they're cool with the way things are going. i mentioned the idea that aaron and michael are conservative and liberal economists are both thinking that the fed is getting ahead of itself here this number makes it seem like it's not as tight. >> we're out of time thank you for being here today have a great weekend everybody right now it's time for squawk on the street. >> jobs number shiest since february meanwhile in europe a slight sell off the president meets with putin later g-20 you heard becky say it got to

2393 in the high so far this morning. our road map begin with a jobs number 222 in the month of june may and april higher as well. >> plus president trump and vladimir putin meeting face to face in the next hour. it's an important moment for the administration. >> qualcomm suing apple in it's escalating battle over patents how that could effect shipments of the iphone but first up the better than expected jump in june payrolls, 187,000 jobs in the private sector that unemployment rate tix up to 4-4 as more people enter the labor force average hourly earnings between 2, maybe that's the only complaint some people have why that would not be higher given the number. >> there's many opportunities for come plants. i look at that and i say this is one of the reasons why i remain more than i think many people want and i look at this and i say look if you get job growth that still gives the fed reason

to do some normalization which can i want because that's good for the banks but i look at the categories, i find it's really interesting to see that health care that we know has been on fire still gets people but how rabbit the fact that restaurants, i thought people weren't going out anymore. this would indicate otherwise. mining, maybe some of these industries are never going to come back. >> goose egg >> yes and financial it's positive i would love to find a p pro dressing drug to take that would make it so i can be more negative about this. it's a good number the 180,000. more or lez the same. >> imlying there's no real change. >> this takes us up obviously

given where we have been 226,000 jobs in 15 and 250,000 in 14. so we are still slowing. >> right. >> in terms of where we have been year to year average monthly gains. >> we now had a 200 plus print 4 out of six months which is good news which is given since this print we had the worst in five years. >> what sectors do you need to see move if you want to see the stock market go higher you want technology to move, you got it here. you want industrial to move, you got it here. you want health to move you got it here. so those that keep saying this is all just a wait until it falls apart, i come back and say i don't know, you know i'm in the business long enough to recognize when i see this bubble of employment i can't just call it a bubble.

>> civilian labor force grows which gives credence to the long standing thesis that people will return to the labor force once they see some evidence of rising wag wages. >> i see the promos. >> he looks just like me. >> and a bunch of other people that you have taken from us. and i lost my train of thought i was so busy talking about it. >> the banks >> before we insulted david you were talking about people returning to the labor force. >> i know i just wanted to bring up again, no doubt like mark but saying that jan yellen sorry, i know we're on air saying that janet yellen doing a

great job and it was kind of like, did he just say she is doing a great job. can we give her some credit for this or you're not allowed to do that >> i'm curious if the president was willing to do that. >> not to die vevert but the speculation continues to mount she's not that far away. >> january, february, yeah. >> i think that when like at these numbers i think, you know what, she waited until the economy was really strong. we had great job growth to start raising rates. it's like we're panicked remember we were like if they raise rates. look if interest rates to go to 2.4, i'm sorry go be every ceo from housing not one of them said that even three would hurt us. >> meanwhile, the lack of wage growth sals the reason why we're seeing the bonds come around right? >> that is surprising but that's the new economy. we talked about that he addressed the new economy

how many -- i know everyone says this creates a lot of jobs can we be really honest. all of those different icons they take away a lot of jobs you don't need as many people to do as much just doesn't create as many jobs and it's true. >> retail did have a few i'm wondering how much of that is amazon. >> the fed is in a place where they can raise rates for awhile without doing long standing damage. >> i remember it was not that long ago when he went on a serious radio interview that he thought it might be right.

of course he's come around to being more -- he's a good guy. >> are you guys no longer at lauger heads. >> we're buds. good buds but there was a time when it was like are you really going to raise rates into this now when you see this, do you ever want, if you want permanent low rates fine that's not what i want i want it so we have a legitimate normalized rate. >> one question is productive growth that we still don't see average hours rose to the highest level in a long time but we're not getting the economic growth economic growth is a function of both wage growth, productive growth, employment growth. >> wait until we start seeing this mexico is a currency.

>> working session of the g-20 this morning we'll have a bilateral in about 30 minutes or so and then may later on this morning before heading to a concert hall tonight. aman is in germany watching all of that. good morning. >> good morning, you guys were just talking about mexico a few moments ago and the president has just wrapped up a bilateral session with mexican president president trump emerging from that session was asked by reporters staking out that position whether or not he still feels that mexico should pay for the wall that he intends to build. the president paused for a minute and then said absolutely he does. so a point of contention there but he also came out of that meeting and said that one of the areas that the two countries do want to work on is the area of organized crime so that gives

common ground. we saw the big family photo as they call it angela merkel playing the role of post here greeting everybody in a delicate diplomatic position so many diplomatic undercurrents for her to navigate as the leader here and of course another headache for her and more importantly for local leaders here on this issue of protestors that we have seen throughout yesterday and we're expecting more of today and also throwing cocktails so things could get dangerous. so dangerous in fact that the police did not give the okay for melania trump the first lady to leave the facility where she and the president were staying she wanted to go to g-20 spouses event but was prevented from doing that because protestors

had surrounded that area and made it impossible for her motorcade to get out and move down the street. that was something on the united states side. it was simply unfortunate. melania trump saying she was thinking of all the people injured so far in the protest. and we have already seen the trump-putin handshake. that was ahead of the meeting that's coming up that will be formal bilateral meeting between the two sides. we're told there may be as few as just six people sitting in that meeting we'll have to wait and see who ends up attending and so much speculation about how that will go given russia's interference in the u.s. election and they're waiting for those pictures that we should get in about a half an hour's time. >> thank you for that. we'll be watching closely.

