the three-month vacation that our kids have. "squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. they are indicated higher. the dow indicated up by 44 points if we were to open here, we would open above 22,000. we only need 36 points today to break 22,000 for the first time on the dow jones industrial average. it looks like the nasdaq is indicated up 42, and the dow up 44 apple with very strong earnings.

overnight in asia, you'll see that the nikkei was up by almost a half percentage point the hang seng up by a quarter percentage point in europe in the early trading, it's a similar picture you can see slight declines across the board the dax down by 0.2% ftse down 0.4% cac is down by 0.3%. the dollar, which is showing such weakness in recent weeks, this morning it's down against the euro trading at 118.31 dollar is up against the yen, 110.77 crude oil down another 15 cents. >> a lot of stories to talk about. the trump administration reportedly planning to take aggressive trade action against china. the "new york times" reporting that the trade case will focus on alleged violations of american and intellectual

property trump administration officials became frustrated with china's reluctance to face north korea over its intercontinental ballistic missile capabilities shares of amc plummeting after the company previewed a dramatic quarterly loss and a cost reduction plan. the stock tanking 27%. right now you're looking at it it's down about 25%. amc will be releasing second quarter earnings next week but expects a loss of 1.34 to $1.36 per share versus the 1 cent previously forecast. they expect revenues to come in at $1.2 billion, compared to 1.25 billion it expected and amc says they don't expect the third quarter to give relief to owners either this as the box office continues to nosedive, down 4.4% year over year we'll talk about apple in a

minute on today's agenda, the july adp employment report out at 8:15 eastern and we'll hear from cleveland fed president, loretta mester and san francisco fed president john williams. on the earnings front, mondelez and time warner report before the opening bell. time warner everyone will look like in the context of the at&t transaction. also hearing from aig and tesla. apple was out with earnings last night. >> yes, lots to digest with apple. shares hitting an all-time high. 1.56 was the previous lie. should be 800 billion or so. the tech giant beating the street on ipad and mac sales customers are awaiting what could be as many as three new

phones in the september quarter. we'll talk to these gentlemen about it jonathan gellar from the boy genius report. jonathan, 30 years from now, can it still be called boy genius? if you're gray, you know, using a walker you will eventually have to change the name, right >> i've already changed the name it's bgr now >> good. stands for boy genius now. we have will power, senior equity research analyst. will at robert w. baird. one thing they're pointing at is that the mid point of the wide range for next quarter that ap t ple gave for revenue indicated no production problems for iphones. that's a good sign >> it's a great sign as far as guidance from apple.

i would expect the phone to launch at most a week to two later if there was delay that's a great sign for the next phones there's rumored to be three new phones, a new top-end phone, higher average selling price, a new iphone 7 plus and iphone 7 >> did you know you could rejuvenate mac sales ipads i can understand because schools and education arenas are using ipads. i thought they could use other tablets, but it wasn't an iphone story this quarter, was it >> was an ipad renaissance of sorts. first year over year growth in three or four years, still dwarfed by iphone. the other story was the services strength 7.3 billion of revenue, growing 22% year over year that's an excacceleration in yer

over year growth 125 million in paid subscriptions. >> the other thing people point out, instead of double digit declines in china, it was a single digit decline, which is progress there, right? other things are going on with china. how would you characterize apple and the business in china? improving or there's problems mri politically? >> i don't think apple's long-term strategy has changed in china tim cook mentioned that hong kong probably brought some of that market down but everyone is waiting on a new iphone ever since the iphone 6 super cycle that happened in china when other carriers came online. everybody is waiting for a new iphone this quarter and the quarter after will tell us a whole heap about what is going on in china.

>> that was much better even now in china than when they get the new upgrade. will people in china by the new one? apparently they hold on to the phones longer. >> i think they will the apple brand carries a lot of weight in china. when you peel back the numbers on china, the headline number was down mainland china flatter in constant currency terms up, but it's reclearly a big focus, but our view is that can rern to being a growth engine. >> so what -- on the horizon, what could derail the inevitable move that people have been talking about in foif years to a trillion dollars can anyone threaten apple in terms of competitive products? android? what can cause it not to play

out like the bulls think >> there's always favorables f variables apple will take a long view and see the pieces pull together we are seeing the phones, the software, ecosystem, hardware. that's not even talking about things we don't know yet whether that's autonomous systems in the future or the ar kit that will be huge. there's a lot of things we don't know about yet again, i'm bullish on apple in the long-term. i think we've ben through this cycle many times before. we see how it's played out >> will, did you raise your price target >> we did. we're at $172. we took that from 160. look, one big question is the stock is at the higher end of its recent valuation range

expectation is that it can trade there or slightly above given the opportunity for accelerated growth taking a stab at the previous question, we'll have to keep an eye on amazon. that's the biggest question going for yard given apple's interest in the living room. those two will butt heads increasingly as we look forward. we also like apple still off these levels into the cycleful. >> jo cycle. >> jonathan, we were running pictures yesterday while on air. >> the beautiful phone i was worried that the phone was not as attractive as i would have wanted it to be do you think that's real those pictures >> i think at this point, those pictures, while not the real phone, based on case demands, moel molds, that is 99% the phone it always looks better than it does, but i think that's the

phone. >> jonathan, someone you could probably look to is neil patrick harris doogie hausous howser was a gens doctor he won a tony. if you're going to look to a way to transition, you're a boy genius, now adult, but you think that will work for jonathan, will what do you think? do you know john then at all we know jonathan look at him. >> yeah. you know, i'm still battling with just my name on will power. >> what do you expect? you've been battling your whole life talk to your parents don't talk to me >> i feel your pain. last name quick. >> quickie >> it's all good >> it's all good gentlemen, thank you

maybe we'll see you again, maybe not. but thanks for being on today. >> we'll see you guys soon >> thanks. shares of illumina are rallying as the second quarter revenues topped estimates the firm is racing its full-year earnings and revenue guidance. you can see up by 10% in pre-market trading fireeye reported a smaller than expected second quarter loss as revenues rose. the firm is also raising its full-year outlook as it shifts to a more subscription-based model. shares up by 6.5%. herbalife reported second quarter revenues that came up shy of estimates company is issuing a weaker outlook for the third quarter. the trump administration considering aggressive trade actions against china. kayla tausche has more on that story. >> reporter: the expectation is those actions could come soon. the white house has been considering implementing new trade restrictions on china for

some time following last month's economic meeting that yielded no new results after talks began between the two administrations in april actions are likely to include a crackdown on intellect cal property the worry according to official is that the world trade organization could dispute the u.s. action or china could choose to retaliate against the u.s., likely in the agricultural sector, which of which falls in states that trump won. the president frequently targeted china for taking u.s. manufacturing jobs and a large trade imbalance and suggested trade actions could affect diplomacy to get china to put more pressure on north korea rex tillerson yesterday appeared to break with the president saying north korea was not china's fault. >> we have been clear with the chinese. we don't blame the chinese for

the situation in north korea only the north koreans are to blame. because of this economic activity they can influence the north korean regime. >> still waiting to see what the ways are perhaps it's also unclear whether actions this week or as early as this week would include quotas or tariffs on steel that the president has been considering a report on the matter from various cabinet agencies has been submitted to the white house, but it's unclear if or when they will choose to act on that whether it would be separate from the actions over intellectual property. >> watching the dynamics are fascinating. we heardthe scuttlebutt about

rex tillerson. he was flanking the president yesterday. is there any notion that this is good cop/bad cop he can go to china, the it the is mad i understand it's not your fault. i'm trying i'm trying to talk to him. god, if you could help us. >> or if he off the reservation? trump is like what is with this guy? we want to be on the same page with a concerted stance. i wonder how it works sometimes. i think it might work sometimes to have a strong person that -- >> might -- i don't think it's calculated >> what i will say, if it's a good cop/bad cop dynamic, it's been playing out in more instani instances than just -- >> with kelly, too >> there was the comments rex tillerson made about the u.s.

view of qatar, and other mideastern nations the president made comments off the cuff in the rose garden that directly contradicted what tillerson in a diplomatic ov overture said hours earlier. >> i don't know if it's calculated but that trump is playing in the diplomatic areas. it may be effective with good cup/bad cup. >> pompeo said regime change in north korea. rex tillerson said it's not something that is essential. >> when yyou realize there's no other options -- no good options on this. all bad choices. when you get to that position, you realize maybe it is a situation where you have to do talking. >> i'm looking down because we did just get some news in from the associated press that

apparently the u.s. air force successfully launched an unarmed intercontinental ballistic missile from california, that the fourth such test this year so the u.s. military response is continuing to evolve in response to that threat we'll see how the diplomatic effort evolves >> the bigger question is can you launch the missiles to protect south korea, japan and our allies >> the interceptor-type things they've been working, too, but not 100% >> kayla, the release of this transcript that the president had. the "wall street journal," some xhen comments around gary cohen he talks about gary's disposition, if you will, in terms of being a dealmaker,

somebody who likes to be in the action and somebody who doesn't want to sit around and figure out whether to raise interest rates or not any conversation about that? >> not necessarily it's clear gary's portfolio is not only complex and comprehensive at this point, but it appears to be growing he was reported to be under consideration for chief of staff. but the preoccupation with tax reform and the potential consideration for that fed spot precluded him from getting that position at the white house event on tax reform yesterday afternoon, when ivanka trump was asked by small business leaders about tax reforms, she kept pointing at gary cohn, he is the one working on that, he's staying up all night and day working on that. it's unclear how season a

decision the white house wants to make that if they want to make that sooner, perhaps gary would stay at the white house and make tax reform if they want to make it a later date and he feels he has made significant pressure, perhaps he could be okay with that. >> the other piece of it among the washington folks around the white house have suggested because he's now so associated with tax reform, that potentially that could work for or against him, which is to say if he pushes through tax reform that would be a big plus in the plus column, then maybe goes out on a high note and goes to the fed. if the tax reformed looked like he was going in the wrong direction, you might pull the parachute but it would remain seen if you were in the good graces of the president.

>> they point to the fall for tack reform, so maybe several months from now. you hear people talking about the president's preoccupation with television, production, wanting these big, flashy events there's a school of thought that he thinks the press meetings are sleepy maybe he wants to lighten them up a bit putting carry cohn at the helm is one way to do that. >> i don't know what the market will think about that. kayla, thank you very much when we come back, if you are looking for a new job, nasa has an opening we'll tell you why they're paying six figures if you have the right stuff to protect the ertd from f earth from foreign invaders.

