panthers. i did see the serena match. we'll bring you the highlights of the nfl and maybe a little tennis. nfl opening night. friday, september 9, 2016. we've got a lot going on. "squawk box" begins right now. ♪ ♪ ♪ >> good morning. happy friday. welcome to "squawk box" on cnbc. i'm becky quick. let's take a look at u.s. equity futures. you can see the trend setting up at least in the early part of this morning. right now dough futures down. s&p down over 5.5. nasdaq down 13. it was technology that really drew things down yesterday. apple other technology shares giving back some of the ground they've picked up recently. you did see oil prices higher. we'll take a look at that in just a moment.

in the might be team take a look at what happened overnight in asia. right now, asia closed up just slightly. the shanghai comp was down slightly. the hang sang up .30%. europe in the the early trading right now. see red arrows across the board. these are declines. pretty mad rat. basically a quarter percentage point decline across the board. if you check out crude oil prices big thing to watch yesterday. crude oil up jed yesterday. biggest jump in five months. after we saw that confirmation of the drawdown that had been suggested the night before, you see right now wti giving back a little gain. decline of .51. breaking news out of north korea overnight that could be ralting markets this morning. the country claiming to have successfully tested a nuclear war head in what may have been most powerful detonation ever.

south korean said it was the fifth test and had the impact of a ten killton explosion. president obama was briefed on that test aboard air force one. he said any provocative action would have series consequences. china's state run news agency a said the test was unwise and violated u.n. es legal conclusions, but would be curious to see how markets think about this this morning. >> soek is freaking out. had to go home and leave early. you can understand that. we keep says huge rep you are cushions. not sure what those are beyond sanctions at this point. >> ten killton, that's stimatomic. they tried to el us it was hide gin last tiemt. >> it's enough. >> they claim it was hydrogen, which is you know, exponentially

greater than atomic. i don't they got that technology. that guy is -- wow. crazy. you read what goes on there. what was it last week, one of his lackeys looked bored at one of the speeches, dead. dead. off with his head. >> by the way. >> i'd be dead like 100 times. >> just this week. >> does the market react or you think there's nothing to react to. >> i don't think this is it. it's all about the fed. what if they raise points. nuclear bomb the one thing. what if they raise a quarter point. let's keep our priorities straight, andrew. on today's economic agenda, july wholesale trade. inventory forecast to rise slightly.

rosengren is a voter. don't miss steve liesman's interview. that is at 10:00 a.m. eastern. one topic for sure to be covered recommended that pair back wall street ability to own physical commodities and engage. fed cautioned against behavior poses risk to the financial system in 1999 lawmakers grant permission to morgan and goldman sachs to store and transport physical commodities. fed wants to congress to revoke that. surprise the congress also revoked the ability to make investments in nonfinancial companies. the fed said this would preclude to legal belief or operations of a company in its portfolio. the number of bank industry groups have protested that. saying regulators haven't provided a cost-benefit analysis of justification for the change. could have a big impact for a

couple of big banks. >> very complicated. a lot of them exited commodities anyway, didn't they. >> some have pieces of it. merchant banking to itself is not just a commodity business. that's one business, but there's all sorts of other businesses they've owned and goldman sachs has owned some of those businesses. you could make different argument accide arguments. >> did you twla story. >> i didn't decide anything. >> you seem you knew what you were talking about. >> i chose -- i occasionally. >> wow, this is detailed minutia. >> this is a serious issue. look at the revenue. it's not an insignificant chunk for some of these banks. there's another piece that the fed coming out with in terms of regulation around private equity, which is the other issue by the way in sorm papers this morning you can read about how they're regulated. >> private equity is loosening some restrictions. >> some want to keep them and

make them more restricted. >> so we're going to be continuing to hear about this. >> we'll hear more about this, joseph. >> i'm going to study up on it. >> there was oo whole lot going on. you're right. th . >> joseph was not convinced there was a lot going on. >> i said in the opening of the show there's a lot going on. >> that's right. there is. >> thank you. >> look at these stocks. these are things you're going to want to keep an eye on. shares of restoration hardware surging. beating profit and sales expectations. plus reaffirmed earnings guidance for the year. check that out, up better than 12 .5%. enterprise product partners is no longer pursuing a deal to merge. saying it wit drhdrew offer bece of lack of engagement. two samsung reports weighing on the strong.

faa warning travelers suggesting to them not to use the samsung note seven on planes. those phones were recalled after complaints that the batteries can catch fire. weird thing is the faa is just recommending this. not saying you can't bring it on. they don't want you to check it or charge it because again it can start fires. allowing to pay cargo handlers to remove goods. around $14 billion in cargo has been tied up globally. i believe samsung has something like $38 million of its products that are stuck on these boats and some cases the boat haves been picked up and taken by creditors who want to make sure they get paid their money after h h

hanjin declare ed bankruptcy. >> samsung already said it causes fire. >> right. if there's the slightest chance, but to tell you -- you can't tell people they can't. there will would have to be some type of law. >> tell people they can't bring the hovercraft on. we told them you can't bring those on the planes. >> you were forbidden too. this was like a recommendation. if you have to, go ahead. it's weird. >> you know they say you can't do things like charge it. you can't do things like pick it up while you're on the actual plane, but we all know people who on the plane are using phones when they're not supposed to. >> right. >> you're looking at me. >> okay. >> i've done it before too. >> i want the get to very last e-mail. >> somebody is cheating. >> it's coming. >> so i'll put it in my pocket. >> and i get those last couple of tweets or -- which is sick

and sad because there's never anything on the tweets that i need to see pu i don't want to miss them. don't want to miss them. the dow and s&p logging second negative session in a row. nasdaq breaking a four-day winning streak. joining us now katie stockton. and, you know, there's some shows episodic that are on tv and others that stand alone. i see you as providing an ep d episodic thing for "squawk box." i remember the things you've been saying over the past six to nine months or so as a technician. i want to go back to the last couple of times you were on. did the market sustain that upward move that you were looking for to indicate the near term we were going to head higher or are we failing once again. where are we. >> it did already. if you rook at the s&p 500, it confirmed the breakout if remember in july to a new

all-time high. all we needed was consecutive closes above former resistance. that's right around 21 .35. that breakout was confirmed. does set a long-term bullish buy for the market. at the same time we song long-term momentum improve. we had monthly indicators negative since 2015 and just this month now turning positive with a slight lag on the back of that breakout. indeed we got the breakout. now we're entering a bit of a consolidation phase. august was characterized by a tug of war on the sector front. we saw the defensive sectors really underperform and upside leadership from tech and financials held the market up. now we see a little bit of a loss of leadership there, that sets us up for a bit of a pull back. >> people that follow fundamentals have their pros and cons. people with technicals have pros and cons as well. every day talk about the flaws of fundamental buy side -- no, sell side guys.

they're whole skill is in saying, you know, being able to see why it goes up or down. you just said, i mean, you have to go out on a limb, but you're out is when you say this was violated and so the technicals that were indicating a bullish move have be violated and no longer in effect. at this point you're saying we're in a bullish phase. bullish phase intermediate and long-term. looking for more weakness short-term and that should be an opportunity. what we can do next is focus on support levels as gauge of downside risk for individual stocks that have broken out and look to add exposure closer to those support level. >> what's my key support level for the s&p? >> it's right around 2100 h. i think it actually goes a bit lower than that. the 200 day moving average is closer to 2060. i wouldn't rule that out, but it will be sort of fast, furious

little pullback here. >> can i ask what long-term, short-term intermediate. what are you talking about roughly with those sorts of time frames. >> i tend to be pretty short-term myself. short-term for me is days to weeks, intermediate term weeks to months, long-term beyond that. so to me the short-term pull back could be two to three weeks in duration. >> so what is the intermediate and long-term target upside on the s&p. >> the breakout that we did see in july yielded at a measured move, we call that, of about 2400 for the s&p 500. >> doesn't sound measured. no one thinks that's going to happen. >> so yeah, that's about 10% higher of course and, certainly, would dictate that bullish buy. so now what we want to do is make sure we're in the right sector. that sector strength becomes important. most recently even this week we've seen that rotation into

energy. i think is pretty compelling. see that breakout in crude oil. pending confirmation today. if we get that breakout, nrch is something people can act on even right away without waiting for that pullback. >> so, you know, even though you don't need to worry about fundamentals like the fed, i bet you have some technical viewpoints on the ten-year. are we finally staying above 160 or maybe we're right around there today, i think. >> yes, i call it hovering. hover tlg. there's resistance if you want to call it that on the chart around 164. the important thing with the ten-year yield is to respect the long-term down trend channel that has been in place for decades and assume these up moves we see are counter trended nature. without a breakout above this only 164 level, but the 200 day

moving average would be more convincing to me. that's closer to 177. on the downside support around 139. that's really final support. >> so you don't need to be emotional. i would be afraid to be her to be a technical analyst and say things on this show which no one else does of the guests we have. >> we're trend followers. >> i can think of a couple people. >> they're probably usually wrong. all right. >> katie sticks her neck out. >> we're in a long-term downturn on yields. >> long-term trend. >> we'll have her back and see. >> thanks, katie. >> all math. >> our other guest on recently talking about math the other day. it's all math in a way based on assumptions. going to talk twitter in a moment. having their own math problems. just how much time jack dor si still has left to turn that

company around. joining us now is robert. editor of fast company. fast company's cover story this month. show it. there he is. the man, jack dor si. picked the right guy this month or what. >> i hope so. there's a lot of interesting things happening. a lot of interesting things happening at twitter also. >> cranking. >> it's wild. every day. >> katie is great, by the way. she is just so smart. >> clears all the nonsense away. i think that's what twitter is trying to do. trying to clear some nonsense away around his company. part of the nonsense orp the kmaj he has is the constant comparisons with facebook which is a comparison that he loses with every time. >> but it's tougher and tougher. >> what is he going to do. >> so our staff spent a lot of time with the management team at twitter. the challenges how you find the strength the twitter has and

lean into what those are. one of the key things he points to is something that happened last spring where twitter reclassified app on the app store from being in the social networking category well behind facebook and instagram and other to the news category where it was suddenly number one. this is an indication of trying to reframe what twitter is about. >> that sounds like dressing around the edges frankly. >> there are. there are strants. i'm not saying twitter stock is suddenly going to move and make a ton of money in the next five minutes. there are strengths that twitter has as a business that they have not been able to make use of. there are strong groups affinity groups where a lot of activity and news happens on twitter. they're investment in live streaming the nfl. i know nfl season is starting. they're trying to define themselves as a different kind of media company. >> multiple on a news company relative to a tech company or a social media company.

