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 for the fifth straight month

road map begins with google, hit with a multibillion dollar fine from the eu, saying the company abused its search dominance. plus, sprint is working with charter and comcast on a wireless sharing agreement what that means and the implications for any potential merger between sprint and t-mobile >> coming up on the show, a live and exclusive interview with the ceo of kroger. stock was hit hard this is the first time we're hearing from the country's biggest grosser about what the future holds for the entire industry first up this morning, eu anti-trust regulators hitting google with a record fine. commissioner vesta gechlt r tweeted google gave illegal advantage to own comparison shopping service by abusing its search dominance t must stop and pay fine of 2.4 billion euros.

commissioner vestager will be a guest in the next hour for its part, google says they respectfully disagree and will consider the option they have for an appeal, sara. >> seven years in the making it was a long-running probe. eye-popping numbers, $2.7 billion more than most people anticipated. the eu could have gone even further and fined up to 10% of total revenues, a fine like $10 billion from google. still, this is a big deal. the other question we'll ask commissioner vestager about is how google addresses it. it's sort of left up to them how they want to deal with this. but it gets into their business model of posting ads on their shopping services. google will argue, look, we have to compete with amazon, ebay and a lot of other competitors in this space and this is part of what we do we actually improved the quality a lot. but the eu goes after u.s. technology companies and this is only going to fuel that political fire even more.

she said europe is open for business we're just dealing with anti-competitive behavior, but after apple's $14 billion fine in back taxes and now this, she's inviting a lot of political -- >> bundling is the issue and they don't like the fact that you're packaging these services together google always has said with some legitimacy that people are often looking for ads when they're searching on google. it's not as if they want some kind of -- they want the take me to the business that will give me what i want the dollar amount is not crippling. it's a big number but it's a matter of it doesn't just go away business practice is being crimped. >> what does google have in cash 90 billion >> they do 30 billion a year in net income. >> 35 in quarter revenue, right? >> exactly the stock is moving a lot more on just the general mega cap tech move. the pullback yesterday, year to date it's been lockstep with

amazon fundamental basis that people are much more excited about 1.5 billion youtube users. but does it globally crimp business >> are there implications for travel, maps or something beyond search >> exactly in other words, they want to be the gateway to everything. and this would definitely limit that. >> or are there implications for amazon and other big cap technology firms it's no secret that the u.s. has been beating europe in terms of its firms at this game and she is taking a pretty hard line approach the question is, does it open a new front in this sort of rising protectionist environment in a trade war? the trump administration has appointees that are pro business they had a bunch of tech executives meeting at the white house. it's interesting to see whether there's any response verbally or even through actions we're already monitoring the commerce department every day to find out -- >> the kind of anointed handful

of tech companies are going through adjacent areas, looking for ways. >> we'll talk more about fang. in the meantime not the only big tnt story we've got today. >> one that's out there, wall street journal reporting last night about exclusive talks taking place between comcast and charter and sprint and i can confirm that that is the case now, don't forget, charter and comca comcast, our parent company, only last night announced their intent to work together when it came to wireless wireless is all the talk when it comes to cable a lot of it will probably just end up being talk at this point. now, talks are going on between comcast and charter with sprint but it is focused on what we call an mvno, mobile virtual operation agreement which

regionally allows them to use verizon's network to sign up cusses to add to their cable, if you want to call it, cable subscription why talk to sprint you may get a much better deal, first of all and judging, at least, from where the talks are, there is a bit more talk about sharing certain things that verizon might not have allowed you might get better pricing on any sort of a deal you put pressure on verizon to a certain extent we'll see if it does end in an mvno agreement between charter, comcast with sprint. it may people familiar with the situation have said they're halfway through a 60-day exclusive negotiating period to try to get something done. from sprint's perspective, it doesn't necessarily hurt their chances of the big kahuna. that continues to be getting t-mobile to agree to some sort of real deal that being a merger between

those two companies. the synergy's from which and cost efficiency from which are too large for either company to really ignore. significant question there about anti-trust as of now, of course, given this exclusive period that's been going on 30 days or so, these two companies are not talking. don't expect they won't re-engage at some point about a potential deal the question will be, can they actually get to the finish line and do both of them have a positive enough view on the anti-trust implications that they're willing to take that chance for now we'll see where things end up with comcast and charter. let me specifically tell you the expectations that either one of these companies would take an equity stake in sprint are unlikely take a look at shares of pandora, i'm told that the ceo, as we expected, is out and that's going down. no word on, i don't believe, a

replacement. back to charter and sprint this does seem focused very much on getting an mvno done and it does not appear likely they would end up with a specific equity stake in sprint the idea that comcast or charter would want to own sprint outright is not something that anybody believes is the case at this point landscape can change two years from now, thing koss look very different. comcast could make a very different decision when approaching its strategy when it comes to wireless. right now, comcast doesn't seem very focused on, owning a wireless operator. i would argue, guys, there's a far higher likelihood -- not that it's going to happen -- that comcast would rather buy charter itself, given its ownership of time warner cable but that can change. 5g coming into the picture in a couple of years. does it represent a short-term threat to cable, with its

ability to bring in a wireless signal into the home that is not related to your broad band connection yes. but it's early days at this point. we'll see. >> getting some kind of agreement potentially here is a defensive move of let's have this as part of our offering, wireless feature in case down the road you can circumvent the broad band connection? >> also it does enable them to market to their customer base with the quad play, so to speak. but the idea of really being up against a 5g offering from the likes of verizon, we'll see what that amounts to. some would say it's a short term problem for cable but long-term problem for wireless verizon tried to buy charter, and they did they negotiated. they tried they failed. they could never come to any sort of price agreement there. charter's ask is very high we'll see where all this goes. >> are you shooting down the idea that charter and comcast

could buy sprint outright? >> yes that's just not something in the cards right now. it's not something that either one of them are expecting or talking about doing or, for that matter, t-mobile again, the t-mobile sprint deal is the most one that makes sense for them, if t-mobile plays ball value t-mobile very highly, they want to be very much compensated in a reverse breakup fee, if they were blocked for anti-trust reasons and so they want their guy to run it, which i don't think will be a problem. we'll see. the anti-trust side of that is still a very difficult one and so sprint, at least, is giving itself other options here not that -- again, other options, at least, as it pursues its core business. and the other guys, you have to keep considering wireless overall but not as an ownership position despite what john malone might be musing about. >> altese usa may want to be a

player at some point. >> without a doubt we talked about it when they went public last week but don't seem to be interested in wireless if you were ever to see the comca comcast/charter deal they're not talking about t just speculating here the vestitures that need to take place for that to happen altese usa would have to be the beneficiary. they could pick up millions of subs. >> as david mentioned earlier, tim westergren stepping down as drch ceo of pandora westergren no longer on the board, a question for some analysts, whether or not he would remain pandora announcing jason hirshorn to the board. >> who becomes chairman of that company. liberty -- sirius. liberty with its significant