♪ welcome back nasa offering a six-figure salary for an out of this world role the agency is seeking a full-time planetary protection officer, ppo, to protect earth

and inhabitants from alien contamination. making sure microbes don't contaminate the earth and that we don't contaminate other planets, moons, objects in space. the job would require a commitment of up to three years, and pays up to $187,000 a year sounds like it's from "men in black. >> how about space invaders? missile command? >> you want to take the job? >> if they're coming down in droves, i can kill a lot of them >> i'll be a referral for that job. kid rock leading a field of republican candidates for u.s. senate in michigan if he gets in the race he might begin his campaign within striking distance of democrat

debbie stabinow. name wrerecognition would play a big role robert richie is his real name >> he has been coy about it. he sent out some tweets, he said i might, andif i do, they better watch >> it's funny, hez we's well ah ffrs republic as far as republicans, and she's a sitting senator. 50-42, and he hasn't even announced? >> isn't this -- this is not the beginning of it, but are we at the celebrification -- >> we're been there -- >> of politics in a new way? when you think about who the next president is, people talk

about oprah, beyonce, or jay-z or the rock. do you think this is where it's all headed >> no. >> you don't >> look, kid rock -- >> i think it's possibility. possible. >> kid rock is serious >> 16 other candidates were vanquished kanye says he is running >> i'm suggesting to you, i think it's very possible that washington -- >> there may be 16, it will be kanye, oprah, the rock, chuck norris really >> it may very well be it may be. maybe this is what's happened. >> i don't think so. >> al franken. people love him. >> ronald reagan >> reagan. >> fred grandee. >> cooter was also >> who is the guy from "grey's anatomy. >> schwarzenegger. >> right >> i'm just suggesting have we reached a new tipping point?

>> new low schwarzenegger check out this amazing catch by austin jackson of the indians. i'll watch it with you he robbed red sox batter hanley ramirez of a home run in dramatic fashion whoa >> whoa. >> cleveland was able to hold on to the two-run lead thanks to the catch. they still went on to lose 12-10. >> wow >> look at this angle. >> he holds himself on the wall. >> that is cool. >> athleticism there coming up, the dow coming off a record high. we have a full slate of earnings data that could move the markets. me just walking through the cameras and wires and everyone is athletic for me to get back to the main set. here's yesterday's s&p 500 winners and losers

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♪ >> welcome back. you're watching "squawk box" live from the nasdaq market site in times square. good morning i forgot about some of those guests chuck negron, i'll have to do work with andrew between now and when he comes on

one is the loneliest number. jeremiah was a bullfrog. >> yes >> this guy was it when i was -- i tried to go. i was too young, 14. three dog night -- >> a concert >> yes with credence in 1970. i will ask him if he remembers he'll be on. >> he remembers you not being there? >> yeah. i think grand funk was there, too. what a concert, andrew credence, three dog night, grand funk ten years after, can you imagine? >> i can't >> this is like russian. don't want to say russian! don't want to get you started. >> your sugar word >> that's right. >> trigger word. >> futures indicated up by 40 on the nasdaq and the dow almost 50 think apple with both of those averages not quite as much on the s&p, they don't have any double class stock anymore. they do, but no new ones, right? >> no new ones

>> the ten-year, 2.275 there are individual names that we're watching as well >> yes stocks to watch, hanes brands reporting second quarter results in line with forecasts. growth at the company was largely driven by acquisitions hanes brands is lifting the full-year revenue outlook. shares of ultimate software are sliding. the cloud company reporting second quarter revenue that missed forecasts also cutting its sales outlook for the year citing a bigger backlog in orders. match group's second quarter earnings came in below estimates. the online dating company has named mandy ginsburg as new ceo. she runs match's u.s. operations, which include plenty of fish, ok cupid and other sites. >> i love it >> plenty of fish in the sea, i guess. >> yes in fact, you remember the story about plenty of fish in the sea? >> nope. >> started by a single guy in

canada who started this thing basically -- if i'm right -- for himself. there was a 60 minutes thing on this >> we'll talk more about the markets and economy. joining us now is jack cafferty, equity portfolio manager at jpmorgan private bank and laurence white, professor of economics at new york university stern school of business he served on carter's council of economic advisers and is a former board member of the federal home loan bank board welcome to both of you >> thank you >> jack, i want to talk earnings any given day we walk in here and earnings are the overwhelming theme if amazon is down in the overnight, we're going to see that reflected in the indexes. if apple is up, that's the reflection in the futures. how much of this is what we hear in earnings on a day by day basis. >> the market has thrived off

good news. you have beats of percent plus in revenues which is more important than the 5% beat we're seeing on the earnings front then play from that since we are trying to look forward, guidance has been okay. when you think about the numbers, commentary that's come out, companies are seeing a way forward, where they can continue growing earnings, so far doing a good job controlling costs >> a lot coming from the revenue being better than expected lawrence, that's important because it tells us the underlying economy is strong what do you see from the economic perspective >> basically steady as she goes. we had a good second quarter, brought the first half up from where the first quarter had been in terms of growth dollar down a bit, that's good for exports. you know, it looks like we've got a solid economy. we've been growing now for eight years or so. it looks like there's more

growth to be had >> part of the reason the market has done so well, we don't expect the fed to be raising rates at any rapid clip. >> that's right, because inflation -- it's a bit of a mystery, but inflation still is below the fed's target of 2% as holong as inflation stays lo, the fed will be cautious about raising rates. >> you said it's a mystery why do you think inflation is low? >> we had decreases in crucial prices that helps. it is a mystery. labor costs are remaining low. even though labor markets are in pretty good shape, 4.4% unemployment that is back where we were in 2007 we've been below 5% unemployment for over a year, yet labor costs are not going up, which would be an underlying cause for higher

inflation. so, you know, the fed doesn't really understand it, most academics don't understand why labor costs, why wages basically are not going up rapidly >> jack, are you worried about this or is this good news no matter what the earnings are doing well, the economy is doing well, the fed won't step in and jack up rates. >> it's pretty much gold ed egos like as an equity investor, it's not just what stocks are trading at but what elseky i can do with a money. cash earns you nothing corporate credit you make some money, but spreads start getting tight there. from that you ask yourself what are the risks? i think the risks are i will get

policy change, i will get personnel change that leads to policy change, that makes it harder to handicap the fact you can talk about it and try to price it in >> you mean policy change in washington that would lead to additional gains in the stock market. >> who is running the federal reserve six months from now, and whether they're more in the camp of low interest rates for longer or might they take a more traditional orthodox -- >> most of the time when we talk about policy, we're talking about tax reform, healthcare reform you're more interested in what happens at the fed if we get a new fed chief more hawkish, that changes your perspective how? >> i would say the fed chief and other board members. the fed wants a consensus. can you get to a consensus >> we were talking about this earlier. did you see this gary cohn donald trump thing this transcript? >> i have not. >> it's from the "wall street journal. it suggests that gary cohn is more of a mover and shaker and

wouldn't want to be -- wouldn't necessarily be sitting around talking about theoretical options. >> plet's say somebody like gary cohn goes in, and it's hard to think of someone more dovish than janet yellen. what happens >> then suddenly i start worrying about do we get higher interest rates in the short-term >> stocks look less attractive to you >> evaluations come under pressure if you have an alternative. if i can get back to earnings, 4% on quality fixed income, 5% on quality fixed income, 17.5, 18% multiple feels fuller. >> so you are looking at things coming out of washington, a lot of policy would be great for the markets, but if there's a change in the fed chief, that's something that in itself makes you reassess how you value the stock market >> i would say change in the fed

leadership coupled with fed in change policy leads me to a path where i start having the question what's the right valuation today. i might get more alternatives. if i can shift from that, you often said you can't cut your way to greatness for the last several years you had cost cutting which has been a major driver of corporate earnings that's been offset by the fact you had this accommodative set of fed policy, the fact that quantitative easing was designed to engender higher asset values and higher asset values integrate or confidence and spending that succeeded the question is where do you go from here? i will unwind the fed's balance sheet, have a change in policy >> we're out of time lawrence, quickly, what do you think the odds are of getting someone other than janet yellen in the job >> for sure. janet yellen, once the term is over, there's going to be somebody else.

it could be someone like john taylor at stanford university, very respected academic. could be gary cohn i would say more likely inclined towards moving interest rates a bit higher which could have the kinds of consequences for the market right now everybody is quite optimistic you know, a new fed chief, uncertainties there, who knows what happens tax reform. i could see a lot of uncertainty. >> lawrence, jack, thank you for your time today. >> thank you coming up, autonation will report we'll bring you those numbers and a ceo interview with mike jackson and then the co-founder of hyperloop one will join us on the set. and then an early read on friday's jobs number with the adp private payroll report stay tuned, you're watching

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time for the executive edge. the top three u.s. insurers are set to report. morgan brennan drew the short stick and joins us with what to expect from aig, metlife and prudential good luck, morgan. make it interesting. >> good morning, joe it's going to be a really exciting day this is insurance super day a flurry of insurers reporting including the u.s. top three, aig, metlife and prudential financial expected to post strong earnings growth group underwriting expected to be favorabiliorgavavorablefavor. growth in the pension risk transfer business, a lot of companies have been offloading pensions to these companies, and expect an impact from low interest rates which has fallen with the yield curve flattening,

despite more hikes by the fed. hi all three have conference calls tomorrow morning comments from the new aig ceo, bria dupperrault will be the most watched since he talked about more tech adoption and m&a for metlife, this is the last report before that company spins off its slower growth more volatile u.s. retail life insurance and annuities business that will start trading next monday as brighthouse financial. that's adding to the debate about metlife's fate as a systemically important financial institution. it was de-designated last year aig and prudential still operating under that sifi

status all three stocks have surged since the election these are the other financials that we don't talk about as much that have seen a big trump bump. so far year-to-date they have underperformed the s&p aig is the biggest lager this year, about flat for the year. >> all right, morgan good job thank you. thank youchltthat. we'll be watching. they're stragglers it's august. you're supposed to be done reporting in july. quarter ends in june -- >> they beat the retailers >> the retailers, their fiscal year is different. >> right >> their quarter ends in july, if your quarter ends in june, you know, i won't report them. if they can't get it in by july, you've missed your opportunity >> maybe we wouldn't be talking about them quite as excitedly this morning if they were reporting when everybody else was reporting earlier in the

season >> they want to shine. >> shameless okay all right, morgan. thank you. >> bye when we come back, we have new data on jobs the linkedin work force report after this break first a quick check of the european markets bit of pressure on stocks. looks like they are off the worst levels of the morning session. ftse still down by 0.3%. the dax and the cac only down 0.1% 'lick around wel be back with more "squawk box" after the break stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker.

