♪ live from new york where business never sleeps, this is "squawk box. welcome back this is "squawk box" where we are live from the nasdaq market site in times square i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. you will see that both the s&p and the nasdaq are down a little bit. nasdaq off by 13 points below fair value s&p futures down by 2. the dow just turned positive, barely the dow has been up four sessions in a row. it's been up 14 out of the last 17 sessions. now back negative. it's right around the flat line. we'll see where things go as we get closer to the opening bell in asia overnight, japan did see some weakness. japan ended up closing down by 0.1% hang seng down by a quarter percentage point shanghai was up by almost 0. %

and in europe, some of the early trading, you see some modest declines there ftse is the biggest decliner, down by a quarter percentage point. look at what's going on with the dollar the dollar which has been under pressure broadly for many months, you can see it's up against the euro today at 117.06 down against the yen at 110. this morning wti down another 7 cents to 46.71 >> president trump disbanding those two advisory councils, the announcement coming as one council was dissolving already the president in bedminster, new jersey eamon javers is nearby in bridgewaters eamon? >> the president will wake up here in bedminster, new jersey to a changed landscape in the relationship between corporate

america and the president of the united states. we saw this dramatic moment yesterday as you just described as the elite ceo advisory council was deciding to disband. the president issuing a tweet saying he had instead folded both of his ceo advisory councils here's what the president put out. rather than putting pressure on the business people of the manufacturing council and strategic and policy forum i'm ending both. thank you all. the president very much framing it as his idea to end these two ceo advisory groups. after that we saw this cavalcade of statements from ceos rebuking the president of the united states aetna's ceo saying i'm ashamed of the president's behavior and comments apple's ceo saying i disagree with the president and those who believe there is a moral equivalence between white supremacists and nazis johnson & johnson's ceo saying the president's most recent

statements are unacceptable. president must recognize the broad criticism that is he receiving. we've never seen anything like this, a breach between corporate america and the president of the united states. earlier the president called those who were leaving his councils grandstanders, and said he had plenty of people to replace them obviously no replacements have been named to either of those councils so far. back over to you >> the outrage is real i can't tell you about the number of phone calls i got from members of the council as this was going on yesterday and throughout the afternoon in particular outraged about the tweet that went out where he tried to take credit for it. i can't te tell you the word lyg was used multiple times. one of the bizarre and fascinating details that i learned last night was that when steve schwarzman had called jarrett curb noer saykushner toe

dissolving the group, jarrett asked him if they would be nice enough to write this in the press release that they were doing this in agreement with the president. they agreed to do that to be polite about it, and couldn't fathom the fact after having done that that then he tried to frontrun the entire thing. what is your -- what is the state of play now in your -- from what you know about what's going on with gary cohn? that was a big conversation late in the afternoon and into the evening about where he stood on all of this. >> we don't know what's going on with gary cohn there's been total radio silence from the white house on that no indication that anybody is preparing to resign from the administration i was standing about 20 feet from gary cohn during the remarks on tuesday, where the president got angry with the press, angry about this white

supremacist rally. gary cohn was looking down, looking to the side, wincing, looking physically uncomfortable standing there, but the question is whether he's morally or politically uncomfortable staying there inside the white house. we'll have to wait for a decision or nondecision from gary cohn. i think it's too early to say where that ends up you talked about the reaction from the ceos on this council. i was texting with one ceo involved in this yesterday i asked him what is going on with this council? he texted me back one word saying "resolved." you get a sense of relief there, and finality from that that some of these ceos were anxious to put this to bed and put this behind them. it's a tricky moment for american companies they don't like to be seen as taking sides in any partisan issue, but this was a bridge too far for them they couldn't -- they couldn't continue to be aligned with this

president. >> i was going save this for son fel sonnenfeld, these high-minded ceos, i get it that's fine. there's another side they do -- they are risk adverse. they have handlers around them you're talking about torches, people walking with torches, with nazi slogans. here's what holeman jenken's take was companies get in bed with politics when it service their interests and quick to run away when it doesn't. thus nobody is obliged to interpret the flutter of ceos away from the president as occasions of courage b still there are some -- these are some of america's most delicate pr canaries surrounded by risk-adverse advisers >> but that in itself -- >> from torches and white supremacists it took a while that's probably the point that you should make. it took until tuesday. >> tells how big of breach this

is coming from the president that these people would actually get up and say we're leaving we're disbanding this. >> this is holeman jenkins you can write him. >> when you use the phrase pr canaries -- >> talk to holeman >> you brought him up. >> i thought at least there's another side -- jeffersonen fsod will take these guys and canonize half of them for leaving. >> hold on you know what, let's get sonnenfeld on the line >> let him -- >> do you think he heard it or he can read it again >> we can read it again if he hasn't heard it. >> but the rest of the holeman je jenkins. >> i think he's a thoughtful guy. to the degree we talk about courage and leadership, there's a degree of leadership that it required to leave this thing >> ken frazier, maybe. >> ken frazier

>> but it ththen the guys -- >> there's no question there's safety in numbers. >> exactly >> having said that, there's a much larger issue at hand here the idea that the business community has effectively walked away from a president who has scribed himself as the business president. >> and who has made some efforts to make their lives easier, as many of them have said, despite the programs that they agree with, they can't -- >> i'm not saying there's a giddiness or a glow thee that ti happening among certain parts of the business word, but it's weird that since it means a lot of the pro growth policies will probably have trouble now, to be so gleeful about it happening is strange for business reporters >> but for ceos this was a conflicted time to try to get through. >> i understand. >> let me say one -- one

executive said to me last night, i will say it to you, joseph, because he's important -- >> there's 20 of them. i know some of the ones that you know that are like-minded with you. >> but they were like-minded with you up until yesterday. that's the difference. they said last night at some point, you can't tolerate it anymore. >> i understand that >> that we -- the business community -- have tolerated lying, racism, all of it in the name of tax growth, taxes, pro growth policy, whatever. and that at some point you have to have some moral courage at all, whether you think it's too late, sure to me, that's the issue at hand. >> when you say they tolerated racism what are you referring to >> they tolerated a president who has not been willing to truly condemn racism in a meaningful way >> they didn't tolerate that this is where they got it. i thought you were saying prior to this latest thing they tolerated racism

that's what you said, right? >> to the extent that you believe he has been slow to condemn -- look, the david duke comments are a perfect example he has a pattern and practice, this president, for reasons that i don't know -- i don't know what's in his heart. i don't know if he's a ratist. i want to think he's not maybe it's a political calculus, but it's his calculus, whatever that is, people have decide that's intolerable period i will talk to jeff. >> probably true to some extent that prior to any of this happening, the -- there are probably 55% of the country that wanted this guy gone in any case any way. it was pure revulsion. he's not my president. this is illegitimate he's an impostor you add this on top of it, some of that was already there. >> sure. >> okay. >> by the way, many of these ceos, when they say tolerated, not only tolerated, they came to

get get on these committees, in same way they were used as props by the president, they were using the president as a prop. >> even republicans are throwing darts at trump they bring jeff flake, lindsey graham, john mccain, they bring up the same ones at this point, i don't think you can get any republicans to -- other networks that are friendly to republicans, couldn'ts on tho say nice things. i understand but there's no way that when you see torches and slogans in this country and in 2017 -- >> shoe run tyou should run ther direction. tfrn >> it shouldn't be qualified even tom brokaw said this is the moral leader of the free world you can't be dogmatic enough

about your statements. that's what we're dealing with here >> jeffrey sonnenfeld has been waiting patiently, sitting, listening to this conversation have at it, jeff what do you think of what holeman jenkins had to say about this, in terms of the issue -- i think there are two distinct issues, but the issue of courage or leadership in this instance >> thank you i appreciate the treat of joe spending his ammunition in advance so i know where joe is coming from. i did see the piece in advance andrew, congratulations on your incredible research. joe, i somewhat agree with you this round in fact, i have right here that i was about to run until the dam broke yesterday afternoon, a piece called brother where a

art thou >> not coming to ken frazier's defense. >> i'm not canonizing these guys a half dozen of them, paul pullman did serves credit, meg whitman, others came around later. it took them twice as long as the boy scouts to rebuke the president. they have an 80-person board business roundtable has 22 people but i just learned that jaem mi dimon didn't respond had some minor surgery, had pulled a hamstring over the weekend. i couldn't understand why this brilliant, most revered outspoken leader wasn't engaged right away he was detained at a critical time and couldn't jump into action i think if he had broken the dam with ken frazier, we could have seen this happen an awful lot

faster people were hanging back and waiting to see what jamie would say. he is very courageous. but the business community, what i had written in this piece, which i pulled, i will tell you what i was going to say, is that the founding generation of the business roundtable would have recoiled no, in american history we have never seen this. no one watching this show, nobody's parents or grandparents ever heard of a business community that ever said no to the call to public service by the commander in chief of this nation they've never turned their back. never. you can find in every generation, the bernard beroffs, whoever has been there, they always stood to bring the business community with them right now this is something different. but they were late i don't canonize them, i celebrate ken frazier. ken frazier was a clariairian cl ben franklin warned if we don't

hang together, we will hang separately the business leaders were hanging separately this is what trump's mow tdus operandi is. china versus russia. canada versus mexico >> what was the moment you decided that this was too far? because in the past you have been supportive of his policies and some things you have seen. when was the moment you said no more >> i liked a lot of the economic agenda i think there's a taxation issue, deregulation issue. trade issues to adjust i was supportive of those. when you can see many of these ceos were sitting there as potted plants, wallpaper for photo-opes, several of them telling me that they felt that things were overscripted, they didn't get to meaningfully engage then we see this large loss of faith in the back drop, especially over the weekend from the general public, that was a real problem

to get this economic agenda through without the will of the people, it doesn't take a big endor endorse. of skinheads to get it through, it has to be the support of the general american population. that is what was hurting here. the fact they were not rallying around ken frazier that was disturbing surely as more and more signed e breaking open. it was frustrating watching you poor guys trying to keep up yesterday afternoon in two hours having this tidal wave of sudden declarations of conscious? where were they before they talk about so surprised how could they be so surprised about the lying this morning it's like claude raines saying in casablanca, gambling, here? i can't believe it

they knew that these were not the facts. so i think it was not credible for them to act like they're so outraged but historically we have a conundrum now. they can't go forward without a liaison, link to the business community. i expect the business roundtable will do a great job stepping up to the plate all 22 people on that board are politically savvy, strong performing ceos. i think they'll forge a link through the business roundtable now that the councils have collapsed. they won't be able to get legislation through without some wisdom the argument was you want a seat at the table to have that influen influence. this is a president who's smarter than most think. >> there's been a lot of e-mail traffic last night about the future of gary cohn.

