derail the markets. it will be a hiccup. >> i 100% agree. i really, our baby boomers which are approaching retirement, really thought they would get 5% risk free on their investment. that's not happening any time soon. so when you look at the market, there really is no other choice. real for investors. if they want to generate income in portfolio, they're going to come to the stock market and get growth and generate income. now, some of the valuations on bond proxies are very high.

some aren't. like telecoms, believe it or not. we still like the rate market. still have pharmaceuticals fairly priced. not everything within the market is that high, but i also want to mention when you study history, when markets have the type of reaction in 2008, 2009, it can take decades for investors to have confidence back in the markets. so it still may take a long time for investors to get confidence. just a strat just on the street. the strategist are very bearish. >> we were down on friday before the report. closed up, what, 70, we were up yesterday. so the two days we had looked like it wasn't going to raise. once again back on track. we started having some sideways action and down action in the market after the fed guys said, you know, september is a live meeting. this time we want to get at

least one maybe two for the rest of the year. suddenly that looks off the table. >> ism services was down too. >> bad news is good news. >> back to bad news is good news. >> we're not going to get good news ever. >> nothing else happening, and, you know, the ecb they may start buying stocks. >> that's what i said on thursday. >> not necessarily europe per se. some opportunities in europe. the higher yielding place emerging markets have been on fire. so there's opportunities outside of this country for stocks. >> any other emerging markets you've touched. >> we like areas like india, china, mexico. if you're going to use valuation as your may tritrix, emerging ms is what you want to look at. >> wouldn't though markets get harder if the fed decides to raise rates. >> he said a hiccup. sure, emerging markets are a

volatile part of the market. up substantially. absolutely they would get hit. can you get volatility in september into october, remember, october generates generally major lows within the marketplace. trends for the market are higher. >> after a lousy september, see bottoms in october. >> absolutely. we find individual investors and professional investors just to bearish. >> going to leave it there, tom and marry. thank you. >> football season. official truck of the nfl. details about that new partnership next. and how it could change the way trucks tailgate. back in a moment.

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welcome back, everybody. dave and buster cutting same store forecast for the year after sales missed forecast in the second quarter. stock is down 6.5% this morning. canadian retailer hudson bay reported a second quarter loss. sales surged 60%.

driven by european expansion and acquisition of retailer guilt group. spoke within the ceo about. ceo of hudson is going to be joining us about the bottom of the hour to talk more about that. amd plans to raise more than a billion dollars through a stock offering debt. chip maker use the funds for capital expenditures and to pay off debt. profootball season just one day away. nfl teaming up in a show of toughness. today announcing a three-year partnership. u.s. marketing sales and service at ford and i specifically requested anthony nunez. long time cincinnati bangle. almost happened once. >> close. >> to this day, joe montana. >> i just got over that with counseling and you bring the name up again. >> 25 years.

>> twice, 16 and 23. number 16, joe montana. >> i will get to ford in just a second. i have to amy --ir my -- i gave it's hard to be with the reds. >> h he claims he still watches >> we're close. that would have been a great year for super bowl and last year andy getting hurt. >> that was my example of getting excited for post season and then he throws a touch down and gets an acl injury. reds get in the playoffs and no hits. remember that. >> exactly. >> wow. >> i'm a steelers fan. >> anyway, trucks and nfl just go hand in hand.

something about it that just makes sense. >> our fan base, the vehicle market in general, especially for trucks, is directly in line with the nfl. it's the one place you can really get scale that time of year. certainly the nfl is a long season. we're excited about the partnership. you know, america's biggest sport matches up directly with our demographic. if you think about our owners, their building america, the tough guys in the trenches. matches up with the offensive line. we're excited about the partnership with the nfl. >> for ford, it would help to have a mid size truck. do you have one of those. >> we sell one globally. in the u.s. today we sell just the full size truck. f 150 and super duty. >> that's the best seller. >> been the best selling vehicle for 40 years. >> with the oil prices people are buying trucks again. >> moved strongly from cars to

suvs to trucks in the past five years since coming out of the big recession. the truck business continues to strengthen and the commercial business the new super duty we're here in new york with. that has been strong. the housing market has plenty of room to run actually. hospit optimistic. how much is a direct correlation with oil prices. as prices go down at the pump, americans are much more willing to buy big cars and trucks because it doesn't hurt them the way it does when oil prices are double what we're seeing now. >> certainly contributes to it. the move from cars to trucks to suvs you don't need to make the tradeoff. they have good fuel economy. all the technology in the trucks. great ride quality. customers are choosing the higher seating position. >> i like to sit higher on the road. >> i like being lower. >> why do you want to be low. >> i feel safer being close to the ground. >> you don't feel the g forces

around curves. >> or the 18 wheeler rolls over you. >> no, now yo have to be defensive. you need almost a truck. >> no. defensive or size. >> you need that big truck. >> exactly. >> physics matters. >> it's going to be 130 degrees all across the country. >> are these trucks getting lighter by the way. >> the all new f 150 was 700 pounds lighter. the super duty is 250 pounds lighter. bigger axle, bigger breaks. kind of capability to get work done. >> every week you'll give out an award. this is long overdue. i think you would agree. offensive lineman. lately we understand. quarterbacks we see when the line, doesn't matter how good the quarterback is. if guys get in immediately, they look horrible. >> i agree. that's what exciting with me.

teaming up with ford: ford built tough. i gee with this. >> i agree. >> i think so. number 78 holding, that's the only time we get our name called. we're going to recognize a line every week. when they call me to team up with ford and i know mark a while back, i said, you bet, m i'll be there. the working man truck. tough. i have to throw this in. maybe not me, we had a couple of holly cross guys. it's a great partnership. i'm thrilled to be part of this partnership. >> so, ford, the last report , the last quarterly numbers. a couple of things not good. do you remember? incentives? did they not learn again the u.s. auto maker. >> we had a strong first half of the year. record first half profitability. end of the year record: august sales were a little soft on yearly basis. part of that was a big august

and september a year ago. third quarter in the auto industry was really strong. we're still running 17.5 million units. close to all-time record. growth we've seen for the last five years has seemed to have plateaued. makes business a little tougher. we're still operating historically strong. >> my dad at automation has warned us that he thinks the u.s. auto makers have been overproducing as a result of the sales floor. they have to offer bigger incentives to get these to move out the door. do you see any kind of weakness when it comes to consumer. >> my good friend mike and i have talked about this frequently. as the industry plateaus we all spend a little more money because of all the eer in sha. tremendous deals this past labor day weekend seems to have been good for the business and we're

going to mass supply the demand. keep incentives in check and continue to drive toward the rich mix we're seeing in the industry and strong levels of profitability. we're not seeing the strong straight up acceleration we've seen for five or six years, but still a strong industry. >> will i was thinking last year. maybe was it is den verl paver game. even brady looked like he wasn't a great quarterback. this year, mckaren. still sticking with dalton? >> i don't think my opinion matters. marvin is going to stick with dalton. he's the their starter. he'll be in there. it's a matter of mistakes. it's eliminating big mistakes. >> those weren't mistakes. those were bone head mistakes. we can eliminate those, we still have -- >> you still say we sfll .

>> 13 years i still live in cincinnati. ive say we. >> can denver be back this career without pto paton. >> i don't think so. they have a great defense. brady isn't there at the beginning. can't count them out. seattle still very strong. >> they still have belechek. whoever comes in is going to produce. can't count them out. i think cincinnati has a great chance. you can call me a homer. they have as much talent as anybody in the league now. >> by the way, when joe gives up on a team, it's rough. >> hang in there. you have to hang in there. >> really? >> they got rid of everybody though. >> finally came on at the end. anyway, gentleman, thank you.

>> we're going to we didn't talk about uber. we're going to uber and get explain what this is. you get an on demand truck. part of the whole partnership in the nfl, we're going to have several ago vacations around the week. anthony just talked about and we're also going to have the toughest tailgate. toughest ticket. pop-up sensational parties around the. >> uber for a truck. >> go on uber and go on the uber app and go uber eats. see nfl ford logo and deliver a tailgate right to your place or work or business. you select the gate. >> yes, it's a taxi. >> and don't forget, nfl tix off tomorrow night on the best network, actually, with the rematch super bowl 50. panthers versus the broncos. >> we're going to uber tailgate. >> you and uber. >> love it. >> counting down to 1:00 p.m.

eastern time when apple is unveiling latest project. maybe you'll be able to uber. that project importantly upgr e upgraded iphone and watch. tell us what to expect next. right now wed head to a break, take a look at s&p 500 winners and losers.

