live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome 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 andrew is off today. sitting in with us is guy adami >> this is becoming our regular friday thing >> if yo joe is okay with it. i know you're okay come on, it's quick. i like your feedback after the show when you tweet how welcoming we are to you. yes, it's lovely to see you. >> i'll tweet pre-show -- i'll do during show how welcoming you are. >> i got no health problems for you to help me with today. don't have to deliver any -- he delivered epsom salt to me last

time >> guy is so nice, he got everybody starbucks downstairs >> he does that once in a while. >> every time he comes in. >> he expenses it -- >> you know, see, you ruined it? you ruined it. we had a moment. >> he did not expense your epsom salt >> no he did not you're a good guy, guy >> do people say hi guy, guy >> you just did. >> japan has called for an emergency meeting of the u.n. security council u.s. secretary of state rex tillerson is calling on china and russia to take direct action against the north. there has not been much action in the u.s. fought chores. the dow is indicated higher again. futures indicate up 9.5 points now. s&p fought choutures down 2 1/2s

the nasdaq down 11 let's look at the currency markets. the dollar coming up the dollar was lower versus the yen after the north korea missile launch news first hit. you can see this morning that at least at this hour the dollar is up against the yen at 111.20 down against the euro. let's look at the asian markets. overnight the nikkei still closed up by a half percent. the hang seng was up by 0.1% the shanghai down by a half percent. in europe, in the early trading, you'll see that at least at this hour, things are relatively flat except in london where the ftse is down by 1% because of some other concerning news we have been hearing there >> following breaking news out of london. british police are on the scene of an apparent -- i don't know why we're calling it an apparent explosion. it was an explosion it was apparently a terrorist attack or

terrorist incident on an underground train. several people were injured. carolin roth joins us from london good morning >> good morning. once again a recap of what we know london's met police say they're treating the situation at parsons green underground station as a terrorist incident. police were called to the scene in the southwest of london at approximately 8:20 local time, at height of rush hour, following reports of fire at station. officers from metropolitan police service are on the scene in addition to the london fire briga brigade. the senior national coordinator for counterterroism said a number of people have suffered injuries people are talking about facial injuries here. he added that it was too early to determine the cause of the fire, but a full investigation was now underway by the met's

counter terrorism command. this after images of what bystanders believe was the source of the blast, showing a white plastic container in flames it's important to note any details of the explosion have not been confirmed by authorities. a uk government spokesperson said theresa may was receiving regular updates. she will chair a meeting of the emergency committee later today. she said my thoughts are with those injured at parsons green and the emergency services responding swiftly back over to you >> carolin roth, thank you very much we'll follow this situation closely. let's get to the latest on north korea. chery kang joins us now from seoul. >> good morning. so, yes, it was not exactly aimed at the u.s. territory of guam, but like what we saw late last month it flew over the northern part of japan it managed to fall into the pacific ocean.

let's talk about the distance of this latest north korean missile. it managed to travel further than any north korean missiles in the past. so i think it was a part of that messaging from the north korean regime to the world and also to the u.s. that our missiles can reach the u.s. territory of guam as it was talking about in its latest threat last month so that distance was actually 3700 kilometers if you factor in the distance between north korea's capital city of pyongyang and guam is 3400 kilometers, it traveled further than the distance between these two areas. also i think it's part of that messaging coming just three days after the latest round of the u.n. security council resolutions saying that sanctions are not going to stop us the regime is going to continue, speed forward with its missile

program. i think it also -- there's always that need to keep testing its missiles i think the u.n. security council gave the regime a very good excuse for that the key takeaway is the distance and part of the messaging and the fact that it's making it clear that it's not really intended to stop the provocations at this point >> chery kang, thank you very much in washington, they're closely following the situation in north korea eamon javers joins us from washington >> this will give the president something to deal with today he's back from his trip to florida yesterday. we have a statement from rex tillerson responding to that north korean test that you talked about he says china and russia must indicate their intolerance for these reckless missile launches by taking direct actions of

their own. put this in context -- this comes in the late summer period in which the north koreans have been extremely aggressive in provoking all kinds of international response go back to july 4th, they were conducting an icbm test. july 28th, another test. august 26th, throw missiee miss tested on the 29th, this a missile over japan. then the h-bomb test new sanctions on september 12th, and now this incident last night. so the question for the united states is can they get russia and china into the game to put pressure on north korea to stop this activity. the north korean sanctions put in place earlier this week fell short of what washington wanted to see here. nonetheless the u.n. did impose new sanctions on north korea obviously it has not had the desired effect, at least so far.

domestical domestically, we had an interesting situation regarding immigration yesterday as all of official washington tried to figure out what exactly president trump and the democrats agreed to at dinner at the white house the other night. the democrats came out and issued a statement they said in fact there was an agreement on the dreamers, the young children brought to the united states by their parents who have now grown up here, and whether or not they could stay the democrats said there was an agreement. the next morning the president put at this tweet making a distinction betweenthe idea of an agreement and a deal. the president saying there was no deal last night on daca, massive border security would have to be agreed to in exchange for consent. would be subject to vote the democrats responded and said fine, we said agreement, you said no deal that's fine. they said president trump's tweets are not inconsistent with

the agreement last night as we said last night, there was no final deal that seems to clear it up. there was an agreement no final deal then the speaker of the house came out he had this to say >> there's to agreement. the president and the chief of staff called me from air force one today to discuss what was discussed. and it was a discussion. not an agreement or a negotiation. >> so there you have it. according to speaker of the highways, no agreement, according to the democrats there was an agreement according to the president there was no deal. i talked to mick mulvaney the omb chief yesterday, he said there was no final deal. somewhere in there is a negotiation. we'll try to figure out what happened, and if anything has been agree ed d to or any dealse been done here >> eamon, just adding to the confusion, i thought when we heard the tape from the president yesterday as he was getting ready to get on marine one to go to air force one, he

already talked to ryan ryan made it sound like he just called him from air force one. >> we parsed that carefully at white house yesterday. the president was asked whether he talked to ryan and mcconnell. they were not invited to this dinner, which sort of gave agina to republicans on capitol hill the president was asked on his way to marine one, have you talked to ryan and mcconnell he said i have talked to ryan and mcconnell. if you go back and look at tape, the president was suggesting he has talked with them in general about immigration over the past period of time >> okay. >> not necessarily after the dinner >> right >> boy, you have to parse that carefully. it looks like ryan and mcconnell didn't get a chance to weigh in on this until yesterday morning, after the president was on the plane. >> thank you we will move on to something maybe we have a better feel for. well, with adami here, i think

so. >> let's hope so that's why i'm here. >> it's about the markets. >> you have money on the line. >> well, we all -- don't we all have money on the line in some way, shape or form >> not really. >> come on, joe. just go with me on this one. >> don't you make those buy and sell decisions on different -- >> i try to. yes. successful some days, unsuccessful most. >> politics is 51% >> we have a binary decision every day, do we keep our comcast forever or sell. the best thing to do is keep it forever. >> stay the course >> noiit's not really stay the course it's get on board. >> get on board. >> it's like a horse it's like the thoroughbred who won that race? big brown? >> i was thinking secretariat. >> why do we remember that one it was spelled wrong american pharoah american pharoah it was spelled wrong. >> i did not remember that until

you said it. we're old. we remember things from '70s >> if you're old, i don't know what i am. >> ancient >> let's get to the broader markets. coming off a relatively calm day that still saw the dow hit its three dozenth all-time high -- not baker's dozen. regular dozen. joining us is david lebowicz, and juryjurien timer jurien, are you aware of the global fears in. >> headlines will always be there. we used to worry about iran, about putin. ultimately the market is driven

by fundamentals of earnings, liquidity, valuation what investors ought to do, is have a diversified portfolio, so when there comes a shock or scare especially with valuation levels on the high side, they have a portfolio not entirely in stocks but a combination of stocks, bonds, cash, other asset classes. i'm preaching the gospel here, but diverse fid portfolified po to withstand these shocks. we sthau aw that in the minfina markets. stocks are set to grow in q3 maybe the market is complacent about how many more rate hikes are coming the fed is in do no harm mode so is the ecb and most other central banks. centralening