>> i don't disagree with you. i think the conversation around the board meeting is are they going to put themselves up for sale. is somebody going to buy them. if you look back, twitter went public too early. at the time they went in 2013, having a $10 billion valuation was like why not. it's time to go public. now you've got companies like uber, airbnb. much larger valuations still private. >> i was watching. i think it was melissa at five. the point was that twitter went public too late. a lot of the growth that the company had by the time it finally went public, it was a mature entity and all that growth -- and now if it was private, it might have a better -- if we weren't looking at every detail, it might have a higher private market valuation and public market valuation. that was a guy was a good

analyst. >> maybe. i think their business is what it is. the valuation falls what the business actually sports and the question is where does the business strength really lie. if you look at the more analogous -- this is what jack is trying to do. make them more analogous to say youtube, not really a social networking. you don't have to post videos to use youtube. you don't have to tweet to get value out of twitter. if they can make that work, they can generate more around it, but that's a transition they're in. that's where they're not growing. >> twitter is part of the conversation right now because of the election because@donald trump udonald trump uses it so much. nchl thing coming up. if there are this many concerns from the board and how you make it work now, this seems like this is their moment in terms of relevance. >> i think they have a long-term challenge about how to generate a different functionality for

the company. they're in the process of trying to do that. will the marketplace be patient enough or believe it enough, that's jack's job to prove. >> can they keep people around, talented people around? so much of the compensation there is stock-based compensation. they do a nongap accounting thing. a lot of people don't like and people are moving away from the valley which will put pressure on how they approach that. >> i think a lot of valley companies have challenges once they're mature. the number of people who are going to leave and go to places like uber and airbnb. >> will he be on the cover -- where will jack dor si be in two years. back on your cover as a poster boy for good or bad. >> i don't know whether i'm going to make that bet a this time. i think jack is a smart guy. whether he can make this work, it's a challenge. >> thank you. appreciate it. >> thanks for having me. >> this month's issue of fast company hitting the stands on

monday: this is friday. >> this is a sneak peak. >> that's right. >> we have some for sale right here. >> wow. >> thank you, bob. when we come back, a startup that wants to replace your filing cabinet and keep your important documents secure. the crow will tell us how the company wants to be the dropbox for crucial files. we'll tell you next. we call it dark data. 80% is invisible to most businesses. the ibm cloud has tools that can help see dark data and put it to work. hello, my name is watson. working with watson in the ibm cloud, we can help an energy company predict pipeline corrosion. and help a start-up to use social data to predict market trends. now businesses can get more out of their data. that's what the ibm cloud is built for. now businesses can get more out of their data. ♪ [engine revs] now businesses can get more out of their data. ♪

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welcome back to "squawk box." chipotle has agreed to a financial settlement with more than 100 customers. resolving the matters outside of court in an attempt to avoid long public battle and risk more attention to food safety issues. the terms of settlement not disclosed. right now time for today's executive edge. a new cloud storage company looking to replace filing cabinet at how many. futurevault. organizes documents from report cards for kids to bank statements. we have the ceo and founder joining us now. >> thanks for having me. >> let's get into the notion behind this. the idea is so many documents are now electronic that we get sent, even kids report cards, things like that. unless you have some way of keeping track of it, it gets lost in the ether. >> every day you think about it. we gt more and more innovated

with documents. think about where is your house deed, your life insurance, broker statements, bank accounts. each entity is creating solution. one of my money managers sent a big e-mail. so excited spent countless hours building this portal. the reality is i don't want to go to 40 different portals. i want to go to one spot and be able to store and manager it for the rest of my life. >> what happens, you go to the companies or schools and all of these different businesses and say use our portal and it's an easier point to point. >> our business model is b to b to c. we're going after the financial services. banks, credit unions. unions, accounting firms, law firms. anybody with a direct relationship with the tend

consumer. right now delivering documents typically in point solution format. my view and our view is the company within five years, every financial organization in the world is going to deliver documents through a voult type product. part of making the relationship sticky. in the fintech world with all these things from robo advisers and micro lending and a bunch of things. >> b to b to c. >> business to business to customer. what would you do about nirp. >> good old nirp. >> negative interest rate. >> i was going a barnacle. >> i grew up in the brokerage business. >> and he knew he wouldn't know then he goes aleppo. it was such a -- so you know what you would do about nirp.

>> i would love. >> he did know. he was supposed to not know. i'm going to do it to every guest today and ruin their life. >> let me ask you a different question about your business, which is about this disintermediation issue. which so tay there are services like mint for example whiching a ga ing aggregates information together. they don't want necessarily the relationship to be disintermediated this way. why are you going to succeed where others haven't. >> the horse has left the barn on that one. they've already lost that battle. what we see on the ground is the big skbanks financial institutions are embracing this which i think. in this case you're seeing them hire lots of people, spend time on fintech. they don't want to be

disintermediated. >> i think it's a great idea from the consumer's perspective in terms of ease. what concerns me is the security aspect of it. why should i feel safe having stuff here. i don't put important files in anything. >> we said that was table steaks. you're correct. we hired the people. or cto is former of water house. recruit add whole team of former bank executive technology people and love to tell you about our technology with respect to security, but it's two levels of encryption. multiple points of security. that is the game. we don't even know as employees of futurevault what's in your vault. >> great. scott, thanks for coming in. >> horse has left the barn. do you think about tooth paste left the tube.

>> what about geneny is out of the bottle. >> train has left the station. >> we'll come up with some more. >> especially since i'm trying to be techky. >> i'm looking through the guest list for people who won't know nirp. i'm going to spring it on one of them. what about the kroger cfo. do you think he will? he might not. i'm going to get one of these guys. >> we do live in fascinating times on that issue. >> just the whole negative interest rates. i grew up in the brokerage business. >>. coming up, your money, your vote. grading the candidates economic plan. joining us next, author of how money walks. we head to break, s&p 500 winners and losers.

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see redd arrows. down 55 points below fair value. s&p down close to eight and the nasdaq down 18 after the market had a down day yesterday as well. the new york stock exchange is going to be implementing changes to opening procedure on monday to speed up trading and efficiency. the new procedure will eliminate rule 48. allows market makers to delay the opening of the stock. fcc approved changes in july. the flash crash of august of last year when the dough dropped 1,000 points in a ten-minute period. political news, donald trump campaign raised $90 million in august. that's three times more than trump raised in july. falls short of $143 million that hillary clinton raised and her campaign did in august. speaking of hillary clinton and donald trump, both are making big promises to create jobs and boost the economy. joining us at a score of

economic plans, travis brown. ceo of first rule and also author of how money walks. travis thanks for joining us. we should point out, wrote an intro or something. >> coauthor of the book called wealth of states. we look back at literature that grows the economy at federal and state local level. >> we're in some very partisan times right now. >> indeed. >> and i've always been of the opinion that earned success and trying -- and having the dignity of work is paramount for what all policymakers should try to allow every citizen to do. we want a strong safety net, obviously, for people, but as a bridge, hopefully to some day doing what the dignity of work and earnings a living and i think the two parties have vastly different ideas how to get there. one, i'm not shy about having

this opinion, one, i think causes people to be stuck on the state dole forever which is not good for anyone and the other rewards work. so i'm prefacing all this because you're going to say trump's economic plan is probably better than hillary's. is that correct. >> what we're looking at is what is the incentive proposed by either campaign. we have a conversation about whether we should reward work or punish work in the future. unfortunately, i mean, it would be great if we could create work from nowhere, but it comes from pooift sector employment at risk capital. we've seen that over the last eight years. got to be the case. if you're going to reward work that is at risk, you want to lower tax rates. steam line those bracts and try to make it easier for the private sector to create jobs and employee people. i got -- i was totally -- i

don't know. the original hillary clinton ad where she said i'm going to tax everybody a lot more here and use the money to create really good jobs makes me want to pull my hair out. the government is not in the business of creating jobs. that's not the way. it comes from the ground up from the private sector. andrew disagrees probably. >> no, i don't disagree. i think there's a missing piece of context which is that my understanding of what that hillary clinton ad is trying to suggest is this idea that she will a, a tax issue on a fairness thing. i know people have a complicated relationship with. >> it's not complicated at all. i don't know what that means. >> the question is what do do you with that money and using it for infrastructure spending and infrastructure spending creates jobs and government spending has historically created jobs and under people like ronald reagan has spent a ton of money and created jobs in defense.

whether it's defense money or whatever, the money is getting spent and people are creating jobs and looking under certain presidents why you think the economy has done what it's done. this is what it is. my question to you is are you saying that government shouldn't spend any money? shouldn't come from the government? >> look, we have essentially a third term that hillary clinton is running for. we already had that opportunity with infrastructure spending. we looked at shovel ready projects supposed to happen through the public sector. >> donald trump wants to spend. >> there's no doubt that both have spending plans e. when you rook at the economic plan presented in detail, one favors lowering the marginal tax rate and dramatically lower what small businesses could get ahold of taking it down from 39.6 to 15%. that hasn't happened in quite a long time. this is like jfk kind of stuff looking at getting out out of

the way. >> jfk was taking rates from 90 to 60. >> when you add rates of local. >> depending what state you're? >> hillary clinton is doing the opposite. we have a real contrast on economic plans we want to look at. when it comes to spending, both have spending ideas. it's not clear who is going to spend more and how they're going to do it, but on tax rates and deductions and simplificatiosim you're starting to see breaking points. you're also seeing the different attitudes about work in general. should we pay for parental leave districtly or should we reward block grants and things on education and child car deductions through the tax code. a lot of work on the tax code ahead. paul ryan is going to have to sort this out in congress. >> it's the question of our time. we can talk about all these other things, and we do. ridiculous backdrop of this election, but jobs, wage gains,

gdp growth above 3%. it's the economy and it's never been more, but it's all -- there's so many strange narratives out there about, well, growth policies caused the financial crisis. the supply -- we've tried low e taxes before and you see what happened. now you drove the car in the ditch. now you want the keys back. look what we've done over the past eight years, you can't hold that up as a recovery that has helped generate the type of prosperity that we're looking for. i mean, it's tough. it's tough to get out there and like we're re-educating a third of the population. the millennials who think bernie sanders has the right idea. >> it's very unusual for america to have this jobless recovery no matter where you're sitting in the last eight years. it's natural to have anxiety here. >> no wage gains for make less as you pointed out.

now venezuela, look down there, middle class people are going through the garbage to try to find enough to -- and there's an imminent possibility of a complete economic collapse. >> interestingly the countries that did the best in terms of wage gains actually had unions and all sorts of other issues that would be on the opposite end of this. just, again, when you look at it, it's not -- >> look, i'm not suggesting higher taxes. it's not a straight line. >> which countries have the wage gains. >> the highest wage gains that we reported yesterday in france. >> to what? and the gdp. >> of 7%. >> the gdp growth in france, terrible over the past 40 years. the average french citizen is probably 60% based on just the wealth accrual and how their economy has performed. our gdp is outperformed 40 pkts year in and year out.

you can't go to france and say -- actually, we have a president that thinks everything might be better in the euro style. i'm talking about the jobs. it becomes a very complicated conversation all of a sudden. the dignity of work in france is not close to the dignity here. >> let's not forget, france tried this. raise to 90%. >> i'm not putting them up as an example. >> apples and oranges comparison. thank you for being with us today. coming up, we've got a lot coming up. a lot going on joseph. this morning's top stories. including delivery drones. get a burrito at your house today. the new richest man in the world, we're going to tell you about him in just a moment.

