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 ♪ ♪

. good friday morning. welcome to "squawk alley." here with me at post nine none eisen and jon fortt is at one market in san francisco. busy, busy news day. >> got some breaking news actually out of the federal reserve. let's get to the elon moy. >> they expect to reduce its balance sheet sometime this year, and it said monetary policy remains accommodative no new hints on its plans for interest rates going forward however, this report does point out that inflation has softened some in recent months, and the fed also said that low-wage growth remains a concern this report was put together before the june jobs number came out this morning now, this is a 59-page monetary

policy report that fed chair janet yellen will deliver to congress when she testifies on capitol hill next week one thing that it points out is the role of monetary policy rules and the fed's decision-making process. that has been a flashpoint among the fed and republican lawmakers. the fed says in its report that the u.s. economy is highly complex and rules by their nature do not capture that complexity so the fed arguing there for more discretion in its monetary policy decision-making process also of note in this report, the fed weighs in on this debate over whether its policies have disrupted liquidity in the bond market the fed report finds that there has been, quote, minimal impairment back over to you. >> that's aloud of headlines crossing right now that's a big report to read ahead of yellen next week. thank you very much. we turn to president trump meeting with russian president vladimir putin at the g-20 in hamburg, germany i'm eamon javers is there live where once again, eamon, are you

tweeting some photos of police getting into various positions as we approach the dinner hour. >> reporter: yeah, that's right, carl it got a little hairy outside and we move inside here at media hotel. protesters outside vandalizing things, breaking windows, spray painting a large group of police and protesters just moved into the area, so we've sort of retreated here into the interior part of the hotel but we just saw the video that the world was waiting for here in terms of vladimir putin meeting with president donald trump moments ago here in germany. i want to play you the key sound bite that a lot of people are going to be paying attention to in the hours and days to come, analyzing this to see if we can make anything about the relationship about the two men out of this sound bite take a listen. >> president putin and i have been discussing various things, and i think it's going very well we've had some very, very good talks. we're going to have a talk now, and obviously 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. >> reporter: the president there saying it's an honor to be with you with vladimir putin saying there's a lot of positive things going on and saying that they have got a lot of things to discuss but keeping it very general, very high level as you would expect at a g-20 meeting that's more of a photo-op than a news conference. you two leaders did not respond to questions from the press pool in the area. we'll see what leaks out after the meeting from the u.s. side and possibly the russia side in terms of substance discussed between the two leaders. for now we've got the pictures of what the world was waiting for in terms of vladimir putin and donald trump meeting together. >> eamon, we'll see you indoors. come back to you for a while our eamon javers for more on the meeting with trump and put be, formed by former deputy treasury assistant secretary and with us the former secretary of state of economics

and business affairs jose fernandez. great to have you with us. we turn to you, mr. secretary, and say we have a co-anchor this morning that argued the g-20, the model of the g-20 has peaked in its purpose because there's not so much agreement these days about alliances, global trade. do you think that's true >> i don't think that's true the g-20 is a relatively new phenomenon we've only been in place for six or seven years an outgrote of the g-8 and people thought that was outdate. in the last seven or eight years you've had a lot of agreement on the part of the g-20 except with the trump administration we're seeing a fair amount of disagreement know so you have agreement in the g-20 on things like trade, and you have agreement on things like climate change, and you have agreement certainly in most of the countries on immigration, and so you do have a movement forward, but what you don't have is have a u.s. administration that's decided for a number of reasons to actually move away from that consensus that existed last year. >> so do you have a sense of how far back they will move beyond paris let's say in terms of on

issues >> i get a sense that the g-20 wants to downplay some of the differences. i think they are hoping that the u.s. administration will come around in some of these, so you're seeing, for example, things like climate change whereas you could have a vote today and then it would be 19-1 the u.s. would be on the no side i think that like they would like to downplay that and focus on things that they can talk whether, where they can see there's progress there's plenty of progress things like on trade, and the g-20, even though there's no consensus on these things you're seeing separate agreements such as japan reaching an agreement, a trade agreement in principle with the eu, canada with the eu so i think they will try to downplay some of the differences and try to move ahead and show progress without the u.s. >> let's focus on that trade issue, scott i know that you also zero in on the economic policy challenges here for g 20. who is in the economic leadership position in this

