he could be 35 then but he's very young if you've got a fortune of $60 billion or whatever he's got, i think that's enough to keep him busy. >> howard shultz, bob iger >> i think howard shultz is an attractive candidate bob iger also. but just because one business guy is the president i don't think we're going to business executives >> david, we loved having you here please come back >> my pleasure to be here. thank you for having me. >> thanks. >> and wilf, thanks to you that does it for us today. now time for "squawk on the street." ♪ good thursday morning. i'm carl quintanilla with jim cramer, carl faber futures suggesting a possible third day down for the major averages that would be the first such streak since april plenty of retail earnings. europe is red. the 10-year around 2.23%

the biggest drop in 11 months ahead of cpi tomorrow. our retail map with slipping all out with earnings, most of them down in the premarket. >> plus detail from facebook to take on tv with original video content. this is a day after disney added fuel to the content battle as it partially splits over time from netflix. >> and day of ipo report cards blue apron is dropping in the premarket. busy day for retail earnings this morning we heard from macy's and kohl's. they both beat the street. dillards reported. that stock down after it missed estimates and same store sales fell by 1% we'll hear from nordstrom today. they've sort of been all over the place. up and down. >> people are being stupid they're being stupid kohl's is a good quarter the concern is the 5.5% yield. not a problem. macy's, really, really good. why? because they reaffirm. this is a company that has not

reaffirmed in ages i think thatthe new management there is energized they're spending on the stores to make them look better cash flow still good they've got that unbelievable cfo who's going to tell us what's really going on to be able to be sure about the dividend but so far so good dillards is a disaster i haven't been there since 1978. i didn't like it then. but i think that kohl's, only because it ran, is not down a lot. remember kohl's is not a true mall store it's a strip mall store. see what they had to say about order ahead, that kind of stuff that everybody's so excited about. >> transactions were down for the quarter but they said up in july >> good momentum >> comps down 0.4% but down 1.8% a year ago >> this is the trajectory i'm talking about. these places are not going to go from zero to 60. they're not teslas but what they are are companies that could be survivors.

it is not an existential crisis as it is at kohl's as it is at macy's amazon is like macy's except for cheaper. but if they could make the place more hospitable like not be overwhelmed by guards when you go to the brooklyn store not be overrun by cheap plastic hangers. i think those plastic hangers are emblematic of what was wrong. i think they're going to what's right. loyalty program in the fall will matter macy's it will matter >> why >> why because they have no loyalty >> wait. so which way is it going to matter >> no, i'm saying -- okay, look. the larger customers are loyal i was one of the largest customers macy's had when i dropped off, no one contacted me management tells me that's not going to happen. i may have been the biggest -- may have been in the top 100 i quit and it's like, hey -- because what i did, i had a macy's personal shopper.

i give presents to everybody so i just got the list when she retired -- all right, not everybody. because you didn't shop with me. had you shopped with me. >> you were in high frequency. >> yeah. i didn't buy those handbags that are $30,000. you know those things? >> yes birkin >> you can't get them. you know why >> why >> because there's a list. it's like getting into a club that doesn't want me >> i don't want one. >> how does all this fit from what we heard earlier in the week >> coors, digital. they went digital. during a good time google, that's going to matter ralph with supply chain management and a spiritual bond between the new ceo and ralph. what you need to do -- and that's not just going to the polo bar, david. that's follow-up i think that ralph lauren has closed a lot of bad stores i think they are also back suppliers are doing better vf was fantastic don't rule out pvh

suppliers are doing well here. they figured out that amazon is not the enemy. it's a friend. >> really? >> yeah. >> until when? >> i don't know. >> always your friend until they're not. >> hey, listen you know, it's -- i think that they use the channel they're not just mystified by the channel. >> kind of like disney used netflix as a channel, right? until they decided we can do this on our own. >> they're like north korea there. using the channel then do it on their own. you don't like that? north korea's got the whole world in a standoff. >> yeah. >> kind of upsetting the whole world. >> tough segue there. >> i was going to say sometimes i feel that disney upset the world. that was the segue into it right now. >> but i think we have other things, though, then we'll talk about it >> all right all right. i was trying to get it going >> you're good >> we'll cover -- >> you know how to do it i learn from the best. >> i just -- >> look, i got shot down immediately. let's go maybe to blue apron >> let's do blue apron >> we have production elements

>> wider than expected loss, but revenue did come in ahead. a key metric investors were keeping an eye on. customer growth. registered growth of 23% from a year earlier it's almost a million active customers, jim. >> i'm not going to say it was horrible not really horrible. and what i'm look at is let's go over this. this is 18% revenue growth look at this average revenue growth, two years ago 250 dlsh they were going -- they went from 338% revenue. first quarter 42% and now -- i was looking for a much, much bigger number. i was looking for loss of 30 cents. they gave me loss of 47 cents. this remains mr. travesty when it comes to ipl. >> i'm glad you said that. >> kwhie >> because i was about to. this should never have been taken public >> never >> underwriters should have said no >> they jammed everybody >> where they almost did say no in terms of pulling it

but that was a sign right there. remember the price expectations came down, down, down. yet they still brought it to market and we have lots of questions for the ceo when he joined us that day i think we asked a lot of those tough questions. and they haven't been answered >> all the way to the back >> well, i mean -- you know, the exits are overdone here. they didn't sell that much stock and most of what they own is still on the table of course is suffering significant declines >> everyone's in net business. the entry there is nil i do like grubb hub and the way they shuffled it with groupon. do they shuck oysters? blue apron >> i'm not -- i did not order any oysters with the service >> i was going to say, so long shuckers >> got it. >> all right >> meanwhile, canada goose, 13

cent canadian lost. >> good quarter. >> a lot more than the 18 we got out -- >> those guys really have it going. and for those of you who think they hurt animals, go to the website please this was a quarter which was a nonconsequential quarter and they got it going. good quarter i've liked it from the get go. >> and it's ban good performer >> and columbia sportswear was good too this is a company, canada goose came in, everyone just thought it was kind of a one off versus blue apron where everyone was so excited. snap, they were all so excited canada goose, nobody cares >> i don't -- right. okay i don't think people were that excited about blue apron >> i mean initially the -- you know, they used to run all those -- well, they got -- they got people excited >> it was a marketing push >> there was a marketing push. >> and it was interesting. >> it was interesting. >> people were like, okay. >> was means just past tense canada goose, nobody cared about. >> companies are able to get it

together and come up with the pivot. they pivot sometimes. >> you're telling me that blue apron i should trust the process? >> i'm not saying that i'm saying there's always a possibility they'll pivot. >> yeah. they can pivot yeah they're the big man. >> speaking of pivot, let's pivot briefly here to north korea. firing back at the president's threats of fire and fury calling them a quote, load of nonsense it is the latest in a growing war of words between the united states and north korea chery lang is live with the latest >> reporter: thank you very much, carl so north korea upping the ante once again and this time actually following up on the threat that it made yesterday. so the state-run media talking about how putting out a lot of details about this, the planning of preemptive strike against guam, pyongyang says it will launch four intermediate range

