"squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures, futures are under pressure dow futures down by 71 points after closing at a record level yesterday. the dow has been up for 5 out of the last 6 sessions. if you look at the s&p 500 indicated down by 14 points. the nasdaq indicated off by 63 the ten-year yield, this is something to watch yesterday, the fed raised rates the yield on the ten-year falls. yesterday it was at 2.1% it was around the lowest level since mid-november this morning the ten-year note yielding

2.145% overnightin asia, look at what's been happening. you can see the nikkei closed down by a quarter of a percentage point the hang seng off by 1.2%. the shanghai was flat. let's look at what's happening in the european markets in early trading. at this point there are red arrows across the board there as well biggest decliner is the cac, which is down by 1%. the ftse and dax are off by 0.8% when it comes to currencies. you will see right now the dollar is up across the board. euro at 1.1163 crude oil prices which were down 3.7% yesterday, the lowest settlement we've seen since november 14th, you can see this morning down once again. another 11 cents to 44.62. we want to bring you an update on the terrible shooting

that took place yesterday. republican congressman steve scalise is in critical condition this morning after he was shot by a gunman yesterday. "squawk" was on while this happened the congressman was shot in the hip, underwent surgery at medstar washington hospital center a statement says scalise will require further operations a congressional staffer a tyson foods lobbyist and two capitol police officers were also wounded. james hodgkinson of illinois was shot and killed by capitol police he expressed outrage about conservative politics and was said to be distraught by president trump's electoral victory. he volunteered on bernie sanders 2016 presidential campaign here is senator sanders on the senate floor yesterday >> i have just been informed that the alleged shooter at the republican baseball practice this morning is someone who apparently volunteered on my

presidential campaign. i am sickened by this despicable act and let me be as clear as i can be violence of any kind is unacceptable in our society. i condemn this action in the strongest possible terms >> after the shooting, president trump called for unity >> we can all agree that we are blessed to be americans. that our children deserve to grow up in a nation of safety and peace and that we are strongest when we are unified. and when we work together for the common good. >> the president visited congressman scalise in the hospital last night. democrats and republicans decided to play the congressional baseball game tonight in a show of unity and strength we want to talk about our top political story this morning. the "washington post" reporting that president trump being

investigated by special counsel robert mueller for possible obstruction of justice eamonafter javers has more on >> the story in the "washington post" getting the attention of all of official washington last night when they posted it online let me bring you some of the highlights of their reporting. they're suggesting that the investigation into obstruction of justice by president trump began days after the former fbi director, james comey, was fired by the president of the united states they're suggesting that the director of national intelligence, dan coates, th nsa director, mike rogers and richard ledgett have agreed to be interviewed by mueller's investigators. they are looking into evidence of possibility financial crimes among trump's associates the white house referring all questions russia related to the president's personal attorney. we have a statement here from

the spokesman for the personal attorney who said this the fbi leak of information regarding the president is outrageous, inexcusable and illegal. it's not clear why the president's attorney thinks that this leak necessarily came from the fbi in this case that's not clear from the "washington post" story where the information originally came from nonetheless the president's attorney blaming the fbi for a leak in the situation. it was clear as of last week that this was likely to be the direction that the investigation was going when james comey testified up on capitol hill he suggested that mueller would have to get into the question of presidential obstruction of justice. here's what he said in the testimony last week. >> do you believe this will arise to obstruction of justice? >> i don't know. that's bob mueller's job to sort that out >> so comey suggesting that mueller would be the guy to sort it out and he is, in fact, sorting it

out. we'll wait and see where this goes, whether or not the president will have to testify and whether the white house will have a statement on this throughout the day today >> thank you for that. joining us now, we'll continue this conversation -- what was that go back. go back there. there you go >> that's you. >> eamon, you still there? >> i'm still here. >> so, yeah, i -- it's unsettling when you hear, my god, he's going to do it but you think about the sound bite you played f you're going to have mueller do something, what else will he look at if he's not looking at that >> i wasn't surprised by this. >> no. still ugh. we go back to a land deal ending with a stained blue dress. so, it's just -- it goes like this theoretically, this is the worry. >> these investigations can have a lot of tentacles >> this is like the main part of it because you knew this would

happen now the financial dealings of all of his associates? that's kind of new >> it is, though if you're looking into russian interference into the u.s. election and possible collusion, you would be looking at the financial piece of that. did money change hands would people in essence bribed by the international financial deals to cooperate in the investigation or rewarded for what ever they did by the russians that is one avenue you would have to go down. the special counsel in this case is different than in the '90s, he's more constrained, not as independent. >> they tried to rein it in a little >> we'll see how much that succeeds >> we'll talk to a gentleman now, but i was reading certain people, how stunning this supposedly is. stunning they got it underlined the president -- with ledgett.

the president questioned the voracity -- talking about while ledget it was still in office. he documented a phone call that mr. rogers, the nsa director had with mr. trump where the president questioned the voracity of the intelligence community's judgment that russin tried to persuade mr. rogers that there was no collusion. it all depends on if the president knew there was collusion. if he thinks or knows there wasn't any whatsoever, that's what he's hearing from the nsa, the people involved with it, to say why don't you say there's no collusion? why don't you come out and say you're not seeing anything i don't know if that's not telling them to end the investigation or whether it's just saying, look, there's no -- there's nothing going on here. why don't you say it

is that a smoking gun? i don't know depends on whether there's actual collusion in the first place. >> it does absolutely the question here, the legal jeopardy here for the president is that we have another case of an intelligence official in l ledgett who was writing down his interactions with the president. people are documenting these conversations because of some sense that this may come back up again. there may be other memos throughout the intelligence community that could be damaging to the president we have to wait and see what they find ultimately and whether or not there's a pattern of behavior here. i'm told by people that one of the things investigator also want to do is look at what other affirmative steps the president did or did not take in terms of obstruction. did he tell people not to talk to the special counsel, destroy documents, withhold information. all of that. >> let me pose a hypothetical,

and we'll ask john malcolm about this it's been a cliche it's the cover up, not the crime. that's from watergate. there had been a crime, that was a break-in it was minor -- i don't know if it was minor it was a break in. >> but let's say there's no crime at all yet there is some type of obstruction. i don't know it's weird it's weird >> then you get to a situation you will have a judgment call by the special counsel. ultimately by -- in this case the republicans who are in control on capitol hill of who that's high crimes and misdameaner miss d misdemeanors in their view >> what if they did that but there's no initial charime you' covering up but there was obstruction. >> it's still illegal. >> give me the man, find me the

time i'll find the crime plenty of people think the crime trump committed was being elected president. so there are people -- >> i interviewed jeb bush in miami earlier this week in miami. i asked him about this his take is that this was not obstruction of justice that what the president did does not amount to a crime, but he feels it's inappropriate for the president to be having these conversations with all these officials. >> let's go forward now. john malcolm of the heritage foundation is with us. former deputy assistant attorney general. i see that thing in your ear so you heard -- >> sorry >> no, i mean i know you heard the conversation >> yes >> i was wondering whether there are salient points there that you agree with or disagree with

or can add to. >> he made a lot of salient points obstruction of justice is a separate crime in the same way that if someone were conducting an investigation into anything, and somebody was embarrassed and wanted it to go away and you lied to an agent who was conducting the case, you could be charged with making a false statement to an agent. so i agree it is a separate crime. i was struck by your use of a quote by lavernte barea, if you give me the man, i'll find you the crime. if you have a prosecutor with a broad mandate, and they keep turning over rocks, they can come up with something i worked in an independent counsel's office for a while, so i know what that is like i'm not surprised there's an investigation going on this began very shortly after jim comey was fired.

