live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. markets moved higher yesterday on this thought that there will be a deal that gets cut. dow up by 55 points yesterday. this morning it looks like futures are slightly lower for the dow and s&p 500 with the dow futures indicated down by 8 1/2 points s&p down by 1 point. the nasdaq slightly positive up by 1.5. all of this happening as we are tracking hurricane irma as it approaches the united states let's look at asia the stock markets there starting with the nikkei, looking at those markets. you will see the nikkei up

slightly the nikkei up by 0.2%. shanghai composite under pressure as was the hang seng, down by a third of a percent the hang seng down by a third of a percent, shanghai composite down by a half percent in europe, in early trading, mostly green arrows. the dax is up by almost 1% the cac in france up by a half percent. if you check out crude oil prices, yesterday up 1% to 49.16. this morning wti back down to 48.99. let's get an update on hurricane irma here's what we know. the most powerful atlantic hurricane on record ham agriculture string of northeastern caribbean islands with winds up to 180 miles per hour it's a category 5 storm. it's killed at least eight people and millions are without power. on the island of barbuda, 90% of the buildings have reportedly been destroyed

for the latest let's get to nbc meteorologist kale dionne. >> it's an active time in the atlantic basin we have three hurricanes irma, jose and katia that's the first time since 2010 the main topic is irma as it marches closer and closer to south florida. this is what the latest update is as of right now looking at 180-mile-per-hour winds, and look at the alerts here. there are hurricane warnings in the purple for really the dominican republic over to haiti, northern part of the island there turks and caicos, which could get hammered by this storm this evening. the southeastern bahamas are under a hurricane warning at this point as we look at the track, if we move over here, you can see a lot of the models are moving this further to the east still west coast, east coast of florida the southern tip up to the carolinas, you need to make

sure you're putting preparations in place it looks like south florida could see this storm as early as sunday >> just wonder how much wiggle room is still left there if -- as far as evacuations for miami, not official yet, right >> not official, we have about 36 hours before we're really going to know where this storm is going to go but everyone still needs to be prepared >> islands are not enough to have this storm peter out. it has to get to the mainland before it loses intensity? is this expected to be a full-on category 5 >> category 5, category 4 as it makes its way closer what's happening here, it's an environment where there's very warm water that fuels the hurricane, also low sheer. sheer tears a hurricane apart. it's a low sheer environment until it gets closer to the eastern side of florida. everything is kind of helping this storm stay strong at this point. we have to hope it continues to

weaken as of the latest update it has dropped or it has seen a little bit of weakening, but we'll see that fluctuation over the next couple of days. heed the warnings, keep an eye on this. >> thank you kale dionne. nelson peltz just unveiled a plan last night to shake up procter & gamble it's a 94-page white paper >> can i -- >> second screen >> i have -- i'm about halfway through. >> you have not finished >> i have not finished >> i suspect andrew has read >> it's something. it is something. trian wants peltz on the board he wants an overhaul of management compensation and more outside leadership trian thinks the consumer giant should focus on buying and developing smaller, more local

brands in a statement p&g said no we don't agree with you they point to the latest full-year results as proof we'll have more on trian's plan for p&g at the bottom of the hour >> great in washington news, president trump is reportedly not likely to nominate top economic adviser gary cohn as the next fed chairman. the "wall street journal" says the president's change in opinion comes mostly from cohn's criticism of trump's response to the violence in charlottesville. yesterday fed vice chair stanley fischer announced he will resign mid-october for personal reasons. this brings the total number of vacancies on the board of governors to four. chair janet yellen's term ends in early february. perhaps janet yellen will be nominated once again as fed chairman trump has softened his stance on her over the last several months saying she kept the rates too low to she's done a decent job

>> stanley fischer, 73 do you have anything on this, sorkin what's a personal reason what does that mean? >> the personal reason i don't have anything on that. the larger question is how it changes the dynamic, at least in the next couple months inside the fed in terms of who fills this vacuum. he was one of these people, always a great wrangler of the other members. sort of -- >> if you have 44 of 7 governors leaving, the entire dynamic changes. >> then we'll talk more about this -- we will talk about the gary cohn piece of this. by the way, or the fact he probably won't, kevin warsh, who was always talked about, his stock has gone down because the person who was trying to bring him to the fed originally was gary cohn. he's considered hawkish.

>> john taylor is another name >> larry lindsay the bb&t guy >> you go back and read the op-eds that some of those people have written over the years, most have been relatively hawkish. he is looking for somebody dovish >> i love john alice, he's like an aei type. hoover -- >> but hawkish >> yes >> if you recognize sort of what his -- >> that's the change that's been the change ofthe president's rhetoric around this, going from janet yellen is keeping rates low, and then thinking i like low rates, too >> the reason that gary cohn seemed like the perfect person was that because he was on trump's team, so he is relatively dovish. if you understand the way he

thinks about this stuff, but it doesn't look that way. the appearance and the actual. >> the black fine comments about cohn were positive you never know about the post. "new york post" says it was a think praise, black fine is not ye yellen he said he is not an academic, but at one point he said i can't think of anyone better to do it. he is the best at understanding the markets. >> coming from lloyd blankfein, he's not an academic is a compliment >> i don't know that he reads a lot of policy papers let alone writes them. the post says those are luke warm comments. i don't know lloyd said something about the markets being long in the tooth. he said it makes him nervous when the yield on government bonds are below dividend yields.

then he's been nervous for eight years. >> you would think the bond yields start to rise as economic prosperity comes about >> but if that's your only metric, it's been that way for most of the -- >> i also think of him as a divining rod to know when things get long >> he's a risk guy, but also sometimes when everything you do is based on downside protection, maybe you don't stay to the end. we have some -- i call this business politics news bipartisan action on the debt ceiling and hurricane harvey relief kayla has that story >> reporter: an unexpected deal. senate majority leader mitch mcconnell introducing a bill packaging hurricane aid with three-month extension force the debt limit and government spending a proposal by the democrats and

backed by the president yesterday. gop leaders are privately stewing over the deal which speaker ryan hours before the president's decision, he called it unworkable. last night mark short said that the deal was an effort to clear the decks in september to focus on tax reform. the president taking to north dakota to sell tax reform yesterday, notably singling out democratic senator heidi heitkamp in doing so democrats were agassed and surprised when they heard about the news the president said the gop is happy enough with the outcome. we will a great meeting with chuck schumer, nancy pelosi and the whole republican leadership group. we walked out of there, pitch, pau mitch, paul, kevin, we walked

out, everybody was happy not too happy, but happy enough. it was nice to see that happen for a chance >> the legislative deck is stacked for december gop aides say the deal sets up multiple fights on critical spending deadlines and gives democrats new leverage speaker paul ryan will be dining with president trump tonight at the white house residencresiden. to be a fly on that wall after all the vitriol between them and mitch mcconnell as well. exxonmobil, the largest publicly traded oil and gas company is undergoing the difficult process of trying to get its large gulf coast refineries back in business after hurricane harvey now as a second storm nears america's shores, i spoke to darren woods from baytown, the second largiest refinery in the united states. >> the area in houston was

impacted significantly by the hurricane. our refinery in baytown and chemical plant had significant impacts, lots of flooding. the team has been working 24 hours, seven days a week since that storm passed through here put ag lting a lot of priority getting equipment back up and running. making sme ing sure plant and pr safe >> it's hard to imagine things getting back up and running at this point what is your take on the damage done and what are the efforts to try to get things running? >> i spent a good part of the day today going around to different units talking to different employees. i'll tell you, the stories are humbling we had people hours prior to the storm preparing for the storm and working overnight mitigating the impacts of the storm, all the effort on the recovery people spending the night while their homes were being flooded,

they were in our refineries working, trying to keep critical processes up and running so when the storm passed we can start the recovery quickly that's happening in baytown. we're making good progress starting to flow barrels to customers out there. the first priority is making sure people and families and the community is safe. second priority is getting our units up and running and resupplying the demand out there for our xhcustomers. >> i know you have about 7,000 employees in the refinery. what's the situation in terms of how many of them are affected? >> we set up a hotline we had impacts in houston and the beaumont area. we set up a hotline and put in programs to support employees. we had about 1,000 employees call in. about 1800 have indicated some type of damage and need for assistance >> the refinery is the second largest in the united states i understand there's capacity for 560,000 barrels a day to come through the plant

how long do you think before you get back to that peak level? >> our plant is about 585,000 barrels a day of crude coming through. that's -- we're making progress on thachlthat it's difficult to predict when those units will be back up and we'll be back to full load we're making good progress hoping to get units started up later this week, and then one unit after the other, we'll keep building on that >> as you're cleaning up the aftermath of one storm, we have another hurricane barrelling down on the united states, irma. we're not sure which direction it's headed. been watching the governor of florida making comments about how they're starting evacuations and how fuel availability is a top priority as irma comes on to the scene what are you doing for exxonmobil to prepare for the eventuality with that? >> we had a team set up that was working on the response to hurricane harvey when irma

started to reform, we saw that moving in. that team formed a subgroup to make sure our supply operations going into florida were robust we've been working that for several days the strategy is to make sure all the distribution system is as full as it can be and that we're getting fuel dribtded to the distributed to the points so if the hurricane hits, we can aid in the recovery once the storm passes through >> terms of potential operations that may be in the way in the deep water gulf or other areas, is that something you still have time on before you have to make final decisions on these >> the hurricane harvey had a bigger impact on the gulf of mexico operations. we brought all those down safely we're in the process of starting those production platforms up again. some are online and going through integrity checks that's moving fairly well. irma has not impacted any of the offshore production.

>> we will hear more from woods later in the show on the impact of the hurricane on exxon's bottom line, still something they're trying to assess at this point, but something that continues as we see irma coming on. coming up, some of the stocks moving this morning the biggest movers of the day after the break, and we'll tell wlau t you what to expect from the ecb mon meeting. "squawk box" coming right back are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii!