missiles that will land 30 to 40 kilometers away from guam. so a lot of factors at work here it threatens japan along the way and also guam has a lot of key military assets of the united states and also in terms of the distance, it doesn't exactly violate the u.s. waters, but it's close enough to be threatening. and also the level of this specific details that we are getting, this is quite unprecedented even for north korea. and when it talks about how long these missiles will travel in terms of time and distance, it's certainly showing off this technological advancement it's made with its weapons. and now against this backdrop, cnbc did reach out to governor eddie calvo of guam. this is what he had to say about why he thinks north korea does not want to follow up with this -- with these threats take a listen. >> i think it's important to

point out that with the territory of guam, there is enough hardware to, you know, again, cause great harm to north korea. it's important that the united states, japan, south korea, and its allies and together with china which is very critical to this make it clear to north korea that the direction they're going is the wrong direction and it could lead to serious consequences but we feel confident here in guam we believe there's a defense umbrella that can protect this island community, this american community. >> reporter: and i do want to end with highlights on these two factors. one is that the sustainment from state run media is saying that the military will be ready by mid-august, but it will be waiting for its leader kim jong-un to order and to go ahead or not and this timeline of mid-august i think a lot of observers -- a

lot of north korea experts that i've been speaking to all day today seem to have this consensus that that's actually giving washington some time some days to respond. back to you. >> chery, we appreciate that >> everyone has to read mark bowden's piece in the atlantic he wrote down black hawk down. he is to me the great reporter of this era. he says this is going to be appeasement. he says we're going to have to accept it. this idea that china is somehow in on -- china is behind this. i wish we'd stop being stupid about this china is behind this it is in china's interest to do this stuff we keep thinking china is a member of the nations and they're our buds are you kidding? watch "manchurian candidate. that'll tell you what to do. but bodden's piece is good when we come back this morning, the content wars are heating up as facebook unveils a new video platform we'll continue to follow netflix

and disney pluls adp nominating to the board. carlos rodriguez the ceo will join for an interview. look at the premarket. gold's near a two-month high t puthe markets on the worst week in six. we're back in a moment more valu. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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continued fallout from that decision by disney announced on its earnings call along with its earnings call on tuesday night to effectively create the new world that is already, of course, in the sense being created by those who are offering their programming direct to consumers. speaking with a number of high level executives, other media companies yesterday, there was shared frustration and anger with bob iger's decision to create two direct to consumer offerings at disney. the common refrain was as follows, that the cost is forth programming has made the bundle too expensive. without working within the ecosystem to fix that problem, disney is beginning its exit one likening it to a passenger on a small row boat who in

jumping off, capsizes the boat throwing everyone else in the water with them. a number of the senior executives i've spoken with who declined to allow me to use their names said it will have a hard time becoming meaningfully profitable it will forego the profits from the netflix deal and still be dealing with erosion of the espn subscriber base. so will a direct to consumer offerings of entertainment be enough to stem those declines? well, even a service priced at ten bucks a month, if it were to garner 20 million subscribers, may not replace lost revenue from netflix and the espn subs by the time this plan is implemented, mr. iger will likely have left the company he has so successfully presided over for these last 12 years of course he and disney's board have targeted july 2019 as his retirement i was able to speak with mr.

iger this morning in general terms. he did respond on the record saying, quote, any intellectual property company should be careful about being lulled into supporting a platform that may not serve the company effectively in a disrupted world. jim and carl, his point is pretty simple. first ofr all, espn is not going away from the bundle in fact, the bundle is in part held together because of sports programming. he would make the point that espn is part of it but he also says you know what when the world starts changing, you've got to change with it i'm paraphrasing here. but that people in this industry are refusing to more or less admit that the world has changed. and that younger people simply don't want to view things the way they did and that disney is getting ahead of that and responding to it in an incremental way. but i tell you, this announcement from disney i cannot recall a time when i've

been on the phone with people who run other media companies who are just angry >> really? >> they would have had him do what right? >> try to figure out a way to lower the cost of sports programming to a certain extent or bring subfees down or work with them to make the bundle a more attractive from a price perspective i think is one way to live within the ecosystem to certain extent for people. we talk about it breaking completely apart, but we came to that that they're going to constantly be doing there is a benefit, perhaps, to having bundled programming the question right now is that so many people don't necessarily want to pay as much for that sports part of it as they currently do now, they'll be offering, you know, the acquisition of the major league baseball platform will allow them to stream things in a way that are not being done

or cannot be done. it'll be interesting to see how this evolves >> i said the stock has to go down because the economics aren't clear at all. you know, maybe they -- i think millennials are driving it they'll watch sports programming on this. they may pay for it or not they're very cheap but i don't get. if you found a lock for programming which they have, you're now being asked to raise the pay for it how many people are going to buy? in the interim in this wilderness that i think is this era. they need to be able to offload this whole thing they can do it technologically maybe good l will buy it maybe facebook will buy it but they've got to make it so all you see is theme park and studio they've got to get this thing off. when it comes to unbundling and

the decisions being made now we're not going to have the answers for years to come. may have moved on to who knows running for political officer or something else in his storied career >> no. you just heard david ruben say he'd be a great candidate. it's not c-- we're not going to have the answers for many years to com >> you're saying basically -- little louis xiv >> i love when you make those historical references. >> got to google that. but this worries me. this worries me because the people who are upset about it can actually, they can play hard ball >> point b out that mr. iger helped create what is this incredible company through a number of incredibly important deals that made its franchise unassailable >> sports are too expensive to rent is that your point >> i guess so.

but to get rid of a lot of good people and think that can make up for the cost of contracts i leave that to you. >> all right >> all right that was a great faber report. fabulous segment and then he's got adp's ceo. i don't want to hear anymore that i get all the good guests >> i keep fighting it's and uphill battle against you, but i keep fighting >> i threw him that one. not true >> we'll get cramer's mad dash we'll count down to the opening bell look at the premarket. we're back in a minute

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we got only two minutes before we get to the opening bell we'll squeeze in a mad dash. where we headed? >> sometimes ceos put on clinics. how to understand millennials, technology, customer relations this was remarkable. where do millennials go? they don't go to sporting events they go to concerts. why? in order to instagram. this quarter demonstrated the power of concerts and live music. the numbers are up huge. ticketmaster numbers are up huge i am just -- i'm agog at this quarter. i should have known how good it was when john malone bought 34

million shares back in 2010. because he's got a nose for this stuff. >> he does although he's not infallible sorry. i'm just saying. >> just -- >> look. nobody loves -- >> i keep -- >> i'm sorry i'm just saying. >> i got to go back here 50%. 53%. free cash flow up 42%. 7,000 shows. 68 million tickets so far. 12 million more than last year i got to tell you. listen to this our growth continues to be strongly driven by our strategic relationships over 50 sponsors each spend more than $1 million? why? why? why? because they can get the highly sought-after millennial customer the millennials. i hate them. >> stocks up 40% this year. >> people agree. they're all sick of millennials. except for my kids >> depends on who you ask.

