now. >> announcer: live from new york, where business never sleeps, this is "squawk box." good morning, everybody. and welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernin and andrew ross sorkin. and let's take a check of the markets on this monday morning, u.s. equity futures are flat. dow futures down by a percentage. so are nasdaq. s&p futures down by 1. it was an up week for the markets last week. dow was up by 126 points. nasdaq was up by 1.5%. if you take a look at what happened overnight in asia, you'll see that the nikkei was flat was well. not much activity in the hang seng or shanghai composite. the shanghai was down the most by half a percentage point. in europe today, germany is closed for a public holiday. but you can see the cac is down by half a percentage point. the ftse in london despite the

terror attacks down by just 0.25%. breaking overnight, saudi arabia, the united arab emirates, egypt and bahrain severed ties with qatar. now, they're accusing the country of supporting terrorism. the gulf states said qatar support of the muslim brotherhood threatens national security because the foreign minister has said the measures are uninjured based on claims that he says have no basis in fact. takes a quick look at crude prices. wti at 47.84. we will get a live report from dubai in just a couple minutes. in london, as you know, on saturday, seven people were killed dozens were injured when three men drove a van into pedestrians on -- in this case, it was the london bridge -- then attacked people with knifes in a busy neighborhood. it's the third terror attack in the uk this year, comes days after manchester and just ahead of thursday's parliamentary election.

let's get to wilfred frost in london good morning, will. >> reporter: good morning, joe. seven people dead, as attackers crossed london bridge and stabbing further individuals in borough market just behind me. we've learned this morning from the met police commissioner that the identity of all three attackers is now known. and that they have a domestic center of gravity, they were not from directly overseas. this is the third attack in the uk in the last 73 days. theresa may said that they are not directly linked. but that they were, quote, bound by a single evil ideology of islamist extremism. and she added that enough is enough. there's far too much tolerance of extremism in our country. the other thing she confirmed yesterday, of course, that the election will go ahead as planned on thursday. campaigning picking up in earnest once again today. theresa may will go after jeremy

corbyn's perceived lax on terrorism. and corbyn blaming may for failing to be conservative. and criticizing theresa may for making cuts in the police budget in 2010 to 2016. sadly, these arguments have been used after the manchester attack. what does it mean for the polls? it's a clear trend. the momentum continues to gain for jeremy corbyn and the labor party. however, theresa may remains in the lead. the polls put that lead between 1 and 12 points depending on what you look at. the ft poll of polls summary in the last seven days puts her lead at 9 points 44 to 35. the market reaction this morning, relatively new. the pound now flat, having flip slipped a little bit over the last 24 hours, guys. >> wilf, there you are again.

over there. but, you know, we can't help but think, wilfred, you know and have seen numbers of jihadists in the uk. and it's got to be on people's minds. and anybody can rent a van, anybody can have a knife. i mean, it's just -- i mean, enough is enough. but i don't know what that means. enough is enough. >> reporter: well, absolutely right. and that's the question that's going to be thrown at theresa may during the election campaign. in 2016, she used a similar phrase saying the game is up for terrorists when she was home secretary in labor. saying she's someone who is full of talk and lacking action in that particular regard and lacking results. the other thing i'd say three successful attack information the last three months has also confirmed there were five thwarted attacks in that same three-month period. as you say, the battle is significant. and it's hard really to stop depending on what weapons are being used.

>> hey, wilf, theresa may as home secretary wanted to do something that would go after islamist extremists. at that point it was seen too extreme and something that the society wouldn't accept. would you say that the tone or tenor has changed there is that a move that the population would accept or not? >> reporter: well, i think you've definitely seen the right wing papers like the daily express and daily mail playing that up significantly very easily saying they're backing theresa may because of it. i feel now that there is a senses that maybe one attack or two attacks in the first couple of months, march and recently, were felt as a coincidence. perhaps the third one now people are starting to say this is a trend. and therefore more open to more being done. the question, of course, how it plays out. and labor are able to suggest theresa may cut police budgets. and she's finding it difficult to answer that question even

though her intentions as you rightly suggest were to increase powers. so it's slightly muddy waters in terms of the political debate. but people certainly getting fed up with this. and the fact that there are such repeated attacks. >> 23,000 a real number, wilf? nobody knows, i guess. >> reporter: again, that's a difficult number to pin on specifically. and there are many, many different levels of people that are being monitored by security services and questions that continue to go on about the level of knowledge that the service has specifically about these three attackers. who they said were homegrown more than from overseas. >> question the police don't have the resources to monitor 3,000 people, 24 hours a day, much less 23,000. i don't know, cow muld you moni 500 people 24 hours a day? >> reporter: it is very difficult, indeed. and there aren't definitive answers yesterday.

i'm sure there will be investigations. theresa may making it clear, if he's re-elected, she wants to announce her review and increase the powers out there. that includes entinternet and security dpirmfirms. it takes the focus away from topics like brexit which she wanted this election to be about and the one off how she's seen her lead slip significantly. >> you watch people's activity see if they're looking up bomb making. you make sure they're not buying materials. knif knifes and a van, i don't know, wilf, it's just very disconcerting. and these guys they keep moving with the attempts to thwart what they want to do. and they're one step ahead. and it's -- it's unfortunate. >> reporter: absolutely. and i think, as you said, knifes and a van, very, very hard to track.

one of the reasons that we saw the terror threat elevated after the manchester attack from severe to critical was the fact that an attack got through successfully using a bomb which had previously been thought to be easier to track ahead of the event and therefore thwart such attacks. clearly, the threat level remains told, having been lower a week or so ago back to arriving at severe. so, as you said, very hard to stop this attack. but it hasn't been elevated back to critical which would suggest a threat is imminent, as opposed to likely. >> it should have stayed at critical in hindsight. >> reporter: potentially, and that particular part of it has not been politicized bought it's a decision of the jtac, the joint terrorism attack center as opposed to theresa play and what that level is. >> we'll see you, wilf.

the trump administration is kicking off infrastructure week. for more on today's top political stories, let's get to eamon javers. >> good morning, becky. 9 trump a the trump administration wants to talk about infrastructure this week. they've got a week-long series of events planned. you'll see dueling events from the trump white house and also a lot of russia here. we saw some news last night from vladimir putin. he sat down with nbc's megyn kelly. she asked him about reports that jared kushner, the president's son-in-law and top white house aide had tried to set up a back channel with vladimir putin himself. >> have you gone back and discussed what were the conversations with jared kushner or anybody else from the campaign. >> translator: no. >> never? aren't you interested. >> translator: no because anything significant, they would

have reported to the minister. the minister would have reported to me. they weren't in any reports. there's nothing to even talk about. >> so vladimir putin says there's nothing to even talk about. james comey, however, may have something to talk about before he testifies before the senate intelligence committee. that comes up on thursday, june 8th, later this week. you'll see what mr. comey has to say, he's apparently been cleared to testify by mr. mueller, the special counsel in this case. so, we'll see what level of detail he's able to provide with his conversations with the president of the united states. and whether or not the president tried to shut down his investigation into russian interference in the 2016 election. all of that coming as the president today is going to unveil his plan to more or less privatize the air traffic control system in this country. and later on throughout the week, they're going to have a series of events traveling the country, walking about waterways, highways and all of the infrastructure that this administration wants to focus

on, guys. and we'll see the headlines throughout the week. >> eamon, thank you very much. back to the broader markets. we have joe orlando, senior portfoliofederated. why did an department store have an investment? >> that's a question i've asking for years. >> you should work on department stores and malls. >> federated became macy's. it's no longer. >> okay. i keep reading trump trade is over. you pull in your horns. i look at the s&p -- is that a misprint, really, 24.39, it goes up every day. how many new in the last month? >> almost every day. since easter. that's the dichotomy. you open up the newspaper, you flip on the tv. we read about russia comey, the

fed, impeachment and you look at the markets and we're hitting new highs every day. so, you've got this dichotomy where the media is not focused on what we think are reasonably good underlying fundamentals. and again the potential for structure policy reforms actually happen. >> but, phil, even those prospects, we keep reporting how dim it is. we just had richard burr saying no obamacare, did diddley in 2017. we hear that the main reforms are doa. so, everything appears to be watered down but the market keeps marching forward. >> well, we don't necessarily ale agree with that. we think that behind the scenes that congress is working on the transition from the aca. we think they're work on tax reform. >> really? really? >> we do. >> those guys are actually doing

something? >> the reality is that the republicans in congress, and understand it's like herding cats right now, i absolutely concede that point, but they realize if they literally get nothing done by the midterm elections next year, they're done. they've missed this window of opportunity. so, we think by the spring of next year, we're got to see something on these issues. >> take a look at the dollar. >> yeah. >> take a look at interest rates, take a look at high tax/low tax. companies, take a look at the broad market picture. we've got international stocks. expectations for fiscal easing in the united states are very low right now. now, that's a significant risk to the bond market later this year because it will only take one successful round of votes to change the outlook. you can have all sorts of failure between now and then. the bottom line is the world has looked good. we've seen modest trade growth around the world. we said at the midyear outlook, we've had an absence of stocks

and stimulus, but looking better than we have in recent years. >> the fed is not going to present a problem? >> well, look, they're going to tighten at a time when we haven't seen upside surprises. this is right in the middle of year where economists tend to overestimate short-term economic data. you can see this in economic surprises, suddenly going down. but i think they're going to go very slow. 33 just announced on their balance sheet they plan to completely defund their process. they're going extremely slow. the tightening cycle is half of the average tightening cycle so the world can handle it. >> what about on friday? >> i think it's a modest disappointment, what do we see in the middle of the year? we've had zeros for some of the middle of the year periods and we end up with 200,000 on average over the last few years. >> joe, just to make the point, the adp number and claims data which are indicators were very strong. so, while this trend over the

last two months on nonfund payroll, the softest in years we don't think that the labor market is dead. the leaders are telling us that the labor party is healthier and heldier. >> it's harder and harder to find applicants for jobs. >> that's one of the issues. the other issue that we identified with 9 weakness in the nonform on friday to some degree there is a chilling effect, that businesses are waiting, you know, for what is the structural fiscal policy reform. >> anecdotally, we have heard that from ceos. >> you look at employment reports in last few years, we do great january, februarys. and none of the data, as you said, phil, on claims date. >> i don't dispute the gop wants to dough something and needs to do something. the question i have is not even whether they will do something. i imagine they will do something. the question is whether it will be enough to warrant what's going on in terms of what's happening in the markets now. >> well, so, let's look at the

numbers then. corporate earnings on the s&p was $118. now, as steven correctly pointed out, we just had the best domestic quarter in five years. europe, we just had the best quarter in seven or eight years. we're going to do $130 in s&p earnings this year just in fundamentals. that's on fundamentals, that's not about what happened? >> no, but the point is if we're able to get structural reform. the leverage factor for every one percentage disappoint declined in the corporate tax rate adds about $1.30 in earnings. if we take the rate from 35 to 20 you're able to add $20 in corporate earnings. >> if i told you that the corporate rate was going to be 27%. >> okay. >> and i can guarantee that to you right now. that's all you're going to get. you would say that's a good thing? >> that's a good thing. stock market is going higher. >> 27%? >> right. >> it's basically nothing right now? >> correct. >> and there are people like

buffett that say corporate taxes aren't the issue, that health care is the issue. >> yes. >> so, do you think -- and we saw them say about the ah -- whatever the hell it's called that that's going to be put off. the market has nothing. if you said there's no tax the market would plummet -- >> no, no. from a fundamental story. it's not a washington story. >> but it's also -- look, it's either the trump trade or it's not. >> no, it's not. it can be both. >> global markets are not reflecting the trump trade. >> hey, so, is it too narrow? >> i'd like to see that broaden out. in technology, we think there's a technology upgrade cycle coming if we can get some of the structural form done. >> you need to add "c." >> the british prime minister theresa may is speaking right now. let's listen in. i believe it will be essential for the british government to be in the strongest possible position going into today's talks.