for any headlinesor video that we get jim, how much should the market be on alert. >> the old days, outdated weapons and what you want is exactly what you're getting and they died that wait a second i'm going to find fault but when have a market that slaed by banks where technology does not sell off and you have descent health care i don't need anymore to justify buying it i'd love to see the quarters but a market that's lead by bank of america, it's a good market. it's a good market it's not lead by faang we need a market lead by gigantic employers that produce a lot of credit and also have apology want market caps they were restricted and they came out and they said these are

neutrals at a price target but a market lead by jp more gone is a lot better. >> it is. >> amazon is a zero sum game. >> the point being that if the market is lead by these companies it's indicative of strength in the economy that is broader. >> exactly and you have a 14 times earnings stock with jp morgan i'd like a market to be lead by 14 times earnings stock. >> and coordination or lack of coordination regarding north korea is ancillary >> i thought general mattis had good things to say yesterday he said we're not about to go to war. anyone that's ever read knows this guy is a war fighter. when the top war fighter in our country says we're not about to go to war, better than when the president says things about it. >> also a very studious man. >> total heavyweight.

> when we come back, qualcomm is suing apple as their battle continues and the latest on tesla a day after that stock's descent into bare market territory. more bad news today. we'll get the futures here more squawk on the street continues in a moment. i just saved a bunch of money on my car insurhuh. with geico. i should take a closer look at geico...

geico can help with way more than car insurance. boats, homes, motorcycles... even umbrella coverage. this guy's gonna wish he brought his umbrella. fire at will! how'd you know the guy's name is will? yeah? it's an expression, ya know? fire at will? you never heard of that? oh, there goes will! bye, will! that's not his name! take a closer look at geico. great savings. and a whole lot more. we, the people, are tired of being surprised with extra monthly fees. we want hd. and every box and dvr. all included. because we don't like surprises. yeah. like changing up the celebrity at the end to someone more handsome. and talented. really. and british. switch from cable to directv. get 4 rooms with hd, dvr, and every box included for $25 a month.

yogig-speed internet.me? you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig-

really? and these kids. and these guys. him. ah. oh hello- that lady. these houses! yes, yes and yes. and don't forget about them. uh huh. sure. still yes! you can get it too. welcome to the party. introducing gig-speed internet from xfinity. finally, gig for your neighborhood too. trade commission for an import ban on certain iphones as well as damages. >> it's not getting better nor less complex for people that want to keep track this is a seminole issue for

qualcomm that applies on sales of its intellectual property in cell phones across the world this is a dispute that began earlier this year when apple sued qualcomm. there's been a great deal of back and forth we have gone through it a number of times for you apple sued them saying we have been adding all of these things to the iphone. it's a percentage of the overall price that we raised what are you talking about we lead to the absolute development of everything you have been able to do and it's only because we continue to work on all of these different things and different patents that we're still working on and all the intellectual property that's in there and you're able to do what you're going to do they came back and sued apple's suppliers because they're actually with with apple

suppliers. and they stopped paying qualcomm not that long ago they sued saying hey judge, they're not paying us anymore. we may hearing in in mid august on that but yesterday they go to the i, this c and they're saying listen apple's phones are sold here, these six patents are not the main standard and essential patents. they're doing it to focus on the other patents they have. these are things that help improve the efficiency of a phone, help to preserve battery life and they're trying to say we have so many different things out there, typically we wouldn't ask you to pay for these if we had everything in place we needed to with the suppliers and we were being paid and had all the licensing agreements up to date and where he they need to be but now they're going after it it will be 16 to 18 months before you hear from the itc on

this. >> qualcomm the best at disputing it stop alt 5 57bd not 45 >> apple has unlimited resources. we're being sued in courts around the world and they're coming back in the southern district and also coming back to the itc. in the court of public opinion they also have to try to raise the ante to make apple look like the bad guy and put more rates

on them. >> it's so nasty now how do they do it? >> i don't know. how do you make peace? >> they can make peace they're still working with apple on certain things. they both invested in the soft bank vision fund there's disputes and agreement but it goes to the core of qualcomm business. >> a agree with you. i don't know how they're going to make sense of the next quarter given they haven't been getting paid by some of the suppliers. >> i find this one to be a great untold battle. it's not talked about enough because if apple wins, wow >> not apple's first rodeo >> and what he said is that, you know, like amazon, apple, these are confederate states you can't

take them on not confederacy. they're nation states. they're like, they're like the medicis. i just came back from italy. >> we'll get kramers mad dash as we countdown to the opening bell take a look here as we continue to respond to that jobs number of 222,000 back in a minute

hey, i've got the trend analysis. hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.

>> there were sales that were at a loss this is one david where you'll see the cyber security stocks go up because this is the first time, we are now having companies whose earnings are being hurt which means it's no longer a question of well i don't know if i want to shop at that place, my credit card was compromised to being like now we have to start spending real money or it's going to start

hurting us >> we have all of this stuff and it still failed to alert us to what was going on. >> yeah. the bad guys are real smart okay. >> that's the whole idea of how they came up with them in the first place. >> we don't know how many attacks they stopped palo alto a good company now fire eye is more, much more forensic they have done a lot to stop e-mail span that's bad for you. it comes out there it's like broadcast news.

>> now have nothing. >> i lost ten years but where i'm going here yes david that you may think that these companies can't do anything but i think there's a lot of guys who right now are saying does anybody know the number of palo alto? we got to get them in here. >> second quarter revenues due to that sign area tack but basically they think they'll make almost all of it back and they still reaffirm it. >> i happen to like the company. i like emerging growth remember pepsico mondelez have been bucking the trend >> we got to hit t bheell which means we got to go we'll be back with the opening bell right after this.