equity into fusion has the right to three board seats, including chairman role. respectfully chairman and ceo of sirius. >> how about tesla reports that tesla is considering launching its own streaming music service, which apparently some of the cell side today has no problem with, if you believe the car is turning into what they call the fourth screen. >> fourth screen. >> if you're tesla and essentially think of software updates, it's basically an operating system and we're going to control every feature of the car. i don't know how you have an edge in assembling a streaming, you know, music or content platform tesla wants it to be tesla branded for tesla customers. >> who do we talk to on closing bell doesn't make any sense, he says. >> you hear it a lot, though, the idea of it being a fourth screen why apple might be interested in the car. >> takes the biggest block of

time people have where they're not in front of a screen. >> and not to mention sirius is talked about as potentially one day -- liberty, you know those guys, economic animals, being interested in -- interesting for that very reason to another acquirer who wants to follow that strategy. >> nvidia, another partnership, this time with volvo they've got partnerships with tesla and toyota all day yesterday was about managing rental car fleets whether it was apple or alphabet right? >> six cars is enough to get hertz moving six car. >> in phoenix. >> six cars in phoenix and a pile of short sales on the other side that's all it took. >> we'll see what the exist e s existential threats are for pandora. the cfo and interim ceo was once an interim at ativo. >> spencer stewart, as they often do, doing the ceo search

if you want to put your name in the hat, feel free they're looking for the new ceo. meantime, top washington news here. the white house warning syria against another chemical weapons attack and saying it has spotted activities that are, quote, similar to preparations the s r syrian government made before the april 4th attack our eamon javers is in washington with the latest. >> a rare and direct warning from the trump white house to the syrian government, bashir al assad regime, saying they spotted these potential preparations for another chemical attack like we saw earlier in the year that prompted a u.s. missile response in this case, the white house saying this. they say, 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 chemical weapons, he and his military will pay a heavy price. that message amplified by the

u.s. ambassador to the united nations, nikki haley last night, who issued this statement on twitter saying 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 now, that is the tricky situation here, because, remember, russia is also in syria, backing the assad regime. they've declared effectively a no fly zone west of the euphrates. the united states not really testing that no-fly zone if the united states wants to engage in attacks on the assad regime they may have to. u.s. pilots aren't flying missions against russian pilots over syria, which could be a very tricky situation, indeed. speaking of tricky situations, domestically, we saw the release of the congressional budget office report yesterday that would say that 22 million people would lose health care under the senate health care bill. that's going to make it a lot

more difficult for the senate republicans to coalesce around that bill. at the eisenhower executive building they see a scenario if they can get this passed in the senate, they think they can avoid a messy negotiation. if it passes the senate, ted cruz will have had to have supported it if ted cruz supports it, does that get you the support of the house freedom caucus the idea there being if they can squeak this thing through the senate this week, they might have the votes to get the house freedom caucus on the house side on board that could avoid a messy conference negotiation where they bring those two bills together and haggle out the details. it could get the house side to simply pass the senate version of the bill and send it right to president trump's desk for a signature. this could be the whole ball game this week if they can get the votes they might be able to get this thing to the president for his signature. if not, not clear where this

will go next, carl. >> that would be a massive legislative victory, eamon. >> it would. >> we'll see what happens in the come iing days what's next for kroger after tumbling on the news of the amazon whole foods deal. stay tuned for an interview with rodney mcmullen. darden, under armour, gm and yellen talks at 1:00 pm eastern.

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one of the big stories of the morning, pandora, off the initial premarket highs. tim westergren leaving as ceo along with president mike herring. we'll talk more outh aabt atnd a bunch of other names we haven't talked about yet when "squawk on street" continues. hey gary, what'd you got here?

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just a few minutes before the opening bell as u.s. markets end the first half of the trading year with some solid gains, imf is out with new reports, saying a comprehensive overhaul of policies is needed

with ubs, bringing down their estimate this year and next, with the idea that perhaps the white house can't get done what they want to get done. >> i think that's a fear the market hasn't bought into that fear quite yet. they still think the agenda is a possibility i would suggest to you that perhaps the bigger story this morning is dragi, speaking in europe said the threat of deflation is dead, sparking an instant rally in the euro and raised yields in europe quite smartly and even here. now everybody is going to hang very tightly on what janet yellen says at 1:00. >> september could bring about a taper in europe and a balance sheet draw here? that's going to be interesting. >> well, i personally don't think they do anything before the end of the year. and maybe not even then. but we're going to wait and see. he tried to take some of that back a little bit when he said

it isn't necessary to begin taking back some of the east quite yet. but nevertheless, the idea that deflation was not a threat was enough to push yields up and push the euro up. >> art, don't go away. we'll take a short break opening bell, after this

just a few minutes from opening bell art cashin is with us. we just talked about dragi's comments and what yellen might say after lunch. the bulls have the ball, techs need to regroup, you say, and there's some possibility of month-end buying. >> it's month end, quarter end and end of the half. people do have to put some things back in order the techs, in particular, need to regroup here, however the reversal yesterday was a bit ugly there were various rumors around it some even tried to attribute it to the supreme court allowing the president's travel ban to go in, that it might make it more

difficult to get hib visas and people coming in it's really up to the nasdaq and the teches to turn this around and then i think we can see new highs. if they fail to, then we're in for a bit of trouble. >> yesterday in that reversal, the biggest -- took 1% across the board. seems right now, though, the banks picked up yesterday. overall market continues to find a way to support itself. >> it's been remarkable, the rotations that have come in. it's not one day when they're universally negative, the money flows from one spot to another. >> i think treasury has been a guiding light. that moved down to those bigger durable goods. >> i think the move down was based on continuing week data

here in the united states. the gdp, the data that came out was nowhere near as good as it needs to be. that's why what yellen says at 1:00 is important. >> thanks. see you soon, art cashin big board this morning nuveen celebrating 30 years in funds over the nasdaq, black rock capital investment celebrating its 10th anniversary we've gotten into a bunch of stock specific stories, namely underarmour, sarah, which has named a new president and ceo from aldo, the shoe company. >> and fcorp, one of the better performers in charge of some of the outdoor brands like northface over there. and it's an important signal to investors that they have a coo now, someone they claim, mr. frisk, who has been in the

retail industry about 30 years not doing a whole lot for the stock, which is down 25% so far this year. chart looks even uglier on the total year but this is a company as it matures, which kevin plaveng, the ceo, has admitted they need to right side the business, slow down, be more responsible. i think this is a move toward that this is a nod to the fact that they're in a different stage of their growth and they're trying to communicate that very clearly to investors who, at some times when the stocks started turning lower, used the word arrogant to describe him. >> the evangelist and the brand. >> higher at the open.