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$13 million to settle claims made by 270 former employees. former merrill lynch advisers fired after bank of america merged with the broker in 2008. claimed the bank failed to follow proper procedures after terminating them. while we're on the subject of big settlements. wells fargo paying $190 million to settle customer fraud case. illegally opened millions of accounts for customers, but not authorized them to do so. bank employees were under pressure to meet sales goals and opened more than 2 million bank and credit cards accounts. many without the customers knowledge. they have apologized. saying 5300 employees were fired over this inappropriate sales conduct over a five-year period. >> this is a bigger story. a lot of times i hear about the fines and blow it off thinking this is the government cracking down on things. the wells fargo story they were opening accounts for customers.

putting money in accounts never authorized. some cases being charged $14 a month for having these accounts. creating false names. falls e-mails for it and it was 5300 people. it was not one or two bad apples. that is a significant number. managers were also involved. >> they were only fired. versus those other people that you're talking about that were terminated. where was that place, which one was that. >> wells. >> bank of america. >> no bank of america they were terminated after the deal. >> he's talking about the language. >> i think we should stick with fired. >> when you said it. >> you're thinking north korea. >> i'm thinking the terminator. fwoogle parent alphabet using drones to deliver a burrito. i didn't know how a drone would change my life. you get it to deliver mexican

food, and we've got to get some seed money there. we got to get rid of the regulation. anything holding back that industry. although, this could happen. burritos to staff and students at virginia tech. limited test of the drone program. drone will take burritos from chipotle mexican grill food truck to an official who will distribute the orders. >> just burritos. >> that's the easiest to load up. you don't want a big bowl of rice. >> i want an encha lad da. >> no burrito. >> you like all the rice and stuff? >> i try to do it without the rice. >> cheese.

>> okay. cheese. >> i'm a quesadilla guy to be honest. >> do you have a barbecue chicken quesadilla. very good. when we come back, squawk ceo call is in session. here to talk about the markets, economy, and using data to make better business decisions.

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welcome back, everybody. the 175-year-old firm dunn and bradstreet is helping other companies make smart business decisions. it's making a few good decisions itself. that stock is up 32% so far this year. here is the ceo bob kerrigan. thank you for coming in. >> thank you for having me. >> the last you were with us was about a year and a half ago and you were telling us about a plan to take data and use it to help companies figure out better ways to do their work. tell us about that again for people who don't exactly know. what are things you can help a company do? >> this is a golden age for data. we're executing against a

strategy where previously we had an addressable market of about $8 billion. and now we're going after -- >> $8 billion. >> now we're going after a $24 billion base. which reflects how companies are using data in areas like supply management and global compliance. >> like a retailer who's trying to keep track of all of their vendors? >> exactly. so they want to understand their downstream risk and their supply chain risk. so before where they use this maybe just for trade credit purposes, now they're using that to get transparency all the way through the chain. >> would you tell them hahn might be filing for bankruptcy, the shipping company? >> we understand how those businesses are connected. and so if there's downstream risk, we understand the ripple effect of that. to a company counting on inventory or a large retailer that needs those products on their shelves. >> part of what you've done is

beat earnings expectations as they've come in. what are they underestimates? that you've been able to deliver on. >> well again, the larger trend around how companies are embracing data is just an exciting secular trend in the market. then we're executing a lot better against our core markets. we're relying on our reliance partners more. we struck 16 new alliances in the last months. and new use cases. that's the critical issue here. strong underlying market and better execution against the strategy. >> what's your strategy for the next 12 to 18 months? >> it's more about grabbing the market. going much deeper in sales and marketing and analytics and data management. these are some of the key areas of opportunity for us and a company with the kind of assets, the crown jewel assets we have, it's about activating that serving customers putting them

at the core. and we're excited about where we're going. >> does that require more investment from you? >> look, we've made investments in the business. and we -- one of the beautiful things about a data business is as you grow revenue, we're able to kind of fund our growth from there. that's been the key. for us it's really about continuing that organic revenue growth and then throwing off the margin to be able to continue to invest and keep it cranking. that's the formula. >> so you still survey every small business around. we've talked about it a million times. dnbs call every small, medium, large businesses you have the ceo. do you ever survey them for information that is useful to policy makers to try to decide -- what's holding them back? what's holding small businesses back right now? >> so we produce the small business health index. and through july, you know, we saw another downturn in the --

and the index is based on, you know, what we see in credit applications and payments and timing of payments. and we're seeing -- it's a good predictive indicator. unfortunately we're seeing it at a low. and so we have some concerns about the slowing economy as we go forward. >> well, we don't have time to find out what they attribute it to. >> you should come in and tell us about this next time. >> send out a question and what it is you need. less regulation, easier access to credit. >> access to capital is key for these small companies. >> bob, thanks for coming in. >> thanks for having me. >> dun & bradstreet. i have to get on the phone and make cold calls. coming up, kate moore will be our guest host for the next hour. we'll talk interest rates, the moving crude prices, and portfolio strategies straight ahead.

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breaking overnight. north korea claiming success in its fifth nuclear test. details and the reaction from washington is straight ahead. september to remember? fed speak will be driving market momentum today. plus a new warning from investors jeff gunnlack. kate moore will join us with reaction. and are you ready for some football? >> that's a record setter. >> if you went to sleep early, you missed a great start to the season in a rematch of last year's super bowl. we're going to bring you the highlights as the second hour of "squawk box" begins right now. ♪ live from the beating heart

of business, new york city, this is "squawk box." >> welcome back to "squawk box," everyone. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. the futures have been weaker this morning after you see the dow futures aren't do. the nasdaq down by 17. we've got some breaking news this morning. north korea conducting what it's calling a successful test of a nuclear warhead and the country said it had the ability to produce nuclear tipped missiles at will. eamon javers will join us with more on this story. we'll see if it rattles markets today. general tauhill he's going to be in charge of cyber security threat.

he is a deputy at the department of homeland security. plenty of fed speak today. fed presidents both having public appearances. steve leisman will have an interview request fed reserve governor daniel tarullo on "squawk on the street." warning not to use your samsung note 7 smartphones on airplanes. they were recalled after complaints about the battery. separately asked a u.s. judge to pay it cargo handlers to remove its goods from shipping vessels. $14 billion have been tied up. >> which one? >> there was all shipping carriers. >> yeah. i thought it was hanjin. chipotle has agreed to

financial settlements with more than 100 of its customers. those diners fell ill -- this is not funny. i don't think they're dead, but they probably wish they were after -- when you get sick from mexican food. eating at a burrito chain last year. we decided it can be both, right? >> you can come out of -- >> standing/sitting/standing/ sitting. >> when you're sick with that, yes. >> not really standing. in an attempt to avoid long public battles and risk more attention, terms of the settlement were not disclosed. google announced it's acquiring apigee for $625 million. they're going to pay shareholders $17.40 a share. first customers include at&t, burberry, and vodafone.

apigee shares down by 5 cents but still trading at around the dealing price. snapchat is taking on a new line of credit with morgan stanley as the lead banker on the deal. the credit facility will allow the company to fund growth without the shareholderers. valuing snap chat at reportbly $18 billion. spacex could be grounded for 9 to 12 months as it investigates the cause of last week's launch pad accident. this is according to the chief executive of united launch alliance which is spacex's prime competitor. spacex 9 falcon booster exploded. remember at the beginning of the month while it was being fueled. >> i could see that. competitor wants them to be out of business. >> incredible is what that was. elon musk tweeting about the

investigation saying still working on the falcon fire ball investigation. turning out to be the most difficult and complex failure we've ever had in 14 years. facebook cofounder dustin moskovitz is pledging $20 million to hillary clinton's campaign. in a new blog post, he says he and his wife have donated to several democratic groups. moskovitz says he was compelled to doing so because if donald trump wins the country will fall backward and more isolated from the global community. larry ellison had been the tech industry's biggest donor giving $5 million to support rubio. the market is no longer pricing in a rate hike for september. but one high profile market watcher says investors could be blind sided. jeff gundlach is to show it is

independent and could hike rates this month to prove it. they usually don't do things to make a statement. they kind of do the opposite. but who knows. he says in his words they want to show they're not guided by the markets. why would we think that? goldman sachs reducing expectations that the fed will hike. now they're at 40% citing weaker economic growth. gundlach suggests the central bank is not as data dependent as we think. joining us now is bruce kazman. and our guest host for the next hour is ms. moore. good morning. i'm not saying a nobel prize means that much for economics but mr. phelps was kind of an

ant anti-cainsian. o similar to the precrisis policies from a decade ago. when they looked at what easing money does, it never changes the unemployment picture. it changes wage and price levels and you're left with unemployment unchanged. he says the sooner we get out of this box we're in, the better. so this is just one more voice saying it's a problem. well, i know you think they should stay at zero forever. right? >> no, i don't. and i think they will be raising rates over the next year. we think december is the first. >> over the next year? another quarter point? >> we think they'll be moving three or four times between now and the end of 2017. i think it's correct to say that the very aggressive fed policy has created imbalances in the economy, creating financial excess in some places. down the road we're going pay a price for it. the consequences of not having had -- >> not everyone agrees. that's the discussion we have every day.

