it's tuesday, july 11th, 2017, and "squawk box" begins right now. ♪ ♪ hey, it's not a miracle we needed ♪ >> announcer: live from new york where business never sleeps, this is "squawk box. >> i can't pretend i'm young i can't pretend i have kids. oh, snap is that a way so kids cannot say, oh, you know, the thing they're not allowed to say >> exactly for me, yesterday we had a guy who wrote a book called -- >> yeah, you said it on tv. >> "the justice department chicken shih tzu." so -- >> it is cable you can say anything you want. it's not broadcast. >> it is early morning and people getting dressed. >> family show >> right, exactly. >> good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm michelle caruso-cabrera along with joe kernen. becky and andrew are off today, but joining us for the hour, ed keown, managing director at qma, joining us to talk more.

u.s. equity futures this hour, let's show you what's going on, suggesting a flat open s&p opening lower 1 1/2 points, the dow slightly lower and the nasdaq lower by four overnight in asia, quiet session around the world, generally. hang seng higher over 1.5%, but t shanghai was lower european equities. the dax is higher by 0.25% france and the ftse slightly lower. italy's higher by a third and spain is lower by 0.25%. their yields are backing up over there once again that has resumed take a look at crude wti's lower by 20 cents, a decline of 0.5%, $44.15. if you'd like crude delivered in august pepsico just out with quarterly results. sara eisen has the numbers 10 cents above on earnings, i see, sara. >> sure looks like a big beat. eps 1.50, versus the $1.40

expected it includes a 6-cent gain from a sale, but it's an estimate, so it's unclear whether that factored into the analyst forecast, but either way, a beat on the profit line, a beat on revenues as well for pepsico, $15.7 billion. the estimate was $15.6 billion so, pepsico sees 2% revenue growth overall foreign exchange is still a big headwind for this company. that strong dollar cuts into sales, shaved about 1.5% off of that topline number. but overall, 6% profit growth is something that many packaged food companies would be very enviable of right now. organic revenue growth, which is always a good way to strip out the extras like foreign exchange and show what's going on with the business, did come in at 3%, and that continues to also be above the rest of the industry, and it was also better than analysts expected. frito-lay is the big driver here the chips and the snacks

division showing 3% organic revenue growth, versus 1% for the beverage part of the business, so that's pretty consistent with what we've been seeing quaker oats continues to be a drag, negative 2% organic revenue growth as far as indra nooyi's comments, the ceo, in the report she said we continue to deliver strong operating results in the midst of pockets of macroeconomic challenges and increasi increasingly competitive retail environment. volume growth was down for food and beverages, so the revenue growth is coming from pricing power. they're also getting big profits from productivity or cost cuts, which is a big theme in the food industry so that's i think where the questions are going to lie, but they did see a very strong quarter and continued outperformance versus the rest of the industry, guys. we'll talk to cfo hugh johnston, in the 9:00 hour. >> that's good yeah, i'm in touch with the company. i talked about -- i mentioned to one of their people that, you

know, i see pepsi and i see a big bag of doritos because i'm on the scarsdale diet right now, so i'm like -- >> do you like the blue bag or the red bag? >> i'll take either. i'll take anything that ends in "tos" right now. >> i like the cool ranch. >> across the line >> cheetos. >> anything. tostitos and the gentleman said to me that we have much healthier things to send you, like sabra hummus i said no thanks on that that be a big no smart food delight i've tasted that smart food popcorn. it tastes like you're eating the packaging material that people send -- >> i like the original. >> not harvest and i said, do me a favor, send me a big bag of chili cheese fritos. >> which they do also. >> have you had them >> i haven't. >> you haven't had chili cheese fritos >> no, i haven't what kind of a junk freak are you? >> you know what they don't have, sara, skyline chili cheese

fritos, which is an idea, since all these places are branding with other people, as a cincinnati native -- >> that's an ohio joke. >> no, it's a cincinnati thing. >> it is >> although -- >> don't have a huge market in cincinnati. >> you're from the east side of town aren't you from amerli >> we also had skyline on the east side of town and people loved it we probably had way more skylines -- >> they're empty there you're eating the sabra hummus in indian hills and those places i grew up next to pete rose and -- >> not true. i have been raised -- >> aren't you from amberly village? >> from amberly village. >> yeah. you should see the houses there. >> big three-car garages. >> oh, my god. >> oh, yeah. >> the staff's houses are huge. >> back to you guys. >> thanks, sara eisen. we'll talk to a pepsi analyst later this hour. i'll bet he's had chili cheese fritos. >> you're doing scarsdale? that's like atkins high protein, lots of veggies? >> scarsdale is like -- i mean, somebody killed the guy that invented it. and if he was alive, i may try

to, because it's -- >> okay. >> you don't eat it? it's basically starvation. you have a grapefruit in the morning and you're supposed to say thank you. among today's top stories -- but it works. >> eating less generally does. >> funny that way. president trump ending months of speculation by announcing plans to nominate investment fund manager and former republican treasury official randal quarles. see what i mean? only one "l." >> what is that? >> interesting choice as the fed -- i mean, in terms of just not using -- overusing letters and everything else, i get it. brevity, things like that. why make it more complicated than it has -- you can see his name's randal, why do you need it it's not randall-l anyway, if confirmed by the senate, quarles would be the first vice chairman created since the financial crisis, but it was never filled during the obama administration. and snap is moving lower

and you like your take on this >> well, they created a position to supervise the banks they never filled it and now the guy who's finally going to fill the position to supervise the banks wants to supervise the banks less chris dodd and barney frank must be thrilled about that. >> right right. where are those two guys >> who knows but -- >> they're still around. >> i know. >> actually, i think barney frank is a cnbc contributor, or used to be >> by the way, he wants to roll back the volcker rule as well. >> he does >> yeah, he's on the record saying he doesn't believe in it, so i would assume. all right. snap is moving lower in early trading after shares -- oh, snap i'm sorry, snap! below their initial public offering price for the first time the parent company of snapchat closed lower by more than 1% yesterday at $16.99. that's just below the $17 price when it went public on march 1st. it's not uncommon, though, for an ipo to dip below its offering price, especially in tech.

oh, snap facebook and twitter's stocks both slipped and eventually bounced back, but snap's lock-up period is about to end that allows insiders to sell some shares, and that's at the end of this month. and this morning, morgan stanley is downgrading snap to equal wait -- >> oh, nap >> and lowering its price target to $16 from $28, saying the ad product is not improving as quickly as the firm expected, and instagram competition is increasing that's the part that i know. >> they were supposed to have a new self-service ad platform ready to go in june, and it was slightly delayed and then now, i haven't read this morgan stanley note, but maybe it's not working as well to generate as much revenue per user as they thought. >> i'm delving into an area that, i'm not great at this, but i have heard from people in my family that instagram has a lot of -- i think they're backing instagram more than nap. i think it's still snap, but i think instagram -- >> oh, snap! >> you can do similar things on instagram. >> yeah, they've added these story things where you can do

videos and stuff. >> i thought it was dog ears or something, which -- >> right, right. they do. and pig ears and noses. >> you could get tired of that i mean, what's that worth, keon? that's $10 billion right there in valuation, right? who doesn't like to see themselves in a funny dog ear -- >> not something i spend a lot of time on. and warren buffett donated more than $3 billion in berkshire hathaway stock to five charities. the bill and melinda gates foundation received about $2.4 billion of the total the four other charities are buffett family foundations and after yesterday's donations, warren buffett remains the world's fourth richest person, according to "forbes" magazine he still owns about 17% of berkshire hathaway, despite having donated more than 40% of his holdings so far. in washington news, senate republicans are scheduled to be updated on the bill to repeal and replace obamacare during the closed-door meeting today. kayla tausche joins us now with more kayla. >> good morning, michelle. those meetings have been happening almost daily when

senators are in session, as majority leader mitch mcconnell is trying to stitch together a health care bill that can win 50 votes from his party a forthcoming version this week is expected to include changes like $45 billion in opioid funding, up from $2 billion in the original version, the ability to pay for premiums from health savings accounts and potentially -- this is what everyone's watching for -- an amendment by senators ted cruz and mike lee allowing insurers the ability to offer non-obamacare-compliant plans as long as they offer one that is that amendment has been polarizing, but some on the fence like jeff flake of arizona, now say they support it others argue it would make the plans offered on the exchanges -- those would be the ones funded by the government -- too expensive. lawmakers critical of the bill, though, are under more pressure this week as the group save my care launches ads last night in nevada, west virginia, alaska, and maine, using the senators from those states own words against them susan collins of maine, however, still appears to be a no, saying

on cnn last night the bill still needs a complete overhaul. senate leaders have said they expect a new version later this week and a vote as early as next week the white house says it remains confident in the changes made, but vice president mike pence, who has been attending these senate lunches, said yesterday on satellite radio that if they can't get it done this time, joe and michelle, that they ought to just repeal it outright and work on a replacement later >> yeah, we've heard that before let's see if they finally do that thanks, kayla. kayla tausche. >> good nevada pronouncer, kayla. good thank you. thank you. >> i think i learned that one the hard way multiple times. >> thank you >> oregon. it's oregon, right >> i'm just trying to stand up for the people that live there that know that it is nevada. it's not for me. but you know, thank you. excellent. are you going to talk about this e-mail when are you going -- are you coming back to talk about this thing? >> what do you want to know about the e-mail, joe? >> i'm wondering -- i want to know what it means

i want to know -- >> you're talking about the donald trump jr. -- >> yeah, donald trump jr i thought it through, kayla, and in terms of collusion, i think it represents a dot, that if there are subsequent dots that you can then connect, it could lead to something like that, but i'm not sure it is yet that's -- i'm not sure how else to think about it, you know what i mean >> well, i'm not sure how anyone who hasn't seen the e-mail can really think about it. "the new york times" reported, according to three sources who had knowledge of that e-mail that you referenced, that donald trump jr., the president's son, was aware of the motivation in brokering a meeting with a russian and kremlin-connected attorney. >> right. >> apparently, he was told that that attorney would have research that was contributing to a russian campaign to help donald trump get elected. >> it's some pr guy, like some local -- >> correct. >> -- pr guy who said it so, i don't even know if i'd believe in it. i was thinking about that

dossier that trump, in the hotel or something if someone offered that to the clinton campaign, i mean, to say, okay, i'm listening, to say i'm listening, what have you got, i don't know when that becomes collusion, you know what i mean >> well, i don't think it's really for anyone at this point, joe, to say, except for bob mueller, who's going to be the one who's taking the lead on this you know, there have been some split -- >> not to say that people on other networks aren't going to say -- but believe me -- >> i was just going to say that. someone's already saying that somewhere. >> now there's this conversation about what is normal protocol on a campaign yesterday, sarah huckabee sanders, who, of course, has run multiple campaigns for her father and for others, she said that, you know, she had tons of meetings where the m.o. of the meeting was for opposition research, but then you had others like nicolle wallace and matthew dowd, who are each republican strategists they were saying, yes, we did opposition research as well, but never at the behest of a foreign adversary. >> an adversary, right. >> that seems to be the gray

area that people are going to be picking apart here. >> all right, nevada nevada i'm focused on that still. >> oregon. >> oregon. illinois no wait okay, i got it how do you say louisville? >> like that. >> louisville. i'm from georgia, so i knew that one. >> you are you knew good you get extra credit for that. thanks let's get back to the broader markets. joining us now, michael tyler, chief investment officer eastern bank wealth management, our guest host ed keon, managing director at qma. just start with you, because i'm trying to figure out in a synopsis what you've been saying recently, because you're a longtime bull, but you've tempered your enthusiasm in the last year or so and the markets continue to go higher, but would i call you -- i hate to say it, but cautiously optimistic all through this >> yeah. so i thought at the beginning of the year we'd get 8% to 10% returns this year and we're already seeing 10%.

