>> announcer: live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. the music, we think, is referring anyone planning to travel over the holidays, not the beginning of the show. joe and andrew are off today our guest host is jason trennert from strategas research. thank you for cluing me in on the music. eu antitrust regulators fining alphabet 2$2.7 billion google has been accused of promoting its own shopping search service over those of smaller rivals the decision comes after a seven year investigation that was prompted by scores of complaints from rivals in europe and the united states. the previous record fine was 2

$1.2 billion google does have the option of appealing the decision the stock, as you can see, down by 1.25% this is something we've known was in the works and coming, but this is a larnlgs flge number tt your head around it makes me wonder, too, two sectors were not seen as virtuous, financial and energy in the new administration they are more virtuous or more part of the solution. technology there's more questions about it, not just abroad but also in the united states about its power >> privacy issues. concerns with law enforcement when they want the encryption codes. >> for some people, when amazon bought whole foods, they were like, wow, kale by robot i'm out. this is too much. i think these issues have been brewing for a long time but it's also part of the political

zeitgeist we're in in terms of who has the power, who is wielding it. >> >> tetechnology is a sector has been winning and the less firt wo virtuous have been losing. i'm overweight financials, industrials. the sector that performed since election date and the beginning of the year have been lower year to date. if we have a different varying perception it's we think more of the agenda will get through ultimately i think there are real opportunities particularly in financials energy is a tough run. it cuts both ways. the good news is you're easing some of the regulations. the bad news for the sector and the stocks -- >> means more drilling >> a lot of people will punch holes in the ground at anything above $35 a barrel

that's a tough thing technology worries me a bit. you can see there are real concerns on the beft and riglefe right about the power of these companies. >> potential political backlash could be an issue. >> i think so. >>by it's not stopping you fro being long in the sector >> no. that's where the growth is i'm being conngnizant of where e risks are. clearly they're winning. they're winning so much, as the president would say, it's scary. that could be a bit of the problem. >> nice. >> we'll talk more about this in a bit. let's check the markets. the u.s. equity futures, markets were mildly mixed yesterday. slight gains, slight losses depending on which index you were looking at. this morning things are relatively flat. the nasdaq, future also about 27 points below fair value. you can see a bit of weakness

creeping in. we'll see where things trade yesterday the markets closed at about the weakest ovals of the day. overnight in asia, will you see the knee say ended the day up by a third of a percent the hang seng slightly weaker. shanghai was up a bit. in europe in the early trade, you will see at this hour there are some declines. both from the dax and from the cac. reach are down about 0.4%. the ftse is flat, as are stocks in italy if you check out crude oil prices which yesterday ended up slightly, a gain of 37 cents, they are indicated up by that much again work ti up to 43.75. here are the big stories we're watching this morning. the white house is warning syria that it will pay a heavy price if it conducts another chemical weapons attack in an unusual statement issued late last night, the white house says it spotted activity similar to preparations the syrian

government made before its april 4th attack the white house gave no further details of how those details were detected. nikki haley tweeting that any further attacks done to the people of syria will be blamed on assad, but also on russia and iran who support him killing his own people we'll continue to follow this developing story. big moves in the euro on comments from mario draghi draghi says growth in the eurozone is above trend and broadening, but he said inflation is not solid enough to exit theeu's massive simplus prograstimulus program. sprint is in talks with comcast and charter communications for a possible wireless deal. the "wall street journal" says under one option comcast and charter would invest in sprint's network in exchange for favorable terms to cell service using the carrier's network.

the "wall street journal" says under one option comcast and charter would invest in sprint's network in exchange for favorable terms to cell service using the carrier's network. back in may there was a wireless truce that barred either company from doing a deal without the other's consent. sprint shares in the premarket are lower. more gop senators voicing opposition to the healthcare reform bill after a cbo report said the plan would report in 22 million more people without health insurance by 2026 versus current law. ylan mui has more on that. >> reporter: the early reaction to this cbo score is not looking good senator susan collins of maine came out against the bill last night. she won't even vote to start debate on it she has criticized the medicaid cutsnd t s and the impact on ru communities. bill cassidy said the cbo estimates made him more concerned about this bill. and lindsey graham said he's worried that republicans will regret rushing to vote this week

mitch mcconnell said everyone will act soon on this bill >> obamacare forced millions off the plans they liked and forced millions into plans they didn't want or couldn't afford. >> so unless we act, more americans will be left trapped, forced to buy obamacare to buy insurance, but left without the means to actually do so. >> lawmakers are in the thick of negotiations right now senator rand paul said he spoke to the president sunday night about his opposition to the bill nbc confirmed that vice president mike pence will have dinner with conservative senators tonight mike lee of utah will be among them the white house issued a statement attacking the cbo saying the institution has a history of inaccuracies and its

analysis must not be trusted blindly. we know this institution is widely considered to be objective and nonpartisan. >> it's certainly a nonpartisan group and objective on these things, but some of the numbers they've been asked to predict are tough. the white house was pointing out the inaccuracies for the cbo scoring for obamacare. how many people they expected to have under the plan. this is an intractable problem the republicans are learning owning this is a difficult situation. in terms of a vote that's still expected to happen >> a couple of things. on the cbo numbers the cbo was fairly accurate in estimating the total tnumber of people who would be underinsured in the obama plan. they got wrong the number of people who would get insurance from their employer versus the number of people on exchanges and underestimated the number of

people who would use medicaid. on the second point to the vote, right now is seems like leadership is still on traktdck hold a vote this week, likely on thursday before that, they have to vogt on a measure to proceed. usually goes without a hitch but we're hearing a few senators saying they won't even do that if they can't get that motion to proceed, which is likely to happen tuesday or wednesday, they can't move forward to a vote on the substance of the bill >> elan, thank you very much commerce secretary wilbur ross canceled a trip to germany. he was due to leave today to meet the german economic minister and speak at an event held by the economic council the german economy ministry said ross did not give a reason for the cancellation trade has been a fairly

contentious issue. the u.s. commerce department imposed anti-dumping duties on soft wood lumber of up to 7.72%. this prompted an angry reaction from the canadian government which said it would defend its lumber industry through litigation a final decision on the duties is scheduled for september, notably after august 16th when nafta talks are expected to begin. we'll talk more about nafta with son sonny perdue let's look at the broader markets. joining us is doug cotey and ed keon our guest host is jason trennert

ed, you're underweight u.s. equities how difficult of a move was that what keeps you up at night in terms of the continued sustained sort of holding on to record high levels here in the u.s. equities >> we're selling at high levels of evaluation. not nosebleed levels also i'm concerned that the economic data has been consistently weaker than expected earnings data was great. first quarter was great. second quarter was great i'm concerned that the u.s. economy which has been growing at about 2% is more likely to break below that than above it. >> so there's risk to the down side in terms of earnings estimates and therefore valuations >> i think the earnings forecast this year are solid. >> how will weakness in economic growth manifest itself >> i think next year earnings could be challenged. if we perceive that growth is slowing and the risk of recession is rising, i don't think the market is priced for anything close to that >> doug, do you think invests.

>> reporter: too complacent about the risks to the economy given some of the data has been disappointing? >> no. the growth in reflation trade is on track and what a lot of the worry about the inflation numbers, they really are rearview looking. backward looking a lot of forward look data ed mentioned corporate earnings, they're solid. manufacturing is solid you look at europe, what's going on in europe is new. economic activity at a six-year high even france's consumer spending and manufacturing doing well germany doing well they are finally coming on line and contributing to the global economy. that's why corporate earnings are so good. i actually agree with jason. most of trump's policies do get done i don't think that's priced into the market and i don't care if it happens today, but i think we have plenty of time to wait for the

right policies, which are tax cuts to happen, and i think investors can actually lower their risk by getting into the market now >> i agree europe is doing better so why not just overrotate into europe i think the valuations are two multiple points lower. as an asset allocator i want to move money into where you are getting better value so we rotated money into europe and into emerging markets after being on the sidelines i believe there's faster growth elsewhere. i want to buy where that growth is >> one thing i might add, i actually like japan quite a bit. i think that also trades cheap to the u.s in my opinion there are slight structural change, is that are happening there. monetary policy getting better

more focus on minority shareholders but again, the problem i have with europe, there's no big structural change, is that i can see. a lot of benefits that you're seeing in the european economy are largely driven by currency it counts, but the u.s. actually, whether you like the president or don't like the president, there are things that are pro growth that are on the horizon. whether they get passed or not is another story the regulatory changes will happen regardless of what happens in congress. we talk about financials, energy, those thing also provide, in my opinion, big stimulus for the economy going into next year >> if you are of the belief that the reflation trade will happen, that trump's policies will be enacted at some point in time, are you hand over fist in financials and energy? >> i look at it from an asset allocation standpoint. i want to be -- i do agree with

ed, maybe large caps are not the place to be. u.s. small, mid, global reits, emerging markets, international, you want to vspread your bets i'm core on the sectors. i like bonds here. bonds cribbed to risk control. i think people are too concerned -- i don't use bonds, i don't care about rates going up i use bonds as risk control to the overall portfolio. >> maybe we should care about rates going down what was interesting in yesterday's session is the tlt, the etf that tracks the bond market hit a year to date high stocks are sitting close to record highs at what point do we say bonds and stocks should not be going up together. we're watching the spreads narrow, the five-year spread is the narrowest since 2007 should we worry? >> it does seem a conundrum.

i fend tend to think in this cae bond market may be seeing some weakness if we get pro growth policies, i would agree that growth will be better and that the stock market will do better at this point it looks like a toss-up on whether we will get those policies soon. >> on europe, macron said he would lower taxes, pro growth. do you expect that it seems like he's consolidating power. that would be big for france >> would be. i might be revealing my thing, because i have not seen a lot of structural changes out of europe in a long time one reason we were wrong about not being overweight europe year to date, we were worried about this never endum the problem with euro is you

will have a rolling existential question about its existence forever. you still have these questions, and they're tamped down because growth is better when growth is weaker again, you will have an election next year, so the euro is a top-down political elite driven idea. it's nerver been popular with regular people >> are you surprised to see it at 1.12? >> i am actually for my perspective, i would tend to fade it that's my own feeling. listen, doug, anything is that would change the mixture as far as pro growth in europe i think would be welcomed. >> i think britain as well britain is actually doing much better than everybody expected after brexit even though prem htheresa may he

election problems. i think the uk continues to do well and contribute to the global growth. >> and company earnings are growing faster than the fast pace in the united states. and cheapness. with a couple multiple points in your pocket it's a better bet than the u.s. right now. >> thank you when we come back, if you're getting ready to hit the road for the 4th th oth of july hol you're not alone aaa expects this to be the busiest july 4th holiday we'll tell you how gas prices are affecting those numbers. get ready for scenes like this are you ok? what happened? dad kinda walked into my swing.