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welcome back. "squawk box" on cnbc. first in business worldwide. u.s. futures chltd kind of flat. nasdaq up after a pretty good session yesterday. across the board, we had gains the last couple of sessions after it looked like the fed is out for september, but i guess still a possibility. after ism services about 90 p90% of the economy showed well below expectations. the lowest level we've seen in six and a half years. that in combination with the jobs number and manufacturing number that showed the contraction. >> what was the final gdp number revised in one and an election on hold. i don't know whether september.

the fcc announcing new rules for black rock. allow the firm's portfolio managers to borrow from peers in they're pressed for money. world's largest asset management firm put in the request last year. vanguard and fidelity are already allowed to do this. now regulators are eyeing mutual fund liktdky more closely. the new rules black rock money market fund can borrow up to a third without posting collateral. nchtsz in the mooin time let's talk apple. josh mipton joins us now with more. josh. >> reporter: there is of course the big show where apple ceo tim cook does unveil all of company's new hardware. the star of the show should be that new iphone 7.

so expectations for that new device include a faster processer, a pressure sensitive home button, improved water resistance, and a new dual lens camera system. certainly the news generating the most attention would be the removal of the phone's headphone jack. that would mean cook wants you to connect via bluetooth or charging port. advantage could allow for a slimmer phone. could also frustrate consumers we know prefer traditional wired headphones. a lot on the line. iphone has suffered two straight quarters of sales declines. apple pull but also arlls a be kick start. expecting a new watch released this morning. could have a faster processer, longer life and gps. would allow the watch to be more functional as independent

wearable. sold 14 million watches generating 5 billion until sales. guys, back to you. >> thank you, josh, for that. i. >> i want to know if they show up with a laptop. >> mine just broke this weekend. >> good reason for you to get a new one. >> exactly. >> mine got lost in the mail, which is happening a lot with laptops. no. the one with all the stuff got lost in the mail. the other got hit with a sludge hammer by accident somehow. when we come back, companies rely on data to make faster intelligent decision. what if those decisions are bias or based on flawed assumptions. that's the premise of a new book. weapons of math destruction.

>> bigger advancer in the dax right now is up .30%. stick around, "squawk box" will be right back. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov

welcome back to "squawk box." weighing in on the recent debate over price hikes. curve prices on his drugs. raise prices only once a year and increases will be limited to the single digit percentage range. we have a programming note because we're going to be hearing a lot more about the drug pricing debate. speaks to another prominent name. sit down with valeant ceo at 430 p.m. in an exclusive interview today. right now is time for executive edge. american economy relies on big data to drive decisions, but what if the data influencing was either wrong or biassed. that's what kathy o'neill says in her new book. called weapons of math destruction. how big data increases inability and threatens democracy. thank you for being here today. >> my pleasure. we do look at big data as being

all knowing, it's almost like the oz character from the wizard of oz. what made you think about what if the data is wrong. garbage in and garbage out. >> i started my life as a mathematician. went into finance. so i got to see sort of firsthand how mathematics can be actually a shield of basically corrupt practices. i would the example i would give is like the triple a ratings on mortgages. that wasn't right, but it was trusted because it was mathematical. people trusted math matt i think so. seen this too where noble prize winners have great mathematics set up to explain things. so complicated nobody understood. >> people are afraid to ask. they feel they're not experts and don't have the right to ask. that fear is being used good sense people in the world of big data. >> what were examples you found. >> the one that hit me over the

top of the head. was the teacher model. the scores systems that are given to teachers. it's not accurate. it's wildly inconsistent. i met someone who is an english teacher. didn't change the way he taught, but an all encompassing score and how he was as a teacher. that's a nation-wide system. unaccountable. unexplained because when people ask, they're told it's mathematics. you wouldn't understand it. >> wow. when you start asking questions like this, what kind of pushback to you get from people who are deploying big data. >> well, let me give another example. i'm tell you the kind of pushback i get. the data algorithms that keep me up at night come from the justice system. the scoring system that are given to judges when they sentence criminal defendants. people who have high risk and the risk is measured by how likely are you to come back to

jail. those people are sentenced longer. i don't think the risk scores are being made fairly so we're sending people to jail longer unfather u unfairly. >> and taking the judgment out of the judge's hands. >> this is objective. it's not objective. models are opinions embedded in mathemati mathematics. the pushback i get is hae it's better than nothing. the current system is flawed. i agree. i think we could replace the current system. we could use algorithm as long as they were tested. they were understandable. they were transparent. >> yes. >> we could use them to improve the system, but what we have right now is just like throw something in. call it mathematical and trust it. >> by the way, either a principle who would be judging the teachers or a judge judging criminals who have been brought before them, you're in a much more awkward position if you choose to go against these

things. if something happens you're wrong on one of cases, it's a cya sort of situation. you're safer to go with what the data tells you than to say i don't agree with it. >> i would add, not even a third party is allowed to look into it. i filed a freedom of information request to look at the source code for the teacher model. not only could i not look at it, but no one in the city of new york could look at it. >> why? >> that was the contract that the city of new york had made with this data firm that was actually computing the scores. >> because the data firm didn't want. >> it's like secret sauce. that's the typical information. >> it's our proprietary information. it's a business model not unlike the triple a ratings. >> the triple a ratings from mortgage back security. >> yes. >> i thought that was from because they had insurance on a lot of it, from mbia.

>> what do you that was. these guys made money. >> the triple a rating if you bought insurance, you get triple a rating regardless of the underlying credit in the portfolio. >> that might be true. they also applied triple a ratings to actual mortgage backed security that didn't deserve it. >> then also you had aig with the credit default that they weren't backing up with any -- no collateral for it. >> that was truly a corrupt practice. >> that's how you get traple a though. that's how everything was supposedly triple a. i don't know. there's a lot of things. >> kathy, you think is solution is what? i think the solution is stop trusting mathematic algorithalg we need to actually sort of update the anti-discrimination laws that were written in the '70s to the big data era and

have a bill of rights for people who are targeted by these scores. so they can look into the score and understand how they're made and challenge it. challenge things. yes. >> thank you so much for coming in. we appreciate it. >> my pleasure. >> good luck on the book. >> math works. we put our faith in economists. >> math works. behind algorithm. >> it's the opinion part that is the problem. not the math itself. >> no, it's not. >> math is -- there's no end to pie. that gets me. it just never -- can't we end it somewhere. can't we say that's enough. >> people have tried to do that. indiana did it. >> how does it make it right? they round it off. >> sooner or later you get to something and that's it. there was a state legislature. >> that's because people are uncomfortable with uncertainty. >> very uncomfortable. i am.

coming up, hudson bay earnings. squawk calls jerry storch with an update on that business and read on the consumer. that's next. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.

avenue coming in with second quarter earnings above estimates. joining us with more on this and the state of retail, we've got a lot about this. jerry is the ceo of the hudson bay company. good morning. hudson's bay company. >> good morning. >> this is a nice thing to have happen in what has been a sort of tepid sea of earnings for retail. >> well, you know, i think the death of department stores has been greatly exaggerated. ebidar given the real estate structure we have more than doubled. grew by 115%. >> let's start with the 60% number. that's not a true -- >> no, that's mostly through of course we acquired companies and

we acquired gilt during this. and a large department store in belgium. we're doing something different from our competitors. so we're growing while they're shrinking. we're using a different strategy. through acquisition of new stores. we opened a new saks fifth avenue store in honolulu. we'll be opening a new one in downtown new york. that will be the second in new york for the first time in 92 years. >> how should we think about the straight up same store sales organic business? >> our same store shares on a canadian currency basis which is how we report grew. they were down by 1.3%. >> but your strategy is very different from macy's right now. terry lundgren is shutting down stores left and right. and the market has applauded that move. >> well, we believe in the future requires growth, requires investment. the reason that customers maybe

don't come to some department stores is because the experience isn't very good. if you don't invest and make them great especially in a certain area -- >> how do you do that? >> you spend money. make them beautiful. come visit the brookville place store when it opens on thursday and friday. >> but it is more than just new fixtures? what do you have to have in the store? >> you have to have the right merchandise. not just the same old brands that are expected. you have to have a environment that's stimulating. you have to have technology assisted service. you have to have an environment people want to come to. we're spending over $8 million of cap tam people don't dislike department stores. they dislike bad department stores. >> saks on fifth which has been a great success for you, you've reduced promotional activity which has therefore reduced sales. the good news is you've improved

margin. >> yes. >> how long will you want to continue that approach opposed to trying to go pick up more share? >> it's doing exactly what we wanted it to do. we eliminated unprofitable promotion. the gross margin rate has gone up hundreds of basis points. tremendous improvement in the profitability of the business. this is just what we wanted to do. we'll be annualizing that change soon and expect the sales to come back. we're not worried about that at all. it did exactly what we wanted and it was better for the customer in the long-term. >> is there a point you close down some underperforming stores or say they are not worth us investing the additional money? >> we don't have many stores like that. and i'm not -- you know, we didn't -- you know, if you look at -- >> macy's grew rapidly for a long time. >> dha. some of the stores they bought weren't good when they bought them. i used to run some of them. south dakota and some places, parts of minneapolis that weren't the most desirable places. some stores have to close.

there are way too many stores, way too much square footage in the united states and the bad ones have to close. we don't think we have many bad ones. we'll make the right real estate decisions on a case by case basis. but saks used to be much larger. if there were one that existed, we would make the decision in a heartbeat. but it's nothing like the scale of the kind of closures you're going to see. i keep saying yes they are going to close. >> what do you think about the large argument around retail and fashion right now that people just aren't spending their money on it and there hasn't been enough new fashion? >> all true. it's cyclical. no doubt about it. >> i was going to say cyclical? we've been talking about this for years. >> i know it feels like that. but if you look at it, that's when this whole dialogue started. apparel stores are gone. >> the weather was a big hit. and i think a lot of the retailers had really stocked up

and oversupplied. >> right. this has happened many times throughout history. i've been in retail now 30 years. many times where it's an apparel cycle, home cycle. people want experiences until they don't anymore. restaurants are supposed to be hot. look at their stock trade. they're not hot anymore. it didn't happen. it goes through cycles. home is doing well. home depot has been doing great. posting big numbers. but it always comes back. and we're going to cycle the apparel downturn. october this year, everything says the same thing. we're watching what happens then. >> very quickly. terry lundgren says macy's is going into the holiday season with much less supply. are you doing the same thing? >> everyone's doing the same thing. it's smart. it's fantastic. last season there was way too much inventory. this year if you look at what's happened with freight movements, there may be too little and so you better shop early for christmas. >> it's the warning every time. jerry, thank you very much. >> thank you. when we come back, find out where blackrock's putting trillions of dollars to work.

global chief investment officer richard turnill will join us after the break. and michael dell joins us in an exclusive "squawk box" interview. we'll be right back.

