business never sleeps, this is "squawk box. good morning welcome back to "squawk box" on cnbc live at the nasdaq market site in times square. i'm andrew ross sorkin with joe kernen, michelle caruso-cabrera is hanging out with us today look at the u.s. equity futures at this hour after the president spoke about afghanistan last evening. dow looks like it would open up higher by 50 points. nasdaq looking to open up higher about 23 points. s&p 500 looking to open about 4 points higher. let's show you what's going on overnight in asia. a hang seng and shanghai composite both up. as we fly over to europe you can see what's going on there. green arrows across the board. a look at crude. wti trading at 47.51 >> here are the big stories we're watching ray dalio is reducing risk on

washington worries the manager of the biggest hedge fund wrote a post saying i'm watching how conflict is being handled as a guide, i'm not encouraged the bridgewater founder was initially confident that president trump could stimulate growth tru throuhrough tax refo dered deregulation we'll hear more from ray dalio next month when he joins the delivering alpha conference. a los angeles jury ordering johnson & johnson to pay 417 million to a woman who claimed that the talc in the baby powder caused ovarian cancer. j&j says it will appeal the ruling it's the largest yet in lawsuits saying the company failed toed a quickly warn consumers about the cancer risk of its talc-based products johnson & johnson faces 5,000 cases nationwide >> long long ago, the ceo of --

i think it was after ralph larsen i had read about this probably ten years ago. 5, 10 years ago. sometimes the shape of a carcinogen -- i'm not slaying talc is a carcinogen there was scuttlebutt about this, at least ten years ago i have not touched it since. most baby powder, they changed it it's cornstarch. just as a -- i've always been kind of thinking, you know -- i read some stuff yesterday that says this is junk science this jury this is one of these things, they have no idea about the science. i'm sure johnson & johnson think about how much baby powder they sell i'm sure they will dispute the science. i will tell you ten years ago, i have not touched that. i have not used any -- you can use cornstarch

cornstarch is not talc if i see it in a locker room, there's other products that contain talc >> i never thought about it. it's the way i think of klee next versus tissue it's just talc powder. >> baby powder most of the time now is not talc. it's cornstarch. >> good to know. >> 400 million >> that's a lot. >> you wonder whether that gets reduced. >> it's not like this is something that was postulated in the last week or so. i can remember ten years ago, wow, the shape of a molecule can ef fefk effect >> jim mattis making an unannounced visit to iraq. mattis arrived at baghdad a few hours ago. his visit comes as the iraqi

army tries to take tal afar from isis control. shares of bht billiton swinging to a six-month high the company is raising its dividend bhp announced plans to exit the u.s. shale business following months of pressure by elliott management. and then tronc -- i look forward to stories about this company, which i guess is like the stub of tribune. sorkin, you know which company >> the news papaper business >> also a video game called tron i think also a movie called tron tronc. whatever shaking up the newsroom at the "los angeles times." the company has named ross levinson, remember that guy, as the paper's new publisher. previously ran fox sper actiint

media. >> in the running to be marissa mayer at the time. >> not exactly be here >> to have that role before she got that role. >> no relationship >> no. >> ross is a family name for him. >> i know. it's actually a last name. >> my mother's maiden name, if i say it, then you can steal my credit cards >> i always thought you were david schwimmer on "friends." >> wasn't he born before "frien "frien "friends?" >>. >> no, it's my generation. >> are ytronc -- you remember t great seinfeld episode with the

bar mitt zvamitzvah? i'm a man! >> i don't remember that. >> i don't either. >> tronc replaced the times editor and other newsroom managers -- that's when you become a man, right? bar mitzvah'd. >> yes >> he figured it's time. elaine is there, chasing the bar mitzvah kid. >> taking it literally >> yeah. >> i don't remember this >> did you see any -- you saw them, you just have no institutional memory >> in one year, out the other. like our conversations >> just nod, everything happened on seinfeld that could happen in life you could benefit from listening -- >> i should go back. >> no just in general. macy's naming a -- you knew this was happening today. >> i did.

>> hal lawton will report directly to jeff gennett, macy's is forming a single unit, eliminating about 100 jobs here we go that gentleman there will be on -- courtney is bringing him on. >> she's the retail reporter an exclusive interview at 8:00 a.m. on "squawk box. as wilfred would say "squawk box. >> wanted to check out shares of uk-based provident financial the stock slammed after the company cut its dividend, issued a profit warning and disclosed it is being investigated by the financial conduct authority over credit card replay plans debt collection rates plummeted from 90% to 50% after it switched from contracted collectors to full-time

employees. president trump committing to an open-ended conflict in afghanistan during last night's prime time address eamon javers joins us now with more eamon, good morning. >> good morning. the president spoke at ft. myer virginia last night in order to at the nation on the months-long developed plan for the war in afghanistan. the presidenting ing5:presiden s is a change of stance from him he said things look different when you're in the oval office as opposed to running as a candidate. he dismissed the bush era idea of nation building and said the united states is moving away from that. here's what he said. >> we are a partner and a friend, but we will not dictate to the afghan people how to live

or govern their own complex society. we are not nation building again. we are killing terrorists. >> reporter: the president putting that simply. he also was opposed, he said, to the obama era or implicitly opposed to the obama era efforts to withdraw from afghanistan and from iraq. saying that the time had come to simply double down on the objective there. here's what he said about withdrawing. >> the vacuum we created by leaving too soon gave safe haven for isis to spread, to grow, recruit and launch attacks we cannot repeat in afghanistan the mistake our leaders made in iraq >> one of the other mistakes that the president singled out last night was the idea of trusting the pakistani government too much. he said the pakistanis have worked at the site of the united states he honored that sacrifice,but

also said too often they've been a safe hiven for terrorists. that will change the president changing himself from a candidate who opposed the afghan war and said he would bring the troops home to a candidate who is now signing up for an open ended xlitment mco troops in afghanistan. no number on troops or strategy the united states would adopt. the president saying he doesn't want to telegraph his moves to the enemy. >> thank you, eamon. tough, tough -- i don't know the answer but this would not be the first time we've been somewhere for decades, i guess, it's going to be -- >> this is america's longest war. 16 year years, three presidents. >> it's intractable. it's unsolvable almost

the whole region needs to come into 2the 21st century >> the president mentioned india last night he talked about the corruption in afghanistan the idea that the afghan government needs to step up. these are things that american presidents have said for years he also said that he wants to take some of the limits off of american troops and allow decisionmaking to be down at the local level. those are relatively minor changes, though, to what the obama administration and the push administration before that had been doing in after. the question is will this bring different results than what has been done before you're right.intractable as the president said last night, the alternative is to allow a power vacuum you could see the spread of something like isis like we saw

in iraq. the president decided that was untenable and the status quo was a better choice. >> eamon, two other notes on the business side of the world maybe social media side of the world. curious about the reaction that folks in the white house had f they had one at all yesterday, to lloyd lankfein's tweet abou the eclipse. >> yeah. >> perhaps other things eclipsing the eclipse. >> yeah. lloyd blank fifein tweeting this eclipse was not the only thing casting a shadow across the nation we survived the eclipse, we will survive everything else. the white house had no comment for lloyd blankfein. no word on whether that was intend for the president or gary

cohn there's the tweet. was he sending a shot across the bow? i don't know er gary cohn signaled he will stay following last week >> ben white making the point this morning in "morning money" that perhaps janet yellen stays. do you think that's -- what chance >> that's possible the president is very wary of any aides who take on outside significance we saw gary cohn last week be couched as the person who if he left, the markets would crash. does the president recent sa gary cohn has that influence or

perceived influence in the markets is an open question. the president also good at determining what his aides want most in the world. sometimes if that aid is not in favor, he will deny certain things in thiscatio case gary cohn seeo want to be fed chair >> that was not unanimous. we had mark grant on yesterday who rolled his eyes. that was a yale management professor. so, you know -- >> about the market crashing -- >> ludicrous >> there was a lot of speculation about that last week you guys are the market experts. >> drudge ran with it. for some reason they put on clickbait or something they put on the most incendiary headline they find, add up the clicks, and valuations are -- >> you think drudge does that? >> imagine >> the drudge report >> eamon, while we have you.

one other commotion going on on social media this revolving around an instagram post don't know if you saw this from steve mnuchin's wife a picture of her getting off one of the planes, clearly owned by the government, someone had a sub tweet, relatively nasty to her. she looked -- she was wearing tom ford clothes, looked glamorous. she wrote back, have you given more to the economy than me and my husband either as an individual earner in taxes or self-sacrifice to your country i'm sure we paid more taxes towards our day trip than you do i'm sure the amount we sacrifice is more than the amount you would sacrifice if the choice is yours. a lot of back and forth about that.

