good monday morning, everybody. welcome to "squawk box" here on cnbc we are live from nasdaq market square sitting in this hour, dominic chew thanks for being here. >> pleasure to be with you guys. rare treat on a monday morning. >> tell everybody where you were i was wondering. show was about to start. >> you guys tease the fact that phil mickelson is in the house i was downstairs chatting with mr. mickelson. he really is right downstairs, i think the elevator is coming up with him as we speak going to be a fun program. i was hanging out with melissa at the same time, we were all together >> don't blame me. >> we know the real reason for this let's look at the u.s. equity futures. things are in the green.

dow futures up by almost 65 points s & p up by five and a half, nasdaq up 24 comes after a week we saw gains in the markets take a look at what happened overnight in asia. green arrow there as well indicating it was up only one-tenth of 1%. hang seng up and shanghai up. in europe, more of the same, gains across the board dax, and france, cac up by almost 1%. check out crude oil prices oil down by almost $2. this morning up 31 cents we have seen a big take down in

gas prices here are big stories this morning. shares of nestle sharply higher, at record high after activist investor dan loeb announce stake in the company they're erjing nestle to improve margins, shed noncore businesses earlier nestle considered sale of the confectionary division. argues nestle should sell 23% stake in the cosmetics maker l'oreal. shares at an all-time high today as well. in auto news, the company at the center of the biggest safety recall in history filed for bankruptcy takata saying it would be bought for $1.6 billion by u.s. based key safety systems they face tens of billions of dollars in costs and liabilities from a decade of recalls and lawsuits stemming from the faulty air bags. those defects linked to more than a dozen deaths globally

michigan based key safety systems agreed to take over their viable operations while the remaining operations will be reorganized to continue to make millions of replacement air bag filters. the two companies are expected to complete the sale in coming weeks. takata ceo will resign when timing of restructuring is set in europe, italian banks trading higher on news the italian government agreed to wind down two troubled regional lenders. the deal could cost 17 billion euros. facebook is going hollywood. social media giant talking to hollywood studios about producing television quality shows. the journal says facebook is hoping to launch its original programming by late summer and is willing to commit to production as high as $3 million an episode no surprise where you've seen amazon get into this, all kinds of content creation. probably good news for content

creators another budget willing to pay for it. meantime, several ohio government websites hacked with pro-isis messages sunday morning. at least seven government sites displayed messages supporting isis, criticizing president donald trump among sites hacked, ohio governor and first lady's pages, state office of corrections, medicaid and casinos state officials say no personal information had been compromised by the hack, but that all effected servers had to be taken off line messages posted said in part you will be held accountable, you and all your people for every drop of blood flowing in muslim countries. it is not just there, brook haven websites were disabled, too. sounds like it is a widespread issue. >> just this idea that this is spreading the way it is, a little disconcerting. >> yeah. i have to say when i first heard isis hacking situation, it is not websites i started thinking about, lower key on this than

other situations we're seeing for sure. >> sadly, i thought took this long didn't happen sooner >> right. republicans in the senate are looking to rally members for a vote on health care reform this week, but it has been a tough sell so far. the longer this bill is out there, the more republicans seem to have problems with it >> that's right. this is crunch week for mitch mcconnell and senate republicans. trying to pass the bill by end of the week, revealed it last week after drafting it in secret, attracted criticism from democrats. nonetheless, they have a situation where they can only afford to lose two republican votes, they're not going to get any democrats doesn't look like, that's the margin for error. now we have five or six republican senators expressed reservations, concerns, or said they're against the bill that led donald trump to lobby for the bill here's what he said. he said i cannot imagine these

very fine republican senators would allow the american people to suffer a broken obamacare any longer also he said democrats slammed gop health care proposal as obamacare premiums and deductibles increase by over 100% remember, keep your doctor, keep your plan. the president trying very much to put pressure on republicans up on the hill to do the right thing for him and for the party but are caught in a situation where everything mitch mcconnell adds for moderates in terms of medicaid expansion, might lose conservative votes on the other side of the see saw, it is a delicate balancing act going into the rest of the week. that's something to watch. also to watch this week, the russia investigation continues to tick along. we saw over the weekend the president taking to twitter, making this argument and kellyanne conway on television making the argument that it is the obama administration and the democrats who were to blame for allowing the situation to get out of control last year in terms of russian hacking of the

election here's what kellyanne conway said over the weekend. >> the obama administration was responsible for doing absolutely nothing from august to january with the knowledge that russia was hacking into our election, they did absolutely nothing. they're responsible for this nobody has any evidence of collusion or evidence that the president was under investigation for this >> we also saw the president tweet a similar sentiment. seems to be a new line of argument the trump administration will take forward, which is if this was so severe and a problem, why didn't the previous president do more about it you started to see democrats come out and agree with that that's one area of bipartisan harmony in washington, guys. everyone upset with the obama administration for how they handled this last year >> let's go back to looking at the health care bill and just the count on that. i hear different counts of how many republicans are opposed i heard five or six conservatives have gone on record that they're not in favor of it, won't vote for it susan collins saying she counted

seven moderates who weren't in favor of it either that gets you to 12. talking about 6 hold outs, 12? >> i think talking 5 to 6 now. but numbers can be squishy depends what you count i object to this or that major piece of the bill, but assume they could be brought along. there's a school of thought that mitch mcconnell who knows what he is doing in the senate left some holes in the bill as it was drafted because he knew the holes were things republican senators wanted. the idea being that he would let them go to the floor with amendments to then fix the bill and take credit for it with their constituents and say i fixed it, patched it, put in things that are important to our state, therefore i forward the bill this is mcconnell's way allowing them to express reservations, get involved, make the patch. >> and declare a victory to constituents somebody like susan collins says

you cut $800 billion out of medicaid, no way you're not effecting nursing homes, rural nursing homes that are in her state. how do you fix the idea of the $800 billion hole. how do you fix that? >> that's mitch mcconnell's problem. i don't know how you fix it. you have states like alaska where lisa murkowski says they have high health care costs in alaska, she wants allowances made for that state, particularly when it comes to medicaid, talking about closing nursing homes around the country or evicting people in nursing homes. that's political dynamite. that's a real problem for senators, voted for a bill that might do that. how does mcconnell assure them that's not going to happen what does he change in the bill during the course of the week. you'll see a cbo score likely today, may see a tweaked version come out today as well watch all of this carefully this

week nobody knows outside mcconnell's office how he plans to get it done, see if he can do it. he is a master legislator. >> i don't know the ins and outs i heard some say it has 50/50 shot others say 60/40 how would you run the odds >> i think 40/60 they have a chance of passing it, but it is a tough, uphill climb, the margin so small and school of thought here that says what mcconnell wants to do is pass it or have it fail either way, then republicans can move on to the rest of their agenda health care was dominating republican legislative agenda since earlier this year, was a real problem in the house, finally able to get it done in the house. if mcconnell passes it, the house members will be under enormous pressure to go along with the republican bill in the senate, despite all their concerns and infighting on the house side, the idea they spent

seven years campaigning against obamacare and finally have an opportunity to push through replacement, i think a lot of republican house members will take it. if it gets to the senate, i think it will get to the president's desk for signature. >> thank you so much >> you bet. by the way, a big lineup later this morning guest host at 7:00 a.m., heidi heitkamp we talk to her about all these issues and some things happening in her state, energy is a big issue there. we will talk about what's happening with the energy complex. then at 8:00 a.m., senator rob portman, republican from ohio joining us, will be guest host for that. back to the broader markets, joining me, director of fidelity investments. great to have you with us. good morning want to ask you about one of the biggest events in the markets, that was decline in crude. we saw crude oil down 4.4% what does this drop in crude

tell us, especially since we are at the height of summer driving season, we are back at levels on crude prenovember opec production cuts. >> i think that clients in crude oil are really specific to energy and not representative of larger sort of repatching commodities. my favorite cater is cod raw industrials, which is a good proxy for the global economy that's been holding in very well i wouldn't read too much into energy weakness as an indicator of week driving. energy has things going on inflation expectations all but disappeared from markets energy is one place they have gone to hedge against inflation. >> well, it is not just drop in crude oil we have seen, but effectively decline in -- down 4% or something.

on top of that, these are not warning signals to equity investors? >> the decline in copper and iron or is certainly tied to china slogan tightening policy those commodities are up well from their 2016 lows certainly the u curve is a risk, has been flattening. inverted curve in the past is good predictor of recessions, that pris us to a disconnect between where the fed is and where markets are. fed is implying another 7 hikes in the next two years. granted, some hikes could be in the form of balance sheet reduction. markets only expect one and a half more hikes in two years if the fed is right, tightens more than the market expects, we could get to that inverted

curve. that's historically a big risk factor for the market. past few years, more often than not, fed lowering stocks rather than raising >> you spoke about this idea that inflation expectations are pretty much nonexistent at this point. you look at the difference between normal treasury bonds long term versus inflation adjusted counter parts and expectations for inflation keep falling. commodities are part of the picture, also people are buying up bonds and stocks at record highs. somebody is going to be wrong in this equation in weeks or months who will it be stock investors or bond market investors pouring money into treasury wrong in the next few weeks and months >> hi, dom, how are you. i think right now we're in the ultimate goldilocks environment. since february of 2016 when the global cycle bought, s & p up 27, 28%, volatility, standard

deviation of those returns running about 7, which is half the normal, and against that backdrop ten year-year-old at 2.2% or so yields down from post election high but most of that is inflation expectation. if the decline in yields was driven by decline in real rates, i would be concerned equities are being mispriced. because it is inflation expectation not real rates coming down, that creates more benign backdrop. markets have the best of all worlds interest rates are low, inflation is low fed is in do no harm mode. we assume that it is earnings grow double digits. q 1 up 4%. q 2 earnings outperforming typical tendency to drift lower into earnings season which starts in a few weeks. by my measure, q 2 earnings could be up 10% as well.

while that lasts, it is a pretty good deal for investors. >> thanks. >> volatility will jump up but we don't know when >> thanks. dom sticking around the rest of the hour. when we return, golfer phil mickelson is here. his foundation helping fund kpmg future leaders program to inspire talented young women he is joining us on the "squawk box" set next here on "squawk box. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios

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welcome back associated press and he can wi lar says female ceos made more than male counterparts in terms of pay there are far more women ceos in the united states. developments like recent upheaval at uber show challenges women face in the workplace. joining us for an effort to bolster women in business and life, lynn dowdy, u.s. chairman and ceo at kpmg, joined by special guest phil mickelson, professional golfer, five time major championship winner. thank you both for being here

today. it is great to see you this early in the morning. >> thank you for having us. >> the reason we're here talking about this is because of a series of scholarships you're funding and phil, you and your wife amy kicked in to boost those scholarships as well you want to talk about that first? >> love to at kpmg, we're passionate about lifelong learning. this is one program as part of that ambition. so the kpmg future leaders program is providing scholarships to girls in high school help them get started in college career leadership development done at stanford university that condoleezza rice and her team are putting on then they have on-going mentorship from women that are part of the leadership summit this week at the pga championship it is a continuation of providing lifelong learning to

everyone to reach full potential. phil and amy through the foundation allow us to provide even more scholarships this year 36 young women are going to college because of this program, and it is not just scholarships, it is this opportunity to have mentoring as well as leadership development and an introduction to golf as well. >> phil, why is this cause important to you. >> one of the great things, too, gets these young ladies with a mentor each one has their own mentor. to be successful in business, a lot of times ladies have more obstacles toover come. this mentorship helps provide a path to success. these girls are outstanding already in their own right when we have great leadership like lynne who made the company so successful, brought about so many opportunities, we want to

have other great young leaders, especially females that have opportunity to be successful in business and this program gives them a pathway to do that >> i was going to say, put it on the radar for you in the first place. i have done reporting for golf channel how women, especially young millennial women and juniors on the female side drive growth in the game of golf what was the impetus why you got involved with this effort? >> the consistency of foundation that my wife and i started is about education. stem fields, and this is consistent with that in that it takes young girls that are driving in school, thriving in overcoming challenges and provides this on an as-needed basis. >> is the thinking the more women you put through college, the greater likelihood they make it to the fortune 500, is it as simple as that >> well, in some cases there's a big need for these women,

financial need, to get to college. we are providing scholarships but more importantly as phil said, we're providing leadership development opportunity. they spend three days at stanford condoleezza rice is with them the entire time. they have a mentor sitting there with them that's going to be helping them through that first year of college which can be a really tough year, especially for girls who haven't experienced the kind of mentorship that they really need to be successful introducing them to golf as well, a game that requires a lot of perseverance. it can give you some humility as well and then the bonds they form there were 16 girls last year who spent three days together. none of them had met they realized they came from similar backgrounds, had overcome challenges, now it's

almost like they said can we come back and have a reunion they become close friends that i know that one day we'll see them where they've's become successful and they say kpmg has been part of getting them to that next level. >> you look at women's numbers in college, more women in college than men at this point all the way through you wonder why it drops off at top levels of leadership. >> i think there are a lot of reasons. there's a lot of life challenges that women face but i think it comes down in some cases to confidence we did a leadership survey a few years ago that talked about to that point women start with a lot of confidence, same as men when they start careers. midway through, it drops off they had that ambition when they started, but for some reason there's a confidence gap

this summit as well as the program, leadership development for young girls, is giving that confidence factor. you can do this. you can see other women are going to mentor you that have done it and they're going to help you along the way >> you have daughters. >> melts me when i see them play golf for them to partner with pga america who has direct access to so many kids, it gets these young girls started in the game early. hopefully your eight month old and dom's 16 month old baby girl, hope they get into the game at a young age. if they're successful, able to play golf for a living, it is the greatest job in the world. if not, they can still utilize golf to formulate relationships and time on the golf course, the four, five hours, that's where you get to understand your playing partners that's where business really gets done because it is more personal you find out their needs in a more relaxed way, not just sitting in the office, you're on the course enjoying each other,

find out more about each other, how to better serve each other golf can be a real tool in life. >> phil, speaking of your day job, you have an enjoyable one what's in store for you the rest of the season. you had a high profile split with a man you had a long-standing relationship with, caddy bones. >> we had an awesome 25 years. bones and i right on the day i started. thankful we had 25 years together can't think of a better person to have gone through so many experiences with you also have an opportunity coming forward to spend time with my brother. there's not a guy i like, love, respect more than my brother, tim. we have an opportunity to do this as well, next week at greenbriar, i will be playing 8 of the next 10 weeks playing quite a bit. i'm looking forward to it. i have been playing well, haven't had that break through,

watching jordan spieth win yesterday, how exciting was that that's inspirational when he doesn't have his "a" game but finds a way to win, i get a lot of inspiration from that >> can i ask about the decision not to do u.s. open, you didn't because you went to your daughter's graduation from high school. >> one of the things i learned years ago when my wife and i went through her battle with cancer, two things i learned one is you just show up. the other is it is better to say the wrong thing than say nothing at all you just show up my daughter and i never had a conversation of course i am going to be there for you, it is a special moment. i am so proud of her i will go on and on as we all will about our kids, she's a dynamic young lady from a three sport varsity athlete each year in high school, captain of her teams, to the school president but also very proficient in marshall arts.

works at the museum. i can go on and on very byes aed. to experience that moment, she gave a six, seven minute speech, it was deep, something that i'll look back on life and be glad i was there. >> glad to see you doing it. that's the right message coming from somebody. >> thank you. >> lynn, phil, thank you for being here >> thanks. coming up, indian prime minister modi arrived in washington yesterday for a working visit with president trump. what it could mean for business and trade deals between the countries next. as we head to break, the s & p winners and losers

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good morning, everybody. welcome back to "squawk box" here on cnbc let's look at the u.s. equity futures, higher this morning, significantly. dow futures up by 56 points, s & p up by 5.5, nasdaq up 24. the indian prime minister modi in washington for a working meeting with president trump what that meeting could mean for future deals >> good morning. ahead of modi's meet white gold trump, he met with powerful ceos, including jeff bezos, google, adobe and apple tim cook

who did seem pleased as he was leaving the meeting. >> tim, can we ask you questions how the meeting went >> fantastic. >> also in attendance, jpmorgan ceo jamie dimon who was positive on modi as well. >> how would you say what was modi receptive to. >> he is very open, smart, receptive. >> biggest sticking point you would say? >> i don't think there was a sticking point per se. >> other names included irene rosenfeld, master card bunga he says the ceo discussion centered around the up hill battle american companies face while doing business in india, includes tough regulation and strict rules today modi and trump meet at the white house, defense and combatting terrorism will likely be discussed indian government will show interest in purchasing high tech

drones from the united states in an effort to better patrol the indian ocean keep in mind, this would likely require approval of congress tonight, the two leaders have a working dinner, making modi first foreign head of state to dine with a president at the white house. the senior administration official said the white house is ready to roll out the red carpet >> thank you, seema mody in washington let's bring in senior analyst. thanks for joining us. >> thanks for having me. >> there are a number of common areas that modi and trump will speak on defense and trade specifically seema talked about the meeting with tech ceos and visas a big issue. what do you county to come out on discussion on that specifically >> this is a big issue from india, technology sector a lot of them generate significant profits from h 1 v

visas. i think prime minister modi signaled this is a commercial issue between the two countries and also u.s. domestic immigration policy issues. i don't think he will delve too far into it. he will raise the issue, has to raise the issue, but beyond that you probably see him delegate this topic more towards ministries and agencies responsible for it and having indian industry talk about it directly with u.s. counterparts. >> fascinating to watch will be the meeting of the two gentlemen who have pbig personalities, mod has made in india, trump has making america great each have a big social media presence how do you think they mesh >> i think they get along well modi has a history of being charming when it comes to dealing with his u.s. counterparts he and president obama got along

famously well. i think with trump the focus will be on building a rapport. when he comes, that's probably the main take away how deep can he develop his relationship with trump as basis to build on broader u.s., india relationship you mention making india and make america great again, they're very similar, and have similar outlooks when comes to domestic economic policies while this might seem an area of contradiction, the two can work together on this if american companies can build in india, create u.s. jobs at the same time, that would be a win for both leaders >> part of that crossroads on the military side, you mention defense contractors. they want to buy u.s. planes and next gen 1s. how does that play are we going to end up selling those next gen fighters. >> i think the f-35 is a little ways out we already saw movement on the drones topic drones is something we will see

more of. f-16 and f-18 is another area you can see a lot of head way. again, this is where areas of confluence despite what seem contradictions one requirement is if they want to sell them f-16s, they have to build them in india. by selling and building in india, would be a win win for american enterprise as well. i think the f-35, fifth generation fighters will be off for now. >> what are potential sticking points if at all between the two leaders? >> paris agreement was something that came up a couple weeks ago. trump characterized india position on paris agreement as unfair, saying india received billions and billions in money the deal skewed heavily in their favor. i like h1v visas if he does raise them, won't

emphasize them too much. last thing he wants to do in d.c. is focus on areas of disagreement he is far more interested in finding areas of agreement as a basis where they can deepen the u.s. -- >> what could be the land minmi for president trump. what should trump avoid doing. what are areas he could push too far with >> i think one of the wild cards, one of india's biggest requests of america has been to focus on state sponsor of terror probably going to be a topic that comes to this meeting in terms of landmines, one area is for trump to say off the cuff remark that pakistan is state sponsor of terror. major break from u.s. policy not something i anticipate will happen, but is a landmine, if probed on issue during press conference, if he stumbles into

it and says it, that would be headline grabbing. >> watch for that. thank you. when we return, our guest host at the top of the hour, democratic senator heidi heitkamp joining us to talk taxes, health care, and drilling in north dakota. then the ceo of starbucks ringing opening bell in honor of the company's 25th anniversary since ringing opening bell for the first time hear about sales growth and the consumer. at 8:00 a.m., senator rob portman joins us to talk taxes we'll see what he thinks about the health care bill stay tuned you're watching "squawk box" on cnbc so, your new prescription does have a few side effects. oh, like what? ♪ you're gonna have dizziness, ♪ nausea, and sweaty eyelids. ♪ and in certain cases chronic flatulence. ♪ no. ♪ sooooo gassy girl.

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welcome back activist investor dan loeb disclosing they've taken a 3.5 billion stake in nestle.

>> as you said, more than 3.5 billion in shares and options in nestle. the stock is up quite substantially over the last year, rising higher today. but dan loeb's firm says there's more value to be made. in response to third point stake, nestle spokesperson said we always keep an open dialogue with shareholders and remain committed to executing strategy and creating long term shareholder value. beyond that, we have no specific comment. third point pushing the company to improve margins and double leverage to do more buy backs, additionally third point wants them to consider selling underperforming brands the firm alauded the plan that it would look at brands. nestle should sell 25% stake in l'oreal, worth more than $25

billion. >> it is interesting to see stake of this size, see an activist pushing things. leads you to think it will be successful >> well, it is unclear at this point in time. they have a lot of fire power behind them, nestle does because performance and stock price has been not too bad often times a way activist investors get there to be changes, they get other shareholders on board. it is unclear at this time whether other shareholders are unhappy with what nestle has been doing so far. they have a new ceo which tends to bring activist investors to the forefront because they feel it is someone new, a clean slate, they can enact change that way >> leslie, dan loeb is no stranger to investing in europe. he has a stake in uni credit this is a huge percentage of nestle shares.

what does it mean for his portfolio. probably one of his bigger stakes at this point. >> the biggest stake he has ever, exposure to a single stock. interesting that you point out the european exposure. very few activists willing to go across the globe to make investments. the other one being elliott, they managed to do investments in asia and australia and so forth. it will be interesting when you take these outside stakes, you see more activity from the alkt vis. they made a concentrated bet, they have to make sure their policies get enacted >> latest transformers taking top spot at the box office it brought in $45 million. less than half the ticket sales of predecessors, wonder woman

and cars 3 tied for second place. each bringing in $25.2 million in north american ticket sales >> i would watch it. i would watch transformers i grew up with transformer and gi joe generational standpoint, i watched every one of those movies. >> we have to because of my son. >> i watch remakes of gi joe, channing tatum came in, the rock, i watched all those. >> interesting article in the journal how the movies are doing poorly in the u.s., in china they're huge china had double the box office as transformers did. >> it is true of every one of these block busters has global receipts doesn't matter gas prices have fallen 7 cents in two weeks, according to lundburg survey. $2.32, lower than prices a year ago. coming up, a read on government from the local level.

boston mayor marty walsh joining us live from the meeting of u.s. conference of mayors as we head to break, quick check of european markets right now. we have green across the board france up 1% 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. it's been over 100 years since the first stock index was created,

as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?