meeting? >> well, this is an open question, of course. the germans are hosting, so angela merkel is playing the leadership role nominally and i think in the spirit of what's been the long-standing g-20 orientation on issues like 20 she's taken up that but the real question in the absence of the u.s. providing the leadership it's always provided on the issues and really providing the momentum for the issues, it's not clear that the germans alone or germans even with the chinese or some other leading actors can provide the same kind of momentum, particularly it's not as if the u.s. isn't showing up. you know, the u.s. is very much there. the challenge is that it's there and the new role of being an obstructionist so it's not at all clear how they do make progress when you have a president trump that is showing up and posturing on these issues in a way that is playing to

perhaps a domestic constituency but is not at all, you know, constructed to sitting around the table with the other leaders and trying to make progress on trade, on climate. so, you know, i think it's really a recipe for a g-20 right now that will be effectively neutered. >> scott, how much does it matter that we don't have out of the trump administration, at least the traditional sort of message discipline that we've been used to seeing from u.s. presidents i mean, granted president trump is clearly unique in a lot of different ways, but we're getting tweets about border walls after the meeting with mexico, about podesta. is the that going to have any real impact on trade policy, or is it a distraction to say the discipline isn't there does it not matter >> i think it has a real effect. i think, you know, within the g-20, it certainly undermines trust. you know, we shouldn't lose sight of the fact that the meeting itself does -- you know,

it is about these individuals sitting down around the table in closed-door sessions so that to some degree that depends on a level of trust it also depends on being on top of the details and sort of this shoot from the hip approach from the president, you know, it doesn't inspire confidence that he's showing up in these meetings with a heavy command of the detail of what is a wide range of economic issues on the table. >> well, that points to what some have written this week, that he's surrounded by a pretty hardy stable of partners tillerson and mcmaster and so forth. how important are those? >> they are very important but you also have to listen to them and one of the things that we've heard this week is that trump hadn't come up with an agenda, for example, with the meeting with putin, and if you don't have your talking points straight, if you don't have the questions that you want to prepare for, it's really difficult to get something out of these meetings. at the end of the day i think if you're germany, if you're the

europeans, the rest of the g-20, what you want to find out from this meeting is will the u.s. continue to be an outlier, and if so, who will be the leader of the other 19 will it be germany will it be somebody else and i think those are the kinds of questions that you've got to be prepared for in order to convince your partners, the rest of the 19 countries, that in fact you do mean to continue in that consensus. >> what do you think the answer is >> i think -- it's hard to say, but i do believe that the u.s. will be an outlier on a number of these issues. we're seeing it already on climate change. >> replaced by germany >> i think germany could be. you're seeing a lot of reluctance on the part of angela merkel to take up that mantel. i think she's hesitant. >> in advance of her own election >> exactly she's got to take a position that may not be the position that she wants to take or that she has to take in order to survive an election. >> scott, i think finally the most stunning development to come out of the g-20 besides all

the photo-ops that we've seen so far is europe is preparing retaliatory measures against the u.s. when it comes to trade, and we got specifics out of that ft article including whiskey and dairy products and other agricultural products in the u.s. are we going to see a trade war? >> well, there's certainly that risk it points to the dangers of the kind of posturing on, you know, the statements on steel coming into these meetings from are the white house. you know, trade wars are very damaging to the u.s. economy we're a trade-dependant economy, so, you know, it's another example of not treading carefully, not really, you know, fully reying these issues before making these public statements, so, yes, we're now seeing a very quick backlash from one of our key trading partners, and it is worrying. >> it's not just one there are 19 members of the eurozone hand more than, you know, 25 in the eu this could get out of hand.

>> yeah, that's right. that's exactly right. >> that's unlikely i mean, you've got -- we all depend on trade, but it's just sad that we're even talking about this, the year after we were talking about the trade agreement. >> she, of course, did make some comments about major developed countries, unnames, that have significantly backtracked positions. that bilateral is tomorrow we expect more headlines over the weekend. scott, jose, thank you so much for your time. appreciate it. >> pleasure. one of other top stories this morning, stocks are higher following the release of the june jobs report it was a solid beat. employers adding 220,000 new jobs, well above the consensus estimate of 174,000. for more we're joined by the former federal reserve vice chairman allen blinder and former labor secretary chris lu. thanks for joining us. the consensus on wall street is the that this doesn't change anything for the fed we can expect another quarter point rate hike this year.