>> rich people talking about how much they pay in taxes, hashtaging their expensive clothing in instagram posts is it not go over well with a large section of the country we have not seen a response from treasury or the white house on that this highlights the idea of how big of a leap this is into public life. when you do that as an individual, it's one thing it's another thing when do you that as a representative of united states government >> thanks for bringing us back to the sensitive stuff thanks, eamon. for more on the president's commitments to afghanistan, less bring in james garfano, heritage foundation national security and foreign policy vice president. my first question is generals know probably better than anyone else what the strategy should be

in an area like afghanistan. don't generals maybe by definition take a more aggressive stance? if the people that are there as generals say this does it mean it's the right thing is it possible it's not the right thing? you need to extricate yourself >> yeah. i've only been in the military 25 years, and tracking this war for 15 years generals know a lot about military strategy. so we should just focus on the military strategy for a second where they know what the last administration did was stupid. first obama wanted to walk away, i can't do that. i did that in iraq, it was horrible so the idea is we'll build up the afghan army, let them fight and then walk away so we built up this afghan army, sent them out into the field because obama canwanted to see

levels go down, kept putting down lower and lower troop levels the armies are out there fighting, taking casualties and they're not capable of sustaining themselves. we're not giving them the assistance that allows them to do that. the military strategy, this didn't come across in the speech, the president made that decision weeks ago he basically decentralized the military point of that so they already started to expand what's called the advise and assist mission it's not the number of troops but what they're doing where they're helping the afghans is in fire support, logistical support, and in medical support and evacuation what that allows the afghans to do then, they're the ones fighting this war. they'll be able to better hold terrain awayfrom the taliban and we can do that in a sustained way over time with joust burning through the afghan military that's a huge change

it's a big, big change that's just the military piece of it. >> trump had to go back and know that all of his comments about afghanistan and in the past were going to be dredged up because this was 180 degrees from what he used to think should he get credit for listening to generals? i think other presidents may get more generals if they have to add more troops, add more troops that hasn't been the tact the last eight years >> i give trump credit i've only been following him since hez first day on the campaign trail the fundamental principle of his foreign policy is america first. we donen don't want afghanistan

a platform for terrorism is there a strategy that will do that this administration looked at everything, from everything including pulling the plug, walking away to doing this then president said what is the best thing for the american people andici iic and picked tht course >> you won't be the last word we have today on this we appreciate your insight on it thank you. >> you bet. when we come back, markets in focus we'll talk strategy, earnings, data and the fed look at u.s. equity futures. looking to open up and pop on the open dow up by 55 points higher. later, macy's stock has been under pressure down 50% year to date. the company announcing its hired a new president from ebay. that ceo will join us at 8:00

a.m. eastern time. hey, i've got the trend analysis. hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.

welcome back to "squawk box. let's talk about the broader

markets. here for that is lindsay belle and michael tyler. good to have you here. >> thanks for having us. >> ray dalio, linked in post, he's worried about the markets to me you see a rally in commodities, you think that's portending good things for the economy. he's nervous where do you fall on the issue >> i think there's good reason to be optimistic now on the economy and on the markets i think the rally in commodities is telling you something it's telling you that asia in particular is doing reasonably well that's drawing demand. global growth is on the upswing. i think that plus a slightly weaker dollar is enough to continue drawing u.s. economies to do well >> lindsay >> i would say we are long-term optimistic on the market but we're august going into september, the two most volatile

and worst performing months for the s&p 500. i can see where some concerns come from we have some big issues coming to the forefront we have budget talks, tax reform that will be on the table. could create a lot of volatility >> his linkedin post is about geopolitics, which thus far has not derailed the market at all you sound like it's the classic it's been a long time since we had correction, reversion would mean at some point it will happen >> exactly geopolitics is always something hard to anticipate the fundamentals are there some of the major things when we enter bear markets you usually see inversion of the yield curve. we have a lot of positive economic data points >> you know the copper roof thing, right >> yeah. >> every bull market has a copper roof. that's what you were eluding to right? which is not -- doesn't make sense, because if things are

percolating, you know, as far as global growth goes, should be good for the market. it seems to indicate you're getting to the end of a cycle if every bull market has a copper roof it doesn't seem like there's inflation that will result from commodity rises. you don't have it in the wage sector >> the wage sector is interesting. though the reported wage numbers are 2.5%, that doesn't include a lot of things like bonuses, commissions, so on it only includes salary and wages. if you look at tax data from payroll taxes, you find actually more like 6% wage growth, 6% total composition growth at the high-end of the job market, there is a shortage, but at the lower end we're not seeing it. i don't think the fed is noticing that. i do think an inverted yield curve is a concern the spread between the 5 and

30-year treasuries is tight that gives them very little room to raise rates, other than the one time they're promising >> so we could get an inverted yield curve? >> it's closer than people think. i think we're two hikes away from that. the fed is and ought to be concerned about that that's why they want longer rates to rise well the only way to do that is get strong economic growth >> what about selling the stuff you own? they're not selling. they're letting maturities roll off. what is the duration of a 30-year bond maturing? zero unless they sell long-term instruments, which they're not doing, you won't have a benefit to the long-term interest rate >> you said long-term optimistic, but short-term you thought the market might struggle a bit in terms of a strategist, you tell your clients to do what >> it makes sense to get more

defensive in the near-term utilities are rallying we like that sector. >> even though it's really expensive. >> it's really expensive, that and consumer staples earnings have been good coming out of that group even though you have competitive pressures and lack of inflation. all right we're more cautious. considered a defensive sector. >> if you read into this ray dalio piece, he's the opposite of where you are you may be short-term bearish, long-term bullish. he says while i see no important economic risks on the horizon. he's not worried about now he says i'm concerned about growing internal and external conflict and inefficiencies.

then he goes on to say it could be 1937 in the future. he's been making this argument -- >> we are now economically and socially divided and burdened in ways that are broadly analogous -- >> i think it's analogous to 2008 >> just to put a fine point on it -- >> don't you ineffecti ineffective government, gridlock doek the did okay then. this is not somehow -- i would not say this is his fresh take he's been making a version of this argument, maybe he's getting more pessimistic long-term. >> was a construct so he could have a different version of the market discussion. >> no, no. no >> there's nothing new about ineffective government and gridlock >> just making the point that he may be closer to where you are >> the waterboarding stopped >> i think tax reform will be a

great test for congress and for the gridlock that we are seeing. it is impairing, it will eventually impair economic growth >> what do you think is built into the market on that? very little. >> zero. so it does not go down if nothing happens this year. >> right >> you probably get a strong rally if they do anything. >> even a 5% cut >> yeah. >> thank you >> dalio was bearish five years ago. >> like i said it was a construct for our market discussion >> i just wants wanted to make everybody -- >> he has been on this tact for a while. i remember thinking he has a gazillion dollars under management and he's bearish. at this point we're waiting -- >> all right coming up, we'll talk about the role of business leaders in

politics wes moore is the ceo of the robinhood foundation he wrote an op-ed about standing up to hate groups. as we go to break, here's a look at yesterday's s&p 500 winners and losers

♪ good morning u.s. equity futures at this hour are indicated higher we're up 50 points or so after the market the market ended higher yesterday. up 41 this morning nasdaq indicated up 22 s&p indicated up 3.25. treasury yields back above 2.2 copper hitting the highest level since november of 2014 still though, that doesn't look like a copper roof yet >> so the premise of my previous segment was okay >> your premise was right. a copper roof -- >> i was asking with commodities rising, isn't that a good sign for the markets.

>> i know. but it can be seen as a negative >> okay. ceo activism reached new and public heights following the charlottesville protests here to talk about that is wes moore, ceo of the robinhood foundation, best-selling author and retired u.s. army captain. we'll call him great american hero you wrote a piece after the events in charlottesville, a moving piece called the kkk chased my grandfather from the u.s. but he returned he's what he would say now what inspired you do it? how difficult as the ceo of an organization was it to do it >> was challenging because i think in this moment he was the first thought i had you know, when he was six years old, he was born in south carolina the ku klux klan chased his

family not only out of the town, but out of the country they were jamaican imgrants. when they saw the level of fear and intimidation placed in their lives, their reaction was to go home my great grandparents never wanted they wanted nothing to do with america after that my grandfather had a core focus to come back he came back he became the first black minister in the dutch reform church he was here in the south bronx went to brooklyn he this passion for this country that i thought was just so unbelievably admirable so much of the love that i have for this country came from him i felt not only did he -- he was the first thought that harkened in my mind when i saw what was going on in charlottesville and beyond i think it fit perfectly appropriately in terms of the fact that we as leaders of organizations must have that sense of not just courage but frankly that sense of patri