>> thank you >> let's get to the opening bell on the big board, it's the nasdaq going to want to watch blue apron at the open. they're guiding second half revenues in just under $400 million. stock opened back in june. and awfully close. >> well, they do have a couple bucks in cash. one of the things i'm watching is oil if it can get through convincingly, it's because permian is not what we thought it was that's the takeaway from this quarter. the permian is producing more than we thought. there's no place for it. we haven't finished the pipe lines to mexico. less oil higher prices. not everybody's figured it out it's running out unbelievable that e the permian

that we thought was going to be the swing producer to keep us below $50. the only reason we're not above is because these guys have to sell so much oil in the future to be able to meet their projections, schlumberger predicted the whole thing. and they were darn right look out permian tact >> meanwhile, opec, their monthly report sees pretty good global demands >> this is the other side of the trade. we have to watch this because e the permian, they have a lot of parent wells then you put the wells around it and you see a decline. the clinic there is simerex last night. xec. go listen to their score if you understand what's wrong with the permian they spell it out. a great company they are had the fastest growth they didn't use their cash flow. they actually gave it profit >> i feel like it's been awhile since we've seen an open with this much red across the board

even yesterday where the concerns about north korea were sort of reflected in trading >> europe. >> right >> and also the ppi was so low takes off the table any hope for a september rate hike. none in the meantime, technology had a big run. i'm kind of -- my head's ringing about what you said about disney because, boy, if you're cbs they don't have cable, obviously. everyone's got to be a little upset. >> you know, yes i think everybody is i think they're challenged by it i think they feel like this is the moment when it was a significant announcement in that way. even though it's going to be a couple of years when these offerings really are out there and gaining some traction if they do. >> numbers have to come down much more than they have >> that may be the case. yesterday we had a significant

selloff across the board in many of the media company stocks as a result of this being seen as another significant destabilizing move when it comes to that programming bundle that has supported so many with significant cash flow for all these years. i want to mention though we got fox yesterday and tafs good number it was a number that was well thought of, well regarded. >> i was very impressed with fox. they got -- yes. would have been 11 with currency the margins were very good yeah, that stock deserves to be there. i'll tell you what other stock is -- knows how to market video. how much does a video cost for disney how much does it cost for netflix? how much does it cost for facebook you see the new video initiative >> yeah. in fact, we were planning on mentioning that earlier up on the program. >> i'm skrcrewing up >> no, you're not. i'm glad we mentioned facebook they have given sense they are going to start going to more produced content

this seems to be more of a youtube kind of a model. >> that's how i read it. more of a youtube model. >> was that a blog post they put it out on? we don't have a great amount of detail, do we, carl? >> usually a lot of partnerships with companies like taste made, pop sugar, time inc., thrillist. right? >> i was on instagram last night. i ordered something. had this ten pound blanket she writes about different stuff. she has a blog for people. who's afraid of virginia wolf or something. i don't know i can't get the exact name but there was an ad. boom we ordered five of them. i'm telling you, man this is what you do. i ordered them for presents. >> you ordered five of who's afraid of virginia wolfe >> no. the ad for a blanket within the blog it was so compelling i just kept pressing it.

>> yeah. conversion rate in the cramer household. >> yeah. had a beautiful video. tasteful you know >> just keep pressing that app >> they're not invasive ads. they were tasteful >> the journal's got a big piece today about the four big companies, the copycats, being more aggressive about essentially stealing from smaller companies. facebook has a program that alerts it to would be threats to start-ups. >> is the government going to stop it? you know, it's free for all out there. they copied -- look at instagram. we didn't even talk about snap so now i've talked about it. >> that's it >> that's about all there is to say. snap versus twitter. i see a lot of the notes i like twitter more than snap, i like

snap more than twitter great. real value added there who cares? >> but the journal story does point to the idea they are such enormous come ppetitors and hav such resources nobody can get ahead of them because they will copy them or buy them early on in gestation and therefore you wonder about the level of innovation over time will it be less than it otherwise might be because of the dominance of these two or three companies? >> maybe >> you seem doubtful >> i just think that instagram crushed snap my kids are like snap snap snap. now it's like snap instagram, snap instagram such a great platform. all's fair in love and war >> hey, look we have these generic companies. they knock off drug companies all the time right? what's the matter with that? >> i'm not sure i understand that analogy >> once the patent expires, right?

>> there's no patent protection on the web if you could patent what you do, they have a lot of patents but they're not being forced against. >> if you have complete market dominance in so many areas on the ability to squash any competitive threat early on and you're keeping a close eye on that at all times, i don't know. that could be considered anti-competitive >> i said the only thing that can stop these companies is the government >> i don't see it either at this point. it seems to be early days. >> it is early it is early. but i've got to tell you, this government won't stop it this is a free enterprise government >> right >> very free very enterprising. >> we're seeing an interesting split here this morning, jim, between restaurants like jack and brinkers and common retail apparel retail which is in the red. >> there was a burger truce.

a lot of people didn't know. but red robin, mcdonald's, wendy's. jack was okay. as chipotle goes, quidoba goes the other way. so you can spin off because they had a better than expected number watch for a lot of activity. darden is the one that's hard to figure out they had such a good quarter yet the stock is just one-way trajectory ever since cheesecake. and yet they're not really mall based. they're strip mall based >> meanwhile, we haven't mentioned financials yet but we talked about the soft ppi number >> right >> at the same time mike mayo says citi could double in five years. says the overall of the ten largest banks are, we could go from 9 to 11 that's not counting rates. >> mike was known as kind of a

famous bear for awhile he comes out, agrees with me on corbat stock's down tangible book. just a crummy market today except for comcast >> you mentioned those follow on offerings from yesterday how did they fair? >> geez, let's see the french is mustard. mccormick up five bucks. that was really, really good the other one was 3.5. the -- oh, geez. caught me in -- >> sorry >> but anyway. they are thermo fisher >> it just ticked down it had been up >> a note that caught my eye that i'm concerned about, estee lauder has been up really big. i did a lot of work last night

on elf which is eyes lips face they've cracked into walmart that was disconcerting to me they said we're not going to guide up every time. but cos mettics are soft dillards pointed that out. i think that cosmetics have cooled as a category with tremendous growth and there's price competition coming in. >> you mentioned estee lauder and it is up dramatically in the last five days it's gone from $98 to $103. >> it's a bad setup for fabrizio who took ulta by storm you see much nor estee lauder than you thought there that's why they're taking share, i think. elf says they're taking share. everybody can't take share but estee lauder is one of my favorites. i think it's going to cool off i have concern for those who own it you may want to ca-ching some. >> couple other things we haven't mentioned. flannery at ge buys some shares. 109,000 at $25.56.