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welcome back to "squawk box. it is jobs week in america and the hiring streak continuing that's going to lift the workforce report is out this morning. it found hiring in the u.s. was 17.3% higher this july than in july of 2016 going to break down the results dan ross editor in chief of linkedin this is good news. >> it's really interesting we're seeing every month the growth continues in hiring this year it's been on fire. although this is the first month -- second month in a row we've seen month over month increases in hiring.

possible that there are signs that things are not going to continue to be as hot as they have been. but so far this is all good news >> hottest sector >> manufacturing you're looking at oil and energy is the hottest but if you look at all of these kind of traditional, you know, building sectors, oil and gas construction, manufacturing, those are the ones that are really seeing growth these are sectors that have not been hiring in the last couple years. all of a sudden, they, last six, seven months, they've really started to pick up >> biggest surprise on the downside >> i think that -- >> or biggest downside >> the biggest downside. if you look at the what's going on with health care. we've seen health care every month show incredible rises. this month we're not seeing that we're seeing weakness in places like ob/gyns, some different specialties. people just -- the doctors aren't getting hired at the same right they were except for mental health professionals. that's the one thing we've seen

since january there's been this incredible rise in the hiring of mental health professionals. >> what do you ascribe that to >> funding >> i mean we are -- it's hard to know but it started to january. it's tend every month. we think probably have to do with some other things going on in the medical profession, with hospital change, kind of emerging and doing less hiring in other areas mental health professionals cannot work for the exchange so it's possible what they're doing is setting up their own shops or getting hired by schools or by companies. >> now that you've done this for awhile, what kind of predictive powers do you think you have in terms of looking out in terms of where jobs are going to be for the rest of the year >> well if you look at the trends you're seeing the same things happening month over month. there is this continuous growth in hiring and construction, and better tech sectors. i don't think any of that is stopping so especially in the tech sectors, which is this kind of every month just keeps getting stronger and i think a lot of that is

people -- the tech skills are constantly in demand these are companies, every company now feels like it needs to be or knows it needs to be a tech company so they're hiring people with s.t.e.m. skills. this is -- that's one easy thing to predict >> what about wages? because we keep saying that the wage inflation hasn't been there. have you seen it >> well, we haven't looked at wages yet. what we have looked at is the gap that's emerging in -- for areas in cities where there is -- where there are high paying jobs. so places like portland, seattle, denver, san francisco, and as the demand goes up for high paying jobs, kind of lower paying jobs, the demand is skyrocketing >> people don't share their wages on linkedin. >> they don't yet. >> yet i like the word yet. that's interesting >> it is an important thing for us to know is how people are -- first of all if you want the job you have to know how much that job, how much you make in that job, we -- it's important as you are thinking about where you

want to go what kind of profession you want to go into, knowing wages. >> we have a debate here on the set and steve liesman entered into the debate yesterday when we were talking policy and what the policy implications have been in terms of what's happening in the real economy. when you look at what's going on in washington, relative to the jobs, is there any correlation you see? >> there seems to be if you looked at where the loosening of regulations, in places where trump and the administration are saying they want to invest, those are places that are hiring. >> right >> so i think it makes sense if you think about if you're an employer in one of these areas last year you wouldn't have been hiring wouldn't be sure if he was going to be sitting in the white house. now you have some certainty. you have a feeling you know what's going to happen over the next couple of years i don't think any of us necessarily do but it makes sense that you would feel more power to start hiring. >> dan roth, thank you >> thank you >> good to see you >> all right coming up, america's largest auto retailer set to report. we will bring you the numbers from auto nation also a first on cnbc interview with ceo mike jackson.

later an early read on jobs. the adp private payroll report at 8:15 a.m. eastern you can see the estimate, and the previous numbers on the screen right now "squawk box" will be right back.

dow 22,000 in striking distance as the record rally rolls on we've got your trading day set up straight ahead. new overnight. the white house is weighing some aggressive trade action against china. we have the full details straight ahead plus auto sales skidding we'll ask auto nation ceo about the health of the industry and run through the latest quarterly results when they hit. the second hour of "squawk box" begins right now

live from the beating heart of business, new york city, this is "squawk box." >> i can't -- >> welcome back to "squawk box." we're talking about whether we can touch our toes this morning right here on "squawk box. joe says he can touch his knees. i'm andrew ross sorkin along with becky quick, who did just touch her toes i don't know if people saw you touching your toes >> really? >> of course you can't? >> joe is here that's -- now we've gone off topic. the futures right now, take a look see what's going on. as you might try to touch your toes at home the dow looking like it would open up higher about 31 points higher the nasdaq up about 38 points. and the s&p 500, you know, that's better. it was in the red for just a second now it says unchanged. i'm going to call that unch for now. at this hour, apple stock likely to give the dow the most help in getting over the 2200 mark

shares jumping -- >> 22,000. >> 22,000. >> wishful thinking. >> yeah. jumping after apple beat forecasts from both the top and bottom lines in its latest earnings report. one of the bright spots for apple. a surge in its services business which generates almost $7.3 billion in sales and multibillion dollar takeover in the engineering services this morning as well. jacob engineering for $2.85 billion in cash and stock. that deal helping jacobs get more business from government and infrastructure and health insurer anthem, discontinuing obamacare coverage in 16 of 19 california regions where it offered coverage in 2017 after citing uncertainty on whether or not the trump administration would maintain subsidies to help keep it. folks we have some breaking new that's just out. this is coming from mondoleez

internation. the chief executive officer is going to be stepping down and will be succeeded by the president and ceo of food producer mccain foods. he's going to be joining the board of directors as well and rosenfeld will continue as the board's chairman until march 31st at which point she'll be retiring van de put's company is a privately held canadian company that's the largest marketing and manufacturer of frozen french fries. but, interesting >> and irene will be joining squawk on the street this morning. >> oh, yeah, that's coming up at 9:15 a.m. eastern time also shares of amc plummeting after the company unveiled a cost reduction plan and issued disappointing guidance the stock tanking 27% last night. this morning it's down by over 25%. amc is going to bery leasing second quarter earnings next week but expects a lost of $1.34

to $1.36 a share the street had been looking at a very different forecast. the company also expecting revenue to come in at $1.2 billion. that is just about $50 million lighter than forecasts amc saying that they don't expect the third quarter to give much relief to theater owners calling it a very challenging environment. the announcement comes as the u.s. box office continues to nosedive down by about 4.4% year over year the summer film lineup hasn't helped the case for the world's largest theater chain with slots like baywatch and king arthur dragging down ticket sales >> the july adp employment report at 8:15 forecasters expecting to see 180,000 private sector jobs in july that would be up from 158,000 in june we'll also going to be hearing from two fed officials today cleveland fed president loretta moster and san francisco fed president john williams. >> get you caught up on the broader markets in the economy

as we count down to key jobs data on friday joining us is david bianco chief investment strategist for the americas at deutsche asset management and covering the economic side sheryl myers head of u.s. economics at the bank of america merrill lynch global research welcome. >> thank you >> thank you >> we've had some discussions already about the fed. we didn't really talk as much as i guess we should about friday's numbers. great number last time, right, was it similar this time >> it was really strong. we think we're already right at 200,000 this month which would be a pretty strong number it shows that the trend is job growth running about 185,000 or so well in excess of what we need to keep up with population growth and keep the unemployment rate constant. to me i think that the important numbers in the report is not only the head line, it's what's happening with the unemployment rate, what's happening with wages. so there we think it's a little

bit maybe of a different story for wages we think we're going to see a 0.3% month over month increase year over year that translates to 2.4% pace despite the fact that we're seeing this strong job growth, the unemployment rate is holding close to levels that are consistent with full employment, wage growth is remaining quite slow >> which is good and bad bad for wage people, good for inflation staying low. >> exactly so when you think about in terms of earnings, that's one story. in terms of economic growth, it's a different story you need to see wage growth in order to see stronger income creation, in order to see that much more stronger consumer spending, and to get that kind of real push-through to the economy. and also, very much matters for the fed. if you think about what the fed is trying to handicap, they're looking at these strong head line growth numbers, the manufacturing data is looking stronger you're seeing momentum in the economy, but price pressures are just not -- >> does it look like a 2% economy gdp? or does it look like a 2.5% economy? when it's all said and done,

2017 will be what? >> i think it will be closer to 2% than 2.5% -- >> more of the same. >> if you think about the average since the recovery started we're at 2.1% annual growth so more of the same. >> all right what's happening for stocks? >> yeah, well as michelle said you've got this tightening labor market the fed cares about the labor market which matters for interest rates and interest rates matter for banks. and what's been interesting is even though the labor market tightened inflation stayed low and the real debate is just how high is the fed going to get the overnight rate this cycle. what's going to happen to the shape and the curve? we're still overweight financials both u.s. banks and european banks. but, if the fed doesn't look at as if it's going to get to 2% by the end of 2018, we might have to start looking more to just european banks for what we think is the last remaining value opportunity in developed market equities so far, we're sticking with tech and health care. we've got slow growth. yes. we do believe this economy has traction but the best earnings growth, is

still healthy earnings growth, health care. and with these low interest rates, somewhat softer dollar, the earnings outlook is really good in the second half so we're going to stick with what's worked in the first half growth stocks, tech and health care that's our plan for the back half of the year >> with valuations, what some people would say stretched, does that mean that we're susceptible to something worse than just a little pause that refreshes, do you think? >> look, my price target at the end of the year is 2400. of the s&p we're 75 points above that but when i give the analysis for what he are likely to be, there's upside to my estimate. interest rates are surprising us, long-term interest rates are surprising us, to the low end. there's really a good case to be made the s&p ends the year over 2500, particularly if we get corporate tax cuts before the year is out. i don't want to get from here to there until i see more certainty on that corporate tax cut being effective. >> the well-known tightening, this is nothing like the '90s? i mean, they were up on -- they

were up on hope then i mean there are real numbers with all of these -- >> the tech sector is no longer cheap. >> i know, but -- but at least you can value it against earnings instead of value -- >> totally agree the valuations are reasonable. very reasonable up against the growth >> even though the market cap is not just -- >> you know i often argue that the fundamentals dictate the size of the sector share of the s&p. so the market caps are justified. the 22% wage the tech sector has in the s&p is justified. and the earnings growth looks like it's in jeopardy of slowing down sharply it's a sector we think that continues to have -- >> so you know, you guys should all get paid to worry, i think, about -- economists. previous breaks in global economic activity seemed like it happens more often than not when things are overheated and central banks have growth. what's scary right now anywhere? what are we not taking into

account that could cause, you know, global economies to not perform like we think we're going to perform >> i think right now we're in an environment where things seem to be operating quite well. the economy is accelerating. global economy is accelerating some banks are talking about removing accommodation which is something we were all really worried about. we were worried about just slowing down purchases and now we're talking about shrinking the balance sheet. so i think what would concern me is the central banks, the fed, gets further along, they're reducing their balance sheet they've hiked interest rates, and then we do have that weakening in the economy how much ammunition or ability at that point do they have to turn dovish and underpin the markets and underpin the economy once they're well in this hiking cycle. so at this point we're entering an environmentwhere we're stil uncomfortable with the balance sheet is going to start to shrink. we don't know how that's going to play out. >> do you remember when we were, the most common term we used was kicking the can down the road. we were trying to figure out some other term to use and italian banks --

>> janet yellen -- >> the can stopped europe is okay we don't need to worry about that they were kicking the can down the road? they actually grew out of all the worries about solvency and liquidity and everything >> i think we've had -- we've had -- >> risk is okay? italy is okay? portugal's okay? spain's okay i'm not worrieworried? >> i think reality is we probably should be worried there are still a lot of vulnerabilities. but i think what we've learned is that we've had really aggressive policy responses. and those policy responses did what they were supposed to do. they provided the backstop during periods of heightened stress >> that's the first time in histo history -- >> but to your point -- no, everything worked perfectly in the end it seems highly unlikely at some point there's going to be a policy mistake or some sort of vulnerability that we're not prepared for >> i think your mike is -- you have a wireless that is battery operated we're hearing stuff. we're going to go. it's not your fault. >> enjoyed being here.