welcome back, everybody. a couple of stocks to watch. pandora's founder ceo tim westergren is reportedly planning to step down. the company has not yet selected a replacement. he will likely stay on at pandora until a new ceo is in place. and unilever is reportedly threatening to pull marketing spending from facebook and google the london "times" reports that unilever wants the tech giants to provide more detailed information on how their online ads perform. united states conference of mayors annual meeting is under way with over 250 u.s. mayors in attendance on the agenda, obviously, the things that we've been talking about on a national level. health care, tax reform, infrastructure, and much more. joining us from the conference

right now is boston's mayor mardy walsh. and mayor walsh, thanks for being here today >> good morning, thanks for having me. >> obviously, these issues are important on a national level, but they're issues that affect your city, as well how do you come down on some of these issues when it comes to immigration? you've taken a very strong stance that counters what we've heard from prime ministesident . >> the u.s. conference of mayors, the bipartisan group of mayors, and some of these issues, on immigration issues for different reasons a lot of people feel the same way i do. a lot of it is trifen by economics and opportunities and moving our economy forward in other places, it's like in the city of boston, we have the economic side of it, but we also have the human personal side of it we have many kids that were brought here to the country by their parents, they're in our schools, they hang out in our community centers, and they're afraid right now >> just yesterday, political magazine was out and name you one of the 11 most interesting

mayors in the country. and it pointed out that while you have all these issues that you're find of focusing on what's been happening from the national level, you also say that you don't make any really big decisions based on donald trump. how do you kind of equate those two things how are you making decisions >> well, i make decisions based on what good for constituents of the city of boston and what moves boston forward the president comes out in policies over the last, you know, in the last six months, whether it's the immigration or the muslim ban or the affordable care act or climate change, all three of those boston is very active in. certainly we have world class hospitals in our city, many of them, and what he's done with the affordable care act has deep fiscal impacts on those hospitals, but on our state as well when it comes to climate change the work that's been done in our city, we're a cultural town, so i'm not going to -- you know, when the president pulse out of the paris accord, we're going to continue to move forward and what works for me right now is the city of boston and being

the best mayor i can be and the issues that impact our city. >> mayor walsh, can you tell us, and viewers, what exactly -- how do you determine or what can you control from a city level versus what happens in the national headlines from our national policy level what are the things that you're looking to do or that you can even do to better the lives of boston's citizens, as opposed to being subject to what's happening coming out of d.c. >> well, let me take that just a little broader for a second. we're at the conference of mayors in miami, and a lot of what we're talking about is mayors taking everything into our own hands. meaning moving our own agendas forward, individually in every city and town, collectively across america and i think that that's important. in our city, you know, i don't really depend upon the federal government to tell me how to run policies i certainly would love to have partners in the federal government to help me with finances, with housing, to continue to build more housing, with roads and bridges and infrastructure, with public safety but as of right now, they seem to be out of that business so we

can't sit back and wait for the federal government to act. we can't -- i'm not going to react to something that's not going to happen. so we look at their policies and the agendas for moving our city forward. we're a city that's made up of 700,000 people, of all economic, income brackets, and different nationalities. and different races, so it's important for us to make sure that we're fully inclusive city and that when we roll out a policy it's for everybody. >> mayor walsh, this new health care bill, there are going to be winners and lossers in that bill just like therewere in obamacare and as a mayor, clearly, you have some potential losers but there are going to be other sides that are winners in this how do you kind of add all of those things up? >> you know, the fastest growing population in our city, the two are millennials and older bostonians, and older bostonians stand to lose a lot in this bill older americans stand to lose a lot in this bill that's why the aarp came out so strongly against this bill people that have pre-existing

conditions stand to lose out in this bill. family members that -- >> pre-existing conditions are taken care of. >> the drug or alcohol issue, they stand -- there's a lot of people what's happening is the center is holding out because they don't think the bill goes too far -- doesn't go far enough excuse me. the american people have to push back themselves. they need to get on the phone today and that's what we're talking about at the u.s. conference of mayors about how we contact our senators and i suggest everyone in washington call the united states senator and tell them that this bill is bad for america. >> mayor walsh, thank you for your time today. we appreciate it sir >> thank you >> also, dom, want to thank you for being here today >> appreciate it so much fun hanging with you guys it was great >> coming up, our guest host for the next hour, democratic senator heidi heitkamp from north dakota, and at 8:00 a.m., republican rob portman will join us for the hour. "squawk box" will be right back.

monday markets health care, tech and energy all front and center as wall street kicks off a new week we've got your trading day setup straight ahead washington watch we'll talk trade, energy, tax reform and much more with our special guest host for the hours, senator heidi heitkamp. and starbucks is celebrating 25 years as a public company cfo scott ma will join us with a company outlook and tell us why they are betting on food and rising coffee prices for growth. the second hour of "squawk box" begins right now ♪ live from the beating heart of business, new york city, this is "squawk box." good morning, and welcome back to "squawk box" here on

cnbc, we're live from the nasdaq marketsite in times square i'm melissa lee along with becky quick and wilfred frost. we'll take a check on how we are setting up for the morning here. we do have green arrows across the board. the dow would open up about 68 points at the open the nasdaq continuing up last week up 1.8%, this week looking at 26.5 points the first key economic report of the week comes out about 90 minutes from now economists and durable goods orders will show a decline of 0.4% for the month of may. that would follow a drop of 0.8% in the month of april. european banking stocks are rallying this morning. this coming after italian authorities said they'd be willing to spend up to 17 billion euro as part of two regional bank shutdowns. italian banks have been hurt by bad loans, low profits, insufficient capital, all of which has weighed on the european banking sector. facebook is reportedly in talks with hollywood about producing original tv programming. that's according to "the wall street journal," which says facebook is willing to spend up to $3 million per episode.

the aim is to launch original programming by late summer a couple of stocks to watch today. barron's thinks the computer hardware company ncr could be a big beneficiary of the amazon whole foods deal saying ncr could gain 30% in a year gencor sweetening its bit for rio tinto. the company is offering to pay more than $2.6 billion in total, roughly $225 million higheren from a rival offer from china's yan coal a little bit of a movement one% for both stocks higher. shares of nestle are up sharply this morning at a record high after activist investor dan loeb exposed a $3.5 billion stake in the company his firm built a more than 1% position and is urging nestle to improve margins, buy back stock and shed noncore businesses. earlier this month nestle said it was considering the sale of its u.s. confectionery division. also third point argues it

should sell its stake in l'oreal. shares are at an all-time high the congressional budget office is going to be releasing the cost estimate for the better care reconciliation act that was introduced by senate republicans last week. ylan mui joins us from washington with more what's the early guessing on this >> there is plenty of skepticism over the fate of this billion. here's where we stand right now, i've counted at least six senators who are on the fence. and that's on top of the five senators who have come out against it ron johnson of minnesota is one of them. he said on "meet the press" yesterday that the senate should drea voting on the bill this week >> i've been encouraging leadership, the white house, any i've talked to for quite some time, let's not rush this process. let's have the integrity to show the american people what it is show them the truth -- >> also up in the hair are cory gardner of colorado, and he was even on the working group that

drafted the bill susan collins of maine says she wants to see the cbo score as first. that estimate could come as early as today and the big question is whether the changes in the senate bill will make any dent in the 23 million people who would be uninsured under the house version. does this bill, as president trump put it, have more heart. now the president seemed confident that it will tweeting this weekend i cannot imagine that these very fine republican senators would allow the american people to suffer a broken obamacare any longer. but remember, the gop can only lose two senators, guys, so you do the math. it doesn't look that good right now. back over to you >> ylan, thank you very much joining us from washington here with us on set right now to talk about health care and other policy issues affecting your money is senator heidi heitkamp from north dakota. senator, thank you for joining us >> well, thanks for having me. >> all right so let's talk through the politics and what we're going to see in this entire hashing out of the senate bill we know the cbo score is going

to come out. but we also know that there are going to be a lot of tweaks and changes trying to get senators to agree to this >> you have to look at it from a mile high and they're trying to tell you we're going to keep coverage the same, no one's going to get hurt, and we're going to take billions of dollars out of health care >> you're saying it doesn't add up >> no, none of this adds up. and once it's parsed and people have a chance to take a look at it it's only going to get more difficult. one of the great challenges you have is that it's not just obamacare that's being amended medicaid as we know it will change it will go to a per cap system and that's created incredible insecurity in states like mine with a lot of moms who have disabled kids. a lot of folks who have relied on that medicaid program for a lot of years, elderly in nursing homes. no one knows what that's going to be. >> that may actually be the more significant part that's being changed here i mean, you know that obamacare was going to get kind of pushed around and different things but the idea of having a cap on medicaid for the first time

ever >> well, when i talk about this, i say, this isn't obamacare reform this is entitlement reform and i think that the speaker has long wanted to cap or at least limit entitlement spending that's what this is. and now it's getting really much bigger exposure. but the challenge that you have is that when i have a question about it, where do i ask is there a committee hearing where i can vet this and that's one of the problems that i think they have is that everybody's saying one thing and then somebody else says something else, and it just kind of ratchets up but if you have a committee hearing you can have that conversation in committee hearing. it's awfully hard to have that conversation on the floor. >> i mean, in all honesty, your vote doesn't matter here >> nope. >> you're going to have a no vote they're looking at their 52 members and trying to figure out where they're going to get them at that point. >> but i think my participation on behalf of the people of north dakota matters and that's why i've spent an incredible amount of time. i was one of the few senators who actually sat down in a

bipartisan way to talk about whether there's common ground. but when people say we've reached out, that's not true certainly the majority leader has not reached out. and they've wanted to do this alone. they chose reconciliation as the process to use -- to do it and so this is way too important. life and death for a lot of people in north dakota and across the country you shouldn't be doing it this way. >> you know, one point, we can say that their bill is going to hurt all of these people that are out there. we're not trying to be mean, we're trying to cut the budget defic deficit. we're trying to get to the point where we can get our arms around this how -- how do you respond back to that? what's your answer >> one of the things that i talk about is i say what you will hear from republicans is, we can't afford it. and i had an insurance executive tell me well the state can't afford it, either. and there's where the rubber meets the road health care costs too much it costs too much for employers. it costs too much for the government we need to get our arms around

it but there's nothing in this bill that's going to curtail costs. if we took people -- there's been a study, 14% of american population has four or more chronic diseases, which cost the health care system 40% what if you drop them out, put them in a managed care, took them out of the insurance pool, it would lower the risk for the rest of folks, and it would improve quality. -- >> that people have with obamacare that interested in trying to make sure people were insured, it didn't help health care costs that we've been kind of dancing around this problem for decades. >> yeah. and they would say it did. i would say it didn't. when i was campaigning and twelve people would ask me what do you think about obamacare can we talk about health care first and they would just kind of look at me like, what's the difference and i would talk about my work in control look at what we've been able to do in public health and tobacco control. we need a program exactly like that for a lot of chronic disease. >> like diabetes >> and the challenge that you have right now is that a lot of

chronic disease goes untreated because of behavior and mental health and if you want to look at who's the medicaid population, it tends to be people with behavior and mental health problems at a much greater percentage. you take a look at north dakota. 14% of the process or the recovery of expenses comes from medicaid and a general hospital. it's 60% to 70% for people with chronic -- with behavior and mental health issues you've got to get those people in to the system, so you can lower costs of care. >> on top of that there's just a lack of transparency in the system nobody knows what they're paying for at any one point in time you think that your insurance company is going to take care of it, so there's no ability to say, you know what, this costs this much money, versus this -- >> for an x-ray -- >> and if you wanted to, you cannot do that >> you know what's interesting, because i think there's new emerging, and you probably have had some on your show, where you see like image centers that don't take insurance you want to apply for insurance, go your x-ray is one fifth the cost of what it would be if you got

it through a managed system. but, you know, again, you're cherry picking and so you've got to look at the impacts of all of that you know, when my father had cancer, and died in theerly '80s, my job was to take the medical bills and compare them to the insurance statements. it was impossible. it's still impossible. that's not the right way to run this because, you want the consumers to have some skin in the game. so unlike a lot of people on my side, i think health savings accounts could be that thing that drafs good consumers' decision making. >> so that you are very interested in making sure -- >> right >> but like i said it's impossible to even find it out after the fact >> think about this. if you said i need to get my gallbladder out. what would happen? they would say, how much will that cost? they'd say well what's your insurance. what's that got to do with it? how much does it cost to remove my gallbladder and they say well it depends on your insurance and that's the lack of transparency in this system. >> you're not happy with the way

republicans are going about this but have they at least made some improvements do you prefer the senate bill to the house bill or are they much the same >> no i think the senate bill might even be worse. the changes -- >> and then there's a capping, which i haven't gotten a handle on, you know, obamacare said once medicaid expansion or medicaid reaches a certain percentage of gdp, they actually lowered that percentage of gdp, so when you might be expecting if you're a state in terms of medicaid match, you might not get if we hit the cap on gdp >> you mentioned that you're in part of a cross-party discussion group originally on this what are the areas that both parties do actually agree on are there areas? >> i think that everybody should agree, we'll put it that way, they should agree that younger, healthy families are disadvantaged on the exchanges, and you've got to fix that you've got to take care of the fact that they are subsidizing older, sicker people i don't think it's my changing the ratio of one to three to one to five. that's why you hear aarp talking about the age cap.