>> everyone is making a lot of decisions based on it but what i am far more concerned about is can the bank rally continue. this is nirvana for banks. this rate rise makes it so it's so easy for janet yellen it makes it so jp morgan, you have to go to 100 price target. >> jp morgan has to go to 100.

>> i'm sticking my head in the jamie dimon guillotine. >> >> let's get to the opening bell at the bottom of your screen it's bancorp it's national geographic bringing wildlife from six continents live to viewers this sunday let's check out jpm at the open and some of the financials as they respond to rates this week. >> why are people not talking about that why serve talking about tesla? do you think tesla is more important than jp morgan honestly i'm asking you right now is tesla more or less important than jp morgan to the economy and the u.s. in the stock market >> no, jp morgan is most likely more important than tesla.

>> i rest my case. >> >> elon musk may be more important as a human being than jam j jamie dimon. >> he has electric cars. he has a hyper loop, that guy has a lot going on. >> there was an article about two billionaires do he they talk about taking over the world. >> they talk about a lot of different ideas. >> i feel like jp morgan going up is the life blood. >> people understand that. >> and tesla going down just sport. ihs market has a study that

finds tesla registrations in california down 24 year on year. they argue perhaps people waiting this morning points out it's historically lumpy. a lot of times these numbers are up and down depending on shipments. >> i care more about driverless cars than i care about tesla. >> okay. well they're not unconnected >> it's going to change a lot of things. >> you have already decided. >> i look at ten gaugement numbers from the motor vehicles department which you can google and what do you find it's the least disengaged. that's what matters. how often the driver has to wake up. >> they had the most miles i said many times it's all about the data you want a model for every single situation for the

algorithms i guess that are running the automobiles. >> if the partnership is good. mark fields, one of the reasons people lost his job is people feel like they haven't developed the autonomous car. >> and what chips do we need >> invidia. >> this is like a double jeopardy here. >> i have to answer with a question though. >> you were on eopardy. >> i was yes. >> only watson beat you. >> he beats everybody. unfortunately in the marketplace not as much. i don't know. >> jim he's your buddy now. >> nobody's my buddy nobody except everest. >> you're not here to make friends. >> >> he got that message. >> wow. >> >> bring it up every day.

>> it's going to have a nice bottom to build from that could be helpful and reset things. >> it's only $7, jim. >> well, i mean, 7 tesla bucks will be used i forgot to mention tesla. >> we got it on the record i want to ask you about something he wrote in his post today. he argues that central banks are ending an era of easy monetary policy and says and i'm quoting our responsibility now is to keep dancing but closer to the exit and with a sharp eye on the tea leaves

i always said don't fight the tape and the fed is raising and if you could just talk to marty that's such an amazing man maybe he would say the move from 1 to 2 is not that bad. >> and my problem with that is that's hedge fund speak. he's a fine man. he would say don't be as small minded and i come back and i'm stuck with the canvas and that says there's lots of opportunities. and i'm saying i don't want to just default to warren buffet. we didn't even talk about that acquisition. >> we're talking about other

company which is is bankrupt >> i broke that story way back when it was private. the largest failure of all time. >> $32 billion deal. most was about natural gas that was a specific part of it the state of tex was like don't mess with that >> they reject the few buyers. >> can we talk young china can we talk about that

>> fire away i'm still mist identified. >> second quarter results not so good pricing problems or what in terms of young china. >> i'm going to say it right here right now. >> yum is better growth than yum china. >> yum here. >> there's an aversion to taco bell in china. i can tell you that. >> pizza hut being flat. so it's just plus 4. i mean, plus 4 doesn't do it for

>> i think that howard is going to solve it with kevin who is a great technology. >> kevin johnson is the ceo of the company. >> he's still there. >> yes >> i'm aware. >> howard's in the hamptons. >> is he >> yeah. >> you didn't get the memo >> no. >> but i do think that -- >> we'll be in the city. >> sorry. >> what is the matter is that

people got ahead, i'm telling people that this is 55-56 if it gets down there given the fact that it was overenthusiastic and now it's being sudden. this is where it was when they couldn't solve the problem they're going to get back to 4 or 5 comp numbers in the u.s. and you'll regret you didn't buy the stock around here. yesterday carl noted in a tweet that whole foods was down below 42 back to 42 it's been trading above that since the deal with amazon was announced and this idea that it would be a bid from another buyer. we got the background of the merger this morning and it does indicate of course things between not just amazon and the company but all of this did happen quickly started in early may but also a company x which indicated interest in pursuing a merger

equals they thought it would be valued at 35 to 40 bucks. i'm not sure who that would be doesn't sound like kroger. i don't know haven't made calls on this to find out and then there was a company interested in talk about various things they might be able to do in terms of partnership but it was amazon all the way. they came at 41 and amazon said 45 and they said done. >> how about all of that when it got to 43. what was that about? >> i don't know. you shot that want to have an

understanding as far as who is considering consolidation. >> everyone is thinking kroger has to make a deal what day are you taking off? >> i'm not so there won't be anything that happens. >> mark it on your calendar. >> i'm not off for awhile. >> have to tell you david that's indicative of the idea that don't give up on this industry they're in the mood for consolidation that's what they need to do but remember costco was down 93 cents because of amazon >> it's all about anticipation