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apple set for a refresh. the tech giant will unveil a new product lineup and the rumors are heating up. underarmour taking its game international. comments from kevin plavrng and nba star steph curry straight ahead. and a story way out of this world. the big business of ufo hunting. ben mezrich is here talking

about his book. as the second hour of "squawk box" begins now. ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen with becky quick and andrew ross sorkin. this is distracting. we're sending a signal here. buying intentions. i don't know. it's working on the nasdaq. >> i like it. >> let's check out europe.

we had a good day on friday. there's the price of oil above $45. it is a big day for apple. holding its product event in san francisco. company expected to unveil the newest version of its iphone. also sony has a new product event today as well. i don't know why you would do your own if apple is. the company expected to do a new version of the playstation 4 console. and the federal reserve is out with its latest beige book today. that's out at 2:00 p.m. eastern time. in other corporate news, activist investor bill ackman's hedge fund taking a nearly 10% stake in chipotle. he believes shares of the fast casual chain are undervalued.

the company has suffered from repeated food illness outbreaks. the fund is in the red though for the year so far. more on bill ackman today. he's also leaving the board after four years of canadian pacific. that freed up $1.5 billion of its own cash. some of that was put back into this investment. the fire that broke out at a gap inc. center in new york last week was intentionally set. no employees were harmed in that incident.

gap says it's working across networks to serve customers. do you think that was the right adjective for the apple thing? a much anticipated product introduction today? >> for certain people. >> what about for you? >> i will admit -- >> how about a somewhat anticipated? >> somewhat. but today i will go online and i will watch. i will actually watch it. >> then you don't have a problem with much anticipated. you think that's accurate journalistically? >> i think it's close to accurate. yes, for a lot of people they care. a billion people have these phones. >> the real story is in the past when we've been talked about it all they're doing is fake away the head foehn jack. >> that has a lot of people upset. >> maybe that's much anticipated.

i'm just not sure of it. no one wants to hear a headline that a somewhat anticipated meeting is coming up. >> it's much anticipated by the media. we're kind of covering it ad nauseam. >> we need to get real lives some day. it's late for me. >> hold your breath. anyway, let's talk about the markets right now. san francisco fed president john williams repeating his calls for a garage yut interest rate hike. the policy maker saying it makes sense to get back to a pace of steady increases sooner rather than later. williams says that the economy is in good shape despite the recent slowdown in jobs growth. joining us now is richard turnill from blackrock. richard, thank you thanks for coming in today. >> my pleasure. >> would you agree with the assessment the economy's okay? it's not just the jobs report that's been weak. it's the ism manufacturing and non-manufacturing. a slew of other reports that we've seen recently that is suggests we could have seen an

abrupt slowdown in august. >> not only in the u.s. but globally for some time. all the data we're seeing. both the pub established data but the much maligned big data we've been talking about is telling us the same thing. which is we're still in the slow growth environment and there's been downgrades over recent months. they may have gone too far. looks like the economy is holding up pretty well right now. we wouldn't be overreacting to some short-term numbers such as the payrolls. look at the long-term view which is steady slow growth. >> at the same time you have the central banks that are activist banks at this point. we'll find out if the ecb is considering buying stocks which is what some economists are saying they should be doing. because they're going to run out of bonds if they continue to buy. >> the focus has been on the fed recently. now starting to shift to the ecb. once the fed's gradually tightening policy and expected to do so, the ecb are going the other way. they're committed to further qe.

is the question is whether they announce that tomorrow or -- >> so you think of buying stock z an inevitability? >> i think on the list of possible tools they could use. i think in the upcoming meeting, that's unlikely to be announced. we have to go back that far to think that buying corporate credit for the ecb would be unthinkable. >> and now we've become to that entire idea. what is that doing to these markets? >> what it's doing is driving yields lower. when you say artificially propping things up, it's important to recognize yields are lower, monetary policy is loose for a reason. because nominal growth is very weak. it's very weak in europe. because inflation is low, growth is low. very low level of interest rates. the buying of corporate bonds will flex that environment. so that's driving yields lower. that's having global consequences. it's anchoring rates not just in europe but the rest of the

world. that's driving that search for yield. this ecb purchasing is only going to extend that. people are going to be looking for yield wherever they can get it. >> he said that in his opinion, the central banks are no longer just a player influencing these markets. they are now becoming some of these markets? you think that's correct? >> in some markets you see that's the case. for example in bank of japan, almost 40% of the jgb market. still fundamentals. it's not central bank purchasing. >> but do you think markets are really markets anymore if this is the case? i realize you can't look at every market equally. some are much deeper. some are much more liquid. but is there a way to get a true read on what rates would be? i guess if you're looking longer out the curve, maybe that tells you a bit there's not demand there. >> i tell you what's happening in the equity market today.

people refer to that as a bubble. actually, we don't see that. when we look across equities, they look reasonably priced. some parts of the market here in the u.s. look highly valued. but in an environment where government bonds are yielding 1.5% here in the u.s. where you've got negative interest rates in large parts of the world, high evaluations are -- >> they look fairly valued to you but that's because of what central banks are doing. if central banks, if the fed actually starts raising rates, would our markets still look like a fair market value to you? >> i think so on a relative basis. they look extremely cheap. and so then the question is how does that extreme valuation gap correct itself? does it correct itself through central banks tightening aggressively or does it correct itself through ek we sis doing better over time?

and our view is the latter is more likely. >> because of corporate earnings doing well and corporations -- equities doing well because they deserve higher ratings because of their performance? >> i think equities do better because they're the best option available today. corporate earnings will be good enough. but i think most importantly the factors which are keeping yields low today and there are essentially two low nominal growth and central bank purchasing or purchasing by not just central banks but non-value buyers. those aren't going away. nominal growth is staying low. you're going to get continued purchasing. going to get continued purchasing by central banks. any significant rise in bond yeelz seem off to us. in that environment, that relative value of equities is what matters. >> thanks for coming in today. >> my pleasure. mortgage rates have been flirting with all-time lows. but that doesn't mean that they're heading higher any time soon. i don't know why it would.

diana olick joins us with more now. hi, diana. >> hi, joe. rates didn't move much last week at all. despite that weaker than expected unemployment report on friday. total mortgage application buying was up just 0.9% in the week send september 2nd. now, volume is nearly 28% higher than one year ago, but it's fueled largely now by higher refinance volume. applications to refie a home loan, just up 1% for the week but they are 43% higher compared to one year ago. on the other hand, mortgage applications to buy a home rose 1% for the week but they're just 7% higher compared to a year ago. now, you would think that mortgage rates would have moved dramatically lower after that disappointing jobs report. but they did not. in fact, the average contract rate rose ever so slightly from 3.67% to 3.68%.

it begs the question, have rates just hit and are stuck at a bottom? i spoke with matthew graham and he said no, rates could still make new lows if you consider the global bond market, some economies operating below 0%. and a general desire to keep currencies competitive. also with the fed buying fewer and fewer mortgages now, mortgages are actually underperforming compared to the benchmark treasuries. and they could have trouble keeping up with them. so it's a little complicated. but we could see rates go lower. take your bets, guys. >> i want negative, diana. it's what i'm waiting for. waiting for that. >> you can't buy a house on a negative rate. i don't see that. >> i want to pay no mortgage -- i want my principal to go down as i'm not paying anything into it. >> squatter. it might happen if you look at some of these corporations -- >> that's what i mean. >> negative bonds.

>> free money. >> you might qualify. >> thank you, diana. >> sure. when we come back, apple isn't the only tech company in the spotlight this week. twitter holding a board meeting tomorrow. rumors the social media platform may be looking to sell itself. what might be on the agenda. as we head to a break take a look at shares of twitter. we're back in a moment. you're here to buy a car.

welcome back to "squawk box." the futures again right now are down about 13 points on the dow. down 2.5 on the s&p. the nasdaq continues to be up about 2.5 points. let's get over to julia. dwiter's board expected to meet tomorrow with heavy topics on the table. julia boorstin has more on that story. >> reporter: hey, andrew. with looming questions about twitter's growth potential and its struggling shares spiking every time there's a takeover rumor, the future of the company will be up for discussion tomorrow when twitter's board meets. now, on the immediate agenda are cost cuts. that could include selling off ad tech company or video sharing app vine. speculation are notable because

they've been two of the company's key strategic initiatives. i'm told by a source close to the company that the management won't be mentioned at the meeting. he's expected to have a few more quarters to execute his turnaround plan. but conversation is likely to address the idea that twitter should look to sell even though the company doesn't have current bids on the table. potential buyers that could boost twitter's reach includes alphabet, and sales force. the core of its video strategy that it hopes will boost growth. twitter has no comment on upcoming board meeting. >> thank you. did you see this rich greenfield piece? >> i saw it. >> basically said that there was a bid on the table or suggested that there were people out there.