>> halfway through the year. >> and we're only halfway through the year, so i think the up side is somewhat limiting earnings growth has been terrific, granted, but it looks like there might be some signs that it might be a little slower than the first quarter second quarter, consensus is about 8% we'll probably do 10%, because we always beat that. a lot of that is driven by the energy earnings and rebound as a result of energy prices being higher than this time last year. in the broader economy, there's been a lot of disappointing economic data where things have fallen short of expectations, even though the jobs report was great. and it's long in the economic cycle. this is getting to be seventh, eighth, maybe even the beginning of the ninth inning, so i think a little bit of caution here is warranted, given that stocks are selling for pretty high valuations. >> you've kind of been saying that for a year. >> yeah. well, if i move to a more defensive stance around march or so, so about the last three-four months. >> that's it so, you were bullish from november on? >> yeah. >> okay. michael, you are -- i would say a lot of people are echoing what

both you and ed have said, the market might be a little bit overvalued, but don't sell here. and maybe i think in your view, you need to just switch to some different sectors that stay long is that right? >> yeah, we've done -- exactly right. we've done a little bit of rotation, but not a lot. we've pulled a little bit of money, taking profits out of technology, which has done very well, put it into some sectors that haven't done as well, such as health care and some consumer staples companies. so, that part's going fine but let's face it, breadth is really good. where the techs have begun to slow down, the financials have picked up. the overall market is tracking along fine the earnings are looking good. pepsi is not the first company i think there will be others that beat. we've had, frankly, very few profit warnings for the second quarter, much fewer than usual, which bodes well for the earnings season. and i think that, yeah, we'll have slightly slower earnings than in the first quarter, but let's face it, there's less of a

tailwind from oil prices compared to a year ago so that's not disturbing either. i think that while i wouldn't be quite as bullish as i was six months ago, simply because stocks are up, i think we continue to ride for a while >> what about interest rates, which once again are backing up again today that took a breather yesterday? at what point do you start to get worried? and we're only still talking about maybe approaching 2.4% on the ten-year, but if you -- the higher they go, the more competition that provides the stocks. >> that's right. i think the market is starting to price in a more aggressive monetary stance among the fed and also among central bankers around the world so i don't think that rates are going to go tremendously higher from here, especially since eventually we will have another recession. i'm not predicting we will soon, but as we get into 2018 or 2019, based on historical standards, with the economy maybe slowing a little bit and the fed raising rates, unless we get some pro growth policies, i would expect -- >> tax reform, et cetera. >> correct i would expect that we would see

a pullback at some point over the next few years. >> why, ed, when you talk the eighth and ninth inning, do you think the stock market reacts to the business cycle >> i think it does sometimes with the lead and sometimes with a lag. >> okay, but is there any reason to think that a business cycle has a nine-inning -- >> well -- >> why, you know, even baseball, sometimes extra innings, it goes to 18. how -- i'm just making the point that business cycles don't die of old age, supposedly they die when you kill them, by a policy mistake. >> and the fed has just started a -- and not only that here in the fed right now, you've gone from an unprecedented policy to try to find a new -- >> so you think the business cycle is petering out then >> i don't think it's necessarily petering out right now. i'm just saying, as time goes on -- >> getting long in the tooth. >> it's getting long in the tooth. you're seeing some excesses in things like car loans and so forth. again, i am not suggesting we're on the verge of anything negative i'm just saying, it's going to

happen eventually. >> because australia had a 26-year expansion. >> did they really because we're the second largest -- this is the second longest expansion in our history, so a lot of people just say reversion to the mean at some point, you just get a slowdown >> it's a much slower expansion, and that makes a difference, too. >> exactly that could buy more time, too. >> but also we do have a democratic headwind of the population is aging, labor force growth is slowing, so there is -- again, i don't think -- i'm not suggesting we're going to have a recession this year, but i do think it's likely just by the odds that by 2018 and 2019. >> we've got to go, but just real quickly, you wanted to say something? >> well, it occurs to me that the fed does not want a flat or even inverted yield curve. that way lies recession. that's how you kill a business cycle. and as long as the gap between u.s. and european bond yields is so big right now -- it's close to 1 1/2 or 2 percentage points -- you're not going to

see too much hiking by the fed, maybe one more hike this year. so the fed's going to be very cautious and as long as europe is in the mode that it's in, i really don't see the fed killing this growth >> okay. one of those guys with two first names. i always am kind of skeptical, but michael and tyler. tyler mathisen. >> mm-hmm. >> but a lot of people like that i'm not sure -- >> tyler could be his middle name, right? michael tyler. >> is that really your name, michael, or did you shorten it up, or -- >> no -- well, my grandparents shortened up the name, but yes, that is my real name >> all right, two first names. like keon. i don't know any -- you know. >> some people have keon as a first name. >> really? >> all right, thank you, gentlemen. coming up, it's amazon's biggest sales day of the year. as part of prime day, the retailer's offering more than 100,000 deals in more than 30 countries. reaction from wall street straight ahead ♪

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retail and explain why department stores are taking the biggest hit from what he describes as the ecosystem of convenience. joining us now is randy conic, jefferies analyst covering consumer department stores and speciality retail. good to have you here. >> thanks, michelle. >> before we talk about amazon prime, yesterday the retailers got clobbered, hammered. i saw that there was this news that amazon's thinking of starting an installation business okay, that hurt best buy. >> yep, yep. >> is it because of prime day? are we thinking oh, my gosh, the headlines from the next 24 hours are going to be how much they sell and these guys will get hammered what happened? >> i think yesterday was a combination of best buy fears around amazon going into the geek squad kind of business, but also abercrombie and finch is a name where they had strategic review options on the table for the last few months, what have you, and nothing came about. >> they were putting themselves up for sale. >> potentially for sale, didn't get a bid from private equity or other players, sending the stock

down 20% and it drove all the retailers down as well. >> all with it, because it's just seen, nobody wants to invest in them or -- >> well, retailers are just a tough space right now. >> sure. >> everybody's -- the perception is that amazon is taking over everything in retail and forever. so, no one wants to invest in retail none of the long-only investors are doing the stocks and others are pressing their authorities. >> prime day is about amazon taking over retail, right? it's not just about having a big day of sales, it's about trying to get prime members, correct? >> yeah, i agree with that i think the idea of amazon's prime day is more about the ecosystem of convenience driving more prime members, which is driving more consumers to think about amazon as a convenient way to get items, any item, that is, in two days. so, what retailers need to do to battle back, they need to focus on their brands, they need to close stores, and they need to offer free shipping to better compete with amazon. >> do you believe these numbers from consumer intelligence, that they think there is 85 million prime members? do you buy that? that sounds awfully high to me

that would be a huge percentage of the american population. >> i wouldn't doubt it the idea here is, you know, a lot of the population obviously is aware of amazon, obviously aware of the convenience factors of amazon. so i wouldn't be surprised, although look, we don't cover amazon we're more focused on the retailers, but i think what we're trying to educate the buy side on, or our clients, is how can our retailers survive? what companies can battle back -- >> and >> and those companies are the big brands, the brands that have the ability to segment their products across both the internet and in stores, properly segment those distribution strategies so, key names we like right now are nike, tiffany. you're not going to buy a $20,000 piece of jewelry on the internet, particularly amazon.com, and we also like under armour we recently upgraded that stock about two months ago again, a big athletic brand that can sell their products around the world. >> as the sentiment indicator, you see etfs where you can double short and triple short retail >> yes. >> doesn't that wreak of something? >> it's starting to wreak of, when you don't see private

equity wanting to buy retail, when you see everybody short retail, but when you see cash flows that are actually somewhat stable in the space and the ability, as i said last week, for stores that are, companies being able to close stores, we actually think there are some retailers that you can actually buy here >> all right. >> the space is overshorted. >> thank you >> thank you. coming up, a new read on small business optimism. we've got the numbers right after the break. plus, pepsico just out with earnings we're going to dig through the results with an analyst. and as we head to break, here's a look at yesterday's s&p 500 winners and losers ♪ the power of the nasdaq market. the power of 100 of the world's top companies. the power of an etf.

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containing this information. read it carefully. can we at least analyze customer 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.

♪ >> announcer: welcome back you're watching "squawk box," live from the nasdaq market site in times square. ♪ good morning u.s. equity futures at this hour, after an interesting session yesterday, today it's not interesting, at least not so far. the s&p's down a little over a point, and the dow jones up less than a half point, nasdaq indicated down five. we'll see, though. a lot changes throughout the trading session. that's where we are, though, this morning. developing story a u.s. military plane crashed in rural mississippi yesterday afternoon, killing at least 16 people a marine corps spokesman said that the kc-130 transport aircraft experienced a mishap but declined to provide any

additional details before the victims' families had been notified and a u.s. army soldier who served in iraq and afghanistan as well has been arrested on terrorism charges. the fbi says the 34-year-old soldier was on active duty in hawaii when he was arrested on charges of providing material support to islamic state extremists apparently, he was under investigation for a year and swore allegiance to isis, and i guess shouldn't be totally surprised, i guess, but -- >> i know somebody in the armed services -- >> but had served in afghanistan and iraq it's, you know, unsettling, though. >> yes. >> i'm glad they got him. today ftime for "executive edge," the latest measure of small business optimism. kate rogers has the report kate. >> michelle, good morning. main street's mood has taken a turn for the worse as the uncertainty in washington continues. small business optimism did take

a hit this month, dropping 0.9 points to 103.6 for june this is the largest month-over-month decline since november and also its lowest level since that same month. the index saw a huge post-election pop to 105.8 back in december. the biggest drops this month were in those who expect the economy to improve and those who expected higher real sales this month's drop also echoes the fall we saw back in march when the house failed to pass its plan to repeal and replace obamacare. the conservative lobbying group also used pointed language to describe the gridlock in washington in this month's report, saying this drop is "due to the mess in washington," adding that "while progress is being made, it's being poorly communicated" and that main street's two biggest issues of health care and tax reform are "stuck in the bowels of washington politics. this is certainly the most critical language i've seen used since trump took office, and the group's chief economist, bill dunkelberg, said this could be problematic for job creation among small businesses, if it does continue. >> hmm interesting evidence

it's not what we were -- things were going along pretty good there for a while. >> i mean, it is still holding above 100. the historical average is 98, so above 100 is still high, but to drop more than two months in the past few months i think is notable. and to hear them use that kind of language, they're getting frustrated i think with the administration small business owners want to see the agenda that they voted for in november kind of coming to fruition. >> they're frustrated with the administration or with congress? >> i think both. they're talking about the mess in washington, but certainly, you know, they like what they've heard in terms of health care and tax reform and the proposals that have been put forward, but they want the action. >> anybody that watches, you know, what happens in the house and senate has to say this is, you know -- i mean, you control the executive branch and the legislative branch, and you know, you finally caught the bus, and that's what you worry about, when a dog catches the bus. >> right. >> what am i supposed to do with this thing so, they can be the opposition party, but they don't know how to govern. that's what it looks like. >> one thing, though, that has nothing to do with congress, is skilled labor is a huge issue.

that's their number three problem every month. we're talking taxes are a huge issue, regulatory costs, and then they can't find skilled labor to hire the right people. >> there have been rollbacks in regulatition through the congressional review act i assume that's one of the reasons why it's still high. >> it's been high, exactly and obviously, trump ran on that agenda, and he has, you know, put forth measures to roll back regulations among businesses of all sizes. that's something that they're holding on to, and i think personally that's why optimism -- >> it's already happened in some ways >> yeah. >> congress has already done a lot of that work at the deep state level -- >> exactly. >> -- as some people like to refer to it. >> but i think that's why we're still seeing this number at a historical high level, oo. >> the link between confidence and active behavior is pretty weak, so i wouldn't necessarily think the drop makes a big deal, but i do think it's important that we get pro-growth policies that we've been talking about here, if we're going to extend the life of this recovery. >> when you thought the market would be up roughly 8% this year, was it because we were going to get tax reform, you thought, or even if you didn't get it >> i was counting mostly on earnings, which have actually been better than i thought, so we might get a little more than

10%, but i just don't think we'll get that much more, given where we're priced and unless businesses start to ramp up their spending, i think you'll see we'll start to slow further than we are. >> how much will the market move if we by some miracle got tax reform >> if we got both tax reform and a tax cut, then those two things are separate, but if we get a tax cut for both businesses and individuals, i think we could see this rally last for another few years. but right now it looks like if we do get reform, the politics as i read it are that it will be revenue-neutral. so it might be a positive for the economy in the long run, but its immediate fiscal impact will be somewhat muted. >> you compartmentalize all these things as a democrat, why are you selling tax cuts how do you feel about yourself when promoting tax cuts? are you conflicted >> did you see france is going to cut -- >> i am a capitalist here. i have been in the markets -- >> did you see france is going to cut -- >> if you are capitalist, how do you put those, your other -- >> well, i think the things we

say all the time about corporate taxes are too high and they have -- >> go ahead -- >> france is going to cut taxes on the wealthy i mean, if france can cut taxes on the wealthy, a massachusetts democrat -- >> this is more -- this next story is more like something i can sign up or lawmakers in seattle unanimously passed a tax on the city's highest earners. just, like, randomly, the city is going to start taxing people that couldn't possibly use all the money that they're making. i mean, they've got -- >> they don't deserve it. >> no! they're not doing anything any different than anybody else. the measure creates a 2.25 tax rate on those earning more than -- on rich people, people making more than $250,000. and married couples jointly earning above $500,000 supporters say it will raise $140 million in new annual revenue to pay for all the jobs lost with the $15 minimum wage that they recently put in. no, i added that take it back and affect fewer than 20,000 residents. the new tax is likely to face a legal challenge over violating a

state law. a city, really got to watch out here. washington is one of seven u.s. cities without a tax on personal income and no city in the state has an income tax. i love the -- i love in new york -- did you see this deblah, blah, blah, went to germany instead of the cops -- >> the graduation and the funeral. >> but he got the go-ahead from the city's conflict of interest board, which said going to germany achieved one of the city's objectives of opposing president trump. so, one of the city's actual stated objectives is to oppose president trump, so sending deblah, blah, blah, over to germany was actually a citywide sort of -- >> and the taxpayers should pay for it. >> exactly, the taxpayers pay for it. >> yeah. >> anyway, i have said, de blasio is the mayor that new york city deserves the home of the "the new york times," home of mainstream media. this is the mayor that you

should have. >> i switched political parties, you know that? i'm trying -- i switched political parties so i can vote in the primary. >> oh, you did >> yeah, because that's where the mayor of new york city's decided, in the democratic primary. >> right. >> god >> how many total votes he got out of -- >> not many. >> i know. coming up, today is the day. cnbc releasing our annual ranking of the top states for business i don't know if washington state is going to be in there. in the 8:00 hour, we'll reveal state number five on the list and get a hint for the number one state. plus, republican senator roger wicker weighs in on the gop health care bill stay tuned you're watching "squawk box" on cnbc ♪ when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business,

