good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market set in times square. joe keis back. equity futures, keying off stuff we'll talk about in a moment cow would open higher, nasdaq higher, s & p 15 points higher overnight in ashz, show you what's happening in japan and elsewhere. close to 1% everywhere quick look at crude. if buying by the barrel, wti,

48.62. the latest developments following the charlottesville attack that many call an act of domestic terrorism. >> reporter: charlottesville is in shock and mourning after a white nationalist rally turned fatal. car ramming into a crowd of counter protesters saturday, killing one woman, injuring 19 others the suspect james fields junior age 20 of ohio is expected to appear in court this morning a vigil was cancelled because of safety concerns. mourners in downtown charlottesville around a makeshift memorial gathered anyway earlier in the afternoon sunday, attempt by the organizer to hold a press conference devolved into yet more violence and ended up being cancelled as well. charlottesville has been the

site of four such rallies organized by the so-called alt right since may. symbolic location because of multi year debate ovaer removal of confederate statue. the weekend events which featured tiki torches, nazi salutes, confederate flags, even some companies, maker of tiki torches took to its facebook page to say we do not support their message or use of our products in this way our products are designed to enhance backyard gatherings and to help family and friends connect with each other at home and in their yard. leadership at the university of virginia which makes up the lion's share of the state's population strongly con determined violence that took place over the weekend, saying in the course of the coming days, a process of healing and conversations about moving forward. that is when students are expected to return to town ahead

of the academic year beginning back to you. >> thanks, kayla appreciate that. going to continue to discuss this for more on the political fallout. go to eamon javers. >> good morning. the president in response to the violence and racism in charlottesville, the president stepping out and saying that ultimately there was blame to be placed on both sides of the political debate here's what the president said saturday that came under such criticism. >> we condemn in the strongest possible terms this egregious display of hatred, bigotry and violence on many sides, on many sides. it's been going on for a long time in our country. not donald trump, not barack obama, this has been going on for a long, long time.

>> republicans and democrats criticized the president for that comment, failing to single out the white nationalists and neonazis responsible for the gathering and suggesting the violence was on many sides, and blame therefore was on many sides as well. the white house after that criticism put out a statement from unnamed spokesperson. here's the statement if you can put it on the screen in which they said the president said very strongly in his statement yesterday that he condemns all forms of violence, bigotry and hatred and of course that includes white supremacists, kkk, neonazis and all extremist groups he called for national unity bringing all americans together. meanwhile, his national security adviser hr mcmaster was on television over the weekend, said the president goes without saying condemns the kkk and white nationalists >> when he condemned bigotry and hatred on all sides, that includes white supremacists and neonazis, i know it is clear in

his mind, ought to be clear to all americans, we cannot tolerate obviously that bigotry, that hatred that is rooted in ignorance of what we stand for. >> clear in the president's mind he was condemning the white nationalists and kkk jeff sessions will be on television across the major networks this morning, see what line he takes as department of justice and the fbi begin their investigations into the violence over the weekend, joe. >> eamon, one of the things this also causes you to talk about, you see the scuttlebutt, would have been more front and center, what it means for bannon being associated with the alt right movement and latest about general kelly, whether he has it out for bannon, because it is all kind of related if you think

about it with this i wonder if you know anything about what's likely to happen there. >> well, i don't, but you can read the tea leaves, anthony scar mooch ee, just there 11 days before fired, he wouldn't allow the president to give a statement like that. real criticism there from a trump loyalist how this was handled over the weekend it's possible that the president would look at bannon, kelly would look at bannon as somebody that's independent political center within the white house anyway, therefore a threat to his attempt to centralize and clean up the way the trump white house operates on a day-to-day basis. i think that's something that we have to look at. but no indication that anything is coming any time soon. >> his demise, as mark twain

said, in and out a few times. >> during the mooch intervie over the weekend with george stephanopoulos was the idea not only that he would advise him differently but that he truly views it as making it much harder for the president to do his job. that's what i was going to ask about, how much harder for him to do his job after a weekend like this when it comes to moderate republicans and independents that the mooch talked about during the interview as being ones that he needs to bring over with him >> look at who criticized the president. senator cory gardner, orrin hatch. these are republicans that are not regular critics of the president, so they're feeling like they're forced to come out and suggest language that the president used didn't rise to the occasion and that makes it all the more difficult for the president to generate good will. whether you can draw a straight line from that to tax reform, i wouldn't think so. all of the republican senators

have a vested political interest in passing tax reform legislation, but it makes it tougher for this president to find friends in washington you need friends in washington he has been attacking the republican senate majority leader. >> always got him as a friend, fall back on that. >> this is a president who has not gone out of his way to make a lot of friends look, politically very damaging is the column in the daily stormer, neonazi website which said it viewed the president's comments as terrific for the neonazi cause in the sense that he didn't condemn them specifically when you have a neonazi website thrilled about what you've said and you're the president of the united states, you have a political problem. and the president definitely has a political problem. i think we'll see jeff sessions take steps to clear it up best he can >> do you think the president will try to clear it up himself? >> we haven't seen that. saw the statement from the anonymous official will the president come out and

do it. if he does, i think it is tricky to unpack. the nation saw the president's first instinct on saturday to talk about all sides that's something that you can't put back in the bottle once it has been done. how he moves forward, i don't know you could expect he will be in d.c. today, he might have something to say >> first instinct was to also tout what he has accomplished so far, falling unemployment rate, increased business investment, but not as an explicit condemnation of the kkk or neonazis or white supremacy. >> didn't name them in the statement. >> managed to tout his own accomplishments. >> this is a president that touts himself fairly frequently. that statement in the context of speech he was making that day struck a lot of people as extremely tone deaf.

>> thank you. president trump will break from his working vacation with a trip back to washington. he will sign a memo this afternoon, ordering top trade negotiator to launch probe into china trade practices, has to do with forcing them to turn over intellectual property. president trump's national security adviser suggested the action signals a tough new approach to china. said the u.s. isn't looking for a trade war. >> the operative word is not punish, operative word is to compete effectively, demand fair and resip ro cal trade and economic relationships with not just china but all countries what the president is doing is everything he can to ensure a fair playing field, make sure the american workers and american businesses are not disadvantaged by theft of intellectual property or unfair trade or economic practices. >> china run newspaper says crackdown on trade practices would poison relations between

the two countries. corporate news, uber is considering three investment offers to buy company shares "new york times" reports the board voted to move forward with proposals from two investment groups and is considering a third offer. uber voted to take the next step from softbank. the board okayed going ahead with proposal from coalition led by dragoneer, and considered consortium from an earlier investor interesting to see how that soap opera plays out. how kalanick lands in this >> lot of times i get up, on the way in look at the different financial websites one story got me this morning, north korea. going to take a back seat to true concerns, that's the consumer data. i couldn't help but think that, you know --

>> what are the headlines? >> north korea could take a back seat, and it reminded me that years ago when i was in business, there was one day it said asteroid strike on the earth is imminent, causes stocks to sell off, but they rallied in the afternoon as money supply data came out. the fed is going to ease, don't worry about the end of the world in the meantime. it just reminded me, so north korea, all right so nuclear oblivion, but this week we have to pay attention to see how the consumer is feeling. and the other thing, north korea is not the only thing effecting this ailing market i was out last week, i know it was down a little. but we're like 21,900, aren't we are we ailing? you're ready to get back on the train, think it is back now, just outside penn station in

newark you think -- >> so many problems with penn station these days all right. >> what i am talking about, this consumer, watch the consumer this week. don't worry about, don't look directly at the flash, bright flash. apparently -- >> you mean the eclipse? >> not to wear conditioner on the hair because it attracts radioactive thing. >> what? >> yes >> the consumer, focus on the consumer now to this week's agenda on wall street, plenty of economic data tomorrow, here we go jewelry tail sales import prices, wednesday, july housing starts and latest minutes from last month's fed meeting. thursday, philly fed survey, industrial production, then friday, am i right or am i right, august consumer sentiment. consumer on the earnings front, retailers

report, home depot, tjx, walmart, target and gap. outside retail, also going to hear from cisco systems and alibaba. he is in a good mood, he has five bitcoin. >> good return. >> trading above $4,000 first time ever. now quadruple in 2017. took just a week to jump from 3,000 to 4,000 >> this is true. do not use conditioner in your hair, it will bind radioactive material to your hair. >> in the case of nuclear strike. >> this is the notice that went out to guam residents. >> oh. >> i'm not joking. very serious >> very serious. seems more serious than consumer -- i was coming back on a plane, you would not believe what i was able to do. watching a movie on my iphone on

a united wi-fi deal. on my united application didn't even have to pay anything figured it out i was like you got the app i had the app. >> you need to have the app. download it in advance. >> can't download it on the plane. >> already had it. that's how i coordinate my stuff. >> that's thinking, joe. >> so i saw this, john goodman in it, it is a combination of the room and walking dead, zombie apocalypse. it is happening after one of these horrible, you have to stay in a shelter for a year. >> resident road warrior here. >> i know. >> in terms of being very tech savvy. comfortable with technology. >> i'm proud of you. >> i had earphones ready to go. >> news you can use here >> is the screen -- it is small,

isn't it hard to use things. >> you could use an ipad or laptop if you have the app on those devices. >> keep that in mind. netflix recruited shonda rhimes away from abc she has been with abc 15 years for hits like scandal and "grey's anatomy. she will develop shows exclusively for netflix, she will move her production company from abc studios to netflix. in the past week, they signed movie directors joel and ethan cohen to make a western series, and late night star david letterman out of retirement to make new shows amazon walking dead creator signed to a deal comes as disney decided to pull its content from netflix this is a real war >> and by the way, netflix also bought the company that --

