they effectively fire but they don't fire he stay on in that room you're talk about waiting to vest their stock. >> i predict a bad outcome >> this was a good outcome we're thrilled that you were here. >> i enjoyed it. >> we're going to hang out with you. >> one more time with feeling i think. >> one more time with feeling. make sure that you join us tomorrow with mr. wonderful squawk on the street begins right now. >> good morning and welcome to squawk on the street i'm david faber with jim cramer live from the new york stock exchange and what do you know? carl has the day off which i just realized. let's give you a look at futures. full week of trading as you see we are looking at least for a some what higher open off of those strong employment numbers on friday

european markets you asked we answered. they're a mixed bag with the ftse up ever so slightly this morning. the ten year note yield did move around on friday and we do have it now at 227. right around the same levels it can't get through it. >> too much future selling and boy did that group collapse. >> it did. >> let's talk more about that and other things including our road map which is going to start with stocks seeking new records. the dow is on track for its 10th straight at aly gain and plus, paging inspector gadget. apple nearing the release of a new watch version which can make calls directly. >> right. >> there you go soft bank ceo providing speculation about a sprint-t-mobile deal continued speculation about a

charter deal we'll try to wrap all of that up and add some insight and new stuff. we'll see. the s&p 500 one point away from the record closing high. the nasdaq is in the middle of a two week losing streak. >> amazing. >> it is. >> march of 2,000 is what people keep saying. >> the difference is cash positions, multiples, shrinking multiples in nasdaq. expanding multiples and the big dow names and each week there's one that's new and the week after another large cap name, 3-m. it keeps going

rotation within the caps at the same time shrinking multiples. >> it's very hard and then came back to the capital equipment companies. we're seeing a rotation out of everything other than apple and arguably facebook. alphabet which my charitable trust owns was not liked >> no it was not as well received as many others. >> it was unstabilizing where as what's going up when amazon stable oozed down? >> walmart not predicting it but talking about how difficult it is right now how it's been a loser and we know that and quoting fang

something you created at least. >> you have to do your thing. >> but that's been the way to go for a long time now and these pull backs have been just that very brief very brief pull backs and growth in the underlying earnings, top lying revenue and the stock price continues. >> right i think it's hard to value a facebook if you're looking at it i speak to a lot of people about stock when i'm on these weekends no one can justify the value of facebook except for you and me because we're looking at gap earnings gap. now people don't ever seem to understand gap it's a really good piece about paypal but book is gap >> but you have to compare it. it's hard even comparisons across the board to companies. so many adjusted ones in so many

ways. >> stock compensation. >> you mention twitter because that was always a big knock against the company when it was for sale almost a year ago at this point here's what it would look like if we gave these people crash. and make a judgment. but the people that are really rigorous of which facebook i think is the most rigorous at all want to show you how profitable they are. >> microsoft does it too. >> microsoft does it too, yes. by the way, that microsoft quarter was fabulous but the very reserved forecast kept that stock under a cloud.

>> you're still largely positive. >> very positive. >> why >> because david one thing that has come out from thernings period is the adoption of the cloud as the fastest trend in the world of all the trends i follow second by the way is aerospace aerospace. undervalued by the market and we're going to talk about that because the aerospace companies have greater growth in almost every part of technology except for the crowd cloud adoption is extraordinary. it's going faster and faster and every time i think someone says amazon web services is going to lose, look at their growth. >> soefsh wins it's one of those situations where everybody wins. >> sales force wins? >> well, sales force is alive. >> oracle wins. >> oracle, i think oracle will understand. >> we talk cloud we're really talking that. >> got resource planning

they don't even need to compete in the cloud they have good cloud presence but amazon web services is run agoway with it i question how strong googles is we don't he know it's growing well. however diane green that runs the business and the claims that they will be as big as five years a number of times it seems hard to imagine. >> amazon web services is so powerful it's really the place to be. after the sell off. >> you're including boeing in that. >> boeing is so much more richly valued than united tech. >> i'm afraid i don't have much to offer although bankers have

been hired on both sides so there's an indication that there is something going on here i think it was bloomberg on friday that reported interest from utx although no talks in that initial report. the rumor had been around earlier last week but the question was they just finished the bea deal and utx could have had a shot because people weren't happy with that deal. >> no, they weren't. >> they could have had a shot with rockwell back then and didn't go for it i don't have any insight other than it does appear that again at least the advisers that typically get hired in these things doesn't mean that anything is going to happen have been hired. >> i think they should pay 140: bow as good a big power grab because it was at 15 times earnings on friday

united technology, 18, boeing 23 boeing needs to be reckoned with you can't go into boeing and say we have some great ones, you have to say we own it. and you have to deal with us in more than just the way you would deal with the other partners there was a great american that put together and got rid of a lot of great stuff for time warner and when he was ready to rant fox tries to get it right now they're finally where they have to be. this ceo, if this company is taken from him, it's good. >> really? >> yeah. >> hopefully we'll have more actual reporting on it for you. >> versus what

give people building blocks you still manage to use your voice you were on vacation. >> no, because i spoke to the eagles i had my video here. this is me speaking to the eagles but i guess we should take it after the commercial break. >> we're going to show that after. i can see it here but nobody else can it's very exciting. >> we have a report this morning saying the company is going to release a version of the apple watch later this year that will make calls on cell lurks rarks networks need to be connected to an iphone to have that capability he's been wearing this for years

