lies the rub i think that it's local merchants will actually decrease, you know, the transport costs, the storage costs, urban gardens begin to emerge. >> we had a guest on yesterday doing an urban garden. >>but it does actually that's what common thread does they'll find local merchants and bring healthier foods to make it more accessible. >> good luck. >> thank you very much. >> scared of heights. >> thank you see you tomorrow make sure that you join us tomorrow squawk on the street is next.

shares are climbing in the premarket after stronger than expected earnings surging on that news. nasdaq set to open higher after the 39th record close of the year but revenues miss anz dekrien for the 31st executive order. it's a lot to think about.

it's very hard to have cyber theft which is really important. he did it lightning speed. these guys are 15. it takes so long to remake an organization in an environment when you're up about amazon and microsoft. these are just, these are competitors the likes of which ibm has never seen before.

and to outrun the legacy business it's slowing. the growth is slowing more quickly than originally watson don't come here i don't need you. >> but that's a key part of their strategy. >> it is artificial intelligence is an important component of what ibm services is going to offer. >> now another undercurrent is they can't get the ai people that you can get out west. i don't know

it is difficult but it can be done ibm has not yet been able to make the transition the new business they're up against these companies. it's so easy to shift cloud to cloud. this is an amazon story in some ways it's another company that has been amazon when it comes to going in a cloud it is amazing

that the list of companies can include kroerg and ibm. >> you could argue that he was amazon when it comes to cattleman's barbecue frank's red hot sauce was very interesting. talking about how much he loves it. >> how did you transition to that >> i mentioned amazon and i think that when you talk about the store you're talking about how people in the aisle in the center isle just, they avoid it. >> we're going to wrap up mccormick and that incredibly high priced -- >> i want to save it >> we'll talk scripps.

>> sometimes the gods make our job so easy. out of pure chance we get two deals that completely explain the landscape of the moment. i'm ready for you. >> >> you don't need. >> i want to make sure that i can stay quite then for the rest of the show because you got this. >> yesterday people on my staff said he really, he doesn't even like you at all. >> when people asked what he really liked he said his kids and he asked when they reported. that was too critical. >> i might have a little bit to add in between your incredibly insightful analysis. >> i have been working on this since 3:30 in the morning. >> great. >> ibm -- >> take my guests. do it all. >> let's get to morgan stanley better than expected quarterly

results. trading revenue down one jp morgan down 14 and goldman down 17. >> let's revel in what james gorman has been able to do the mojo is clearly back here. they have quadrupled wealth management it's up from $1 billion a year to $1 billion a quarter. he joined in 2006 and they were doing $300 million pretax in wealth management. do you know they now do that in four weeks this is a model that works. >> that sort of helps. it's not like it's all been organic. i'm just saying. the strategy is one you're clearly applauding it's being rewarded in the marketplace. >> i am applauding the fit was good it was only down a little less than goldmans and david, i think that you have to -- the higher

multiple is coming this should not be at 12 times earnings you're going to say they're going out the door every morning in the elevator. >> right they have been talking about this higher multiple for a long time. recurring revenue from wealth management and it's deserving of it but they still have a lot of trading. that hasn't happened in awhiechlt maybe they're deserving of it. maybe not. >> what's interesting this morning is is they're highly correlated in the way they trade but not today. whether that's because of morgan stanley's results or kbw cutting goldman. >> to me if they could do this quarter in an environment where commodities was mentioned as the worst since the company became public but if they can do this with -- did they do great fixed income work? obviously they didn't but if we have any volatility you want to

be in goldman over morgan stanley but i do think morgan stanley should trade at 14 times earnings which would put it higher if you're jamie dimon this morning you're calling and saying good job. i think they do. >> goldman sachs, that was -- they had a tough call yesterday. it wasn't yelling and screaming but they got pressed on commodities. people want to know was there a loss did something go wrong >> that's the crux. >> it was aquizzical conference call the stock was up $1 before it began. i'll see you on the kbw and i'll raise the price target they go from 251 to 256. now it goes from 260 to 230. i don't think it's as critical as he said but can we write trooi on the fact that the best one has been pnc financial pnc with the best quarter. no one talks about pnc

>> quarterly results did beat expectations but current quarter violence a little bit weaker than expected. the airlines trying to recover months after dr. david dao was removed from the flight. they asked if it impacted bookings in asia >> i travelled out and saw some of the highest people in government in china and japan to make sure and i have to tell you in the course of my week there i don't think i got one single question on the aspect it's all about secondary cities and demand and capacity and balance and it's an all business conversation despite that we're very concerned with that issue and making sure that indeed there's no longering issues from that incident. >> all right so that was april 9th, that incident and involuntary denial is down 79% in may down 88% in june

they're working hard not to have that be a repeat. >> stock went from 69 to 80 was actually the best performer of the group in the wake of that. but i think, and great interview by phil of course but what oscar could have talked about is there's tremendous price cutting in the asian roots so you want to look for more domestic play if all the airlines come down and remember that southwest air does not fly on those china roots. delta, hurt by european roots and low cost carriers. you have to do your flying in the u.s. where all planes are full don't put too much in there. we have to load the plane. that's domestic. okay international, these roots are just a free for all. price line s'up because there's a lot of price competition the travel and leisure segment is hot but when you deal with international roots you deal with low cost carriers.

>> nor wnorwegian or whatever. >> or the emirates what do they give you? a shower. >> your own room your own butler. >> really? >> when we come back this morning, media and food as david and jim said already in the mix a busy day for m&a do you and s&p have not had a 1% move in either direction in 42 sessions sort of getting back to a streak 'rba ia ern e ar ithye wee ckn moment time's up, insufficient we're on prenatal care.es. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns.