the job market continues to show improvement, even with lack of substantial wage growth. is that your opinion >> oh, yeah, and furthermore the fed's interest rate raising policies if you want to call it that are obviously not denting the economy's forward momentum the fed may be a little bit slightly aggravated about that because it -- the intent is to slow things down a little, but not very aggravated because inflation is nowhere to be found. >> chris, why no inflation, and are there specific policies that we can get out of this administration that will boost wage growth? it's something that president trump has said he wants to see along with the jobs improvement. >> you're right. this is a strong report, but let's be clear that there are storm clouds on the horizon. you know, we haven't really seen a jobs plan out of this president other than tweet-shaming companies and whether it's with ford or boeing and carrier that has limited impact whether it's infrastructure or

tax reform, the president's political agenda really is in question at the moment, and then add on top of that the potentially negative effects that come out of repealing the affordable care act, and so this is a strong report, but i am -- i have concerns about what the path forward is right now. >> although, chris, i mean, the white house would push back that repatriation and tax reform and even health care bill -- health care would lead to the kind of job growth and ostensibly that is their plan, right just the problem is getting it through the hill. >> well, it's not -- it's not just getting it through the hill it's the president having the kind of discipline to push forward on his agenda, not creating the kind of self-inflicted wounds that we've seen over the past six months. in your last segment you talked about some of the global uncertainty that comes with potential trade wars i would add on top of that climate change, the effect of the travel ban on tourism. there are a lot of things swirling around right now. it's really going to require this administration focusing on its core agenda, and they haven't been able to do that so

far. >> but what about my question on wage growth, allen maybe you can address it what kind of policies do we need to see to boost average hourly earnings to a place they should be at the cycle and with this kind of jobs growth? >> good question it's a bit of a mystery why wages aren't doing better than they are we now have finally got to the position that we were in the very late '80s where employers are scouring the landscape looking for people to hire that's a big, big change from what we've had for the last six or eight years, and yet wages are going nowhere. so, i mean, what do you think about? do you think of things like having greater union power, greater -- well, maybe pro labor rather than anti-labor nlrb. >> really? >> yeah, no, this is not a forecast of what the trump administration wants to do. >> no, i realize that. >> it's -- you know, it's answering your question on what

might give labor a little more bargaining power at table. labor doesn't obviously have very much bargaining power at the table right now. >> so allen, do you think -- i mean, people look at long-term charts of the share of gdp's flip between labor and capital and how that 30-year chart has been so unfair to labor. do you see that pendulum swinging back in the next few years? >> i do. yeah, no, in the last few years, actually this is one of the unknown, quote, secrets it's not a secret. it's public data in the data labor shares actually perked up in the last couple of years. why is that? because -- not because wages have accelerated very much, but because productivity has done so poorly labor's share goes up when the wage packet goes up faster than productivity and opposite was happening for decades and in the last couple of years wages, even though they are only going up it.5% per annum, have way outstripped productivity growth more like half a percent per annum.

>> chris, how much do you think we should make of the fact that there seems to be this mismatch between the skilled labor force that businesses are looking for and what's available in the pool if there was some policy to try to narrow that gap, might we see an increase in wage growth because of it, because the sort of worker that businesses value and apparently want to pay would then be available? >> well, you're exactly right. there's about 6 million open jobs in this country right now, and as the deputy secretary of labor i traveled around the country and i talked to employers who are ready to hire but couldn't find the skilled workforce and one of the really good non-partisan, bipartisan initiatives is around job training, and specifically around apprenticeships and i want to applaud specifically the president and ivanka trump for taking on this initiative that president obama first launched back in 2013 apprenticeships are really a proven training method that's been used in europe to train people for jobs like i.t. and health care advanced manufacturing that really moves

people into middle class jobs. >> all right we'll see if it starts to yield some effects thank you for joining us on this friday allen blinder and chris lu. >> when we come back, apple is trying to stop qualcomm from selling some of its ipads in the united states? one of the most watched and increasingly heated legal battles and tesla shares slipping this week entering bear market territory and it was once a $3 billion company now one silicon valley darling is liquidating dow is up 56 the banks are pretty flat and f.a.n.g. is up better than 1%. back in a minute at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage.