but you've got to do something to get people with chronic diseases out of the system and i think that's where the rubber meets the road. it was interesting, because a colleague of mine came in on the republican side and said how about if we just say these people that are high risk and drop them out, and let the insurance market work gep. >> but what would you do with them -- >> well you'd have to put them -- >> on medicaid >> you would have to put them in some kind of managed care system, which would actually save the health care system overall. >> because when you're looking at obamacare you are talking about counties that are going to have zero providers. >> absolutely. >> under obamacare, because they can't make money because of what you just said. >> i will tell you -- >> -- healthy people -- >> but i will tell you i think one of the critical things we need to do is we need to fix -- you guarantee the cost sharing payments, and you do some kind of reinsurance, get people back in the market. and i think if we were focusing instead on 18, on the plan year 18, and then having a broader

discussion, i think we could come up with -- 2018 kshs >> yeah. because a lot of insurance companies are saying my premium will increase 8% but it's going to be 22 because of the intern in the government's payment >> just want to come back to a point you already touched on which is this is the u.s. economy, 17% of gdp in the u.s., no matter who's paying for it. most of the other developed nations are between 8% and 10% on health care how does it got to that point? and can that come down again or is the starting point it's always going to be that much spent on health care in the u.s. >> no, i think that it has to come down. if we're going to be competitive, we talk about taxes making us uncompetitive. we talk about regulation making us uncompetitive i'll take you what makes american businesses uncompetitive is the high percentage of cost that they have to pay for health care. and it's a fluke of our history that we do it this way but, again, it's taking a look

at curative medicine, what i call curative medicine you go to the doctor, you get a prescription, you get a precede your you intertwine that with behavior and mental health and with unlick health initiatives which should lower costs but lowering costs depends on changing patient behavior. and that's a challenge always when you say, you can get as sick as you want and we're still going to cover you which i think we have to but we have to have that conversation about how we can do this and you know who's leading the way, is self-insured businesses who are working all kinds of models we could look at those models and say that works how do we provide flexibility in the system to accomplish exactly that >> senator, thank you. we're going to continue this conversation and get in to drilling, regulation, a lot of other issues, too. the senator is with us for the remainder of the hour. thank you. coming up a check on what traders will be watching this week on wall street. we'll talk markets right after this break and at 7:30 eastern time the cfo of starbucks joins us. starbucks is celebrating its 25th year as a publicly traded

company. and rob steel, the former wachovia ceo joins andrew live from the an september ideas festival a big hour to come stay tuned you're watching "squawk box" on cnbc [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock. the power of innovative thinking. the power of 100 of the world's top companies. the power of an etf. the power of qqq.

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seeing the futures trading higher at least they have been through the morning. right now it looks like the dow futures are up by about 68 points above fair value. s&p futures up by 6. the nasdaq up by 28. this week on wall street we get durable goods orders from may at 8:30 eastern. tomorrow the case shiller, and consumer confidence. also janet yellen. on wednesday pending home sales, on thursday the final estimate on 1k gdp. on friday personal income, chicago pmi and consumer sentiment. joining us from the cme jim iuorio, also cnbc contributor. jim, let's touch on health care because it was the best performing sector last week, up on news of the senate -- some construction coming here not pmi just actual construction jim what do you expect from the health care bill how much is priced into the sector following last week's rally? >> first of all i like the

health care stocks for a couple reasons, one of which is remember 10-year yields have gone from 2.65 to 2.15 in a matter of months those health care stocks pay a fairly fat yield and that's one of the reasons people are buying them as far as what happens in the health care debate to me it seems like it's anybody's guess. every time i think i have it figured out, i realize i don't but as far as the health care stocks go, i'm still fine with that i'm long pfizer. i plan on staying that way >> jim, on the flip side, last week energy very much the underperforming sector are you encouraged by the way in which that oil prices decline has only affected the energy sector and not brought down others with it >> yes, no doubt about it. but i think a 42 or 40, that range there gives, that's when i think the house of cards could fall i actually think this is -- the oil part of it is fascinating. when opec said they were going to cut production, you know, everybody looked at them like who's going to cheat first nobody did oil prices still started to decline. all of a sudden we see them reup we see them beginning to cheat and we realize that -- the

alignment is for the incentives to have everybody else cut production but from each individual company to start secretly ramping it up the market has come to that realization quickly, and the fact that poe peck doesn't have the power it does with the big producers like the u.s so i think 42 to 40 give that could be one of the big things this week that could cause the stock market to crash. i don't think it's going to. i think 42 is going to hold. >> energy very much the work performing sector to date. tech is the best any of the big tech stocks you still think are a buy at this level? >> no, not at all. tesla, nvidia, even for some odd reason starbucks seems to trade, i know it's not a tech company i started to lighten up on those. that's one of the things i'm looking up -- >> what changed, jim was it a fundamental change for these stocks at all? i would say that largely it hasn't so is it valuation -- >> no it hasn't at all >> yes, yes valuation all of a sudden i think that people will run to these stocks and these are very good names

i have them. they're very, very good companies. but at some point in time it just feels like they're attracting to much loose money that's traveling around. probably for the same reason that we're seeing 2.15 yields. there is so much central bank money sloshing around the globe. it's ending up in different places those bank stocks are certainly ending up there. and i just feel that at some point in time everybody looks around -- where's they're next wave of buying if they don't see it >> are you a buyer in the nation that, you know, there's been a rotation out of technologies precisely for the reasons that you cited and into health care that that's really helped fuel the health care rally in particular the subcomponent of health care? >> no doubt about it i think biotech represents the further off the risk spectrum. like going from one further out risk faction in big tax to further out a little bit but then the other things like not just health care, dividend paying health care but things like consumer staples have done quite well and that's not a very sexy rotation to me it's like people sitting back going, okay, we've got to

put money somewhere, where is it supposed to go >> jim, thank you very much for joining us this morning. >> thank you, guys coming up, much more from senator heidi heitkamp in just a bit. and then, the cfo of starbucks, scott maw talks coffee prices and where he sees real growth in the business ly recognized for her compassion and care. he spent decades fighting to give families a second chance. but to help others, they first had to protect themselves. i have afib. even for a nurse, it's complicated... and it puts me at higher risk of stroke. that would be devastating. i had to learn all i could to help protect myself. once i got the facts, my doctor and i chose xarelto®. xarelto®... to help keep me protected. once-daily xarelto®, a latest-generation blood thinner... ...significantly lowers the risk of stroke in people with afib not caused by a heart valve problem. it has similar effectiveness to warfarin. xarelto® works differently. warfarin interferes with at least 6 blood-clotting factors. xarelto® is selective, targeting just one critical factor interacting with less of your body's natural blood-clotting function.

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>> >> gasoline prices have fallen by seven cents in the past two weeks according to the lundberg survey the national average for a gallon is now $2 pipe 32 four cents lower than a year ago. of course oil prices themselves down around 4% last week, the fifth straight week of declines. >> when we return, starbucks celebrating 25 years of the publicly traded company. cfo will join us after the break to talk coffee wars and the business and then bob steel, former wachovia ceo and chairman will join andrew live from the ideas festival we'll talk banking and dismantling parts of dodd-frank. let's take a look at u.s. equity futures. they have been higher and continue to push up. dow futures now up by 71 points above fair value s&p futures up by 7. the nasdaq up by 30. "squawk box" will be right back. what if we pull customer insights from the data in real time?

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good monday morning. welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square. among the stories front and center shares of real estate investment straw capital raising in premarket trading berkshire hathaway is spending $377 million for a 9.8% stake. store capital specializes in single tenant real estate. jury selection begins today in new york in the trial of former pharmaceutical executive martin shkreli facing charges of security fraud and pleaded not guilt if i shkreli is best known for buying the rights to a decade old drug and increasing the price 55 fold the charges however are not related to that. today is the final day of the supreme court term it will be watched closely on two different fronts the justices may hand down a ruling on president trump's travel ban and there's speculation that justice anthony kennedy may announce retirement

from the bench several ohio government websites were hacked with pro-sigh sis messages sunday morning. at least seven government sites displayed messages supporting isis and criticizing president donald trump among the sites the ohio governor and first lady's pages, the state office of corrections, medicaid and casinos state officials say that no personal information has been compromised by the hack but that all affected servers had to be taken offline. the messages postedby the hackers said, in part, you will be held accountable, trump, you and all of your people for every drop of blood flowing in muslim countries. today is the 25-year anniversary of starbucks' listing on the nasdaq. scott maw is here. he is the chief financial officer of starbucks, and he joins us right now to talk about shareholder returns since the ipos, and the biggest initiatives driving the brand forward. scott, thanks so much for being here today >> thapgs for having me. >> so, things have changed in the last 25 years at starbucks >> yeah, if you look back 25 years, when we went public, in

1992, we had $100 million of revenue. we had just over 150 stores in five states here in the u.s. we went public with a market cop of $250 million. and if you roll forward to today, we have over 26,000 stores in 75 countries, our market cap is north of $85 billion. revenue is about $21 billion and we have over 330,000 people that proudly wear the green apron every day. and what's exciting about that we call our employees partners because they participate in the equity program at starbucks. if you look over that 25 year period, that goes all the way out to our store employ east, we've given about $1 billion worth of stock value to those people out in the stores and it's really them that we're here to celebrate their hard work. their dedication, they're ability to deliver that elevated starbucks experience every day today's really all about them. >> let's talk a little bit about the new initiatives that you have because it seems like things are always changing at starbucks you always have something else going on

and maybe one of the big issues that you're focusing on right now is just increasing the percentage of food sales you think of starbucks as a coffee store but it is much more than that. >> indeed. if you go about five years we had about 16% of our revenue was from food in the u.s. stores today, that's over 20% and lunch has been a big part of that we've certainly been successful at breakfast with our lava lunch, french bake which acquisition but lunch has been a big part of our food growth and it's all about providing higher quality, fresh food at lunch we're rolling out a test in chicago of really a food that we make that day, and sell that day. it's really fresh food >> in the stores >> in the chicago stores, yeah we've been doing that for a couple months and early results are very strong there. so they'll be rolling that out to more stores as we head in to next year, but lunch will be a big focus for us in food >> how do you do that without messing up in the order of things getting in quickly, i mean just when you start taking on more and more roles like that, there are the potential