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welcome back to "squawk box. "stocks to watch" today. shares of arena pharmaceuticals are jumping. the company announcing positive results from a study for its key hypertension drug. the stock is higher by 37% in extended-hours trading barracuda networks' stock is

slipping this morning. the cloud-based security company posting earnings in line with expectations, but operating margins came in below estimates, and its earnings guidance is a bit light. that stock is off about 5% in the premarket. pearson selling a 22% stake in penguin random house to bertelsmann for $1 billion publisher hoping to bolster its balance sheet and return cash to its shareholders pearson's lower by 5.5%. and as we told you earlier, pepsico is out with quarterly results this morning the company beat on the top and the bottom line, also raised its full-year guidance joining us on the squawk news line, steven powers, ubs beverages and household products analyst. is it really the snack food side of things, stephen, that separates pepsi from its peers in this report >> yeah, it is so, the beat on the top line -- they put up a 3.1% organic growth, which was probably a point better than feared, and it was to your point driven by snacks frito-lay north america was up

3.5%, i think relative to any u.s. food company, that's going to be best in class, and it is what separates pepsi from its peers. >> because in the past, you know, it's in vogue, it's out of vogue, it's in vogue, it's out of vogue, it's in. they should have this combined with the beverages >> look, i think right now they're doing a good job of leveraging beverages and snacks together they're winning a lot of food service accounts by going to market with the full portfolio they're winning shelf space at retail by leveraging the full portfolio. they're really managing the business together for the first time, you know, both snacks and beverages report up to a single manager in the u.s. and the same is done internationally. so i think, you know, we talked about pepsi as a kind of power of one, better together company. that was certainly the narrative on the company ten years ago, but really, they weren't managing the business together until the last three or four years. and i think you're seeing the results. >> that's interesting. so, indra doing a good job

there. because i always just, you know, salty snacks, i'm thirsty, i want some diet -- you know, that always made sense, but there's actually concrete examples and operations of where these two things are synergistic, and you can go in and get self space or whatever based on having more. so that works. >> it is working now from a selling proposition perspective. getting the supply chain integrated is a little bit more tricky, but yes. >> are we -- you know, millennials supposedly, the generation "z," they're going to come back to, like, more normal thought patterns, i think. does pepsi have to go to, like, kale chips, or can i count on them to keep delivering me the chili cheese fritos that i want? and i understand they're not perfect, and i won't eat 18 bags, but can i still have snacks that aren't like gmo, you know, gluten-free, tasteless things i mean, do they need to get

healthy? because they seem like they're moving with that sort of whole foods mentality, and i, you know, you get -- if you know what you're getting, i don't see why it's a problem. >> yeah, the risk is they move too far too fast. >> that's what i mean. >> i think that's the point you're making, which i agree with, but they do need to move healthier. >> no. >> so, i think they're -- >> hold on -- >> it's in the eye of the beholder gmo-free, that doesn't make it healthier, stephen you buy into all that? >> but explain this to me, stephen, why isn't quaker foods doing better nobody eating oatmeal anymore? that's healthy. >> well, you have to have the right product and the right branding and quaker is made up of, you know, there's rice roni in quaker foods, there's life cereal there are a lot of things where the consumer's not going in that segment. so it's a balancing act and they're doing really well selling super hot, spicy cheetos, and they'll continue doing that. >> now you're talking. and if you're going to be

fanatico about it, you can't really have diet soda because the stupid esporte may be killing you. you can't have sugar, because that's like heroin to the left, sugar itself so, what do they have, water water and kale chips that's not a company you want to own. so i mean, if we keep moving in this direction, pepsi would not be on a preferred list of healthy choices. >> if the market moves to kale chips and water, pepsi's got a lot of work to do, yeah. [ laughter ] >> well, that's what i'm saying. hopefully, generation "z," you know, will -- >> come back to normality. >> exactly. >> although, look, they are -- you know, they're experimenting with healthier snacking items slowly, which i think is prudent. and one of their big innovations or big, new products this quarter in beverages was their life water, which is a premium water, kind of an answer to smart water from coke. and it did really well in the marketplace. so, i think, you know, they need

to take their shots on both sort of the indulgence side of the spectrum, which is their historic strength, as well as getting healthier. >> i mean, like, vegetable -- what are those dry vegetable chips to replace the potato chips? have you had those >> have you seen where they're ricing vegetables? so you don't eat rice anymore. now you eat broccoli that looks like rice, cauliflower that looks like rice. >> you should try these hollow pretzels we've been getting. >> hollow pretzels >> you get the taste and the salt, but not the calories because it's hollow -- >> like a flagel it's like a flat bagel i try to eat, but i'm not even allowed to have those. >> stephen, is pepsi the best company in this sector or is there something better >> i cover beverages and household products and i'm partial to beverages right now, so i like coke and pepsi for different reasons. i think both are good options, but pepsi's definitely one of the best one point i think is important to make for your viewers, the

stock was down premarket you know, as i said, as we talked about, they beat on the quarter. there was a 6-cent gain that they booked from a sale of their uk bottler, and they did not raise guidance by 6 cents. they elected to reinvest that gain in the rest of the year that's caused a little bit of consternation among investors. was this a net guide down or a prudent reinvestment of the gain i'm in the latter camp i think in a market where u.s. staples companies, u.s. food companies are having a hard time growing, it's the right decision to take the gain, reinvest in growth, and set themselves up for a better '18 and beyond. >> what are the valuation stocks in the sector? >> stocks in the sector have been trading around 20 times, plus or minus forward earnings you've seen the food stocks in the last several weeks trade off. pepsi's traded off a bit in sympathy with that into the print. most of that is a concern around

top-line growth, and to some extent, a waning of industry consolidation enthusiasm but to the extent the market's concern on top-line growth, i think that's the highlight of this quarter for me. 3%-plus organic growth is going to be, when we look back on q-2 earnings, it's going to be one of the better results of the group. >> okay, all right stephen, thank you appreciate your time. >> you got it. thanks, guys. >> see you later. coming up, boutique fitness goes global. cae ceo of barry's boot mp unveils their expansion plans, next ♪ physical

the boutique fitness biz is booming. joining us is diana olick with the scoop on the fit economy hey, diana >> hey, michelle we know boutique is kind of a newish term. but one of its hottest players, barry's boot camp has been around for almost 20 years it was just in california, kind of a celebrity favorite, but now the company is expanding aggressively, and globally, joining us with the new's is barry ceo joey gonzalez in a first time cnbc. i'm going to let you give us the exclusive news tell us what's happening >> hi, thank you we just recently announced, today, that we are expanding into five new territories. three are domestic here in dallas, d.c. and atlanta and two more additional international which are toronto and stockholm. >> and so you're expecting directly to expand given what you've done this year by 30% in

basically a year, which is very aggressive why now when there's so much competition in the space >> so, barry's has been around for two decades. and for many, many years, the brand has been a lot bigger than the business and this is really just about catching up to our brand we recently did a transaction with north capital partners in -- and so this is just the first announcement and new expansions >> just not to go into the franchise oddle like orangetheory or crunch why not go into really big you're expanding globally but you're still only going to be about 40 studios worldwide they have thousands. >> we identified early on that our brand equity was one of the most valuable things about barry's. and so, it was really important for us to protect our brand and our culture and make sure that the experience people were having was exactly what it was meant to be. >> you saw the franchisee might not provide the same quality or

experience based on wholly owned studios? >> exactly and we actually did do a few franchises back in the day around 2011 and the partners that we chose were and have been amazing. but in order to make a franchise model work you need to do hundreds of those, right and we realized the bar that we set was just not practical >> and you talk about the brand being very strong. not only do you have to have the fitness, but i saw in your club yesterday, we did the workout, full disclosure, the video should be up here, people, come on, roll the video anyway, you have, you know, a whole clothing line. you have the juice bar you have a lot of other things around the brand how important is that given the competitors in the marketplace where you see all of their names anywhere >> it's very important back in '98 it was a completely different world. people didn't even know what boutique fitness was, right? the industry didn't exist. and so what we started to do was offer the best workout in the world. and it was all about the efficacy, and it still is. as we've grown and had a lot of competitors popping up left and

right, we have tried to do the best job we can at building a true lifestyle brand and what that means is bringing all of these different pieces into one and so our studios typically are much bigger than the average boutique studio. we offer a lot of the things -- >> is that a personal trainer? like classes -- >> oh, yeah. it's a class they're between depending on the size of the studio between 30 to 50 participants -- >> and it's like -- >> i should talk a little bit about what they are. >> -- three minutes making you feel like -- >> definitely not. it could start off a little bit like that but it's gotten -- >> joey was originally a trainer. >> i'm looking at joey and i'm wondering do you have to look like that to be the ceo? because michael moore be the ceo -- >> that guy could not be here talking about -- could he? >> right >> he applies for ceo job you're going to say no. >> one thing i can say about barry's that is genuinely a fitness company created and run

by -- >> there's the video >> finally got it. >> is that you >> that was me yeah we worked out together. >> and so did you do this for like three minutes or did you go through the whole -- >> i did it for the full hour. you know anyway so you talk about from north castle at some point there has been talk with soul cycle, they were going todo the ipo, there was talk about peloton and they pulled back from the ipo what do you think about -- >> now i believe yoga works has announced their ipo and it's definitely talked about, asked about on the regular we currently have no plans of going public it is definitely not an objective that we are, you know, after. anything is possible >> -- people pay by the class? >> people pay by the class there are memberships. we like to reward people for frequency so we do offer memberships. customers come from buying

packages >> which cost how much >> depending on the market i'd say an average of $30. >> okay. >> thanks so much. joey gonzalez. >> thank you >> and, geez, yeah -- we're going to leave you alone, but thank you. you can -- thanks to our guest host who -- if you're going to come back, we want to see some progress here. coming up one apple watcher who correctly predicted past apple moves says he expects the iphone 8 to cost $1200. we'll tell you what that means for wireless providers, and apple stock. they can't do that too much and then later republican senator roger wicker weighs in on the gop health care bill.

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wall street looking ahead to the start of earnings season what you need to be watching when banks start reporting this friday a rundown of market moves and investment ideas is straight ahead. the health care showdown the senate trying to pass a bill that will revive legislation and move to repeal and replace obamacare. we'll speak to a former obama administration official about what to expect from new provisions expected to be revealed this week and primed for record-breaking sales. shares of amazon rally with prime day in full swing. we'll tell you how much the e-commerce giant could make from today's deals. the second hour of "squawk box" begins right now live from the beating heart of business, new york city, this is "squawk box."

good morning and welcome back to "squawk box" here on cnbc, we are live from the nasdaq marketsite in times square i'm michelle caruso-cabrera along with joe kernen and wilfred frost joining us now the futures at this hour, pretty flat not suggesting a whole lot at this hour. s&p would open slightly lower, dow lower by almost 6 points, the nasdaq by almost 3 points. president trump will nominate former treasury official -- look joe randall quarrels they've got two ls the audience can't see with that >> randal. >> he only has one "l. >> as the fed's top banking regulator. quarles would be the first supervisor of the fed. the role was created after the financial crisis but never filled microsoft planning a five year $10 billion program to bring broadband internet to rural areas of the united states according to the seattle "times." microsoft will announce the full details of the plan at a

washington, d.c. vent today. small business confidence declined last month. the monthly index from the national federation of businesses fell from 103.6 -- to 103.6 from 104.5 in may. the biggest drag in the index was a drop in expectations for economic improvement in washington, senate republicans are scheduled to be updated on the bill to replace -- repeal and place obamacare. during a closeddoor meeting that's happening today, aides say that gop leadership is hoping to unveil a new draft, possibly by thursday, setting up a vote for next week reports say multiple proposals have been sent to the congressional budget office to be scored. including the measure from senator ted cruz his proposal would give insurance companies a right to sell any type of health plans they want, as long as they also sell at least one plan under the regulatory requirements of the affordable care act. >> and a few stocks to watch this morning, pepsi reporting quarterly results earlier before the bell the company beat on the top and the bottom lines and also raises full-year

guidance pepsi cfo hugh johnston will join "squawk on the street" at 9:10 a.m. eastern time jcpenney cfo is leaving the company effective today. the retailer's chief accounting officer will serve as interim cfo while the company looks for a replacement. the stock's down 1.8%. the stock market, now principle and senior investment strategist at bessemer trust and chief investment strategist at brown brothers harriman. good to have you here. what do you in i about the market right now >> the market right now is driven entirely by earnings and we're off to a good start. it's very, very early. we've had a couple of dozen reports but the theme so far is not only are companies reporting very good bottom line results, but reporting good topline results as well. so the quality of the season is off to a good start. >> higher from here? >> we get into a little bit of trouble in the third quarter once we get third quarter reports because the year over year comparisons will be difficult but so far there's still fuel going in the tank >> so the s&p finishes the year where? >> i'd say probably modestly higher from here