>> miller world, comic books >> anyway, more fallout from the hack attack on hbo hackers released episodes of "curb your enthusiasm" more than two months before they are scheduled to air hbo releasing a statement saying they may drop bits and pieces of stolen information in attempt to get media attention, that's a game we're not going to participate in hbo first fell victim to the major hack attack late last month. coming up, a lot to talk about. u.s. equities futures higher talk with market strategists after the break about what's going on back in a moment

get to the broader market. guys, good to have you with us john, kickoff with you friday, snapped a three day losing streak, today futures indicate higher open is this continuation of this mentality or was it weaker than expected july cpi which lowered

expectations of hike in december >> i think a combination of both so it eased up concern that the fed might raise once or twice before end of the year then on top of it, the market recognized the fact we are likely not to go into a war. >> that's always a good thing. sharply higher open we're expecting. lindsey, in terms of weaker than expected july cpi in your mind, does the fed raise at all between now and end of the year? >> well, certainly this reinforces the idea that we're seeing clear trends of disinflation in the economy. but it wasn't a large enough drop to call into question the fed's commitment to raising rates to one additional time by end of the year, nor does it sway committee members from expectations that inflation will eventually move back to the 2% target over the coming 12 to 18 months so it really was the perfect

report for the marketplace keeping the fed on the slow path, but at the same time keeping the fed on that path to a higher interest rate environment. >> in terms of sectors you're watching, where are you looking to go. what we saw was draw down sharply and higher performing, higher momentum areas of the markets, and probably see the snap back here, seeing amazon and facebook up 1% premarket so far. if you believe as you believe that the markets are pretty much stalled out, not too much traction now to end of the year, where do you go? >> yankees i don't see it that . you have the wrong buy up there. >> 6%, 7. >> i said my target is 26.50 >> target 4% or 6.5 or 6.6

you're good. >> you pop it in there, tells you. >> you're good >> we had 24.50 was the target for this year. >> i understand. >> you have a target, figure out what that equates to >> we've got the dollar weak, that gives competitiveness on top of that, you've got a huge transition going still after all this time from an log to digital economy should benefit every sector, should benefit technology. all look to be of interest keep the cyclical exposure. >> stick with what's working in this market. >> yes at this point you ride the horse that's been running powerfully this year. think there's more opportunity going forward, from the current cycle as well as driven by secular trends out there

both in emerging markets and developed mashlgrkets in terms greater influence of the digital, the cloud, big data, the whole bit. >> lindsey, you know, a lot of investors bullish in markets will cite fundamental backdrop of strong corporate profits, for instance john mentioned the dollar. how much tail wind could that be with dollar down 8% this year? >> it certainly could, the bigger tail wind comes from the very modest consumer that we're seeing at this point certainly you can point to strong consumer confidence indicators as we go into second half of the year as potential indication that consumers are ready to spend what we've seen is consumers pulled back. they're saying one thing, doing quite the other. as you point out earlier, you get another round of retail sales data this week, should we see another month of very weak

spending activity, i think that in and of itself will be the catalyst, setting tone for the second half of the year. consumer based economy, if we don't have strong consumer out in the marketplace spending, it's not going to matter any other support from any other sectors, and we will see growth fall below the 2% trend we've seen the first six months of the year. >> more broadly, within consumer, seeing by fer indication of where they spend clearly, types of retailers performing, where the consumer pulled back most look at rcl, price line, they're close to record highs. in terms of what we expect for retail, what would that be >> expect with retail continued mixed results with bricks and mortar having a tougher time than anything that's related to electronics sales, so to speak expect the consumer will remain faithful in terms of home renovation and likely to stay

flying a lot of airplanes. >> lindsey, last question to you. if north korea remains an issue in the headlines at the next fed meeting, does that play a role >> i don't think right now the market has been largely ignoring geopolitical tensions, and i believe the fed as well will continue on fl pathway, independent of tensions that seem to be rallying now between the u.s. and north korea but that being said, if it becomes an issue, we will see that enter into discussion but at this point i think it is too early. fed is focused on the domestic economy and potential disinflationary trends. >> thanks to you both. >> killed my pga, don't have time. south korea says kim jong-un's military hasn't mastered missile re-entry technology the latest on the conflict with

north korea after the break. and now here's a look atl at last week's s&p 500 winners and losers finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.

good morning, welcome back to "squawk box." u.s. equity futures look like we

open in the green. dow looks like it will be higher, 122 points higher. s&p 500 would be higher as well, 15 points. nasdaq looking to open about 39 points higher. should mention to you that president trump has just been tweeting this morning, he writes the following. heading to washington this morning, much work to do, focus on trade and military. #make america great again. >> that was not intentional? >> which part? >> the beginning we both heard it did you not hear what you said >> what did i say? >> melissa. >> trump sounded like chump. >> i did not. >> you want us to replay it, you said president chump >> if that was the case, first of all, i would like to apologize to president trump and second of all, it could have been a -- that was not freudian.

>> it was funny. it was really funny. you didn't notice, you called president trump, you really did. >> that is not -- that was -- we're going to take it back. >> andrew, the whole thing about freudian slip is it is unconscious. >> this was more of my tongue. >> borderline of chump and trump. >> that's all right. this is very serious, between the u.s. and north korea ten te tensions are high, pressing the chinese to do more to rein in the north korean leader. we want to talk to eunice yoon in beijing >> reporter: thanks so much. the immediate economic impact would be on south korea. south korea is the 11th largest economy in the world, and research firm capital economics said during the 1950s, korean

war shrank the south korean economy by 80% they believe if there was to be a war on the korean peninsula and say it cut the korean economy by 50%, then that would knock a full percentage point off global gdp a war would also have immediate impact on global industry. south korea is the second largest maker of semi conductors, largest maker of lcds the consulting firm spoke with me and told me if south korea is hit by a missile, global key chip supply would stop immediately and all electronics production will stop as well for americans specifically, south korea considering its size is much bigger trading partner than you would think, it is sixth largest trading partner with the united states, with total goods traded at $112

billion in 2016. u.s. consumers could suddenly see there's a lot of stuff on store shelves at best buy or walmart that would go missing. part of the reason is samsung electronics is the biggest maker of smart phones, and south korea is the biggest maker of lcd flat-screen tvs. consider a company called lg display, they make products like the screens in ipads, and they have research as well as lcd production facilities right at the dmz, not seoul, but right at the dmz. the last thing, the potential for the human toll, there are 25 million people, half the population of south korea, that lives in and around seoul. you can only imagine the type of casualty cost. guys >> all right we're going to continue along, talking about that part of the world. tensions between the u.s. and north korea. bring in former u.s. national

security official, fred flight, senior vice president of the center for security policy and programs fred, thanks for joining us. >> good to be here. >> i hate to try to make everything too simplistic, the markets have been sort of complacent as we've gotten suddenly used to the idea of saying the term nuclear war, and that, you know, references to the cuban missile crisis i mean, we're in a very surreal environment here but the markets don't seem that effected i wonder whether mad, mutually assured destruction plays into things, doesn't it if you know that your actions will cause you to no longer exist, it is like neither side can really start this, can they? >> well, i think we see a different dynamic going on now after previous u.n. security council resolutions when nations

would pat themselves on the back over tough sanctions, then north korea would ignore them and china would cheat on them. the u.s. is significantly upped pressure, with the president's statements, by releasing intelligence through "the washington post," we're seeing things happening now which i think are very positive. there was a "the wall street journal" article last week that said beijing struggles to avert korea conflict north korea has withdrawn -- well, temporarily withdrawn ambassadors from the u.n., russia and china for consultations. i think we see the makings of pressure on north korea we haven't seen before, and i'm hoping there's going to be a good outcome >> we tried a lot of different things, and as we've seen, even susan rice mentioned that yeah, the last -- she failed, obama administration failed, but it goes back 20, 30 years of failure in trying to deal with north korea. you think that this actually -- there's a little bit of hope

that something is changing this time >> you know, i think there's a little bit of hope, that's as far as i'm going to go i didn't like what susan rice said, we should be prepared to live with north korean nuclear bomb i think that's absolutely the wrong approach my concern is that the north korean nuclear program does not seem to be deterrent on where it is an offensive program. and i worry what its ultimate goal might be. that's why this president is right, not to kick this down the road, to put real pressure on north korea for some substantial concessions to address the situation. >> it's hard i guess economic sanctions are not going to hurt kim jong-un or his associates really, he's already hurt his country. we know that the standard of living, at least we hear about it in north korea. can economic sanctions work when they're not going to hit the

people in charge >> you know, we don't know what the full extent of economic sanctions will be because they've never been fully enforced north korea's trade with china increased by 37% first quarter 2017, over 2016, despite toughening sanctions imposed last november. there are new sanctions passed by the security council, banning joint investments, direct investment in north korea, but only future investments, current investments should be cut off. there also should be cutoff of chinese oil sales to north korea. we have not pressed north korea as hard as we might to twist their arm to stop them pursuing nuclear missile programs >> in the next month, two months, do you think we've -- the inflection point has been passed, that the level of greatest risk, was that last week or the week before do you think? >> you know, we don't know if north korea is fortunate

enough to fire missiles near guam, i think the situation could get much more serious. and i worry about that north korea's missiles are notoriously inaccurate, they might hit guam the u.s. administration or japan may decide to shoot them down, and frankly that would probably be the right move. this would be an unacceptable provocation. if that happened, i think we move to a higher level of tension. >> thank you for joining us this morning. >> good to be here. >> seems a little bit less worry some today, but i can't believe we're really talking about the possibility of initial strike and followed by reactionary strike. coming up, we talk to david walker and alan krueger. stay tuned, you're watching

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welcome back to "squawk box. snap and blue apron disappointing investors since going public new numbers, beaten down, thanks to competition from heavyweights like amazon and facebook what would it take to keep up with the giants of silicon valley joining me, managing editor. before we go there, let me ask you. are we making too snap, dare i say, a judgment about snap if you remember, you go back and look at facebook stock. >> early in ipo period. >> what a nightmare that looked like. >> facebook didn't have facebook to compete with. >> i recognize that. i'm just wondering whether, i'm trying to be generous here. >> look, i actually think snap still has a lot of room to grow, could still be a significant second or third player in the online media space i think the context is right facebook, yes, there was no other facebook to compete with at the time. it was competing against

something more structural, which is mobile. in other words, facebook was designed for desktop mobile everyone was doing things on the phones, facebook didn't have a decent enough presence. they had to figure it out. there was still a question mark then, a question mark on snap absolutely you know, its user basis rabid they love the service. >> is there any number or metric you look at on snap and go okay, that's really great and we should take some solace in that. >> the outside metric i saw in the last earnings report was the -- for users age 25 and under, spending 40 minutes or more on the service. i think that was astounding, big deal spending time. >> why can't they switch the conversation then away from daily active users to minutes online because daily active user growth is slow, users added ten minutes. >> they were spending more time, even though growth is slower

i think that's a fair point. they could have hit that narrative harder, absolutely at the same time, the bigger context is that it is going to be a distant second or third, wherever they land facebook is so much bigger now as we can see, they're good at copying features, deploying them in a way for a lot of people, this is same or same enough. >> at what price does this become attractive to a google, to dare i say, hear something crazy, to twitter. somebody who says you know, let's double down, go for gold >> i like that i would go for that certainly. i don't know that -- here's the issue with a lot of companies, they're founder run companies. jack door see runs twitter, evan spiegel runs snap. they're not either willing to give up control, at least not now -- >> can't the shareholders sue the founder, like uber, call it

a day? >> founder friendly. >> i think, look, founder friendly has good and bad. look at google and facebook, they're examples in favor of founder run companies. at the same time, founders knew when to step off in the case of facebook -- >> there were people whispering in his ear about that. i don't think he woke up one morning that way >> you then take the advice. you take the advice, work off that we're not seeing that as much in the case of uber, absolutely not the case i think twitter and snap, still up in the air. >> should they have gone public? >> snap was losing money, went public while losing money. there's argument to be made they went public too early. i think it's more that they have to sort of press the narrative that young people love the service, they're getting older

every day, more valuable every day. >> we have to go what did you make for dinner last night, didn't order from blue april on, did you >> i did not they have been having warehousing issues probably the reason stock -- operationally speaking, just haven't gotten there that's the big knock on them amazon looms for anyone in the retail business. >> prove the bigger giants out there are poised to crush any sort of newcomers out there? it is a different environment. you have deep pocket incumbents. >> i think when it comes to retail, it is harder thing to go up against because you have to crack the execution part of the business not saying thatyou don't have to say in the world of snap or facebook, but as you see with facebook, once you replicate it, do that thing, apply it quickly. delivery, with retail, there's an operational thing, you have to figure out beyond the technology it is harder thing to break into >> ed lee, thank you for making

snap decisions for us. defense stocks getting a boost with tensions with north korea escalating we tell you what's working in that sector after the break. and quick check on what's happening in european markets now. green arrows across the board. "squawk box" returns in a moment when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