screw-ups of things you do really well. >> indeed. we have daily deliveries to all of our stores today for fresh food items like sandwiches and bistro boxes we already have a significant supply chain capability set up what the fresh food test we call mercado. chicago emphasizes even more fresh food, perhaps multiple deliveries every day so it's leveraging the infrastructure and the vendor support that we already have today to just elevate that fresh food another level. >> what are your margins in food versus coffee? >> margins in coffee are in north of 80% and in food, they're north of 50%. so we still get really good gross margins in food. >> but as you ramp up the food aspect, your combined margin will be lower. >> indeed. the gross margin is lower but if you look at profitability at the store level our operating margin at the store level actually goes up with food sales and that's because we leverage the rent and the fixed cost infrastructure we leverage labor, so every time we attach food to a bench order, profitability goes up on a percentage basis in the stores >> what about mobile transactions what percentage is that of coffee sales at the moment, and where do you expect it to be in

five years >> it's approaching 10% today. so when we launched -- when we fully rolled mobile order and pay a couple years ago we had a target within the first year to get that up to about 4% of transactions and we were really watching stores that had more than 10% of our transactions at peak because of primarily a benefit of convenience for our customers at peak. we're now at 1800 stores that are over 20% of transactions at peak and that percentage is getting close to 10% to answer your question. >> when you think of technology in that sense and how it's affecting your industry, is the purchase of wells fargo a specific threat to you >> it certainly is a shifting -- >> he's like what happened >> i just got an e-mail but they might do that, too >> expensive purchase. >> definitely a shifting retail environment. in fact, howard's been talking for a number of years about the seismic shift in retail. and for starbucks for us we're really focused on two things that we think differentiates us in that space. the first thing is, if you want to be a successful physical retailer today you have to deliver some sort of experience,

that's beyond the core product that you sell or serve so for us, it's really been about that third place environment, about the starbucks experience, a gathering place, a sense of community, a sense of connection that we provide in our stores and obviously with howard's focus on the reserve brand and the grocery which is a 15,000 square foot store experience in seattle that we think we're really well set up for that experiential side and the second side is about digital. the relationships that you talked about making it easier for the customer to interact with you. we've been investing for that in years. mobile order and pay is the latest evidence of that and we'll continue to do that in the future >> one of the great challenges that we have the future of work. what does that workforce look like we're really concerned about what's happening in retail, and even in food service, and you being a huge commitment to refugees across the country and across the world how do you see growth in employment at starbucks, compared to other competitors? >> right we have significant growth in employment just from the number of new stores that we build, and the increased transactions we

have every year. that 330,000 number i mentioned is growing significantly every year because of the new stores that we're opening what's happened is we opened the new stores at higher levels of profitability and higher levels of revenue each and every consecutive year that's adding significantly to our employment rates not just here in the u.s., but significantly in countries like china where we'll add over 500 stores in china, it's our highest level of return. our highest level of overall profitability and return in those stores so, we continue to hire a significant number of people, partners for those stores. >> through expansion did >> through expansion and additional transactions, as well so we've been growing transactions, which drives more labor and getting at high quality pools of labor is really important for us so we announced an initiative where we're hiring thousands of veterans and military spouses. where we're hiring opportunity youth that come from disadvantaged backgrounds to fill positions in our stores and recently refugees. >> you mention china being a huge driver of growth. would there be any consideration of spinning off the china business as young did with its

china business you recently hired i believe a separate head of the china business, so it looks like structurally, you're moving in that direction >> we're all about owning our china business we have half the country that we own and half the country we're in a 50/50 deal with so that relationship and structure works very well for us by owning those stores we get all of the profitability, we control the growth and really what's happening in china is it's our biggest growth market our best days are yet to come there. i mention it's our highest level of profitable. we have a local chinese leadership team that's driven significant growth so china remains our highest revenue growth market. our highest comp sale same-store sales market often in the single higher digits. >> are we growing enough coffee in the world i mean there's a big challenge right now, as we see climate changing, basically what's going to happen with the growth of coffee >> it's a great question sustainability is a huge focus for starbucks. we have 99% of our coffee is ethically sourced. sustainably sorsed

we make significant investments in origin countries. we actually have agronomists that work for starbucks in costa rica, in the sumatra region that share practices around how to develop plant species, fertilization, things like that. and we share that not just for starbucks farmers but for all farmers in the area and that's helped us keep a really steady supply of high quality arabica coffee which is critical for us. >> thank you so much for joining us today >> thank you very much >> again, scott maw is the cfo of starbucks who's going to be ringing the opening bell here at the nasdaq a little later this morning. congratulations. >> thank you let's get back to our guest host and talk about u.s. crude and national gas production. senator heidi heitkamp from north dakota senator, we've seen in one week crude oil down by 4.4% at what point does it get concerning in your view? >> you can't change investment decisions on a dime. and so everybody was counting on that 50-plus i think we saw a tremendous amount of stability over that time period in terms of domestic investments.

we saw investments come back to north dakota we saw increased production. obviously there's a price point at which people -- it will, again, slow down i don't think we're here and i don't think we have stability yet in price that will slow it down but it will definitely give us back to production and less exploration. one of the things we don't talk enough about is that right now we know where the oil is i mean we know how to produce it we're producing it more efficiently. that's a great story that's not told often enough. what happens when the known reserves begin to decline curve and we have not done enough exploration because there hasn't been money in exploration. >> what is the price point of this $50 that you see additional production or is -- what's the price point the kind of cliff for when you actually see more exploration? >> if you had asked me 18 months ago, i would have told you it was 60 but we continue to be more and more efficient in part because we know where the oil is

we know how to get it. we're much more efficient in terms of extraction. especially in shale plays. >> -- at this level at $43 >> you know, one of the things that i know i was here before is touting the oil exports we do see the spread between west texas and brent has made a huge difference and as dollar values decline that's going to make a difference, as well. and so you know, i would hesitate to give you a number. because, this is a industry that has been much more nimble than what people ever thought -- >> moving -- >> there's still quite a big price gap with asian lng prices and domestic prices. how much opportunity is there for the u.s. to be exporting oil or gas, and where would you -- how far away are we from that happening? >> well i think we're going to continue to see expansion in oil. in exported oil. in part because our refineries don't refine what we produce in

massive quantities especially in shale. but natural gas is a real opportunity, and there's kind of this push/pull because one of the reasons why you see chemical manufacturers coming back. why you see advanced manufacturing in the united states, is low natural gas prices nobody really talks about that as a driver. everybody kind of wants to hang onto that. if we continue to export, what's going to happen with stability of natural gas prices. what i say is that, if you keep natural gas prices artificially low, you will curtail investment and curtail production and so eventually, we're going to have to see some stabilization. we're going to see for the first time probably a natural gas kind of international market that's going to establish more international pricing of natural gas. >> so the president is expected to make a speech at the department of energy on thursday, and the focus is expected to be exports you were instrumental in the 2015 export law. have you been working with the administration what would you like to see on the export front in terms of

expanding it, and in what areas? >> i would love to see more lng export terminals i think that's good for our trading partners i think it's really good for stabilization of our allies. one of the things that we know is that in order to get natural gas you may be doing deals with people you don't want to do deals with we want to be that alternative but we also want to make sure that we don't destabilize natural gas prices here in the united states. >> what are you talking about specifically helping europe perhaps not rely on russia, or -- >> absolutely. and japan. and looking at where those mark e9s are, and how we can, in fact, integrate ourselves. i was just up in norway, saw their export terminal for their natural gas, and so this is something that i think is going to be -- it's going to surprise us in a year to see what's happening with the movement of natural gas across the water >> well, senator, sticking around

stay tuned for more from heidi heitkamp meantime coming up, former ceo of wachovia bob steel joins andrew ross sorkin live. meantime a check on futures holding up and even gaining a little steam on the dow jones up by 72 points at the opener nasdaq looking to add about 32.5 (baby crying) ♪ minutes old. ♪ a baby's skin is never more delicate. ♪ what do hospitals use to wash and protect it? ♪ johnson's® the number 1 choices in hospitals.

andrew is in aspen, colorado, this morning he's there for the aspen ideas festival and he joins us right now with a special guest andrew, good morning >> good morning, becky i am here with a very special guest. the chairman of the aspen institute, but you know him so very well for so many reasons, bob steel is joining us. he's the former -- you were the former deputy treasury secretary. undersecretary for awhile. also, deputy mayor, new york ci city you've had a lot of titles >> listen, i don't know whether that's a function of not being able to keep a job or whatever, but i've got to do a lot of interesting things and have some good seats and work with amazing people >> one of those people, before we get into this, is walter isaacson who is going to be on with us in just a little bit but this is his last aspen ideas

festival >> that's right. walter's been the leader of the aspen super for 14 years and done an amazing job. because of walter's leadership the organization has really gone to new heights and higher and higher and walter's done an amazing job. he wants to retire and focus on writing a few books. he's moving back to his hometown of new orleans so it's good for walter, and it will be an opportunity for us at the institute. >> okay. let's talk business. what are you seeing out there right now? is this good or bad? even out here, among let's say the well-heeled, there seems to be a sort of strange sense of anxiety yesterday during some of the sessions >> you know, i think we started the ideas festival focusing on health care, so that does preview the idea of an area that's got a lot of questions. >> right tom price was here yesterday >> yeah, secretary price was here and i thought what i took away from him is that -- that what you're seeing is kind of a starting point, and a beginning of a negotiation and you have the president's point of view. you have the house's point of

view and you have the senate's point of view, on both parties and there's going to be a process here and i thought what you heard him say was that we have some principles that we believe in, but we're open for discussions, negotiations, and that's going to be the path forward >> okay. but when your corporate clients call you and say, is health care going to happen? are taxes going to happen? you tell them what having spent all the time that you did in the swamp, dare i say, you know how these negotiations go one way or the other. >> well i didn't think of it as a swamp when i was there but, i think we're watching this develop. and it's certainly going more slowly and a bit bumpier than we might have guessed or we've historically seen. but we have a new type of president and he's figuring it out and getting his team organized and it's still early days but we really have health care, tax reform are the two big things that people are watching and we're going to have to deal with bumping up the debt ceiling, too >> how is that impacting one way or the other what you think big business is doing? which is to say, cap-ex investment, which is to say

employment, which is to say m&a deals that you advise on >> i think that's background noise. i think the front noise or the loudest noise really goes something like this. you're a ceo, and you're working hard, and growth is hard to find if you're an industrial business it's not an economy that's going strongly if you're in a packaged goods business there's no pricing power and no matter what business you're in business models are changing but if you look at those three things, the backdrop is stock prices are high and interest rates are low. so ceos i find open to discussing how to change or adjust their portfolio businesses >> senator heitkamp is actually back on the set. she has a question for you >> hey, bob, you know, there's a lot of talk, again, about institutions being too big to fail and the four largest getting larger do you think that there's hope that we could do small bank and regional bank reforms, provide that competition, and to put some of the other dodd-frank

issues like large bank issues off to the side? do you think that would help with competition and with the too big to fail problem? of course i think the question about dodd-frank is that we watch when regulation responds to a crisis. you wrote the definitive book about this, and about the time of that period and basically, i think a lot of us believe that the pendulum might have swung too far in particular, as the senator suggests, that with regard to small financial institutions, there's a weight on them that seems unnecessary. so, taking some of that weight off has to be stimulative for growth, and we, as you suggest, segregating that out from the more complex issues of too big to fail seems like a progressive, or a positive force for the economy. >> a couple other questions for you. you are a former goldman sachs man. >> okay. >> and i should ask, because gary cohn is now in the role, and there'sny news story out this morning speculating about whether he either wants or should be the next fed chair

would you encourage that >> listen, it was great to be at goldman sachs for almost 30 years and i learned a lot. i'm appreciative for the wonderful experience gary, point two, gary's a talented executive i don't know what he wants to do his role today is really at the center of the white house, in the west wing, leading policy. it's a date-to-day, make it happen, kind of job. being the chairman of the federal reserve board is different. and i just don't know which one gary would like to do. he's a really skilled fellow and he'll do well at whatever he does i don't -- i'm not inside gary's mind as to which type of activity would be better for him. >> okay final question your big idea, we heard what they called brave ideas yesterday at the aspen institute. is there any big idea you've been ruminating on yourself or that you've heard? >> well i think you and i talked about this before. i think the issue that all of us, who follow policy and business and the economy, have

to think about, is how do we have an economy that both grows and works for more and more people and that's something we all have to puzzle on and i think it's unlikely that all the policies or strategies of the past are going to be good enough for the future. and so how do we do it i thought yesterday, in the interview with teller, who runs google-x, he told us that in his view things were changing at three times the rate of what we saw in the past. so if you went back 30 years, the change from 30 years ago to today will be the equivalent of ten years in the future. so we're going to have to have new ideas and think about new ways to do this. >> bob steel, thank you so much. >> it's good to be here. thank you. >> thank you guys, back to you. >> all right, andrew, see you in just a few minutes coming up we'll wrap up our special hour of senator heidi heitkamp in the next hour senator rob portman talks budget, tax reform and much more. walter isaacson joins andrew live from the aspen ideas festival we'll talk leadership and innovation, and later former

u.s. commerce secretary penny pritzker will be our guest "squawk box" will be right back. you always pay