>> there were plenty of reports that google was interested in buying twitter but is no longer interested. from what intds there is no longer a bid on the table. there may have been feelers out on the table before. >> so it's a buyer's market? >> yeah. it sounds like the next six to nine months, that's the kind of time frame twitter might be looking at. but they want to have time for their video strategy to really play out. >> holman jenkins has a much better idea. i asked you to read his piece today. it's about how the eu is shaking down apple because they're very bitter. because europe will never create a google, an amazon, an apple, a facebook. when's the last innovative thing? so they're going to do it another way. for $14 billion? and holman jenkins says instead let's just give them twitter. that's the market cap of

twitter. $14 billion. let's give twitter to the eu then maybe they'll leave our successful companies alone. don't you think that has some merit to it? or you don't? that's holman jenkins. you said you love him. >> i love holman jenkins. and i reads the piece. i thought it was great. as you know i always -- i don't want to disparage all of europe though. they've done some good things. maybe not amazon or google yet. >> in terms of globalization and statism. >> think of nokia. >> yeah. give me one. one that's -- >> spotify. >> is that -- even jack ma is, you know, i mean it's possible to do this. to create something in your own lifetime that becomes great if you're not held back by, you know, all these structural issues. >> fashion. think fashion. great fashion in europe. >> they created the euro too. >> thank you, julia. when we come back this morning, we'll get more of today's top political stories including a fed policy face-off on the campaign trail. and later a look inside the

mysteries of ufos along america's paranormal highway. ben mezrich will join us with details about his latest book.

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welcome back. now news from the campaign trail, hillary clinton is criticizing donald trump for his comments about the federal reserve. speaking to reporters on her campaign plane yesterday, clinton said fed policy should be off limits for those running for office. >> another example why he shouldn't be anywhere near the white house. you should not be commenting on fed actions when you are either running for president or you are president. words have consequences. words move markets. >> trump has previously kussed

the fed of keeping interest rates low to help president obama. on monday he said the fed has created a false economy in that interest rates should change. hillary clinton and donald trump will appear at a town hall style event tonight in new york city. but it's not a debate and they won't be on stage together. the hour-long forum at the intrepid sea air and space museum is cosponsored by nbc and the iraq and afghanistan veterans of america. the themes will be national security, military affairs, and veteran issues. and the audience will be made up primarily of vets and active military members. >> first of the big events when it comes to the campaign. we should also mention that peter thiel penned an op-ed for "the washington post." he spoke at the republican national convention. his peet in today's paper is trump has taught us this year's most important political lesson. the paypal's cofounder writing that the establishment doesn't want to admit it, but trump's

denial of republican dogma about government incapacity is exactly what we need to move the party and the country in a new direction. and coming up, the countdown is on. it's a countdown for me at least, joe. i want you to know. apple set to unveil a new product lineup today. i know you think i'm crazy. >> is it much anticipated? >> yes, it is. we'll tell you what the tech giant might have up its sleeve. once you have a countdown clock, by default it's much anticipated. plus our good friend ben mezrich is in the house. he has a new book coming out. we're going to talk to him in just a moment when "squawk" returns. ing right by our customers. who's with me? i'm in. i'm in. i'm in. i'm in. ♪ ♪

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♪ welcome back to "squawk." among the stories that are front and center at this hour, a mortgage bankers association. applications for new home businesses rose.

remained nearly flat at 3.68%. now separately blackrock has been granted s.e.c. permission to lend money to each other. that would be done if a fund needed extra money to cash out clients. had requested s.e.c. approval last year. a couple other funds have that permission. ireland's parliament voting today on whether to approve the appeal of the tax decision against apple. the eu ruled last week apple owed $14 billion in additional taxes. cabinet endorsed the appeal last weekend. ireland's prime minister is going to be talking more about that in an appearance on "squawk on the street" later this morning. it is apple day. the tech giant taking center stage in san francisco this afternoon. joining us right now with a look at what we can expect is josh lipton. the countdown is on. >> reporter: that's right, becky. we talk a lot about apple music, apple pay, and the apple watch.

but certainly it is the iphone that remains this company's flagship product. and this morning that new iphone 7 should be front and center is. so expectations for that, what are we looking for? a faster processer, pressure sensitive home button, improved water resistance, and new dual lens camera system. but the feature generating the most attention is actually the one that might be cut out. it's expected that apple will remove the headphone jack in favor of connecting via bluetooth. that could allow for a slimmer phone but also might frustrate those who love their wired headphones. ceo tim cook knows there's a lot on the line with this new iphone 7. he has seen sales of the company's most popular product fall as the tech product with comps. whether unveiled here in a few hours can help reverse that

trend. gene muster says it can telling me by his estimate there are some 275 million active iphones out there older than an iphone 6. he thinks you're going to see a lot of users upgrade even if what we see here today the changes to the iphone 7 are incremental. >> all right, josh. thank you. watching that countdown clock all the same. we'll check in with you in a bit. it's now been almost 70 years since something odd happened in roswell, new mexico. we're still not quite sure what. but our next guest also isn't sure that we'll have to wait too much longer to find out. joining us now is author ben mezrich. his book called "the 37th parallel: the secret truth behind america's ufo highway." and you entered into this skeptical and you actually -- it's about a guy -- >> that was a reserves deputy in

colorado. he was fired after investigating a cattle mutilation. cattle mutilation is a crazy phenomenon in the midwest where over 10,000 cows and horses have been found lying on their left side missing a heart, missing lungs, missing eyes. >> what? >> all the cuts are surgical, circular and surgical. and they're drained of blood. it was a huge phenomenon in the '70s they petitioned the government for an fbi investigation. they investigated for ten years and found nothing. >> why make the leap to aliens versus satanic cults? >> there's a lot of positive theories. chuck made the leap to ufo's. when it happens in multiple states at the same time over 70 years. you would need a massive cult. >> yeah, but who knows. >> and it's a possibility. but chuck after getting fired from the sheriff's department,

he became a ufologist. he dedicated himself to finding out about ufos. and i have to say there's an enormous amount of evidence -- >> i was trying to think if i were trying to study us, i'd be finding humans lying on their side. but again, if they were that advanced, they'd know that might be a problem and people might get a little bit more educated. better to use cattle. so i guess that's -- i'll tell you the one thing that -- and this is purely from science and physics. you know how vast the universe is. >> we're changing our -- so 20 years ago people didn't believe in life on other planets. the closest star we found which may have an earth similar planet

is proxima sant o rks ri which we could get to in 40 years. you use the new thing -- the new program is these solar pods or whatever you want to call them that there's a russian billionaire involved and scientists involved. that's the next project we're working on now. we can't send people there. but the thought that these distances are too vast, that's changing now. >> it takes too long to accelerate. >> you can get to 20% of the speed of light. >> you better do it slowly. >> and you can't stop. so you're shooting these probes off in that direction. >> but i still -- i don't know.

ufo, ghosts, i don't know which one i'm likely to believe in. >> may as well believe everything. in the research i've done for the "the 37th parallel," i've come to the conclusion at the least something did crash at roswell. that it was covered up by the air force for whatever reason. and today that debris is at area 51 and there are still files that call it the unidentified debris. >> you swear they found that jacket in the debris of the space suit? >> you can't see -- >> that's what an officer on that ship -- >> a rock star author gets to wear a rock star blazer. >> so that was not found in -- >> can we go back? how did you land on this story? >> sure. i heard about chuck when they

was fired. and i went out to colorado and he meets me in the denver airport. puts a bulletproof vest on me and says we're going ufo huntsing. he handed me a gun. i'd never had one before. >> did you say i'm definitely doing this? >> originally i thought this is going to be crazy. it's not for me. i've read about kids who pull off schemes. but as i looked at the research and what really blew my mind was the amount of high level people in the sciences and the aerospace industry at nasa, at tro naughts, presidential candidates who all believe. there's so many people who believe. and the jump to us having been visited is not that far as it used to be. 25 years ago, people did not believe in life on other planets. now they believe it's somewhere. the idea that maybe something

crashed here. >> well, hillary clinton for one went on kimmel and said one of the first things i want to do when i'm in office when i'm elected is i'm going to open up the ufo files. i'm going to open up the ufo files. >> finally. >> and this was a woman who had access to everything. she's been asked that we have been visited and she said i wouldn't be surprised. bill clinton is supposedly a believer. ronald reagan believed. we don't know whether president obama believed. >> that's scary. the guy that really believed was kucinich. >> there's different levels of belief. it's a fascinating subject and a topic. and when you look into it, there's so many files of weird radar things that our military bases, a correlation between nuclear bases and sightings. roswell, there's one in the uk that are famously ( parts of

coverups. the roswell coverup is well documented at this point. the story of roswell, something crashes during a storm and they gather the debris. then they announce we have found a flying saucer. two hours later they rescind it and say it was a weather balloon. they fake a photo with a weather balloon. everybody involved in that photo now said it was faked. and that debris is moved to area 51. doesn't that bother you? that bothers me a little bit. a mainstream scientist can't look at it without losing his job. i figured i'd write about it. because everyone thinks i'm crazy anyways. so this is something the mainstream can't cover. >> i think you've got to go to exorcism next. i do. weird languages and --