and bob mueller has been given a broad mandate to look into all things russian the bit about going to examine the financial dealings of trump associat associates that's puzzling to me. you poz ssited, maybe he was brd or maybe people were extorted. they were aware of financial impropriety, and the russians say do this with us or we'll out your financial deals >> i wish you wouldn't have outed me on where i got that quote. now i could be under investigation. i'm like -- that's a despicable lie. it's not true. who did you say stalin >> the head of his secret police

jour you're in trouble now. >> i am. >> let me ask you this when i -- when i first saw it, i was like you'll find democrats and republicans everywhere so mueller picks all these democrats to staff up on he is also very close to comey as far as friends. i said, well, he's an honorable man. i'm sure bipartisan response, when he was selected was positive but then again i started thinking, if you really -- i don't know what his opinion of donald trump is. if he has the same opinion as some of these other people at this point, is it possible he could be looking for something rather than just trying to get to the bottom of the russian thing. key be looki could he be looking for the crime to fit the man >> let's hope not. he's got a great reputation.

he has to be close because he dealt with comey every day when he was dock threat assessments and mueller was fbi director i heard a number of people whom he brought into the team have contributed heavily to democrats. i'm not looking to impugn their integrity. but if they were investigating barack obama, and they filled an investigative team with people who contributed heavily to republicans, or if they were looking into donald trump and they staffed the team with people who contributed heavily to republicans, people on the other side of the political aisle may complain about this. whatever happens at the end of this investigation, it must be fair and appear to be fair to the american public. so he needs to be careful about who he picks on his team and needs to be careful that he keeps an arm's length distance from jim comey he did a good job digs himself yesterday by announcing he was aleaker

>> does it appear to be fair to you looking at who is surrounding mueller? >> they have michael dreeden, andrew weissman. >> so you're not concerned >> we'll see how he conducts himself. i have a lot of faith in bob muell mueller. just because an investigation has begun, we're a long way from charges being leveled or sustained. >> john is with the heritage foundation >> the donations thing to me is less interesting, only because i look and say donald trump, jared kushner, cgary cohn all made donations to democrats it's all complicated >> so anyone can make a mistake is what you're saying. john, thank you. we have to go. there's more to talk about but we have three hours. just won't be with you

>> great to be with you. comingup, when we return, my reaction to what joe just said and reaction to the fed rate hike and hawkish outlook. we'll talk market strategy after the break. a look at u.s. equity futures at this hour. the dow looks to open down off about 80 points. and later, we will talk to the ceo of a company making security robots being used in malls and on qualcomm and uber's corn pratt campuses. we have one there. we'll talk about it and show you more are we going to launch that thing? >> good morning. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business,

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welcome back the bank of england's latest rate decision is due back at 7:00 a.m. eastern time in the united states weekly jobless claims may import prices and the june philly fed survey at 8:30 eastern time at 9:15, we'll get may industrial production. at 10:00, the numbers keep coming, the monthly survey by the national association of home builders back to the markets. under a bit of pressure. joining us now is kathy jones, chief fixed income strategist for charles schwab and company and lou breen drw trading group

specialist lou, after the fed announced it was raising rates yesterday. the markets wobbled a bit but closed higher. this morning things are under pressure what do you think happened >> i think the pressure this morning is as much as there is, we're not down a half percent or so >> 70 points on the dow, 14 on the s&p. >> so it's not nothing, but nothing significant yet. i think that had more to do with trump and mueller than the fed the one interesting thing with the fed is that they were a little less concerned with the recent decline on the core inflation measures than i would have thought they said they will keep an eye on it. janet yellen was very willing to look past it in her press conference the ten-year note is not that's a mixed message that we're getting. the fed showing themselves more

hawkish, but the ten-year having none of it because inflation and inflation expectations is the key to the ten-year note right now we're reversing that whole trump inflation trade that existed since the election and the fed just put fuel on that fire. >> let's talk more about that. it's stunning to see the fed raise rates and watch the ten-year note move to 2.10%. that's the lowest level since november >> it's not unusual for the yield curve to flatten when the fed raises rates they've been pretty aggressive now. that was a fairly hawkish rate hike in terms of the rhetoric surrounding it as they're raising rates when inflation is well below the target and has been below for five years, the market will interpret it as no room for inflation to move up here. so the market is not buying the fed story that unemployment will drive rages up and going to

drive inflation up >> is it reason to worry >> i think if they continue to move fairly aggressively, it would be reason to worry in addition to the rate hikes now, and the flattening of the yield curve to the flattest it's been almost the flattest it's been in the cycle, we'll have the balance sheet to deal with that's a form of tightening as well as they take some of that extra stimulus out of the market it's a lot to deal with. >> not that it's a huge surprise watching these things, hearing these things, but why is the market just now realizing that that's the case? i've been surprised by how calm things have been heading into this >> the bond market has been on this for quite some time >> bond has. >> if you look at the inflation expectations embedded in the t.i.p.s. market, the flattening of the yield curve, those have been rolling over for several months really since probably february or march i think the bond market has been

on top of this for quite some time >> lou, can the bond market and the stock market both be right what do you think? >> to a large degree they have the ten-year note -- >> even though they're signaling different things the ten-year note at 2.14% we've been falling for generations on the yield there the stock market has gone up by four times yeah they both can be right it's almost telling the same story, the low inflation and the fed hikes are not going to affect the long end of the market, which the fed has much less control over now than it used to. the stock market has gone up without strong economy and for several years. this last seven-year period during which the stocks have gone up by 4 times, the gdp has been one of the most -- the smallest gains over that period of time in the last 60 years

that has not bothered the stock market can something bother the stock market i would think so it just makes sense that it would at some point. right now the story, as far as the bonds and stocks, we're near all-time highs and low on the yield. >> we had investors like buffett and gates tell us that they think that the real issue is those interest rates as long as interest rates are low, they act like gravity on stock prices as long as they're low, you will continue to see stock prices climb. you agree with that? >> i don't see anything that changes in the bigger picture the long end interest rate and i say that because of the inflation and because of the inflation expectations if that's their story, they can stick to it. whether the politics upset the stock market at some point, we'll see. it hasn't up until now because we're very close to the all-time high >> i think it's true that low inflation has historically been good for the stock market. both markets can be right unless

the fed overdoes it. >> what would be overdoing it snfrnlt. >> moving towards an inverted yield curve. and if they move aggressively as inflation is still low if that moves down to 1, and they're still raising rates, that's a concern >> they signaled one more rate hike this year that is not necessarily cause for concern, right >> it shouldn't be let's see what the inflation numbers do also seeing softening in the economicdata elsewhere the u.s. numbers this morning are soft retail sales numbers were soft depends on how the economic data develops they could overdo it i hope they don't. >> i think as you were just saying on the favorite inflation measure, you get a couple more down ticks in that, you're at 1.3, something like that i think the fed will walk away for a while. >> lou, kathy, thank you both for being here today