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>> a deal in which they would combine. not to mention something that we referenced briefly which is mccormick's purchase of their food division lead by frank's red hot and of course $4.2 billion let's get to them. they were both up rather nicely. this is is a deal at least entertained a few years ago by the two companies but was not one that could ultimately get

there based on the inability of these scripps family that which controls the family to agree it was the right time perhaps that has changed discovery for its part in the world we describe so often in which people are disconnecting from the large video packages many would say does not have a must have. what do you do in a world where you don't have a must have network? as for scripps they have done well but you could make the same argument the first half of the year isn't as strong as in the past but this company has done very very well for a long period of time with the networks that you just saw. the question is would they benefit from being together and what would it take for them to say yes this is a deal we want to entertain we're happy to roll into a combined discovery scripps or do they want a large cash number even though it would seem to generate a descent tax bill for them

i don't believe they have been rerated or brought up in terms of their overall tax liability and so jim, you kind of can make the argument based on the strategic merits for the deal. this morning saying they can see as much as $400 million in potential cost synergies from this overtime. you have 750 million in sgna at scripps. you could create your own overthe top network made up of the networks international, scripps doesn't have much. and discovery made a huge push in international they're up against a lot of big competitors. i don't know if discovery is in a position to offer enough in terms of what they would want with cash and is the right partner the scripps family in terms of the future and actually enhancing that future for that

company. >> it's a must deal because i find when i look at scripps networks programming it's all evergreen. this is the opposite of what we like when you flip around it's entirely possible. you can keep watching the same house rebuilt, i'm not myself interested in that but my l millennials aren't hgtv is not on their radar screen this is a great, great deal if they can make it work. >> he's been a very good builder and buyer. when a lot of other companies were starting networks and saying we'll give you a piece of it they did not they did it on their own they own 100% of all of their network which is is important and you have to wonder if they going to want to be minority shareholders in a combined company. we'll see. they're talking. it's unclear where they're going. i don't have a lot of details to share at this point but i'm

working on it. >> i want to talk about the similarities for one moment. there's a slew of channels you may not want them. there's a slew of aisle in the super market you may not want them mccormick has a big spice and condiment business people like them why? they have a theme. people cook. you can add it to that you can certainly add franks red hot to that and you can add cattlemans although that's a lesser brand. >> i meant frenchs. >> it's the ultimate throw back mustard. it does have a craola feel to it i also felt it could survive thermonuclear war. the problem is their relevance whether it be hgtv to millennials. >> but they're paying 23 times. mccormick is up to five times.

now they're going to delever i knew it was mccormick, hormel, pinnacle, they were all potentially involved in this and i told you last week, 3.5 billion and you were like 3.5 billion. >> 4.2 million. >> unilever paid next to nothing. it's a much better mustard because it's a millennial mustard. >> they don't eat frenchs. they don't watch hgtv. they get their news on snap. >> listen to him because he gets this and it's okay. now red hot. >> red hot is hot. >> yes. >> it's on fire. >> here's the thing. people feel that frenchs is not millennial but franks, you go to the twitter handle, i'll do a little jamie dimon here. like he did on the conference call when you have a food company of

old school but it's twitter handle is i put the s hashtag exclamation point t on everything that's them trying to capture the millennials. >> $4.2 billion is the must be to spend on these brands. >> you confuse me. i am saying that a company like unilever would never do this. >> are you criticizing mccormick for having done it. >> no, i'm saying wreck it may have gotten a great deal. >> they did. >> what has frenchs done added honey mustard and they added all sorts of shapes of bottles. if you come with me to the supermarket they have one that's round, one that's short, one that's tall but you can get the stuff on amazon. >> now you sound like peltz talking about p&g brands this is is an amazon problem because you can get all this stuff in your pantry do you know millennials don't have pantries?

that's because they don't even have closets. >> this will encourage other companies considering, including unilever considering selling any of their non-core assets because of food quickly. >> this is antidisruptive. >> this number gets everybody's attention if you're even thinking about selling something. >> i don't know because i don't go to the supermarket. >> we'll countdown to the opening bell in just a moment. we'll talk about this new show from nbc news going on to snap and millennials are dominating the first half. >> it's all about mienalllnis. more squawk on the street continues in just a moment

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time for cramers mad dash ahead of the market open. >> the love today for facebook is extraordinary they're taking share instagram from the snap. much more than they thought. don't forget the big lockup

there but heather, my favorite analyst comes out today and says that over the last several quarters while management said that revenue might slow that's probably not going to happen pace of innovation from the consumer product and tech stack are good and cpms are going up and she is talking about how powerful video s. both of these analysts are basically saying this company owns this category. he even talks about it as being a monopoly on the business no one can beat them these are two calls just as facebook one like amazon one. >> why isn't google hitting an all time high like facebook is. >> she doesn't come out and say it's doing better than you think. she doesn't do that. she doesn't play that game she never played it at morgan stanley and doesn't play it at

alphabet. >> various alphabet news today overhauling their mobile search app. revamping google glass for enterprise did you see this >> well, i just think, watch youtube this quarter it's going to be very strong >> let's get to the opening bell and the s&p at the bottom of your screen. the big board is ubs and rent the runway it will put the nasdaq at 5 below. doing the honors you mention snapchat, nbc news, our parent launching a twice daily news show. recode reports 30 employees will be putting that together it did close below 15 yesterday for the first time that's a 13% decline from the march 1 ipo. >> that's a jack tatum reference.

>> that's great by the way. >> it was. >> that wasn't even talking about it, the whole paragraph about stock bubbles is odd but it would be remiss, we miss him. but i think that the -- true that he did it to comcast and to snap what's with them. >> they had a good call on snap. >> conference call. >> they were on it right away. >> from the beginning. but david, comcast never recovered from their assassination. >> no, comcast shares are still down from that point. >> what's the deal >> well, the stock is still up 13% for the year. >> it's kind of like saying it might be a tepid quarter. >> there was concern when they came out with the call that comcast was going to have a tepid quarter. we'll find out next week, next thursday when our parent company reports. there was concern that there was

a bit of a slow down. >> i like that they are making impact research and that makes me like them very very much. >> discovery and scripps are some of the biggest gainers. the only one bigger is vertex up on the cystic fibrosis trial. >> those of us that tried mightily to contribute to the cause have to feel great and those of us that have friends, many of them very close, this is 90% possible 90% of the people with this triple combination could have a much better life, let's say that. >> upgradesof barclays. >> deserving the company has to be bought by another company. gilead should have bought them this is remarkable and just hearts go out to these people. what a horrible disease and it's been, people so tough to try to cure and people who are so dedicated to trying to cure it so let's hope. >> let's hope. >> we did mention one of the larger m&a deals of the morning.