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has been watching the price of crude oil, this is a relatively cheap time to go >> you talk about the drop in crowd oil coming right before the biggest su efgest summer hof the year gas prices nationally down 15 cents a gallon in the last few weeks. and the lowest july 4th sense 2005 >> how price sensitive are consumers? i knows there something like three states where you have gasoline prices below $2 a gallon how price sensitive are consumers to saying i will drive. >> i think they're becoming used to the low prices and not as excited about them keep in mind, this is a dramatic turnaround we've seen two years low gas pries. that 1.99 still makes a big difference >> what does that mean if prices go up, not that i'm predicting that they will but if gas prices were to cross

above $3 a gallon, what would that mean for people >> rewinding back to 2008, where this is something americans have to the felt in a long time that's when we start to see consumer behavior reacting the most going back over $3 would be a big deal in terms of this move afoot to raise the gas tax. part of that has been -- the debate has come back because gas prices have been so low. the gasoline tax, is that something that would change consumer behavior? >> i think a lot of taxes slated to come in are coming at a time when gas prices are low already. indiana will raise its gas tax 10 cents on july 1st california will do the same thing in november. motorists have not really felt the gas taxes show up at the bump yet that's why politicians are probably busy trying to pass

them >> i don't know if this is a fair question, is there a natural beneficiary to lower gas prices is it restaurants? other parts of consumer spending that tend to doppler particulary well with lower prices at the pump >> i think so. it's going into the convenience stores fast casual is a big winner as motorists have extra cash on road trips, they won't look for the dollar menu, but they want something quick and easy, restaurants, entertainment option as well think of going to the movies, ball game, discretionary spending is up also automakers as americans go back to bigger vehicles. >> how far are most people planning on driving? are we talking about an hour's trip or longer >> our gas buddy summer driving

survey found over 60% are going to be taking at least a road trip of over 500 miles these are not just half hour stints a lot of times these are multiple hour drives and they're crossing state lines. that's another avenue for potential savings. be aware of those state lines. gas tacks change in every state. >> so fill up when you see a low price. >> yes, but shop around for low prices, especially close to the state boundaries s. >> anybody who has been on the roads knows that with all these people traveling it will mean some backups and major delays. maybe one bit of good news this is not busiest of the summer holidays, is it >> it actually is right up there. i would say it's the busiest summer driving holiday because temperatures are better than memorial day and labor day some kids are back in school. this play be the number one

driving holiday. at least if you're sitting in traffic you are not burning that expensive fuel >> what are the worst days to drive? >> generally during the weekend. that's when most folks have off any way. expect a lot of congestion i expect most motorists would end up taking monday off expect the congestion to continued through much of the weekend. >> patrick, thanks for joining us >> my pleasure >> jason, you mentioned who are the natural beneficiaries, the last time we saw gas prices low, we saw cigarettes increase because people were going to the convenience stores >> as patrick mentioned, some of the casual dining. >> we talked to pepsi in the past, they can tell when people are on the roads and when they've working.

coming up, the indian prime minister's visit to washington bringing trade into focus. up next, we'll chalk to the vice chair of the u.s./india business council. here's what president trump said about india's economy yesterday in the rose garden >> india has the fastest growing economy in the world we hope to be catcng y shiouoon in terms of potential increase i have to tell you that. we're working on it.

. welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back look at the u.s. equity futures. things are barely budging. yesterday we saw significant

moves to the upside. those all waned by the end of the trading session this morning dow indicated up by 1.5. the s&p 500 looks like it would open down by a point crude oil prices have come back up but still trading under $44 a barrel news breaking in the past hour, eu antitrust regulators fining alphabet 2$2.7 billion google has been accused of promoting its open shopping service over those of smaller rivals the prove quous recoevious rec 2 $1.2 billion google is considering an appeal. stocks to watch today. paulson and company upping its stake in valeant to 6.3%

this a week after john paulson joined valeant's board general motors is trimming its new vehicle sales outlook for the year the company is now expecting sales to be in the low 17 million range, reflecting a widespread expectation that th industry is headed for a down turn. shares of western digital slipping after they issued revenue guidance that fell short of estimates western digital said it teamed up with kkr to resubmit a bid for toshiba's chip unit. president trump greeted indian prime minister modi at the white house yesterday. >> i look forward to working with you, mr. prime minister, to create jobs in our countries to grow our economies, and to create a trading relationship that is fair and reciprocal. it is important that barriers be removed to the export of u.s. goods into your markets. >> for a look at the u.s./india agenda, let's bring in edward

monster. thank you very much for joining us pleasure to speak with you >> good morning. >> i know your ceo had attended the indian con frenferenceconfe. what are the takeaways the takeaways on sunday were 15 ceos met with the prime minister around what needs to be done to encourage more investment. david farr, our chairman and ceo that attended that session focused on ease of doing business more particularly what is necessary to move money in india. a few technical points he tried to give some focus to there's no holding company tr k structure allowed in india

today. if you have multiple entities and want to pool cash, that cannot be done, so you have trapped cash there was a big tech discussion on digital india the investments necessary to drive digital india forward. a lot of progress being made there. a lot of good investments. all 15 ceos had already comm committed and invested significant money into india it was pretty friendly meeting pretty positive on both sides about what can be done and how to move forward. >> it was a warm exchange in the rose garden yesterday between the prime minister and the president. in terms of their political agendas, modi is known for make india program which wants to bring companies into india to manufacture. president trump wants to preserve manufacturing jobs in the united states. can the two things co-exist? can you create jobs in both countries when you have president trump jawboning

companies into keeping manufacturing jobs here on u.s. shores >> the thing to notice about that, they're talking about the norm this is not something new or different. it's the way business is done around the world if you want to sell in china, you have to make it in china if you want to sell in india, you have to make it in india now with president trump if you want to sell in the united states, you have to make it here fw there's about $120 billion of trait between india and the u.s. that could be as high as 500 billion. >> 120 billion to 500 billion if the regulations were less onerous? >> i think that's the potential. that's what we see when we look at defense sector, the agriculture sector, the energy sector, the healthcare sector. all of these areas together look like tremendous potential. so the u.s./india business

council, the number we're pushing for is what do we need to do between the two countries to get to 500 billion. >> that's interesting but almost sounds like those are two conflicting issues how do you make more in the united states for sale there how do you make more in ichbdya for sale there and increase that trade budget between the two countries? >> there is a balancing that goes on. if you look at defense spending, right now it's up to 15 billion. it was just a few hundred million a few years ago. >> in terms of what india is spending for us. >> india spending for us >> what are we buying from india? >> on the other side, what we buy from india are other goods, consumer goods so those kind of products come back defense on one side, consumer on the other. i think those things can be mixed. >> mr. monser, was there

discussion of china in your discussions? is there a greater geopolitical game going on, which is to say a little bit stronger relation shn betwerelationship between u.s. and india would be a check on china's power >> i didn't see any words there. if they discussed it, they didn't make it public. i have not heard anything. it's well known that india and china have issues. the united states and india would be a powerful combination in any discussion around trade or global issue if you're going to sit down with china >> from an emerson perspective, how much do you intend on increasing your investment in india? do you have a sxwroint havenvo w

>> we've been there since the '80s, we continue to build out we're in the midst of building our largest factory in india, a factory to serve india, the middle east and africa with product for the oil and gas, chemical, electric power and pharmaceutical so a significant investment. about 1$125 million factory tha we're in the midst of building now. so we continue to move ahead >> how crucial has prime minister modi's pro business agenda been in your expansion? >> very important. we needed to buy land. ten years ago it was impossible. fooef years ago it was almost impossible we just bought a nice piece of land we got building permits. we got approvals for the project. we got support for the project that kind of investment is very

positive, and the systems are working much better than they had in the past. >> meaning there's a nationalized system versus the state by state way you used to go >> there's both. you need help from the federal government but the state government is critical certainstates are ahead. there's a real competition, the way prime minister modi runs the country, he pushes the states into competition to run ahead. it's a clever process. he's very good at it as we work in the states we see them working hard to improve >> ed, thanks for your time. >> it's my pleasure. still to come on "squawk box," agriculture secretary sonny perdue will join us at 7:30 a.m. eastern time to talk about the pfuture of nafta.

and the "wall street journal's" greg ip will join us to tell us why he thinks we need more amazon. and we'll talk to democratic senator robert casey from yoreatinlvia u' wchg "squawk box" on cnbc (baby crying) ♪ minutes old. ♪ a baby's skin is never more delicate. ♪

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welcome back to "squawk box. right now it's time for the executive edge on the agenda on wall street, the s&p case-shiller home price index hits at 9:00 a.m. eastern time followed by the monthly consumer confidence index at 10:00 a.m. janet yellen will give a speech at the british academy in lonten at 1:00 p.m. and we had hear from philly fed president, patrick harker and neel kashkari on the earnings front, olive garden parent darden restaurants reports before the opening bell. ibm is building a block chain program for seven big european banks including hbsc and deutsche bank. nvidia unveiling a joint venture with volvo

and auto liv the partnership is part of an effort to develop systems for self-driving cars. l'oreal and natura signing a contract for the body shop sale. the company announced it started talks to sell the body shop for 1$1.1 billion earlier this mont. brazil's top prosecutor has accused the president for taking millions of dollars in bribes. timmer was charged in a corruption scheme involving the meat packer jbs. timmer replaced rousseff just over a year ago. in pop culture news, ail bex banews,ailec

baldwin saying he will appear on "snl" as president trump, but not as regularly due to scheduling conflicts it's not often you hear about white collar crime, people being prosecuted at the top. here's a case of that. a pharmacy executive has been sentenced to nine years in prison after being convicted of racketeering and fraud charges for its role in a deadly u.s. meningitis outbrack in 2012. barry cadden was the co-founder and president of the new england compounding center he produced drugs in unsanitary and unsafe ways to boost profits, and that led to 178 pains being harmed after receiving contaminated steroids. the nine years is less than the 35 years the prosecutor sought. coming up more from our guest host jason trennert. as we head to break, here's a look at yesterday's s&p 500

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welcome back our guest host this morning is jason trennert from strategas research partners. we've been focusing on the low interest rates we seem to have been stuck with, the flattening yield curve what that means. what is your best guess? >> my best guess is that the yield kev wicurve will be meaniy steeper a year from now. because? >> because i think economic growth will be meaningfully better next year because going back to what we were talking about before, i believe the president will get his economic agenda pushed

through. >> so you believe it's weak growth, as opposed to central banks around the world flooding money everywhere >> it's a fair point i have to say i'm critical of central bank policy globally i think it's created more problems than it's been worth. >> it's hard to figure out >> i think they created deflation in many ways i think it's led to a mrastive misallocation of capital >> how do we get meaningfully higher next year >> daughter the taper tantrum, treasuries got to 3.10 >> sky high level. >> i know it sounds crazy. that's what i'm talking about now. that's why i'm bullish -- >> that's a big jump from today. >> it is i think the economic data has been a bit -- as ed keon said

before, earnings have been good, but economic data not as good as expected i think when you see more clarity on this people will discount higher real gdp growth for next i think it both can be true at the same time economic growth hasn't been as good as people perhaps expected. at the same time you do have this anchor with your global central bank policy. >> let's talk about the federal reserve, and who we expect to be the next federal reserve chairman >> yeah. >> you've got an interesting prospect, who do you think -- >> well i think the most likely -- wrote this on friday for a piece for our clients, i think most likely successor to janet yellen is probably janet yellen and i think that's largely because i think president, all presidents like to talk a tough game about hard money when they're running. and then when you become president you say well we don't have to go crazy here. we don't have to tighten right away and i think -- i don't know mr. trump but i would imagine he's probably pretty happy that

rates -- >> i love your thee 'tis on this because he actually told us on show, president-elect trump told us that he's a real estate guy so he likes low interest rates >> of course >> so -- >> and it's hard to get someone more dovish than janet yellen it seems to me. and so, you know, i do think there have been other rumors, gary cohn, you know, has been rumored pip don't think that would be a particularly big development only because she's so close to the president. and i think that you do want to preserve some -- you do want to preserve some independence, or sense of independence of the fed. she's very qualified to do it but you do want to have that separation 33 and so i think a lot of it, with the way the president rolls, i think a lot of it will have to do with how the stock market does between now and february, when her term is up. >> what about kevin warsh? >> kevin is obviously a personal friend of mine full disclosure i think he would be fantastic i think he would be a wonderful