>> tiffany is up as it's added to the u.s. one list new board members. mentioned the wealth effect from the rising stock market. second half comps inflecting after two years of negative comps. >> and global wealth effect, in theory you know, i don't know that that's a relationship. these catalysts, it seems as if you have the whole sum of the parts story that's always out there with regard to tiffany and the real estate. >> speaking of comps, darden beats by three cents, revenue in ahead. olive comes in up 4.4 and six of seven chains at darden with positive comps a couple of years ago it was a much different story. >> straight up to the right versus brinker, versus dine

equity, immediate dining competitors. it's night and day darden clearly has the takeout to go story backing it i think olive garden is tremendous in terms of having that take-out stuff help out their comps and everything is so value oriented in terms of this category it's a company that revenue is like 50,000 revenue per employee it's one of the lowest revenue for employee companies it's so big. you have to actually be pretty disciplined about the value. >> we haven't mentioned 12% dip as well. >> ceo of darden saying we're thinking about amazon, too, and trying to figure out the future of delivery. apparently it is testing with amazon prime and this is a big question i know we'll talk a little bit about it with kroger just for the restaurant indus y industry, too, struggling with technology and food delivery and more convenience as well. >> whole foods, people will talk

about, is a quasi restaurant. >> prepared foods. >> prepared foods. >> yeah. >> we'll continue to watch performance of fang today. facebook in the red. google, obviously. alphabet, we mentioned earlier today. apple, down about half a percent. in china, asked about valuation of fang, here is what marc benioff said. >> i would agree with jim cramer amazon web services, we work very close with amazon, a very large customer of ours you look at that aws business going past $20 billion this year i think it's on a trajectory to go over $1 billion it's a tremendous upside for the future and jeff is doing an unbelievable job.

>> crm, by the way, trades at a pretty much multiple suntrust does initiate crm with a buy. sustained 20% top line. >> yeah. if you're benioff, you have to essentially endorse the idea that the winners in these secular growth areas are not overvalued because he's one of them right? that's exactly where facebook, amazon trade right now the market is all valuing them along that similar base. on an earnings base. >> 8.5 billion in actual cash going out for content. here in the markets dynamic

yesterday, certain hedge funds were actively selling, in part because they were getting redemption requests. that has been picking up late for a number of hedge funds, which continue to be under significant pressure in fact, some of them, it's an interesting dynamic in the hedge fund industry. some, because of such under performance for so long, moving more to a long only structure almost with a fee structure that mirrors that more than it does the hedge funds. you never know what's true, what's not wti higher for the fourth day in a row, a bit of a comeback from a rocky start before and financials making a move up to the top of the s&p and dow with jp morgan and goldman outperforming yields.

>> essentially the traders are very much leaning against it maybe you have the recipe for a bounce there and stress test results coming out. >> wednesday, right? >> yeah, yesterday the banks were outperforming they've been resilient in the face of low treasury yields and flattening yield. >> another look at sprint and t-mobile sprint shares are up this morning. again, the journal first reporting on these exclusive talks between sprint, comcast and charter together and i've confirmed they are focused on an mvno agreement they're about halfway through a 60-day exclusive negotiating period sprint has not been negotiating with its long thought to be adventure partner with t-mobile, whose shares are down about 3% right now. it has the help of sending a

signal other things we can be thinking about here don't get too crazy what your ask will be. comcast or charter could take a significant equity stake in sprint and highly, highly unlikely they would ever consider buying it, at least at this point this landscape is changing quickly and perhaps in a couple of years there will be a different viewpoint from the likes of a comcast or charter. you can see both stocks moving in opposite directions. >> we'll keep an eye on a couple of smaller names goldman has a note on shake shack in which they argue because of the company's northeast presence and because they rely heavily on outdoor seating that the 4 days of rain we've gotten in the northeast is going to have a material effect on comps. >> outdoor seating and outdoor lines in a lot of cases. you're reluctant to -- if there are still lines at a lot of

these locations. it's not really moving the stock very much at this point. it seems it's very much a show me can they meet the expansion plans? it's come way off the highs from a couple of years ago. it is interesting that of all the restaurant names it would be a weather -- >> i don't buy it. new yorkers don't get held back by the line. have you seen the lines at that madison square -- >> you're talking about the original, flagship shake shack they're on the roadside in austin, texas. it's not just the core anymore. >> we haven't mentioned gm, by the way. on the conference call yesterday, they said looking in the low 17 million range, even even though they did say incentives appear to have bottomed out and dealers refusing to give away cars for the sake of maintaining market share, the pricing remains

competitive. several years doing well above that. >> with these kind of doomsday annual sales numbers that are just 15 and below in the years out, people are trying to figure out how much of it is structural and how much of it is cyclical that comes off, as gm said, moderately encouraging. >> another one we should be watching today is alphabet, parent company of google after we finally got the fine from the european regulators, eu anti-trust regulators, $2.7 billion and that was more than expected over what the eu has called anti-competitive shopping sites, preferring its own services over smaller shopping sites. what google has done is illegal, according to the european commissioner for anti-trust who we'll talk to soon

and they want to see google make changes. google came back with a response through its blog and its attorney this morning, saying completely disagrees, defending itself sort of leaving an open question as to whether they're going to appeal this. this is the biggest fine since intel, remember, who spent years in court appealing it, and trying to fight that. >> i noticed about two-thirds of a percent exactly what facebook is down to. >> part of the broader tech selloff maybe. >> a lockstep move in big tech. >> we'll watch action on alphabet and faang at large. dow is down 19 let's check in with bob pisani on the floor good morning, bob. >> good morning, carl. asia was not bad overnight let's take a look at europe here it's all about dragi, talking about reflation coming back. markets are slightly weaker on that banks have done well euro at the highest level since

november here. european buying, particularly the german ten-year and french ten-year rallied on that news. european banks, higher yields helping them, deutsche bank, bnp paribas all moving up. china up fractionally overnight. the big indexer moving to include china mainland stocks into its indexes next year, starting with 222 large ones overnight the ceo said he may add another 195 mid-size companies here the effect of all of this, you're going to be owning a lot more china stocks in the coming years in the major indexes, which is what these etfs are based on een, emergencying market index, chinese stocks, mostly hong kong listed, with full inclusion of mainland china this could take several years.

a lot more china stocks in everybody's future here in the u.s., banks up yields have stabilized, have you noticed, in the last week or so? 2.13 seems to be about the low so, banks are up energy finally turned around a little bit oil is up for the fourth straight session here. obviously, still have concerns about supply side there. tech is a little bit weaker. qualcomm, nvidia, fractional declines there consumer discretionary also not doing too much autos are all to the downside, gm lowering their vehicle sale this is year low 17 million range there and you see fiat down 1.25% there. we're not expecting policy commentary for her she can't be terribly happy to look at these imf numbers here they're lowering their numbers to 2.1%. u.s. gdp it's interesting this is starting to diverge with the

feds or converge with the feds commentary the fed has 2.2 for 2017 and 2.1 in line with the imf for 2018. and while they did talk about benefits for tax reform, things that sound like the trump agenda, estimates that the u.s. gdp could grow by 1% was probably unrealistic they're assuming no policy changes in these estimates right now. even there, there's some dispute about how much the trump policies will make a difference. right now, the dow down 32 point s. back to you, sarah. >> i agree with you, bob i thought it was an endorsement by the imf of the trump agenda, deregulation, tax reform, saying that the u.s. needs all of that. bob pisani, thank you. let's head over to the bond pits now rick santelli with the cme group. >> sara, i'll tell you, there's a lot of things to observe that could really impact your strategy trading forward