stock's down a bit and then tesla according to reuters developing self-driving technology for commercial trucks and apparently meeting with some california dmv officials today >> i had schneider on. they said they still didn't see there could be an 18 wheeler going i-95 at 75 with no driver. >> they won't be five, ten years from now it's going to happen right? >> you think that's the case >> i do. >> all right then i'm going to bring something out that's going to prove the case this is tonight's show, i was at the u.s. concrete plant. when you see concrete, when you see trucks that have concrete, and no guy on it i say look out i would like to have a guy with a concrete truck -- i'd like to have a guy driving a concrete truck. >> that may be the case for

awhile but it won't be the case >> david you want a concrete truck nobody's driving >> we could spend show after show on autonomous vehicles and trays. it was a hole in need for so many even the likes of hospitals. >> huh >> yeah. well, nobody's getting injured in a car accident anymore, hopefully. >> it's like -- >> trial lawyers >> right now car crashes are like a 747 every hour falling out of the sky >> by the bay, you can put that little thing on and wander around and there's construction guys they lost their wallet. i've had them -- >> are you serious >> oh, yeah. and it's a good one. lost my wallet i was at the site kpp you help me out and give me five bucks. >> were they also wearing a suit with a similar thread count? >> i'm going good, guys. they put on the yellow thing and

the hard hat. >> it's a good scam. >> down 1:16. >> good morning. happy thursday, everybody. 3-1 declining in stocks. weak across the board. overseas same story second day in a row by and large i could say most of the global markets are down about 2% for the week. so vietnam's weak again, south korea down, japan down about 2% overall the whole week for these. here in the u.s. is coming up. as i said declining to help. retail is a little bit week. they've got reports mixed there. as easily have been down then semiconductors for a week and a half they're down 4% for the month. biotech that's the fourth one there. they're down probably 3% that's another elite group and the group people don't pay attention to a lot of these miners, copper stocks have been doing well

recently rallying on the better global economy. they're also showing some weakness those bottom three are market leadership groups showing weakness we talked about the retail mixed reports. i would note kohl's beat on low inventory numbers. but dillards had a big miss and high inventory macy's was a good report overall. they beat and affirm now, one reason we're seeing these declines even though kohl's and macy's were not bad, we've had a huge rally in their earnings people assumed we could see some sequential improvement in the same store sales and we did look at these rallies going into today. one more reason we're seeing the selloff. >> i would point out same store sales generally have been expected so cole's is down only 0.4%. that's a very good number. we were expecting them to be down more. macy's was better.

and these were better than the prior number macy's was down 3.4% or so in the first quarter. so it was sequentially it'll be better i don't want to skew it too much not threatening. year over year the ten straight quarters it's been tough here but still looking for some kind of overall improvement elsewhere, what a crummy mid-season we're having for the ipos some of my friends have been listening to the blue apron call they've been talking about operational challenges over there for blue apron it's not just amazon and we have an nyc ipo that's been -- that's steel that's been okay but the steam business to the utilities that's been not so well that's been postponed for today. don't have any data on when that may start up again we do have a new nasdaq ipo that

has refiled. they may try to go public this week we don't know. but one of several that postponed this year. must be eight or nine of them this year. they refiled they had a mush better price the prior price talk six or eight weeks ago. but bottom line is it's about a third lower in terms of the amount try tries we're getting a stock market that is essentially 1% off historic highs in theory this should be a great year for ipos. yet we're getting a blah year. and the blah year is because we have north of 100 unicorns sitting out there in the private sphere money still being grown at the private space. so they don't want to come out and face the public scrutiny because the public buyers do not want to pay what they perceive

to be private for the private sector out there right now one of the biggest problem for the dow market, down 103 points. >> thanks. let's get to rick santelli as well check out the bond pits in chicago. morning, rick. >> good morning, carl. you know, the treasury complex and the entire sovereign complex may be barely holding in certain sectors of the globe the low range of their interest rate yields. but they're acting a little bit slippery here. see an intraday of tens. this is a new guy so we don't want to mix apples and oranges but we're going to have an old guy 30 years one week chart as we get ready to splay it see how it's slipping? we want to pay attention to the 278 and 289 level. seems like the bunds always go one week of bunds slipping away here you want to watch 40 we know that 60. we didn't spend much time there.

if you blinked, you missed it. when it comes to the yen of late, so many issues you talk about the science expeernt that has the most test tubes. this is what you want to study of late. whether it's the fact that it's an unbelievably management complex. the securityings, the corporates, the etfs, the stocks so what's going on what could a year to date chart of all of the following relationships and the end seems to be king kind of taking the crown b away from the euro. look at the dollar/yen similar slipping pound/yen. pound slipping even the swiss, the kind of, you know, proverbial safe haven currency, not lasting that long with regard with north korea about 20 hours ago and also losing to the pun all right. we'll talk to you in a bit coming up at 10:30 a.m. eastern time, david's exclusive

with the adp ceo you do not want to miss that dow's down 05. we're back below 22k and the worst day for the market since july 6th

goldman, apple, microsoft. we're back below 22k we're trade with jim after a short break.

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call today. comcast business. built for business. it's time for cramer >> chicago bridge & iron cut the dividend going to spin off technology in a for sale they have a lot of contracts that were too hard to make both nuclear i still would not touch the stock. i would not touch it don't forget trending videos after the close of reports today. someone said if they have a bad quarter, would you rename your dog? no i'd trade the dog in for a new dog. >> you've been active on the nvidia -- >> it is the key to this nvidia is machine learning it's gaming. it's bitcoin it's everything. >> right you can -- and you can be

everything but it doesn't necessarily mean that you still go to the sky. right? everything should have some sort of -- >> but it's also voice >> value. >> everything that you talk to that comes back to you, it's nvidia all right? it's nvidia. all the big video games are waiting for the new chips. nvidia this is acompany on the conference call, frankly you need a translator. you need a computer scientist from stanford to actually go over the conference call with you. it's that hard >> but in a different league than amd >> yeah. >> saying watch out, not going to -- >> no, it's not. brian on our show declared war against amd. no one's declaring war against n video. they're autonomous cars. remember the testing contract. wong is a genius he talked about robots making robots which to me is the begin og the terminator. but, you know, he is -- he's on

another plane from everyone else he may be the smartest ceo in the world. it's very, very hard to keep up with his thinking. he is really a genius. he's a genius. >> "mad money" tonight >> we got u.s. concrete. this guy builds everything are they making a come back with a new ceo? and planet fitness remember i do millennials every day and every night. you got to look your best. you go to planet fitness or exceed. for you. >> yeah. in our neighborhood. >> our friend here -- >> jim, we'll see you tonight. when we come back, the ceo of adp will join david on the heels of that proxy battle dow slightly off the opening lows down 95. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson.