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markets at this hour, dow is up 56. we're seeing pretty good action in technology. the peak of the prior bull market started forming exactly ten years ago. our senior markets commentator mike santoli is writing about that this morning on dotcom. good to see you. >> good to see you, carl july 2007 was time to start worrying even though it didn't seem like it at the time stocks at at new high-time high and unemployment at 4.5% really it didn't seem like there was much reason to think there was the end. in mid-july, a 9% sudden pullbacked in 500. did you rebound into october to about the same level as the highs in july and then it fell apart from there just an occasion to look at

similarities and differences with today's market given, of course, we're at an all-time highand have full employment you do have elevated stock you have more expensive stock market i could argue it's justified but definitely more expensive. low volatility leading into this period, of course, very low unemployment as well so you have a late cycle feel to the economy, and then high corporate debt levels. we don't talk a lot about that, but right now correspondent rat leverage is pretty high. companies have done a good job of taking care of a complaint fixed income market and differences i would say are more significant and, therefore, it looks like we're not at the edge of the cliff credit markets are very firm back in mid-2007 you've already seen the cracks, the sub prime crisis was almost 2 years old and by then corporate debt was a little shakier that's not the case right now. the yield curve, people are worried about it right now for no good reason, i would argue. we had a flat if not invert the

yield curve back then and the fed is in a better spot right now. tightening for two years they were on hold for a year and basically look like they had been doing too much. right now they are kind of picking their spots because the conditions are right to start tightening again also the market behavior, guys, is much, much more september with an ongoing bull market. opposed to something that shows pretty scary divergences. >> i was just going to say the bubble indicator, whatever that is, is a little bit different. >> sure. >> yeah -- >> this time around. >> credit bubble was the thing in 2007. you're seeing excessive credit creation perhaps right here but it's not pervasive around the economy. it's not like households are indebted and like banks do crazy things you don't have the craziness and '99, doesn't look like that either. >> what about the step function that we've seen about a month, two months ago in the number of 1% moves, right? we haven't been able to put a string together of four in a row

on either direction, right, except the dow had one forward move. >> you're coming off this uncommon depressed level where the market was asleep. i would see it as not one of the indicators of the very end stage of the bull market but just a normal level of volatility we're way overdue for a rougher shakeout maybe that's already started the market has to adjust to what the markets and central banks will do. you so the peak over peak year earnings and maybe it will get spottier and you'll have a 5%, 10% pullback and i'm drawing a distinction between what we saw when the market was about to get caught in half over 18 months in 2007 and what we might be seeping right now. >> yeah. no sub prime mortgage bubble and burst. >> no. doesn't seem like it. >> good. thank you. mike santoli qualcomm suing apple as the legal battle continues jon fortt digging into this up the latest on the escalation and

once a silicon valley darling in the days of wearable technology. now jawbone is going out of business what exactly went wrong. and former economic council adviser ed lazear talking the june jobs report "squawk alley" will be right back

i'm sue herera here's your nbc news update as this hour. an historic day in germany where

president trump is meeting with russian president vladimir putin for the first time since taking office president trump saying there are, quote, very positive things in store for the u.s. and russia the meeting comes as investigators look into russia's involvement in the 2016 presidential election. evacuations are underway in oakland, california, where a large fire destroyed an apartment complex under construction there is word that firefighters are concerned about a crane at the site that has been spinning from the heat. no reports of injuries or a cause at this point. bill cosby has a new court date the retrial is set to begin on november 6th in pennsylvania cosby's sexual assault trial ended in had a mistrial last month after jurors were unable to reach a unanimous verdict the 79-year-old comedian says that he is innocent. and a federal health warning. the cdc is urging residents in alaska to fully cook their walrus meat, that's right, walrus meat. it comes after two outbreaks of

trichinosis which apparently is caused by parasites in undercooked meat that's the news update this hour back downtown to "squawk alley." sara, back to you. >> or you can just skip the walrus meat. >> you could just skip the walrus meat, but in some parts of alaska that's pretty much a staple. >> good to know. thank you. let's get back to headquarters seema mody has the european close. >> european stocks in a modest move to end the weeks off the lows of the session following the better than expected u.s. jocks report and what's really the big talker, the german it un-year yield hitting new 18-month highs today bonds in the midst of a global selloff this week which was sparked by indications that central banks are moving towards reducing stimulus efforts. the move has sparked a discussion about the impact this will have on the european equities, specifically the rate-sensitive sectors just take a look at the french ten-year yield and the italian ten-year yield moving higher 2.3

