good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with mra li melissa lee and brian sullivan. andrew is out today. if this is three's company, am i john or mr. roper? >> that's what i asked before. >> you get to be john. >> that's how we'll start the day? >> it is >> a look at u.s. equity futures. the dow was down by over 200 points that's the biggest decline for markets since may 17th this morning dow futures are indicated up by 10 points. modest declines for the s&p and the nasdaq down by 14 points s&p off by just over two all of this coming over concerns about north korea. the nikkei was closed for a public holiday called mountain

day. you can see the hang seng was down by 2% the kospi in south korea, where the closest to these concerns is located, is down by 1.7% in europe there are also concerns playing out there the dax down by 0.4% all the other averages down by 1% or greater. biggest declines in spain, the market there down by 1.4%. if you check out crude oil prices, the iea releasing a new report saying that global oil demand will grow more quickly than expected this year. that's not helping prices which are still down by 37 cents. >> here are the big stories we're watching shares of snap are sliding after the social media company reported a bigger than expected loss snap lost 16 cents a share last quarter. revenue coming in at a lighter than expected 1$181 million the company added fewer daily active users than anticipated.

ceo evan spiegel addressed concerns on the conference call. >> we have always been last to market, competing against giant companies, we've been able to grow our business in markets that are highly competitive because we're focused on innovation that explains why we're willing to take this wait and see approach in markets around the world that don't make sense for our business at this point but may make sense in the future. >> highly competitive meaning facebook's instagram stories, which has made a big splash since launching last year. spiegel said the co-founder won't sell snap shares this year we'll talk to a snap analyst later on in this hour. and google's ceo cancelled a company-wise town hall meeting that was organized after one of google's employees was fired the employee was let go after a controversial memo on women was released some employees worried they would be outed in the media for asking questions some of the pre-submitted

questions were leaked along with the employees who submitted them and one of uber's earlier investors is suing travis kalanick benchmark claiming fraud, breach of duty and breach of contract benchmark wants to boot kalanick from the company totally >> when is the last time a board member sued another board member at the company this will get interesting. kalanick owned 10% of the company, benchmark owns 13%. >> and 20% of voting shares. >> he does not own enough without the help of camp and others to prevent things >> he will also lose the right to have his board members -- in addition to his own board seat, the board members he was able to carve out through his separation agreement. >> i was able to read through chunks of the lawsuit.

they were saying, y they voted for him to have these things, but he made all kinds of promises and conditions, and they say he didn't let them know about things that was happening at the time, especially with waymo. the allegation almost makes it seem that kalanick was almost orchestrating the theft of some of these items >> i know north korea is a big story, but let's not forget about silicon valley big story with goggle, snap. snap's pain is a big stock story today. others are on the move as well nvidia second quarter results easily beat demand with strong demand for gaming chips, but that wasn't enough the data center and automotive units fell short the stock down 8%. nordstrom reported better than expected second quarter results. same-store sales rose 1.7% analysts were expecting a decline.

the company said more people shopped at its online stores no nordstromrack.com. news corp.'s swinging to a loss in the fourth quarter thanks to a writedown in uk earnings the company did beat on the earnings forecast but the revenue missed on estimates, on continued weak demand for print ads. that stock is unchanged this morning. the big overwhelming issue weighing on stocks this week are the tensions rising between the united states and north korea. president trump responding to the escalating threat. eamon javers joins us with more on that story. good morning >> good morning. president trump took questions from reporters at bedminster, new jersey yesterday where he's on a two-week working vacation he talked about the comment earlier in the week in which he said fire and fury would rain down on north korea if they advance too far in this brinksmanship we've been seeing over the past several days the president said if anything, that comment which was criticized for being too tough

may not have been tough enough he also said he will wait and see what the leader of north korea does in terms of his threat to attack guam. here's the president yesterday >> let's see what he does with guam he does something in guam, it will be an event the likes of which nobody has seen before, what will happen in north korea. >> when you say that, what do you mean >> you'll see. you'll see, and he'll see. >> reporter: the president said that was not a dare but a statement of facts another issue he addressed yesterday, he declined again to kr criticize vladimir putin the president did not criticize putin for expelling ambassadors, in fact he thanked them. >> i want to thank him because we're trying to cut down on payroll. as far as i'm concerned, i'm thankful he let go of a large

number of people now we have a smaller payroll. there's no real reason for them to go back i greatly appreciate they have been able to cut our payroll for the united states. we'll save a lot of money. >> was a wide-ranging conversation there the president also talked about paul manafort, his former campaign chief whose house was raided by the fbi at the end of july the president called him a good man and said the fbi raid was tough stuff but also distanced himself from manafort saying he had only known him for a short period of time >> wow we get a lot out of these press briefings. thank you. let's get to the markets, joining us is ed campbell and j.j. kinnahan. welcome to you ed, is this the dip where you still buy? does this feel different this

time around? we see a 4 4% spike in volatility transports below the 200-day moving average we've been looking for a tullback this summer that so far has eluded us. we've been through an environment where you typically have -- if you look at the long history, you have 5% or more pullbacks from a peak every two to three months. we have gone a year without one in a low volatility environment. this could be the catalyst that sparks the meaningful pullback >> what is meaningful? is it 5% is it greater? >> yeah. i think it's 5%, possibly a bit more i do think the underpinnings of the equity bull market that we experienced over the past several years are still in place. that is the long noninflationary

business cycle, corporate profit growth i don't think the probability of a bare market is high. but we are concerned a bit and our position keople are positiod cautiously >> j.j., is it north korea that is the biggest risk to viewers money or something else? >> i think north korea in the short-term is, brian you know, we could sell -- i'll say one thing, this is our first 1% move in 55 trading days i don't want people to overreact. we're coming off all-time highs. i think it's natural we see selling pressure when it's a geopolitical risk, when you have both sides sort of talking tough, that does put things in a bit different light. we seen in the vix over a 45% move so i think there's a bit more fear that being said, you know, i think many investors may want to

pair back risk because i don't think it's time to run and hide. you may want to let this play out a bit more before you go in guns ablazing to buy if you've been a buyer on dips the last five years, you've been a very happy person. >> would you advise people selling a bit of stock when you look at this market, we see names like nvidia down nearly 8%. the nasdaq lost more than the dow. people seem to be selling what they made money in should they continue to do that or buy some protection on the market >> when you're at all-time highs t makes sense to take some risk off the table. you talk about nvidia, which has had an incredible move i think it's wise to take off some risk to get back into cash and look for that opportunity to buy back in. as i said, in the past it's been

1% you're looking to go. on this one, this may take longer to play out so you may want to, you know, go in very slowly if you're going to buy, or take some risk off the table. bulls and bears make money, pigs get slaughtered. if you have all the your stocks on and you haven't taken anything off, you have to look at your portfolio carefully and say what are we waiting for? >> i thought picks got rich, hogs got slaughtered any way, we get the point. j.j. was right to put this move in context we're still about 2% off from all-time highs in the s&p 500. it's something we would have seen in the past, we're just not used to seeing 1% moves. the spike in volatility seems to be troubling so many funds are built on low volatility and long equities volatility goes up, they have to sell equities. that's the way the fund is

constructed. at what point do you get concerned that a spike in volatility as we've seen royals the market because of the construction of some of these funds? >> that's a concern that's out there. but, you know, as i mentioned, i do think that from a longer term perspective, in terms of fundamentals, the underpinnings of this equity bull market is sti still in place if we get a 5% or more pullback, i would be a buyerment. >> right now, just sitting on your hands and waiting >> yeah. we started the year off bullish. our forecast for s&p 500 returns this year was 8% to 10%. we exceeded that so we've been pulling back as the markets have run up. we're positioned cautiously now. if we get a meaningful pullback, we would be buyers >> j.j., should we be concerned about the spike in the vix given people were short the vix and

that could be a squeeze? are we year stating that move in the vix? >> i think that's a good point the other thing besides people being short fix is many people were not buying as much protection as they had they said i'll take the risk that i may have to pay up on a 50% risk, at the end of the day it's still below 20. once it got to 15 yesterday, you saw more buying pressure on people coming in to buy protection they were willing to take that risk that's a great point again, i think 20 still remains the warning signal because we're coming from such low levels. those who say the fix was broken, volatility, the higher we go, the lower volatility is supposed to go -- >> but it's only 15. i hear what you're saying about a 40% move, but when we have this 40% move at 15, it seems like the vix is broken or market

fear is not high it's higher but not that high overall. >> i agree the other part about it, we did see a gold move for the first time, two-month highs yesterday. people did come for gold bonds were up yesterday, not even a full point on the 30-year future to your point, yes, people are buying risk, heading into a weekend you may see them buy more until we get to the 20 level and people come for bonds and gold convincingly, this has to be a cautionary tale but not a panic tale >> we'll leave it there. thanks to you. >> thank you among other headlines. amazon is reportedly in talks with major u.s. venues to try to offer tickets to concerts and sporting events.

the move could loosen ticket master's grip in this country. ticket master is owned by live nation amazon said some success in business where it sold tickets to shows may have been behind this. china cyberregulators investigating the country's top social media sites for breaching laws banning content that's violent or offensive to the communist party. tencent, baidu and weibo are the points of the probe. the government has shut live streaming services and sites, tightened regulations on internet access and issued warnings about cleaning up web content. general electric's new ceo is betting big on his own company. john flannery bought nearly 2$27 million in ge stock. that's according to a regulatory filing he added 104,000 shares to his 401(k) account bringing his total holdings to 15$15.5 milli. as of yesterday's closing price. so a sign of confidence among

the new ge ceo on a stock that's fair to say needs a sign of confidence >> yes >> this has been not only the worst dow performer the past year and few years, but by far the worst dow performer. not even close to the other decliners. >> we don't know if the kitchen sink is out. the next earnings conference call is where we will get that kitchen sink quarter >> maybe it's a bet in oil ge got big into oil. 16% of ge's revenue is part of the oil and gas business they got into it as oil started to slide if oil can come back up, maybe we'll see ge stock recover >> maybe bet on themselves >> maybe wish i had that money. to bet on yourself >> i bet a dollar this show will be one of the top five "squawk

box" this week >> new reports say that hbo may have been working on a ransom payment to hackers over leaked show scripts, but hbo won't call it a ransom, and it could be paid in bitcoin. that fascinating story straight ahead. ♪