now. >> i didn't plug it in last night. >> what's going on with your hands? >> i dropped something in between the seat of the car. all of my skin was gone. i got up at 2:30 i didn't give it time. i didn't give it any time. >> i have not been particularly positive on the watch. and then basically you never saw it again you have it. it's a black hole on your wrist but when and if it can make calls do you think that's a game changer? >> of course. >> of course because i can just very quickly give you a call. >> absolutely. get smart. this is a lot for me

if i never take it off when i do my all nighters it's not like i wake up and it's charged because i don't wake up. what am i supposed to do how do you do it with my schedule with a two hour, one hour sleep night that's the big draw back >> that i don't believe is healthy. even for you even for you. >> you told me i was getting younger. >> yeah if you don't sleep at all, that doesn't work >> i'm a three day sleep, 4th day no sleep. >> i get much more out of life. >> i sleep all day for three days hopefully we'll get to charter, soft bank, t-mobile as well two separate conference calls.

here's another look at futures as we get closer to the opening bell this morning. we have a lot more squawk on the street coming after this ♪ ♪you are loved ♪

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>> tesla announcing plans to raise $1.5 million in debt that's going to help scale up it's model 3 production and sure up it's balance sheet. elon musk said the auto maker was considering a debt offering but not considering offering more shares to raise money that would be known as an equity offering it is lowering the price of its model x suv by $3,000. this will be 79,500. it notes improved profit margins. >> that's going to help with the debt offerings this is a company that lives and dies in the capital markets. the ability to sustain itself given it's not making money is a key. but people believe and will keep doing that. >> as long as they give him money the stock will go higher.

>> as long as he keeps the dream alive and the capital markets cooperate. they have chosen to debt markets recently more often than the equity markets. >> he singled this in that bizarre conference call last week i want to back up on that. it was right after the journalist saw the model 3 and the journalist fell in love with it so as long as the car is great the money will keep coming if the car were not as great as another car it might matter but the other guys have not produced we say many times elon musk is unbelievable there's nobody like him. maybe besos is better than him in certain ways ai'd love to see him go head to head.

mayweather and mcgregor. >> i was thinking more like the rumble in the jungle. >> i'd like to see them both put on their space suits they can put those on and go at it. >> we're smarter than we are a lot of people keep talking about what is going to happen to whole foods. >> when amazon takes control >> that's a real possibility whole foods, they were going to go growth and then decided to not grow as much because the profit mar jins but i don't see that. >> it completes the acquisition and that's the amazon way. >> what do we do >> just sit back and wait and everybody assumes.

>> reporting. >> real reporting on which i did a whole documentary and got nothing from the company come on. >> look at costco. they reported again a better than expected monthly sales number nobody cares because it's food and everyone just says food is a battleground and either walmart or amazon is going to win but they both could win. >> that's interesting. >> what do you do? >> what about the providers of things that go on the shows? you were here friday. >> i don't want to be -- i don't want to be there

>> walmart is doing private label. they're the only guy walmart is doing private label i think walmart is telling you to get off the amazon web services too. >> they are. they're playing hard ball but walmart is not going to let these companies go over that that was a key it's not about french's mustard. it's about franks hot sauce. it's the number one hot sauce and millennials love it. why do millennials love hot sauce? >> i don't know. why. >> it doesn't have any calories.

it's the fastest growing aisle they may have paid a half billion more than anybody else if not more. >> true but they have a plan a man, a plan, a canal panama. >> panama, got it. up next we'll see what he has in the store. take another look at futures this morning we're headed for a higher open d me ls rere squawk on street ani anotmo straight ahead.

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6.5 minutes. not even 6 minutes before we get to an opening bell >> there are things that you say on air that make people money and you throw them away like kernels. i pick them up and develop them into popcorn nxpi you said and they may not be, and i'm talking about qualcomm may not be able to get this. elliott owns a big position in xp this is now over the 110 price. >> well over. >> we kept talking about all the 110 calls. do you know that index funds tend not to tender with f the stock price is above the offer

they have to pay more. morgan stanley raises price target what do they say? >> share holders of the other upper hand. >> based on conversation with large holders that expected just this and maintained. air argue is its based on what they get it's the key for qualcomm. i asked the ceo about it he is more or less deferred on it as he should. what is he supposed to say you have to wait. >> we have to wait, jim. >> you never know he face peemd

down my charitable trust i'm telling people don't tender. go with elliott. >> electrical bot owes the way around these things. it's a dutch company too we have the opening bell in a few minutes. we're going to go for a lot of stocks you should be watching including comments from softbank because they continue to talk deal somehow for someone a deal.

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opening bell is going to ring didn't get your take on the employment number from friday. of course. >> look, that sweet spot right now, optionalty. that's all i ever want the fed have optionalty to do what they want yellen is so smart i trust her. i trust her.