on italian debt. switching focus to the currencies, the uk pound moving lower today on some disappointing economic data. industrial production falling unexpectedly in may from the previous month a decline in car production being the main reason for weak manufacturing output you also have the trade deficit widening in may. the pound at 1.28 against the greenback. now on to foreign policy the world continues to pay attention to developments at the g-20 in germany, especially surrounding president trump's first ever face-to-face meeting with russian president vladimir putin. the meeting comes with the russian ruble now at five-month lows against the u.s. dollar as oil prices have fallen in the wake of an increase in u.s. crude production that on top of unexpectedly high inflation in russia, you're looking at the ruble lower against the greenback, but just check out the russian stock market, also falling down. now down up to 14% year to date. back in january, guys, emerging market strategists were

expecting a stronger u.s.-russia relationship to help european exhis outperform, specifically on the prospect of sanction relief, but that hasn't happened yet. carl, back to you. >> all right thank you very much, soma mody with the headlines out of germany. merkel is speaking and says some discussions on north korea, those leaders who spoke expressed their great concern about that threat. also says that the group has produced, quote, very difficult discussions on trade no surprise there. >> i was just going to say north korea seems like one that they can all agree on, that nobody wants them to have these dangerous missiles that could possibly attack the united states versus some of the differences that we've been playing up in a lot of the media playing up going into this including trade first and foremost and, of course, climate, what to do about russia, so we'll wait to hear how they dealt with those differences as well. >> our understanding is the bilateral continues even now between the president and putin and we'll await headlines if we get any from there

we're watching tesla, of course, sinking into bear market territory losing its crown as the most valuable u.s. automaker as new registrations in california fall 24% in april compared to a year ago the former c.o.o. of yahoo, current president at cheg joins us at post nine. always great to have you here. >> pleasure to be here. >> what do you make of this? the registration thing we have attributed to lumpiness out of the data in california, but overall they have been hit with negative data points, negative sentiment and news. >> yeah, look, i think this comes down to a very simple question do you believe tesla is going to be the most important car company in the next ten years or don't you because it's hard to justify their valuation at any of these levels. it sells significantly fewer cars than any of the other companies. it has only a few models its production has to ramp up dramatically so it can't be a quart everyone-by-quarter buy. if you're interested in tesla you have to fundamentally believe their technology, their cars, their designs and what

they are going to do by, you know, dotting the landscape with ability to charge these cars will be the differentiator, and if you believe it, it's way undervalued. if you don't believe it, then it's hard to accept the fact that it was billed the highest valued car company in the world. >> jon >> that's my question is how much do these really ambitious production targets matter to the tesla investor because thus far tesla has gotten a pass for missing various benchmarks that they have set, but, i mean, for this model 3, and this is supposed to be the mainstream product, so how much should investors be nervous about the level of ambitious, that the just unprecedented nature of producing that many cars from what's basically a standing start? >> yeah, and a new car, so you've got -- you've got that element as well. i look at it like the apple iphone which is everything is what is the iphone going to do this quarter and then people panic and it gets pushed out and

it's fine. they don't ramp up the level of production the way they are supposed to and maybe it misses its quarter as opposes to the total objective, so i think if you've focused on those things around tesla you're not understanding elon musk and the way he thinks. it happens when it happens, and you're either betting it's going to happen and they are going to ramp up production in a reasonable period of time, but to try to hit that data and get it exactly right seems nearly impossible. >> we should mention it's been a rough week for the stock prices, still a stock that's up about 45%. >> to $300 a share. >> about up as much as cheg which is up 140% over the last 12 months. >> true. >> clearly the investor buy-in is there, and you mentioned the valuation as well. what about the safety test though because if this really does come down to believing this is the car company of the future, it has dropped below the value of general motor, doesn't that matter more than some of the other incremental news items? >> so the way i understand it is if you look at the government testing, it's at the highest possible rating, so this is an

independent firm that does its ratings, and it's down one, and it has to do with the seat belt. it seems like a relatively easy thing to fix and if you're buying a model s, those are the people that are buying really expensive cars i don't think they are thinking about is the seat belt exactly perfect when i get into an accident when you get to the lower priced cars and start making family cars you've got yourself a challenge if you don't fix that, so i think the new model, if it has the same issue it will affect sales, but i don't think it's affecting sales of the other teslas. >> qualcomm is suing apple for patent infringement alleging they breached six of its patents that deal with battery life and asking for an import person on certain iphones and ipads and we had a discussion this morning whether it's an extension threat and apple's experience in litigation