enough to get rates back up. those two things together, even evaluations notwithstanding, those leave markets in the sweet spot that's where we have been all year >> david agrees. it's not always go with the flow and ride the momentum. now 22,200, you go from even before the -- the move election was supposed to -- especially with this outcome was supposed to derail things once you realize it didn't, then we got to january, okay. but it already paused it looks like it's over since january, it's been nothing but up don't you think at this point, you just give the benefit of the doubt to the bulls just wait for something to say we're derailed >> i think the fundamentals are supportive earnings look good second quarter gdp was revised

up it sounds like we're making progress towards possible tax reform or a tax cut. it looks like the path of least resistance for the equity market is higher. it's our expectation that equities should continue to move upward hopefully with the fed continuing to normalize and the ecb tiptoeing towards the exit, we get higher rates on top of that >> this normalization is slower than people thought, even though gdp is higher than people thauk thought. inflation is also less than people thought >> inflation is the most concerning >> why is it concerning? we can get it if we want it we can talk to brazil and argentina. >> exactly what's fascinating, if you look at the volatility of inflation, it has come down the question is will we go to 7% inflation or zero. the question is will we be at 1.5 or 2 that's why the fed will most likely hike in january a third and final hike for this

year we're pencilling in two rate hikes for next year. inflation is the new payrolls. in order to gauge what fed will do, we need to look at prices. don't know how you measure inflation anymore given the internet, technology i don't know whether you people are experts on blockchain, but -- what is blockchain? >> blockchain, i think i finally understand it. >> this genius, this crazy genius -- this programmer yesterday. >> he said it will be -- okay. if you say something will be bigger than the internet, i think the internet has been big. i don't know i look at my kids what they do, 24 hours -- the internet has been big how you can be bigger? i think he meant this is going to make the internet so much safer -- >> but it's not even close to the internet >> but it can make the internet a safe place to operate. you can verify everything that comes through. >> exactly we're much more interested in the blockchain technology than the cryptocurrencies, for

example. >> it's not bitcoin. >> that underlying technology. >> even in healthcare, aggregating all of this information and the way it's disseminated now, i don't know what that is worth in terms of holding down prices. nobody can charge more than anybody else because there's transparency immediately across the entire chain of -- it's -- i don't know if normal inflation measurements -- >> you bring up a good point we are likely mismeasuring, not only inflation but economic growth as the economy becomes more service oriented t becomes more and more difficult to capture what the output looks like counting the number of wij jdge off the assembly line is different than an app. the other issue is productivity. until productivity goes up, wage also probably remain muted profrnlgts du >> jurrienf fshgjurrien, if ceoe

confident, won't productivity go up we'll let the dreamers stay. the population will grow people worry about that and think we can never get above 2%. don't you think productivity can come back? >> sure. you know, potential gdp growth, the speed limit of the economy is the sum of productivity growth and labor force growth. having immigration is a good way to grow the economy. absolutely all the western -- all the industrialized countries have a demographics problem so you need to boost your population one way or another, whether through birth or immigration. it's a slow-moving thing productivity the same thing. if taxes are cut, regulations are cut that should potentially

boost productivity unless you do one or both of those two, you will be stuck at 1.5, 2% real gdp growth. you need to do something structurally to raise that limit, and it comes down to those two things >> okay. thanks, jurrien, david guy, thank you for being here. >> i'm staying i'm not going anywhere >> i know that i will thank you every chance i get. >> you can weigh in any time you're friendly, aren't you? >> my place is to wait my turn >> no, no, no. you're the guest host, we expect you not to do that. >> that's not my thing want me to just chime in >> yes >> want me to throw us to break? >> yes >> now i can get above my -- >> does wapner -- >> he's the half time report from 5:00 to 6:00 is melissa lee. you know, joe. don't feign ignorance now. it's 11 years.

you know this is how i compliment you >> i understand. >> when we come back, ringing up retail stores are already hiring people for the holiday shopping season. the numbers can tell us a lot about the state of the economy we have those details next you are watching "squawk box" here on cnbc

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a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. macy's plans to hire 80,000 temporary workers through the poll l holiday shopping season. the retailer is increasing the number of people it hires to fulfill online orders during the holiday by 20% >> up about 18,000 >> one down, the other up. >> it says they have 70 fewer stores going into this you can see that transition as people make the move into e-commerce, which is the perfect reason to be talking to matthew espey, his company is hiring 27,000 seasonal workers to try and support retailer demand for e-commerce thank you very much for being with us. >> i want to thank you for not playing christmas music on the way in >> it's time >> you must hear that in your

head all year long >> the sound of a carole makes my blood pressure rise >> in a good way or bad way? >> in a good way >> we talked about what macies is doing you're in position where you're expanding your seasonal work force by 400%. >> exactly >> why because of the customers you're serving? bringing in more retailers that you're serving is that because the customers you already had, these retailers expect to have so much more online business? >> great question. we're the second largest e-commerce service provider in north america, behind amazon we power the online sale force retail clients, so consumers get that who are some of your clients >> names like dsw, pet smart, dick's sporting goods, other luxury brands, homegoods we have hundreds of clients that come to us for that service. >> we talk about macy's,

walmart, they have their own fulfillment and distribution systems. you pick up retailers who may not have been able to do it themselves >> yes, we provide transportation, fulfillment, customer service and technology. >> you are getting more retailers who say i need more help from you or is it because the retailers we always have more business. >> it's the second part. we got that back end dynamic for us holiday peak is halloween through christmas. we start planning for peak in february we start our strategy in june. more and more our current clients, traditional retailers see this enor mougsmous amount f business come in 60% of our business happens in the next four to six weeks that's why it's a pressure time to get everything right. >> absolutely. >> you have people like amazon,

walmart, macy's also trying to get seasonal workers what do you do >> you have to get the fundamentals right we have to pay competitively we have to on-board productivity it's more than that we have a nurturing environment. we provide incentive bonuses our clients provide discounts to employees. we even provide transportation tofillment centers >> what are your concerns about this holiday season? is it what i would expect, the logistical how do you get the last mile of the package delivered? what are your concerns >> we have many. it's just the enormous amount of volume that comes through. last year we did 10 million orders in peak there will be 9$915 billion of

revenue in this season so it's just -- you know, it's the volume that goes through but again, we're uniquely positioned because of our scale in technology to support our client base. >> i'm surprised i didn't know about you before it seems like you make up a backbone of what is becoming an important part of the retail landscape. >> you don't know us you know our clients we're a relatively new company we were a spinout from ebay, known as ebay enterprises a couple years ago we have only been around as radial for two years >> if you had one thing you wish you could do -- very quickly, what do you expect this holiday season >> significant volume increases, up over 20%. >> matt, thank you very much for being with us. we'll talk to you during the holiday season >> thank you very much >> i was going sing some -- ♪ jingle bells, jingle bells >> i won't do that >> coming up, the north korea

threat another ballistic missile flying over japan if something goes wronging then what right over japan airspace before crashing into the pacific ocean. we'll talk about the rising tensions and what ulcod come next stay tuned you're watching "squawk box" on cnbc