>> well they asked in the article the journal article that is worth reading about and what's going on, what is it? is it cheese is it actually cheese? >> you are the cleanest and the best. >> meanwhile, kraft heinz is down. >> don't take him as the soft guy that he is

just because he's about sustainability doesn't mean he wants to play hard ball about that deal as you know. >> i do. i know very well >> he was going to rollover and play dead. >> he is a wellmanered gentlemen and they took that as a sign of something that wasn't there. >> you're really pushing dow is down 55 ge is the lagered again approaching 26. >> 2 year low in fact in general

electric when you get bank stuff the same day that health care is up that is a broad rally this is a broad rally that we're seeing the area where central banks were driving interest rates down and pumping money into the system and this has been widely passed around and the data doesn't support a big rise in yields but everybody is worried about it where are we on growth and inflation? growth s'up. we saw it today but it's subdued. inflation is subdued even in the way of age growth which i would love to have, i'd love wage growth but we don't have it that much and a rational person would said the upside for yields is limited at this point. the problem is nobody believes this narrative because the fed keeps telling us they don't believe it they keep saying inflation is

transitory so everyone is saying okay and we see this playing out in the stock market this week banks, interest rate sensitive up very sensitive to rising rates all moving to the down side. other sectors are holding up well though. look at the big industries that we have had this week. nice support from all of the transports and they're up nicely and the spaces that are up racing on they're all basically flat so all of these have not been a major, major factor in the

market we have industrials holding up, banks moving up, the tech holding up okay so far right now this sabt as good as you're going to get and if this keeps going we'll break through the s&p old record any would say a short while. it was 24-50 or so and we're about 35 points away from that right now the dow up to 40 points guy backs to you. >> thank you let's get to the bond pitts as well and check in with rick santelli talking about what we need to get to 3%. hey, rick. >> absolutely. sometimes we spend too much time saying it's going to be difficult if not impossible to get to a certain level of growth but what we actually know is by doing certain things we'll never get 3% so we need to think outside of the box a little bit. hopefully somebody will begin doing that or at least take action on doing that but you would think there's been a resurgence of optimism on growth the way rates are going up seems

to be central bankers. manipulating the yield curve to keep it at a certain place we had volatility around the number we started where we're at now. 137, 138 we're unchanged on the day up 7-on-the week. let's turn to the real epicenter of the action. it's skyrocketing. now it's skyrocketing to be almost 60 basis points but when you settle at 22 basis points i think the term fits don't you? let's take it in the way back machine and look at bunds at the beginning of 2016 maybe that gives us a better picture and then finally let's look at yield curves we know our yield curve is very directional at the long end. long end rate versus been going up and the curve steepening. in europe same dynamic is true look at the year to date of bunds minus shots but remember it's still minus 58 basis points

on the shots it hovers at 116 but it has steepened rather dramatically and if we look at the last two charts these are the currency driving all currencies in my opinion. as you see the dynamics moving the euro are very similar to the central bank dynamics moving rates and all that gives a potential artificial landscape if you will to the growth initiative yes they're probably going to get a stock rally. maybe a hiccup but it's their turn now and the euro is reflecting that. if you open the chart up big time to the beginning of 2015 you can see how significant this 114 handle is but normally that means you're going to spend more time there so that's what traders seem to be thinking about.

carl, jim, david, back to you. >> thank you meanwhile, let's get to jackie at the commodity desk. >> good morning to you well bob hates the term gol goldilocks, i hate the term seasaw the knee jerk reaction was to go higher on the draw downs but i told you about that production increase 100,000 barrels a day in u.s. production and that is troubling the markets. sometimes it takes awhile to digest these numbers or indigestion in this case not only are we not seeing the trend wes need, but now in 2016 it's average production barrels per day was 10.6 million that's a record output for them so when you think about the opec cut in perspective to that it's

a small cut and we don't even know all the players are agreeing to it today the markets are looking at this again and saying there's still too much oil out there it's still troubling back over to you. >> thank you very much >> rate count, rate count, rate count. >> thanks. >> interesting story in private company valuations consumer hardware start up jawbone which was one valued as high as $3 billion has become liquidation proceedings. now started a new company. they are perkins, silver lake, an all star investor team. >> remember and look at. >> i have a few jawbone speakers still going after the fit bit market too >> do you wear your blue apron. >> wear my blue apron. >> they cut the range.

the advertising spend is up. the sales are not keeping up. >> what happens on july 11th, amazon prime which i sympathy going to be 20% year over year what happen ifs they decide whole foods sends you a box of food if you're a member of prime. >> blue apron managed to get to the market and jawbone did not. >> that's desperate. the blue apron ipo. >> come on how could they not pull that deal. >> they made it to market. we questioned the ceo i think rather energetically he had a descent story to tell. >> they don't have the growth they had

look what do you do with blue apron? honestly do you think blue apron should be like diverse identified. >> i have facebook and i have blue apron. >> so you're saying they have no business. >> exactly people say you didn't like grub hub. >> it was terrible and came back maybe at a certain point they'll have a couple of bucks in cash. >> it was like a communist plot. did you read the s-1 we are like commune. >> i thought that was container store. >> i took them apart on my father's death bed he said you have to short this container store. i'm not kidding. pop was amazing.

a visionary. his birthday coming up monday. would have been 95. >> he was dynamite man. >> 1,065ois. pnt we'll get stock trading with jim in a minute. don't go away. whoooo.

you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if there was a single site where you could find the right hotel for you at the best price? there is. because tripadvisor now compares prices from over 200 booking sites... ...to save you up to 30%... ...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices.

we attempted to say sell but we're staying neutral given m&a speculation saying the earnings are too high but she doesn't want to tell people to sell because they get a bid isn't that what is going on in the whole sector people are afraid to sell general mills. this is a very high quality analyst saying i can't recommend

sell because something could happen. >> it's the brazilians wondering what is on their list and where are they going to keep coming down. >> my conclusion. >> keeping it good out there. >> if you don't take any vacation there will be no yields. >> people should read this report by wendy but hey, it's heavily weighted today at a center >> and you're talking about a company that sat the heart of the fastest growing farming. >> i'll get a number. >> yeah, and we'll get some of the guests i talk about.