what do you think is going on? >> i think this is an extension issue for qualcomm because the way they deal with patents is different than anybody else and they have been able to get away with it for years. apple charges the most for their phone, they have to pay them the most, so this is a debate between apple's profits and qualcomm's profits, and where that extra several dollars goes. if qualcomm loses this, i think they are in a world of hurt in terms of how they will be valued, but the more interesting question to me is what you're seeing is a big change in silicon valley philosophy. you're seeing the big guys in a race to a trillion dollars fighting everybody amazon and walmart are at war, not at war in the markets but walmart forcing people going after aws and google go after google in terms of waymo because it's an extension crisis for google potentially but for google it's a matter of how does this svain growth going into the future, so these companies get bigger and bigger and bigger we're seeing lawsuits we never would have imagined around

patents. 15 years ago in silicon valley, that was a taboo thing to do. >> is the frenemy dead or does it exist it is. >> i think it the frenemy exists because you always need somebody else's technology but the big companies who are loaded with cash and have great momentum and have great confidence willing to go to war with really their biggest enemies, and you're seeing new factions being built. you're seeing microsoft partner with people it never partnered with before so it's almost like global politics. you see companies that never partner, started to partner which changes the relationship between other companies, so i just think it's a big issue for qualcomm it's not that big of an issue for apple unless they are prevented from selling their product in which case they could just pay and be able to sell their product. they have so much cash that i don't think it matters but what matters is a race to a trillion dollar valuation, who has the clearest lines to profit and growth if apple is paying 15 bucks per phone, $5 savings per phone in the value is an insane amount of money for them to fight for so you can see why they would fight

for it. >> jon, how does it pan out? >> apple is not paying 15 bucks per phone. they have a pretty good rate from qualcomm and while this specific case is not a big deal for apple, i think there is a big deal for apple behind it here's why apple is trying to cast qualcomm as just another widget supplier that has a big head. qualcomm is saying no, no, wait a second we're kind of like an unbridled's song co-inventor of the smartphone, and qualcomm has a case that doesn't often get made that they invested all of this research in intellectual property that's allowed so many smartphone companies to stand up huge businesses in a pretty quick amount of time so the reason why this is potentially a big deal for apple, if apple is overplaying its hand legally here, i think they still think of themselves as kind of the underdogs and kind of these artists in a world of manufacturers if they are overplaying their hand and think that people are going to find them sympathetic

in the way they did in the samsung case and people don't find them sympathetic, i think you can have implications for apple's growth going forward and lots of other areas. >> i think it's just a lot of money for apple. the less money they have to pay them the better, and for qualcomm it's more important because if the way they charge for patents gets changed, then they will be recapped in a way that i don't think that they want to be >> that's a good way to put it speaking of jawbone, once famous for its fitness trackers and bluetooth head sets has begun liquidation proceedings. the company was founded back in 1999, one point valued around $3 billion. the ceo reportedly starting a new company focused on health care called joebone health hub this is the end of the company have some say helped pioneer wearables. >> ya, bluetooth, the original thing, you look like a borg in your ear

they invented that. >> they had kleiner, everything in the world, and, you know, it's actually really a great lesson for investors and for silicon valley companies, and i think you see the way a facebook behaves or google or amazon behaves which is the complete opposite is those guys never picked hardware or software and they were always looking for the next big area as opposed to dominating the area that they were in. but most importantly if you want to be a growth company, you've got to invest in technology every day. there is just -- because you can be usurped at any time, whether it is a fitbit or the apple watch or all these other things. you've got to go out and redefine the category, make people believe that you're the leader in the category and continue to invest and innovate in that category, and they stop doing that, and they use a lot of their capital on actual hardware itself as opposed to innovating on software, and i think it just caught up with them but it's a really interesting lesson for the rest of us out there which if you

don't innovate you become a twitter, you become a yahoo, you become a jawbone there are companies that continue to fail to move and take chances and continue to reinvest and end up losing in the long run. >> just to be clear, twitter didn't liquidate, right? >> no, no, i'm not saying they go out of business neither did aol liquidate. the question is do you become a factor are you a factor in the next generation if you look at what's going on with snapchat, one of the reasons it's great they went public for them they have to continue to innovate if facebook is able to fast copy and put it out to more people than snapchat has, then they will constantly have to innovate until they have another breakthrough that facebook can't catch up on right away it's not a matter of going all the way down to the liquidation level but are you a factor, are you a playing in your vertical and the companies that constantly innovate and invest and redefine categories all the time, look at amazon we never know what category they are in anymore. >> jon, from the sidelines i think the question is how exactly does jawbone get to do