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tesla is up by 1.4%. defense sectors seeing a bump as well as tension between the u.s. and north korea keep shares of lockheed martin, raytheon and northrop grumman hit record highs. here to tell us what's working in the defense sector is senior aerospace and defense analyst at drexel panel peter great to have you with us. >> good morning, thank you >> what accounts for the slump is it just a knee jerk reaction? or is there an actual belief that this will result in an increase in the fiscal year '18

defense budget >> i think there's kind of an emerging consensus out there that while post-election and into this year there was a general trend to increase defense spending, you know, when you get this threat from north korea emerging, all of a sudden kind of the man on the street recognizes that, hey, there's an issue here that we need to address. and a lot of people start talking about it now that they start to reach out to their congressmen. whereas in general i think congress was sort of pro-defense before korea kind of emerged, now we're really kind of cognizant of a real comfortable threat out there that is probably going to result in higher defense spending. >> so the funding request has been for 5.5% growth, a 5.5% you actually anticipate that to be more because all these congress people are getting calls from constituents >> it could be you know, the pre-korea there was already various defense committees in congress talking about 10% type of growth, pre-korea, right so now we have that threat crystallizing even more. so we're going to watch very

closely post-labor day when congress is back in session. >> right >> because of the talks and negotiation of defense budget are really going to heat up in earnest, i think, in parallel with the tax cut debate. but, certainly, that probability of 10% type of growth is very real, for sure we just have to see if we can get kind of a consensus between defense spending and nondefense spending >> right >> because democrats want higher nondefense spending. but it's a real possibility for sure >> in terms often demand from elsewhere in the world, international businesses typically higher margin business for these defense companies. where are we expecting to see that and will the growth there actually be stronger than the growth that we would see in the united states? >> yeah, it's ironic, but there is very strong global growth and it's really only driven by a few countries essentially. russia driving growth in eastern europe you know, there are smaller countries there that would never consider sort of a full-up missile defense system and now you have poland looking to buy the patriot defense system, romania. there's at least one other country looking to buy it.

and then iran driving sales in the middle east. you saw the saudi arabia package a few months ago and sort of north korea, china, to a degree, driving asia pacific growth very active -- >> in terms of the stocks that will best capitalize on this backdrop >> sure. well you know to be honest, we've been kind of growing in lock-step year-to-date they're up on average 20%. it's been a very strong year we do look for the potential incremental missile defense funding now, you saw president trump mention last week, you know, missile defense funding was essentially set to a decline lead in fiscal '18 he talked last week about potentially a billion dollar plus type of a boost to missile defense funding. so we're watching for that to kind of break this week. when you talk about that you're talking about lockheed martin, raytheon, smaller players like orbital atk so those are firms we're looking to get incremental boost as a result of north korea threat

>> all right, peter, thanks for your thoughts. appreciate it. peter skibitski from drexel hamilton >> the latest from charlottesville, virginia. we'll get a live update and talk to martin royal. former may of new orleans and president of the national urban league so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver.

rally on dow futures surge as strong data out of japan propels stocks higher we've got your monday market setup. straight ahead, anyway, does the american voter really want tax reform

a new study suggests, no, a look at the numbers, and reaction from former u.s. comptroller general david walker and hbo not very enthusiastic about yet another hacker leak. details straight ahead as the second of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square i'm andrew ross sorkin along with melissa lee and joe kernen take a quick look at the futures this morning green arrows across the board. the dow looks like it would open up much higher, 125 points higher s&p 500 looking to open up strong, as well. about 15 points higher the nasdaq up a little over 40 41 points right now. let's get you caught up on what's making headlines right now. president trump will be breaking from his working vacation in new jersey with a trip back to

washington today he'll be signing a memo this afternoon ordering his top trade negotiators to launch a probe into china's trade practices due to chinese policy toward u.s. companies operating in china to turn over their intellectual property. yesterday on nbc's "meet the press" president trump's national security adviser signaled it's a tough new approach to china but said the u.s. isn't looking for a trade war. >> the operative word is to compete effectively, demand fair and reciprocal trade and economic relationships with not just china but with all countries. so what the president is doing is, everything he can to ensure a fair playing field to make sure that american workers, american businesses, are not disadvantaged, by the theft of intellectual property or other unfair trade or economic practices >> a china state-run newspaper said today that the u.s. crackdown on china's trade practices would poison the relationship between the two countries.

president trump tweeting moments ago, quote, obstructionist democrats have given up, or not fixed, some of the worst trade deals in world history i am changing that fast, exclamation point. also, there's plenty of economic data out this week tomorrow look for july retail sales and import prices, wednesday we get housing starts and the minutes from last month's fed meeting. thursday we get the philly fed survey, and july industrial production and on friday we get august consumer sentiment. meantime on the earnings front we have several retailers reporting this week, names include home depot, t.j. maxx, walmart, target and the gap. outside retail we're going to be hearing from cisco systems and alibaba. and finally the price of gasoline has increased by eight cents over the past three weeks according to the latest lundberg survey, average $2.40 per gallon 23 cents higher than the price a year ago the increase comes from slightly higher crude oil prices. okay stocks on the move this morning, barron's is negative on

netflix. the publication says increased competition could cut the company's stock price in half by the end of the decade. it is the only f.a.n.g. stock this morning not trading higher preopen. lockheed martin winning an $8 billion u.s. defense contract. this course global logistics support services for special operations forces. and bitcoin surging to a record high the crypto currency trading above $4,000 for the first time ever it has now quadrupled in 2017, took just a week to jump from $3,000 to $4,000 up 15% just from friday. wow. >> amazing we're following the latest developments out of charlottesville, virginia, following this weekend's deadly attack many are calling an act of domestic terrorism. kayla tausche joins us now with more hey, kayla >> good morning, joe the alt-right rally here in charlottesville over the weekend turned deadly, after a car drove right into a crowd of people,

protesting the rally's white supremacist messages killing one woman and injuring 17 others the suspect will be arraigned this morning and the department of justice has opened a federal investigation into the event it is a dark cloud hovering over the charlottesville community at the center of which is the university of virginia students return this weekend ahead of classes beginning next week, and uva has since reached out to students alumni and parents denouncing the events over the weekend, and in one such e-mail saying, quote, as a republican institution we value an environment in which learning happens. the views of many of the groups which converged on charlottesville are in direct contradiction with this. there were racist anti-immigrant, homophobic and misogynistic chants. such rhetoric is not intended to bring us together. it is intended to drive us apart. in past years we've seen flares of racial tensions and resulting protests have an effect on

enrollment at those universities take the university of missouri. where protests emerged in 2015 around ferguson. freshmen enrollment there down 35% from 2015 according to "the new york times." enrollment by black students is down 42% important to note here in charlottesville, that the four alt-right rallies that have been held here since may were organized by outside groups, and as the president of uva said, they converged on charlottesville, but nonetheless, we'll see how the university responds with the academic year set to begin guys, back to you. >> thank you for that, kayla want to continue the conversation about violence right now, and what's going on across the country joining us right now is former mayor of new orleans, and now president and ceo of the national urban league, mark, good morning >> good morning. >> we just talked about what's going on down there. but i just wanted to talk about what your sort of immediate reaction is. not to what happened down there, but to president trump's

comments over the weekend. >> they did not go far enough. look the institution of the presidency is bigger than the man who holds the presidency and, in these types of instances, we need to hear from the president a strong, unequivocal denunciation of these hate groups by name. it's important because inside of this white house he's got a bannon, he's got a gork ka who have ties to these groups, and ties to the organizers of what in a sense was a hate march and a hate rally people came with weapons they came looking for trouble. they created trouble and now there's been an unfortunate death. i think it's an opportunity, but also a time when the president and the institution of the presidency and what it means to all of us as americans, has to speak loudly and clearly >> is there something he could say today that would make you feel better? >> well, i couldn't -- it's not

about making me feel better. it's about sending a very strong message to the people of the united states, and acknowledgment that neo-nazis are connected to, and worship adolf hitler for whom millions of americans died some 70 years ago in europe to crush the ariane philosophy we cannot allow any instance of that to gain momentum, or legitimacy, or normality, in the 21st century in this country >> as mayor, what can you do, or what could you recommend the mayor of charlottesville do, to ensure the people of the community that this is a safe place to be? it's a safe place to operate a business, for instance to make sure that the city keeps going as it has been >> i think he's been strong in what he said i'm not on the ground. but i think that this is a time when you, as mayor, you want to promote healing and cooperation and mutual respect

you want to bring people together, and say we respect the right of speech but we don't -- we don't honor, we will not honor or respect hate speech, and speech that is designed to incite violence against any group of americans >> but that's a delicate dance right? as the mayor, to allow -- to allow some of these marches to take place, and allow some of the speech to happen, when you disagree -- >> well here's the thing i think for a march to take place is one thing for a march to take place where people have arms, have bats, have shields, have torches, is not something that most cities would permit and they would not allow marches to march with that, because that's not only provocative. >> right >> it is a -- >> so why aren't you condemning the mayor this morning >> i can't condemn the mayor this morning because i don't know what the permit that these marchers had in fact -- >> they brought these things on

their own? >> they could have brought these things on their own. they may not have said in advance that this is what we're going to do. but look, this is really a moral question for the country >> right >> we discuss it in political dimensions, in political terms but i think neoconfederacy, nazism, neo-naziism, alt-right, they joined together and organized this march they're dedicated to a philosophy that's obnoxious. to what most americans believe and so people of goodwill, wherever they -- >> here's a question for you which is clearly there are people in the gop and others who are racing as far away from the president on this particular issue -- >> mm-hmm. >> right they don't like what he said, how he said it but, they're not racing away from the president entirely. right? i mean, or we don't know when it comes to policy, if -- if taxes come up, or other issues come up, it hasn't -- it