patriotism >> everybody is grappling -- when i say everybody, ceos have been grappling with how to expression emotions about particularly sensitive topics. you are the new leader, recently named new leader of robinhood. how difficult was it to decide you were going to do this, be outspoken about it, and how far do you go. >> one thing at robinhood, we realize this is intertwined. robinhood has been around for 30 years, it has been involved in the fight to reduce and remove poverty not just from new york city but beyond. you realize this idea of making sure you are always going to fight for the underserved, also the lacing of poverty and race and discrimination, these are things that have been intertwined throughout society for so long. >> it feels like we got into a

moment that's political. you have all sorts of business leaders and others part of your board and organization i imagine with different political leadings how do you contend with that one thing we have to do is say this has nothing to do with politics with a capital p. this has not do with an administration or a specific party. this has to do with what's right. if we have people, in the case of new york city, 1.78 million, 40 million around the country living in povcy, millions more on the cusp, it becomes our responsibility to push in and making sure these issues are being debated and discussed and that we can create alliances around making sure we can make real progress on the issues. >> you were in afghanistan, right? >> yes >> what did you make of president trump's speech last night about what should be done there? >> yeah. this war is also personal. for the past 6 years, either i

or close friends of mine have been in close combat i hahave friends now fighting as we speak while i applaud the decision to get away from a time-based freight work, there's two things i'm waiting to hear. one, what is the exit strategy two, how was the strategy changed at all last night? there was one word that was introduced this is the biggest piece of news introduced from it. one word was introduced throughout the past administration, that's the word win. is that the intention now, we will win this war. the president is saying he's owning this war. he's owning our victory. so i think if you're going to own a victory, you have to be very clear about what that victory looks a like and how we got there. there's a difference between tactics and strategy we saw a collection of new tactics last night i'm not sure if we saw a

different strategy >> different attitude. >> different attitude. >> when you say win, one criticism of president obama he laid out the timetable president trump rearticulated that saw paul ryan yafr afterwards saying they're watching the clock, and once we leave they're ba back talking about the ptaliban. >> when i deployed, there were 17,000 troops in afghanistan i remember thinking we have the land mass relatively the size of texas, 17,000 droops to pa tr t. we will get to around 13,000 in afghanistan now. the attitude has changed and the truth is that there are

going to be probably thousands of families who will get deployment orders. there will be thousands of families who will now be separated. >> yeah. i think when we're talking about a war going on for 16 years, a criticism i've had of multiple administrations, we have to be honest with the american people what this will cost, what 5:f sacrifice where is asked to make and for the sacrifices for those families being dedeployed, we he to know what it looks like >> thank you >> of course, thank you. the company ceo of classpass will join us to announce the expansion. and later, macy's cutting jobs and bringing in a new ceo from ebay. and president trump making a new commitment to the war in afghanistan.

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welcome back you're watching "squawk box" live from the nasdaq market site in times square.

time for the executive edge. in a speech last night president trump signaled he would dispatch more troops to the war in afghanistan. joining us now to talk about what that means for the military's suppliers, morgan brennan. what did you find out? >> president trump will become the third president to send more troops to afghanistan. here's the key about that. what are the roles they're going to fill? the center for strategic and international studies published a 160-page report on this he says this will likely involve specialized officers who will train and assist the afghanis. also expects to see increased air support. to analysts say services contractors will be early beneficiaries of increased activity other names to watch, makers of

remotely piloted air crafted, which are inaccurately referred to as drones sometimes manufacturers of light tack cal and armored vehicles bae systems. and if we boost air support, you're talk about lockheed martin and boeing. we're still light on details here in the meantime there's another development to watch today when the markets open this occurred last night the air force awarded two new development contracts for t northrop grumman will compete for that lockheed will not. it's the modernization of the ground based leg of the nuclear triad. why it's not tied to afghanistan, there's a lot of speculation before the president took office on whether he would modernize this part of the

nuclear triad. joe? >> morgan brennan, thank you appreciate that report coming up, when we return, new york fitness start-up classpass could be coming to a city near you. the company announcing a major expansion. the ceo will join us after the break. right now a quick look at what's happening in european green arrows across the board. "squawk" returns in a moment when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.

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the dollar getting weaker by the day again today. >> the dollar may not continue to go down there's a lot of short positioning right now, and now we're looking at a fed that might still hike interest rates. >> the previous failures and

distractions could actually add fuel to the notion this must get done, otherwise they'll have a big goose egg on the legislative front. >> won't congress bet get something done >> let me get these going so i can be ready for anything coming at me. a company calling class pass announcedi extending to ten more cities , it's the way enthusiasts sweat. joining us is the ceo of class pass i want everyone to understand the business model you don't run a fitness studio, you run a subscription modding where, for example, if i join i pay a certain amount per month and i get access to classes, all different classes throughout the city >> that's exactly right.

you pay one fee to us, no ongoi ongoing. >> you can do anything in the network, depending on the plan the reason we're expanding is because the model is really working. we haven't launched a bunch of new cities because we've been making changes, but just raised $70 million financing, and using some of that capital to not only invest in technology, but to expand to more cities. >> people pay the subscription fees, but i assume you give a cut to the participating studios. >> the vast majority of the revenue goes to our studio partners, but like other marketplace, we take -- >> you're a market maker. >> how much does this cost >> it depends on what city

you're in. >> let's just do new york. >> so $135 for a ten plan. >> ten classes a month. >> yeah. >> the idea because you were giving access to all these boutique studios, that people were -- at least the initial idea was they would go to the places and the gyms would love it, because they would sign up for more classes. >> these were people signing up a class. >> that's the hypothesis in the beginning. my partner thought she would be a lead-gen operation we thought people would find a studio they loved and convert over what we saw is people were

signing up using a different e-mail address and wanted to keep coming through class pass some customers who are loyalists, who gets really excited about one workout our within brand, they go direct we tell our studio partners sell as much as you we have a different customer, now we're getting millennial, men, lower-tier plans. our customer isn't a hard-core brand loyalist, they want variety. >> what you went from a lead-generation on a yield optimization business. >> to the consumer we're a subscription service, to the partner, the studios or gyms, we look a look like what priceline does, you're only filling 35% of your excess capacity, let es try to fill the rest

>> on classes that are popular, may be harder to get into those classes. do you think there will be a movement where you'll strike a deal where those classes are made available, the as well as to the others, or is that never going to happen? >> you have the right question, which is if we're filling excess capacity, if there is no excess capacity, we'll not have that class available. fortunate for us, the whole space is priced at the top of the demand curve, so it's only about 35, which mean 98% of their schedules. >> that being said, we are exploring ways to let people potential pay more. we've got to go. so sorry. >> thank you so much >> good luck. >> cheers. we'll talk more about president trump's commitment to the conflict in afghanistan, with p.j. crowley, a former state department official, next. these days families want to be connected 24/7.

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it all adds up to our most reliable network ever. one that keeps you connected to what matters most. good morning president trump with his first major policy address, announcing he'll step up the u.s. engagement in afghanistan. reaction from washington, and former assistant secretary of state p.j. crowley, that's straight ahead global stocks are rising, and we'll have a closer look at what's driving this morning's move and where you might want to be putting money to work. plus a new travel website that's taking on the big boys, what sets wanderlust travel apart? we'll fund out from the company's cofounder, a name you might be familiar with the next hour of "squawk box"

starts right now. from the beating heart of business, new york city, this is "squawk box. good morning, welcome back to "squawk box," life from the nasdaq marketsite in it times square i'm here with andrew ross sorkin and joe kernen, did you see how smooth that was? i was supposed to say andrew ross sorkin. i caught it. >> it's important to think about what you're saying, because sometimes they put stuff in the teleprompter that you don't want to say. >> right. futures this hour are suggesting a positive open. >> president trump didn't go off-script. >> generally the big speeches he tends to stick to the teleprompter

boeing and northrop t. the pentagon had asked the defense industry to come up with proposals to replace the current minuteman 3 system, which has been in place for 45 years. toll brothers is well above the consensus. the bottom line, and a 6.5% increase in the average price of the delivered home apple has reduced the wait time for customers to get its airpod wireless headphones. originally the wait was about we six weeks, now it's cut to two to three weeks others say it can't reflect reduced demand. ray dalles i don't is reducing risk because of washington worries the manager of the world's biggest hedge fund writing in a

linked link din post, he was initially confidence that president trump could stimulate growth through tax reform, but recently has expressed concern over trade policy and much more we'll here much more next month from ray dalio when he joins cnbc's deliveringal for a. for more head to deliveringalpha.com. eamon javers joins us with more. >> the president spoke to the nation last night from ft. myer, virginia, he be gan his remarks by going to some of the divisive rhetoric, calling for a moment of national unity here, saying

that the united states simply c stage unless it's bound together as one here is what the president said last night >> when one part of america hurts, we all hurt, and when one citizen suffers an injustice, we all suffer together. loyalty. love for america requires love for all of its people. >> the president there emphasizing love for all of america's people he also had a message for the government of afghanistan last night. american leaders for a decade or more have been so frustrated with the level of corruption and the lack of cooperation they have seen. here's what the president said to those leaders last night. >> america will work with the afghan government, as long as we see determination and progress