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla markets having another tough time getting out of the gate dow's down 103 all three indices down for three days in a row. this is the worst three-day loss

for the dow since april. and all 11 s&p sectors are lower. our road map for the hour does begin with retail roundup kohl's macy's and dillards all on the move. >> shares of blue apron falling after first reports of going public >> plus i'll have an exclusive interview with the ceo of adp. as we said, markets having their first day in over a month down the third straight day. dow's having the biggest slide since april. it's good to see you both. what's going on here is this -- got some inflation numbers weren't to hardening obviously north korea a heating up do you see this lasting longer than a few days? >> i think a few days is the extent of it in my mind.

the underlying economic strength on a global basis is still pretty substantial and what this is going on in the market right now is really north korea taking over the conversation at some point, that will fade. you know, the markets really don't have any way of figuring out what is going to happen. we can't price it. sop at some point, we'll give up on that. >> it's been said a few times this morning that pricing armageddon, they don't do that well does it mean we get 5%, more than that? what does it mean when you're dealing with things like that? >> i think we are overdue. normally we get three of those every calendar year. we haven't had one since february of '16. right? that you almost touched it in brexit but we are overdue evaluations are full right now they're not quite stretched yet. but we do start to see a build of some what we call some of the late cycle indicators here buybacks look like they've peaked debt is rising valuations are a little bit full or stretched here.

so i think it's time for a little bit of a pullback >> so i guess what does that pullback really look like? and which sectors suffer the most we've been in this period of rotation where just as technology slips, you've got financials or energy coming back to pick up the slack >> you're right. there's actually good rotation, i think, happening inside of the sectors right now. there is really good growth in the health care sector there's really good growth in the financial sectors and nice valuations there financials traded a 30 multiple discount tro proxy right now through the first half of this year >> i think the question is not whether we can have a pullback or not it's really more about what do you do when you have that pullback i think for that you have to go back to the fundamentals yes, valuations are not cheap. but the economic moment, the earnings momentum, and i think the dispersion of that moment on a global basis is substantial

enough for us to really have a good view on the markets over near to medium term. >> we've had a few things envogue. then for a few days it was industrials and metals and anything coming out of the ground would it be different? would there be something in favor after a dip like we've been talking about so i think after a, perhaps, a pullback but i think it's -- the more interesting thing is on a global basis. i think you think about places, international equities that had some correction. and i think that the economic strength in emerging markets, i think those are the places where a global investor will benefit in a big way >> as an investor, do you want cpi to come in ahead of expectations tomorrow? or would you be happy to have it miss and put the fed on hold far longer than we thought >> no. i think we would want it to come

in at least add expectations. a healthy economy needs a healthy inflation. growth is underwhelmed inflation readings have underwhelmed a lot of the soft data have started to turn back towards the hard data. the hard data has been what's been disappointing when you think about retail sales, industrial production, durable goods, allthat stuff so i think that sets up for a little bit of a chance call it the pause that refreshes here. and i would make a point, too, on the technology side when you look at active managers positioning today, they're 30% over-positioned to a historical norm on technology 65% over-positioned on stocks right now. so there's a lot of momentum going that direction thinking that's where you need to be to maintain the market that you've had. >> seems a little crowded. >> seems a little crowded, you're right >> you used the phrase earnings momentum especially from the bulls pointing to the fundamentals looking better if you slice and dice the

earnings, makes the point in today's note that it's really only a few sectors technology, health care, energy because of the year over year price gains in oil some of the luxury stocks, perhaps. but if you look at some of the basics, companies that i cover like food, household products like toilet paper and toothpaste, there's no growth. what kind of earnings momentum and economic picture does that paint? >> that has been the case for quite some time nap is the economic growth outlook is really uneven. only certain parts of the economy where you have pricing power where there is growth. where you can get the fundamentals going in a big way. but that doesn't necessarily mean that the overall market is going to have a substantial correction because the earnings momentum at any particular point is coming from one or two sectors. i think the point on inflation is an important one. the question to ask is are we trying to solve the market's problem or the economy's

problem. so from a market's perspective, is softer inflation in the near term would be definitely helpful. but from a longer term perspective and for the real economy, getting inflation back i think is a good thing. it gives the economy to get to the next level that it is unable to get at the moment >> yeah. cpi has missed for four straight months >> that's right. >> after the jobs number and jolts, people do have some hopes for tomorrow morning, right? that's not a joke. >> they do and there's a time when inflation should start to turn higher we need to see that happen i think another point to make in this conversation is when you look at second quarter earnings season, overall we've been widely impressed double digit earnings growth, strong revenue growth. but when you look at companies that have beat, they've not been rewarded in the cycle. >> the average is down on it >> that's a very typical late cycle indicator. it doesn't mean we're about to roll over. it just means those are things we need to watch as we head into

third quarter earnings growth. and can that maintain itself >> we'll see what happens later today and tomorrow when we come back, retail routed kohl's, macy's, and dillards all slipping plus why our next guest says traditional retail needs to embrace the enemy. and it's an interview you won't want to miss the ceo of adp responds to bill ackman's push for a shakeup of the company. he's tki talngo david exclusively. "squawk on the street" will be right back

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♪ macy's and kohl's both out with earnings this morning let's get to our courtney reagan who's been listening in on the conference calls what can you tell us >> good morning, sara. better than expected so far for the department stores. but wall street is not impressed. macy's the largest u.s. department store beat estimates for earnings, revenue, and comp sales. all lower than last year the department store also just reaffirming its full-year guidance it is the first full quarter for macy's under jeff gwinnett this is just starting but i spoke to him on the phone this morning. he says, quote, we have a solid second quarter the initiatives we tested and put in place are working those include changes to fine jewelry and shoes which he says is lifting shoes by four points

and fine jewelry by double digits a new loyalty program coming in october will lift sales in the second half. i asked him why not raise your sales guidance he said when you look at what we did in the first half, we had to show sequential -- we had more confidence we will reach the previous guidance. gennett says traffic in stores is still down with the tourist heavy stores seeing the worst traffic in q2 than in q1 and he said stabilizing the bricks business is a high priority but our digital business continues to be strong. we had our 32nd straight quarter of double digit growth in digital. now kohl's which has 450 more stores than macy's sales improved across all categories and geographies but are still lower than last year on the call, kevin manziel said

it was driven by better traffic and improving traffic remains kohl's key priority. sara >> so how do you interpret the price action that we're seeing it stands in contrast to what we saw from ralph lauren and coors earlier in the week. solid reports. the market embraced it it seems like the opposite is happening with the department stores >> it may very well be a fundamental difference in retail you lump that all together, say coors, ralph lauren, macy's, kohl's we call that all retail. one is brands and one is boxes if you will. you've got a department store like macy's that sells michael kors and ralph lauren. but do you need to go to a macy's if you can go directly to those stores or websites i think that's the fundamental question that the markets are struggling with going forward as retail goes through these seismic shifts macy's just had better than

expected results, so did kohl's. but neither one upped their guidance what does that tell you about the full year and what they expect going forward we know that's an important time of year. >> yeah. it does feel like brands are definitely more envogue with investors. thank you. >> thanks. we're going to stick with the retail conversation. the rise of amazon being blamed for the closure of many brick and mortar stores. but goldman sachs says retail is not dead with us now matt postler >> great to be here. >> you say retailers overstep in the e-commerce boom. what's taken them so long? >> i think the urgency of sales declines, the number of bankruptcies, the fact that the mall-based ecosystem as you're seeing today from the department stores, numbers better than expected but still down it is starting a gradual spiral.