i want to read a headline. this is the article sent around a number of people on wall street a piece in breitbart that some have suggested steve bannon was behind the headline, donald trump disbans ceo council. it goes on to say the council dissolving is a significant blow to cohn in the white house they go on to say he was rumored to be potential candidate for federal reserve, his chances at that are waning, too, given the disgusted remark that's been in the press. what do you think he should do >> i think if he steps away, it would crash the markets. i don't want to be an alarmist, but there's faith he will carry through the tax reform people are looking for. if not some of the deregulatory agenda wilbur ross, he's been quiet lately

he's not a kweiquay crazy perso. he's a smart guy elaine chao, you add it up, ten members of this cabinet are disaffected right now from jeff sessions to tillerson. it only takes 12 to throw this into a trump off the job for two weeks until the senate and house vote and that seems so farfetched so farfetched even two weeks ago. >> his adversary, cohn's adversary in the white house, bannon had some interesting comments in those interviews to me it was a little odd saying finally we put basically -- paraphrasing, put a dagger in the heart of the globalists that had influence in the administration these multinational ceos that were not allowing the true economic nationalism that we've wanted to sort of put forward. how do you do 3% and how do you improve the economy without the big companies? can you do it with a grassroots

effort finally you came out and stood up for our people, and you laid to rest the globalist influence of jared kushner and gary cohn that's not normal conservative economic policy to say we got rid of these globalist ceos. >> this hits to trump's vulnerables. he has a hair-trigger sensitivity, he doesn't like to be cornered. he has tantrums, and he's unsophisticated on these fronts because he's not a fortune 500 ceo, he has never been one he admires them, reveres them, loves the association, but also loved learning from them he did want to listen to them. as he gets isolated this way or insulated, it becomes a self-destructive pathology this is awful. he can't apologize he can't say no. i sent a message to some places to try to get a message to him,

i'm not in direct contact with him anymore, i'm sorry to say, whether or not you're jimmy swaggart or jim and tammie faye baker, when you come out with these apologies, the american loves contrition we love that it's not his mow tus op ra modus operandi if he could show something, build a bridge, people are willing to work. he's denuted >> we'll have ken novak on later. trump will not lose an argument. maybe eventually, jeff, you're right, maybe he will see some -- i don't know, i doubt it at 71 jeffersonen feld

jeffersonen -- jeff sonnenfeld i shouldn't do that. you knew what i was going for. >> andrew did all the heavy lifting. >> holeman jenkins, i introduce it, then it's not my problem after that the dow logging its fourth straight session as crude prices fell to a three-week low we'll talk strategy after the break. at the temperature of the hour, retailer and dow component walmart set to report. we will bring you the numbers and reaction from wall street. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered...

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no one else lets you do that. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. welcome back to "squawk box. stocks to watch today, shares of l brand down 5% after the retailer lowered its guidance for the year the owner of victoria's secret and bath body works reported a bigger than expected drop in sale store sales netapp beating the street. product revenues grew 10% on the year cisco systems latest earnings matched estimates, but the stock is under pressure after revenue from the security business missed estimates. we'll hear more from ceo chuck

robbins. he joins "squawk on the street" at 9:10 eastern. we have been watching the markets this morning, the futures are relatively flat at this point let's talk a bit more about what's happening kevin gittis is the head of fixed income from raymond james, and peter boockvar is from the lindsay group. welcome to both of you peter, let's start talking about stocks first we know that stocks yesterday still closed higher even though they gave back some gains. you can see what happened with the ceo councils and extrapolate what that might mean for trump's policies why is the market not more concerned? >> the market and the economy don't care about trump's personality, they only care if it influences the policies that are still to come.

>> it's hard to believe that won't happen at this point >> until they know whether tax reform is going to get kicked to next year because of his political issues now, they won't care every day people -- >> you're saying if the market suddenly thinks tax reform is not coming this year -- >> that's when they'll care. right now they're trying to separate his personality and current issues with policy and every-day activity of the economy. >> we talked about tax reform. it's very difficult. hasn't happened in 31 years because it's so hard everyone we talked to said you need leadership from the white house. that's the only way to get this done it's troubled, no question about it the market is reactive these days they want to see it right in their face, whether this will happen or not. >> you could see these guys, number one, it's self preservation all the guys in the house need to do this i don't know about the senate,

you could see them almost saying all right, i'll put trump in a separate compartment here. >> i could see that in the house. >> he'll sign whatever they send him. whether they cut off the nose to spite the face and say i won't work hard for tax reform because i no longer am backing trump that doesn't make sense. >> what we've heard in the senate is much different tax reform than what trump himself has talked about 15% to 20% for corporations it might just be a cut, not reform >> i think there's hope that there will be something. like joe said there is self preservati preservation a lot of these guys have to run next year, they're all bandied about getting some tax cuts done whether or not it happens, the odds are shrinking >> what do you think happens to stocks if there is some realization that it won't happen this year? >> right now earnings estimates are not including it so, from that perspective, maybe

it won't have much of an impact. but we're in the ninth year of this expansion in order to continue this expansion you need some tax relief and some stimulus kick. and it just -- we're at a late stage to the economy do you put into extra innings because of tax reform? yes, if we don't, people will be worried. we're tightening in this moderate economy we need an offset. >> we are also right in the middle of this, what's happening now. we know about news cycles. you heard jeffersonen feld ta jd talking. i don't know, is trump going somewhere in the next three years? i don't know i don't know how this works itself out how there's some healing with this i wouldn't write him off

completely here just because of this >> no, kevin, when you look at fixed income, the treasury market, what's driving it now? is it the back drop with tensions for north korea escalating, receding is it what the fed is doing next the economy? what's the overwhelming issue now? >> becky, the treasury market in particular has some good things going for it a few things against it. some things causing investors to step back no the market is the lack of inflation for starters two is the fed if you notice from the minutes yesterday, the members are torn on when inflation actually will pick up and the much expected conversation about reducing the balance sheet in september looks more like a september announcement of a plan or that they'll set a dated for a plan that they may fatake on the balance sheet.

then geo risk looms large out in the marketplace. every time we have some we'll see this spike yesterday it was mostly about comments from the fed and hangover about geopolitical risk on the flip side, treasuries, higher yields can happen if something does happen in washington the vol is so low now, the high/low range is about 8 basis points from the ten-year lastly the economy is mostly acting like it supports higher rates, it's just that enough rates happen to keep it from coming true. >> kevin, peter, thank you both for your time. >> couple of tweets. it's interesting, i just said maybe he walks some of this back in walking it back, he has lindsey graham he always has a guy -- >> guy to slam >> publicity seeking lindsey

graham he wants to make the point he didn't say there was a moral equivalency between the kkk, neo-nazis and people like ms. heyer. such a disgusting lie, he can't forget his election trouncing. it's almost a combination of making the point that i didn't -- i wasn't saying it was a moral equivalency -- >> but he didn't say -- >> he's mad at lend indsey grah. >> so much for general kemly k controlling the situation. >> coming up, ceos parting ways with president trump we will talk with mike rosenbaum. >> another tweet >> what's the tweet? >> the public is learning even

more so how dishonest the fake news is. they totally misrepresent what i say about hate, bigotry, et cetera shame, exclamation point so, as we head to break, we look at yesterday's s&p winners and losers ♪

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you're watching "squawk box" live from the nasdaq market site in times square. welcome back our top story, president trump shutting down two business advisory councils after a backlash over his remarks following the events in charlottesville. our next guest has created two companies to help diversify the workplace. let's bring in mike rosenbaum, former white house economist turned tech entrepreneur founder and ceo of arena thanks for joining us. off camera we were making the point this is a different world we're living in now. not a ceo values diversity and doesn't live in the world that we're living in now. this almost seems like a retrothing retr retro thing to be talking about these issues again public opinion has moved far from where we were 10, 1520 yeayea

years ago. >> when you think of the job of a ceo, you need to be out there representing your brand and the values of the organization diversity is a key value of so many organizations today even more significantly today, i think about more myself as a ceo, for the organizations that we work with, authenticity, being honest about who you are as a leader, who you are as a human being is kricritically important. that's core to, you know, to everything you are as a ceo. >> but the -- a lot of times it's about the bottom line when can you distinguish between actual moral courage with a ceo and just doing something that he knows pr-wise is necessary or for customers, because they run the gamut from the right all the way over to the left, or for shareholders, a lot of these guys are interested in survival and the bottom line as well,

too. you can't separate the two, can you? >> when you think about the culture of an organization, it's that culture that ends up driving the financial results of the organization when you thinked about the role of the ceo, it's to drive the culture. when i think about being honest and authentic and getting the trust of the organization, being able to communicate to the organization that authenticity is important, and to drive those values inside the organization, that ultimately drives financial performance. >> can it ever be detrimental if you're too worried about the way things look? too worried befoy ied about howe perceived? too politically correct to do the right things for a company or is it always -- the long-term success and shareholder value will always be correlated with doing the right thing? >> you know, it's interesting. a few minutes ago you were talking about the idea of

leaders having lots of advisers they are >> they do they are pr canaries >> thinking about risk aversion, thinking about being afraid of what might happen. i'm in the business of collecting data on people and predicting how someone will do in a job when do you that, we usedictive do that. you find organizations become more diverse when we think about how do we talk to a client about that, the organizations we're working with are concerned about diversity long-term, but the immediate need is a financial return the immediate need is moving an organizational outcome so for us when we're talking to a client, some of the first stuff we talk about is by doing a better job, putting someone in the right place, don't even

think about diversity for now, doing a better job of putting someone in the bright place, you will generate a better result. when do you that, you will get a financial return and the bu p biproduct is the organization will become more diverse over time when you think about how people hire, they look at a resume, conduct an interview when that happens, you do end up having bias in hiring. >> meaning we want people like us >> we want people who look like us >> or who are like us. they went through the same sort of schools, the same sort of internships. >> that's right. exactly right. the first time i ever worked in the government, you know, i got a job because the person who was hiring me had gone to the same graduate school i did. it's exactly what you're talking about. for us, you know, our client base processes about a million unique job applicants a year

it's a relatively significant data set when you look at the percentage of each group in an applicant pool, before you use techniques to remove that bias, and you look at the percentage of people who get job offers, those numbers look different when you use techniques, orchestras have been doing this for a while, when you suck that bias out, quu you can do a bettb of that matching >> i wonder if there's times that pr is at a certain point, public opinion is at a certain point, it's a fad, error or not the right strategy sometimes it might be the ceo that ignores the -- i was thinking about exxon there were times in the past when oil prices were $200, where there was shareholder pressure for exxon to move out of hydrocarbons and move to renewables, to wind. whyitioning th

entire company to this some of those guys, lee raymond, they existed they continued developing hydrocarbons, natural gas, fracking, horizontal drilling, which was not fashionable and not what you would want. it's not always that you just do what is the easiest thing to do pr wise. sometimes you have to have the courage to do what you need to do for the company >> absolutely. frankly, as a human being. just -- >> well -- >> we're talking about that today. you're not just a biz ps leusin leader, you're a human being >> there was a time that we were absolutely sure red meat would kill you, cause cholesterol, heart -- as it turns out, the cascade of consensus is not always -- you have to do what's right. mike, thanks >> thank you very much for having me. when we come back, earnings alert. dow component walmart expected to report at the top of the hour we will bring you the results and the reaction from wall street plus president trump disbanding two business advisory

councils former yum brands ceo david novak will tell us what challenges lie ahead for executives in america. and later the council on foreign relations president richard haass will talk north korea and the political environment at home.