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indicated up by 9 1/2 points now. s&p and nasdaq both breaking three-day winning streaks. yesterday with the loss, this morning they are a bit weaker. s&p futures down by two. nasdaq off by 11. our guest host is guy adami. we can ask you for a few stock picks. we just talked retail. getting ready for the holiday season what do you think? >> july 13th, i was here joe was off. i was here melissa was here with me target came out with guidance. it was 6:30 in the morning the guidance was outstanding the stock has been off to the races since. we talked about it that morning. target would have continued to go up but for that whole foods amazon deal. if you like walmart, you know, their multiple, you have to like target at theirs i think target works here. exxonmobil is the other one. common has been fwrim death fgrr

the last nine months, ten months in a market that's gone sideways something happened interesting last week. the stock held 76 a bunch of times. started to go higher as crude went lower first time you've seen that in a while. for the first time in a long time exxon looks interesting for a trade. >> i believe it was ubs saying, look, the premium that you expect exxon to have over somebody like a chevron had compressed i think it's 25, but they expect that's a good place to buy in we saw oil close above $50 for the first time in a long time. >> that's giving you tame winds. exxon 21 times forward earnings is not cheap at all. but this stock has been in decline for a long time. i think it's finally turning the corner the last one quickly i know joe has something to say. i can see it in his eyes >> i don't like the yield on exxon. you said it held 76, that's the

low. what are you going to do, buy a ten-year 4% plus 76 -- >> versus 2.1% for aen ten-yea. >> the other thing everybody has been knocking for a long time for political reasons, not for evaluations, biotech now we've seen some deals in biotech. gilead finally got off and did something. everybody wanted them to do something. yes, they paid up, but they paid up in a space they need to be in now biotech has tailwinds as well those things to me are interesting. >> watching bernie the other day with his -- introducing the single payer, all his people around him talking about how we'll get out of the business where anything healthcare related is done to make a profit. we'll -- no insurance companies

will make a profit no pharmaceutical companies there will be no profit incentive whatsoever to the delivery of healthcare in the united states. to these people that makes sense to them. get that out of the way. suddenly that will mean everyone gets great healthcare, instead of realizing if there's no accountability, no innovation, if there's no reason to develop new drugs, it's two ways of looking at the world you have a third of the democratic party lining up behind that viewpoint. it's frightening >> it's a dangerous way to look at world >> that's why i would be worried about it. >> to years ago, leukemia was a killer >> don't get me started. >> you understand. do >> the science works you need to invest in the science to save lives. >> but bernie honeymooned in the soviet union enough said. guy, stick around. >> i'm not going anywhere. >> huh in. >> i'm not going anywhere. >> did you know that. >> did i know bernie honeymooned in the soviet union.

>> i'll google it. i'm not that well versed in bernie sanders honeymoon destination. >> when you drive somebody with a bernie bumper sticker, do you check it out >> no, you don't i'm sure you do something other than check it out. north korea launching another missile over japan today. joining us is john park, director of the korea working gro group. we have this discussion just about every day. another binary choice. do we see the day where we have to just accept that north korea has the nuclear capability to hit the united states or is there some other way of preventing that? are we -- is that eventually inevitable, professor? >> that's what we're looking at now. this is a fully fledged program, rather than something where it's an event and north korea is

trying to raise up the price, get bought out, somehow kicking the can down the road even more. we're actually seeing north korea make the type of development and the progress that is getting to this category where it reaches the united states with a nuclear warhead. if we can learn to live to a nuclear warhead, we go down that path however there's competing views saying we can't tolerate that ra reality, a nuclear north korea threatening other countries and bullying other countries >> it's different than the containment during the cold war. i tonight know what the soviet union could have extracted from us north korea can extract things from us through blackmail, or who knows who they will give the technology to. whether it's another nation state that hates us or a t terrorist group.

i don't know what answer is to this without eventually having accept that there's going to be some horrific consequences to it i don't know how you get around it i don't know how -- we're talking tough, aren't we when you listen to nikki haley saying we'll never accept that >> we are. but we're going to have another meeting in the u.n. security council. we'll probably have another round of sanctions but the path we're going on the sanctions result, these measures, secondary sanctions, the focus is not on north korea, they're on china, chinese banks and companies. the idea is to put the political pressure on china that china reins in north korea that's a theory. that's a hhypotheses the chinese don't view the north korea problem as their problem, they see it as a problem between the united states and north korea. so you will get push back and

employee back from the chinese side we will go in directions that's more complicated rather than cooperating closely with each to deal with north korea. >> what about technology we'll have somebody on later who thinks that's the way to handle this, whether it's cyber -- we've had -- tom freedman was on he speculated we may have something we're not using could disrupt the launch or the deployment of some of this stuff. like, you know, thinking about a movie or something themissile is launched straigh up and comes straight down could we develop the cybertechnology to cause that? >> earlier on there was, i think, a popular view that north korea was the focus of these types of efforts some of their earlier explosions on the launch pad or a few seconds into flight were as a result of thee efforts

but if you talk to some technical rocket experts, they're basically saying an early stage of ballistic missile defense programs, you have these setbacks what we're seeing now is alarming in terms of how quickly north korea is developing its capability and how they're displaying it to the world they post the videos and photos on the internet for all to see under the 17 years of kim jong-un's father, he did about six tests. over kim jong-un, there were 40 tests and six nuclear tests. the last one measured 6.3 on the richter scale. so the sure pace of his program is outpacing these technologies that may have played a role earlier on >> okay. thank uf jo thank you john park. appreciate your time no easy answers. thank you.

>> sure. let's tell you about a couple of stocks to watch. oracle reporting first quarter earnings and revenue that beat forecast as the company's shift to the cloud gains momentum. >> if you look at where oracle traded up to yesterday, i think it was close to an all-time high rivaled the previous all-time high from 20 years ago technicians talk about the possibility of a huge double top. oracle has made the transition i think growth will be enough, but the stock probably trades high 40s, mid to lie 40s probably settles in around 46.50, $47 >> year high at 53, closes at almost 53 this chart only goes back to '07.

so maybe in '99 -- >> ish you were around then you were a big shot investment banker somewhere no >> no, i came here in '91. >> come on >> not kidding i was never investment -- i was a stockbroker. >> yeah. >> i thought i was big time. coming up, business in the fast lane. google's parent company considering a billion dollar investment in lyft >> 112, december of '99. >> details next. stay tuned, you're watching "squawk box" on cnbc e 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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president trump just tweeting another attack in london by a loser terrorist. these are sick andimen dimented people fw facebook is removing a feature that targeted ads to

people who identified themselves as jew haters. the change happened after a news organization found the topics in facebook's self-serving ad buying platform, they found that term they paid $30 to test them with their own content. the categories were created by an algorithm facebook says it is removing the ability to buy targeting marketing based on topics and notes it does not believe the use was widespread. google is being sued by three women for pay discrimination the former employees allege the tech giant is bias against females in pay and promotions. the plaintiffs want this to become a class action lawsuit covering all women who worked at google in the last four years google is already under investigation by the u.s. department of labor looking into sex bias in pay practices. and in separate news on the same company, alphabet is considering a ride hailing investment the company is in discussions with lyft about a possible $1

billion deal alphabet is already an investor in uber, but their relationship has soured you know what's been happening, google's suing uber for alleged by stealing files from google's self-driving car company maybe this is an even further way to punish uber as a result coming up on "squawk box," educating america. are charter schools the answer enrollment has nearly tripled in the last decade but not without controversy. this is a famous name we have coming up. i'm an unabashed fan of eva moscowicz. here's a quick check on what's happening in the european markets now. stay tuned, you're watching "squawk box" on cnbc

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welcome back school choice is a corner stoke of the trump administration's education agenda millions of families opting to enroll their children in charter schools over public schools. there's a new book that tells the story of the controversial growth of the publically funded

privately run institutions joining us right now is eva, ceo of success academy charter schools. she's also the author of a new book that's called "the education of eva mosk owi tz." you have become such a punching bag, but this is a much more complex story about what happens when you get in and try to fix education systems for children why don't you talk about what you have learned and how you think we can eventually fix these problems >> there are teachers unions and politicians on one side that ar interested in jobs and protecting the system, and then there are ordinary parents who just want a better life for their children than they have for themselves i'm on the side of parents zoo there might be a few politicians that benefit from the contributions from the teachers unions that come from

always go to democratic candidates too it's a pretty easily described finish no, ma'am nol, what you are seeing, is it not? who has dogs in the race and who doesn't? it's so obvious what's going on, and the people that lose are the kids that we're trying to help >> the unions all over the country have controlled the statehouses and -- >> for a reason. because it's about money you're trying to do that you're going to get hammered, killed and you have here you are you look good. >> i've had a lot of defeats, but also some victories, and i have always tried to persist and work backwards from high quality teaching and learning.