>> they're loud enough that i can't hear you right now there it is. there's the opening number day two here at the big board making all the noise provided with water for the oil and gas industry and it'sthe way to avoid environmental problems but it's a comply katd issue. our president is not really focused on the possibility. >> no. over at the nasdaq was brighthouse financial. provider of life insurance and annuity products that did complete it's separation from metlife. >> metlife is 60/40. i love the international

>> stocks start to open across the board. not much to tell you about a little bit of a bid in technology after a few bad days. >> yeah. you always have to watch it. there is a move, an understanding of both opt car length could be in little problems i don't think so it's a switch from 40 to 100 for cloud. and this auto business is just on anything it touches anything but it's gaining. >> let's take a little time to talk oil. >> really? >> yeah, really. what's your take i feel as though you try to be more positive. >> here's what happens

pioneer that is the company that did a series of equity offerings stock collapsed. it collapsed and eoc that had a fantastic quarter, stock got hammered >> it's always good to stop for a minute and explain. >> it's the lowest cost all in but there was a sense that if it produced too much would send the price of oil down. so there was kind of too much oil goes down. if they don't produce enough they don't make enough money what's happened is wall street will no longer fund these companies so they can't spend beyond their cash flow now eog is a conservative company but it doesn't matter. people just feel like it's packed i don't agree. the problem not enough pipe.

initially everyone said hey listen it's from 1940s there's pipe, pipe, pipe there's been so much oil found and natural gas that it's overwhelmed the infrastructure and in the meantime oil can't get above 50 because as soon as it gets to 49 or 50 all the companies have to sell in the futures market to be able to fund their drilling. so the price of oil on the futures market, 50 no appreciation it's going to be mediocre for years. >> it's the eogs and pioneers of the world. costs have come down considerably over the last three years. >> they're 20 bucks. >> pioneer is the one.

>> why isn't that a good thing >> it should be but the drilling service companies are starting to raise their rates >> they are? >> yes it's going to squeeze margins. a couple of counts in north dakota that's it. >> right talked a lot about that only in part of oklahoma so it's a half full, half empty and i think that the half empty crowd is in charge now plus there's this overhang of antifossil fuel no matter what even though 80% of the world these stocks are becoming coal and at a back coe like when it comes to the holders and there was a hedge fund that closed i struggle to find upside right

now. >> the longer term picture interesting as well. now that is the really long-term which is electric car and or the automated car. so the autonomous vehicle sleets of which could be roaming our streets within who knows, depends who you talk to, but they'll be very efficient. and they're going to run all the time nobody is then going to be buying a car and having to have it filled up in the garage. >> the demand for oil, the demand for oil is going to plummet. >> now they're going to be buying all the oil. >> so tesla has done the convertible buying say they do it again and again there's more pressure on the fossil fuel stocks because people will be saying that's a long-term short and it's right in our faces. >> they're not going to have

their focuses on electric as of -- >> volvo so that's right. >> what is going to happen david is the group is trapped and you need to have a major event because opec is no longer a factor opec can't get it together so i got into the saudi deal and they're caught. >> one said they're buying them and another said they're buying charter. >> who knows if they're buying anybody. this is the on going saga involving masason. one of the truly unique individuals in the world of business now that started softbank and the vision fund that we talked about that started to make investments at $100 billion that's separate from softbank.

softbank bought armed holdings they own 80% of sprint they turned that all around. made a killing there of course alibaba is still the greatest single investment made by anybody he bought it at nothing. $50 billion worth of stocks. >> soft bank reports earnings. he is asked questions. >> what does that mean it's unclear as i reported not last week but week before when it comes to charter soft bank is in the process of trying to come up with a fairly complex structure under which it would make a proposal for charter even though it is said it will never go hostile and charter indicated no real interest. how much equity could soft bank

contribute much debt capacity would they have to put together a deal at a premium for sprint and charter that would be interesting for charter shareholders very much unclear but is there a possibility of raising other outside capital? does he have other investors that might want to contribute to this new company that would then buy in sprint and buy all of charter? they engaged off and on and t-mobile doesn't see sprint as being worked with the markets right now and part of the reason is when you look at the cash at sprint, it's only about half it gets a little tough it's treating it like a 9

multiple and he says listen sprint is doing great even if we leave it alone but we only want to consider trying to do things that will help it. he's probably not looking to do anything that doesn't at least value it at current market. >> okay. >> so we'll see if we can get past that impasse, whether all of these things he is doing will bring t-mobile back in a reasonable manner. i don't know but the equity is some what overvald when they look at sprint. >> because of how much is just that horrendous balance sheet. >> and it needs balance sheet repair and any deal they did would have to involve outside capital coming in to sure up that balance sheet as well is it

possible that he'll get another large investor to give him equity that will help solidify it as unlikely as it would seem that they have interest? to be continued. >> he did not offer details this morning. we would tell you if he did. >> why does one reporting outfit say it's charter and another says it's t-mobile >> they're not talking to charter -- well, i shouldn't say that massa says bring this to your board. i'm going to make an offer and he hangs up on him or is courteous to him but makes it clear he's not interested it's been on and off again so you never know because he's now so involved in other things he would go over to the soft bank side and become the key number two and take over

and so we'll see. >> can i ask you just part of this whole universe why did viacom collapse so badly. >> we heard that the ceo was good and this was the collapse people were talking about this weekend. >> during the course of the day on friday there was a sense that it was down 13% at would be point. i'm not sure where it flows. people thought it was a bit overdone there's concern for a number of reasons. one is slowing domestic advertising. and then you had viacom say