welcome back to "squawk box. time for the executive edge. google parent alphabet bought a start up that makes an app that can change the hair color in your selfies >> what? >> yeah. >> if yyou want to be blond, pik hair -- the company is called aimatter it was founded last year, based in belarus it's fabby apps let users make and transform selfies. terms of the deal were not disclosed. what abo >> what about adding hair or filling in areas of head -- >> we might do that. >> i'm game. >> so they were bought too bad they can't go public for

$10 billion. that is -- that might be better than putting dog ears and a dog nose on people what was that worth? the dog ears and dog nose? that was like 5 billion, right for a second >> yeah. >> for a millisecond >> we're -- our parent company is a proud owner >> i didn't know that was instagram or snap. i have plausible deniability a former bank of america technology consultant used his access to the company's computer system to share more than 50 trading tips with friends. that's according to federal prosecutors who unsealed an indictment against five people who profited from the tips prosecutors say the consultant, daniel rivas, accessed the bank's internal deal tracking system to generate more than $5 million in illegal trading profits. bank of america said it fired rivas in april and cooperated

fully with the investigation rivas went on to work at rbc but has been suspended from that institution. results just coming in from china's e-commerce giant, alibaba. earnings per share came in below forecast, but the revenue did beat estimates revenue was up by 56% in terms of an increase of a year earlier. you can see that stock is reacting it's up by -- up by a declining amount up by 4% when we first saw it. nowup by 2.8%. the adjusted earnings per share were 1.17. revenues, 4$4.7 billion they're talking about their digital media and entertainment increasing 30% year over year. by the way, the cloud computing business has grown 96% year over year, has reached a smimilestonf 1 million paying customers they are the amazon of china. when we return, we'll talk more about that and the effect

of trade on employment in america. we'll take a closer look at what happens when trade kills yr ou job. we have that story when "squawk" returns. 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. going somewhere? whoooo. here's some advice. tripadvisor now searches more... ...than 200 booking sites - to find the hotel you want and save you up to 30%. trust this bird's words. tripadvisor.

welcome back, everybody. talks to renegotiate nafta are

under way and we are taking a closer look at the effect of trade on jobs in america >> good morning. president trump talked a lot about trade and bringing jobs back to america while on the campaign trail as a candidate, but what actually happens to jobs that are displaced. for some the traded adjustment program can be a lifeline helping to retrain workers taa is a federal entitlement program administered by states he lost his job at american airlines back in 2011 after 22 years when his position was shipped off to china as the company restructured in bankruptcy >> you get comfortable in a career that you've been doing for many years and you're at a good place in life, you're making money, you're saving. everything is comfortable. you get taken out of that environment and it's a whole new world. >> at 45, he went back to school and retrained to become a surgical technologist at cook

children's medical center in ft. worth, texas, taking prerequisite courses in science and going up against younger candidates for his new position. >> the main motivation is my daughter i've been a single father. i've raised my daughter from birth and it's just been me and her. i have to provide a good home for her, so i knew i had to find a career that was beneficial for both her and i, one that i could survive on and make a decent living. >> he is hopeful others won't have to rely on taa under the new administration the way he did. however, given all of the america first rhetoric trump has touted, they did request an increase for funding for taa at $790 that's up from $673 million. but i think it says a lot about a person who's been in a career for 22 years in manufacturing and working on engines and painting planes to go back to school, totally rejigger their brain and work on something new like this. >> i also heard, i read

somewhere yesterday that the number of americans who are quitting jobs in manufacturing is much higher than the number of americans who are losing their jobs in manufacturing. that this is a sign of a healthy job market, of people having choices and opportunities and being able to do different things. >> i read the same article in "the watering post." the guy at the carrier plant said a robot bumped into him at work so it's definitely interesting but good to see that he was able to find a new job. >> that's a great story. coming up dow component walmart set to report. we'll bring you the numbers and reaction from an analyst next. plus former yum brand ceo david owknovak talks about president trump disbanding his councils and the challenges they face in 2017 but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment

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good morning, everyone president trump's corporate councils collapse as big business rebukes his response to charlottesville. a look at how the dramatic turn of events at the intersection of wall street and washington is impacting your investments. plus, how does this latest washington fallout affect the president's global agenda? we'll speak to richard haass. and walmart reports. the latest quarterly results hitting the wires. we will run you through the numbers right away >> live from the beating heart of business, new york city, this is "squawk box." don't say it, don't say it good morning, welcome to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square they're saying stuff that cannot be said on television. i'm andrew ross sorkin along

with becky quick and joe kiernan. the dow looks about 12 points off, the nasdaq off about 15 points down and s&p 500 looking off about 3 points we do have a number of earnings reports this morning, including alibaba and one that's crossing the wires as we speak. >> walmart quarterly results just out courtney reagan has the numbers. >> good morning to you, becky, and to everyone. walmart second quarter earnings beating the street by a penny. that's adjusted on stronger than expected revenues of $123.55 billion. also raising the lower end of its previous guidance range now at 430 to 440. that brackets analysts' consensus of 4.37. u.s. comp sales growing 1.8% in line in estimates and the 12th straight quarter of u.s. comp sales growth traffic also higher for the 11th straight quarter nine of the 11 of walmart countries where it operates saw

their comp sales grow. now, the discounter's u.s. online net sales grew 60%. the sku count, the items available, grew from 50 million last quarter to 67 million now walmart's cfo brett biggs, i spoke to him on the phone just a moment ago and he tells me it was another solid quarter, we're pleased with the first half of the year one of the things i'm most excited about is that we continue to bring together what we are doing in the stores with what we're doing online. he calls out the strength saying it was broad based over categories, segments, format and time but does point to the grocery business, which remember makes up more than half of all walmart sales saying we're happy about what we're doing in the food business. online grocery continues to grow rapidly. order online, pick up in stores, that those numbers do get reported in the e-commerce numbers. i did ask about walmart's position on the president's councils disbanding and they pointed me back to the group statement and said they didn't have anything further to offer

at this point. >> let's take a look at those shares it looks like they are trading, the bid and the ask surrounds where it closed yesterday. >> stick around, we're going to bring in chuck into this conversation, senior research analyst. what's your take >> it's pretty much an in-line report i think the over/under for the comp, we polled a bunch and it was around one-eighth to 2%. the eps being $1.08, we'll look at the quality over the next few minutes. i think the raise and guidance from 440 to 430 to 440 is pretty much expected so i expect a muted reaction to this this isn't a blowaway report we've seen a lot of bad numbers out of retailers the past week and i think this is a pretty solid report. >> doesn't that -- i mean since we have seen such crummy numbers from a number of folks, walmart has a really solid trend

positive comps for 12 straight quarters, that's impressive when a retailer is pulling in $123 billion a quarter. >> but the setup for walmart was a little tricky here you had a number of upgrades over the past week the stock is up 17% year to date the xrt is down 12%. this has been a big outperformer as we saw with home depot, even if the print is perfect, the stock can get sold off temporarily. does that take anything away from what walmart is doing in the near term, absolutely not. they're outperforming, they're taking share but i think this number needed to be a little bit better today to drive the stock higher, we'll see. >> that's the short-term story play out the long-term story in terms of what we're looking at in terms of the bricks and mortar piece of the business and the electronics, e-commerce piece of the business. >> well, retailers is a case of the have and have nots right now. what walmart has done under douges leadership is

revolutionary. she's completely flipped walmart. i've never liked walmart in the 12, 13 years i've covered it i like it now. the fact that they're merging their brick and mortar operations with their digital operations is exactly where they need to be this is a two-horse race right now between walmart and amazon i don't know what the sales online was, i don't know what the gmb was. >> up 60%. >> so what they did in the second quarter again, continuing market share what they're doing on the e-commerce side. longer term this is a winner today i'm not sure it's enough to us we think it's going into the high 80s, low 90s. the fact they raised guidance is indicative i saw they raised third quarter comp guidance up 1.5 to 2%. >> they're acquisitions, things like bonobos, shoebuy.com. how should investors think about

this part of the strategy? >> i think it's one of the most attractive things they're doing, frankly. digital native acquisitions is exactly what they need to do they get customer data, intellectual capital, younger with the customer. i think these make a ton of sense for them are they all going to be home runs absolutely not. >> before we let you go, one final question, which is this. we're about to have a conversation about yesterday's news with the ceos and trump giving up this council is there any kind of economic implication for walmart because dodd mcmillan was as outspoken as he was monday night and then getting off of this council? is that going to have any impact are you a believer that there are customers on one side who are going to run to walmart to say thank you, doug, i think you're showing moral leadership and other people who are going to say i'm boycotting this store because i don't like the political decision. >> i don't think it's going to have any impact at all i just don't i could be wrong, but i think it's news for a few days

we'll see what happens i think on the margin, i don't think it will have much of an impact to the average walmart shopper. >> there's a few of those. 123 -- really? 123 with a b. >> with a b in one quarter the number of -- >> you need scientific notation to talk about the revenue. >> that's a third of the country. >> it's incredible. >> it's great. >> the guy just died. >> sam walton. >> yeah, yeah, yeah. >> anyone watch michael keaton yet? >> yes, as the founder, ray kroc >> yes. >> that was an amazing story. >> did you see it? >> no, not yet it was sort of an under-the-radar film. >> it was underappreciated it was very well done. >> it's a good movie for you. >> i bet our next guest saw it because he was an icon in fast food for more on the story of the

morning, the relationship between president trump and the leaders of american business, our next guest co-founded and led a company of 1.5 million employees with over $13 million in revenue let's bring in david novak, former yum brands co-founder chairman and ceo of golead.com you look great i like that full head of hair, looking good thanks for joining us this morning. >> it's great to be with you, joe. i'm glad to have the hair back too. >> looking good. you made an interesting point in the notes that president trump does not like to lose arguments. he just tweeted again. just let me get this in before we talk about all this great to see that dr. kelly ward is running against flake, senator flake. >> he calls him flake. >> against flake, jeff flake that must be the name, who is weak, capital, on borders, crime and a nonfactor in the senate.