this we're calling it a liquidation, but it's still run by jose raman, still calling it jawbone, just slapped health on the end of it and he's bringing over a bunch of employees from jawbone into jawbone health. it kind of looks like investors are getting screwed here they are calling it a a liquidation. keeping the name and will still service the device that are out there. what's the lesson here for investors who are worried about getting taken advantage of >> that's a brilliant question and it's sort of a fascinating thing. the last time we saw something this is when jack m ha h did it with ali pay from yahoo and people still debate how legitimate was that. i have to imagine and i don't know, but i have to imagine given who the investors were and given that these investors were on their board, that they knew about this, that they are comfortable with this and there's, you know, whether or not they are putting capital in or getting a piece of of this company or not is yet to be known, but i do think that there's -- that there has to have been some kind of deal

worked out or this is not going to be something that plays out in the long term but there's a lot of good relationships. i think the people who invested in it the first time will probably end up being investors in this new company one way or another. >> do you think its demise says something about what happened with wearable technology or competitive pressures like the apple watch and all the other new entrants >> there really hasn't been a breakout other than fitness so far in wearable technology, and i do think that got caught up pretty quickly with fitbit and jawbone late to the fitness side. >> fitbit's stock is down more than 50%. >> the wearable category has been debatable for a long time is it cosmetic is it beneficial is it health and what is it? we haven't found that yet and one of the reasons why the apple watch hasn't taken off the way people thought it would take off. so it's a testament to both. remember, originally, they were speakers in -- in headsets and those have taken off it's what wearable turned into, became a war for fitness and

nothing else soon. >> next time you're on we'll talk about cheg. >> 64% for the year. >> and 154% for the year and people are really beginning to understand our story that direct-to-student and online and affordable and using technology to help educate people is the way to go, and we're excited about the future. >> dan, thank you. >> thanks for having me. >> as we head to break, watching mondelez's share, a recent cyber attack will cut into its revenue growth stemming from the attack next month first, rick santelli, what are you watching today >> you know, in the last nine trading days bounds have covered 34 basis points, ten-year notes have covered 26 basis points on a closing basis, we have ed lazear coming up what's going on that warrants that kind of of a move

more on that after the break

coming up today on "the halftime report," did the jobs report just give investors the ability to pour more money into stocks we'll also take it live to germany for the breaking news of president trump's meeting with vladimir putin "halftime report" starts noon eastern. carl, we'll see you in a little more than ten minutes or so. >> top of the hour, scott. we'll see you then let's get to the cme group in the meantime rick santelli, get the santelli

exchange rick >> reporter: good morning, carl. like to welcome my guest he's usually always our guest after employment reports ed lazear, the economist's economist. ed, thanks for taking the time today. >> thank you, rick pleasure to be with you. >> all right give me your observations on the data, you know, 22,000, pretty good, upward revision last month. >> right. >> labor force participation moves up to 62.8 we did see a tick up in the unemployment rate. i somewhat look past that and see all the people we don't count. your thoughts? >> yeah, yeah, well, you nailed it except for one good number, and it's an important one. it's the one i always point out which is average weekly hours. that's up .1, and that's always a big deal because a tenth of an hour it the equivalent of 100,000 jobs when that moves up that's a good thing. it's back up to the level that it was up about a year and a half ago it hasn't been there since then and that's good news

so overall a good report the one -- two negatives actually i would say one is, as you know, wage growth has not been what we'd like it to be, and then the other thing is that the job growth for what we would think of as say less than college-educated men has not been great you know, construction, manufacturing, transportation, the kinds of jobs that those people do hasn't been that great, so that would be the weak spot in the economy, and, of course, it's been the weak spot for a long time. so nothing new there. >> you know, one cool thing about my job, ed, is i get to talk to and e-mail and stay in contact with cool, smart people like you we have another person like that, friend of cnbc, richard farr, from marion capital. >> yeah, sure. >> and when we were talking about wages earlier he spent me a note and i want you to comment on this. he said wages actually accelerated. all you have to do is take wages times your favorite, hours worked you average weekly pay actually