>> weekend squawk on the street. >> i would do it i would do it in my pjs. >> stop saying that. >> >> we'll see you tonight. >> on the jobs number. the power of a low volatility investing approach. the power of smart beta.

power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

the other big story, it's 22,000 >> our road map for the hour though begin with president trump and russian president vladimir putin about to hold their first face to face meeting. we will look at a live report

from the g-20 summit next. >> versus the 179,000. >> the first face to face meeting with russian president vladimir putin at the g-20 summit in germany. he is live there with the latest and it looks like a protest. >> yeah, that's right. sarah, we just saw a large group of protestors coming through this area lead by some of the more intense masked protestors and following them is a very peaceful group of people that are marching chanting anticapitalist slogans also followed by a large group of police officers. i would say 100 to 200 police

officers so they're preparing if r something here this is a well organize add fair here we had a couple of people alerting us that this protest was about to come through this area so you could see some of the folks here wearing the full black masks. some of them carrying signs, cha chanting and we haven't seen bottles being thrown the way we did yesterday. we will see the pictures live when they come back through. you'll have to wait for that this meeting is so highly anticipated around the world you'll see it. and a few hours ago this will be

a normal sit down session that we'll see here in a few memos so we'll wait for that as soon as we bring it to you and we'll wait for analysis of all the body language as well as the substance between the two men. >> highly anticipated. thank you. live there in hamburg germany. for more on what is at stake here from the trump-putin member and the u.s. economic agenda we're joined from former under secretary of state and co-director of the program at george mason university thank you so much for joining us it's good to talk to you just give us a status of the state of affairs between u.s. and russian relations right now as president trump is about to meet president putin for the very first time. >> they're at a very low level right now. greater cooperation from russia

and dealing with isis and syria. we need a stronger alignment on dealing with the threat posed by north korea and we want to send a message about the unacceptability as well as at the election process of other countries. >> who has it between the two of them economic or political leverage between putin and trump. >> of course they're all intertwined. this is an important meeting but the president has made it more difficult by u.s. trade policy picked fights on trade with key allies we saw president putin in an article trying to drive a wedge between the united states and the other g-20 countries on trade and he has a point

the u.s. should be leading on trade at the g-27 and yet we're talking about protectionist measures while the rest of the country is ready to move ahead the eu japan free trade announcement is huge that's going to put them at a disadvantage and of course we could have had access to the japanese market but the trump administration unwisely walked away from the transpacific partnership. >> so is merkels job here to avoid a repeat of the g-7 where it appears the u.s. is relatively isolated and days later we do something like pulling out of paris as we did in that case how much is her responsibility maintaining overall cohesion >> well, as the chair of the meeting she is trying to maintain cohesion. get an acceptable result find that area of common ground

where leaders can agree they share an interest and share an assessment of the path that needs to be followed and that would be true on trade and true on economic economy and true with respect to emerging threats like the one that has come from north korea in the launch of this inner continental ballistic missile. >> you mention the trade postjurors postur of the united states orange juice, dairy products, is this a new project and do you think they could actually go through with something like this if the u.s. imposes tariffs on its imports? >> the answer is yes

the european union will retaliate. the european union is one of our main suppliers of steel. they're a reliable supplier. a nato ally but if we use national security as a cloak to protect our steel industry they will retaliate not just against u.s. steel but against orange juice and as you mentioned bourbon and potatoes and things like that they did that in 2002 when under george w. bush we raised tariffs on steel so they're ready to retaliate and this is another example of the trump administration's trade policy complicating our important foreign policy work. we have huge items on the agenda like nuclear weapons, russian ambitions and reviving the

economy. >> as far as putin goes we await video from this bilateral. some argue that in their view putin always has the upper hand in the bilateral because of his tenure as a leader because of his experience in the secret services. because of his schooling do you buy that? >> heist a very clever man and to deal with him you have to be prepared to understand his tactics and objective and you have to really understand you know how to conduct a negotiation i think secretary tillerson will be helpful many this regard. he has had a lot of experience and he has made it very clear in his remarks since he's become secretary of state that russia needs to change direction and

ukraine is one of the examples of that where russia is continuing to intervene in ukraine so putin should never be underestimated but he shouldn't be seen as a superman either. >> we will await the first photos and any headlines that we get as this meetings is set to kick off this hour gentlemen, thank you for joining

us thank you very much. we appreciate it president putin and i have been discussing various things and i think it's going very well we had some very very good talks. we're going to have a talk now and that will continue but we look forward to a lot of very positive things happening for russia and the united states and for everybody concerned and it's an honor to be with you. >> thank you

[ speaking foreign language >> translator: on very important bilateral and international issues conversation is never enough be able to resolve most of the

national problems. >> i am delighted to be able to meet you personally and i hope our meeting will yield results >> thank you very much >> thank you thank you. the president not much more specific in saying they

discussed various things an honor to be with you to putin and things had gone well he seemed sidelined there by the chair to the left of the president. russian sanctions, north korea, syria and iran >> outstanding takeaway from the tape and the question has been given the disagreements between the united states and russia over north korea, over syria. the election hacking by russia in the united states and u.s. intelligence agencies to benefit president trump. there was the question of is donald trump going to get tough with vladimir putin? insists that russia not interfere with american elections. insists that he mover closer to

the united states position on dealing with syria on dealing with north korea and that was a very good briefing. talked about positive things happening. we heard from president trump's aid earlier that he did not have a specific agenda going into the meeting. that notion was reinforced by him saying in general we talked about various things so i think the take away was that was not a stair down and we'll see what we get after it's over. >> why are you surprised by that >> trump president all along the campaign trail and even as president barely acknowledged that russia interfered with the u.s. election despite the fact that his intelligence chiefs said so very definitively. he's been friendly and wishy washy with russia and putin