that remains the most critical issue in this campaign. but, of course, when this campaign started, we could never have predicted the tragic turn of events which it takes. we could never have imagined the appalling depravity that led a killer to target innocent men women and children the way we saw two weeks ago. nor could we have envisioned the brutal attack carried out on the streets of london on saturday evening. we continue to hold all of those affected by both attacks in our thoughts today. and let us also continue to think of the brave men and women that the police and in whiemerg services who continue to deal with the aftermath. many of whom will have witnessed things that no one should have to see. but when it was right that we should cause to show our

respects those we've lost and make sure all of our energies are focused on responding to the immediate afterthought of those events it's our right that democratic process should go on. that is why today, i want to return to the choice that we face in three days a time. and to the crucial -- because that's what this election is about. it's about which leader and which team people trust to make the big decisions that matter to britain. it's about which lead to which team and which leader will deliver economic security four and your family. and about which leader and which team will travel to brussels in two weeks and will negotiate the right for position in europe. but the question of leadership has always been at the heart ever this campaign. and it is absolutely crucial that we get the answer right. the ability to say the

courageous thing and do the difficult thing. to face up to and address great challenges, not to pretend they don't exist or seek to wish them away. the strength to be straight with people and not just tell them what they want to hear. >> that was theresa may talking about what took place over the weekend and what she hopes to achieve. in the meantime when we come back, a downgrade for apple. plus, we're getting a live report from dubai on the growing rift in the arab world. "squawk box" returns in just a moment. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average.

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welcome back to "squawk box" this morning. on today's agenda, apple is hosting its annual conference for app developers ceo tim cook will give the keynote address at 1:00 eastern time. ahead of that event, pacific crest is downgrading apple, the sector weight from overweight limiting to current iphone expectations. pacific crest values shares at $145. the shares are trading at close to $154 right now.

analysts recommend that large-cap tech investors use proceeds from the sale of apple shares to purchase alphabet, of course, the former google company citing more exile -- so -- >> okay. i'm trying to get comcast into the frame thing. covfefe is taken. >> taken -- >> what about co-fan -- you but alphabet in -- >> the amazon? >> you've got the amazon and the google. >> and you have microsoft is one of the top performers. >> but it's -- >> you don't play jungle with this, we've got to get a "c" in there. did you see comcast -- >> president trump will tweet out a word for you and you'll be able to use it.

>> that whole thing was so -- obvious that it was just -- conversation with what he was saying -- he's good at that. there are people that do want to switch to the news of the day because they were covering that tweet, andrew, some of your colleagues over at cnn and other places. >> some of my colleagues over at cnn? >> you don't do the jungle -- your circle -- one of them is coming on later today for two hours. anyway, stocks to watch today, herbalife is raising its second quarter and exceeds the threshold with the federal trade commission. the deal requires 80% of the company's u.s. sales to be documented purchased by consumers, does expect that citing weakness in mexico. don't tell me you sold your comcast and held on to "the new york times." >> no i'm a shareholder in both. >> one is doing better than the other. >> actually, by the way in terms of performance -- >> percentage gains. >> percentage gains, you might

be surprised. talk about a trump rally. "the new york times" has had one of the great trump rallies -- not just trump rallies as a stock. but trump rallies as fundamentals, given the number of shareholders -- >> it's a $2 billion -- it's like a micro cap. >> continuing this, there's news about astrazeneca. >> 42, that's 84 -- >> it's a beautiful thing. >> wow. >> good for the family. >> i hope you -- >> actually that is the true trump rally. it's gone like from 11 bucks to 17.50. >> thank you, thank you. if you could own one or the other, however, i like all of my -- >> listen, listen. sell all of your comcast and buy "the new york times." that's my recommendation for you. that would be a great move for you. >> look at msnbc's ratings. >> phil griffin is like --

wonderful things are happening for that perspective right now. >> he's a very tall lengthented. >> he is. they beat fox. what in -- is it across the board or -- >> i don't know. astrazeneca says that a late-stage clinical trial drug ly ly lynnparza slowed the spread of an inherited form of breast cancer that typically strikes young women. they don't know what to do with these names any more. the study found those giving the drug are 42% less likely to have metastases than those given chemotherapy. and commute netting from

gigamon, have you heard of that one -- >> pokemon. >> reported to a possible sale last month. activist ellicott mannequin said it would push for a strategic revi review. >> i got -- like paul shaffer for a minute. got somebody laughing. >> yeah, somebody's laughing this morning. >> which is a total switch. >> yeah. >> thank you. thank you. great minds. coming up, russian president vladimir putin sitting down with nbc's megyn kelly. it's a new hairdo, that's all i could focus on. she's been through so many different things. she's very good at what she does. very good. i think she said putin's feet to the fire. >> megyn kelly talked about the

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>> announcer: welcome back. you're watching "squawk box," live from the nasdaq market site in times square. good morning. i guess we'll look at u.s. equity futures again last time

becky and i were looking at them and we said, can we just skip these again today. >> haven't done much for the markets. >> maybe it's a story that there's nothing happening. >> yeah. >> maybe that is the story. earlier, they weren't even round numbers. they were decimal points. but all red, i think. just right around the flat line for most of the morning. a lot of good gains, though, in recent sessions. and president trump, just moments ago, i'm looking right at my twitter thing. my twitter feed. tweeted people, the lawyers and the courts can call it whatever they want, but i'm calling it what we need. and what it is, a travel ban. there's a second, he also tweeted the justice department should have stayed with the original travel ban, not the watered down politically correct version they submitted to the supreme court. real quickly on this, too, we'll

see what most people think given the new makeup of the court, that some of the unfamiliar appeals court decisions will be missed. in the meantime, nbc news, "sunday night with megyn kelly" debuted last night, an interview with russian president vladimir putin asked the president about the interference with the u.s. election. >> translator: that it even happened, by the way, in the united states. the very skillful and professionally shifted the blame, as we say, on to russia. you can imagine something like that? in the midst of a political battle. by some calculations it was convenient for them to release this information. so they released it. citing russia. you can imagine something like that? i can. >> for more, we want to bring in thomas pickering, he's the former u.s. ambassador to russia and to the u.n. and your honor ambassador, ambassador

pickering, thank you for joining us this morning. you saw the interview last night, your impressions of what he said, was he telling the truth? >> i don't have a truth detector built in. but clearly, lhe was defending himself by putting all of the blame on himself, whether the u.s. or 3 year olds or smart hackers, or people intimidating russia in the interference of u.s. elections. anything at all he could spread out there he did very cleverly, very artfully, maybe in a self-amused way as you saw. all of that kind of infused his own strategy, caused confusion, the u.s. in an uproar, keeps things uncertain. bring mr. trump in occasionally, maybe occasionally pushed back but playing it like a trout on a fishing line. >> so, what do you think -- now, perhaps all of that could be expected in terms of how he

might react and what he might say. but what do you think is the truth? >> well, the best i can tell you is that there's enough people in the u.s. government who are leaking stuff that seems to be real. but we should at the moment reserve on what mr. putin has to say to perhaps mr. comey will tell us at the end of the week, or that whethmr. mueller may re at the end of this thing. that's where i would look for the truth. i can't tell you 100% i know what the truth is because i have no inside information. but my view is, quite carefully with mr. putin, list ton mr. comr.listen to mr. comey. and mr. mueller. >> i assume you're referring to comey that we're referring to on thursday. and you just referred to it, there have been so many leaks that have come out of the intelligence services over the past couple of months. how much do youpolitics?

and how much do you think that is about a deer fear that they really do have about facts? >> i think it's a great question. my sense is that the intelligence community has always been very cherry. and rightfully so in our democracy about playing politics. and much more concerned by people ignoring what they believe, after very careful analysis and great investigation, to be the truth. and so, i think their sense is that -- put it this way -- their integrity is being invaded. and they think perhaps very unnecessarily. and maybe not on the basis of anything real. so, perhaps, that's a motivation. but, again, i'm giving you my best guess after a few years in government. >> and how concerned are you about those leaks? meaning, flip it around for a second. and just speak to the issue, if you could, about leaking itself, which is to say, as citizens, should we be applauding the leaks? or should we be upset about all of this leaking?

>> i think it's a great question. my view is if leaking becomes a habit and it leads people to sources and methods of intelligence collection or puts agents in danger, or puts our access to vital information in danger, then it isn't good. this is why we devised the classification system. so, we are kind of in a downward spiral here where perhaps one set of ideas and one set of thoughts out there to try to say, hey there is a truth here. and this is where the truth rests. and people out there ought to know it and make up their minds on the basis of understanding the truths. otherwise, they're subjected to falsehoods. and those falsehoods could be high up in the political arena. those falsehoods bring them down to the wrong conclusions, it could be a serious mistake. so, my sense is that the people do this are really caught between telling the truth because they think it's important for national security. but telling the truth in a way

33 hope they're not, in terms of the way they do it, destroy or upset certain national security accesses and certain national security thoughts and ideas. it's a very good question. and in this world of unreality of which we have been plunged, it is important to think through these questions very, very carefully as we go ahead. >> ambassador, to the extend that jared kushner did seek some kind of backchannel to communicate with the russians, is that something that strikes you as unusual or untoward? >> well, if he was in the transition team or if he thought he was setting up something for the future government of the united states, backchannelis an that is the first time that information has appeared on the news feed, then perhaps it makes sense to find official purposes and find a way to put president putin or president trump in more direct, more useful, more

verifiable perhaps more quickly available relationship. so, backchannels, in and of themselves, in my view are not a portrayal of trust. but just the impact of the sanction of the highest levels of the u.s. government. what they can be if they're done independently, and used to promote a personal foreign policy is violate some u.s. laws that go back to the 18th century. and, so, in that sense, we need to be careful. it's less of that channel than how it's used. but how it's set up will, of course, help to determine how it's used. and obviously, with a country like russia, and perhaps others, we need to be careful about what they're putting into their side of the backchannel. is that verifiable? is it true? is it reliable? can it help? years ago, we set up a hotline between the two countries in which we used that to alert each other of the serious problems that might arise in areas which might lead to potential war and

nuclear use. it was valuable because it was official. it was valuable because it worked quickly. it was valuable because it put the two leaders in touch in a role that they couldn't have been perhaps in a situation where things might move more slowly. and so, for that reason, it was useful. but it is also very important to keep in mind in any communication situation events or the old caveat emptor. let the buyer beware. >> all good thoughts, we appreciate it, ambassador. >> thank you very much. >> thank you. when we return -- hotel executives weigh in on the london terror attacks. president trump's travel ban and the impact on tourism. we will start with loews chairman jonathan tisch at 7:15 eastern time. then at 8:00 a.m., marriott

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stocks to watch this morning, toyota shows that it sold its entire stake in tesla after the end of last year after cancels its ties for the electric cars. toyota had got a stake in tesla for $50 million. boeing has delayed the delivering of the 737 max jet because of technical issues. move comes after boeing had to deliver the first delivery of the boeing 737 last month. and coca-cola, ahead of the trade deadline to settle a trade dispute with mexico reuters said that coke, abm and carters met last month warning a potential fallout if u.s. and mexico don't reach a deal to avert large duties on sugar imports. in entertainment news, "wonder woman" say box office

hero. it made more than $100 million in the u.s. and canada this weekend. well above analysts' forecasts. it's the biggest debut for female director patty jenkins and she stopped sam taylor jenkins who directed "fifty shades of gray." and then got it on the paul shaffer -- because your husband is not -- you gave it a thumbs up? two thumbs up? we're going to rob. >> he's got a jacket on. >> you said it was good. >> have you seen the pictures all over twitter of the young girls dressing up? >> yeah, it's cool. >> rob, you didn't -- normally, i'd go to you on movies.