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♪ that's appropriate for this first story in science news a team of researchers say they are one step closer to transplanting organs from pigs to humans they have successfully used gene editing techniques to remove diseases that could be transmitted from pigs to humans. it's a potential solution to a huge problem there's currently more than 100,000 people in the u.s. awaiting organ transplants only 20% to 30% will receive them can you imagine if you can harvest them from pigs, how many lives could be saved >> they didn't say how long it would take before they could do

this that's a huge discovery. >> if it can be scaled up in any way, even for one particular organ, think of the leaps and bounds >> we're already using pigs bladders to heal wounds. >> and pig valves. >> fantastic news. [ pig squealing >> it is nearly a month until labor day. the countdown to christmas is already on we're just 136 days away from christmas. have you shopped yet >> no, no, no. >> toys "r" us is getting ready for the holiday. the retailer announcing it will return to times square, but only temporarily beginning this month. the decision comes about two years after toys "r" us closed that massive 110,000 square foot flagship store >> is the pop-up going to have the ferris wheel >> they also had a life sized

barbie doll house. there's no word on how long the store will stay open >> it was heartbreaking, if you have kids, you want to bring them into times square, that was a fun place to go. >> used to be an espn zone, then -- >> i don't remember before toys "r" us >> toy stores are almost becoming like book stores where you would bring children, they had never been to a bookstore and toystores -- >> mine think they actually just come from amazon >> fao schwarz shut down in the city >> they must have had the highest rent in the city if our viewers have been there, it's right next to the old apple store. a new development in the hbo hacking saga the hacker who told television scripts and other data from the

network leaked a new e-mail showing a company executive offering $250 thoishgs as a bounty payment to the cyberthief this is according to multiple reports. the e-mail said hbo was working to obtain $250,000 in bitcoin. the executive never described the payment as ransom. they called it a bug bounty payment. that's a term that refers to a payment for those who help you find security vulnerabilities. they have been careful to say they're not paying ransom, but that's what this is. so many companies say we never pay ransom this shows they sometimes do and this is what the ransom hackers are saying, you want your stuff back so badly, you have to pay the ransom >> they're trying to friend they're not paying ransom. >> that's not what it is

i was joking around with a friend of mine, he said it feels like we're going back to the days of the mafia. so many e-mail hacks, high level executives are lichi inin ininig e-mail, after sony, don't put anything into e-mail >> carrier pigeon is the way to go >> that's how reuters got its start. coming up, tensions with north korea are rising markets are nervous but what is the feeling on the ground in south korea? a live update from seoul is next as we head to break, here are some of yesterday's s&p 500 winners andize izlosers not a lot of winners yesterday, but a few, perrigo, blaker hughes, darden we're back after a couple minutes.

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back good morning a bit of good news for your money. a little calm has returned to the markets. futures indicating a bit of weakness the dow, s&p and nasdaq futures are all not moving a whole lot the dow futures are down a bit but the implied open is higher that's where you get that fair

value difference the nasdaq is the one to watch the nasdaq has been the bigger decliner it's been the biggest gainer so far this year. nasdaq futures indicated slightly lower but nowhere near the magnitude of the selloff we saw yesterday. on today's wall street agenda we get the latest nap shnapshot on inflation. the july consumer price index is out at 8:30 a.m. eastern time. both headline and core cpi are forecast to rise 0.2%. we're going to hear from a pair of fed officials we have dallas fed president, rob kaplan and minneapolis fed president neel kashkari making comments and on the earnings front, look for news from jcpenney they report before the opening bell growing worry over military action by north korea is one big reason that stocks have sold this week. it's grabbing all the headlines here but what are they saying in south korea? chery kang joins us live from seoul. chery?

>> hi, chery, i don't think she hears us now >> i garnered that, when she said i don't hear them >> let's give her a minute >> chery kang has been doing some good reporting. i would love to see -- i would love to hold up some covers of the newspapers to see what they're saying because we forget that in 2010 and 2013 there were conflicts between south and north korea and threats over guam and hawaii chery kang i believe you're with us now from seoul. good evening to you. >> hi guys, good morning to you guys there was muted reaction coming from the south korean government today. i don't know if you can hear me, hear the music in the background, but certainly they have a mini concert going on in downtown seoul it's raining a bit, but looks like a normal day with many

people just going about, doing their own business certainly this tension getting the attention of south korean media for sure i pulled up some morning papers for you this morning asia time this is one of the major conservative daily here. it is an interesting juxtapose between north korea protesting against the u.n. security council sanctions that was veetd t vetoed in this past weekend and this is south korea protesting against the thaad deployment system and the top headline goes north korea and the united states going head to head against each other. and let's bring this up. this is a left-leaning paper left-leaning meaning more pro north korean and embracive of

north korea. an interesting choice of photo it carries an image of american protesters standing outside the white house calling for diplomacy rather than war. peace over harsh rhetoric as we saw this past week it's about the op-eds, too one editorial peace called for a contingency plan for the south korean government. on the other side there was one op-ed from a left-leaning paper calling on u.s. president donald trump to sort of stop ratcheting up the tension around the peninsula. calling the comments coming out of him this week, calling the comments, the threats that he made careless and not so well thought out. that's the sort of divide we see in the media reports

certainly what was interesting, i talked about how this is just a normal day in south korea, but i did interview some people, just average citizens of south korea, and asked them if there was any difference this time around take a listen to this clip >> translator: i think trump makes me nervous if he approaches the north like that, i'm worried whether they will corner north korea. many former leaders have taken a gentle approach before >> translator: as a south korean citizen, i'mbo worried a little bit, but i trust that south korean leaders and the president will coordinate well with the united states and solve the issue. >> i think this is part of our routine in south korea many of us think that what president trump is saying is not sensibiliible either. i think they will stop this at some point >> over the many years covering

north korean stories, i've been telling viewers that south koreans are calm about this. this time i felt like they -- this unfamiliar rhetoric coming from the u.s. president is certainly worrying some south koreans. overall it's about keeping calm here and going about their usual business in seoul. back to you. >> chery, thank you very much. > joining us for more on this is adam mount thank you for being here >> thank you glad to be here. >> chery brings up an interesting perspective. south korea is in a different position than the united states is for the first time we're facing this idea that they could potentially reach out to us with some sort of missile, potentially a nuclear armed one. that changes the dynamic probably explains some rhetoric heating up here.

what do you think? conventional wisdom would say president trump should not be so bombast bombastic. but what we've seen to this point is trying to negotiate with these people has not worked what do you think the right answer is? >> you're right. this is certainly a new challenge for the united states. the united states has never -- the continent of the united states has never been threatened by north korean icbms before that's a new development the president has clearly reacted to that. the difficulty is the administration has allowed internal infighting to come into the public sphere, which is paralyzing response to this icbm you see gyorko weighing in publicly, contradicting rex tillerson. every time they contradict themselves, they make it more difficult to make progress >> just to lay this out, some people say this is a case where the administration has intentionally played good cop,

bad cop scenario you don't think that's the case, you think it's chaos >> i think good cop/bad cop is a rational strategy. this is more improvised. you saw secretary mattis last night say that the president's rhetoric is up to him. this is my rhetoric. one of the last chances they had to achieve rationality in this process, and to make clear and coherent threats to north korea was form mattis, tillerson and mcmaster to go to the president and say you have to work from prepared language. this has to be vetted through the pentagon and state department, we need to be ready to engs cuxecute it. mattis kind of acquiesced in this infighting, and they make it harder to make progress >> some people say the rhetoric trump was using was achled at north korea, others thin the compliance rate, by

this was directed towards china. what do you think? >> the dialogue seems to be the threats have not resembled credible threats they spell out a way forward either both for china or for north korea. what you heard instead was vague elusions to the power of u.s. military force that does not leave north korea a direct way forward. you have got to ask yourself, why is it worth dialing up tensions this far? they may hope to coerce north korea back to the negotiating table on favorable terms, but north korea has been clear that's not going to happen they see themselves as a regular nuclear power. they say they will not dismantle their program voluntarily. the only chance for negotiations to start is for the united states to make a direct approach and open talks on broader terms.

>> in your analysis of the situation, you sort of leave china out of it. i'm wondering if we should china count. overnight in a state-run newspaper, the global times, there was a notion there that beijing should remain neutral should there be any conflict between north korea and the united states. the peoples congress is going to meet late their year president xi is focused on his second five-year term, being re-ele re-elected to his office why should the chi nnese get involved and are we hearing telegraphed that the chinese want no part of this >> the chinese global statement which is not directly official central policy but related said that they would want to get involved if the united states struck first but not necessarily if north korea struck first. in pyongyang that will be read

as permission. china has not implemented sanctions reliably they have proven unwilling to apply the level of pressure necessary to coerce north korea to denuclearize. this unrealistic reliance on china's assistance has to end. it's held back progress as well. >> adam, thank you coming up, nuclear threats rising we'll talk to former australian prime minister kevin rudd about the war of words between the u.s. and north korea and earnings alert jcpenney expected to report around 7:30 a.m. eastern time. later, author james patersterson will join us on set. stay tuned, you're watching "squawk box.

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. i think trouble may be on the way for snapchat investors it could be another difficult day for those folks.

the stock is down 14% in the premarket after results disappointed on nearly every metric it had a larger than expected quarterly loss revenue missed the mark. and it also missed estimates on global daily active users, the most important metric of all joining us is eric sheridan. you cut your price target, correct? >> yes >> but you're still 5 bucks above where snapchat's stock price is right now why? >> we took our price target down to $12 >> down to 12. you had cut it to 19 previously. >> we took it from 24 to 19 a couple months ago. from 19 now down to 12 that's mostly been a function of consistent relatively poor advertising checks >> so it's an elevator without a cable. what has changed between 24 bucks and you cut your price target in half over the last

year or so what have you seen that is making you be that much more pessimistpessimistic? >> i think when we were talking to it advertisers in the february/march time frame, they were talking about snapchat being a company that can could do well north of $1 billion of revenue this year, well north of $2 billion of revenue next year. we're closer to 9$900 million o revenue this year, and 1.5 billion next year. so the price target is showing less momentum in the advertising business >> because of less of a reach to customers or -- >> it's really two things. i think the user growth has come in slower than expected. this company went public early in its life cycle. this advertising business is almost early stage compared to where facebook and twitter went public in their life cycle

you have user growth coming in worse than expected and competition being heightened from the likes of facebook and its division of instagram. >> when you look at instagram stories, do you also calibrate that on the same metric, that it's a new business in and of i itself it's 250 million users in april it was 200 million. it ramped quickly. do you look at that and say that's a relatively new business, as well as snap. look at the two versus each other. >> it's a great point, but instagram'sed a vo ed advertisis got layered on top of facebook th most instagram users have logged in using their facebook identity >> would this have been more valuable had face bach bought it it was wrapped into the family brand? >> scale is an important part of

the advertising business if you were a part of a larger scale program, you could grow users faster facebook and instagram, in terms of logging in as a user and selling advertising has been a much more positive >> my only source of information is my nearly 14-year-old and her friends. you ask do you ever see ads? no no does it work is there any proof that advertisements on a platform like this will ever make money because if it doesn't, the advertisers will go back to traditional media. >> what they do have, they have a younger demographic who is very, very engaged we are seeing them lay ner ed a

v layer in advertising. this is a $10 billion valuation on less than a billion revenue >> and no profit >> and no profit at 10 billion valuation, you are going out a couple years to justify how to buy the stock here >> there was a bit of a snafu on the call yesterday they left the microphone open, t one analyst laughed at their response is that a big deal >> no, these technical snafus happen from time to time on earnings calls >> but to that point, the laughter erupted because evan spiegel did not answer a question directly. were you getting a sense that on the conference came that snap's management were answering the questions in a direct fashion? >> is it any different than what we hear from corporate executives >> what i heard from clients all through the night is frustration.