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hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing.

find your awesome with the xfinity x1 voice remote. welcome back to "squawk box. news just out from amazon. the company announcing a search for a second head quarters in a city yet to be determined. amazon is soliciting pitches for a location for what it calls hq2. it will invest over $5 billion in the new facility and offer more than 50,000 high-paying jobs ceo jeff bezos says he expects hq2 to be a full equal to the head quarters in seattle >> wow >> 50,000. >> think about all of the cities and towns and states that will try to figure out -- >> how to lure them. >> what's the tax incentive, all the stories that will then come from are they actually creating real jobs? >> what happens the ecosystem

around it? if i think not just about amazon headquarters, but how well seattle fared between microsoft, starbucks, and -- >> the question is will he choose a city and try to become a new anchor tenant of the city? >> my guess would be yes >> that doesn't have the ecosystem, or go to a scity tha already has it >> would it be better to be on the other side of the country or oregon or something? logistically what makes sense for a headquarters for amazon? i don't know probably the taxes are the logistics that we're talking about. the tax deal. weekly jobless claims -- is it thursday? out at 8:30 a.m. eastern along with revised second quart productivity and labor costs the ecb is meeting today a rate decision expected at 7:45 a.m. eastern then mario draghi's news conference at 8:30 a.m

a programming note, don't miss steve liesman's first on cnbc interview with new york fed president bill dudley, that's at 10:00 a.m. on "squawk on the street." markets in focus this morning. joining us now to try to make sense of where we are, steven leiding for citi private bank and phil orlando here from federated investors. i want to ask both of you guys, we'll talk to steve liesman later about this whole fed situation, both on phifischer a whether cohn is out. i know joe didn't love what jeff sonnenfeld said, he said if cohn leaves, the market will tank fischer leaving, does that matter to you? >> it does there's a number of issues that concern us in terms of the market, the fed was at the top of the list. we were concerned about leadership transition risk in

terms of whether or not trump was going to reappoint yellen or pick someone else. fischer we thought would stay in place until next june when his term expired the fact that he's leaving now for the same reasons that yellen save when she gave her speech at jackson hole, and now questions about whether cohn will be the guy, that raises a bigger question mark about this fed leadership issue >> when you heard that news yesterday, did you do anything as an investor >> we didn't we pulled our horns in earlier in august. we took or equity weight down from 8% to 4% because we were concerned about how the fed thing will shake out >> we've been essentially neutral on u.s. markets, and overweight international markets because of the movements in the dollar there's greater uncertainty about the monetary policy. this doesn't clarify what the direction will be. the opportunity has been to be

long in other markets appreciating currencies rates are generally better in emerging markets, and return opportunities, even in some of the dms are stronger this is one more uncertainty the direction is not clear yet in the u.s. but it's in favor of international markets. >> anybody here betting on tax reform is that factoring in did you see this news about the freedom caucus this morning? freedom caucus putting together a plan, that would-dhash would ke keep the tax rate down to 16%? they're willing to blow out the deficit. >> the freedom guys? >> the freedom guys which is opposite of what they said >> swinternational markets givig a new up cycle for the long-term

this year, this can be interrupted easily and you could have a resumption of u.s. strength the mexican peso is up 15% small cap stocks have underperformed by 1400 basis points this is the assumption that nothing is happening on the fiscal front that we have one-party gridlock you saw on the debt ceiling that's not thecatio case. >> upside risk don't you like it when things go up these guys that are supposedly agnostic -- >> upside risk >> don't you wanted prosperity for everyone >> fully invested. >> pension plans it's not a risk, it's a possible upside benefit, isn't it. >> upside benefit versus down side bad stuff >> our base case is congress coming back from the august recess would spend september trying to figure out, keeping the government open, lifting the debt ceiling, going through that nonsense, but once we rolled in october, we would spend the fourth quarter drafting some

legislation that we thought would get past in the first quarter of next year so we're in the ni nori minorit terms of thinking some of this stuff will get done, but that's key underlying assumption. >> fair enough what does this whole debt ceiling push back to december do does this give time for other stuff to be resolved >> it does buy us time it shows trump is willing to work across the i'll, which is something we hoped we would get to eventually and maybe we're getting there sooner rather than later. >> the "journal," did you read the lead article last tar graph was don't spend your lower tax bill, because this makes it less likely it will happen. it will set up a greater cliff, more brinkmanship it shows republicans, when trying to shoot each other, they can't shoot straight, but that they brought it on themselves, they made it clear they would extract too much from the process.

three months, let's get it out of the way let's help the harvey people but it's like come to my parlor said the spider to the fly >> this is a 75th increase in 55 years. can we please just stop using the debt ceiling >> yeah. >> because no matter what you do, it's kicking the can down the road, whether it's six months, three months, 18 months. whatever you get >> we'll be right in the middle of the tax reform negotiations in december. the rational is that we can start now and we won't be worrying about this one. you won't get to it until december, you'll be in the middle of it again >> great point if we fixed it now, the end of october, we could have extended that a couple years as opposed to a couple months >> andrew, did your people -- i'm talking the huffington post -- >> my people >> did they have to say trump caves and goes down in humiliating defeat couldn't they say trump reaching across the aisle

did have to be he caves, crashes in humiliating defeat? do you have to rub it in his face immediately >> boy gentlemen, thank you >> he'll never do it again now >> up next, we will be joined by ken feinberg, he's the man you call when you set up a compensation fund. and well weget an update frm florida as irma churns towards the coast. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. this is not a cloud. this is a car protected from storms by an insurance company

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good morning u.s. equity futures at this hour, they were weaker when i first got up this morning. down 30 points or 40 points. now they're up green. s&p is up 1. the dow up 7 the nasdaq indicated up 8. the nasdaq has had a good snap back after being down three, four days in a row, now up three, four days in a row. i think fischer overshadowed that -- that was overshadowed by this crazy bipartisanship. he went from head clown to my good friend chuck and nancy. >> yeah. >> first names first-name basis interesting. hurricane irma is headal f aed e florida coast. residents there are preparing for the storm. jackie deangelis has an update good morning >> good morning, joe

it's certainly quiet on the ground here. we saw a lot of people scrambling to make preparations or get out of town yesterday i imagine the same will be the case today i'm watching closely for ever glade behind me, it's the number one seaport by revenue and the number two petroleum port in florida. gas is certainly going to be a big part of this story as people are getting out of town. they've been trying to fill up we witnessed a lot of gas lines going on around the corner as a matter of fact, gas buddy is saying 30% of the gas stations in miami, ft. lauderdale and west palm are already sold out of their gas products it's difficult to say whether or not they'll be replenished or not. we had a chance to speak to the mayor of ft. lauderdale yesterday. >> people don't realize that port supplies the petroleum for 18 southern counties initially you'll see a further shortage of petroleum because of

what's got to come through that port >> florida consumes about 500,000 barrels of gasoline per day. about 80% of that, according to the eia, comes in on tanker. the question is when they make an official call to shut port everglade and when the supplies will stop moving in and out. as i mentioned, it's quiet at the moment now everybody is bracing for the impact of this storm which is expected to be quite severe. at a certain point it will be difficult to fill up those gas tanks. >> thank you yeah wonder if that -- if that ever comes to that. it's not just $4 a gallon, but sorry, we don't have any gas it's been a while since we saw that happen. i thought about filling up, topping everything off you should always top everything off, don't you think at times like this? >> it's always a good idea but you bring up the idea of

price gouging. we heard about it yesterday, we also spoke to the mayor about that he is saying, you know, it's a problem in situations like these. he's urging people to call a certain hotline if they experience that, whether it's with gasoline, food supplies or whatever else they need. >> so you should be plugging in your car you had a chance, but you didn't you finally made the purchase, you went with fossil fuels -- >> he didn't get a plug-in >> he dose en, but he should >> can i tell you, i did a test drive of one of those teslas it was amazing >> they are amazing. one of the new ones. >> not the newest. >> which one >> the one with the wings. >> that thing is so boxy >> we were autopiloting, which was amazing. >> yeah. >> what's the other thing? you go so fast >> the -- >> ludicrous mode. i swear your heart comes out of

your chest it's that good it's all electric. >> i was in the s, you get a bit of whiplash. i'm not sure that's great. >> just saying i don't know why a car needs to go that fast ever. but that's a separate thing. >> agreed. >> do you remember when we were driving that ferrari, you made that sound when i went fast. >> like the ahhh >> yeah. >> did that happen again >> no, i couldn't speak it was going so fast. >> let's get back to irma's impact the cleanup continuing in texas as insurers begin to handle claims joining us now is ken feinberg, ken, thank you very much for being here today >> glad to be here >> it's still early, we're trying to thing out what to do i heard damages could run as high as 150 billion to 1$180 billion just from harvey alone

that has people trying to figure out how to get people help and get things up and running right away you're the first person we think of to turn to when something like this happens. >> there's three buckets, billions of dollars, fema basically handles that federal money and distributes it then there's the ininsuransuran industry the insurance industry after sandy and katrina established creative claims processing programs to accelerate claims, avoid lawsuits they set up an infrastructure to process those claims as fast as possible then there's a unique situation involving millions of private donati donations. the charitable impulse of the american people, it's unbelievable and the real issue there is going to be, well, what are we

going to do with this money? you can't replicate federal money. and who is going to administer this who is eligible for these special privately donated funds? this is a huge issue what's the sfrux goi the infrastructure is going to be what? >> you can't give everybody 1.60 dollars. so how do you distribute these private donations that have nothing to do with the federal government >> the fema money that's come in, from the best i understand from people i've been talking to that will meet the immediate needs, food, cots, water then infrastructure projects to get things back up and running is that the best use for those funds? >> that's right. that's fema. they know what they're doing fema does that they will distribute billions of dollars. the insurance industry knows what they're doing

they will set up a process quick filing of flood claims, property damage from wind and rain, they'll get that money out in an accelerated way. it's the private money, jj watt fund, these other funds, i have no idea reading the newspapers how that money is going to be distributed, who will do it, and will they do it as we normally do pro bono. we're not looking to get paid for distributing money to eligible claimants >> we were talking about that off-camera in terms of donations to the red cross so many people have asked what's the best place to give money, what's the best organization, how do i know the funds get put in the right place. what would you tell people. >> you saw after the boston marathon, i was on your show, may the playmra eplay mayor starteda

specialty fund, privately donated $60 million over 60 days, asked me pro bono to distribute that money to eligible families who suffered terrible losses, tragedy, death, physical injury, bullet wounds, explosion wounds we got that money out in 90 days what happens in florida it will be interesting in houston it's interesting also you have millions of dollars who will decide who is eligible, how much should be distributed, for what purposes? i haven't heard anything yet on that but i think that's going to be very, very important there are expectations down there that millions of privately donated dollars will be distributed. and i have not read yet who is going to do that, how they're going to do it, and how quickly they'll do it. >> so, i guess this is just a way of trying to rally the forces to say here is what has worked in the past, and here is a -- a sort of situation --

here's a setup that could be replicated quite easily? >> i don't know about easily you got, as i've read, there's 20 dead or 30 dead from mar i have there are some physically injured. maybe some of that money goes to the families and to the victims. but what about the rest of this 10 million, 20 million, 30 million in private money where is it seated who has custody of those funds how quickly are those funds going to be distributed for transparent designated purposes, and how quickly can that be done who is going to do it? >> am i correct in assuming you have some concerns because you have not seen a framework that's been laid out a concern and a public watchdog way of making sure the generosity that americans are feeling and donating all this money, to make sure it's adequately and

properly given out to the right people >> that's right. i mustsay, it's quick. it's early yet this money is there, i'm sure that those who are administering these funds or holding these funds will quickly come up with a protocol, here's who is eligible, here's how much money you will receive, here's where you file your claim. here's the proof we want to know that it's a legitimate claim there's got to be some proof and then hopefully, as we've done in the past, as you know, this money goes out very quickly, it's a gift, there's no requirement that you wave any rights, it's really gift money, you just want to make sure it gets out to the right people promptly and in a transparent way. that's what the owndonors of th funds expect >> ken, thank you very much for your time. we hope to see some resolution

for this quickly thank you for joining us today to talk about it >> thank you. coming up, our "squawk" newsmaker of the money former treasury secretary jack lew will join us then tax reform and immigration with steny hoyer he will join us at 8:00. later the "squawk" ceo call is in session. we will talk drug pricing and development with the ceo of celge celgene. u' watching "squawk box.