accelerated. will you comment on that an given me your thoughts on that form of insight. >> well, yeah. i think that's right what he's talking about, of course, is total earnings rather than wage per hour. >> right. >> total earnings have gone up that's an important point because it because it basically is another indicator of strength in the labor market the one thing i would say, and again, i don't want to throw cold water on it, but we've got to remember that wages tend to mirror productivity. and the primary suspect for -- >> oh, we're sunk, then, ed. we're sunk then. >> well, that's -- you got it. that's exactly right we know that productivity has not grown. we are lagging behind where we need to be and we've got to get that moving again before we're going to see increases in the standard of living of the typical worker but absolutely look, you know, if you're working more hours and you're getting even the same wage, you're still taking home mor pay. so that's a positive development. no doubt about it. >> all right we have one minute left. and i have to ask you this, ed

nobody watches the data or understands the quan side more than you do. and over the last nine trading days, okay, we're up 26 basis points in ten-year note yields we're up 34 basis points in bund yields i could go over the guild, i could go over a lot of other sovereigns have the fundamentals changed that dramatically in nine trading sessions what do you think and how do you explain that move and is it something that we ought to pay attention to >> well, the fundamentals have moved in a more positive direction, but i must say, i'm a little bit puzzled by it, as well, because i think that the -- it certainly doesn't deeuate dramatically from expectations and when you see these kinds of moves, it has to be something that's new information i don't see a whole lot of new information in the market, either in terms of central bank policy, in terms of fundamentals, so, to give you an honest answer, i can't really tell you what's going on there

it does seem to me to be somewhat of a puzzle >> an economist who isn't going to give me an answer, because he's not sure. you might be the only guy that would actually qualify under that heard listen, we're out of time. my own theory is pretty simple the arbitrage of money makes our rates follow their rates ed lazear, it's always a pleasure thank you for taking time this jobs friday. and we're going to go back to carl >> rick, ed, thank you, guys good to see you. that june jobs report topping estimates. where are the opportunities for hiring we'll get the answers on that when "squawk alley" comes right back

u.s. employers adding 222,000 new nonforeign jobs in june, but where the jobs this month? our kate rogers is outside united nations headquarters in new york city with the answer. kate >> reporter: hey, there, sarah that's right, as the u.s. becomes increasingly globalized, companies and organizations like the united nations are looking to add skilled translators and interpreters to their ranks, like the ones who are working with u.n. delegates in this meeting room right here behind us in fact, the american translator's association says in the past seven years, the number of people working within the industry has actually doubled. the u.n. is currently looking to

add about 50 or so hires to its ranks of 450 translators, verbatim reporters, and editors right here in new york city, but it's very competitive to get a job here every year, thousands of people apply to take their language competitive exam, but only several hundred or so actually make the cut on to their roster. salaries are competitive, as well, you can start at $60,000 per year up to the six-figure role depending on your role. and there are a ton of opportunities for advancement here within the u.n. because their workload increases every single year. and technology helping translators to streamline their process and do their job even better there was a lot of fear in the industry several years ago that tech and ai would actually lead to job losses and job cuts, but experts say that a lot of this so highly skilled and really detail oriented that tech can help, but it's always better to have a human translator wallith lot of human experience on hand for those jobs >> great story for jobs day. w'nehe highs of the day.

"squawk alley" is back in a minute can we at least analyze customer traffic? can we push the offer online? legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. welcome back we continue to watch for news out of this bilateral between the president and vladimir putin. it's been going for much longer than we had been directed. we were told it was going to last for about 30 minutes. it's been going for more than an hour ap has a headline that according to sources, u.s. and russia are prepared to announce a cease-fire in southwest syria, starting on sunday so that would be one hard commitment coming out of that

meeting. we'll see if that's all there is >> and this is one topic that we did expect there to be some agreement and strategizing on, which is the involvement with syria, the fight against isis, the trying to figure out a peaceful resolution to that crisis we'll wait to see if there's anything else on the u.s. election hacking, north korea -- >> and a long weekend of headlines ahead. >> let's get over to wapner and the half and welcome to the "halftime report." i'm scott wapner we begin with breaking news this hour, an historic meeting between president trump and russian president, vladimir putin, in hamburg. our eamon javers with the latest from the g-20 in germany where, eamon, we believe this meeting is still going on. >> reporter: yeah, that's right, scott. at about 28 minutes past the hour, we got a note from the white house press pool which said that the meeting, they had been told, was still going on, about an hour and a half into the meeting at that point. that was about half an hour ago. the two leaders now pushing about two hours for a meeting that wasn't supposed to go