however, our commitment is not unlimited, and our support is not a blank check. the government of afghanistan must carry their share of the burden the american people expect to see real reforms, real progress, and real results >> the president expressed changes in terms of three specific areas -- pakistan, deadlines and the issue of nation building. on pakistan, the president said that government has been too willing to serve as a safe haven for terrorists the last several years. on deadlines he said the united states is no longer going to give a date certain on which it's going to do anything militarily instead that will depend on conditions on the ground on nation building, the president said the time for nation billing is over and the united states will focus on

killing terrorists back to you. >> thank you for more, we want to bring in p.j. crowley, the author of "red line." good more to yning to you, p.j. >> good morning. >> your first thoughts were what >> i think the president came to the right decision to extend the american commitment. i think he tried hard to tie this to the current state of american national security he was right to put the focus on pakistan as being one mall lined actor playing both sides of the struggle, making it harder for afghanistan to succeed he didn't mention two other countries that are not helpful either, that being iran and russia i think the most stunning aspect of the president's speech was the acknowledgement that 16 years into this war, the longest in american history, you know, the prospect of a political negotiation is still a long-term

challenge. >> he didn't mention iran and russia, maybe because they're not our allies in theory pakistan are our allies, yet they harbor terrorists on the border this is an issue we have instrument well it, almost like china. how do we get china to change? how do we get pakistan to change vis-a-vis afghanistan? are there any levering we can pull >> china may well be helpful in terms of helping clair day what pakistan needs to do the president talked about the tension between pakistan and india last night, and that is at the heart of the unwillingness of pakistan to recognize that its most for that foremost challenges is not a prospective conflict with india. >> can we explain something basic. why does pakistan support the taliban? >> it's supported the taliban,

because they do not want to see indian influence in afghanistan grow behind their back and it's pakistan's inability to come to some accommodation with india that really drives its perceptions and its actions and it's unhelpful actions with respect to afghanistan p.j., one of the other questions is we had wes moore on the show the last hour, he thought the most powerful word mentioned during the speech was "win." he's effectively described a plan to win this war, a distinction from previous presidents from previous administrations. do you see it that way and what does it mean? >> that's a very good question i thought the president put too much emphasis on the military aspect of this struggle. no question that we need to help afghanistan retake and hold territory in its own country,

but we've been at this for 16 years, we've been killing terrorists for 16 years, yet we're no closer to a political negotiation. that really ends up being the ultimate challenge here. you know, we're trying to buy time here for afghanistan to be able to sustain the struggle on its own, and we're also buying time for afghanistan to grow a legal economy so that it can deal with the vacuum that does exist in at least some of its territory, but ultimately we do have to get the taliban to the negotiating table, but the real question -- i was in meetings, and the obama administration where we were challenging pakistan on this, but it's really unclear at this point where the taliban is interested in and able to goevt that remains one of those elusive elements. >> is there any reason to ever believe that afghanistan can have a viable government on its own? >> i think, michelle, what we have done over 16 years is

underestimated how complex this is, and we've underestimated how long this is going to take so we have president trump has leadership the same lesson from president obama, the same lesson from president bush. >> do you think that will be political palatable with the american public, his base? >> there's tension for sure, but i think president obama put the challenge on a more sustainable long-term footing. i think the president has more or less reampffirmed that as log as afghanistan is taking most of the fighting, our challenge is to help them to sustain that effort for as long as it takes. >> p.j., while i have you here, since the book is called "the red line" i'm curious how you think what the president said about two weeks ago about north korea and how you think about

north korea versus these other risks. >> yeah, i think about, you where he has drawn the red line with respect to north korea. i think that's still moving. you know, general mattis has helped hem in recent daze say, look, the red line is if north korea fires something at us, we're going to shoot it down and we reserve the right to shoot it back i think what president trump was toying with is that if north korea threatens the united states in some fashion, that's a red line that's a recipe that gets abu a shooting war, and as steve bannon said, he want wrong with his interview of the american prospects. the challenge for any military operation is tell me how you can do this without putting hundreds of thousands of south koreans and japanese citizens at immediate risk. >> a lot of investors, of course, watch us here in the morning. they're always trying to make sense of all of this both as

citizens, but also as investors, trying to put some kind of cal inclusion around the percentages of what may or may not happen. if an investor or ceo were to call you and say, you know, how big a risk is this, what's at the top of your list and what kind of chances do you put it at >> i think the president was right to bring north korea back up near the top of the list of challenges that we face. the dilemma is partly his rhetoric he has -- he's lapsed into this in terms of north korea, he lapse booed it again last night in terms of afghanistan. these are enormously complex challenges they are going to take a combination of military force and diplomatic skill i think he's putting too much emphasis on the military component of this. we're going to have to find a way to getnoic into the negotiation, and find a way to get the taliban in negotiation

niece of those is going to be easy. >> p.j., thank you for spending time with us this morning. >> always a pleasure, guys. the buy "the red line. miami is at the heart of the battle over minimum wage kate rogers is talking to business owner she'll join us next. and we'll talk markets and investing ideas, with equity strategists. at 8:00 a.m. eastern time, jeff gennette. stay tuned these days families want to be connected 24/7.

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we are in the green pretty much across the board. we'll calm dow 57 points higher, nasdaq up about 28 points. a couple stocks on the move. macy's naming a senior ebay executive at its new president howe lawton will report directly to the ceo it's also consolidating into a single unit. the move will eliminate about is 00 jobs.

macy's ceo will join us live at 8:00 eastern shares of bhp bill the ton raised its dividend. and it announced plans following months of pressure from elliott management tronc -- a nice name to it -- has named ross levinsohn he's also replaced other newsroom managers. he's a cnbc contributor and will be on "halftime report" today. on at noon >> "halftime report" is from noon to 1:00, but you knew that. >> i wanted everybody else to know that. the minimum wage still

stands, but cities and municipalities are taking matters into their own hands kate rogers is in miami looking at how a local wage battle stands to impact small businesses there kate >> hey there, michelle good morning in miami beach there's an ongoing battle to hike the local minimum wage to more than $13 by the year 2021, $5 more than the current minimum wage, but for some small businesses like panther coffee, where we are live today, they do have locations, paying more than the minimum wage is a no-brainer joel and latisha actually start their lowest paid workers at $10, and that's before tips kick in they say it's simply the right thing to do. >> we can't have the business without a team if people come to work and don't feel appreciated or respected, i find minimum wage disrespectful.

>> reporter: the florida retail association says it will simply be devastating to local small businesses we talked to james miller, the group's communications director, he told cnbc that the wage ordinance would see jobs maybe going away all together, and higher prices for consumers. one thing is for sure, wage battle or no, miami is a growing hub for small business activity. the kauffman foundation found it the number one metro in the country for small business growth there's tax credits for jobs being created, and of course florida itself has zero personal income fax for all those small businesses that file at the individual level back to you. when we return there's a new prince and princess of bel air with jay-z and beyonce what they spent on their new home take a look on futures

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i love these kind of stories. the power couple securing a massive mortgage to buy their new $88 million home you heard that right the home cost $88 million. public records show they got a home loan totalling nearly $53 million. the mansion sits on two acres, only two acres, by the way, of land with six structures the gated property has four outdoor swimming pools, a spa, wellness center and a -- i'll say it again, a is a 15-car garage so there you have it >> $88 million is a lot in last. $88 million in l.a. is a lot of

mon money. >> wouldn't know -- >> because you did deploy the cash elsewhere why tie it all up? if you can't write it off you definitely already paying the monthly interest you may be able to beet somewhere else. >> does it prove the point, though, that maybe we shouldn't have interest deductions on mortgages? >> we don't on that.

>> do we have an image here? this is in times square. this is a big box or boxes, we should say, of sugar, part of a campaign against sugar this is what they say being consumed here it's a pretty remarkable thing they have put together. >> part of the ongoing war on sugar. >> it's a marketing for the sugar-free product. >> children in the u.s. consume 4.7 billion pounds of added sugar every year. >> it's free of added sugars. >> every five minutes? >> every five minutes.