there's frustration that is went public there's been some noisy quarters now. the stock has not performed well that frustration continues to build. the only thing that can solve for that is execution. >> do you have confidence in evan spiegel >> i think he's a good innovator on product their product is really interesting to its users you have to scale a business on tof of top of an interesting product. >> thank you. they say money can't buy happiness but mathematics can quantify it. oscar fernandez joins us next on "the calculus of happiness." and later two of the biggest real estate coanmpies team up. ♪ ♪ top speed fifty knots life on the caribbean seas ♪ ♪ it's a champagne and models potpourri ♪

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♪ this is not. this is pretty good as things go ♪ it's a small world after all ♪ right now it's time for today's executive edge our next guest wants to help mike math more accessible to your everyday life and make your life better too. the subject of his latest book called "the calculus of

happiness" and it tries to use math to help you become happier, wealthier, and also find true love just some small goals along the way. joining us is oscar fernandez, professor of math at wellesley college. thank you so much for being here >> thank you very much for having me here >> i wish my calculus teacher had laid a little bit of this on me it's good for you. it can bring you happiness and wealth explain that to us >> the most common question that you get in a math class is when am i ever going to use this stuff. >> right >> what's interesting is that, you know, when you talk about math at this level, the math tigss are very aware of how this comes up the students want personal relevance. how does this relate to my life? this book is all about that. health, wealth, and love >> give me a great example how i can use math to make myself happier. >> let's talk about nutrition for one second common question we all have during the day, how many calories should i eat. turns out there's an equation for this and there are a few components to the equation. one is total daily energy expenditure. it dependsen your weight, your

height, your age -- >> how about love? how do you use calculus to find love >> i want to ask him this because -- >> hold on, hold on. >> listen, like, millions of americans, i suffer from done laps disease, my belly has gone laps over my belt and getting rid of that spare tire is hard here's the thing i know what you're saying, but i don't have any idea how many calories i burn during the day >> sure, sure. >> we sit behind a desk. figure that out. >> so there's a -- >> help! >> so turns out if you put groups of people in a room, you study them, you measure the caloric intake, caloric expenditure. there's a little equation, if you know your weight, your height, your age, you can estimate how many calories your body will burn at rest if you're a couch potato 24 hours, you don't eat anything that's called your resting metabolic rate you layer on exercise, anything as lifting a finger, that's

exercise, believe it or not. you layer that on, you layer on reduced thermogenesis, if you eat more protein your body requires more calories to digest that this is one of the differences in science eat more protein you naturally start losing weight because you net fewer calories >> let's get back to love because that's more complicated. that's where i don't understand how calculus can be applied. >> right there's lots of interesting little bits here so take the following problem. suppose you're going to commit to dating 100 people in your lifetime >> not at once >> not at once >> right >> question is, and we do this, you know, through our life, most of us every day, we date a few people, we get a sense of what the field is like, what's out there, what we're into and we form what's called a leading contender in my head, the ten i dated this person is probably the best turns out there's a rule of thumb, 37% rule. take however many people you're going to date, take 37% of that, you should date that many but absolutely reject them

right? form the leading contender in your head and settle down with the next person who is at least as good as that. >> that's really interesting always thinking about the grass is always greener on the other side of the fence. you've tried the other side of the fence. >> you've tried it >> it's already 37% of the scorched earth >> all right oscar, great stuff and makes math interesting the book again is called "the calculus of happiness. thank you for joining us today >> thank you for having me it's been a pleasure >> up next, stocks coming off their worst days since may the s&p and the nasdaq on pace for the worst week of the year we have got your full guide to your money in the trading day ahead. plus former australian prime minister kevin rudd is here to talk about the war of words between trump and north korea. there's a lot more to do don't you go anywhere. "squawk box" will be right back. when this bell rings...

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tensions running high as president trump issues a new warning to north korea the latest in this rapidly developing story straight ahead. markets on alert as concern grows over north korea will today be another big down day for your money we're going to set you up for a full trading day in just a couple of minutes. and the great american eclipse. what you need to know to get ready for one of nature's most awe-inspiring moments. another awe-inspiring moment, the second hour of "squawk box" begins, right now. live from the beating heart of business, new york city, this is "squawk box." ♪ good morning again, everybody.

welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square i'm becky quick along with brian sullivan and melissa lee let's take a look at the futures this morning yesterday was the biggest down day for the markets since may 17th this morning, things have stabilized a bit dow futures are indicated up by about five points. s&p futures down by about 3. check out the nasdaq, it is indicated down by another 16 points so we'll watch this as we get closer to the opening bell in the meantime, here's what's making headlines the white house will reportedly release a brief document next month outlining a framework for tax reform reuters says that the three to five page document will not be accompanied by tax legislation as some have expected but it could provide a starting point, laying out areas where the trump administration and congressional republicans agree. reports say it could also include some input from democrats. shares of snap are sliding after the social media company reported a bigger than expected loss snap lost 16 cents a share last quarter. that was two cents below estimates. revenue came in at a lighter

than expected $181 million and the company added fewer users than had been anticipated and as a result the stock is down almost 14% this morning amazon is reportedly in talks with major u.s. venues to try and offer tickets to concerts and sporting events that move could loosing ticketmaster's grip in this country. ticketmaster is owned by live nation and amazon, by the way, has had some success in britain. that's where it's been selling tickets to shows in london's west end that's been happening since 2015 stocks to watch, nvidia second quarter results easily beat estimates strong demand for gaming chips used in bitcoin mining but the company's data center and automotive unit fell short the shares had nearly tripled over the past year, you see the decline in premarket down more than 7% right now. news corp. meantime, fourth quarter loss excluding items the company's he beat forecasts but revenue missed estimates on continued weak demand for print ads. today's wall street agenda,

we will be getting the latest picture on inflation with the july consumer price index. that comes at 8:30 eastern both the headline and core cpi are forecast to rise 0.2%. the inflation numbers earlier this week and the ppi were lighter than expected. we'll hear from a pair of fed officials today. dallas fed president rob kaplan and minneapolis fed president neel kashkari. on the earnings front, jcpenney report less than 30 minutes from now. we'll be having a look at the retail sector a little later in the hour, but before this, jcpenney down by 17 cents because of the low price of that stock. a companywide town hall meeting was consequenceled after one of google's employees was fired. the employee was let go after writing a controversial memo on women in technology and diversity issues at google some employees were worried they might be outed in the media for asking questions he said some of the presubmitted questions were leaked along with

the snams of tnames of the emplo submitted them >> the dow dropping 200 points yesterday. the worst day since may. let's talk more about the markets and your money gabriela santos, jpmorgan funds, and river front investment group. gabriela we know that north korea is a scary situation, a serious situation, and a risky situation. but how do we quantify the risk of north korea into our stock market how do you figure that out >> well, it's tough. i think stocks are having a hard time investors are having a hard time figuring that out. if we remember, what we've had year-to-date we've had some very, very strong global economic data some very strong global earnings data including the u.s so that's really been the backdrop for stocks. and now there is some attempt to figure out whether these are just escalating tensions, or whether there will really be a military confrontation here on the horizon. so far the best case for stocks is good economic backdrop will continue

these are just tensions. we are not seeing military escalation >> it's easy to forget, in 2010, north korea lobbed bombs on a south korean island. in 2013, north korea threatened to attack guam when we put the missile defense system in. and also attackhawaii. the markets have rallied obviously since then, for a lot of reasons is this another one of those things that is important and scary, but it will pass, in your opinion? >> it seems at the moment we do seem just like escalating verbal tensions sanctions, as well rather than an actual step into military confrontation that would be an entirely different ball game. but we have gotten very much used to geopolitical stress around the world not just north korea, south korea, right but we've also had several confrontations in the middle east we've had terrorist attacks. this has become, sad to say, a normal backdrop for the market >> but, michael, you are looking at the markets right now, what would be the thing that might cause you concern, that might make you think, maybe this time,

this dip is not the one to buy anymore? >> you know, i think it's really hard as gabrielle said, with the earnings backdrop so strong, with the economic backdrop so strong, and with this being kind of the wolf on the whatever that we've kind of become used to quite frankly since 9/11 i think this would be really a mistake for investors to overestimate the potential consequences of this potential crisis. i also think we should recognize that we came in to this environment with volatility at an all-time low. a lot of people have been making big bets against volatility. so the market might have been poised for any kind of destabilizing event to cause a little bit of an excessive reaction simply because no one was anticipating such a reaction, and everybody -- >> so you're saying the volatility surge that we saw yesterday, 45% or so, that was a squeeze that caused the downward pressure on equities in that one session? >> absolutely.

absolutely and not only that, but remember, we are down about 1.5% off the high this market has not seen a 5% correction in over a year. 5% corrections are normal part of any bull market and by not having had one in so long, we're kind of due. >> but having said that, gabriela, we've been waiting for this pullback. even if we were to pull back 5% that only gets us back to where we were on may 17th of this year if you've been waiting and waiting, you're buying in at higher levels, anyway. >> well, we do still think the market is going to go higher over the next few years. so for investors who are still, perhaps, too concentrated in something like fixed income, it could still be an opportunity. and also, not just a pullback, but an opportunity, around the world, as well >> i guess my point is do you need a pullback before it looks like an attractive place to start putting your money >> we think that u.s. stock market is still an attractive place to put our money and with the pullback it would be particularly attractive for investors who are underallocated to stocks. >> we've seen, though, big

moves, michael, in specific stocks i don't necessarily need you to speak specifically about stocks. we've seen 11% drawdowns in netflix and amazon we've seen pretty big moves and pretty big cap technology that used to be the leader. does that cause you concern? do you say those are the areas to buy or those are the areas that would see continued pressure should we enter the 5% correction >> from my perspective, i think pullbacks in some very, very richly valued stocks are a healthy sign that the market's recalibrating and getting a little less frothy i would not be chasing fully valued, you know, high multiple stocks in this environment simply because there's a lot of great value sitting in the marketplace, particularly there's been, in my opinion, an excessive move in some of the overseas markets, particularly in europe. europe has had a fantastic earnings season. all the economic data continues

to surprise to the upside. so from our perspective, you know, rather than chase some fairly pricey stocks higher, i think this is a good time to think about, are you fully allocated in international space? it's been left out of the rally for a lot of the last seven years. and if history is any guide there's kind of a biblical pattern. seven lean years and seven fat years -- >> you think europe is still a good deal, michael >> absolutely. >> the dow is up 11%, 10% this year, one of the worst performing major indexes over the past 12 months almost every major european market has outperformed us but that doesn't scare you off >> and the euro is rising. >> and that. >> doesn't scare us off for the simple reason that, while we've got one year of outperformance, ironically, a year of outperformance that began right after the brexit vote, we've got one year of outperformance after seven years of underperformance. the relative valuation gap between the u.s. and europe is still more than 30%.