>> we went and saw "up." >> just now you saw this? >> rented? >> rented it. saturday night. >> picxar thing. >> his kids weren't born eight years ago. >> kind of crazy. >> a little plausible at the end. >> yeah. the house has balloons. >> yeah. >> that's happened. that's happened. but people have done that with balloons. it's scary. coming up, market watch. mark grant weighs in on politics, the oil market and his best investment. in fact, we're going to ask him because he said things have changed for stocks, all new highs six days in a row. but we'll be right back.

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welcome back, everybody. right now it's time for the executive edge. oil prices have turned negative. wti had been trading higher after saudi arabia and other gulf states cut ties with qatar. our next guest has been right a lot about oil lately and he joins us right now. mark grant is here, the chief strategist at hilltop securities. mark -- >> hello, becky. >> good morning. oil's been under quite a bit of pressure.

what do you think of where 24i7x stand? what have you been thinking to this point? >> as a matter of fact, becky, i've been invited by the government to discuss this subject and i'm leaving tomorrow for washington, d.c. i think the issue with the breakup between saudi arabia and qatar as oil is going down because they're going to start cheating and cheating in grand style. >> opec? >> opec is. and it's going to be a division in opec, and i expect oil to head around $47.50, and then $45 the next technical level down and i think this is only going to exacerbate the speed at which we get there. >> you've been invited by the government. who are you going to be speaking to? >> no, no, no. i'm not telling you that, becky. >> i was just glad it was the u.s. government. i thought you were going to talk to putin. these days you say government, could be -- depends on which one. can i ask him a quick question? >> i'll specify it's the u.s. government. >> okay, good. all right, that's good. okay. so you only -- it was like a

week and a half ago you've only missed a week of new highs on the s&p by saying that you thought people ought to, i don't know whether you said get out of everything, but you said the game had changed with stocks, because the swamp is much harder to drain than anyone thought, and you i think it was because you didn't think anything was going to happen with tax reform or obamacare. so 2439 on the s&p. you stick with that or saying maybe this has got -- maybe it's got a mind of its own the stock market and it's going to keep going up? you don't think so or you're not reversing what you said? >> no, as you remember, on november 8th and 9th with you, right here, i said buy equities. we've had a great run in equities. and now i'm looking at a different strategy because i think most of the run has taken place. i didn't say we were going to have a big downdraft. >> right. >> i said most of the run has taken place. i think a better strategy is to buy 5 to 10-year corporate bonds, discounts, closed end

bond funds yielding 10%, 11%, get 7.5% locked at the time you buy it. and i'm very happy with the 7.5%. >> so we're up two or three -- we're up -- how much are we up since you said? when would you say i was wrong and this thing is still going to 2650 on the s&p? would anything cause you to say, all right, there's more left than i thought? i underestimated how far this might go? >> i mean, yeah, if the government did certain things, or i saw that the tax plan was going to pass, or we were really going to have real less regulation i'd start getting excited. the point i was making was that, mr. trump's plans, many of which i support, are going to take a lot longer because of all the issues in congress, for democrats and republicans to get them passed. so the process is going to take longer and i think i'm sticking with that point. >> yeah but we just had a discussion and the market might be going up partly because of

that and partly because of just all the global, you know, synchronization of growth, blah, blah, blah, better corporate profits, stuff that was already in the, you know, stuff that was already happening might not need those things to keep going up. >> well, you have to have drivers and earnings drivers, you know, one of the things that i'm huge proponent of, going back to the oil situation, is that america's taxes imported oil, give tax credit for exported oil, gives tax credit for r&d in the oil space, and i think that would make the market, if we did something like that, pop tremendously. >> all right, mark, it's great to see you. >> you, too, becky. >> hope you'll come back after you meet with those in washington whose names will not be mentioned here. >> the u.s. government. >> and tell us what you think. >> i'll be with you in a few weeks in new york. i'll be in your studios. >> sounds great. we're looking forward to it. >> thank you. >> in the meantime when we return, the effect of politician

and terror attacks on the travel industry. jonathan tisch is going to join us and later arnie sorensen. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

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a developing story. a growing number of arab nations are cutting diplomatic ties with qatar. the latest straight ahead. markets right now the futures are flat as investors appear to be shrugging off geopolitical concerns. u.s. stocks sitting at all-time highs. plus apple holding a major developers conference today. will tim cook unveil a competitor to amazon's alexa?

we'll find out as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city. this is "squawk box." good morning, welcome back to "squawk box" right here on cnbc, we're live he is nasdaq marketsite in times square i'm rrn along with joe kernen and becky quick. our guest host this morning walter isaacson is here, the ceo of the aspen institute and a cnbc contributor. we've got a lot to talk about in the headlines this morning. president trump set to highlight plans for overhauling the nation's air traffic control system as well as for rebuilding u.s. infrastructure. he's scheduled to talk about both topics in a white house briefing. we're going to hear from him at 11:30 eastern time this morning. also apple's annual worldwide developer's conference begins today, runs all week. some are predicting apple will announce new hardware to compete with apple's echo speaker device for the home. and also big new this morning,

saudi arabia, the united arab emirates and bahrain all among countries cutting ties with qatar accusing it of supporting terrorism. that news sending the qatar stock market into a tailspin with its main index falling more than 7%. it also initially sent price of crude oil higher but those gains have since been erased and crude has moved a bit lower. we're looking at wti right now at $47.39. >> uk authorities continuing to investigate the weekend terror attack in london that killed seven people, left dozens injured. it's the third attack in the uk this year. comes just days ahead of thursday's parliamentary election. let's get back and talk to wilfred frost again. he is in london with the latest. hi, wilf. >> hi, joe. uk prime minister theresa may has just said that islamist terrorism is one of the gravest threats that the united kingdom faces. however, in a speech that has just ended, she tried to change the focus away from saturday's terror attacks and back to thursday's election.

>> while it was right that we should pause to show our respects to those who have lost, and to ensure all our energies were focused on responding to the immediate aftermath of those events, it is also right that our way of life and our democratic process should go on. >> she tried to frame the choice of the british people as one around leadership, and one around the issue of brexit. but immediately, the questions from the press afterwards focused on the topic of security and the fact that she made significant police cuts when she was home secretary from 2010 to 2016. indeed, labor leader jeremy corbin speaking just moments before that speech said quote you cannot protect the public on the cheap. police must get the support they need. the labor party has promised an additional 10,000 police officers as part of their manifesto. the question, of course, now, is which angle voters believe

thursday is when people go to the polls. very clear trend, theresa may still in the lead, but jeremy corbyn closing ground. >> wilf, thank you very much. we will check in with you later this morning. in the meantime, joining us write now is john carlin, former assistant attorney general for the u.s. department of justice's national security division. he's a partner at law firm morrisson and for rester where he claires the firm's global risk and crisis management team and he's a cnbc contributor. john thank you for being here this morning. >> thank you. >> we have seen three attacks in london in as many months and we're being told that these attacks inspire additional attacks so that leaves us with the question with what can they do at this point? >> well, this is the most difficult, at least as it looks now, type of attack to prevent. and that is individuals who are inspired by the cause of the islamic state but actually are home grown that live inside their country. i remember now acting director of the fbi andrew mccabe last

year at a cnbc aspen conference on cyber summit saying that that was the issue that keeps him up at night. and really the only way to prevent it is to have excellent intelligence which means getting the support and help from the communities where these folks are living, and getting the help from those who are communicating with them online. so in other words, all of those who see the signs of radicalization both in the real world and these days in the virtual world, coming together, sharing that type of intelligence. i remember one near miss with the fbi where thanks to excellent intelligence work an fbi agent confronted an individual armeded with a long knife in the boston area right before he was going to get on a bus and start to attack individuals in the name of the islamic state in levant. ended up shooting him right before he entered the bus and was able to attack individuals. why? excellent intelligence. >> john, we only have reports at

this point, but some reports suggest that of these three attackers, one was very well-known, and had been reported repeatedly for having some strange behavior. the problem may be that there are so many that it's tough to follow up on, and unless you can basically take people down for just saying things or writing things on the internet, you're going to have a tough time. are those issues that you think free societies like the uk, like the u.s., will actually go down that path? >> you know, you raise an important point, and always i think vital to remember the differences between even our closest european partners, and the united states. as serious as the terrorist threat has been in the united states, and it has been serious, we have not faced a threat on scale that's parallel to what they're facing over in europe. so to give you an example. we estimate in the low hundreds the number of individuals from the united states who've gone over to fight as foreign terrorist fighters. if we have the same problem per

capita, the same problem on scale that, for instance, belgium, much smaller country, had, we would have 30,000 individuals. that's the type of scale and scope that partners like the united kingdom are facing, and as the -- as the islamic state in the levant loses ground inside iraq and syria, we're seeing those folks return home and it's causing a huge problem. the second issue that's different between the united states and europe is that here in the united states we don't have a whole community that feels geographically isolated. a whole ethnic group that feels isolated from the mainstream. instead what we've seen in our cases is that we have investigations in all 50 states, we brought prosecutions in over 35 jurisdictions and the common factor in almost every one of our case was both the age of the defendant. in half of them they were 25 or younger. in one-third, and this is troubling, there were 21 or younger. and what unified them was their contact with social media.

the problem in the united kingdom, and i've met with the head of the metropolitan police department there when i was in government, the problem there is they have whole communities that feel cut off or isolated from the mainstream. and however we end up responding to this problem, what we don't want to do is replicate that issue. >> it's walter, your colleague at the aspen institute. and you were talking about the need to get the intelligence here. are you worried about some of the policies, whether it be what's called a travel ban or other things that could hurt the ability of law enforcement to keep things safer here? and i know you're doing another one of these conferences in october, right? what's going to be the focus there? >> well, thanks, walter. that's right. i think we do need to be careful, whatever policies we announce, that they don't do more harm than good. and if we were to isolate or ostracize an entire people because of their religion, or an entire ethnic group, that would be terrible for the counterterrorism professionals who day in, day out, have

prevented numerous terrorist attacks, saved american lives, because of the help and cooperation from people in those communities. for the os pen conference on technology and cybersecurity this october 4th one of the key issues to focus on and it's one that the facting director of the fbi raised last year and that theresa may has just echoed the call for is what can you do to ensure that online communities are safe? and that we get the responsible cooperation from those that provide the platforms where our children are now playing online, in a way that prevents them from falling prey to what is a strategy by this terrorist group that's dead indicated to slavery, that's dedicated to murdering civilians regardless -- >> real quick, let me follow up on that. do you think that facebook, google and other should go much further than they have right now in making sure that they control

what goes on their platforms? >> i think that's a vital topic of discussion. and we've seen them take significant new steps in that direction since even last year. i do think regardless of what we do in the united states, though, they're going to be under continued pressure from even our closest western partners like the united kingdom billion we all figure out together a way to keep terrorists from exploiting that space to target young people, and those with mental issues. so, until the problem is solved we need to keep working it together. >> but, john, so you're convinced that any type of so-called extreme vetting, any benefit that you would have to possibly not letting i don't know, you look at great britain, or you look at some of the other countries over there, that really do have a lot of internal issues, you figure that the extreme vetting would be counterproductive, so the number of people that you kept out from extreme vetting, that would be