>> thank you. >> coming up, bank stocks trading higher a closer look at what is working in the financial sectors. and a look at yesterday's s&p 500 winners and losers it's all yours. wow! record time. ♪ at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. ♪ get ready, because we're helping leading companies lead with digital.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site

in times square. good morning u.s. equity futures at this hour are in the red you know, not overly significant amount, but early on you see this, it could be a rough session depending on how things open at 9:30 the dow jones down 75. but it's from an all-time high a pull back of 75. the nasdaq doing much worse on a relative basis, down 66 points the nasdaq indicated down 15 the ten-year is down at 213 or 214. chinese authorities asked banks to suspend business dealings with anbang insurance group. this according to bloomberg. i don't know why the mayor is getting involved with this whatever the halting of deals would weigh on the firm. last year alone nearly 90 -- nearly 90% of the firm's

premiums came from bank distribution yesterday the chairman was detained by police anbang releasing a statement saying the chairman was no longer ability to perform his duties for personal reasons. a number of complaints by passengers on u.s. airlines rose sharply in april it's probably not a surprise because it came after a series of high profile incidents including the one of the man being dragged off the united flight that was captured and played again and again and again. the department of transition says complains spike eplaints s a year ago the complaints and incidents have not hurt stocks united has risen since april to hover near an all-time high. we'll talk airline customer service later this morning american airlines ceo doug parker will be our guest host. that is starting at 8:00 a.m. eastern. bank stocks, they have been on the rebound after the fed's rate hike and hawkish outlook.

joining us for a look at what is working in the financial sector, mark cassidy is this the time to buy into the banks? >> yes, we still believe it's an opportunity to own bank stocks if the economy accelerates in growth, that would be a positive you saw the rise in short-term interest rates, that's expected to continue as you heard yesterday from federal reserve woman yellen so fundamentals are still strong and you're seeing benefits from the rate environment >> the continued question has been whether you should be in the small banks or big banks >> that is a good question i think a mix of both would work well looking at the larger banks, the asset sensitive banks, that's one way of playing it. bank of america is an asset sensitive bank one of the largest banks in the country.

comerica is another, not as large as bank of america you can play it either way asset sensitivity is a driving factor of which banks to choose. >> you still seem to be indicating you would take a bank index. where i'm going with this, what banks do you really like are there banks that you wouldn't touch right now >> the banks that we really like are the larger banks banks that have this asset sensitivity but also have capital market exposure. there's reports of trade activity being lower than year ago but owning citi, jpmorgan is a good way to play the banking side of the business and the capital market side of the business these regional banks will benefit from the rise in rates so owning comerica or key corp >> has the upside already been baked in to the cake to the extent there will be some

regarding the repeal or at least some kind of relegislation of dodd-frank >> that's the real interesting point. you saw this week the treasury come out with recommendations. they're pretty profound. as we know, bank stocks did very well after the election. and as we saw back then, many investors were buying the banks in anticipation of news like what we heard this week from treasury so some of that is priced in but it's not entirely priced in. if treasury gets through with what they're subjecting, this is positive for the banks when you think about the last eight years, this sector has been in one of the most oppressive sectors >> final question for me is this, which is when you think about the upside in the sector, i know this is a sector that you like what kind of upside is there really if you're an investor thinking i could put my money into banks or f.a.n.g. stocks, you see where

i'm going? >> yeah. i would say the upside is still pretty impressive. when you think about it, the banks are trading 1.5 times book value. we think they can get to 2 times book value if you turn back the clock, these stocks at one point traded over three times book. we expect a big merger wave amongst our biggest banks excluding the top four amongst the biggest banks probably starting in late '18 or 2019 as they look to consolidate and build up expense savings, which will drive the profits higher >> so you want to oent small regionals that will get gobbled up or the big guy? >> no. you want to own the smaller regionals. you look at comerica, that's one again that is a leading acquisition target out there >> okay. we'll leave it there appreciate it. >> thank you when we come back, congresswoman marsha blackburn

weighs in on the president's agenda she will join us on set at 7:30 a.m. eastern time. at 8:00, american airlines ceo doug marker will be here for the hour. and kroger is set to report quarterly results this morning the ceo will join us first on cnbc stay tuned "squawk box" will be right back. >> in case you're wondering, i'm a security robot so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver.

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box. time for the executive edge. terrorist attacks, security breaches have communities everywhere on high alert joining us now with one high-tech way to possibly secure your community is bill santana, ceo of knightscope he brought an oversized version of r2-d2, which looks like if we light this candle it will go through the roof here. that's a robot that's a big one >> that's an autonomous security robot. >> i figured out how this could work that is that it measures temperature, right so you could have this robot

somewhere, and it could see a restricted area, and if a human walks into a restricted area t could alert someone. >> that plus much more this is intended to do advanced anomaly detection for a security guard to do their job more effectively. it needs to see, hear, smell, feel >> it can smell? it will smell me >> that is for threat detection capabilities, or weapons of mass destruction. >> detect a bomb or radiation? >> detect radiation, and concealed weapons capability to see a visible firearm >> hear a scream >> how would do a concealed one? >> similar to what do you at an airport. >> i was thinking this would be a good thing for an airport. >> our clients are corporate campuses, malls, hospitals, anywhere indoors or outdoors you might see a private security guard is fair game