throughout he won the election. it doesn't seem to have harmed his base or his supporters what makes you think he will change his posture now >> there's been so much pressure domestically from republican leaders and others to make the assertion that russia is our adversary. they're not our friend we've seen a republican controlled senate overwhelmingly vote to stiffen sanctions on russia and so the question is with all the spotlight of the investigation proceeding would donald trump make some demonstration that he did not see himself as putin's friend and ally so i think that expectation made you wonder if this was the moment he was going to choose with all of this attention to show that and he did not show that and, in fact, as you said,

consistent with the pattern of behavior he exhibited throughout the 2016 campaign and since it was over >> some others might argue bringing it to warsaw and his comments and having pushed back some what in syria perhaps he believes his actions are speaking for him i'm sure people in the administration would make that argument and we certainly did see in syria some notes of hypertension militarily but that bails in comparison to the broader picture of u.s. russia relations and russia's actions with respect to the united states >> you mention pressure from congress it's an honor to be with you who's going to be the fearest critic when it comes to this meeting? what are the consequences going

to be? >> i'm not sure there's going to be consequences. ultimately the most significant consequences will be what comes out of special council investigation but you do have the legislation that passed the house. there's question about whether the administration is trying to kill it. slow it down, weaken it. so i think that's one venue where this is going to play out but republican leaders have been inconsistent in drawing line with the president and ignoring things he says and does and we don't know what category this will fall into. >> it's argued that putin is well aware of the pressure the

president is under regarding russia and perhaps would have something to deliver to the president so he doesn't get hammered as he comes home. is that likely >> no evidence of it that i'm aware of and when you heard hr mechanic master giving a briefing in advance of the trump-putin meeting he said we don't have a specific agenda it's whatever the presidents want to talk about so that suggests it was open ended but vladimir putin has a reputation for pairing more rigorously than that for meetings such as this so i'm not sure if vladimir putin is going to come to this meeting with some gift for president trump in order to appease the critics to the contrary, president trump before the meeting to putin was

on whether or not russia had even meddled in our he election which is something that major u.s. intelligence agencies all agree on. >> of course our visibility is extremely limited john thank you very much for that what a picture when we come back more on the historic meeting between the president and russian president vladimir putin we'll watch for the market's continued reaction to the job's number which was a barnburner. dow's up 37.

we're joined by wells fargo chief economist as well as jp morgan chief global strategist happy friday guys. >> thank you. >> good morning. >> nice number david i'm assuming you agree was there any hair on this one >> i think it's a pretty good number i think it's solid we did see the unemployment rate tick up. we saw it tick up by .2 so i wouldn't call it a barnburner but it's solid not much inflation but the key thing to think about here is long-term rates are still in the wrong place and i think the fed won't be distracted.

they have to worry about asset bubbles and this keeps the fed on track to raise rates in december three times next year that pushes long-term rates higher in the u.s. investors should pay attention to that. >> sounds like you think we've seen the lows in round 220 >> so as an investor there's a limit to how much the stock market overall goes up but focus on the sector which is are really correlated interest rates which are thing likes the financials ought to do better in the environment. >> john if that's a more reliable play book now how much do you agree, for one, and two, how much runway does it have >> it does solidify the expectations in the market for the fed to move once at the end of this year and to start it's balance sheet. i think the economic numbers

simply say that on the real side of the economy you have 2.5% plus economic growth and i think it's a very strong report for the overall economy. it eliminates a lot of the recession discussions that some people were percolating in the last month or so and i think it solidifies market expectations on the fed. >> but it does raise some questions john and that is why are we seeing better wages at this point of the economic recovery and why aren't wages rising faster and where is the inflation in this economy? >> there's two parts going on here one is you are creating more jobs than the labor force growing in the unemployment rate is being lowered over time but you don't have the productive numbers and pricing

power. it's difficult for firms to raise wages when the productive is not improving and can't increase the prices to 3 to 5 years. it's low wages consistent with low productive and low inflation rather than watching that unemployment number. >> i'm seeing a few theories this morning one of them is the changing structure of the economy is increasing and been expanding and those prices largely set by the government don't respond quickly to the economic cycle do you agree with that >> it's a structural issue we have not seen core consumption inflation go above 3% not once in 25 years we had these bubbles what i think is going on is very much alone in this economy

and airbnb you're negotiating for an hour of your labor and i think this itemization is leaving them powerless to get the wage increase so there's a lack of productive and also in the relationship it's more skewed in management that's holding down wage inflation. holding down consumption but is not going to hold down asset prices so they need to focus on it as they try to figure out the monetary policy. >> is it moving in that direction? >> i think if they're not concerned bbt deflation they are concerned about how they're getting on the balance sheet before janet yellen may or may not be reappointed they really need to normalize

short-term interest rates too so i think they think the economy is healthy enough for that. >> there's going to be questions about the politics of this presidents always take credits for job numbers especially good ones does president trump get credit now more than 800,000 jobs added in the first five months of his presidency it's not that different from what we saw from the remaining months of president obama's tenure but it's late in the cycle and there's been a surge in confidence across business. one of the surprising points is we have many jobs this year as we created in 2016 year to date. >> it's the same economy whether it's a democrat or republican in power and you're creating the same pattern of job gains that you did last year and this year. >> so it's an interesting point.