fed chairman he spent a lot of time there, knows a lot, also, about the private sector so he's, you know, which is something i think the fed personally, i think the fed should be moving much more towards, people that have, with all due respect to the fed, have been in the real world you know, it's 900 -- there's the00 ph.d.s at the federal reserve board. there's nothing wrong with being a ph.d. except if you've only been a ptd and academic, certain things like negative interest rates seem like a good idea until you actually do them and then you say gee i didn't realize that would completely decap banks and the monetary policy i think having people with both academic chops and private economy experience would be welcome. >> we want to get back to one of the stories that broke in just the past hour and a half or so eu antitrust regulators fining google parent alphabet $2.7 billion. google has been accused of promoting its own shopping

service over those of smaller rivals joining us now, cnbc's jon fortt. >> thanks for calling in i would imagine google would be appealing this it's not just going to go and write a check for the biggest line ever. >> that's right. they've already said that they are going to appeal. it's kind of a landmark moment, though looming over silicon valley is what happened to microsoft, that antitrust case that really had a big impact not only on that company psychologically, but also on competition. and you sort of wonder whether eventually things go in that direction for google there's a little bit more of that risk now. i think of this particular case, and these particular charges i think of yelp. that is one of the companies cofounder and ceo of yelp is very much front and center saying hey, it's not fair, what google is doing favoring its own results over local results from the likes of yelp. that they're crowding us out in some cases they're taking data fromour service, and

displaying it themselves and keeping people from clicking through to our site. as you know, and as many of our viewers know, in europe, the competition rules really have more focus on the effect on competitors, versus the effect on consumers so, in a case like this, it's a bit easier to prove an anti-competitive case or to mount on anti-competitive case if you're the eu regulators than it would be in the u.s but still, this could have a much broader impact beyond europe >> when you're trying to think about sort of the winners, you know, of this settlement, you're thinking of yelp what else are you thinking smaller rivals basically every other company that operates on the internet out there, i mean, doesn't really narrow the field much, but could it be the likes of priceline for instance or an expedia, just think more broadly, jon, if you will, about who are the potential beneficiaries of this? >> oh, absolutely. i mean, the travel sites have

brought this up as google has tried to expand into travel, and display pg flight information when you do a search the list goes on and on. i mean, i think one of the things that google and others will argue is, boy, the advertising market, and the search market has moved beyond the blue links now, it's now into video, youtube gets mentioned as one of google's strong suits from here going forward. but i think this mind-set on the eu's part should also, you know, raise concerns for the likes of amazon which is probably going to be favoring whole foods items when you search amazon for food you start to wonder how is the eu going to treat things like that, as some of these powerful silicon valley and really u.s. companies, amazon isn'tin silicon valley but these powerful u.s. companies that have become strong, if not dominant in one particular area, try to leverage

that to grow and to bring more services to more arenas. the eu is going to continue to be on their case it's not just google they've been on facebook's case when it comes to data, and personal information on apple's case, as well. so, but this google case is the one that's been percolating for quite awhile and could be taking the turn >> it will be interesting to see if there's any administration reaction here in the u.s. to this sort of anti-competitive charges. >> exactly >> jon, thanks for calling in. jon fortt. our thanks to jason trennert for sitting in >> thanks for having me. i appreciate it. >> coming up, agriculture secretary sonny perdue will join us to talk about the future of nafta and the return of american beef to china after a 13-year hiatus and gop senators working to rally support for their health care bill. we'll talk to democratic senator robert casey from pennsylvania and a programming note, rodney

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a wireless deal in the works. reports are swirling this morning that sprint is in exclusive talks with charter and comcast for a wireless service keel we have the details straight ahead. 22 million uninsured the congressional budget office releasing its score of the senate's health care bill. we are live in washingtonwith the latest plus u.s. beef arriving in china. sonny perdue joins us to talk trade and the revamping of the usda the second hour of "squawk box" begins right now

live from the beating heart of business, new york city, this is "squawk box." good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq marketsite in times square i'm melissa lee along with becky quick and wilfred frost. let's take a check on how your tuesday morning is going to be shaping up in the markets. and a mixed bag here we've got the dow looking at about 1.4 points at the open the s&p looking to lose about 2, nasdaq looking to lose about 27 at the open. making headlines at this hour, breaking news, eu antitrust regulators hitting alphabet with a $2.7 billion antitrust fine. they said google used dominance in search results. regulators say google must end its conduct within 90 days or face penalties of up to 5% of its average global revenue google is considering an appeal. settlement has been reached

with the sons of bernie madoff they'll pay $23 million to the trustees and madoff's victims. the trustee had thought to reach $1 53 million saying madoff's firm had operated as a family pig by bank. and a rail winning streak for crude oil on for the fourth straight day of gains largely the result of short covering oversupply concerns have led to losses in each of the past five weeks and those concerns still remain sprint is reportedly in exclusive talks with cnbc parent comcast and charter communications for a possible wireless deal. "the wall street journal" saying under one option comcast would invest in sprint's network for favorable terms to use the network. joining us is jennifer fritzsche. she covers the sector. thanks so much for phoning in. >> thank you for having me >> what would this mean for sprint >> for sprint, this offers a difference dance partner than what many likely differented was

t-mobile it gives them another chance which is obviously the position you want them to be in many think that sprint was really back against the wall and many thought if t-mobile were to happen it would essentially be a take-under this brings that into significant question >> what is the most likely option, "the wall street journal" is making it sound like the investment by charter and comcast into the network would be the most likely option for sprint which i would imagine would be a great thing since sprins really needs to, i mean all the carriers need to spend money for 5g but they really need to improve their penetration in the city >> i don't follow the cable sector but i think this would be a great scenario for sprint. obviously they're backed by coming from comcast and charter, two very strong and deep balance sheets but for strength, what sprint brings to the table, think of sprint as an old house with great bones that needs a lot of work and it has more spectrum, really, than any of the four national carriers. even some who participated ina auction andwalked away with a

lot. and with 5g spectrum it's going to be key and if comcast and charter, or cable in general, wants to get into wireless, we view this as a very logical step >> would the regulators have anything to say about this, do you think? >> this gets a lot easier, becky, with the regulation, because comcast and charter don't bring wireless to the table. so the issue with sprint and t-mobile clearly would be what's called a hhi index, which would get coj focus. that was one of the killers in the at&t/t-mobile deal 2011. so, with comcast not essentially having any meaningful wireless, that hurdle gets tremendously easier >> so i was speaking to the ceo of sprint just about a month ago and he was very adamant that t-mobile merger would still be an option. that they are working hard towards it this is putting the talks off for about two months does it take it off the table? does it make it more likely? how does it change the calculus

if charter and comcast make some sort of investment >> i mean, i don't think it takes it off the table completely if the article is to be bleeftd, things are in pause for two months the synergy with t-mobile sprint is a real number cable doesn't bring wireless subs to the table. i don't think there's any debate that wireless is a scalable business so where you check the box more in scale is with more subs and that would favor t-mobile sprint marriage because together they'd have almost as many subs as at&t and verizon. about a third of the market. >> jennifer, i know this is kind of a broad question, but when you hear things like this, i can't help but think about at&t, and its push to go ahead with the time warner deal so that it had all of these offerings, and that it has content, as well you kind of look at comcast getting into all of these areas, i guess the big players are just going to need to get bigger and bigger to compete with each other. is that what this kind of tells

us >> i think, absolutely, that's exactly what it tells us and i think the traditional lines of tmt, technology, media and telecom are morphing at&t clearly has placed its bet on time warner, and what did verizon do don't forget verizon is the largest, the strongest, the most nationally recognized wireless carrier. so i think the question is what is their next move >> does verizon's move with aol explain that or is it going to have to get into traditional content as well? >> that's something verizon has felt theydon't need to they often talked about digital content is more a mobile first strategy i wojt underestimate verizon here but it looks like the market, you know, is maybe forcing them to maybe do something bigger than the original plan. >> in terms of the stock price okay, jennifer, thank you. >> thank you for having me >> stocks to watch today shares of western digital slipping storage company issued revenue

guidance that fell short of investment they teamed up with kkr to resubmit a bid for toshiba's chip unit. it's down 2.2% western digital this morning and nvidia is teaming up with volvo. the dow's managed to snap a four session losing streak while the nasdaq's three-day winning streak came to an end. joining us the senior managing director and chief market strategist at cantor fitzgerald, and small and mid cap strategist at jefferies where are we in markets in terms of evaluations >> i think we're pretty rich across the board we look at the s&p obviously, 25 times, a little bit less on trailing twelve month earnings historically that's fairly rich. and if you look at it on other measures, whether it's price to sales or price to book, we

equally rich between enterprise value lu to ebitda looks pretty elevated as well for lark and small cap >> you've seen a bit of a rotation we've seen sort of the drawdown a little bit in technology we've seen that money move to health care for instance, biotech specifically in health care, a little bit of move in financials, does that help your -- i mean, valuations overall may be rich, but sectorwise, they're not. >> yeah, in fact, i think there's quite a bit of dispersion amongst sectors right now. in fact we came out with a note last week where we said we should be buying energy and retail for that matter because it's been so beaten down that the relative valuations of those two sectors versus small caps in particular we like frankly like selling short small caps and long those two sectors as a rotation out of momentum and the value presented itself >> that's your area, tim >> yes, you know, i think today, i don't disagree on the overall market valuations. small caps trading at 19.5

earnings which is really going to be earnings growth that drives market forward. and right now earnings growth looks to be relative weak down the cap spectrum, due to the fact that the global names that have more over disclosure, a bigger push from the weaker dollar and better global -- >> -- small caps compared to themselves if you think there's going to be some sort of tax reform you would think small caps would be the greatest beneficiary and the thing is to figure out how much of that is in the price already. >> you tell me when tax reform is going to happen and i'll tell you about the earnings growth going forward. we did three or four pieces on taxes, and we could just trash them because we haven't really seen anything happen there and i think you've got a lot of that push in the fourth quarter where small caps were up 11%, small cap values up 14% or 15% i think it's a show-me story at this point given where we are in valuations, 19.5, we're still going to -- we get tax reform, let's say it's 25%, you probably

knock two multiple points off so you're still somewhere around 17 or 18 times earnings when historical you're somewhere around 15. i like peter's point, though, about dispersion of performance where there's a massive gap between health care, best performing sector in small gap, and energy, the third widest in the history of our data for the first six months of the year >> you mention in your notes that despite fed tightening central banks are still around the world one of the big drivers for the risk onto the market move what did you make of mario draghi's comment this morning that the euro is up on sort of hawkish comments >> i think it's very interesting that over time and over my career we've gone from thinking about the fed to now, frankly, a new mind-set really which i had an ah-ha moment last year where we're thinking about one large global central bank effectively. and it's clear that, you know, when you look at mr. draghi's comments from this morning, they were, well, the pressures on inflation are temporary. i think we've heard that from another fed chair, as well now whether or not that's the

case is tough to imagine but it's clear that they want to move towards nomplalization. i think they realize they have to if we look at how much balance sheet expansion we've had between the ecb and the doj year to date it's about $1.3 trillion $2.5 trillion on the pace for the year that's quite a bit of qe at some point they've got to take their foot off the pedal, i would think. >> all right peter, steven, thank you >> thank you to washington now, president trump hosting indian prime minister narendra modi to dinner at the white house last night. the president thanked modi for visiting telling him it was an honor to have him in washington. during talks yesterday afternoon trump urged modi to do more to relax trade barriers for u.s. exports. both leaders also took great pains to stress the importance of a strong relationship between the u.s., and india. i look forward to working with you, mr. prime minister, to create jobs in our countries to grow our economies, and to create a trading relationship that is fair and reciprocal.

