♪ good monday morning, welcome to "squawk on the street." premarket steady positive. fallout from the amazon whole food deals, europe is up macron wins the majority in a parliament oil is steady. our road map begins with tech

ceo at the white house, many set to meet with the president and his team >> and also chris ladell will join us live from the white house to talk about what the administration hopes to accomplish with today's meeting. >> and the massive deal rocking many industries, we'll look at the fallout of amazon's purchase of whole food. tim cook, jeff bezos among those headed to the white house today and will meet to brain storm on a wide range of issues still some discussion, jim, on where their interests overlap and how influential they've been, if at all so far >> i think the latter is really the issue. we start thinking that maybe a lot of these meetings have not led to what we thought might happen, which is the apprenticeship program seems to

be a little stillborn, the idea that there is going to be some immigration reform a lot of these companies have billions overseas, nothing happened it might be a nice conversation but i think we're beginning to believe these are all window dressings. >> though they still show up it was said if you're not at the dinner, you're on the menu or not at the table you're on the m menu the questionis photo-op or -- the administration is demanding a good deal of time. they're asking for many hours today apparently to go off into these working groups and really work on various ways to make government more efficient. >> i look at some of these people, like safra catz, brian

krzanich, jeff bezos, honestly, i don't know about you but that whole thing should be about bezos and whole food it's all nen can talk about. every within of those guys is going to say what's going to happen to my whole foods >> we're going to talk about all the pieces over the weekend, some of the analyst sides we're getting today on costco and kroger and others. we do want to focus on apple the price has been checkered >> dreadful. >> i think with each administration in every country in the world, there are things you disagree and things you agree, and you look to find common ground and try to influence the things you don't if you don't show up, i think

that's the worst scenario because then you're quiet and this doesn't do your cause any good >> he did say he and the president are dramatically different. >> yes >> is the stock reflecting china? >> the stock went up a lot after buffett got involved i think there was too much talk about a super cycle. a lot of people are talking about how there's a conflict with qualcomm that kind of went up about the fastest chip and came back down tech has been acting -- a lot of tech has been acting kind of problematic here, all the companies that certainly in to apple, even jaybill said things are strong

and cook created all sorts of apps but then again, i don't know what the president really wants from these people. more jobs here it becomes a little trump fatigue. trump fatigue. >> yes, we've done this many mornings it has been a while as soon as we' -- since we've done the tech meetings >> merkel was there. i don't know if they have a german "apprentice." >> we're told facebook was invited but said they couldn't attend because of scheduling

>> and cisco also. >> and mark benioff. >> do you think safra catz is going to say you have to get the money back in? he's not stopping people from getting the money in he's pro that. wilbur ross is saying everything's great it's great, great, great you know, it's great it's great, david. >> okay. if you say so. you were away for a week there's a lot of agreeness that went on during the week i was gone so much had to come on the phone a couple of times with the change at the top of ge and the deal -- not giant in the sense of size. diapers.com was probably a larger percent and of market cap than whole foods is in terms of

right now but giant in terms of impact >> i look at this group and i say these guys, the common ground they have is that they want to get in and get out >> there's still a lot of buzz today surrounding the amazon deal now published reports say that amazon will likely take steps to cut prices at whole foods and reduce head counts grocery-related stocks did tumble deutsche cuts costco to a hold, are there buckets of devalue that are unamazonable? >> this is like when walmart destroyed all the mom and pop stores amazon has very low gross margins and make a ton of money. food had been the one area --

walmart -- i don't know how this happened but walmart became the biggest grocer in the country. this is a shot at the bow of walmart. i don't know how walmart can come back other than bid much higher for whole foods david, i defer to you but you really think that walmart is going to let this go and not try to get whole foods >> i don't know. i think it would be uncharacteristic of walmart to -- it's very rare that you see overbids of deals. there's a $400 million break fee, that's it that's typical when you think about it as a% of the 14.7 million purchase prize i don't know, jim. i haven't heard anything that would indicate that is the case. the stock of whole foods is trading above the $42 all-cash deal it's always you have to say highly unlikely to see an overbid. you really feel as though they will feel -- unless there is a true need on the company's part that feels as though they are

going to be eclipsed in a significant way. >> walmart needs this bad. >> really? >> you don't think they can just compete? >> no, i don't >> we're talking 460 stores here >> they had a road map for 1,200 stores before mackey and walter kind of went their way and i think that one of the things that i'm looking at it just that mackey clearly was thrown off his game by what janus was done, even though he had changed the chairman, he had brought in ron on the board, brought in a terrific cfo whatever mackey did was never enough i think mackey walked away, happy to get a price but the price is so far what it was two years ago, i cannot believe they could get it that cheap. the stock was at 55. it makes the most money per square foot of any retailer in

america. you tell me they're going to -- >> on a pe -- on a multiple basis it's not that cheap. the company has not done as well as it was doing two years ago. >> because it doesn't have good artificial intelligence, doesn't have an affinity program, really never organized anything in terms of food at home. i think the deal is an earthquake for the -- i do not want to be kroger. i do not want to own kroger. if kroger lifts, i think you have to sell kroger. this is really trouble for them. costco, margins come down. walmart, big fight none of these guys brings a knife to gun fight walmart brings a bazooka and amazon brings nuclear war. >> i'm going to at the very least start making some calls here and see if we get anywhere. >> you just got back >> involved in this or just to make calls to say hi, i've been gone for a week. >> part of the question is

whether walmart would go for costco >> what a stretch that would be. talk about a culture clash, that would never work we're cutting all your wages in half >> apple goes for -- i mean, come on, guys, can we at one point facebook goes for, i don't know, germany. >> it's not even -- >> i do think there as going to be fabulous consolidation of the food group they need to get strength to go against amazon that's where you should mack your cal - make your calls. >> i have to watch my back because you'll be calling whoever it is. >> and lord blankfein. >> you know how amazon is relentless right here >> when we come back, the president and the tech ceo summit, woe're going to talk wit