>> doesn't move fast >> one to three miles per hour for this version we have a four-wheel one which is coming out at the end of the year >> this thing looks big. but i assume the guts of it, if we were to open this thing up, is it just a little computer >> no, it's packed with stuff. it's five foot tall, three foot wide, 400 pounds it's basically a self-driving car. has all the same technologies to roam around on its own not remote control these are running 4/24/7 >> you're charging people $7 an hourments. >> the machine has a service >> that's a different model. >> what is less than minimum wage >> i am an ex-ford motor company executive. selling hardware is probably not a good idea if you can't cover cost capital but on a machine it gets interesting for clients who spend 1$150 million a year on

security guards at $25 an hour, having a $7 an hour machine that can give them unprecedented capabilities >> so you're thinking of this as a replacement to human security guards >> most people think that's it we have maybe two clients who are like i want to get rid of that guy almost everyone is adding capabilities >> i would assume a business that is properly capitalized would say i would prefer to buy this thing, deprecate it >> you don't want to do that because we drop new software code every two weeks, new hardware every three, four months the technology is getting better and better over time the you don't have any weaponized capability. >> dear no >> and they will not ever physically sub die a persodue a does mean this one won't or -- >> eyes and ears for the security -- >> have you seen "robo cop" 1,

2, and 3 >> fiction -- it's science fiction. >> wait a second "robo cop" was science fiction >> yes >> so this is not robo cop >> no, this is very friendly >> in terms of building out this company, you have money? you are financing? you have venture capital you advertise on tv? >> we're allowed nowed with the new regulatory framework that the s.e.c. allows companies to do a public offering for a private company. so we raised $14 million in prior rounds we're raising $20 million mini ipo. about halfway through it. >> why did you choose to do it publicly you're running ads on tv soliciting investors is it cheeper money? >> one is the cost of capital. two, there is not a venture capital firm that's fluent in law enforcement, physical

security, so why pay the premium. but will society allow us to do this this is an opportunity to build a brand, seek clients and investment at the same time efficiently. >> there was a great quote in "robo cop" that he said over and over again i can't find it. >> what kind of ai in this >> one is to detect a person versus a light pole. machine learning in that regard. second, be ability to have ai concierge, so be ability to -- if you're at a mall, something as simple as where is macy's, can you take me there? third, for the navigation. >> final question, it's off topic, but you're in the robot business, you'll know it google, alphabet just sold boston dynamics, which is the robot company, we've shown it on the air a million times. sold it to mass is a sasan for o

money. why do you think google wants out of the robot business? >> i won't speak for google, but i think over ten years, the world will change more than over the last 100 years, and massosan is taking that to heart. it's not robot also take over, but it will have a massive impact on society. >> no plans to merge with, like, a human, a sicyborg, put flesh n it >> the next one was a four-wheeled -- >> that was "robo cop. the cop died, and he -- oh, it's fiction. you say it's fiction >> go to knightscope.com and buy it $3 a share. >> wow all right. thanks, bill >> thank you. when we return, we'll talk government transparency. the coo of open gov will join us

next first a quick check of what's happening in european markets right now. "squawk" will return in a moment >> you are watchg quin"sawk box" on cnbc. 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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businesses welcome back to "squawk box. silicon's start up of open gov for more we want to bring in zach, the co-founder of open gov. >> we just signed with one of the largestcompanies in the space. >> what are you going to do with them >> they're going to distribute our software to the 1,500 customers around the country >> open gov is open and more powerful government, including comprehensive opening movement there's a whole movement on for more effectiveness and more

accountability and there needs to be a technology background. >> who are your customers for the most part? >> cities, counties, state we just signed the state of virginia they had a $500,000 budget short fall and -- >> i call you up and i say i run a municipality, i want you to come in and put my budget into -- what happens explain it 12k3w4r8 2% of governments in the country are building their budgets in microsoft excel, which itself is a 20-year-old technology large cities might have 90 tabs with 99,000 rows and one link breaks and they lose two, three days of time

open governor can't build your -- say you want to know how much have you spent on police salaries over the last five years? right now a staffer would have to run around, answer that in five days and get you the answer and with open gov, it five clicks >> if i hire you, tell me what happens. meaning how many people -- part of this has to be a consulting project, i imagine, part of this is a software project. >> we have a services group but the majority of this is just straight software? >> yes, someone has to unlock the data from 30-year-old systems and used by of fochl. >> a small up to town might be

extremely apordable. might be 10,000 a year >> what if de blasio wanted o defend, you owe. >> it's one source of truthin tear you can did f he has just spent an enormous amount of money, personal money on his own, he thought he would ask the kind of questions you were asking so wores did the money go i don't know if you followed his project. >> of course i talked to his group. >> what do you make of what he's done sp. >> i think there's enormous

interest drawn to the space. executive chairman of cisco also joined the board last year there's something very important happening here it might be the largest industry and yet it's kind of been passed oaf by the cloud and open gov is leading the charge in terms of building software. >> and you're doing it all mostly at the local level. is there a federal component >> not yet we'll probably be going overseas first and then to the government after that we're signing a new government about two days and we have 1,500 in total now >> who do you compete against in. >> beside microsoft excel. i've been building my this way

but it also ibt on the imagine software companies that have a large government practice and who have longstanding relationships, this is classic insurgent software as a service being applied to the oldest industry >> we wish luck. >> thank you for he -- yeah, great episode. you said it last time and you wpt and looked and you watched it right, bookman joe bookman, the library cop prumhave been ♪ ♪ [vo] when it comes to investing,

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breaking news overnight. president trump is possibly under investigation for obstruction of justice >> the fed hikes interest rates. this morning the bank of england announces the idea signatures. a deeper dive for what the move means for the markets. >> and hovering on a self-yen-month low of supply concerns the second hour of "squawk box" begi begins right now ♪ i always feel like somebody's watching me ♪

>> live from new york city, this is "squawk box." good morning welcome back to "squawk box. i'm andrew ross sorkin along with becky quick and joe concken check out the pound after the announcement, which has risen just slightly this morning we should mention that futalognkosaurus dukeis are down, somewhat in a big morning. the s&p 3,500 looking to nsh we want to be done getting 90 minute from now, the philly med impression add also, wells fargo

was embroiled in that sales practices last year. bang officials were apparently making unauthorized hangs to home loans fechl dprrjt cnbc has learned a team within their health unit has talked about bringing clinical data to the ni phone. >> and republican congressman steve callies is in critical condition after being shot by gunman at a congressional babe

practice in al exand from seems a little more ffrmt sclees will nrmg the student who was not. was said to bes fchb after the shooting, president trump called for unity. >> we can all agree that we are blessed to be americans, that our children deserve to grow up in a nation safety and peace and that we are strongest when we are unified. and when we work together for the common good. >> we will have more reaction on

yesterday's shooting at 7:30 eastern time >> a special counsel investigating president trump for possible general tech. you this go for on juks he nrnl. >> now they're interviewing white house interns. sad. we would have all kind -- >> you do a great bill clinton >> well, i know. i've had plenty of practice. can you imagine if clinton you a through that, it might have been much better, right