in fact the largest one because it's a purchase of a private company by a large public company. crown castle which is the largest operator of wireless towers and small cells in the united states is buying light tower. 7.1 billion in cash. take a look at shares not being used here as the currency to purchase light tower which is a private company. a lot of other investors as well they're saying it's 13.5 times adjusted during the first full year of ownership so they may be already adjusting to a certain extent the multiple based on synergies they're going to have. it's a share but it does increase their exposure to fiber and it's a little bit more capital intensive. you can see those shares are down by 3%. >> obviously with the competition among the carriers american tower has been

remarkable remarkable stories a lot of short sellers in there have been completely overrun. >> i can remember after the crisis they were so worried and now look where they are. you had an opportunity there to buy some of that stuff. >> was it great? >> oh, man, yeah. >> how about that restoration hardware debt. they pull back half the company. they brought back half the company. >> yeah. >> that is a statement antibond. >> that is a statement you typically expect to see that more with a company that has a high dividend pay out because you're retiring stocks but that's not the case. >> i know from watching our network they got a high house pay out. i don't know if you saw that. >> speaking of opportunities, jim, they do upgrade cmg today to out perform although they take it to market perform on this noro virus. it's safe to eat at cmg. >> that said that about boston

college where the students got hurt, the basketball team and it took 18 months and they were about to recover reset. >> you reset at 18 months. >> reset this is a store that closed and the headlines are bad and yeah i know i struggle on this because i still like to eat at chipotle but people are going to say there's something that is imbedded, something is wrong with the way they run the company and the clock starts ticking again. that's a bad break. >> you're willing to go that just on one. >> absolutely. >> one store. >> norovirus december 7th really hurt that was a day that lived in emphany. >> you're not taking them at their word. >> doesn't matter the american public has a memory. look i'm a believer but because i didn't think we'd run into this problem again how many restaurants has he run

at mcdonald's? i don't see a lot of those have any problems. >> it even got jeff into the game last night on twitter i don't know if you saw what he tweeted regarding chipotle i think we have it up here somewhere. came in late in the session yesterday. do we have it bill someone said to me in the control room that we have it all right maybe not. >> there it is. >> wow he's the ann coulter of mexican food. >> he's a nonexpert on the fixed market. >> do we just extend that? >> look, i could opine all i want but i will not because this could happen to anyone it's just an unfortunate incident but the american public is forgiving but it takes awhile for them to forgive. taco bell by the way, it's a killer and some people like moes.

>> shares of morgan stanley up 3.5%. >> do you think that's a rerating data. >> could be. >> or it could be a response to stronger than expected earnings so the multiples are remaining the same. >> yeah. >> you're starting to get to me. >> occasionally there's another side. >> there's always two sides to every story. >> yeah. >> every picture tells a story too. >> i didn't wake him this morning. off to the races but not ads muh as i like. >> we mention the upgrades, the downgrades or at least the price target higher. >> it's a biotech day. regeneron upgraded celegene is on a major role.

you'll have to come up with new acquisition work in that group are you take dag oing a day offe next couple of weeks. >> i'm taking friday and monday. >> wait a second, you shamed me into coming to work on friday. which i did. >> you changed your schedule. >> i told you not to do that. >> and now you're off. >> i told you not to do that i told you not to. i said life is too short live for vacation and you didn't listen to me. >> i postponed my honeymoon. can you imagine taking a day off from gardening versus the joy of listening to him, he is a genius how is that stock doing? and don't forget honeywell he's going to run a good conference call. >> i'm sorry i won't be here and ge earnings will be interesting. >> are you going to go shopping?

>> no, no. >> i will not be doing that. >> vacation is all hammered out. >> my wife doesn't know i have a show so it doesn't even matter. >> ibm is shaving about 40 points off the dow by itself let's get to bob. >> that's why the dow is notably underperforming. we have a very good start to the day folks. it's 3-1 advancing the declining stocks this is very rare when you see the s&p dramatically outperforming because of ibm and the dow here let's take a look at the sectors. very nice right across the board. even retail is in an up trend. a lot of earnings news on that and industrial news are weak because of ual and also on the

down side. the big banks, morgan stanley, you can see that m and t also as well down about 3% i want to talk about morgan stanley and the revenues he brought up a good point about that smith barney acquisition but it's a great investment overall. this is where they get their money from half is institutional securities sales of trading revenues were down a little bit but overall pretty good. wealth management is now about 45% of the overall revenues for the company. that's a huge business let me show you why when they did that smith-barney acquisition they brought in 9 or 10,000 representatives they now turned them into this army of wealth management people look at the wealth management overall for morgan stanley 16,000 wealth management representatives. client assets are now $2.2 trillion.

they have nearly $1 trillion 962 billion in fee based accounts do you know what that means? every year they collect 1 to 2%. depends on what the account is in revenues. it's enormous amounts of recurring stable sources of revenue. not trading that goes up and down but stable sources of revenue. so that old deal is turning into a very good investment for morgan stanley they did raise the quarterly dividend u.s.bancorp. they have a huge consumer business a huge small business operations they had good numbers. their loan growth 3.4% compared to last year it's been pretty anemic. it's 1%, 2%, 3.4 that's really good and look at their revenues also as well. their net interest income. we always talk about how much money they make off of interest. how much charging for mortgages.

how much charging, $3 billion but these are the fees these are bank card fees fees from with drawing money from the bank. $2.4 billion more than 40% of their revenue come from this noninterest income and that's what is going up every year. we tend to talk about this interest income but those fees they keep charging go up every year and that's where a lot of the business is migrating. 50% of the business is noninterest income and by the way, tax reform is dead, it's not dead in the mind of bank ceos the ceo of u.s.bancorp said our balance sheet is strong. core businesses are well positioned for an economic and regulatory backdrop that has the promise to be more conducive to growth so the bank ceos still have regulatory reform, tax cuts, very much on their minds overall we got enough of these banks out now to get a clear

indication of what the trends are and here's wha see overall trading revenues for the biggest banks reporting are lighter but those matter net interest income is up. but it's been modest they're waiting for short-term boost in yields. noninterest income is higher that's a significant source of revenue. those are the fees that everyone complains about and loan growth is anemic. 1% is very typical year over year growth and the guidance and one of the reasons you're seeing them up today is their loan growth was much notably better than people anticipated that's what's going

on right now back to you. >> thank you very much one reason we're watching some of these csx is the third biggest on the s&p after we had gotten pretty good data points about port traffic and rail traffic. >> totally cretrue hunter harrison was a miracle worker but in the end your hostage and while coal was very strong, it's diminished to zero and that was approved. fertilizer was good.