offset by alienating people with the program itself? in other words, the last eight years where we wouldn't even say the words islamic extremism, that that helped minimize the amount of terrorism going on in the world? by just not saying -- if you don't say it out loud it's not going to happen because you might upset someone? >> well, no, i don't agree with that. and i was saying, violent islamic extremism, which is an issue, and i think many officials were saying it over the last eight years -- >> but you think extreme vetting would be counterproductive -- so you might keep some people out that shouldn't get in, but, but making other people upset that we were doing that would actually make it counterproductive to actually -- so the travel ban would be counterproductive to -- it would be ineffective and actually make things worse than not doing it is your point? >> that's -- that is exactly the concern. we need both partners with the foreign countries, where some of these folks are coming from,

that's where we get vital intelligence, and we need the help and support of the communities where people don't feel isolated because of their religion or ethnicity, and certainly their geography. and the fact is, i think you can -- we should always look at how we can improve vetting. but we should do so trying to make it intelligence based. really focused on where the threat is. and doing the exact cost-benefit analysis that you just wlad out to make sure that by having a dramatic statement that you're blocking everybody from one country or another doesn't actually make the problem worse. >> you think the uk should have been maybe more extreme in their vetting? or is there anything that could have been done that could have helped keep some of the, what is it, some people say 23,000 jihadists? could anything have helped? you mention the diaspora from isis as they lose ground there. shouldn't anything be done about being, you know, doing a little

more with the vetting? or just let them come in and just hope we don't make anyone mad with these policies? >> yeah, i don't think anyone's saying that. >> okay. >> i mean, i remember the type of intelligence resources at fbi, at the central intelligence agency, at homeland security, that were dedicated to ensuring that individuals from abroad with terrorist backgrounds who might commit attacks here don't get in to our country. or if they do, that they're under surveillance in a way we can pick up other members of their group. i know that the united kingdom employs similar measures. we should always learn from each incident -- >> we have a much smaller group of people here compared to england right now? >> we do. it's much smaller compared to england's right now and we want to keep it that way. >> right. yeah. exactly. thank you. appreciate it. >> i will say, by the way, the october 4th conference that he's touting, being done in partnership with cnbc. and i'm going to be there. >> so you've got that going for you. >> i was just told that i am. so i will be there.

>> you're going to do what we tell you. we own you. >> i'm marking the cal car. >> and john carlin is going to be there and you can continue the discussion, joe. >> coming up, president trump tweeting about the travel ban saying the justice department should ask for an expedited hearing of the watered-down travel ban before the supreme court, and seek a much tougher version. we'll get a ceo's perspective next. lowe's chief jonathan tisch joins us on the "squawk" set. a,

welcome back to "squawk box." the tourism industry is facing headwinds after another terrorist attack in the uk over the weekend. we're joined now by jonathan tisch, chairman and ceo of loews hotels and co-chairman of its parent. he's chairing today's international hospitality industry investment conference in new york. and you know, we all face this, i think, jonathan and it's irrational. that's why it's called terrorism, obviously. and i think the number's big for ramadan, i think 140 people dead already and it does seem like things are increasing. but 140 makes your chances of something happening to you, it's absolutely minuscule but people

make decisions based on visiting the uk on that, do they not? >> it's not only visiting the uk, it's just fear that people are thinking about when they leave the safety and security of their home, and it is a force in the industry that we have to think about. we do everything we can to keep our travelers safe. that is our primary -- our travelers and our team members. that is the primary goal that we have as employers. but we also want to break down the barriers. we want to have secure borders and open doors so that the right people are coming in to this country. international travel is vitally important to our nation in terms of reducing the deficit. we're the largest service export and we still create jobs. we need people to come to this country, spend money, and also embrace us as americans, understand why we're so proud to be living in this country. >> you're talking about foreign tourism -- >> inbound international travel. >> because domestically, i guess at this point, people traveling in the united states aren't concerned about domestic

attacks. i would think. >> i think people worry just because of the travel process. it's not easy to get on an airplane. there are delays. there are challenges. you get to our hotels, and if you've been traveling all day, who do you take it out on? the poor man or woman that's checking you in. and you've had a rough travel day. so we need to streamline the travel experience, but also because that international traveler, they stay longer, they spend more money, vitally important, especially right here in new york city. >> yeah. >> and we're concerned now that we could lose 700,000 international travelers in new york alone in 2017. >> so forget about even the travel ban. let's talk just about the computer laptops being able to travel with them. how much of a problem is that? and where is the line drawn between safety questions, and what we -- >> becky, that's a huge issue also. any time that you put up a barrier to make it harder for travel the men and women, as they're on their computer, planning a trip, they say, do i really need to do this? do i need to attend that meeting? should i go with my kids? should i travel with my partner? any barrier is an impediment to

a strong travel industry. and our industry is vitally important to this nation. >> but jonathan, the question then is, who's supposed to pay for it all? right? and the fact of the matter is, we've talked about airlines before, most people, unless you're traveling on business, pay strictly on price, meaning you choose your airline on price, you want the cheapest price humanly possible. in the united states, the airlines, tsa is paid for in large part by taxpayers. in europe not the case, by the way, the airlines actually pay. and where should hotels be in the mix on all of this? >> certainly we have costs that are embedded in to our structure to make sure that the safety measures we put in place are effective. that's just the cost of doing business in today's world. but it actually raises a good point, because if you look at new york, we've had negative growth here the last couple of years because of all the new construction. so we can't necessarily raise our prices, but our expenses are going up, our labor costs are going up. insurance, taxes.

marketing cost. distribution cost. so there is such pressure on our bottom line but we don't have the ability in some of these overbuilt markets to raise prices. >> jonathan, you mentioned earlier about how important the international traveler coming in. there's about, what, 77 million coming in each year. >> mm-hmm. >> is that going to go up or down this year and why? >> well, we have a goal that was set in the baukz to get to 100 million international travelers, and remember once again that helps reduce the trade deficit. i don't know if we're going to be able to get there. >> by when? >> by i think two years ago was to get to 100 million international travelers. we'll have 61 million travelers alone in new york city this year. which is a strong number. >> but we're down what year-to-date? >> well the numbers are unclear. the anecdotal evidence is that some of the rhetoric coming out of our nation's capital is starting to have an impact on inbound international -- >> don't you even have doubt -- >> the new commerce department numbers won't be ready for the first quarter. they're not ready for another couple months. but anecdotally, we're starting

to see evidence that inbound international travel is down. and that's just because maybe of the conversations that we all hear coming out of our nation's capital. but then you also have brexit, and you have a strong dollar and so -- >> let's separate rhetoric from actual safety issues. because i think that's a huge concern, too. in terms of the laptop issues, you know, we spoke with an airline executive last week who has concerns about what you're going to do. you can't put all of these things in the hold underneath in one place because the batteries are a threat at that point, too, when they're all stacked on top of each other but what do you do? we hear these threats. we hear these concerns. where does safety become an issue that you just have to do it no matter the inconvenience? no matter the -- no matter the cut in tourism? >> these are conversations that should have the travel industry at the table. they should -- >> and you're not right now? >> unclear as to what's happening at tsa amd the airlines, because i'm not in the airline industry, i don't know that. but i'm just saying in general

we need to be part of the conversation. and we had that in the previous administration. we had an administration that talked to us about the creation of brand usa an international marketing campaign. that talked to us about visa reform. that added countries to the visa waiver program. all of these kinds of discussions were beneficial for the travel industry, which means they're good for america. >> you don't have any -- your hotels are all here? >> we have 24 hotels. we have one in montreal. and we have one opening in toronto. >> but you don't care about -- >> of course i care. >> we can't ask you -- >> i've been worrying about these issues for 25 years. >> we can't ask you about people traveling to europe because -- >> i don't have any in europe. but i have people coming in. >> do you have any hotels in this country where it doesn't rain every day, where i could -- where it would be possible for me -- >> we have a joint venture with your parent company where our sixth hotel is under construction -- >> where is that? >> orlando. venture between loews and comcast. >> because it's going to rain every day this week. >> and volcano bay just opened.

>> can i get the hell out of here? where do you suggest? >> orlando. you have your choice of five hotels. >> and i can go to universal -- >> how is volcano bay? >> vom caneo bay is very cool. >> jonathan i want to go back for a second, you feel like you're not being able to communicate with the administration? that surprises me given that he has long been in the real estate and hotel business. >> we were hoping that we'd have a president, probably the first time that a hotelier has been president of the united states. and obviously these conversations are difficult for the industry. and words matser. perception matters? and we're concerned that there is a negative sense that people are not welcome in this country. and that will have an impact -- >> and he's not had the hoteliers in the way he's had the ceos just -- >> there have been ceo meetings that representatives of the industry have attended. i was not at that meeting so i can't tell you what was discussed. >> right. >> but there have been representatives of the industry that have been to the white house. and certainly we know other

individuals who are part of that conversation, whether you're looking at infrastructure, richard lefrak and steve roth or gary cohn, we're hoping that they understand the issue -- >> how would you feel if i told you there was going to be a hotel tax on top of the taxes you already have to pay that pace for the tsa. >> i'm not sure you need to go there. because there are so many taxes on hotels. do you really think that another tax is going to help the travel industry? we have done everything we can to reduce our taxes. >> i want to help the industry in terms of getting people to come here and i'm trying to figure out how to pay so that we it actually search through every laptop and feel comfortable that people can get on the planes and everybody feels good about it. >> i understand. >> and to me that's the great conundrum -- >> we don't need more taxes in the travel industry. >> there are enough taxes. >> it's an economic issue here which is how do you actually get people here and how do you do that and how do you pay for it? >> yeah. >> we're going to keep the country safe, jonathan and we're going to have 3% and 4% gdp growth so you just put your concerns on the back seat for a second and economic activity is

going to help your industry, just relax. i know you don't want to be taxed, god forbid. >> we are taxed already. >> all right, all right. >> look at your hotel folio, you know they're faxed. >> okay. >> can i get free wi-fi, damn it? >> we have free wi-fi. tutly. >> you know we talked about this. the cheaper the hotel the more free wi-fi. the more expensive the hotel -- >> we have free wi-fi. when you come for a power breakfast at the regency hotel you have free wi-fi. >> free coffee. >> and that is not true. >> we've got free coffee here at "squawk." coming up when we return, today's top stocks to watch, including the story behind the drop in hershel i've shares this morning.

good morning, welcome back to "squawk box" right here on cnbc. we're live at the nasdaq marketsite in times square. among the stories that are front and center at this hour, we're going to get first revision of first quarter productivity figures in about an hour from now. the initial estimate had

productivity falling for the quarter. this expected to improve to a flat performance. also watching shares of herbalife this morning. the company cut its sales forecast due in part to softness in mexico but raised its profit forecast and said 90% of u.s. sales last month were documented purchases by consumers above the 80% threshold mandated by its agreement with the ftc. of course, that was the big issue that bill ackman had brought up. >> is there a way of fudging -- how do you fudge that number? if 90% really went to end users instead of just piling up, in people that are part of the sales chain, right? does that -- >> the pair mid. >> yeah. >> call them what it is. >> right. but if you can document that 90% goes to end users, doesn't that -- doesn't that say it's not a pyramid? >> right. that's what they've just -- >> is it really not? >> i don't know. i mean -- >> we still don't know k3e79 for the ftc effectively said it was without saying it was.