the back half of the year is troublesome, because we've got a looming debt debate. we've got a budget debate, a debt ceiling debate in washington the fed begins restricting drawing back its balance sheet there are a couple of things that could disrupt the market later this year. the next couple of months i think we're good >> joe, s&p at 2427. where do you think it goes to? >> i actually think markets continue to grind a little bit higher from here, and i do think it's important to see that the magnitude of this rally that we've seen so far year-to-date, the majority of it or the bulk of it has really been driven by improving earnings expectations. the one thing i will say is the pace of this rally, i don't think it's likely to be repeated in the back half of this year. i would love for nothing more than just take the first six months returns, multiply times two and say that's what you can get. but that seems very unlikely in light of the fed, of course, beginning to unwind this monetary policy. >> everybody's gotten very, very skeptical, it seems to be this whole idea of it's been so good for so long and it just can't stay that good

i mean, it seems really that simple >> and i think there is some underlying truth to that it's a bull market now has been going on for close to 99, 100 months but -- and you also take a look at the economic expansion and the duration of the economic expansion has truly been unprecedented. having said that when you take a look at the cumulative growth of this economic expansion, it truly isn't that unique. right. rather than growing at an clip of about 3% a quarter, year over year of course, we've been growing at a pace of about 2% a year it's quite possible actually that there's still a few more innings left in this economic expansion which should help fuel earnings reports, and help with markets even higher. >> scott, how much is the u.s. equity market benefiting from loose policy abroad? when the likes of the ecb start to normalize their own policy, will that be a bigger catalyst for a pullback as opposed to just the second half might be flat >> we may already be seeing that happen as there's even just talk about ecb policy beginning to move in

a different direction or beginning to slow down you've seen the fortunes of international markets, european markets in particular and the dollar begin to reverse some of the trends of the past three or four years and i think that's probably likely to continue to happen we've dialled up our exposure to international equities for that reason as well as valuation reasons as well doesn't quite take the sail out of the u.s. markets, just raises the appeal at the margin of nondollar equity markets >> joseph we were talking about earnings season kicking off. banks got over one hurdle last week with secar they kick off on friday what are you in particular looking for, and also on goldman sachs do you think they can bounce back from that poor quarter they had >> i think bradley looking at u.s. financials we are expecting not only a solid quarter but also prospects, i would say, looking at that particular sector over the quarters to come should only continue to get better i mean we are looking at higher interest rates and i realize and i hear the argument of a flattening yield curve and how that will negligent activity impact their margins. but i think we've got a ways to

go before we're actually there you still have a very healthy household sector a very healthy private sector and i think that will support profitability. >> there's so much focus on the health care bill does that not really matter for the market is the debt ceiling what really matters to the market? >> i think so wilfred. we've seen this play before, right? several years ago the debates about a debt ceiling and the budget the atmosphere in washington today is so toxic, not a political statement, just an observatio observation, it's likely both political parties choose to make a football out of this to choose to make their point. that doesn't necessarily impair market values but does have a negative implication i think you could see more price volatility >> historically that's been buying opportunity -- >> historically it's been a buying opportunity and if the earnings growth is still in place it will be again this time around so there's two dynamics that we're watching not only the earnings strength in the third and fourth quarter of this year, but the possible impairment, sentiment that takes place

because of debates in washington >> the long end of the curve rise being -- we talked now about flattening however, for the last week, it's actually been deepening, the sell-off in techs and some -- you know, anything with a very high multiple. do you believe that's going to continue >> you know, we have seen central bankers become seemingly a bit more hawkish, and of course as you know, that's been putting some upward pressure on interest rates i think, look, all else equal you're still looking at very accommodative monetary policy around the world even, as the fed unwinds this huge balance sheet it's still going from very accommodative monetary policy to accommodative monetary policy and the same can be said -- >> but you see the ten year yield doesn't go very far from here ultimately the higher long-term interest rates go, the more competition there is for stocks. the further out in the calendar that a high multiple stock earnings are they certainly would be way out in the future. basic math, people pull back on those kind of stocks

so, what do you think about the 10-year note >> i think 10-year yields go up but at a very measured pace. so long as you have accommodative policy abroad you're still encouraging all of this capital to come back into the united states and i think that's going to suppress -- >> up from here. i think there's more inflationary pressure in the system than the market's currently taking into account. and i think that will put some upward pressure on the longer end of the yield curve over the next twelve months >> and so that would mean, what, in terms of how you would allocate >> well, we haven't allocated a whole lot of money to traditional fixed income and we're managing money largely for taxable clients. for us that would be higher quality municipal bonds. we've stayed very short, very high quality fixed income for us to really more of a source of liquidity and stability than it is a source of return unless, or until we get interest rates that absolutely compensate us for risk. i think that's probably a ways down the road. >> the things that are the stocks, technology, we're seeing sell-off in the face of every time we see ten years or 30

years rise -- >> they act like higher duration assets they should act like higher duration assets. they're acting the way they should >> good to see you this morning. >> likewise. >> you're not -- >> huh i switched in. >> how you doing, wilf >> i'm pretty good, joe. >> great i just looked over and not even close to ed you big, strapping young man how tall are you >> 6'5", joe >> 6'5" wonderful feet and you know what? >> lucky for you, everybody's the same height on television. >> what do you mean lucky for me lucky for me, i'm 6'1" -- >> i know but he's taller than you. >> i know, why don't you pick someone for the rest of the day. you've got a couple of 5'2" people -- >> you missing with me at 6'1", really >> you're the one -- >> you don't have to go. you don't have to go far from here on our schedule how about wimbledon, wilf?

>> we've got a female hope to win it for the first time since the '70s >> yeah. you know i hear it's -- >> jo konta. >> it's dry over there so nadal, was supposed to be almost -- >> the final set itself was wondrous from federer and murray was all matches, in terms of going into the quarterfinals epic performance from him yesterday. i caught the last ten minutes of that >> i'm surprised you're here >> well, i was in london last week so -- >> do you go there and walk right through without anyone saying anything to you >> no. absolutely not back in the day you did all right but it was amazing -- >> back in the day >> amazing how quickly things dried up >> well -- >> but it's -- >> i mean -- >> just amazing. i want him even more than murray i love andy. he's the brit. but federer -- >> i like when he gets mad but afterwards he's always very gracious he's a good guy. >> yeah, i think -- >> he's a competitor

>> he would admit that he was a bit too brash in the first couple of years but now he's not too much there's an article this week saying how inexperienced he was his first time he played and he did pretty well, eating pizza between the games, and he was acting like a brat now he's focused, you know i mean he's number one seed coming into this, but he's certainly not favored coming into this. he's slipped a little bit in the last couple of tournaments >> you watching this >> no. >> okay, all right coming up -- >> wimbledon is just -- a day at wimbledon is hard to beat. >> i agree >> have you been >> i haven't been to wimbledon i go to the u.s. open, though. anyway, expect -- this is you know i read this and it probably will be $1200. you got to watch this. speculation mounting that the next iphone could cost that much we're going to speak to "usa today" tech reporter and author of iphone for dummies, ed tell us about what you should expect when it'sreleased

then later a former administrator for the centers for medicare and medicaid services during the obama administration, andy slavitt will talk health care. plus prime sales for amazon. the company selling prime day. a look at some deals and what the numbers could mean for the company's top and bottom line. stay tuned you're watching "squawk box" on bc where to get out. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. 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™

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welcome back to "squawk box. the futures are suggesting flat to slightly negative open. dow would open lower by nearly 14 points. the s&p a little more than 2 and the nasdaq a little more than 5. shares of exxonmobil however are trading higher this morning. barclays upgraded the stock to overweight from equal weight price target remains $94 currently trading at $80.60 a share. and related to that, the international energy agency launching its annual world energy investment report our steve sedgwick is attending the world petroleum congress in istanbul joins us with the details. you know, frost is here. wilfred frost. you remember this guy, steve >> all i knew before you got hold of him. he didn't know much. >> certainly didn't, steve >> you taught him everything he knows -- >> only 10% -- >> michelle and joe, caught you now. just taking you on from my

little boy i inherited and making you mine. you're doing a fantastic job, will fred. i'm watching you just backing off, defending yourself against joe on a regular basis let me tell you about the report it is interesting, trust me. almost as interesting as will fred's burgeoning career i can assure you the ieo represent the oecd which i'm sure you all know is basically everyone who consumes oil in the world and they've got this huge report out and i'm sure you'll be reading it later, 191 pages long which says and very interestingly, total energy investment around the globe fell 12% in 2016. why do we care about that? because the more the energy investment falls, the more pressure it puts on supplies in the longer term. because, as a short-term, we're absolutely awash with product. and so people have seen low prices and low investment. in fact, electricity investment is now more than o&g oil and gas investment, for the first time in history. in first time full stop and that is very interesting. where seeing all the investment?

china, 21% india and the middle east as well seeing a lot of investment across the board but very interesting numbers when you look at the oil and gas spectrum as well because the last two years we saw a 38% decline, as indeed our viewers know, in oil and gas investment a 44% decline in upstream but that is turning around in 2017 and this is a very interesting point, looking at the shell plants out there, especially, because shale is leading the recovery in oil and gas. 53% increase in 2017, in investment, but, costs are going up, as well. you know, costs have been solid. they're seen going up around 16% this year. also the author of this report is an arch skeptic, so to speak, of the ability of opec to manipulate prices higher he told me months ago they should leave it to market forces i caught up with him here today in istanbul and i said, look, what do you think about the strategy now is it working? let's listen in. >> much will be the results of this agreement i said that would be reaction

from the united states, and as such we should bring a lot of oil to the markets and what's happening now we are seeing a lot of oil in the markets, and it is still under $50. >> if you try and take oil out of the market, every time the oil price rise what he's saying is shale will replace those barrels from opec. he think it won't do much for the eventual rebalancing of the market with that i'm going to hand it back to the seasoned professionals, michelle and joe and the burnening great young thing wilfred frost. back to you. >> as ever, steve sedgwick in istanbul. >> with the tech world holding its collective breath for the next iteration of apple's iphone one developer says the iphone 8 could hit store shelves with a whopping starting price of $1200. joining us now ed beig personal tech economist at "usa today" and also iphone for dummies author good morning to you. >> fortunately

>> over $1,000 entry level price. you agree with that? >> i agree it's going to be expensive. even today the current iphone top of the line is pushing close to a grand so i don't think it's unreasonable to expect that this, you know, tenth anniversary phone, a lot of hype surrounding it, is going to cost a lot. >> why is it going to be so much more expensive are they trying to control -- do they not have enough components? is it worth that much more is it that much more expensive to make? >> that will remain to be seen but it does come down with supply and demand and economics. there's some reports that the fancy displays that will be on there, there's some supply constraints there. there's been reports about issues with the fingerprint sensor, that they have under the display, may be some issues there. >> so what extent does the actual innovation level, the quality of the phone, drive demand for this versus just the apple brand? because, samsung's latest galaxy, without the issues of come busting, many an analyst say was actually higher quality when you look at the screen and

various other functionalities of the iphone, but clearly apple has its loyal following. >> they have a very loyal following. make no mistake the iphone is a solid device going way back ten years to the present device these are really good phones samsung makes good phones, as well, as do other people so quality, of course, matters but you're right, there's this, you know, halo around the apple brand that's been there for a very long time, that's not going to go away, obviously. >> and what do you expect in terms of release date, and coming back to the point michelle said, is there a lot of pent-up demand do a lot of people wait because they new the tenth anniversary was coming >> absolutely. i think we're already seeing that from the numbers leading up to this device there's a lot of pent-up demand. hype, tenth anniversary, the latest phone improved but not like, wow >> that was my question. what's in it >> well, a lot of rumors edge-to-edge display again i mention the oled display. it's a fancy term for really

clear, solid screen. >> that's an acronym for something? >> yeah. wireless charging is likely to be in there. we've seen that in some samsung devices and other devices. big emphasis on augmented reality. this idea that you're blending sort of the virtual digital world with the real world. >> because when you have a very small screen close to your face you actually don't need 3-d glasses to see 3-d, right? i mean that's an important -- >> that's true yeah absolutely so i think we're going to see some stuff and their recent unveiling of the latest software, big emphasis on ar, augmented reality. >> stepping away from the iphone what's your next big hope for apple on the innovation tree or does it really matter now >> i think you're right. they are trying to become that it's hard to produce great devices. you know, i mean, what was the last huge hit? you could talk about the iphone. you could talk about the ipad when it first came out now, you know, not so much so, if i could predict that i probably would be, you know, up there. i wouldn't be here right now >> and where do they stand in

terms of the level of voicivativoice activation, whether it's on a phone or another device, the growth of watson, alexa? >> they've lagged with siri. they've been out with siri for a long time. there've been improvements through the various iterations of the iphone. but, the wide perception is they do trail some of their rivals. google, certainly with google assistant, google home products. you know, apple recently announced they are own sort of echo-like speaker. you know, amazon has alexa so, i think apple has some catching up to do there. but i suspect they'll be in the game very much >> ed, thanks for joining us this morning >> absolutely. tv ads for the nfl have been limp this off-season in part -- you did this? you didn't write this? >> i sure didn't >> some smart ass writer -- okay >> tv sales have been limp, part of the reason, erectile