>> let me make one other point. what we need right now is higher wages and higher prices with stable employment levels. that's exactly what the economy needs. >> and you think zero does that? >> i think that easing monetary policy combining with other things happening here, we're hopefully fading the big drags that have hurt u.s. corporates in the energy sector and the dollar. those things combined are going to help us to give us performance. we do have a real problem here which is that we're not generating productivity. the underlying potential is very weak. and we're going to face constraints down the road. we need an easy fed. not as easy as it has been and i think we are going to get okay economic performance out of this over the next year. >> you know, you're at blackrock. larry doesn't tell you what to say, obviously, but larry fink wanted to raise rates awhile ago. i don't know if he changed that. larry tends to want to do things that might benefit blackrock like anyone would who's the ceo. but in your view, fed's been too

easy too long or just right? >> i think the thing i worry about the most is the sentiment impact of not raises rates. the signal the fed's been giving corporates and risk takers and investors is nothing is good enough in the u.s. economy. we can't give you the all clear. i think that's really caused, you know, companies to horde cash more than they otherwise would and be reluctant to engage in capex and investment. to feel normalization would spur some of that. >> that's a totally different reason and a valid one. it's not the same people aren't going to -- you know, if they thought rates went up they might start doing things. so that might engender some -- and also the main thing people talk about is moving them out to rusk curve and causing all these bubbles we don't know about until hindsight. >> we hear some companies say,

look. things feel pretty good in my industry. i'm able to pay my workers a little bit more. i'm able to maintain my margins this far into my cycle. what am i missing? am i missing something? >> what's the fed that we don't? >> should we be concerned? >> i don't think we can have it both ways and say on the one hand that easy money is causing asset prices to go up in financial excess and say on the other hand we need to have the fed tighten. doesn't work both ways. and i think right now we should recognize that the market is not thinking the fed is going to tighten much because we've just finished a year of 1% gdp growth. we've got inflation low. we still have risks in the fed economy. that labor markets are getting tight. there are going to be signs we are going to see prices go up at a faster pace. they're telling us they're going to stay behind the curve but they're not going to be static. with the debate about september being an interesting one, that is the right message they should be sending us. it's the one that's most

conducive with keeping business confidence and consumer confidence at a supportive level. >> i want you to be going -- >> i know you want me to disagree, but i have great respect for bruce. what i would say is if the fed doesn't move by the end of this year, that would be an additional confidence killer. if they continue to give us this message that they will normalize, they're not totally paraly paralyzed, that will help. but i think there's something weighing in the back of minds of business decision makers and investors asking this question how weak is the economy really. and if we are really concerned about global growth and global financial conditions and the effect on the dollar, should we be really cautious? >> not to mention that they still have the aftereffects of what happened in 2008. i mean, that's psychological too. >> and everyone has to be defensive. they have to worry about their jobs and how they're compensated and whether or not their companies will be able to weather the next storm. is it 2017 or 2018 or further out. and does the fed know something

we don't know? >> just note the problem we have in the economy right now is that profits have been declining for six quarters. business investment has been declining now for three quarters. this is really the heart of the issue for the u.s. outlook. whether a more stable dollar is going to give us that lift. so far we haven't seen it. >> so why do you think the fed will actually raise rates in september? >> the first thing on september is they don't feel they've gotten enough. >> but you think they will feel that by december? >> two or three months of solid payroll growth, hopefully some news from corporate will start to build the case. again, also, with a little bit of signs -- >> you think we're all just too negative? we're in new york. the only reason i say this, you talk to people who don't live here and they're not nearly -- they're not having this conversation. >> no, but they are -- >> they think the rest of the world -- >> but a lack of security in their own jobs. >> in certain places. but don't you think the rest of the country think it's actually better than the -- >> 70% wrong direction?

>> i think one thing we have to be aware of right now in terms of the way this economy has performed over the last year, year and a half, jobs have been growing rapidly. consumers have been getting good purchasing power with falling energy prices. consumer confidence is at a good level. but look at business confidence. look at business behavior. we have a bifurcated economy right now. if the business sector doesn't do better over the next year, we're not going to be able to sustain. >> and the capex intentions gets me worried. we've seen a lot of cfos looking not to spend more over the next four quarters. at the lowest level since 2009. and that i think so gets me a little bit nervous. we want companies to feel confident. to the earnings side, we should have slightly better comps in the back half of this year. but they really have to come through. because those numbers and expectations are baked into current prices, i think. >> told me the american dream is dead. and "b," everybody's going to be

replaced by robots. that's what you've been telling me for five years. >> that's 2030 problem. >> it's not fair and people don't -- >> that's an immediate problem. >> you said people are happy because they're in the heartland and happy. you know what? you take either side just depending on where we are. >> he learned that from you. >> yeah. what are you going to be about nerp? >> what am i going to do? >> you know it. okay. what are you going to do about aleppo. >> i'm not even sure. >> don't go there. >> i'm asking everybody about nerp because i'm trying to get a got ya moment where they don't know what it is and i'm going to shame them. >> ask our guests that don't work in the markets. >> everybody knows what nerp is. >> we think about nerp all the time. >> all right. i'm going to ask one of our generic non-financial guests what nerp is. >> but they're not supposed to know. >> that's right.

>> not everyone pays attention to the same acronyms we do. >> you could have started with, wow, syria's really a problem. there's several -- the refugees. what about aleppo and then the poor guy would've -- >> but if you're running for president you should know. >> but don't set it up in a way -- >> if you're in the tech community you should know about fintech. >> what? >> thank you. >> thanks, bruce. kate's staying with us for the hour. when we return, the pentagon returning to north korea's latest nuclear test. and tom ridge warning of what he calls a gaping security flaw in the u.s. mail system. we have the details right after the break. "squawk box" will be right back.

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welcome back, everybody. former homeland security adviser tom ridge writing a 9/11 themed op-ed on wednesday warning about the dangers of terrorists using the u.s. mail system. but there's one piece of information ridge left out. eamon javers joins us now with more only the story. >> reporter: good morning. before i get to that let me bring you up to speed on the north korea apparent nuclear test that happened overnight. the pentagon is reacting to it this morning. here's the statement from pentagon spokesman peter cook who says this test is yet another flagrant violation of

u.n. security council resolutions and a serious provocation. the test poses a significant threat to the peace and security of the asia pacific region. now, speaking of national security, guys, as you know we are coming up here on the 15th anniversary of 9/11. so much has been written about 9/11 this week. we're going to see a lot more through the weekend. but i wanted to flag for you one piece that was written this we can. i think it shows sort of behind the scenes how washington really works. former homeland security adviser tom ridge wrote, there remains a gaping hole in our national security preparedness. coming from a largely ignores source, the global postal system. he also said ultimately that there's a real problem here with the post system because private carriers like u.p.s. and fedex are doing enhanced security but the united states postal system and other global postal systems are not doing.

he says that's a security weakness. that also happens to be the same argument that u.p.s. and fedex have been making on capitol hill for awhile now in terms of their lobbying campaigning. tom ridge says he's joining a new group called americans for securing all packages. now, in classic washington fashion, that's a 501-c-4 organization. so it's impossible to tell who their donors are and who's financing this group. a spokesperson would not tell us who is financing them. it involves tom ridge and also juliet kaiem who were both involved with that group. what we know about that group, though, from doing some reporting is that there are financial links between u.p.s. the postal carrier -- private postal carrier and that group. and money changed hands between u.p.s. and trade association and the nonprofit group. and ultimately tom ridge has been paid for his involvement in this issue as has juliet.

the payment there is not mentioned necessarily in the op-ed piece. we asked tom ridge's spokesman about that. he said tom ridge is a rusk-management consultant. he's paid for his time and expertise. he's sincerely concerned about this issue and believes it's important to speak up. >> it's very interesting trying to find out where the funding is coming from. but sit true? does the postal system not do the testing that u.p.s. and fedex do? >> reporter: when you talk to u.p.s., they say it's a problem for national security because they are imposing a higher standard for security and the u.s. postal service is not getting the data that it needs to apply that level of security ultimately to the packages that are coming into this country. ridge is arguing in this op-ed piece that that's a security problem. but one of the things you should ask yourself, whenever you see an op-ed piece in this town, ask yourself is money changing hands

here. because often you do find financial links between the people who benefit from the argument being made and the person who's making the argument. >> interesting to know. definitely interesting to know. you want more transparency with these issues. but it does sound like this is a serious problem that i wasn't aware of. >> reporter: yeah. absolutely. >> what would a stamp cost if they did everything that u.p.s. and fedex does? >> reporter: that's a good question. >> think about it. there's no way. they already lose -- >> reporter: -- a lot of security that the other side -- the government is not providing. >> but the answer is not to enforce everything too. >> on top of everything else. that's why these guys are turning the screws on them for not doings it. >> it's because congressmen won't allow the u.s. postal service to get rid of some of the less profitable delivery systems. >> it's rough. snail mail. >> thank you, eamon. coming up -- i'm very

excited about this -- philadelphia's federal doughnuts are invading. the chain opening a pop-up stand for one day only. we're going to tell you where you can find it and what they're going to be serving after the break. >> you're going to eat one of everything, aren't you? >> i might. let's take a look at futures. they're down but i'm up. dow looks like it's going to open up 58 points off. we're back in a moment. man, i'm glad aflac pays cash. aflac! isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care? aflaaac! and everyday expenses? aflac! learn about one day pay at aflac.com/boat

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folks, let's check out the futures this morning. yesterday the markets ended a little bit lower. that's the indication this morning. in fact, we have gotten progress ily weaker through the morning with the dow futures down now 60 points below fair value. the nasdaq off by 19. stick around. "squawk box" will be right back. when we return, protecting your portfolio from politics.

a look at stocks that are winners and losers for either side of the aisle. dan clifton joins us with his presidential stock picks. "squawk box" will be right back. 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.

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♪ welcome back to "squawk box." i'm in love with the doughnuts. i'm going over there in a second. among the stories front and center, williams companies this morning rival enterprise products saying it's no longer interested in a deal to buy williams. it says, quote, there is no actionable path forward for an agreement. european regulators have halted their review of the merge enbetween dow and dupont. they're asking for more data. both companies have offered concessions which were deemed insufficient thus far. samsung considering slling its printer business to hp inc. now to sports and opening

night of the nfl season with a rematch of super bowl 50 as the denver broncos played host to the carolina panthers. without peyton manning, the broncos still managed to mount a comeback in the second half and went ahead by one point late in the fourth quarter. a last-second field goal missed wide left. that's, you know, those guys get paid a lot. only go in once in awhile. when it goes bad, i don't know what it'd feel like. denver holds on for the victory beating carolina 21-20. and from football to tennis, a major upset at the u.s. open. serena williams going down. this was sad. pliskova of czech republic. second straight year serena has lost in the u.s. open semis. she's only the fourth player to

beet both serena and venus williams. she will take on the number two seed. i'm not even going to try. i'm going to call her kerber in the finals on saturday. i was there. it was the saddest thing. >> it is sad. it's unbelievably sad. that angelique is too much for you. i mean -- >> but you watched this. i was there in person. but you were watching this. >> what if you were bill -- or what if -- >> some of these names. it would be a struggle. i would struggle like serena struggled last night. >> you would need therapy. >> do you remember what al michaels did in the 1980 olympics? he and his co-anchor decided we're going to pick a way to say all these names. nobody else knows. we're sticking with it. as long as you're consistent, nobody else will know. >> she looked hurt last night with though. >> serena. >> her hamstring on her left leg. she kept touching. the three-set match the night

before -- >> she just seemed a whole step lower. plus she was wearing stupid things on her arms. >> but she did fine with those. >> last night you couldn't even breathe outside it was so hot. >> there was a big discussion. you were at the game but i was listening to the discussion. she's over 30. and no one, you know -- guys that are -- pliskova is number 22. we expect her to go out there -- that's why they play the game. you have to do it every time. you expect greatness and you're surprised. but i don't know if we should be. i hope she eventually gets -- you know, she lost her number one ranking because of this. i hope she gets the next major to beat steffi. let's get to the election now and effects on the markets. as we are approaching the grand finale, investors are thinking