and so now they're -- >> they don't know either. >> they've been on notice. so this -- the reason they're putting this out is to make sure -- >> is there a way of getting to 90% while it still is people you're getting it to that are selling it. is there a way of fudging that number? >> it very well may be. it's possible if you're a consumer of it you can claim i'm using it myself. we don't know enough about how -- >> i don't know how -- >> will we ever know? >> -- of the ackman thing? >> it's taken a long time to find out. >> remains ongoing. >> ackman's out of it. >> right. >> but there's still questions that continue to swirl. and there's been big questions over the stock. >> hmm. >> we should also tell you the so-called pink slime case against walt disney's abc unit. south dakota meat processor suing for $5.7 billion. it accuses abc and one of its reporters of defaming it by calling its ground beef pink slime and making errors in its reporting. the company dropped 80%

following reports back in 2012. meg tirrell joins us now with news out of the pharma industry. meg? >> good morning, becky. we're coming to you live from the biggest cancer research conference in the world that's been going on all weekend, tons of news coming out and a lot of it this morning, looking at two pieces of data that just came out from roche, the world's biggest maker of cancer drugs on both breast cancer and lung cancer. now looking at their breast cancer data, they were testing in a specific segment of the population, women were hr2 positive breast cancer, had sergery and had taken roche's drug. they found that at three years 94.1% of women were living without their disease progressing versus 93.2% on a comparative arm of that study. we talked with roche ceo about that. that is influencing both roche and puma via tech which makes a competitor drug. >> what we showed is that at the

three year mark more women were living without their disease recurring than on herceptin alone. there was a 20% reduction in risk of recurrence and we're talking about curative settings. we're talking about more hope for cure for women in this difficult-to-treat cancer. >> also a lung cancer update coming from roche this morning. in it comparing drugs from roche versus one from pfizer. we also talked with dan o'day about that. >> we were able to halt the growth of cancer for more than a year on top of the currently available medicine that's used today. you know, formally we're talking about months of difference. and here we're talking about more than a year. so this is extremely encouraging data. >> so, a lot of updates coming here. we'll be talking with a lot of the ceos and heads of research of these companies coming up all day. the data just keep coming, guys. >> all right, meg. they're very early. saw you there about an hour and

15 minutes ago. >> that's right. started bright and early here in chicago. >> we will see more from you throughout the day. meg tirrell, when we come back we're going to talk markets. the dollar, gold and more with dennis gartman of the gartman letters. stay tuned you are watching "squawk box" on cnbc.

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welcome back to "squawk box." a developing story out of the middle east this morning. five gulf states have cut diplomatic ties with qatar. those are saudi arabia, egypt, the united emirates, yemen and bahrain. all saying doha supports terrorism. doha stock exchange sharply lower on that news. and you can take a look right now. the oil market also reacting. we're going to show you what wti crude is doing in the meantime. you're looking at wti crude right now. 47.35. joining us right now is cnbc contributor dennis gartman who is the editor and publisher of the gartman letter. let's talk about oil. it was under pressure last week before we even heard about this situation. now what? >> beck, i think it continues to go lower. one of the things to pay attention to is the term structure. the difference between the front month and the second, third, fourth, fifth month back. and what you're seeing is that

contango continuing to widen which tells you there's an abundance of crude, either of supply, or a lack of mend and crude is bidding to go into storage. that was beginning to widen again last week. until that changes direction, and i don't see that contango narrowing, it means crude oil prices are going to continue going lower. >> walk me through contango again? the front month is higher than the months behind it? >> no the front month is lower than the month behind it. back gradation is when the front month is higher than the months behind it. why they call it contango is still quite beyond me. it's a silly term but it is a very important concept. >> can i ask you a question, which is the collapse in natural gas prices. to what extent in the next year, two years, three years, will that affect oil prices? is there going to be some substitution of things like compressed natural gas or liquefied natural gas, even in the transportation industry?

>> well, there may well be. but the big transfer is what's gone on in electricity, obviously. people have completely shifted from coal -- i shouldn't say completely, but have predomin t predominantly shifted from coal into natural gas and in that process have gone a great deal for the environment. natural gas is so much cleaner than coal shall ever be under any circumstance. and that's going to continue. what's fascinating is in the marcellus shale formation, they're just outside of new york city going up towards the saint lawrence, and stretching all the way down into west virginia, there are times in the past year or two, when you've actually seen natural gas prices at negative numbers just to keep the wells alive. fracking has done this horizontal drilling has done this, better technology, better geology has done this. and that -- it's going to be very difficult, i think, for nat gas prices to ever get much about $4 per million british thermal units again. you could put $2 easily into a rather normal circumstance. there's just an abundance of natural gas and it's not going

to stop. >> dennis, we had a coal industry ceo last week who told us that because trump pulled out of the paris accord that that would mean more coal jobs are coming back. but economics tends to rule these situations. and the way you just described it sounds like there is no reason that the coal jobs would come back, that the natural gas will continue with these low prices and that will be what drives things. >> yeah. there may be at the margin, becky, a few more coal jobs increased. but those will be at the very margins. there will be far more jobs decree sated in the natural gas industry than shall be created in coal. coal numbers i think right now we have about 50,000 coal miners. will that drop below 50,000? i doubt that. but will we get them back above 60,000 or 65,000? i doubt that too. so you probably stemmed the decline in the coal industry but have you put a bid underneath it to take it to -- to move it higher? i doubt that seriously. natural gas is really supplanted coal in almost every circumstance. >> do you think that you'll have natural gas revolutions like this in other parts of the

world? i mean i'm thinking china and india haven't quite had it yet? >> it has to be. we have learned how to frac. we have learned better geology techniques. we have learned horizontal drilling. and to think that those other countries won't either steal it or learn from us is -- is naive. of course they shall. so fracking and horizontal drilling haven't even begun yet in russia. haven't even begun yet in asia. haven't begun yet in africa and they will. so i think that really makes it very difficult for energy prices on balance to do anything other than rally modestly at best, and quietly head lower for a long period of time. that technology will be transferred around the world. no question. >> do you think that that would also might encourage an electric car industry eventually since, as you said, natural gas will mainly be used to generate electricity and that will be cheaper? >> yeah, looks like that's what's going -- elon musk may be on to something. i have doubted him along the way, but it would certainly mean that electricity prices are not going to rally much in the

future and it would certainly make electrical cars far more efficient than we might have thought a year or two years ago. >> dennis, always great to see you. thank you, sir. >> thanks, becky. always good to be on. >> coming up, apple holding a major event today, including a keynote speech from ceo tim cook. shares trading lower this morning after pacific crest downgraded the stock to sector weight from overweight. we will talk expectations for the big event. that's next. the new guy? what new guy? i hired some help. he really knows his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy. what do you think? not bad. ...better than a manual, and my hygienist says it does. but... ...they're not all the same. turns out, they're really...

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welcome back to "squawk box" this morning. apple hosting its annual conference for apple today. wall street expecting that announcements will focus on software, updates to the mac and perhaps even a siri enabled smart speaker. joining us to walk through what to expect, will power, r.w. baird senior research analyst and ed lee is here, cnbc contributor. ed is sitting across from me so i'm just going to go to you first. you get a little bit of credit for being in the studio. >> it's hard. >> it's hard for fred -- anyway. let me just ask you what do you think -- do you think we're going to see a speaker? and does it matter? >> i think we will. i think there's a good shot. it does matter. because it's not just a speaker, i think really what it comes

down to is it's siri enabled. what that means is it's voice enabled. you would access information using your voice instead of a keyboard or smartphone. i think that's the next big potentially big step-up in information access. and i think you have to own that part of the platform. that's just what amazon's doing it with alexa. the echo. and you know, google's trying to do it with they have a home device as well but also something called google now which is their version of siri. >> speculation is this will be very pricey. >> apple is always pricey. but i think it's got to be within the range. it can't be so much more expensive that people think oh, there's no reason to get that. >> will is there anything you're looking for today that you think is going to move the stock in a real meaningful way? >> look, i mean, the focus is going to be software. to ed's comments, anything related to siri and improvements there could be helpful. any other products we don't expect. this is sip ply a software focused conference. despite every year there might be new hardware announcements. i do think a siri speaker is perhaps the most likely

potential hardware advancement. but i think anything that all e alludes to a.r. is a big focus for investment. any software applications that perhaps open up that possibility -- >> and that's the big expectation for the new phone, in terms of the hardware that will come in the fall. but you need the software piece, as well. do you think that they tip their hand today on that? >> well, we'll see. i think we'll be trying to read the tea leaves on that front. look, they're going to be quiet with respect to the phone and potential enhancements to that. but i think as you talk to developers and understand some of the underpinnings, through some of the new advancements, we'll try to get a better feel for that. >> right. any updates to their camera software will be an indication of how -- what a.r. might look like this fall if there is something. beyond the actual phone updates, there's supposed to be potential glasses or something that might sort of go along with it. that's a way to look at it. >> you tell me. i thought that this conference was for developers. >> it's for developers. it's a software update. >> right. but to get developers, to

develop new things for the software. >> right. >> even if there's new hardware coming you have to tell them a little bit about -- >> you're going to have to get -- exactly. anything that updates, gives developers better access to the camera. better access to siri tells you where the hardware might be coming later down the road. i think that's what you have to start looking for today. >> will, is siri up to the task? i mean that's always -- we joke about it here. these guys, joseph likes the echo, i think. you like alexa better. >> i haven't hooked it up. i'm afraid. i'm afraid of my samsung tv. >> look. we use a lot of siri but i think we can probably degree that, you know, there are still some improvements that could be made to siri and the performance there. amazon's done a great job with ale alexa. we have a dot in our home. you talk about price for a siri speaker the dot, of course, is just $50 so it's all relative to a agree. but we would expect it to be priced at a premium to the products out there. but no question there's still upside opportunity there. >> i would say, though, that one of apple's advantages would be

that music is sort of deep in its dna. so it can price these things higher because they're going to be really good speaker systems if it's done right. >> right. so it's a good point. the home speaker, the siri enabled speaker if it comes out, is going to be more audio sort of focused in the sense that it's better sounding quality, and so unlike, say the echo which still has a really great speaker i think they want you to speak of it as sort of a home entertainment system, you know, not just like a kitchen kind of gadget. >> since we have you here, you long or short these days apple? you don't need to talk about the stock per se, necessarily. but just in terms of where they are in terms of innovation, given the time you spent. >> i keep waiting for the ig innovation and i've always thought if you could really capture the home, which is what this might do, this device we're talking about, where you're, i think steve jobs always had a vision of you can walk in to your home and say, hey, put on "squawk box." and the tv would put on "squawk

box." or play this music. and it would be a beautiful sound system. and that apple would own the home, or the living room, in that manner. so i think, you know, we need the next big apple thing and i do feel it's got to be a piece of hardware, like a home device. >>ist a piece of hardware but also sort of connected system. >> connected to the ios? >> well i got a hard one for you. >> connect to your tv and the apple tv and all the videos that you have, too? >> would steve jobs be satisfied today? with what's happened? >> if you don't mind, i try not to go there on terms of what would ben franklin think? what would steve jobs think? it's just not -- doesn't feel good to me. >> okay. fair enough. >> don't people have sonas. >> it's a whole other attendant device. >> i play everything on sonas because they now have the interface. so i don't need the speaker, do i? >> good question. we've got to see how good the speaker is. >> are there people that don't have sona? >> there's a lot of people who

don't have sona. >> inside plug in my amazon -- >> apple wants everybody to plug in. that's what they want. >> ed we're giving you the final word. what do you want to see? >> well -- >> oh, ed -- we've got two final words. >> i know. >> hey, well i'd like to see something on the siri speaker front but look, tvs are one of the holy grails too. and we could probably agree on that front. this is a huge opportunity in terms of owning the living room. >> give me a flying car. skip all this other stuff. we're going to leave it there. thank you, walter. >> incremental. >> flying car. self-flying. >> when we come back -- >> jet pack. >> -- we have some stocks to watch ahead of the opening bell on wall street. first as we head to a break check out the futures at this hour. under slightly more pressure. dow futures down by about 15 points. s&p off by 2 1/2. and so are the nasdaq futures. stay tuned. you are watching "squawk box" on cnbc. think again.