he's toxic and this is -- this just goes to your point, david. with everything else that's going on, he fights back no matter what. and with all the other things that all the cable channel, including ours, is talking about, he's still got it out for jeff flake you've got to admire the tenacity either admire it or -- maybe not admire it, but at least see that it's still there >> you know, many times, joe, one of your greatest strengths can be your biggest weakness i think one of the big challenges that president trump has is managing his desire to win any argument that's not possible no matter how much power you have. i think it's very important as a leader in any situation, whether you're running the country or you're running a company is that you've got to take the moral high ground, you've got to establish a great culture. i think every ceo that i know

that's good makes establishing a great culture their number one work priority because when you get that right work environment, then you get the very best results. and when you have a great culture, there's a set of core values that people know are basically the rules of the game. and when you follow those rules of the game, you do well, you can continue to keep your job. but if you break the cultural values of a company, you have a real challenge in almost any great company of staying on board. so i think the leader has really got to establish what you're all about, what really matters, be unequivocal on that, and make a stand for what really matters, whether you're the president of the united states or whether you're the ceo of general electric >> david, you could have easily been on any of these councils, obviously, and we did see one of the president's advisers, steve

bannon, actually seem to celebrate a break with the big corporations because it allows economic nationalism to be pursued. in the future, just give me a guess, do you think that this is the end of trump and corporate america or do you still think he'll call -- certain people will take his call and they'll talk about things. do you think we can just say the next three years there's going to be no cooperation whatsoever with corporate leaders how does this play out because he's not leaving office as far as i know any time soon who knows, but -- >> i think -- you know, i think the ceos in america are great patriots i think they want to serve our country. so, you know, i can't imagine ceos not returning a president's phone call to get some individual advice. we'll still have the business roundtable it will be there as a vehicle to talk to the president and the

administration and give them their views. so i think there will continue to be a dialogue from what i understand, the two committees that are being disbanded really have not met that much and a lot of the members were frustrated because they weren't getting heard that much anyway. so sometimes you can have too many committees. i think if we can really make the business roundtable work on behalf of the business community, we can get after the agenda that we really need to get after, which is more and more jobs, higher quality jobs, attacking the infrastructure, improving the tax code you know, all the things that need to be done. the unfortunate thing right now is because of where we're at, we're taking our eye off the ball and focusing on something that obviously is a big challenge and issue in our country, but at the same time, we've got a lot more to do that we need to get done to really improve the lives of americans. >> and, david, that's the question how much has the agenda, the pro growth agenda, the tax cutting agenda, how much has that been threatened by these events

do you think this is a temporary setback or something that completely disrails it for the foreseeable future >> i just think it makes it harder to do i think it's a temporary setback. i think people will get back on the issues we have people who need to get the job done if you don't get the job done, you don't get to keep the job. if the president has any desire to run in a couple years, he's going to have to start making a lot more things happen, and that means he's going to have to start taking people with him there is no leader that gets things done by themselves. i can't really be at the top of the mountain and just provide all these edicts ultimately you have to take accountability for the results that are being generated and in my mind, whether you're the ceo of a company or you're running our country, you're accountable for what's going on in this country and how much progress we're making. and i really hope and pray that president trump will get back on the agenda that he got elected on and will get people to help him get done what needs to get done in our country.

>> that brings us back to some of the stuff that may have been what he was elected on vis-a-vis china. how many times do you think you went to china, david did you ever total it up >> i went a lot of times it was a big part of our business you know, we actually spun off our yum brands spun off china. >> not only did we -- are we starting to ramp up on some of the, i guess, intellectual property and other things that we have a problem with, we needt kind of language that kind of language basically puts people in corners and gets people's hair on their back to

rise and keeps them from getting at the solutions we need to get at when you look at china and the united states and the rest of the world, we're all intertwined. we need to work together to create a great global economy. i think going in with that attitude gets people to work together in a much more positive spirit now, i'm not naive on this, there are lots of challenges that need to be done, but i've always believed that positive energy lifts people up, negative energy brings people down. when you go into a conversation with a lot of vitriolic comments and divisive comments, i think it's hard to get everybody on the same page so that you can at least get a common understanding of reality and then start to make progress. so i think these big, big comments like that don't do a lot to move the ball forward. >> back to this whole economic nationalism, though, what we are seeing is the president and the administration making moves to really go after china for what they have been doing in terms of intellectual property theft. and while that may not be a huge

issue for yum brands in terms of intellectual property, it has been a big issue for a lot of other ceos how do you see our relationship with china after these moves >> becky, you're right about yum brands the only intellectual property we had was the colonel's secret recipe and that's those 11 herbs and spices but i think what's going to happen is we've got to get more of a level playing field with china and i think we have to negotiate our way there and find the win-wins that will move both sides forward. i don't have the answer to that, but i do know that you have to -- you have to take an approach that it's possible and that we can get there by working together not at just basically attacking each other and i think the right approach with chinese leaders will get us to the right place and vice versa. >> you got hair growing on your back what did you say, your back hair was standing up? it's everywhere, huh

>> on the back of your neck. >> in the back of your neck. that's a missouri phrase, you probably don't understand that. >> if it starts growing there, wouldn't you have it -- is that painful? just have it ripped off the way -- "40-year-old virgin". >> i don't have that problem >> are you -- how's your -- are you out on the -- are you doing that now or -- you got some time now, right are you swinging what are you down to you must be a 2. >> no, i'm playing a little bit. but, you know, i'm really having a fun time building this digital leadership platform called ogo lead. >> you're not at yum anymore you don't have to say, no, golf, what's that? i've never done -- all right, anyway, great to see you thanks for coming on today, i appreciate it. >> it's my pleasure. the trump backlash weighing a bit on the markets we'll talk about where stocks are headed after the break. and then former office depot

ceo steve oden will join us with his thoughts later richard haass will join us to talk cha,in north korea and a lot more you're watching "squawk box" right here on cnbc 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.

that's why at comcast we're continuing to make4/7. our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back to "squawk box," everybody. let's tell you about some headlines from this morning. cisco systems, the shares are likely to weigh on the dow today. cisco's quarterly profit of 61

cents a share was in line with estimates but its sales in its closely watched security business missed forecast and that stock is down by 2.75%. we have a number of key economic reports that are out this morning before the bell at the open we're going to be getting initial jobless claims and the philly fed index coming up at 8:30 eastern time followed by industrial production 45 minutes later. alibaba shares are higher in premarket trading this morning just a note that some of the numbers you may be seeing on the screen when we report those, those are in rem and d the chinese e-commerce giant did beat on the top and bottom lines. that stock is up 4.6%. when we return, is washington gridlock coming or continuing? we'll talk about the fallout of ceos quitting the president's councils up next, though, more problems for hbo. a number of social media feeds were hacked, including the "game

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of pressure. dow futures indicated down by 25 points s&p 500 futures down by about 3.5. the nasdaq off by 14 joining us is jeremy zaren, head of investment strategy for ubs wealth management americas also hans olson, global head of investment strategy at stifel. gentlemen, what do you think we can talk about how the futures are under pressure, but it's really just down 25 how much of this is because of concern about trump's agenda how much of this is because we've been up so many days in a row? hans, what do you think? >> yeah, i think it's more about the -- we've had a really good run. august and september are typically seasonally weak times of the year. that's been the case for the most part in august. i'd expect it will be the same for september. and then we'll get back into earnings season and it will be much more about economics and earnings. >> jeremy, that's certainly been the case that we've been watching the economy, been watching earnings come in very

sharply. what are your expectations about what to expect the rest of august, because we have written off geopolitical concerns, we've written off all this headline risk out of washington, we've written off the ceos kind of abandoning the trump administration at this point what do you think? >> i think there's lots of evidence so far this year that the market is putting the political backdrop as a sideshow and the market is focusing on the economy and economic fundamentals have been good and improving. we've seen payrolls over 200,000. it's certainly been the earnings story. so second quarter earnings up 10%, second quarter double-digit gains and importantly it's not just the earnings story domestically we've seen a broadening out of global growth in 90% of countries that have pmis above 50%. that's the highest figure since the great financial crisis. >> you both sound pretty laid back about things. is there anything that concerns you when you look out there? >> well, i guess it's the pace of the earnings. we've had an earnings recession in the united states that just came to an end at the end of

last year. that's fairly rare over our history to have an earnings recession outside of an economic recession. and as jeremy said, if you look around the globe, earnings are on the rise so i think that gives us some measure of protection the question is how fast the earnings can continue at i think the easy money has been made at this point >> flies on set. >> another one bites the dust. and we go from there. >> jeremy, if you were telling people how or where to invest, where would you tell them to focus? >> i think we're still in a bull market you want to be innic quits relative to bonds. that's more of an indictment on the low yields from the fixed income market rather than equity values are attractive. they're not stretched to any extent like we've seen in other periods. >> what would you start to think that we're out over our skis, to

use a phrase i think that we use too often? >> there's no evidence that the market enters a bear market unless you have a recession. so unless you start to see signs that economic growth is weakening, if you start to see the fed become overly hawkish and you think that will stunt economic growth or as you start to see some of the traditional leading indicators suggest that growth is slowing then you start tightening lending standards. >> you've been out over your skis since august of last year you've tumbled so many -- how long -- you're one of those long jumpers on skis? you're still like this >> i'm waiting. >> waiting to land >> it's a long jump. >> thank you. >> thank you. >> i killed that fly. >> did you get him >> yes i'm worried about peta. >> where did it go >> i caught the fly and leedreas it outside where it can return to its family and make more flies. these days families want to be connected 24/7.