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financial deregulation where there could be cross body support? >> absolutely. i think for small banks we already have a lot of that done. the democrats proposed a bill last session, or last congress, that i think we could have passed and had unanimous support on the -- our side of the aisle the trick will be the regional, and midsized banks, which i think need the support, need to reduce compliance. they're not systemically significant. they shouldn't have those burdens. and they need to be there in the competitive market against the bigger banks >> in terms of deregulation, it's still fairly political as a topic. many of your colleagues criticize the treasury white paper. your view on that from treasury secretary mnuchin? >> i actually thought it was pretty moderate. i expected something a lot broader and bigger and there's things obviously i don't agree with but there's also things that i think we can do. you're going to see hopefully in this congress something get done

i sat at a hearing a couple days ago and said look i'm tired of talking about it i've been talking about it for four years i want to get it done and move on >> ten seconds left. your hunch, will the republicans get the bill through the senate? >> i never bet against mitch mcconnell. i think you're a fool if you do. >> senator thank you very much for joining us this morning. >> thank you >> when we come back we'regoin to hear from the other side of the aisle, senator rob portman apg um on the key committees shintrp policies he's our guest host for the next hour last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and.

crunch time for health care reform gop leaders in the senate trying to rally support for a vote on the obamacare replacement bill this week. our guest host this hour, senator rob portman. ideas and innovation global business leaders gathering in colorado for the aspen ideas festival we'll take you there live. plus, watch out netflix. facebook could be coming to a tv near you the details straight ahead as the final hour of "squawk box" begins right now live from the most powerful city in the world, new york, this is "squawk box.

good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square i'm becky quick along with melissa lee and wilfred frost. joe is out today and andrew is in colorado. he's at the aspen ideas festival and he has three special guests joining him this hour. the aspen institute's walter isaacson, aol cofounder steve case, and former u.s. commerce secretary penny pritzker andrew, good morning, good to see you again. >> good to see you >> there he is it's early there >> it's early. we, i should tell you, and we'll show you a little bit later, not only are we in beautiful aspen, there's actually a crime scene behind us. i feel like i'm doing local tv, literally is taped off a car is in a little pond right behind us, so we'll show you that and talk about it later it's a little bit one of those sort of strange videos but -- steve case and walter isaacson coming up in a second >> is everything okay? >> everything's okay >> i assume you didn't drive that car >> it wasn't me.

but this -- this will be in the local police blotter tomorrow here in aspen. >> we need a shot of it later. we need to hear the story behind it in the meantime let's take a check on the markets this morning. futures have been higher all morning long you're going to see right now that the dow futures are indicated up by about 71 points. s&p futures indicated up by 7, and the nasdaq, which had a very strong week last week, indicated up by another 33 points this morning. treasury yields, well, that's been an interesting story as we continue to watch the yield curve flatten. right now you see the 10-year is yielding 2.147%. the 30-year just yielding 2.719% and that's a spread, that's been what people have been talking so much about we'll continue a little bit more of that later this morning but in the meantime take a look at oil prices that's the other big market story. oil prices down by almost $2 just last week this morning up by 14 presents to $43.15. >> oil was up a percent this morning as well. so it's slipping a little bit.

obviously down like nearly 4% last week. if it goes back into red territory today that would be a concern. >> among today's top stories, activityist investor dan loeb disposed of 3.5% stake in nestle he's arguing the company to improve margins, buy back stock and shed noncore businesses. earlier this month the swiss packaged foodsmaker said it was considering the sale of its u.s. confectionery division third point also argues nestle should tell its 23% stake in l'oreal. facebook meantime reportedly talking to hollywood studios about producing cd quality shows. "the wall street journal" says facebook is hoping to launch its original programming by late summer and is willing to commit to production budgets as high as $3 million per episode and on economic agenda, major durable goods just about 15 minutes time. economists are looking for a drop of 0.4% following a slide of 0.8% in april ar connick reportedly supplied panels for use in london's grenfell tower.

75 people died in the fire last month. according to reuters e-mails sent by and to arkinic sales manager, questions why the panels were used despite warnings that such panels were a fire risk. down 7% now on share price shores of store capital are rising berkshire hathaway spending $3.77 million for a 9.8% stake store capital specializes in single tenant real estate. pandora's founder and ceo time westergren is reportedly going to step down recode reports a replacement has not been selected. he will likely stay on at pandora until a new ceo is in place. pandora is up 3% this morning. in washington, president trump will be meeting with indian prime minister narendra modi at the white house today. immigration and climate change are expected to be among the top issues that the two leaders will

talk about yesterday modi sat down with some of america's most high profile ceos including apple's tim cook, amazon's jeff bezos, jpmorgan's jimmy diamond and google's pachai. the congressional budget office is expected to release its score for the senate health care's bill sometime this week, possibly as soon as today. joining us right now is our guest host for the hour, ohio senator rob portman. thanks for being here today. >> thanks for having me back on. >> so all eyes, joe hates when i say all eyes, but all eyes are on the senate -- >> by the way we miss joe. where is he? >> he is on vacation >> cincinnati guy. >> yeah. >> you know, senator -- >> very genuine. >> we just heard from heidi heitkamp and she says she would not bet against mitch mcconnell when it comes to getting legislative bills through. where do you stand on this will you vote for it >> well, until we know what is in it it's impossible to know how to vote on it in my view the congressional budget office, which is a nonpartisan group in

congress that determines what the cost of the bill is, but also what the coverage is, in other words what the effect of the bill is going to be on people i represent in ohio, is going to report today. i look forward to seeing that. i saw the report on the house bill, i was not able to support the house bill as a result mostly because of the coverage issue with regard to lower income americans and in my home state as you know we have a huge problem with these opioid prescription drug heroin, synthetic heroin, and unfortunately, that problem's getting worse, not better. and medicaid is a huge payer, and the changes in medicaid concerns me. >> is it the changes to medicaid that don't leave enough for people with opioid problems? or is it the limits that are eventually placed on medicaid spending for states? where is it that it really bothers you? >> well it makes an overall reform of medicaid giving it back to the states more flexibility i think that's a good thing actually but then it cuts it back in terms of the federal share to the point that i think it's very difficult to imagine the people who are now getting the kind of coverage that they need,

particularly those on treatment on the opioid issue will continue to have it. ohio as an example, expanded medicaid, which is part of the affordable care act, 50% of our cost is mental health and substance abuse treatment. and so we need to figure out a way to deal with that. i do think we can make some changes to the house bill to address that but we need to see where this senate bill comes out. >> you know, ohio is an interesting position you point out the oip yoid problem that's rampant in ohio and a lot of other states around the country, but you also are dealing with anthem pulling out. and the obamacare exchanges, you're going to have something like 18 counties that will have no coverage by next year because of anthem pulling out. what are you doing in that situation >> we anthem made its decision two weeks ago you're right 18 counties end up with not a single insurer on the individual market, including the exchanges. another 27 counties had just one insurer. and several other counties have two but are going to one soon.

i believe. depending on what happens with this bill. so i do think there's things that can and should be done right now to stabilize the insurance market and i think the legislation that the senate is putting together is frankly better than the house bill in terms of providing that stabilized market, because it price more funding for these companies to be able to stay in the market or in some cases to come back in and that's really important. because my home state we have a lot less choice. with these insurers being out, and people living with no choice and we also have rising premiums and copays and deductibles as other states today, in part because of that. so that part of the legislation, which i think is sort of the core of the affordable care act, improvements, actually i think it's pretty good it's a part of the legislation that deals with the medicaid program, much of which has nothing to do with the affordable care act. >> okay. for a potential fix with medicaid, i mean, do you want to see the medicaid provisions taken out entirely from this bill i mean, i think they're added in for a reason, trying to get their arms around it, and is

that a possible thing. is there a way that the medicaid provisions could be fixed that would actually -- >> yes absolutely as i said earlier i think more flexibility at the state levels, and i do think there's a way to do that. the bill goes to a per capita block grant per beneficiary block grant taking into account population increases, and taking into account whatever the state's experience has been in terms of an increase but we need to do it in a generous way and we need to do it in a way that ensures we aren't having people fall between the cracks particularly again with this overwhelming problem we have with the opioids. >> but in order to address your concerns if i'm hearing this correctly it's going to put mitch mcconnell in a position where he is likely to lose some of the more conservative voices -- >> not necessarily >> how so, because people like rand paul and ted cruz have said, look, this goes too far, and it's too generous, and needs to be taken back in and rein in some spending. >> they focused more on title 1 of the bill and i've read the legislation, which is, you know,

excruciating task to do. but it's very complicated. but ultimately, i think where they're more concerned is about the flexibilities, ensuring that the markets work, ensuring that premiums do go down. i share many of those concerns i think on the opioid issue and being sure that we have adequate resources to deal with addicted people in treatment, there isn't as much disagreement i do think that we need to see some improvement there and if we don't we're all going to pay the price because these folks are going to end up needing this care, which means they'll end up in the emergency room, which is much more expensive, or they'll end up in jail because they're not getting the treatment. this is a disease addiction. this is something that is causing more deaths in america today than any other thing including car accidents, more people dying of opioid overdoses last year than at the height of the aids epidemic. so this is a crisis. we need to be sure we're addressing it. >> so it's not really on the cbo score then you'd like to see those changes regardless of how the cbo score comes down >> that's correct. although the cbo is going to

tell us something wilfred which is what is the coverage? what's going to happen with regard to these medicaid changes that the senate is putting in that are different than the house. we're looking at that very carefully. >> just north of the 23 million who will get kicked off that's a negative in your view. >> that's a bad sign, yeah look, you need to look at underneath it the analysis to understand what the assumptions are, and some people say that's because they assume that more people will go on to the expansion states and that's not fair that's fine. but they also say that some people will lose coverage. we've got to be sure that the combination of the medicaid reforms, and whatever the tax credits are that help low income americans -- >> the cbo scoring for the house also said that some people would not get coverage because they would choose not to. they're forced to under the mandate. that some of them would come off because they would choose not to >> of the 23, 14 million were medicaid recipients who would lose coverage. but you're right the majority of the other group, a number of them were younger people who would choose not to get coverage, it's an individual mandate were not in place. >> you're okay with that

it's the people getting kicked off medicaid -- >> well i want everybody to get coverage and i think that's important that we have incentives in the bill to ensure that young people do get into these pass if you don't have young people in the pools it's going to be even more expensive. so i think there's some positive things in the senate bill with regard to ensuring that you have a broader pool and ensuring you have a higher risk pool for people with chronic diseases because that's something the house bill could be improved on. i am going to look at the whole thing but particularly my focus is going to be what's happening to medicaid, what's happening to people who need drug treatment in order to get their lives back on track >> have you discussed this with mitch mcconnell to this point? >> many times. >> and do you feel like he's receptive to your concerns >> we'll see >> you think there will be a vote this week >> i don't know. i don't know i'm not one to set artificial deadlines and this is too important. we've got to get it right. so we'll see whether they push it to a vote i don't think the information is out there to be able to do that. we have a town hall meeting tonight, i'm going to talk about my constituents about the cbo score and what we see.