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keeping the world of business connected and protected. that's the power of and. some biggest names in tech heading to the white house for meetings among the attend, jeff bezos, tim cook, safra catz chris liddell, good to see you

again. >> thank you for having me >> ten-plus hours, what are you guys going to talk about the whole time >> there's three objectives. first of all, modernizing the government experience, so making the experience of the people who rely on the government every day as good as the private sector. number two, we think there's an opportunity of to a trillion dollars and trying to make it secure, the cyber sector >> there was a very big deal this weekend, this whole foods/amazon discuss the notion of work displacement if amazon comes in, there are 3 million people who are checkers. how do we make it so that the checkers have something to do if that are really going to go away because of technology? >> this today is really focused on internal government services. we have enough to discuss. we have ten streams of activity

over four hours so we have plenty to discuss already. one of them is on the workforce of the government. we'll be talking about how to hire and retrain for the future. it doesn't exactly cover your point but it will cover aspects of it. >> it's great to get their thoughts on technology but then they go away and run their companies. whe this administration has still failed to fill so many key jobs. >> we have internal people on all the sessions at the end of the day, they're the ones responsible for delivering on what we're tacking abo -- talking about. we've already been working for 90 days. all we are looking for from the ceos and their plus ones is their ideas. but we will be asking the companies to help us afterwards to work on an ongoing basis.

it's our job to make this happen but we think by bringing the best people together we have $3.5 trillion in market value arriving today, having those people and the power of their ideas and the power of hopefully some of their people over the next few months and years, we think we can really accelerate what we're doing. >> how much of the government business is on the cloud and how much should be on the cloud? >> virtually none. 3%, 4% is on the cloud it's tiny. that's one of the real opportunities. one of the sessions we have is specifically on cloud, computing and how we actually move to what would look more like a modern enterprise and get that into double digits. when you talk about cyber security, getting into the cloud is really going to help there but it's tiny at the moment. >> chris, there's been some reporting that some of the ceos have their own issues they'd

like to talk about, immigration, even the paris accords to the degree that's still in the air how receptive is the white house to receiving comment about things that maybe are not on the agenda >> again, we have a really full agenda so we have ten streams of work over four hours we do have one on h1 b visas. but what we've been really impressed with is how people have been willing to come, put aside whatever differences they have on other issues and focus on the things that are important for the citizens of this country. >> how will you measure success here and over what time period >> so success really is generating ideas today and get thing people engaged over the time frame, this is going to be hard work over years. we're ten to 20 years out of date in the government

it's literally work over days, months and years to improve things today really is about generating ideas. >> how many people did you ask that turned you down >> we got over 90% of the people that we invited, and that's probably higher than we get from a lot of the sessions. virtually every imagine tech company is represented by their ceo or chairman here so we actually had a huge turnout. really pleasing. >> can you talk a bit about what happens after these meetings are over and what kind of follow-up happens at lower, more granule levels of management. >> we already have people working on all the ten streems of activity and it's more like what we do in the private sector, breaking them down into streams of work, having teams,

having teams working across the government,s that temperature chee-hwa so all this is going to do today is help enlist some of the private sector people and get some of their ideas and get some of their people to help us out and more detailed working sessions >> i just want to go back. i'm kind of blown away that own 3% to 4% is on the cloud i mean, it's $4 versus prom sis versus $1 for cloud. you could save as you fortune if you adopt it quickly can you move can you move kekly >>. >> we have something look 6,000 data centers, jim, across the government we spend $86 billion a year on i.t., we have 2 million employees, so at roughly $45,000

a person those are orders of magnitude higher than anything you'll see in the private sector. so there's a mass of opportunity here >> so can we say the days of government being a perennial tech lagger are over. >> peer and i i have to say one of the things we're going to try and do is encourage the whole government/tech sector this is about opening up data and apis to help build a government technology sector we don't need that many more social networking firms out there but we sure as hell need a lot more, better government. if we can encourage. >> chris, we appreciate you helping viewers understand what's happening today we look forward to seeing some

arrivals and maybe some sound later this afternoon thanks so much >> chris li ddell, director of strategic nir tifs more "squawk on the street" straight ahead world ugly and messy.