that's why at comcast we're continuing to make our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. good morning, welcome back to "squawk box" right here on

cnbc we're live at the nasdaq market site in times square fed vice chairman stanley fisher warning against the dangers of loosening regulations on banks he just told the "financial times" such moves are dangerous and extremely short-sighted and he thinks current political thinking could move the u.s. back to where it was prior to the 2008 financial crisis. also the white house has approved obamacare cost-sharing payments to insurance companies for the month of august. president trump has threatened several times now to stop those payments, those subsidies estimated to be a total of $7 billion for 2017 we want to check in once again on walmart shares. the stock now lower despite a beat on the top and bottom lines for the retail giant comparable store sales rose for the 12th straight quarter but we had an analyst on a little earlier who said in part because there had been a number of analysts who had raised their guidance just even in the past week that perhaps just that alone maybe expectations were

too high. >> they're talking about their full year earnings expectations 430 to 440 the street was at 437. a number of hbo social media accounts were hacked late yesterday adding to the pile of security issues that the company has following leaks of scripts around key shows like "game of thrones. the hbo twitter account was taken over by a group. they compromised the hbo and "game of thrones" accounts the hackers posted about trying to get #hbohacked trending they have been responsible for high-profile hacks of social media accounts, including several belonging to facebook ceo mark zuckerberg and google's ceo. in its post they asked hbo to contact them it was deleted after hbo regained control of the accounts. the ceo exodus from

president trump's advisory council, joining us is the president and ceo of the committee for economic development. he's also the former chairman and ceo of both office depot and autozone steve, i don't know how much the commentary you've heard or whether you so jenkins' piece, but i think it's somewhat telling that he used the term -- ceos a lot of times are pr canaries they can't stay long if something threatens either their customer base or their shareholder base should we look at this as a courageous move or just sort of just bailing when the going gets a little bit tough >> yeah, i think it's very unfortunate that they have folded these two groups. you know, all the reasons that existed for the establishment of both the manufacturing council and the strategy and policy forum still exist.

they were put together in order to advise the administration on nafta and trade, taxes, health care, regulation we haven't gotten any of that done yet, so all those reasons still exist. so to get rid of these councils at this point is cathartic but at the same time we still have these needs. so it comes back to what should be the role of ceos as it relates to advising administrations and whether you're talking about a democratic administration or a republican administration, i think companies and ceos should be nonpolitical and focus on policy >> and we've also talked -- if the president calls any of these guys individually, i can't imagine they wouldn't return his call and then the other thing that's kind of interesting, steve, it's certain parts of the -- maybe the left or the mainstream media, i kept hearing about how these guys never met, they never accomplished anything, that when they were there meeting with the president that, you know, he didn't really listen to what they had to say so it was really useless, none of these things

were doing any good, but the minute they're disbanded, it's like the biggest news in the world for the same people. any truth to that? >> well, they just got started i was on two presidential commissions a few years back in each case we set out what are the objectives of the commission, we set out that we were not political we weren't there to serve the politics of any administration, we were there to serve the objectives that were set out on the commission it's too bad that these commissions were not set out the same way you have to start with saying why do we exist? and the time with the president is not the important thing, it's the time before that and the debate and what advice are you going to provide to the administration and so they had not -- they hadn't gotten to that yet. so you come back around and say, all right, we got rid of these two. you still need to put together advisory groups or advice in some way we don't have the positions filled in this administration and we've got some really serious issues and some

important things that we need to deal with right now. >> steve, but here's the issue is it possible, as joe just mentioned, for these executives in these companies either directly or through lobbying organizations and whatnot to still get their message across, to still contribute on the policy issue, but that the larger issue was that these councils and being attached to them to some degree may have very well been some theater for both sides, by the way, in this instance in terms of being props for each other, but that the -- just being attached to this sort of council or committee unto itself at some level, even if you put the policy stuff aside, that that was becoming a brandibran brand issue and there was a leadership element to all of this. >> joe was right, any of these ceos can pick up the phone and talk to the president. the benefit of this was to provide a discussion group where

they can come to some sort of consensus on here's the policy path that the administration should follow, so now that's gone you're right also, that the lobbying group still exists. but the lobbying groups all have narrow political goals to either defend their point of view or industries. >> think about this, think about public polls recently about tax reform and cutting corporate taxes. there's a lot of people out there for whatever reason, i think it's misguided, but they think corporations don't pay enough in taxes. here you have the average american watch the president meet with all these ceos, what used to be known as fat cats lo and behold, these fat cats think they should have lower corporate taxes. how does that help sell the message to the average american anyway it probably doesn't. it's the president meeting with all these highly compensated ceos talking about cutting taxes for their corporation. i'm not even sure that's that beneficial in selling the whole

program. >> well, and so then it comes around what's the role of business leaders in society? they have got to educate their employees and they have got to educate the public look, this is our gdp. we are a market-based economy, businesses provide the gdp and the growth of the economy. if they're not listening to the business leaders, we're in a world of hurt. so, you know, the economic issues still need to be worked out here. >> steve, call them economic issues or not. i was going to say what do you do as a ceo, steve, if you're on one of these councils putting even the morality issues of what the president said or not when you don't feel that you are being listened to? so the paris climate accord, obviously many of those ceos advocated for a position that was not the president's. on the immigration issue, they advocated for a position that was not the president's. and then to see the president effectively attack or at least verbally attack ken frazier, for

example, or doug mcmillan for the comments that they made, that makes it very complicated very quickly. >> welcome to the real world, though this is the point of being a ceo. you're a public figure everything that you do is scrutinized. maybe not as much as the president of the united states, but you're out there and that's part of the role. your role is to lead and to take positions on issues and to advise the president on the right thing to do regardless of whether you're going to be listened to in every little detail that you provide. you still have an obligation to lead so these guys need to get together and they still need to provide policy advice to the administration, otherwise you're just delegating it to a bunch of politicians who will politicize everything that we do. >> but i do wonder how useful it is in terms of pr. you would never see president obama meet with jamie dimon and lloyd blankfein to figure out what to do with dodd-frank obviously. so i don't know -- does it look

good to meet with corporate ceos about cutting corporate taxes? that doesn't help with the average person. >> no, but you can talk about ways to do it correctly, ways to do it without spoiling the job creation. >> demagogue. >> but to walk in blindly into some of this stuff seems a little ridiculous. >> certainly with the border adjustment tax, the ceos had some things to say about that part of tax reform. >> he's actually right we'll talk more about this. >> steve, thank you very much. for more on this story, let's bring in another voice mary ulbein is from texas university's school of business. mary, steve just set this up saying that the ceos need to have a voice, they should be consulted. but so far we haven't seen a president who tends to go back to people who have burned him in the past do you think that this is a splitting of the ceo community with the trump administration? >> i think we're in a very interesting times and the old rules don't apply. this isn't a situation that we

used to have where politics was very separate from business. and with the rise of social media, there's a lot of pressure on ceos now to have to think about what their moral stand is, so this is really a moral and ethical issue, i believe it's not simply a matter of having a voice at the table, it's a matter of the association with the administration sending messages and the values that are being -- that are being conveyed in those messages. >> it's a more politicized america, it's a more split and divided america. my guess is ceos can't afford to have 50 or 40 or 30% of their customers turned off by something that they are doing outside the ordinary bounds of running their own businesses, correct? >> yeah, what we see is a fundamental power shift. in the past it was harder for consumers and social advocates to have a voice. but with social media, they can band together and they have a tremendous amount of power they pressure organizations. i agree with the previous caller that it's really unfortunate that it's turned out this way.

i think that there was a lot of excitement when trump came in, that business was going to have a voice at the table and these councils were a key part of that but we saw when the administration started there were going to be some significant policy shifts. and what that did is it forced companies to have to really reflect on what their position is and their stand on issues like trade and pollution control and immigration and climate. so that's just playing out, continues to play out and we saw it escalate this week and the ceos deciding that they can't be part of -- in association with this administration. >> hey, mary, though, here's the complicated part about this. in fact i was having a conversation with someone last night about gary cohn's future in the administration and whether it's better to leave out of protest or for brand reasons or whatever but the practical implications of it as well, which is this executive was saying part of this person's feeling was that gary should resign in protest, but the other

thing he said was, you know what, he's the adult in the room i want people like that around the president. and so there is a little bit of a mixed picture here you want the experts, people who are in the trenches and know stuff to be there and yet if people abandon the president, you know, who comes to fill that void >> it's a very, very difficult situation. and i think that that's been the mindset during the year is that we're not going to abandon the president. but when the actions continue as they do and they get basically pushed into a corner, they don't have a whole lot of choice so i think that the public and the sentiment not only in the american sentiment but the global sentiment is that business leaders have to take a moral stand. in many ways they're taking a stand that politicians traditionally have taken, they're kind of playing that role so we see a very different

situation for business leaders they have to be much moorage ill and adaptive they have to read the context and situation and in many times improvise. in this case it was a radical move for them. they were excited about the opportunity to have the voice at the table. they wanted to represent their constituents they believed that by having a voice they were going to influence policy to benefit productivity and jobs. this is a seriously lost opportunity. i don't know, unless something changes in the administration, i'm not quite sure where we go from here. >> mary, thank you for your time. >> thank you. coming up, the president's global message, council on foreign relations, richard haass joins us after the break shares of walmart this morning, the company reporting results earlier. wall street's reaction and what analysts are saying about the stock which is now down 2% "squawk box" will be right back.

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welcome back to "squawk box," everybody. take a look at the futures this morning. they have been under a little bit of pressure. the last we looked, the dow was down 25 points below fair value. we've also seen the s&p 500 and the nasdaq under some pressure right now it looks like the dow futures are down by close to 32

points walmart shares after earnings reports

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welcome back, everybody. president trump receiving more backlash following his controversial reaction to the violence in charlottesville. how is this going to impact the president's global message we are joined by the council on foreign relations president richard haass. he is the author of "a world in disarr disarray" which has been turned into an hbo documentary. richard, thanks for being here. >> thanks, becky. >> i've spoken with ceos who have said, yeah, when we met with the president we felt like he was actually listening to us. we felt like it changed his opinions at times and they felt like what they were doing was valuable service by showing up not just to these councils but some of the meetings he had called as well if this is the way we are painting it, kind of a break between the ceos and the white house, what does that mean >> well, look, what it is, it's probably an inevitable switch. i would argue that a lot of what donald trump is doing is not particularly good for american business the trade policy is bad for american business, much of the immigration policy is bad for

american business. and it also shows you the difference between the political world ceos work in and with donald trump, they can't isolate themselves. >> although, what you're talking about, some of those things like the trade war and some of those other things you don't think are good, some of the ceos have told me that they have had a moderating impact on some of those views and as a result things like the b.a.t. went away, the trade talk with china tamped down a bit. it wasn't quite as venomous they thought after they had the an impact are you going to continue to see ceos consulting with donald trump? is this for show at this point or is this a true break -- >> there's a difference between consulting, if you will, as a day and being on councils as a relationship relationships have now become unsustainable for ceos because they have to be -- they have to answer to shareholders and employees. they can't sustain that. i think going in for individual meetings is something qualitatively different and they'll continue to do that. >> do you think trump will actually reach out to them only because he is not somebody who tends to take rejection