>> wow think how big the country is you know, we're not smoking, we don't feel quite as -- >> it's the white powder, but -- >> keep it in perspective. >> if we could get people off the amount of issue gather we're consuming, 28d be better for everybody. >> case closed, because andrew said it. okay didn't you do okay don't you feel okay? i had issue far. >> did you each count chocula? >> is it an epidemic you don't -- >> you told me it causes diabetes they don't know a lot about actual cause-and-effect. red meat used to be horrible, too. is everything at whole foods good, too? >> how about -- how about gmos >> how about gluting free. >> are we going to debate whether sugar or good sore bad

everybody in moderation. the problem is it's not being done in moderation it's done in soda -- >> we need -- we're going to get back to the markets after this. >> i can't even believe we're having this conversation. >> i mean, carbon dioxide --

>> announcer: welcome back you're watching "squawk box," live in the nasdaq marketsite in times square good morning we're live at the nasdaq -- among the stories front and center, another day, another clarification in the takeover speculation involves fiat/chrysler. great wall said it's indeed evaluating a bid, but says it has not formally contacted the company. that's in line with what fiat chrysler said. michelle is going to stop us for a second. >> i think it story is extraordinary, if you go back

and real some of the original reporting. "automotive news" set they received an e-mail from the ceo of great ball. who does m & a this way? instead you tell a reporter via e-mail we're definitely going to buy it it's bizarro-land to me. you covered m & a. >> now they're playing the technicalities, did they get in touch -- clearly there must have been some back-channel -- >> how often does somebody on the record confirm to you via e-mail they're making a bid for a company without anything official -- >> i'm saying it's unusual. >> exactly call it what it is it's weird could we reach peak facebook according to research company e-marketer facebook will see a decline in teen users, the first time e-marketer has ever

predicted a drop also the national transportation safetyboard has now scheduled september 11th for a hearing to determine the cause of a fatal may 2016 crash of a tesla model. that car was us semiautonomous driving system ntsb had said earlier this year that the driver taos his hands off the wheel for an extended period of time there are reports that he might have been watching a movie at the time during the drive. all right. back to the markets now. here with us is mike ryan, and david leibovitz. good to have you here, earnings season almost over, so that catalyst or derailment is behind us turned out to be a catalyst. and jackson hole on friday, with the fed still cheap money even though they're talking about raising interest rates what are the chances there's some kind of market-moving event

as a result the jackson hole >> i think that expectations are pretty well set. you make a good point. we are entering the black hole of august, low trading volume, low liquidity, so we need to be on our toes, bur our expectation is the balance sheet reduction will formally begin following the september meeting. i think what will be particularly interesting, is the comments around inflation, financial stability and the possibility of a third rate hike form the fed is clearly concerned about assets bubbles we're seeing much more asset inflation, so i think weighing her comments and getting a sense of how much inflation will give a good glimpse into what to expect for september. >> i think david is right here i think the real issue for the fed will be the focus on inflation. let's face it. inflation has serially

disappointed also we see progress towards the fed's 2% target, i think it makes it more and more different to raise the rates market has about a 40% chance of a go in september. on you view is we'll seed some improvement, but a lot will depending on what we ein terms of inflation numbers >> and long-term or short-term utilities were positive last month, one of the few sectors that were, because people fell far more relaxed going into what was a high yielder at this point? >> i think the real question is how much of an effect the reduction in the balance sheet has and the potential for that to put not i think is a real

possibili possibility. >> that will be bad for the banks. >> i think -- the concern had always been they do it in a manner that's disruptive certainly from the banking system, you want to see higher rates. but i think the market wants to make sure they don't come in a sporadic or episodic manner. what the fed will go, then, is a directed approach. >> so, david, you managed assets how are you managing them right now? >> i think the earnings story gives us confidence that the fundamentals are fairly sound at the current juncture i'm with mike. i think it will be a well telegraphed next 12 months of federal reserve action, which i think will keep equity markets from getting terribly volume

tiff we're embracing opportunities. >> i think this puts an enormous burden on earnings right now let's face it. they were punished >> so within the u.s., we would -- financial technologies. we're warming up to energy you know, activity data outside of the u.s., with earnings

growth out, we do think there's some -- >> bolstered that. >> we reduced a bit. that had been or largest overweight we've balanced it out and increased our waiting relative to the u.s. both in terms of non-u.s. developed markets the. >> why >> because we think the earnings growth store is birr we've had this chronic set of weakness conditions. first in emerging markets, then clearly in europe. you're starting to see the global -- and the earnings back drop is much better that people fully appreciate so far. >> thank you, gentlemen. good to have you on. coming up a new travel website with a twist we introduce you to wanderlust travel.com the ceo is a junior, not a senior, the break tells us what sets them apart tro an already

d 8ded feel anat:00 a.m., the ceo of macy's will join us. "squawk box" will be right back.

welcome back to "squawk box," the futures are suggesting we'll have a positive open at this hour. the dow would open higher by 53 points, the nasdaq higher by 28. >> okay. adp's ceo sounding out of on bill ackman last might on "mad money", telling jim cramer, quote, he takes offense to some of the claims made about his company. just yesterday adp unanimously rejecting the attempts he told cramer about a phone call he had. >> i had a conversation with bill right before, you know, we, i guess, agreed to disagree he was going to launch a proxy contest. i asked, bill, i know you have a vacation and why you need an extension of this deadline, but when you get back from vacation,

why can't we meet then he said i'm afraid that's not going to work. i have to have the leverage over the threat of launching a proxy contest in order to get you guys to agree to the things i want to do with the company. >> ackman's pershing square saying the characterization of that conversation is, quote, totally false. adp shares have taken a tumble, down more than 7%, you know, if it's not working with my vacation schedule, that's usually what i say, i need an extension. >> the founders of gear -- the founder of gear and "spin" magazine is on to his next venture. gianting us is the founder of the new website. wanderlu wanderlu wanderlusttravel.com.

>> congratulations >> your dad was the publisher of -- >> the original "penthouse." >> can say it. >> a hero to some people. >> some people on this panel, at this table >> don't look at me. >> i'm looking right over there. >> i know. i know >> i was 14 years old, okay, and i didn't understand objectification and everything, so i happened to -- [ laughter ] >> i was 14, okay? he tells me now, which is -- i'm a bit disturbed, he says my mother knew i had a couple of these. >> no doubt. no doubt why didn't she sever saying anything >> anyway, tell me about wanderlust you started it -- >> a very straight, legitimate

travel site. you know, i feel that travel media has be able a bit generic, sort of a patina that everybody is fabulous, though that's true, i think travel is mower about the soul, more about our innate desire to move, as infants we start crawling away from wherever we were sitting it's the way we express ourselves. i say the first story ever told was a travel story it had to be to get us out of the caves. from there we keep exploring perhaps most importantly it should be fun. >> and there's nuance. you have to talk about to sorkin >> he niece knee wants >> no, bhutan, vietnam faro faro in africa he needs

nuance and exotic stuff. >> how to pack for mars is one of your stories. >> i love that the reason is i wanted to say a little statement to the industry, you know, that all of this ubiquity on how to pack articles, i don't know, i'm an adult. i know how to pack badly, but i pack. so i thought well, let's have fun. actually it's a real thing there's a entire chunk of nasa dedicated to the one proposition, because you can't just pack everything you want. >> it really is limited space. >> 0.1% of the weight of a mission is not the rocket and the fuel it's everything else so you can't pack a lot. >> what is the business model given how crowded the space is >> it's not crowded with good ones, and, you know, all through my career at "spinning," "gear"

i bought and sold "discover." as long as it's interesting, people support it, i think we can grow probably into e-commerce at some point. >> so it's rif for lead generation kind of product >> i think so, but i think it has to be done in a way with integrity. with all due respect to a jetsetter, which is more a travel company rather than a publication, i think you have to first establish an identity and a personality and honesty with your audience, then i think they want you to guide them to things. >> when i say ten best shatto in france, are you getting a cut of that >> no the at all, i wish i was >> is that the goal, though, eventually it will be part of our business, but very transparent that was just a list, not even a

ranked list. >> also fashion business for a lodge time, too, is whether the journalist or writers about these locations effectively all of it is a big freebie, and whether they need to disclose that in fact some celebrities have not disclosed certain things like that on social media and the ftc is looking at that how do you address that? >> very transparently. we'll be honest if we do, but i've said to publicists we want to send your writers this place or that place. i said, great, we september the invitation, but we're going to write or piece if our writer goes to bhutan, they'll write about bhutan, if they're happy with it, then fine i don't have a -- i didn't have a problem with that with "spin." we always did our things, and

raers knew we did our thing. what missing in travel media, and i'm already on making enemies, but there's no humor. and why not? the world is funny you know, it's full of funny things and funny people and funny situations, more so than at home. so i want to bring that humor, and i mean wit, not comedy it's not a comedy thing. the name is wonderlust, homage to your dad >> no, no, most of my life is a homage to my dad, but no, it's a lust for wonder. a spin-off of the word wanderlu wanderlust that word is 100 years old, for people who went to the empty quarter in the sahara and discovered great swathing of thor today wandering is not a big deal, nots an accomplishment to wander around the world, but to worlder is an accomplishment