>> every kid gets to play chess and poetry and music yet, there's opposition to parents choosing the best school for their kids the opposition is fierce it's unrelenting i've learned that you can't care so much about being controversial, and you have to have the north star and for me the north star is great teaching and earning. >> are you a supporter of betsy devoss >> i have supported betsy devos. i'm a big believer in school choice >> who has gotten hammered worse? you or her >> oh, i think i have. >> really? >> she's got her own scars >> she does. she does she hasn't been in the fight as long >> i have been doing this for

you nor 20 years >> what do you think of the way that women that are in the trump administration are portrayed he has his communications director, hope hicks kellyanne was campaign manager sarah huckabee-sanders is, you know, the person that is in the press room now when are we going to see time magazine do a puff piece on women of the trump administration that's upcoming any time soon. i don't think. do you >> i don't know. >> let's get back to what you think needs to happen.

>> can this be replicated again and again? can it take care of massive amounts of the children across the country? >> i believe it can. in the book i talk about what are the ingredients -- one of them is management there's a lot of talk these days about the teacher in front of the classroom, and, of course, that's important >> you still need operational excellence, and, you know, we are very innovative and disruptive we look to other sectors what are the best practices in hr what are the best practices in had talent development we need a lot of those best practices in the field of education. >> eva, thank you so much. folks, the book is called the

education of eva moskowitz check it out when we come back, north korea firing a blis ig missile

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breaking news. an explosion at a london subway station during the morning rush hour police now say that they are treating it as a terrorist incident plus, another major act of defiance by the north koreans firing off yet another ballistic missile landing in the pacific ocean. we have the details in the latest developments on both of these stories in just a moment in the meantime, the dow closing at a record high we will talk technology ideas and find out where you should be putting your money to work right now.

the second hour of "squawk box" begins right now good morning welcome back to ""squawk box." here on cnbc live from the nasdaq market site in time square i'm joe kernan along with becky quick. andrew is off today. checking the -- the dow jones up 7.5. the s&p down two the nasdaq down about 12 also following some big developments out of north korea after that nation launched another missile over japan this morning local time the launch prompting japanese residents to take cover and then officials say it landed in the pacific ocean. for more we're joined now by

nbc's hans nichols good morning, hans this is very similar to the last one, i guess, right? >> yeah, it's very similar we don't have a full read-out on whether or not it was the kn-17 which is the designation for this missile the important thing is it went high the scary thing, i should say. it went high and it went far what we don't know it went about 2,023 miles. that's according to south koreans. we haven't gotten confirmation on that from the u.s. side we also don't know whatsoever warhead was on the top the distances changed a little bit depending on the weight of the warhead, and they simply don't know that yet. we'll hope to get a little more fidelity on that later today >> they control at the launch the height and distance, don't they was this fired at the same trajectory, do you think >> roughly that's what the preliminary estimates and the preliminary telemetry suggests that had a similar really

when they see this, though, within minutes and i've talked to secretary mattis about this within minutes they know where it's heading, how far it's likely to go, and that is when they make the decision and those initial minutes to shoot it down >> the last fwo have worked, but every time they fire over yappan, isn't there a chance that someone could get hurt on japan from this and there could be a shooting war? is it reckless, or do they know for sure it's not going to happen >> it is very reckless and provocative. the issue that they have is they don't quite know what happens when they re-enter the atmosphere when you go up 500 miles above the earth's surface, you're going to re-enter the atmosphere this looks like it re-entered a

good 1,000 miles to the east of japan, but there's always -- you know, there's always a danger. just give you a sense of what the u.s. does when they test a missile that's going to splash down the model >> the distance travelled is exactly the same distance to guam it wasn't directed towards guam, but clearly, the north koreans want to put the u.s. on warning that they can hit guam, which is u.s. territory i just remind you that, you know, two, three weeks ago secretary mattis visited us down here at the pentagon, and we asked him what happens if they hit guam, and he just said it's game on. it's war

>> that is that breaking news out of london this morning british police are on the scene of an explosion on a london underground train. it happened at the parsons green station in the western part of the city earlier this morning in the height of rush hour traffic our very own gemma atkins joins us from london. gemma. >> we just heard some news from regards to the injured there are currently 18 injured who have been taken to hospital. none of them were in serious or life-threatening condition it's mostly burns that are the main cause of injury we're seeing so far. what we do know is there was, as you mentioned, an improvised explosive device detonated on a train this morning a couple of things to note it's thought to have been a white plastic container within a certain market however, this hasn't yet been confirmed by the authorities there have been some pictures circulating off this device on

social media, and that is currently believed and not confirmed to be the source of the detonation furthermore, you mentioned the underground of the metro we call it the gp here in london in the morning absolutely packed generally at that time. around 8:20. what's been talked about here is the fact that it was one of the earliest stops between a train running from wimbledon, the start of the line, to paddington, the end of the line. one of the stops that had less commuters than otherwise on this line as they pick up passengers along the way. snoo we had an update from the acting commissioner -- the assist yabt can commissioner off the metropolitan police. the metropolitan police is leading the inquiry, being

assisted by the british transport police as well as the mi-5, our intelligence -- our domestic intelligence body here in the u.k theresa may is hosting a meeting this afternoon, which is the anti-terrorist mlks -- national emergency response committee back to you. president trump, a couple of these tweets that were mentioned. just moments ago -- this was in light of what you just heard this is about the travel ban president says the travel ban into the united states should be far larger, tougher, and more specific, but stupidly, that would not be politically correct, and then the last one, which i don't think we made a full screen yet, but we have made progress in the last nine months against isis. we must be proactive and nasty there it is.

in the president's -- >> in other headlines this morning, today marks the busiest day of the week for economic numbers. at 8:30 eastern time we'll be getting august retail sales in the empire state manufacturing index. later this morning investigators will get a look at industrial production and sentiment oracle is among the stocks we're reporting too. quarterly earnings of 62 cents a share. that was 2 cents better than the street was expecting revenue above street forecast. the company is benefitting from a successful shift towards cloud-based software, but still, that stock has been under some pressure closed yesterday at an all-time high this morning it's down by $2 that's a decline of 3.8% alphabet has held talks with ride-sharing service lyft about a $1 billion investment. that's according to the "wall street journal" which says it isn't clear whether the deal will take place. right now it's time to talk markets. joining us is jason pride, director of -- also, peter, who is chief market analyst at the

lindsey group. he is a cnbc contributor and gentlemen, welcome to both of you this morning >> is that anything to worry about or not >> it's nothing to worry about, but it means the fed is going to continue to tighten policy they're going to announce quantity takive tightening next week depending where the s&p is in response to that, they'll broebl raise rates in december. and they think -- i think they want to continue to raise rates through next year. even if inflation stays around these levels, it means further tightening >> we'll talk about those things this is longer term thing that we've been watching what happens with the fed and what goes beyond, but this morning we wake up to headlines like this once again. north korea firing missiles. the latest situation that we've just seen in london waiting to find out more details on that. how come the market isn't spooked? what do you think? >> i think, you know -- i would say two things number one, is sometimes the market is spooked by these sorts

of things, and sometimes it's not. how does it actually impact the value of my investments? when the market -- sometimes when the market participants can't see the direct impact on the profit streams and the economic streams, the impact ends up being a little lighter some are not elevated to the point of actually being true events of their transpiring. >> in other words, we can't figure out what to make of it. >> brexit was something we couldn't figure out, and they

sold off a quick 5% to 10% right off the bat. we're looking, saying, you know, one of these days, one of these items is probably going to trigger a correction we haven't seen a correction in quite some time. that will probably come about. it will probably also be something until if we figure out like other times that actually it doesn't have the economic and profit impact. it will be something that happens right in the middle of this longer term economic expansion. >> do you try, it or do you ignore it? >> i think the $19 trillion economy that we have is powerful it doesn't care about a lot of these externalitieexternalities. it cares about what are the central banks affect going to have on markets and the economy, and obviously interest rates that's been the focus. geopolitics has only short-term impacts. it's usually fleeting. the debt ceiling, everyone knows that eventually it will get raised the government shut down it will eventually reopen. it's the things that directly