>> they did say e-commerce was strong but your highway to rail conversion issues working but in the end if you're shipping through your autos and you don't have rail. >> he runs an efficient railroad that no longer allows for naps by the way the journal reported it. they don't let their people take, there had been ability to take a nap and meanwhile he monitors every rail he can communicate with every engineer from his home. >> but he can't create the fundamentals. >> right the coal recovery is good for them even the pipe and steel business wasn't good. that was up something worth watching because there's a lot going on in hainesville. there's way too much natural gas everywhere but this is a railroad that is indiana coal

railroad so coal did well but the stock had run well in anticipation and you needed to have the other cargoes do well and they didn't. >> you mentioned automation. journal has a piece on walmart using robots to count cash which is amazing and then on self-driving cars california is now making the highway lines thicker so they can more easily be seen by self-driving cars. >> remember, it's about disengagement. go to the california motor vehicles, google it. google is the way you search things amazon, it's alphabet, it's how much you have to disengage and google is here and every one else is under -- >> they are but i also talk about data being the key because the more data it collects, it's able, the algorithm is able to identify all sorts of different situations and tesla's cars are doing that for tesla as well

they may not be as far along. >> stage four but machine learning of these things is really especially. but you know what, you know who makes the chips for everybody else. >> i do. >> my dog. it's rescue dog. >> let's get to the bond pits this morning good morning, rick. >> good morning, carl. you know whether you look at twos, fives, sevens, tens, highly unchanged for the most part but it doesn't mean the moves aren't interesting look at year to date of twos and consider it's six basis points from its highest yield close which was 141. just switched down to 135. was at 136 another sector another security that's down 6 from the highs bunds. they're down an equal amount from their high yields where as if you look at a year to date of tens it's almost 40 basis points

off it's high yields of 163. you could see the glide path listen we covered a lot of basis points but it's really little small helpings every day at the buffet of purchasers pushing these yields down. now when we talk about real aggressive action and areas that wise investors ought to pay attention to especially how packed they're getting etf look at year to date of the lqd. once high yield. once investment grade etfs unlike spreads the higher they go the more demand there is for the mentality of these lesser credits. listen if rates are going down these are definitely going to keep going up. you want to pay attention. they're close to the highest levels here. it was there in the range today. year today the euro versus dollar we all know down 7 plus percent. it's having a rare down day and it isn't by very much but i

continue to say where is the dollar going take the big look in charts. this one coming up is a ten year chart. the 115 area we could spend time there but it looks like it wants to punch through said the technical traders hi talked to they said 120. take a step back and look at that chart 120 is the macro goal of many investors that continue to fire the launch site of the euro versus dollar. carl, david, jim, back to you. >> thank you very much we're going to watch oil inventory soon after a surprise build last night. >> good morning to you carl. we're seeing about half a percent bump in crude prices everybody a little bit tentative in the marketplace right now that surprise build you mentioned, 2 million barrels in crude oil. very unconditional and the market was looking for a draw down of 3 million barrels. the api said that gasoline barrels drew about 3 million so that's keeping things balanced

out still but the numbers don't make a lot of sense. what exactly happened this week and the doe doesn't always mirror what the api said anyway so they're waiting for that data out at 10:30 and they'll dig into that report to see what happened with u.s. production. last week we left off at 9.397 so 9.4 million barrels a day this say number on the rise and if it continues to rise it will probably push these prices down. one of the other reasons we're seeing a little support today, a weaker dollar is helping us out and the news yesterday about the saudis potentially cutting their exports, people are still talking about that back over to you. >> thank you very much the amazon whole foods deal is getting the attention of a capital hill lawmaker. he's calling for hearings on the planned merger here's what he had to say about it on closing bell. >> look, people have a lot of anxiety about the creeping monopolies and mega mergers

giving consumers less and less power in the marketplace and those are real concerns so this is a hearing to give us an opportunity to examine the important issues to understand what the implications are. the kind of growing and rapid pace and automation and what the impact will be on communities on labor demand, on prices. >> interestingly ubs when they upped their target on amazon the other day mention on the risk side the increased possibility of regulatory pressure. >> i just think what they're miss as good that the government is primarily interested in keeping consumer prices lower. amazon is the ultimate cpi lower so the case is just not going to be made. i think that my anti-trust is one that's always been the barometer. >> there is a strange monopoly

argument that they will dominate markets even as a result of forcing out other competitors. >> but this is not a tie in the way that windows was >> no, but, and don't expect that argument to actually -- >> right. >> in currency where it matters for now. >> yeah. >> it's around you've seen it. >> it is around and they should go, just like when intel was so desperate to keep them in business for the old days. but may i suggest that jeff besos say you know what, welcome. come on. bring jet.com. i saw jet.com for something i was trying to buy today. i couldn't believe it. do you know what it was? mustard. and cattleman's brand. they'll send you like a vat of cattleman's brand. i don't know what mccormick is going to do. i don't use cattlemans. >> they better figure something out because they paid a lot of

money. >> walmart would argue almost 90% of the population within ten miles of a walmart. >> i have to promote him because he won't promote himself i think he's good at the job >> dow is up 6 points. don't go away. she can't become a guitar legend just by playing air guitar. the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there.

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$115 million extreme ultraviolet photography systems that are integral for all and this is moving up one of my favorite but also putting a bid under the microns of the world and when people sit back and realize this company is doing such great things with a backlog by the way of $2.8 billion they'll say maybe we're too faang sen trick today. maybe we'll get data maybe we have to circle back to micron so it was make it so that we're not just all about faang. >> you have been warning us on that for awhile. >> they did an etf and i got nothing from it but i will be here friday. it's a big day ge we have honeywell. >> huge news day. >> and there's probably going to be a merger because we know he's

not in. >> merger. >> before we get to that, what's tonight on mad. >> okay. we have a company that, company i find the most innovative science company, edward's life science. remember if you have to have a, you have to have a very big heart procedure, they used to have to crack the chest open the way they did in 1864 during the civil war. now you just insert edward's life science and that stock has been a monster and i cannot wait. >> it's a good one. >> we'll see you tonight. >> and tomorrow and also friday. >> friday too. >> i look forward to that. >> i look forward to not seeing you on friday. >> i can talk all i want about french's mustard. >> you will. >> i won't get any push back. >> no, you won't. >> more on another record setting day for the nasdaq and the s&p at least we'll talk to ian bremmer as well that broke the story about the undisclosed meeting between the president and putin at the

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another record high for the nasdaq and the s&p, ibm dragging the dow down by about 40 points. >> our road map start with a possible deal in the works in talks to merge and details and analysis straight ahead. >> a warning on third quarter revenue has that stock falling what the airline ceo had to say about growth and the road ahead. >> plus an undisclosed meeting between trump and putin. the man that broke that story last night is with us. >> morgan stanley t latest of the big investment banks to report posting a beat on the top and the bottom line. wilfred frost has been digging through the numbers listening to the conference call and joining us with more the last of the big banks to report looks good. >> very good indeed david. so james gorman said he was pleased the firm delivered respectful numbers despite obvious head winds and singled out three tail winds that could improve from here.

capital tax reform and interest rates. here are his comments on taxes. >> u.s. corporate taxes are too high if the administration and congress can achieve a sensible realignment of tax rates with other major developed economies that would be a clear positive for our business and corporate america in general. >> worth noting that morgan stanley's tax rate was 32% ie very high that's the positive view while the ceo said the current uncertainty of taxes regulatory reformand broader political landscape will likely weigh on activi activity despite that investment banking performance was upbeat wealth management also strong with margins hitting the top end of the target range of 25% but it is trading that delivered the beat relative to pooers. equities like the others benefitting from their global footprint and saying performance was very strong in europe but fixed income currency and commodities made them stand out.