>> but more entertaining for the rest of us if you're bill clinton, ebt r entertaining might not be your goal if you're drpt, he kbp the person who "the washington post" is reporting is looking at obstruction of justice who was not involved with this through the ten sin. >> now the special counsel has been on his job for aefr peeks the president not clear of what

he's talking about there let me bring you up to speed on what the "washington post" reported last night. the washington reporting that into trump personally given gay dpam can zplachltd dan coates, the nsa director, mike rodgers and dalery from frfrm -- turning over evidence of f flchlt it doesn't matter these days the pes prbt sfrrkt, and that

attorney's spokesperson put out a statement last night here's what he said: it's not necessarily clear here why the president's attorney believes that this information is coming from the fbi to "the washington pos post". there presumably would be a number of people who would be aware of this investigation, including the people who are interviewed in it and those persons' attorneys nonetheless, the attorney hitting back here at the fbi saying it's illegal for them to leak anything about this investigation. note that neither the president's attorney nor the president himself is denying pr pr the prz, undermining hillary clinton for 30 years it was the same people many also

a. sfp you know what "they" is, is it the president is saying somebody made up these charges, and somebody is making up the obstruction of justice charges but you're talking about robert mueller here, spun now you're getting a little bit too will the rahal who until i guess mine was that my of the first boik wing independent nom o no and he went out of his way relating to the firing of comey to point out that comey had told

him self times that he wasn't under investigation at that time "the washington post" is reporting he is under investigation now because of the comey firing we'll see where it goes. it's a pair sfrerchlt. >> all right, see you later. >> u >> joining us is speaks spns sfwrfrms first of all, it may be new news coming from the prapt post nab from the home that we

heard after comey was fired, after he told himming let nrmt that i thought clearly in his mind bob mueller was going o o tregt nn for those of us frn the nfrmt nuchlt and now we see him taking some pretty aggressive steps to interview witnesses >> isn't there an argument to be made if these moving aggressively or moving fast, that the goal was to figure out if there was a problem or even not a problem, isn't that a good thing? >> i'm sure that's his goal.

whether you're a supposer or presidentin trr want them to get to clock truth wall streetbe a frvgs. investigation is hooking at twoichl sfwlchbl that's a complicated investigation. it might take a while. there a limited number of people who would know what the president said to hem, what the president asked this many to do. it's a case where you can get all of them in an fbi or grand jury a a an and fwr be frorng prch

prchlt. >> in some swagss, though, based on the pchs pb and that be opinion flnlt. >> nfrmt nfrmt railroad the exact word the president used, i hope, will be used to show attorney general what i think they're going to want to do is talk to everyone who spoke to the president and also the president's aide. i would expect them to say everyone close to you about the

russian sprek sfrvg. >> that with a a frrchl frochlt. >> how long does it take to litigate what are we talking about? is it going to take mmm months or are you talking year? >> nixon claimed it in opinion. >> f ne said in the criminal

case the trum pop presume buys it >> just to fight a fun point on opinion thin nrchlt -- donald trump thought this was an apou nchkt nouchblt and though there veal no underlying piece to this, if he were to say to one of his aide, we got to grork frorks woor frrmt. >> it's going to be easier to show or easier to could be have

been sfrsh. >> it wouldand mike flaen has a lot of exposure, flshlt and that hooves still trying to trk frvgts if it turns out there was no crime and all it was that was try it frnk flrchl. -- >> abandoning him and voting are two different things >> right >> for every one of them, as we

get closer toneck year's election, if this is happening, the president's at 30%, 28%, a much closer call >> but they're also, the course of public nchbl sbrn when we come back, we'll talk with congresswoman -- ♪ to err is human. to anticipate is lexus. experience the lexus rx with advanced safety standard. experience amazing.

there are some signs out there that the economy is slowing. >> there are a lot o

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welcome back fed hiking rates for the second time this year steve liesman joins us with more >> good morning. the fed took several steps yesterday down the road to getting its policy back in total. the fed, one, hiked point to a frerjts and flounce sfrurj sfrrks an unemployment rate that's climbed to levels we've not seen since 2001.

even in motteration, we have a lengthen market that tns to strengthen >> back to the approximately sheet. some speculate pfrmt frj personal snrnlt so that's two trillion frrktsd perhaps or normal. i don't know if it's ab or be abnorm abnormal >> frank stein >> thank you want this naurngt now, i'm lay fochlt i mean, i know a oum nifrmt.

>> you know that part. >> yes, but i've never seen it it >> nfrmt g yo a investment, senior portfolio and sflifrmt and one of theets days one of these new his will represent the point at which we her ysh pr fwrrchl i think we've already

seen the races ups sfrrks or tend problems for the frornlt rotation in the nrmt it's dpn been relatively good and likely to stay good we just did a company, looking at 5% increase in capital spending going up nichblers des desen grerchlt what do you

think? >> well, financial conditions have be sprrch even if you strip utility that. >> pirchlt we have been avoiding equities the entire time i think we do take pause for caulk notice ebb pb sflshl when you see something parkbeal pfrm snirchlt and your key point of the agenda and deal with other things, it's going to certainly set it back.

i think any time that you're thinking about 2018, air not going to get to the mid term nermt know when it just happened, it was either a comey firing or -- it was something that raised the level of concern >> it made the mccomey firing. >> it was just three weeks ago when it happened so when the market does lock like something serious is going to happen to either trump or himself policies, the market sits up and takes notice >> you have to remember the market also tend it look through politics >> if there's a constitutional crisis >> no question, all you have to do is look if water gad and

testifi testifies. >> i think when you're thinking about look foo nsh there flo sfwhrn sfwhrnls. >> sfn. >> i don't get to vote kind of a god send in neff snochlt it wills

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good morning welcome back to "squawk box. we're live at nasdaq england has kept key interest rates unchanged but came to the closest to raising interest rates since 2007 airline passenger complaints up 7% if april. that's compared to a year ago earlier. it was fueled in large part by the high-profile incident on april 9th in which a passenger was dragged off and overnighted effort in the. >> will pla sflam -- a lot to

talk about in terms of tax policy and health care and all the other things but this game and what took place and just your own feeling of security and what's going on in this country. >> it is a tragic, tragic occurrence and we're all very concerned about what has transpired and i think most people realize now that members of congress do not have security the leadership has a skiert deta detail. >> this has become political this was a bz supporter. there have been lots of questions about whether one side

incite the other or the other side incites the other >> my hope would be that we do not see this happen given. a and i don't think it time for pl plan and a return to civility and discourse. i hour hayes been so concerned a rot prm between republican and the democrats on left and the right. we need keep toes that is correct be a nana semi-personal question do you now would he ever about your security? >> you a nofrm furnl nurnl you a

look at my twitter feed. it is just so disconcerting the way people go to frn nrnl it's disconcerting not only for our staffs and families, but also for individuals who want to visit with us at public events because we do not have security, we drive ourselves, we move about do you think we're going to have to kmeng dmnk love in rote re kplub kprufblt.