affect every day business activity >> are we becoming too used to the idea that all of this will work out is there going to be a situation that -- >> with north korea particularly >> even the debt ceiling even some of the things. >> irma. i thought irma meant we're not going to raise rates again soon, but you would discount that. >> i think the fed is going to continue to moderately gradually tighten, but it's still tightening it's still the pace of tightening that we've seen relative to the last few years >> i'm with peter on this. we've been looking at these risks and talking it our clients about the littany of risk investors face the two things that keep popping up and we think are more material risks for investors is the over-valuation of economic markets particularly in the u.s. it's not elevated to the fact of being an extreme risk, but it's a risk, and this idea of monetary policy tightening the fed has put forth a balance sheet plan that if you run the numbers is a pretty decent pace, and it's operating on this thesis that there's enough bond buying supply that it can absorb

all these sales of $50 billion per month in bond sales from the federal reserve. >> no decisions can be made without thinking about what is still the thousand pound gorilla in the room. not even the 800 pound gorilla >> the bottom line over the next year is what is the right multiple for earnings? the fed continues to tighten if the bank of england raises interest rates, if the bank of canada continues to raise interest rates, if the ecb continues to taper, is it going to be 17 times, or is it going to be all of a sudden 15 times we know the massive multiple expansion helped the markets over the last five years >> but that's assuming that earnings don't continue. the gdp doesn't continue to improve, that economies aren't the globe don't continue to improve. >> we've pulled forward in terms of multiples a lot of that

earnings have risen much faster than -- i'm sorry. multiples have risen much faster than earnings. >> the actual earnings we pulled forward a lot of future returns >> the key to this is going to that pace from the federal reserve. if they follow a fairly slow monetary tightening pace, that increase or that decrease in multiple expected by the markets or the market would be valuing things at the expectations of corporate growth and economic growth won't be as dramatically impacted, and then we can carry at higher valuations for more sustained period of time it's actually what we've done in other cycles if they thieten faster and harder and they actually start showing up as having an economic profit impact, then you will probably see a more significant reaction >> larry, lindsey, ever talk about whether they're talking to him about being fed chief? >> i mean, he is out there as a possibility. i don't know anything. >> you just -- >> he is out there, but -- >> i could either ask you or becky or jacob

do you know anything you work for him >> i know he is a possibility. >> do you know that from him, or ju just read the same things i read >> i talk to him >> i think trump wants to have a steady monetary policy he says he likes lo interest rates. larry is more of a renegade guy. >> if you pick somebody other than the top job >> i think that's the one he would take if offered. >> that would be good because we know him pretty well >> it's all about us >> i think trump -- >> you like taylor who do we not like >> we like a lot of people >> peter, jason, thank you for coming in. we appreciate it >> thanks. >> thank you >> coming up, dealing with north korea. should the u.s. be looking at

cyber warfare as a means to stop kim jong un's nuclear ambitions? we're going to assess that possibility after the break. check out the futures at this hour kind of mixed. the dow has indicated up ayune records already this week. st ted you're watching "squawk box" on cnbcto track this is a financial transaction secure from hacks and threats others can't see. this is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. this is not the cloud you know. this is the ibm cloud. the ibm cloud is the cloud for enterprise. yours. kevin, meet yourkeviner. cloud for enterprise. kevin kevin kevin kevin kevin kevin kevin

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>> rest tillerson and jim mattis have said that the u.s. will stop north korea's nook missile program through economic pressure backed by military options in their words, but our next guest says that there's a more effective middle ground, and that is cyber warfare. let's bring in john yu, berkeley university law school professor. he is the augthor of a new book out this week, "striking power." i followed you over the years, and, you know, i'm usually with you on a lot of this stuff because when i hear someone say with terrorists we need to lavish them with love or we need to somehow work into our own souls about what we've done wrong, i just doerchlt know wrrn these guys, there's only one thing this he understand, and the same thing with what is really a terrorist head of state

over in north korea. >> our country has to think about options between full blown war and -- >> i think you're right. i see the appeasers. they don't come out of the wood work completely and say we just have to let them get these, but i can see that that's where they're headed they're saying there's no other options, so they're starting to prepare us for a hydrogen -- >> some of them actually have said you have to be prepared >> for north korea they can hit the mainland with the hydrogen bomb it's going to be what's in our future they seem to be okay with that i don't think we can't -- do we need to accept that?

>> leading figures at the obama national security team have been out in the last few months saying we have to accept it. we have to contain them. there's no forward agenda to try to pressure them to stop it. >> i think that's what sheer saying for the television cameras, but behind the scenes there is a secret plan, whether it be cyber terrorism, cyber attack or something along those lines. what would a technological solution look like >> so i think you have a range of things. what you would call a layered defense. it runs from bulking up national missile defense, bulking up defense of right around in the region i think using cyber, even north koreans depend on computers and networks just like we do they need computer systems and networks to test and design their missiles they're also trying to integrate in the economy they are also using missiles -- i'm sorry. the internet to move money around, to try to pay for all the things that they're importing. i think one thing we start doing

is using cyber to tahack into t companies doing business with north korea and to hack into north korean accounts and networks themselves. also, so stop anybody doing business with north korea. >> only time we've had an affect is when we take away economic supports, and you start seizing the assets of their leadership abroad we start making it difficult for north korea to trade and proliferate their technology to get -- stop them from getting hard assets into the country >> i don't know if everyone remembers, but the enhanced interrogation was something that you made constitutional cases for. the obama administration immediately threw that out

we're seeing, you know, korea is what we're talking about, but there is also another attack in london today, and the president, you heard the tweet, says we've got to get newscast why i. >> they have been considering it there were big drafts that they've been considering it. i think you have to. look what's happened over the last eight years we have not captured any more al qaeda leaders because president obama wanted to close gitmo. he didn't want to add anyone to it we ramped up drones, started killing more al qaeda leaders abroad, but that meant our source of intelligence dried up. i think at the same time you have seen an increased in terror attacks in europe and in the u.s. in places like san bernardino, and so until we start getting more intelligence from them, we're not going to be able to prevent them from

carrying out these kinds of attacks like in london or god forbid, like we saw in new york on 9/11. until you start getting more intelligence from them and the only place you get it from is from the leaders themselves, and that's by interrogating. >> you would say at this point we did get useful information from -- >> oh,a you. >> the other side says no, that nothing useful came out of this 75 water boarding. >> i think that's quite wrong. i think we got plenty good the way to think of it, it's like investing, i suppose. you build up a capital of information. the only way you get that pool of information where you can piece together a mow sayic of what the enemy is doing is through electronic intercepts and interrogation. for the last eight years we've cut off the most -- the most fruitful area. if you look at the 9/11 commission report, almost all the information about what we have on al qaeda came from those interrogations we said we're not going to look in that area we drew down on all that information we had -- >> do we have a secret service

time quacking around berkeley? how do you walk around berkeley? how did that go? i heard that was pretty ugly i can't believe you're there do they not know you >> well, i move fast, and i stay low. >> god all mighty. thank you. >> i think so that for having me >> we'll be talking to industry and government leaders about cyber issues and more at the cambridge cyber security summit on october 4th among the leaders am to bosser, u.s. homeland security advisor, mike mclaughlin, president and ceo of palo alto networks. and others, as you can see >> three former google employees filing a class action lawsuit against the technology giant alleging that it discriminated against women. we'll have more on this lawsuit and the company's culture in just a bet are you ok? what happened? dad kinda walked into my swing.