only down 3% year on year compared to goldman sachs 40% year on year yesterday goldman sachs said commodities were a story of challenges on all fronts and that they had the worst quarter on record. morgan stanley cfo said they feel good about the results in light of the environment and movements were not that dramatic a clear contrast between the two. the net effect on overall trading gives us this chart. the key differ she yence for the performance. morgan stanley down just 1%. goldman sachs, the loser, down 17%, guys. >> thank you wilf. for more we're joined by director of bank and equity strategies as well as portfolio manager, thank you for joining us give me your quick take now that we have gotten a lot of the big banks. what stood out to you? >> i think boring stood out to me capital markets were weak.

everybody knew that from conferences and preannouncements i think the numbers were fine. numbers aren't going down. credit quality is good loan growth. we need exactly what we talked about earlier. we need tax reform and infrastructure spending to create loan growth out there but all in all things are descent from the banking industry and a lot of capital coming back to investors. >> not that much hope for an increase in interest margins some concern continuing about net interest income. is that what your expectations are in terms of where things are going to stand for the rest of the year >> no, i mean, i think that the fed is still on an upward trajectory there's noise in some of the numbers. for instance, bank of america sold one of their european credit card units and that impacted their margin and interest income. they were very well positioned for a rise in rats and again the point was most guys actually beat their numbers

it was just more people looking inside and kwifling about it no numbers are coming down and i think the story on the big banks is capital return. i think that's really the biggest issue. dividends going up buy backs going up valuations very reasonable compared to the rest of the s&p and i think that yeah they're boring compared to the faang stocks but they'll maintain a multiple if not some and, you know, it's descent for investors to get those dividends and buy backs. >> are we getting any answers to this puzzle about what's happened to loan dproegrowth la? >> loan growth is held back for two reasons. one is the capital markets opened up so we're getting some substitution people being able to lock in debt versus using working capital in the bank balance sheets but loan growth isn't the catalyst here. what we're looking at is we're about to make an inflection point in this earnings season. we're going to go from the big banks that don't have as much margin improvement, net pressure

from capital markets we're seeing more of the super regional banks and we'll get the benefit from the lower credit cost as well as the higher net interest margins so we're about to pass the baton to the faster runner and we'll see a munch stronger performance the next couple of days. >> are you already seeing some better signs from the smaller banks? >> indeed, one of my favorites is pinnacle bank that's up substantially based upon loan growth that's spectacular because if you pick markets, nashville, south carolina, north carolina, there's a lot of really good growth in those markets and it's driven by better tax policy. the panama canal, favorable labor laws so as a stock picker you look for markets providing that growth and banks leading the charge in those markets. >> marty, goldman sachs stood out the last couple of quarters at least for what seems to be some under performance for when it comes to at least fixed

incomes, current sis and commodities. they took a lot of heat or questions yesterday about what went on in commodities what's your sense in terms of the franchise and the stock? >> well, when you look at goldman sachs it was the money center bank that has really no benefit from what's happening in the operating environment right now. credit is not any part of their picture. net interest margin, they don't get any benefit there. what morgan stanley does as they build the wealth management business and then they get the pressures from the capital market so they are really missing out on the two benefits and getting all the pressure from the other side. when you look at the pressure within capital markets we think that their customer base is just much more on the institutional, much looking at full returns versus the corporate business where you get under the writing. >> hey, marty also i'm just

looking through the returns on equity you mention how you don't think loan growth is going to be the catalyst what about they trick. you see citigroup getting worse to 6.8% and while they're improving to 12% that's a big gap. is that going to persist >> we think it will. they're one we don't think can outperform the market at this point. they have risen through the capital employment which is the biggest piece of their puzzle. that capital piece we got the benefit last month as we look at earnings and returns citigroup is not generating revenue growth. isn't generating as much efficiency gain so we'd rather be in bank of america that has the capital as well as expenses going down as well as some revenue generation so much rather shift bank of america at this point versus citigroup. >> all right guys thanks to you both.

>> thanks for having me. >> move to united airlines here this morning reported earnings beat but the stock is trading low on the third quarter revenue. phil joins us with more. >> carl it's the revenue for the third quarter and also what they saw in the pacific region in the second quarter those two points are really what swag on the stock today it was up 2.1% in the second quarter but for the third quarter there's a potential it could be negative 1% and also positive 1% that's below what many people were expecting in the terms of the second quarter, united has a huge presence in china. that was down 5.5% here's the increased competition in china. >> connecting all of those

customers from the inland aspects into the areas is something they're jumping in so the combination of that and one of our biggest international regions for us is causing some of our degradation. >> one area where united remains strong, ancillary revenue. we're talking about everything from the money they get from their credit card with the frequent flyer program to change reservation fees to bag fees united last year according to idea works and they tallied all the numbers, united number young among all airlines worldwide and the big four here in the united stat states.

good stuff let's bring in managing director it's always good to see you. good morning. >> good morning. >> it's probably the fifth quarter in the row that the margin gap between us and the industry has narrowed. is there a sense that unite sd catching up on key me tricks >> you're seeing a significant improvement and that's key to winning back a lot of the business travellers they lost over the last couple of years. they had merger related issues phil pointed that out earlier on his report and i think that as they disapate and get a better handle on what they're doing, really, i think you're seeing narrowing of the margin gap and of course it's holding up very well so you're seeing really good results on that end. >> so to the degree they're trying to catch up on operational efficiencies how closely are you watching costs

which in this case were up three? >> yeah, so all the big airlines have given their employees huge pay increases over the last couple of years and united has a step up for their pilots so any time another airline gets a pay increase that is greater than united, united pay goes up to the new level so this should be the last year where we have those kind of increases and as we move forward you should start to see labor cost growth disapate they're trying to invest in product. we haven't really seen them invest in product over the last years because obviously there's issue. you're seeing huge it investment the airlines in general and united in particular were early adopters of information technology and they haven't kept pace this is the 8th year of

profitability. as they go through the years of profitability they can catch up and invest in it, invest in product, announce where most of the costs were going. >> you mention this was the 8th year of profitability. where are we in the cycle? yesterday we were talking about look if you think this is going to play out for several more years you could probably make a good case for owning the airlines here. how do you see this cycle playing out? >> yeah. so i think that this is a transition year. that's and we think it's setting up well for 2018 the economy seems to be doing okay certainly every time you go out to the airport you see that the flights are packed we're seeing very good business traffic. most of the lower cost airlines are also faced with higher pilot and labor costs so you're seeing them raise ticket prices and the others are following i think 2018 could be a very goodyear for the group. >> finally on asian roots we mentioned you have written about

pressure there, capacity from some of these other carriers i assume you attribute it to that and not lingering effects from the april 9th incident here? >> there's a huge increase in capacity between china and the united states. there are roots that some of the chinese carriers are flying with few passengers on board. that's pressuriing fares. give it time and let the roots mature this year should be the last year we see new roots because the bilateral agreement will be filled out and as you look out to 2018, 2019 it should bottom and then start to improve. we may be a year or two away but i don't think it's going to get dramatically worse from here. >> always good to get your take on this quarter. thank you so much. >> thank you for having me. >> when we return possible deal