>> it would be very difficult doing our job. so many people contacted me and said i had no idea y'all did not have security. members of congress do not have security >> while we have you here, what took place yesterday is obviously terrible situation and we do hope it was a one-off situation. i do want to talk to you about what's taking place in your world, which is to say where do you think we are on tax reform and on health care >> the senate is determined to do something before they leave for the july 4th break at that point, the house can can take the bill. we can go to conference. we'd like to have health care on the president's death before we league for the august recess tax reform is moving forward may not get everything that chairman brady and the speaker

want, but reducing marge al rate, froosh sfrchl frfrmt with your own constituent sants snarm but that's not a bad thing, to n

(. i think something probably scaled back is going to get agreement. it wouldn't be a bad thing to break it into two parts -- >> that's what larry kudlow has talked about >> that's right. we've proven on health care, you get to those other baskets because with the health care bill, we are focused on med malle, on increasing the utilization on how people can do those deductibles, roos straight lines and that is ing sing to f. how does that work out in conference when you guys come back together nuchlt -- well, if

it extend that out and as a result it costs more, does that -- >> the medicare would probably cause a little bit of angst in the house. it one of those issues that we as whips would have to see where the -- >> you're tlk sfln flrnlt so many nm in nrnlt.

>> let me tell you that you could not get -- >> that is a nice place. >> jimmy:s that naesh it. >> were sfwurnl it is a wonderful mid sfchlt but in and of themselves, they're nice. >> what? >> frc frchl. >> thank you thank you.

thank you. sflerngt nuchlt anyway this is where i trade anding manage my portfolio. up, dan jergen joins us after the break. "squawk box" will be right back. i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

>> i think we're in a rang now with these prices where you just hear now that the capital may

not be so available, companies don't have the same cash flow. maybe not for this year but we'll see the impact next year >> and what's that range that you're talking about >> i think as we get towards $40 a barrel, the pressure becomes great. meanwhile with the interests in the activities, put. >> ehuh a plaque -- they can do things with the refinery down on the gulf coast to make it look like less than look nooichlt

which short cycles and moves very fast and clearly watching the inventories and watching production >> would we need a global slowdown to get to 35 and then below 35 all can you talk about is supply >> if you had a -- to get to 35 -- >> there is this other thing called demand. if you had a big slowdown -- >> could just supply get us below 35 >> i think has you get in the range we are, we're going to start to see. >> just the u.s. producers, right? >> right >> so when the speg oot spart.

>> that's right. if you had a real global slowdown, that would be a different game for the whole economy. >> we know it important for our rn these governments, if and maybe they can healed it off for a while. >> that's the pressure that they're feeling. that why they kaep together. and saint noormt, his far 234506r78 a free fall in prices and i think that's a pressure on all of them. and now you have one of the countries that was key in helping to make the deal between

saudi arabia is not in a it, r concern are frrm and really no imprakt frrchlt frmtd frmtd is abo -- our secretary of state rex tillerson and went back and criticized him the same way. the other thing is venezuela it's so terrible and continuing to get worse >> we want to thank you for your time today >> when we return, we'll talk

about stocks on the move ahead of the opening bell. future have been under pressure all morning. s&p futures down by 14, the nasdaq down by 56. "squawk box" will be right back.

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jabil reported estimates up. bob evans farm earned well above the estimate the company saying it's seeing benefits from its move to sell off its restaurant chain and become a pure food distribution company. and goodyear tires expected a flat performance compared to a year ago >> coming up, president trump reportedly under investigation for pos di

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markets now, stocks under pressure, oil prices hovering near a low >> plus airline complaints doug parker joins us on set as the final hour of "squawk box" takes off right now. ♪ >> announcer: 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 cnbc live from the nasdaq market site here in new york 22 second @real donald trump,

you are witnessing good to see you. earlier we said since the drag off of the united passenger, complaints are up 70%. so did complaints -- did incidents go up 70% or it's the madness of crowd, right? you must be mad at united. >> he's happy the attention is on somebody else >> somebody besides me is going to intro you i nt want o get lo it percentage

basis, it's not that ugly because a lot of times you see hip sfln, a lot of times you got 80 crude, just had a pretty interesting discussion on that it's nice -- it's almost like there's a supply floor of like 40 or so because people stop, it doesn't make sense >> shale >> used to be 70 >> and shale with the new technology, it's really easy to turn it back on every time >> you figure you don't see $28 oil, although i like it. it means bad things.

i know a bad guy who might like it >>er's your kprrks that -- i'm going to go one time i'm going to say is one way. we haven't got a style correction on qatar or -- >> or "cutter" i've heard them say. >> do you fly to qatar >> we do not >> what is the name of that? >> i've always said cutter but -- >> always?

and i've been told. >> supermarket chain kroger's ceo mike schlottman will join us >> president trump responding to reports that a special counsel is investigating him the president tweeting "they made up a phony collusion and now they made up joe tweet frmt

this is a hunt and it's led by some very bad and conflicted people presumably he means robert mueller there. presumably he's talking about robert mueller, the special counsel, who is leading this investigation. we'll see why it is that the president thinks that -- apparently thinks he's bad and conflicted later on this morning. here's what "the washington post" reported last night that has aroused the president's ire this morning "the washington post" reporting an obstruction of justice investigation trump personally began days after he fired the --

we're told through "the washington post" that investigators are looking into any evidence among financial crimes presumably that is related to the russian investigation because that is mandates personal lawyer spokesman why the president's attorney believes that the "washington post" story was leaked out put out by the fbi, there could have been a number of people who could have put that information out. also not clear if there snrn and

frrchl i don't can immediately think he's talking about muller. i saw it but it could be that other people that are conflicted and wrong have done enough of the -- maybe he's talking about comey and muller as the independent counsel has to look at it now because that's his job. you can't just pigeon hole it sand say now i know trump is talking about mueller. >> if you put the tweet back up -- the other one. >> i read it >> you wonder who he's talking about when he talks about being bad and conflicted we know who is leading the investigation and that's mueller. is the president saying mueller is bad and -- >> no, but there might be some

people in the intelligence communities that are mad for whatever reason. it's a whole plethora of possible bad -- >> you're saying they o could be leading it because of their actions -- >> i'm saying there could be some bad people around who want hp ot. >> i think we going ask that >>ets led by -- if someone's leading it >> i don't know. that's now how i read it i read that it was a they. >> you had the same comments earlier and there was no led so -- >> well, look, that's the trouble with the 140 characters of twitter the president likes this medium because he gets his message out

unfiltered to his followers. in though the led there is people meechld if he's talking about mueller, it would have been a person. so you used lead covfefe. let's talk about that for 20 minutes. >> kellyanne conway has been tweeted out stories about how grchblt zbhrchl the i bring it up is because we've seen reports that the president has been talking behind the scenes about firing mueller