on the interest rate complex, boy, you talk about linked at the hip. look at the intra-day of tens of acknowledge that yesterday we came very close to trading that 210, 211 area. there is some support there. boom, we've popped 218 right now. intra-day boom here is where it all lies. we sell yesterday 25 we're trading 32 one week of bund really jump. let's think. we all know that the relative value trade really is couched in the notion that policy is kind of goes around the world, like liquidity and stimulus, talking about the taper. they have to start making some decisions and rates moved higher their two-year went from minus 62 to minus 57 that doesn't sound like a lot. but monitoring it, it's a huge move, especially considering where it was just three months ago. if you look at a mid may start to bunds, you can see, trading at the highest yields for the

month of june. that's for sure. look at intra-day dollar index, lesson number two. our rates are up why is our dollar getting wet? look at it it's down over two-thirds of a cent we've been talking for the last week how the back half of june is nothing like the front half of june, where the dollar index looked really solid. if you look at one-week chart you can see the weakness, the culprit, of course, is the euro versus the dollar. this chart starts back in august of last year listen, if they're talking about a taper in the rates moving up, they're the headband member right now. the euro is reflecting that dynamic at the expense of the dollar carl, back to you. >> all right rick, thank you very much. rick stantelli watching oil trying to get close to 34. jackie is at the commodity esk >> we are back under 4that level

api tonight ahead of the department of energy tomorrow, we're looking for 3.25 million barrel draw in crude, almost a million barrel drop in gasoline as well. better than the last few weeks but still not as strong as we expect to see this time of year. demand is holding up production, that's going up, too. it's been good for the consumer heading into the july 4th weekend. national average is .25, down 12 cents from last month. the weather holds up, people hit the road, they can take advantage of that. from here, short term higher probably many traders are saying they don't want to be short ahead of the holiday, but that they will revisit those positions after the fourth back over to you, sarah. >> hope you got a road trip planned this holiday jackie, thank you. also, the stock of kroger, little changed right now, but hammered during the month of june, guys, down more than 24% it was really a double whammy for kroger

we have an exclusive with the ceo and chair rodney mcmullen from cincinnati today. this is his first time talking since the amazon whole foods deal, which knocked his stock down 9%. actually, a bigger stock move came the day before when kroger reported earnings, lowering its guidance by about 10%, saying it expects higher costs when it comes to labor, food deflation is still a problem, lower profit margins as competition meets up with walmart, the world's biggest retailer, which gets half of its sales from groceries. kroger has to take on the world's largest retailer and the country's biggest online retailer i think there are a lot of questions about what this means for the country's largest pure plate grosser, kroger. >> amazon whole foods deal one day friday after the earnings driven move, it has traded above that and kind of stabilized, the stock has.

people were pointing out a lot of the revisionism that just exactly how much a fiscal grocery is amazon/whole foods going to threaten? intensive competition is not a secret anymore in terms of the overseas players coming in as well if you look at kroger, it trades at a discount to target. it used to be the premium player in the industry. and it's way cheaper than walmart, a 17 times earnings kroger is 11 the clarity on the ability to hold the line on top line levels going into next year is probably what the street will be looking for here. >> the stock is down 38% if you go over the past 12 months it's had its second same-store sales, quarterly decline in a row, which is something it was very proud of, getting 30 something quarters in a row. sales increases. it's blamed the food deflation story. the competition question will be the biggie that's coming up in the next hour

10:20 am. >> and vestager. >> and vestager, the cop who fined google today $2.7 billion. a lot of questions about whether they are targeting u.s. tech companies. and still to come, that's who we're talking about, european competition commissioner margrethe vestager. she will be speakingitus wh first here on cnbc (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings)

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the martin shkreli trial. >> day two of u.s. versus martin shkreli. shkreli arrived here along with his attorney early this morning, answering reporters' questions this morning, saying he hopes a jury will be seated today. no idea, though, whether opening arguments will actually take place today. this has been a pretty long process. more than 130 jurors were

dismissed out of almost 180 as they try to get a panel together, ultimately trying to seat 12 jurors, six alternates scheduling for the summer, perhaps, six-week long trial is difficult but also a lot of jurors coming in with opinions about martin shkreli, some of which said would not allow them to make fair decisions about the case one juror saying they see martin shkreli as the face of corporate debride. jury of 12 and six alternates, get to hear opening arguments today. it was slow yesterday because of the notoriety of martin shkreli. we'll bring you more news here from the federal court in brooklyn. >> hate to surprise you with it, meg, but how much are you watching some of these developments at merck today, this cholesterol drug showing pretty good results on reducing coronary heart disease a lot going on, even as you're watching the case. >> absolutely. it's always good to see good

clinical trial data. this was especially a surprise for merck. this class of cholesterol drugs has been rockny the past huge blow-up for pfizer. it wasn't clear that this approach to lowering cholesterol would be a successful one. merck in their release saying that thistrial did meet its primary goal of reducing coronary events. they're deciding whether to file for approval here. that may be tempering the share's movement definitely good news on the cholesterol front. >> watching day two of the shkreli trial in brooklyn. meanwhile, dow down 14 s&p relatively flat. we might see cards held close to the vest when yellen speaks. >> you would think so. days ahead of month end an upward rise. >> a couple of large dow components, ge and verizon fairly weak this morning, too. i noticed ge

i can't help, old habits, of course, having been part of that company for so long, nearing its 52-week low again, despite that change that is now coming in leadership. >> nobody really quite knows what it means in terms of whether it forestalls the thinking of the structure or not. good news is that it has ceased being a bellwether for the industrial sector, which has actually done okay. >> that's one way to look at it, right? verizon has a dividend yield of 5.14%, perhaps taking a little bit out of it today as a result with those discussions between charter, comcast and sprint that has an existing mvno with verizon but may find a better one with sprint. rodney mcmullen, on the future of his supermarket chain. don't go away.

♪ good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla along with sara eisen

we got a lot of bank speak from dragi and soon yellen. road map for the hour begins with eu anti-trust regulator slapping google with a record fine the commissioner, margrethe vestager joins us next senate gop health care billion, cbo score 22 million left uninsured exclusive talks with sprint with comcast and charter for a wireless deal. david has the details straight ahead. it's a busy week for economic data. let's get over to rick santelli. >> we're looking for our june read on the consumer confidence, expecting a 116. we ended up with more. 118.9, following a slightly revised 117.6. obviously, sequentially better, which defies expectations. we need a little context here.