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>> major companies have their eyes on the dollar impact on their earnings dollar index down more than 7% for the year that's a huge move let's bring in the ceo and chief currency strategist at fire apps good morning to you. >> good morning. how are you? >> doing well. 7% drop in the dollar would seem to boost u.s. corporate profits. how are you reading this >> no, it's absolutely correct you would only think about the dollar then you would definitely interpret that that's more good news than bad news from a competitive point of view and financial data point of view but as you're going to start look and seeing earnings report as we just saw with ibm yesterday you still have to focus on the earnings of q-2 and the dollar

has not been as weak and you'll see still hits and the earnings coming from a not so weak dollar which is really only happening in july more. >> yeah, weirdly a lot of companies are still reeling with dollar strength. this came up with procter & gamble and companies have been there haven't they if this thing turns around and starts to rebound they'll be in an entirely different position is the volatility itself an issue. >> absolutely it is. the interesting part is that corporations can do something about it you have lots of companies that have this under control. they have the technology and the advice to figure out how to manage this currency risk properly that's probably the biggest surprise but for investors they need to look at which companies are doing it well and which ones are not.

because as you said a there's high volatility. b they can get it and c investors need to look at who is doing it right and who is not doing it so well because they're not in the business of speculating in the currencies. they say so by signing and saying we don't speck you lay but that's a form of speculation. >> i wonder how much money companies spend on trying to hedge all of this. you mention though that some companies have done better and worse at handling this can you give us some examples of that. >> you look at the company like a google, there's lots of companies that do it really well they understand the currency risk and by the way, there's still this misnomer that currency hedging is expensive but with interest rates having all narrowed that's the largest cost of actually hedging currencies it's really not nearly as expensive as people would look at it especially if you compare that

to the impact that it can have on a corporations market capitalization and of course resulting from their earnings per share so the benchmark that actually corporations have is that they should not have even a 1 cent earnings per share hit due to foreign exchange and there's lots of examples such as the ones i just mentioned that don't have these impacts but you still have ibm that didn't report last quarter being q-1. much of a hit. now they're all of a sudden leading, guiding to 3 to $600 million of head winds again. that's notwhere they can be. they can be doing a lot better. >> so you mentioned that google is doing well with this. is that because they have prowess that market timing fx calls? is it because the office in charge of this is hedging it out and trying to be proactive about it what are they getting right? >> they're absolutely not in the business of timing when to be in the market what they're getting right is they understand their exposures really well in an accurate and

timely way and since they really understand it well they can protect the company via the hedging so a little bit more toward the latter point, via the hedging in other ways to actually reduce the exposure to be basically currency agnostic those companies, lots of them say i'm going to hedge this away it doesn't cost me a lot to do but if i miss it's a serious market cap issue so they're doing it right by understanding accurately and completely in a timely fashion their exposure. >> all right thank you for joining us. >> my pleasure. >> ceo of fire. >> discovery and scripps networks are up after the wall street journal reported last evening that the two companies are in talks about a combination. we confirm that is the case. these two companies revisiting talks they had a number of years ago designed to create a larger company that can better compete in a rapidly changing landscape

in which many consumers are choosing to unbundle or simply unplug from a large bundle of programming that's currently available to them from their video distributor. that sometimes has the effect of potentially at least leaving out some not must have networks and there are those that believe discovery has a bunch of networks that aren't necessarily needed to be part of the smaller bundles that are starting to proliferate or the over the top groupings of channels. so the two companies at least talking about the idea of getting together and the likes of creating at some point their own overthe top network combining those networks that you see right there. scripps has had a very successful run of it with ratings increases for many of the previous years but this year is a more difficult one for the company. perhaps enhancing it's willingness to consider doing something with discovery what were the economics look

like what is the value proposition to scripps majority holders namely the scripps family. it's no longer held in a trust but that family does or can act in concert they do have a great deal of confidence in their ceo who has been running the company very well for a long period of time but it's still a question as to what they would want in a potential deal is it a good deal in cash or compose a lot of stock to make it more tax effective. what i heard is in past at least when they have been approached there has been a desire for a good deal of cash in any value that would be given and you could expect it would be a significant premium they would want a lot of question marks in terms of whether they could get to the finish line in these talks and create in think company. discovery has been focused internationally over the last few years. buying sports rights and

expanding to the extend that it represents almost 50% of the companies revenues but had a tougher time scripps much more of a domestic company but still questions as to whether it would work for its part, they could identify as much as $400 million in cost synergies even though they don't see necessarily revenue synergies from putting them together. but that's a good cost number when you at least put a multiple on that it gets up there and there is at least capacity in terms of adding debt to discovery's balance sheet as well should they choose to lever up to try to present a large cash component so we'll be following this one closely. >> discovery come off the highs a little bit scripps up 16. where are the media deals? where is the consolidation this is the market saying don't you think, stick with it more to come. >> i think there's been a desire

on the part of discovery shareholders for the company to do something it's not been an easy time for discovery for quite sometime certainly not in the stock market if you look at the three year chart the ceo was a guest yesterday on cnbc. >> he talked about a lot of it the free rad kals of media trying to make it work. >> and ken low has done a good job but it may be time, he may see it as time to step aside we'll see, the key is can they get to the finish line and one of the keys is that scripps family trying to get a sense given who represents them and not to mention the rest of scripps but they'll take a signal from ken lowe because they have a good deal of confidence. >> free radicals >> he didn't say it. >> it's a very destabilizing time 5 million subscribers around the world in one quarter

that sends a message if you're one of these guys. >> probably true. >> when we come back the president and russia's president vladimir putin reporting sitting for a lengthy private chat during a g-20 dinner in europe ian bremmer is with us , cord highs for the dow naaqback in a minute think again.