about which companies stand to benefit the most from each party winning in november. joining us right now is dan clifton for strategas. you put together two portfolios. one that tracks what the republican winner might do and the democrat winner best portfolio. it's not just about tracking for this election. it's also about seeing which does better over time. what have you found so far? >> that's right. so that's right. thank you for having me on, becky it's a diagnostic tool where we can run those portfolios relative to each other. it also works out as a good portfolio. in the two years after president obama got elected. what we're seeing today is that the democratic portfolio is out-performing the republican portfolio by about 3% year to date. what we find to be very interesting about this, though, is that at one point the

democratic portfolio was out-performing the republican portfolio by 10%. and that portfolio peaked on july 5th and slowly the republican portfolio has been out-performing. that was the day the fpi released findings on clinton's e-mails. the market has been pricing in a closer election all summer. now the polls are starting to catch up what investors had been sensing. >> do you look at it based on what the candidates are saying maybe for the republican portfolio you'd have more financials. maybe for the democrat portfolio you'd have more new energy type sources of something? >> that's exactly right. you can really get a sense of where these candidates want to go. i would say their one caveat is in divided government you may not be able to get everything you want. we're trying to handicap a reasonable -- what can actually get done in congress with those leaders getting elected. and so what you see is a bias on the democratic side towards health care not including pharmaceuticals but hospitals

and medicaid hmos. you see renewable energy. the push for carbon limits is working its way through policy. and also, you know, if you're looking a t the democrats, infrastructure. i think it's going to go up regardless. but a democratic congress is more likely to increase infrastructure more. that's why we have infrastructure names in our democratic portfolio. >> dan, you actually made an interesting point there. the fiscal spend and infrastructure spend is different regardless of who wins the white house. i wonder if and it looks this way that those stocks are already pricing in future spend. you know, how likely are we going to get that spend in 2017 and really what is sort of the time frame we should be thinking about in looking at the expenditure on transportation in particular. >> well, i think you just hit the nail on the head. one, are we going to do fiscal policy in 2017 so monetary policy can relax. is infrastructure going to be part of that.

and we do believe that infrastructure will be part of it. but our strategas is up 25% this year year to date. clearly out performing s&p 500. so the market has begun to price in these infrastructure stocks. and interestingly, we're starting to see the infrastructure stocks slightly underperform the s&p 500 as hillary clinton's probability of winning has gone down in the last couple of weeks or so. but i do believe as we get closer to the election, we will be more focused on that infrastructure. you're probably going to get a second leg up if the democrats look like they're poised for a big election night. if you see the republicans are going to possibly win this election, you'll probably see some more rotation into defense and a little bit away from infrastructure spending. because that's where the republican priority will be on the budget overall. >> dan, thank you for joining us today. >> thank you for having me. okay. enough of all this frivolous news. we're going to do the important

stuff now. this is it. i've been waiting for it. the sweet smell of victory doughnut wars. they are heating up. and a new competitor taking the market by storm. susan li joins us with more. >> lucky me. >> lucky you. >> lucky you as well. you know breakfast is an important battle ground for restaurants and americans are consuming morning snacks at a faster rate than the u.s. population is growing. you know there's a lot of opportunity. the most important thing about breakfast is portability and speed. and also doughnuts, of course, seem to fit that. for one day only in new york federal doughnuts is here with a federal pop-up store. and also it's been featured in a lot of magazines. eater calls it the hottest doughnut chain in america. >> if you eat a lot of these, you can't probably be in "gq." >> the founder is here with us. and there's already a lineup in your store. >> we opened up at 7:00.

>> where is this? >> this is going to be at food and wine chef's club on mulberry street. that's happening just today. we're doing doughnuts throughout the day. and we'll do our fried chicken sandwiches starting at 11:00. >> they're going for $2 and also $3 for the specialty ones. >> we are in new york. that's good for new york, right? >> so this is -- people who watch the show know i'm a doughnut guy. >> this is our blueberry pancake doughnut. >> okay. i like that idea. >> this is our chocolate -- >> oh, my god. wow. i'm sorry. that's -- i'm not making that up. it really does taste like a blueberry pancake. >> it's magic, right? >> yeah. >> chocolate eclair. you've got to double fist the doughnuts. >> what's the calorie count here? >> zero calories. >> okay. >> fat free. >> this is chocolate eclair. one of our biggest sellers. and this is marshmallow on

marshmallow. >> they sell a million doughnuts a year. >> look at this. can people get in on this one? this is something. okay. hold on. we do a thousand chickens a week. >> wow. okay. >> how's the marshmallow? what's your favorite so far? >> blueberry. but awesome. >> and then we have our hot fresh doughnuts too. these are just hot doughnuts that come out and we roll them in fancy sugar. >> made to order. >> this is apple. it's got cocoa powder, orange blossom, a bit of clove. >> you have to do some more running later on. >> this is amazing. >> we need to get you a new tie and shirt after this. >> sorry. making a mess. >> then wash it down with a chicken sandwich. >> double fried. >> with buttermilk ranch. >> okay. cheers. >> plenty of calories. plenty of coffee. >> guys, this is like heaven right here. >> i can't. >> i can't even get over it.

thank you. >> they look delicious. >> thank you for having us. >> wow. >> i'm going to come over there. coming up, it's a hot new trend among companies. now professional services firm is offering its employees the benefits of 16 weeks of paid leave for maternity, paternity, and beyond. we're joined by the ceo to talk about the policy change and how she's transforming the company. we'll see if she know what is a nerp is. futures at this hour still down. 64 on the dow. down 10 on the s&p. almost 20 on the nasdaq. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals.

♪ and invesco believes doing that today requires the art and expertise of high-conviction investing. ♪ translation? why invest in average?

welcome back to "squawk box." this morning deloitte with nearly 80,000 employees announcing this week they're expanding the family leave benefit for 16 weeks of fully paid leave for any family situation. kat kathy englebert is the ceo. how did you get to this decision? >> we're looking at innovation around talent. lots of companies are looking at innovating. this is when of the things we

wanted to do to be more inclusi inclusive. we wanted to do it because we thought it was the best thing for our people and our business quite frankly. and to provide the multi-generational workforce we're working in now with someone like myself the baby boomer looking at more caring for aging parents at this point. and looking at maybe the new employee coming in looking for maybe more predictability, flexibility type programs. looking for maybe student debt consolidation or even a fitness subsidy. then the mid-career professional. >> is this about talent recruitment though? do people ask this question when they come in? >> absolutely. we did a survey and over 50% surveyed a thousand employees across the country said they would rather have expanded family leave than a pay raise. >> wow. >> so we really -- looking at the pulse of what they're looking for. >> what do you think that's about? why? >> i really think this is about people kind of looking for peace of mind as they think about taking care of families.

you wouldn't believe the e-mails i've gotten over the last 24 hours about people in their -- in a broad set of, you know, my husband had a heart attack a month ago, this is really going to give me peace of mind i can take the time off to take care of him. >> how's it work? what do i have -- i have to come to you and say i'm leaving. how much -- under what are the circumstances? >> we have a whole process of which you would notify us that you were leaving taking up to the 16 weeks off. obviously, you know, we have a broad set of capabilities in our teams. and so we'll fill gaps where we need to. but people will just ask permission to go take care of an aging parent or a sick child. or again, the traditional parent leave. >> it seems to me the consulting companies have been on the forefront of a lot of this. six months for maternity leave 37 why is that? is it you have a hard time keeping the toll talent or you have more young people coming through? >> we hire more off campus out

of the universities. we tend to be on the forefront to attract and retain the best talent. soing that's really -- and when you're not selling a product and you're selling your people and service, that's why as a professional service firm it's so important. >> but the flip side of that, right, is how hard is it to have a key person in a group say i'm actually out of commission for the next 16 weeks? >> i think we've thought long and hard about that. we say this is the right thing to do for the people. we think the productivity of that employee and that team -- you know, we work with big fortune 500 company and big teams so we can fill that gap quickly without going out and hiring. we may use the open talent economy that's emerging to fill some gaps. but, you know, we're really, really don't think there'll be a big disruption to the teams. >> cathy, while you're here, you have a good insight to how businesses across industries around the globe are performing.

and you have a good idea of economy in places. there'd been a lot of concerns based on recent numbers in the united states. ism manufacturing, ism non-manufacturing, the services industry, also the jobs number was lower than expected. does that fit up with your view of what's happening in the u.s. economy right now? >> yeah, i think i've talked to a lot of ceos over the past couple months who they think are well positioned about their investments in innovation whether that's digital or cyber. i know at deloitte we're looking at the year of cognitive, internet of things and how that's changing business. so i think companies are, you know, less focused on the uncertainty out there and more focused on what choices they should be making around investment. >> but do you get the sense that the economy is weakening? >> maybe a little softness. but certain areas are -- continue to be very healthy and hot. and you see that in the numbers. and you see that in our clients investments whether they're investing in m&a activity or

ecosystem plays around alliances and collaborations. >> okay. >> what is the average paternity leave for a person? >> it will be up to 16 weeks for paternity. >> i've already gone to bat for you. i insisted i was going to leave if they didn't give you six months off for this time. >> how many are you getting? >> i haven't figured out entirely. >> you promise you'll take the six months. because i went to bat. i sacrificed everything and risked everything. >> we need role models. men to be role models to take the paternity leave. >> didn't mark zuckerberg take it? >> yeah. he took two months. >> what month? >> you're going to have to take off all of 2017 and '18. that's for you. >> for what? i'm not having any. >> you're not having children? >> no. i'm just saying i hope you appreciate it. let me know.