march read was rounded to 125, the best since the beginning of the century. that's really a good number. but this isn't bad if we look at the notion of richmond fed and these indexes, that improved a couple as well we were expecting five, ended up seven. markets, 218 on tens might not sound like a lot high yield but about 24 hours ago, we were trading 211. sara, back to you. >> rick, thank you very much for that rick santelli. senate republicans weighing whether to vote on their health care bill this week as cbo released that score. joining us from washington on what could be a pivotal week yl a ylan mui ylan >> cbo score found it would leave 22 million more people uninsured. republicans don't have enough

support to even begin debating the bill four gop senators say they will likely block a procedural vote expected to happen today or tomorrow in order for the senate to vote on the substance of the bill before leaving town at the end of the week. susan collins of maine, rand paul of kentucky, johnson of wisconsin and dean heller of nevada, already getting hit with attack ads for his stance. senator ted cruz opposes the bill as well but is still deciding to move forward. >> conversations continue and they're productive the current draft doesn't have the votes to pass but i believe we can get to yes and i believe we ultimately will get to yes. >> negotiations are under way. the vice president will try to woo conservatives at a dinner tonight. and senators hold their weekly lunch today. we'll try to get some guidance

on whether a vote is on track still for this week. >> i wonder how senator mitch mcconnell could call a vote, knowing there's enough opposition within his own party to shut it down. would he do such a thing >> so, there's some scuttlebutt wondering. you could intimidate members and dare them to vote against this bill also they just want to get this done they don't want this looming over their heads for the rest of the summer because if they get this done, they can then, hopefully, move on to tax reform, which is, they feel, sort of the crown jewel of their legislative and economic agenda. so, the longer this debate drags out, the longer it could take for them to get on to what they really hope they want to do and what they feel voters will really be looking at come 2018. >> i have one more question for you, ylan. you've covered economic policy out of washington for a while and you know that the cbo is always a political football when it comes out with these scores, even though it is nonpartisan

and supposedly independent how wrong was the cbo in scoring obamacare? republicans, does the white house have a point there >> they were sort of right on the broad measure. so the cbo got it right in terms of the number of people, percentage of people who would no longer be uninsured under the affordable care act. where they messed up, where they got it wrong was on the number of people who would sign up for medicaid, they underestimated that number and also underestimated the number of people who would get insurance from private employers versus these new exchanges. so, on the broad idea, they certainly were right but they were wrong in some of the details. partly that's because of the way the law was implemented and because of the supreme court decision that allowed states to not expand medicaid. so, there were some questions about the execution of the bill that the cbo could not have foreseen. >> we're going to find out how that score affects the vote count, if at all, in the coming days ylan, we'll talk to you soon

ylan mui in washington david? shares of sprint up, shares of t-mobile and verizon down first reported by "the wall street journal" late yesterday or last night that charter and comcast, the two large cable companies that have their own cooperation agreement when it comes to their wireless strategy are in talks with sprint about a wireless agreement that would involve the two companies signing what we call an mvno agreement, mobile virtual network operation agreement that might be fairly generous in terms and might be fairly all encompassing in a way that is not the case currently with the deal that both those companies have in place and are starting to use with verizon. mvnos allow the cable companies to use the spectrum, to use the service of the provided wireless provider for marketing to their own customer base. the idea being if you're a

comcast or charter company, you can get your wireless service through your cable provider. they're using the verizon network. in this case, if it were to come to fruition, they would use sprint, perhaps at the exclusion of the verizon mvno. both these companies possibility of taking a stake in sprint is not seen as likely, highly unlikely that charter or comcast together or separately, for that matter, would ever buy sprint. sprint, for its part, has been involved at least in considering a merger with t-mobile three in terms of wireless competition and number four in terms of wireless competition. that very heated competition, of course, comes down to price and so many other things that deal continues to be the one that many people believe sprint would like to see completed. the question is anti-trust given the enormous cost savings

that would be available from the scale that would be put together, the efficiencies that can be created it's certainly one that both companies aren't ready to necessarily walk away from however, they haven't been talking. the exclusive period for negotiations between comcast and charter and sprint is about halfway through a 60-day period, meaning it's not like sprint and t-mo will be talking for at least another 30 or so days if they do actually sit down at the negotiating table. lots of them to discuss. this enhances sprint's hand when it comes to discussing with t-mobile and its majority owner, deutsche telecom, a potential deal saying we do have other things we can do we don't just need you we'll see and we'll be talking more in the weeks, months and years ahead about this overall strategy when it involves cable and wireless the advent of 5g, what that's going to mean for the wireless and cable providers as well. perhaps right now people getting

a bit ahead of themselves. >> thanks for explaining the mvno. >> sure. happy to do that. >> that's the word of the day. >> yes letters of the day. >> no word on the financial transaction? >> they haven't figured anything out yet. >> verizon, though, is the worst performing dow component by a long shot right now. >> all the telecoms weak today. exclusive interview with chairman and ceo of kroger is amazon taking on whole foods a changing industry and more, cnbc exclusive. taking a look at shares of pandora down 1.3%, announcing its ceo, tim westergren is stepping down. interim ceo naveen chopra. ghbawk on the street will be rit ck [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that

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weaker note here you've got groups, big groups like technology, dragging on the overall index, both the s&p and nasdaq, down about a third of a percent. dow is pretty much flat. names that are strong today, goldman sachs and jp morgan, energy is strong as well not doing enough to offset some of the weakness. telecom as we mentioned, utilities with treasury yields on the rise and technology, carl, which continues to be sort of the focal point for the

broader market. >> indeed. as baron said over the weekend, leadership keeps slipping between tech and financial, tech and financial. and at some point market has to make up its mind on which one they're betting on secular growth in a slow economy or true economy that starts to pick up steam and results in higher yields. >> so far it's been tech, as the winner so far year to date at least. financials have made a move lately and are continuing to do so >> also, massive change right now in the supermarket industry, capped off by the recent announcement that amazon is buying whole foods that sent shares of kroger down 9% now with us to discuss the competitive environment, e-commerce, future of retail and a lot more, it's rodney mcmullen, the chairman and ceo of kroger, an exclusive. he joins us from cincinnati. rodney, thank you for being on nice to see you again. >> great to see you. >> so, we've got to start with the stock price. i mentioned on the back of that deal news, stock is down about a

quarter of its value since the beginning of june. you just had your investor day last week. what did you tell shareholders as far as how you're going to correct that stock move? >> what we told our shareholders is everything we do, we start with the customer and focus on the customer and we found that through all different business environments that pays great dividends for connecting with our shareholders and everybody else you know, the customer will always tell you what they want it's our job to deliver against that when we do that, our shareholders get a great return as well. >> i know you like to think long term on the big deal, amazon buying whole foods, you and i had talked about amazon getting into online grocery you had said you expect more consolidation in the sector. did you ever imagine we would see amazon outright buying whole foods? >> yeah. i guess for me it wasn't as much of a surprise as it was for others you know, you could tell that amazon wanted to do something from a physical asset

standpoint and i think whole foods is a great fit for them we feel great about where we are. we have great physical assets. great store associates, great associates across the company. we've been building our digital presence because our customer tell us they want to engage with us from all pieces, not just from one direction. >> why did investors have it wrong, in your opinion, selling out kroger shares, the most of anybody, on the back of that news >> from our perspective, we do really focus on the long term. the long term is three to five years. we continue to grow market share. our customers continue to tell us we're doing a better job. as i mentioned in the last nine weeks of the quarter, identical cells turned positive and have been positive quarter to date. all those things are telling us the customers are connecting with us and we continue to grow our business. >> a lot of people see this deal as an inflection point for groceries, the entire industry

and maybe even all of retail do you agree >> well, you know, as i mentioned before, the deal didn't surprise me i think the retail industry is a constant change. we've been saying that for several years. and for us, we don't see this deal as any different than anything else. we know in retail it's going to constantly change. and change is the only consistency. when you look at what we're trying to do it's taking care of the customer on their terms not our terms. >> many are wondering if you're planning to make a competing bid for whole foods to keep it out of the hands of amazon and whether you have the financial firepower with the stock lagging over the past year to do so. >> you know, we won't talk about specific transactions but i always tell all our investors you should assume that we look at any potential opportunities we feel great about the financial structure and flexibility that we have to be