so there's a long way to go in catching up from the underperformance of recent years. also, remember, the euro has been in a trading pattern for the last two years of 105 when we're worried about the euro breaking up. 115 when we get great economic data like we've gotten recently. we've broken out of the upper end of that band by a little bit. but with marrone's election, and the potential for labor market reform in france the risk to the euro is dramatically lower than it was even a year ago i think an increase in the training band from 105 to 110 at the bottom, and maybe 120 to 125 at the top, that's not going to derail their recovery, and it's fully validated by the lower risk >> we've got to go gabriela likes cyclicals in europe, as well. >> we do >> thank you both. coming up quarterly results from jcpenney plus the war of words between president trump and kim jong-un making a lot of people nervous a crocer look at what's driving the rhetoric and what options the u.s. and its allies have

after the break. stay tuned you're watching "squawk box" on cnbc there's a denture adhesive that holds strong until evening. fixodent plus adhesives. just one application gives you superior hold even at the end of the day fixodent. strong more like natural teeth.

north korea appears to be a poor country, and yet it has

managed to develop ever more sophisticated wep bes and generate nuclear power those are very costly. so where do they get the money michelle caruso-cabrera has more >> the short answer is they sell commodities to china well known less well known they manufacture and sell weapons mostly to african countries. they also export north koreans as a form of slave labor to russia, china and africa and in the category of weird, they design and export huge brass statues. we know all of this because of this what i've got here this is an annual report from the u.n. panel of experts, these are investigators who work for the u.n., put out a report every year on north korea's progress toward nuclear weapons, and whether or not countries in the u.n. are enforcing the sanctions imposed by the u.n so, like i said, the sale of coal and minerals to china we all know about that let's move on to arms sales. just one of many examples in this report, investigators discovered north korea sold automatic pistols, assault rifles, anti-tank missiles, anti-personnel mines to the congo for the u.s. by the presidential guard and special units of the congolese police.

we're going to show you a photo of 30,000 rocket-propelled grenades seized from a ship in the suez canal manufactured in north korea. they are underneath the tarp there, underneath that dirt. they do all this through front companies. example, north korea has a company called glowcom they advertise on the internet moving on to labor, this is a letter from the report showing that a north korean construction company built new military headquarters for namibia abusing north korean labor and they also build enormous socialist style statues. this one is in senegal the u.n. sanctions were imposed on north korean statues in 2016, in theory this should have stopped. if we went out a little wider you would see very tiny flags at the bottom of this statue to give you a sense of just how enormous it is think the colossus of rhodes >> oh, you're kidding. >> enormous. crazy, crazy stuff >> using north korean slave

labor? >> right so they have a construction company, for example and they export their labor to that country and they bring them back and one government pace their government rather than paying the employees directly >> and also, isn't most of this done in cash, michelle by the way, it really is power lunch in the morning >> yes >> crazy >> that's why sanctions don't work because if you're paying everybody in black market cash, what does it matter if you sanction the banking >> we got these employees going back, $20,000 u.s. each for them to travel for expenses they smuggle things all the time i think we have this photo of this bentley that they seized, can we bring that up that they found stuffed under like a bunch of grapes or gra grapefruits and things they're always smuggling because it's very difficult for them to use the international banking system >> that's the letter >> joining us for more on north korea, former australian prime minister and president of the asia society policy institute kevin rudd he's just out with a new piece

on north korea in the financial "times." mr. prime minister good to have you with us. this is a huge roblem. michelle just outlined there is a whole other economy existing even if sanctions are imposed, they get their money from other sources. very difficult to sort of shut them down. >> exactly i've never been of the view that sanctions work with north korea. i think that it makes everyone feel good politically. you go off to the u.n., the security council passes a resolution, we get tougher and tougher, but the bottom line is these guys are up 10, 20, 30 years experience of getting around them. and so i the key question is what other leverage can be deployed to get them to change their behavior >> you don't think china has power or influence, or do we have -- >> no, they do they're unprepared to use it >> unprepared or unwilling >> unwilling but what i'm saying is that china asked this question. for a moment put ourselves in their position they're thinking about country next door to them, strategically,s who forically a buffer state between themselves and the rest of the world.

what then happens if they do what the united states wants, which is bring about a fundamental change in policy in pyongyang on nuclear weapons, which could lead to the removal of the supreme leader. they're question is what comes next, is the country next door then destabilized or worse, could end up becoming a state which is pro-american rather than pro-chinese on their borders. that's the deep fundamental national interest at play on the chinese market the big problem is, big problem is, i don't think the chinese believe that the united states is being real when it says that a unilateral military option is on the table of course, that causes china to be even more relaxed about the pressure that it brings to bear on the north koreans >> you don't think that's changed in the last couple of days with president trump saying what he said >> i think president trump -- >> or at least add a level of doubt that wasn't there before >> well i've just come back from beijing about two days ago and talking to friends in china

about all of that, certainly the temperature is going up, the language coming out of pyongyang, language coming out of washington is ratcheting up, but the key question still, i think in china's mind, is what happens the day after? if they were to do what the americans seek them to do. my own view is, as i've outlined in this piece in today's "financial times" is, look, china could come to the table on this, but they would need to be told by the united states, what's the grand bargain here? for the future of the korean peninsula so that we don't end up with american proxy state on our border >> there's a guy name bill perry, former secretary of defense under clinton. >> i know bill >> oh, you do, okay. and i was listening to an excellent interview done with him, i can't remember where, a couple of days ago where he was talking about the carrot and the stick back in the late '90s, and the clinton administration basically had sort of reached a deal with the kim family that we're going to keep you in power. just don't be a nuclear state. and everybody's going to be left alone.

and it was going well, and then the bush administration came in, it's not a political thing, but was more hard-line and the kim family said what's the point of us giving up anything if we're coming after us. nobody likes the bully that is north korea, but at the same time, do we need a little more carrot and a little less stick here >> i think you're looking at questions like that, and bill's analysis, by the way, i think is right. i mean, looking at this you've got to hop inside the mind of the north korean regime. that's hard because we're looking at kim jong-un, and to us he seems to be irrational but what's the core interest there? >> to stay in power for 1,000 years. that's it. and so the last thing he wants is war, because he'll be definitely out if that happens >> so he says, i want to a nuke in order to be my ultimate deterrent, no one gives me strife is there another way of providing the regime with the guarantee of the security that they seek? and that's part of a grand bargain on the peninsula >> i think you're going to get

to the grand bargain but it shouldn't be negotiated with north korea it should be negotiated with china. what do we have to give china for them to actually do something with north korea >> if it was me trying to put the ledger together, what do we want what we want is the end of the nuclear program in north korea, and elimination of the existing arsenal and the associated ballistic missile program. what would the chinese want? on their side of the ledger. one, a peace treaty between the united states and north korea. because we've been in a state of war with north korea technically since '53. two, diplomatic recognition by the united states and north korean regime. three, possibly this, a tripartheid security guarantee for the regime for the future, bill perry's point and four this is the really tricky one, where real diplomacy could be applied, if we get all of that, would the united states be prepared to consider a staged withdrawal of its own forces from south korea in order to

produce a genuinely neutral korean peninsula >> how would south korea feel about that >> depends which government is in power at the time the center right government, which lost power recently, would have to reach for the smelling salts. >> the government that's there now? >> the center left government, if it was part of a broader security arrangement for the peninsula, may think there's some merit in it but there's a difference between having troops on the peninsula by the u.s., and retaining security treaty with south korea, which no one should -- >> and what we -- what we won't realize here, necessarily, is that south korea does not have an ambassador to the united states right now they don't have an ambassador to china. they don't have an ambassador to russia because they were also new in their administration. is that a risk >> well the south korean government as you said is even newer than the trump administration >> that's right. >> just been elected and frankly, they're still working out where the washers are in the blue house that's what happens when administrations change overall what worries me about developments on the north korean

question at present is that i've always been of the view that conflict or war on the korean peninsula is improbable. the problem with everything unfolding at present, is it's now become possible. and calculate to the degree of possibility is ratcheting up >> leave it there. kevin, thank you kevin rudd >> good to be with you >> michelle, thank you >> >> when we come back, hackers holding game of thrones script at ransom. the details right after the break. and the futures at this hour have stabilized a bit. dow futures up by 13 s&p futures downdy 1.5 nasdaq down by 11.5.

welcome back to "squawk box. a new and interesting development in the hbo hacking saga the hacker has leaked an e-mail now showing that an hbo executive offered $250,000 as a, quote, bounty payment, to the cyber thief. that is according to multiple reports. e-mail says that hbo is working to obtain $250,000 in bitcoin. now the executive never described that payment as a ransom instead calling it a quote, bug bounty payment although that term typically

refers to a payment to those who help a company find security vulnerabilities. this definitely has more twists and turns than a "game of thrones" episode by the way, you know what's going to happen saturday night >> i'm behind like two seasons so i don't want to hear any of it >> no. >> coming up the president making some forceful comments about the opioid crisis. a closer look at what can be done to stop the abuse of highly addictive painkillers. that's next. plus we are expecting results from jcpenney any moment as we head to break take a look at u.s. equity futures watching thenasdaq very closely. down 11.5 right 2340u. prsu oth iexodto be a big esren atnd tay t $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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all right. good morning happy friday 7:30 here in the east. welcome back to "squawk box. we're live, of course, at the nasdaq marketsite in times square among the stories that are front and center for you this friday, ge's new ceo is betting big on

his company and maybe himself. john flannery bought nearly $2.7 million in ge stock according to a regulatory filing. he added 1 04,000 shares to his 401(k) account bringing his total ge holdings to $15.5 million as of yesterday's closing price. china's cyber regulators investigating that country's top social media site for a breach of laws that ban content that is violent or offensive to the communist part ten cent weibo and baidu are part of the probe. the government has shut live streaming services down, tightened regulations on internet access, and issued warnings about cleaning up web content. and we are watching oil once again. the iea releasing its latest monthly report this morning, and that agency says that global oil demand should grow more quickly than expected later on this year it should help to ease a glut despite rising crude production.

however that report not helping oil this morning crude oil down just about a half a percent to 48.36 a barrel. the futures this morning had stabilized as people kind of looked at what happened yesterday. the futures down, or at this point dow futures up by two points this comes after the dow was down more than 200 points on all these concerns about rising tensions with north korea and the united states. we will see if this holds, because president trump just tweeting about north korea once again. saying military solutions are now fully in place, locked and loaded, should north korea act unwisely hopefully kim jong-un will find another path and again we've been watching the futures this morning we will see if this continues to hold >> we saw a slight tick lower in the futures and we're watching the bontd yield down to 2.195% right now. jcpenneys out with earnings. they just crossed the tape adjusted loss per share nine

cents. they're saying that the broader retail environment remains challenged they are reaffirming their eps guidance for the year. >> wider than expected loss. for a loss of five cents instead of nine cents? >> adjusted loss of nine cents a share. it's interesting that they're reaffirming their eps guidance for the year the commentary matches what we've heard from a lot of the other retailers, though, that the broader retail environment remains challenged we even heard that from nordstrom yesterday. that was a better than expected result better than expected comp-store sales and they said the same thing about the challenged retail environment we'll see how this plays out in the rest of the sector today president trump making a forceful stachlt on the nation's opioid crisis during his vacation in new jersey >> the opioid crisis is an emergency and i'm saying officially right now it is an emergency, it's a national emergency. we're going to spend a lot of time, a lot of effort, and a lot

of money on the opioid crisis. >> that is a very different characterization than the one that was used earlier this week by u.s. health secretary tom price who said that the official declaration of a national emergency was not necessary at this point joining us right now is someone on the front lines of this nationwide fight against opioid abuse. tim feeney is the commissioner of the suffolk county, new york, police department. thanks so much for being with us >> thank you for having me >> this has been a big problem, not only on long island but in places around the country. why don't you just describe for us what you're dealing with right now. >> absolutely. this country is losing approximately 150 people each and every day to the opioid epidemic the opioid epidemic is ravaging communities throughout the nation it does not discriminate on the basis of gender, income, race, community, in suffolk county, where i'm from, it's affecting all of our communities rich, poor, middle income. this is an epidemic that started in the '90s. so this is a long time coming.