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station in the western part of the city you are looking at pictures right now that were taken from the scene. there are reports that the device that was used did not fully detonate several people were injured, though, and london police are treating this as a terrorism incident we will continue to monitor the situation and bring you more as we hear about it we are also following big developments out of north korea after that nation launched yet another missile over japan this morning in the early hours local time there the launch was prompting japanese residents to take cover. something like 25 million residents received warning either through the sirens that went off or through texts on their phones that missile landed in the ocean without any further incident, but obviously, raising tensions there. let's take a look at the markets this morning after those incidents den incidents. the futures there are positive once again indicated up by 10.5 points after closing five days in a row with gains. s&p 500 and the nasdaq are slightly weaker with the s&p 500

futures down by less than two points the nasdaq down by about ten here are some of the other stories that we're watching. retailer macy's is going to hire what sounds like a lot 80,000 seasonal workers for the holiday shopping season. that's down, blooechbtd, from the 83,000 that macy's hired last year. earlier this week target announced it was hiring 100,000 holiday workers, and that's up 30,000 from the 70,000 in the prior year a disconnect there much of the world -- to the rest of the world they're looking at raising interest rates the russian central bank has cut its key rate by half a percent to 8.5%. that took the action because of falling inflation driven in large part by lower food prices. bmw is reportedly mulling the idea of going away with car keys that's according to reuters. it says the automaker issing replacing the keys with a bmw mobile app, which would be used to unlock and to start the

vehicle. i saw yesterday you can get a chip -- i don't know it's the mark of the devil you can't get a chip >> the chip that you get for what i have heard the employees doing this >> you can get it to start your car and for identification and for credit card. >> why because you can't carry a credit card or a car key? >> it could get infected or something. >> they could be tracking all of your moves, doing other things >> a chip in my hand i don't want to be the beast >> yeah. i have the same concerns we're a little too similar there are some problems with that meantime, google is being hit with a gender pay discrimination lawsuit cnbc's josh lipton is here he has more on this story, and, josh, good morning

>> here's their lawyer on the suit >> google is paying women less than men, and it is doing it in a way that is statistically significant. >> for example, plaintiff kelly ellis was hired by google in 2010 as a software engineer despite excellent performance reviews, she says men with less qualifications were promoted to higher paying positions. she resigned in 2014 due to what's described as a sexist culture. google spokesperson responding to cnbc. we work really hard to create a great workplace for everyone and to give everyone the chance to thrive here in relation to this particular lawsuit, we will review it in detail, but we disagree with the central allegations. this is just the latest controversy for google the company is already under investigation by the u.s. department of labor over claims that it didn't fairly pay some female employees google says those allegations are without any supporting data. it ignited a firestorm when it recently hired a male engineer

who says biological differences could account for a lack of women in tech. guys, back to you. >> all right, jo thank you very much. we'll speak more with josh a little later this morning. in the meantime, though, our next guest says that america is experiencing an unconventional energy revolution, and it has all kinds of different impacts that you may not have considered yet. right now let's bring in megan o'sullivan she is former deputy national security advisor to president george w. bush she's also now a professor at harvard's kennedy school, and the aught ovthor of a new book "windfall.

>> i think you're making the exact point that i try to make in my book americans think about the increase in energy production in oil and gas as being good for the u.s. economy and that's certainly the case, but it also has changed the strategic landscape in a way that has been beneficial to the united states as well. it has weakened our adversaries. russia being the most obvious of that bunch given their reliance on oil and gas it's also created new opportunities for cooperation. even with china, which is a country that we really need to find at least little nodes of cooperation in order to manage what is the most critical bilateral relationship in the globe. >> let's break that down a little because of russia's weakened state, weakened economic state, that probably has to do with a lot of the the reasons we have seen putin be so much more aggressive how do we try to reign him back? >> this is true. he has less oil and gas revenues, which has had an impact on the russian -- >> big impact. >> russia has actually been able

to manage the economic downturn in terms of prices better than people expected because of the devaluation of the ruble still, putin is no longer able to deliver economic benefits that he had counted on and that had really propped up his popularity instead, as you suggested, he is offering them russians a sense to fuel powerful in the globe, and i think that accounts for a lot of his actions in crima, in the middle east, and other parts of the world >> we worry about the s&p earnings every quarter because some of the energy sector at $45, they don't make as much money.

we actually talk about it. >> we have gotten past that. i think it's a year or two since we started talking about that. >> if energy costs less, it's unbelievable for the industrial sector, for the transportation sector it's like a tax break for consumers. it's all these wonderful, wonderful things that needs to be -- >> i think the many examples you gave are in the economic realm, and that is important. >> i got some other ones for you. >> the cheap natural gas -- >> okay. let me give you this one, megan. let me give you this one >> sure. >> you are still taking hydrocarbons out of the ground, and there's going to be more irmas, and secondly, it's so cheap now that you are hurting the inevitable development of renewables by making them not cost efficient you are actually just kicking the can down the road for the inevitable transfer to those better, according to some people, types of energy. both of those things number one, more irmas, and, number two, i mean, i'm just

playing devil's advocate >> i can see you're the resident pessimist this morning >> this is what i read all day -- on twitter. this is what i see all the time. it's ludicrous >> there's an element of truth to that, and cheaper fossil fuels, oil and gas >> delays the -- >> greater consumption that means more carbon emissions, and there's also that substitution between cheap natural gas. not so much oil. >> you talk about that in the book it's all great >> no, be i had a whole chapt are. i also point out there are arguments in the other direction as well.

>> i don't know how richard branson and leo are going to fly without renewables >> i think you would be surprised. they're making -- >> we've been -- >> a wind turbine. >> what if there's no wind you're not going to be here. andrew >> ultimately, though, this is very powerful for us >> net >> on a global scale increase our dominance. >> i think -- i mean, this is the point that imauto trying to make in a world that's otherwise filled with negativity, just looking at your coverage this morning, a lot of difficult things happening in the world, and it's important for the u.s. people, but also the u.s. government to keep in mind that we have for the first time energy is a huge asset not a vulnerability. when i worked for president bush, you know, energy was a vulnerability. we imported so much of our energy, and that influenced our foreign policy now we have the opportunity to take advantage of this, and we need to think beyond just

producing more oil and gas we need to think about taking advantage of the new strategic environment. >> if you do the ben fraipg lynn 20 positives a bonus. >> no. there are some negatives >> net-net on the whole it's a positive >> don't -- see, i'm more bullish than you >> great thanks >> 20-0. the citrus industry feeling a squeeze after hurricane irma wee take a look at the long recovery ahead for citrus growers in the state and what it would mean for prices. as we head to break, here's a look at the futures. "squawk box" wilbel i count on my dell small business advisor for tech advice. with one phone call, i get products that suit my needs and i get back to business. ♪

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a grower group says oranges and grapefruits were hit hard. the storm also hitting strawberries and tomatoes. the road back may be a long one, but our next guest says that failure is not an option for the state's growers. joining us now shannon shep, executive director of the florida department of citrus

what's the latest you can elit us, shannon, and do you know completely the full extent of the damage right now do you know exactly what happened >> i think it will be weeks before we know the full extent of the damage, but i'll tell you what we do know now. we've got an awful lot of citrus on the ground. we've got trees out of the ground neither of those things are good signs for the florida citrus industry after that category three hit in south florida and came right up the citrus belt of florida. >> so i know that the futures spiked, and when it tracked west, the futures fell the next day. compared to where we were before any of these storms, where are our futures prices right now they're not at the highs of where they were? they've come down a little what are they telling us about the extent of the damage, what traders think anyway >> you know, i have to tell you,

i'm not when floridaians are facing a hurricane or freezes, those risks are bigger, and the markets are going to act accordingly. >> when things like this happen, people at some point say, you know, i'm going to go into line of business. this is just too difficult it's been how long since there was a respite from florida and hurricanes in the last decade or so i would imagine that the industry was doing pretty well in terms of supply >> well, you know, i'm glad you asked that question. 2004 was a huge hit. we saw three hurricanes come through the citrus belt, which was a big reduction in crops for

us it was almost a 90 million box reduction. in the years following we were trying to get things back in order. we also discovered that we were battling a pest called greening. it's a disease that enters into the tree and is spread by a little bug that blocks the nutrition in the tree and eventually kills the tree. >> this was supposed to be the year that we saw gains in about decade >> we'll keep an eye on this we really feel when something like this happens for people that are in that business. hope they pull through this because i love, obviously, can't be without oranges

appreciate it. >> well, all i can say is just keep drinking the orange juice it's really important. >> i can't wake up really without it it's like a jolt i love it. >> it is good. thank you. when we return, sector-nomics. the technology sector. in the meantime, check out the equity futures this morning it looks like the dow futures have been picked up more they're up by 16.5 points above fair value s&p futures down by less than a point. the,in dn aowby 6.5 stick around "squawk box" will be right backi you know, geico can help you save money on your homeowners insurance too? great! geico can help insure our mountain chalet! how long have we been sawing this log? um, one hundred and fourteen years. man i thought my arm would be a lot more jacked by now. i'm not even sure this is real wood. there's no butter in this churn. do my tris look okay? take a closer look at geico. great savings. and a whole lot more.