able to do whatever we think is appropriate to continue to grow our business. >> what about margins, rodney? they're already under pressure as a result of all the competition in the sector. the fear now is that amazon has such a big financial cushion, they can lower prices for whole foods, organics across the board and that will only put more pressure on your already razor-thin profit margin. >> from our long-term business model we always assume the market will get more competitive. it's one of the things that, when you look at natural and organics for us, it's a $16 billion category over the last several years, we've been able to make natural and organic accessible to all customers from a pricing standpoint and from a product offering standpoint. we feel great about the proactive things that we've done to help lower prices for our customers and we see that opportunity continue going forward. >> rodney, long term, i wonder if amazon or anyone is able to

really smooth out that last mile delivery where grocery delivery to your home is reliable, it's fast consumers bet on it. they trust it. what rachls compelling about going to the grocery store and if that ends, what does that mean for all the real estate >> i can tell you the experience we've had so far in places where we have click lists and where we deliver to people's homes, people still like to go visit with friends, engage and see new foods and new experiences. murray's cheese shop, our cheese mongers understand what farm the cheese came from, love of the food and help share that knowledge with our customers for some events the customer likes to come into the store, visit with family and friends and our store associates and learn more about food. other times when they're in a hurry, that's when they want to drive through, pick something up or get it delivered to our

house. what we find is that when you put those things together in a seamless way is when it connects well with the customer. >> sir, i want to follow up on your answer to sara's question a moment ago you talked about responding if you need to strategically to various things that happen in the market why do you believe you have that financial flexibility? you have a decent amount of debt, a stock price that hasn't done particularly well if you wanted to use it as a currency could you explain more behind that answer? >> if you look from a debt standpoint, the coverages, we are still very strong investment grade. that's been important to us for a long period of time. in terms of some type of transaction, balance of debt and equity really depend on any specific transaction and what made sense for that transaction and what a seller was interested in as well. >> but you don't feel as though you're mitigated in any way from pursuing what you need to, given the constraints you may or may not have on your balance sheet

>> not at all. we really feel good about the flexibility that we have and understanding where the customer is going and what are the things we can do to make sure we're there for them. >> what investors are wondering, rodney, you've already been going up against the country's largest retailer that is walmart, which has a giant grocery business now you're going to go up against the country's largest online retailer and whether you're up for that challenge and what sort of edge kroger brings to that fight what can you tell us there >> we're definitely up for all challenges kroger has been in business 130 years and we've been through many, many changes and we really see this change as well what we find is when we help the customer fall in love with food and we deliver at a great value, the customers reward us with that business. we don't see that changing and digital is one piece of that obviously, we've been using our data for over almost two full decades in terms of helping make

it a little bit easier for the customer to shop with us and provide great value for the customer as well. >> i wanted to also ask you about some of the food brands that sold off on the back of the deal, kellogg's and general mills. what does it mean for them will this be a margin story over there, too, accessibility of cheaper, organic foods especially if amazon decides to put whole foods branded items on a larger scale what's your expectation there? >> in terms of expectations, if you look at our brands we've been gaining share the past 25 years in terms of units and dollars and the quality of our brands is just incredible. if a customer wants a natural brand they can have it our brands is great quality and the customer can have that as well when you look, a lot of the branded companies have been going through thatpressure ove several years in terms of the customer's change and what their desires are. and the natural organic.

>> you expect that to continue >> i would not see that changing at all. >> your naturally organic brand has been a big source of strength for your company. and i think it's a bigger business overall that whole foods currently operates is that correct? >> the whole category for us is $16 billion. if you look at our simple truth, which is our brand, it's $1.7 billion in itself and it continues to grow in double digits cusses tell us they love it. they give a great value for the money and continued improved variety. >> on the quarter, a lot of analysts were surprised to see the guide down specifically. they felt they talked to you recently and you sounded upbeat. are you having any visibility problems because you've had to, in the last few quarters, sort of pare down expectations when it comes to cost, labor and food deflation. is that hard to see out in front

of you >> any time you're changing from inflation to deflation back to inflation the climate is a little harder. we've been telling our customers that over the past year. you can start to see a little bit of inflation there's a couple of things we proactively did in terms of entry level pay in certain markets to help reduce turnover and also some entry price point items in a couple of markets we addressed. both of those things were things that reflected in the changing guidance and then also the change in inflation, we raised the estimate as well. >> rodney mcmullen, we respect that you came on to talk about all of this. thank you. >> thank you appreciate it, sara. >> thanks a lot. the chairman and ceo of kroger, joining us exclusively from cincinnati now to our other top story of the day, european union slapping google and its parent company, alphabet, with a $2.7 billion fine the watchdog charging that

google broke anti-trust rules. joining us now, the woman behind the decision, european commissioner for competition, margrethe vestager good to see you again. welcome back, commissioner. >> it's a pleasure to be with you. thank you very much for having me. >> okay. a little bit of a delay there. first, talk us through how you got to that $2.7 billion fine. a little bit higher than most people were expecting. >> well, the fine is a reflection of the abuse and how long the abuses have taken place and, of course, the importance of the different actors in this market and we find that this abuse has been taking place since 2008, but also that it has taken place

in every european country where google shopping has been rolled out. that, of course, is a very serious matter and that's reflected in the level of the fine. >> as you know, google has already responded this morning they say when you shop online, you want to find the products you're looking for quickly and easily when advertisers want to promote those same products, that's why google shows shopping ads connecting our users with thousands of advertisers, large and small. we believe the european commission's online shopping decision underestimates the value of those kind of fast and easy connections how do you respond to that >> this has nothing to do with advertising. advertising is a completely different matter we take an issue with the google behavior when it comes to google shopping we find that google, being so dominant in general internet

search, they've used this dominance to promote themselves and to demote rivals you find rivals in page four on average if you're on desktop but you always find the google shopping unit just in front of you where we know that most clicks will take place and that is an abuse it is illegal on the european anti-trust laws. >> well, google might argue it has loads of competitors, in fact, bigger competitors like amazon and ebay when it comes to shopping so it's doing what it needs to do to improve the quality of its own shopping service services. >> we have been looking very thoroughly into this claim that google shopping is in fierce competition with amazon and ebay and etsy and the likes what we find is that these are two different things on amazon, you find retailers who want touse amazon as part

of their service those you don't find to the same degree on google shopping. you find the bigger brands, those who want to have the customer relationship themselves, the data, the payment details, your search pattern. these are two different things we've been very thorough in assessing this to make sure that we do not mix up markets and we don't we have the marketplaces and we have the shopping comparison services where google has made sure that there is very, very little competition by favoring themselves and demoting others. >> commissioner, how often are these decisions overturned on appeal >> well, these decisions do not come about very often, so i don't think that you can use statistics for any record. we're just in the very sort of

late stages of the intel case, expecting the court to make the judgment in some time to come. so, these cases are quite rare therefore, of course, also the cases before the court are quite rare. >> you know what the narrative is here, commissioner. you've dealt with it before. first apple, now google with this record fine why are you unfairly targeting u.s. technology companies? is it because some of the european rivals can't compete? they're dominant and have been highly successful. >> but we're not our work has to do with the fact of the case, the evidence, the case law there's no room for bias of any kind we have to stand up in court to make sure that we have a case that stands solidly on the facts