it started from the overprescription of pain medication, and the misuse of pain medication, and now, the country's in a full-blown heroin epidemic, and many places are now in a fentanyl epidemic >> describe how we get from prescribed opioids to heroin and then to fentanyl for people who don't even know what fentanyl is >> absolutely. so people were overprescribed pain medications and some folks even when prescribed appropriately misused those pain medications because they are so addictive. they developed opioid dependency and government acted, albeit slowly, through programs that prevented doctor shopping, laws that cut down on the prescription of strong pain medication, education among doctors and pharmacists. but folks still had the dependency, but the demand -- i'm sorry but the supply of those drugs decreased. so what happens? supply and demand. price goes through the roof. at one point a bill for oxycontin on the black market went for $80 so people gravitated towards heroin, which is much cheaper.

in some states, including new york state, you can get a dose of heroin for $5 >> the excellent book "dreamland" outlines how medicaid really helped push the opioid epidemic, because you could use a $30 copay card and buy huge quantities, sell half to your neighbors. this is a legal -- heroin is not, but the rest of it is a legal crisis and we always hear, how do doctors do it? well many doctors are compromised themselves, huge debt they just need the money of the prescriptions. but they also are just overwhelmed. how do we solve the problem on the doctor and dentist side? how do we stop the distribution? because those are, hate to use the term, those are the dealers. >> absolutely. a combination of education, and law that restrict the prescription of pain medication. so in new york state, i do have to commend the state legislature and the government for passing some aggressive legislation that limits the amount of prescription pain medication

that can be prescribed at once to seven days. and there are some exceptions for the chronically ill, which is appropriate and we need to raise awareness but even in my own state, we're not addressing dentists, for example. many dentists are prescribing large amounts of pain medications for root canals. and then what happens is that the unused medication is either abused, by someone else, still the number one source of drugs in this country is the medicine cabinet. >> how come dentists aren't held to the staple standard as doctors? >> i can only suspect that that was the result of lobbying efforts. >> 150 deaths per day due to overdoses is a tremendous number i would imagine that there are also a number of crimes per day related to opioid use. >> right >> tell us what's going on >> sure. in terms of deaths there are more people now dying of opioid related overdoses than firearm violence and motor vehicle crashes combined it is now the leading cause of

death for those under 50 years of age this is a historic epidemic that this country has never seen. and of course there's associated crime. many folks steal to fuel their diction. they typically start off by stealing from loved ones and friends and people in their social network and as they destroy those social networks they then start to victimize strangers. what's amazing to me is at least in suffolk county we've been able to keep crime at a record low despite the epidemic as a result of very aggressive policing, community based policing, but i would say that close to -- definitely more than half of our crime is related in some way to the opioid epidemic. >> you've said yourself we can't arrest our way out of this program. you talk about trying to make sure that people get help with this issue what would you like to see the federal government step in and do now that we've heard president trump say that he thinks it is an emergency? >> we need to be investing significantly on all fronts. prevention, treatment, recovery and law enforcement.

i think the best way out of this epidemic is prevention there's no question we need to increase access to treatment and invest in medically assisted treatment models but prevention is the key. opioid dependency is extremely powerful it's extremely hard to kick. so if we can prevent someone from ever going down that path -- >> how do you do that, though? listen the nation has -- we also have an obesity epidemic and an obesity crisis. i bring that up, because as you've read a number of books where the doctors, if you're 350 pounds, your knees are going to hurt, your lower back is going to hurt, you're going to keep going to the doctor, i'm in pain, i'm in pain, but there's no solution because it's your weight that's causing this because the doctor who is tired of seeing you every week saying oh, here you go, this is new from purdue farm suitals back in the late 1990s, just take this, you'll feel better by the way, now you're addicted. how do we solve that >> we need to remove certain financial incentives that doctors have prescribing certain

medications. that's number one. number two we need to raise awareness about the issue. if i were president i would provide funding for a pro-bust evidence based drug prevention program in all of our schools k through 12 you have to start early. >> commissioner, it's a terrifying problem one that is not going to go away quickly. we hope you'll come back >> thank you very much >> thank you coming up, a roundup of big retailers including jcpenney those shares are down sharply. a worse than expected earnings wow, look how much it's gone down since we last checked now wnbo 1 pmaet dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac!

jcpenney results out a short time ago the stock is getting crushed premarket. courtney regan joins us with more on what to expect from other retailers. >> so this is the last of the department stores, jcpenney coming up with a loss of nine cents. that was almost double the loss analysts had been looking for. and jcpenney says it was in part because of liquidation of invent other from 1 27 of its stores.

that also is why gross margins took a pretty big leg down in the quarter. revenue did beat for jcpenney. the comps coming in down about in line with what analysts had expected down 1.3% last year in this quarter they actually had posted a comp increase they did reaffirm their full-year guidance again in part because they said some of that earnings hit was because of the liquidation of inventory from the 127 stores that will not be a repeat next year that's not currently in the plans. shares are under pressure, just like all of the department stores were yesterday. even though we saw macy's, kohl's, beat expectations almost -- basically across the board. shares were still under pressure because the fundamentals are still an issue with the department stores. they're aggregators. they are boxes they sell a bunch of brands. and in this e-commerce world you don't need necessarily to go to a macy's to get some of those brands and that's part of the reason for the pressure we have a lot of retail earnings

to come next week. tuesday is actually a pretty big day and we're going to get reports from a number of different types of retailers we're getting coach, home depot, dick's sporting goods, urban outfitters and target and thursday we get walmart and gap. target did raise their guidance last month but they had a choppy history. they have had moments in the recent past where they have raised guidance and then failed to meet that so we'll see what happens there and we want to see that same-store sales continue to increase for walmart >> walmart's an interesting one, also, because it's very close to 50-week high it's been on a tear this week. >> it has. a lot of people look at this and say walmart and amazon are the two to watch if someone can compete with amazon it is more than likely walmart. before amazon came around walmart had the most sophisticated logistics system perhaps in the world for retail. >> can we throw up a 10-year chart of jcpenney and i'm sorry to do this on the fly.

looking at -- looking at the premarket price based on the decline melissa just told you i think this will be an all-time low for jcpenney it's not an all-time low it's longer than my charts go back to a 20-year low for jcpenney. this was a $68 stock almost ten years ago today. >> you know, and like yesterday on power lunch they did log about $3 billion in revenue. it's not like they're not selling anything they said that all categories actually improved. or nearly all categories improved but this is just a sector that has been -- >> that's what i don't get we showed this on power lunch yesterday, i pointed out that macy's, their sales were down 5% year over year 5% that's not a little but it's not a lot. stock's down 37% dillard's, sales are down 6% or 7%, stock down 47% why are these stocks falling so much faster than their -- we act like the sales are just drying up they're still selling billions of dollars in goods.

>> yeah. i mean -- >> they're just not making any money. >> i don't know. when we had the kohl's ceo just a couple weeks ago he really tried to make his case, not all retail is created the same look, we're different. we're off-mall we're having some pressure, but it's not the same kind of pressure we're not cutting stores they have 450 more stores than macy's so it's a very complicated story. and certainly not over yet >> reaffirmation of the guidance of jcpenney that still doesn't make any sense i understand the hit because of the lidge widation, but this implies they have to make up four cents in the coming two quarters >> yeah, it definitely is. >> they have to make all their profit in the fourth quarter >> like trust me, i'll make it up to you later on we don't buy that anymore. >> the conference call hasn't started yet. i think that's going to be the gigantic question that's going to be asked. he said really strong and back-to-school was still in -- still happening in many parts of the country. but holidays obviously the most important quarter. can they make it all up? it's going to be a big beat. >> court, thank you.

>> all right, who was it sang total eclipse of the heart was that kim carnes? a total solar eclipse is coming. this is expected to be one of the most photographed videoed, streamed, shared, whatever, events in history. it's going to be amazing august 21st the author of apollo 13 and apollo 8 jeffrey kruger joins us after the break to tell us what to expect. futures coming off yesterday's big declines the markets have been weakening a bit as we head into the open ing so to watch. "squawk box" back righafr ist te looking for balance in your digestive system?

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introducing gig-speed internet from xfinity. finally, gig for your neighborhood too. welcome back, everybody. krispy kreme will be going dark for the solar eclipse. check this out for the first time ever, krispy kreme's original glazed doughnuts will be eclipsed by chocolate glaze the chocolate glazed doughnuts will be available monday, august 21st that's the day of the eclipse at participating locations. >> that total some ar eclipse will be on august 21st and it is projected to be the most photographed, most shared event in history for a preview let's bring in jeffrey kruger offer of apollo 13, more recently apollo 8 he's a "time" magazine editor at large. the apollo 8 book all about that photograph, which is one of the most famous photographs arguably

of all time, giving us the viewpoint of earth basically from outer space the moon's point of view, this august 21st eclipse, supposed to be spectacular don't just tweet it. actually look at it, enjoy it. right america? but not with your bare eyes. use the glasses. what can you tell us about this upcoming eclipse >> well, this eclipse will be -- -- >> it will eclipse other eclipses >> in lots of ways it will you can watch it and it is sort of worlds within worlds all the eclipses come together this one is crossing the united states specifically and exclusively. so, look, we're a very vain people we could be forgive be our egotism and think this is a gift from the cosmos for us it is random, of course, but it's a little bit like woodstock in that it comes in the summer of our profound miscontent and this cosmic phenomenon, crossing the nation, knowing no particular region, is just the kind of uplift we're going to

need this summer >> it's a unifying force for the country? >> it is well, yes, because it elevates us look at this wonderful thing that's happening in the sky show just for us, but it also humbles us we are small people on a small planet, being shown this grand cosmic spectacle >> i have my parents and all kinds of relatives who are driving to south carolina to north carolina to see this i'm not. i'm going to try and watch it from here. am i crazy >> well, you will not get anything like the full effect. i have seen one cosmic eclipse, one solar eclipse, rather, it was a transformative experience, and it really reminds us, no matter how proud we are of our 21st century brains, i had kind of a 12th century fear as i was watching it, because it's the cosmos behaving like they're not supposed to. it's really extraordinary. there will, however, be a lot of livestreaming 3-d experiences of it and we will have one on time.com so if you have the right equipment -- >> where will you be >> i will be in casper, wyoming.