i want the opportunity to visit with my constituents more on it, and get their input. i've gotten plenty of input from people who have decided that this bill is great or decided that it's terrible without knowing what's in it so now let's see what's in it and have a more informed discussion >> senator, thank you very much. again senator portman's going to be with us for the rest of the program. >> still ahead on "squawk box" what's the big idea? business leaders are in aspen this week for the annual ideas festival up next the institute's walter isaacson, and then aol co-founder steve case will join us and later former u.s. commerce secretary penny pritzker on the future of work and artificial intelligence stay tuned you're watching "squawk box" on cnbc (baby crying) ♪ fly

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welcome back to "squawk box. andrew is in colorado for the annual aspen ideas festival. he joins us now with two special guests andrew >> hey there we do have two special guests.

we are at the annual aspen ideas festival our host of the festival walter isaacson is here he's the president and ceo of the aspen institute. also a cnbc contributor. and joining us is steve case who is hanging out with us this morning. aol co-founder and chairman of the investment firm revolutions. you're going to go see president trump later this week. i want to talk about that. you spend some time with tom price yesterday and have a host of leaders coming today, and for the rest of the week let's start with you, though, because this is your last. i don't know if it's your last you're going to be coming back, right? >> if you invite me. >> i will invite you i will invite you back but you have been running this for so many years by the way, congratulations. >> thank you >> this whole event is in testament in part to you to all the people who do come every year, right? actually let me ask it this way, what's the one best idea you think you've heard over the past 14 years running this institution? >> you know, i think general mccrystal came here and talked about serving in the military and serving in other ways that

got people out of their zip codes, out of their comfort zones, that that had been so much a part of the genetic makeup of america over the years, and it wasn't now part of what america's about maybe and he kept proposing an idea of national service so we started something called service year project, which is now being run, and it really is to try to instill the expectation that people out of college are going out of high school to do a year of service >> i remember you telling the story of how you met steve jobs here and you used to walk around with him i'm curious, given that we've been talking -- for the past two weeks about amazon, mazon, amazon, when you think about steve jobs, relative to jeff bezos, relative to elon musk or relative to all the great minds that you've written about historically, how do they rank these days >> you know when steve would walk this campus it was designed by the dow health designers. if you look at the buildings around here. very simple but a beautiful

connection design to technology. and that's where the ipod, iphone, others come from that. that design. i think one of the reasons he stands differently than some of the others today is that he really believed in the beauty and the design of an end-to-end integrative product. you don't see that, whether it be facebook or even amazon, or google now, this notion that you have to control it from end to end and make it beautiful, even the part-time -- >> but who -- i'll ask you, who will change the world the most, 100 years from now, will we be talking about steve jobs or talking about jeff bed owes? jeff bezos' parents, i should say, are also here and donors to the institute. >> real quick say that one of the things just one of the many things that steve jobs did is when he does the iphone, i think it's, you know, by 2008, in july, he says okay, i'll allow third parties, companies, to do apps on the iphone within a year that's a $2 billion industry

now we're talking about uber we're talking about airbnb none of those really exist if you don't have an app economy on an iphone. so that's just one example of how steve jobs disrupted the world. >> you mention it so i will go there before we get to trump, uber mr. kalanick if both of you were on the board of uber, you would have done this you would have said you have to go >> i think it's time for steve to get in on this conversation >> exactly i don't know all the details but it did feel like a great business model, a great company in many respects but some serious culture issues, a broader regroup probably did make sense there's some other issues, some of the litigations with google, sounds like some of the trade secrets are pretty tricky -- >> both of you having studied and you having been a founder-led company, but of very special things and the role of the founder can be a very important component of -- >> absolutely. it's always a great risk when you lose the founder so that is a risk. well that is a risk, the opportunity to move uber forward

with new leadership and probably, find somebody to come in as the number two person, i suspect there's a lot of things going on there that led to that decision >> one more on this subject. and it really relates to continue to be a great founder, a great change the world person can still be nice. that's better way of what i asked yesterday. >> you used the "a" word >> i used the "a" word -- >> you don't do that on tv i mean i think you could look at, you know, larry page i think jeff bezos, he's probably got -- >> how about this guy? he's kind of nice. >> i worked with him for a long time and even before the aol/time warner merger and it was, i mean steve case thad this sense of connecting people as being a mission, as opposed to just being, you know, a jerk or something, and so it worked well >> i think obviously the entrepreneur want to change the world, lead a revolution, you're going to have to be pretty tough minded, pretty resilient, pretty passionate about it. i think you can still do it

well, bringing people along in partnerships are very important to you it can't just be about you and your team and your partnerships. >> i think travis kalanick had to be really aggressive to break down the taxi industry he had a special case there. and i think if he hadn't had that personality, it's pretty amazing to disrupt transportation in most open areas of this world. >> okay, steve, you are going to see another guy that some people call difficult, the president. >> thursday. >> and you told him what >> we've got to make sure that entrepreneurs all over the country have access to capital part of the reason he's the president is because he tapped into a sense out there, a lot of people feel left out, left behind by globalization, by digitization we're backing entrepreneurs in place like silicon valley disrupting the middle of the country and we need to figure out ways to get capital flowing. >> and did you think he was listening to you >> i did think he was listing. he had his secretary of commerce, gary cohn, vice president was there, jared and ivanka kushner were there.

hopefully as they look at this tax reform they'll look at ways, investing in the opportunity acts for example that creates capital gains for investments. we also talked about immigration. there's something coming up in a couple weeks, international entrepreneur rule supposed to go into effect july 17th. i urge them to keep that on track so we can win a global battle for talent. i thought it was a good constructive discussion. >> okay. steve case, walter isaacson -- >> on tour >> in october, columbus, indianapolis, ann arbor. >> gets on the bus >> rob portman is back in the studio >> and you're bringing j.d. vance. >> yes, providing his great book he'll be joining us on the bus tour and hopefully see walter there, and senator portman >> amazing in columbus, ohio >> great cities rising up. we just need capital >> thank you both. for waking up early. appreciate it. guys, becky, back to you >> andrew, thank you very much our thanks to steve and walter, too.

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with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. up next economic data, durable goods about to hit the tail and later former commerce secretary penny pritzker will

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we're just seconds away from may durable goods. let's take a check on futures ahead of the economic data that will be released an up day here on wall street. dow up about 77, nasdaq looking to extend its momentum adding 35 at the open. let's get to rick santelli at the cme in chicago rick >> well, thank you and yes, this is the may preliminary reading which means a few things, durable goods orders are volatile. this is with a lot of pieces missing and we're looking at down 1.1 on this preliminary read that's down about double, almost exactly double the expectations we were looking for minus 0.5 to minus 0.6% take out transportation. it rises to up 0.1 which is definitely light to expectations but it gives you a sense of where the negative dynamics are in the head line let's look at durable goods, capital orders, nondefense acts, aircraft, capital spending, down 0.2. and that follows a slight upward regs from up 1 to up 0.2 many believe this is the most

important aspect of this number. and it isn't good. and if you look at shipments versus orders, it's exactly the same down 0.2, we're looking for the same up 0.3. so these aren't good numbers we've had a spat of not good numbers. we wouldn't say that they're horribly negative. like i say, it is preliminary. we could put in more pieces as we get close to the end of the month. they could look better i don't see equities giving much back though futures still up 71. interest rates at 2.13 right now so it did slip a base point. we are now one base point away from challenging the low yield close of the year at 2:12. will fred back to you. >> thank you very much for that. the health care agenda the house is preparing to start the tax reform ohio senator rob portman is still with us. let's just round things off on health care. we've already gone through some of the areas that members of your party, yourself included, still want to see change in the health care bill

but those issues aside are there areas that have pretty broad support that even have cross body support >> i think there's broad support on the idea of getting premiums down and copays and deductibles and providing more competition in these individual markets. so, we've talked about earlier in my own state we've had a lot of insurers leave the market, leave people with no choices and 18 of our counties is an example. i think there you have more consensus about doing something to bring these insurers back help people in the individual market be able to afford health care >> and bottom line, therefore, does health care reform definitely get done whether they vote this week or not? >> i think eventually it gets done by the way if hillary clinton had been elected president and/or a democratic congress had been elected we'd be in the same situation. we'd have to fix these problems because the affordable care act does not work, the structure of it does not work, particularly with regard to these changes in the individual market. >> senator we've got a tweet coming out from the president. let's get straight to it president trump tweeting in the last minute or so, it says the democrats have become nothing but obstructionists. they have no policies or ideas

all they do is delay and complain they own obamacare senator your reaction, do you degree with that >> you know, i've been on four or five shows now where a tweet has come on while i'm talking. it's always -- >> the odds aren't really that low. >> look, heidi heitkamp was here earlier the senator from north dakota she and i work a lot together. there are democrats working with us let's be honest, with regard to the affordable care act we're not going to get help from democrats. it's sort of religion. and even though they understand that there are flaws in the current law that don't permit it to work for the people they represent, particularly with regard, again, to the way the exchanges haven't worked, the kay the co-ops have gone bankrupt, the way the costs have skyrocketed. i hope we can pull together. >> what does this tell us if anything about the republican party if already, eight senators, on the republican side, have publicly voiced misgivings about this bill which haven't even gotten a cbo score?