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. we got a mad dash as we're counting down to the opening bell consolidation in the natural gas production industry you want to talk about >> it's a beautiful day. i'm not going to let this story get away the eqt buys rice. why is this important? we've all been waiting for consolidation in the energy patch, interesting it happens with natural gas eqt is getting 100,000 of marcellus, utica and nat gas aren't these guys going to get together but it was oil that we thought would merge. nat gas is pretty good anyway, i thought that rice would never surrender so to speak, but maybe this is more of a beginning than a lot of the

commentary saying this is one off. i do not think this is one off >> the journal has a story related to job losses but talking about power plants that had been running on coal being decommissioned, which natural gas becomes -- which you've talked about for years >> there's pipeline from utica, going down to the gulf, these are reverse pipelines that used to go up from the gulf and going east there's tons of pipelines being built. this is a ready market so it's a very smart deal. can you on imagine how much money rice is going to make for eqt given their low cost this is all about power plants, it's all about the east and it's all about the south. it's remarkable how much natural gas, it's the second biggest natural gas -- >> let's go to the opening bell.

on the big board today, it catholic charities and the archbishop of new york sci-fi, the science fiction network, part of our nbc universal family, having just gone through a rebriending >> and this satellite group of nbc. >> we'll watch for mover at the open apple might be a leader at the open >> who is the seller, let's get to the bottom of it. a lot of companies have been moving out of tech and moving into drugs and tech rindustries maybe the rotation has gone so far and maybe the money comes back but it's been wild and it's hurt a lot of people

the sellers, who had taken a break from last -- remember two fridays ago, those sellers had come back and really destroyed a lot of technical looks like they're finished. i can't tell there was so much chaos in the supermarket and food group, no one was watching how tech was selling off. maybe the sellers took a breather last monday >> there was a point on friday where the only positive element was amazon >> and amazon was initially down i thought that was stupid. i'll tell you what's kind of compelling here, blue apron, that's a smart deal to get public right now before the chang in the world blue apron could be valued at $3 billion. that's a company that sends you food and you make it at home i would rather have amazon send my prepared whole foods meal to home >> as would i. we did blue apron for some time. >> did you >> yes

it took a real long time to make that stuff and it was good but it was never enough. it was a running joke. we needed to double the order size for everything. >> you can just call whole foods, they'll have an uber delivery, it will be at your house in three, four minutes and you'll never have to call blue apron again. >> one of the casualties would not be just grocers but fast casual because the emphasis is on prepared. >> one of the things that whole food does best -- if amazon wanted to for prime, they could give away sides. you could have the brisket that they have, which is quite good and they'll give you the potatoes prime, they'll put in whatever they want to give away this is going to be a giveaway if kroger has to sell eggs,

these guys have to give away eggs i'm shocked about that blue apron. that was stunning wa yhat you sd >> why that was just one example. i also found myself wondering and discussing at the dinner table about the profit margins on this business the cost of shipping blue apron, the big dry ice container that it comes in, the waste that it causes as well, i just had to wonder how can they possibly make money i'm not sure they do i'll be very interested to see the prospectus >> i can tell you the stay at home just got even more stay at home people do not want to go out if they tie up with uber, with

ly lyft, the mall people are telling me -- >> you can see you're going to watch a movie and they'll ask you if you want a pizza with that movie >> they know you don't like peet pizza. >> you know how blue apron comes and you have to work 17 hours to prepare it now you'll get home, if you don't like it, you just tell alexa. this is running man where you've got everything at home >> that's not helping cyber property today sbg is down almost 2% along with a bunch of other retail. >> i have don witter on later

this week for federal reality. he's the largest shopping center company. there's an article about shopping centers being turned into health care facilities. shopping centers are not going to look the way we think they used to look >> while we're on that, john bay and landon buildings getting in there, trying to get them to think about different ways to create value i don't want to go too deeply into it. i don't know if hudson bay is up but they had a brief foray to buy macy's and that went nowhere and neiman marcus, that went a level farther. remember, he was a very successful analyst for years remember him john lynch >> i struggle over -- i was a the a dinner where there were people who said this was the

greatest thing thing ffor searsr and others saying sear was going to get killed over this. everyone wants to talk about sears and i don't get it everybody should be talking about these gigantic companies >> i said i think we should be talking about kroger >> there's no stock out there. >> i think kroger is a focus >> kroger should be a focus. you wouldn't touch kroger. >> i think this is a deal that's really tough for kroger. by the way, it really tough for target they go into casper the friendly ghost mattress company is that an answer to this foray? >> i don't know. >> i mean, everybody is doing something. but one company is thinking huge, the other guy's thinking about shirts and the other guy's thinking about bets. it's not an answer

>> mattresses are not going to be the answer for target it's a $170 million round they raised from target that business model is another one i find hard to fully process. >> why, because -- >> the mattresses are highly priced you try and them and if you don't like them, you -- >> i've got great beds, what can i tell you >> for the three hours you spend on them? >> last night was about two because of the u2 concert. bed in a box is not the answer target has to go to kroger and say will you please take over a

food area. the average answer was what do you think they said? >> what do you think, jim, what do we do >> what do we do, jim? >> 4310 now, whole food is trying to tell you something >> that's a little odd >> it's speaking to you. >> that may be you saying walmart is facing a big decision >> so you may shoot me down. >> i'd like nothing more than shooting you down, you know that >> i have lloyd blankfein. you can shoot me down all you want but -- your sources have no names. >> let's keep it that way. can we do that >> disney "cars 3" comes in number one for the weekend twitter begin as new marketing campaign tonight a tv spot will debut with chance

the rapper >> i just called him rapper chance one and my kid called me an idiot i went to hear chance. >> did you >> i did >> chance the rapper >> i did he's got an interesting business model, too he doesn't make any of his music available -- what is it? i have to remember >> loot of people were questioni of people were questioning their new look i liked it >> apple is up 2%. ali baba, tomorrow they're

having a big presentpresentation >> are you going to fly to detroit for that presentation? >> whenyes. >> when i said no, they went to you. ali baba has 20 billion in groceries they ship. >> they're trying to impress the chinese platform, how they can sell into china. there's some questions about some of the agricultural products what if you're a u.s. farmer >> i don't know if it's going to be that big. >> why are they going to detroit, david >> i don't know. i don't know >> okay. >> we got a dow record high. >> there you go. >> apple's up nearly 2%. we'll watch that