>> thanks. when we come back, crude stocks rising. denting hopes that recent inventory draws were a sign of tightening market. we're going to get the latest on where crude prices are going to be trading in the coming months. and then auto nation's ceo mike jackson joins us to talk quarterly results. and business announcements >> seriously neil young >> that was a joke -- >> oh. >> in the meantime check out the futures at this hour oh, my goodness. right now, dow futures still -- or actually just below, they're indicated opened just below 22,000 about two points below s&p 500 unchanged. the nasdaq up by 40. "squawk box" will be right back. ,

track your pack. set a curfew, or two. make dinner-time device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. introducing xfinity xfi. amazing speed, coverage and control. change the way you wifi. xfinity. the future of awesome. senate voted overwhelmingly 20 confirm christopher wray as the next fbi director. wray who is a former justice department official telling lawmakers that he would never pledge loyalty, and he added if

president trump ever pressured him to drop an investigation, he would push back or resign altogether coming just months after former director james comey was abruptly fired by president trump. mortgage applications out just a short time ago. for more on where rates could be headed we're joined by diana olick. good morning >> good morning, listen, no move in interest rates last week and that gave both homeowners and home buyers no reason to rush to their lenders. total mortgage application volume fell 2.8% on a seasonally adjusted basis compared to the previously according to the mortgage bankers association volume was 22% lower compared to the same week one year ago due to much lower volume in refinances refi apps fell 4% for the week they're still 41% lower than the same week one year ago, when interest rates were lower. rates have been so low for so long that there is a shrinking pool of borrowers who might benefit from a refinance now that said, take a look

the average rate on the 30-year fixed held at 4.17%. that's the lowest in five weeks. it moved even lower yesterday on weak economic news of course we wait for the jobs report friday for a potentially bigger move, which could go in either direction mortgage applications to buy a home also fell down 2% for the week, but 9% higher than one year ago home buyers today are less concerned with interest rates and more concerned with overheating home prices, and a severe shortage of homes for sale andrew >> okay. appreciate that. in the meantime, u.s. crude hitting the $50 mark a barrel for the first time in two months for more on the oil market want to bring in matt smith, director of commodity research at clifford data. how are you? we're over $50 are we going to stay there >> i think we'll go up to the top of the range here. there's really this downward channel, and in the last month, we've rallied from the mid to low 40s. the reason for that primarily has been because of u.s.

inventory. >> right >> u.s. inventory typically draw by the last few years have drawn by 5 million barrels in july for the four weeks of the preceding four weeks they've drawn by 26 million barrels. the reason for that is because saudi arabia has been pulling back on their flows to the u.s >> so here's the question, head line in "the wall street journal," opec's catch-22 how to unwind its deal to cut oil output how do you think they're going to figure out? >> i don't think they're necessarily going to figure it out, to be honest. we've got saudi arabia that continues to lead the charge here they signaled that they were going to cut export into the u.s. >> right >> they have done that on the flip side of that, you have libya, who averaged about 300,000 barrels a day in exports last year, july their figure has just come in, 900,000 barrels a day of exports and so even though saudi is cutting and specifically to the u.s., offsetting that you have libya, pushing out more oil. >> so where are you predicting -- where are you

predicting oil is going to be, let's say, at the end of this year >> i've said it at the beginning of the year we'd be to the low to mid 50s i think we will probably be around that similar sort of level. the thing is, we'll probably dip a little bit lower from here simply because we've seen more crude coming to the market in terms of global loading, we still see storage around 100 million barrels, and so there is still this surplus product demand is strong >> right >> strong in the u.s also strong in europe, as well asia demand is holding up, too but that isn't enough to mop up this surplus >> in terms of china >> yes >> are you of the view that things are actually humming along swimmingly there and therefore they're going to need a lot more >> they have continued to increase their imports they've been really, really strong that said they pulled back a little bit in july >> right that's the question. >> but it's been mopping up. mopped up by -- >> mopping up the oil. >> that's what it is because there's been so much oil on the market, excess, it has to

be taken out for things to really rebalance for the market to tighten >> okay. we're going leave it there matt, thank you. >> thank you >> appreciate it >> coming up when we return, we're going to continue, oil in a different way. talk about auto nation ceo mike jackson, and then hyperloop one co-founder and venture capitalist will join us with an update on his hyperloop project. up next, want a job in space there is an opening. joe is thinking about it, but you have to protect the earth from invaders. details right after the break.

nasa offering a six figure salary or an out-of-this world role the agency is thinking a full-time planetary protection officer to protect earth and its inhabitants from alien contamination. responsibilities include preventing alien microbes from contaminating the earth. making sure humans don't contaminate other planets.

sounds like kind of an easy job. i'm not sure you need to do anything we don't want to contaminate moons or other objects in space. >> you'll look like you're working hard >> you simply don't go to space. don't go to another planet if you don't want to -- >> contaminate it? >> yeah. the job would require a commitment of three years, and get this, it pace up to $187,000 annually >> the alien has already contaminated you look at that >> i mean i guess it's possible that there could be some microbes on an asteroid. >> i think it would be inevitable, right? >> i don't know. but how do you stop the asteroid -- >> you can't i mean if you look at all the asteroid fields and things that have hit, haven't we always had minerals that have come from these things and probably lots of other stuff, too >> you can treat asteroids with preparation-h but you can't really stop -- >> that's a different kind of asteroid >> oh, it is >> different type. beyonce could become the next -- >> thank you, thank you, thank

you -- >> bloomberg reporting yesterday that the pop superstar is showing interest in joining groups to make a bid for her own nba team last month rocket's owner put the franchise up for sale. forbes estimates that the team could sell for $2 billion. beyonce already has some experience in this arena her husband jay-z owned a small stake in the brooklyn nets he sold his share. >> and an auction for rare currency kicking off this week in denver with billions of dollars worth of coins on the auction block. amongst many highly coveted coins, the money fair features a 1792 penny ever manufactured in the united states. same coin sold for nearly $2.6 million a few years ago. but experts say this coin may only go for $500,000 because its condition isn't up to par. you know -- >> still some pretty nice return on investment. >> people give me a hard time

picking up pennies but -- >> you don't pick up tails, do you? >> no -- just heads? >> just pick up heads. they keep them and then when you give them, it's good luck. >> i'm -- >> you know, i'll pick up anything >> you throw salt over your shoulder if you spill salt i freak out -- >> no. but -- >> i'm not afraid of friday the 13th, though >> i got married on friday the 13th >> you hold your breath when you drive past the cemetery? >> no, i don't do that >> huh-uh. >> scared of black cats, either of you >> black cats don't bother me. i like them. the thing against the salt, it's -- because it's so jarring to knock it over and go oh, my gosh you know -- >> so you're superstitious but only in some cases >> i don't think i roo ellie am. >> throwing salt over your shoulder >> when we come back autonation ceo mike jackson is our guest right after this break we're going to talk about the big slide in auto sales that we've seen, auto sales slumping for the seventh month in a row

not at autonation but across the entire industry. we'll talk about sales and the company's latest results right now as we head to a break. take a look at the u.s. equity futures. the dow would open two points below 22,000 if we were to open at these levels. indicated up by 34 points. nasdaq indicated up by 39. both of those indices being helped pretty strongly by shares of apple s&p put yours down by less than one point. "squawk box" will beig bk. rhtac ? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac!

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it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back to "squawk box" this morning right here on cnbc we're live at the nasdaq marketsite in times square among the stories that are front and center at this hour, irene rosenfeld is stepping down as ceo of mond leez international she will leave that job in november although she will remain as chair until march. she will be succeeded by dirk van de put currently the ceo of the largest producer of frozen french fries

mondelez beating estimates by three cents. irene rosenfeld will be on "squawk on the street" at 9:15 to talk about the big hoff she's going out on a high note she's been in battle over the years with nelson peltz and others and, it will be very interesting to hear what she's got to say. we'll look forward to that separately we're now about 45 minutes away from the july adp report on private sector employment economists looking for 180,000 new jobs following the addition of 158,000 private sector jobs in june. and then mortgage applications, they fell 2.8% last week both new purchase applications and refinancing activity fell. the average 30-year mortgage rate was unchanged during the week at 4.17%. autonation just out with its earnings just a moment ago let's take a look at shares of the company. the company came out with earnings of 86 cents a share versus the 97 cents the street

was looksing for sales came in at 5.3 billion dollars versus the 5.5 billion the street had been anticipating the stock is down just slightly by about 41 cents. the car retailing giant seeing a second quarter, i want to talk about this in just a moment, this comes up against a industry that has been facing some tough times with the seventh slumping month in a row according to j.d. power. joining us is mike jackson, the chairman, the president, and the ceo of autonation. and mike, thanks for being here today. >> thank you good morning good to be here. >> the "journal" had a story about how this is the seventh month in a row that we've seen slumping auto sales. according to j.d. power that there are some things that have been taking place in the industry and it sounds like you're seeing some of the very same trends. >> there's no question that there's headwinds in the new vehicle business now, july being down 7%, i think that's more fleet than retail sales because our july retail sales are only off 2%. >> fleets are like the -- >> fleets can be very volatile, from month to month. >> we're talking about fleets

like police cars, car companies? >> okay. so i don't think there's anything too dramatic in july's numbers. but the fact remains that new vehicle sales are slowed and it's a headwind moving downward 2% to 3% still be above 17 million units. but, down as a humble retailer, the manufacturers are overproducing for this level of business so there's a lot of inventory pressure and then they raised -- they run crazy incentive programs that create chaos and mistrust at retail which we get blamed for but they're the manufacturer program. >> meaning those buyers come in because they think there's a better bargain >> exactly because three car monty like out here on 42nd street. you've got to really find the special deal >> we came out about a decade ago -- >> maybe -- >> out there now people painted, naked people walking around town. >> three card monty.

>> but here's an important point. i think what's really hang for the economy and the overall -- >> is this a reflection of the economy or -- >> -- because it's really a shift towards nearly-new vehicles away from brand-new vehicles because of all the lease programs started three, four, five years ago, we now have 3.5 million, 4 million, 4.5 million vehicles that are nearly new coming back to marketplace le >> they're three years old >> they're three to five years old. so much higher than the normal return rate. and consumers are looking at this and saying, well, that's a great value. >> right >> so if you've thought of the marketplace as a combination of nearly new and new, i don't think it's changed that much but there's definitely a shift and so i think this headwind with new vehicles, listen, you know, it's clearly a serenity moment for me. i can't control the new vehicle business it's dominated by the manufacturers. so i just have to accept it and run their play

but i still have responsibility to grow autonation and grow it profitably so i look at our unique capabilities around brand, scale, digital technology, and a tremendous customer service base of over 4 million vehicles that we visit our stores every year, and say how do i leverage that to autonation's advantage? >> how do you? >> so, we intend to go pre-owned much faster to counterbalance what's happening -- >> because that's what consumers want >> that's what consumers want. >> can you make a good margin on that >> yes, we can because it's an arbitrage. it's a difference between what we buy them for, our reconditioning costs and what we sell them. so we control that business. where as in a new vehicle business, it's oem dominated business so, we'll grow in our franchise business, and also in -- by expanding into free-standing autonation usa stores that we can open new segments of the pre-owned business, that we not

completely in today, and those usa stores will include a big customer care component. then we take our brand, which is very much embraced and accepted, admired by our customers, and we're going to extend it into parts, accessories, collision centers, auctions. >> that's a big change >> it's a huge change. >> and that's going to require a lot of investment. how much >> it's going to require a lot of investment. we said it's about $500 million, including last year, this year, into next year but just in the customer care business we calculate next year as everything comes online, a list of 100 million in gross profit incremental next year >> customer care meaning just people bring their cars back for tune-ups and for fixes >> yeah. and the complexity of the vehicles is going up exponentially. >> can't fix cars yourself >> when an accident does happen the amount of sensors that get damaged and computers and the systems that all have to be