welcome back to "squawk box. it's time for the executive edge we will get into the details now of trian's nelson peltz releasing a 93-page white paper on procter & gamble. we have a better idea of what he wants do with his board stake that he wants. leslie picker has the latest on this saga. >> hey, andrew >> good morning. >> pelt sz is calling for a reorganization of what he says would be a leanholding company with three distinct business

units underunderneath. peltz wants more oversight on the company's cost savings plan and why as he says the innovation machine is broken according to peltz the last biggest hit was the swiffer. he wants the company to focus on smaller brands and adapt to changing consumer preferences. he was critical of ceo david taylor but stopped short of calling for his removal. he wants more recruiting from the outside. his goal, he says, is for 25 of the top 100 executives to have significant experience outside of p&g in response to peltz white paper p&g said it will review the document in more detail but added trian has an outdated view of our company taylor is set to peek speak at a conference in about an hour and a half we'll monitor that hopefully hear more from him then. do you think there's a

chance that he somehow jawbones his way on to this board >> there's absolutely a chance one thing to keep in mine if this does reach a proxy fight, 40% of the shares held in p&g are held by retail investors, mom and pop investors, a lot of alumni of the company, people who worked there, had a company plan so it's really hard to wrangle in a proxy fight situation individual investors it's easier to wrangle together the big institutional investors. that's one key obstacle. but the plan gets him one step closer to people siding with him. the 93 pages attempts to describe what he would do to fix the company. >> leslie picker quick programming note, the delivering alpha conference is on tuesday we have a huge lineup of newsmakers on deck, including steve mnuchin, jamie dimon, ray dalio and many, many more.

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strong american industry has been a consistent theme from the white house under president trump. for a look at some investment opportunities, we're joined by ann dignon ann, good morning. >> i think we had another line that came in. >> it wasn't even english, was it ann, did you hear that that was not me. all my questions will be in english for you today. i figure that's better i think your basic thesis is that many industrials, and you

can explain why, many industrials are fairly valued, but as a result the ones that you tend to favor have some unique characteristics on their own or some investment triggers for why you like them. why are you sort of neutral on the group in general >> yeah, let's put it into perspective. our coverage is up 28% since the elections on the back of an infrastructure bill, which i'm pretty skeptical of and the group is up 13% year to date, trading well above their historical multiples so it's kind of slim pickings in u.s. machinery right now given where valuations are we like the three names we brought this morning because each one of them has a unique kind of sort of self-help story and we think this will help provide upside to earnings even in the context of a weaker macro environment in the u.s.

>> many times we'll have someone on at jpmorgan -- not at jpmorgan, but we'll say what are they and they say, well, you have to be a client of the firm. but in this case you're willing to give us these three names, even though people out there can get it for free, right why parker hannifan? >> it's a company that acquired a filtration business back in march and there was about $140 million of synergies and we think that's too conservative. parker is a lovely diversified company with no one in market with more than 5% of its revenues as we see things recover in manufacturing in the u.s., we think it benefits naturally and then you get this option of upside from the integration of car corps. >> 17% possible operating

margins, that's pretty solid how about tarex. >> it is unique in that it's a business that's gone through a lot of divestitures. you've got a new management team in there they're doing a lot on every part of the business, whether it's divesting assets, optimizing its footprint and they call it execute to win, but they're focused on growing sales. they would also benefit from cleanup from any of these storms, what we'd expect to see in places like texas is you get a lot of rental equipment moving into the state terex makes cranes, aerial work platforms. some natural upside there too. >> and then finally kenmetal quickly. >> new management going through the same kind of optimization, self-help. you've got conservative guidance so upside to earnings is a higher probability in something

like that. >> very good andrew is over here taking notes. did you come into some money or something? >> i'm trying to figure out what to do with it. >> i hear you. ann, thank you appreciate it. >> you're welcome. when we come back, florida residents bracing for hurricane irma we'll bring you live reports from ft. lauderdale and from miami, next. and later, jack lew will be our special guest. he will weigh in on tax reform, the economy and what he expects to hear from next week's delivering alpha conference. stick around, "squawk box" will be right back. if you'd have told me three years ago... that we'd be downloading in seconds, what used to take... minutes. that guests would compliment our wifi. that we could video conference... and do it like that. (snaps) if you'd have told me that i could afford... a gig-speed. a gig-speed network. it's like 20 times faster than what most people have. i'd of said... i'd of said you're dreaming. dreaming! definitely dreaming. then again, dreaming is how i got this far.

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good morning bracing for irma, an historic hurricane leaving more than a million people in the dark in puerto rico and now it is setting course for florida also the future of the fed why gary cohn reportedly won't be tapped to run the central bank. plus we'll get ready for a major decision from the ecb. it is thursday, september 7th, 2017 "squawk box" begins right now. >> announcer: live from the beating heartof business, new york city, this is "squawk box." good morning, everyone welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. the futures have moved a little higher after being under pressure earlier the dow futures are indicated up by 14 points, s&p futures indicated up just over 2 and the

nasdaq up by close to 9. oil prices, which traded yesterday at their highest levels in a month have given back a little bit of ground, they're down slightly to 48.98 for wti due in october. >> here's what's happening right now. andrew has re-rolled up your sleeves. you've got to roll them down, button them, put on the jacket, talk for 30 seconds, take the jacket off standing -- we're working here. >> i wasn't wondering. i don't know activist investor nelson -- you do look good in a jacket we all do, but we're working here. >> you don't roll up your sleeves, though. >> no, i don't >> a working man. >> yeah. tattoos. anyway -- not really not that there's anything wrong with that. activist investor nelson coates has unveiled a 93-page white

paper detailing his strategy for improving p & g's performance. trian -- he wants a board seat p & g said it would review the white paper but peltz has an outdated view of the company. amazon has announced plans for a second headquarters. where? there's 50 states, right have i got that right? or 57. and is soliciting proposals for possible locations they plan to invest $5 billion in the new headquarters. it would offer about 50,000 high-paying jobs 50,000 why? i guess -- the headquarters is not just a headquarters. there's got to be other things involved. >> a distribution center >> i don't know. how do you need 50,000 people in a headquarters >> they're doing a lot of different things different projects they're constantly working on. >> anyway, when we opened up the

new -- what was the apple factory, that was going to be -- wasn't that like 8,000 jobs? 50,000 >> so like the headquarters of apple in cupertino, i think, has only about 12,000 people. >> what are we talking about here, and who's going to get it? where do you think -- can you give me a best three, do you have any idea? i have no idea do you know who we need to ask >> austin, texas -- >> we need to ask scott cohen. best places for doing business washington they're already in washington. >> texas is interesting. i don't know if they want them in the east coast. does that matter to them >> that's what i was asking. do you want them on two sides -- does it matter if it's on the other side of the geographically >> we have some breaking news to bring you right now. gopro out with some positive news on guidance the company says the third quarter revenue and gross margin are both expected to be at the higher end of previously announced ranges joining us right now on the squawk news line is gopro's chief operating officer. good morning to you.

>> hey, good morning, guys how are you doing? >> walk us through what's going on here. >> well, you know, the bigger picture even beyond this quarter is that we're seeing really strong consumer demand for our products and we're successfully turning the business around. so we had a great q1 we had an even better q2, we posted 34% year over year revenue growth in q3 you just mentioned we'll be at the high end of our revenue and gross margin range we're also going to be profitable from a non-gaap basis for the quarter. it sets us up really well. we set some stretch forecasts to be profitable and we expect to do that. so things are going really well and we're happy about the momentum that we're seeing in the business. >> this stock, i don't know if you're monitoring it, but we are. the stock now literally just in the past couple of moments here

is up about 13.5% on this better guidance tell us what's going on in terms of the competition, sony and others >> yeah. i mean from a -- i can tell you what's really fueling kind of the growth and the business performance that we're seeing in gopro. and for us we really have the best products in the market that we've ever had, so if you look at the hero 5 black, the hero 5 session, those are really concept changes to our prior products we've got -- now have the softer ecosystem. we sold 26 million devices without really enabling consumers to easily share their content. and we just last month launched a new experience called quick stories where your content automatically moves from your camera to your phone we automatically create an edit

for you and you can tweak it or share it out so we've eliminated this thing consumers historically have had. when you think about the competition, we're leaps ahead of where others are in terms of enabling that sharing experience and then just, you know, from like a company management perspective, we're super focused, we're watching costs really carefully and what we're most excited about is we're setting ourselves up for a really strong 2018. so we're expecting -- >> what can you or can you not for us gadget heads, is that what they call it, the hero 6 and the new fusion camera coming up >> so we're launching two great new cameras the second half. i can't say much about the hero 6 except that i'm incredibly excited about the innovation we're bringing with that product. what we have said about fusion, which is our 360 spherical

camera i've been using them a lot recently, and the perspectives that you're able to capture in 360 but then, you know, create a 2-d image with, whether it's a video or just a photo is -- is really compelling. >> and all this stuff will be available before the holidays? >> we'll be launching the hero 6 before the holidays and fusion before the end of the year >> but not before the holidays. >> gadget head could be any -- but this is a gadget on your head. >> true gadget heads, yes. >> and you know what, from millenials -- >> the head is one place. >> but you have to go do things. if you have a gopro, you have to be experiential, that's why the millenials have to go do things. what if you have a gopro and you're just in your basement on a computer and you're film that. that's why you have to be

experiential, c.j. >> yeah, yeah, you have to be experiential but i think there's a common misconception that people associate gopro with action sports. it's really -- >> that's all the videos we watch. >> i wanted to do everything that -- well, actually i wanted to watch someone doing everything i just saw. >> c.j., how much though in terms of when you think about this new camera is going sort of the upgrade cycle from current gopro users and how much from new customers? >> it's going to be both i mean the thing that we're doing on the marketing side when we launched this new camera is we're really marketing this new experience that we've never really had before, quick stories. we think that that's going to bring a lot of new consumers into gopro. >> c.j., thank you for calling in this morning and bringing us this new guidance. that stock, we should show it to you real quick, as i mentioned earlier, literally the second that news hit, your stock, sir,