welcome back global markets in the wake of today's north korean missile launch japan has called for an emergency meeting of the u.n. security council u.s. secretary of state rex tillerson calling on china and russia to take in his words direct action against the north. u.s. equity futures have been not surprising they kind of are flat for most of the session e session. >> dow has been tick picking up. >> dow has more even though 18 points that would be the fourth -- >> it's already -- >> it's been five days in a row of gains s&p 500 and the nasdaq broke a three-day winning streak yesterday with some modest clee declines they've been picking up a little too. s&p is down. s&p futures down by less than a point right now. >> quick look at the ten-year. that's been between, you know, 2.1 and 2.2 for a while. looks like we may be finally

headed back above the 2.2 level. the dollar make a quick look dollar on visa vi the euro 119.5. dollar weakening and then the -- the european markets which are all green this morning. >> let's bring in some sector-nomics this morning landon dowdi has winners and losers landon, good morning >> good morning to you the tech sector has soared up more than 25% year-to-date that far outpaces the overall s&p 50000 up about 11% there are some real winners. let's take a look. active vision blizzard jumping 81% year-to-date as one of the favorite names in the video game sector tim o'shea of jeffreys telling me the optimism looks set to continue thanks to a growing global audience and a shift to digital gains. semiconductor equipment maker lam research climbing 64% on continued heavy demand for chips, and nvidia up 58% thanks to all the buzz around artificial intelligence with

chris of brandon james saying the firm has really taken a leadership position in that space. the data center business topping 175% year-over-year in this most recent quarter who is having a tough time in tech rbc's mark mahaney pointing to sustained loss in clients and its content delivery network business that's the largest revenue segment. qualcomm sliding 21% on the uncertainty regarding its legal battle with apple over its license and business according to morning star. f5 network falling more than 19% on several disappointing quarters and weakness that they've seen in europe and japan. back to you. >> landon, thank you look at a couple of stocks to watch carnival was downgraded to neutral from outperform in credit suisse and pointed to declines in cruise demand and increase in the supply of ships as well as cruises genworth financial higher in premarket trading. they received approval from

virginia officials to sell its insurance companies. based in that state the china oceanwide holdings cell gen was rated as a top pick at rbc capital with 1 $176 price target rbc says the drug products are being undervalued relative to its piers. >> google parental fa bet is considering a ride-haag hailing investment the company is recordly in discussions with lyft about investing a billion dollars. alphabet is already an investor in uber, but as you know, their relationship has soured. google is in the middle of suing uber for allegedly stealing files from google's elf-drivin car company wamo facebook testing a new feature to let users temporarily unfollow a friend or a page. end gadget says they are exploring a snooze option that will let you hide a friend's post for up to a month versus unfollowing them permanently

>> when we return, the latest -- >> does that sound like -- >> permanently >> is that really a feature that they are thinking about this let's put this feature on, really >> well, you are pretty decisive when you block somebody. >> oh, yeah. zero tolerance >> please tell joe to unblock me i have not asked -- >> here's a guy who doesn't like me >> yeah. >> no, we won't, but people who don't like me are very consistent with the rest of their views usually. >> that's interesting. we have the latest on two major stories that we're following for you this morning first up, that explosion at a subway station in london police there treating the incident as a terrorist incident also, north korea launching another missile over japan the international community on high alert at this point we have the latest on these developing stories straight ahead. "squawk box" will be right back. you know who likes to be

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developing stories around the globe. several injured after a terror attack at a london metro station. meantime, north korea fires another ballistic missile over

japan. breaking market news we are just minutes away from retail sales data. the numbers and the reaction coming up. plus, under cover at l.a.x how one of the busiest airports tracks your every move the never before seen technology is straight ahead as the final hour of "squawk box" begins right now. ♪ i always feel like somebody's watching me ♪ >> live from the most powerful city in the world, new york. this is "squawk box". "squawk b. >> most powerful city. most powerful morning show good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernan along with becky quick.

>> good morning. since i last spoke to you, there's been an increase in the number of record injured it's now up to 22. once again, no life-threatening or too serious injuries. most of them are said to be flash burns. there's also concerns that some people were possibly stampeded as they were coming off the train in a rush to exit the train and the station. now, speaking of the station, if you look over my right shoulder, you can see behind me a street which is populated with lots of emergency services, police, ambulance, firemen, and at the end there's a bridge on the left-hand side of which is the station. indeed, that bridge you'll see is the train track the london fire brigade said that they were on the scene within three minutes there's been a very rapid and very thorough spot by emergency services the met police are leading the investigation and counterterrorism unit in conjunction with the british transport police and our intelligence domestic intelligence unit, the mi5 the metropolitan police, interestingly, asking for photographs or any videos to be

uploaded to their site in order to get as much as possible in temz of visuals. this is to assist with the other sources of evidence, such as witnesses and cc-tv which are being looked at, as well as, of course, information which is with regards to collection of security nflgs the prime minister will be calling a meeting this afternoon of our national emergency service response unit, which is in white hall, which is our parliament in order to discuss the implications and ramifications as of yet. the terror alert in the u.k. has not been raised from its current level of severe. we do need to remember, this is the fourth attack within six months in the u.k. three of them being in london, and one, of course, in manchester in terms of other information that we know so far, it's thought that the actual device itself was a white bucket within a shopping supermarket bag this has not been confirmed. there have been several photographs of this particular

instrument placed on social media. it hasn't been officially confirmed yet by the authorities. still waiting to hear more on that it is expected this actually detonated too early at the point in which the tube journey, the underground journey, which it exploded, it it was only a couple of stops in the train gets significantly more crowded at 8:20 in the plorng as it progresses along that line, and it ends up in paddington, closer to inner london where many people take other destinations to get to work it's possible that what happened here is that we were lucky in the fact that there are no deaths, and at this point no serious life-threatening injuries that's really all we had the latest update from us. i'm going to hand it back to you in the studio. >> thank you very much again, that is gemma atkins joining us from the scene. another story we're following this morning, north korea launching yet another missile over japan this morning local time. this happened very early as people were getting ready for work, getting ready for school

it prompted a warning that was sent out telling japanese residents to take cover. 25 million japanese people were warned either by sirens or by texts that were sent to their cell phones. officials say that the missile landed in the pacific ocean. >> let's get another check quickly on the markets the dow has set three all-time highs so far this week that would make four right now, although the other sbeks are down just a little bit or indicated down the s&p is down about one. nasdaq indicated down seven. >> italy and spain all down.