we had originally planned to be in hop kinville, tennessee, which will have the longest period of totality, but our trail boss, and the man at "time" who coordinates, a guy name jonathan wood, did all of the preliminary research and realized casper, wyoming, and all the main cities in the pass of the eclipse has the lowest seasonal likelihood of cloud cover. >> right >> so we're going high >> what happens if it is cloudy? what will we see >> you'll see a great deal of weeping among millions of people you can still, depending on what -- how dense the cloud cover is, you'll still see certain measures you'll see the odd color of the sky turns. you'll see a sort of filtered sun behind it. but it does pay to be, people who are watching it on water are very smart, because you can then duck out under the cloud cover but you know, clouds are simply a nonnegotiable risk when you're watching an eclipse. >> even if you get the full view for the longest period of time it's only like two minutes >> 2 minutes 40 seconds, maximum

totality but i'm telling you they can be 2 minutes and 40 seconds of transformative experience. it's just -- it's transcendent >> we've heard all the news reports about the national guard getting called out already in some of these areas. these are small towns, it could be besieged by 150,000 people. is that a real concern >> it is one of the places in oregon we talked about, and the story we have in the magazine this week, has a nominal population of 6500 they will have a population of 150,000 for a couple of days but i'm glad, very briefly, that you brought up apollo 8 because i'll tell you something, that famous picture, this was a hinge point for humanity that this was the first time we saw the earth, not just as a horizon beneath us, which is even orbiting astronauts only see it that way, but the first time we saw the earth as a full, fragile, krus mass ball hanging in space and it gave us a sense of how fragile it is

photographing the eclipse, while not exactly the same, will give us that sense of this sort of -- >> what are you going to use as your glasses i keep seeing we've got to order glasses, buy glasses >> there is a particular kind of glasses that you have to use until the moment of totality, and then when it is total you can take it off and watch it with the naked eye >> but put it back on. >> and be careful because there are, this always happens, counterfeit glasses flooding the market the american astro on cal society and nasa both have guides online about what brands are reputable and what outlets are reputable to buy >> already >> thank you very much >> thank you >> and good luck in casper >> thank you so much i've never been there. it takes a lot of spirit to be there. >> oh, i like you. i like you you're coming back, baby latest book "apollo 8" is out now. >> coming up barry sternlicht joins us after the break politics, markets and much more.

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president trump's new warning to north korea >> the people that were

questioning that statement, was it too tough, maybe it wasn't tough enough >> global stocks take notice as tensions rise between the two nations. snap, snap, so much for that viral dancing hot dog. shares of snap plunging after disappointing quarter. plus, america's new landlord blackstone and starwood team up for a rental home mega deal. real estate mogul barry sternlicht joins us first on cnbc the final hour of "squawk box" begins right now live from the most powerful city in the world, new york, this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square i'm becky quick along with brian sullivan and melissa lee joe and andrew are out today let's get a quick check on the markets. the futures had stabilized yeah, they're still there. took a little bit of a tumble after the latest comments from

the presidential tweet on north korea saying we have a plan in place, as well but things have come back. the dow futures up by about four points nasdaq still indicated down by about 16 points. the s&p futures down by 3. among today's top stories, is a developing story that we've been following president trump tweeting about the rising tension with north korea. quote, military solutions are now fully in place, locked and loaded should north korea act unwisely. hopefully kim jong-un will find another path this comes, of course, after the president issued yet another strong warning to north korea saying that his, quote, fire and fury threat, may not have been harsh enough meantime, shares of jcpenney are getting absolutely smoked this morning. the department store reporting a wider than expected loss revenue did come in a little bit above expectations same-store sales down 1.3% slightly more than estimated company says the broader retail sector remains very challenged that stock is now under $4 a share.

saudi arabia, meantime, reportedly favors the new york stock exchange for its main listing in the big saudi aramco ipo. that according to reuters. but financial and legal advisers have recommended london as a rather less problematic and risky option for aramco. the final decision on where to stage what could be the world's biggest ever public offering will ultimately be made by saudi principal bin salman who overseas the economic and energy policies "time" shares under pressure after the company missed wall street expectations on basically every important metric that investors were looking at. julia boorstin joins us with the details on the report. >> that's right, melissa snap disappointed wall street expectations on every metric, earnings and revenues, as well as its user numbers. the company added 7 million daily active users in the quarter for a total of 1 73 million. that's 2 million less than analysts projected the average revenue per user coming in at $1.05 that's two cents less than expected

now snap ceo tried to reassure investors ahead of the big lockup expiration of employee shares coming on monday. >> given the amount of speculation around the lockup expiration i feel it is important to note that bobby and i will not sell any of our shares this year the company will withhold the shares needed to satisfy tax with holding obligations we believe in the long-term success of snap. >> spiegel and chief strategy officer stress the value they see in their new self-serve add class and spiegel weighed in on the competition. >> we've always been tloost market competing against giant companies and we've historically been able to grow our business in, maates that are highly competitive and saturated by our competitors because we're so focused on innovation. so i think that explains why we're willing to take this wait and see approach in markets like the rest of the world that don't make financial sense for our business at this point but may make sense in the future >> analysts pushed spiegel and

asked him whether snap is growth packing by sending users push notifications and based on the open mike moment that followed not everyone was satisfied with his answer >> i think the most important thing for us is that when we're telling you about content on the service that it's really highly relevant to you and from your very close friends, and i think, you know, people as they become more reliant on push notifications have sort of relaxed the standards there, and i think it's important for our business >> thank you >> the next question is from -- >> i didn't even understand his response >> some analysts were more impressed with spiegel laura martin praised spiegel for being more engaging with wall street and having a clearer message, about snap's unique advertising appeal >> what was that clearer message, julia obviously there's a disconnect between what investors thought of the conference call, and what evan spiegel sees of the quarter. what was so clear about the

message from advertising the fact is, daily active users aren't growing as quickly. instagram story users, those are growing very quickly >> well, so she did have the underperform rating on the stock. i have to take that in focus but she called out the fact that there was less conversation about snap being a camera company. they weren't talking about that anymore. they were talking about the amazing amount of engagement that snap has with users the amount of time that -- >> like that hot dog >> like the hot dog. >> 1.5 billion times this hot dog was opened in the app. and that is the future of snap evan spiegel basically said on the conference call, the hot dog. >> can you explain what we're talking about? >> users under the age of 25 sent more than 40 minutes a day on app that's up from the numbers reported last quarter. and then again, the numbers that were reported in f-1 i hope we have video of the dancing hot dog. this is one of their augmented reality filters and one of the reasons why their users come and

they return and spend so much time per day on the app. they say that their daily active users create over 20 snaps per day on average one of the things they're doing is using augmented reality filters like the dancing hot dog. i'm so sorry we don't have it now. >> it's part of a world future released in the quarter and so, you know, basically saying this would be the 1.5 billion times already, and so this is -- >> a little -- >> okay but here's the thing we just talked about the eclipse. the eclipse is going to be viewed what 1.5 billion times in real life. advertisers aren't making any money after that, either >> well here's the thing, brian -- >> just because something is viewed 1.75 billion times, is anyone going to make any money from that? >> you have to remember that they offer sponsored lenses. so if you are oscar mayer wiener and you want to pay for that lens you can pay for it and you can have your logo on it, and what's remarkable about an

advertising perspective, there aren't many advertising products where you can get consumers to interact with them, put their -- put your logo on their face, and then send that photo of you with their logo to their friends. so when those augmented reality filters work, like they did, there was a famous taco bell one, a number of very popular ones some for "game of thrones," all of these different brands, if you can get an augmented reality filter to work it's a remarkable product for the advertiser but the question is really, what's the long-term potential of this company. and i think that -- i think that what's interesting is what laura martin pointed to is that the conversation has shifted away from being a camera company to being an advertising company and so, that was something that she valued in that conversation. >> julia, thank you. >> i've driven the wiener mobile >> no you haven't. >> yes, i have >> anybody can drive the wiener mobile

>> in the cnbc parking lot i was in the wiener mobile and i posted a picture like a selfie of me with this window looking out. and people were like oh, private jet travel i'm like it's the wiener mobile. because it kind of looked like a big chair. that's the future? a dancing hot dog? >> what do you know? >> when we return, the biggest rental home companies teaming up for a real estate mega deal. starwood's barry sternlicht is at the center of it. he will join us 234ex. plus president trump says fire and fury may not have been tough enough for north korea we'll talk to a former special ops intelligence analyst about how to contain the threat. and former white house press secretary sounding off about the daily press briefings being televised. mike mccurry who served under president bill clinton and james patterson will join us here on set. he's out with yet another book about an online superstore that wants your money and your soul sound familiar u' wchg quk x"n un yoreatin"sawbo o cnbc whoooo.

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let's see what he does with guam he does something in guam, it will be an event the likes of which nobody's seen before, what will happen in north korea >> what do you mean by that? >> you'll see. you'll see and he'll see. >> that was president trump's new warning to north korea those comments came after the president met with his national security team yesterday at a new jersey golf club the president declined to talk about potential preemptive strikes against north korea, saying he does not telegraph his mel tear actions the president also tweeting again this morning on the topic, quote, military solutions are now fully in place, locked and loaded, should north korea act unwisely hopefully kim jong-un will find another path the latest on tensions between north korea and the u.s., and

possible next steps, let's bring in the former special ops intelligence analyst, author of drone war, also founder and ceo -- co-founder of commission drone company expert drones. brett, good to see you >> nice to see you, brian. >> so doing special ops for years. doing good work for the american people thank you for that what can you tell us about north korea? what's the real threat of north korea? >> right now it seems like quite a bit of rhetoric in my opinion -- they can barely feed their own people >> exactly you've got really a kick stater that is starving his own people so he can play with rockets in the mountains and it's very, very dangerous for someone like him to have access to the capabilities that he does. especially within the last 24 hours where china came out and essentially said hey listen, we're going to remain neutral in this case, unless the u.s. government conducts a preemptive strike and they just essentially gave them a hall pass to continue going down this path of presenting this, you know, option of essentially trying to strike u.s. assets but really in my opinion, it's a

lot of talk, not a lot of action, and our military is ready if there is ever a situation where you need to go after them >> if you were still in the military, and you heard the president say something like, if north korea does this, or if they do that, everything's conditional. >> right >> would you expect action, or do you take that as sort of, here's the language, but it's really now in north korea's corner >> it's important language look the military's always preparing for operations, constantly i remember being in south korea, and jumping out of planes with the south korean special forces guys to train in the event that we ever had to go in to north korea. so we've been planning to go after, you know, for a war with them for decades okay and so really in the end we're waiting for north korea to do something here and i think it's important that the president and the administration do step up the rhetoric because it looks like at this point, north korea's essentially winning that war in that space, as well. but we have all the necessary personnel, the capabilities, our capabilities far exist out of

our adversaries. we ever have to go in north korea we would absolutely crush them -- >> in north korea launched a missile, could we intercept it could we even prevent it from landing on guam? >> so we have a layered missile defense system and a lot of people have been talking about the fact that as of late, in case they needed to intercept a ballistic missile. that system alone is not enough. and that's why you really need a tiered missile defense capability the problem is the one that was recently deployed to south korea is not enough to have this umbrella coverage that is really needed effectively to shoot down a ballistic missile that's there. but there's a number of different capabilities that exist out there. in this case, and really, the fact that it was designed to intercept medium sized missiles. it was never designed to hit a missile early in flight. it was there to strike it as it was coming down. so potentially north korea could overwhelm that if they had to. we have a number of different defense capabilities that are already in place that are essentially ready to go if something were to happen