when we come back, more market thoughts with kate moore. and oil and gas companies have had to live through a boom and a bust. now they're dealing with a different reality. living with oil stocks in the $40 to $50 barrel range. brian sullivan will join us with how dealers are dealing with the prices. he's in the thick of things. stick around. "squawk box" will be right back. [ clock ticking ]

time. you only have so much. that's why we want to make sure you won't have to wait on hold. and you won't have to guess when we'll turn up. because after all we should fit into your life. not the other way around. right now it's time for some final thoughts from our guest

host before we let her go. kate moore from blackrock. we talked about this at the top of the hour. just your idea of what the market is headed at this point, how optimistic are you about things? >> we've been in a tight trading range. the thing that sort of stresses me out the most, if you will, has been the lack of volatility in the market. >> why is that? >> because we're not really seeing significant position. everyone is holding their position steady. in a normal market, you get consistent pullbacks. usually a few times a year. and we've been in this period where i think political uncertainty is high. not just brexit. but also u.s. politics, the rest of europe. where growth concerns are the forefront of people's minds. and yet it's just not coming out in equity volatility. >> see it again in january and in june. big opportunity ifs you had some money on the sidelines as a way to pile back in. is that what you're waiting for? >> yeah. look, i think investors need to

be ready to step into the market and buy high quality and high yielding assets. if we do get a bit of a pullback. i think the one thing i'm going to watch closely as we get into the election is whether or not volatility picks up in that month ahead of election. traditionally it does, but we're also not traditionally starting at this level. so i think the magnitude of the move might be a little bit less than in previous cycles. >> isn't the fed's zirp policy causing no volatility? none of the markets know where to go. it is kind of artificial. you're not clearing trades necessarily the way you would. who knows with the stock market. it seems all bets are off with all these markets. >> i think monetary policy is part of it. i think the earnings story is part of it. i think the uncertainty around the oil price which you'll talk about in a bit. >> most of those things are given though. a lot of people say there's a lot of uncertainty. i've never known when there wasn't a lot of uncertainty. with over 20 or 30 years of watching. the always thing that's

different is the extended period of time of what seems like artificially low rates. >> well, we've had this disconnect, too, i think between what's an okay economy and what's been pretty uninspiring profits. you know, we've had okay earnings but the earnings coming through are through cost reduction and not top line growth. we get these valuations which i think, you know, monetary policy and low rates have contributed. and a lot of investors who have been in the market for multiple decades say at these levels i'm not super comfortable at these multiple levels adding additional money. >> there is no alternative. if it is that, how do you know what anything's worth? >> i think you have to think really hard about the quality of the assets that you're owning. and valuation should be a part but not necessarily the single driver of your process. that's the mind shift that needs to happen. they could go higher if monetary policy stays accommodative for the next five, six years.

we don't even know at this point. we also need to think about what we're buying when we're buying individual assets instead of the broad market. we want investors to be more active. >> kate, i want to thank you for being here today. it's been a pleasure. >> thanks for having me. i want a doughnut. >> they're on the way out. >> we have them back there. coming up, the ceo of waste management is going to join us for the remainder of the show. his thoughts on the global economy, politics, and more. then the cfo of kroger on the quarterly results. "squawk" returns from that on a sugar high in just a moment.

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new this morning, crude prices slumping after a big rally. a live report from the oil patch straight ahead. talking trash. >> golf clap? >> golf clap. >> our special guest this hour, david steiner, the ceo of waste management. we'll get his take on the risk of recycling and much more. plus raise a glass to premium brands. but can the world's second biggest distiller drive up

profits? the final hour of "squawk box" begins right now. ♪ from the most powerful city in the world, new york city, this is "squawk box." >> we got a big drinker joining us on the set. david steiner. did you request this? i apologize. >> a shot or two of tequila in the morning. gets you going. it's the ceo secret. it really is. >> in the freezer because it doesn't freeze. so cool and delicious. anyway, that was a joke. david is here. we'll talk to him in a second. i'm joe kernen with becky quick and andrew ross sorkin. this time we went with -- i called you a morning drinker. you keep coming back though. >> it's amazing to me you haven't got a broken leg yet.

that's the amazing thing. >> in an accident. >> accidents happen. >> as you slip off the step. >> our guest host this morning is david steiner. amazing i haven't got a broken leg. i love that. ceo of waste management. one of the greatest ceos in the history of all businesses. >> better. >> is that better? meantime, futures right now are indicated actually they're getting worse. and yesterday wasn't great either. now they're indicated down about 75. i don't know what's ailing the markets at this point. oil's up. >> technology was weaker yesterday. apple was weaker. gains for the nasdaq. >> headphone jack. maybe it's all related to that. markets in europe at this hour are indicated -- or have been trading mostly in the red. that's worse than it was across the board. >> among today's top stories, north korea is conducting what it's called a successful test of

a nuclear warhead. the country says it has the ability to produce nuclear tipped missiles at will. fed speak's going to be dominating the today's conversation. public appearances by fed presidents. and steve leisman has an interview with fed governor daniel tarullo. twitter remains in focus after this week's board meeting had some speculation about the company's future. "the new york post" reports that contrary to rumor, investor carl icahn is not building a stake in the company. cnbc reported earlier this week that no bids have come in for twitter. app lot of talk about whether they want to sell themselves. the more you talk about it, the worse to bring bidders out. a few stocks you might want to watch this morning. jpmorgan downgraded to neutral from out perform. citing valuation, challenging

interest raut environment, and the higher than peer required capital buffers. shares of restoration hardware rising this morning. the retailer of luxury home goods posting better than expected earnings and revenue. and kroger reporting quarterly profit of 47 cents a share. revenue is slightly short of forecasts. supermarket operators also cut its full-year outlook. the company's cfo is going to joins live in 15 minutes. >> oil and gas companies are dealing with the reality of living with oil in the $40 to $50 range. brian sullivan joins us now from oklahoma city. he's got more. brian? >> good morning. we've been talking to you from texas permian basin. this is area that not many have been talking about. want to expose the scoop and the stack. those are acronyms. i could explain them but it would take the rest of the hit. either way, it's a huge oil

basis west and southwest of oklahoma city. there's a rough map of where we are. and the idea, guys, is while texas has gotten all the attention, actually the lowest cost production for much of the united states may be in those two areas where we are. and we wondered why. so we came out here and we went out to a rig yesterday and spoke to a senior drilling engineer. basically he told us that it's where they are, a lot of labor, and also good land. listen to what he had to say. >> we've been able to draw off the other technologies of the surrounding basins. it's -- we have easy access to louisiana, texas, other basins that started way before us. and so we're able to draw that technology in here and basically all those learnings are culminated right into our stack play and we're able to execute well with the learning curve already taken care of. >> you know, guys, we hear a lot about that kind of stuff. technology and learning curves.

let me give a concrete example. that was a new exploration rig. the well cost two years ago was about $8.5 million per well drilled. it's now 6.5. they've cut the time to drill a new well from 21 days to 9 days. they say time is money. time is money on an oil platform literally. so that gives you an idea of how much cost and time has been cut and why they can be profitable with $40 oil. >> wow. >> i don't see why that doesn't show up in productivity, brian. why everybody keeps crying about -- those numbers are unbelievable. and you said in two years. >> yeah. and actually it's less than two years. i did two years because i wanted to be safe. it's more actually like a year. i asked him why didn't you get faster before? and they sort of hemmed and hawed. the idea was they didn't really have to at $70 oil. now they have to. >> necessity is the mother of all invention, right?

>> and good drill bits. >> cheap land. and becky's from oklahoma. >> no, actually -- >> it's more expensive -- >> i lived in oklahoma but his producer is brad. and brad was born in oklahoma. >> you were in broken arrow. >> cool name. >> that's by tulsa on the other side of the state. brian, what -- >> yeah, but have you ever been to okarchi? >> i have not. where is that? where you are? >> i have now. we're in oklahoma city here, becky. we're at a ge building. later on in the show, i don't want to give too much away. why are we in a ge building? we're going to show you. it's an oil and gas story. it's kind of cool. but i've got to save stuff for the rest of the day. because oklahoma city is not the easiest place to get to but there's a lot of nice people. we're going to talk about who the players are, why is it cheap, what are the names you need to be paying attention to all day long.

hopefully it's going to be a new angle to the oil story. the scoop and the stack. later on i will explain what those acronyms mean. whoever came up with them is a mad genius. >> brian, thank you. we'll be watching. appreciate it. all that low cost oil, it poses a challenge believe it or not to the sanitation and recycling industries. our guest host today is david steiner, ceo of waste management which serves more than 21 million customers in united states and canada. we talked about this before but it's a little surprising. you would think lower oil prices would be good news because of all of the trucks you have out there. it lowers your cost structure. what happens with recycling? >> it is good news for our fleet. but with recycling, low energy prices both oil and electricity is what drives fiber and plastics recycling. so when you have those low oil prices, you can't sell the materials for as much on the back end. which means it becomes less profitable. which means you disinvest in it. so we went from a high of

investing upwards of $300 million to $400 million a year in recycling. the last couple years that's been under $20 million a year. so, you know, what you need to do is you either need to drive down the processing costs or drive up the price on the back end. hopefully both. you know, we haven't seen that in three to four years. usually recycling has a "v" shaped curve. goes down quick, pops back quick. we're now in the fourth year of basically a recycling recession. what i like to say is if we're disinvesting in recycling, think of what the other folks are doing that don't have other parts of business to fall back on. we've got a large business. recycling is only about 8%. for folks who theirs is 100%, you're seeing it go down. which for the first time in 50 years you saw recycling -- >> what is your peak of dependency on recycling? was it above 8% five years ago? >> it was about 12% five years ago. investment point of view, it was the business that we were

investing in. >> investing in. and also what was the thing -- waste to energy? you sold that. three or four years now? >> we did. we did. >> did you keep a stake and who'd you sell it to? sit still in business? >> absolutely. it's a great business. the reason we got rid of it is it's really two things. it's taking the waste in and then the electricity on the back end. we know all about taking the waste in, selling the electricity on the back end, not something we were good at so we sold it. >> is it competitive with the way electricity is produced. >> extremely competitive. so the folks we sold it to were energy players. so they understood the energy on the back end. so we have a long-term contract with them where we supply the waste to them. then they take care of the energy piece. basically we got rid of the volatility of the energy while keeping the ability to dispose of that waste into those plants. for us it was both a great financial deal and a great strategic deal.

>> when it comes down to it, though, the rest of your business -- obviously this is a small part of your business. the rest of the business, the pricing is up, yield is up, and churn is down. what's happening in the garbage industry overall that allows you to keep those metrics? >> it's interesting. in the great recession, we didn't bounce back as fast as other businesses. i'm on the board at fedex. and fedex was well -- right after the recession was higher than they were pre-recession. right? we still are not higher in volume than we were. i like to say now is our time. the economy has done well for us. we are now tied into housing stocks. now we see housing stocks above a million moving toward that 1.2 million to 1.3 million. you've seen the volumes bounce back nice for us. we kbpt that to continue for three years. >> new houses means new customers. >> all the junk that gets created in the housing production. >> and then all the surrounding businesses. so you have to open a new

restaurant, a new gas station, a new dry cleaner. those are the customers for us that are basically annuities. when you got a small business, there's one thing you've got to have. you've got to have that waste picked up. we keep those customers on average about eight years. and that's what really starts piling up. >> after the eight years they go out of business or you lose them to somebody else? >> it's just an average. so most of the business we're losing about half of it are people going out of business or moving location. and then about half of it is just sort of systemic churn. >> put the dumpster out there. you own the dumpsters too, right? >> we own it all. >> how much is it? do you charge by the month for the dumpster? >> yes. it depends on the size. if you have a small business, you might get a two yard dumpster, four yard dumpster and we're going to charge you. you might want it picked up once a week. or if you're a restaurant, you might need it picked up four times a week. we'll work out a price for you, joe. >> awesome. >> david's going to be with us for the rest of the hour.

we got kroger out with numbers and the cfo after this short break. 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 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.