it is important that barriers be removed to the export of u.s. goods into your markets. >> as trump and modi met yesterday the pentagon said the u.s. state department has approved the possible sale of boeing military transport planes to india and a developing story overnight. the white house warning syria that it will pay a heavy price if it conducts another chemical weapons attack in an unusual statement issued late last night the white house says that it has spotted activities that it called similar to preparations the syrian government made before its april 4th attack eamon javers joins us right now with more on this and the latest developments out of syria. >> good morning, becky unusual is the right word for this statement a lot of observers haven't seen anything like this in decades from the united states but clearly, the trump administration seeing something here that is very much not comfortable with in syria, the trump administration issuing a statement last night saying that they're spotting potential preparations by syria for another chemical attack similar

to the one earlier this year that killed children and innocent civilians the white house going on to say in a statement, as we have previously stated the united states is in syria to eliminate the islamic state of iraq and syria. if, however, mr. assad conducts another mass murder attack, using his chemical weapons, he and his military will pay a heavy price. a stern warning there, from the white house. also followed bup by nikki haley the u.s. ambassador to the united nations she said in a tweet, any further attacks done to the people of syria would be blamed on assad, but also on russia and iran who support him, killing his own people so a flurry of warnings there last night not clear what the underlying intelligence is here that the white house is using to base this warning from but clearly this is something that they saw that they have a significant problem with >> eamon, that's something that people are going to be watching very closely throughout the day.

and throughout the week. but the other issue that still has everyone's attention in washington is what's happening with the health care bill. will there be a vote this week what happened after the cbo scoring in terms of senators who were willing to stand up for it or not >> yeah, that's right. we saw the cbo report come out yesterday that said that as many as 22 million people would be uninsured as a result of the bill that's a big number for republican senators to swallow remember they have to do this on their own. the democrats are not going to supply votes to repeal obamacare. so the republicans have a margin of error of two senators, mitch mcconnell does figure out a way to get this over the line with 50 votes then they can use the vice president mike pence to break the tie and pass the bill. interestingly, i talked to a white house senior administration official yesterday, we were over at the eisenhower executive office building right next door, this official said that if they can thread that needle, in terms of the vote, there is a scenario by which it's sort of total victory

for the white house. they said if the bill passes the senate, that's a big if, they said if it does pass the senate, ted cruz will have to support it in order to get it across. so the question is, if ted cruz supported it, does that get you the support of the house freedom caucus the idea being here, if you have ted cruz on board, he's very close to the house freedom caucus members if it's conservative enough for him, it might be conservative enough for them, and that means you'd have the votes in the house to simply pass the senate, and move on. and they don't have to go back to a conference committee, where they have to re-engage in a massive negotiation between the house and the senate that could be a messy and difficult process, so the thinking here in the white house is, there's a way to avoid that, simply pass the senate bill, and send it straight to the president's desk but that means they have to get the votes this week, and that's a real uphill pull >> and it means that ted cruz is in the catbird seat. >> cruz control again, absolutely >> eamon, thank you very much. >> you bet

coming up oil prices hovering near seven month lows thanks to relentless rise of u.s. supply. we'll talk crude realities after the break. and then agricultural secretary sonny perdue talks trade, china and the reorganization of the usda plus the ceo of airlines to america, an op-ed calling out lawmakers who are trying to add an amendment to air traffic control legislation that would pass the airport tax on passengers stay tuned you're watching "squawk box" on cnbc y 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.

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expectations >> good morning. this afternoon the api is going to set us up for the department of energy numbers tomorrow expecting a draw in crude of about 3.25 million barrels, and gasoline of almost a million that would be better than what we've seen the last few weeks but still not super steep especially when the peak of the driving season is only a week away and a 15%drop in crude prices over the last month as we head into one of the heaviest periods of demand is breaking from the norm what it's telling us is that production continues to rise at a greater rate than the market can absorb it. but should we worry so much about falling crude prices or is lower for longer okay for the economy and the stock market more experts are telling me that the crude drop is actually pretty healthy and oil is just recovering but that's okay gas prices have fallen twelve cents over the last month 2.25 is the national average, good for consumers. a 20% drop in oil is also good for any business that uses it as an input big oil, they've become more resilient so earnings drops may

not be as severe consider that energy companies are roughly 6% of the s&p weighting when in 2008 they were about 15% and that any hit that oil puts into gdp might actually keep the fed from tightening further. so oil in the 30s isn't being viewed as a factor that may press the market >> jackie, thank you very much for that let's discuss further, stephen schork joips us. very good morning to you how worrying this fall in oil prices is in your eyes >> it'ser generally not worrying i'm not concerned with regards to the health of the general economy. oil prices have decoupled from the industrial metals complex. that's whereas two years ago when oil prices crashed so did all the heavy industrial metal prices and that was indicative of storm waters ahead. this time around we've had a bump in industrial metal prices, and they're holding steady while

oil prices have decreased. so the oil surprise story is a case of too much supply, not enough demand, hence the formula for lower oil prices in general it's a good thing for the consumer at this point >> what about for the oil market itself what are the key support levels from where we stand at the moment >> right now, we broke a key support level between 45, 47 dollars a barrel that was very important because what we've seen now over the past three years is that hedgers, and that is to say the crude oil producers, the guys, the only guys in the world who must sell oil, they've been very active hedging to spot oil prices between 47, to $54 a barrel in the spot market. so that has been looked like it is your ceiling for the market for the time being so your question, where can we go from right now? well, we broke that level of support between 45 to 47 dollars a barrel the next ominous target is the threshold that's $40 specifically, there's a key

technical area between -- the trace between the lows of 2016, the highs thus far of this year. so i'm putting the next appointment between $41 and $37 >> maybe a bump from short covering and the inventory numbers, fourth of july next week, fine but we're heading into that peak season when you're seeing the low 40s. you mentioned the high 30s as a possibility. but in the fall, what i'm concerned about, and we typically do go down, how much lower can we go? some people are saying high 20s are not out of the question. >> and that is, of course, the biggest concern right now. we've had this $9 decrease in the price of crude oil right now. that translates into about an 18 cent decline in retail gasoline prices which would take in the summer, gasoline prices down to where we saw prices last summer but that's where the year ago, the narrative year over year has completely changed to your point, oil prices are trending lower now and that has to be a concern, because the

demand for crude oil as gauged by refinery thru put has never been stronger. so prices are going to trend lower when you have record demand what happens to your point in september when demand drops from 17.4 million barrels a to 15.8 million barrels a day and u.s. crude oil producer is still putting on an extra 100,000, 200,000 barrels a day. that's a lot of demand taken out of the market in the third quarter while u.s. supply continues to rise so, indeed, the template for lower oil prices significantly lower is set. so, but in the market, one step at a time. our first area of support is $41-37 you take that out and if it's below that we're going to be looking for that $30 threshold >> stephen, what about outside of u.s. supply, particularly the opec companies plus russia such confidence in their supply deals. where do you stand on your confidence in that at the moment, and does the saudi change in leadership affect your

confidence >> well, i'm completely confident that deal with russia would never work in the first place. and i feel rather vindicated there. wall street went all-in last november let's be honest, opec colluded with the market. they talked to all the big hedge funds out there, they all told opec we want oil prices higher, it did not work. so what did we see in december and january? wall street went all in betting on higher oil prices, they took a record amount into the market, they were wrong at this point. regard to opec -- >> opec wasn't doing it to help out the hedge funds, it was doing it to try to hold onto it owns market share. the hedge funds may have thought they were going to be more powerful than they were. but the collusion is among opec saying we've got to fix this we need this price to be up for our own budgets, right >> okay. so but with regard to collusion the guys who are running the hedge funds out there, they've

been the only guys outside of opec that were in on negotiations so they've got that proverbial first pause they didn't hit mute where opec was going on that -- >> the smart money call, right >> well, and well and yeah they bet and they bet incorrectly and my biggest concern at the time was, look, i didn't think opec was going to have, you know, very strong cohesion on the agreement, and i was wrong on that. i think the opec cohesion was much stronger than history it's ever been and i was getting -- excuse me the big concern was the guys that were not beholden to the opec quote and that was libya and nigeria, and that's what's really cleared the deal my concern expressed to my readers was the fact that libya and nigeria were not beholden to it and of course texas, north dakota, and north american producers were not beholden to it and we knew they were going

to bring back production to the market this year >> stephen, thanks so much for joining us >> when we return, agriculture secretary sonny perdue talks trade deals with china, the revamping of the usda and much more check out the futures at this hour things started relatively flat we're still there. dow futures down by 5.5. nasdaq down by 27. quk x"il b2.y 5. "sawbo wl be right back. a used,

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restaurants, the company beating estimates by three cents revenue also beating forecasts, same restaurant sales driving 3.3% darden raised quarterly dividend to 63 cents a share. that stock up 3.25 shares of shake shack, this is an interesting report from goldman sachs, expressing concern about current quarter earnings she noticed that new york has seen 14 precipitation days so far in the second quarter compared to just 8 a year ago and that's a big deal for shake shack which has got a heavy concentration in the northeast and many locations that feature outdoor seating, not to mention you're talking about the lines out the door you're less likely to stand in line for a burger or shack dog or you like the chicken shack, right, wilf? >> i do. >> do you real little? >> i do. the chicken -- >> yes, yes. >> yes, that's the one i go to at shake shack overall i don't think shake shack is as good as people talk it up to be.

>> really? >> yes i don't dislike it but you know, it has such an aura around it kind of like a -- >> melissa had a good idea which was to install awnings outside >> buy a few awnings, shake shack. solve the problem. also the latest read on home prices in about 90 minutes the case-shiller report for -- hi becky hi there it's expected to show a 6% year-to-year increase. that would be just bov the 5.9% reported for march >> eu regulators fining google parent alphabet $2.7 billion google had been accused of promoting its own shopping search service over smaller rivals google is considering an appeal. european union commissioner will join "squawk on the street" at 10:00 a.m. eastern time. lots of questions for her. it will spark some kind of transatlantic round of protectionism? either way, you're seeing a softness in google share prices this morning the expectation is for more

around 1 billion euros it was 2.4 billion euros or $2.7 billion. a little bit more than people expected still small in terms of google's cash box >> commerce secretary wilbur ross has canceled a trip to germany. he was due to leave today to meet the german economy minister and to speak at an event that's hosted by the conservative party's economic council the german economy ministry said ross did not give a reason for the cancellation but of course trade has been a contentious issue between germany and the united states under the trump administration and a lot of people speculating about what this might mean tomorrow, agriculture secretary sonny perdue heads to asia to celebrate the return of united states beef to china. it actually started to arrive last week. secretary perdue joins us first, right here on cnbc before that trip and sir, thank you for your time today >> good morning, guys. >> you know the return of u.s. beef to china, that's a big deal for our industry china has really stepped up its imports of beefover the last five years it's gone from something like 275 million to 2.5 billion

dollars in beef that it is now bringing into the country. what does something like this mean for our beef industry >> well, u.s. exporters in beef industry and china's phenomenal growth and growing middle class, and i'm convinced once they taste this wonderful u.s. beef they're going to want more of that >> how are some of the early shipments going? and which states are really the big beneficiaries of this first? >> well, nebraska got out of the gate early they've been preparing for this. but all of our beef exporting states from throughout the midwest are going to participate. but, this will be nebraska beef that we'll celebrate coming in initially. >> you know, it's great news for us to know that we are exporting more beef. but part of this was tied to the idea that we will also be accepting chinese chicken. i know for some consumers, that may raise a brow we've heard all these stories about how there's avian flu in china and how food protections are not as strong as we like to think they are in the united

states baby food being contaminated, things being sold and marketed as what they are not how do we know that the chicken, the cooked chicken that's going to be imported here is something that we can feel good about? >> well the good thing about it is our foo agency in the usda does a marvelous job. they've looked for years over inspections, and again we're talked about cooked chicken. the other thing is economically, becky, and that china probably will not be a major exporter of chicken protein to u.s they probably will go regionally i don't think there's any fear really of major -- of chicken poultry protein coming into the u.s. we're great producers. we're the low cost producers across the world that's why we export all over the world with a great poultry industry, as well as a beef industry >> you know what you're talking about with the last name perdue. just in terms of that, though,

what i know as a consumer if i was buying something that was cooked chicken from china? >> you should, yes >> okay. we'll be clear on making sure some of those things come through. >> secretary, how do you think about the balance in your role between protecting producers of food, and making sure they get what they deserve, and protecting consumers and make sure they get the best quality at the lowest prices and i'm particularly asking that question with automation, of course, growing significantly across your sector >> well, no question about it, food safety is number one. zero tolerance for food safety if we don't have food safety standards in this country, we have nothing, and our consumers, we don't want them to fear, to consume u.s. products. that's one reason last week you saw we suspended brazilian beef coming into this country our food inspectors have been inspecting brazilian beef coming in and we suspended it because the product was not up to our u.s. standards and we didn't want our consumers being exposed to that.