we're going to be down 2%. there were hopes there wouldn't be but ratings have been better. there's also a fear that somehow they're going to get dropped by charter. because they don't have must have networks. >> and then disney coming up this week. >> yeah, thoughts. it's a company have were good programming as a bundle. where younger people don't know what you're talking about when you say bundle my skinny bundle is netflix and amazon and it's so generational what does he want to do. >> with it's 20% stake in espn

which we don't talk about often. >> would you spin it off would you try to get a deal? youtube needs that program. >> do you do direct to consumer as he has indicated will be the case but can it really move the needle >> i think this disney conference call is going to be so important. >> why if the espn number goes down again it's going to, you're going to question why you said he was bullish and feeling better about it. in the meantime they're 40 cents away from an all time high this thing is back it wants to be in fang so badly.

>> the dow up for the tenth straight day and this comes off of a very strong day for markets in europe and asia in fact, asian stocks are trading at a ten year high following that strong jobs report is this the end of a weaker dollar? probably not but this week's market cues will be very important. we have treasury auctions starting tomorrow followed by chinese trade data most economists expecting china's surplus to increase with the u.s. plus friday's u.s. consumer crisis following weaker inflation. i also want to draw your attention to the big energy names and the double digit

losses we saw last year. pier in national, range resources, opec leaders are gathering to discuss the current supply cut agreement traders also watching venezuela and whether economic sanctions will be announced so oil very much a big talker. quick look at bitcoin that continues to break records well above 3,000 following the highly anticipated software upgrade now at 3400. lastly, marriott teaming up with alibaba to get better access to the chinese tourists according to analysts china's online travel market sales expected to increase 20% this year compared to a year ago

looks like we're going sideways if you go to a two day it looks like we're holding the gains that's the point back to the end of 2015, do you know where bonds close where there trading now. let's start the chart the very end of 2015 when the bonds settle at 227. the reason i point this out is not only that we're unchanged on a 2 year basis but to comp it to the bund if you look at the bund chart yields were over 60 and now under 50 but considering the cra crazy ride the last couple of years we're linked at the hip and we continue to be although

if there's a light to be shown it would be that the treasure rates are high and most down moves are due to the bunds we want to pay attention to the 118 levels of p ifrivot and it ' only the euro strength against the dollar it's also against the yen and against the pound as you see on the one year chart where it's at the strongest level since october of 2016. david, jim, back to you. >> thank you, rick let's get a closer look now at oil prices. >> good morning. oil is pausing under $49 barrel at the moment. an unofficial opec, non-opec gathering this time, speculation

that there's conversations regarding stepping back from the negotiated deal if certain members are unable to comply longer material. but it's chatter at this point the break of $50 barrel was significant but not enough momentum to be able to hold as you can see. we're approaching the close of the period and that's going to be anticipated soon as well. crude had a more than 10% run in the last month along so to go higher from here traders are saying you need a good reason. back to you. >> okay. thank you. jackie coming up we'll get a closer look at what is at stake for the trump agenda especially when it comes to tax reform and tomorrow on squawk alley be sure to watch an exclusive interview with jp morgan chase's ceo jamie dimon. that's tomorrow at 11:30 >> happy birthday.

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>> let's take a look at where we are. starting the week strong the dow in record territory. can we make it nine straight record closes in a row we'll see if the dow closes positive s&p 500 stays positive materials and technology are strong today energy is lagging and wti crude is sitting below $50 barrel as

these producers meet to talk about cuts technology is having a good day. david with the nasdaq up a quarter of a percent right now. >> a bit different than in recent trading sessions. the dow hitting another record high we have you covered for your trading day ahead. >> big immediate yaernings this week what investors should be watching as cbs, disney, 24th century fox get set to report this week. >> plus getting convicted of fraud. the details and the possible sentence straight ahead. >> but first let's get straight to the markets joining us now is chief market strategist at russell investments and the director of global macro at fidelity investments. you have been sounding the caution alarm on this market saying it's vulnerable to a pull back and here we are again on a monday morning in record

territory. >> correct it's an opportunity to be disciplined so we don't have a recession call on the u.s. economy for example. we don't necessarily have a negative view on the u.s. markets but we do think that this is a good opportunity to rebalance globally at these valuation levels they are supported by the fundamentals so fundamental is good but these valuations we think this is a good time for a u.s. dollar based investor to diverse fireworks globally and look in areas where evaluations are not as challenging. >> like what >> europe.

we think they make more sense. >> do you agree with that? they have a stronger currency. that's not exactly friendly for exporters. that's one of the factors weighing on european stocks lately which do you prefer? >> a agree that nonu.s. equities offer better risk return potential you than the u.s. market they have caught up already quite a bit since the february 2016 bottom. it's up 50%. the s&p is up 32% which is pretty good as well of course. but germany is trading at 13 times earnings the u.s. is trading at 18 times better forward earnings.