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welcome back to "squawk box." take a quick look at the futures. now down over 80. oil prices not the -- necessarily the issue today. they're up above $45. they've been traded above that. they are down a little today. 1.5%. and we got some breaking fed news. steve leisman joins us live in washington. >> thank you very much. boston fed president eric rosengren will make the case essentially for raising rates saying that the low rates increase the chance of overheating the economy. you'll remember he got concerns about financial stability relative to low rates. he'll go on to say that by raising rates the fed has a chance of lengthening the

recovery. not doing so he says could shorten the recovery. he says raising rates are best for achieving employment. he says the economy is growing fast enough to raise employment to improve the labor markets. so he'll be one of several speakers we have this morning dallas fed president will be in question session. and then we talk to dan tarullo. that's before fed speak on monday we'll be covering for you as well. >> okay. thank you, steve. kroger reporting quarterly profit of 47 cents a share, 2 cents above estimates. however, revenue slightly short of forecasts. supermarket operator also cut its full year outlook by about 10 cents. joining us now mike schlotman, cfo of kroger. also part of the cnbc council. so you are in -- where's your studio, mike? >> i'm right across from the big

kroger building that you know. >> yes, i do know that. what is that on? >> right on vine street. >> vine street and what's a cross street like 6th? >> court street. >> court street and vine. okay. i know exactly where you are. i love businesses like yours. because i -- it boggles the mind. you do about 1$100 billion in sales. $26.6 billion in this quarter. and 383 million in net. that is a -- i think that's a fair margin for any company. i don't think anybody that makes more than that really needs to make any more. what is the net margin in number that's like making a penny on every dollar. >> we are a penny business. we fight for every penny every day whether it's how we procure product or how we get more efficient inside the store. always has been. >> it always has been.

and i think that's -- you know, i feel much fairer about that. that you're not gouging people and trying to maximize profits which ends up hurting so many people. being sarcastic. i have to say that now with, you know, a lot of times people don't understand. you cut guidance because of continuing deflation. we talked about disinflation, low inflation in other words. we don't really think deflation is still that prevalent. but in your business, is it deflation? >> well, it absolutely is deflation. it's pretty broad based in our book of business. we are about 1.25% deflationary in the quarter compared to this time last year. in our grocery category which is still about 45% of our business was about 1.5% deflationary. if you look at the price of milk and eggs and commodities like that, they're historically low. eggs are under a dollar. this time last year they were over $2 a dozen.

that's pure deflationary. produce is on a deflationary trend. it was slightly inflationary in the quarter but it was more disinflation than deflation in that category. but it looks to be trending toward deflation with where the last three periods have been. we're proud of the quarter we posted. strong id sales. when you look at the real growth if you look at our id sales plus the deflation in our quarter, it was a mid-two number. lower households grew nicely. and they're making more visits and buying more on a monthly basis when they come in the store. we've been through deflationary periods before and we'll continue to work hard through this. there's always light at the tunnel. >> this is dave steiner from waste management. we use kroger in our pharmacy program. how important is the pharmacy business to the grocery business? >> it's extremely important for us. 10% of our sales are out of our

pharmacies. you know, we're one of the largest pharmacy providers in the country. you may have seen an announcement we added to our specialty pharmacy business. we merged with a company called axium a couple of years ago. last couple weeks bolted onto that with modern health who is a large specialty pharmacy provider. we think that combination with our focus on health and wellness as well as our brick and mortar locations to provide that environment is something that will serve us well in the future for our customers. >> so you went over like six different things that have been going down. no, they've been going down in price. what are the -- are there different reasons and dynamics for each of those? i figure there must be. it's not just the dollar. what is causing that? what's the primary reason? >> it's pretty much supply and demand. if you look at the meat complex, all three proteins have been coming down for awhile.

global consumption of meat products is down. which leads to higher supply and over time those things balance out. if you look at the dairy complex, milk has been very low for an extended period of time today. and that effects not just the absolute fluid milk, but it winds up affecting cheese and yogurts and ice cream and everything that contains that. >> we do it on less land than we ever had. and these arguments that we're not going to be able to keep up with. i don't know. it just never seems to be born out in reality. and then how about your cage free eggs? now, i'm not a person that thought that eggs would try to escape. like, do they roll out of the -- and if they do how do you prevent that if it's cage free? >> well, the eggs come out of chickens that are raised in a cage free environment. >> oh, oh, oh. okay. >> i know you knew that. i know you knew that. >> don't assume anything on this. you know what nirp is, mike?

>> well, it's a game i play with my son when he was growing up. for sure. there's some scary pictures of me stressed up in stuff to get -- >> how about aleppo? i'm going to get you on something. appreciate it. good luck. i don't know. we're the salt of the earth from that town, aren't we? you going to beat purdue? >> well, i'm a university of kentucky grad, so -- >> ooh. but you're on the board of uc for something? >> i am not. the economics council i was on the board of the uc economics council. i've cycled off of that. you can only do so many things like that and you take your turn and hand it off to somebody else. >> i guess when it comes to basketball there's probably not a lot of love lost between the university of kentucky and the bear cats. but you seem to be doing okay. >> yeah. i don't -- i'm not that kind of fan that laments anybody else. if there aren't two teams, there's not a game. you need strong competition out

there which is fine. >> do you remember the old song let's go kroger the happy way to shop. do you know that one? >> i absolutely knew that one. i'm a native from here. let's go kroger. >> all right. thanks, mike. see you later. >> thank you. when we come back this morning, a rescue in the french alps. dozens of tourists spent the night in cable cars. we have the details on this rescue after the break. time to squawk and roll. kansas is back on the road kicking off a 40th anniversary tour. first stop? "squawk box." with details about their new album and to weigh in on the big business of music. monday starting at 6:00 a.m. eastern. "squawk box" will be right back.

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welcome back to "squawk box" this morning. making headlines, snapchat has hired several bankers to help it raise debt financing. morgan stanley goldman sachs among those involved as well. snapchat did not accept an ipo banker yet and has no plans to go public. tourists who were trapped in cable cars in the french alps were rescued this morning. a series of cable cars stopped working at high altitude in the mountains yesterday. pretty scary stuff. it prompted a major rescue

operation. but it left 45 people trapped in mid-air overnight. four helicopters were deployed when they were stalled because of a mechanical incident. they rescued people before the efforts had to be suspended for the night because of rough conditions. they did provide blankets, food, and water to help weather through some of that stuff. but again, you could imagine being stomach up there. >> and it's just scary when you're on one. when it stops for a second, you're like please go. coming up we have today's top stories plus find out why one investor is doubling down on biotech and oil. ♪ 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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♪ boston fed president eric rosengren pushes for a fed interest rate hike. a voting member of the fomc this year says failure to gradually raise rates could actually shorten the economic recovery. the longer you wait if you're trying to get somewhere and you don't start, then it gets

steeper when you finally have to. >> since steve told us about the comments we have seen additional weakness. dow futures now down triple digits. down 103. >> john williams said it. then the employment report came out, took it off the table. we go up. now it's back on the table. now we go back down. so it's the same crack addict market. >> if you look at individual stocks, some of the banks taking it a little bit harder. you can see that goldman sachs is down by over 1%. they did have that big fine against them too. wells fargo. >> any reason to think it's not -- okay, now you think you know what you're going to do. there's no way we're raising in september because of the election but we're going to make you think we might again with the jawboning again. >> what i will say is leisman said even a 150 number might be enough. the 150 jobs number might be enough for them to actually go in september. >> and now the narrative is they're going to prove that they're not political and prove that they're not market

dependent and finally going to show some -- >> they'll show you. >> they're finally going to show some -- that they do something without thinking -- >> very quickly check out oil prices too. oil prices after two huge days of gains yesterday wti was up by 4.7%. this morning that has picked up again after comments from rosengren. you're looking at wti down by 1.9%. $46.70 is where it's trading. we can kate stockton on this morning who said if oil could close above $46.60 that would feel more comfortable in energy stocks. but it's at $46.69. let's look at stocks to watch this morning. mattress firm reported quarterly profit estimates by 8 cents. revenue also falling short of forecast. comp store sales fell by 1.1%. >> how do you think they came up

with that name? >> clever. we sell mattresses. >> what if you said mattress firm mattress. they changed it for you. mattress retailer mattress firm for the lack of confusion. we should tell you deutsche bank is expected to settle several mortgage backed security cases for more than $2.4 billion. according to a german magazine, the report says the justice department will send a formal agreement to that bank next week. and samsung electronics is reportedly considering selling its printer business to hp inc. that's according to a newspaper report in seoul who says the deal could be worth $1.8 billion. our next guest is bidding on biotech and oil. david's platinum portfolio is up over 22% so far thissier. congratulations on that. >> thanks. >> you like wells fargo. we were just talking about it.

>> we do. you mentioned the banks were down. if the fed is actually going to raise rates, it's very bullish for banks. we think wells fargo is well positioned for that. it's paying a 3% yield. if it's off anything today, we would be buying. the fine is ridiculous in terms of the business practice. we don't think it was a company-wide thing. we think it's a good organization. we think -- >> can i ask you about that? i was shocked by at least what the headlines were. this idea that there were a million -- 1.5 million accounts opened without anybody knowing what was going on. and 5300 employees that -- that's pervasive. that's systemic. that's not -- >> it's extraordinary the bad actors that have been involved in a lot of these companies but it's not the entire company. that's a small percentage of the company. and we think wells fargo is actually a very well run highly ethical organization. we would use that headline risk to buy. this isn't what runs wells

fargo. >> that was 5,300 employees they had to fire. at aig, there were fewer people involved in that entire scandal. >> it's extraordinary, but as an investor you want to look at what the company's earnings are, their long-term positioning. >> and you don't think there's large repercussions to come from this? >> definitely not. >> all right. we can move on to some other ones you do like. you like qualcomm. >> qualcomm is doing well this year. they had a lot of turnarounds in the last year. they've resolved issues and are at 14 times earnings. you're seeing on a daily basis articles about the dividend trade being crowded. we think that's the case especially for utilities. but there are other businesses paying -- >> multiple story for this to actually work? >> it's got to have better earnings and we think you'll get a multiple expansion. >> really quick, occidental. >> you're starting to see them do better here.