so, there's no balance when it comes to food safety that's number one. that's what we do. but also, what we're doing is educating our producers from the field to the table, that the supply chain has tobe safe in all regards. that's why you see many of the standards in fruits and vegetables increasing every day. >> mr. secretary, i wanted to ask you about beck kip's point about the consumer knowing where their protein is coming from i thought that in december 2015 congress repealed the country of origin labeling so that consumers wouldn't know. has there been a change? or am i just misreading this >> no. the kol legislation, the country of labeling origination was a wto case which we lost the u.s. had a country of labeling and there's still a lot of interest in that. there was a huge fine and we were adjudicated to be guilty in that regard and congress then took the only measure they could and repealing that that's still under consideration. but, right now, the country

of -- labeling origin is not there. >> so how will we know chinese chicken? >> well, i think probably you're going to recognize u.s. brands, and i think our consumers are smart enough to know that -- what those brands mean to their family >> if you go into the supermarket for instance, and sometimes you come across a package of chicken, let's just use that since that's your area, extra fine expertise, mr. perdue, oftentimes it's just a store brand. does that mean that it could come from anywhere >> no, not necessarily >> okay. >> our store brands are sourced in the u.s >> got it. all right. >> so i guess it's just a lesson to consumers that if you are concerned about these things, to make sure doing it a little extra research on the sourcing for each of these brands, and that you know the brand well >> that is true. that's why we're looking also at labeling congress passed a labeling law just a year or so ago, and we're developing the rules and regulations there. where consumers in the u.s. can

have access to the information they need to make healthy, wholesome decisions for their families >> the reason china and many other nations stopped importing u.s. beef 13 years ago is because of issues that they had with concerns about our food safety, with the mad cow potential and how closely we were policing some of these things how have the standards changed and were those concerns justified at the time? >> well i think those concerns were not justified i think it was a single animal that came from canada that had the bse, or the mad cow disease. and we felt like the suspension of imports from the u.s. was a difficult and wrong decision that's been long, we've had no experience and no evidence of that in over 13 years. the other thing has to do with our poultry going into china as well while we have occasional incidence of avian influenza here, we -- they're very localized. our usda as well as our state partners have got a good

protocol on our poultry farms that make that very safe, as well, and i'll be talking to china about geographical identification rather than when a small farm in -- somewhere in our poultry has an incident that the whole country shouldn't be barred from exporting chicken. >> mr. secretary, if i could just switch gears. i'm just curious if you had spoken to anybody at alibaba and the reason why i ask as you probably know is alibaba has made a big push here in the united states for small businesses and for producers to sell their goods, oftentimes agricultural goods, to china the example that they continually use are cherries from washington. and i'm just wondering how agriculture perceives that, and whether or not you're helping because theoretically this is getting more u.s. goods, produce, sae produce, et cetera into the hands of chinese consumers >> the answer is no i've not spoken to alibaba. but that's a great idea. that's one of the areas i've done in the private sector, trying to get more u.s. products

from small businesses in there and the electronic commerce this day affords that opportunity so, that's one of the areas we'll be exploring as far as not just large companies, multinational corporate companies coming in, but many small producers that grow great products here in the u.s. having access to a growing market in china. >> mr. secretary, thank you for your time today. we do appreciate it. >> thank you all coming up, lawmakers looking to uncap the airport tax and make passengers pay for airport infrastructure projects. the ceo of airlines for america has a new op-ed tackling that very topic he joins us after the break. and on a programming note, kroger ceo rodney mcmullen will join "squawk on the street" 10:00 a.m. eastern at the cnbc exclusive interview fascinating things going on in his sector at the moment futures at this hour slightly lower. so you miss the big city? i don't miss much...

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welcome back to "squawk box" -- what's so annoying is that was on microphone the most important -- >> stuck on the quality of

chicken and whether you're going to be able to know if you're buying cooked chicken from china which started our entire conversation >> it did. and we transitioned to the point which is the food retail in new york is not as good quality as it is in the uk. >> according to wilf >> specifically -- >> if you compare tesco eggs or sainsbury segs -- >> also much better. >> so all eggs >> we're all getting -- >> this wasn't making me hungry thinking about british eggs. not american eggs. anyway, futures. let's have a look at what they're saying right now they're a little bit lower yesterday we did see the dow and s&p close fractionally higher. nasdaq down having led the charge higher last week. airline passengers are in for a bumpy ride as congress marks up the faa reauthorization bill this week the bill takes aim at modernizing our airways and improving experience but possibly at a greater expense to flyers. joining us now for more is nick calio the president and ceo for airline -- of airlines for

america. nick, thanks so much for joining us >> happy to be here. thank you. >> sort of a danger that could potentially lurk is in amendments that would uncap the airport tax. which would mean what? new taxes on flyers? >> it would mean, yeah, higher taxes on flyers, who are already paying considerable amount of taxes. most people don't realize every time they fly that their ticket, 21% of the ticket cost is taxes and fees paid to the federal government if you buy a $300 round trip ticket, you're already paying $62 in federal taxes and fees. what we have here are the airport and some politicians just simply wanting more, and it's not necessary you know, we're going to fight this, because our passengers pay too much already -- >> sure. >> in taxes and fees it will have an impact on whether a person nice or not a lot of politicians and airports view our passengers like piggybanks. the more you feed her, the more she wants. >> you know what you're saying

is music to most people's ears and i'm certainly not raising my hands to pay more in taxes when i fly, nick. at the same time, isn't it sort of the way you get the people who use the system to pay for the upgrades i mean, otherwise where does the money come from? the money comes from a broad base of taxpayer money, right? and so why not make the people who use the system, who will benefit from the modernization of air traffic control, pay a little bit more for that >> the reason you don't want to is because they're already paying too much. and there's no need for the money. do you know the -- >> there's no need for the money? we don't need any money to do this >> we've got the money there's $7 billion sitting in the airport trust fund paid for by the passengers. there's rents and charges paid about $11 billion last year by passengers and by the airlines to the airports. if you look across the country, if you look in new york at laguardia and jfk, if you look at chicago, los angeles, smaller airports like sioux falls, they've spent over $100 billion invested by the airlines in the

last eight years to improve runways, terminals, and airport process in general so, it's working now it's working in partnership -- >> nick, you just mentioned a couple of the airports that are leaders have called basically third country airports going into some of these things. what's the problem with places like laguardia or something? >> well, laguardia's being improved part of it is that it's not -- there hasn't been the adequate investment you know, there's something called diversion what many airports do is and airport authorities do is they take the money paid when you go to airports and divert it to local politicians for pet projects like roads or buildings -- >> what? >> about a billion dollars a year gets diverted out of there -- >> how is that even allowable? >> well it is allowable. before the congress decides to increase taxes on passengers -- >> first lock it up. >> exactly >> nick quick question in terms of the supreme court decision to allow parts of president trump's travel ban i mean last time that was introduced it caused chaos at

airports is there better preparation this time what's your take >> it has to do basically with visa issuance. it won't impact our operation is our estimation right now >> nick, in terms of whether or not this amendment actually gets slipped in, what are you hearing at this point? >> it's going to be very tough particularly in the senate and i will say this, one thing we're going to do, we can make clear to our passengers, who is paying for it. there's something called a full fare advertising rule so it's very easy for -- we are the only industry that has to include all taxes as part of the ticket price, without the ticket payer knowing that $62 of that $300 round trip ticket is federal taxes and fees so if they slip in another $2 or $4 they're going to reduce demand but at the same time it will look like we're raising prices we can let our passengers know if you fly from somewhere in mississippi or st. louis or las vegas to somewhere else, and you have two legs, that you're

paying an extra $18 because some politician decided that you could afford it. >> and give us a context, nick because i believe that its was your website where i saw this information in terms of the base price for an airline ticket, for a given point, it really hasn't gone up that -- i mean, the perception is that airfares have gone up. but the reality is that they have not gone up tremendously and it's the taxes that have gone up, the add ons >> that is a very good point that's true. year over year for the last two year fares are down about 15%. if you look at, from going back to 1982, when deregulation started to take effect, fares are down 40% adjusted for inflation. that's why so many people are flying we fly 27,000 flights a day and we're up to 2.4 million passengers a day when i grew up, nobody could fly because they couldn't afford it. now everybody can fly. and take advantage of it you can go see your family you can get your business done it's the most affordable, and the safest form of travel. so the question is, why would you want to screw that up?

>> all right, nick we're going to leave it there. thanks so much for your time >> thank you very much >> nick calio. >> so i've been spending some time on the marks and spencer website looking for eggs and i found diamond encrusted trinkate box. >> i'm going to get because they have the groceries -- >> there's four runny scotch eggs for seven pounds. >> they sell regular eggs, too i'm not buying fake faberge eggs for breakfast. i just have those to look at >> egg storage which is like a golden egg holder? >> i didn't even realize they sold food. >> yeah -- >> this is a new development to me >> very victorian, right >> the closest one from my apartment in london. that's the only reason i go there. >> coming up biking for a great cause wilf is ready to embark on a cycling mission to raise money we've got all the details after the break. and later more on this morning's top corporate story including a possible deal between sprint, charter, and our parent company

comcast. "squawk box" will be right back. (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings)

welcome back, everybody. cnbc very own wilfred frost is about to embark on a major bike ride for a charity that is very close to the heart wilfred frost lost his brother miles just two years ago at the age of 31 when he collapsed while he was jogging miles had an inherited heart condition known as hypertrophic cardiomyopathy or hpm. it happens to be the most common identifiable cause of sudden death in young people, and it's

the leading cause of death in competitive athletes the frost family set up the miles frost fund to try to raise money for a diagnosis model. and wilf is with us today. wilf this is something i had no idea about until i heard what happened to your brother >> yeah. and it's a massive tragedy, and my family and i can never replace miles, and we miss him every day. but i think, you know, a year and a half ago we thought, if we could sort of set about this task and make sure his death wasn't in vain, then we'd get small comfort from that. and indeed we have already, and we have the news that the miles frost fund has already saved one life and we hope many more as we continue to roll out the model >> the issue is that this is a completely identifiable situation because nobody bothers to get checked >> exactly, htm has two real tragedies about it the first is that it is totally identifiable the science exists to detect

hcm, the action and awareness does not so miles' death, sadly we discovered we could have prevented, and that's what we must make sure we change now the other tragedy is, as again we learned with miles, is that there are no symptoms until the moment that it strikes, and it can strike at any time and a couple of sports stars in the u.s., reggie lewis and hank gathers are people who have died in the past of it that people may remember over here >> so your bike ride is how long >> so i'm riding to monaco i fly tonight. we start on thursday morning, my self, my little brother george and 60 of miles' friends and families, we're cycling 365 miles over four days and we've raised around 350,000 pounds already our target is 500,000 pounds and that will help continue to roll out the testing centers across the uk. there will be 14 when we're finished with the project. we funded one so far and as i said it's already identified one 14-year-old boy so many more still to find 500,000 people in the u.s. have hcm. about 120,000 in the uk. so it's not a small issue.