hasn't been a clear sort of demarcation. >> but you know, that's the intelligence of poll picks people can disagree with someone. i may disagree with the president on a wide range of public policy issues, right? and i'm hopeful he comes up with something like jobs and infrastructure that i can support. but i don't think that quote/unquote you're going to see people in the gop universally condemn the president. but i think you've seen a number of members of the united states senate, particularly speak out against the president on this issue, and question his policies on other issues. so, that is what i call mature politics is all about. you can disagree with someone on an issue, and find cooperation -- >> so that, in fact, the ability of the president to get that agenda done, because of this sort of -- >> i think that these types of things undercut the credibility of the presidency. the president is now sitting with a high 30s approval rating. it's tough to get things done as

president, when you don't have the will of a majority of the american people behind you >> right >> so this -- and you know, look, there's an opportunity here i'm glad to see elected officials and business leaders, and labor leaders, and civic leaders, and civil rights leaders, speak out against this. we've got to understand that this is a defining moment. this alt-right, neo-nazi, neoconfederate movement is seeking legitimacy >> marc, does bannon or miller, or gorka the three you mentioned, what the do they need to do? do they need to go or do they need to speak only against -- >> honestly, i think, remember, bannon, and miller and gorka are public employees they work for us and i think the white house would be better suited if they were not there remember, miller has a very close tie to spencer who organized this march one of the questions is, what kind of relationship is there, and i'm raising it as a question, because i have no

evidence, coordination or back and forth is going on between these participants, and the organizers of this march i think that's a legitimate question that ought to be raised. and i hope the president will raise it about his own staff >> i asked you this question once before, i think when president trump was just inaugurated. >> mm-hmm. >> do you think president trump is a racist? >> i told you before and i'll stick to the same questions, i think some of his policies, and some of his utterances have been racist i don't examine, nor do i evaluate, nor do i comment on what's in a person's heart >> okay. fair enough. thank you for coming in this morning. >> thank you >> appreciate it coming up when we return, we set up the trading day, and the week ahead on wall street. take a look at the futures they are in the green. the dow looks like it will open up higher about 123 points higher and later does tax reform matter to americans a tax report and reaction from former u.s. comptroller david walker stay tuned you're watching "squawk box" right here on cnbc.

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up 120 the s&p indicated up 14. nasdaq up 37 points so far that's where the indications are for the open >> some news to tell you about, third point firm disclosing a new stake in blackrock in the second quarter the final run off 1.6 million shares of the firm in a letter to investors last month. third point called blackrock an asset gathering machine and also reinitiated its stake in alibaba, up 4.5 million shares it also owns alibaba shares directly and through its stake in yahoo and softbank. third point loaded up on facebook last quarter to increase its stake by 500,000 shares to 3.5 million a holding now worth nearly $600 million. and also sold his entire take in snap after having bought more than 2 million shares in the first quarter. he bought during the ipo, it would have cost about $38 million. stock markets this morning as we have some off one of the

most volatile beex of the year joining us the president of u.s. trust and leah bennett the chief operating officer at westwood trust. good to have you with us keith, i'll start off with you you know, last week we saw the dow and the s&p have their worst weeks since the week ended march 24th and a huge snapback. we put together friday what we're seeing in the premarket today. how do you interpret that bounce >> well, look, i think the underlying fundamentals are still intact for us that means we're going to see a continuation of the global expansion. we're going to see that global expansion drive strong profit growth we think inflation stays relatively benign which means that rates, although they'll still move up somewhat, it will not be aggressive. so the environment generally remains positive for equities. although having said that, melissa, we think in the fall, because of the geopolitical issues, because of the fact that we will get probably another increase of 25 basis points in the fed funds rate, and we are going to at some point move to normalization with the balance sheet, we'll be surprised to see

a pullback of 5% or so not really >> have we seen the highs for the markets for the year >> we don't think so we think we're probably going to gravitate toward a 2500 ending point, which is right around our equilibrium level. >> leah, in your notes you say that investors are quite complacent is complacency bad i mean, keith's view could be construed as complacent in some respects, because to say the fundamentals still bear out the valuations in the markets here, and that we haven't seen the highs despite the geopolitical tensions i mean, is it necessarily a bad thing to be complacent are we making too much of the vix being historically low >> i think complacency is not unusual for this point, and in a recovery what -- where i do think it becomes important is really looking at the risk management of your investment popout. so if you're an investor and you're investing with somebody who has active management it's an important time to review what sort of risk management that --

>> what are you talking about? buying protection with the vix being so low i mean, what sort of risk management are you specifically talking about? >> sure. great question so, at westwood we manage about $23 billion in assets. when we look at and have 18 different investment strategies, a basic investment as part of our investment is looking at the outside down side potential is for a stock when we purchase it. we're not looking at downside potential as it relates to the market we're looking at the most that we can lose as it relates to purchasing a stock i do think having some sort of risk management process is important for active managers, as it relates to individuals who are moving in the path of management i think it's really important for them to understand exactly what they'll own >> so you're talking about etfs? when you're saying -- >> yes >> okay. do you think that people are just -- when people are investing in etfs, which is probably one of the most popular ways for the individual to

invest these days, that they're not sufficiently looking at risk management they're exposed to much more risk than they think >> yes so, there's only been three times since 1990, where a sector has comprised more than 20% of the index. and one of those periods was in 2000, again, in 2007, and then now, technology compromises more than 20% so, it is important. and i think a lot of investors don't necessarily drill in to that >> could that actually be what causes the markets some more volatility, keith, that you're talking about? >> well, i think there's a number of things that can come into play with volatility. a lot is going to be north korea. we've got to see how that plays out, very importantly. i think there's going to be a lull between the second quarter earnings releases, which have been very positive we're looking at probably 10% to 1% year-to-year growth in the third quarter. so we think we're going to be in a pretty tight trading range here but as we get closer to the third quarter earnings, we

should also be robust, we think that people will start to focus again on the fact that fundamentals are pretty good and we think that's where we'll get the market moving back towards the highs. >> and you're saying just stick with what is working stick with the big gainers of the year >> we would. trying to play -- >> how do you risk manage sticking with the biggest gainers of the year? >> what we try to do is we're diversified, we want to be overweight equities, you want to be underweight fixed income. we like the international area better than u.s. although we're overweight u.s. emerging markets, we like international develop. so we really manage risk through diversification, both in terms of geography, and good balance right now between growth and value in our portfolio >> how big of a concern in terms of your international exposure is weakening u.s. dollar >> well, you know, we don't think the dollar's going to weaken dramatically from here. that's another good underpinning for strong profit growth in the u.s., especially with the multinational companies. >> and leah, just quickly, your favorite sectors here either in the u.s. or elsewhere?

>> we actually think the markets are fairly attractive at this point. europe is very attractive, versus the united states and you're seeing the dividends actually increase at twice the rate that they're increasing in the u.s. we have an office in toronto that runs some international and emerging market strategies for us, despite the move in the international markets, and despite the move coming out of china last night, we do think that emerging markets are quite attractive small caps have also lagged significantly on the year, and that seems to be an attractive area, as well. >> got it. keith and leah, thank you. >> good to be here, thank you. >> thank you coming up, hbo is not very enthusiastic about another leak of a popular show. details after the break. and then does the american voter really care about tax reform as the president pushes congress to get a plan in place a new study shows the number of those who feel they pay too much has actually dropped in recent years. the numbers and what lmarsawke are going to do to make the

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this morning there is some more fallout from the hack attack on hbo the reason you're hearing that music, hackers releasing episodes of the popular larry david comedy series "curb your enthusiasm" more than two months before they were set to air. the hacker may continue to drop bits and pieces of stolen information in an attempt to generate media attention that's a game we're not going to participate in first announced it fell victim to that major hack attack late last month and by the way, in case you didn't know, "curb your enthusiasm" is coming back this fall i had somebody e-mail me to say. are these old episodes no, no, these are new episodes >> it's a different world. you know, it's a different world. crazy. i mean, the stuff that you can get away with. anyway, now to -- and it's -- you know, not quite as much as certain things now to sports. justin thomas etched his name into golf history. the final round of the pga

championship thomas was two strokes behind the leaders by a couple of putts, and some incredible length on some of his shots. i'm going to talk about that in a second he was masterful on the course that was a 15 footer on the 17th hole the tap-in on 18 for the win and his first major title, as a lot of the challengers fell by the wayside. eighth time in the past nine majors a first timer has raised the trophy so on 17, two strokes up and then actually three when some of the other guys but it was a 220 yard par 3. he hit a 7 iron. so watching these guys play, just one after another, just watching them, it almost reminded me of caddyshack. where bill murray is there he's got about 320 he's got an 8 iron a beautiful back but i mean it's no longer a joke 225 yard 7 iron. hideki hit out of the rough an 8 iron he had like 210 or something >> have you ever seen me with a 7 iron do you know how --

>> a 165 yard club for someone who -- i hit it pretty far but anyway -- >> that's about half for me. i chop the ball. coming up former u.s. comptroller general david walker is going to join us to talk tax reform plus an outlook for deal making on wall street ahead of m&a for ubs is our guest. "squawk" returns in just a moment or even trouble with recall., thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates

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good morning, welcome back to "squawk box" right here on cnbc live from the nasdaq marketsite in times square. among the stories front and center is this hour's shares of fiat chrysler rising on a report that a well known chinese automaker made one offer this month to buy fiat. the report is in the automotive news fiat rejected that offer for not being enough another deal this morning, vf corp is buying william son kickie, the price tag $820 million in cash. new developments on a story out of charlottesville,

virginia, where a white nationalist rally saturday turned fatal when a car ran into a crowd of counterprotesters killing a young woman and injuring 19 others this morning, attorney general jeff sessions is making comments to news outlets. eamon javers joins us now with the latest eamon. >> good morning, melissa the attorney general was on television this morning calling the president's comments a good statement over the weekend, defending the president, who's come under criticism now for not having singled out white nationalists and nazi groups for specific criticism in his comments over the weekend. here's what jeff sessions said a few moments ago on television. >> well, he made a very strong statement that directly contradicted the ideology of hatred, violence, bigotry, racism, white supremacy. those things must be condemned in this country. they're totally unacceptable and you can be sure that this department of justice in his administration is going to take the most vigorous action to protect the right of people like

heather heyer to protest against racism, and bigotry. >> the attorney general also said that the president is going to be speaking to the people again today. he did not say that he knows what the president will say specifically, and he said that the president has not apologized to sessions in the wake of the president's very public criticism of sessions earlier this summer. sessions said the president simply has the right to castigate anybody in his cabinet that he feels like cass igating. so sessions very much defending the president of the united states today who has been tweeting this morning. i believe we might have one or two of the president's tweets this morning one saying that he's headed to washington this morning. much work to do, focus on trade and military, #make america great again. nothing there that would indicate that the president focused on the charlottesville comments another tweet this morning from the president, going after obstructionist democrats, saying that in fact they're causing a lot of the political problems in washington, d.c.