of the case. and, you know, i take this very seriously. because this is the european union. it's built on the rule of law. and when i go through our merger cases, our anti-trust work, i find no facts to support that there should be any bias because this based on the rule of law. >> commissioner margrethe vestager, thank you for joining us to discuss the fine on google at the headquarters in brussels. we appreciate your time. take a look at the stock market this morning. dow down six points. watching yield rise, helping financials "squawk on the street" will be right back

absolutely we supported the last strike, the use of chemical weapons against innocent civilians it's absolutely abhorrent. we supported the last strike that took out the airplanes. >> at least one building has been destroyed and 250 people evacuated as a wildfire

continues to burn in central california near the town of santa margarita. seven u.s. sailors who died off the coast of japan when a cargo ship slammed into their destroyer were honored today navy personnel formed an honor line, lining the streets as family and shipmates of those seven sailors were escorted to a memorial ceremony. on that sad note, that's the news update for this hour. carl, i'll send it back downtown to you. >> sue herera, thank you cbo score predicting the loss of insurance for 22 million americans. where does this leave senate leadership and the bill? joining us this morning, former acting director. donald, speaker ryan this morning is saying he wouldn't -- it's a mistake to count out

mitch mcconnell. and we know mcconnell's prowess as a parliamentarian. >> 22 million folks losing coverage by 2026 is a big hit. but another noticeable thing is that the bill $200 billion more reduction than the house bill. that gives mcconnell $200 billion to work with if he wants to find something that's acceptable to his caucus. >> brian, is that a reasonable narrative, that it's an improvement in that respect over the house bill >> well, look, i think it's telling what you saw this morning was that what mcconnell is at least reportedly saying to his colleagues privately is that if this bill doesn't pass, then the threat is that they will be forced to work with democrats. and i think it's worth just stepping back and reflecting on that, which i think is what most americans would like to see happen here, is exactly that,

that are there improvements that could be made on the status quo? absolutely but the most viable path would be for democrats and republicans to sit down and hammer something out that actually moved the country forward. if you look at the cbo score, under the hood, as don says, there is additional deficit reduction but there's a lot of pain that i think is just coming to the surface, particularly around the cuts to medicaid. 15 million additional uninsured next year is a pretty tough number to swallow. >> which is more likely, brian, concessions made to bring in fellow republicans or that eventually something gets worked out with the democrats, as you say? >> well, look, i think this week all the focus and pressure will be on can leader mcconnell find a pathway to work something out with republicans one thing that we've learned from these processes is that they die several times and they're resuscitated several

times before we know the ultimate outcome we have a couple of days left here and i anticipate we'll see some to'ing and fro'ing. if this does end up in a place where they can't get republicans together at the end of this week, i think the conversation will quickly have to turn to how can democrats and republicans work together here. >> donald, there's been some criticism of the cbo many people will take it on face value the number they're using they seem to be using a far higher assumption in terms of those in the exchanges that actually is the case, making the gap much larger between the uninsured. is that a fair criticism in your point, from your point of view >> you know, it's always difficult to predict what's going to happen with the economy. cbo numbers have not been exactly spot on. but, you know, the right metric is whether they're modeling and analysis is better than everybody else's i think it is. and whether it's useful to the process. the answer there clearly is. if you do, there are changes that the senate bill has in

mind, you'll clearly have millions upon millions of people with less coverage it might not be 22 million it might be 20, 24, but the key thing there is that it's a big magnitude and the senate needs to think about that. >> donald, what happens the next time historic legislation is on the table and we're relying yet again on a cbo score has the cbo been able to maintain its reputation as a nonpartisan entity >> absolutely. i think cbo is doing a terrific job. you take the trouble to read the report they put out yesterday, they are grappling with a very complicated set of questions in a very transparent way, trying to explain all the various exchanges that would happen in insurance markets as a result of the reforms. that information is incredibly useful to policymakers, to citizens, cbo clearly doesn't have a thumb on the scales one way or another they're trying to call it as they see it. >> brian, do you agree >> look, i worked at omb don worked at cbo. there's always tension around

the scoring approaches at the end of the day, cbo is an extraordinary organization that does really important work in the face of uncertainty. and the truth is, if you look back at what the cbo projected around the affordable care act, they were pretty close one thing they didn't predict is that the supreme court would rule on the viability of the medicaid expansion of course, that's impossible to hope that they will predict. and i would agree, i would really encourage people to take a look and read the full report that the cbo put out it's thoughtful, serious, balanced and does as good a job as any organization can at presenting likely outcomes and i think that we all need to recognize that these institutions aren't perfect, but they play an incredibly important role and when you don't like the particular outcome attacking the institution it's really just not the way to go. >> if this goes down to defeat, brian, in the senate, do you think there's an opportunity

there for democrats and republicans to work together to try to then reform the existing aca or should we simply be set up for the expectation that nothing will change and that the exchanges, for example, will continue to deteriorate? >> well, look, the opportunity is always there. and the potential changes that could be made on a bipartisan basis are pretty straightforward. whether the political winds will come together in a way that you could see that happen, that's definitely a harder question the point about the exchanges, i think it's important to recognize that what's happening with the exchanges today where in some markets you're seeing insurers pull out, that is not an act of immaculate conception. most of these insurers are explicit in saying the uncertainty around the future of the affordable care act and uncertainty that some of the steps that the executive branch have taken are contributing principally to their decisions if there's a decision trying to

stabilize the exchanges and trying to actually help people get quality insurance as the objective, there's a lot of opportunity to make progress. >> finally, donald, david brooks in the "new york times" today argues -- this is him speaking republicans have no defining vision they can't replace obama version with some alternative, so they accept the basic structure and cut it back some is that a prevailing narrative where you are, that obamacare, you can't put it in reverse? >> it's extremely hard to see how you put it in reverse, as brooks said. you look at the proposal from the senate, will people still be able to buy health insurance on exchanges? yes. will states still have the ability to expand medicaid to the population added yes. you're not eliminating the fundamental bones of the reform we saw there are big changes, repealing the majority of the tacks that accompany the bill, cutting back on the subsidies provided to states there are significant changes there.

a lot of the bones seem to be in place. >> donald marron and brian deese, thank you very much get an update on the martin shkreli trial. meg tirrell is live at the courthouse good morning once again. >> reporter: good morning, carl. a little news out of the shkreli trial this morning his attorney has filed a motion to -- for a mistrial, essentially citing negative publicity that came out of the jury process yesterday, including today, front page of "the new york post," jury of his jeers, saying 134 jurors are out in the pharma bro trial, saying this is messing with the jury selection process. the federal judge has denied that motion and jury selection is continuing. he also asks that the media not be allowed in the side bars where the jurors explain why they can't continue with the trial. a lot of them yesterday saying

scheduling didn't work out for them this is a six-week long trial in the middle of the summer a number of juror s said they se martin shkreli as an evil man, one calling him a snake. these reported in "the post" and elsewhere today. the judge has dismissed the defense's concerns about that. jury selection has resumed today. >> they're going to have to find jurors that aren't on social media. people know his personal character, attitude or is he the poster child for higher drug prices, which there's still plenty of outrage about. >> reporter: yeah. and sara, comments we heard yesterday were specifically about drug pricing a lot of people mistakenly thought he was responsible for the price of the epi-pen, a lot of people saying they have relatives with hiv or cancer, who can't afford their

medicines, associating him with all of those things. he seems to be tied to drug pricing. of course, that is not what he's on trial for this is a securities fraud case, not drug pricing but that is complicating the jury selection process. >> i'll bet. meg, thank you for the update. we'll continue to check in with you as we get developments there at the court ceo of pandora, tim westergren, stepping down from the company. stock is moving lower. major averages right now, tech is still a drag, which explains the nasdaq down a quarter of a percent dow just goes positive as we speak, so does the s&p, being lpheed by groups like financials and energy.

after four awful years this one european market is on fire is it worth your mon sni why spain has been moving up on "trading nation.