let get to bob pisani on the floor. >> good morning. we have a record high here and a high in europe europe is still ongoing. hong kong is right near a 52-week high, germany at an historic high. macron is trying to to get france to think more like a startup. sectors leading today. being j which are a lagger group recently have been reinserting themselves industrials, health care, lagging. telecom is lagging these have been problems rotation has been the story. today tech is leading a little bit but so far the last week and a half, the story have opinion

rotating into banks, small caps, and transports big technical is up today. note the names we talk about all day long, apple, netflix, alp alphab alphabet, facebook, even amazon was down trafractionally let talk a little bit about natural gas. nat gas is down 4% today you heard the guys talk abouting about the but this meant a terrible year for anything natural gas related. southwest is down 50%, sw energy right there. range resources probably down 30 or 40% so consolidation is necessary but so far any kind of -- type

of consolidation talk not helping any of these stocks. you can buy all of these but it's been straight down throughout most of the year. >> looking at a ten of week low. a big week for ipos, a rather dry period for ipos. a big, broadband communication company will be coming on thursday woor talki we're talking over $1.5 billion going public that's the biggest ipo we've had in a while that will be trading thursday on the new york stock exchange. and you heard the guys talking about blue apron that should go next wednesday down here, a meal kit delivery service. 30 million shares, $15 to $17. we're talking about maybe $450 million. that's a pretty big dal and

tough timing with the amazon deal for whole foods crust nunsed here. as the up side a new mention there. >> bob pisani on the floor let get to rick santelli a lot of fed speak to chew on all week hey, rick. >> that will just make the market so much more focused. it mott what the fed is tacking about doing or what the market thinks the feds are going to be doing. it continues to be not on a combination of those but what other central banks are doing with respect to quan tative easing and what's going on with europe and the economic data around the globe, intra day of tens look at when we contend, sort of at the top of the range, 2.13 to 2.21 were the closing yields of last year.

even though we're holding, we're holding at a very low level, just a few base points away from the low levels of the year the bunds are about 6 basis points up on the year whereas as we closed at 244, currently trading at 216 we heard analysts talk about how good things are in europe. macron is putting together a very big group of politicians to give him some clout to potentially do some reforms in france that are hovering just root above 60 base points their yield have come down o lot. a lot of pressure on all neelds. the notion of how we'll see markets in france and germany and how the -- and finally the dollar index yields, it's holding but at a low level.

it's at least solidly above 97 it still done about 5% for the year >> thank you very much, rick santelli in shechicago. still to come, walter isaacson of the aspen institute we're back in a minute no splashing! wait, so you got rid of verizon, just like that? uh huh. i switched to t-mobile, kept my phone everything on it oh, they even paid it off! wow!

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this morning, led in part by goldman sachs. just breaking a few moments ago, senator elizabeth warren is calling for the removal of 12 wells fargo directors offver tht company's sales scandal. apparently, jim, in the letter she does cite some u.s. code that says the fed has the legal authority to remove members of the board. >> gees, good for her. she's a law professor, she

probably knows i just don't think it's going to happen and i feel like it's also -- by the way, it happened a year ago and i think that wells has made a lot of changes they've changed everything and so i think this is a call -- look, have there been board members who we think may not have been as aggressive? perhaps. but the fact that the federal reserve likes the changes from what i understand. it's not like they sat still and left the same people a lot of people have gone. a lot of changes made in the way that they do banking i think this is going to fall on deaf ears. i. >> i assume you'll bring it up with lloyd tonight >> i guess so. if senators can start calling for directors to be removed. ma maybe there's more leeway for the fed than i thought i think the whole idea of what

happened in the financial crisis versus what happened with wells is worth talking about and we're in the middle of a lot of industry changes and it very be very hot group. i would have thought at this point there would have been a lot more m-and-a, a lot of ipo i what does he think about the changes on wall street and whether eight good place to work or not >> hoose been in that job how long >> sense pauls i don't know. he came in, the stock was the 149, it now at 241, versus morgan stanley wells fargo is up dramatically, 62%. >> so he's been in the job 11 years.

>> 11 years. and gary cohen, not there. >> no discussion of who. one would expect he'll be in the job for some time to come. although jamie dimon has within longer >> how about blankfein, james oo but diluted. >> i mean, the ideas that lloyd has -- man, lloyd is. >> to carl's point, the departure at jpm makes you think, all right >> when i see a young guy require, jeff and i don't want ne discussion of retirement, all

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no one's believing my thesis there could be more consolidation in natural gas if you want to know who is the lowest producer, it's cabot oil & gas. people are still running from this group even after a remarkable deal i think is so important. what can i say i'm looking at this maybe glass half full and people are just thinking the glass is empty, not no half empty. it's just empty. >> we look forward to a big show tonight, jim >> lloyd blankfein we're going to talk about the idea of what happened to this group? we're going to discuss the

notion of would you start off now as a banker or would you go to facebook or alphabet if you're a smart person? because the world has changed. >> when i turned down stan stfo i was like backup school i wouldn't get in there at all now. >> coming up, walter isaacson talking about today's white house tech summit.