>> wilf, if someone is interested in donating to it >> i set our website donatewilfcycle.com. any support would be greatly appreciated. because i'm going to find this pretty tricky. it's a long way to go. >> we'll be watching you're going to send us updates. >> i will, indeed. >> thank you very much coming up the president and prime minister modi speaking warmly of relations between the two democracies. we'll talk about the countries ties and the global economy with mark weinberger right after this break. "squawk x"ilbeig bk.bo wl rhtac ♪ 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?

so that's the idea. what do you think? hate to play devil's advocate but... i kind of feel like it's a game changer. i wouldn't go that far. are you there? he's probably on mute. yeah... gary won't like it. why? because he's gary. (phone ringing) what? keep going! yeah... (laughs) (voice on phone) it's not millennial enough. there are a lot of ways to say no. thank you so much. thank you! so we're doing it. yes! start saying yes to your company's best ideas. let us help with money and know-how, so you can get business done. american express open. so you can get business done. ♪ at johnson's we care about safety as much as you do. that's why we meet or exceed 15 global regulations for baby products. and where standards differ, we always go with the toughest. johnson's.

breaking news. the eu slapping google parent alphabet with a huge fine. the details straight ahead from washington to the rocky mountains. mark weinberger is plugged in to every major issue facing corporate america from doing business with india to shaping tax reform we'll get his aspen idea next. dominating and disrupting. jeff bezos making a bold move to buy whole foods. does the world need more companies like amazon to spur global economic growth the third hour of "squawk box" begins right now ♪ live from the most powerful

city in the world, new york, this is "squawk box. good morning, everyone 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 and andrew are out today we've been watching the futures this morning and so far probably not much to write home about but we'll see. you saw yesterday futures were indicated up pretty sharply and gave way through most of the session where we ended near the lows of the session. this morning dow futures indicated up by about 3.5 points s&p down by just over a point. the nasdaq futures down by about 20 points. they have curbed some of the losses that we saw earlier this morning. if you're taking a look at the treasury market the 10-year still sitting right around 2.15% this morning, the yield sitting at 2.17% and oil prices have been a little bit higher this morning they continue to push up almost to $44 a barrel. at 43.97 >> euro as well highs of the

day, 112.72. up 0.8% off those comments, hawkish comments from mario draghi on the quality of europe's economy and that's weighed in return on european equities down this morning. among today's other top stories, eu antitrust regulators finding google parent alphabet $2.7 billion google's been accused of promoting its own shopping search service over those of smaller rivals google responded in a blog post saying it disagreed with the decision, it's evaluating the decision and considering an appeal on a programming note, european commissioner will join "squawk on the street" at 10:00 a.m. eastern time "the wall street journal" is reporting that sprint has entered into exclusive talks with charter communications and comcast to explore a deal that could bolster their plans to offer wireless services. according to the report sprint put mobile talks with t-mobile on hold entering a two month exclusive agreement for discussions with the cable companies until late july. a possible deal could see the cable companies investing to

improve sprint's network in exchange for wireless services on the network another possible deal could include comcast and charter jointly acquiring sprint competitors at&t and verizon suffering in the premarket and the markets, so lots of premovers on that particular topic. the market will get fed speak today. janet yellen will give a speech at the british academy in london at 1:00 p.m. eastern time. you have to admit i had to google what the british academy was this morning and then i was picked up by all sorts of viewers in the uk for not knowing. now to washington and developing story overnight the white house warning syria it will, quote, pay a heavy price if it conducts another chemical weapons attack in an unusual statement issued late last night the white house says it has spotted activities, what it calls similar to preparations the syrian government made before hit april 4th attack the white house gave no further details and supported preparations or how they had been detected. u.s. ambassador to the u.n. nikki haley tweeting last night

that, quote, any further attacks done to the people of syria will be blamed on assad, but also on russia and iran who support him, killing his own people, end quote. we will continue to follow this developing story and bring you new details as we get them president trump hosting indian prime minister narendra modi for dinner at the white house last night the president thanked modi for visiting telling him it was an honor to have him in washington during talks yesterday afternoon trump urged modi to do more to relax trade barriers for u.s. exports but both leaders took great pains to stress the importance of a strong relationship between the u.s. and india. >> i look forward to working with you, mr. prime minister, to create jobs in our countries to grow our economies and to create a trading relationship that is fair and reciprocal. it is important that barriers be removed to the export of u.s. goods into your markets. >> as trump and modi met yesterday, the pentagon said the u.s. state department has

approved the possible sale of boeing military transport planes to india ceos and leaders from around the world are meeting this week at the aspen ideas festival. joining us right now from aspen is eli's ceo mark weinberger mark met earlier with india's prime minister modi. and mark, thanks for being here today. >> becky, good to see you. >> what was your takeaway from the meetings with the prime minister >> well, it was a great meeting. we had about 19 i think ceos there and the whole discussion was around how our experiences in investing in india, what could they do to attract more capital, more employees and what barriers were we seeing? everyone was pretty honest, india continues to be a great place to invest. at ey we have 38,000 people there, we're going to have 50 by 2018 it's a fast growing economy. one of the fastest growing emerging markets there are barriers they have limitations and caps on how much you can invest in certain industries those are being removed. they put in a brand new tax system to get rid of a lot of

the corruption how that's going to be implemented, it comes in play july 1 a lot of discussion around that. so really good discussion about what can they do better to attract business to india. >> you know, there's a point of contention that was pretty evident during the campaign, and that was just this idea that u.s. jobs are being outsourced to india did that come up and what kind of discussion surrounded that issue? >> it was a great discussion, becky. that's a great point because it wasn't -- the old call center model that people thought about doesn't exist really maybe still exist but not the companies in the room there. there are high tech companies there that are professional service companies, financial services companies our model, you know, we have a quarter of a million people around the world we serve 220,000 people around the world but our digital and data centers, the education there, the english language, the 24-hour overnight service, is a high quality service offering that's embedded into our service offering around the world. so it wasn't an outcenter type of discussion. it was more about how do you increase the education, the infrastructure, to be able to have employees who could help

serve clients all around the world from anywhere. >> but, mark, does that mean the contention between all of these issues is gone away? i mean this was a hot issue that was talked about, and frankly i haven't heard much discussion about it at all, even with the prime minister meeting here. >> well, i don't know if it went away everywhere, becky, but it wasn't conscientious issue in the discussions we had with the prime minister and as you heard from the meeting with the president, the visa issue didn't come up, outsourcing didn't come up, many other issues that have taken front and center stage >> is this a sign, mark, that the tone was more -- the fact that the tone was more positive a sign of how positive people are on india's future? perhaps more so than china's future, because, you sat in on lots of meetings with the president. he's been very critical of various countries with which the u.s. has a trade deficit, whether it's germany or china. but the tone, pretty positive throughout with india. >> it has been india, growing 7%, the amount of people they have there, the increased opportunities for our companies to put more and more

money there. we do a survey every year and ask people our clients and others where they want to invest india is always near or at the top of the list. so it really is a great opportunity for u.s. businesses to be able to sell our products overseas it's an example. and the trend has been to open markets. reduce the costs of doing business try and move up on the difficulty of work, to work with, which is where they have been with all the corruption they've taken some major steps under prime minister modi from change of the currency to going ahead and opening and digitizing the country so that everybody is put on a system where they're going to have bank accounts, to reducing barriers in limitations to investment. with china, i think what you've seen and heard is they are also a tremendous trading partner obviously a much bigger trading partner. but, until they have this 19th congressional -- 19th communist congress in november a lot of the reforms have been slowed down and opening up the market has been put behind in order to have this so-called election, and in november, there, and after that,

we hope the reforms will continue to open up the china market >> let's talk about reforms here in the united states i know you have been very active in some of the tax reform talks that have been taking place in washington and, mark, i just want you to think about the backdrop today with the senate health care bill where do things stand with that and how that in turn will impact when we get to tax reform. what do you think about what you've heard to this point >> becky, that's the right question i've been out here as you know many times i talked about the four ps a high priority, you've got to figure out the policy, work through the politics and then you have to have a process to get anything done in washington. what you're seeing is the health care bill is getting held up on the politics they had a process, they used the fy-17 budget resolution. they have a policy they put out there. it has been the number one brie orty and it's being stuck on the politics the issue for tracks reform is they are working really hard behind the scenes. we had a business roundtable meeting just a couple weeks ago. the speaker of the house was there i interviewed the

secretary. they are working behind the scenes to come out with a plan in september or october, working on the policy, it is clearly the speech that the speaker of the house gave indicated it's a high priority for members of congress the politics have to play out yet and the process. the real issue is health care is the budget resolution for fy-17 if they're going to use reconciliation to get the tax bill through, they either have to come up with a whole new budget resolution, fy-18 resolution which is going to be very difficult to do the tax bill in or if health care fails they can use the fy-17 that's the real issue to keep your eye on. >> so you're out there and you're going to host a panel about how difficult it is for businesses to make long-term decisions. does this all feed into that ey has its fipger on the pulse across many industries talking to many businesses constantly what are you seeing? >> so, thank you for asking that question yeah this is taking a step away from the short termism in washington and what we're seeing in corporate america and it really is an effort.

we're trying to go ahead and explore how can you give investors, we're working with some asset managers, asset owners and companies, 20 businesses from around the world to figure out in addition to quarterly earnings what else could you look at to see if a company is adding long-term value creation, not looking at the 24 hour news cycle, the analysts quarterly earnings issues, not looking at the activism but saying what would you do how can you evaluate a company at its long-term potential for research for investing in people, for investing in their brand, which don't show up on the balance sheet anywhere so it's a pretty ambitious project. we're going to be working on it for awhile >> mark, want to thank you for your time today. good to see you. >> thank you, becky. good to see you, too >> coming up next, does the world need more companies like amazon to spur growth and innovation and is the move by jeff bezos to by whole foods a good thing for the global economy that discussion's coming up next and pennsylvania senator bob casey weighs in on t lesheatt version of the health care bill. you're watching "squawk box" on cnbc

good morning and welcome back to "squawk box. the euro trading sharply higher this morning it follows comments from ecb president mario draghi speaking in portugal he said growth in the eurozone is above trend and broadening but isn't enough to exit the massive staple husband program yet. inflationary pressure seems to be replacing reflationary pressures and was much more hawkish on the economy than he had been recently. the euro hitting session highs at about 112.78 up 0.8% and we've also seen bond yields move up across europe that is weighing on european equities the high euro as you can see

down about 0.7% for the french cac down a little bit less than that also worth pointing out that europe had big gains yesterday around 1% of gains, so a bit of profit taking in light of that happening this morning anyway. >> stocks to watch, dow component merck is higher. merck saying an experimental cholesterol drug met its main goal of reducing heart disease those shares are higher by 1.6%. darden restaurants beating estimates by three cents with quarterly profit of 1.18 a share. revenue above consensus and the olive garden parent raised its quarterly dividend to 63 cents a share. those shares have been higher all morning now up 2%. amazon's whole foods deal is the latest example of the tech giant's growing empire the company's disruption could be a good thing for the economy according to our next guest. chief economic commentator at the "wall street journal" recently wrote an op-ed the economy needs amazons but it mostly has ges