dysfunction drugs are pulling out. cnbc's meg tirrell joins us with more you didn't write it. but you caused it. >> i definitely did not. >> you caused it, but you didn't write it and i didn't change it you could have gone in and helped me out, could you not >> i respect the authority of the amazing producers of the show >> oh, okay. >> i mean i would have -- >> they're like children, my god. >> there may be something familiar missing from commercial breaks this upcoming nfl season. >> ask your doctor about viagra. >> as for pfizer's erectile dysfunction drug viagra may disappear as the medicine approaches the end of its patent cliff. cheaper generic copies are soon expected to hit the market here depressing the branded's drugs's revenue. viagra hasn't aired a national tv ad since may 15th and the brand didn't participate in the upcoming season and that means

big bucks. viagra was a top pharma brand for the nfl. pfizer told us it doesn't comment on future marketing plans for competitive convenients. viagra was a blockbuster drug for pfizer at its peak bringing in billions of dollars in sales. its patent cliff in the u.s., has been well known to investors. and if you still thought you'd at least have images of people holding hands in bathtubs, the ad for viagra's competitor see olous, that ad, too, faces competition. >> i would have thought nfl viewership average is quite young. but this was a big -- >> according to ad agencies it's around 50, actually. >> news some people can use, joe. >> you know what, it was the biggest drug introduction in history. >> yep >> and what percentage do you think was for people with e.d. that -- they have numbers on the percentage of people that actually have problems, versus

people that just use it like a recreational drug. like four people used it -- >> i'm not sure. >> you know the ads, i do like you saw the viagra ad it's always like a young woman talking about it she's not taking it. i guess she's like giving it to her -- i don't know. and then you've got the other ones where the people are out in public, like they look at each other or hug and like, you're supposed to think that they just got the urge, and like i don't know where they go in the back of a bar or something? >> maybe in the bathroom >> yeah, yeah, exactly now, how cheap are we talking for the generics >> yeah, you know, when jenngens come onto the market it really collapses branded drug sales >> what are we talking not 50 milligrams. >> i am just looking up the prices -- >> normally i'm sold by will

fred >> it's actually very expensive. >> $25 for a pill. >> cvs pharmacy, $387 cash price for six tablets. 100 milligrams >> you know, this is all your fault. thanks, meg. >> the latest on the health care bill coming up. >> you look guilty wilf. in a doughnut. right away, it was a success. i mean, it really took off. what people don't know is that it all started with points from my chase ink card. i bought the ingredients, utensils, even custom donut cutters. wow! all with 80,000 points. what will you create with your points? learn more about the ink business preferred card.

good morning welcome back to "squawk box"

here on cnbc we are live from the nasdaq marketsite in times square among the stories front and center, the labor department's jolts report for may is out at 10:00 a.m. eastern time. last time around that report showed a record number of u.s. job openings more than 6 million as of the end of april western digital says it's matched rival bids for toshiba's semiconductor unit that comes a few days before western digital's attempts to stop the sale. the two companies are partner the at toshiba's japan plant and we're watching shares of snap once again today. the snapchat parentsaw its stock price fall below the ipo price of $17 for the first time yesterday. morgan stanley has now downgraded the stock to equal weight from overweight citing increased competition from instagram, as well as slower than expected developments of its ad product yesterday, closed just below $17, $16.99, now at $16.40

>> for the latest on the senate's push to rewrite the health care bill let's bring in andy slavitt he served as the acting administrator for the centers for medicare and medicaid services in the obama administration and it's good to see you again, andy been a couple, six, eight weeks i guess since you've been on good to see you. >> good to be back >> where is -- >> thanks for having me. >> we'll start with -- before we get into the nitty-gritty, where do you think things stand since this is sort of a make or break time, it looks like, for republicans, they're going to try and come back with something, i think this week, to vote on next week. do you think that they're going to be successful >> well, let's just take stock where we are the senate came back from their district in july and i think for a lot of them, many of them, their heads were still where we were in 2016, which was campaigning against obamacare was a great campaign issue and of course that was in the absence of having an actual bill to consider.

i think they came back and i think they heard fairly firmly in their districts and in their states that people are unhappy with this bill it doesn't meet either the more democratic goal of covering more people, or the more conservative goal of reducing cost. so, they're back, they have just a couple of weeks to work with they're going to introduce a couple of new amendments to try to see if they can put something together, cobble together more votes. but right now, it's fairly challenging. because i think you have a lot of senators that would just like this to go away. >> andy, to get in to some of the specifics. i don't know if you saw the "journal" over the weekend, it was basically talking about john kasich and what he says about medicaid and what is actually in this bill. obamacare really did expand medicaid to a large patient population, and it wasn't intended for initially, i'm talking about childless, healthy adults that make much more than

the poverty level. 138% of the poverty level, they're still allowed -- >> i hear you. >> and they also get a much better reimbursement they get like 93% of reimbursement, versus the truly needy people that get like 62% i mean it's a mess do you not want any type of medicaid reform whatsoever from the way it is right now? >> look, i think the idea that we should be taking a look at medicaid and figuring out how to make sure it's more efficient, that we get better quality outcome, that states have proper flexibility, is a great and important conversation and i wish that that's what this bill was about it's not the bill is actually about just cutting medicaid by about 35%, forcing that on the states, and on families, and it doesn't even reduce the federal budget deficit. the money goes right back in tax cuts so if this were about medicaid and making it more efficient for the states i think a lot of governors would be on board.

it should be pretty telling. it's not just governor kasich, there's not a governor in the country that would endorse this bill because it's just a broad cut. >> the point of the piece in the "journal," and i'm not convinced that all republicans and that all, you know, the "journal" editorial board, are a bunch of hard-hearted people that just want to give tax cuts to their friends. i think they truly think that this is unsustainable, medicaid, the way that it's -- the way that it's working as it is right now, and that the growth, if you just let it go unabated, that that is also unsustainable and i think they're really trying to do something the point of the article over the weekend was that ohio, the growth in medicare p.m., it's already well below what is stipulated in the republican version. i think it's 3.8% growth going out, you probably know the details more than i. but it's already below 2% in ohio just based on some of the reforms kasich has put in himself. so the thrust of the piece was that, kasich is throwing all of

his colleagues under the bus when he's actually got medicaid growing more slowly in the state than is what is called for in the bill >> well i think that's what's interesting there's to some extent the invention of a problem here medicaid is about 28% cheaper than commercial insurance. and its growth rates are, indeed, low. and the reason they're low is because all the managed care companies, now 75% or so of medicaid is through managed care we don't actually have a cost growth problem what we have is the fact that medicaid takes up a significant portion of the health care budget why is that? because health care is too expensive. it's the underlying issue. so just saying we're going to reduce what the federal government gives to states doesn't really accomplish anything i know we'd like it to but all it does is fixes the federal government -- >> they address that, too, that people always argue medicaid is much cheaper than everything else that's because it doesn't pay doctors, almost what you would

consider a fair market rate. it pace 62% of what medicare pace so -- and having coverage, if you can't get what you need, you know having coverage but you can't get anyone to do what you're covered for, you have no access, that doesn't help either i mean, this just seems like -- >> let me address that >> okay. >> let me address that it's a fair point and i think it's accurate. about 70% of physicians in this country take medicaid. it's about the same rate as other products but the difference is, people generally lose money or if they make money they certainly make very little money on medicaid. so reibm yoursment to medicaid probably ought to go up to increase access. but how are you going to take access up and reimbursement up if you're going to cut 35% from the program. you're not you're going to reduce access even further because you're going to cut reimbursements pretty significantly this solution doesn't solve that problem. >> i just don't know whether the expansion, and it was a huge

expansion in medicaid, under obamacare, and it wasn't the people that were truly necessarily the people that truly needed, and that's what -- >> who's to say? who's to say -- >> well, childless, healthy people, that, you know, and there are those that say that the people who truly need it -- >> -- why do you have to be childless -- >> you've seen the stories, right? everyone's seen the stories that journalists write, they focus on the disabled -- >> -- get 62% when the healthy people with the expansion population, they get 93% reimbursement. i mean the whole thing -- >> are you telling me that people with disabilities with kids are getting less health care because of it >> i'm telling you that they get less reimbursement and that some of the money that's going to these healthier individuals that shouldn't necessarily be getting their health care from medicaid are actually hurting the people that should be getting it from medicaid >> are you telling me you think if they reduce what they take the states that's going to get more people care or fewer people care >> the whole idea was actually

to make the individual market better so that individuals could actually get insurance on the individual market. and that's what the subsidies were for why is it that medicaid -- >> the whole idea -- >> excuse me >> medicaid expansion was about giving coverage to people that were near poverty that were not getting care, that were coming to our emergency rooms, not paying the bills, driving up everybody's cost >> right >> and giving them -- >> and part of the effort was the design an individual market where there would be, presumably, affordable products, or subsidized products, so those people could actually get health insurance. now we see here that 60,000 disabled ohioans are on a waiting list to receive care i mean, shouldn't the money for medicaid be really dedicated to the disabled for children >> i came from the private sector and then in the government i had a chance to oversee all of those programs look, health care has a lot of

moving pieces. it's very complicated. the one thing we just have to think about is if we want to cut 35% of what the federal government gives the states do we really know what we're doing? do we really think that's going to make people's care better i see your point about how we want to make sure the rates we reimburse don't create bad incentives so let's just be clear what we're doing here with this bill if we pass this bill, it's a fairly significant cut to everyone's care, and it's going to drive costs up when people don't pay when they go to emergency room -- >> so you agree if you designed better individual market, you wouldn't have needed to expand medicaid like you did? >> i'm sorry, you're saying instead we should -- individual market that's what they did in arkansas and i think that worked out fairly well. states have the option to be -- of moving people into well financed marketplace option like arkansas did, for the medicaid expansion. and i think those are very valid approaches but the point is, you can't do it unless you have the federal reimbursement. without the federal reimbursement you can do neither. >> andy, that point, i'm looking at a huge piece written here

i don't know if you've heard of hadley heath manning she makes -- this was in "the wall street journal," making the case that better care for the actual needy could be the end result of fixing the brokenness of medicaid. now where a lot of the resources are going to people that aren't as needy and that's the whole thrust of the piece. >> right right. so someone is saying that by cutting a trillion dollars of money that goes to people who need health care you're going to make people's health care better [ everyone talking at once ] >> if there was a bloc grant you'd have to focus your efforts on the people that actually aren't getting cared for now, because of all the healthy individuals that are getting cared for. >> that bloc grant is a third less though. i think that's the place that there's a -- >> i'm going to send this to you. "the wall street journal." it's called, should medicaid be converted to a bloc grant program. support irps of the change say it would cut costs and provide

better care for the needy. and then it says -- critics say it would force states to cut eligibility. you know it's an argument. go ahead >> one thing we ought to be doing is i think both parties ought to be getting together on the topic of medicaid, democrats and republicans and actually putting to the a thoughtful process on medicaid reform this is not what this is this is a rushed process, and it's a process that focuses more on just a broad cut, and then tells the states to figure out how to deliver care with that. i'm all -- i'm fine with a bipartisan process, i think we worked very well but we've got to focus on actual reforms to the program, not just broad cuts >> all right good to see you, thanks for being on today, andy good to see you. >> thanks for having me. >> coming up, could it be a billion dollar day for amazon? the annual prime day is in full swing. a look at the deals and what it could mean for the company's top and bottom lines coming up after the break. also check out futures at this hour pointing slightly lower 14ois wer pntloto be precise for the dow. "squawk box" will be right back. the future isn't silver suits and houses on mars,

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>> he's too tall to play golf. last year's amazon prime day was its biggest -- british open is coming up i think in a week. >> the called the open >> i'm sorry the open is coming up. but this is the biggest ever, this year's company is hoping to top that monumental day offering more than 100,000 deals. and courtney regan joins us now. you were in here yesterday, courtney >> i sure was. >> how do you decide, coming in, not coming in? >> it all depends on the morning schedule i had to join wilf and sarah this morning >> don't say you didn't enjoy it >> the location was here to start. so here i am >> there we go >> don't worry, i've been watching and shopping all night long for you no matter where i am we're actually ten hours into amazon's third annual prime day. it's the first shopping volume spike likely hit around when those deals launched last night. another sales spike is probably expected later this afternoon if we look at history as a guide.

amazon devices like the alexa powered echo, those are listed right now as the best-selling electronics. they are selling at a bigger discount than they were offered on black friday. but hundreds of thousands of deals will roll out over that 30-hour event. some of the biggest discounts and sellouts include portable power bank, 84% off. it's sold out now. hyaluronic aside is sold out and any of the sharppro vegetable spiralizer that was 76% off that's already sold out, too and according to a panel more than 100 million people in the sample, jump shot says that shoppers on amazon did buy less in the days leading up to prime day this year than last year the group suggests that shoppers decided to hold off buying to wait for some of these prime day deals. amazon says last year's prime day was its biggest day ever able lists estimate that prime day may hit somewhere between