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marcus limonous is watching everything we're doing. the profit -- eight new episodes? which season is this? >> been on awhile. >> probably four or five. >> good billboards we just saw

it. take a look at some stocks to watch this morning. home builder d.r. horton is offering $16.25 a share. to buy 75% of residential real estate developer forein star. forestar has an offer to be bought by starwood capital. d.r. horton's plan involves keeping forestar as a publicly trading company. and pandora shares are higher in the premarket. "new york post" reports that verizon is considering a $100 million investment in the streaming music service. stemming from its interest in pandora's user data. and gap was upgraded to outperform from market perform at oppenheimer which says current strength in earnings and profit margins for the apparel retailer is not reflected yet in the stock price. chris suisse upgrading ebay to outperform from neutral saying platform changes and product innovation gives ebay several paths to earning -- >> the concept by the way, season five begins tomorrow right here on cnbc at 10:00 p.m.

eastern. >> okay. good billboard. >> our guest host this morning is walter isaacson, president and ceo of the aspen institute and a cnbc contributor. good to see you. we've got to talk you to a little bit throughout this hour but haven't really gotten to talk to you about what you think is going on in washington and mr. trump and we're going to be hearing from comey later this week. what do you think really happened with russia? >> well, i think that russia did interfere with the election. john carlin, who was on earlier in this show, you know, is part of the justice department, cyber thing. it was clear, even putin has now basically said it, the real issue for me is that, you know, they did it because they preferred trump. trump is very much, in my mind, helping russian foreign policy. and this is something he has to be careful about. i don't think he's doing it to be a puppet master. joe and i were arguing about this in the interim. i think he's just doing it

because this is his view. but the point is, for 70 years russia has tried to divide the united states from west germany or germany. it's tried to divide nato. and now, this is happening. trump is doing exactly what the russians want. so, i don't know if it's collusion. because there's a connection. >> but you're not suggesting manchurian candidate, right? >> no, not at all. i'm saying the russians supported him for their own national reasons and they got what they wanted. >> so putin said last night on nbc that he doesn't care who's in charge because the politics go the same way. >> i mean he did not want hillary clinton. he did want donald trump. i think it's just that simple. now you know, we do that in other countries, as well. >> yes. >> elections have consequences. that said, when this happened i think we have to be on gord not just against where the collusion was, but do we have a foreign policy that is supporting certain things that aren't in our national interest that are in putin and russia's national

interest. russia's national interest is conflicting, directly with ours, and we have to be careful. >> walter, we're going to continue this conversation. coming up, arne sore sorenson is going to join us. stay tuned. ♪ ♪ here's to breaking more glass ceilings. in golf and everywhere else. ♪ the kpmg women's pga championship.

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the global terror threat. prime minister theresa may takes on the tech industry after the latest attack. >> we need to do everything we can at home to reduce the risks of extremism online. >> a live report from london straight ahead. >> the trump travel ban. the president tweets a renewed push for the policy. arne sorenson weighs in first on cnbc. >> plus we're watching oil prices. crude swings after several arab nations cut ties with qatar. the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." good morning. and welcome back to "squawk box" here on y nbc. live from the nasdaq marketsite in times square i'm joe kernen

along with becky quick and andrew ross sorkin. our guest hose is walter isaacson. the futures have been in the red. gotten a little bit worse in recent moments. down about 17 on the dow. down 2.5 on the s&p. down 3 on the nasdaq. check out oil, several arab nations including saudi arabia, egypt and yemen cut diplomatic ties with qatar accusing the country of supporting terrorism. earlier, they boosted the price of the complex. but now actually down on wti crude and ice brent. >> mark grant said he wouldn't be surprised to see cheating among the opec nations at this point. it does show some splintering. >> for qatar that's going to happen. >> yeah, that was his point with this. we are seeing it down once again. uk prime minister theresa may resuming her election campaign after the deadly terror attacks that killed seven over the weekend. wilfred frost is live in london. pi fred what can you tell us

now? >> yes, becky. speaking earlier today prime minister theresa may addressed the ongoing battle against islamist terrorism. >> without our efforts to defeat them overseas are ever more successful, they're increasingly seeking to spread their poisonous ideology and to prey on the weak and vulnerable in our own countries, inspiring them to commit acts of terror here at home. they exploit the safe spaces of the internet and social media, and they exploit them in the real world, too. >> lots of questions about what that might mean for social media and internet companies in terms of policy. perhaps the best clue we got was from home secretary amber rudd yesterday where she did single out end-to-end encryption technology used by some messaging apps. she didn't mention any specific companies or policies but it might be an area to watch out for if prime minister theresa may's government gets re-elected. on that note, her main open,

labor leader jeremy corbyn just suggested she should resign in light of police cuts and recent terror attack. clearly an election ploy to claim that. but it shows how high on the agenda security is today on the campaign trail in a way that it wasn't two weeks ago after the manchester attacks. now on that topic, just moments ago, we heard from london mayor sadiq khan addressing the attackers and the attacks themselves. >> i'm angry and furious that these three men are seeking to justify their actions by using the faith that i belong to to justify their actions. the ideology they follow is perverse, and is poisonous, and it has no place in islam. >> he also said that londoners would not be cowed by terrorism. guys, back to you. >> wilf, we've already heard from facebook and twitter, where they have said that they are going to double down on their efforts to make sure they weed

out any sort of this violent thoughts that show up on their networks. obviously that's probably something to do an end run around being forced to do that by regulators. just how deep is the feeling for this right now? how much are people blaming social media for some of these instances? >> well, listen, it's very significant that people feel like there need to be further and deeper steps. but, clearly, we don't have specific policies on it yet given that we're in the middle of a campaign. there's just not been time for that kind of thing to develop. but theresa may, both yesterday and today, and the home secretary who's really responsible for these policies, have mentioned the internet in the space of 24 hours a number of times. certainly something to watch if they get re-elected, as i say, in terms of specific policies that we've heard about from theresa may in the past, when she was home secretary, there were plenty that didn't quite get through when she was home secretary like extending powers

to key people in jail on terror offenses without being charged and being able to shut down terrorist cells even if they haven't outright broke criminal laws yet. those were shut down. but we don't know about her specific policies on the internet and something we'll have to continue to watch. it will be an area of focus, for sure. >> wilf, thank you very much. okay. president trump doubling down on a travel ban in a series of tweets this morning. the president writing, people, the lawyers, and the courts can call it whatever they want, but i am calling it what we need, and what it is, a travel ban. he also tweeted the justice department should ask for an expedited hearing of the watered down travel ban before the supreme court, and seek much tougher version. let's bring in arne sorenson, president and ceo of marriott largest hotel chain in the world. in town for an international hospitality industry investment conference. and good morning to you. >> good morning. >> so, the big question is what would a -- what would this travel ban or what is already happening doing to your business? >> well, it's still early in some respects.

but we're seeing arrivals to the united states from the middle east and mexico, and not surprisingly down 20%, probably. 20% to 30%. when you look at arrivals from the entire globe, all sources, it's about flat. >> right. >> which actually is not all bad when you think about the strength of the u.s. dollar. i think, though, what you're seeing is that we are on economy which is performing, a lot of travel is business travel. and so it's still coming in. we are at the cusp of summer now, which is when there is relatively more leisure travel that tends to be more sensitive, i suspect the numbers will be worse over the next few months than they've been over the last few months. >> what do you think the answer is? if you could be king for a day and wave a magic wand in terms of how we approach security in this country? >> well, i think there is one of the frustrating things about the tweets that come out, is they're such blunt instruments. and basically what they're viewed by the rest of the world as is you're not welcome to come to the united states, no matter who you are. much better would be a

communication which said, we're going to do everything we can to protect us from terrorism, and around those plans, maybe we're going to have additional processes for visa applications, or for laptop review, or for something else. but, if you mean us no harm, we still want you to come. >> do you feel like you have a seat at the table? one of the fascinating things jonathan tisch told us is that he doesn't feel that the hotel industry has a seat at the table in washington with president trump, which given his role as a real estate and hotelier, to some extent, seems a little bit surprising. >> i think we've had less access in some respects today with president trump than we lad with president obama at a similar time in his administration. which was interesting. we had one industry meeting at the white house, met with gary cohn and a number of others. there's been no industry meeting, and no ceo meeting with president trump himself. i think maybe a piece of that is he comes out of the hotel business.

and i think probably believes that he understands the business well. that may not be a place where he needs to consult. and that's okay. nobody's looking for access just to have access. i think, though, we would like to make sure we get engaged in this conversation about how do you draw a line between protecting the united states from terrorism, and at the same time, driving the travel which creates jobs in the united states, tax revenues, economic growth. >> but, this is really an economic challenge. which is to say, there's math here. how much can you spend on the security? right? and how much does the security cost? and what's the benefit on the other side? meaning how much more do you think needs to be spent? what do you think has to happen to actually make the system that much more secure? and therefore the benefits on the other side? >> well, if we could wave a magic wand we would get to a global trusted traveler program. where basically, the 99% of travelers who pose no risk company opt into a process and essentially have much less security applied to them so that the security resources could be

applied to the folks who actually do produce a risk. you could probably do it with less cost than the cost we're spending today because right now we're essentially putting everybody through the same -- >> that makes a lot of sense. >> and there it's about technology. it's about governments cooperating with governments, which is a challenging thing. if the u.s. could cooperate with governments in europe and elsewhere around the world, it's also a little bit about privacy. particularly in europe. you've got a sort of rabid view about what information can be protected about all of us here. so it would have to be an opt-in kind of approach. >> i've heard, though, some controversy questions raised about trusted traveler programs and the idea that ultimately there could be trusted travelers then effectively get radicalized and that the system to protect you is then even -- is less there in many ways. >> well, even there, though, if people are opting in where you actually have information, you've got an ability to monitor those folks in a way that you wouldn't have if they didn't participate in the trusted

traveler program in the first instance. and of course, we're not going to live in a world where there's zero risk. we're going to live in a world where you say, okay, what are the things we can do, and what are the costs to us if we go to some extreme to say we're going to ban all activity? we know in the united states, there's 75 million visitors, roughly, last year from abroad. we think that created 2.5 million jobs in the united states. so if all international travel disappeared, 2.5 million jobs are gone. >> we've heard that the commerce department figures aren't out for how many travelers we saw in the first quarter yet but what have you seen in your home hotels in terms of travel here to the united states and in terms of travel overseas where we've seen some of these terrorist activities? >> again, we would say that all sources globally were about flat. we've got declines, meaningful declines out of the middle east and mexico. not surprising. you go around the world, and there are different stories. you've got still arrivals from china growing. that's because the china business is growing dramatically. >> but this has not changed materially your business in terms of your guidance?