we think we're in a new trading range. occidental is a well positioned company. just raised the div deidend thi summer. >> we think the stock could be 15% to 20% higher. >> thanks a lot. >> let's get back to our guest host david steiner. ceo of waste management. do you think about the fed very much? you don't, do you? >> you know, i think when you're running a business, i think wall street thinks about the fed and what effect it's having on the market. when you run a business you think about tax policy and regulatory policy. right? i mean, that's what drives our business. if we could get a logical tax policy, i think we all know that business investment follows jobs. and jobs follow business investment. so if we could spur some business investment through tax policy, i think you start creating jobs. if we could get rid of the regulatory maze, you're going to start to see jobs created. look. interest rates are important. but they're not what we sit and worry about running the

business. >> the economy does though. the economy is. if housing starts are what you most closely track. >> absolutely. and i would tell you that i think tax policy and regulatory policy would help the country imminently more than anything with interest rates. >> if the fed wants to prove it's not worried about market reaction to what it does, the market -- they're giving it a chance to prove that. because it's doing exactly what they worry about. all they do is intimate that maybe september is a possibility and immediately go down triple digits. does the market and the economy really need rates where they are? or else everything comes to a stand still? >> look, i think it's the difference between the market and businesses. right? interest rates on wall street are am i in bonds or equities. right? we don't think like that when we're running a business. >> computer trading or whatever. immediately you feed that in -- you feed that possibility into these program trades and it immediately starts selling based

on a quarter point possibility? >> and i've been doing this now for 16 years. and i've seen every interest rate cycle. i will tell you other than just the cost of capital has no effect on how we run our business but tax policy, regulatory policy, that's what drives our business. i think that's what drives all businesses in the united states. if we want to create jobs, let's start focusing on that. and let's let the fed do what they need to do. >> we don't think that anymore, what you just said. we think -- and the fed seems to think that the entire world, you know, revolves on what central bankers do. it's kind of sad that we've been conditioned to think that in the past five years. >> the real world does not revolve around the fed. the fed needs to do what they have to do with the interest rates. . we want the real world to create jobs, let's look at the tax policy and regulatory policy. >> is the epa coming after you? >> we actually have a good

relationship with the epa. >> oh, okay. >> we do have a good relationship with the epa. look. landfills are for sophisticated animals. right? they are not just the old -- in the old days in the 1950s you put it into a hole. now it is they're highly engineered and the epa has actually helped us develop regulations around landfills to make sure they're environment tally safe. >> they put golf courses on top of them now. >> absolutely. >> so you're not just throwing the trash in a big hole now. >> we're recycling the land ultimately. that's a pretty good thing. >> it should be like a big compost pile, shouldn't it? >> to a great degree, it is. we grow natural grasses on them. i'll take you to a closed landfill and you'll see put a golf course here. >> why don't you just tell me. i'll take your word for it. >> i didn't say i'd take you there voluntarily. >> yeah plp i come back from there? that's the question. there's the waste management

rubbing me out joke again. it never gets old. >> i like it. it does scare you a little. >> it does. let's look at wti. oil started out down this morning. it took another leg down as we got these comments from fed president rosengren suggesting that the fed is more likely to hike. you can see right now that wti is down by 2 p.3%. wti has been up yesterday up 4.7%. the idea the fed might actually hike rates puts the dollar on stronger footing. wti sells in dollars. you can see this morning that they're trading at $46.50. we spoke to an analyst that said if it could close above $46.60 this could be the leg up on the oil prices. this puts some of that into question. $46.50 is the last trade.

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welcome back to "squawk box." there's the futures. triple digits has been uncommon to see lately. >> yeah. because of the lack of volatility. >> big lack of volatility. down 104 on the dow indicated this morning. going to need a drink. down 14 on the s&p and down 33 now after a weak session yesterday on the nasdaq. you'll see why i said i'm going to need a drink. >> show them as we're speaking. changing consumer tastes are an issue in the world of high end spirits. our next guest says a shift to premiumization is lifting. get a camera on him. joining us now is alexandre ricard ceo of pernod ricard. it's the world's second largest distiller. what have you brought us? >> that's part of our latest

innovations. this is all premium. at the service of our premiumization strategy based on authenticity and quality. so you have extra which we launched last year. the glen founders reserve. which is our newest to join the family which is the market leader here in the u.s. and globally. jameson which is my personal favorite. >> and the fastest growing here in e the u.s. >> and fastest growing spirit premium spirit drink in the u.s., yeah. >> what's that about? why is that happening? >> well, basically that brand is really cool. it's very accessible. it's very versatile. the taste is smooth. >> you say it's cool. what do you do to make it cool? >> it's an irish -- it's basically an irish spirit. in both senses of the word spirit. it's triple distilled which is quite differentiated. basically we say we like to say triple distilled, twice as

smooth, and one great taste. people like to drink it on the rocks, neat, as a shot, or with ginger ale or cocktail base. >> don't get upset with me, talking cool and not cool, what happened to absolut? it's not as cool as it used to be. >> i'll tell you. absolut is actually pretty cool outside of the u.s. within the u.s. market the vodka segment is competitive. we've upped our investment behind absolut. the one thing we forgot to communicate to our consumer base in the u.s. is absolut is a one source one community vodka based in south of sweden in a small community called ahus. and it's based on winter wheat. i went and visited these beautiful fields of winter wheat. they grow during winter and harvest happens in spring. >> there's a changing sentiment

in the united states after years and years of being told moderate to light drinking is good for you. it seems there's a changing theme from medical establishments and obviously these things change all the time. but how difficult is that for you to fight, this idea that maybe younger people aren't going to take it up quite as much as people in the past have? >> you know, the fact of the matter is -- and like most things in life, a balanced and responsible attitude is what really works. >> what andrew said about vodka is also true of tequila. remember stoli and then grey goose. they all taste the same expect they got cooler bottles. i want to know about tequila. what is premium tequila? if it's 100% agave, is it any difference if it's patron or this? i've seen $350 bottles of tequila.

does it taste better? can i notice it? >> that's the thing in the industry. you have craftsmen that work behind these products. there is a heritage behind them. and there's a know-how, an expertise. you know, the art i call it an art of distilling and of making these kind of spirits. >> you can tell the difference between terrible tequila and premium $350 tequila? >> oh, yeah. >> vodka? vodka's tasteless. can it be more tasteless? >> i strongly suggest and recommend you try some of this. >> if you insist. >> we like to call it liquid silk. and we do blind tastings. and you do see that there is a taste difference. >> i'm a wine guy. and that's like saying it's all just grape juice, right? and there's a wide variation in wine. i assume that where your product comes from, that it's important. and that the ingredients and the way you distill it makes a big difference. >> yeah. we have a very strong approach.

basically the glen has to come from scotland. it has its own distillery. and has been so for a couple hundred years. and likewise for jameson which comes from ireland and was founded in 1780. they all have a story and heritage behind them. >> i'm going to get in trouble because we got to go, china, what's the market like and what's popular there? >> i'll tell you, china is a difficult market currently. the most popular segment in china right now is cognac with the market leader being marto switch a 300-year-old brand. >> what about in russia? they don't drink the good stuff do they? >> some of them do. the affluent consumers do. >> thank you for being here. come on back. when we come back, jim cramer will be joining us live from the new york stock exchange. we'll get his take on the top stories. check out the dollar right now. you will see the dollar has moved up against the euro.

up at 1.1244. stay tuned. you're watching cnbc, first in business worldwide.

let's get down to the new york stock exchange. jim, my man, you probably have struggled with this. the guy was here trying to get

the perfect margarita again. i'm not -- you know, i keep trying different things. san miguel you got the perfect margarita? >> 100% agave the state makes it the same. people want to pay up and put these more expensive tequilas in that's a mistake. i like casanova. i am a huge cas drinker. it's the best. the drink that i serve as soon as september comes around. >> really? >> yeah. i switched right out of tequila into jame missson. >> is that irish whiskey? >> it's irish. i've been to the distillery. an amazing institution and it's just a fun thing. i know my friend david is a wine man and there there's actual great deviations. but there's not as much difference as, you know, as people think in a lot of these drinks. >> down 100. we were talking about it, maybe use a drink. it's not oil, jim, it's, again, a quarter point again.

>> well, look, we had the story, it's when you talk about there must be a rate hike, there are people trying to build it in who weren't building it in. i think there's going to be one. i'm not crazy about it. it's something you have to deal with. i don't know if it pro longs growth. i think it's something they want to do and we have to be ready and we're not ready. just a lot of people are complacent why there's been, you know, the vix is so low. i'm urging people not be complacent. >> i would be flabbergasted if it was september. for me to see they can do it with some courage, i would welcome it. i still don't believe it. i just don't think -- >> i am with you. >> i don't think they have -- i see the market today and go oh, no. >> yeah. this is the exogenous down day. james corden is here on the floor of the exchange. >> is he the karaoke guy? >> i was in the back seat with him over here and we're doing "brown eyed girl". >> excellent. >> you're not joking?

>> i'm just dreaming. >> dreaming. my wife would think i was really cool. >> you had the song ready to go. >> i told him i was in the back seat of his car. which is fine. i don't know who he is. well, i kind of know. you know. >> all right. >> he's not as big a "mad money" fan as david stein. >> no one can be as big a fan as david steiner. >> sing us out, "brown eyed girl". >> you know -- >> down in the hollow. >> behind the stadium with you, becky. >> playing a name game. >> you're "blue eyed girl" can't do that. >> we'll see you in a few minutes. >> thank you. >> all right. coming up, we will have much more with our guest host david steiner including his call on the economy when we return.

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and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. digital works for banking and financial services. lets talk about how digital works for your business. ♪ welcome back, everybody. our guest host this morning david steiner the ceo of waste management. david, we talked about a lot over the course of the hour. what the economy looks like from your perspective, how business is going. what types of things have we not gotten yet to? >> you know, i think it's interesting in the business world that we've become happy

with 1% to 2% gdp. >> we've become complacent you mean, settling for less? >> yeah. things are going okay and, you know, after the great recession, okay, became really good. >> right. >> and i think, you know, we were he all looking at it saying, what's the next big shoe to drop, right. and that's why i say, i think we need to bolster the economy from down below. look, interest rates are interest rates. let's get some rationale tax policy. let's get some good regulatory policy and focus on creating jobs in the united states. right. and i think that's what worries businesses. is that we're not creating the jobs that we should be creating. >> we have seen the unemployment rate fall from 10% to 4.8%. gdp we're looking at the third year since the great recession where we will have below 2%. that's been the real crazy story and how do you figure out what's happening. productivity numbers are down. you think it's -- >> participation. >> labor participation rates at the lowest they've been. you have the income gap, right.

so the jobs being created are low value, low productivity jobs and don't -- >> don't generate enough garbage. >> yeah. >> and we really need to in the united states, we need to figure out a good policy to create long-term jobs that create high value wages. >> thank you so much for being here. >> thank you. >> it's always a pleasure. >> thank you. >> appreciate it. >> make sure -- good to see everyone. make sure you join us on monday. "squawk on the street" is coming up right now. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber, jim cramer at the new york stock exchange. stocks threatening a loss for the week now as futures tumble to the red on some of these comments from the boston fed chief about a potential rate hike. a lot to cover as well interest wells, to kroger to samsung. europe's been on