>> i thought they pukd back and said that was the guy guy from news maximum the guy from number flrchl. >> is this an indication today, is the president voicing in his tweet just moments ago frustration with robert mueller and what action wouldy take as a result of that firing robert mueller would be a dramatic step. it's not clear he could actually, cute on it based on the process of having to get the d.o.j. to do it. that would have been a grm brrm

zbhnl zbhrnl and the u.s. department of transportation reports passenger complaints surged 70% in april versus last year joining us is doug parker, chairman and ceo of american airlines >> thanks for having me today. >> probably not a surprise when things searched in vitiello and it really got people's attention, particularly united

airlines where do you see the issues? >> some years of earnings and huge losses and restructuring all the time that's behind us we've been entirely transformed. you can see it in the earnings of american and of the earnings of the skri. -- >> through it's still kpeand -- >> frn is the clear answer there are fewer competitors and not as many dumb ones >> not, no too many sfwa you the

ability to take on passiers snrnl and that allows us to be a more mature, profitable bin frrchl i realize not all of it is the airlines and when you're going through tsa, there's delays you're going to be sitting on the tar mac for a while and the antiquated control issues we' issues are we're prrpsfwlorm

nfrmt think about those poor employees, all they did was show up for work. you shouldn't put people in that situation. but look, we all have policies and procedures and rules that unfortunately can put our people in those types of situations we are working really hard to make sure we correct all of this. >> well, first of all, we put in place that says we won't remove a customer that's on an air paul ryan for another customer.

and the other this evening is give the latitude of your team and not be forced to follow overly restricted rules and guidelines that our frunks and in this environment we got a lot of pushback on that. i can argue why that was the right decision other airlines are fine on the 28 inch es nfrm but in this world, it didn't make sense. is he we changed that and we nurm nurmts. >> the reason why customers are

frustrated but often don't feel they've charge there nrn just you all, a could be be snrnl willing will to narn so we all complain about the space nobody is actually willing to put up a dollar store how do you think about that balance if there is a balance to be nshl nrnl really our employees feedback they're going to have to deal with those customers and fints

pb flurnl nufrmt and commerce wouldn't operate with airlines like ours. we just need to do a better job of giving them the tools they need to go down what they do so well and not put themselves in circumstances. they know it doesn't seem if iy eigh eighth. >> plus, a delusion of data. we have three economic reports

nrnl. >> fed sill. ♪ you don't care, no (. >> i remember meeting muhammad al [vo] when it comes to investing,

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. welcome back to "squawk box. share of kroger are under pressure joining us now is mike schlotman, cfo he's a member of the cfo council. that's what you tell people at parties and stuff? >> i lead with that, yes, sir. >> i don't blame you for doing that we've talked a lot i always bring it back to deflation. it makes it tough in the supermarket business because your margins are so narrow >> certainly inflation and deflation is playing a role in what's going on in our industry today. in the quarter we had about 20 points of basis point o.

p you you frnl it's one of the reasons we lowered guidance. >> the on person who has any idea what you're talking about now is doug parker >> i thought you said lipo i thought maybe that's an dwrchb

so a in. >> it's n think montana. in n nrchlt it just takes a while for all of those,000s ands to tim certainly a will the bit chock nvlgts is that what it is? you it it n everybody's getting hurt and is teams like it from

digital stuff, walmart snrnlt we have not a big online die signatures stwrks and it continues to be a very, very strong offering that our customers really like and anticipates. i think everybody is going to have top in. >> we're adding on tomorrow blif about f. >> could you run coast guard are

frrnlt. >> but, dug, i'm -- he's not smarmt ejts frchlt i did work with your dad in the mid 80s >> so you listened to everything what would you do right now? it tough to tell them what to do about their business it all about c.b. i think n nchn an bring customers to the stores like we do to the airport. my dad would always tell me when

we walked into a store, i think you can tell if people are happy. it's about making sure you have your team engaged and taking care of your customers >> and we live with that today, doug i heard you save you serve 2 million customers a year, we serve 8.5 million a day. and when you have engaged associates and you have the right product and they're in stocking the shelves and you have great price, we have 8.5 millionchances to have those people have a better day and our associates when they get to do that, it's a better day for you as well. >> so we will never see a kroger

in millburn, new jersey -- >> i'll never say never. because i'm there at a place call king's so i'm there three times. it's a big part -- it's important to have a great experience when you go into one of these places. >> we did do a deal where murray's cheese is part of kroggers >> i have to go to grand central village? >> we also. >> anyway, thank you appreciate your time this morning. >> thank you >> thanks, doug. >> when we come book, a parade of economic data about to hit the tape we will bring you the numbers and much more. stick around we'll be right back. ♪ don't fly mr. blue bird, i'm

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we are just seconds away from the weekly jobless claim, may import prices and the markets have been weaker this morning. the dow finished at a new high

yesterday but this morning is expected to open down 85 points below fair value the nasdaq off by 62 maybe the more interesting chart to be watching thorn is the ten-year note. check out the yield. yesterday it closed in at abo aboabout aboabout about. -- about 2.1% >> let's go to rick. >> empire is always a roller coaster in terms of where its numbers come out it's kind of the durable goods of this series if we look at import prices, that is down 0.3, a little more than expected. and you lost 0.3 on last look up to half a percent only up 0.2.

year over year up 2.1. that's like following 3.6 so that's a pretty big drop on claims 237,000. that's down 18 -- excuse me, down 8,000 once again, that's getting into the early 70s category it's a good thing to have the claims down and 3.3 unemployment rate problem is we need some growth if you look at philadelphia, this is also a june read philly also can be quite volatile this is darn close to expectations and follows an unrevised 38.8 we still have utilization. i do see the 22.15, 2.16

yesterday's drop was data related. from the fed perspective, it represented about a three basis points rise in rates let's keep that in perspective the dollar index, it is up by half a cent. hold on! that is a good thing it starts to put the dollar index in a mode where maybe we can start building a foundation to build a rally i like the relationship with what the fed gave us a-plus for designing and give as you lot more detail on the reduction of the balance sheet hopefully the bank of england and others will take note. if we don't, we can't collude but policy with regard to all this accommodation really has to

change it's difficult for one developed economy to do the right thing if the other developed economies don't. joe, back to you >> a lot there, steve. i thought it was all about lipo. >> i heard a lot of it and i agree with a lot of it >> i think i can find something. >> it was good to get a lot of the balance sheet. i think the fed can talk about selling what will ultimately be oaf the course of the year $300 billion of assets and what did you say? three bips on the ten-year they said they did a quarter, they're going to do another quarter. i was pretty interested in all that so what am i missing here?

>> just on the market interpretation i think it's really tempting fate -- >> i know what it is we're six years too late >> no, no, no, no, no. we all know that we don't need to rehash that that's going to be in booksfor the next 50 years. trust me, the reputation of the feds in power at the time isn't going to be good ben bernanke has a book, "the courage to act." we need somebody to design a federal where it's the courage not to act to say the market was blahzay.