$860 million and $1 billion this year it was $640 million, at least according to estimates, last year now ebay and best buy are offering some competing discounts on things like apple products, google home devices which compete with those alexa powered echoes but it does seem that fewer retailers are clamoring to offer their own big discounts this year than in years past. maybe just waving the white flag to amazon, letting them have the day. wilf >> cool. thanks very much for that. and for more on prime day's impact on amazon we're joined by senior internet -- senior analyst -- michael good morning. >> good morning. >> thanks for joining us overall is this bottom line for amazon about profits or promotions and getting the public >> i think the biggest thing is it's just about promoting prime. prime is the key part of amazon's strategy for its business to consumer offering. you know, they've got many things in place that have been long investments over many years to try and bolster the prime

offering, the biggest one is the fulfillment network and being able to offer free one and two-day shipping worldwide and so, prime day is just a way to get, you know, millions and millions of consumers engaged with amazon, on the site, all day long,looking for bargains, and they also should get a lot of prime members out of the day as well. >> this is the biggest sort of 24 hours or so for amazon of the whole year, versus things like black friday >> well black friday would usually be the biggest dale for a retailer and for amazon historically, and then last year are prime day was bigger than black friday we'll see how it goes this year. at a billion dollars that's roughly twice as big as the average day on amazon. so definitely should be a big day for them >> we saw walmart dragged down on the dow yesterday do you think that was specifically related to the fact that amazon's got its prime day? and what does this mean for the other retailers? >> well, amazon versus walmart is definitely a key topic for both of those companies. they're the two biggest retailers in the country and i think that in general, you

know, whenever amazon's doing well it's going to be perceived as somewhat of a negative for walmart. i don't know if prime day itself was driving walmart yesterday but certainly those two are competing very aggressively. >> you're at a buy price target of $1200 it feels a little crazy right now, the whole world is saying oh, my god, everything's getting amazon just purely on sentiment, you get worried? i mean it used to -- i remember when amazon went from just books, and cds to other things, oh, that's never going to work books and cds are small, they're easy to ship how are they going to do it? every single step that amazon ever took was met with skepticism they buy whole foods and now, everybody believes them. does that make you nervous >> you know, i think that the biggest thing for amazon is that investors have given the management team a green light to go ahead and incubate huge businesses inside of the company, and you know, the

original amazon was the first example. aws, amazon web services was the second example i think the grocery business is not so much a new business, as it is just a great big new market and i think that investors are saying to the management team, you know, we think that you're some of the best in the business at attacking large markets, where you need scale to be successful and so, it really actually gifs me more confidence about amazon going forward. i think that they need to make big bets like that in order to keep the growth -- >> now that everybody is confident, they can do it? >> yeah, i think they have that green light from investors and that's the most important thing for them >> you're sort of roughly 20% price target upside. is that mrs. heavily based on aws or more the retail side? >> aws is about 40% of amazon's profit base right now. it's not quite as big as that in our valuation, it's about a third of the value, i think, for amazon but it's definitely an important part you know the margins in aws are way higher than amazon's

e-commerce business and so -- and that aws business is the one where you might expect to see a little more volatility there's the prospect of competition with microsoft and google, so whereas in the e-commerce business amazon's prime membership and its fulfillment network really are competitive advantages and aws is not quite as obvious. >> and on the whole foods acquisition, what do you make of that and the price and does it mean that they're going to go and buy food retailers across the globe i mean, we've seen some prices fall and rise depending whether food retailers like in the uk are seen as competitors or targets, and it's been quite different depending on that. >> i think the fundamental thing that amazon sees is that 20% of the food that a grocery store buys and stocks in the store is wasted because it just never gets bought. so is that really the best supply chain that you could have i think amazon's looking at food and grocery as something that the company can really revolutionize, buying whole foods i think, 440 stores, a lot of great supply chain relationships.

so it's an opportunity for amazon to learn a lot about the food business. and the grocery business and try to get better at it -- >> you've covered amazon through nothing but a declining environment, right >> well, for about 15 years. >> which they've done nothing but go down. are you worried about rising interest rates have you thought about at all what happened if long-term interest rates go up >> well, it's not a capital dependent business, really >> no, but it's up high multiple stock. >> i think you could argue that, you know, if you look at amazon, their profit margins now, you're slightly right it's a high margin stock but i think that if you look at it on any sort of reasonable expectation of a structural margin in their businesses, it's really not that expensive. you know, it's operated at 7% operating margin when it wasn't growing so fast for years and years. it's much lower than that now. you know, you look at walmart, it's 7% to 10% plus -- >> i'm just talking about investors making different choices based on competition from other things. >> yeah, i mean --

>> that's beyond your control. >> sure, yes >> that's just something that drives sentiment in a different way that if they ever really move and who knows if they do, you've got a whole new world, don't you? >> yeah, as long as investors are looking for growth, i think amazon is one of the most reliable growth prospects out there. if the sentiment, you know, dramatically shifts away from growth, then, yeah, you know, obviously other stocks will look more attractive. >> michael thank you very much for joining us this morning. coming up joe has a list of stocks to watch ahead of the open on wall street. atop of the hour, senator roger wicker of the budget committee will join us to discuss the senate progress on a health care solution, and then, did you know, wd-40 is more than just lube to stop a squeaky door. it can be used to protect a bird feeder from squirrels, separate stuck glass wear and even type away tea stains. i did not know that. did you know that? >> it's a long story, but yes. wlle lkg outhe ceo coming up.

stocks to watch this morning. publishing company pearson publishing company pearson is selling a 22% stake in penguin random house the joint venture partner bertelsmann -- a lot of

"ps" there that was alliterative -- >> you popped all of them. >> the deal cuts pearson's stake in penguin random house to 25% barracuda networks reported quarterly profit of 18 cents a share matching estimates however the cybersecurity firm gave a weaker than expected current quarter forecast michelle >> coming up, senator roger wicker, member of the powerful budget committee joins us. and then later, wd-40's ceo arrly ridge talks qutey results. "squawk box" will be right back. your insurance company

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good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq marketsite in times square, i'm joe kernen, along with michelle caruso-cabrera and wilfred frost. andrew and becky are off today take a quick look at the markets. futures have been quiet so far this morning now down 14 on the dow down 2.5 on the s&p. down about 9 on the nasdaq treasury yields got close to 2.4 on the 10-year 2.38 right now and oil prices continue to be relatively weak from where they've been the last few years. below 45 43.93 today. down another percent >> they were down about this amount yesterday and thin rallied by the end of the day to gain about 0.4%. among today's top stories, pepsico beat on the top and bottom line. also raised its full-year guidance the stock is up about half a percent this morning don't miss pepsico cfo hugh

johnston on "squawk on the street" at 9:00 a.m. eastern time it's prime-time for amazon the e-commerce giant's day of deals or prime day is under way. analysts say today could be the biggest sales day of the year for amazon the stock is flat in the premarket. the mfib out with the monthly read on small business confidence on main street declined last month, falling to 103.6 from 104.5 in may. the biggest drag on the index was a drop in expectations for economic improvement >> mm-hmm. senate republicans are hopeful that by week's end they'll have a new draft for their legislation to replace obamacare. joining us now is mississippi senator roger wicker good to have you here, sir >> hello good to be with you. >> you guys going to get this done >> well, i sure hope so. and the plan is, yes, to get a tweaked version out by midweek, and then to pass the motion to proceed. actually get on the deal and

that will open up what we call the voteorama and it will be one of the most open processes of amendments that you've ever seen we need to move to that phase, get on the bill, and then move to the amendment process next week >> are you really optimistic that i can happen? because it sounds like there's this just huge division among republicans. republicans within the party about what exactly health care reform should or should not be about when it comes to, for example, the expansion of medicaid >> well, i think there's unanimity, though, that the current system is imploding. there was a gallup survey out yesterday that indicated that 2 million viewer adults will be covered this year under the current system the market is crashing the co-ops are getting out of the business premiums are going through the roof this is a system that's not working. we can make it better. >> we know all that. but you're losing the pr war on the medicaid front -- >> i'm trying to -- >> where --

>> i'm trying to win the pr war -- >> where every story that i see -- >> on cnbc this morning. >> every story that you read about what the bill will do to medicaid is all about how the severely disabled are going to lose their care. the elderly are going to lose their care rather than the whole focus on the expansion to able bodied adults >> well, you know, that's just -- i would just challenge that, as the fall. listen medicare expenditures are going to go up under the house plan i think under the senate plan, medicare expenditures are going to go up even more but we've got to slow the growth rate of this program so it will be around for people that need it and also for future generations nobody's talking about cutting medicaid we're talking about slowing the growth rate, and preserving it and making it better and having 50 states have experiments about making it more efficient, and able to deliver better services for the people in those states

>> but do you realize that the american public is hearing that it's about cutting medicaid? i've been doing a lot of research over the last three weeks talking to medicaid researchers, when you get them on the phone, they are very much against this bill. this is about draconian cuts, the entire system is geared against you guys right now >> well, and that's why i'm on your show, at 8:00 a.m. this morning, in beautiful washington, d.c., to try to win the pr war so, of what i am telling you is that we are going to -- we are going to make medicaid better we're going to give straits the power to experiment, and come up with their best plan, and also we're going to lower premiums for people in the private market now that is a better solution and we're doing our best to get the message across but you're right, it's awfully hard to compete with the media, and all of the voices -- >> senator, the problem is,

there is a -- there is a contingent that, like bernie sanders, he wants single payer -- >> that's exactly what the democrats want >> that's what they want >> no question about it. >> so if everybody had medicaid that would essentially result in single payer so they're not interested, i don't think, in any way of reforming the entitlement. they want to expand the entitlement to basically be akin to something like a single payer. >> well, thank goodness i'm not pebding on bernie sanders to make this work bernie sanders and his team lost the last election. and the team that won was one saying that we are going to replace obamacare, which is a failing system, with something that lowers premiums, and makes the medicaid system work better. >> senator, california, i thought they were going to, as a state -- they're, you know, clear thinking people out there, public politicians, they were going to make it single payer in

that state but then they realized, wow, we won't have any education, we won't have any police, we don't have any cleaning up the parks, there won't be any highways, there won't be any firefighters, but we can have single payer, we just can't have anything else and we probably will owe a lot of money on single payer >> thank you i need for you to repeat that five times an hour, and maybe you'll help us get our message through. we can grow the medicaid program and make it work for the people who depend on medicaid and we can do it in a sensible way that lets 50 states experiment and we'll see who comes up with the best plan. nobody's talking about cutting the medicaid program and also we've got to do something to moderate these premiums in the private sector no question about it >> snor you say it's about winning a pr war but realistically it is more than that. if you really want to get this bill passed, what actual changes to the bill do you expect will need to be made?

>> well, okay. but don't -- please excuse me from negotiating in public i think it's going to look much like the bill that was out two weeks ago. but we'll see. i'm not in the room where the writing is taking place. but i think bottom line is, we're going to grow medicaid at a reasonable rate that our economy can sustain and we're going to let 50 states experiment with doing it right >> does all this happen before the august recess? >> oh, very much it needs to be done we need to free up the congress to work on tax reform. making us more competitive internationally, and getting jobs going we need to talk about an infrastructure bill. >> since you have such big -- >> we need to build up our defense -- >> should you just give up on the august recess completely, since -- so let's say you get health care reform done.

tax reform is a big item as well should you just give up the august recess right now, say you know what? >> i for one, if the majority league ask my vote absolutely i would certainly welcome the idea to stay here in washington, d.c. and get the job done for the american people. it's that important. no question about it but let's go ahead now around try to get it done in this month and then move on to -- to the conference committee and to other topics >> senator just quick side point randy quarles' nomination, when does that get the floor and will it be an easy confirmation >> you know it seems to me that confirmation that should be easy have been slow walks by senator schumer, the majority leader we even had a vote closer yesterday on a district judge nominations that have initially come from the obama administration so, i'm not going to be optimistic about any nomination moving quickly

>> all right you good i thought you had another -- >> no, senator i know you got to run. but leave your ifb in for a second because i'm going to ask wilfred about his health care system over in the uk i don't think people like you -- did you ever use it? >> yes i also have private health insurance -- >> but how often -- is it -- do you think we should have single payer here, wilf >> listen, i think the fundamental issue, which is not enough addressed and not enough discussed by us, i'm not saying by the politicians, is this, that in most of the developed western world, countries spend about 8% to 10% of gnd on health care the uk is a bit above that 11.5%. the u.s. is about 18%. >> but there's a lot of extenuating circumstances -- >> i get that. i get that but listen, eventhough it only costs us 11%, roughly versus 17% of gdp, it is -- >> -- the lifestyle -- >> listen, i degree. >> a lot of issues >> nhs is at the point of cracking itself.