i think if someone loses their sense of wonder, they kind of have given up. our tagline is it's a big world after all. it's massive full of so much we'll never get a chance to see. i wanted to bring the largeness of that of what we don't know. >> i could go on all day there's a idea about fantasy islands, what to know. >> important consideration >> travel sites often head to be high-end sites, they tend to be geared toward the rich. >> we call ourselves a luxury travel sites, and i'm going to cheat. we'll be about interesting places i'm not looking to do backpacking across nepal, because it's done better elsewhere. i think the luxury end is done flatly and uninterestingly, so i want to make it interesting. >> why

for example? >> i think too many talk about the threat counseled of seats on you how fabulous coffee is on the patio in the morning i think a travel site should be about the environment. >> can i ask one thing >> one thing that's changed the travel business is tripadviser, the idea that people are generating their own comments. before i go on a trip to any hotel, frankly before i would reed "travel & leisure" or "wond "wonderlust" perhaps, i often go to trip adviser to figure out what everyone is saying, what those people actually like are they four seasons aficionado or holiday inn? but all of that has changed -- the whole idea of reviewing

properties in the same way amazon has changed the idea of reviewing books, do you think that's changed how you approach it >> no doubt. it's changed the entirety of travel media, but i don't think it's necessarily replaced good reporting, interesting reporting. again, not just about a hotel, but about where that hotel is, what the culture is, who the people are, what funny interactions happen when coaches mingle and sometimes collide. >> i think great journalism will always trump i read trip adviser, too, and there's so much of it, and so many different opinions. when you have that many different opinion, imagine applying it to the financial world. would you buy a stock based on the fact that 400 people had 400 different opinions you actually want one smart opinion or one of two or three smart opinions

i have great respect for the travel leaders >> is "travel & leisure" still owned by american express? >> no. they sold a few years ago. >> so fun having you on. >> thank you very much >> i saw a couple articles that i want to see. what's the best hotel in rome? >> yeah, that's -- >> i want to see that. >> that's an example of the mainstream reporting we are doing at the core. there are a lot of hotels in rome >> and i like that >> i think the j.k. place is not as beautiful, and the michael anglowouldn't even make my list. best new hotel >> maw the lauren? >> where is that >> that's in the bahamas that's just a beautiful place. the copinsky in havana looks

amazing. >> we'll chat during the break >> okay. >>. when we come back, stocks to watch, and then the ceo of macy's is going to join us 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.

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a 14% gwinnett it also posted an unexpected rise in same-store sales and announced a share buyback. >> medtronic, revenue fell below, and the supply issues involving its diabetes sensors and restaurant brands international a top pick at ubs, says the parent of tim horton's burger king and popeye's should continue to outperform as it opens more locations and drives comp sales higher. cosmetics maker coty broke even for its last quarter revenue did beat forecast, but the company significantly increased it's marketing -- coming up, corti reagan will

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i will not say when we are going to attack, but attack we will a cnbc exclusive, macy's poaches a new president from ebay we'll talk to the retail giant's ceo about the shake-up straight ahead. facebook could be losing its grip, and snap's dancing hot dog could be to blame. the final hour of "squawk box" begins right now ♪ you make me feel like i'm livin' a ♪ ♪ teenage dream the way you tur me on ♪ ♪ >> announcer: live from the most powerful city in the world, this

is "squawk box." i'm joe kernen, along with andrew ross sorkin, he has very sterile hands. >> just pure. >> we have many things in common one of them is. >> germ ophobe >> well, you know, yeah. i fist bump. >> there you go. >> fist bump better than the -- >> than the handshake. a quick look, up most of the morning after gains were posted yesterday after two down weeks >> and the s&p under 6, treasury yields hovering around 2.2%. just below that.

afghan strategy in a primetime address as the nation as candidate he insisted america pull out of war-torn country, though in the speech he reversed his stance >> america will work with the afghan government as long as we see determination. however, our commitment is not unlimited and support is not a blank check. the government of afghanistan must carry their share of the military, political and economic burden the american people expect to see real reforms, real progress, and real results >> he's living decisions about the number of u.s. troops to defense secretary jim mattis in corporate news today china's

great wall motor put up a controversy that it indeed is evaluating a bid for fee at chrysler, but it's not formally contacted the company. notice the word "on formal." levinsohn -- also replacing the times' top editors and manager levinsohn is a cnbc contributor and will be on "halftime report" today. toll brothers earned 87 cents. that was well above estimates. however, revenue was slightly below forecast deliveries were up 26%, the average price up 6.5%.

stock right now lower by 0.7 of a%. >> apple has reduced wait time to get >> it is a little weird. totally weird. the crown jewel of fee at, and worldwide symbol of american military and manufacturing might is an interested chinese suitor. >> yes. >> you know me with the bacon. now you're --

>> such an iconic brand? didn't we sell the humvees at some point >> tal be strange -- >> italian company -- >> i used to have a jeep. >> we have an actual jeep in the family now, a whatever -- a sahara >> phil lebeau syphius would be a hurdle -- that's the committee that looks into foreign investments and whether or not. >> i'm thinking of the other guy sysifus. >> sore about that private label functions, let's get to courtney reagan she joins us with a special guest. hi, courtney >> good morning, joe

we have some exciting things to talk about here. i'm with macy's ceo jeff gennette we're in your woodbridge store how long he's coming from ebay, taking over one of your titles and you're realigning merchandise how will all of this help macy's lift sales >> thank you for having me i think yesterday's announcement was all about how macy's is going to grow sales faster the first was hal lawton, and he's a great choice for macy's what he learned in terms of his retail experience, and now coming about, and then we made this other announcement about massively restructuring our organization we took three organization, collapsed it into one, and put

an internal great leader jeff cantor to run that our consumer insights teams, we moved into that, so we believe by the pricing decisions that will fortify into a simplified merchant structure, we can grow sales faster at better margins. >> because you'll be able to turn inventory faster? >> and we obviously take lots of markdowns, and having science inform those decisions at a pitch more robust level will help us grow faster, get better margins, drive more sales. >> you've only been ceo for five months, but you changed the way you sell shoes it's not open sell, you have some digital pricing, so it can help update prices and sizes available, making some changes in fine jewelry, beauty, back stage you're doing a lot is it possible you're pulling

the right levers and you won't get the customers to come back >> we're approaching business by business, story by store -- you mentioned women's shoes, fine jewelry. we are our big ticket business our fragrance business, we're winning in certains businesses n. certain stores. we have to put more of them on the board. we had a saul second quarter we have a big half fimplgts fast fashion players, t.j. maxx, now looking at prime wardrobe macy's can't afford to do a program like that. the profitability, there is none so how does macy's compete with that how do you keep your shopper from turning to prime wardrobe for all of her needs >> we talked about the last time we were together some of the initiatives we are working on. one is a new loyalty program right at the hard of what our consumer has been telling us

we're excited to launch that in october, we have that built into our plans and where we believe we will have success off price is lifting the entire building by mid single digits in those stores we talked about the next generation of stores when we were together, woodbridge is one of those what i'm excited about, this is a typical shore. this isn't a flagship or super regional center. this is a typical store. the changes we have made in the shopping experts as well as assortment is lifting the built. with yesterday's announcements, with the simplified structure and this new leadership with hal, we believe we'll have the team to take us forward faster >> michelle has a question >> thank you so much for joining us in terms of investors who might be watching. is the different safe? how do you think of cash flows.

>> so you've done a lot with real estate. i know brookfield is looking at 50-plus properties do you have any updates to possibly redevelopments? i know investors are getting a little anxious about what else they can extract from macy's, as the share price falls. >> we have a good strategy in real estate. brookfield is one of those expect us to make progress on that we expect of the 50 properties there will be a good share we will develop, and more will come on that announcement in the future we also will at any time -- in -- we still have another -- and we have doors, we are continuing to monetize, and then

the big one, which is herald square, that is a big opportunity. it's a very complicated process, expect us to take care there, but we're taking that one very seriously. >> so you mentioned the loyal program. the amazon has the best loyalty program in the world they make it so, so easy do you look at any models, you're offering convenience, you're offering them choice, but do you look at a prime model >> we do actually when -- we have a thanks for sharing program that a customer pays to get a discount, so expect what we're launching in the beginning of october will basically give our best customers better rewards than she's ever had before that's on our list, is the opportunity to have a pay for play program we're not announcing it as a year-round program, but we're selling it today in our stores with a very dedicated customer base that takes advantage of that. >> joe has a question. >> just a quick one, courtney.

another way down from 74 to close to a multiyear low at 19 1/2 or so, if there was just a one mitigating -- one or two mitigating factors that the company has faced that it had to deal with in the last couple years, would you say it's amazon is it malls? what exactly are the challenges that you're facing right now to right this ship in terms of the stock surprise >> i think the best answer is where our consumer has gone. our consumer has more choices than ever. some of the brands we sell have more distribution than ever. when you think about a store's experience, the expectation of a store's experience has changed faster than ever so we're focused on that we obviously invested early in digital, and they remain as robust as ever, but we're

focused on how we take them all and bring them through the entire system. including what we do while we're here today in woodbridge is how do you scale that that are the side of woodbridge, nots just in your flagships. >> frictionless, we still have the advantage of great stores in the best malls in america. we have an amazing website, making the connections between the way she shops and all of the touch points is our journey. we believe we have the competitive tools with our strategy and with the talent and the structure change that we made yesterday to accomplish all of that. >> can we finish can one final -- >> and if that's going to be the case, is it inevitably going to be based on a much, much smaller company? >> i'm very excited about the

green shoots expect us to. >> if we can finish with one big brought question about stores, at the same time when one of your competitor issues a support that's pretty dire, all your stocks fall. do you need to be in this together and do you think the department store model is viable. >> i think it is viable. we now have new economic models through lease or hybrid to make this an exciting destination i'm actually encouraged by a number of my competitor's positive results i think it's there to be won i think we have a consumer that wants macy's to win again. with the right tal ton drive it, simplifying the process so we didk go as fast ago the speed of our customer macy's can win again. >> we want convenience, and if you can bring that home, i think macy's a a good chance of being here for a long time.