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israel is trying to expand control over the muslim run site because it's also revered by israelis tall grass is fuelling wildfires throughout the western u.s in central california the expanding fire is threatening hundreds of homes. nearly 5,000 people have been forced to evacuate

the fighting continues in the parliament legislators throwing water balloons and shoving one another over a budget impasse for a infrastructure development plan. when he's not on the beach, new jersey governor chris christie takes in the occasional new york mets game. sure enough last night he caught a foul ball and he was booed after a few handshakes from nearby fans he gave the ball away to a kid a couple of rows back you are up to date that's the news update this hour i'm going to send it over to jackie for the eia inventory report. >> good morning. thanks so much oil prices are spiking on the back of this department of energy report. we have a draw down in crude oil inventories. 4.7 million barrels. a draw down in gasoline of 4.4 this is different than what we heard from the api last night. the numbers are not always the same in terms of the set up. prices broke up 47% on this report these are in line with seasonal

trends this is what we're supposed to be seeing at this time of the year so it's all starting to come together and make sense ly point out inside of that report however the production number say little problematic. at 9.429 million barrels a day here in the united states. that's up another week some people may look at that and say it's a potentially problematic sign especially as we get close to the end of the summer i'll send it back over to you guys on squawk on the street. >> jackie, thank you very much headlines out of the meeting between u.s. and chinese officials talking trade in washington kayla is at the white house with the latest. >> hey, carl, the annual meeting of economic officials from the u.s. and china is called the comprehensive economic dialogue. a slight title change from the forum originally created in 2006 but in opening remarks this morning, premiere wong highlighted a pivot in the conversations between the two

countries. you. >> dialogue and not confrontation and two new and it's a lot different from previous ones. and president trump and has shunned multination trading and bilateral front the relationship between china and the u.s. needs to be fairer. >> we need to work together to maximize the benefit for both sides. but this is only possible if there is a more fair and balanced economic relationship between the united states and china. >> secretary ross went a step further to say the u.s. trade

deficit with china that stands at $138 billion so far this year must be rectified because it's not the result as he said of market forces. now the expanded bilateral meeting taking place in washington today were supposed to be punctuated by a press conference first scheduled here at the white house and then moved to treasury and now it has officially been cancelled. >> kayla at the white house, we'll watch that thank you very much. another big story out of d.c. is russia ian bremmer breaking news that the president had this previously undisclosed meeting with putin during the g-20 for more on the details we're joined by the president and founder of the group it's good to have you back. >> the news of course the scoop has been attributed to you and something that you said on charlie rose the times says the discussion caught the attention of other leaders around the table why did it take so long to come out? >> nobody else was, nobody elts

w -- nobody else was going to break it we're talking about the heads of state and their spouses i know them well and have for a long time over the last six months i had a lot of conversations about their meetings and their phone calls with trump and how to read them and to what extent they can count on the united states as a solid ally as they have in the past but they have gotten increasingly unnerved on things like trade and climate and security and values and coming out of this g-20 meeting which was the first g-20 summit that trump himself attended and, you know, in full view of them the fact that trump is by far his best personal relationship is clearly with the country that american allies, many of them consider to be their top antagonist and until recently perhaps the united states did as well so i think that's why they spoke to me about it i can't tell you why it didn't

break over the weekend i knew about it last week. i'm not in the business of breaking news. i wanted to have a longer more sensible conversation as opposed to a headline. >> when the white house said it was brief and happened in a public room how substantive do we think this discussion could have been? >> i mean an hour isn't brief. and it wasn't five minutes but they had no intention discussing the fact that this meeting occurred i think it's notable because it's trump and putin and because there's been other incidents where the american president that's not well briefed on foreign policy and doesn't bring in his top advisers and didn't bring in his top security adviser in the bigger meeting occasionally makes mistakes they

have to walk it back you remember on south korea where trump said they pay for the missile defense system during the election and then the national security adviser had to walk it back saudi arabia says we hate the iranians this deal is no good. beat up on supporting terrorism and the saw disput a blockade on qatar and they have to try to walk it back effectively so the concern never mind the fact that meramerican allies ar saying this guy likes putin and not me but the bigger concern is that trump in a private meeting with putin where he has the only tape is going to get played. it's going to get played that's the concern. >> here's what the president said, the story of this secret dinner is quote unquote sick all g-20 leaders and spouses were invited by the chancellor of germany the press knew

even a din area ranged for top 20 lead ne 20 leaders in germany is sinister. >> i don't think it's sinister i think it's a lack of experience and an indifference to taking advice from the smart people he has around him those telling him not to say things on twitter or not to make comments that he does. also not to take a meeting for an hour with putin on the side lines without a translater that can take notes he doesn't listen. i don't think that's sinister at all but he also said it was fake news when the white house confirms he got up, went around the table and sat down to talk to trump, only the kremlin translater was there and didn't have a read out on this until after the news broke, i am having a hard time understanding which part of this fake news is actually fake but

that is what this administration has taken whenever they're called out on something particularly around russia and unfortunately we have seen this story so many times whether it's on the formal national security adviser flynn or the nature of the meeting with trump jr. it pains me to say this as an american but our president and the administration just doesn't have credibility on this issue >> in terms of a personal relationship you believe it's the closest among the other leaders in the room. does the president, i mean, that's a pretty significant statement. we don't know how deep that relationship actually is by implication he doesn't have much relationship with anybody else attending that dinner or at the g-20. >> well the macron trip in france went very very well his relationship with the king of saudi arabia, is quite good

but he decided not to come to the g-20 because he didn't want pressure on the qatar situation but if you look at who trump is reaching out to, he likes the strong man and he likes the philippines, he likes turkey but the thing that's perhaps most unnerving about it is that trump has been very flexible and has certainly changed his mind on many, many foreign policy issue as he is sort of gotten some of the ropes of being president. nato first it's obsolete and then it's like i didn't know it's important i'm sticking with it china their a currency manipulator. but on russia and specifically putin on every single occasion that trump has had publicly or privately to show that putin is his guy from the campaign through the inauguration and the last six months he has absolutely done it including taking a bunch of

direct kremlin speaking points on issues like ukraine and crimea and even talking about syria the president is focused on iran as opposed to russia issues so for all of those reasons, this doesn't add up for anyone following the story and the existence of the muller investigation specifically around russia is going to be part of that story. >> finally, ian, defenders of the white house will circulate and are circulating photos of say obama at a g-20 meeting a couple of years ago where he is with putin and susan rice is there. what do you say to the argument that is somewhere in the neighborhood of prior protocol >> i don't find it strange that two leaders would have a pull aside at any of those things these things happen they're normal the abnormality is the context and that's goes back to why i

decided to break this with charlie rose over half an hour is you need the context and the context for why this is unusual is precisely why the people attending the meeting felt the need to talk about it. it's that american allies watching trump engage with putin privately for that hour felt that something was not right and that needs to be addressed irrespective of whether they were just talking about the weather. >> crazy week for you. that's for sure. good to see you. when we come back, more on the markets, rates and earnings season we'll talk to jim grant. he's going to talk to rick as we go to break shares of ibm, the company with that 21st consecutive revenue decline is down almost 4% shaving at least 40 points off the dow. backn mite ia nu the power of the nasdaq market. the power of 100 of the world's top companies.

the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. excuse me, are you aware of what's happening right now? we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.