>> like what >> well -- >> if we don't have to keep the ability to intercept, then it's a bit of a reactionary side of it that you're talking about in terms of our capabilities? >> right so, we have to be prepared, and be pro-active to react to that, obviously. look, we have missile defense systems. we also have bombers that are stationed in guam. we have cyber capabilities that are out there in case we need to do something we have a number of capabilities that are there that exist to defend ourselves but at the same time, we need to increase our support for japan, we need to increase our support for south korea and really provide them with the tools to help out their organizations, their countries for fighting these guys >> cyber solutions would be using some sort of way of knocking these missiles out before their launched? >> right so, essentially some of the same things that we've done against other countries that have looked at using a missile system, or their nuclear capabilities, and we do have, without basically revealing a playbook, we have

capabilities that are out there that could hurt the systems before they were able to actually launch. so, as long as we continue to allow our war fighter to go out there and prepare for that type of scenario, we'll have the capability that's necessary. >> we've talked to a lot of former generals who have said that there is no good solution militarily when it comes to north korea. what you're saying makes me feel a little more comfortable with things but should we base the assumptions on the idea that we're ready on the idea that there will be thousands, if not tens of thousands of lives essentially in danger? >> well it's like general mattis said a war with north korea would be catastrophic especially for the south korean people we would never want to in my opinion go to war with them. at the same time we have to breep ourselves as a nation. we have to be ready for any event whether it's north korea -- >> i mean history has shown that wealthy dictators who like to impress their own people, their only goal is to stay in power. that's it. i would imagine kim jong-un's only goal is to remain a dictator for as long as he can is that the greatest deterrent

of all his own need why would he do anything when that would automatically basically make him gone? >> you know, he knows what he's doing primarily because he has china backing him. and that's the biggest problem here this whole thing about increasing sanctions against north korea. that's never going to work, because they already have ways to get around that a lot of the money that they make to design these programs in the first place are through the elicit drug trade, arms dealing, and now they've got china essentially backing them and allowing them to be a wild card out there in the region to affect the u.s. military's influence in the pacific yes it is about power. it's about what we're doing right now. where we're talking about this guy, and we're bolstering his persona around the world and that's the danger there in this case. >> thank you >> thanks, brett >> good luck with the book >> thank you >> coming up barry sternlicht will join us check out shares in jcpenney the company's on track to open at lows not seen since 1972.

mpto sesany missing on etf and co-sreal

welcome back, everybody. blackstone and starwood capital merging their single family rental business to form an $11 billion rental company it's the largest single family landlord in the united states. the parties have agreed to merge in a 100% stock for stock

transaction. joining us is barely sternlicht himself. he's the chairman and ceo of starwood capital group barry, it's great to hear from you today. thanks for calling in. >> hi, becky how are you? >> great we are glad to hear from you this morning i want to talk through this deal this is something that's been so interesting to kind of watch, because after the financial crisis, you saw home prices come down so sharply. some investors making comments about what a great place it was. i remember warren buffett saying it was a great place to buy. you actually put your money to work and started buying up these homes. how does it been because some people thought that would be a short-lived trade >> yeah, i mean, we thought it was compelling to buy a house back then, lessen the cost of building and we and a couple of our peers bought as many houses as we could, in lumping, and in the beginning we thought of this

more as a trade, that was a downside, and a lot of upsides now after we created waypoint and merged it with blackstone holdings we've all determined not only the business but margins as good as a mull toy family business which were a major owner of so, you know, 65 different growth margins is pretty compelling i myself was surprising with the he's in which we manage these homes which obviously are not as concentrated as homes, apartments in a building but the credit quality of the tenant is pretty good. better than -- it's usually a family, and they stay for longer than an apartment person stays so it seems to be a gis that is thriving i mean, it's something like 16 million single family rental homes over the 110 million homes that are in the united states. so even though we have 82,00 houses, we're kind of relevant

in the scheme of things. >> i would guess that the bigger you are, though, the easier it is to manage the properties because you can consolidate more of them, and do your margins go up when you get bigger >> yeah, we'll achieve north of $60 million in synergy putting the companies together partly from just beginning the houses in the area, it's easier. there's a lot of technology being deployed in this space we don't even have to go to the house to let the tenant in we just put the keys in the lock box. and they send all their repairs electronically we can schedule maintenance people to go out and do the trip so, it's become quite a fascinating business, and it's interesting, the interventions, and all the interesting things you can do when you have 82,000 people we have 1 14,000 multifamily

properties so this is over a couple hundred thousand units now. a pretty good view of the business and both the apartment business, and the single family home rental business are both very healthy. even higher occupancies, and they helped moving forward with home price appreciation. so this business we thought we could get very good cash yields which we have done, and you see them for the shareholders, and then we have additional value from appreciation in the homes and, i think you know that we've been talking to residential sector for a long time it's very healthy. you can't sleep in your computer so it's somewhat insulated from technology innovations i kind of relish the fact that i have this business i understand and we can innovate and improve the service. which both companies are super focused on >> one thing we've seen, barry is we've not seen buyers return to the home market as quickly as

a lot of people had anticipated after the 2008 crash how much have you benefited from that and do you see that changing just in terms of home ownership, new buyers coming into the market any time soon i know supply has been one of the issues holding people back but also the ability to get loans. >> yeah, you know, i don't think it's as big as i credit issue as it's been just as a buyer issue, to buy houses, the weakest part of the market is the first-time buyer. he's the guy missing also, the regulations around home construction, you have to do it's hard for developers to build entry level housing now in areas that people want to buy. so you have some companies that are in the boonedocks building entry housing and they're doing pretty well. but most of the home builders are trying to build to the middle of the market and the home ownership rates as you know have fallen to 50-year

lows i think 62%. they just ticked up last quarter for the first time i think in 16 or 18 or even longer quarters. and so maybe you've reached the point where the millennials are saying hey, i want to buy a house. obviously as home prices appreciate it gets a little cheaper to buy a house, than -- or it's more important to buy a house so you can get in on it. and also compares favorably. on the other hand if you think rents are going to go up, which or home prices are going to go up, interest rates are going to go up, it's going to be harder to buy a house and afford to buy a house. you could get stuck in an apartment. and you get stuck in your single family home. it's kind offing ainteresting thing. it's better for us i think the biggest single reason people move out of apartments and i'm sure a lot of rental homes, is to buy a house. something like 15% or 20% of the people leave to buy a house. even today

>> you know, barry -- >> because it's more expensive -- >> sorry, barry, when a lot of these big players like starwood, blackstone, were buying up homes, you know, people thought whenever they exit that could really mark the top of rent, it's a better time to actually sell the homes in this sort of environment, it sounds like you're saying that high home prices are actually helping your rental business are you making a bet that the rental business is going to be stronger in the future because otherwise this could be a great time to sell some of those homes with home prices being so high because of lack of supply >> well, i would say that, you know, we're in this for the long-term. we think this is a reals set class. i love the fact that american shareholders or consumers can buy a share of the company and it represents the u.s. housing market and the double play of income and appreciation of the home if you want to bet the housing market, what a great way to play

it i also compare it to all the other asset classes in real estate whether it's hotels or malls or retail or industrial i mean, this is very strong credit diversified company i've got 82,000 homeowners it's going to be very hard, as you pointed out, there are a lot of single family homes being built and that's also because labor is so scarce you really can't find construction workers to build more homes and we don't exactly know where they were we created a home builder, called tripoint, and in some of their markets they had a lot of trouble. even they couldn't liquidate and as i mentioned, some make it very expensive to lose those homes profitably so we -- i'm a holder of this company, and the combined entities, and you know, we really think both relative

value, and even as a defensive stock, i think we can be offensive and defensive. >> all right, barry -- >> it's exciting >> if you can just stand by here, we've got some economic data that we want to get to. july cpi out in just a few seconds' time. we want to get to rick santelli at the cme with all the numbers. rick >> perfect timing. and here's the numbers up 0.1 head line up 0.1 core. that's where you strip out food and energy let's take a year over year look 1.7 on straight. and if you look at just core year over year, that's also 1.7. now, yesterday ppi was cool. this is cool, but not nearly as low temperature as yesterday's ppi. the two top head line numbers at 0.1, about half of the 0.2 we were expecting here. about, you know, pretty much right in line, matter of fact sequentially on head line year over year, 0.1 hotter than last

look, 0.1 cooler than some were expecting. when it comes to year ear year, 1.7 core, 1.7s across the board. maybe let's stick with that. because we all recall, those big runs, if you look at november 15, all the way up to the first couple of months of this year, we had a 17 month run with a 2% or higher handle and obviously now we have one, two, three, four that are below 2% maybe that summarizes things best this is the last number to make the short look for higher rates going into the weekend we've already lost several basis points in tens you want to pay attention today. equities are down, rates are down, inflation is soft. 2.13 is the low close for the year we're trading about five basis points higher than that now. back to you. >> excellent, rick, thank you very much. have a wonderful weekend by the way, folks, let's bring barry sternlicht back in very quickly. you mentioned how this whole

play is going where you really get a dual benefit, as rent prices rise, and as homes appreciate that's a double benefit. if things were to turn down it sounds like it would be a double whammy, if rents go down and home prices come down. how do you protect yourself from that >> the funny thing that led up to the craziness of the housing crisis was the supply of homes got out of whack, 2.5 million homes are being built. before that we have 50 years of straight home price appreciation i think you're going to see general increases, we've seen home price appreciation. so not that worried about home prices falling and i think the tasteness of the market to the lack of housing built across all sectors, multifamily and single family

bode well for future rent growth and current income size. it's pretty interesting. one of the innovations that the companies have done, and we did this, and i think blackstone also did it, built to rent so we go in to a new community where a home builder is building, we buy the whole block. we agree to buy it up front and have the construction nine months, twelve months, to actually rent it, and then we can sort of exactly, you know, the brand there, and the capital costs. and obviously pretty efficient to -- >> barry -- >> so this has evolved -- that doesn't work in every market but it does work in some markets the builder has equity from us up front that he can use as his equity to build up communities >> brian sullivan, good morning. listen, i know obviously making a huge bet here but you invest in everything. can we pivot just a bit, is this a sign that you view the stock market as not a good place to invest right now

>> i don't know how you could come to that conclusion. you know we've done three or four mergers now, started out literally with two guys in my shop in greenwich who helped put together this portfolio -- >> i guess one of the reasons i would say that is there are publicly traded home builders out there as well. have you ever thought about that side of the market going to the equity side rather than the physical side >> yeah, the home building is a tough business, and you know -- concernses with home builders. there are things you may have seen a company called four star [ indiscernible

probably better off being on target and we look today at the differential and they're pretty much on top of each other right now. i don't think the markets -- every time we -- down. you know you talk about the reality of the etfs, they buy on interest rates, they sell the reits when they fall, they buy the reits and etf exacerbated those moves so we continue to look at where there might be opportunities to buy public companies that are trading below their mid asset values but at the moment i don't think there are many you have to take premiums. and we still worry about rates rising some day it should help 50 to