>> the numbers are very clear in terms of valuation discrepancies yet there's talk that value investing in the u.s. has not necessarily been fruitful if we're looking at the basic measures of value that we have come to know is there anything going on in the markets? whether it's the sectors that are working or the types of stocks that are thriving this environment that might keep those valuation differences across the world in place? >> yeah that's a very good point but the gaps are still quite high earnings are higher across the

board. it is firing on all cylinders and really since about a year and a half ago investors have never gotten as much return for little volatility as they would now. i would agree in that we have to remember that a 10% correction can happen for any time for any reason and the odds of that happening are about 1 in 3 so we can get too spoiled by the amount of return we have gotten per unit of risk over the past five or six quarters. >> you don't even have to look to u.s. versus europe for the discrepancy. you see it within the u.s. market big multinational companies for instance versus the smaller cap companies. the russell 2,000 index underperforming lately which one is a better value to you and what does that tell you? the fact that we're seeing this gap widening out. >> that goes back to something earlier about the currency differential between the euro and the u.s. dollar that's going

to be critical and lessly inquirity is going to be something that people want to understand really clear. it would be good relatively. >> you think the fed is done for the year. >> inflation is too low. >> it's getting a little soft. wages a little soft. the economic cycle a little soft no alarm bells but there's not really the fed to be overly aggressive raising rates because i think they're going to let the bond market do a lot of the heavier lifting. >> finally, since we're talk about the risk a month from now,

maybe you want to put in the stock that congress doesn't have that much time to address the debt ceiling and the prospect of a government shutdown as we look forward here. >> the odds of a fed hike in december are about 40% it remains to be seen obviously balance sheet attrition will come first and so far that seems to be on track for a very measured base if anything we need to be looking more at the ecb and how quickly they are going to continue to taper their balance sheet and when and how they're going to eventually start to sli shrink that. that may be a bigger factor going forward now since they have been the driving force on the front. >> north korea is responding to new un sanctions the official news agency says the sanctions infringe on its

sovereignty and they're vowing to take righteous action on saturday the un security council unanimously adopted a resolution that ams ims to slash the export revenue by a third. it would ban exports of core, iron, iron ore and seafood rex tillerson spoke about north korea earlier this morning at a conference in the philippines. >> well, the best signal that north korea could give us that they're ready to talk would be to stop the missile launches we have not had a extended period of time where they have not taken some kind of action by launching ballistic missiles that would be the first and strongest signal they could send to us is stop the missile launches. >> he told russia's foreign minister that the u.s. will respond by september 1st to moscow's move to expel u.s. diplomats. >> not a lot of financial

reaction i was just looking at it maybe a little bit weaker because there's some risk there i guess but it takes a lot to spook investors right now and everybody says north korea is a big risk factor that they're watching but it hasn't got to that level yet. >> i don't know what takes it to that level other than anything you don't even want to come close to thinking about. and the way it relates to our relationship with china and the president continues to put pressure on him at least through his tweeting but how that relationship as it relates to trade is probably the most important. >> absolutely. meanwhile, let's send it over to

morgan for a quick market flash. >> check out shares of bright house financial. those are falling 4.5% right now. first day of tragd ding on the nasdaq metlife which is about half a percent higher today it's up actually 1% now. this day is a long time coming after the top u.s. life insurer announced plans in early 2016 to spin off the slower growth more interest rate sensitive business which had accounted for about a quarter of methieflife's assets. a bigger than expected charge thanks to the spin off and that the dividend would be smaller than anticipated analysts expect volatile trading near term. at least metlife investors are sharing because they don't take a dividend they're down 4.5%. back to you. >> morgan, thank you when we come back it is a big week for media companies earnings we'll break down what investors should be watching for ahead of

those reports starting with disney i believe to recall plus a government shutdown is on the horizon as the battle over the budget continues we'll discuss the impact on pushing through a tax plan when sqwk on uathe street comes right back don't go away.

>> these issues could weigh on the media giants over the next couple of days first up cbs reports after the bell followed by disney tomorrow afternoon and then 21st century fox on wednesday late last week viacom shares plummeted after the company warned both it's domestic advertising revenue and affiliate fees will decline by low single digit percentages this quarter one factor likely to impact the larger media giants this week, broadcast tv saw a 12% overall raidings decline in the quarter but on the upside in a contrast

and directtv now and comcast reported better than expected results in part driven by higher distribution and licensing fees at nbc universal analysts say this could be a rough earnings season for media stocks we see relatively week fundamentals but ahead of earnings tonight cbs is well positioned going into the back half of the year and it should get a boost from a strong up front season as well as the return of the nfl and the launch of star trek on its all access direct to consumer app looking for more details on all of that. >> back to you. >> thank you for more on this week's

immediate yaemedia earnings, so far what we have gotten has been at least some what of a concern on the domestic advertising front there's mixed signals is that something that you'll be watching closely >> right the trend is really frustrating because these guys had good pricing tail winds at a very healthy level. and that was one of the frustrating things they had better trading trends than others but then also at time warner they had cnn but their ad outlook was very disappointing.