is now up close to 18% in the premarket just on that new guidance, so we appreciate your time this morning. in the meantime, some big changes afoot at the fed resignations, vacancies and term expirations all raising questions about the outlook for personnel and for policy too our senior economics reporter, steve liesman, joins us right now with more. steve, this is more than half of that board that is going to be replaced at this point. >> yeah, absolutely, becky for a few months wall street thought gary cohn was the man to be fed chair, to be appointed by president trump. comes now a "wall street journal" story because of his critical comments on trump's charlottesville remarks, he's not the man anymore. reuters looked to have confirmed it one gave a kind of back-door conversation saying unlikely, not definitely no. so fed chair janet yellen's term expires in january yesterday fed chair stan fisher announced his resignation

effective october 13th as you can see there, stan fisher leaving october 13th, that as becky said, would leave more than half of the board to appoint by president trump he inherited two of those vacancies. he has nominated one person, randall crowell. gary cohn appears to be on the skid and i heard andrew say kevin warsh's stock is falling there's glenn hubbard, greg mankiw and john taylor all possibilities there. so what do we know for sure? the president has made no decision yet there are serious people thinking about this who know about markets and economics engaged in figuring this out they're still looking for candidates is my understanding and they all care about what markets think about this choice. i've heard a decision could come as soon as a month but that sounds ambitious given what i'm

hearing about the internal decision-making process, guys. >> steve, we've talked pretty broadly in the recent past about what this means in terms of is donald trump going to be looking for someone who is more dovish or more hawkish? we all seem think it's somebody who's more dovish. is that your understanding too >> it's my understanding, but it's also my understanding that they do want somebody -- two qualifications need to be put in there. the first is somebody who agrees with the president's agenda on regulatory reform. remember, the federal reserve board is the one that really handles the banking supervision part of these things it's also handled at the regional bank level, but in terms of overall policy, so you don't want somebody in there, i think fed chair janet yellen gave her own candidacy a step back in jackson hole when she criticized it. so that's one aspect of it the other aspect of it is i believe the people advising the president on this thing are likely to be more in favor of rules-based monetary policy

rather than total discretion that kind of gives enough for somebody like john taylor in there, somebody who goes through some kind of process remember, republicans have been critical of the way they have conducted policy many of them seem to support much more a rules-based policy than the way policy has been done. >> steve, you have an exclusive interview tomorrow >> yeah, we're going to sit down with bill dudley and throw some of these questions at him. bill dudley, by the way, is the vice chair of the federal open market committee that sets policy, not of the board, so we're going to ask him those questions along with the outlook for policy, possibly reducing the balance sheet as well as the questions about that final or third rate hike this year. >> steve, thank you. >> pleasure. now to hurricane irma. morgan brennan joins us from miami beach, as florida prepares for the worst this morning morgan. >> reporter: hey, andrew so that's right, as the sun

rises here over south beach, you have a mandatory evacuation taking effect here quite literally in the last 15 minutes. officials are saying this is going to be devastating, life threatening. just yesterday florida governor rick scott warned about the significant storm surge, extreme winds and he even went as far as to compare irma to the last category 5 that hit florida. >> this storm is bigger, faster and stronger than hurricane andrew many of you here experienced andrew this storm strength far exceeds that we are being very aggressive in our preparation for this storm and every floridian should take this seriously and be aggressive to protect their family. >> reporter: now, if you lived through andrew in 1992, you know how alarming that is some of the folkswe've spoken to that are already getting out of town, they did all live through andrew so andrew was second only to katrina in terms of insured losses it was a $57 billion hurricane, including flood damage and some

of the economic impact it displaced 250,000 people, damaged or destroyed 127,000 homes. and it completely gutted the insurance industry it was responsible for at least 16 different insurers failing, according to the insurance information institute. it's the reason why the florida homeowners insurance market is so completely different today. the big players all scaled back their exposure here. and now it's dominated by smaller, more localized companies. hci group, federated national, heritage insurance, united insurance and universal insurance holdings all of those stocks have sold off, they're all down double digits over the past week. much of that coverage also backed by reinsurance. and with this storm expected to be in the tens of billions of dollars, that's why reinsurers like everist, renaissance and xl group are all selling off as well but guys, with these early comparisons to andrew, not to mention the fact that analysts are now starting to say on the

heels of harvey that this could be the event that wipes out all the excess capital for the insurance industry, that's why you're seeing these stocks sell off so dramatically and that's why this sector is really the early indicator of how seriously the market is taking the storm. >> morgan, thank you very much that is something we're watching closely with the markets we're also watching as people try to flee the path of irma check this out a delta flight raced hurricane irma out of san juan yesterday we have video of passengers arriving at kennedy airport in new york they were on the very last plane out of puerto rico that flight boarded a full planeful of passengers all of this happened while hurricane irma was bearing down on puerto rico that flight was the last one in or out of san juan air traffic control shut down operations just after that. coming up, becky's exclusive conversation with the ceo of exxonmobil later, former treasury secretary

jack lew will join us right here on the set it's an interview you do not want to miss we have a lot of questions for him at 7:30 eastern time stay tuned, "squawk box" returns in just a moment for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement

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welcome back, everybody. hurricane harvey hitting the energy industry hard i spoke with exxonmobil's ceo, darren woods, about the impact the storms have had on the company's bottom line.

>> our first priority has really been on the safety of our employees in the communities we're operating in and then getting those supplies back up and running and resupplying that logistics chain that went spare during the storm we're working through what the financial impacts of that will be as we get further along in this recovery process, we'll have a better read of that. but that doesn't change what we need to do in the short term so we've been very focused on delivering what we need to get done now to make sure we're resupplying product to our customers. >> sure. obviously very early in all of that of course our viewers are watching the markets very closely. we saw as hurricane harvey came in, it really put pressure on our bob. gas oil prices skyrocketed crude oil prices came down they have come up in the last few days but how are you watching these things. >> well, i tell you it just reinforces how well the markets work

supply and demand drive pricing. that's important because what we have seen with the prices moving the way they have is sploupplie coming in from europe to meet the shortfall here in the u.s. the markets are working, the resupplies are coming and we feel pretty good about how the whole system has worked through this storm and in the recovery process. >> darren, as both a refiner and an oil producer, what does a wide crack spread mean for exxonmobil just curious, i'm not clear. >> well, it's two different parts of our business. when your oil prices come up, obviously that's a hurt for the upstream margins opening up in our refining when they're running helps the downstream, our refining business. that's one of the reasons why we have an integrated model because it's often so difficult to know exactly how the spreads are going to move, where prices are going to go, where the supply/demand imbalance is going to occur we choose to be in the whole value chain.

so irrespective of how that value is shifted along that value chain, our philosophy is we need to be in place to capture that value >> darren, the last time i talked to you i think was in march. we talked a little bit about the capital expenditures that exxon was going to be ramping things up by about 17% to $22 billion for this year. will the costs of this storm come out of that capital expenditure or is this a different pool of money, an expanded pool of money that comes from somewhere else? >> no, our capital program is driven by the robustness and the attractiveness of the investment portfolio. the storm doesn't change that, so we're going to continue to invest where we see the ability to create unique value and a real competitive advantage so we're going to continue that investment program and we'll fund what we need to through the recovery period with our other resources. >> woods also said that exxonmobil is watching irma's path very closely and is already trying to get supplies lined up to cover florida once they see

which direction that storm goes. still to come this hour, an interest rate decision coming up from the ecb don't forget, just a few more days until delivering alpha, a huge lineup, including steve mnuchin, jpmorgan, jamie dimon and many, many more. we'll be there live tuesday, september 12th for more head to deliveringalpha.com. we'll be right back. time now for today's aflac trivia question. which company was started in 1984 by a 19-year-old college student? the aner wswhen cnbc's "squawk box" continues huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think.

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now the answer to today's aflac trivia question. which company was started in 1984 pie a 19-year-old college student? the answer, dell welcome back to "squawk box. apple has reportedly secured a deal for songs from warner music group. the pact would mark the first time the tech giant made an agreement with a label since introducing apple music. under the terms of the deal the company would pay warner a lower streaming rate even though apple won't have exclusive deals with artists, it

would insure that ed sheeran, for example, won't leave the service. apple is said to have sony's catalog in its sights as well. the hollywood reporter says apple is bidding for the rights to the james bond franchise. but appear 'le isn't the only br amazon is said to be interested. warner brothers is in the lead to land distribution rights to the bond properties. however, sony universal and fox are also bidding the value of the franchise is estimated at anywhere from $2 billion to $5 billion. >> constant bidding wars is good for content, right >> that it is. coming up, jack lew will join us. we'll get his take on tax reform, the economy, leadership at the fed and the fate of his proposal for a new $20 bill. he's going to join us on the set in just a moment most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future,

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here on cnbc we are live from the nasdaq market site in times square. among the stories that are front and center, the european central bank will unveil its latest interest rate decision and policy statement coming up in 15 minutes time the bank is expected to leave key rates unchanged, but some are expecting they will begin to lay out the groundwork for scaling back some of its accommodative policy we're just about an hour away from two economic reports. the jobless claims report and the revised productivity numbers. productivity numbers are expected to improve from the last reading the national retail federation has cut its annual sales forecast they expect retail sales to be up by 3.2 to 3.8%. its prior forecast was 3.7 to 4.2% this comes after a drop in the personal income and spending figures. we continue to track hurricane irma the deadly category 5 storm tracking towards florida that's where we find jackie

deangelis this morning jackie. >> reporter: good morning to you guys the theme on the ground this morning is closures. we're waiting to hear from the ports, we're waiting to hear from the airports. on the ground you have a lot of businesses and hotels already closing up shop and telling people to get out of this area and find some shelter. port everglades behind me is a very crucial port in florida it's actually the number one sea port in florida by revenue it's also the number two in terms of petroleum in florida as well it's the number three port when it comes to cruise ships and cruise trips for multi-day passengers as a matter of fact, ten multi-day cruise operators move out of this port, 40 different lines or 40 different ships. we've heard from some of the majors that they're either cancelling trips that depart from florida or delaying them. they're working on rerouting as well i imagine that as we go on through the day today and tomorrow we'll have more news about cancellations that will

impact travelers right now the theme is very cautious here. people are taking as much precaution as possible to board up their homes and businesses. a lot of people, more people are getting out of town, guys. back to you. >> jackie, thank you nice shot at least for now let's get caught up on the markets, though. joining us now for that, brian leavitt, senior investment strategist at oppenheimer funds. we've always got a geopolitical backdrop to worry about us the fed has been with us and is joined at the hip. i wouldn't know what to do without the fed if i didn't talk about them every day so that's also, i feel like, what the fed does. i'm tired of that too. what really matters right now besides positive corporate earnings >> well, i think for a lot of investors it feels like the green day song "wake me up when september ends" because there's