and on top of that, listen, we talk about -- >> you're -- how many times did you go to the national health -- >> i wouldn't -- >> percentage wise versus private? >> higher in percentage times for simple things like i need to go and check in because i've got the flu, you go to a simple free general practitioner if i'm having back surgery, then i want private >> how long would you -- >> you need -- >> then it wasn't simple how long would it take you to get -- are they clean >> the facilities are good and they're clean. i don't know how long it would take but i'm lucky to be in a position to have actual private health care as well. but it is there, the point of emergency is free if people need it it's a great ambition. and i'm not saying it's easy to achieve because even where the efficiencies perhaps, the cost of gdp growth it is cracking at the seams. >> do you -- >> it is a political football and it shouldn't be. that's my point. every single time i think everybody would like to see it improve. everybody would like to see more spent on it but it becomes a political football so you don't

get the reforms you need >> it becomes very clear whenever i'm in the uk every single day there are stories about the nhs and what becomes clear to me is that the reason spending is far more limited in the united states is because there's rationing. because i see fights about, well there's an aids drug that they don't want to cover anymore because it's so much more expensive and people who wanted an eye operation are mad because they can't get the eye operation -- >> parents can't decide what to do with their baby and the state decides that the baby doesn't deserve -- i mean that's weird, isn't it, that the parents aren't in the decision of making a decision about the baby? >> i'm not quite sure about that having no children >> i know but you know what i mean -- >> you know the case that we're talking about. >> i know what you mean in some cases. but i don't think that's widespread to be honest. but listen, you're putting this at me as if i'm the spokesperson for -- >> you're certainly not. because i can't believe you ever walked into one of those places. >> yeah, well i do i do -- >> i need video. anyway, president --

>> it's a completely different setup. completely different setup but, it shouldn't be a cross-party issue. >> you're my skepticism -- president trump looking toshs you hit that private box at wimbledon i don't think you're walking in, waiting in line -- >> private box >> looking to make his mark on the fed, kayla tausche kayla, you've been waiting patiently, joins us with more. good morning again >> good morning, joe someone you guys were just talking about with senator wicker, the president finally formally nominating randy quarles for that seat upon the federal reserve. his first nominee to the fed board which has been operating with only four of the seven seats filled so far. quarles was the undersecretary for the treasury in the george w. bush administration he was a partner at the carlyle group where among other things he led private investments to shore up banks during the financial crisis he's currently running a salt lake city based investment company he founded and president trump is nominating quarles to a

four-year term as the vice chair of supervision where he will have the leading role in revamping rules to regulate large banks. he's also being nominated to a longer-term to the board of governors ending in 2032 where he will weigh in on monetary policy and has been described as a counterweight to fed chair janet yellen quarles' nomination had been expected since april the supervisory post as you guys have talked about was created by dodd-frank but it had gone unfilled since then. quarles would bring a background as a bank lawyer, an investor, and expertise in domestic and international finance to lead that role. but something that will be very important, joe, for this particular nomination is he also brings a background of having been confirmed by the senate once before in that role in treasury in the bush administration i just mentioned. >> right we'll see, kayla we just looks like it's going to go -- what did senator wicker say, how long? depends on when they take it up. >> didn't know he was saying i'm not going to commit to it either way there's a lot of posts to fill before you really meaningfully start to see the

deregulation >> kayla when is the -- what's your latest? i watch your tweets. i follow you now i don't follow a lot of people what's the latest on when the senate bill expected now tomorrow thursday >> i was told as soon as today but the leadership has told reporters in the hall of the senate that it's roughly thursday but it does sound like it's a moving target in terms of when and exactly what the substance of the bill will be. >> and, you're down there. >> that's true >> we have a lot of senators that come in and i see them quoted, they talk about all the reasons why it can't work and then they say, i think it's about 50/50. there's this underlying optimism that they're actually going to get it done. do you have -- do you think it's 50/50 in your view i know you don't matter, your opinion doesn't matter but do you think it's -- mine doesn't. yours doesn't. none of our opinions matter. but i still want to hear what,

since you're down there surrounded by all this stuff, do you think it really is 50/50 >> you know, i know that there are a lot of senators who would like to believe that it is 50/50. the white house would certainly believes that it is higher than that i don't think anyone's counting out the ability the senate majority leader mitch mcconnell to, i've heard references to his bag of goodies, the things that he can offer certain senators as a one-off to actually win their votes on this. but you heard chuck grassley who is chair of the judiciary committee yesterday say for every vote that becomes a yes they're still going to lose more moderates. so until we actually see this thing come to a vote, joe, i don't know how many people are actually comfortable handicapping it, who are not in those closed door conversations. >> okay. >> yeah, that was not -- i just wanted to hear what you really think, because i don't know. >> it seems impossible from here >> that's what i mean. but people say 50/50 we'll see. >> joe >> yes >> do you follow me on twitter

>> i didn't ask out loud but i was wondering the same thing >> i try to stay under 100 people that i follow >> so i -- you really don't care what i think >> i block people and i unfollow people i'm about ready to just give -- >> you didn't answer the question >> i have to check i'm not sure whether i follow you. >> you would know because -- >> maybe i don't then. anyway, coming up -- follow, you know, follow news buffs. one product with more than 2,000 different uses we're going to talk to the ceo of wd-40 about the company's latest quarter that's next. music for everything you know what wd stands for? >> water displacement. >> bingo exactly. >> what does 40 stand for? >> the 40th version. >> wow >> get your guesses in for which state took the top spot for business this year we'll get a clue from scott cohn at 8:30 a.m. eastern time. plus amazon set to cash in as prime users flock to the web for deals, but how much will your company lose while you're shopping at your desk?

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welcome back to "squawk box. check out shares of snap the parent company of snapchat closed lower by more than 1%

yesterday at $16.99. that's just below the ipo price of $17 when it went public on the 1st of march and adding to the pain, equal weight in lowering price target to $16 from $28. the analyst says the company's ad product is not evolving or improving as quickly as they had expected and that low $16.28 as you can see now, being extended, and that's over 30% below that peak just shy of $28. >> and wd-40 out with earnings the american made company beat on the bottom line but revenues slightly shy of estimates. joining us to break down earnings and talk corporate leadership is garry ridge, president and ceo of wd-40 mr. ridge, it's good to see you. someone sent me a website that there must have been 100 uses for wd-40, but i think people pretty much know what they're getting with wd-40 how do you continue to try and grow the company for shareholders >> good day, joe

you know there's lots of squeaks in china that we haven't silenced yet, so over the past 18 years we've transformed the company to having about 65% of its revenues outside of the u.s. and that's ourgrowth engine, number one and then number two is we've extended the brand in the united states with a range of products called wd-40 specialist. wd-45 which is a maintenance product for cycles so you know, we're over 60 years old but this is the most exciting time in our history as we continue to take the blue and yellow can with the little red top to many places around the world. >> i use it on our swing set and it works immediately on any type of squeak. i haven't used it for a lot of the other things it's used for wilfred frost is here. i believe he takes tea every day. >> i already told you that i hate tea >> well, he's british so i assume he takes tea every day. work with me

you can remove tea stains. here's what i'm worried about, gar garry, if you have glasses that are stuck together and if you try and get them apart they're going to crack, you can use wd-40 they come right apart. but it's a solvent, isn't it you can't then -- you need to wash it pretty good after that it's not ingestible at all, is it >> no. but if you wash it with, you know, normal dishwashing soap, and you know, joe, i watch you most mornings. i know you're a domesticated man. i want you cleaning the sticky finger marks off your stainless steel fridge when you get home >> that will work, too we're looking at some of the things that you can do here. you can remove gum from hair >> yep doesn't work for me, but yes >> you must be welcoming lower oil prices do you think they're here to stay >> well you know, we've enjoyed oil at $145 a barrel we've enjoyed it at $45 a

barrel what i like is stability you know, even though oil does contribute to our cost of goods a lot of our ingredients are manufactured petroleum products. so, yes, a lower oil price is an advantage. it does -- it's a tailwind it does offset this horrible headwind we've had for a number of years on currency with, you know, over 40% of our revenues are in currencies other than u.s. dollar our revenue line, once we consolidate, doesn't look as robust as it really is when you look at what we're doing in local currencies, in euros, or in r&d or the australian dollar or else where. so you know, we're living in a volatile, uncertain, complex world and we've got to deal with it >> i was going to ask you about currency what's your philosophy on hedging? do you have your cfo hedge oil prices hedge currencies >> the only perfect hedge i've

ever seen is around a japanese garden so no, we don't hedge. it's hard for us to hedge oil because we outsource all our manufacturing so it's a financial hedge. no, we ride the wave as it comes. >> we saw some of our other brands, that -- how much is wd-40 in total revenue what percentage versus the other brands >> wd-40 brand is about 85% of our total revenue. >> 85. >> which includes the blue and yellow can, wd-40 specialist, we also own free and one oil which is the second biggest brand in the united states. >> yes when is wd-41 coming >> wilf said 1 through 39 were rubbish. didn't work worth a donald trump until you got to 40. that's not true, isn't it? 1 through 39 were okay, just not 40 >> i'm glad they didn't stop at 39 still the 40th one, you know, the product was inwented to stop corrosion in the umbilical cord

of the atlas space rocket, and it does stand for water displacement 40th formula. and the 40th one met the requirements in 1953 >> excellent we know did everybody at home knows a lot. we do wd-40, we do spam. they seem, i don't know, you know, hormel they're similar. a lot of different uses. a lot of different things going in to making -- it's always fun. and we hope to see you -- i'd talk to you every quarter about wd-40. garry, thank you >> i'd love to >> good to see you, thanks >> coming up we're counting down to the big reveal of cnbc's top state for business scott cohn is there with a clue. where are you -- oh, texas >> i'm on a horse. this is my new friend dandy. we are going to start our countdown of the top five states for business leading up to the big reveal today on the the closing bell, and another hint about where i am in america's top state for business at a cinupesn't give it away th'sllomg

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♪ good morning and a warm welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square. among the stories front and center, private equity firm

vintage capital wants to way rent-a-center for the rent-to-own company is resisting. in an s.e.c. filing, rent-a-center says vintage made an unanalysised $15 per share bid but it is formally rejected. the company says the proposal undervalues the company. shares though, up some 16.5% to $12.94 warren buffett has donated nearly $3.2 billion in berkshire hathaway stock to five charities including the bill and melinda gates foundation it's buffett's twelfth annual donation to those charities. he's made about $27.5 billion in donations over that time the majority of which has gone to the gates foundation. the head of what was once the world's largest bitcoin exchange has pleaded not guilty to embezzlement mark koppels blamed hackers for the loss of 850,000 bitcoins and $28 million in cash from now defunct mtgox. >> mount gox i think it was. >> is that what it was >> a flash in the pan. >> it's that time of year,

counting down to cnbc's annual list for the top states for business scott cohn joins us from somewhere in the united states with number five on the list scott, you know, this is all i'm going to say in the past you give us things that if you could solve the clue you could come up with the individual state just sitting on a horse in a cowboy hat you could be in wyoming. you could be in arizona. remember macleod macleod was in new york city you could be in like -- you could be in 30 different states. and you wouldn't be wrong so you're not giving us anything here although it's a great shot. wilf was hoping you didn't tranquilize that horse, and something starts happening if it gets a little frisky >> in a safe way >> i'm a very skilled rider. i'm a very skilled rider are you buying that? >> yeah. >> the horse didn't move for awhile, i swear i thought it was -- i thought it was stuffed when you first -- when we first looked at you. no >> where are you >> why don't you just tell us,

would you, please? >> no i'm not going to do that so listen here's the deal. we're going to count down the top states for business all day today. and this is a study that we've been doing every year for the last eleven years. we rank every state on 66 metrics and 10 categories of competitiveness for a total of 2500 points, and what we'll be doing today is counting down the cream of the crop. so let's get our countdown going now. here's state number five north carolina, the tar heel state comes in at number five this year, with 1,568 out of 2500 points. north carolina also finished fifth last year. north carolina's best category is technology and innovation a perennial magnet for research and development that also helps the state notch a top ten finish in the important workforce category but cuts in school spending dropped the state to 32nd for education. and it's 28th for quality of

life north carolina repealed its controversial bathroom bill, so businesses and events that boycotted the state have begun to return. but it is still one of only five states with lowe anti-discrimination laws for nondisabled people, making it one of the least inclusive in the nation north carolina's individual income tax rate is a flat 5.499% the corporate tax is 5%. the top state sales tax is 7.5%. unemployment is 4.5% north carolina's largest employer is walmart. the largest industry is professional and business services so once again, for the second straight year, north carolina, were it not for that quality of life ranking, or the education ranking, might have been at the top of our list. but it comes in again at number five for a second straight year. so, where am i america's top state for business here's another one of our diabolical hints you can't get there from here.