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♪ ♪ good monday morning. welcome back to "squawk on the street." the market is being led by some tech, some financials, got a record high up on the dow, up 85 points a lot going on today >> our road map for the hour begins with trump's technology council holding its first meeting. big names, all expected to attend we'll take you live to the white house. >> aviation executives gathering

at the parisary show we'll take you there live. >> plus another day, another record the dow hits a new all-time high a full market rundown straight ahead. >> fs pup, prum's american technology conference jones us with their first meeting at the white house. kayla townsend joins us. hey, kayla >> many individuals been to the white house but not as a whole they'll have multi-hour discussions about modernizing government we just saw safra catz walking through the gates here in septembe today administration officials are going to ask for the industry's input, for help in

how to modernize government contracts. and they're going to ask for analytics, how to make the government systems more effect of and user friendly and one specific topic on immigration reform the tech council held a meeting about this earlier chris liddell suggested that particular issue was an olive branch to get has to companies and he said that was added to the general agenda, saying they are going to have a very busy day today. they're going to have several hours, a very robust work stream to try and reach some of these conclusions about how to modernize the government

that hb 1 visas and they want to talk about how to be more effect of, these companies like apple have so much of their companies overseas and they're not doing mna deal because they don't exactly know who to account for that money and what's going to happen on the tax reform front going forward. we'll see if they. >> kayla, we'll be checking in with all morning long. >> and walter isaac, haup monday a. >> interesting framework here. if the government truly became a newly empowered marng nal buyer of tech given the percentage of their information that's on the cloud, for instance that, could mean big money >> it could mean beg money it could also drive innovation

the way technology innovation has been driven for the past 70 years, ever since the defense department and then darpa and nasa a that's the reason you have a microchip is they had to figure out how to put things was very good and very strong and applying it to government, with smith trying to help run that effort but now you have jared because what he's trying to do is say in every aspect of government and some of the things we've been involved with there and it is

really, really old tech. we're still work. >> you could really drive change >> clearly there's opportunities for these tech ceos but we've talked about the clashes on the political and social security. >> it's complicated but that's the way business relationships with governments have been and are supposed to be you have certain conflicting interests and you have certain interests that and tech executives are very good at part be in the -- amazon might say i'm competing against this book store in this realm and cooperating in that realm. and some say we'll have to have

a more balanced be a. >> it sound rook the. >> welfare reform, i think the government, the defense department, everything from the census bureau to the irs, they all contract, they're the biggest contractors for new krek ji when jeff bezos, who owns "the washington post," also owns amazon, has a beg all of these things make it complicated ands you tut fum taking the angle

that technology titans need to be there they need to pro, government's nationalist wing getting painted against this upon lest wife and ceos that some americans may -- it's a tie it not just a wave and it can sweep around it hard to know where it's going to go it could get on technology's case for violating what people might perceive as their privacy rights it could, you know, certainly the notion of populism could turn against the huge amounts of money and the disparities of wealth and if you got on the wrong side of a populist wave, you know, it could be quite difficult, especially sense there's a weird relationship that some of the silicon valley leaders are quite

libertarian and they sort of overlap a bit with the populous sentiment but in some ways they could also be targets of the populous sentiment and, by the way, just intentionally mack an enemy of government, that's not a good idea >> walter, what are your expectations -- we talked to chris liddell. do you think it will lead anywhere you mentioned tarp but the use of technology by the government may lag as much as ten or 20 years. efforts have been made in the pass to try to address this gap do you this it a be as said i think they'll be driven very

strongly pi advances by the pentagon but when it comes to the use of data, generally i it's hard to really inowe which is what a lot of government -- they don't in will be a big summit and i mean, you look at the fact that noah, we should be able to have the best satle leets in the krr that

says let us update all of our systems in this krirks have much better broadband, much better transportation, have much better satellite, weather pre-dibs and mapping and air traffic. >> or better experiences at the grocery store, walter. one last question on amazon/hole foods. a lot was wrisen that somehow this crystallizes another episode of how big tech -- market cap tech will change pedestrian avenues of our lives. do you see it as that seminal? >> i see the big theme here, something you've seen with uber and air bnb is the connection of technology with real things in our lives and amazon seems to be thinking and doing how do you connect net technology with real world technology, stores, the

movement of lettuce and tomatoes, the ability to deliver. so from drones to whole food to amazon to echo, amazon echo in my living room, i think they're creating a system that connects digital to the physical. >> although with whole foods at 43.55 now, we'll see if story is being done, being written. >> that's up to you all to figure out >> our thanks to walter isaacson >> and a very good looking live shot this morning. >> when we come back, big deals being announced from the world's largest air show. we'll take you live to paris for a report >> and we'll speak with vice ceo shane smith. a record high for the dow being led by apple and goldman sachs as the beggest contributors. s&p is uabp out 0.7%

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stores and food companies, which got shellacked on friday can you remember the last time a deal had such a wide ripple effect across industry, sectors and the broader market >> i think it's certainly a game changer, if it's fair to call it that deals like this create more questions and answers and now there's all sorts of speculation as to where is retail headed likegrocery, pharmaceuticals, where are they headed? >> if you have to rerate as strategist whole pockets of this market >>ism thi is think you have too more carefully about the whole pockets of this market i think we have to see what's going forward before we jump to conclusions about the securities >> we talking a lot about food deflation, the fact that amazon

plans to lower whole food food prices, talking about automation and the impact on the work force. what do you think about it, jeff >> the bigger, broader issue is that technology is about low lowering prices. you're seeing a curve flattening, interest rates on the long end going down even as the fed is increasing rates. last week we saw a cpi print, which was in third week print. so to put the walmart -- that was a mistake. to put the amazon news in conte context, it's really about a macro force that is lowering prices and that's something you've seeing in the bond markets as well >> so is that what dudley means this morning when he says a flat i don't knowing curve is is not necessarily a negative >> i think that's part it have he had some comments out this