so much that we're dealing with. we got beyond a little bit of the concerns about the debt ceiling and having a budget to keep the federal government open i think, you know, in thinking about the federal reserve, you typically see at the end of a cycle significant pickup in inflation, tighter monetary policy we simply don't have that. we don't have substantial credit growth we don't have substantial business investment. so given the length of this cycle, people feel like it needs to be coming to an end but for a lot of reasons we're simply not there. so what do we have to look at? synchronized global expansion, accommodative policy globally and a better good backdrop for corporate earnings. >> you know, the -- we've taken for granted that oil has been $40. >> right >> you know, that's -- in the past we've said that's like a tax hike when it goes up. >> right. >> and everybody says, yeah, okay, a couple of hurricanes and it's going to come right back

down we also remember the s&p energy group hurt earnings because it was too cheap. then we looked a gift horse in the mouth, like it wasn't great that all of our energy was 30% cheaper than it was. it can go back up. >> of course. >> can that be what hurts us >> of course and it can go paback up. i think the big concern when energy was falling at the beginning of 2016 was the amount of exposure that some of those high-yield bond funds had and that's why people worried. what we're looking at now is 20, 30 cents higher on gasoline than a few weeks ago, maybe in some instances 40 cents higher. every 10 cents is about a $10 billion tax on the u.s. consumer we saw gdp up around 3%. we're going to come down from that in the second half -- in the latter part of this year. >> it's not going to last either if you're really cheap -- andrew, didn't you take the subway yesterday >> i did multiple subways. >> right and he has -- >> metrocard >> you filled your tank on your

new car recently. >> yes. >> drove him right to the subway so not everyone -- this can -- >> traffic in new york city is awful, though. that's part of the calculus. or i could have done the city bike. >> have you done that? >> i haven't actually. i really want to, though. >> are the helmets there >> no. you need to have your own helmet that's part of the challenge. >> but the reality is if you look at it from the perspective of not fighting the fed, when we say 3% gdp growth, the understanding for investors or the thought may be, well, here comes the tighter policy we'regoing to moderate, higher gasoline prices are taking us there. if you're not fighting the fed, this is going to continue far longer than anyone expected. >> these are the hal krchceon d. >> man, you sound like a crank this morning. >> no, because we didn't appreciate it. >> i appreciated it. >> you did. >> yeah. >> appreciate it when it's gone.

>> of course we will, but i don't think it's going to be over any time soon. >> it's slowly -- we're like, gee, inflation is so low, i wish we had some inflation. i guess they don't remember the '70s very well. >> right they do not. it depends what you look like. >> go down to argentina for a week. >> right, exactly. people feel inflation in some ways, education costs, health care costs but in a lot of ways, we've got a pretty good deal a lot of the products we buy do not go up substantially, but we do have to be worried about the other side of that, which is deflationary, which is not good for profits and wages. we continue to fight that battle and that's why we see policy where it is in this country. >> how about -- okay, we're done but speaking of argentina, do you know who the biggest hero -- he was already the biggest hero in argentina. >> who's that? >> seriously you're asking me del potro/federer. he won last night.

this is going to be a whole new level of where he goes >> that's your hero. your personal -- >> that's where i thought this was going. >> so now he's going to play nadal. but it's not your federer -- it's not your federer/nadal matchup that people were looking for. how great -- i got off on a tangent here how great about the women's semifinals. >> yes. >> how great, four americans and one looked better than the other. i want to watch sloane tonight did you see her the other day? they're all great. >> i have not been -- i haven't seen it. >> you didn't see enough you were reading that white sheet from nelson peltz, right brian, thank you. >> all 93 pages. >> yeah. couldn't sleep coming up, a debt ceiling deal in washington the prospects for tax reform, geopolitical concerns. we'll talk about the biggest issues for the markets right now with former treasury secretary

jack lew that is next and that's the wonderful, competent, brilliant cameron with him and then tomorrow don't miss steve liesman's interview with new york fed president bill dudley, the first cnbc ierewntvi at 10:00 eastern on "squawk on the street." i count on my dell small business advisor

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welcome back to "squawk box. president trump traveling the country laying out his tax reform agenda. democratic senator heidi heitkamp joined him in north dakota as he touted the republican plan to lower taxes and overhaul current u.s. -- the u.s. tax code. joining us right now to talk about this and so much more is former treasury secretary, jack lew. we welcome him this morning. good morning. >> good to be with you. >> we can talk taxes, and i want to go there in just one second, but i just want to get your sort of other thoughts because one of the big stories of the morning has been the fate and future of gary cohn and whether he was going to join the fed or maybe had been a front-runner for that and whether he'd leave do you have a take on if you were in the administration, what

do you think would happen right about now? >> i'm not sure my instincts would necessarily mirror the instincts of the current administration i can just say that i think the current fed leadership has done an extraordinary job janet yellen has done a great job as chair stan and others, members of the board. the fed plays an extremely important nonpolitical role. it's a hard job and deserves a serious person. >> knowing what you know, though, with fisher out, how does that change the dynamic in the room >> obviously the fed is harder to manage in a world where you have fewer votes and there are decisions that have to be made boy by a majority. i think it's still going to be a stable decision-making body. but when i was treasury secretary, i wanted to have a full fed board i still think that's the right way to proceed i'm not sure why it's treated as a matter of less than urgent importance by congress and others. >> everybody from apparently steve bannon, who's going to be on "60 minutes" this weekend to

larry summers has said that gary cohn should resign do you think -- would you tell him to resign? >> look -- over the events in charlottesville you mean or -- >> and perhaps also just the situation he is now in. >> look, i can't speak to his situation in the administration. you know, i respect the comments he made after charlottesville. and i think i'll leave it at that >> but there is this sort of larger question right now on two sides of it. there's a community of people who look at charlottesville or other things that perhaps the president has done and said that they should resign out of sort of a moral protest there's others who say that actually it's even more patriotic to be in the room. >> look, i think that there are issues of policy that are different than issues that are just right and wrong what we saw in charlottesville was good and evil.

there's no equivalency between neo-nazis and protesters against neo-nazis so i obviously very much think people should speak out against that the question of staying or resigning is a tough one because you do have the ability to change things from the inside if you stay you know, i just try to imagine myself standing there. i can't really imagine it because no president i've worked for would have said something like that. i personally would find that a very, very difficult thing to go back to, but i do respect the fact that gary cohn spoke publicly on the issue. >> taxes, let's talk about them. what do you think is realistic, given what you're hearing right now, in terms of what kind -- you wanted your own tax reform plan. >> i did. >> it was higher in terms of corporate taxes at the time, but you've also mapped this out. even with dynamic scoring, what's the best that you think you can get to. >> first, let's start with the core principle it would be a good thing if we could do revenue neutral tax reform that lowers the rates by

cutting loopholes and paying for it how you do it really matters there's a big difference between tax reform and tax cuts. tax cuts just add to the deficit, could create a burden that would be a real economic burden, and because it matters how you pay for it, if you were to do it by cutting programs that go to the most vulnerable, that would be a terrible outcome. that's not real tax reform so i have kind of four principles that i think of as kind of the guardrails that should be used right now first, everything that's done has to at least maintain the progressivity of the current system it can't make it worse, it should make it better. second, it has to be paid for. by being paid for, it has to be paid for with revenue. it's not good enough to do it by cutting spending the third is the scoring has to be honest. because you can find a few hundred million dollars cheating here and there, but you can open up a gap in the deficit that becomes a burden like in '81, in '01 and '03 which will just go

on and onand hurt the economy. and fourth, you can't open big new loopholes. the proposal to lower the rate on pass-throughs could be a trillions of dollars loophole that creates more inequity and a huge deficit i've been on this show before. i'm a big believer we should get rid of the junk in the tax code, lower the statutory rates, have a system that's more competitive. i worry that the choice right now because it's so hard, it's technically hard and politically even harder. >> if those guidelines aren't followed, are you suggesting that the current tax rate should stand? >> i'm suggesting you start by doing no harm. to violate the rules that i just described would do real harm i think there could be a bipartisan consensus to do it in the right way. you look back in 1986. it was a bipartisan bill because it worked in the broad medal of sensible policy. it was deficit neutral it paid for it one thing i know is in 1986 the

way the showdown in gucci gulf ended up as a win for the good days is everybody stayed together >> you know this community in d.c. now very well you know where the fault lines are. there's a report out in axios today, somewhat surprising, that the freedom caucus wants a 16% rate and they're willing to stretch out whatever you think revenue neutrality would be for 20 years. >> i saw that report this morning. look, consistency is not always a virtue -- one of the characteristics you see in politics it's highly inconsistent to worry about the deficit and to support something that would create a huge new deficit driver. >> are there enough democrats -- did you see heidi -- what do you take away from heidi heitkamp standing with the president? >> i think the democrats, the principles that i described i think reflect where most democrats are. obviously in a senate where you

can only afford to lose two republican votes -- >> what's the lowest number you could get to i know 28 was where you used to be could you get into the mid-20s mid, low 20s >> i thought you could get to 28 with the kinds of loophole closing that we could as a realistic matter accomplish. so i think getting lower than that, you're either going to be having to do things that take on bigger and bigger political and special interest fights or adding to the deficit. so i think it's really hard. raising expectations that the rate will go to 20 or 15, that is only possible if you're willing to do it by cheating on the numbers and adding to the deficit. >> putting the cheating on the numbers aside, don't you think there's a willingness among some to at least add to the deficit in the short term? >> i think that there certainly is a lot of discussion of using the kinds of technical approaches, scoring rules that would have that effect whether people are willing to

stand up and say it, the freedom caucus comments obviously cross that line. i think that's hard. you know, there's a difference between doing it a little bit and doing it a lot you know, let's remember what these tax cuts could cost. if you do everything that people have proposed, you could be talking about $4 or $5 trillion of revenue loss. that is a huge number, even in a big economy. we have seen what a burden that becomes if you do it and the time to put a yellow light up is before, not after. >> joseph? >> yeah, we did. we saw what a burden $10 trillion was, i just wish we could gotten some dynamic growth from the $10 trillion that we spent during the obama administration i don't want to get into any of this but at least -- i'm ready to try it i'm ready to give it a shot to give growth -- you know, to say that it's just cheating on the numbers ignores the possibility that there is something to dynamic scoring. >> we tried it we tried it in 1981, we tried it in 2001.