>> let's send it over for a quick market flash. >> shares have beaten down retailer down by 2% in early trading. the company is being called upon to buy back it's stock after the teen apparel retailer failed to sell itself. now this call comes from sls management which said the company wasn't being aggressive enough in it's turn around efforts. we're talking about the stock right now down more than 50% over the course of the past 12 months down 20% year to date. a lot of these retailers in focus but this one here being called on by management for a different reason. >> looking to sell itself. that didn't workout. shares up less than 2% thank you. let's send it over to the cme group now.

rick has the san tetelli exchane with a special guest. >> we do anybody out there interested in fixed income markets anythingt do with interest rates whether it's a fast nation, investment vehicle, here's the man. jim grant, the god, the legend of anything with interest rates. thanks for taking the time jim. >> if only there were interest rates how lovely that would be. >> yes well, let's go right to it you know, i don't know what anlage to use. there was a movie years ago of peter sullers where they thought she was a genius the smartest interest rate guy ever when you read the statements from janet yellen or going back is it all crystal clear and when markets don't cooperate is it a communications problem your thought >> i think it's a candor problem and to a degree it's a coherence problem but rick how about if the fed were held to the same

standar standards. here's a therapy here are the side effects. the fed acknowledges no side effects. what it doesn't say is we're doing something that's never been done the side effects are unknown and unknowable and good luck everyone. that's what it doesn't say but certainly it should. >> well, in your opinion though, they don't say things like that quote unquote because they don't want to share the market do they think that people in the markets are less frightened because they have taken us on a rocket ship to mars? >> i think the fed has an unspoken concept for markets and the people in them it does not respect the institution of discovery and that goes for central bankers the world over the ceo was quoted that left ten days ago with respect to the european central bank and the ecb's relentless bond buying

60 billion euros $69 billion and said you know what the ecb has done is to destroy the institute of price discovery. so you don't know how credit is priced and if credit is mispriced that is a very very big deal and the central banks certainly ought to acknowledge that you'll never hear them do it but how can thoughtful people be scared by the simple truth simply spoken. >> so when we talk about the fed and on the floor it's the main topic, they have models and they seem to be really into these models and i understand why, but what you're saying is the signals are broken doesn't it even seem second derivative crazy that you're look at market where is the input is effected by what you're doing and think any output is going to make any financial

sense? your thought. >> well said i don't know about the dynamic, but the fed's principle me trtrc modeling gimmick in the age of 2006, 7, and 8 did not incorporate the financial sector i'm not sure in that shortcoming has been fixed i think perhaps not but the fed, well, you have a weather app no doubt, we all do, you look at it and it says it's going to rain tomorrow and then tomorrow comes and it doesn't rain. now clouds and rain drops don't read the papers. they don't watch cnbc or change their behavior because of other rain drops human beings are not like rain drops and yet the fed has to conceive that it can model behavior so again, please, fed just talk to us in english they require relatively plain

spoken disclosure. don't get me started rick. or you have, actually. >> final thought because we're out of time, having said all of that, is it possible in anyway in your opinion that at some time in the next three to five years balance sheets sheets, alg central banks will be whittled down to pre-price levels and things like interest level reserves will disappear never to be paid again. do you think going home again on normalization is even remotely possible >> well, having ranted against the conceit of star gazing and forecasting, i don't want to be radical about this, but radical policy against more radical policy, we are not in the normalization phase of things, we are in the kind of permanent abnormalization. we cannot do that. >> jim grant, that's the perfect place to leave this. always look forward and enjoy your writing and unique style. thank you. "squawk on the street," back to

you. >> all right, we'll take it. you can never go home again. all right, let's send it over to john fort for a look at what is coming up on "squawk alley. >> google is out with big changes to the flagship app on android and ios adding a fee, news, and how facebook handles the way it handles subscriptions. what is going on with the tech giants and the news sissbune we'll dig into that and more coming up on "squawk alley". ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

their leadership is instinctive. they're experts in things you haven't heard of - researchers of technologies that one day, you will. some call them the best of the best. some call them veterans. we call them our team.

more "squawk on the street" is coming up.

shares of vertex are surging this morning here's more on that story with megat meg tirrell.

>> vertex is up this morning after a huge surge yesterday they have two drugs on the market for soocystic fibrosis. these triple combinations they are testing in mid-stage studies would aim to expand treatment options to 90% of patients with cystic fibrosis. and the results surpassed wall street's expectations which is what is driving the stock so high as a result, you're seeing a lot of upgrades and price target increases from banks including barclays and cowen and leerink now talks about taking over vertex can help patients with cystic fibrosis that didn't have options previously the next step is to decide which regiment to take into the next clinical trials to expect in the first half of next year. could be a few years until we see the regiments on the markets, but these results are driving up the rest of biotech

today, 1.3%. so some really good news for biotech, carl. >> what a move today on that, thank you so much, meg speaking of moves, dow is not moving a whole lot on the index largely because ibm is weighing it down. but we have had new all-time highs on the dow, the s&p and the nasdaq and the russell looking for a 1% move that we have not seen in either direction on the s&p since the middle of may. >> the dow underperforming because of ibm there second day in a row, yesterday goldman really weighed the index down while the s&p and nasdaq hit highs. today's high is barely higher by 10%. ibm is dropping 4% today meantime in the s&p, you've got vertex popping, you've got scripps higher, a lot of things working in its favor nasdaq benefiting from vertex and discovery. >> and the vix at 969 for

probably the 26th time this ye. dngheim, the vix. >> we'll be back with more "squawk on the street" after this don't go away.

welcome back to "squawk on the street." i'm dominic chew keep an eye on the technology sector that sector on pace to break the more than 17-year-old all-time high record set in march of 2000 that's if the index can close above 988.49 that happened at the peak of the dot com boom

tech stocks have generally outperformed this year up more than 22% as a whole. and are on track for a ninth straight session of gains overall. as we watch technology, the most important sector out there, the biggest waiting is important there for sure that does it for this hour of "squawk on the street. back downtown for the start of "squawk alley. good morning, it is 8:00 a.m. at alphabet headquarters in mountain view, california. and it's 11:00 an wall street and "squawk alley" is live ♪ ♪ good wednesday mor