>> you can go anywhere. the problem with these studies is when you talk to people who believe, they often believe everything. they believe in ufos and suddenly you're talking about the loch ness monster. >> there's a billion other galaxies and each has a billion stars. we're special but you put 4 billion on anything and you're going to get life. you put enough time through natural selection, it's going to design a hand and and eye which is amazing. i believe that. maybe there's some times that maybe we don't understand. >> we're working on that as well. but the other idea is if you shot off 100 probes in a 100 different directions, eventually they would hit something. if you think there are a thousand civilizations out there, they're all shooting probes off. eventually someone will get somewhere. >> a double helix, a structure looking like the double helix so

that people theoretically -- if matter's constant throughout the universe, maybe carbon based is out there. >> maybe they'll understand it. i think it's a very interesting thing. but "the 37th parallel" is about this highway across the united states where these things happen. >> if you find out it's devil worshippers, i want to see that too. and they suck the blood. there was no blood, right? maybe we find out what happened to vince foster's blood too. maybe interested in that. >> now we're talking a real conspiracy. >> yeah. yours is fine. but -- yeah, right. that's farfetched. but yours is more likely. >> i'm good with that too. any direction you want to go. >> ben, the book looks amazing like all of them. i'm intrigued. thank you so much. >> i appreciate it. thank you very much. >> there it is. "the 37th parallel." thanks. when we come back, underarmour is taking its game international. looking to expand its business in asia. and nba superstar steph curry is

along for the ride. a live report is next. as we head to break, look at the top selling basketball styles in china. "squawk" will be right back. everyone thought i was crazy to open a hotel here. everyone said it's so hard to be a musician, but i can't imagine doing anything else. now that the train makes it easier to get here, the neighborhood is really changing. i'm always hopping on the train, running all over portland. i have to go wherever the work is. trains with innovative siemens technology help keep cities moving, so neighborhoods and businesses can prosper. i can book 3 or 4 gigs on a good weekend. i'm booked solid for weeks. it takes ingenuity to make it in the big city. i'm booked solid for weeks. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state

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welcome back to "squawk box" this morning. among the stocks to watch, hudson's bay which owns saks reported a second quarter loss. 60% surge due to its acquisition of gilt group. we should mention a quick correction. during our interview with the eceo this morning, we showed a chart and it is incorrect. we apologize. but this is the correct one. also new drama other pricing. allergan ceo brent saunders is weighing in on the recent debate of price hikes for drugs. in a blog post he said the firm will raise prices on its products only once a year and that those increases will be limited to the single digit percentage range. interesting. especially given some of the hikes we've seen recently. but this is allergan kind of stepping out and trying to make sure it's taking this head on. it's something that picked up in politics. it's been an election year issue as well. programming note for you, we

will hear more about the drug pricing debate when meg tirrell speaks to another name in the pharma space. she's sitting down with joseph papa. that's coming up at 4:30 p.m. later today. under armour has enjoyed huge growth since the founding two decades ago. now the apparel company looking to take its name internationally. we are joined now from taiwan this morning. good morning. >> reporter: good morning. good evening from taipei, andrew. we traveled to hong kong and then taiwan with steph curry and under armour. and the battle for consumers isn't playing out on the nba courts at home, it is playing out in smaller gyms like we saw here in taipei. where curry spent hours coaching and training and doing push-ups with some of the thaiwanese all

stars here. when it comes to sneaker sales. comes at a time when curry sort of after making a dent in the u.s. market and under armour is dent in the u.s. market is coming up at a time when nike has been here for decades. they've managed to grow a billions dollars business in china. so i asked how long it would take him to grow china like he did the u.s. here's what he said. zblit takes time. you know, since 2010 we've gone from our first million dollars in business to $3 million in 2012 to over $150 million in revenue this year. we just hit that trajectory of growth. it doesn't happen overnight. when you think of china, you can't think about it in terms of what happens this year or next year or the next three years even. that it truly is a five to ten year -- it's really a 20-year approach of plan.

it's got to be something which is leaving china thinking you're going to pull revenue out of the market. >> reporter: and when it comes to growing in this market, like under armour, curry has some work to do. the list of global athletes. and they looked at data analytics and in the top ten you do see soccer stars and sneakers. kobe bryant number 11. steph curry number 32. we did have the chance to sit down with curry a number of times. he is positioning himself here he says early. so i asked him who he looks up to in terms of other nba players and how they've managed to leverage their brand internationally. listen. >> there's always a great example all across from players that have come before me. and so kobe's always done a great job of keeping a consistent presence in asia.

once again trying to create an authentic story to him. everybody does it a different way. i want to have something that's unique to me and a story to under armour and steph curry. >> reporter: but make no mistake about it, guys, the fans here in asia went wild for him. we got a chance to see it up close and personal as curry went to a local under armour store. they lined up for hours, missed school, stayed up from 5:00 a.m. just to catch a glimpse, get an autograph, or maybe even a selfie and there were a lot of selfies taken. he held 5,000 people at a consumer event where he just played ball with some high school kids and refed that game. it comes at a critical time for under armour where it has split so far for multiplying since the ipo. investors are wondering whether it can grow into the above industry valuation. international is the key.

and when it comes to the international strategy for under armour, steph curry is their man. >> thank you for that. we appreciate it. we're going to see more of you over the next day and a half. meantime, joining us now to talk more about the sneaker wars. senior research analyst at capital markets. good morning to you. it has underperformed recently and can it grow into that multiple, if you will, at this point? >> yes. we believe it will. and international is a big part of that growth. so under armour is highly underpenetrated. significantly underperforming versus nike internationally. and i think that international is going to be a big part of their growth driver going forward. as well as footwear where it's underpenetrated. so i think they easily can get

to that mid-20s to high-20s top line growth for the next several years. >> in terms of what they need to do to get there, right? i can make the general argument you've just made. then the question is an execution one. spending internationally. how do you want to see them sort of reallocate their resources? >> yes, so, spending is going to increase as they invest more internationally in their footwear business. but to offset that, they're getting more efficiencies in their supply chain particularly in apparel. we see margins being flat year over year. we're not really concerned about earnings coming down as top line continues to go up. valuationwise, though, if you actually look on it at a price to earnings growth metric, it's about two times very similar to what nike is. and so we don't think valuationwise given the topline growth and most of that flowing to the bottom line it's really that expensive. >> how important -- we talk about steph curry.

how important do you think these endorsements are globally? steph clearly translates on a global basis to places including asia. are there other athletes or other marketing plans that they need to endeavor to pursue? >> yes, they're very important. it's really the new way for a lot of these sports apparel and footwear guys to start marketing. and when you look at the price of these sponsorships, it's still a fraction of what they were paying for other types of media advertisement. so i do expect under armour to make these endorsements going forward not only in the u.s. and north america but with high profile athletes. >> susan, we appreciate your time this morning. thank you. >> thanks. >> wow. people go crazy with ufo stuff on twitter. >> from the mezrich interview. >> i got to tell you, i'm pumped up about this. >> hillary went on kimmel and

she'd open the files. oh, the ufo files. oh, those files. okay. >> might be marked "c." >> hey. look at you. good job. when we come back, we had this morning's biggest movers and in the next hour, don't miss a cnbc exclusive interview with michael dell, the ceo of the newly formed dell technologies. stay tuned. you are watching cnbc, first in business worldwide. [engine revs] ♪ [cheering] ♪

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let's take a look at a couple of stocks to watch this morning. western digital raised its current quarter earnings forecast. now looking for $1 to $1.05. that is up from the consensus of 90 cents. the hard disk drive marker says its recent acquisition of sandisk has given it more customers and a more favorable product mix. tegna which just rolls off the tongue, doesn't it? tegna. don't you think it should be ten-ya? >> they have the thing over the "n." >> but if the keyboard didn't have that. it's not ten-ya.

i hope it never gets acquired because that name has to stay. tegna spun off from gannett said it will spin off its cars.com unit and consider alternatives for its career building business. and hd supply reported profit of 85 cents a share. that was 2 cents below expectations. the industrial revenue also fell below street forecasts. and advance microdevices is planning a $600 million offering of stock as well as $450 million in convertible notes. just want to check this out, see what the actual -- how far this thing has fallen to. actually, look. it's gone from $2 back to $7. chip maker plans to use the proceeds to pay down existing debt. let's get a check on the markets this morning. you see that so far the futures are -- yeah. they've been slightly higher to slightly lower.

right now the dow futures down by about 17 points. s&p futures off by 2.5. the nasdaq is up another two points after setting an all-time high yesterday. also if you look at the early trading in europe, for the most part we see the markets higher. the dax up by 0.3%. ftse is relatively flat. the 10-year note as we've been watching the yield, again, at this point looks like the yield has given back some of that ground it picked up. it was moving as high as 1.6% before the numbers we saw on the jobs market on friday. this morning it's at 1.531%. coming up, done deal. dell completing its merger with emc. ceo michael dell is going to join us. that's a cnbc exclusive interview. we'll be back in a moment. nce between life and death. for partners in health, time is life. we have 18,000 people

around the world. the microsoft cloud helps our entire staff stay connected and work together in real time to help those that need it. the ability to collaborate changes how we work. what we do together changes how we live. 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. because no one knows & like at&t. mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil?