>> my guess is the market knows -- >> see, this is the thing i fight about with ira now and the problem is that high ra you can't acknowledge that most interest rates have been manipulated to the point where we don't have a gps and then plug them into a model federal reserve where you draw all these fantastic conclusions. you can't have it both ways. that's the big problem i see everything look at the news yesterday we said look what the ten-year is doing get me the balance sheet for a month, i'll get you 3% >> gdp next year 3.2, unemployment 4.3, fed funds

pretty much unchanged. we're going to tolerate a lower rate and not higher fed funds required the data yesterday says the fed has the same problem and strong employment which we got in the claims number today. i don't know if we have a minute to talk to our guest host about airline fairs? >> he'll join us on set.

maybe in reference to united just kidding ♪

welcome back to "squawk box. we want to get back to our guest host, doug parker. one airline in particular has remained relatively silent recently so i don't know where they stand but historically they've been against it, which is delta, which has made an argument that by privatizing it that the costs will go up rather than down. they said places have gone up 30%. do you think that will happen here >> we we did -- what we wear about is providing official air travel it takes like 40 minutes longer today to fly from dallas to philadelphia than it did 15

years ago. >> because you're oun the runways. >> the airlines are faster this kind of work, though, you need the ability to invest long term, something that's not going to pay for a while. >> you have studied the same things that delta studied. why won't it happen here you want lower prices, i imagine. i don't know if you want lower prices but i'm sure you want the world to be more efficient >> this is le about the we'll

burn a lot less fuel >> we were talking about price earlier and united and all this stuff. he says about 35% of customers choosing today when they buy a ticket they choose on price and price alone. another 35% whoos most loin price. he said the great irony is most ceos would love to compete on product and experience, it's more fun the problem is customer aren't paying aaif our fares are $1 mor than other customers -- >> are you kidding me? >> because we fly around the

world and into in the and we need to make sure we're providing that product as well >> if every dollar literally counts on the price tag, how will the sector not get in trouble? >> because we. >> what does it say about all the things that airline custome

customersn we have a product in place and are putting in place a product that attracts high-end customers. that market can carry that kind of a product we'll do things like a basic economy product which will allow us for customers that really care only about price. they'll have less of the product amenities than others have >> do you think who buy on price really don't care about the service? >> course they care about the service. they don't necessarily pay for it >> and they may not travel as frequently, so they don't know the -- >> we'll be right back with more "squawk box. stay with us my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.

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can we at least analyze customer can we push the offer online? legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

welcome back, everybody. we've been talking airlines this morning. but airlines aren't the only ones facing trouble. think about what's happening with uber these days and our guest, the author of "leaders eat last. you and doug know each other you've gotten to know each other

through leadership meetings. >> american airlines had a leadership conference. i had an opportunity to speak at their conference >> why is it that some teams get ahead and some team doesn't? >> message is it all irn if ladders get the irn wrong, cynicism, pairoy it simple but it not easy for sure leap p leadership is hard work it a and if that your good at their jobs, promote them but we don't teach them how to make that transition. we simply put them into a management position and expect they know how to manage.

quite frankly, we don't get that >> so what would you be telling a poe sense lead aresflmtd sflomtd. and so much what resonates is because it all short term. when you're in it for the long

game, once you quickly realize is the way we have been treating our team is not long-term sustainable and it not going to pid a harder struggle for us than maybe some others so that's why having simon talking to the team and the message he deliver, maybe it was hard for some to hear because he's up-front about what people are doing -- when people are doing things the wrong way it's what we wanted the team to hear. >> simon, we were talking off camera i know in airlines that have merged i can try to figure out who's on the old team, who's on the new team, who got hosed. you can tell. >> yeah. when we have is bad service, will's -- there's always exceptions but usually when get it on a usual basis it's bad leadership. they're feeling some pressure from above them and above them

it's almost always a leadership issue. >> doug, you mentioned the same thing that your dad said about the stores he worked at in kroger he could tell if it was well managed by how nice the employees were. >> it's simple, but not easy it takes a lot of hard work and leadership in our business and i think in the grocery business it's easy to focus on through put and making sure you're getting people through the store, through the airline. therefore, build rules that are designed to do that. when you that you lose the human factor and that matters more to our customers. they want through put and want efficiency we need to give our team the tools and let them know how to do what they know how to do well. >> kind of pulling back the bean counters you can't say you can only offer $400 if -- >> we need to give people more latitude we just need to give them the tool and the latitude to do it and simon is helping us figure that out. >> thank you for joining us. >> when we come back we'll talk

to j cmeimrar. jim cramer from the new york stock exchange we'll get his take on today's top stories.

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let's get down to the new york stock exchange. jim cramer joins us now. in the old days, 08 points or 75

would have been a lot. we understand on the percentage basis it's not a lot, jim, but the nasdaq again looks like it's leading the way. if we ever do see a pull back you expect it will be led by the high flyers? >> yeah, i think it's a valuation pull back and a rotation none of the companies has reported a bad number there's no big preannouncement. if anything, from jabil, we had good news that was a read through. they make a lot of apple stuff right now people are in the mode i see downgrades of tech stocks from people who want to make names and it's going to work because there's a rotation into the banks an into retail of all things there's rotation into industrial and health care. some big funds are selling the very big valuation stocks in the nasdaq and moving into the lesser valuation stocks that are triggering the s&p that's what's going on it's being masked by the fed it will continue from friday this is a continuation of friday's action. take out some of the lows, look

at the new picture. >> one of these days these new highs are -- we'll remember that new high as the high i just never know which day it will be. >> a lot of money being made. >> right thanks, jim. see you at the top of the hour we'll be back with more from american airlines ceo doug parker

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let's get back to our guest host, american air ceo doug parker explain to me why -- well, somebody said you have to fix costs you know what that is. if you have one guy flying on it it would be bad. it would be expensive. if you had a thousand it would be cheap it's just that simple. every seat needs to be taken somehow you have to balance that out with service and convenience. it's tough i wouldn't want to be you. have you got the magic sauce for how to do that >> we do need a product that distinguishes between different customers' needs and we're getting there. >> you have to fill the plane. >> absolutely. we're not having trouble doing that the challenge of course is, again, as you're noting, i mean the airlines right now, by the way, they have by far the highest margins, the ultra low

cost carriers, 28 inch pitch we need to be able to have a product we can sell to those customers. and we do now with something we call basic economy but most importantly for us we're trying to cater to the high end traveller >> thank you always great to see you. come on back, we'll do it again. join us tomorrow "squawk on the street" starts right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange david faber is off nasdaq futures are down about 1% on the back of a google downgrade. market continues to digest the hawkish some say tone from yellen yesterday europe is pretty red benchmark yield around 2.16. empire and philly fed. the fed hiking the rates