it's their retransmission. they have a lot of exposure and then at disney you're going to see a add number because there's fewer finals games and it's soft at this point. >> when it comes to disney there always seems to be continued focus on espn and what maybe continued subscriber decline sort of as being the leading edge of the unbundling we talk so often about is that going to continue to be a focus? should it be a concern for investors heading into the quarter? >> it's absolutely a concern the trends are clear that you're seeing a 3% or so decline in basic cable and that's an uncomfortable number and getting worse so it seems. the impact on the numbers is not huge what's happening to these stocks is the multiples are coming down

in advance of the earnings estimates coming down but i'm not sure what changes that outside of consolidation what do you think is the key to watch for in terms of next steps in consolidation >> you'll see more that will make it easier for consolidation among broadcast companies. tv station ownership ruls will be loosened. we'll see the conclusion of the at&t time warner merger and then how they leverage over the networks if they have success that can be a catalyst for more content merger consideration which i think would be, put a bed underneath many names in the group. >> and finally of course we

didn't mention fox it's funny, you add fox's market cap to that of cbs, two names reporting this week. the market value of netflix which i think said it all in some ways doesn't it >> it does it says valuation doesn't matter netflix has gone straight up viacom has gone straight down. it's a super cheap stock and netflix is super expensive it's the secular trends that matter and not evaluation. >> any concerns when it comes to fox? >> fox is largely driven by sentiment around the sky merger that's delayed a little bit. if you want fox you're very excited about india where they're doing well you're a little bit concerned about the add trends here in the u.s., exports. >> all right we'll leave it there thank you. >> great, thank you. >> when we come back the battle over the budget and taxes. will disagreement over spending actually cause a government shutdown this fall we'll discuss. and a quick programming note

don't miss an exclusive interview with jp morgan chase ceo jamie dimon with wilfred frost. ua on the street will be right back don't go away.

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>> gentlemen, good morning to both of you. >> thank you. >> are we really talking about a risk of a government shutdown when republicans control all three branches of government >> that's an amazing statement sarah. i think we are although i put the odds at less than 50%. i do think that republicans in the house will be able to pass spending bills but you'll need 60 votes in the senate and i strongly suspect would be dead in the senate. senate democrats and remember you need democrats to get to 60

will object for example to the fact that republican house spending plans go above the cap when it comes to defense spending they allocate more to defense than previous congresses have agreed to and cut a bunch of low income programs so they're not going to get democrats on that attend of the day i suspect we'll get another one of these patches of continuing resolution that should keep the government open and then there's the debt ceiling. >> that's the frightening one. the shutdown is not the frightening one. and republicans are going to try to do this weird thing where they're going to try to get a debt ceiling increase while maybe needing democrats while they're going to try to shove through a big tax bill with no democrats that's not a great dynamic. >> he seems to still be going in one direction.

does he want to do it in his heart? i have questions about that. in the meantime you have house republicans that still want spending cuts. sitting in my e-mail is a letter saying that republicans must push for spending cuts with the debt ceiling bill. that could get very, very nasty and it should give you no confidence that this is going to go smoothly. >> i guess there's a little bit of a sense out there that yes you have all of these factions going in different directions but when it comes down to it if the core priorities of both houses of congress is to get toward something on taxes won't that bring them together to say listen we have to have the

short-term fixes that's the way the market is playing. not a lot of nervousness at all being shown. >> sarah made the point about how unresponsive markets have been to, in that case, geopolitical noise i'd make the same case for washington noise like you just said there's an important point which is that the tax thing and the other stuff we're talking about are very much separable. so the tax plan, this reconciliation plan can do that without democrats. when it comes to the debt ceiling if you go back to future debt ceiling bills they to use democrats. john boehner needed democrats to raise the debt ceiling i do think and this is an important theme that i hope we can develop in coming weeks. there's the economy on one side and washington noise on the other side and they're not the same thing and the markets and the job market are moving along and discounting a lot of noise that works great until you start bumping up against the debt ceiling and start talking about

shutdowns and start having kinds of disagreements that bleed into the real economy. >> although i have to say -- jimmy we have been here before remember what happened even at standard and pores downgraded and we still managed to avoid a default. it's only happened once in the 1970s and it was an accident we're talking about september 29th we're also talking about a president that his number one talking point right now is the strength of the economy jobs market. >> he'd have a better approval rating if it didn't look like the lanister army. most of this centers around

donald trump he's unpredictable that factor splaing in some of the more scary scenarios. >> did he just spoil game of thrones. >> he just spoiled last night's episode but that was an amazing gold star to you for that reference. >> he is basically saying they're going to run into it it's going to happen i'm not sure why he comes to that conclusion. do you have any thoughts >> i think that the issue of trump in here has baring on this and increasingly members of congress, republicans are just not that concerned about where he wants to push them and he's making it worse by lashing out against republicans around health care.

they are really blaming congress and they have a real incentive to get their act together but i don't think trump is going to help them much. >> meantime they are on august recess now at least the house thank you for joining us to talk about these washington risks >> united technologies may be weighing a bit for rockwell collins. phil joins us now with more on whether or not it actually makes sense. i'm all ears, phil. >> and david there's a lot of people that say well on paper it makes sense in terms of what the two companies could do when you put them together and then you have to look at the financials let's start with the report from reuters late friday afternoon and that pushed shares higher 4 or 5% today let's talk about why

this would make sense if you're united technologies. it makes up 20% of the revenue they're growing that business and they would fit in nicely and also a nice defense portfolio and if you're rockwell collins you bought be aerospace this year it has a higher premium if you're united technologies and remember last year when honey

well was making its move for united technologies? at that time they said we don't think this is the right fit and there were concerns about antitrust hurdles. but it would be a rich price that they would be paying. >> i remember that very well the only thing that i can add is the two sides do have bankers but again it's unclear if utx did make a bid or what it was rex tillerson holding meetings with his counter parts

measures to reign in north korea high on the agenda john kerry commended the judicial branch of kenya's country for their role in solving political disputes he's leading a dell kags egatiof carter center observers. >> we're privileged to be here among the international observer groups in order to try to help kenyans have confidence that they will have the election that they deserve which is open, fair, free, transparent and accountable. >> lightning causing a wildfire that scorched 3,000 acres in western nevada strong winds shifted the fire away from the structures that's the news update at this hour i'll be back in an hour and get you up to date back downtown to you guys. >> thank you when we come back much more on the markets. look at how they're doing right

now. just slightly in positive territory. the dow work on a tenth straight day of gains nasdaq out performg stinju slightly squawk on the street will be right back don't go away.