100 basis points my guess is that something will get done in the trump administration particularly on taxes. and so i think the whole housing market would play ar part reflects fairly defensive nature of the position that we're taking today we want to be a little more careful. and the other things we do, we buy in europe. >> barry, want to thank you so much for calling in today. appreciate your time, and appreciate your willingness to talk on such a wide variety of topics we hope to see you in studio soon >> a pleasure. take care. have a good weekend. >> you, too. this is barry sternlicht calling in on the news that blackstone and starwood capital are merging their single family rental business to form an $11 billion rental company that is the largest single

family land owner in the united states when we come back this morning, the white house press secretary who turned the cameras on now says the press briefings should not be televised. mike mccurry will join us. "squawk box" will be rhtacig bk. e kids to get a repair estimate. i just snapped a photo and got an estimate in 24 hours. my insurance company definitely doesn't have that... you can leave worry behind when liberty stands with you™ liberty mutual insurance.

happy friday welcome back to "squawk box. all right, u.s. equity futures indicating perhaps a -- well look they flipped around there was a slight drop indicated but now, dow futures indicating maybe a slight move up for the markets remember we're coming off yesterday of it 240 drop in the dow. >> that has to be because of the inflation numbers. right? there's no way -- >> we're going to get to that in just one second. i'm going to read -- there you go we're going to get it right. steve liesman's giving me the old -- >> like hurry up >> go to the camera. because this in television, folks. >> this is what's interesting. >> this is the universal sign for hurry up steve liesman looks at me and goes like this, it means hurry up or you're a hamster on a wheel, sullivan steve liesman, give us the information. >> maybe the latter. no

you're right this is a cool number. it's the second cool number we've had. this week when it comes to inflation and the ppi coming in lower than expected. when i look at the individual components i see mixed but a bunch of negatives there i'll give you some of the negatives that were in there we've got to talk to phil about this new and used car prices calling 0.4% that is a specific interest to brian sullivan, who is always in the market for a car immediatelyal foeing the moments that he bought a car as well as my brother. medical care up -- folks we've had these two things that have depressed the cpi. telecommunications and physician services physicianselveses picked up a little bit which one is that? that's the year over year falling at a 10% rate. it's so important that even janet yellen mentioned telecom prices and melissa you know about this. because was it sprint or one of the ones that started its wireless offering, free --

>> sprint and t-mobile are at war to the bottom. race to the bottom >> this service is the year over year that one picked up a little bit on month on month. here's the bottom line 1.7 year over year on the core, and i think it's 1.7 on the headlines. at least from the fed standpoint it's not getting worse take a look at the probabilities. and i did get some e-mail yesterday our probabilities are different from the cme we use the reuters numbers they have one that we can track minute by minute 36%, 30% on december 36% on january so not going anywhere any time fast according to the market as brian pointed out you can see down in the 2.18 >> 18 firmly now this is really -- >> this was 28 like a few days ago. north korea made it step down and then the inflation data i think has led to another stepdown >> if you are a home buyer, mortgage rates could hit a new

yearly low on this data. it's not just the bond market. it's the mortgage market >> i think that's very significant. you could have a little bit of help there and it's going the other way as far as where the fed wants it to go but one of the ideas, we talk about this another day, maybe the fed is too tight here. >> steve, thank you. mike mccurry was the first press secretary to allow the networks to televise full press briefings. he now believes it's a mistake to make these briefings an oncamera event mike mccurry joins us right now, the former white house press secretary for president clinton and the former director of communications for the dnc he provides counsel for public strategy washington and thanks for being here today >> glad to be with you this morning. >> you're the guy who said we should turn the cameras on why do you think we should now turn them off? >> well, i actually think they should be left on. i made a mistake, though i think the problem is that it's a live news event. and you know, a white house briefing is really supposed to be a briefing for the reporters

who are there. they get information from the white house, that they then need to go out and check that information against other sources. and then prepare a report so people get a complete report and get, you know, multiple sources talking about whatever the white house wants to put out on a given day. so it's not so much that the cameras and that the broadcast media are there, it's just the fact that it's turned into this spectacle of kind of fear of the absurd every day when we watch people do this combat back and forth. and that's not what this briefing is designed to do it's supposed to be an exchange of information reporters holding the white house accountable. the white house providing information it wants to provide on the president's initiative, and his policies i think if we just lowered the temperature a little bit and turned it back into what it was supposed to be, which is a briefing, i think that would be in the best interests of the american public. >> mike, i have to say, just making a delay on this it still has everybody recording, making it be delayed, i don't know that

that in itself is going to change anything because each outlet is going to run out and try to be the first to get that out there their network, or to their blogosphere or whatever that may be. >> but why because -- >> because there's the pressure to constantly be first on this stuff. and that's not simply the white house press briefing that's changed that >> that's not the right model for journalism the right model for journalism is substance, depth, getting the best information that people can act on, rather than helter skelter just -- >> so would you ban twitter not only from the president's use but from everybody's use because that has shortened the news cycle >> yeah, but twitter is like, you know, it's cotton candy for news junkies it's not the substance and the depth that we need if we're really -- look, you've been talking about the financial markets, and where they're going, what the overall economy is doing people need solid information that they can use to act upon.

they don't need just to momentary things that come up in the briefings. i think we need to even it out a little bit and provide a little more substance and depth on behalf of the american pub lipg. >> mike, listen, i don't want to go after anybody in my own industry i have great respect for everybody, people i know and don't know it's a very difficult job. however do you feel like sometimes balls it is live viewed that many of the questions seem to be more to benefit the news reporters, news organizations, than the actual giving out of information? some of the questions sometimes often seem so narrowly focused, that i'm not sure what purpose they're serving to the general population >> okay. that's exactly part of my complaint. what i notice, you know, things went along well when i was at the white house for three years of, you know, broadcast journalists being able to have access to the briefing but then we had a certain zesty matter that developed involving

a young intern, as some of you will recall, and then it changed, and people were posturing on both sides of the camera i'd have to say probably i rose to high dungeon myself sometimes on camera. but it was for the benefit of a momentary television show in the afternoon to supplant soap operas and that's not what the american people need. they need to know really, what is going on in their government? what's the president doing what's the government, you know, what are the policies that are being shaped, and you know, that's -- that's my argument is that we should not make this a television show. we ought to make it something that is for the benefit of the reporters who cover the white house, and obviously for the benefit of the white house to get out information about the program the president's trying to produce >> okay. >> i think that's where we need to go. >> mike it was good discussion thank you very much for joining us on "squawk box. >> nice to be with you >> all right this is very cool. up next, "new york times" best-selling author james patterson is in the house! check this out his new book is about an online superstore on the brink of global domination.

sound familiar jame h keep waving and come on out. we'll see you in a few minutes with at&t you can get your entertainment right here. right now, when you get the incredible iphone 7 from at&t you can get unlimited data and live tv.

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the price tag that comes with this convenience though is steep. that's the story told by new york times best selling author james patterson. his new book the store is out on

monday there's one of two covers i have seen for it. thank you for being here. >> it's funny it's witty, it's scary. >> does everything have to be politicize now blue and red >> yeah, sure. make a choice. excellent. two faces in the store instead of one but it's a cool story it is scary. stepford wives. >> there's a very stepford wives feel to the whole thing. >> it is the store is taking over everything. >> i guess i don't think it's really about amazon but amazon fits so if you're into business you're going to feel it. in an overt the top way but if you think about okay here's amazon, they take over books which i don't like that

much. >> you've been outspoken about that. >> they take over, you know, supermarkets, next is going to be the news. they got the washington post and the next thing this will be the amazon squawk box. >> jeff besos owns the washington post but not amazon per say. >> good point. >> but the extrapolation is there. >> jeff besos is amazon. >> is this a scenario that you think is realistic >> i think it is this is the era of meglomaniacs and the strange era where they're techy billionaires running the world now and my only thing was realistically with amazon i would like them to do a better job. jeff would say if i didn't do it somebody else would do it and i think he said that my only thing is okay you're doing it, maybe you can do it

even better. maybe that company can be a little better than the competitors and not beat up the publishing world and we need publishing right now. >> although he would say loo we're trying to give our customer what is they want and disrupt markets. >> that's okay but they did beat up publishers. >> walmart used to do it before they were there. >> walmart owned all of their suppliers. >> are they giving customer what is they want or telling customers what we need like amazon dictates our behavior >> i'm not out here to necessarily beat up amazon as much as deal with this whole area of monopolies. >> isn't there something deeper. >> of course it's deeper i wrote it. >> well, clearly but it's almost like the role of artificial intelligence is a much bigger, really the root of

this. >> that's bigger, yes. that's another thing that makes the book and what happens here scarier. where is it going to end is it going to end with us -- it doesn't happen in the book where machines are running our lives but that's another one of our fears. >> this is just one of many projects that you are always working on you're probably the most prolific author. >> this one comes out monday but they can order it right now. >> on amazon. >> on amazon, sure. >> barnes & noble.com. >> terrific. >> any bookstore ifs there are any left. >> the strand in new york city absolutely. >> you're working on a lot of different things though and it just got my attention about the project that you're working on with president clinton right now. >> yes >> it's a novel. i think it will hopefully be the best novel about a president ever because we have a president who is writing and collaborating

and forcing me to absolutely get it right we were in hollywood last week and we had like 11 companies bidding for the film rights or whatever with which was a lot of fun to be there with president clinton and i said, hi been with president clinton a number of times now but it was one of our sessions that goes four or five hours and all of a sudden it washed over me i'm sitting here talking to bill clinton, you know for four hours and the realism and the authenticity in this novel right off the bat i'm interested how did that happen. >> that's another one that they can order on amazon or barnes & noble.com. >> when will this one be out >> this will be next summer. >> james, thank you so much. we love checking in with you to

see what else is in the docket. >> stay close because i'm moving fast. >> always are. thank you james patterson. >> thank you when we come back details about the hottest new single on itesun and why you might not be able to hear it. squawk box will be right back.

all the as make the song jump to the top of your play list that way when you turn on your music silence will play rather than the first song in your play list that's crazy. >> it's not a song. >> it's nothing. >> it's the sound of silence which is also a song. >> exactly >> hey guys, real quickly it's the last day of our hard working intern summer with us today. here she is. she has been getting up very, very early all summer long

thank you. we appreciate it thank you for your help this summer. >> thank you. >> good luck back at school. she's going back to welsley. let's take a quick look at the markets as we head into the weekend. the futures this morning have rebounded pretty sharply on the lower than expected inflation. dow future is up by 40 points. brian, melissa thank you for being here have a great weekend everybody right now it's time for squawk on the street. >> good friday morning welcome to squawk on the street. >> futures have been battling it out to see if stocks fall for a 4th consecutive session. north korea tensions remaining earnings for jcpenney snap and