reintegrated the entities that can do these repairs are fewer and fewer. and we have the size, the training, the equipment, the expertise -- >> and there's much higher margin >> there's much higher add value and much higher margin, as it should be. so when i look at autonation, you know, three, four years from now, our pre-owned business will be larger than our new vehicle business now don't get me wrong, we're going to run the manufacture play we're going to give away as many new cars as we can but, as far as profit, that's going to be in pre-owned and customer care. >> mike, let's say musk starts making a lot of these things like he says he can, i don't know if he can, $40,000. 300 miles on a charge. i mean, will that finally convince -- will that convince you that this is a big deal with tesla, and that you have to change see what some of these, volvo, that's a marketing ploy i think. >> you're right on the point we passed an inflection point on

electric vehicles in this sense. the three major markets in the world are committed to electric. and let me describe. china is doing it for national security regions not green reasons. they don't want to import petroleum, they want to build coal fire plants and plug their electric vehicles into it. and has the full government support. >> that's definitely not green >> it's not green. >> coal fired -- >> but then you have the u.s which california mandating electric vehicles so everybody has to make them and tesla has proven -- >> they may secede, though >> tesla has proven that consumers will embrace a cleverly designed, well engineered electric vehicle. so that's passing different points but the next big domino that's falling is europe. big diesel debacle imagine 50% of the vehicles in europe by powered by diesel. this was their answer to the co2 challenges that's in tatters. between the regulators, and the

changing consumer preference, they're now -- >> come on they're doing it -- >> if you screw up with a regulator that's one thing if you deceive a regulator -- >> given those three major pillars of this trend, how fast can the u.s. manufacture, or the european manufactures catch up to the degree that tesla is advanced on the technology >> well, they're not far behind. >> you think everyone's in the same place or not really? >> no. i think they're not far behind i think within the next year or two, you will see incredible electric vehicles from every manufacturer not the modified things that are half and half. but -- >> not hybrids >> truly genuine, all-electric vehicles that are attractive, dynamic, affordable, fun to drive. they are all in the pipeline coming now what's changed, though, is they've now said okay, we have to do this for the world so everybody is thinking about where am i going to get scale in batteries? how do i ramp this up? much faster than what the old

plan called for. if we were having this conversation a year ago, we passed the tipping point on electricification. it's coming and it's coming around the world >> wow that's a big -- even for you because we had this conversation for many years now >> i said it's different than a year ago >> i want to go back to the industry overall and the trends that you've seen. because you've been saying for some time that the manufacturers were making too many cars, that it was not going to be a sustainable pace we're seeing that in the numbers that they've been playing out and i think you've been saying that for at least a year and a half, maybe longer >> yeah, i said it on this show in january of '15, said, the bull market's over, this thing plateaued. it still will be around 17 million but year upon year of growth is over and everybody needs to change their plans to reflect that >> and by the way, that's not the first time you've made a call on this show that we have then seen come true in the next year, year and a half, two years over time. what i want to talk about now is the cost of cars the cost of new vehicles they've gone up dramatically

you point out that when you get in an accident, when anything happens the sensors break, it's a much more expensive proposition. people are holding onto their cars longer. do you think that's part of the reason people like used cars, versus new cars? just because the price has gotten to phenomenal levels? >> so the price increase is entirely due to the shift towards suvs and trucks. >> okay. >> and this isn a very importan factor for the industry. we're looking at $6 a gallon gasoline and the industry's profitability is under extreme pressure but 65% trucks they can make money pushing volume and even with all these crazy incentives, at the manufacturer level. creates chaos at retail. so, and that's pushed up the average transaction price. however, what we see with the consumer is the consumer has transparency on price is very sensitive to value, and they compare and say, well, gee i can have this nearly-new vehicle,

which i understand how it all works, and i'm comfortable with, at a much better value than stepping up to new now it's a modest shift, by 2% to 3% for year, meaningful numbers. >> you just said something else that i want to dig into. we think that the big auto manufacturers have been completely restructured, that they've fixed things, after the financial crisis that they're in much better shape. you made it sound like it's low oil prices and therefore low gasoline prices that are saving the manufacturers. >> i wouldn't use the word save but if you look at the level of profitability it's two completely different conversations. now here's what's important to factor in. every manufacturer comes to the conclusion that oil prices are strategically low. and by the way the american consumer has embraced the same thing. and i, by the way, i think it's true fracking has totally changing the game we are no longer a hostage to opec on gasoline prices so you can sort of lock in a truck mix of 65%, 70% open

ended. >> that's because we like driving, if we can afford it >> -- they crank up, and we're fine so that's a completely different game and therefore the underpinning for profitability for the manufacturer, and for suppliers, and they've done a lot on the restructuring side, is pretty healthy. now, as far as their go-to-market programs, which is the balance between production, supply, we have 4 million finished vehicles sitting on dealer lots. $110 billion worth of merchandise. really that's what we need? and all the incentive programs that come with it. but their profitability will be fine i have to go a different way for my profitability >> mike we appreciate your joining us today numbers came out a little below wall street's expectations but as make has laid out he's got a plan for the future. >> i do. >> a shifting into more of the pre-owned stuff and making more profit >> and customer care, becky. >> appreciate it >> great to see everybody. >> coming up, amazon holding a

giant job fair today plans on making thousands of office >> yes >> andrew's a car owner now. andrew's actually -- >> finally >> you can actually talk with a little bit of -- >> experience. >> he pumps his own gas. >> wow >> yeah. he's rolling up. i love it. the latest today on today's big event is straight ahead. but up next, co-founder of hyperloop one is our guest hyperloop transportation infrastructure, spending, and other -- who is that handsome young man in there he's making "squawk box" great again. we'll be right back. time now for today's aflac trivia question -- mike and i are both veterans, both served in the navy. i do outrank my husband, not just being in the military, but at home. she thinks she's the boss. she only had me by one grade. we bought our first home together in 2010. his family had used another insurance product

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- like our directors. but mostly, to get the entertainment we love. maaaaark ! ! ! switch to at&t for the only unlimited plan that gives you 60 channels of live television on any screen all for $70 a month. welcome back to "squawk box," the race to build the transportation system of the future taking one step closer to reality with hyperloop one's latest announcement. the company sharing with cnbc exclusively that it successfully completed phase two of its testing for its full scale full system hyperloop technology. the maximum speed with nearly 190 miles per hour the fastest test speed achieved

to date. joining us right now is hyperloop one's co-founder and executive chairman also co-founder and managing director good morning to you. >> good morning, andrew. >> so that's very exciting >> what does it mean for those of us laymen out there >> what it means is that we have the entire hyperloop working we've got the pod working. you're going to see the video working. my co-founder josh giegle moved to the desert the last few weeks. working to create history. and we've got the hyperloop working. it's the dawn now, after this, the dawn of the commercialization of the hyperloop. so we've got conversations and dialogues with governments around the world and this, what you're seeing right now for the first time, that pod going down, and that whoosh sound, that's the sound of the hyperloop >> there's nobody in that thing, right? >> there's no one in there yet there will be. >> so there's two pieces to this one is people said that the

technology could never be done >> right >> you now achieved that piece of it. >> we proved them wrong. >> the second piece has always been, i don't know if it's been the more difficult challenge but the cost of all this >> right >> this is not a cheap thing to produce. >> mm-hmm. >> and not just the actual technology to produce, but how you act -- i mean any time we've ever talked about either tunnelling or building, that's where the money comes in >> right >> can you make this economically viable? >> absolutely. >> okay. >> so what i can assure you, this will be the cheapest, cleanest, fastest form of public transportation, and cargo transportation in the world. and what you just saw happening, that was actually 310 kilometers per hour you'll see in the videos, in the speed test, we hit 192 miles per hour >> right >> in 500 meters, and brake. which just technologically from an engineering perspective, that what you're witnessing is so difficult to actually make happen

and it took 2 1/2 years, almost an incredible work of 300 people at hyperloop one >> how do you make it affordable to andrew's point? >> so, absolutely. it's a good question >> is it dependent on scale? how do you get to that point >> so the way we've engineered everything, what you'll see is we've invented a whole new form of propulsion. so you have propulsion happening, levitation happening and you have a vacuum. so it's like inventing your own sky and flying at 200,000 feet, your son got it better than anyone i've ever seen in the green room i actually found like youth and children implicitly understand what this means. and the way we get it that way is that the actually motors that we've invented, you're only required to have it in this system every 30 kilometers or so any other system, high speed transport, you know, high speed

rail, is actually continuous so the entire track has to have these motors >> but i got to go back -- >> and that's way more expensive. >> i've got to go back to what i think is the true challenge of all this which is, this looks like you need to have a straight line correct? >> no. >> no? doesn't have to be straight? >> you can actually bank what josh and his team have engineered you can actually bank this in the tube around slight curves so we can either make tunnels or -- >> and g-forces and everything else >> exactly it will be the same experience as flying and when you're banking, the same g-forces this won't be any different, it won't be uncomfortable -- >> but in terms of getting the right of ways to figure out -- what i'm talking about is if you're trying to get from new york to d.c., or you're trying to do the, you know, we're talking about i think going from denver -- you're going to do it in colorado, right >> that's one of the proposals >> there's another one in san francisco and chicago. >> the texas triangle.

there's florida. >> the question is how -- >> dubai, abu dhabi. >> even if you were going to build a new subway tunnel in any of these places would be really expensive. >> it's extraordinary. as we all know, first of all, the infrastructure in this country and around the world is decrepit it's falling apart it was built by visionaries decades and decades ago. and we are suffering from whether it's traffic over the roads of it that are in our cities, these need to be replaced this is a multidecade process. no one -- i'm not here saying this is going to happen overnight. but look at the speed of which we've been able to go after the moon shot -- >> how many of those pods can you get in there at one time how much space do they need? >> every 30 seconds or so there will be another pod going. because of those speeds. by the way -- >> what about slowing down are they going to ramp up -- >> what happens if -- it's a vacuum, what happen if somebody -- >> -- speed and break in that -- >> what i mean it's got to be a vacuum what happens if somebody shoots a hole >> so it's not a perfect vacuum.

that's the genus of that design. it's a near vacuum but enough to make it as if we've invented our own sky. >> you've got to come back because we also have to talk about the company what ee ron's trying to do do you want to go under or over? >> under, over >> what's your preference? the cost in going under does that make sense? >> sometimes it will make sense. but over will be a lot more economic >> now the answer to today's aflac trivia question -- for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.