>> that is to say job growth is in excess of 200,000 more than half the time in the past two years. the economists contention for job growth undershot all but one

of the 200,000 job growth months by an average of 46,000. one prominent forecaster thinking about changing their outlook. goldman sachs writes over the weekend we have made a sizable downward revision to our forecast for the unemployment rate by tend of 2018 to 3.8% from 4.1% previously they think this is going to continue quote with openings elevated and firm searching job growth should remain brisk here's the question whether brisk job growth and falling unemployment rate will spook the fed. there's an argument to let the job market run and see if the economy can run longer at a lower inflation rate and lower unemployment rate doubt sparking inflation. >> thank you very much we had the dow looking to post it's tenth consecutive positive session following the best week since may and for more on how it fits in with the jobs picture and economic outlook we're

joined now financial conditions incredibly loose. market loves it. can can can it count on that continuing >> history implies that it can when you look back and look at the number of new highs that we had so far this year, whenever we have had an above average count of new highs that has actually increased the likelihood and magnitude of the markets performance in the remainder of the year so the indication is maybe the consensus would be long thinking we would be stumbling into a big decline shortly. >> so the way the market is persistent in stretching to the upside that itself is a good forward indicator but in terms of what might be out there and up ending this happy economic story -- >> i guess you could say if this

is a goldilocks scenario you have to remember she was snoozing while surrounded by bears but also the reason that the market continues to work it's way to the upside is regarding the economy, the same could be said about corporate earnings this is the 22nd quarter in which the actual results have exceeded the end of quarter estimates and the average rate has been about 3.5% so now we're at 10.5% rather than the 6.2 estimated at the beginning of the quarter. >> what do you think markets fully supported by what's happening fundamentally either in the u.s., globally or are we seeingly quiddity make its way into expanding valuations more than that? >> look it's all of the things we mentioned but there's one thing we shouldn't forget thus far you have seen a decline in the unemployment so surprise in the number of jobs created

but we haven't seen the same surprise in wages. wages have been fairly benign. as a result of that corporate profits continued to increase without much inflation being visible. as we go forward i would expect wages to start to edge up as some of the effects that have been helping wages start to subside. if that helps, i actually think there was a lot less room for corporate profits as they start to rise. >> we have been waiting for that for a long time. a lot is being made about august, quite month, volatile month. usually actually a poor month in terms of market returns. not so quite in recent years we had the chinese devaluations a few years ago. what are you telling investors about how to play the seasonals? >> don't go too far out on the risk curve because seasonally we're in a sleepy period and we

could sleep walk and fall down the stairs so august traditionally has the second worst performance for the s&p 500 since world war ii september is by far the worst. not only on a price change basis but also it's fallen 58% of the time so on a frequency batting average basis september is by far the worst. so august and september together are periods we find it most challenging. >> you might be able to step back and say this period of unusual calm in the markets across all asset classes might be viewed as an opportunity to pick your spots and say how do i want to reposition what seems overdone? what seems like it might be neglected. what would you be saying in terms of potential rebalancing >> so one of the things that perhaps surprised a bit is we have seen a decline in dollar so some of the larger cap stocks, well poised to at least deliver against the benefit of the we

weaker dollar and health care and technology and select industrials between now and the year end. >> and in terms of, i know you were focussing on equities but everyone keeps pointing to credit credit seems to be supporting whatever fund the equity markets want to have is that going to continue or can credit be sending a wrong signal. >> the credit spreads are quite narrow the one thing i'm worried about in the market is we keep looking at the averages and if you look at the distribution of credit among the companies you are starting to see a bit of weakness among the smaller companies that are exposed to the credit markets on the margin we have some with a preference for equities relative to credit. >> all right thank you for your time this morning. appreciate it. >> as we head to a quick break here take a look at shares of marriott in the green after news that the hotel chain struck a

deal with alibaba. both stocks are doing well today. the deal allows alibaba users to book hotels through the website. and when we come back, guilty of fraud. we very the details and the possibleennc stee as well as his always colorful reaction don't go away.

find out what it is at trading nation.cnbc.com. more squawk on the street coming up