>> you need to see something else going on to move up on the economy. >> john, david, thank you guys have a good weekend. we'll see you later. >> when we come back, mondelez swarming the cyberattack that happened last week may have cost it's business. more on today big june jobs number janatusitus hzi wh here at post 9. ts from the data in real time? wait, our data center and our clouds can't connect? michael, can we get this data to...? look at me...look at me... look at me... you used to be the "yes" guy. what happened to that guy? legacy technology can handcuff any company. but "yes" is here. so, you're saying we can cut delivery time? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

>> triggers landslides and cracking buildings. >> a 23-year-old florida man in trouble after he assaulted a flight attendant on a delta airlines flight. the incident happened yesterday on a seattle flight. the flight attendant and two passengers were injured trying to subdue him. >> chicago cubs outfielder can now add pitcher to his resume down by nine runs in the final ending against the milwaukee

brewers. >> meantime president trump is meeting with russian president vladimir putin as we speak syria, sanctions, north korea all expected to be discussed joining us by phone is deputy director of the institute at the woodrow wilson center. as we await any details of policy discussion we did get a little bit of tape william it showed a very cordial exchange of pleasantries between the two world leaders. what signal does that send as we await more detail? >> they'reoff to a good start

from president trump's perspective and president putin's perspective and it's going to be far more important to see what they have to say after the meeting than before but the pleasantries were straightforward and obviously that was not the place where there was going to be any difficult conversations and we just wait to see what the results are of the conversation. >> so you really gamed this out. walk us through what each leader wants from this discussion and whether there's any room for an actual deal to be made of some ki kind. >> well all the talk about better relationship with russia is beginning to bare fruit but he needs to achieve that without causing domestic consequences. but i don't think he came to the meeting with an advanced agenda. putin did and putin's points

focus on ends of sanctions, return of the compound, dealing with syria, and i think trump warrants to show there's a positive reason for pursuing this relationship in light of what has already occurred domestically in the united states i think that's a major barrier

toward that issue and even on it on an issue as prom bt as north korea just yesterday the russians objected to the u.s. measure condemning north korea at the u.s one would have thought that might be a place but it doesn't appear that is going to be the case >> they so definitively said it's russia. >> it interfere with president trump's narrative about his victory in the election and he believes he won a great victory and won it all by himself and that the russians did not play a role in his election so he continues to dismiss the evidence provided by the bell jens agencies that russia interfered in the election

>> june payrolls beat estimates this morning the estimate was 174 unemployment up to 44% we're joined by goldman sachs chief. native of hamburg. >> i grew up in hamburg. >> very nice. >> always lots of protestors. >> it's a very solid report in terms of what it says about growth in the economy. upward revision all of that says that the economy is really moving along at a very nice pace despite some of the recent indicators and durable goods

we're making one momentum and the area where things are clearly weaker is once again the average earnings numbers so the signals on price and wage ij inflation have been below expectations over the last few months i don't think it's a game changer. >> you would argue the building blocks are in place for finally some wage growth >> i mean, we have seen some wage growth right? so we were in the range several years ago and now in the 2.5% range and that's a little disappointing relative to what it looked like three or six months ago when the numbers were indicating closer to 3 but i think it's a set back. but i think we'll see a rebound. we are seeing it in some of time-weighted average surveys when households or businesses

are asked about what's going on with wages there does seem to be more optimism there. >> if you break apart the report and look at where the jobs came from, health care is a big contributor. does that continue to be a job creator if they can pass something to repeal and replace obamacare? >> it probably does continue to be a contributor but the last few years did see a big expansion of health care the rate dropped a lot there wasn't a big increase in health care consumption and that gave you numbers but i'm not expecting it as a function of what happens in congress the one area i would pick out which probably did overstate things a bit was the big increase in state and local employment some of that was teachers but

overall it's very solid. >> does the jump in the labor force ratify yellen's stance about people coming off the sidelines? >> it was a bounce back from a decline last time. the decline didn't look like something that was going to last and i think we got the confirmation of that. >> >> this is looking a bit farther out? >> it's hard to say. we don't have any more information on any of these things that we had six months ago. i would expect the decision to be taken in the fall but probably not imminently. >> how do you start to factor in the professionist trade move ifs the president does go through with steel tariffs on u.s. imports that could effect a lot of different countries and major alabama lice and trading partners how do you calculate the economic impact especially with

europe threatening retaliation in key u.s. exports? >> i think if you get an increase in tariffs in the united states and abroad it's basically a negative supply shock at the margin. gives you more inflation but probably a little less growth. i don't think the numbers we're talking about are enormous. >> if you translate it into a growth impact or inflation impact you're not going to get very large numbers for economy as a whole but it can be a big deal for the individual sectors and it does make, you know, production effectively less efficient because you're reducing the choices they have. >> does it help american workers as president trump has argued? >> i think potentially in certain industries it's hard

overall if other people retaliate. and benefit for sure but it's pretty hard to believe that you protect your way to prosperity >> ending with this idea that you have to keep dancing closer to the exit with a sharp buy on the tea leaves. >> the business cycle is about to come to an end meaning that we're in the late cycle phase in order to keep it too hot or too cold. >> central bankers need to lean against significant further increases in labor market, you know, and employment rates i don't think the unemployment rate can really fall that much further in a sustainable manner so that does mean probably a

little bit more head wind. on the other hand if you look at other indicators of recession risk if that's the concern that we're going to go into recession in the next year or two those indicators still look pretty moderate there's still a good chance that this will be the longest expansion on record and while i do think recession risk is a little higher than it was a couple of years ago when we had so much more slack in the economy still it's still not that high. >> good stuff. thanks for coming in as always. >> thank you. >> when we come back a warning from mondelez. the snack maker saying a big cyberattack hit the company sales. we'll share the details next

the power of 100 of the world's top companies. the power of a proven 15-year track record. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.