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amazon now holding a giant job fair today deidre bosa joins us now with more you have a great job oh, you're covering it oh, okay >> i'm not here for a job. listen all these people are. let me tell you, joe, there are a lot of people in this line we're in robinsville, new jersey this is one of twelve locations across the country where amazon is hoping to hire 50,000 people. handing out some of these jobs right on the spot. now it all starts in just a few minutes from now they're going to be opening these doors. and this lineup goes beyond -- stretches right around this white tank some people have been waiting here since 5:30 in the morning we talked to two of the gentlemen that were here first and they said what appealed to them were the flexible hours, immediate medical benefits, and if they're hired the stock options. i thought that was very interesting. they've been tracking the performance of amazon shares they want in on the action they think that there's more room to run.

now the jobs fair are all warehouse jobs, most of them full time, they offer between $13.50 and $14.50 an hour. that's five or six dollars above new jersey's minimum wage. but amazon is telling employees that they should expect about 10 to 12 hours a day of standing, potentially very hot temperatures and if you're wondering about robots, it's even here, working side by side amazon's robot fleet of hundreds inside now amazon is calling this the country's largest jobs fair. and let me put the size of it in perspective. they're hiring 50,000 people that's nearly a quarter of all the jobs added in the entire u.s. economy in june so this is a massive number. but, not sure it's enough to make up for the numbers of jobs being lost in brick and mortar >> okay. deirdre, appreciate it when we come back, the ceo of ian weiss is going to join us to talk tax reform plus a lot more on apple's big quarter and then the adp jobs report we've got the numbers and the market reaction ahead of the friday jobs number all straight ahead the futures right now, we are in

the green. dow up about 35 points nasdaq up 35 points. as well. "squawk" returns with a big hour in just a moment

>> the marge to dow 22,000 shares of apple could push the

index to that key mile 3 stone after the tech mint's big earnings beat. >> the adp employment report just minutes away. we're going to bring you the numbers and what they could tell us about the week's big payroll release. plus, why one may not be the loneliest number ♪ >> legendary musician chuck negron out with a new solo album. the founding member of three dog night will join us on set as the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. >> 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 becky quick and andrew ross sorkin the futures right now.

i don't know, it's questionable. let me see if they backed up to where they were. yeah, they're -- s&p, that's apple in the dow and the nasdaq. they're up both indices were up close to 50 earlier. and now they're up 35. and the s&p has been right around either up a little or down a little as you can see >> one point up. >> close to 22k. >> okay. one of the top stories, check out shares of apple this morning. helping what you're seeing on the screen you're looking at apple stock now up about 60 cents in premarket surging. earnings came in at $1.67 per share, ten cents above estimate sales rising to more than $45 billion coming in cash reserve even grew by 13% to $261 billion. try to get your head around that one of the bright spots for apple was surge in its services business that generated almost $7.3 billion in sales.

put them just alone as a fortune 100 company, just did the services business on its own separately other big news of the morning irene rosenfeld stepping down as the ceo of mondelez international. the company wanted to change the name of mondelez sounded like it was getting the -- >> he wanted to change it. >> who wanted to keep it >> she will leave that job in november though she's done a terrific job although she's going to remain as chair until march. >> the whole thing off wrong the whole tenure name that mondelez that was the problem vand lay >> mccain foods -- who >> art vandallay >> you're just making up stuff now. i don't know what you're talking about. >> that's seinfeld >> oh, oh. yes. >> the architect >> i forgot about that >> the largest producer we should say that is the largest producer of frozen french fries. separately mondelez reported

quarterly earnings up 48 cents per share, beating estimates by three cents, and a quick programming note irene's going to be hanging out with the gang on "squawk on the street" at 9:15 a.m. eastern time maybe one of her sort of last acts might change the name. we can only hope >> she's still chairman until march 31st of next year. >> there's still time. >> we are just a few minutes away from the adp employment report forecasters expecting to see an addition of 180,000 private sector jobs in july. that would be up from 158,000 in june of course, everyone's going to look at this number to try to understand what we might be seeing on friday >> the trump administration is reportedly planning to take aggressive trade action against china. "new york times" says that the trade case will focus on alleged violations of american intellectual property. trump administration officials have become frustrated by china's reluctance to confront north korea over its nuclear and ballistic missiles program an official announcement could come in the next several days.

in the meantime, ceos are jumping in on the debate around tax reform the business roundtable plans to launch a campaign later this week highlighting the importance of reform for the u.s. economy joining us right now is chairman and ceo mark weinberger. he chairs the business roundtable tax and fiscal policy committee. thanks for coming in >> thanks, becky >> let's talk taxes in just a moment first back to trade. this idea that we could see some trade sanctions against china, it's not a surprise if you've been following the president's twitter feed he sounded off over the past weekend that he's much more frustrated and if they're not going to help us on north korea then we are going to take a much tougher look on trade. what does this mean to businesses not only here in the united states, but around the globe? >> well, clearly a trade war would not be great so what the president as you said has been very clear that he wants bilateral deals, not multilateral deals so now that they're fully staffed up, you've got bob lighthighser in there, wilbur ross they're focused on enforcing

existing deals they're seeing the deals not being enforced and saying we're going to send a signal that these deals have to be enforced. and that's going to be part of the negotiating process. >> the rhetoric around trade with china was very high during the campaign even at the beginning of the administration then after trump sat down and went through some of these things with north korea, he had a much different tone. but it does not look like the chinese have been complying in terms of trying to crack down on north korea. and that's going to change everything >> it certainly is a factor, you're right but you are spot on. originally remember the president ran on labeling china currency manipulator and having ripping up nafta and then the tune changed we're going to negotiate with bilateral deals with china, we're going to renegotiate nafta, not rip it up but he has always been consistent about enforcing the deals that are in place. this is really about enforcing >> so is that a good thing from where you sit or not >> i think it's good that the deal should be enforced. i think it would be bad to go to a trade war. this is the way to deal with it. one-on-one, take the issue on. hopefully they can negotiate an

out. if they can't you're going to see some of these. >> let's talk about tax reform is this going to be easier to pass than health care reform >> it's not going to be easy we've got 44 legislative days left but it will be easier than health care in my view the hard part for tax reform, i've talked to michelle many times with you, obviously about the four ps. it is now clearly a priority for the senate and the president health care has been stopped >> depending on who you ask health care has been moved to the side mitch mcconnell didn't mention it as something in august but the president said he would like to see them do something on this >> but when you look at the letter from the big six, the activity that's going on on the hill, the push that's going to happen in august in the various districts, clearly they pivoted. and they're focusing on tax reform you're going to see some activity probably not publicly until september or october, but this august is pretty active >> you need to get to 60 >> no. >> it will be a croppy -- >> if it's bipartisan, i'm sorry, they're not going to let you do -- >> it's not going to be 15%. it's not going to be 20%

>> no. >> it's going to be -- >> are you going to get any dems on board >> so you have three dems who didn't sign this recent letter that went to the president >> manchin donnelly and hightower. they basically are saying open, talk to me republicans are going to be tougher to get the ones -- >> you can get to 51 with those three dems >> remember just because you use budget resolution and reconciliation that's something you should talk about. you've got to get that done before you can get to the tax bill >> they'll look for a reason not to do it even though they might actually want to do it, they're going to look for a way just to -- the way mcdonnell didn't want to give obama anything. >> it's going to be tough. there's no doubt about it. but the pressure on the republicans to deliver is so great that i think they're going to do everything they can into this the business community to your point, becky, is out full force. we're working on it, trying to educate the public about the issue. they're going back to the districts. the president and the administration much more involved the difference between here and health care, you see the house,

the senate and the president all on the same page with their announcements. that wasn't the case with health care >> you said the business community is out in full force trying to educate the public what because what they're going to be hearing is businesses are going to get a tax cut and we're going to be paying more as a result. how can you educate them that that is good for them? >> well that's exactly almost 70% of the corporate tax flows through the labor. so this is really about jobs investment serving the business ceos just did, 76% said that they would hire more people if there was tax reform 82% said that they would invest more in capital for increasing productivity if it doesn't happen 90% said they would slow down that's not only important for jobs but wage growth and investment capital >> it's not a message we often hear, though >> that's the point. that's why we've got to get out and start talking about it right now the noise is all about russia, everything else going on we've got to get the signal through the noise about how important tax reform is. >> what do you tell your clients in terms of how the plan is one way or the other >> you don't make decisions solely on whether tax reform

will happen. you've got to go forward with a business strategy. then you have to look and see how you have contingencies and timing a bill based on whether this thing may or may not happen this whole foxcon deal they want to take advantage of the deregulation and tax reform they're expecting in the united states, this is one of many companies. >> i have a hard one for you bloomberg has a story with a title trump ceo brain trust with which you're a part of hasn't done much. elon musk of tesla, walt disney's bob iger have quit, jeffrey immelt of general electric and jpmorgan chase's dimeny diamond travis kalanick quit and then they go on to say that the strategy and policy form and the manufacturing group, the administration hasn't convened the group for months or set dates for future meetings. what is happening? >> well, listen, first of all the meetings are still occurring. the quarterly meetings of our group which is strategic and policy form. the 17 ceos who are on the

group, i'll tell you, they wouldn't be coming to washington if they didn't feel like there was some positive effect whether it be on what we were talking about before, moving away from some of the trade wars moving closer to tax reform. dealing with deregulation, dodd-frank, all these issues there is not a date yet set. but in july and august there's not a lot of activity. so i'm guessing september, october we'll get together again. but in between the meetings, this is where the president is very out and gary cohn and secretary mnuchin, we are meeting on a regular basis with them to talk about what types of tax reforms make sense, what type of deregulation makes sense, and these other issues. the meetings aren't the only place these discussions happen >> mark, we're almost out of time, when i said it would be hard to get to 15 or 20% you said that's not going to happen. what is the tax reform that you expect to see? >> i mean with the border activity tax off the table that's a trillion dollars less you have to offset the cost -- they could leave those taxes in place. that may not affect tax reform but realistically i think you're looking at low 20s

at a territorial system, and getting rid of some of the deductions and credits and incentives that is doable you're going to really, the big question mark will be on the individual side, and the pass-throughs. how low will the pass-through rate be able to get to how do you prevent anti-abuse provisions from companies moving overseas there's going to be some tough things in there, too but it is realistic to get to the low 20s. territorial system and simplifying and get something for pass-throughs and middle income people >> mark, thanks for joining us today. >> always a pleasure still ahead the july adp report is about to hit the tape. we'll bring you the numbers and the market reaction as we count down to jobs friday. plus chuck negron is in the house. the legendary musician will join us on set at 8:40 a.m. eastern time three dog night one of the founders later, a meaty new starbucks brew even -- depends on whether it's free or not. even andrew wouldn't drink we'll tell you what's in it. stay tuned you're watching "squawk box" on cnbc you always pay

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welcome back to "squawk box. some stocks to watch shares of amc plummeting this morning. this is going on amc warning for the q2 report

they expect a loss of $1.34 to $1.36 per share versus the one cent previously forecast the company also expects revenues to come in at $1.2 billion. about $15 million lighter than forecasts. and amc thinks they don't expect the third quarter to give much relieve to theater owners calling it, quote, very challenging. other theater operators falling on that news amc down 23% steve liesman has some important numbers. >> breaking economic news, andrew the adp employment report showing that 178,000 jobs in the private sector were created in the month of july. this is pretty much spot on with the estimate of 180. june was revised up by 33,000, the adp was, by 33,000 191,000. and let's look at the july breakdown. goods, kind of a weak month, 4,000. with services reasonably strong on 174,000 and there's your nonfarm payroll estimate for friday, the consensus is 180,000 so that's sort of in line.

remember the adp does not include government, the overall does and take a look at what's happening here this medium size business, up 83,000 that's been a very strong point. and then education health care services a lot of jobs right there. trade and transport. you heard the stories about amazon hiring. that was up by 24,000. leisure, hospitality has been strong construction, okay, manufacturing having a tough month down by 4,000. and i guess, joe, i bring in mark zandi >> you do? >> i'm going to bring in mark zandi the chief economist with moody's analytics. mark this is a funny thing for me when i think about what healthy growth is. would you tell me that job growth was 100,000 i'd say that's fine. i would have been more worried about 200,000. except we keep posting these 200,000 numbers and it doesn't seem to be a whole lot of inflation, a whole lot of wage growth i'm going to say anything between 100,000 and 2 thund,000 for job growth in this country is just fine how do you think about that?