>> sarah, thanks for taking the

time >> my pleasure, thank you for having me. >> on august 3rd it's ironic because moodies still has aaa rating on the u.s. s&p almost exactly six years ago in 2011 in august downgraded it one notch but the paper that was put out earlier in the month talks about how higher interest rates rising debt, lower revenue, all of these things summarized interest costs to revenue ratio that deterioration makes moody's nervous can you explain? >> yeah. the bottom line is its already begun. debt affordability the ratio of interest rates, interest costs to general government revenues are rising and we expect them to continue

rising >> that can occur in various forms. all of that is going to change the me tricks a bit. there's an assumption that over the next five years moody's believes medium term rates will nearly double. i don't disagree with at a but that assumption hasn't been correct in the past. how much weight is put on that particular notion? it's a baseline scenario over the next ten years so if medium term rates don't rise by as much as we would expect you wouldn't see this ratio get as -- it wouldn't be as bad as our baseline scenario. having said that, the bottom line is that even if measures are taken, you're still likely

to see an increase in a ratio that's much higher it's about four times higher than the ratio that germany has for example. >> finally in our last half minute, sarah, the idea of revenue neutral when it comes to tax reform is an odd thing you don't necessarily want it neutral. you want a little bit of a kicker does moody's or any of the ratings agencies take a dynamic approach to tax changes to the down side in you're final answer. >> i can't speak for our competitors. what we look at is a baseline forecast for revenues over gdp and that gets incorporated into all of these other ratios that we look at but what we're doing is coming up for the baseline.

>> we'd like to have you back as we move toward potential legislative progress thank you for joining us this morning. back to you. >> thank you let's send it over now to john fort and get a look at what's coming up on squawk alley. >> not exactly a jerry mcguire moment but internal memo is rocking google as we start the week it's a position on diversity that's not exactly the company line ha'll dig into tt. that's coming up on squawk alley.

martin was convicted of three counts of fraud on frichlt we have more details and the possible sentence. when will ween into how will we know are the options >> it was asix week long trial including five days of jury deliberation that's ended friday afternoon with a guilty verdict on three counts. the government accused him of robbing biotech company in order to pay back investors. he defrauded into hedge funds. government witnesses during the trial testified that they were mislead by shkreli about the funds and performance. they tried for long periods of time to get their money back and were unable to but that ultimately shkreli

repaid them and then some. the fact that investors made money complicated the case and may have implications for shkreli's sentence despite the three guilty verdicts claimed victory on friday >> i think ben said it all you know, we're, i think, delighted in many ways with this verdict. count seven was the government attempt to theorize that i robbed peter to pay paul and the jury has spoken that i did not defraud. investors made three to five times their moneywithout any aid of any settle comment agreement. so i made ten times or more than that of their original investment after they did receive settlements. the jury did their job and saw the facts. >> shkreli could face 20 years in prison but he would seek much less, potentially no jail time the so-called pharma bro was already back on social media

friday afternoon live streaming from his apartment while he drank a beer, no sentencing date has yet been set the judge concluded friday by telling shkreli i wish you well and see you soon >> i was going to ask the fact that he was back on youtube claiming victory not showing any signs of remorse or guilt would work against him when it comes to sentencing which he still waiting for. >> yeah. there's been a lot of speculation that showing a lack of remorse could potentially factor into how the judge sentence here's. we're going to have to wait and see. we don't know yet when that sentencing date will be. but certainly folks think that's not going to at least go in his favor. >> all right thank you, meg the price of big coin surging over the weekend topping now $3,000 climbing as high as $3,360 the price has more than tripled in value for the year. software upgrade last weekend that was expected to cause volatility was relatively

uneventful we got that fork and that bitcoin cash spinoff clearly there sin creasing demand for this currency whether it's coming from abroad, places like china you have a weak dollar which some say helps at least. this is another alternative. >> and others too. >> on some level although, you know, so what was this kind of like the y-2-k thing with bitcoin that didn't cause disaster >> this is the first time it would happen and have the split. and it was a test of demand and bitcoin passed again >> you have to be focused on bitcoin a couple years ago so tell me what your thoughts are with the latest price and interest that seems only to be increasing >> i think the latest is it's hard to put a value on bitcoin i always was careful to say that you can never put a price on it because it was nearly impossible there are clearly underlying risks. it's not backed by government or

a central bank but there say lot of money and interest coming from legitimate and illegitimate parts. there is also the technology that underlocks bitcoin. that could be driving it up as well when we come right back, netflix making first acquisition ever buying comic book maker miller world. we'll speak to an early investor of netflix a quick programming note today on the halftime report at noon eastern, an exclusive with leon cooperman a long time board member of adp, it will be interesting to hear his reaction to the campaign against that company that is coming up at noon eastern. "squawk on the street" will be back experience uncompromising performance at the lexus golden opportunity sales event before it ends. choose from the is turbo, es 350 or nx turbo for $299 a month for 36 months if you lease now.

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welcome back to "squawk on the street." check out what is happening with consumer staples, technology, the best performing groups in the s&p 500 on the staple side of the equation, we got meat producer tyson foods leading the charge here in a better third quarter beat and strong forecast as well. tyson benefiting from streng tht in pork and beef business. the consumer staple sector up

nearly 7% already this year in 2017 certainly a sector to watch and, of course that, dividend play is certainly one of those things that we have to keep an eye on when it comes to the dividend stocks anyway that, does it for this hour of squawk on street let's send it back downtown for the start of "squawk alley." back to you. >> thank you, dom. good morning, it is 8:00 a.m. at alphabet headquarters in mountainview, california 11:00 a.m. here on wall street and "squawk alley" is live ♪