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a "squawk box" exclusive. michael dell joins us to talk about closing the deal with emc, taking on the cloud, and the future of the pc industry. and an apple a day keeps the bears away. ready to roll out new products but will it juice the stock? plus fighting poverty with a star studded lineup.

rihanna, metallica and more. we'll bring you a front row seat as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. and a live studio audience today. which is exciting. >> welcome, everybody. >> we should do this. >> every day. >> right now futures down 15 points on the dow. that's a little worse than before. the s&p called down about three. the nasdaq continues to trade higher. and we're going to still tell you where oil is even though that hasn't been the story for the last couple of months. as you can see, oil's down to about $45 a share. let's get you caught up on

today's stories. apple is expected to unveil its latest product lineup. focus of course on that event will be on the new iphone 7. the phone apparently will have a faster processer, more pressure sensitive home button. i don't know what that means. higher quality camera with dual lens. and removal of headphone jack which has been controversial. also big ackman's pershing square has taken stake in chipotle. he's tried retail and food before. we'll see if he has luck with this one. and hillary clinton and donald trump will appear at a town hall style event tonight. it's at the intrepid in new york city. the hour-long forum is cosponsored by nbc and the iraq and afghanistan veterans of america. the themes will focus on national security, military affairs, and veterans issues. matt lauer hosting that.

should be interesting. couple more stocks to watch that we didn't mention in the last hit that we had. southwest airlines expected third quarter revenue for available seat mile to drop 3.5% to 4.5%. about a half a point of that drop comes from july's computer system disruption. >> ouch. >> remember southwest and -- >> delta i think. >> and yesterday it was ba. conoco phillips upgraded to hold from underperform at jeffrejeffe rerks ries. the analyst says the market is not giving the heavy equipment maker credit for some of its latest cost cutting moves. it is official. dell completing its $67 billion acquisition of emc. it's a historic deal because the tech industry's biggest merger ever is this one right here. joining us now to talk more

about it is michael dell. he's the chairman and ceo of the newly named company dell technologies. it is great to see you today. thank you for joining us. >> it's great to be with you. good morning. >> let's talk a little bit about the new company. what is it going to look like? what do you envision and who are you going to be competing with in this new world? >> our company will comprise a set of unique businesses. roughly $74 billion in revenue. 140,000 people around the world. the essential infrastructure company combining dell, emc, vm ware, rsa, pivotal, secure works. we have a very broad portfolio of solutions. and as the world is being instrumented, you know, we've all talked about the internet of things and the digital transformation. the cost of making things intelligent is approaching zero.

and so the number of intelligent things is exploding. and so there's new infrastructure required and new software, new capabilities required to power that digital future. and that's really what our company's going to enable and do it securely too. >> normally i'd ask you about the street's reaction to such things. but because you're taking this company private, there is no street reaction. so let me go back to some of the initial media criticism of some of this. when this was announced back in october of last year, you got criticism from fortune which said a dell/emc deal doesn't make sense. they also had wired weighing in and saying that not just dell but hp, cisco, ibm, all of these companies they think are the walking dead. what's your response to some of that criticism? and how do you combat that? >> you know, when we took dell private in 2013, we had the

benefit of being able to focus not on the 90-day shot clock that public companies typically find themselves in but in a longer term time horizon. during that period we gained share for 13 quarters in a row, we paid down substantial amounts of debt. our net debt in the dell transaction as of now is roughly less than zero. when you look at the combined cash flows of dell/emc, this is a large transaction and you find that we are operating the company with an investment grade approach and the demand for the debt has been extraordinarily high because of the high quality nature of the assets and the strong predictable cash flows which are certainly very evident in our latest quarter which you can see in our quarterly filings. the combined cash flows of the

company are quite substantial. on the order of $3.5 billion just in the last quarter. >> so you miss the public markets and quarterly analyst calls? >> well, we actually have two public companies as part of the group. >> right. >> vm wares remains a public company. and secure works is also a public company. and it's possible in the future that within the group we could have other public companies. >> but michael, let me just ask you about the legacy issues that somebody like an ibm is having. we hear time after time that they need to get rid of some of their legacy costs and their legacy revenue that is not profitable. cloud's been very profitable for them. do you have any of those legacy issues with emc that ibm and others have faced and struggled with? >> you know, one of the interesting things about the dell/emc combination is we don't have a lot of overlap.

there are two businesses that we've already announced that we are selling to other firms. we feel very good about the portfolio. and, look, you know, we're investing for growth. we've invested in the last three years $12.37 billion in research and development. over 20,000 patents. an unbelievably strong rnd engine and combined with the broader go to market engine in the world. again with this long-term focus, we feel confident in the country's future. no question that the technology industries is characterized by these sort of changes and, you know, companies have to adjust. this is a change or die business. and we absolutely know that. and, you know, are prepared to change. >> michael, help us with this. given the transformation of dell

itself plus this deal, it's sort of hard to put you in a particular bucket or i think the public has a hard time trying to appreciate the bucket you put yourself in. when you think of your competitors today, not what they were five years ago, who are they? >> i think you named a number of them. certainly when you look at the broad portfolio that we have, we would have a number of companies in the industry, well noted companies that we compete with. as well as i think the partnering aspect and this is important. because we have a set of open ecosystems, probably most prominently the vm ware ecosystem that where we're partnering with many of the companies that, you know, are -- we're also competing with. that's another characteristic you see in our industry. but look. this is a almost on its way to $3 trillion industry. and there's no company that has

a very large percentage of the total industry. we're well positioned to be the essential infrastructure company. the largest enterprise systems company in the world. >> hey, michael. you know, we've talked a lot and i have trouble getting you out of your comfort zone sometimes. so i know i'm risking that right now. but you started this -- you know, think about -- >> why get out of the comfort zone, joe? you know, when you're comfortable, it's a good place to be. go ahead with your question. >> because you started this company in your dorm room and think of the world if you hadn't been born, there wouldn't be somebody called dell. it's amazing the way i'm giving you a compliment on this. it's incredible. >> thank you. thank you very much. >> you've got some smarts in there, obviously, about tech and innovation. so there's this guy maybe you've read him. his name is robert gordon. he says everything worth inventing has already been invented and the reason we're stuck in this productivity slump right now is because, you know,

we haven't made air travel faster. we haven't had any better way of getting water. and it reminds me of people in the 19th century that wanted to close down the patent office. you see what's possible now in the digital world. isn't discoveries becoming more frequent? is there any reason to be sort of pessimistic about the pace of technological advances in the next 20 years? >> i am completely optimistic about the future of technology and its role as a lever for progress in the world. i think it won't take long for the pessimistic predictions to be proven wrong. let's go back and think about what people have today in terms of information and access. the speed, the number of things that they can do with the

technology that's available. and the dramatic changes that that's having inside the economy. now, certainly there are displacement issues, right? as new technology becomes available it creates new opportunities, but it also destroys opportunities. but i'm very optimistic about the long-term future of the economy and technology's essential role in that. the world of technology is moving from kind of the back office to where everything -- every company sales, marketing, customer acquisition. new product development, media, all industries are becoming technology industries. and it's not information technology. it's business technology. and we've got the powerhouse company to enable all of that across the world. and so, look.

if people are -- if people are, you know, skeptical, it just creates opportunities for those of us who have the ability to think long-term. >> so your comfort -- you were definitely comfortable then. it was politics one time i asked you about when you were not comfortable. but i agree. you look at -- >> and now on to your next guest. >> michael, seriously though, what you're talking about with the economy, i remember it was at least four or five years ago when you talked about how we are coping with our abilities as a nation to gear up our workforce for what was happening with these technological changes. you said you couldn't find enough engineers to fill the slots quickly enough. but there was a line around the corner of people waiting to apply for jobs at the factory or jobs at the distribution center, i think it was, people who could package things and ship them out. is that still the problem in the economy or is it easier to find

high qualified tech engineers and people who could work on some of these jobs in this economy? >> for the most advanced jobs, it is still a real challenge. if you look at areas like artificial intelligence and deep learning, machine learning, these areas are so hot there is not enough supply today to be able to meet the demands that companies have. and remember, all the data that's out there which is, you know, like doubling every 18 months or so, maybe a percentage of it is being used to make better decisions in realtime. that's an enormous opportunity that would require massive new skills, new capabilities, null infrastructure. so yeah there are critical skills challenges as it relates to the pace of change which is in many ways faster than people can change. and so there are real challenges

within society in terms of how to get ready for this digital future. but the future doesn't care if you're ready. right? it's coming no matter what. >> all right. we need a new printer, also. remember you brought a printer in here and installed it for us. are you available next week? >> that might have been in the last century, joe, but we'll -- >> it was. >> i think that was -- it's been a long time, michael. anyway, so the new michael dell -- >> he doesn't do tech. >> he doesn't do that. okay. all right. fine. you're too good for your customers. that's all right. >> before you go, one question that we've been talking a lot about apple today and they have a new product out. some people think it may or may not be disappointed. we'll see. i'm curious as a founder, you are a founder-led company. what risks do you think you can

take as a founder that maybe others can't and what do you think there's a distinction or not? >> i do think that founders have a kind of special permission to make sometimes sweeping changes inside their companies. i would also tell you that being a private company with a long-term focus allows us to focus on our customers and on creating success for them over time. that is a tremendous asset we have both the flexibility of a giant scale company largest in the world in our space and the speed and flexibility of a start-up as we're creating new businesses with inside the group. so the combination of being founder led, that's a great thing. i take that one pretty personally. because i have to. a but being private is really a

tremendous flexibility creator for our company and ultimately creates success for our customers. >> we want to thank you for joining us this morning. going to give joe your tech help number. >> i've got his e-mail. but he says he still caters to customers. we'll see. >> you're not a customer. you're a cling-on who wants it for free. >> michael, thank you. appreciate it. when we return, congress back in session. senator john barrasso will join ugh after the break. and a programming note, don't miss the delivering alpha conference. we've got more details and also can pick up tickets at delivering alpha.com.