morning. you're seeing it again in the curve in terms of curve flat i don't knowing that's bringing back into the market some expectations around -- the fed is going to continue to proceed along its path of normalization for the front end but the longer end market moves are still reflecting a couple of things, the pressure on inflation, the longer run pressures on inflation and an unwinding of earlier expectations for a faster pace of normalization that's really coming outs of the markets. >> so the yield right now is -- where does that leave the market when they said they are going to be hiking interest rates >> in the week where you got the fed giving a relatively hawkish announcement and signaling its

intent, you had a bigger disappointment, bigger surprise in terms of a continued weak print on cpi you're seeing it in terms of inflation and inflation expectations that's coming off. but the fed has really been clear that they're expecting that to be temporary and looking through it to a forecast of higher inflation, that's why they're moving the market's not quite there yet in terms of its inflation expectations >> so we have the dow up another record, s&p record is this low inflation, low rates, growth in second names story continues? >> i think the fed has made it very clear that they want to normalize but they're going to. >> slow. mean wheel we have earning growth coming back and risk assets can continue to rally >> cause for concern om not heuer it means the vics is going to -- bu does that mean

that tech can continue to improve? >> i think it could. these are not your father's tech stocks we've seen the growth sector take on more defensive properties recently, which i think spell success. >> you don't worry about the valuations there >> no, valuations look good for us >> gentlemen, thank you for joining us >> the cnbc all-america economic survey let's go to steve liesman for results. >> let's talk about what 8 hoon americans that we polled think about a stock market and these of almost an all-too many and we followed this differential or this net positive you can see

how long that was deeply negative got to go pack to '07 to have a differential than what woo have right now. and look at the stocks, 54% think it's a good time to invest why to people think a third of our 800 americans think it's economic growth and corporate profits behind recent stock gains, 26 say it policy from the new administration, 7% say it's a little bit of both and a third say they don't know. i don't know either. the stock market is at an all-time high. what difference does this make on your investment no difference at all

a smart group out there. the whole survey is online you can read about it. you can read the full survey and the report we wrote on it. plus tomorrow right around this something fed president will be on squawk. >> well, you defended the survey's integrity with kernen this morning >> we spent about three minutes on that. that's why we call it the all america survey >> steve liesman with some good numbers. when we come back, the world's largest air show is under way. a quick programming note, do not ttg wnityd blankfein tonight siindo wh cramer at 6 p.m. eastern time. ng. ng. always on the lookout for patterns and connections to make everything work better. i call it the internet of everything,

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aviation executives gathering at the air show. fill phil lebeau is there and joins us with more >> orders are coming in on the

commercial side but plenty of interest on the defense side on the commercial side, look at shares of boeing moving higher today, the companyin veili iunv new version of its most popular plane, it's the 737 max 10 it will carry up to 230 people they've announced 240 orders here is ceo dennis mullenberg talking to us about the demand for the in your max. >> we have more than 4,000 737 in back log and against that increasing production profile, we're actually oversold. so we continue to feel very strong about the airplane. now as we feather in the max, we're adding even more value into the marketplace >> for the defense side of the business, this is lockheed

martin's f-35. it was supposed to fly last year this is the first time it's flying over an international air shore show we talked about increased interest for the f-35 among forng count foreign countries. >> we have nine of us that put money in on the frent end and invested in it and three additional foreign military sales and finland and belgium and germany have expressed interest and there are others lining up so we're very excited. >> finally, take a look at shares of rockwell collins the ceo talks about how important it is they're growing the commercial side and defense side on the defense side he told us earlier today they're having more discussions, more interest and we're hearing that from a number of the military

contractors. because the u.s. is increasing their defense spending and other countries are increasing their defense spending, defense contracting and multijets, hair in sprooz here >> when we come back, we're going to go live to cannes [ indistinct chatter ] did i say that right you guys no better than i do we'll be right back. going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e300 for $569 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

i'm contessa brewer. london's mayor is calling this morning's attack a horrific terrorist attack a van plowed into worshippers just leaving a ramadan prayer service. the driver was arrested on suspicion of attempted murder. >> it reportedly took nearly one

hour before the deadly collision between the "uss fitzgerald" and a japanese container ship was reported to the coast guard. seven servicemen were killed >> and many were trapped in their cars as a fast moving wildfire spread. >> and parts of california, las vegas, phoenix will see record breaking temperatures, over 120 degrees. normal average summertime temperatures in phoenix about 104, 105 that's our cnbc news update. back to you. >> contessa, thank you very. let's go to our julia bornstein.

you just valued the company at how much >> 5.7 i generally round it up to 6 but 5.7. >> so big investment here, what are you going to be doing with this new financing >> i think one of the things we're doing here is we're figuring out where media is going and then figuring out how to deploy the capital. we have a if you different plans. one is we looked at what we've done with vice as a brand, with rolling out the television networks and pushing that into mobile why viceland and we look at our munchies, our food vertical we're also looking at direct to consumer, transactional and one of the other thanksgiving we're going to do, iffy are going to go direct-to-consumer, we need to build a muff bigger leebbury.