>> well, let's wait for the cbo score among other things, see what the coverage numbers are, see what the costs are see what the impact is going to be again my concern lies more in this area of low income americans making sure they can have access to health care particularly with the opioid crisis we have so much of that treatment is being paid for by medicaid we don't want to pull the rug out from under people. >> you're not concerned about the state of your party and its unity? >> no. this is a complicated, tough issue. and we have 52 republican senators and we need 50 republican senators without a democrat to be able to pass this and it's not unusual that there would be some difference of opinion among 50 different members of our party >> is deregulation a less tough issue? >> i do think there's more opportunity there to be bipartisan i mentioned senator heitkamp's and my bill called the regulatory accountability act. it's been marked up in committee meeting. it's commonsense reform that says let's go back to a cost benefit analysis and look at the most cost effective way to accomplish whatever the

objective is commonsense stuff like that. ensuring that independent agencies, alphabet soup agencies like the s.e.c. or ftc and others are included in a cost benefit analysis framework that they are not now president trump agreed with that by the way i think there's an opportunity here to improve our regulatory process going forward, make our regulations smarter so we can be more competitive in a global economy and so that we can put more people to work. >> and what's your time frame for achieving that >> we're hoping to have this to the floor within the next couple months i'm hoping that late this summer or early in the fall we'll have a regulatory debate on the floor of the senate. the legislation in a very similar form has already passed the house of representatives, in fact it passed six times once with 19 democrats supporting it. it has been more bipartisan than some of the other regulatory reform efforts and i think this is a great opportunity to give the economy a shot in the arm. and to help improve not just a number of jobs but the quality of jobs. in other words getting wages up. >> we talk about financial

deregulation there's lots of sort of different white papers or bills out there. are people generally on the same page, whether it's gary cohn, steve mnuchin or congress and the party within it? >> i think generally people are on the same page in saying that we can be smarter about how we regulate, and use frankly some of the information from around the world. other countries get this and on permitting reform as an example, other countries are moving forward more likely with being able to provide construction projects, and green light because they know that we'll track capital and sure enough america's gone from one of the best countries in the world to build something to below 40, you know, on a scale of say 150 countries so, we're losing capital, we're losing jobs. this is why everybody from the business community to the afl-cio building trades council says let's simplify some of these permitting regulations, some of these rules so we can get things moving again and build not just more roads and bridges, more ports, more

infrastructure in terms of our electrical system and so on and do it by stretching the federal dollar further and having more sensible permitting. >> senator thank you very much stick around time for another chat. >> when we come back, leaders and innovators gathering in aspen this week for the annual ideas festival andrew is there, and andrew, what do you have coming up for us >> we have penny pritzker who just walked in we're going to have her up talk a lot about big ideas here, as well as some big ideas that she has about what should happen in wainon 'rgotoalabt itshgt when we return in just a moment. the power of

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welcome back to "squawk box. take a check on where are the markets on this monday morning we're still looking at green arrows across the board. about ten minutes ago we got durable goods orders for the month of may down 1.1% versus consensus of down 0.4% so that was a bigger disappointment thant the markets had been expecting. but not too much movement on the futures. the nasdaq is at 33 point. that's of note because last week the nasdaq added 1.8% on the week european markets green arrows across the board italy has seen the biggest gain of 1.3% and france is higher by just about 1%. >> that off the back of a bailout for two italian banks and banks across all of europe benefiting because of that news. andrew at the aspen ideas festival joins us now with a special guest. >> hey there, how are you, wilf. good to see you. weigh are in krad dpoe at the aspen ideas festival we want to bring in penny pritzker to the conversation, chairman of the psp capital and

former commerce secretary. >> great to see you. >> the big idea here a lot of people talking about the workforce. the skills gap people talking about a.i we had the ceo of dunkin' donuts on our show just two weeks ago and he said that he is having a hard time finding, that he's having a hard time finding skilled workers to work at dunkin' donuts what is going on >> well, there's some -- there's a gap. and we need to be training workers for the 21st century, and for jobs, and we're not spending enough resources. if you look at -- and i think this is a defining issue of our time, which is making sure not only there are jobs and opportunity, but also the workforce is prepared for 21st century jobs and if you looked at our funding of oecd countries, we are, aside from mexico and chile, we're the lowest in terms of funding for workforce training in fact, europe spends seven times as much as we do on workforce training

so we've got a lot of work to do >> so if you were a king or queen for the day you would do what >> i think first of all we need to invest more in apprenticeships, internships we need to make it easier for someone to go from high school to training in a community college. make it much less expensive, to gain the kind of certificates for middle skill jobs which is where you see a big gap in terms of our trained workforce >> okay. you're on the other side of the aisle. but what do you think of president trump's apprenticeship the apprenticeship program that he's talked about. >> well i love the idea that we will have 5 million apprenticeships in the united states the problem is the budget that's been proposed doesn't support that and so we've got to both want to do it, and we're going to have to spend some money behind it. >> okay. i think that senator bob portman is back -- rob portman i apologize, back on set and has a question >> thanks, andrew. penny, it's good to see you out there. i see like andrew you drew the

short straw and had to be in the mountains of colorado this summer >> yeah, exactly it's rough duty. good to see you, senator >> great to see you. i want to talk for a minute about career and technical education. i agree with apprenticeships and internships and have some legislation to provide pell grants for shorter-term training but that would be people at the end of their high school career. how about getting started with career and technical engineering training at the middle school level. we're finding in ohio there's this skills gap and a lot of kids don't see the opportunity to go into a skills trade. they're going to four year colleges and universities, which is right for a lot of people but not right for everybody, getting out and having a big student debt and not being able to get a job that matches their degree. so how about starting career and technical schools earlier and putting more emphasis on that? >> senator, i think you're absolutely right i think starting in middle school, really particularly exposing young people to where the careers are, and what kind of training they need, and then making it -- you know the states that i think are most successful

are making it much easier for while you're in grade school and high school to be able to get the kind of technical training that you need while it's free, in your public schools, going to the community colleges i think these are the kind of programs that we've seen in places like delaware, or rhode island, or south carolina, or here in colorado, that could really pay off for our workforce. the other thing i think we need to do is make sure that we have a 21st century safety net. and providing enough flexibility, because we have 50 million workers today work in the on-demand economy. we need to make sure that their benefits are moving with them, so that they don't find themselves in trouble. >> quick political question for you. this was the president, i think we read this tweet before, but just 13 minutes ago, this is what the president said. the democrats have become nothing but obstructionists. they have no policies or ideas all they do is delay and complain, they own obamacare take the obamacare piece off the list for a second, while you

were with president obama in office the democrats called the republicans obstructionists repeatedly is there -- is there any part of what you just said in your mind that's right in terms of finding some kind of compromise over some of these big issues >> well i think that, you know, one of the things i tried very hard to do was work across the aisle. and as you can see i have a good relationship with senator portman and many of the republican members of both the house and the senate i think that we need to absolutely press forward and try and find compromise. what i don't understand about the health care bill, and i'm not steeped in the details, is we need to make sure that our workforce has certainty. and we need -- and health care is one part of that economic certainty. and so we need to make sure that we fix the problems that exist in obamacare but also, not take away benefits so that folks know that they can be covered if they have a problem. >> and is there any part of the new bill that we've heard about,

the different bill, that you think the democrats could sign off on >> you know i'm not going to speak for the democrats. but what i would say is, is that obviously compromise is important, and economic certainty for our workforce is critical and to get at that, what we need is really to, you know, focus on workforce training for the angst that's been created by automation, digitization, artificial intelligence, globalization. >> final question for you. a fascinating piece in the atlantic, which sponsors this event, about the shift in the way democrats have thought about immigration over the years which is to say, that democrats actually weren't where they are today on this issue. in fact they were probably where president trump was to some agree, even ten years ago. do you believe that? >> well, you've heard me talk about immigration, which is, i think we have a moral obligation to deal with the folks living in our country. but we also have is an economic opportunity to have some form of

immigration reform and i think democrats have woken up to both the moral responsibility as well as the economic opportunity. >> do you want to grade your successor wilbur ross before we go i'm curious. >> you know, no i'm not passing out grades i'm not a teacher here but what i would say is that, you know, he's obviously quite focused on trade, and the world is watching. >> okay. penny pritzker, thank you. >> thank you >> melissa, back to you. >> all right, andrew it is the first day of jury selection, the u.s. versus martin shkreli case. shkreli just arriving at the federal courthouse in brooklyn prosecutors have accused him of lying to investor thes ahis former hedge fund and a drug company he once ran. this is nothing to do with what actually made him infamous and that is raising the price on a decades old drug by 5,000% still ahead how much would you pay for a paper clip $1 $2 how about nearly $200. we'll show you w thyhis is also a luxury item coming up next

time now for your kensho stat of the day --

if you have excess cash and need a high end clip to hold it all together, good news, it's the price of what looks like an office supply item

it will cost $185. not just the price of this is ridiculous but who needs a money clip these days. everything is digital. >> suckers. >> i don't think anyone -- well, maybe some people are. >> going to pay for something that looks like a paper clip just use a giant paper clip. >> also that doesn't look like a jewelry item at all. it looks very plain and boring. >> looks like you could get it at staples. >> a few feature on snapchat is causing out rage for some parents. snap maps lets users track each others movements but child safety group is calling them out saying it heightens the chances for stalking and bullying since others can see what you are and what you're doing. snapchat parent company snap points out the location sharing is completely optional. >> it's like find my friends on the iphones. also a very dangerous app. >> i don't want anybody to find me.

>> you can officially snap anywhere now even underwater royal caribbean is partnering with snapchat to create a modified spectacles mask for underwater diving. they last for 30 minutes under water and 150 feet below the surface. snapchat says it's hoping to roll out the goggles to customers by this fall. >> i like this but niche i can't see many people. >> you can only use it for snapchat that seems very limited. >> so i like the idea. i'm not sure others will use it. >> when we return it is a busy week in washington and tomorrow on squawk box don't miss former u.s. labor secretary pick andy puzder that's at 8:40 a.m. eastern time (dance music)

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senator, thank you for being with us this whole time. we haven't gotten to tax reform yet and the big question particularly as we're expecting a vote on the senate bill is what happens with health care. does that impact what happens with tax reform? >> well, the way the system works you have reconciliation under which you're doing the health care bill now and you have the new reconciliation bill

for tax reform and you cannot start the second reconciliation until the first one is ended either by with drawing from that issue all together or by completing the bill. so yeah, they have to figure out how to get through health care first. >> there's people in the administration expecting a tax reform bill to make it to the floor of congress by the second week of september. >> it's possible. >> it is. >> that time may be a little ambitious because it's taken up in earnest probably in early september but there i think you find more consensus than even on the health care issues that we talk about people realize our tax code is broken it's making it tough for us to see that it's hurting jobs and paychecks. the best thing in my view is we can have the chance to get wajs up that's what all the economic analysis shows >> so i wanted to ask about

north korean given the sad news last week. do they need further reprimand for that or is that a dangerous palth to go down >> i think they need to be held accountable. it was outrageous. he never should have been detained and then the mistreatment and not to tell people of his condition and have the opportunity for health care to be able to come in and help him 16 moss ago practically when his condition was clear he to them so, yeah, they should be held to account for him and others there's three other americans there now. >> how do you hold north korea accountable? >> i'm working on some things that i think are possible which is we already have sanctions on the country but we do not sanction everyone that does business with the country. there's ways to do secondary sanctions. >> that means china then. >> that means china primarily because there's hundreds and some say thousands of chinese companies doing business in north korea. some of which indirectly are

period helping in development of their weapons program and there's an opportunity here using the financial institutions that have business here and also have business in china to help but we need to tighten sanctions. >> sanctions are an enormous step are you suggesting president trump -- >> sanctions would be on north korea but in regard to companies doing business in north korea and that's the question. can we really get the international community to acknowledge this barbaric regime and the need to tighten the sanctions to avoid not just this tragedy also this obvious threat that all of us face which is the nuclear weapons capability and now the means to deliver. >> are we going to get a health care vote this week? >> we'll see i don't know i think it depends on what happens today with regard to the congressional budget office looking at the bill and telling us what the coverage numbers are and telling us how much it costs. we need more information and we

need to make sure that we have the opportunity to take it back and have an informed discussion. this is too important. we need to get it right. >> senator, thank you very much. >> thanks melissa. >> we have just about a minute left let's get back to andrew in aspen. you left us hanging before about what was happening. >> i did this is a place of big ideas but there's a lot more going on here than that. right now there's a crime scene. i want to show you what we saw this morning you have a shot at it now. you have a car that seems to have driven backwards overnight. but the police have been here. this will make the police blotter tomorrow morning here in aspen. you have literally a -- it's turned into a crime scene. >> everybody think andrew was out late last night.

>> paul singer is going to be here talking big business, a lot of interesting ideas always come out of this conference and it's a remarkable thing so for now back to you guys. >> andrew, thank you very much i'm told andrew took his ifb out so we can say whatever we want about him. >> missed opportunity there. >> great to see you. be sure you join us tomorrow right now it's time for squawk on the street. ♪ >> good monday morning cramer is off today. last week of q-2 and we'll start it out with a pretty good trade. futures are higher as the dow tries avoid the five day losing streak from march. the ten year yield near the lows for the year durables are negative for the second straight month. the final trading week of the month. the quarter and th