>> appreciate it. >> i like the macy's day parade. >> this stock has an nearly 8% years old. that's extraordinary if you believe him, and what he has to say, he's committed to the dividend it's a big payer, huge you have to wonder if it's at risk. >> when it was $70, it wasn't an 8% yield >> it puts a floor on the stock to some degree. still ahead, president trump unveiling a none afghanistan strategy, vowing to defeat terrorism in a primetime speech. up next from retired on army general kimmitt.

the vacuum we created by leaving too soon allowed them to grow and launch attacks. we cannot repeat the mistake our leaders made in iraq. >> that was president trump last night in his primetime address joining us is mark kimmitt who

served the george w. bush administration, and assistant secretary of state for political military affairs thank you for being here. >> thank you, good morning. >> your assessment of last night's speech >> i think it was a good speech. he made it his war, his strategy there's been a lot of question for quite some time not only among the general public, but among the troops about which way we're going in afghanistan i think to a great extent hi put that to rest least night >> some would say if you listen to generals, they will always tell you more troops are needed. president trump campaigned on leaving afghanistan. so i'm won'ter dim i'm predicting the answer i'm going to get, but year thoughts on that divide which drove the

election s there is a mission remains for 17 years we've been there. we kept isis contained in iraq is and inside -- so that core mission still remains. because of that, it needs to be resources against that, so i think that provides the justification for the troops being there. >> you agree with that, or what kind of pressure, how do we exert it >> i think the initial pressure will you economic and in terms of aid we provide billions and -- hundreds of billions to pakistan every year to improve their military as well as their economic situation what president trump said last night is that aid is going to be

conditioned. if they act in responsible ways, holding up the haqqani network and those other elements that come into afghanistan from pakistan, that aid will continue if not it will be reduced or eliminated is the gold the eradication of we also discuss what is winning? >> that's a fairly low bar, but when you add on the other requirements, which is generally a self-sustaining stable government and a military that can do its own defensive requirements rather than requiring outsiders to come in, i think those are the minimums we're seeking before we can say we succeeded over there. i never light to use the word

"victory." we are seeking success. >> it sounds an awful lot like nation building. i don't think so, as was said last night, it's more state building we can help with the structures of the state and the institutions h.r. mcmaster for many, many years worked on the anticorruption efforts there, so there are elements, rule of law, legislation, those types of state-building functions that the united states can help with. when you start getting entwined into all the of the elements of afghan society, that's the type of nation building that i think the president is trying to avoid. >> general, thank you so much for joining us this morning. >> sure. general kimmitt. why facebook executives could be saying oh, snap they might be losing ground to the sadippearing app "squawk box" will be right back.

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google is working on a possible direct shot at amazon echo spot. unclear if it will have any additional features.

td ameritrade is teaming up with facebook for a chat-bot it uses artificial intelligence and machine learning to respond to messages about customers' investments. it will be backed by a human customer support team. i'm not sure i understood anything i just read there i don't know what that means >> a lot of people are just having conversations with the bot. that's how it's going to go. about your financial health. >> that's different than talking to alexa >> no, it will be on alexa. >> but not to alexa. >> but using the underlying software. >> got it. coming up, when we return, stocks on pace for the biggest monthly decline since october last year, the futures pointing

to a higher opener right after the break, and later, i love volvos taking the first steps to roll out the all-electric we'll hear from the ceo right after the break.

♪ it will be okay ♪ dance dance dance ♪ just dance still a lot of cabs around good morning welcome back to "squawk box" here on cnbc live. front and center h & r block is getting a net chief executive offer. jeffrey jones, a different jeffrey jones, most recently president of ridesharing at uber will take over on october 9th. he also served as chief marketing officer at retailer target and is a principal at the school proferris buehler went to high school. >> how does he do it all >> yeah, all over the place.

replaces tom geriky necessarily, unilever and tyson foods are announced in a volcano venture with ibm, used blockchain technology to track food supply chains blockchain first came to prominence as the technology behind bitcoin. >> that's interesting. you'll use the technology behind bitcoin to manage supply chains? the argument has always been the greatest thing about bitcoin was the underlying technology. so this is another story i don't actually quite understand, but sounds very intriguing. >> i don't understand, either, but that never stopped me from moving on. mining giant bhp bill iton after the at thesh called on to

shed underperforms assets. facebook losing ground to one of the its own platforms, at least when it comes to teenagers, according to a forecast from e-marketer facebook using among 10 to 17 years olds will decline for the first time this year snapchas would take over by the end of 2017. that's good news to snapchat we do need to remember, of course, that they do own instagram. >> i didn't think about that earlier. i was thinking it was significant, but they own instagram anyway and it's not the end of social media. just a difference. >> the real question is whether snapchat is taken over for teens. the teens will be in that are 20s at some point. do they stay with snap is that how this happens >> it's kind of like radio

stations, right? they can either stay with their pop genre forever and they're always catering to 20-year-olds, or do you grow older with your audience, and always play hard rock like they do in new england. we'll so. >> the electric car generation will create a lot of loser, estimating the populate of these vehicles will they say it could create big issues for maintenance businesses, lenders and also oil companies volvo is pressing the gas on under the circumstances all-electric lineup. phil lebeau has caught up with the north america ceo. >> well, remember volvo just a couple months ago said we are planning to go all electric over the next seven years we're not going to completely go ahead rid of internal combustion engines, but converting more and more to an electric platform along those lines, the vehicle they are rolling out here in the

u.s. is the xc60 t-8 basically a compact version of were theirs most pop you ullr suvs and crossovers. you will get that electric benefit for the first 20 or 30 miles you drive the vehicle. it's all part of pushing the lineup to be more electric and selling 1 million electric vehicles worldwide total by 2025 here's the ceo of volvo north america talking about the greater interest they're seeing from consumers to buy electric >> every time, like when we announced two weeks ago we are going for electrified cars by 2019, you instantly see that it sparks an interest the demand is increasing, with the result, by example, that the t-8 sold out until early next year

that's definitely not something that we expected. >> it is the kind of buzz that volvo has been looking for go back to 2010. that's when chinese automaker bought volvo from ford remember volvo was struggling under ford ford was not giving it the money it needed. for jillguiel geely it's worked well guess what ford shares have done since they sold volvo? down 18%. >> what do you think about this talk about great wall buying jeep there, phil >> i'm not surprised look, great wall needs to expand the chinese government has told its automakers you need to do more than simply grow sales in

country. if you are great wall, and you are making almost exclusively suvs, what's the best brand out there for you to grow globally jeep it has great worldwide brand recognition, barely scratched the surface in terms of expanding those sales beyond north america. you look at europe, the potential there, the middle east, and certainly you look at china. boy, they really haven't done much yet they're just starting to get going. if you're great wall, you would love to have jeep. if you're sergio marhe said he'i the market for a deal for the entire company or potentially jeep or ram or some of the assets from the company. sergio is always in the mood to talk, but you better make it a formal offer jeep is the crown jewel, the most valuable asset that fee ate chrysler is holding. they're not going to sell it for a song they are going to want full

value, or if it's part of the whole package. >> is there an argument. you think the government would step in for any reason remember they did help, by the way, with the rescue of chrysler the first time around. >> and very focused on chinese acquisitions. >> you don't make america great again selling jeep to a chinese company, phil. >> if you're great wall, it's going to take a lot to swallow all of fee at chrysler market cape it's larger than great wall, so maybe they take a partial investment they can say we own a part of jeep or fee at chrysler, and if you're the trump administration, what do you say to that? no, can't have part of the company? i would be curious to see a reaction for the trump at mrgz. >> you know what made me roll my eyes in your report, the chinese government wants them to expand

overseas that is the essence of china, the topdown is telling all these corporations what they're going to do and how they're going to invest overseas or not, depending on the political motives at the moment. it's ridiculous. >> if you look at the suv market in china, it's booming great wall sales were up 44% a lot of that is they're moving down market into crossover utility vehicles, but it's going to hit a saturation point, and for automakers, they're really killing each other they need to weed that out and to expand. >> all right phil, thank you. excellent. if you get a jeep -- look around i hadn't noticed they're everywhere not cherokees, jeeps, saharas the i didn't realize until my daughter has one she waves to anyone else who has

one. it's like keep your hands on the wheels they're everywhere everybody has a jeep anyway, to the broader markets joining us is sarah coater. sarah, i'll start with you we've been saying august will be one of the worst months in the recent past for the stock market unless it recovering it's going to be up a bit today. it's been up a lot you're focused on a value that's still in certainly areas with individual names let's go over a couple of those that you talked about. >> gladly. there are i'd say the sector that'sing woefully left behind is energy. u.s. shale companies that are producing, and they'll be producing at 30% to 35% over the next couple years. the share prices assume -- wti