so the tweets from the president not indicating that this charlottesville issue is on his mind right now but the attorney general, sessions, saying that he will address the people later on today. >> okay. all right eamon, thanks. we're going to switch gears here and talk tax reform, and does it really matter to americans ylan mui joins us now with more on the latest survey from gallup then we're going to talk more. >> joe, tax reform is looking like a tough sell. that's because the polling data just does not show that americans are clamoring for this take a look at this gallup survey that you mentioned. it actually shows that the percentage of americans who feel they are paying too much in taxes has dropped over the past year from 57% to 51% now, that is very different from the 1980s, which is the last time we had major tax reform, 60% of americans back then were unhappy with their taxes the other messaging problem that republicans face is that

people's biggest frustration with the tax system, is not that businesses aren't paying too much it's that they're not paying enough 80% of households surveyed by the pew research center says that this bothers them and that could be why there isn't much support for the white house tax plan among voters. a quinnipiac university poll shows that a majority think it's a quote bad idea to lower the corporate rates to 15%, so what you're seeing republicans do instead is to frame tax reform as a boost to the middle class this ad from the american action network shows a laid-off factory worker from ohio, who talks about how the uncompetitive tax code forced his company to move overseas, and the implication is that fixing the tax code will help bring back jobs but guys, it is a heavy lift you do have to convince the public of the problems first, before you can get them behind a solution back over to you >> all right, thanks for more on the tax reform debate let's bring in david walker former u.s. comptroller

general, currently seeking republican nomination for the governor of connecticut. we -- i know how you feel about tax reform and specifically corporate tax reform i always hesitate to say, well, the people that are against it don't understand it. because i think that is not a good way to go about it. but, i can certainly make a case for why it would help not just corporations, but i think down the road it helps people, i think it helps the jobs picture, i think it helps the wage picture. so i can make the case so where is the disconnect is it in the messaging that you're seeing? >> there's a difference between leadership, and laggardship. when you end up trying to make decisions based upon polls, recognizing that we're dealing with a very complicated topic. taxes are a very complicated topic. we have an interconnected global economic paradigm today. and so, therefore, i think what you have to do is you have to educate the people as to why we need to make this change

we need pro-growth, more competitive, and fairer tax reform and when i went on the 10 million a minute tour through 27 states in 2012, we did exactly that and we got 82% support for comprehensive tax reform, not just on the corporate side, but also with regard to other business and individual taxes. so how you go about it matters think about this, joe. it's not just taxes. it's things like health care or social security. po pollsters ask, would you like to pay higher taxes would you like to work longer? would you like to be able to get less of a subsidy from the federal government for premiums? what the hell do you expect people to say? so it's very complicated we need leadership, not laggardship. and we need to engage the people in a meaningful way. >> and remember some of the people that were -- when obamacare was being proposed, and it was unpopular and a lot of people on the left said, the people don't

understand it, and this is what's good for them, and we're going to legislate this, and we're going to put it into effect, regardless, and i worry that now the right is sort of taking, what i talked about earlier. just assuming that people don't really understand what they're getting. you would -- >> there's a big difference, joe. okay the big difference is, is that you don't want a solution where washington thinks they have all the answers and they push it on the people what we did in this 10 million a minute tour, alex rivlin was part of it, among others, we actually engaged the people with kt facts, the truth, the tough choices, we pulled them together on a fiscal goal, on principles and values that brought people together rather than dividing them apart, and after we did that, then we talked to them about these are the kinds of reforms that we believe will meet that goal, that are consistent with those principles and values, and i'm happy to share -- >> i don't -- >> it's -- >> and democrats want to do tax reform i mean, as long as it's revenue neutral, right andrew

>> no, the big question of course is what is revenue neutral. how dynamic is the dynamic scoring. >> david, as you know, democrats in terms of blowing up deficits they've always been andy deficit. so if it's not revenue neutral they're not going to be behind this ever. >> i think our metrics are bad okay we need to -- >> don't try to put one of them -- >> we need to focus on debt to gdp. we need to get rid of the debt ceiling limit. we need to have automatic crs. we need a capital budget and operating budget we need to go to biannual budgeting. washington has never been so dysfunctional and we need to recognize that we need some fundamental reform so we can actually make progress >> i think the question -- there's two major questions. the two major questions are not whether we should have tax reform it's how do you pay -- how do you pay for it >> the poll says people don't even want it because they don't feel like it -- >> it's corporate tax reform -- >> corporate taxes but then you've got to figure out how to make it work. and i think we generally -- i

think everybody would like individual taxes, but the other issue is how does it -- >> what percentage -- what percentage of -- >> pay no income taxes >> 47% >> it varies anywhere from mid 30s to mid 40s to -- >> okay so when you -- >> you fear -- >> that is -- >> a big level of 40%. >> that's -- >> i don't pay them. >> okay. >> payroll taxes >> you pay other taxes but income tax look, why don't we talk a little bit about what people got behind, okay what people got behind on the corporate side was to go to territorial taxation, versus global to take the top corporate tax rate down to 25% to be able to provide preferences for accelerated depreciation or expense of capital assets to be able to have a deduction for dividends distributed. all right? and to be able to have a tax credit for basic resource. not appliedry search that was that. on the individual to go down to

three rights 15, 20, 25, to eliminate the difference between ordinary income and capital gains to be able to have three primary preferences. of single primary mortgage all right. up to maximum limits charitable contributions and reasonable savings those three things that's simple. that's fair. that's pro-competitive you can get 90% of individual tax returns done on one piece of paper that way but you have to engage the people >> we've had eight years where you've demagogued corporations, as you know, not -- >> not me. >> no, not you you didn't build this, you know, greed, the profit incentive is bad, you've got a whole group of the population, millennials, that think socialism might be, if done right, might be a superior economic system than capitalism so that factors in to a lot of these numbers. i think, too you don't think so, andrew you think that all millennials think capitalism is the way to

go i think they think it's inherently evil. >> i think there are some people who think that but i don't think that's the prevailing view. >> do you think that it -- that corporations should be freed up to compete globally by having a more competitive tax rate? or do they -- there is a real knee-jerk reaction that these corporations are greedy, and need to pay more in taxes. that's what you get in these -- >> no, no, no. look i'd be willing to go to zero on the corporate tax rate oh, my god >> wait a second >> you heard it here first >> revenue neutral >> but you tell me -- >> wait a second >> but you tell me how you make that revenue neutral, and then at the same time -- tax all of the shareholders in a different way? >> okay. >> and what are you going to do about capital gains. and what are you going to do about carried interest those are the things, it's some of those issues, even if they're small numbers. >> we've got to run for office both of us we could fix this, david >> i will fix it in connecticut.

>> that's the place where you really -- >> i will fix it in connecticut. >> all right >> thank you >> coming up, will investors see a ramp-up of mega deals as we head into autumn we're going to talk to an m&a expert after the break whoooo.

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welcome back to "squawk box. 2017 has been relatively quiet on the m&a front with a noticeable lack of mega deals. here with more on the landscape is the head of u.s. m&a at rbc capitalmarkets good morning >> good morning. >> what do we think is going to happen here? >> we thought, or the impression was that when president trump became president president trump that we were going to see a wave of mega deals, that regulations were going to -- the wall was going to get lower and we were going to see lots of stuff the biggest deal, the head line deal that i can even think about right now is amazon, whole foods, and on a dollar basis, not even that large. >> i think the large deal in the u.s. this year is dickinson and that's $24 billion and then last week or the last couple of weeks we've had there's been rumors in the market about upc making a bid

for rockwell collins that would be the largest deal in the u.s. year to date at about 30 billion or so, depending on what you put it at. but if you think about the administration, coming in to the year, it certainly was looked at as a positive for dealmakers >> right >> i think some of the, if you look at some of the factors that happened now, the uncertainty in terms of a forward look has started to creep in to some of the ceo confidence >> okay. >> so for the first time in a long time you're seeing people use as an excuse as to why they're less active. the fact that they're waiting to see what happens to the tax reform perspective and i think they're using that uncertainty potentially to say why -- >> is there any argument to be made on the positive side of it, that people think that their businesses are actually now just doing better, and -- maybe i don't need to do something so quickly? >> well, look, we always look at it as strategic m&a, good deals will happen. it's not -- they're not going to wait for tax reform.

to pull the trigger on the transaction. they're still sitting on a ton of cash. although a fair amount of that is offshore. financing markets are still historically attractive. >> but therefore, if everybody's supposedly so confident, right you read these confidence surveys every other day, you'd think that they would be, you know -- >> but then you look at the -- >> at the altar every other day. >> in the public markets right now you've got valuations at all-time highs so let's think about a large conglomerate they're trading at not just dollar lows but multiples that are all-time highs by a few, three to four turns more than they've been historically in the past five years. and so if they look to sell a division, generally they're going to be lower performing divisions, lower margin divisions that are going to produce less dollars for them, versus if they were to keep it as part of their cash flow and get that valuation in the public market value and so it's difficult for them to sell something unless they can find a large target.

and a lot of the large markets are just too expensive right now. i think if you look at the volumes, you're still getting deals that are under the radar getting done so sort of the $5 billion or less in the u.s., is actually up a couple of percent year-to-date >> is there a wave of mega mergers in the media space that aresitting on the tarmac behin this at&t time warner deal >> well i think the latest is that it feels like that transaction's going to get approved by the department of justice, and they're looking towards the year end for closure. i think this week will be ten months that it announced >> right >> so it gets a lot of attention because it's media gets a lot of attention because of the size. but at the end of the day, that's a pretty straightforward transaction. in the media space they're still trying to figure out how to get better economies and this one here as a vertical integration is going to produce something similar if you look at comcast, nbc universal >> make sense to me what you

were saying earlier and that is if, two reasons that companies do this. right? one is if it makes sense to spend. the other is if they can't do it any other way. you know what i mean they do it through, you know, they -- >> but maybe they're not -- >> revenue growth, or for you know, overlap, and they get to rationalize all these operations and that was the thing you had zero money for a long time >> so that should have been a golden age that we just came through. >> you know the difficult part is you look at the last two years, which have been the two best years on record so this year being down from last year, still a pretty strong year although i think you're missing these larger deals you would have thought there would be greater activity this year because one of the issuing stats we look at is the ceos of s&p 500 companies have been in the seat for on average about eleven years so if you look back, they went through the credit crisis. they knew what it was like not to have cash to pay off the debt at that point. and right now, they're sitting on twice the amount of cash that

they were. >> what do you make of the argument, i think we had a ceo either on the set or maybe i wrote about it, the idea that mergers are not happening, mega mergers are not happening, because of the anxiety that they would have to quote/unquote rationalize? the difference is you're going to have to lay off a lot of people and nobody wants to suffer through the wrath of an early morning tweet storm on 1600 pennsylvania avenue >> it's certainly something that's more thought about. and i think the concern is how do you position that and so we talked about upc, collins that would produce a significant amount of synergy. and how do you position that from that perspective? but i think also that type of transaction, they look beyond just the government. they're looking at the oems that they're supplying. >> right >> and they say are they going to approve this transaction? they're going to be supportive of it. >> so it has -- >> did you look in your pipeline, what industries do you think are most likely come post-labor day --

>> sure. >> i think health care is going to continue to be strong we're waiting to see where oil prices stabilize, think about the energy sector -- >> at what price do you think it will pick up sub45 or -- >> we've seen strength when it gets to $50 level or close to that range i think where it is right now in the 40s it's very difficult -- >> you need it to be stronger to get the stock price up or weaker to make the targets -- >> in the energy vertical it's all about where the commodity price is nothing else i think they're waiting for that stabilization. but there is a good amount of activity that you're seeing. but it's been focused mainly on one of the bases at this point >> vito, thank you >> coming up, stocks to watch ahead of the opening bell on wall street. and then in the next hour the war of words between president donald trump and korea's kim jong-un continuing over the weekend. a look at what options are on the table in case the sanctions fail quk x"ilbeig bk. cy... extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages.