>> well, we can't sustain that for very long, steve that's double, so -- >> i know. but you told me that before, mark, and i'm not seeing it. you keep -- finding -- >> no, no, no. wait the unemployment rate continues to decline it's now 4.4%. right? the underemployment rate which is the broad measure of underemployment is now consistent with full employment. we're at full employment at this rate of job growth unemployment, underemployment will continue to decline it's just arithmetic ultimately we will see wage and price pressure develop and job growth slow. as evidenced in the record number of open job positions companies are having a very difficult time increasingly difficult time filling jobs. it's just a matter of time now is it this month next month next quarter i don't know but -- >> it's also a matter of level, right, mark? in other words, if you had talked -- if i'd asked you a year ago and you said 4.4% unemployment you would say way that's way beyond full employment i mean now, maybe it's time to

think about could it be 3.5? could it be 3? should we let this thing roll until we start to see a serious pickup in wages and not be worried about wage inflation until we get, you know, going for awhile here? >> well, 4.4 is lower than i would have thought but it's not, you know, out of the realm of possibility. no i mean, you can run that experiment but i think that would be a huge error. even in the very best of times go back to the late 1990s and the middle of the technology boom the tech bubble. unemployment briefly got below 4% in the time it overheated so yeah, maybe but that's a pretty significant experiment to run in and by the way, if we're talking about what it means for policy, it means that fed needs to begin normalizing policy they're still highly accommodative relative to the 4.4% unemployment rate which we all know is going to continue to decline. >> all right, mark, we went right for the macro here we didn't talk about this month's job report what is this month telling us

about the overall state and health of the job report >> you know, it's a machine. it's a machine average monthly job growth this year is just south of 200k that's exactly the job growth we've been getting coming up on eight years. it's an incredible run so, nothing's changed. i haven't seen any change. it will change, you know, the arithmetic is the arithmetic but so far that hasn't been the case it's a machine >> let's just talk briefly, mark, about overall economic growth we did a 2.6 maybe that's going to be a little bit lower because of the construction data yesterday. the auto data was not terrific what are you looking at for the third quarter? we continue this 2.5% range of growth here? >> yeah. i think the second half will be around 2.5%. financial conditions are just very easy. i mean, stock market's a record high credit spreads are record lows interest rates broadly are low the dollar has come off from its peak earlier in the year everything would suggest, you

know, the economy should enjoy at least 2.5% second half of the year and by the way, that means continued strong job growth and more pressure on the fed to raise rates. >> try to convince my colleagues why 2.5 is a big number. are you a subscriber to the cbo that the potential is 1.8. at 0.7s of a percentage point, above potential? >> yeah. the potential rate of growth is obviously that we're above potential, right because unemployment continues to decline so potential between 1.5 and 2 and you know, we can get more than that. and we should. but that takes really good policy that means we need more integration. not less integration we need tax reform that is paid for. that means we need an infrastructure plan, a big infrastructure plan. those are things that would lift theion lying rate of potential growth by the way, that will take time. that doesn't happen in a quarter or a year. that happens over a period of a decade we have to be persistent about the policy changes >> mark, thanks for joining us this morning and bringing us the adp report >> steve, thank you.

>> pleasure. interesting stuff. >> okay. we'll see you soon when we come back what goldman sachs ceo lloyd blanken fine just said about the economy. we have this comments next plus, a technology company in wisconsin making headlines for hosting a chip party not guacamole at this chip tas r u tethbrrt deilfoyoafr e eak. it naturall, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

welcome back to "squawk box" this morning goldman sachs ceo lloyd blankfein -- you got me now -- >> joe said it not me. >> you said it originally. >> i didn't even know -- >> got it in my ear as an ear worm, lloyd speaking on msnbc's "morning joe" in the last hour -- >> did i really say that >> you did new york city michael bloomberg to talk about edge cage and small business blankfein weighed in on the u.s. economy and the low interest rate environment >> we're here at a time of full employment situation now, i'd say it's pretty good i'd say the political environment is very bad, and when you're dealing with the economy, it's not -- it's not just science you're dealing also with sentiments >> blankfein as we discussed, tax reform and the country, you have to make sure that whatever we do to distribute wealth doesn't interfere with the

country's ability to generate wealth that was a point he made several times. that's mr. blankfein >> blankfein i didn't even realize i said it. >> the congressman -- blankenstein, you know, exactly. they know it's -- >> what you missed was when we came back from commercial, and i had to say it, and of course, because i had it -- i said lloyd blankenf eechlt in >> no you didn't >> i did >> that's what just happened >> i said i didn't say it. >> no, he said it. >> i was talking to chuck negron >> right >> he said, she said we all said. >> i want to ask you guys, when we do this i said i wanted to hear his best groupie story or something like that he said you want to hear the exploding penis story. now do we go there >> no, no. >> do we go there? >> no we've got to go to commercial break coming up next we will talk about that maybe on a commercial break. we've been speaking to mayors around the country about health care reform. nan whaley is going to join us on that.

and her run for governor of ohio we'll do that next plus, check out shares of tesla up 50% so far this year. the electric carmaker out with earnings after the bed xpt,l tell you what to eec we'll talk to joe during the commercial break back in a moment they really appreciate the military family, and it really shows. we've got auto insurance, homeowners insurance. had an accident with a vehicle, i actually called usaa before we called the police. usaa was there hands-on very quick very prompt. i feel like we're being handled as people that actually have a genuine need. we're the webber family and we are usaa members for life. usaa, get your insurance quote today.

♪ all right good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square corporate earnings are front and center this morning. we are watching shares of health insurer humana humana reporting quarterly profit of $3.49 a share. that beat the street's expectations of $3.ol 8. the company also raised its full-year forecast as its medicare advantage plans performed better than had been anticipated. the stock is up by 2.25% another forecast beating report goms from garmin garmin beating the street by seven cents with quarterly profits of 88 cents a share. it was more than offset by

strength in its fitness devices. in other news, iraq has come to the international debt market trying to raise a billion dollars in a bond offering that is notable because it's iraq's first international stand gentleman loan debt issuance since 2006 initial indications show that the debt has about a 5.5 year maturity with an interest rate in the low 7% range. a company in wisconsin is getting international attention. the reason is a voluntary microchip program for its employees. three square market just held a chip party where workers are implanted with a radio frequency identification chip? what between their thumb and their forefinger the chip can open doors, logon to computers, make purchases from vending machines, yeah, and track where you are every second of the day the company says the technology does not have gps capability, and it will not track its employees. yeah, i don't know if i'd buy that and peer pressure. it will be fun >> you're not supposed to do that

>> the mark of the -- >> yeah. that's exactly what i was thinking >> yeah. there can never be too many. snapchat is going back to college. partnering with universities to make campus editions for the discover section of its app. that part of the platform features news articles from like the buzzfeed, "the new york times," and it will be the first time snapchat has decided to show hyperlocalized versions of discover to its users. business insider reports that snap reached out to a dozen campuses for the new initiative, including yale and dartmouth and the white house's opioid commission is asking president trump to declare a national emergency to combat overdoses. our next guest sees the effects of the opioid crisis in her city firsthand every day. let's bring in nan whaley, she is mayor of dayton dayton, ohio and a democratic candidate for governor of the buckeye state.

mayor whaley, thanks for joining us we remember years ago -- >> good morning. >> good morning. heroin epidemics there's something different about this isn't there? some of these drugs are even more powerful than heir win. they don't involve needles, and it just seems like it can affect a great many more people and i don't know if we're -- if we've come to grips with what's really happening here >> right you know, certainly in the state of ohio, a few years ago, we saw an incredible uptick and this year, cities across the state have seen numbers that are already passing last year's number not so much because of heroin, because of fentanyl and carfentanyl that's mixed in to the opioid that is just making it very deadly across the state. and really across the country. what we notice about this issue is it's truly affecting everyone in our communities and in our state and our country. we applaud the effort to make it a national emergency

here in dayton we've been calling on the state to treat it like the natural disaster that it really is in our communities. as we see it just affecting everybody across the city and the state. >> yeah, talking about some of those, i don't know what you'd call them, opioid derivatives or something, but, stronger than heroin, and i think fentanyl, i mean, it's dangerous for law enforcement. it's dangerous for caregivers. it's dangerous for anyone, i think, as far as five little like salt, like a salt particle, five of those of fentanyl can be fatal. so this is a whole new sort of threat that we're talking about now. >> right right. we've seen this in cities across the state, where, you know, like in east ironton, ohio, a police officer got it on his jacket, and then, you know, had to have

be saved afterwards. so we really even had to retrain our first responders that every site they go in, that they could be susceptible to this on sites because it is so granular and so small. it's also the reason why we want to hold the drug companies accountable here in dayton last month, we were the fourth city in the nation to sue the drug companies, the manufacturers, and a few of the doctors that really went and started this whole epidemic. they told folks that prescription drug opioids were not addictive, and clearly they were we know that in 1960s, 80% of the people that were addicted on heroin started with heroin and moved to prescription drugs, and today that's the exact opposite. 80% of the people that are addicted started with prescription drugs, can no longer get those drugs and move to heroin because of their addiction. we don't think it's fair that taxpayers should have to pay for the burden of first responders, emts, treatment centers, and really the people that started this mess should really clean it up >> i wonder what kind of number

you think in a health care, whatever it turns out to be, whether it becomes bipartisan or not, i think we're currently at about 45 billion what do you think the number needs to be? because people have said that, i mean, that nothing's going to -- it's never going to be enough. is it? >> it's very expensive when you're talking about treatment of folks that are addicted to this, which started generally with prescription drugs, it takes about five years for people to go through treatment, and rehab, for this effort this isn't a 30-day quick fix for folks. and so yeah, it's incredibly expensive. not to mention the cost to emts and our first responders you know, i met with senator portman when we were going through the affordable care act discussion, and really talked about how in dayton we've had a 45% increase in mutual aid other cities coming in to our community, you know, with their ambulances, to save people's lives. and quite frankly, if we don't have medicaid, i don't think

those communities will come in with the goodness of their heart. because they won't be reimbursed for those sites. so this, you know, the medicaid issue is really the basis of how we're really working to treat this issue in communities. and without that, you know, $45 billion like governor kasich has said, is really just a drop in the ocean with this epidemic >> well, it's daunting, and we wish you luck. certainly can't bury our heads in the sand with this. that's for sure. just leave on a lighter note, i'm from cincinnati. i always felt bad for dayton being next to such a thriving metropolis with the reds and everything, and you have wright patterson air force base, right? and you've got the flyers. and they're good year after year, right? >> we do we do. >> is that what you hang your hat on absolutely we love cincinnati and cincinnati is basically an uber