good morning to you, greg. thanks very much for joining us. >> thanks for having me. >> explain that point of view. you say that these type of deals shake up the economy, shame up and disrupt businesses which is positive >> yeah, i mean if you're in the retail sector, not very pleasant to wake up one morning and discover that amazon's entering your space, the first thing that's going to happen is your stock price is probably going to tank, and the second thing that's going to happen is that some activist investors are going to start buying up your stock and demanding to know what your plan is for cutting costs i would say that is actually the opposite of the strategy jeff bezos and amazon have been pursuing bezos always thought first about what does the customer want and how do we meet that and worry about wall street second he's kind of lived a charmed life because wall street has basically allowed him to do that but the result is a company that every year seems to find something new to disrupt the world around us. if i were a shareholder in retail, i would not be very happy about that but as customers, and as people working in this economy, i think it's great and if you ask me, we need more disruption like amazon, not less >> greg, you also say that what

this is helpful for is it creates stock market volatilities not just that it disrupts the way companies do business, but it delivers volatility in share prices why is that a good thing, as well >> well if you look around the stock market right now, the volatility is like the lowest we've seen in like many, many years. and people sort of like you know the old saying wall street hates uncertainty. but this is not the natural state of things. capitalism is not serene there's a lot of disruption going on all the time, creative destruction. the macro economy is not supposed to be a peaceful place. you're in a situation now where you have the central banks around the world determined not to disturb things, giving us plenty of guidance about what they're going to do with interest rates then when you look at a microsector we seem to be surrounded by companies like general electric which focus so microskropically on preserving tax flow and giving wall street what they want that sort of like doing crazy wild things that disrupt the economy risk their shareholder capital but in the end create amazing new value

propositions from the macro all the way down to the micro, we need more risk taking and less of this super cautious let's not shake things up attitude. >> greg, whether what amazon is doing is helping the consumer or not one big threat people always mention to them is the potential for competition investigations, do you think that's likely to happen at some point soon? >> it's kind of like what happens in this country with sides, i call them the poppy syndrome when you get big and successful the forces of the public sector start looking at you carefully i get that you don't want a company like amazon to dominate its position for example electronic books any more than you wanted microsoft to dominate its position in operating systems or ibm back in the day in mini computers. but if you think about it, one of the things that happens is that a lot of this seems to be kind of politically driven when you get to be a company of general electric's size for example every time you make an outsourcing decision you have to deal with the blowback from various political forces, whether it's here in the united states, or overseas. i mean, they spent jack welch's

last big act as chairman of ge was to try to buy honeywell and spent ages trying to fix that one and the european union shot it down. this morning we're discovering another american champion google facing the constraints of its size in europe also from eu investigators. i'm not at all saying that a company like amazon needs to be sort of like exempted from the basic rules of antitrust all i'm saying is that, again, once again as a nation we have to be somewhat trusting in the forces of creative destruction to protect the consumer as opposed to the nanny state >> greg, it's good to see you. the one point that you make, though, is that this does not come out without massive risk along the way. the volatility is because of the riskiness inherent in all of this you say more likely general electric is going to be around in the long, longs distant future than amazon, why is that? >> sure. amazon got where it is by defying conventional wigsdom

the vast majority of companies are not trying to create a bland new website, a brand new business model for retail. they're taking a business model that works somewhere else and making it work in a new venue. that's fine. we need these companies like all around us. most of us work for companies like that. but, for the economy as a whole, think of -- the economy needs to kind of look like a portfolio, right? and your portfolio should be made up of stable tax generating companies and a group that's sort of like wild which many will fail but a small number are going to pay off and as a country, we need an economy that looks like that with a handful of -- with a bunch of companies, hundreds if not thousands, trying to be the next amazon. and once again, a lot of the them will fail we were both around 20 years ago when the nasdaq bubble burst it left a lot of wreckage but also left a handful of great companies that are with us today that have left us all better off. >> greg, thank you very much for joining us this morning. >> thanks for having me. >> on a programming note don't miss a cnbc exclusive with

kroger ceo rodney mcmullen on "squawk on the street. the congressional budget office releasing a scoring of the republican health care bill and lawmakers are reacting this morning. joining us now, pennsylvania senator democrat bob casey senator casey, welcome to "squawk box. thanks for joining us. >> good to be with you >> for days you've called this bill obscene what's your takeaway now you want to add any amplifiers to the word obscene now that you've seen the score is my guess? >> well here's why it's obscene. because in one bill, you have the total decimation, the dismantling of medicaid. in fact the medicaid enrollment reduction is greater under the senate bill by a million people than the house bill. cbo said house bill was 14 million lose medicaid. this bill says 15 million people lose medicaid coverage because of that, juxtaposition of that coverage loss, with the gross tax cuts here, that's why i use the word an seen there's no reason why, when you're -- when they claim

they're doing a health care bill, that they're going to give away the store, in tax cuts, in the most extreme fashion so, this is a bad bill for lots of reasons but the medicaid parts of it are particularly egregious and that means people over 65, people with disabilities, and of course kids >> you've already got at least three republican senators lining up, potentially objecting to even a procedural vote i mean, what's the -- you just sit back and watch the republicans be their own biggest enemy? at this point? >> no i think it's critically important that we sustain the argument against this bill for a lot of reasons because, no matter what happens this week, there's going to be more work to do. for some reason this bill doesn't get a vote for doesn't succeed they will be back because it's my sense that republicans now with the majority in both houses are at a moment that they've never been at before. where they get to, in the same bill, give all these tax cuts to the wealthiest among us, and

they get to rip away the guarantee of medicaid. they've wanted to do that for a long time. so i don't think this is going to be the end of the road, even if it doesn't go well this week. we have to continue to make the arguments and marshall the facts against why this bill is bad >> it almost sounds like even though we're hearing about all these different senators, you know, opposing the bill for one reason or another, on the republican side, that you think ultimately they will come together, because repealing and replacing is a much bigger mandate than the smaller quibbles they might have with individual pieces of the bill. >> well, we'll see but look, i'm assuming the worst case scenario. that's what i should do on my side to protect the medicaid program especially so i'm assuming that today will be a day of deal making. there's a lot of money to throw around not just tens of billions, a lot more than that i'm assuming there will be some deals made today that may result in them getting the votes later in the week.

>> senator, the medicaid cuts weren't included would you be supporting this bill do you and some of our democratic colleagues believe that there are aspects of obamacare that do need reform? >> there's no question when you set aside just for the sake of argument, the things that are working, the things that are major monumental achiefments, 20 million people covered is not only good for those 20 million we're all better off because those 20 million aren't going to emergency rooms for their care so everyone benefits when 20 million more people get health care the doughnut hole, the prescription drug gap where seniors had to pay a lot more, seniors benefited just on the prescription drug doughnut hole filling to the tune of about $27 billion. but more than 10 million seniors benefited from that. 150 plus million americans with employer coverage have a wide array of protections they've never had before because of this bill when you set aside the monumental achievements of it, you can also focus, as well, on

folks whose insurance premiums or other costs are too high. we need to make every -- >> senator -- >> attempt to get every person in the exchange to have an affordable insurance policy in terms of the coverage. i think we can do that in a bipartisan way but we can't do it when they want to wipe everything out with repeal >> all right, senator, we've already heard from senator collins from maine, that she would potentially like to reach across the aisle but there are some big issues with the existing health care system that we have. premiums that are out of control. insurers that are not interested in being in plenty of markets. places where there's even no choice or one choice for an insurer. i mean there's some big problems to fix how would you do that in a bipartisan manner? >> the first thing that should happen, right away, if not no matter what happens legislatively, the president of the united states, and the secretary of hhs should say in a very declarative way, that they're going to make sure that the cost sharing payments are going to stay in place create certainty where there's uncertainty. that's driving people out of the market right now

>> pretty high opinion of -- i'm not arguing your point but that's not the only thing at play >> the other thing that's driven people out or companies out of the market is the -- them taking away the support for insurance companies who are giving greater protections and might need help. those kinds of protections will create certainty so the administration can do a lot, even if the bill doesn't pass or even if it does pass >> senator casey, thanks for joining us >> thank you coming up in the next half hour the trump agenda. from health care to landing a new deal on tax reform former restaurant ceo andy puzder will tell us what he sees coming from capitol hill this summer (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play

(bell rings)

good morning, everybody. welcome back to "squawk box"

here on cnbc we are live from the nasdaq marketsite in times square among the stories that are front and center this morning, the conference board is out with its latest consumer confidence figures. in just about 90 minutes the june reading is expected to be very slightly below last months levels but if estimates are accurate that would mark a third straight monthly decline under arm our has a new executive. patrik frisk is the new coo. slowing growth has been concerns this is one of many management changes being put in police. frisk is going to be assuming his new duties on july 10th. he was most recently ceo at footwear and accessory maker aldo group and he'll be in charge of some of the clothing and the shoe areas, and that's an area ron baron has told us he thinks is a big potential win way for under armour down the road >> this new president apparently has 30 years of experience in the industry so a real veteran here

and giving up giving one of his titles in order to make way for this executive it could also be a symbolic acknowledgment that he needs help here. >> under armour has struggled because in large part the retailers it was selling through shut down. so they're not looking at the same distribution. they're also focusing on other executives who's going to look at digital and make ways that go directly to the soconsumer general motors has lowered its outlook for industrywide vehicle sales. it now says 2017 sales will be in the low 17 million range. and the lowdown after several years of record sales. previously the automaker had predicted that sales this year would roughly match 2016 levels at a little over 17.5 million vehicles former cke restaurant ceo andy puzder joins us on the prospects of passing health care and tax reform andy thanks for being here today. it's good to see you >> good to see you, becky, thanks >> we've been chewing this around today there are more senators who are

voicing their opposition given the cbo score to health care we're trying to figure out what this means for health care getting passed in the senate and then eventually potentially in the house as well. and what that in turn means for tax policy which we know tax reform is supposed to come after health care. what are your thoughts >> i think what republicans have to pass health care reform they absolutely have to pass tax reform we've got an election coming up in 2018 where every member of the house is up for re-election. and people are going to ask, look, if you can't get -- if republicans can't get the tax code reformed why did we elect you in the first place you've been promising health care reform for seven years. if you don't deliver on that, why are we voting for you? and that can't be the way we go into the 2018 election i think everybody in the house and senate knows that. there's a lot of negotiating going on but i think -- i think they'll get there. i agree with president trump i think eventually they get there. >> a few of those noes that we've heard from the senate sound like they're a fairly hard no you can probably count ron paul

out at this point, susan collins, from opposite ends of the spectrum of the republican party. you're right there is a huge amount of pressure, they may be feeling the political pressure, but they're you're also dealing with one on ones and some don't sound like they're trying to negotiate things they're dead set against the entire policy. how does that shake out? how does that change >> a number of things. number one, with someone like susan collins, susan collins hasn't been, she didn't support the nominees, including me and betsy devos or the cabinet she doesn't always get behind republican proposals and i think that should have an impact on her when she comes up for re-election. but she may not get her. rand paul on the other hand, i don't think rand paul wants to be standing there as the one person who prevented the republican party from passing health care. i don't think any republican other than maybe something like a susan collins, wants to be the person out there saying i'm the guy who stopped it i'm the person who didn't allow health care to be reformed when obamacare, you know, is