we want to do a lot of script pted and pete why are. with calls for american honey and so we're doing a lot of the scripted features, scripted tv, building out the i.p., deploying it internationalally >> so lots of different things here, all over the place why does it mack sense when you already have investments from and par why does it make sense to bring nem from tpg as opposed to a third heart investor company in. >> if we wand to sort of peg at a sort of of, you know, a value, then they would be one to set it so we looked at financial investors and to sort of say, okay, we have to sort of go through this process, do the peg

and also go through this even g evening. >> how does this fit into ipo plans? >> i think it's what we would do if we were getting public is get a third-party pay and start building our book and bringing in revenue on a hockey stick base. >> what team frame are you talking about? >> last why are m 80 countries at the end of this year, mush pushing that into fobil owe that that and ip and international and some mma as well building out our technical functions, i think that makes us even more

sexy but you didn't answer my question about timing. what do you think? 18 months, a year? >> we'll go when we're ready i think in this day and age, i think the last sort of bevy of ipos have to especially a media company. and our revenue story is getting better and better but it has to be more consistent and offer years and years and years. so what we're doing is setting up multi-year deals in all our country ps. >> you launched your cable channel a year and a half ago. especially in the u.s. the cable tv business has been challenging, you have cord cutting, ratings declined. how much harder has the -- we had double dj it growth fors lapeck quarter, we have the be

we have the youngest demo on hbo to news. i'm mott going to say there's not headwinds but our model is different. we actually have the because you can't go to vodafone and say give me a million dollars, you have to win the awards, get the audience and then can you push it into mobile >> a big chunk of your revenue comes from band -- they want to know if branded contracts really work >> brands know it works. there's companies looking out there at everything you can possibly imagine so it's not me

gone are the days of "anybody want to buy an ad? now it's all about metrics and analyti analytics. and the aprs that come back from branded are just much better than traditional sort of spots and dots that are ubiquitous >> how you have changed your strategy in terms of coverage and advertisingthis plitry it's hard no to get extheedlet look at the policy so what does it look like with pruett running the epa, who wants to dismanned at we wanted to say, okay, what's what are the policy changes

but it is hard not to get addicted to the there as a new story every day. >> so you're working for a prescription down the line is this going to be for netflix? >> i'm not going after netflix that would be suicide. i think you're going to have in tv's and that we have to do that and also dtc there's going to be skinny bundles there's going to be six, seven, eight of these that will get there and do the work. we need the largest millennial library bar none, at&t is barring time warner for a reason all these companies are going to buy up the i. i.p., they come to me >> great to get him right off of

that fresh investment move thank you. >> some big bio news >> let's start with clovis that is soaring on news of their drug on ovarian cancer the company said they're going to apply to the fda to expand that's less than it had been down earlier this morning, as much as 10%. these two companies are competing in the same space. astrazeneca also has a drug. clovis should be a prime takeover candidate now, which may be why you're seeing the shares up so much. tesaro has been a perennially talked about target b we are also watching seattle

genetics that stock is getting hit as it discontinue as clinical trial for acute myeloid luka and valeant saying paulson has been added to the board and he said he's fully supportive of the strategy and brilliant team at vibrant >> a lot of movers no your space today, meg thank you very much. >> and coming up, we'll tack about the future of the retale indust -- retail industry. -- retail industry. and the dow is u

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are the top performers driving too much of the equity strategy more "squawk on the street" coming up. [ indistinct chatter ] [ intense music playing ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the gle350 for $579 a month

at your local mercedes-benz dealer. mercedes-benz. the best or nothing. amazon is set to cut prices at whole foods and charlie o'shea joins us on the phone bob, we saw a lot of carnage in the retail and specifically grocery space on friday. this morning do you think the reaction was overdone or is it the negative game changer the market appears to be pricing in? >> i think it's a brilliant move

by amazon to acquire such a high quality brand in whole foods it makes you think a lot more about the strategies but i think that it really validates the blend of bricks and mortar and digital and where the world was going today. >> my specific question was what does that mean for some of the competitors. i know you cover walmart for instance, looking at the stock for walmart, it's down a few percentage points over the last week, most of that coming on friday too much or not enough >> we would take advantage of the weakness in walmart. from our perspective, we think walmart has really made a lot of strides in its e-commerce over the years with jet.com, with the deal from friday, the way a we look at it, we think that this validates walmart's strategy of bricks and mortar and e-commerce when we think about the pullback in the shares, we feel very

comfortable with pal mawalmart' positioning over the next several years. >> interesting charlie, do you expect any of them to make a bid for whole snoods we' foods? we're watching the stock price before the deal offer maybe suggesting that. >> i can't comment on whether there's a bid being here that's beyond my pay grade but i will say that i think that this is -- this is let's not get ahead of our skis moment in my view amazon is buying a $16 billion retailer that sells food there's no plan to go out and build a thousand new stores over the next three years so whole foods will continue to grow the way whole foods has been growing if you look at where walmart has grown with its news business, it's taken the super center of the neighborhood markets to

heights and square footage basis that's never been seen before. target has been out of the food business for a long time and i would bring that up where amazon buying a brick and mortar food retailer where it has no experience you're looking at this from two very difficult perspectives, i guess. i think in amazon's case, i think this will end up working out. but laets take a breath, take our time and be patient and this will be one of those situations for amazon where it will be very patient and this is not a bet over the next two to three years, this is a very long-term bet for amazon >> that's a refreshing take. i'm looking at some 2016 market share figures here, guys walmart, this is u.s. food retail market share, walmart and samms 21, target 3, whole foods