well. >> his view of constructive criticism is that it's clearly overrated. so he may cherry pick which ceos he speaks to or the subjects on which he speaks to them. he still needs to know, they're a powerful constituency. for example, of all the ceos were to take a certain position on nafta and they got their employees and others to push, it would really shape an environment in which he operates so he can't afford to ignore them. >> i think a lot of times i'm gratified because i think you're an equal opportunity basher of both parties you weren't -- >> well, i'm unemployed. >> you weren't necessarily impressed with the foreign policy of the last eight years vis-a-vis korea or -- north korea or iran necessarily. but i saw you also said about the fire and fury comment that that was unproductive and self -- that it was going to come back and actually hurt us, those comments now, that was before we saw kim

jong-un blink or back down or at least temporarily sort of say, okay, he was bluffed and then he didn't follow through with doing anything with guam was that definitely the wrong move now that you look back in hindsight? didn't trump do some things right in terms of the way he handled north korea? >> the one thing he's done right in handling north korea is basically saying it can't continue to drift. for more than 20 years, republican and democratic administrations allowed it to drift. >> part of not letting it drift is saying things like fire and fury and having mattis say game on if you take this next step, setting a red line that actually we saw in syria, setting a red line that won't -- that you can't ignore. >> but you don't want to make the issue the united states, you want to continue to keep the focus on north korea also, it's one thing to say we're going to respond with everything we've got, game on, if you use nuclear weapons or something like that first. that's obvious the more interesting question, and i defy you or anyone to --

>> i think he just said sending missiles anywhere close to guam. he didn't say nuclear. he said if you point them at guam and launch them. >> but unto itself, then the flip side of that, right, is if you set a red line and you don't do something about it and you put yourself in a box. >> that's what he wrote about. >> that will be a big part of the previous president's legacy. >> that's why he made all the money on the book. >> and the previous president really was a reluctant sheriff and really will be seen as what he didn't do as more consequential than what he did do. >> is it my understanding that you think that the president is in a box on this red line because if in fact north korea were to either point missiles at guam, whatever, that we can't necessarily go full on fire and fury, or can we? >> we should never be the first to use nuclear weapons against north korea or anybody else. if north korea is threatening to use -- if we had hard intelligence that north korea has nuclear weapons on missiles ready to launch, we should do

what's called a preemptive strike and something like that we would be negligent if we didn't do that the real question is what if north korea doesn't give us that kind of a situation. do we just attack out of the blue we have a big strategic challenge here. >> richard, thank you for your time today. >> thanks, becky. >> come on back. when we returning, we have more on the fallout of ceos quitting the president's councils plus a new deal for helicopter service provider blade the cewio ll join us in just a bit. we'll be right back. ase. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.

ceos break up with trump the president's advisory councils collapse and this morning more backlash from chief executives. walmart beats the street we'll tell you how the big box retailer is defending its online turf, straight ahead. plus akman versus adp. >> it reminds me of a spoiled brat in school asking teacher for an extension for their homework. >> he makes his case in the heated proxy fight we'll tell you what to expect as the final hour of "squawk box" begins right now live from the most powerful city in the world, new york, this is "squawk box. >> good morning. welcome back to "squawk box"

here on cnbc live from the nasdaq market site in times square i'm joe kernan along with becky quick and andrew ross sorkin nobody else, no other people, no other flies, no nothing, it's just the three of us at this point. i haven't seen hide nor hair of that thing, have you >> i haven't but i haven't seen the body either. wait a second -- no. >> futures right now are indicated slightly lower on the session less than -- now actually worse i don't think walmart is helping at this point. even though the numbers looked okay down 39 points or so, down 5.6 on the s&p 500 we had an analyst on that said if deplorables never shop at walmart again it won't make any difference i'm not -- i don't know, we'll see. but there are a few deplorables that probably didn't like that the analyst said there won't be any effect from that letter. there may be a few trump

loyalists that still shop at walmart. i just -- that would be my guess, you know, in middle america. >> we'll see. here's what's happening this hour walmart out with its earnings. the retail giant reported just a quarterly profit of $1.08 per share. that was a penny above estimates. revenue was slightly ahead of street forecasts the cfo telling courtney reagan the company is continuing to bring together what we are doing in stores with what we are doing online that stock, though, down marginally in the premarket in large part paubecause analysts e the past week had brought up their estimates. so once you get the new estimate, it gets harder to beat the newist estimate. also alibaba ticking higher. the china e-commerce giant did beat on both the top and bottom lines. the numbers you're seeing on your screen are in renb rather than dollars

revenues from the core e-commerce business was up 58% from a year earlier. their cloud business up 96%. by the way, on a market cap basis, this company is going to get close soon to amazon. >> reallytrue? >> really true amazon is about $450 billion and at this rate alibaba is probably about $50 billion away. >> wow. >> and an update in the renegotiation of nafta u.s. trade -- the u.s. trade representative says that president trump isn't interested in just tweaking the pact with canada and mexico, they're now blaming nafta for a direct loss of 700,000 u.s. manufacturing jobs since it took effect in 1994 warning that the u.s. could use its clout as canada and mexico's biggest export partner to wring more concessions. >> you can just do the math, though if you do a per capita amazon market cap per capita and then do it at alibaba.

>> a lot more capita >> it's like five times. you're right, it's over 400 and amazon 470. >> so we're getting close. closer the united states is in an economic war with china, that's according to steve bannon, chief political strategist to president trump. in a new interview with prospect.org, bannon says the u.s. is five to ten years away from hitting an inflection point with china from which we will never be able to recover bannon also said focusing on race would help the republicans politically. he said, quote, the democrats, the longer they talk about identity politics, i got 'em i want them to talk about racism every day. if the left is focused on race and identity and we go with economic nationalism, we can crush the democrats. our top story this morning, corporate america taking a stand against president trump. two key business councils are disbanded. the leaders decided to disband

these councils themselves after backlash to the president's response to violence in charlottesville. joining us right now on the squawk news line is andy puzder, the former ceo of cke restaurants. andrew, what do you think about this is this a true break with corporate america or is this a temporary setback? >> i don't think it's a break with corporate america i think that it was the right move for both the president and for these ceos with all of the controversy that was generated around the president's comments, i think it became very difficult for people to represent the best interests of their shareholders and remain on these councils in prominent positions. i think dissolving the councils was a good idea. but they were -- really they were symbolic in any event i think they met twice and only about half the members showed up for each meeting i think they will -- the lines of communication i'm sure will still be open with the white house when there's a policy at issue that these ceos are concerned about. i'm sure they'll either call

with support or call with opposition and i think the president will listen to them so i don't think there is a break. i do think that the councils needed to go given the current controversies. >> is this just a public relations head fake then is this just a situation where they are symbolically saying, okay, we're putting up our -- we're taking our stand at this point but the lines of communication will continue behind the scenes? this is just a way of tamping down shareholder and customer backlash >> well, i think there's probably a lot of things going on i'm sure that a number of these ceos very sincerely feel they couldn't support what the president said at that news conference and decided that they needed to move on. others i'm sure are concerned. look, when you've got 30% or 40% of the country on one side of the issue and 30% or 40% on another side of the issue, if you're in business, particularly retail business, you don't want to offend people on either side of the issue because you to damage to your business and your shareholders' interest so there is some economic motive

not to offend people i think some people probably withdrew because of that but i think the president decided to dissolve them just because it was no longer in the interest of these people to remain on these boards he wanted this to be a positive and it wasn't a positive but i do think people will still comment when they have -- i think people comment to the president if they have a line open to him whenever they have a concern. >> andy, just as a fact check of sorts, because we've described it this way, some of the headlines have described it this way and you just described it this way the president didn't dissolve these voluntarily. i would say to you that he didn't dissolve it at all. to the extent people talk about fake news, it's fake news that he tried to dissolve these things the committee was dissolving itself, told him that they were dissolving it and then he effectively asked to actually have the press release changed to suggest that he was going to be part of it and then before the press release was released,

he front ran the press release >> yeah, i don't know what happened internally. >> no, no, i'm telling you that's what happened internally. >> once you know that -- >> i mean i believe you. i'm just telling you before i comment that i wasn't involved in that so i don't have some insight on this. >> andy, this may be qualitatively different because we're talking about torches and horrific slogans and the most repugnant group of people that you can possibly find. and i don't know whether trump necessarily equated those people with the left and said they're exactly equal. i think he just said there were some bad people that were on the side of it, but saying there were some good people on the other side, i have a problem with that obviously. but if you go back to "access hollywood," you go back to what some people thought with second amendment, people will take care of hillary, i can give you 10 or

20 different things that have happened in the last year that a ceo if he was a social justice warrior and if that was his role in life, there would have never been a ceo council that could have been put together in the first place. so is that now going to be the status quo, that ceos, anything that either could offend any of their shareholders or customers, any time where there's anything -- there's any heat in the kitchen where they have got to protest and resign in protest or do you keep a seat at the table no matter how repugnant you might find some of the comments, but you've got to be there to influence policy, unless the guy is not going to be there next week i don't -- i'm just wondering whether is that what we've decided, that now ceos are the arbiters of social justice. >> i agree with you totally, this was a tragedy in

charlottesville. the actions of these alt-right groups, the ku klux klan, neo-nazis and as the president said racism is evil and these groups are repugrepugnant. to get to your question, i think ceos are always in the crosshairs on these social issues they're always in the crosshairs on any issue whether it comes from the right or the left because you have a real obligation to protect the interests of your shareholders when these councils became so controversial because of either what the president said or the coverage of what the president said, because while the president certainly could have better articulated his position, and i think his position is probably not -- even what he stated probably wasn't as good an articulation of his position as he'd liked to have given it, but there are people who oppose his agenda who are trying to make perhaps more out of it than it is based on what he said. so for the ceos to stay in in that environment was very, very difficult. ceos are always, as i said, in

the crosshairs and you have to be careful their job is to represent the interest of their shareholders, not to make political statements so i think it's a problem. it's difficult to get input from the business community when every time one of them opens their mouth, they're attacked as monsters if you're attacked as a monster every time you open your mouth, you tend not to open your mouth. so i think there's a problem from getting input from business leaders on those issues because they're so controversial but that's the nature of the american entrepreneurial system. you don't want to offend consumers and you want to represent your shareholders. >> all right i almost recused myself from talking to you because of the western bacon cheeseburger, which if you've ever had one of those, i can't really -- it's difficult for me to be tough on you. they have an onion ring on the cke western bacon cheeseburger and a sauce. and now this next guy that is coming on, i don't think i can -- i should really recuse myself here too. andy, thank you. >> thank you, andy.