>> i remember 7% growth. >> do you remember the deficits that came from it? they were enormous. >> yeah, as we defeated the cold war and defeated russia. i'll go back to the '80s if you want for growth and deal with the deficit. >> if you create deficits like that today, your choice to close the deficit would be raising taxes or cutting social security, medicare, medicaid, food assistance, things that would hut hurt the people in the country. >> 3% growth solves a lot of people. >> i don't think you can get to 3% growth. >> other people think we can. >> mainstream economics don't tell you that. >> we could have a special and argue for the next three weeks on whether dynamic scoring can get to 3%. there's a lot of people i respect think we can get to 3%. >> there's no evidence to support it from past experience. this is hope in the face of experience that tells you otherwise. >> let me turn the conversation -- >> i disagree with that. i don't think experience tells you we can't get it. the obama administration is the

only administration that never had 3% for a year. >> joe, let's go back to the beginning of the obama administration when we were losing 700,000 jobs a month and we stopped the slide and came to a recovery. >> every other deep recession we've had a huge bounce. >> faster than the rest of the developed world. we responded -- >> but the weakest recovery from a recession in history. >> and the deepest financial recession in my lifetime we came out of it. it was a slow ecovery. there's no doubt about it. but you look at the recovery of the united states, healthier than europe for sure we're just now seeing europe get back. >> we just heard from the ecb that they are keeping rates steady not unexpected, but they have been doing measures that look like they are tightening more rapidly than our federal reserve is that's why you've seen the dollar under pressure, especially against the euro. you're no longer the secretary of the treasury, so you don't have to say you believe in a strong dollar. what do you think about this imbalance that we've seen? >> i think europe is finally recovering in a way that looks organic, which is a good thing

all the years that i was in office, we were waiting and waiting and waiting. so i have a lot of respect for mario draghi he is making decisions based on the kind of core economics that he's seeing. and the truth is, these differentials in response will reflect the conditions in each of the economies the fed has to look at the u.s. economy. ecb has to look at europe's economy. there are going to be disparities because we are recovering better, notwithstanding -- >> we're recovering better but looking at the euro, the dollar to the euro at 1.20, which is crazy. >> the answer that i gave when i was secretary is still true. you need to get better growth everywhere so those differentials are reduced. >> we've outpaced europe for 40 years. we had 40% higher gdp growth for 40 years based on their own issues that they have over there. so the recovery from the recession that we saw, if you don't think all the regulations layered on, you don't think the

tax, you don't think obamacare, you don't think any of these held us back from higher than 2% growth none of that stuff was an issue? >> i think we did a lot of things that made this economy stronger giving people health security helped make the economy stronger having job growth begin here -- >> this will never be settled whether it was in spite of things that the administration did or because of the things the administration did. >> i would never argue you can't fine tune. you know, we all make the best decisions we can and then you come back and look at it and you can fine tune. but you look at things like financial regulation, the fact that we put a solid foundation under the u.s. financial system helped speed our recovery and made us stronger than other economies. to now turn on that if that is what is done and say we're going to go back and remove the protections that have given us that strength i think is a big mistake. >> i've got to ask you about north korea. what are we doing with the chinese and what could we do with the chinese given the conversations that you had for

all the years that you were in the white house that we're not doing now? >> look, let's start with first principles north korea's aggressive and accelerated testing of nuclear weapons is a real threat to us, to the region, to the world. we were focused on it extremely closely and we kept ratcheting up what we were doing, trying to get china to do more i just want to remind everyone that china worked with us at the u.n. at the end of last year for the first time to put multi lateral sanctions in place on north korea. i think there is a need to do more but there's also a need to be smart and strategic about how you do it because we need to make sure that we don't have unintended consequences that create bigger problems and that could be either in terms of economics impact or turning this somehow into a u.s./china dispute instead of a north korea problem. >> it's a great and longer conversation we appreciate your time. >> great to be with you. i count on my dell small business advisor

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breaking news. ecb president mario draghi holding a news conference after the central bank's latest rate decision the highlights and the market reaction coming up florida braces for hurricane irma the deadly category 5 storm roars across the caribbean a live report from miami straight ahead plus, prime real estate. amazon is hunting for a new home we'll tell you how much the technology company plans to spend as the final hour of "squawk box" begins right now. >> announcer: live from the most powerful city in the world, new

york, this is "squawk box. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin the ecb out with its latest rate decision leaving rates unchanged. they expect to maintain current levels for an dozen extended ped we'll hear from mario drawiughin the next hour. let's get a check on the markets. earlier it was down, now it's flat s&p is up less than a point, the dow call it up 5, nasdaq up about 5 as well. in europe, we've had some green, pretty good. almost a percentage point in germany, france and england and the rest between a quarter and a half a point the dollar on the latest session, we'll check out where

it is. 1.19, it was weak yesterday. sort of reasserting its weakness against the euro it was over 1.20 briefly but now 1.1975 and the ten-year was 2.07 at one point yesterday. >> almost 2.06 we'll get back to the narcotics in just a bit but first we are following one of the most powerful storms on record hurricane irma here's what we know at this hour the storm hammering a string of northeast caribbean islands with winds up to 180 miles an hour. the category 5 hurricane has killed at least eight people millions are without power on the island of barbuda, 90% of the buildings have reportedly been destroyed >> we want to get a quick check on hurricane irma's path nbc meteorologist kaleigh deon is tracking the storm for us. >> we just had an update and everything is going unchanged so

we still have 180-mile-per-hour winds with this beast of a storm. it's still tracking, if you look off to my right here, it's still tracking to the west-northwest right toward the islands of turks and caicos today they can expect this to move on later on this evening and going into friday it will be more so for the southeastern bahamas that we will have to watch out for. as it makes its way toward the u.s., toward florida, what are some of the things that we have to watch out for wind speeds are going to increase ahead of this storm you can see here behind me hurricane-force wind probabilities over the next five days you can see starting with toda going out to really just south of turks and caicos and then all the way up as you go toward really sunday when that storm is expected to get closer to florida and potentially make landfall sunday. there's about a 30% to 40% chance of those hurricane-force winds. with this strong storm surge and the ones that need to watch out

for this starting later on this evening is going to be the island of turks and caicos i want you to look at this for a second 15 to 20 feet in regards to storm surge. that's a lot anyway, but when you're talking about islands that are very shallow, highest elevation in turks and caicos is 161 feet so 15 to 20 in regards to storm surge is just going to be devastating for those islands. southeastern bahamas the same thing with own 206 feet in regards to the highest elevation. again, everyone needs to start preparing from florida to the carolinas as well as this marches closer and closer to the kaunt nenlcontinental u.s. joe. >> thank you, kalee, for the update the senate is expected to vote tomorrow on a bill that would link $15 billion in disaster aid with the deal that was struck by president trump and democrats to raise the debt limit and keep the government open until mid-december. senate majority leader mitch mcconnell introduced the bill last night mcconnell announced his support for the plan following the surprise announcement by

democrats that president trump backed their request that any deadline for extending the debt ceiling line up with the short-term spending package. and now republicans wanted a longer deal on the debt limit, 18 months through the midterm elections. for more on this, let's bring in congressman steny hoyer of maryland, house minority whip and second ranking democratic leader in the house. how did you see yesterday, leader hoyer enemy of my enemy is my friend or i mentioned earlier that a lot of the liberal websites immediately said trump caved, total defeat handed to him by the democrats. do you think that's the way that it should be put that's not very nice you finally get something that you want, you get some bipartisanship and you immediately, you know, cast it that way how do you cast it >> well, when you say they, i'm not sure "they" is us. >> i use that all the time >> i know you do, yeah

the broad brush. but in any event, i was surprised. you asked me what my reaction was, i was surprised clearly the republican leadership in both the house and the senate wanted to do an 18-month extension on the debt limit so that they would not have to have another vote on it before next november's election. and that's what i expected to happen it didn't happen both leader pelosi and leader schumer suggested that it be co-terminous with the cr i was not at the meeting but the president said, yeah, sure, that makes sense and did it, much to, i think, the chagrin of senator mcconnell and speaker ryan i was, again, not in the room, but i garner from the press reports that both of them were surprised and not happy. >> were you gratified, leader hoyer? does it indicate that you can work with president trump on tax

reform >> i don't know whether that's the case or not with president trump. you take it one day at a time, as we know but i think on this issue, he apparently thought that the proposal made by pelosi and schumer made sense, that we address the two issues at the same time in december. i think it's going to complicate the issue. and very frankly, the debt limit extension, interesting enough, will not end in december because they will again have available to them extraordinary circumstances, so it could go into late january or february in terms of when the debt limit extension has to be acted upon having said that, frankly i think the debt limit extension vote is a phony vote america incurs bills the premise is that america will pay its bills. the debt limit is sort of a phony process where we beat our chests and say we're going to withhold spending. we don't the debt goes up and we extend the debt because the global

economy depends upon america's credit worthiness. but having said that, the cr will come up in december it ends december 8th, as you know in addition to that, the harvey relief will be on the bill and this is something that we need to do. it's interesting that it expanded about twofold from the house to the senate. it went at about $7.8, $7.9 to the senate and is coming back somewhere in the neighborhood of 15 so we'll see what some folks who said when you add extra money, they couldn't support sandy relief, we'll see whether they support this relief. >> you know, we watch how politics works lately, leader, and when one party gets leverage, i guess all is fair in love and war, right? was there a sense of glee yesterday that the democrats now have more leverage for december, and will democrats use that leverage to extract what they

see as their agenda in whatever the negotiations are is it going to be much uglier? that's what "the journal" thinks. >> i hope not. but let me say this. the democrats are not euphoric today. one of the reasons we're not euphoric is because earlier this week 800,000 people, young people were put at risk by the attorney general apparently at the request of the president saying they were not going to pursue daca. the children of america really who came here at a very early age. it is interesting that even rush limbaugh said yesterday or the day before nobody wants to kick these children out of america. >> congressman, look, the president has said he'd like to see congress act on that within the next six months. >> that's correct. that's the good news the president said, look, we have to act on this and he said, quote, we have no choice obviously senator graham,

senator rubio, senator hatch have spoken out on behalf of this, so we have a lot of very significant republican leaders who have spoken out on this. speaker ryan has spoken out on this i am very hopeful, and i'll be euphoric or happy at least when we come to an agreement in the next hopefully few weeks not wait the six months, not keep people in limbo for six months, not keep the economy in limbo for six months the business community has overwhelmingly, chamber of commerce, high-tech companies, overwhelmingly come out and said this is bad policy and we need to extend and give permanent relief to children who were brought here as children through no conscious effort on their own. >> but, leader hoyer, would you have preferred that the executive order be maintained? you saw what happened with the other one in the court system with the 4 million you can't see that it was not constitutional probably. the president admitted it, president obama, when he signed it that he really didn't have the authority.