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jeffrey immelt world, or at least the decision >> and a horror, horror sequel scared up millions of dollars in ticket sales taking the top spot at the weekend box office. "annabelle: creation" earned $35 million in its debut weekend the sequelto "annabelle" centers are on a possessed doll. >> presume play named annabelle? >> hasn't that been done is this like the female chucky or something it cost about $15 million to make the world war ii film "dunkirk" holds onto second place with more than $11 million. and that movie, of course, tells the real life story of hundreds of thousands of allied soldiers trapped on the beaches of dunkirk and the heroic efforts to save them it's been a tough summer >> horrible. >> tough summer. >> down 5% wasn't it >> terrible. terrible summer. but who did we have on last week

who said why was it a tough summer >> movies are bad. >> when the movies are bad it's terrible. that's pretty much the deal. coming up, secretary of state rex tillerson urging china to take a leading role in the denuclearization of north korea. the latest on that front straight ahead and then later former white house counsel of economic advisers chair alan krueger is going to join us to discuss the economy and a lot more "squawk" returns in just a moment

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good morning global markets rallying. stocks in the green, as president trump threatening to crack down on trade with china also another dark cloud for snap the messaging app company faces the biggest lockup expiration yet. plus why elvis has not left the building 40 years after his death the king of rock 'n' roll still bringing in business the manager of elvis inc. will join us on the set it is monday, august 14th, 2017. final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box.

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in timessquare, i'm joe kernen along with andrew ross sorkin, and melissa lee. let's get a check on the markets, which are indicated to open sharply higher this morning. triple digits on the dow up 121 points. s&p indicated to open 14 points high higher the nasdaq indicated up 37 all of this would be a bit of a snapback from some weakness that the markets suffered last week among today's top stories, japan's economy grew at the fastest pace in more than two years in the second quarter growing 1% quarter on quarter, beating the 0.6% economists were expecting the nikkei finishing lower 5% stronger yen really weighing on that index uber meantime reportedly considering three investment office to buy the company's shares according to "the new york times," the ride hailing services board has voted to move forward with proposals from two investment groups, and is also considering a third offer. uber voted to take the next step

on investment interest from softbank the board also okayed going ahead with the proposal from a coalition led by the dragon year investment group, and it is considering offer from a consortium led by early uber investor and frequent guest on this show. aldi says it has partnered with instay cart to deliver groceries in los angeles, and dallas aldi says the pilot program is a way to test online grocery demand customers will order groceries on instay cart's website and app and they'll pick up the products at aldi stores and handle the delivery earlier this summer aldi announced a $3.5 billion investment to expand its presence here in the united states an update on a story we've been following out of charlottesville, virginia. a white nationalist rally saturday turned fatal when a car rammed into a crowd of counterprotesters, killing a young woman and jerg 19 others this morning attorney general jeff sessions is defending president trump's response to charlottesville. here's what he had to say on the today show this morning.

>> well, he made a very strong statement that directly contradicted the ideology of hatred, violence, bigotry, racism, white supremacy. those things must be condemned in this country. they're totally unacceptable and you can be sure that this department of justice in his administration is going to take the most vigorous action to protect the right of people like heather heyer to protest against racism, and bigotry. >> department of justice opening a federal investigation into the violence in charlottesville. and president trump is going to make a stop in washington today before heading to new york city expected to sign a memo this afternoon ordering his top trade negotiator to launch a probe into china's trade practices the order has to do with china's policy that forces u.s. companies operating in china to turn over intellectual property. and the president tweeting this morning about trade.

the obstructionist democrats have given us, or not fixed, some of the worst trade deals in world history. i'm changing that fast >> and u.s. secretary of defense jim mattis, and secretary of state rex tillerson out with an op-ed in "the wall street journal" about growing tensions with north korea titled, quote, we're holding pyongyang to account in the co-authored piece that tillerson and mattis urged china to make a leading role in bringing north korea to the negotiating table saying that the region and the world need and expect china to do more. the twoalso writing quote any attack will be defeated and any use of nuclear weapons will be met with an effective and overwhelming response. meantime we want to bring in michael owe han h'hanlono'hanlo fellow and co-director of the center for 21st security and intelligence good morning to you, michael >> good morning, andrew. nice to see you. >> i don't know if you got a chance to read the op-ed >> yes >> i assume you agree with it.

there was nothing in there, really, that you could disagree with, right? >> that's a good way to put it it was solid it was comprehensive it didn't really lay out any new policy initiatives it ratcheted back slightly the rhetorical war of words. but still held very firm and strong and said that strategic patience, which was essentially the policy of the obama administration, didn't work, and strategic accountability was their new phrase obviously hoping that china will put on enough economic pressure that north korea has to change course but i thought it was a very well crafted, well worded op-ed but didn't really break new ground >> on the last piece of what you just said, do you have any expectation that china will put enough economic pressure on north korea? >> not a lot and that's really the key question of course we've heard today now that china's going to suspend or further suspend trade with coal, lead, iron, and seafood from north korea. but we also have heard word that in the first six months of 2017, net trade with north korea, china, did not decline at all. even though there had been

previous restrictions on things like coal. so, what i worry a little bit about is a sleight of hand where china seems to be cracking down in some areas, but expands in others or finds alternative customers or let's certain companies try to work around these things. as you know, china isn't really anxious to put the screws to north korea too strongly and i think we're going to need, therefore, a little different diplomatic approach that while we ask china to tighten down, we also create a little bit of a light at the end of the tunnel for north korea. to be sure, we've got to be firm in what that light would be, and how they would get there but i think we're going to need a little bit different strategy if we really want china to apply more pressure. >> michael, what would be the impact, though, if they did put the screws, if you will, more economic screws to north korea >> well, the impact could be the sky is the limit i mean 90% of all north korea's trade is with china. and unless china -- unless china is replaced by russia or somebody else, what this could mean is that north korea's economy basically completely tanks. as you know --

>> no, no, no. i want to know what it would do to china which is to say, why is china not putting more of the screws, to use your phrase >> right well, if this thing went to an extreme, and north korea actually started to fray or even collapse, then, of course, you've got huge refugee flows. uncertainty about where north korea's nuclear weapons go and possibly even the creation of an instability that allows south korea to reunify the peninsula, and china worries that that would give the united states a long-term foothold on the peninsula. so that's the extreme case but i think that there may also be a worry out of china that they just don't want to mess with this kim jong-un because he's half crazy and he might even start taking it out on them i think they're a little bit intimidated. sort of like the big eye being intimidated by the little bully, the little crazy bully they're not really sure what this guy could do next if he gets angry with them and i think it's sort of a fairly simple level of fear. >> how dangerous is the war of words that we've seen escalate over the past week

>> i worry about it. because i worry for this reason. kim jong-un, as you know, is a young man who does not necessarily have a lot of experience in this job, and worst of all, he has killed off some of the advisers inside of his regime who might have told him when he was wrong. who might have told him when he was allowing some kind of a rhetorical flourish, or a brinkmanship, you know, proclivity, to get out of hand in the united states, we see president trump, a man twice as old, and a lot more experienced, when he says something we don't like, all of us come down on him like a ton of bricks and his advisers actually come down on him, it appears, in private and in public, on various issues like this charlottesville tragedy, or you know, north korea. in pyongyang, there is no such system of checks and balances. so i worry that kim jong-un could make a big mistake and get into a brinkmanship, you know, dilemma or dynamic that winds up risking war. >> when investors call you and say, what do you make of this,

what kind of percentages should we put on something happening or not? what do you tell them? >> less than 10% chance of war, but i would say more than 1% chance so i don't know how much more precise i can be >> if i asked you that question a month ago you would have said what >> a month ago it wasn't that different. you know, the rhetorical exchanges have made me a little more worried but i think president trump came into office and he said, i can't allow what happened under obama to continue. in fact, president obama himself had apparently counseled president-elect trump last fall that the north korea policy that his regime carried out wasn't really successful. i think at that point trump came to the conclusion he needed to do something fundamentally different. that's when the chance of near-term conflict went up i think it's been there essentially through the early period of the trump administration >> okay. michael, always great to see you. thank you for your perspective >> my pleasure >> thank you a busy week on wall street we're going to talk market strategy next. then later the reason why you've been hearing a lot of elvis this morning. we'll talk to the man hoping the

king of rock 'n' roll's legacy move on. assuming he's really dead. the manager of elvis' estate joins us at 8:40 a.m. eastern time stay tuned you're watching "squawk box" on cnbc for your heart...