let's get to a ceo who's backed president trump since he took office. joining us now, i can't believe this, i can't, i can't mike lendell, ceo and stwesinver of mypillow. >> i spend my night every night with this guy -- i mean with this guy's pillow. >> so do i mike, this was not planned, that's not why you're on, but it's a fact. we have mypillows -- >> both of us. >> that's awesome. >> anyway, mike, you were at the white house earlier this summer for a made in america event. you know, you're still a young guy. how many employees from mypillow.com now, all in the united states, like how many, like 2500 or something >> no, we've got about 1600 now, yes. >> 1600. so it's awesome. you designed it from scratch what's in there? actually don't tell me it's like the colonel's -- >> it's a patented secret. >> is it obviously

it is because it comes right back up. >> i got a patent on it, yes. >> becky >> no, i haven't, but i told you i need new pillows we're in the market. >> it has a certain kind of feel for me it works. i haven't convinced my wife yet. >> so, mike, getting back to the nitty-gritty, i keep making the point that since world war ii there is zero tolerance for this we learned our lesson. the greatest generation had to save the world because of -- and that's still fresh in our mind you see torches on u.s. soil, you can't really qualify that in any way. you can't say, well, but it's just what it is and there's just no way around that so are you -- do you understand what happened here with the ceos leaving or disbanding or whatever else it is? >> yeah, they're making their own decisions on that.

i have -- you know, our president condemns all hate and especially those groups. you know, the public, the way the public -- there's been so many attacks on our president and we haven't been able to get to the agenda that i know he has and that he's trying to do and i think the influence with social media, we're in a different age where you say the wrong thing or do the wrong thing and then your business gets hurt. and i think they -- you know, they just made their own choices. but i believe that's a few that are -- i think we're all still unified that are with the president. i think he'll find a way to communicate with us. i've never seen a president reach out for more help in making decisions than any president ever. >> well, that -- i have taken what you're saying and i agree with you, i don't think that he

said that the two sides were morally equivalent i think that that's a narrative that fits certain people's idea of how to approach this. but then again, i understand -- i look at the genuine feelings of a lot of people that watched that and maybe i'm not in a position -- you know, i'm not african-american, i don't have -- i can't judge how horrific that is, and i think that these feelings are genuine that we're seeing. so you can't just deny that that happened and it's the media or the portrayal of it. i mean it deeply affected and it was -- i don't think people are faking there so how does he -- how does he bring that back? how does he heal the country now at this point? >> well, you know, i can only say for myself, you know, i met him last summer and he reached out to me in a meeting i thought that was amazing

having everything that i stood for that he wanted for this country. he's not a racist, he's an amazing person and he will -- he'll persevere and get through it and get to his agenda and all the amazing things he's done already with the jobs at an all-time high over a million jobs since the beginning of the year. the stock market at an all-time high my company is flourishing. the consumer confidence is at a 16-year high i mean these are great things that are happening and i just wish the attacks would stop on the president and we could get down to helping the country and get down to all the things he's doing with infrastructure, the inner cities and the stuff that is really going to matter to help unify this country >> you're a familiar face, mike. congrats on your success, household name almost in like two or three years, amazing. anyway, thanks for your opinions today. we appreciate it >> thank you for having me

it's an honor. >> you're welcome. coming up next, walmart out with earnings. we're going to dig tou thrghhe quarter with an analyst right after the break. the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there.

welcome back to "squawk box. take a look at walmart beating

the street but shares are under some pressure this morning, down a little over 2.5% right now dan bender is here, managing director of jeffreys good morning to you. we're looking at these numbers they look like they're beating but in large part i think, you tell me, a lot of analysts raised their expectations to the high end and now maybe they're not going to be at the high end? >> well, i think that's right. you've seen walmart plan pretty conservatively and beat and analysts have adjusted to that and they have been raising numbers so they did come up at the upper end of their guidance and beat by a penny. if you include some impairment charges at sam's it maybe it was even two pennies i think the important takeaways are that comp store sales are accelerating both on a one and two-year basis in the u.s. and the operating margin declines are decreasing at walmart u.s. so we're working our way towards profit margin growth again i think in a world where amazon

seems to be taking over, if you can have a player like walmart not only accelerate comp store sales but also increase margins, this will be a pretty good story. to your point earlier, certainly expectations moved up. i think after the target preannouncement. but i would draw a comparison, walmart's two-year comps were 3.2% stacked and target was flat i think target is still in the earlier innings. >> what's a fair price for the stock? >> we have an $88 price target and that does reflect a premium multiple based on the idea that we were in a depressed earnings cycle, if you will, for the last few years as they made those investments. we see good signs of improvement. so i still think that's a fair price target. >> we've got to run, but among the big boxes, which one do you want to buy right now? >> my favorite big cap names are walmart and home depot. >> fair enough dan, appreciate your time this morning. >> sure. >> thanks. when we returning, ackman

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welcome back, everybody. bill ackman will be taking questions from adp investors today as his proxy fight with the company heats up leslie picker joins us right

now. >> hey, becky. in less than one hour bill ackman will begin his presentation on adp, a proxy fight that's already shaping up to be one of the most contentious this year. adp disclosed the two had been in talks ackman wanted to nominate five directors and oust carlos rodriguez. adp denied ackman's request for an extension to nominate his directors. rodriguez explained that decision on "squawk on the street" last week. >> the real question is why does he need an extension not how long is the extension and what did he really ask for or what did he really not ask for, because it reminds me a little bit of a spoiled brat in school asking the teacher for an extension for their homework. >> ackman's story was a little different. he said he only wanted three directors, not five, and filed a preliminary proxy statement on monday that included, among other things, backgrounds showing that rodriguez sent an e-mail in error to ackman. in it rodriguez said he didn't

find ackman's willingness to work together as, quote, credible hopefully we'll get a better sense in a half hour, guys. >> hopefully you're right, leslie, thank you. coming up, weekly jobless claims about to hit the tape we will bring you the numbers. quick check on the futures before we go to another break. they have been down but not -- actually now worse walmart weighing on the dow, down 55, s&p down 7, nasdaq down 30 here at td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade.

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♪ ♪ good morning, welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square some stocks to watch this morning, a lot going on. shares of l brand slipping after retailer lowered its guidance for the year also reporting a bigger than expected drop in same-store sales. check out sales of cisco we'll show you what's going on there. you're looking right now at that stock. it is off about 2.5% the quarterly profit of 61 cents per share was in line with estimates but sales in its

closely watched security business missed forecasts chuck robbins will hang out at 9:10 a.m. this morning so you don't want to miss that. also, we are just seconds away, literally seconds away from jobless claims. rick santelli standing by at the cme in chicago rin rick, the numbers, please. >> originally 244 last week, this week you drop it 12,000 to 232,000. pretty good subtraction, don't you think? 1.953 million on continuing claims august read on philly fed index, don't see it yet now, if we continue to monitor everything coming out for the rest of the day, we're still going to have industrial, best utilization, all these things may be important still down 64 in preopening. if i look at the dollar index, it's up 37 of course equities are a little soft, as i described

so you want to pay particularly close attention to the low 2.20s with regard to tens. i don't know why we're not getting all the data that's supposed to be out don't see philly fed when i do see it, i'll dial you up and give you the updates. from chicago at this point, it's jobless claims not having a big effect on the market as we get ready to see what the softer equity open may mean for the markets. back to you. >> thanks, rick. let us bring in chris hisey, chief investment officer for global wealth and investment management at bank of america and steve liesman is here. steve, i want chris to respond, did you see the atlanta fed, gentlemen, yesterday 3.7. is that where gdp is >> that's where his thing is. >> how are they on the high side >> they're on the high side, yeah we're on 2.8 which is the average of all the tracking forecasts on the street. there are different error rates at different times of the cycle.

they have their own model. the reason we do the rapid update is because we don't think anybody has a lock look, 2.8 is a good number what are you looking at, becky >> philly fed is there i want to tell you the numbers 18.9 versus 19.5 for july. >> i think 16 was expected rick had no reason to apologize because the number wasn't there. it's still not on my screen here >> love means never having to say you're sorry anyway. >> he does such a good job, he does math on the fly which i will not do on television. >> chris, are we in a 3% world temporarily? >> temporarily i think is the key here there isn't one big trend that is completely sustainable like we all wanting we all want to see 3%, 3.5%, we want to see inflation close to the fed's target, we want to see equities in the slow grind-up

trend forever but we're going to be in a world of confusion, complexity, changes all around, whether it's geopolitical risk, whatever is going on in washington but here's the key the one trend that everybody dismisses, that everybody wants to talk about, that everybody wants to change their view on every other month is profits the bear camp will tell you they're not real the bear camp will tell you it's quantitative easing, it's the excessive liquidity that's out there in the system creating these corporate profits. they will tell you that stock b buybacks let the first stage of this but the tailwind is non-u.s. economies right now non-u.s. economies are participating in the global growth curve for the first time in years, especially the emerging mark, which are a lion's share of the global economy. and that's translating into s&p earnings, which is translating into a marketplace that continues to frustrate the bears. >> so europe is not kicking the can down the road anymore, are they >> i'm sure they are.

>> they are? >> i'm sure they're kicking it down. >> i thought you said things are better. >> things are better. >> they may be able to grow their way out of all those problems we talked about every day for five years ago >> for now they're extending the business cycle for now. and the business cycle is probably healthy for the next couple of years. >> emerging markets too, and china. so we're hitting on all cylinders, that explains everything that's happening? >> we're hitting on all cylinders at a lower growth rate than normal but better than what people believe. >> and interest rates aren't likely to be a factor in tamping that down for how long, for years theoretically? >> i think that's a good way to put it. >> so it's pretty simple i have not going to call you stupid but this is pretty simple. there's a lot of -- why do we think there's a wall of worry? people still don't love this environment for some reason. >> because the greatest experiment ever in monetary policy has been with us for quite some time. there's structural changes in the global economy that we're not sure of yet. there's an innovation cycle that

continues to confuse people and surprise people to the upside. so you get inflation stay dormant and there's excuses for it -- >> andrew, it sounds like you're not like this on your skis, it's like you're trying to catch up with your skis. >> i've got to catch up with my skis. >> they're out in front of you, which is not a good way to ski either over or behind. >> that's one of the things the fed was talking about yesterday was this inflation outlook the crisis of confidence around the fed's ability to create inflation is a big issue if you look at a long-term chart of inflation and unemployment, there's supposed to be this thing called the phillips curve. and it's not working too well. when those things come together or fall apart, that's the phillips curve working when they move in the same direction, it's the phillips curve not working. the idea is if you have low unemployment, wages should go up and inflation should go up when you zoom in on the last five years, take a look, kind of flat you're not seeing much of a relationship just so you know, i looked up

this guy, a.w.h. phillips from new zealand. escaped from russia and he did this big study on unemployment and inflation in england it's been kind of like the thing that everybody has used and now it's falling apart and the fed doesn't know if it's technology, if it's globalization, arbitraging, even local wages here or if there's just something going on i think what this sets up for is this idea, this december rate hike may not happen now because of this uncertainty about inflation, even though dudley yesterday -- does that change your outlook at all? >> what it does is it creates a lot of questions the question that i constantly have, and i don't know if anyone has an answer to it, there's a lot of work that needs to be done around it if you're going to a global economy that is every more contingent upon the service economy, how could you get higher productivity. >> you never do. >> that's so interesting.