and i think the urgency to address whatever opportunities are left is definitely growing >> so from these results and i know you can't talk about the individual stocks, but do you see light at the end of the tunnel on better than expected or do you see that urgency increased on the way the market is taking it >> i think big picture, declines are declines and, you know, the reality is stores today are generating 85 cents of every retail dollar spent in the u.s that number is 70% five years from now the urgency for retailers is there to make the most of the volume that they're going to have for the foreseeable future. >> what about the efforts we've seen so far? they're all investing in e-commerce and they're all trying to grow digital sales which we've seen still such a small percentage of overall sales. >> and i think reality is that retailers need to embrace

digital. retailers need to work aggressively online. but also need to direct some of their technology investment toward their stores. and to rethink the store if it's going to thrive in the future. >> like what do you have an example >> of course retailers typically have operated stores that try to opt myself both display and logistics. that's hard to do. the kind of real estate that's optimistic isn't well positioned to compete with an amazon center i think the retailers that thrive going forward are going to have to tilt towards optimizing logistics or optimizing themselves in showrooms. i think it's going to be very hard to do both. the second factor relates to optimizing data. think about a retailer they build a store they hope people come. they're not quite sure who walks in they're not quite sure what they've done when there. they're not sure who brought what, why, what they didn't buy, why they didn't buy it think about amazon you go on amazon, they know who

you are instantaneously. the page you're on is customized for you. they know where you've gone, what you bought, what you didn't buy, et cetera, and what the triggers are so the imperative we see is for retailers to bridge this business intelligence gap versus online how can you try to replicate the tools that amazon and others have to see what's going on in the store and how to act on that >> that's one thing when paying with a credit card on your computer you go into a store want to buy something simple and they start asking you for your phone number and your address i'm like, i just -- here's cash. i just want the good and i want to exit. right? there's going to be friction there. >> one of the realities is they don't have to know who you are to know that you are someone who acts in a particular way so retailers are now starting to install sensors for tracking where people go, what their emotional state is, if you will, when they see a product. what they're bringing into a dressing room. what they're leaving there and then of course what they're buying so they don't need to know you by name to know that you are a

given customer by gender or age or et cetera are making a decision about a purchase. they can then adjust their marketing and inventory. >> you're laying out a significant number of important things that retailers will need to do. >> yes >> and culturally, many of them may not be up to it. how do you discern who's got the ability to implement some of the things you're talking about and who simply is not in a position to do it >> culture is a huge barrier and the reality of today's retail economics are also a huge barrier. if your sales are declining. are you going to marshal your resources to do what you do well and understand or are you going to take some of this risk? i think you have to make the -- take the best of a bunch of bad choices, choose the best bad option, if you will. and invest aggressively in technology take a company like walmart. walmart has scale to make these investments. given their balance sheet, they

have the time to make these investments. they have been one of the more vocal companies about embracing some of the technologies and distribution in their stores and of course online >> kroger also does this big data thing that you're talking about. in the meantime, how many more bankruptcies are we going to see? >> without prognosticating about a given number, there are elements of this industry that are in distress. now, a lot of the companies that have gone bankrupt are retailers that were troubled for a long period of time they were retailers that were saddled with debt through lbos i think the conventional brick and mortal sector is still solvent and still has the ability to make these investments. >> we'll see what they do. matt, thank you for joining us with your new report on the future of retail from goldman sachs. when we come back, blue apron getting slammed after releasing its earnings report last night of course the earnings guidance this morning not so hot either our aditi roy will join us after

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let's get to dominic chu >> one group in the green. you've got lockheed and northrop and raytheon on top of that, analysts at bayer just raised their share forecast for raytheon on growing optimism over its future missile defense sales. all of this playing out, carl, a lot of the markets shrugging this off but defense stock is where the rubber meet this road. a lot of investors watching these guys >> good eye. thank you very much. shares of blue apron tanking after reporting earnings this morning. our aditi roy just talked to the company ceo and joins us with more >> reporter: that's right. we spoke to matt salzburg about a number of things we talked about the plunging

prices since that came out they're down 15% now he says he's still focusing on the long-term goals and believes investors will stick with them i also asked him about the competition with amazon which just started a meal kit service. he says he believes there's room for multiple players in this crowded field because of the huge market opportunity. he said, quote, we admire amazon as a company we take them seriously big or small that being said we are competing in a competitive and large market the grocery and food market is one of the largest that exists and it is not a winner takes all market he believes that there is room for multiple people about in that space he also added, we think about ourselves very differently i think amazon thinks about themselves we think about ourselves as a branded consumer products company that produces proprietary products around understanding of consumer needs. and on the reorganization cofounder just stepped down to a senior advisory role he told me about that corporate

reorganization that the business is maturing and focusing on newer and bigger priorities during the earnings call, the company also lowered their guidance, by the way, because they're seeing that a new fulfillment center is taking longer and coasting a whole lot more to ramp up. as a result they're going to be lowering their marketing spend for this back half of the year which will affect obviously going after new customers. back to you guys >> aditaditi, thank you with those shares down 14%, it has been a steady slide since the june ipo tesla also one to watch today. our phil lebeau is with us on more on how the trucking industry is changing do we know about tesla's plans, phil >> we know tesla has been working on an electric semitruck. we can tell you that yesterday executives from tesla did meet with the california dmv to discuss their autonomous truck plans. there are other reports that tesla may be looking at platooning these trucks together when they are testing them on

the roads of california and potentially in nevada as well. it'll be some time before tesla actually rolls out one of these vehicles that you'll see in use on the roads in a commercial sense. but by the end of this year, take a look at this vehicle. this is an electric truck by a chinese backed firm that will be rolling on the streets of california potentially by the end of this year the company is change. it is backed by a chinese official putting up a billion dollars. commercial work vans, urban customers are who they're targeting. backed by a $1 billion investment and the ceo says this is where it's going to happen in the future a combination of the silicon valley and china >> you need the technology and the innovation and the vision that comes out of silicon valley us being based here being in the epicenter of seeing where the technology is is fundamental in success. but at the same time, you need scale. and the commitment that china has made to the capital, for us

to be able to put almost a 4 million square foot facility up and have that kind of through put and capacity is also critical >> i mentioned that there is a china-based firm that has put a billion dollars into chanje. look at the investment in electric vehicles. this comes to us from cb insights $2.7 billion is how much is expected to be spent on ev, tech, ev-related firms start- s start-ups, other companies already in existence it just speaks to the fact that this is where the money is going when it comes not only to venture capital but to existing companies saying, yeah, we're going to invest more in that space. >> phil, you mentioned that tesla had a meet with the california dmv for this. what in terms of getting an electric truck, is it a different sort of license? what are the regulatory obstacles and how -- >> no, you need -- any vehicle that you are going to test, if

you're one of the automakers, you meet with the dmv. it's an electric semitruck more than anything, it's to make sure they're aware of what you are doing. and we get it. we understand it start testing it out on the roads. you need to keep them apprised they already have electric cars. what they've been working on and we know what they've been working on are electric semitrucks now they are simply keeping in that area. >> got it. i don't know maybe electric self-driving trucks would be a bigger hazard. trucks are always -- seem more dangerous. >> i don't mean to get into an argument, but i don't know if it's a bigger hazard than any other semi. >> you know better good point >> autonomous is coming. it's coming. >> the battle over the board at

adp, the ceo will join david faber exclusively. it's his first interview since kmat proxy fight began with bill "squawk on the street" will be right back whoooo. going somewhere? here's some advice. tripadvisor now searches more... ...than 200 booking sites -