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and it starts with foster farms simply raised chicken. california grown with no antibiotics ever. let's get comfortable with our food again. welcome back to "squawk box" this morning. take a look at futures right now. the market looks like the dow would open up lower about 17 points off. s&p 500 off about three points. and the nasdaq looking to open down 1.75 points.

police say the fire that broke out at a gap distribution center last week was intentionally set. no employees were harmed after the incident. investigation still under way. gap says it has a contingency plan in place. congress returns to washington this week to debate a number of issues as the presidential candidates enter the final two months of the campaign. wyoming senator and physician john barrasso joins us now. senator, it's good to see you this morning. there's a couple of topics. i know you're a senator, but we also are aware of your medical background. there's so many different things we could talk about here instead of just the election. let's talk about the prospects for obamacare. who is going to have to deal with this? 2017 is really sort of d-day, isn't it? for the premium increases. how's this going to work? does it have to go to single payer to work?

has that been the intention all along? >> i think that's what the democrats have intended. look, obamacare has been costly and complicated from the beginning. but right now it's collapsing. for one out of three americans going into the exchange next year, they're going to be down to a single choice. so it's not a marketplace like the president describes it. it's a monopoly. in wyoming we only have one choice. but many states are now in that situation. and there's an area in arizona where they have no choices. we're going from an obamacare wasteland into an obamacare ghosttown. so the increases have been terrible and they're going up much, much more. next year lots of people are going to lose their doctors. the website has even taken down the point if you like your doctor, keep your doctor. that is gone. 2 million people who bought on the exchange this year are going to absolutely have to change insurers and many people change their doctors.

>> senator, watching the news last night i saw the latest zika -- you know, harry reid saying one thing. then mitch mcconnell saying something else. both pointing fingers. i mean, i don't -- i think the american people are looking at this and saying these guys are crazy. i mean, but -- in the republican plan, though, there was the last thing that it seemed so out of nowhere, this -- the last provision that was stuck in there had nothing to do with zika or anything else. i don't remember what it was -- >> it had to do with family planning. >> no, it wasn't that one. it was something even more out there than which agencies would get the help. i mean, what are we supposed to think of that when congress has a 6% approval rating right now? why try to stick something in at the last minute and just do it? >> the money is there, the request the nih has made, the request the center of disease control has made, that is there. we need to fund it. there's two things you can do to

help in the fight against zika. one is to kill mosquitoes and the other is to develop a vaccine. that's going to take a couple of years to develop the vaccine. you need to kill the zika virus which means kill the mosquitoes. they hang around where there's water. there's going to be a lot of additional water in florida after the storms. so it means spraying for mosquitoes. yet the environmentalists are saying spraying may effect the water. we need to get this done -- >> but, senator, the money you referred to part of the debate is should this come from other agency spending? should it be cut from, say, cancer research? or is this new money that should be allocated? what's your answer to that? >> this is money that ought to take from other areas. we put so much money into ebola, so much of it has never been spent. >> a lot of that is allocated. >> there are a lot of programs that money has been allocated to and you say do we need to spend

money in those areas. no, you need to move it to other areas. we're looking at a $20 trillion debt in this country. >> i think that's what's frustrated in florida so much. >> i can easily find areas in the budget where you say you shouldn't spend money in this area. the democrats say no just add it to the debt. just add it to the $20 trillion debt. there are other areas where you can take money that doesn't need to be spent and focus it here. i think we need to pass this. i voted for it. this before the break was 68 people voted for it in the senate. we come back, harry reid wants to filibuster. he's being very obstruct i haiv which is part of the plan to take back the senate he lost because of the mandates of obamacare which had been so unpopular around the country. >> what else do you think can get done in this session, senator? what should the priorities be? >> well, i've introduced lejs along with colleagues that try

to protect people from this obamacare mow noply. if you're one out of these three counties where you're down to a single choice of obamacare and it's expensive and doesn't include your doctor, i don't think you ought to be fined by the federal government because you don't buy a government mandated program. we have a number of senators who have signed onto that. i'd like to see that done between now and the election. obamacare continues to be very unpopular around the country. and i just want to get some freedom and protection for these people and give them some of the flexibility and choices that i think they deserve in a health care plan as opposed to what president obama and the democrats have forced on the american people. >> all right, senator. we'll keep it tight today. we'll talk about -- you know, there are so many other -- if i remember -- like, if i was on fox, i'd probably say you're a doctor, does hillary look sick to you? but i'm not at fox. so i'm not going to -- >> so you're not going to bring it up. >> i'm not going to ask you

about that. so if i'm cicero, i could ask that. but i'm not going to bring up hillary's health. >> very good of you. we need government funded for the next year. we're going to do that as well. >> good. >> all right. >> he's not taking that. >> no. i'm not asking it and you're not taking it. thank you, senator. we'll see you later. >> thank you. >> but you didn't have a coughing fit. at least you got through the interview. >> thanks for having me. when we come back, we'll have this morning's stocks to watch. stay tuned. you are watching "squawk box" on cnbc, first in business worldwide.

we've just been hearing so much about how you're a digital company, yet here you are building a jet engine. well, ge is digital and industrial. like peanut butter and jelly. yeah. ham and cheese. cops and robbers. yeah. nachos and karate. ahh. not that one so much. the rest were really good. socks and shoes. ok, ricky...

welcome back to "squawk box." here's what's making headlines this morning. the fed's beige book is on the calendar. region by region assessment of the economy. comes at 2:00 p.m. eastern. investor are looking for any clues on the future of interest rates and whether a hike i think at this point comes this year. whether there is another one. another report out today may be of interest. the labor department's so-called jolts report. that's out at 10:00 eastern. that's this month's monthly job openings and hirings. this will be for the month of july. and one notable earnings report out after the bell.

we'll get the latest from hewlett-packard. quarterly profit of 44 cents a share on revenue of $12.6 billion. oh, god, fabio. get a life. >> bye, fabio. >> see ya, fabio. everyone got a shot at fabio there. we have some other headlines to get to this morning. new drama over drug pricing. saunders is weighing in on the price debate. in a blog post he says his firm will raise once a year and the increases will be limited to the single digit percentage range. quick programming note. we'll hear more about the drug pricing debate when meg tirrell speaks to another name in the pharma space. she'll sit down with the ceo of valeant joseph papa today at 4:30 p.m. eastern. >> fabio by the way stops by every day at this time.

has been for a year. >> you always notice that? >> but he's our daily visitor. >> he is. >> we might have to interview him one morning. >> you know we had the real fabio on. >> i do. >> he's one of my favorite -- >> he's funny. >> he is funny. him and richard simmons. and he's tall too. that guy -- >> yeah. he's all that. >> he is. did you feel it too? >> no. you did? >> no, no. i mean, did you think he was all that? he was a charismatic guy. you could feel it. >> he was. >> this squawkward moment brought to you by joe kernen. >> i'm giving it to you. >> you said it. anyway, among stocks to watch, dave & buster's cutting same store sales estimate. the company's ceo is going to join jim cramer tonight on "mad money." check it out. stock down by almost 6%. fans of -- and now this?

>> watch this. get it ready. >> fans of one particular -- it's called a porn site may be the victims of a data breach. the names of nearly 800,000 people who allegedly -- brazzers? >> what? >> he just found his name on the list. >> fans that allegedly use the brazzers porn forum were leaked online. exposing identities of the users and their public conversations. through the website. the as a resuvulnerability was >> i've never heard of it. >> general type site? >> don't know anything about it. >> go ahead. >> incognito. right? >> yeah. anybody that gives a name or a password or a credit card to --

>> to a porn site. right. >> duh. in the meantime, we're talking other versions of tech this morning. we're counting down to apple's big event later today. the tech giant set to take center stage. joining us now to talk about what to expect is senior writer at buzzfeed. covers technology. we've been talking about this being much anticipated. but i should tell you if you do a little apple googing this morning. words like frustrating, disappointing, and boring come up in terms of what this -- it's not even out yet and people are saying these things. >> it's expectation setting right now. >> what's the problem or is there a problem? >> we've been conditioned with all of these keynotes to be wowed in some way to have the game completely changed and the paradigm shifted. and, i mean, these smartphones are becoming really kmodtized. they all sort of do the same thing.

and it's more about the ecosystem you bought into. are you a google person? an iphone person? is your universe an apple universe? if so, you're going to go. >> does that mean the runway's over in terms of apple's ability to -- >> i think it's all right now about improving this broader ecosystem experience. you know, part of ios 10 is going to have this smart home connected home kit. which if you see parts of it in action are -- i mean, it's a wonderful thing. but these are small little upgrades. and there's not a lot you can do right now if you think about it with the design of an iphone. i mean, you're not going to come up with some triangular shape. people want what they want. it's hard to make it up that much smaller. so it's more about these little tweaks on the inside. faster processing chips and then the software that controls the whole thing. >> for all of the, quote, disappointment that everybody has, there's nobody else out there that's doing a massively

better job at this, right? >> i mean, you look at the big samsung battery fail. and i mean, their phones are exploding. so i think what you're looking at right now is apple is always going to sort of be on the vanguard of some of these great product changes that don't always necessarily make sense at the beginning. like the headphone jack. >> is that really gone? >> you know, the rumors seem pretty consistent and have been for a long time on this. and that's -- i mean, that's going to be a thing that's really going to frustrate a lot of people. but apple does this. apple got rid of the floppy drive awhile ago. got rid of cd drives. >> can i ask a rumor question? how do the rumors? i know how people get stories. but how do you get your information? i mean, does apple guide people behind the scenes? how does this happen? >> you know, for years there's been a lot of leaks. it's a pretty large supply

chain. there are definitely certain reporters who are plugged in with a lot of sort of, you know, real dark sources there. a lot of the unconfirmed ones come from china. the manufacturing side. >> they are consistent. there's a lot of them. a question of how organized the leaks are and how it works. that's a story we should work on. you should work on that. >> i think b i have an assignment now. >> okay. cool. thanks for coming in. coming up, venture capitalist peter thiel speaks out on what he calls the year's most important political lesson. his latest op-ed is next.