would you have rather maintained the status quo or secretly do you believe that if you get some legislation, that that is actually a better place to be when it's all said and done? i hear a lot of harping, but did anyone want to keep the status quo that was so tenuous and not permanent? >> we didn't have to take action the president could have asked for legislative action certainly we all agree that legislative action giving certainty to these 800,000 plus young people who are 90% of them working in our economy and paying taxes -- >> but now it has to happen. that wouldn't have put any urgency on it. and you guys had a chance to do it in the first two years of the obama presidency when you had the house, the senate and the -- and you didn't do anything with immigration. you did obamacare. >> you know, the d.r.e.a.m.ers bill passed the house of representatives. you're right, it didn't pass the senate, so we did do something

the house did its job. when i was the majority leader, we sent a bill over there. having said that, i think you're right. the glass is half full in that the president said we have to deal with it. >> it could work out well. >> it may and i hope it does but i think the earlier we act, particularly in light of the overwhelming, overwhelming numbers, 84% of democrats, 70 plus percent of independents, 60 plus percent of republicans all believe, as rush limbaugh said, nobody wants to kick these kids out of the country we need to give them some sense of stability and assurance that they're not going to be kicked out of the country this is the country they know, they grew up here, they went to school here, they speak this language and they're working in the economy. as a matter of fact, to kick them out people say is going to be about a $400 billion plus hit on the economy over ten years. so the smart thing to do, and i was glad, you're right, that

president trump said, look, we have no choice we need to work on this. he said i love these children. if that's the case, we're going to act positively. i'm going to be urging leader mccarthy and speaker ryan to bring a bill to the floor, the d.r.e.a.m. e d.r.e.a.m.er to the floor so congress can pass legislation to give certainty i believe the majority of votes are on the house floor and senator graham believes the votes are on the senate floor. >> i just can't wait to see when this tax reform is up for a vote and you and a lot of democrats say, you know what, i remember president trump with harvey and the debt ceiling let's go ahead and do this bipartisan thing and work together on it you think back and remember how that worked yesterday. >> the problem will not be with democrats working on it on a bipartisan basis when did we last pass it 1986 who was president of the united states ronald reagan. who was in charge of the congress of the united states? democrats. tip o'neill.

>> i remember those. nothing seems similar to those days now, leader hoyer. >> i think you're right on that. i think that's unfortunate, but i think you're right but the fact of the matter is, let me say this. we need tax reform we're for tax reform what we don't need are tax cuts that are not paid for that pushes this country deeper in debt and passes the cost along to our children. >> all right congressman, thank you. >> thank you. >> we will -- we'll see you again, soon, i'm sure, and look forward to it. a little bit of corporate news for you nelson peltz unveiling his plan to shake up proctor & gamble trian wants him on the board and also wants to reorganize the company's business units and overhaul management compensation also add some more outside leadership talent. trian thinks the consumer giant should focus its acquisition strategy on buying and developing smaller, more local brands p & g responding this morning saying that trian has a very

outdated and misinformed view of p & g. the company also said that it is confident it has the right plan, the right structure and the right board in place the war of words will continue when we come back, a ceo double play. exxonmobil trying to get its refineries back online after hurricane harvey and bracing for the impact of another mega storm, irma. we'll hear from the ceo, darren woods, right after the break. later, we'll check in with the chief executive of celgene there's a partial clinical hold on company trials. "squawk box" will be right back.

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welcome back, everybody. exxonmobil, the largest publicly traded oil and gas company, trying to get its large gulf coast refineries back in business after hurricane harvey. now a second major storm nears american shores, we're talking about irma and focusing on it. we spoke with the ceo, darren woods, from the baytown, texas, refinery that is the second largest refinery in the united states. this is all happening as exxon brings operations there back online >> the plant is about 585,000 barrels of crude coming through and we're making progress on it.

it's very difficult to predict exactly when all the units will be back and we'll be back on the full load but we're making good progress we're hoping to get some units started up later this week and then it will be one unit after the other and we'll keep building momentum on production. >> as you're cleaning up the aftermath of one storm, we have another hurricane that is barreling down on the united states, irma we're not entirely sure which direction it's headed but have been watching. the governor of florida, who's been talking about how they are starting evacuations and how fuel availability is a top priority as irma comes onto the scene. what are you doing for exxonmobil to try to prepare for the eventuality with that? >> well, we had a team set up that was working on the response to hurricane harvey when irma started to form. we saw that moving in. that team actually formed a subgroup that started working on making sure that our supply operations going into florida were robust, so we've been working that now for several days the strategy right now is to make sure that all our

distribution system is as full as it can be and that we're getting fuel distributed to the points as much as we can so that if that hurricane hits, we've got inventories that are high enough to aid in the recovery once the storm passes through. >> in terms of just trying to assess the damage, trying to assess how long things will be down and getting back up, i know you're still in the process of doing those things if you had to try and figure out what sort of impact it's going to be for the company, do you have any insight into what it will mean for earnings for the current quarter? >> yeah, you know, our first priority has really been on the safety of our employees and the communities we're operating in and then getting those supplies back up and running and resupplying that logistics chain that kind of went spare during the storm. we're working through what the financial impacts of that will be as we get further along in this recovery process, we'll have a better read of that. >> sure. obviously very early in all of that of course our viewers are watching the markets very

closely. we saw as hurricane harvey came in, it really put pressure on our bob. gasoline prices skyrocketed, crude oil prices came down how are are you watyou watching these things >> it just reinforces how well the markets work they're commodity markets, supply and demand drive ricing that's important because what we've seen with the prices moving the way they have is supplies coming in from europe to meet the shortfall of the production here in the u.s so the markets are working, the resupplies are coming. it's what we need to have happen so we feel pretty good about how the whole system has worked through this storm and in the recovery process >> our thanks to darren woods. joining us right now to talk more about what's been happening in the energy sector is john kildorf. john, you heard what darren woods had to say just in terms of saying, yes, this is going to see the crack spread start to

narrow again, that the markets are working around that. is that your sense of things too? >> very much so. i think we talked about that recently here. the commodity markets work fantastically well there are cargos coming from europe it's a bee hive of activity in terms of shipping crude oil and other refined products into the gulf of mexico entire region one thing about exxonmobil, to the extent investors want to try to pick the bottom for oil or wait for a cyclical upturn, they're the company to go with or one of a few to be early with because they have a natural hedge. they're fully instategrated he's got oil and gas production, natural gas production, refining capacity and the retail end. so he's got all his bases covered. our bob gasoline skyrocketed in price. they make that in times like this crude oil prices are coming back exxonmobil produces a lot of that so they're terrifically positioned that's why i was critical about

hess being dismantled who wanted to make them a pure play exploration and production company. >> because of times like this. >> when crude is doing well and highly priced, the refiners suffer when crude is low, the refiners do well. when conditions are bad for both, the retail pump does well, they're able to hold their margins. >> uvs upgraded exxon yesterday to a neutral because of what they have said it was trading at about a 25% premium to chevron, it is right now. that premium had been stretched a little bit, it's come back down that's why they like shares of exxonmobil you sound like you're in agreement with that. >> i didn't see their note but the other big positive was their acquisition of xto, which is a huge natural gas producer. the prospects for higher natural gas prices over the next several years are quite good the rise of liquefied natural gas, exports from the u.s., a big industry that's on the rise. i'm not as negative on crude and refined product prices as i had

been for the past two years. >> because >> demand has really come on strong the global economy picking up. diesel demand picking up, gasoline demand picking up both here and in europe andlatin america. there's a great new market for u.s. refiners in latin america has they have been able to outcompete, outwork and lower their costs and be able to provide cheaper refined products to latin america really than anybody else right now the brent crude oil price is about $5 higher than wti. it's never been that way so our guys have about a 10% input cost advantage to the rest of the global refiners. >> john, thanks for your time today. >> thank you. coming up, two tech giants want bond, james bond. we'll tell you which companies are duking it out for the rights to the movie franchise when "squawk box" returns

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coming up, breaking economic news, jobless claims about to hit the tape we'll bring you those when we come back. or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.

welcome back to "squawk box. breaking news. initial jobless claims, of course, harvey should affect these and indeed they did jump from 236 all the way up to 298,000. 2,000 shy of 300 of course the issue of jobless claims, how the state of texas may try to make access easier with various emergency-type programs we're going to pay attention to that 1.94 million on continuing claims a weak difference in timing. it doesn't look like a huge effect there that's versus 1.945.

so almost unchanged. 1.5 on nonfarm productivity, second quarter, final read 1.5. that's not a bad number. and up 0.2 on unit labor costs up 1.5 to give it some context, we're up 0.1 in quarter one. the 0.9 gets tossed out because that wasn't a final read for the second quarter so those are your two reads for 2017 thus far. last year we had 1.3 in the fourth quarter and 2.5 in the third quarter. that's where we're comping basically. 2.08 on tens the euro currency coming very close to 1.20. doesn't look like there was much change in mario draghi's policy. the press conference may give us more details on quantitative easing that's the whole game right there in terms of rate but bund rates approaching 30 with the euro moving higher. seems like the same old tune again.

andrew, back to you. goldman sachs ceo lloyd blankfein sounding a warning on the market he said some of what he sees worries him. he says things have been going up for too long. when yields on corporate bonds are lower than dividends on stocks that unnerves me on the trump administration, blankfein has disappointment but also has hope. for more on the markets, we are joined by scott nations, president and chief investment officer of nation shares he's also a cnbc contributor joe made the point earlier about lloyd blankfein' comments in terms of how out of whack things are relative to the dividend picture, but that's been the case for a very long time now. >> absolutely right. and i think part of that is the fact that the ten-year yield is at 10.08 the yield on short term is much lower than that. we know that short-term rates, rates that are too low for too long do more damage over time than rates that are too high for a little bit of time we're not going to get any

relief ecb as expected. i think the disappointing number we got is unit labor costs, less than expected. we're desperate, we're desperate for a little inflation maybe we're going to get it from energy we see gasoline at its highest level in two years if you ignore the harvey spike, the transient harvey spike the s&p, we've sold off a little bit on these number, just a tiny bit from strongly unchanged to down less than a point the 20-day moving average, why is that important? we've been skating up that level since the beginning of the year. >> and your expectation is it goes where >> andrew, being a dip buyer has worked for years and years and years. it's a little tougher now after tuesday because we didn't bounce back as well as we might have wednesday. as a trader, you do what works until it doesn't work, but i think that you have to be really careful right now. much tighter stops than you might have had, say, this time

last year. >> do you think there's been a change in psychology literally since labor day? >> i think that the sort of thing before blankfein has said is pervasive, everybody is afraid that's a good thing. when everybody is afraid they're generally out of the market. that means they rush back when we get a little good news. the ecb is probably good news, for stocks anyway. it seems they're willing to lay down in traffic if that would help growth over there a little bit. i used to say they're two years behind us. i now think they're three or four years behind me i think some of the turmoil we've seen here in the fed is not going to help. the storms aren't going to help if you're looking for higher rates, and higher rates would help financial stocks. i don't think that investors in financials are going to get any relief for the rest of the year. so they're spending the rest of their time worried about what might happen with the rest of the stock market. >> scott, we are going to leave it there thank you, sir great to see you. >> thanks. among the stories front and

center, mario draghi is speaking at his post-meeting news conference the bank left rates unchanged but said they would remain at current levels past the time when its bond buying program ends we're monitoring that news conference and will bring you the highlights and show you how it's impacting the markets. in the meantime shares of gopro are on the rise. gopro says its current quarter will bow profitable on a non-gaap basis revenue and gross margins will come in at the high end of its prior forecast. cbs is running into a snag in its deal to buy the australian broadcaster ten network holdings a court has held up the deal to hear a challenge by a rival bidder it's a consortium led by none other than lachland murdoch. the group was the sole bidder until cbs entered the picture. florida bracing for a hit as hurricane irma powers through the atlantic miami residents evacuating we will take you there live right after the break.