>> if china is more service oriented, they're over the 50% level. if the u.s. continues to move that way shall what's on the phone. software driven economy, not just robotics, but how do you get higher productivity if you have a higher magnitude of a service economy? you can't. you can't measure how fast the waiter comes back and forth from your table so how do you get higher productivity >> i think a robot on wheels could get back to my table even faster and that would be -- it would be more productive but none of us will have jobs. >> so you think it's a fake number just because we can't measure productivity in today's society but we could be getting more productive along the way? >> well, that's an interesting thing that's out there, this measurement issue. the argument has been, well, we've always mismeasured service. but the idea is that if more and more of this stuff is either, a, free, b, available online, that we cannot -- we're making a bigger measurement issue now our friend marty feldstein has

this issue, he thinks we're mismeasuring this, that there's more productivity out there. people feel like they're more product i'ive and it's not showg up in the anybod numbers ultimately this gets to how much we can grow and whether we should be satisfied with the growth numbers we have because there's more efficiency in the economy, but what's interesting is the profits are there and if the profits are there, that's one barometer of how well the economy is doing it's not the only barometer. and the question becomes whether or not the workers and the wages end up sharing in that wealth. it seems increasingly incrementally they are the trouble is the way that in your job today, maybe a robot or foreign worker is the one depressing your wages. >> this is why corporate profits for investors mean more today than ever before, because not necessarily mismeasurement, but the efficiency ratio of a corporation today is so much higher

>> right. >> than it ever has been >> if it's not a foreign robot. >> right, steve? just hope it's not a foreign robot. >> it's a complicated situation. >> there's a lot of foreign robots, joe. >> we hope they're made here. >> there was a great article in "discover" magazine that says we're not robotized enough japan is way ahead of us given the aging of american society, there are going to be more robots. >> we've also said that japan has this deflation that has gotten them in trouble for so long. >> they also have this aging society. >> people like jeff bezos would argue if we could get robots to do all of the things that we don't want to do that that ultimately is better for society. >> but how do you distribute income >> i know. >> you're going to go to guaranteed income. the hair on joe's head -- >> redistributing it, he knows exactly how to do that.

>> thank you very much we've got to go. we're coming back in just a moment because there's a new deal for helicopter service provider blade the ceo is going to land on our set and he's going to do it right after the break.

welcome back to "squawk box" this morning i was going to say that rob

wiesenthal has landed on our set. helicopter providers that work with the oil industry are teaming up with blade. pilots and choppers from bristow have been flying through the hamptons this summer instead of their usual routes to and from oil rigs joining us with more on that and where this whole helicopter industry is going, rob wiesenthal, the founder and ceo of blade we were going to have you last week you had a little pink eye. it's all solved. >> thank you for telling the whole world that, but yes. i'm sure my doctor is thrilled. >> that was smooth. >> good to see you i apologize about that. >> i got to come back again, by the way. that's all right, go ahead. >> how did you get that, rob >> okay, we're okay. >> come on back. >> everybody is good. >> andrew. that's about the grossest thing you can get. >> because of what's

happening -- hold on because of what's happening in the oil industry, these helicopters are now being used to chopper back and forth to the hamptons >> why is it only the hamptons to you it's boston, it's philly i know, you revolve around the hamptons it's his social circle, right? blade started out by taking excess capacity and consumer helicopters and getting it to the point where people could buy it by the seat and make it economic now we're taking helicopters that are down in the oil field service industries that are moth balled because the infrastructure of these companies were meant for $100 oil and they want to keep servicing the oil industry, they want to diversify and they have a dedication to that business. the right answer is not moth ball them -- >> so how many are no longer in service because of this right now? >> there are a lot of them. >> are we talking hundreds >> probably into the hundreds now globally i think we're talking about extremely large, sakorskis, what

they call lorenzos, these are $10 to $15 million helicopters. >> how many people can fit on them >> the helicopters we have are up to eight people they'll go up to 12, 18 -- >> which changes the economics for you. >> changes the economics and i think that there are jobs that are now preserved we're bringing people up here. it's an important -- it is the most valuable short distance aviation corridor in the world for the consumer market is the northeast. so they're thrilled, we're thrilled we want to keep this going. >> i'm trying to understand what you think this -- i just want to go back to the oil industry. what does it say about that world right now? and do the folks who own these helicopters think, you know what, i'm going to do this blade thing for a while and hope that this comes back? what's the -- >> i think it's twofold. number one, i think there's a dedication by the bristow group in terms of -- that this is an important part of the global energy infrastructure that can't go away in terms of servicing these rigs they want to be around to, you

know, to continue helping them, but at the same time they want to use the excess capacity i think down the line it's really about diversification era has done a good job in terms of tourism, other businesses bristow sees the ability to use our crowd sourcing technology in terms of getting more oil field service employees onto rigs, really important. >> what happens, though, if oil goes back up to $100 what happens to your business? >> they'll be continuing to diversify. i think people learned a lot of lessons here it is, obviously, cyclical and i think you're going to see investors really want to see some diversification. >> but what does that do to your business, which is to say you're making a bet now on these helicopters. could they leave you >> they could, but you have to bet that there's diversification. also, remember as we talked about last night, we're really transitioning to what we call electric vertical takeoff and landing helicopters. at some point the oil industry and the consumer market, we

increase our market by having more places to land. that's about quiet aircraft, safe aircraft, less expensive aircraft. >> what's the price do you think you can get it down to using these bigger helicopters >> right now we're down to 195, to the airport these larger helicopters are what we call cabin class where a lot of your executives who are on your show use twin engine 2 pilot large sakorskis. these are really the high ends of the high end but they also have moderately priced helicopters as well. >> will we be landing on the tops of roofs in new york city ever again >> yes, 1977. >> and those flights were cheap. >> they were $5 back then. >> no single engine -- single pilot flights, are there >> yes, absolutely. >> there are still some of those? >> absolutely. >> he does those every day. >> i think nothing to be fearful about, joe auto rotation. they don't drop in the sky they have fans, they glide like planes. >> i'm more fearful of pink eye

than the single engines. anyway, when we returning -- >> rob will come back another time. >> we hope, after this >> after we've burned all the brushes and makeup and sponges that were used on rob, it's very contagious but when we return -- >> he's fine he doesn't have it that's why he's here he's fe.in >> you're going to be on the bus from now on, joe. >> thanks.

the final two weeks of august tend to be a tough one for stocks

welcome back production was up by .2% last according to figures by the federal reserve. which was scheduled for 9:15 eastern time but came out 30 minutes early. still unclear why that happened. rob walked off. >> let me just say, i only meant -- president of the show we have known him for a long

time he wasn't on and i felt like i was trying to explain why he wasn't on. >> let's keep digging. >> that std is all taken care of. >> he is the author of tears we can't stop. >> i'm very serious now. >> no, this is a very serious conversation. >> yeah. and first of all let's just get your retox whaction to what has

on over the past couple of days. not how to look backward but is there a way to look forward? >> yeah if the president uttered the words i re-sign it would help us a great deal short of that he he have to take seriously the criticism coming at him let's discard what he considers the alt left let's look at the conscience voice within his own party if he we take john mccain and senator blake. those that's conscience moved him to say you're wrong. they failed to name him by name it does strike me as interesting that republicans that are always touting the virtue of either self-help or be responsible for what you do and don't make excuses in this instance it's failed them all together so what we do from now is use this as a teachable moment even if the president refuses to come to class, he can still be

an object lesson for us to say you don't make moral he kwif len sis between big gots on the alt right and neo-nazis and people who no matter what their flaws may be are not amply identifying the worst things we know. >> we had a number of ceos come on today or yesterday and say they want to support the president. they want to work with the president and then there's a larger issue which is you do want good people to be around the president. >> yeah, you want good people to be around the president if they have the possibility of make an impact he's proved to be impervious to solid advice if general kelly can hang his head and say manion what i can do with this of course that's not his position but the reality is that very good people surrounded this president and he has not taken their advice number two you have to draw the

line in the sand at some point people are saying we still have to do business he's still the president, that's true but if you don't have any moral authority to exercise. if you don't say enough is enough and our leadership is man chest we we are able to say even as business men concerned about the bottom line we're also concerned about the mosral line we draw in the sand. there's an interesting article this morning suggesting that the ceos took too long. >> they did but the fact is they're doing it now they did take a long time. they put their finger in the wind to say which way the wind was blowing but at least now they're acknowledging this we need people ahead of the curve and understand this is fundamentally wrong and we have to do something is about it. >> thank you for coming in this morning. >> let's get down to the new york stock exchange. jim cramer joins us. can you figure out walmart for me jim >> it is good.

i think that what happened is this has been stand out and moved ahead. i like the fact that they are offering so many different products on their e-commerce and the stock has given up a lot of what it made in the last couple of days. i think it is a buy. >> so everything we talked about for three hours, jim, number one is it really important that you get the input from the big company ceos do they, will they individually still talk to president trump at this point six months from now are we not talking about this every day again? how do you see this playing out? >> if the president were to call any one of these people and say

toipt talk about tax reform and they say, they may say listen i can't because of what happened but i think that time does not necessarily heal all wounds but i think if you get back on a business track, joe, i think that people will say okay listen i do want to help but they're way off the track right now. >> all right, jim, thank you we'll see you in a few. >> jim and the whole crew on squawk on the street in a few minutes. we'll see you back here tomorrow, take care. 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?

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good thursday morning, welcome to squawk on the street. i'm with jim cramer at the new york stock exchange. chuck robbins is going to join us on the companies earnings market slightly red. ten year yield just 224 despite jobless claims near a six month low. our road map begins with a gap between the president and ceo.