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good morning, everyone i'm sue herrera. here's your news update at this hour north korea announcing a detailed plan to launch four ballistic missiles towards graum. it says it could be sent to leader kim jong u.n. within a week or so french authorities say the suspect in the attack on french soldiers on wednesday was known to french police as having been involved in minor crimes he was living in a suburb north of paris where police searched a building last night. violent protests continuing in nye ree bairo nairobi's neighborhoods after alleged earlier that hacking had affected the election. today a top kenyan official says

the data base was unsuccessfully targeted by a hacking attempt. pulling its recommendation of four microsoft surface laptops after one of its surveys found that users were complaining about problems with the devices. the findings do not accurately reflect surface owners' true experiences. that's the news update this hour i'm going to send it back downtown to you. automatic data rocessing the latest target. which has taken an 8% stake through derivatives for now in the company. and as nominated three directors to replace existing directors on its board. joining me now is adp's c aeo carlos rodriguez in all of these fights, the first question i have for a ceo is why bother? why the fight? why the decision

you engage in your own releases and some of his comments at least briefly. he makes some points and you make a decision to fight it can be distracting, take a lot of time. why did you make that choice >> the only thing we've choesen so far is the extension which including an amendment to our bylaws to our nominating deadline which is august 10th. so i think we've offered to meet with the board in fact, i actually flew back from a trip to meet with him with john jones. we're willing to listen. we're open but we weren't really to and the board wasn't willing to extend the line >> i want to talk more about the fundamentals but there's been a lot of back and forth. bill told me well i really only wanted a week. and then maybe another week if we didn't get to discuss what i wanted to discuss. >> well, actually have the e-mail here in my pocket which i

can get to you if you want so you can see it later it shows his request for 30 to 35 days. >> i had reviewed that he mail he said the e-mail following it revised it to a week >> he didn't revise it in writing. first time he asked 30 days. then an e-mail asking for 30 to 45 days. then i think as he became more desperate towards the end of the discussions we were having with them already after having a board meeting, he said he wanted a week he said he might need more time after that he would have to come back to ask for another extension. i think the real question i guess is why does he need an extension? not how long is the extension and what did he ask for or not ask for. reminds me of a spoiled bra t in schooling if the teacher for an extension. >> i've been the ceo for six

years. i've had close to 30 board meetings, 24 quarterly calls i've never asked anybody for an extension. if you want to be on our board, our board as far as i know in six years i've been ceo never never asked for an extension >> you said no. >> the board said no not me >> excuse me that is my understanding as well of course. now, did ackman make it clear he thought you should be replaced >> he did. first time i spoke to him, he was quite cordial and mentioned to me that i thought he needed to be replaced gave me a series of reasons why. frankly it was a surreal experience who i know and don't talk to and i've met him i think once 31 years ago back in college. i think he's been saying that we're close friends and classmates and so forth.

i'm not in his holiday greeting card list as far as i can tell so, you know, the whole thing has been baffling and a surreal experience for someone to say i need to be replaced. i think he's changed his stories multiple times when i spoke to him the last time we met with him, he told me he thought i had saved the company after decades of neglect. now also sending e-mails to other people saying i destroyed the company over the last five years. now his press release says he's not looking to oust me what it feels like is i'm negotiating with someone about buying a used car. this is not a used car this is a company that has 58,000 employees, $50 billion market cap and a lot of shareholders we have responsibilities towards >> right he tells me he was under the impression you were going to be exiting the company within the next year or two and would you really be up for the kind of changes that he is going to be advocating when we

hear from him next thursday. >> well, he might have mentioned that to me the first time he spoke to me or in the e-mail he sent first of all, it's not correct or accurate. i think he's getting his information from disgruntled exemployees. at the same time he's saying that somehow people stick around forever and the people that work for me have been around the company for a long, long time. what he's not aware of is my team is almost entirely new from the time i became ceo. he also maybe should think about the fact if he's talking to 85 former executives, maybe we have a fair ame amount of turnover. >> let's talk fundamentals we don't know exactly what ackman is going to advocate when he pushes his slate of candidates next thursday as we know he's going to certainly one part of his argument is going to be that amongst your peer group broadly defined you have the largest margins. and over time while you have

done very well and your customer base is increased, your employee base has increased even more quickly than your revenue growth how do you respond to that >> i think i'm probably more aware of what our employee growth has done and what our revenue growth has done. and although i'm a little surprised that he's saying that because it's actually not accurate, our employee growth has grown slower every year since i've been ceo at about half the rate of revenue growth. >> the 50% increase in employees. that's not true. >> that's not true i'm not sure where he gets his information from for maybe years ago when he did his own research he may be relying on other people coming up with inaccurate information. >> he said he spent six months researching the company. as you pointed out talking to 85 executives you're implying he doesn't know what he's talking about?

>> actually, i'm directly saying he doesn't know what he's talking about. >> why doesn't he? >> well, first of all, most of the information he's gotten appears to be coming from disgruntled ex-employees a lot of the information we have available publicly he hasn't availed himself of for example the question about margins you have, we have a very large peo business that has a lot of -- >> peo standing for? >> professional employer organization and it's simple mathematical issue. they have very high returns regardless of the percentage margin but he -- if he had done his research, he would realize that's one of the reasons we have a lower margin than some of our -- >> paychex is the one everyone wants to choose. and there are margins of something like 44.7% over the last let's call it five years. yours are 21%. >> yeah. we have a lot of respect for paychex. they're a great competitor they're just a different company than us.