market we see a lot of commuting between cincinnati and dayton. i head down to cincinnati, i'm very close to the mayor. we think about cincinnati every day, particularly during reds season we like them down there to think about dayton twice a week. we'd be okay with that but we're troud proud of our city this is the beginning of college basketball, and we're certainly proud of the dragons, which is the reds farm team has the longest sellout in professional sports history number two is the boston red sox. so a lot of sports here. >> you're talking about cranly you're friends with cranly >> yes yes. >> okay. that's the mayor i went to school with his uncle. everybody else in that family is a republican he's the black sheep you know of that entire family as a democrat. that's a totally different issue. mayor whaley -- >> well i think he might be the smartest one there, so -- all right if you can get elected in cincinnati as a democrat, you got to be pretty good. so anyway, thank you we appreciate your time today,

mayor. thanks >> thanks a lot. >> okay. and tesla out with earnings after the bell today phil lebeau joins us with a little bit of what to expect phil >> andrew, as much as we say it really doesn't matter what the numbers are, the numbers always do matter. it will be a wider than expected loss but the focus today when tesla reports its earnings after the bell will be a lot about where things stand in terms of production, not only right now, as they ramp up on the model three, but then going into 2018. you'll get a lot of questions for ceo elon musk about model 3 production remember, the first deliveries happened last friday the 2018 guidance will be in focus. and this question of, do we get any more details about possibility of new plants, whether it's in europe, or in china, or perhaps another one here in the united states. more giga factories. they have hinted there will be some news about that to come over the next six months to a year tesla's 2017 production, by the way, the estimate is that it probably is going to end up being about 115,000 vehicles we might get a little more guidance on that but the cash burn, as it always

is, is in focus when tesla reports earnings and there will also be a few questions regarding solar panels and the solar roof not only the production of the solar roof panels, the shingles, the solar shingles, but also when do we see some installation that we can actually look to and say, okay, here is a home in this particular market where we've seen the solar roof shingles go in if you take a look at shares of tesla, remember that when the company reports its second quarter results, after the bell, it is expected to report a loss of $1.82 a share on improving revenues, obviously because production is going higher, but we say this time and again, guys, it is the conference call with elon musk that gets the most attention i'll be back with you guys tomorrow morning with no doubt a few comments from elon musk that will have people saying, hmm, okay this is where the company is at right now. >> phil, thank you for that. and, it will be very interesting to see what happens. we'll be talking about it i'm

sure a lot tomorrow morning. >> coming up chuck negron is here 21 consecutive top 40 hits the founding member of three dog night is not done yet. he joins us on set right after the break.

welcome back to "squawk box" everybody. let's take a look at the futures this morning we have been in positive territory all morning long for both the dow and the nasdaq. s&p picked back up again, today.

the dow futures are indicated up by 44 points that would put us above 22,000 on the dow jones industrial average for the first time ever. 22,000 we'll see if we get a little closer to the opening bell s&p futures up by 1.5 points the nasdaq up by 39 points shares of retailer nordstrom are down in premarket trading. women's wear daily reporting that nordstrom sales remain only at an informal stage at this point. several nordstrom family members have been trying to bring in equity partners to take the company private. we have a special guest on set this morning we've been talking about him he's been entertaining audiences for five decades joining us chuck negron. a founding member of the rock band three dog night and he has a new solo album called negron generations. great to have you here >> thank you for having me >> you -- in looking up, i thought i knew everything about three dog night because it was contemporary, i think when was the very first big hit '69 >> '69, yes. >> so i was 14 >> oh, my god.

>> and you -- there were three of them, obviously three dog nights but all lead singers. >> yes >> are you the only one left at this point >> no, danny -- >> danny is alive. >> danny is left and unfortunately we've lost four of the original seven >> four of the original seven? >> so it's, you know -- >> and just for people that don't know, which -- since there were three lead singers, which of the hits that we -- >> one is the loneliest number >> that was you. >> easy so be hard old-fashioned love song. joy to the world ♪ joy to the world >> you're the guy. >> yeah, i did -- i was lucky. >> we think of you as the lead singer of -- >> well you know what happens in business just like you know, you deal in business when something starts working, the money people want to keep that going they don't want to try something else so i was in the position that kept putting out my voice. that's why that happened >> you were legitimately one of

those years probably the top draw for a rock band in the world. one of those years >> we were -- yeah, we were a couple of years. this is pretty -- >> led zeppelin was around there were other -- >> they opened for us. >> they opened for you >> yeah, they ended up going to our management who talked them into doing stadium gigs because we had -- we were doing nothing with stadiums, and they came and did one show, just to see how it would work, and they ended up doing about two years later. >> you're on tour now, and you know, my mind has got cobwebs. the association, is that -- yurs on with the turtles, i love that song you're on the happy together tour with the turtles, and the association. that was -- was that -- >> yeah, cherish >> and cherish >> wendy sam. a lot of names >> these are -- are some of these, and it's not just people with the names of the band, it's some of the -- >> no the three of them are

original original turtles, original cow sills, original ron dante did sugar sugar, he's original and unfortunately the singer in the box tops passed away so we have other guys are original >> all right >> there were three three dog night songs, of these tracks -- what's your new album? >> negron generation yeah, i -- back in the day, one of the smartest things i did was when they could no longer raise our royalties because they just wouldn't do it, i said do i want to own the masters, and they said from this time on, you can own them because we were kind of in trouble with the drugs and everything they didn't think we would last. we did seven more albums so, i own those seven albums and on one of those albums were these three songs. >> amazing >> the record company had a buyer, lost it and i'm the only one that has the copy >> that's amazing. >> so, you know, i don't know

where i came up with some smarts back then. actually i do know we worked very hard. and i wanted something to -- i didn't want to be like so many other guys that worked so hard and got so wealthy and then had nothing. >> right >> i don't know why that happens in music, but it does. >> while i've got you here i got to go on to something where we would actually maybe do some good here, too. i always say when we have rock stars on, always want to come back in my next life as a rock star for a reason. just the whole nation of being a rock star and it's fun for awhile until it's not fun. and you've been sober 25 years now. >> yeah. >> and we were just talking about a previous interview that we just did. you actually found fentanyl 25 years ago. so you just moved on to where you needed rehab, and now you've been friends with -- >> yeah, 13 years of trying -- >> now it's 25 >> now it's 25 years >> so this is a scary place. >> this thing, if anyone's interested, chucknegron.com, i

have a blog. i wrote an article, why do we have to die to live. and it's all about the drug diction i saw coming with the pills, and the heroin, and so, it's interesting a lot of facts like fentanyl was around >> i didn't know that. >> yeah, yeah. i used to use it >> and you talked about the money. even in the music, the money in the oxycodone in the pharmaceuticals -- it's about money now. >> oh, yeah, yeah. the dealers, i mean, the guys that are out, because i work with them, guys trying to get clean, they said the deals are no longer on the streets, they're in offices and they're talking about doctors. >> yeah. unbelievable we wish you could stay i wish we could have you on longer -- >> -- amazing having you here. >> oh. unfortunately -- not unfortunately. i have a lot of information. i deal with kids but they don't know the facts. all they know is they're strung out, and their lives are over at 20 so you know, i do the best i

can. >> chucknegron.com >> right >> we're going to be talking about this, but i was told it's more of a howard stern type -- maybe we shouldn't do it here. even though we're cable, let's not. let's leave it on this leave it on doing some good. >> i just want to let you know everything off camera. >> that's right. that's right >> they told me i could keep that in my back pocket i don't know -- >> doesn't fit in the back pocket >> can't get it around there anyway, chuck, thanks. >> thanks. >> by the way, joe tried to sing us out to a commercial break earlier, with joy to the world >> you want to do it >> i thought we'd let you today it ♪ jeremiah was a bullfrog was a good friend of mine ♪ ♪ never understood single word he said ♪ ♪ but i helped him joy ♪ >> well done >> thank you thank you. that was great >> thank you, you ys agure great. >> we're back in a moment with jim cramer

>> lots to talk about this morning. we talked about amc this morning because that stock is just

tanking. don't know what you want to do about that if you're an investor. >> it's real trouble because you're talking about minus 4% box office you're talking about a basic collapse even though they made acquisitions you're talking about people staying at home and watching netflix. competition for the time and internet tv is crushing amc and i'm not even including the fact that a lot of the releases weren't that good this summer. this is really dyer because my trying to buy another theater and trying to get bigger they got worse and not better. >> the other thing that we talked obviously about is apple. what tow do? it's amazing this was not supposed to be the quarter that's amazing. >> i like the break down it wasn't all cell phone this surface revenue stream.

180 million people are take services think about netflix and how many people are taking that think about amazon we're motte quite sure but this has to be the biggest club in the world and it's a club willing to pay more for apps and i have to tell you, i think augmented reality is going to be big for the next quarter or two quarters and people that said trade it, what are they doing now? >> we're all looking forward to your interview with mondelez at 9:15 she will be stepping down. >> yeah. >> what's your quick take on that before we see her >> she just finished the great five year and expanded the gross margins fabulously i would have loved to have seen her finish and take this thing higher someone else is going to take it higher i find it disappointing. >> we are looking forward to that interview and seeing a lot more of you in a couple of minutes. >> thank you >> we're looking forward to this a jerky cold brew.

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

flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. starbucks combines coffee and beef jerky the new pepper nitro with a

jerky twist features cold brew through a nitro app and black pepper syrup and topped off with real beef jerky. drinks only available in seattle for a limited time. >> would you drink it? >> i love the nitro as you know but i don't think it's going to work with -- i like jerky too but i don't know if i like them together i haven't thought about that. >> it's not like jerky ice cream. with coffee jerky doesn't sound quite as bad as like clam ice cream you're not going to want. >> i tried lobster ice cream that was pretty awful. >> i'm sure. this might be okay jerky is good for you too. >> it's carb free. >> low carb. >> and the mets, it's another story going to bat with a medical device company the team says that florida based comprehensive health services stole it's trademark after the company filed an application for

its promedical examine tracking system mets which goes by mets the device managing cloud based medical information which is mets say is too close to what they do. the baseball teams claim they provide online nondownloadable software to facilitate information for games and events. >> that's a stretch. >> but it doesn't work very well just like the mets usually don't work well historically and that's why it's so similar. >> says the reds fan. >> says the reds fan 20 games under 500 at this point. >> amazing catch by cleveland. outfielder austin jackson robbed ramirez of a home run in dramatic fashion cleveland is able to hold on to a two run lead thanks to that catch but they still went on to

lose 12-10 the mets were a national league team i was a reds fan so i never liked them they sent us tom seever and it didn't workout. >> the dow set to open above 22,000 it needs 36 points to get to 22,000 for the first time ever we're up 45. >> join us tomorrow. squawk on the street begins right now. >> good wednesday morning welcome to squawkon the street dow looks to be in our future. the first milestone for the index thanks to apple and it's earnings last night. three quarters of the s&p will have reported. europe is fairly soft. so is the ten ar