1. so, charlie, how narrow can whole foods and amazon get that number >> that's tough to dimension at this point i think whole foods has had challenges over the last several years, i don't think there's any question and my colleague has writ kwten lot about whole foods over the last couple of years there is some growth potential out there but this is not going to be amazon getting into a new market and all of a sudden seeing 10, 15% compound annual growth on the top line i just don't see how that's going to happen. amazon will grow maybe a little bit faster than whole food was going to grow on its own but this is not geometric-type growth we're used to seeing out of amazon in this product category this is a validation that amazon was having not a difficult time but on the food side similar to

what amazon did with jet it's better to buy it, paying you for it, that's an open yet, much like the question of whether walmart will get a favorable result with jet over time >> bob, do you expect this deal to draw any regulatory scrutiny? >> i'm not a regulatory expert but from our perspective when you think about the 1% market share that they had prior and you put the whole foods piece together, it's a huge market, it's a huge opportunity and ultimately i think the consumers will win so i think that would increase the likelihood of this really proceeding >> all right we're going to talk more about that issue in the next hour on "squawk alley." >> thank you >> speaking of "squawk alley,"

let's send it over to john for a look at what is coming up on that aforementioned program. >> a lot of tech ceos gathering at the white house to try to get president trump's ear. and, yes, amazon whole foods, is there any regulatory argument for blocking this? we will dig in and finally, youtube and google trying to put a lid on extremism. can they do it all that and more coming up on "squawk alley. 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. we cut the price of trades to give investors even more value.

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s&p 500 and dow notching new record highs rick santelli with the santelli exchange good morning, rick >> good morning, sayer yachlt i'd like to welcome my first guest of the week, morgue an stanley's jim karen. thank you for taking the time. >> thank you >> well listen, jim, it's a real tough time for investors in my opinion. you have fed and central banks on one hand. you have the global economy on the other. you have markets that are really responding to liquidity, sometimes more than funneled ales what do you see as specifically with the u.s. fed that investors should pay attention to if they're trying to reconcile how much more normalization lies ahead? >> well, you know, thank you i think it's a good question

there's a lot of disconnect in the market what the fed is telling us is that fed funds rate is 3%. the market is saying there's no way that's going to be the case. and with the fed has been trying to let the markets know is that they want to look past the recent softness and inflation. and effectively what the market is pricing for fed funds by december and end of this wreer is maybe a 50% chance that they hike one more time one more hike in 2018 and then one more in 2019 meanwhile, what the fed is telling us is on the plot there is three hikes in '18 and three hikes in '19 i think that's -- i think that's really a skew at this point. if the fed continues down this path and just blindly follows their models, you know, what's at stake is that the fed could put the u.s. economy into recession. so i think ultimately they have to re-adjust the forecast. >> all right you brought up two great points. let's go with the first one. first one is it really sounds like you're describing a yield curve that is going to get more

excessi excessively flat we know central bank dozen not like inverted curves specifically your thoughts on the yield curve even with the biases of ownership by central banks potentially distorting long rates lower? >> it's that distortion exactly what you're talking about that i think is causing curves to get flat and when curves get flat, we have to think about that as a credit creation mechanism. the naem provide credit need to make sure they're being compensated for the risks. as a yield curve gets flatter, they're being compensated list and less to extend credit out longer term. so when we look back historically and look at the yield curve, once it follows below 90 basis points, look back since 1992 the average is 125 basis points. once it gets below 90 basis points that, is a sign that things are going to start to slow down. today the yield curve is at 80 basis points if you look one year forward, two years forward that, curve gets into 60 basis points and into the high 50s.

what the market istelling us i that if the fed continues along this path, that the credit creation engine in the market is going to start to get restricted and without credit growth, it's not productivity that is bringing us -- that's achieving growth we need the credit growth. that could create problems down the road and i think the fed needs to be very careful with a lot of the securities that they bought, a lot of the manipulation in the markets that they could be creating a bigger problem inadvertently. >> you know, finally you brought up my favorite topic it's a topic of the day for me and that's mottos. i'm not picking on the fed but the models virtually are the same models that we've had before the crisis. i don't think the economy or growth or productive is anything like it was before the crisis. so finally, i'd like you to finish out is it ever possible central banks will move away from current models or would that be admitting that policy over the last seven or eight years wasn't calibrating right? your final answer, jim >> i think that they ultimately

will have to but it's going to take a change at the top at the fed. because right now they're married to the models. >> got you jim karen, thank you so much for your thoughts especially the regarding fed and yield curve. david faber, back to you. >> thank you very much, rick santelli as we head to break, a quick programming note don't miss jim cramer's exclusive interview with lloyd blankfein at 6:00 p.m. on "mad money. coming up this wednesday, i'm going to sit down with alibaba's chairman jack ma in detroit. we have a lot more ahead

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welcome back to ""squawk on the street." markets are higher driven by gains in technology and financial stocks the tech sector is outperforming after that rocky performance last week. the large cap stocks, facebook, amazon, net flicks and google parent company up by more than a percent or so apple is leading the charge bip more than 2% on track to break the three day losing

streak tech is by far the best performing sector of the year, rising 18% since january watch that tech sector etf trading about 60% more than its average daily volume over the last ten days. we'll watch that for sure. now let's send it back downtown for "squawk in the alley". >> it is 11:00 a.m. on the white house. 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ i don't want to know your nam because you don't look the same the way did you before ♪ good monday morning. welcome to "squawk