they're a quarter of our size. they offer mostly in the small business segment we have international operations we have operations also in the national accounts segments with large clients. it's a structurally different business they also account for their peo business different than we do for some reason. but we believe that we are counting for our peo revenues the right way. and those really are causing pressure on our margin but it doesn't take away from the fact it's sill a high return business we love that business and it's profitable >> right you know, i think one of these overriding questions is going to be are you overcoming shortcomings in your product with people? are you simply filling in gaps by hiring more people opposed to really making the moves you need to to compete in the 21st century when it comes to technology and software? >> i think it's a lack of understanding of our business which he probably would have gotten had he approached us in a different way to talk about our business >> what would have been a different way then >> one approach would have been

to just contact us and say i have some ideas i want to talk about. i've either invested in your company or are planning on investing in your company. instead of threatening us indicating specific situations and telling me that if i don't exceed to his demands for an extension, that he's going to embarrass me and humiliate me because he has such a huge media following. >> he seemed to hope it went the way it went for him and chipotle and in air products as well where there was a meeting followed by the ability to put some board members on. >> well, i think the difference there, i don't know if there was a request for extension of their deadline but that's really what caused the problem here is that apparently he was either not prepared or it's also possible that he did mention that he had vacation plans that he couldn't disrupt which is why he needed the extension. so it could be that his vacation plans were too important for him to be willing to meet with the board which we offered so john jones and i offered to have a meet with the board so he

could share his ideas. he also told us that even if he could and he couldn't because he had a vacation, he simply wasn't ready. he didn't have his presentation ready. didn't do his homework not sure why he wanted the teacher to give him an extension. >> and when he said he wanted you replaced that you would oppose him >> i actually don't know exactly what -- if that's the case you'd have to ask him. i can tell you that i think our board feels that, you know, given the track record that we have as a company and given his track record and specifically on ceo replacement, his track record and the decisions he made there bringing in his hand picked ceo who completely destroyed the company probably would make us think twice about wanting to listen to bill ackman's advice. but he's a large shareholder and we're open to listening to him we offered to have a meeting with him i think at this very moment we're scheduling a get together with him in early september. >> you are

>> yeah. >> what's going to happen there? what are your expectations it's clear that you're -- and this is not always typical, you're willing to be combative here you're coming out strongly against him. why bother at this point even meeting with him >> he's a large shareholder, number one number two, we are an open company. and an open board. we're willing to listen to any ideas. frankly we haven't heard any ideas yet because he wasn't ready to share his ideas but should he have come up with something or stumbled on some kind of idea that would enhance the value of adp, of course we're going to listen to him >> and what about the future what do you think is the strongest leg you can stand on to combat what we still don't know but is going to be certainly given his history a very long presentation next thursday with all sorts of different slides >> i will start by saying you are what your record says. and so i think it's pretty clear that the current management team, the current board, and the current ceo which is me have done a pretty good job over the

1, 3, 5, 10, 20 year time frames and better than mr. ackman i think our record stands on its own. i think our strategy once people understand what our strategy is and what we've been doing for the last five or six years under my tenure, i think it will become clear that we have a very clearly focused strategy on modernizing adp and continuing the successful track record we've had for 6 yea8 years. if i can add one of the things i'm most proud of, this is only ceos get excited about this stuff. but adp is one of the dividend aristocrats. which is a group of companies that have been increasing and paying a dividend for more than 25 years so adp has been doing that for 42 years if bill ackman leaves us alone, we intend to get to 50 years which would put us in a list of companies that's only about 25 companies. >> all right what if he says how about just one director

wouldn't you just take one >> as you know, that's up to the -- first of all -- nomina nominating governance committee will make suggestions on what it recommends for election. and then the board of directors is going to i think make the final decision on what the slate is the way it works is the shareholders will decide who the next board of directors for adp will be. >> we appreciate you taking time with us this morning >> thank you for having me >> you're welcome. carlos rodriguez, ceo of adp we reached out to ackman we'll see whether he joins us again some point in the future back to you. >> that was a good interview a lot of shots fired and headlines made >> good. as we head to break, taking a look at shares of live nation soaring today after the entertainment event promoter beat on both the top and bottom lines. stock up 10% concert ticket sales were up 22%

through the end of july compared to the same ri apeod year ago. "squawk on the street" will be right back don't go away.

according to analysts, five stocks that have beaten up are now set to rise by more than 40%. but does that make any of them worth your money find out at tradin tradingnation.cnbc.com more "squawk on the street" coming up.

stocks are lower across the board. let's get out to the cme group in chicago with rick santelli with the santelli exchange rick >> thanks, sara. special guest jerome schneider the reason he's a special guest is because he's a bond guy we talk the same language. we don't necessarily see everything eye to eye, but let's start at the top the recent spat of data as you write, it's kind of good enough in your opinion. >> it's good enough. one of the things we have to think about is the fed the fed has transitioned from a data-dependent scenario to a conditions-dependent scenario. they want to create optionality

for themselves they want to look at good data as good and bad data as maybe transitory we see that in inflationary data then more microskoptic in terms of -- >> you can get more microscopic, huh? >> yes other term of inflation data employment conditions, et cetera >> it's kind of funny. when you listen to some of the issues of the day that have nothing to do with the fed, and i'm getting offtrack a bit if you really read the stories and forget all the big issues, it should be inflationary, if nothing else, right? generically. the reality is the fed wants too think about ways -- >> i guess what i'm getting at is if the fed is putting us through this horrible flight to mars and trying to navigate us back, it seems as all the legislative things that might increase inflation are doomed, because the general public at large, the people that unare the

country, don't like them it seemed pretty weird. >> what they ultimately want to do is create optionality, when and if those policies come into play, they can react accordingly, but right now what they want to do is focus on the conditions, to normalize the balance sheet, to get to a higher balance sheet and higher interest rate regime so if or should there be enough recession they have enough firepower to cut rates. that's the job of janet yell en, over the next few years. >> let me dig down a bit that's great, okay when i talk to clients, that's the way why sound. when i talk to floor traders, here is the way i would present it to you. mo the longevity of this business cycle, they need to ramp it up to get that insurance, ultimately so they may be able to denormalize against in the future. having said that, rate increases have really odd responses in a market that make them scratch

their head what is the one way we know of janet yellen walking out the door to get nominal rates higher. >> the balance sheet. >> they know that will get rates up. >> the most important thing here is economists are pencive people they want to be methodical sure enough janet yellen will likely want to -- >> but for investors, what they need to be thinking about is how the risk manifest it isself in their portfolio. now just with days like today, but potential when -- >> he could keep going, folks. jerome, thank you very much. we better make sure it doesn't light a fire in the barrel of securities owned by central banks jerome schneider, thank you. david faber, back to you. all right. thank you, mr. santelli. time to send it over to jon

fortt for a look at what's coming up on "squawk alley." >> david, you smell something burning it it might be blue apron stock, down 11% the first report after the ipo snatch report is coming up we'll see how they're both faring, coming up on "squawk alley.

welcome back watching shares of adp, david, after that interview you just gave with the ceo, fiery, i think the highlight was comparing bill ackman to a spoiled brat. >> very combative carlos rodriguez, pulling no punches when it came to fighting back against mr. ackman's request for three board seats and request most importantly for the nominating deadline. he was saying he didn't have his homework done, and wanted an extension, and he said we don't do that here interesting choice, though i thought effective in terms of combatting i would add that once we got off camera, mr. rodriguez said he would be willing to meet with mr. ackman, or i should say, join him on tv.

>> for a debate? >> for a debate, if mr. ackman chooses as well perhaps to do that so it's out there now. >> that's a dare challenge. >> not the first tv debate by a long shot. when we come back, retail is getting hammered, watching blue apron as well, dn ow11%. "squawk on the street" continues in a moment. 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. ...saving time when it matters most. stay with me, mrs. parker.

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