indicates a 3% slice off of the revenue growth rate for the 2nd quarter. cyberattack impacted the company's ability to ship an invoice during the last four days of the quarter. multiple companies around the world reported being attacked on that same day and more than 60 countries guys it's not a huge slice of revenue. but the disclosure is notable

because we know that the number of hack attacks, cyberattacks is only increasing. they're targeting companies and it just makes you wonder what the financial impact is going to be now that we seen from mondelez and a big consumer company as well also warned that it had to cut sales forecast from 3% growth to 2% growth as a result of the impact of manufacturing and distribution from this attack >> they did reaffirm the or fwanic revenue growth target for the year they'll make it up in this quarter and didn't lose a lot of the sales but perhaps a small number. >> it does highlight the fact that there's a financial kit here and i wonder if more companies are going to feel like they have to disclose this thing. there were other companies effected by this. >> yeah. >> the law firm, wpb the advertising firm and we'll wait to hear from them as well.

>> a new report is out and newer and smaller may be better. >> this may soundcounterintuiti the same reason you may want to go to a surgeon with few patients and little experience investors often shy away from newer hedge fund managers with smaller funds. both newer managers and those with less than $300 million in assets actually produce higher returns than the industry as a whole. over the last 12 months, take a look at this chart, first-time funds with a track record of fewer than three years returned 14%. funds with less than $300 million returned almost 12%, and the hedge fund industry as a whole returned 10% the same was true over three and five-year horizons newer managers outperformed followed by smaller fun, which, of course, led the broader

industry now the trade-off for those returns, of course, is risk. volatility for smaller funds was slightly higher for newer funds and smaller funds than larger hedge fund industries over three to five-year time horizons interestingly, fees are about the same among newer funds, smaller funds and all single-manager hedge funds about 1.5% of assets and about 19.5% of profit from performance. still, investors remain hesitant to invest in newer funds, according to the frequent survey highly 72% said they would consider smaller funds, only about a third said they would consider a fund that was less than 3 years old however, given the newer funds' stellar performance numbers especially with the challenges facing the broader industry, now may be a good time for a newer manager to raise capital back to you, david. >> yeah, of course, and that's the key and they raised capital, they get bigger and less agile, if you will, and their performance numbers sometimes fast by the way, always keep in mind

many of these large funds that have very impressive annual returns, leslie, did a lot of them in the earliest years when they were small. >> yes. >> which tends to make them look good over time, but when you look at what actually what came in and what went out and how much money they really made for investors over time it gets more interesting. leslie, thank you. >> thank you >> leslie picker now let's send it over to jon fortt in san francisco with a look at what's coming up on "squawk alley. >> jon >> good morning, a little bit of a low battery reading on tesla it's getting a low bid we'll take a look at that. also, qualcomm counterpunching yet again in this ongoing legal feud with apple over who really deserves credit for the smartphone revolution. finally when is a startup pivoting when is it dying digging into the story of jawbone. all that and more coming up on "squawk alley.

let's get to rick santelli at the cme group with the sfely

exchange good morning again, rick good morning, carl you know, it's fascinating to watch when data is released and see immediate reactions in the marketplace and it's equally fascinating to watch what happens when the soup simmers a little bit what i found, and this shouldn't be something all of you viewers and listeners haven't seen or heard before, and that is that actual fundamentals seem to be a back channel, so to speak, in certain markets at various times. you could make the claim about the equity markets around '08, '09, '10 potentially, especially after the crisis of it a.r.p. and some of the stimulus thrown at it and how it was packaged up. i think that same type of issue is now involved in the fixed income markets we know that money seeks a certain equilibrium with currencies and interest rates, and that equilibrium gets disturbed, but the biggest disturbance out there in the atmosphere is the thumb on the

scale, so we aren't really trading fundamentals anyway. we're kind of trading thumbdamentials. what this does is makes technical analysis rise higher if you look at marks and you get weak data and yields go up a lot, or you get strong data and yields go down, it doesn't quite add up, so technical analysis and patterns get taken up more and more the behavior of markets versus how they react to data points. then you add in things like pattern recognition and a lg os and it's almost as if these markets get a whole life outside of fundamentals and i think that's worth talking about, because it seems like when markets get in this thumbdamential mode, they really hit all the technical areas much better, and i think that's partially the reason why the other thing is we had a discussion this morning about growth you know, i think it's a lot easier to dial up 3% growth

department, and i'll tell you why, and it really does have to do with the telephone. when i first got into this business about 38 years ago, not on the tv side but on the make and lose money side, an old-timer in the grain room told me something he said 40% of your success in the business, young man, is keeping the same phone number. change firms, change titles, but keep the phone number the same why? because people can find you. it's consistent. they know where you're at, and no matter what changes in the world, over time your phone number is the same i think it's kind of the same with growth, okay? i can't tell you if we can get to 3% growth, but i can tell you without a certain amount of consistency and the legal and financial structure of our economy will never get there, and that is a key point. sarah, back to you. >> with a prop and all rick, thank you. rick santelli. when we come back, more on that

meeting happening between president trump and vladimir putin. we're awaiting headlines as the meeting wraps up, and we'll share them with you as we get them time?

wait, our data center and our clouds can't connect? michael, can we get this data to...? look at me...look at me... look at me... you used to be the "yes" guy. what happened to that guy? legacy technology can handcuff any company. but "yes" is here. so, you're saying we can cut delivery time? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

welcome back to "squawk on the street." i'm dominic chu. tech and discretionary text, very volatile week for tech spots. despite the 2% gain the sector will come in basically flat for the week so keep a track on technology stocks overall. that does it for "squawk on the street." let's send it back downtown for "squawk alley. >> it's 8:00 a.m. at palo altes headquarters in palo alto. "squawk alley" is live ♪ ♪