>> well, i think we've got to put this -- it has not. the u.s. numbers, 95% of u.s. hotel business is domestic. >> what would -- >> 5% only is inbound arrivals. >> what would a laptop ban do for your business? >> well, it would be ideal if any laptop ban applied globally. obviously. so that it was not a impact on travel to the united states only. now, you've got -- think of laptops, to some extent -- >> -- shut down business travel across the board even more? if it was globally just from a mind share concept people say -- >> what percentage of business travelers would cut -- i mean what percent would cut -- >> i don't have surveys to know. i don't think it would be anywhere near that. i think we would find a way to put up with it, because we're traveling for reasons. >> how many hotels in china, like 40 a year or some ridiculous number what is it? >> gear open with nearly 30 and

will be opening 60 or 70 this year. something like that. >> full-on expansion in china? >> yeah, our pipeline is more than two -- >> have you ever asked yourself about europe, and expansion, and whether nothing's going to change any time soon? >> actually, interestingly, europe is having its strongest year. >> so you're going to expand in europe? nothing about the current would cause you to pull in -- >> decisions about adding a new hotel with quintessentially long decisions, right? because these are assets that have -- >> but somehow we're going to figure this out some day. >> we will figure this out. london notwithstanding the events of this weekend is a spectacular destination. which if anything has gotten stronger in the last five years, not weaker. >> i was going to ask you more about the hotel business. you're really going strong on cigna for, autograph brand now that you've done starwood. is that the next big trend in the industry? >> i think it is one of the

trends. one of the trends broadly is people want real localized experiences, they want to have a hotel that looks different, they want to know they were in new york last night as opposed to some place else. they want to have a localized foot and beverage experience. there's a little bit of dissonance between that and one of our brands which has 1,000 hotels that tend to look quite a bit alike. but our platforms, reservation platforms, et cetera still drive enormous amounts of business. >> what about independent -- >> independent hotels could be part of this system. >> what you're talking about sort of gets you towards an airbnb type of thing. will you ever compete with airbnb with some type of offering in between what they do and what you do? >> i think at the edges we do compete with airbnb. so their first generation was really home sharing. your extra bedroom or your house when you were traveling some place. i think increasingly they've gotten to dedicated units. new residential buildup we're going to put eight flats in it. that's not that different from a

hotel room. we'll compete against that. >> you saw hilton hotel with american express? >> i did. >> american express has hooked up with starwood. is that good or bad for you? >> i don't know that that makes much difference actually. i did hear from ken when they were announcing their news last week. >> he's interested in having us, too. >> i'm sure he is. >> did you see tisch earlier? >> i saw him just out walking -- >> kills him at the meeting is at the marriott. the big conference. >> no he loves it. >> like i can't believe i have to go to that place. he did. he was talking trash. >> not! he was not! >> up next -- >> do not say that. >> what a dump. >> not! >> the senate is back from recess with a busy agenda. we're going to talk health care reform with senator john b barras barrasso. you're watching "squawk box." will you be ready when the moment turns romantic? cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines,

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welcome back to "squawk box" everyone. the senate is back from recess, and health care reform is front and center. joining us right now is wyoming senator dr. john barrasso, and senator thanks for being here today. good to see you. >> thanks for having me, becky. good to very you. thank you. >> where do things stand?

we've heard again and again that the health care reform passed by the house is dead on arrival in the senate, that you all are working on your own legislation. where does that process stand? >> you're absolutely right. we are writing our own bill in the that. we've been meeting quite extensively to talk about the issues of health care reform. but let's talk about why we need to do this. all around the country, prices have continued to go up. and choices for people have gone down. we've seen it in nebraska, blue cross blue shield has just pulled out. no one is offering insurance on exchanges in big parts of the country. so we need to do something to get people the care they need from a doctor they choose at lower costs. that's our focus. >> over the weekend, "the new york times" wrote a front page story about how those on the left are now looking at an even more extreme option of universal health care. it seems like the two parties are kind of fracturing and going different directions. how do you add all of that together and come up with something at the end of the day? >> well, you're right, becky. when you take a look at what california democrats have

proposed, in the legislation there, as well as at their state party, universal health care for all. they've priced it out. they said it would be about $400 billion. which is twice the general fund for the entire state of california. so to do just what they want to do on health care, their own budget people say, is you'd have to spend all the money we spend on everything, including teachers, firefighters, police, and raise taxes at the same time. it is just not possible to do those sorts of things. we're focused on responsible legislation that helps people get care at affordable insurance. that's what our focus is. and i think the obama health care law has made it worse. but we need a health care plan that was better than we had before obamacare was passed. i was practicing medicine back then. we needed health care reform. we need to get it done and i think obamacare has made it worse. >> senator, walt isaacson. good to talk to you again. >> good to be with you, walter.

>> sure. you say you're working on it in the senate. is there going to be some other -- are there going to be some democrats who work with you on this and might this have some bipartisan component? because one of the mistakes, perhaps, that president obama made was doing it on party lines and once again the house did it that way. it would seem the one hope is the senate might actually try to get something that's to some extent bipartisan. >> well, i agree with you walter. i think a bipartisan approach is the best approach. there are a number of different working groups. some of them are bipartisan. i had a meeting in my office a week ago with ten senators, three of whom were democrats, along with the surgeon in boston who writes frequently for the new yorker just talking about what we need to do to try to move forward with health care reform in this country. at a time with an aging population. he wrote the book being mortal about what is happening as our parents are aging. so we need solutions for all of society. we need to strengthen and make

sure that medicare remains strong, and provides care for those people. we also have the next generation that's coming up. we need to make sure care is there, as well. >> senator, why did richard burke say that? what's gets into someone's head when they say just being realistic about not doing it this year, or do you agree with him? or 2018 or the senate? >> i think it's really important that we do health care reform because people around the country certainly i heard about it over memorial day at home in wyoming, people are concerned with the growing costs, and the -- >> is it possible -- so it's possible this year or not? >> oh, absolutely possible. and necessary this year. not just possible. but necessary -- >> why do you say that? >> you know every senator speaks for himself or herself. we need to do health care reform. >> that's the problem i think. especially on the gop side. do you think that you can sell -- you said something very telg, and that is, access. affordable access. but you may not get the kind of coverage that's going to play in

the media. it would be great to have affordable access then people can get it, get health care, pay for it, premiums don't go up. but you're going to have to deal with that maybe not 24 million, but you're going to have to deal with head line risk that you're, you know, taking people off of obamacare to give tax breaks to billionaires. you're going to be very difficult on the p.r. side of things to convince people that getting access is preferable to just trying to cover everyone. >> well, what we know is that even under obamacare, 20 million people have chosen not to go on either pay the fine, got an exemption under the mandate, so we know that obamacare has failed significantly. we know that a lot of people added to medicaid have a hard time getting a doctor. and when you look at the numbers that have reported out of the people that are supposedly going to lose insurance, these are people that don't have it right now. it's just that the actuaries who take a look at that say well if obamacare were to continue, they would get it.

but joe, let's face it, obamacare can't continue. it is collapsing all around the country. that's why it's critical we do something and we do it this year. >> okay, senator. thank you, senator. senator barrasso. godspeed. >> thanks for having me. thank you. >> coming up when we return. wonder woman making history at the box office this weekend. it could be the reason shares of one company get a super boost. that story next.

welcome back to "squawk box." shares of time warner could get a super boost thanks to "wonderwoman." that's according to barron's. the film and television studio that controls d.c. entertainment. they estimate warner brothers and the d.c. movie made more than 100 million in the u.s. and canada well above analyst forecasts. the super hero film along with time warner's upcoming releases could help lift shares by 20% over the next five years even if its pending acquisition isn't completed in a timely manner. if it is barron's notes the stock has a history of rising after deals are completed. almost 100 bucks. >> i'm not clear. >> hello. >> i'm not clear on all her super powers, rob? she's got x-ray vision? huh? okay. but what are her -- can she fly? >> she has a magic, invisible

jet. from the cartoon, she had an invisible jet that flew her and she had the bands that were -- >> she got most of the same stuff he had? super strength? >> no. >> no x-ray vision? >> can't fly. >> all right. looks good, though. thank you. so you got -- using you a lot today. when we return, breaking economic news plus facebook, google, twitter. we're going to talk to intelligence expert michael o'hanlon about the tech community's influence right after this break. ♪ 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?

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welcome back to "squawk box." our first quarterfinal read on productivity, hitting the wires. our last look was down 0.6. it's now moved up to unchanged. so unchanged. last time around the box, first quarter productivity improved. and if we look at unit labor costs, our last look was 3%. we were looking for 2.4. came in at 2.2. so, the numbers moved in the correct direction in terms of the revision but there were much better, indeed, especially on productivity. 2.17 before, during and after 10-year yield on this number we

still have service sector measurement coming up in the form of nonmanufacturing, index up a little bit. equities down a little bit. we're going to continue to monitor how interest rates globally continue to move down and weak dollar intention figures into that equation. joe hope you had a good weekend. back to you. >> what's wrong with three-day weekends? france is on to something, aren't they? they don't quite have that yet. but do we really need, i mean is there -- everybody be employed? i mean, isn't that a good -- people have thought that before haven't they, rick? let's do four days. four and three. >> you know, and if you do three days you use less natural resources. you know, people would just sit out in the sun. >> carbon footprint. >> yeah, exactly. exactly. >> maybe we could use -- >> you know if we're sitting under trees not working, drink less water, throw away less water bottles. >> something to think about. >> i agree. >> but if we do it, i want monday off. because i -- i want to pay my

deuce the previous week, do the five days. mon da mondays i always like better than fridays off. >> i think congress has already made a play in that direction trying to test the waters with more time off. >> i knew i could get you. thanks, rick. tech giant facebook has pledged to aggressively remove terrorist content from the social network after another terror attack in london joining us now, brookings institution's foreign policy senior fellow michael o'hanlon. michael, it's -- it's good to have you on this morning. i have been hit by kind of a sense of frustration, and i don't, i guess, not resignation, but if you're going to use vans and knives and low tech soft targets it's just a very daunting task to see how we ever -- how we can ever prevent this or get a handle on it. >> no doubt. good morning to you, as well.

i guess since we're all so troubled and saddened by these tragedies it's worth seeing if there is any silver lining and the kind of responses we've seen. i kind it encouraging that the british have known where to go to arrest these dozen or more associates and affiliates, not only from the recent attacks in london but from the manchester attacks before that. what that means is that even though they didn't stop the attacks, obviously, they had some inclination of who was talking to whom, of which kinds of groups they had to be cognizant about. these did not come completely out of nowhere. now that's only slight solace in a situation where ultimately they did carry out their attacks. but what it tells us is that there is a rich intelligence operation and network that is generally speaking tracking these kinds of groups. and so, when they slip up, when they try to do something too big. when they try to do something that requires substantial coordination in advance, there is a very good chance that will be picked up. you're right, it's not going to stop every small or lone wolf kind of attack. and that's a tragedy every time it happens. but i'm still impressed by much

of the surveillance that i'm seeing the british have been capable of. >> and i'm torn between feeling good about being here in the united states, and being complacent when i hear our, you know, government official say if you knew what i knew every morning you wouldn't leave your house. so on the one hand i think we've still got that ocean. we don't have the disenfranchise ed, you know, large areas of cities where hopelessness prevails, nobody can get a job and they might be, you know, different -- you know, have to come from different cultures. that seems like part of the problem. we don't have that here but should we be -- should we feel better about being in the united states? >> well, excellent points. a couple of things. you're right. our challenge is with social cohesion have more to do with our inner city problems, bringing people along out of poverty. and we do have, frankly, a lot more crime than most western european countries. so for those that are thinking of traveling the summer abroad or what have you and are put off

and terrified understandably by these recent attacks it's worth remembering that most european cities have very low crime rates krared to the united states. these terrorist attacks are even more striking because i think for example in the last few years the number of victims from terrorism has been a quarter of the number of victims of murders, regular criminal murders. in the united states we have far more sort of regular street crime that we've become accustomed to. but we don't have as much of the problem, immigrant prop lags populations, especially from the broader islamic world. also it's just a corollary of what you said. we have a lot fewer people going back and forth to the libyas and syrias of the world. we're further away. it's harder to get there. it costs more to get there. we've been a little bit tougher in some of our homeland security and immigration kinds of activities even before donald trump and so i think that the odds are, generally speaking, with us but of course we've seen san bernardino here. you've seen orlando, as you and i know there's no guarantee.