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just off the wires procter & gamble sending a letter to shareholders, the company says nelson peltz is seeking a board seat to satisfy this own agenda saying quote mr. peltz does not bring new or needed skills to our board. we believe adding him to the board would derail the significant value creation progress we are making p&g said its growth plan is working. one-year return on that stock 5% >> a couple stocks to watch this morning. barron's says netflix stock could be cut in half by 2020 competition from disney and others, separately netflix has recruited shonda rhimes away from abc

rimes has been in abc for seven years. under the multiyear agreement she'll develop new shows exclusively for netflix and continue to be involved in the shows that are currently on air or in development for abc. and she will move on with her production company shondaland and go to netflix. let's turn to our panel andy, director at research atlantic, michael, mining analyst, and cathy managing director of texas strategy and founding partner of bk asset management cathy i'll start off with you so we can go macro before we delve into the specifics here. in terms of what the currency markets are telling us about the risk from geopolitical events around the world, we're still seeing a bid to the yen, to the swiss franc. what happens to the dollar here? >> well, actually we're seeing quite a bit of a release rally today. i think overall the markets are nervous. the lack of antagonistic comments over the weekend really helped a short covering in the dollar

i think at the end of the day, your previous guest said the realistic risk of war is 10% but there's a lot of key dates coming up. tomorrow, north korea set to issue some missiles near guam on august 21st, august 31st, so we could have military actions against between u.s. and south korea around the region. investors know this. and i think that, you know, we've got a long time until then this could still be a lot of back and forth and even though the fire and fury could be more visceral than strategic, you know, president trump has plenty of opportunities to backtrack on this so i think it's more anxiety for the fx market. >> more risk aversion -- >> which is ultimately going to be negative for dollar/yen but positive for the dollar in the high beta currencies like the australian dollar, the british pound, things like that. so you have to be very sensitive about the shares that you trade. >> at the same time gold moving off of its high. >> yeah, sure. >> gold miners, junior miners

have been a great way to play this do you see that tinge? >> i think there's a lot of storms in the marketplace and what kathy mentioned, the safe haven bid, i say given about 2%, 2.5% to the gold market in the last week, week and a half i think with those indications of still that uncertainty, i think you'll get that continue i do think 1300 is going to be a key point for gold we're near like the triple top right here and the technicians start to get on board i think you can get the next rally even if there's some pause in some of the concern in korea >> break 13 and then we go to what level >> our target's 1350 and i think that would probably be a reasonable spot to check in the next three to four months. but, if we get some concerns we could pull back into the 1240 level. >> andy, you still like some of these stocks leveraged to the economic coverage in the u.s.? financial chip stocks, right

>> there's nothing wouto be wore about here >> there's plenty to be worried about. what's great about this year is we have the greatest amount of earnings growth that we've had actually this century. looking at 2017 so far every single quarter has delivered double digit earnings growth and what's better than the growth is some of the details around it. if you're looking at companies, any time they deliver a great quarter, they try to rein in expectations by, well, driving them down, giving themselves a lower bar to clear next quarter. that's not happening so far this year in fact, when companies come out and say that business is good for the rest of the year, doesn't seem as good as the top line growing as quickly as the bottom line. so we're not growing by virtue of top tech anymore. >> in the chip sector you like intel here intel has been a laggard in this sector >> intel has been a laggard in the sector and that has created an opportunity they are dirt cheap. if i look at tech stocks broadly. tech stocks broadly are pretty expensive. intel is trading 12 or 13 times

earnings offering -- >> what is the growth process for intel? that doesn't really tell me anything, does it? >> the growth prospects are not as great because they make the relationship on mobile in some ways, they're never going to catch up. but in other ways, they do the most important thing, which is service every iphone that we carry, every ipad that we carry, the date that that goes in to that from a website or any other service. >> right >> starts out on the server. intel dominates that market. >> question about minors here. we've also seen sort of recovery in copper. >> sure, absolutely. >> if i had to put a dollar here would it be in a gold mine or a metals mine or industrial metals mine >> i'll go 50 cents on freeport copper and 50 cents on mining. >> very hedged >> gold is a hedge those are two -- >> industrial recovery around the world? >> yes, i think also, we haven't

spent any money in mines in exploration generally over the last five or six years, and that is going to limit the supply response, across the board in commodities. so i think some of the moves we've seen in copper, or zing, lead, has been driven by shortfall supplies, in addition some better than expected demand globally >> so you expect the likes of a rio tinto, to start spending now? >> i would say not quite yet i think they're starting to do some early initial studies, feasibility studies. i wouldn't see it real tick up in a cap-ex probably until second half of '18 into '19 and then we'll see a big rally >> okay. last question, kathy give me a dollar index level to watch. >> well, i think overall, in terms of the dollar index i'm looking at more percentages. >> okay. >> and i think that we could realistically see a 3% to 5% drop in the dollar index if we get into war because that's what we've seen historically a minimum when we had the gulf war one, gulf war two. so i'd be pretty careful with dollars here

>> guys, thank you very much andy, michael and kathy. >> when we return another potential dark cloud over snap today's messaging app company's biggest lockup expiration yet. we've got that story next. we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

nap hammered last week after reporting disappointing quarterly results. now facing its biggest lockup expiration yet julia boorstin joins us now with more good morning, julia. >> good morning, joe the lockup expires on an estimated 718 million shares held by employees. that's nearly four times the number of shares that hit the market in snap's ipo so how many shares could actually sell today? well, about three quarters of those shares unlocking are owned by directors, executive officers and other affiliates the ftc limits how many they can sell no individual can sell more than 1% without getting shares of the proxy stock they're selling. cofounders evan spiegel and bobby murphy each own 211 million shares and announced they would not sell any shares this year. jpmorgan saying that should quote help alleviate the near-term concerns around the lockup but that still leaves 182 million shares held by other employees according to jpmorgan.

friday, one of the stocks risks is continued pressure on the stock from the tail end of the substantial lockup expiration. today's stock move could give a hint in how employees feel about the company's prospects, and it's worth noting that this stock opens at current levels, will be at a new all-time low. >> julia, i would imagine that it also matters if employees, if their options are underwater they might be less inclined to sell at a loss >> they might be less inclined to sell at a loss, absolutely. and there's also just sort of the question of whether or they think the company is worth more than it is right now i mean, they've seen the stock tumble so dramatically from the ipo. they may have a better sense of what's in the pipeline and they may not want to, you know, deal with those options at a loss, and they might want to hold on for the hope of the stocks turning around >> julia, the complicating part about when a stock drops after an ohio isn't necessarily the money in the short-term it's what happens to the employees.

which is to say do you think employees out there working at snap right now who are thinking to themselves, they've got to go work for facebook? >> well, snap is in los angeles. so it has the advantage and disadvantage of not being in that same ecosystem as facebook, apple, google, all of those companies up there and i think that a lot of engineers moved down here, and were recruited here, because los angeles is not silicon valley, and very different culture, accessibility to the beach, among other things down here so i think that these employees may be a little bit more protected. a lot of them may be waiting to see what stocks vest they have other financial incentives to stick around down here but i actually think that being here rather than up north will be an advantage for sthap. >> all right, julia. julia boorstin in los angeles. when we return, today's top stories, and later taking stock of the trump economy former cea chair alan krueger

joins us right after the break u.s. equity futures looking to start a monday with very strong gains across the board s&p looking to add 15 at the open dow looking to add 130 nasdaq up 42 points right here "squawk box" will be right back. whoooo. finding the best hotel price is now a safe bet. because tripadvisor searches... ...over 200 booking sites - so you save up to 30% on the... ...hotelock it in. tripadvisor.

♪ good morning welcome back to "squawk box" here on cnbc. when he did it with his torso it looked -- didn't look like he was going to throw his back out when elvis was -- did you hurt yourself >> no. >> you all right >> i can shake 'em like -- >> we're at the nasdaq marketsite live in times square. and one of the things happening, fiat chrysler rising on a report

that representatives of a well known chinese automaker made at least one offer to buy fiat this month. the report was in automotive news says that fiat rejected the offer for not being rich enough. meanwhile, a&e network launching a new advertising campaign in an attempt to stand out in an increasingly crowded tv space. the ad push called brave storytellers promotes the network's unscripted shows and shows off a&e's new look the company hoping the campaign which launches -- can you really say that, steve? wait your turn -- is launched tomorrow >> is launched tomorrow. >> that would be like if we went back dbs >> future past perfect >> okay. >> will help its ratings rebound between 2013 and 2015. ratings in the year -- ratings

in the 18 to 49-year-old demographic dropped by about a half at a&e. and amazon is holding out refunds for certain solar eclipse glasses that were sold on its site. the e-commerce giant says that the glasses might not meet safety standards needed to protect your eyes during this month's total solar eclipse. amazon says it's removing the glasses out of an abundance of caution. in a bizarre political story from australia, the country's deputy prime minister barnaby joyce may be forced to resign. at issue, joyce has been told he may be a dual citizen of australia, and new zealand and under australian law that would make him ineligible to serve in parliament. joyce was born in australia, but his father was born in new zealand, and by law that makes him a new zealand citizen by descent. and here's why it's important. if the high court forces joyce to resign it wouldup set the balance that currently favors the conservative party, and would likely lead to a new

election a busy economics week ahead focused on the consumer. cnbc's senior economics reporter steve liesman says we should focus on the job supply. >> critical to the consumer. we've been in a run of extraordinarily strong job growth five of the past seven months have been north of 200,000 each month. so how long can it last? is there a limitless supply of workers willing and ready to come back to work? barclays with a report over the weekend suggesting there may be more workers out there than previously thought the answer is critical of the fed policy but the fed thinks labor markets are tight could increase rate hikes to stave off wage inflation or let the job market run barclays says there's been a surge of prime working-age women coming back into the workforce the group's participation rate has risen by two points over the past two years barclays says what are you doing? what do you think? barclays says better wages especially for the least educated groups have brought these women back in to the workforce. so thank heaven for prime-age women is what that suggests.

labor force participation from prime-age workers is rising indicating more slack in the labor markets, sharp markets than the sharp fall in the unemployment rate. barclays sees a pattern, a series of tight labor markets would bring our wage hikes, and coax more workers back into the labor market should be patient with wage hikes and allow them to put americans back to work. we're going to bring in -- >> no, no, you're on a roll. let's bring in princeton university economics professor alan krueger good morning, alan so i'm a little confused here. i thought there weren't people to come back where are these workers coming from that are getting 200,000 every month? and can it last? >> we don't see too many workers coming back. in fact transition rates from out of the labor force back into the labor force is continuing to edge down. the labor force participation rate has basically held steady it's exactly where it was in january of this year what we've seen is the

unemployment rate come down. we've seen people stay in the labor force longer not leave the labor force, and i think that's a positive thing. but, i think we need to change our policy if we want to bring back more prime-age women who left the labor force for example by having family leave. having maternity leave >> but they're coming back in already, alan. how many more could come back in they're still running, i believe, two percentage points below their rate in 2000 men are below it the overall participation rate of the economy is below it maybe they can go back to the old rates where they were before >> i think that would be terrific if that were to happen, steve. but bear in mind we're not seeing people come back into the labor force. that's plain wrong what we're seeing is the labor force stabilize, we're seeing older workers retire labor force participation rate has for older workers but still at a lower rate for workers overall. we have 10,000 workers a day retiring and i think if we want to see labor force rise we need the change in policy

we need to make work froendlier, particularly for women, and we need to change our immigration policy to encourage more hard-working immigrants to come to the u.s >> let me ask you whether or not you think you can count on these 200,000 numbers to continue. everybody always said, you know what we just don't have the workers to have these kinds of numbers is that your expectation >> i think if the recovery continues at the pace that we've seen, which is basically the pace that it's been recovering at since 2010, we are going to face a labor shortage. our demographics are pushing us in that direction. our immigration policy is pushing us in that direction so i think we should be prepared to see job growth moderating, with 100,000 jobs added a month. i think we'll see the unemployment rate stabilize or even edge down >> i just want to pivot real quick before we let you go you got into this cool little thing you're doing we've got the founder of graceland coming up in a second so i just want to talk about rockin' somibles you've been studying the economics of rockin' roll.

and you found it's become a little more egalitarian? there's more poor people coming into the music world, and more rich people. what's going on there? >> i think music is reflecting what's going on in society, which is polarization. we're seeing more people make records who came from impoverished backgrounds about a quarter musicians who are in the top 100 came from impoverished families. and also more coming from the top. i think that's reflecting what's going on in society. it's also reflecting change in genres of music. rap and hip-hop over half of the performers came from impoverished families. >> and what about the wealthy? why are there more wealthy people involved? >> well i think two things you know, the distribution of income in the u.s. is becoming more bipolar we have more people at both ends also, you know, it's expensive to train for music, to prepare not all schools are providing music education. and i think we're seeing a

reflection of what's taking place in society in the music industry >> all right, alan thanks for joining us this morning. alan kruger, princeton professor, a little bit of labor, a little bit of rock 'n' roll >> thanks, steve up next, up side the officelvis economy. 40 years since the king died the man in charge of managing at nt.s c. th'sex ♪ i switched to t-mobile, kept my phone-everything on it- -oh, they even paid it off! wow! yeah. it's nice that every bad decision doesn't have to be permenant! ditch verizon. keep your phone. we'll even pay it off when you switch to america's best unlimited network.