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there have been a wave of cyber attacks around europe today. several reports are describing it as a ransomware attack. it's given few other details cyber attacks at russia's biggest oil producer, rosneft as well as ukrainian government agencies and the airport in kiev it's unclear if they're all related to each other. it has been of note today. all five of these all around the world. wpp i.t. systems in several companies within wpp have been affected >> we're still early days here in terms of what we may see with cyber attacks and espionage.

itv and a guy there who has identified something called the double pulsar, one of these things stolen from the nsa and made available and apparently used at the same time that those ransomware, those attacks were going on, getting high profile but potentially much more devious, because it was able to get by all the defenses of so many of these companies, carl. so this is something we'll be dealing with many times but there is this overall concern that it's only ramping up. >> ramping up, going global and hitting seemingly unrelated companies in various industries and sectors, something we talk a lot about during the last one. >> and always this concern that you get to the point where things like the transportation network, the electricity grid and things of a public service nature are affected and, obviously, that would be very scary. >> right we'll see. maersk, by the way, spokesperson says systems have been impacted as part of the i.t. infrastructure once you start hitting logistics, though, it's

alarmingly close to other things that are important. >> cause a lot of damage. >> without a doubt. >> let's head over to a mans who middle name is cyber john "cyber" forte, who has a look at what's coming up on "squawk alley. john >> where are the implications for the rest of silicon valley and silicon valley's dominant companies? also this amazon whole foods transaction. we talk to the ceo of kroger what's the impact on the rest of the food industry going to be? and immigration changes in the trump administration that's having an impact on how we measure the top skes tafor business we'll tell you what that is on "squawk alley. minutes old. ♪ a baby's skin is never more delicate. ♪ what do hospitals use to wash and protect it? ♪ johnson's®

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oil is on the move breaking back above $44 a barrel up 2%. what is driving this move, jackie >> it's mostly short covering right now. as we're heading into that holiday weekend, traders are telling me they may revisit this trade when we get past the fourth of july but right now all indications are that we could even potentially go higher from here. right now $44.39 is the high we reached this session it's the perfect storm you got the holiday weekend. you got a weaker dollar right now and we're ahead of an inventory report expected to show a drawdown. the drawdown isn't supposed to be that steep. compared to what we've seen, it could push these prices up now many traders have said to me that we could potentially go higher from here before we end up going lower the problem right now is the disconnect between the magnitude of the drawdowns and the kind of production ramp that we're seeing here in the united states so that's what we need to watch as we head out a little bit longer short term, back up to the $45 level, quo test we could test i

here >> oil is up for a fourth day. citi says we may be close to the short term bottom but sentiment and then you have oil rigs operating at a three year high u.s. shale up 10% year on year they argue that's going to weigh on any recovery. >> short term bottom meaning it's going to maybe define a new trading range at the low end we sagged through the previous one. i don't think anybody's particularly bullish about the underlying conditions just because of supply. i think interestingly that kind of fits into one of those that's why this is not a systemic event. there also commentary saying this is why this oil decline is not disturbing the overall markets. it is supply driven. it's not really coming along with a global industrial recession which is what was happening the last time when oil crashed down through the 30s it seems like the world is absorbing this okay at the moment >> it is also worth mentioning, i hate to draw too much of a correlation because there's not a very tight correlation over

long periods of time the dollar is weaker today that is particularly due to the euro's move stronger ecb president spoke today. it was interpreted as being very upbeat on the european economy saying we're no longer in a deflationary period. he used the word reflagsationar. the dollar weakens, that helps commodities. >> he's saying this stuff works. and we're now not in a mode anymore of kind of fighting this war against deflation that we're not making progress on the bond market is taking it the dollar is weak against the euro the bond market is saying okay, fed's back on plan because the two year note is basically at its highs, 1.37 or so that is basically the high yield for the year that is saying that fed is going to make progress on the short end. at least right now that's what

they're saying we hear from yell nonen in a lie while. i think that's in line with the idea that rest of the global conditions are the fed's friend whereas in the previous parts of the psych whl thcycle when theyt tightening going, you had slow growth elsewhere so right now -- >> so it's covered >> everyone is thinking it's covered. exactly. you no longer have the idea that fed is fryitrying to move in ona and the central banks doing the other. who knows if he continues along this path and buy in and all rest he said as the economy gets beshgs as inflation gets going, if we just keep the same policy, that's kind of a -- that's easier relative to conditions. so that's kind of the new way to observe what they're doing. >> so would you argue that the likelihood of a tantrum as we've come to call it, is less -- if it's a global phenomenon >> i think yes would be the short answer to that but i mean, it can change so quickly. we're talking about such a small differences in, you know, the

pace of growth here and the rest of the world and whether you get a stutter step in the inflation numbers in euro-zone or not. so i think the sentiment can change right now it seems like there is harmony. >> i wonder if we get a market reaction if the senate goes through with the vote on health care on thursday before the july fourth recess. it's not clear if they have the republican support the indications are that they do not. but in case there is some back door negotiations and senator mcconnell can pull it off, whether that is a market event at this point in that it would signal that tax reform up is next on the agenda that's been a market mover in the past although it feels like this market is much more in show me mode than in rhetoric and seeing how the sausage gets made. >> the market doesn't want to seem to rush to price things in the way they did several months ago. i think incrementally it would probably support the idea that i think honestly what it comes down to is support the idea of the 2018 earnings estimates are

okay assen equity investor, i think the market is completely mers on airy and says all i care about is 2018, going to be better than we might be able to expect right now. >> yeah. i was looking at the consumer confidence numbers we got, the conference board this morning, they break it down by income if you look at those make 125 k or more, march is the top for confidence 157, 146 and now 143 as tax reform became a little less -- >> that was a policy driven surge. >> we come back with alphabet getting hit with the multimillion dollar fine from the eu pandora stepping down from the helm of that company we'll watch that

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welcome back to "squawk on the street." i'm seema mody energy stocks are leegd the way. this as oil prices inch up ahead of the release of fresh inventory data stocks leading the charge include valero and tesoro. >> thank you very much good morning it is 8:00 a.m google headquarters out west 11:00 a.m. on wall street. and "squawk alley is live.