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welcome back to "squawk." this morning peter thiel paying an op-ed for "the washington post." he spoke at the republican national convention. his piece is entitled "trump has taught us this year's most important political lesson." quote, we can't expect the government to get the job done until voters can say both to

incompetent transit work es and to the incompetent elites who feel entitled to govern. you're fired. >> that's different than what he said last time. that's interesting. last time we said that he was saying the idea that government -- almost sounded like he was saying trump made it okay the government can do something well. and that's a conservative small government -- but you have to be able to expect if you're going to fund something there should be -- and that is the big problem. if you don't have the whole idea of a profit incentive, you have to watch your p's and q's. there's a lot of -- well, you don't -- you have a driver's license, right? you just don't have a car. but you've been to a dmv. >> i have. >> they get a bad wrap but some of them are pretty unbelievable. >> jeebs drives me right up. and then we go through the special entrance on the side.

>> then it's not such a big issue for you. >> haven't had problems. they've been good to me. when we come back this morning, fighting poverty with a star studded lineup. rihanna, metallica and many other artists teaming up for political activism. also a programming note. next week don't miss delivering alpha conference. it's the summit produced by cnbc and institution investor. more details and tickets, go to delivering alpha.com.

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welcome back to "squawk box." futures right now are indicated to open if we were to open right now down about 15 points on the dow. down just under three on the s&p and up just under two on the nasdaq. making headlines this morning, ford says sales in china rose 22% in august driven by the new models of the edge, the focus, and the escort. it's the company's highest monthly growth rate in china since last january. later this month, thousands of fans will be rewarded for their activism with free tickets to a star studded concert in central park featuring rihanna, kendrick lamar, metallica, and many others. joining us now is hugh levins. he is the ceo behind the fest kal. thanks for coming in.

>> i appreciate it. >> it's been five years. when you started this, you thought this was a one and done type event, right? >> we absolutely did. we got through year one and our team was so exhausted that we thought that was the end. day after we got a call from stevie wonder. he said hey boys i want to headline your tour. we said there is no year two. >> and then you realized what you said? >> he said there is now. so all of a sudden we were into an annual event. and now it's in our fifth year. and we're just so excited that rihanna and kendrick lamar and, you know, such incredible artists like metallica have signed up. >> part of your goal is to end extreme poverty by the year 2030. but for people who haven't seen those other interviews, what's your definition of extreme poverty? >> extreme poverty is defined by the world bank as those living on less than u.s. $1.90 per day. it's the useless suffering where

a child would die for lack of an immunization. we think the world is getting worse but there is good news in the battle to end extreme poverty. because while i've been alive, extreme poverty has plummeted from 52% of the world's population in 1991 down to less than 25% of the world's population today. >> where are the biggest pockets that exist today? >> still exist is sub-saharan africa, latin-america, southeast asia. obviously india, pakistan, northern nigeria. so we all it africa. plus. but approximately a billion people still living in extreme poverty. >> do you know at the turn of the last century what that number was? i'm just curious. >> you've seen -- the good news is you've seen extreme poverty decline particularly after the industrial revolution. >> exactly. >> so based after the, you know, '40s, '50s, '60s, you've seen amazing human progress. and so what we're focused on now is that kind of -- that last mile to try to reach those that haven't been reached yet.

and so when you think about it, you're talking about last mile health programs like polio eradication, you're talking about water and sanitation services, trying to -- >> before it was you didn't have the wherewithal to do it. now it's different which is why it's addressable. just based on attention and just will. >> and will, exactly right, joe. there is enough -- there are enough resources to eradicate extreme poverty. we need to motivate the will. >> it's interesting that your model is getting corporations and individuals to give money to your organization instead of doing directly to create a school or do something else. and you use the money a little differently. it's that lever of trying to beat governments into recognizing these problems. right? >> exactly. and the way we look at it -- so if you think about extreme poverty is a $256 billion a year challenge. no amount of black tie gala

dinners are going to end it. we focus on the short-term investment. we try to encourage long-term investment for sustainable change. let me give you one quick example. last month we worked with gucci on a campaign to encourage the british government to increase their interest in girl's education. citizens across britain called on the government to up their investment. and they responded with $130 million in new investment for girls' education which would send 175,000 kids to school this year. if we'd invested that same campaign money just in sending kids to school directly, we could only educate 400 to 500 kids. >> because the campaign cost you how much? >> $300,000. so that's 400 to 500 kids in school versus 170,000 kids who are going to be in school this year. so we can't approach it with a band-aid for bullet wounds approach. we have to look at the systemic issues and have vast resource

ifs we want to take the issue seriously. >> is that a recognition that philanthropy can only do so much, that it's really government that has the money to end this? >> it's both. if you think about the scale of the challenge, philanthropic is about $60 billion. you've got a $200 billion a year gap. so you do need -- >> i guess that is going to stuff the governments won't touch because it's not tested yet. >> it's important. the bill and melinda gates foundation do tremendous work. they focus on polio eradication when few do. you do need the investment as well. but you need both working together. >> how much does it cost to put this on? >> the festival? >> yeah. >> so it's millions of zlars to put it on but the artists all perform for free. so we don't pay the artists a single dime. they do it absolutely for free. >> does the city donate the park? >> well, you have to pay a fee for the parks department. but because we're now in our fifth year, they reduce the cost

every single year. here's the thing. over the last five years, we've now secured over $25 billion in commitments that will impact the lives of 656 million people over the coming ten run a tradition benefit concert and donate those millions we would never be able to have that scale of change and we focus on what we do. >> there's an artist you haven't announced that is going to be joining you. >> demi lovato is joining the lineup, one of our headliners, working with her team and the stars aligned for her to be part of the festival. >> kendrik, that's start. that is strong. >> thank you. >> makes me want to come. >> you should come, joe. we would love to have you. i'm not going to get political, i look at clean water, vaccines. >> yeah. >> food. >> priorities i see and i see some misplaced priorities on other stuff. it must be frustrating when you see conferences about possibly i don't know, cutting a half a

percent of a fahrenheit off -- maybe by the year 21. we can do this now, near term and it's stolen a lot of the thunder and the, you know, motivating people. i think it's misguided and misdirectd and i can get behind that 100%. >> thank you. i really appreciate that. >> thank you. cheers. >> coming up, when we return down to the new york stock exchange and see our friend jim cramer get his take on today's top stories including apple. next. as we head to a break check out the yield on the 10-year t-note. you're watching "squawk box" first in base here on cnbc.

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let's get down to the new york stock exchange. just got the kendrick lamar we had on andrew's phone phone. i don't know if you saw the interview but that was interesting. this morning, i guess we have hewlett-packard after the close. the market looks a little bit uncertain as to which direction it wants to go. we're waiting for something to happen it seems like. >> i mean it's crazy yesterday it was going down off what

people think is a fed hike even after the employment number but oil turned up. it's intellectble doesn't seem to matter if oil goes up we see things go up, mergers yesterday, the growth stocks, fang back in action. this market still taking its cue from oil as illogical as that seems at this point. it's what's happening. hp, i have to tell you meg whitman never seems to be satisfied with the numbers, always something up her sleeve. i would not bet against her, stock at 21, 22, seems inexpensive to me. >> if we go above 50 that means the market goes higher on oil or we like it in the sweet spot? >> look at apache. apache put together acreage back in delaware basin where pioneer is. the stock goes up 3. i mean it seems if you say anything good about oil your stock reacts incredible. eog up 5%. spectra and enbridge were up.

this area has become so important to the market it's willing to overlook whole major cop stocks that don't seem to matter. so i don't know, i mean the market is quirky but quirky to the positive side in the the negative side. >> jim, we'll see you in four minutes. >> thank you. >> all right. coming up, this morning's biggest movers and tomorrow don't miss a cnbc exclusive with bank of america's brian moynihan will join us live at 7:30 eastern. you're watching cnbc first in business worldwide.

as you can see, i build the jet engines, and programmers teach them to talk. so yeah, ge is digital and industrial. so it's indigital. digidustrial. indigenous. shhhh... let's go with digital industrial. for now. digidustrial. yeah. or, digital industrial. what's going on here? i'm val, the orange money retirement squirrel from voya. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at voya.com.

welcome back to squawk. stocks western digital raising its current quarter earnings forecast. saying its recent acquisition of sandisk has given it more customers anding at t ing at tt will spin off its cars.com unit and consider strategic alternatives for its career builder business. >> one more check on the markets. the futures slightly negative as far as the dow all morning and less negative down about 4 points. the nasdaq has gotten more positive up about 3.5. and the s&p is down just

fractionally. the 10-year, the yield dropping again. up above 1.6, now back at 1.52. >> last week -- >> it was most of august it was 1.5 and change. finally hit 1.6. gave it back. >> market still moves higher when oil is higher according to jim cramer and now oil is up a little. >> good-bye. make sure you join us tomorrow. right now sometime for "squawk on the street." good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. busy day ready for apple's product event this afternoon. beige book we react to pershing's stake in chipotle. watch europe over the next hour. carney does testify before the uk parliament. 10-year has settled to around 1.52. api inventories tonight after the bell. road map begins with much anticipated apple eve