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box. making headlines right now, ken frazier announcing he is resigning from president trump's american manufacturing council in a statement posted on twitter frazier says in part our country's strength stands with diversity and the contributions made by men and women of different faiths, races, sexual orientations and political beliefs. he concludes, as ceo of merck and as a matter of personal conscience i feel a responsibility to take a stand against intolerance and extremism. so, it looks like he is resigning in protest over what's going on in charlotte and the presidential markets -- charlottesville >> both "the new york times" and abc news and others are now reporting that president trump's advisers have specifically said to him, before he made his statement on saturday, that he should use language that very directly attacks the -- what -- what some of these people were doing and saying and that he decided not to and i think that that plays in

to all of this, as people think about it >> hmm all right. totally separate, fans from around the world are now mobilizing on memphis. this year's el fis week festivities are expected to draw record crowds to honor the 40th anniversary of the king's death. on wednesday joining us now graceland holdings llc managing partner. we all kind of know how profitable, and what kind of business elvis inc. still is but i'd like to hear some of the actual details you know, what kind of money are we talking about in a year >> this year, 40 years after his passing, 35 years after the opening of graceland, will be by a long number, his largest revenue year ever. even accounting for inflation. so, the business of elevation will generate more revenue this year than he did at the height of his popularity. >> not velvet pictures, either

>> no. it's really, you know, we released in 2015 elvis and the royal phil harmonic. it was always elvis' desire to play live with a fiphilharmonic we released it with the london phil harmonic. that was the number two record of the year in the uk. justin bieber and one direction. >> then you've got graceland >> yes >> and a fairly new hotel that opened up, right four star hotel? >> 450 room hotel. the largest hotel project in memphis in almost a century. since the peabody in the early 1900s we were told by the banks, by people we shouldn't build it there. we were told by people it was the wrong place and the wrong time we opened it to record crowds. just really incredible place >> i was going to ask you, it was a pie chart of the revenue that you produce >> yeah. >> how does it break down? >> in 2017, the largest part of the revenue will be at graceland. it's really the number two private house that's visited in

the united states. the white house being number one. 600,000 plus people coming you're looking at over $100 million in revenue plus several hundred million dollars to the memphis economy >> okay. >> so, it's really -- it's the destination. graceland really drives. and what you wouldn't think is, our largest demographic isn't the first generation fan it's not our parents and our grandparents, it's actually 20-something and 30-somethings with families. >> and then after that what's next? >> you'd probably be looking at a song publishing catalog. and then his likeness, his name and likeness >> hmm >> when did the 20 to 30-year-olds decide that elvis was cool how did that -- did you have to help with that or just -- >> no. you know what? it's revolutionary is revolutionaries. you go back in histories who is leonardo da vinci, everyone knows who is mozart, who is beethoven. everyone knows elvis was a revolutionary.

with a few other people, marilyn man row, andy warhol, all of these people have grown larger since they passed. because what they did was so unique and so amazing. when you go to graceland, people talk about what is america great, was america great, elvis made america great people came out of world war ii, soldiers, who were, you know, were poor, most of them were poor, their families had never owned homes,their families had never owned a new car and elvis, they looked at elvis and said i can be like elvis, because nobody was born and grew up poorer than elvis presley. >> there's too many people think they can be like elvis the impersonators. none of them are like elvis. that helps too, doesn't it >> everything helps. but you have two young lads from liverpool by the name of paul mccartney and john lennon who because of elvis presleydid what they did. that's not my opinion -- >> who is your partner is priscilla still involved? lisa marie >> lisa is is my partner i am the managing partner.

i put up my own money to buy the majority of the graceland business we have a partner who put up the majority of the money to buy the name and likeness and publishing authentic brands group that's primarily loaned by leonard green. but lisa is our partner. lisa took over the estate, you know, when elvis passed away priscilla was the executor priscilla is an amazing spokesperson lisa is my partner i have the flesh your of talking to her almost every day. and, you know, all we're doing is listening to elvis. we're not trying to reinvent the wheel. we have something, you know, woo he have a revolutionary. if you look at, you know, you know if you look at apple. you know, would you too i to say no forget about what steve wanted let's do something different? no you try to listen and even though it gets fainter and fainter you listen to the dna. you listen to what elvis would want >> you ever seen an elvis impersonator who was really good you know riley keo, elvis -- >> and just a brilliant actress.

>> actress >> producer. she's a real philanthropist. i work with heron some of the charitable -- >> no good impersonators we've got some parties coming up >> bruno mars. so bruno, as a child, was an elvis impersonator and he's doing a pretty good job today. >> thank you we appreciate it and -- i like all the -- i like your outfit, too >> great american designer >> thank you >> okay when we return, much more on merck's ceo ken frazier stepping down from president trump's manufacturing council. outraged at the comments over the weekend. om t jim cramer joins us live frhe new york stock exchange we will get his take on today's top stories.

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welcome back to "squawk box. new this morning, merck ceo ken frazier has just announced he is resigning from president trump's american manufacturing council in response to trump's comments over the weekend we want to bring in eamon javers, who is going to join us right now. >> andrew, that's right. this is a tough statement here from ken frazier of merck against the president's response to the handling of the charlottesville incident over the weekend. here's the statement from the ceo of merck he says i am resigning from the president's american manufacturing council. our country's strength stems

from its diversity, and the contributions made by men and women of different faiths, races, sexual orientations, and political beliefs. america's leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy which run counter to the american ideal that all people are created equal. as ceo of merck and as a matter of personal conscience, i feel a responsibility to take a stand against intolerance, and extremism. ken frazier was here celebrating technological advancements in the drug sector. today he is resigning from the president's manufacturing council. >> eamon how many people are still on the manufacturing council. we're wondering if this is going to exert more pressure on some of the other ceos to make a stand. he is making this stance

>> yeah, that's right, melissa i don't have the numbers right here at my fingertips in terms of who remains on the council. we've seen some resignations in protest from the council that the president has put together remember in the beginning of the year he put together a burst of different councils involving ceos from every different councils involving ceos from other sectors. we saw elon muscks and others re-sign saying they disagree with how the president was proceeding almost all of them will be asked today whether they'll continue to stand by this president in the wake of his comments over the weekend and you can also except that the president and the white house will be under enormous president to have the president very visibly rectify his statement from over the weekend but this is not a president that likes to be called out as having made a mistake, that likes to admit

having made a mistake. we'll have to see how he handles that jeff sessions was on nbc today explaining that he thinks the president will come out today and talk but we haven't heard officially from anybody in the white house on exactly when or what format that might take. >> all right aman at the white house. >> let's get down to the new york stock exchange. jim cramer joins us now. we keep getting more and more with the way the stories work. that's the latest news, ken frazier. >> well, mr. frazier is a great man of conscious when it comes to the drug industry he has a fantastic drug and the one thing he has not done has made big ads direct to consumer say this is the greatest thing that has ever happened and i always add miemired him for thad

when it comes to the pharmaceutical industry he is representative of wha like he does not make promises that he can't deliver. >> starting to do a little more with that jim, i saw -- it was, i couldn't believe how long it took to talk about the side effec effects. it's for a very specific type -- is it small cell or non-small cell for lung cancer >> they tried it for a lot of things and when you listen to anyone that's lost anyone to cancer i lost my mom to cancer and the last thing you ever want to hear is hey, this one works and then you go and it doesn't work and you say well why did they make that promise and mr. frazier, going back and forth with him on that always congratulating him for not making broad claims because boy when your mom is dying of cancer the last thing you want to hear is hey, get into this study. he doesn't play it like that and

i admire that. >> a lot has been made of the north korea situation seemed to moderate a little bit recently but now we have to worry about the consumer do you think we're going to see a weaker consume frer some of the numbers that we get this week >> we have strong employment very good confidence there's a separation here. i know that people think this is appeasement or whatever. general mechan general mcmaster is a great man. anyone that read his book knows this is a thoughtful man if you go back and you read the battle you know these are guys not about to put people in harms way just for the sake of doing it because of a poll situation and not this politician. so i don't know. i'm not saying, they're nuts but

i feel like the chinese showed you they're on north korea's side as they were in the korean war. i don't know why we're so shocked but there's a sense of let's go back more normal and push it back and if that's the case we see teams like bm wear and i'm thinking wow that's good for tech. >> all right, jim thank you. >> thank you. >> we'll see you in a couple of minutes. >> that's unbelievable. >> this is coming in the president has tweeted now that ken frazier of merck pharma has re-signed he will have more time to lower rip off drug prices, exclamation point. >> that's just a remarkable. >> that came fast didn't it. >> a remarkable thing. it would be one thing to, if he came out with comments apologizing for what he had said or didn't say over the weekend it's another thing to now attack a ceo who is on your

manufacturing council -- >> was. >> or was for leaving it to protest the fact that he didn't call out what took place over the weekend as being what it is. >> it's not surprising he hits back he will hit back harder. >> but i have to say if i was a ceo on one of his so called councils, i'm not sure i would want to be on that council anymore knowing that if i drop out i'm now going to be attacked too. the whole thing, think about all the people on the council. the chairman of goldman sachs i believe he is on the board or the lead, he's not the chairman, he's the lead director of goldman sachs. used to be the clerk for thurgood marshall, how can you abide by this? i'm sorry so get so crazy about it but it's really something. >> you want them to re-sign. you're calling them out to re-sign. >> if you're looking at what

he's doing. >> in good conscious

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north carolina sub decidsided ae bit over the weekend s&p up 14.5. nasdaq very strong indication this morning for where it will open up 42 points or so. so we'll see 9:30 will come faster than you think. melissa, thank you for joining us. >> my pleasure. >> things are happening this week. >> make sure you join us tomorrow squawk on the street is next good monday morning welcome to squawk on the street. david is off oday. futures are up as the white house over the weekend tries to relay concerns about north korea. the president goes to washington this morning europe is rebounding from last week ten year almost back this week the