you can't get there from here. what does that mean? think about it try and get into this hat and under this cowboy hat. you like this? and you can read all about our study. top states.nbc.com follow us on twitter use the #topstates let us know where you think i am we'll have another state coming up on "squawk on the street. guys >> you're in oklahoma. i mean there's -- we went over all of them. you could be a million places. >> wyoming mentioned >> you could be in maine >> a lot of different places anyway i just -- >> does anybody remember, besides you and maybe me, remember macleod i mean, that's -- that reference is -- >> you know -- >> we just dated ourselves >> i was going to go further back than that to coogan's bluff which was a clint movie that was before macleod and he went to new york and everybody wore a hat and he said you're from texas, right and he goes arizona. so i mean that's what i was going to mention you can't judge a book by its

cover. that was one of clint's version -- god i love clint. i love him who doesn't. but i thought macleod would be more easier for people to identify anyway because i think macleod ripped off coogan's bluff. we will see you and get more and more clues and i have no idea can't get there from here. >> mexico. macleod is new mexico. >> what? >> according to wikipedia. >> see coogan's bluff -- >> new mexico deputy marshal assigned to manhattan's 27th precinct >> he heard you say manhattan he wouldn't know what the heck you were -- >> now i can see roughly what macleod is but basically -- >> first coogan's bluff. one of the first -- and i'm not kidding was like 1968. >> this show this morning. looking for a good deal on prime day on amazon your company is probably being dealt an economic blow. eric has crunched the numbers of people not working >> that's right. i mean, i was just tweeting here

about joe's first viewing of movies -- >> 1968. >> it's a fun exercise to think about how much time people are spending on amazon prime day so when you look at the numbers, our estimate is about $10 billion in lost productivity around companies, around the nation the way we did that was let's say it was 85 million prime members. we know not all of them are going to be shopping while at work we know not all of them that have memberships are going to be at work. we know that 30 hours, most of that is not at work anyway let's be conservative and say they spend one minute each time deals roll off and put that together with gdp data, prukd it data, i don't want to do the equation, but you get $10 billion. and there's a lot of people they don't even have prime. but they're going to use the day to think about whether they want to buy prime so they're going to still be looking at deals that we haven't even calculated. so the range could be really anywhere higher or lower than that and if the deals are really good, you might see people spend more than one minute per deal

and the other thing to think about is really, it might not be so bad, because a lot of people, they waste time at work anyway thinking about what movie they saw in 1968. >>playing solitaire. >> work's not going to lose the $10 billion but facebook and twitter and all the other web surfing, maybe that's what's really going to suffer today >> how does this compare in terms of economic hits companies to other big shopping days because i suppose the other shopping days kind of come at holiday periods and there's less people at work how does that -- >> if you think about amazon it's a limited membership. where a cyber monday or black friday, that's open to anybody but when you think about how many people in america have amazon prime you're looking at about 30% of the adult population but most of those people do have jobs, because it is a high-end type of product if you're going to spend money in order to have the privilege of spending money. >> how does it compare to the final four >> final four is a much bigger blowout. but that's at night time >> isn't there daytime -- >> the daytime is the first thursday/friday. that's a two-day event, thursday

and friday and that goes on all day. >> because i've noted co-anchors watching basketball. >> co-anchors, but not this anchor >> no. >> it's interesting. the other thing i found thad was special as i researched if you want you can look back in your amazon settings, click on the part where your name is, go down to your order history in the bottom left you can find out everything you've ever bought on amazon, total it all up, i found i have spent $10,000 over the last ten years >> no way. >> median price $23. that's 300 items at $23. >> i spent zero. >> you spent zero? >> my family has spent more than you. >> -- spend 200 grand. >> keeping an eye on djokovic's current -- >> golf doesn't take away, u.s. open -- >> all of them it's almost like every day there's something that people waste their time doing anyway. today's day happens to be wimbledon and -- >> profile -- >> click on the name and go to the bottom left you'll see your order history. it's in one of the boxes

if it takes a long time they'll send you an e-mail it's taking so long we'll have to e-mail you. >> oh, gosh, really. look at this, and i didn't know that i have artistic license. i want to talk about that i'm going to talk about it >> exactly >> anyway, up next golf's oldest major will tee off next week going to talk to, golf channel's brandel chamblee will be with us as we head to break check out the futures. so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets.

every branch running like headquarters. that's how you outmaneuver.

my name is jamir dixon and i'm a locafor pg&e.rk fieldman most people in the community recognize the blue trucks as pg&e. my truck is something new... it's an 811 truck. when you call 811, i come out to your house and i mark out our

gas lines and our electric lines to make sure that you don't hit them when you're digging. 811 is a free service. i'm passionate about it because every time i go on the street i think about my own kids. they're the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then i'll drive it every day of the week. together, we're building a better california. box. stocks to watch, barclays upgraded exxonmobil to overweight from equal weight the analyst cited the diversified portfolio and recent underperformance by the stock, it's up 0.4% this morning. jcpenney's cfo is leaving the company effective today. the retailer's chief accounting officer will serve as interim cfo while the company looks for a full-time replacement. down the best part of a percent this morning president trump weighing in on los angeles' bid to host the 2024 olympics. the president tweeting this morning, working hard to get the

olympics for the united states l.a., stay tuned so we'll see who's going to get mad about that tweet someone. >> someone will. >> golf's original major is pointed out by wilfred today the open championship tees off next week on nbc and the golf channel. joining us now for an inside look at the tournament golf channel analyst brandel chamblee good to see you. >> nice to join you. the open championship. >> yeah, he got mad -- >> that's right. >> i didn't get mad, i just -- >> royal birkdale. is that right? >> that's right. fabulous place >> where was the last time -- when was the last time -- because they're on sort of a, over at the open, they go through a rotation >> that's right. birkdale was 2008. >> who won that one. >> was a fabulous year greg norman was 53 years old and had the lead after 54 holes but padraig harrington ended up winning, amazing shot on the

18th hole made eagle ian poulter was in the mix >> i love all those guys poulter is great fun >> padraig is one of the nicest guys >> and -- >> accessible. will talk whenever done promo for "squawk box" before so we'll go to this next question, and that is, who do you like but it's impossible. you'd have to gauge a couple of things, like whose game suits royal birkdale i'm sure you know that better than i do. and who is peaking right now because you saw at the u.s. open how many of the top ten didn't make the cut you can't possibly figure this out. >> well, u.s. open is, you know, quite a bit different than the open championship. the great thing about the open championship is, because of the nature of the golf course, you know, they take a lot of experience you've got to, you know, really have a rationale look at the way things turn out because you get a lot of weird bounces but the greens are a little slower because they need to be because it blows so hard so the oldest players still have a chance you know

tom watson almost won when he was 59 greg norman as i just alluded to and henrik stenson, phil mickelson, lit the place up last year i mean the championship is like the movie, night at the museum all the dinosaurs come alive and they've still got a chance when you look at all the young players that are playing great right now it's going to be tough for them because you've got sergio garcia, maybe this new young spaniard, jon rahm who just won the irish open >> he gets mad >> he does but last week he said i'm not getting mad anymore. >> he was mad that he was getting mad. >> he was mad that he was getting mad and everybody was getting mad at him but he didn't get mad and he won. rickie fowler. jordan spieth had the walkoff hole out bunker shot >> jordan almost won the british open a couple of years ago and jason day almost won, too. >> yeah. but rickie fowler is an obvious pick i liked him to win the u.s. open he had a very good chance. >> so close. >> and all around, he's probably the best player on the pga -- >> is he >> all around.

you look at everything he's probably the best player but brooks koepka, we haven't seen him since he won the u.s. open >> that was statistically the best golf that's ever been played if you break it down and look at it, nobody's ever played golf like that. >> from all the tournaments you've covered what's the attitude like at the open? >> it's the most bizarre atmosphere it's grown into this weird mix of old and new anachronistic juxtaposition of reverent and irreverent. you're looking out at the golf course, and then 20 guys will walk by dressed like bunnies singing some ditty they just made up about rickie fowler that weird al yankovic would win a grammy with if he'd have done it you never know what you'll see there. the fact that everybody's in it, hardiest fans in golf. the big yellow iconic scoreboard that stands on the 18th hole surrounded by, you know, those beautiful majestic stands. so you know, we're always looking out at, you know, an

angry seat, and that's beautiful to look at >> how do they -- in the courses where the open is played, how do they keep it difficult for these guys over here we keep putting -- we move packing lots over here. >> that's right. >> and put in narrower fairways, grow the rough what do they do over there >> it's a combination of one it's dunes and mounds and what not and pot bunkers. really it's just mother nature if you look at, you know, some of the best players of all time, tiger woods shot his highest round ever in a major championship at the open so did jack. so you get some awful weather which brings about some awful golf >> let's hope so >> it's been glorious in the uk. >> what i read last time was warm, and nice which is hilarious because the first sign of sunshine out come the shorts you know, and the shorts are from, usually younger, long ago skinnier days, and you know, you see these brits walking around with, you know, legs the color

of string cheese and by the end of the day, they look like radishes when they come in, and they just had the best of times. >> i mean, i've sadly experienced that myself. >> we're waiting to hear who the next two cities are going to be for the olympics we could learn this week you excited about -- >> i'll just stick around in the break room to watch that i know we're going to japan pretty soon. >> you see cinnamon rolls in there? >> i did >> what time does coverage start? does it start on the golf channel and then move -- >> you know, when you wake up thursday, and the great thing about the open, is it's like wimbledon, you know, breakfast at wimbledon, you wake up and it's on, and it's on when you go to bed the golf channel has it covered all day, every day you will not want for golf that week really starting next week on monday >> and then nbc -- >> golf channel and then nbc so it will be, you know, first thing in the morning you wake up, grab your cup of coffee, go get your cinnamon roll and we'll be on talking golf just like you're talking business >> brandel, thank you. >> thank you >> if someone does get hurt at

the open how long will they wait with one of those national health care -- i mean, they could be there for months? >> if they get an mri in six months >> i think they get six months -- >> -- private insurance -- >> i think six months. >> here you get it the next day, though >> right, right, right >> they would be able to go to accident sand emergency, a&e, immediately, free of charge. >> jim cramer joins us live and healthy from the new york stock exchange we're going to get his take on today's top stories. ♪ if you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go? ♪ expedia gives you the world in your hand, so you can see more of it. ♪ expedia.

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welcome back to ""squawk box"." jim cramer joins us now. you have pepsico coming up. >> with a report three weeks from now, we'll see by far it's the best growth, organic growth, by far the best consumer goods company. instead of the stock roaring, which it should be, we say, ah, so what. we won't be saying so what when we see the rest of these guys coming out it's good. >> walmart weighed on the dow. is that an amazon prime effect or unrelated >> yeah. i'm trying to buy blew ap ron for six bucks and snap for 15. they're limited to amazon merchandise. they have a weber grill.

it's not even weber. it's like coleman. i've never seen a bunch of crap that i'm supposed to be buying and be excited about i would rather go to the mall, wilf can we just accept that amazon prime is as boring >> if there's a bar at the mall i'll probably go with you. >> i could be in the race that you're involved. i want to do something so it's more than consumption of amazon goods i don't need prime. >> snap, are you buying this now, did you say buying it below the 17 >> no. i want to buy it for 2 bucks less on amazon prime i certainly don't need the roomba and i don't need the grill. do you see the stuff that i do not need the mermaid or the 22-pair shoe rack. is this what i sold all these stocks for >> totally sold out. you saw that report.

>> what's that >> facelift in a bottle it's a gone. >> the facelift in a bottle is gone >> yes. >> holy cow! i'm done for the day. >> jim, thank you very much. see you at the top of the hour. >> yeah. this is an important day, amazon prime. like a day that will live in infamy. >> jim cramer there. at the stock exchange. keeping trolls off your timeline for twitter he will like this one except he doesn't follow me so i'm upset

one company in china quickly realized the downside. start up e-umbrella has reportedly lost almost the 300,000 umbrellas available to rent in cities across the country in the last three months here is how it's supposed to work customers use an app on their smart phone to pay a deposit fee and are charged by the hour. then you're supposed to return it except people don't. start-up doesn't charge users an unreturned umbrella fee. >> that's silly. that would be the way past it, wouldn't it? >> exactly. >> also in china, you've got -- you know we have the city bikes here and in london you don't have to leave it at a set destination. you just leave it with your app, you log on and someone can find a bike anywhere. >> cool. >> it worked really well to begin with but now stations just have piles of bikes outside them.

>> there are umbrella vendors that pop up immediately if it starts raining. >> right. >> $5 when it rains. i can't imagine renting an umbrella you can buy one for like $18. >> everybody is a disrupter these days disrupt the umbrella business. >> they lost all 300,000. >> and the money, too. twitter is giving you more control over your notifications. you think that's a little thing that i'm on right now, i think instead of hum social media introduced new advanced settings to mute notifications from accounts that don't follow them, as well as new accounts, the additional settings are part of twitter's push to manage abusive or untrustworthy content, which both of those seem totally redundant because almost everything that comes in is either untrustworthy or nasty or abusive or trollish. it's a cesspool. you get a couple of things

useful out of it, occasionally. >> from kayla. >> wilf, do you talk about soccer >> i do. i express personal opinions, things i like as well as business news, things like that, too. >> what is your twitter handle >> @wilfred frost. >> you can do it. >> i don't have my real name i think i'm either @squawkjoe or @joesquawk. >> high school student scored an interview with secretary of defense james mattis as his information was accidentally leaked, accidentally seattle sophomore called the secretary and mattis not only called him back but granted the student a 45-minute interview. among the topics of conversation, president obama versus president trump's handling of the middle east, defeating isis and the syrian

conflict. >> kudos to the student. >> and to mattis for giving him access to that the markets are mixed today. the dow indicated down a little. we'll be back here you're going to be here tomorrow, both of you. >> yeah. >> we'll do it again make sure you join us tomorrow "squawk on the street" is next ♪ good morning welcome to "squawk on the street." i'm david faber along with jim cramer carl quintanilla has the day off. take a look at futures as we set you up half an hour from now for the day's trading. looks like a slightly lower open european markets, you ask. we answer, will we also include spain and italy? yes, we do. >> on a roll now. >> i know. i kn.