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the mayor of miami is announcing now a mandatory evacuation as florida braces for hurricane irma morgan brennan is in miami and she joins us now with more tell us about that, morgan. >> reporter: hey, joe, that's right. so a mandatory evacuation was -- took effect this morning here in

miami beach. so far a lot of the folks we've spoken to not taking this very seriously, at least not yet. i want to show you something else take a look at these, there's two of them here hiding behind these walls, you have pumps over there you have a generator. this entire area was lifted about three feet it just came on line a couple of months ago there are a number of these up and down the bayside of miami beach. this is all to help with flooding and pump all the water back out so you can bet with all the storm surge and all the flooding that's now expected with hurricane irma that these systems are going to be operating. but all that storm surge, it's going to put an emerging industry in the spotlight as well, and that is the private sector flood insurance market for homeowners so unlike texas and everything we've seen with harvey, florida, thanks to regulatory reform on both the federal and state level, is ground zero for this emerging industry for insurers like aig, chubb, progressive and hci which are just starting to

underwrite some policies tied to flood coverage for homeowners. so the flood insurance agency, which is based here in the state, is the biggest producer of those policies with $4 billion in property insurance written around the country 20% of that just in florida alone. so ceo evan heck says between hurricane harvey in texas last week and all the anticipation around irma, he has seen a huge spike in applications. >> traditionally that volume of requests for low hazard insurance goes up about 50% during the hurricane season. right now it's up 1500%. >> reporter: so the agency already had to put a moratorium in place, that's going to be in place until september 20th as it moves through all of these applications and this event. but, guys, this is going to be watched very closely here because irma really represents the first truly potentially

catastrophic flood-related event here in florida for all of these private insurers, starting to dip their toes into this market. the insurers, policyholders, lawmakers, are all going to be watching how those insurers perform very closely, especially since florida is one of the most flood-prone markets in the country. back over to you >> all right, morgan waiting and watching we appreciate it and we will check back in with morgan a little later this morning. in the meantime, ecb president mario draghi is holding a news conference steve liesman has been listening in steve, what are the highlights >> the first thing i thought was interesting, becky, is he mentioned the exchange rate. he said volatility in the exchange rate is a source of uncertainty, something that requires monitoring for possible effects on the medium-term outlook for price stability, so not all that exciting now. but there was some movement in the euro it spiked up, spiked down and then spiked back up headed towards the 1.20 area. he said a very substantial degree of stimulus is still

needed this autumn we will decide the calibration of policy instruments, that is what they're going to do next year when the current stimulus or plan for quantitative easing is supposed to end at the end of this year. as i reported from jackson hole, this was not the date they were going to announce it, october is more likely and almost certainly now. but it's a little weird that he's going to be announcing this ending the qe while they revise down the forecast for inflation because of the currency. also he's still saying, becky, quote, a very substantial degree of stimulus is still needed for the economy and the interest rates will remain low beyond the horizon of the end of quantitative easing. andrew. >> okay, thank you for that, steve. by the way, one question for you. there's so much commotion on twitter this morning what's the betting line now in your mind that janet yellen is still the fed chair? >> i like to bet on horses, not necessarily on fed chairs. you know, i saw something on our

air like a 25% number. i think there's a slight improvement in her chances because stan fisher is leaving the trump administration i think cares about market stability and they care how the market reacts to this. but that said, the trump administration always knew that stan fisher was leaving. all that does is move it up. i still think ultimately the better odds is that he wants his own person in there, somebody who first believes in the administration's view on regulatory reform and, second, somebody who is more in line with this idea of monetary policy via rule. >> while we're talking about this too, steve, let's go back to draghi very quickly maybe if we can call up a chart of the dollar versus the euro as we explain this. is this more dovish than you had anticipated going in or is it in line with where you expected him to be? >> maybe a little bit. >> a little more dovish? >> a little more dovish, which is weird, right, because you

would expect the euro to weaken in that context. >> right. >> there it is, 1.20, we just hit that number. it's hard to say to the kids, you know, we're almost there, we're almost there, and then we have another three hours to go it's like there's definitely a mixed message in this idea we're keeping rates low, we need a lot of stimulus, but we're going to tell you what's going to happen next year in october and everybody anticipates it's going to go down what i have found weird about this whole currency trade, becky, is the idea that it is going to be many years before, if ever, europe catches up with the u.s. in terms of how tight its monetary policy is the idea that we're trading on some notion here that somehow the euro may be tighter than the u.s. or whatever, it seems a very long way off. they're still doing qe, still at nebras negative interest rates. there's a very long time to go between there's parity. celgene celebrating its 30th

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news out from celgene this morning. the fda has placed a partial clinical hold on five trials of a specific initiative by the company called fusion and a full hold on one trial. we'll talk quickly about that. joining us now, mark alice, ceo of celgene the company celebrating 30 years as a publicly traded company today, and it's -- i mean what a success story. $109 billion company i guess it went from a billion dollars to where it's up 100 times in value. >> yeah, joe, thanks for that. we're celebrating the 30th anniversary today and we'll open the market for nasdaq today. in 1987 the market cap was around about $48 million so it's been an incredible run and it's interesting that we're here celebrating that success but also as you mentioned in the open the fusion program. so this is a collection of trials that combine our

products, small molecules, with some of the checkpoint inhibitors that you've heard about from bristol-myers squibb, merck, roche, et cetera. mi myeloma, lymphoma. the fda out of a cautionary approach has put the trials on hold until we sort through the data and make sure that while we develop these experimental combinations we don't do more harm than good so that's where we are today. >> you can't even tell whether the risk profile is higher at this point, right? >> in some instances, the answer is yes so it's very widely known that the drug from merck in combination with some of celgene's products led to an imbalance in deaths in a clinical trial that's been reported earlier this year. these latest versions of the trials don't show this yet but

it's very important not to get too far ahead of ourselves in miy emyel risk than benefit so we have to slow down. now relapse setting so take the world where drugs are being developed for relapsed all, cll, myeloma there the benefit risk is easier to take on so we're dealing with this ratio of benefit risk early versus late in conjunction with the fda and all of our partners developing these medicines we're stopping to make sure that we understand what's happening. >> what you just described is the issue facing the fda all the time and that's how quickly to go along but you point out that drug development out of all the things that are going to help us whether it's with quality of

life or living longer or holding down costs drug development is probably paramount so you want to be careful working around the edges. we have a new fda commissioner has it changed from the last administration and is it in the right place >> so the commissioner is an outstanding leader of fda. the previous administrations did a lot to advance the ball. break through designations all kinds of accelerated opportunities were developed by previous administrations he was a cancer survivor so he brings to the job the mind set of a cancer survivor of a physician that treats patience in that context he is dealing with a lot of the bureaucracy and streamlining opportunity

one thing we talk about is is cost it's notoriously large if we work as an ecosystem and reduce the backlog of generic products in a meaningful way in a short period of time costs will go down costs of the system will go down dramatically and he is working on that as one of his initiatives. >> how quickly could you do that >> within a year to 18 months to backlog could be released. resources are always a question but i think under his leadership this is a priority and for the industry it's a priority let's be clear we're a branded innovative company but the generic world is bringing down costs 9 out of 10 prescriptions in all the developed countries of the world are generics so if we keep with this cycle of branded patent life going to a generic model we'll realize benefits can i just use one example of

this 30 years ago when celgene was incorporated and listed on the nasdaq, aids was a crisis of epic proportions no one knew what was going to happen in the world. the world came together and azt was so expensive in the mid 80s we would have sat in a meeting like this and said how can we possibly deal with aids as a crisis today we don't even talk about it all the drugs we invested in we don't discuss it because they're all generic. where will we be 30 years from now? >> the industry could use a win there with generics because it would take the pressure off the epipen and allow you to take risks where you do need to

recoop huge ams. there's going to be all of these failures so it's going to be expensive so there's a reason that something costs 50 or $100,000 and we want to make sure that we have this precious american industry that is so innovative and so important we don't want to kill the goose that lays the golden egg >> this is because there was one competitor if we go back to the regulatory setting and we encourage more generic innovation the system benefits and we don't have the outliers that you just talked about. it's an important contextual discussion. >> do you think cooler heads will prevail in terms of regulation or do you see the ill winds blowing from, you have bernie

sanders there was a lot of drug control talk during that campaign has that been thwarted or will it come back >> global economies and health care costs will always be with us and always a challenge. so segmenting out where we can intervene and fix that cost curve is very important. what cooler heads know is that innovation through medicine is the most cost effective way to bend that curve and those cooler heads understand that on both sides of the argument. >> really? >> i do believe that the point is if it's a political discussion, if we talk economics the industry invests $72 billion a year in research and development at risk. and invent a new medicine and

get it to market and there's one other absolutely true economic fact the only part of the ecosystem that's going down in cost is the cost of prescription medicines because they go generic. the rest of it, hospital admissions, physician fees, all the care of patients those are escalating much more than the cost of prescription medicines. >> don't mess it up. got to press it the right way. >> i'm here to celebrate 30 years on behalf of a great company. thanks for kicking me out. >> thanks for coming on. >> draghi making additional comments saying the ecb will have to take foreign exchange into account and future policy decisions and saying that the financial conditions unquestionably tightened you'd expect the moves to pull back that's not been the case the euro eenng uxtdip against

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s&p futures up and the euro

and foreign exchange markets and we're watching so closely after these comments and you would expect based on what they're saying that they're going to take foreign exchange into account and things got tighter in terms of liquidity that you would see a pull back. >> we'll turn it over to squawk on the street. we'll see you back here tomorrow >> good thursday morning, welcome to squawk on the street at post 9 of the new york stock exchange stocks try to price in big uncertainties. hurricane irma's potential impact on