$30 not close to 50. so investors hate them, and so value investors love them, because we're not leaving fossil fuels anytime see despite what volvo is doing. >> and cord cutters aren't the demise of viacom and other companies. you figure it's been overdone? that's not going to happen either >> yes cord cutting will continue the pace may slow, but there's some very valuable properties in that company, and mtv's ratings are improving. comedy central tracks a lot of viewers. that kind of valuable content can be moved to digit at platforms and attract the millennial, and then the paramount studios out of an $11 billion total market cap that means the rest of the business is trading at something like four times earnings compared that to the stock market at over 20 times, and

there's a bargain there. it's not going out of business, either it generates lots of cash. investors have become very selective. they like certain stocks and hate the rest. so as value investors, it's our job to find value and get those stocks with some of them, for example, with high different yields like china mobile that's a fantastic stock over $200 billion market cap you got to like that >> virage, we had an analyst yesterday that she's not convinced we're on a trend up from here. you appear fundamentally whether it's the diminishing odds of any pro-growth policies, you don't think 118 or thereabouts is the end of the run in the euro >> well, in keeping with the main event in las vegas this week, we actually think it's

showing the -- that's refusing to go down despite a verbal hit from the ucb last week we would probably can't in resistance to fade, but in reality, euro is actually pretty strong we expect it to move lower before it moves much higher again. as you mentioned, it really is a weak dollar story, that's underpinning it. >> you do expect, after the recent weakness, you expect it to get in another sustained up trend over 120 and beyond? >> well, we're not expecting 120 until next year. we expectly expect a bit of a correction to 115, but we can't stress how weak the dollar is. the dollar's weakness is threefold. we have explained that it's pretty much to do with short-term u.s. data and what it means for fed policy, maybe this might ease up, but the other two factors, which is what is shown

to be a reply wall risk weighing on u.s. assets, as well as signs of the u.s. economy topping out in the absence of any pro-growth or significant pro-growth measures from the white house, both are likely to be headwinds for the dollar in the near term. >> thank you viraj, and sarah, thank you. we'll be watching. i'm not cutting my cord anytime soon. >> thank goodness. >> no, i'm not i don't -- >> we work for a cable company. >> what are the other screens? >> second screen >> i'm a second screen called "new york post" right now. >> i'm glad to see you're reading that's correct but reading page 6 isn't it great. >> first place to turn. up next president trump will make his way to phoenix tonight for a campaign-style rlleay. stay tuned you're watching "squawk box" right here on cnbc

hey, i've got the trend analysis. hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.

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welcome back to "squawk box. this morning president trump holding a make america great rally tonight. joins us is j.c. watts, a democratic strategist and purple strategies cofounder steve mcmahon. good morning to both of you. what do you expect to hear tonight, as opposed to what we heard last night j.c.

>> well, i didn't hear much of last night i kind of read some of the reports and some of the assessments that people were given. i don't know i think the president probably goes in and talks about what he wants to do, or what's happened over the last seven months, and, you know, that's not a very good lineup, not a very good menu to give to the american people based on what we have seen when you look at health care, infrastructure, the things that we have talked about getting done, they just hadn't gotten done, and in large part, it's due to a lot of unforced errors that the president has made. so i hope that, you know, tonight will be a start of getting him on a path, getting him in a rhythm of working with speaker ryan and majority leader mcconnell to get where we all would like to see us go.

>> steve, you look at last night's speech, got some good reviews, he stuck to the script, he stayed on the prompter. you have to imagine his team at the white house was happy with that when he does the rallies, oftentimes he doesn't stick to the teleprompter he often ad-libs what kind of approach do you think he'll take this evening? and what do you think it means >> so what i think he's probably going to do is go out and have a campaign-style rally, which is exactly what he should not do. i think j.c. is right. he doesn't have much to brag about. if i was advising the president, i would tell hem to stay at the white house and bask a bit in the afterglow. i don't say this very often and i probably will regret it, but he sounded a little presidential, partly because he was given the same speech that president obama and george w. bush have given before him, but he also but the responsible

president that every previous president has made there's no winning strategy, but you don't want to be the guy who loses it, and i think trump finally saw that last night. >> j.c., you heard that. you've been critical of the president for him to go out and do a really speech, he's not going to address what's happened in the last seven months he'll address what he wants to have happen over the next seven. >> even that, you have to have a good understanding of how the process works. you know, america, we elect presidents, we don't elect kings. there's a legislative process that's very ugly, very nasty, it's been ugly and nasty for republican presidents and democrat presidents, so i think until the processings how you get from a to z, i think the president has an interesting

understanding of how that all works. when you talk about infrastructure, you talk about taxes, some of the good things that the president wants to do i think if you would work with mitch mcconnell, work with paul ryan, kevin brady and just, you know, kind of understand that it's going to be ugly i don't think the tax bill is going to be easy you know, washington don't do -- washington doesn't do comprehensive well on anything to get a comprehensive tax bill, that's going to be quite a challenge. but nevertheless i look to the old pros if you will in ryan, mcconnell, brady let them navigate it and see if we can get something good. >> steve, what's realistic what's possible? >> tax bill. i think it will be difficult, given the fact that the democrats yesterday came out with their three principles, one of which is that you can't give

a penny to the top 1%, one of which that it has to be deficit neutral and it has to go through regular order. mitch mcconnell and the republicans that jncht c. are list there have decided to do the opposite of that it's going to be big tax cuts at the top, not paid for. they're going to put it through reconciliation so they can jam it with 51 votes if the president is smart he will try, dare i say, a purple strategy, with an infrastructure or something attached to this tax bill that democrats could support. >> who is moveable on your team who is moveable right now? >> i think you've got any blue state or any democratic senator in a republican state is probably susceptible that would be manchin, highcamp, donnelly and others. mark warner, tim kaine and others would like to do something constructive and positive a lot of people, democrats who believe that the corporate tax rate is too high

and he has some wiggle room there with democrats and there are also democrats who think we need to invest in infrastructu infrastructure if he's smart and the deal maker he said he was, he could actually get a deal. >> j.c., steve, appreciate it. >> thank you. jim cramer live from the new york stock exchange. we'll get his take on the top stories.

new york stock exchange, jim cramer joins us now. we had a long conversation about macy's i didn't even want to say the "p" word, jcpenney, but i got worried. i looked at it at 75 and then down at 19 and i started thinking, man, it's just all retailers are tough. but it's not going to be another jcpenn jcpenney, is it, jim >> look, i think he just point blank said look, the dividend not an issue he had better things to say about real estate and what he's going to do on the conference call he seemed more control of the future in this interview, which i like i felt, as we did last night on mad money, that there's real value here now, obviously, if the fourth quarter does become more promotional, that's something

that will change the story but i do think that he acquitted himself in a much more positive vain than the conference call. it destroyed a lot of value. >> macy's has this great sort of brand with me. if i need to go to a department store i would go to macy's jcpenney lost that somehow i wonder if they're all headed there. >> no. i don't know the real estate -- you could argue the real estate and merchandise there is worth almost the whole company the company is valued about $500 million as an ongoing retailer penney does not have that. i agree with you with the existential crisis at penneys. i don't get it. ross linhnevso interview at 12:30 pm we'll be right back. nk to keep their global campus connected.

and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.

taylor swift is back on social media and sent the internet into a frenzy, the pop star posting a cryptic ten-second clip of what appears to be a snake moving back and forth after she completely wiped

all her websites, fueling speculation she may be getting ready to release an album. >> i thought the thing was broken when i was on twitter. >> you saw this? >> yeah. i follow her on twitter. i saw a periscope thing. >> how many people do you follow >> i follow a lot of people. you follow none. >> i follow 100 and try to pair that down when i get above t make sure you see us tomorrow. "squawk on the street" is next good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange david faber is off today coming off three straight losses benchmark el