>> michael it's walt isaacson. you talked a moment ago about how they were able to track these people down very quickly. you also talked about the internet companies, facebook and all having to crack down. but that gets to the point of not just social networks, but these encrypted apps. including snap, but those that are even more encrypted. whatsapp and other things. should those be banned or should those be changed? >> that's a great question, walter. i don't know if it's realistic to ban them because as you know there are derivatives that can come from other parts of the world that we probably can't easily get our hands on, and could probably still be circulated through some kind of an underground system. i have no problem with trying to -- trying to slow the use, or require some kind of greater scrutiny for those who want to use these kinds of apps but i don't think it's likely to work. >> how would you do that, michael? >> well, you know, i think what you would try to do is you would, perhaps, any kind of a legitimate app store, in the western world, could be

prohibited in some sense from offering that kind of service. you could do that. it would be very draconian but i guess you could theoretically imagine that. the problem is there are going to be all sorts of surreptitious and copycat apps of that same time that i don't think are going to be as easily dealt with through western controls. that's my broad sense that you could try. you could probably slow down the use of the traditional app that you just mentioned. but i'm afraid other things might step in to the void. >> michael we've got to go. in your view, if the supreme court allows president trump's travel ban that's a net positive or a net negative for our efforts to stay safe? >> i'm almost indifferent. i think it's a negative in terms of our foreign policy. you know it sounds like one of the three attackers at least was from pakistan. pakistan was not even going to be covered by the travel ban as i recall. just makes the broader point you can only cut off so much of this through travel bans and most importantly we already have extremely tough vetting. getting back to our earlier conversation about why we are probably a little safer here on balance. i don't think it's going to help

much. >> okay. thank you. >> thank you, gentlemen. >> we'll see you. >> up next, why the economy can count on president trump to make america grow again. that is the topic of former cke restaurant ceo andy pudzer. he will join us after the break.

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former cke restaurant ceo andy puzder out with an op-ed on the trump economy and the prospects of passing health care and tax reform. andy puzder joins us now. we'll delve back into the discussion about whether 3% growth is even possible anymore. with the population, and aging, and productivity, and everything else. did larry summer's forecast 4% growth? that's in your notes. i don't remember. did you know that? sorkin, did he forecast that back in the days when he was on the obama team, andy? >> yeah, back in 2009, the omb under obama came out with a forecast that in 2012 through 2014 gdp growth would be 4% to 4.5%, coming out of the recession. and as you know it never reached 3% for any year during the entire obama administration. so summers, furman, they were

all involved in predicting growth well in excess of 3% and the average since world war ii has been 3.2%, 3.3%. now people are saying we can't even hit the average. >> when you go 0 for 8 at 3% it's in your best interest to then say that it's the potential of the economy is only 2%. that makes -- that way it wasn't your fault, and it wasn't -- i take issue a little bit with your narrative here. you're talking about ining der since november 8th since the president has come in how much better things are going. i think he started with sub5% unemployment, didn't he? i mean, a lot of this was already in the cake. >> well, we're now at a 16-year low with 4.4% unemployment. so it's a very positive number. but there are a lot of other indicators. for example, joe, the numbers on the index on manufacturing activity came out this week. every month since president trump has been elected has been

better than any month in 2015 or 2016. if you look at median household income, it went up about $1,000 between the end of the recession, june of 09 and january 2017. it's gone up $1300 since president trump was inaugurated. so you're seeing a lot of very dynamic activity that you haven't seen over the past 7 1/2 years. and i think you have to credit a lot of that to people feeling -- you know i talk to a lot of ceos. and everybody tells me, look, i don't wake up in the middle of the night anymore wondering what the next executive order is going to be or the next regulation that's going to hurt my business. that has a very positive effect on what people do. >> so the two things that go in to gdp, i mean you need population growth, i guess. and then some would say that we're anti-immigration or anti-illegal immigration. and then you've got to find ways of -- you think we can make it all that shortfall up in productivity? there is something to the notion that baby boomers aging make it

tougher to get back to that, you know, 3%, 3.5%, 4% environment that we were in. >> i tell you, in may, for may, a number says 5.2 million people are not in the workforce who want a job now. that's their number, that's not my number. there are plenty of people out there to be employed. and look, if president trump needs to allow people in legally, not illegally, to make up for a labor shortfall, i think that's what they'll do. he's very focused on growing the economy. he's very focused on creating jobs for people, and economic growth. we're seeing some of the results of the regulatory pullback already. if we can get tax reform, and health care reform, i think you're going to see that 4% number for sure. >> we're lucky to have, walter isaacson here, because he collects a cadre of elitists and globalists and the smartest minds, seriously, in the entire world. >> i'm brilliant. >> i don't know, you do make

mistakes, obviously. i would be willing to bet that your group thinks that 2% is the maximum type of gdp potential? >> i think some of the arguments you made are actually -- >> was i doing well? >> you were doing well. >> that's why i'm here. >> you know, the question is how do you get to 4%? and you're right, take in some regulations. but also you need -- >> is it possible, walter -- >> i think you need, and you look like -- >> sshs to say yes -- >> i'll turn it to the -- when you have big technological advances over the past 40 years, that's when you've seen us get to 4% or 5% growth. and we're in a bit of a lull right now. i mean, i'd even ask -- >> you would say electing ronald reagan was a technological advance? >> i would say that came at the exact same time the internet was opened up to the public, the microwave was invented -- >> that was al 0 gore. >> you know, you have in the

1975, you know, before reagan, it -- >> defense bill -- >> defense spending -- >> we can do that again. >> we increase the debt more than we ever have -- >> including -- >> also created the microprocessor because you needed it for -- >> we need flying cars or something, then. i don't know if the apple watch is going to do it, andy. >> andy, let me ask you this, walter isaacson. what is the next big tech advance, just in your old industry, that's going to change the way we consume food? >> i don't know that there's going to be a big change technologically for food. i think the big change in food right now is coming in the way people purchase. it's hitting all retail. in other words you're seeing more delivery. you're seeing more people ordering groceries online. which takes people out of the restaurants. so i think the next big thing in the restaurant industry is to figure out how to deal with the way people are purchasing things differently today than they did five, ten years ago. and the company that does that is going to be the next, you

know, be the next mcdonald's. it will be the next company that really makes an incredible breakthrough. industrywise the next technological breakthrough is going to be in driverless cars and the autonomous vehicle, with respect to the american automobile industry. and i'm hoping that we make some real progress on that soon. >> we're out of time again. i think the last great invention was the onion ring and that barbecue sauce that you put -- >> western bacon cheeseburger. >> that was -- what year was that? because that was -- >> productivity -- >> microprocessor, internet, and then -- >> it was in the reagan administration. back in the '80s. >> all these things happen -- >> microprocessor and onion ring together. >> the barbecue sauce. >> i'm worried it increased health care costs, too. >> that's right. cholesterol. andy, thank you. >> thank you. >> see you around. >> when we return, the world's biggest cancer research meeting under way in chicago and has big

implications for the drug industry. we're going to take you there live. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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, everybody. the world's biggest cancer research conference is under way in chicago.

>> good morning, becky. we have three big biotech movers this morning. we'll start with loxo oncology. that after study on the targeted therapy for a specific mutation in certain cancers. seeing the overall response rate of 76%, citi called it stunning, and that fda approval is as close as a slam dunk as it gets. they're up 38% and we have the ceo joining us on "halftime report." tune in for that. two others to call your attention to. puma biotech on some just released data from roche that we report on last hour in breast cancer. while the data did show that roche's drug helped the women live slightly longer, that wasn't big enough to get on puma's threat. and tg therapeutics on the new

drug. we sat down with the ceo of celgene and pricing was the big topics that comes up at the conference. here's what he said. >> we would never ask a patient who has to go into the hospital for surgery to pay up to 50% out of pocket for the surgical procedure. yet, the insurance schemes and many of the things we do for cancer patients we force them to have high deductibles and high coinsurance on the medicines that are the only option for them to live longer and better lives. i see a lot of collaboration, enough of the blame game. let's come together on access and affordability. >> so the celgene ceo talked about a lot of government focus on the drug pricing right now. and they have some updates in multiple mile loma, guys. back to you. >> thank you. the man behind oculus pr blotting a -- plotting a

comeback. palmer luckey sold his stock when he was 20 years old and he's got a new start-up in the works and it's a virtual border wall. paging president donald trump. they're developing surveillance technology that could be deployed around the military bases. we need to create superior technology to keep troops and citizens safer. peter thiel's investment plan plans to invest in the company. an interesting way. maybe that'll be the wall. there won't be an actual physical wall. save some money and do it better. >> come up with a way to make travel safer that would be good. we'll have parting shots from walter isaacson. get his take on tax reform and media. that's when "squawk box" returns.

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to grow the businesses of morrow today we show you this morning a rare downgrade for apple. pacific crest bumping the tech giant to sector weight from overweight. they cited limited upside to the apple 8 and pacific crest also

recommended that large cap tech investors use the proceeds from the sale of apple shares to purchase shares of alphabet. citing more upside potential. the apple downgrade coming ahead of today's annual conference for app developers. with we'll hear more about -- we'll hear more about that today and throughout the weekend. our guest host all morning has been walter isaacson, president and ceo of the aspen institute and a cnbc contributor. one of the questions i would ask you since you've raised wit a couple of the people. we talk about what happened in russia, what happened over the weekend with the terrorist attack in uk and what may or may not happen here in the u.s. you spend a lot of time in d.c. you are officially leaving d.c. -- but is this ultimately going to paralyze things or will things get done? >> i think things will get done. i think the things that will get done is an infrastructure. >> an infrastructure plan.

which by the way we'll hear about this week. >> we have all this week. i think there -- i always thought trump could really be successful if he became an independent and transcended party. the best thing to do that is through the infrastructure bill. bill schuster has done a great job in the house. if you upgrade air traffic and research and development, you talk about productivity group which is what joseph was talk about earlier. productivity growth comes as a result of good infrastructure. good research. good development. >> i want to know there was a time we needed -- that we were going to shut down the pat end and trademark office because nothing else -- >> that was in 1890. >> you remember that. >> yeah. >> sorry. >>ette -- ettu, brutu. if we count on that being a net positive for society, what is it

going to be? what is next? there's always something. >> the drugs -- should be major leaps in life sciences. >> that makes it harder to pay for people who live to 120. what's the next thing? >> good infrastructure. so you can -- the amount of time we were talking about it off set -- >> it will increase productivity massively. >> if you're spending five hours -- if you don't have wi-fi, you can't bring your l laptops on the airplanes, the air traffic being clogged up, highways being clogged up. >> look at what's happened in the last ten years i would say to -- >> the cost of that isn't easily factored into the cost benefit. because people are like wasting an hour, but that's not something that goes into the productivity number. >> so keep the patent office

open. >> keep it open, have an infrastructure plan like i hope that gary cohn and the president are announcing today. upgrade air travel -- traffic control. the last great president to do it was eisenhower. he did it with nasa and he did with the interstate highway system. productivity went nuts. >> you know he was a republican. he was a republican. >> right now, time for "squawk on the street." ♪ good dan employ darning. welcome to "squawk on the street." a big week is upon us. ecb, uk elections, comey's testimony. a white house focus on infrastructure. even apple's conference, the futures are down. ten year is around 2.18. our road map begins with a terror attack in london that killed seven people.