collapsing people's deductibles are shooting up. their premiums are shooting up we've got health insurers pulling out of the exchanges the co-ops have clapgsed we're seeing a real death spiral and if we don't do something if we don't get behind some bill republicans are going to pay a price. hopefully people in the senate know that. by the way if you're negotiating the one thing you want to appear like is that you're not negotiating. you want to look like you're taking a super strong position so if you think people will come around >> you know, i'm just trying to do the math. and i don't mean to belabor the small details on this, but when you've got somebody like a senator heller, who is up for re-electi re-election, he's the only one who is considered to be a senator potentially in a position of losing his seat, he was originally earlier in the week seen as somebody they were going to give a pass to that nay didn't want to put him on the spot because his state has kind of turn against this health care reform bill. so if you've got that and susan collins, and then a rand paul or three or four others who kind of pop out, i guess you're

anticipating that mcconis going to be able to be very influential and get this through. do you think it happens this week or do you think it takes longer >> first of all mitch mcconnell, if there's anybody that can get this done it's mitch mcconnell i don't know did it gets done this week, by july fourth, or later in the summer. i just think it will get done. i don't have a good feel for how soon it can get done with all the people that are coming out and making comments, that seem to be negative, you would think it would be tough to do it by july fourth but we'll have to see. but heller, there's a lot of pressure on heller now to get behind this bill i've seen a number of things online, and on radio and on tv >> sure. >> reporting pressure nationally on heller. we'll see what happens >> i want to switch gears. there are two really interesting stories that came out in just the past few days. first of all a study out of seattle studying the impact of raising the minimum wage they found that in seattle, which actually tracks hours worked, jobs and hours worked by the lowest income people fell

after the minimum wage hike. los angeles is about to raise its minimum wage july 1st. at the same time there's a story about mcdonald's replacing human cashiers with 2500 kiosks. now i'm just wondering, you know, you combine these two things together and it seems like it's going to be really hard for these lower income workers out there faced with potentially being phased out because minimum wage could be rising in their city and then you have this other force of technology >> and the study in seattle showed, i think, that wages actually went down $125 a month for these people, or a week for these people there's also a study out of harvard that showed in san francisco, restaurants closed, and very significant numbers, as the minimum wage went up so you've really got a lot of research now showing that in cities that are very financially successful like seattle and san francisco, that increasing the minimum wage to $15, or even $13, has a very negative impact

on employment, and you know, i've been saying for at least a couple of years now that if you keep this pressure on, the businesses are going to automate and you're not only seeing mcdonald's announcing automation but you see its stock price going up because investors understand that this is how the restaurant industry needs to react to increasing labor costs. so when you've got people like bernie sanders, or elizabeth warren out there pushing these massive minimum wage increases, all they're really doing is hurting the very people that need these jobs. they're really taking them out of the job market. and look, the minimum wage if you don't have a job is zero and that's the place they're putting -- can you imagine what this wage, look at the impact it's having in seattle and san francisco. what if it were in birmingham, alabama? or memphis, tennessee. it would be devastating. so you're really seeing numbers that show that you just can't rationally do this and hopefully people in both parties will come around to that conclusion >> andy, wouldn't you say that president trump's agenda is also pushing back against various free market initiatives, whether it's protecting industries that

are declining, just in order to get -- keep those jobs on hand >> i think what his -- he's really been very, very supportive of the free market. particularly with respect to deregulation we're seeing deregulation that we haven't seen in decades, and businesses are responding very positionively. business optimism is sway up more people are working. they're working at better jobs unemployment claims are down to 44-year lows median family income, household net worth, last week, the sales prices for new homes, and thank you 6 million job openings, all of those at record highs so you're really seeing the impact of deregulation, and what impact that has on free markets. and you're seeing real economic growth i think >> andy, thanks for all your time we appreciate it >> my pleasure to be here, thank you. >> coming up the low airfare wars norwegian air shuttle is right in the middle of the battle with one of the fastest growing airlines in europe the company taking delivery of

two new boeing jet liners this week and the ceo joins us coming up

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this information. read it carefully. norwegian air is expecting delivery of two boeing 737 max aircraft this week joining us now on what's next for the world's fastest growing airline is bjorn kjos, he is the ceo of norwegian air bjorn, very good morning to you. thanks for joining us. >> good morning. >> you operate, for those who

don't know, one of the fastest growing low-cost, long-haul airlines, norwegian air flying many routes between the u.s. and europe, not just direct to norway to what extent have the gains made in technology from the likes of boeing made that possible something to offer at low cost long haul flights for cheap prices >> the most important thing we can do is flying aircraft like the dreamliner, and the max. the max we use to fly on to small airports giving -- then we can have much lower fares, because the cost of flying in to small airports is much lower, of course. and, the dreamliner is incredible on the cost side. >> when you weigh up airbus and boeing, their latest planes, which do you think is a better bet? >> well, they're very good, both of them. but we started out with dreamliner >> so it's better than --

>> yeah, i think the new air 350 might be up to the level of dreamliner, but obviously we prefer the dreamliner. we started with the dreamliner >> fair enough in terms of the problems we've seen some airlines face recently, whether it was outages for british airways, of course, the big transatlantic carrier, or issues in terms of customer service that united have seen, has that been a direct impact for you? have you benefited from those issues >> i don't think so. the benefit you get on much longer term. you have to give it a good product, a reliable product, and very new airplane. that's the key to it >> some of the u.s. airlines often complain about international competition. it's usually focused on the state backed middle eastern airlines do you feel like you receive that type of criticism, as well, from u.s. operators? >> it's always good to have competition. it's best for the passengers

the only thing that gives you low fares. so you should embrace competition all the while. >> the european union, brexit and those sorts of things, is that having a direct impact on you? >> fortunately, we are inside uk and outside uk, so we are in a somewhat hedged but complicated hedge start. the brexit is an impact on everybody living in uk so that's for sure >> and final question, bjorn, clearly you're a low-cost airline. does that mean you have to trade off customer service to offer those prices >> no. you should never trade off customer service that is always -- we are living for the passenger, that should be the highest on the list >> are you charging for everything in other words do you charge more for an aisle seat, do you charge to bring a bag on are you providing great customer service, and a low fare, but you're charging every little extra thing? >> as an example, we have wi-fi

on our airplanes, to use it for free we charge what you usually pay for what your neighbor is or the guy who is sitting beside you want to have you should -- >> bjorn what do you think of ryanair? that ceojoins us pretty frequently what do you think of their model? >> we are quite frequent from ryanair. they do good job, certain a lot of passengers. but we have another, another concept. we don't charge for everything what should you expect to have free you should get free >> bjorn, you ever thought about changing your name because norwegian air suggests it's just norwegian flights to other destinations but really most of your flights don't go through norway. london to new york, examples of others

>> no, but norwegian is something that you can trust them, and a good quality and regardless, your name shouldn't mean anything. >> okay. thank you very much, bjorn and congratulations on taking delivery of these new planes they fly later this week >> yes, we start later this week, so we're really looking forward to that. tremendous airplane. >> bjorn, thank you very much for joining us when we return, facebook updating its status on hate speech plus a programming note don't miss a cnbc exclusive with kroger ceo rodney mcmullen 10:00 a.m. eastern time on "squawk on the street." take a look at futures, s&p looking like to lose aoi pnt, nasdaq lower by about 25 points.

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news just crossing russian oil giant, hit by a powerful cyber attack rosneft unaffected after an attack on its servers. facebook, in a new blog post, says it tleetd an average

of 66,000 posts per week that had been reported as hate speech facebook says it is still a long way from being able to rely on machine learning and ai in order to handle the speed in assessing hate speech. one of the biggest prizes in professional golf is here with us at the nasdaq we get ready for the open with nbc sports next. coming up moowtorr scott gottlieb of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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early this month, pro golfer brooks koepka took home his title and then at the travelers championship calling action from the 18th green at the royal birkdale in the uk and also joined by dom chu. is the open the biggest major? >> it's the oldest

it has more history than any other major championship it started in 1860 from that aspect it's the granddaddy of them all more history, more worldliness, if you could put it that way this claret jug is considered not just in golf it's the oldest championship trophy in golf but the most revered in all of sports it's special in that aspect. historically, no one can touch it. >> claret jug, stanley cup, what's it like to call an open championship how does it feel compared to the numerous other broadcasts you've done in your career? >> we did our first open after doing many years of the u.s. open i had been told by mike and terry, part of our crew, there's nothing like t i thought let's wait and see i went to my first open last year and actually worked it. by wednesday i could not wait to get it going you're enveloped by the history,

where you are, what it means you just get the sense of it immediately. in my book, i can't think of a better way to finish maybe the back nine of my career than to broadcast open championship. >> not necessarily the back nine. >> maybe we're getting close to the turn. >> if koepka plays like he did in the u.s. open, is it his to lose >> it's hard to predict those kinds of things in golf. we've seen a lot of changing of the guard recently dust in johnson is the new numbr one. not so new but has stumbled a little bit in the first two majors hasn't played like he's capable of playing rory mcilroy is looking for a putting stroke golf there's an old saying, you only borrow it for a while we'll see if brooks koepka can have some kind of momentum. >> dan, you've seen a lot of golf develop over the years -- not that you're that old, but you've seen a lot of history unfold before you in the game. people talk about the game is nowhere near it's peak like we

saw with tiger woods in his heyday is that how you feel about the game of golf or is there reason to be optimistic >> there are numerous things to be excited about in golf granted, we haven't seen anybody like tiger woods and i don't think we'll see anybody in our lifetime dominate the game the consistency that tiger woods had and the way he won championships, we just haven't seen it. i do think it's so exciting for the mere fact we've got all these young players, and they're great guys, by the way they're accessible, very media savvy, social media savvy. from the rory mcilroys, jason days, jordan spieth who won in spectacular fashion over the weekend, you've got -- yeah. look at this that is the greatest celebration, i think, i've ever seen it's right up there in the top five of all time holed out the bunker shotto wi the travelers. >> is this good for the game, bad for the game it's hard to figure that out when you realize americans have less time on their hands golf, the game itself, is an

uphill battle, just given our lifestyle. >> the entities and the organizations are trying to figure out alternatives to play. there's a big push for nine holes and how that can be good, posting a handicap by just playing nine holes i think the game has evolved for the true purist what makes golf great and what i like about the game is that for the next 4 1/2, 5 hours, i'm doing nothing but relaxing with friends and a great sport. >> what's the crowd like at the open, compared to some of the other majors does it make a difference? does the home crowd push people forward? i, of course, ask, because i hope one of the brits wins. >> wolf, i would say a great amount of respect. maybe not as boisterous as, say, a u.s. open at bethpage just over on long island here ryder cup is headed there as well, which could be the most boisterous of all. i would think, though, they are the most educated fans in open championship they know when to clap they know when to get excited and they know when to back off

when somebody might be going through a difficult time i think that's what encaptured me when i covered an open championship for the first time, were the fans, and how respectful and knowledgeable they all were. >> dan, thank you so much for joining us pleasure to have you. >> thanks for having me. >> dom, also thanks very much. be sure to catch full coverage of the british open next month on golf channel and nbc. before we go today, we want to wish wolf good luck he is about to engulf on a major bike ride for charity. he lost his brother, miles, who collapsed while he was jogging he suffered from a heart condition called hypertrophic myocardopathy. if you want to donate to this cause go to donatewilcycle.com we wish you the best of luck t raise awareness and make sure other people are able to catch

this very crucial diagnosis. >> thank you so much i appreciate the support from you guys and also everybody from cnbc it will be tough so thesupport will be much appreciated to get me through. >> we hope you'll send us update. >> my selfie training has been very well honed over decades we'll put it to good use. >> that's great. it's time for "squawk on the street." good tuesday morning welcome to "squawk on the street." i'm carl quintanilla cramer is off today. mildly weak. a lot to watch with three central bankers, including yellen speaking today. dragi has lit up the euro with comments a record high fo