>> above 220 we'll see whether that's coming down 220. >> to sell on the terms that it's offering. game maker roveo -- the company behind the angry birds franchise says that it plans to offer shares within a range of $12.22 to $13.70 each the ipo will raise gross proceeds of more than $30 million and allow existing shareholders to sell shares. they expect to start trading in

helsinki on october 3rd. more fall-out from the equifax breech senator elizabeth warren -- of 143 million americans. the senator also planning to introduce a bill that will give consumers the ability to try and freeze their credit for free >> the ftc is also into probe into equifax's breach. separately, a cyber security firm in argentina found that scores were -- admin that's annen usual one not one we don't all see in you are on workplace constantly. this is unrelated to the breach in the united states in response to the cyber security firm's questions, equifax told cnbc that they fixed the vulnerability immediately upon learning about it there's another story out today that says that a lot of this happened because of a software patch that was never put in. >> i like the one -- i thought about you when i read this in the journal.

it was actually the customers who had actually -- it's the ones that actually purchased fraud protection who had their information stolen if you were actually -- >> well, in that case i wasn't at risk. >> right but if you actually said -- you know, i think about -- i'm worried about identity theft can you help me? you pay them, and then you were more likely to be. -- president trump tweeting about a disney network this morning. i haven't seen this one yet. it's also -- espn is paying a really big price for its politics and its bat program people are dumping it in record numbers. apologize for untruth. espn has come under fire after one of its hosts jim l. hill criticized president trump and called him a white supremacist that's just the latest with

espn there's a lot of -- les munvez -- les is smart and very outspoken and frank, and the other day -- i don't know if he told our people, but he was at that cornucopia or whatever it is, and he said there is a ma rkt for scores and just seeing some video of games that you are following. he turns on espn now he just sees people yelling at each other that's what he sees. it's like -- they do have a lot. they got a program a lot of things, and maybe you want a little bit of the whatever that is that, you know, that cable thrives on, but really you can do it with just -- i don't care about -- >> just thinking about that in our world. >> we get tired of just -- i don't think talking about politics on espn is the outcome for sports whereas when we -- >> it has a serious -- >> i don't feel bad advocating

for private sector free market >> that youly this lead to gains. >> and pushing back against things that take us down the road to surf down the road to socialism. >> policy on wall street has -- such an intersection for the last many years. >> in this day and age where really our young people really think socialism is -- or have been told on colleges that socialism is a viable alternative. they just haven't been -- >> right it just hasn't been done right yet. they can't look south in latin america to see what some of the effects of how it hurts the people that you are supposedly trying to help >> politics essential plays a role in how the economy is going to do, and speaking of just that, let's talk about what's been hang with tax reform. republican leaders are pushing ahead with tax reform with the hopes of trying to have a bill on the table before the end of the year joining us with more on this right now is, aei resident fellow alex brill and brookings

economics fellow we've heard it a lot, even though we don't have the details just yet we've heard a lot from people like treasury secretary steven mnuchin and house weighs and means chair kevin brady over the past week about what to expect do we really know what is in the details at this point? does anyone? alex, i'll start with you. >> we don't know yet obviously there's this gang of six, the big six, i guess they call themselves that are working on a proposal. i was at the finance committee yesterday, though. senator hatch, the chairman of the finance committee, made clear that that bill, the tax reform bill, is going to get normal consideration in the committee. it's going to be an inclusive process. i think that there's going to be an open process in the house as well they may diverge in the details, but i think that they're going to be unified in the principles. one of the things we heard yesterday is pretty wide agreement among all lawmakers about the problem. there may not be agreement about the solution >> that's under appreciated, i think. >> if we assume that that's correct that everyone is going to be involved, that it will go

through committee, that this is not just the leaders of each party who are putting this together, is that -- i mean, it's likely to happen on the time frame we've expected this year >> well, look, tax reform has to be bipartisan. if you are going to do what tax reform is, which is to essentially be revenue-neutral and to make the tax code more efficient so that we're not incentiveizing people to make investments on the basis of tax benefits, but, rather, on the basis of real economic growth, which is something i'm very much for, you have to take both parties, have to link arms inless necessity link arms and fight together, one party alone can't close the loopholes that are necessary to raise the revenue in order to make the right responses. >> you are right yeah >> i'm afraid what you are going to end up with are tax cuts. >> i thought you were making a different point. when one party does it all on its own, we see what happened

with that. that's the problem there, i guess, is what you are saying. >> in terms of health care, the attempt to repeal obama care was really the republican congress's first attempt at tax cuts. right? the offset for those tax cuts was health care for working people the republican party almost agreed to do that, but just narrowly couldn't get the votes. i would be optimistic for tax reform if it were a bipartisan process, and for that i think instead of a big six, you need a big 12 i mean, six republicans sitting in a room talking about how they're going to have a bipartisan process isn't necessarily the best way to start. >> do what i say, not what i do. that's what you are saying basically. >> yeah. well, you know, if you want to have an clussive process, bring people in. obama care, you are right. dodd frank, you're right the bill, the final bill ended up a lot on a partisan basis, but a lot of the elements were broadly bipartisan i remember votes on dodd frank with 90 plus votes if you look at the bones of obama care, it comes from a heritage proposal in the 1990s >> what i would just say to jump

in, i agree that there's an opportunity here for democrats to engage in this process. i think that republicans are willing and open to work cooperatively with democrats who are interested in pursuing tax reform i don't think it's possible to work in a bipartisan basis with folks who are not interested in legislating, but if lawmakers on both sides of the aisle want to simplify the tax code and bring down statutory rates and broaden the base, i think that republicans would welcome the opportunity to do that in a bipartisan basis >> let's break it down instead of talking points or picking up sides on these things to say let's welcome this, what do you think actually happens? just game it out will we have tax reform? >> yeah. >> or a tax plan before aaron corrects me for saying that. >> we need to have a budget. that's the first thing we need so set the cost perimeters for tax reform. that's the next thing that has to happen, and i think it will happen in the next couple of weeks. then we need to have obviously bills that move through

committee. i know that lawmakers want to get this done as quickly as possible i think it's really difficult. the process of transitioning from the tax code we have to the tax code we want requires a whole set of special rules, and those rules are going to be complicated and to themselves. i'm not sure that we're going to be able to ramp up by christmas, but i do think that lawmakers are 100% focused on this, and -- >> aaron >> so there's no chance we get this done this year. it's too complicated it's going to fall in the flex year here we are in september, and the white house hasn't eastern led with the concrete proposal two, you don't need a budget you only need a budget if you want to unlock special rules to allow this to go in the partisan reconciliation basis if you want to have the 1986 tax reform proposal again, both parties link arms and have you broad bipartisan majorities, you don't need a budget. the language you need a budget is to create a fail safe environment that creates a threat >> i don't know that we're living in a time that is going to allow something like that

let's talk about where we see -- do you think that there will be -- what's the likelihood of getting a bill that gets the corporate taxes down to, let's say, 20% to 25%, somewhere in that range trying to iron out some of the things that they still can't agree on i know there's a lot of different areas, but there are loopholes that we might see close, like carried interest, at least when it comes to the hedge fund managers. what's the likely hoord that something like that gets done, even if it's by the end of thisser yoo, let's say by early next year. >> i think, look, in order to get to 20% to 25%, you need to close a lot more loopholes than just carried interest and corporate jets the math doesn't work. >> the republicans might do it do they have the votes to do it on what they would expect with dynamic scoring? >> this is -- this is a different question in terms of are the republican -- is the republican party going to link arms and generate tax cuts i think in the end of the day, unfortunately, yes it's a shame because i think that a bipartisan tax reform

system that makes -- that incentivizes more economic investment in productive actions and not ways to game the tax code would be beneficial, but i think the core question you have to ask is what's the ultimate goal is the ultimate goal tax reform or tax cuts? people are talking tax reform and putting proposals out for tax cuts >> alex, aaron, i want to thank bot of you for your time today coming up, a new app designed to help cancer patients navigate their treatment the details next plus, on breaking economic news, we'll get a check on the consumer at 8:30 a.m. eastern time with retail sales we'll bring you the numbers and the market reacts, and then later, keeping your face safe. apple's face scanning technology may be cool, but does it put your identity at risk? we'll have the debate at 8:40 a.m. eastern time. stay tuned you're watching "squawk box" on cnbc it can detect a threat using ai, and respond 60 times faster.

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welcome back shares of oracle under some prur the business software company reported quarterly earnings of 62 cents a share that was 2 cents above estimates. revenue also above the street's forecast oracle says it's benefitting from a successful shift towards

cloud-based software, but, again, you can see the stock is down by about 4% today our next guest personal experience his partners quina sharp inspired the launch of a new app to help others navigate their therapy. let's bring in matt. he is co-founder and creator of chemo wave matt, so many things in health care and health care delivery are moving at break neck speed into the future with technology and the internet i don't think most people could understand how you would apply that to chemotherapy, but after looking at the notes, i see how you can do it. it's a daunting, very scary, i guess, proposition for most people, but people who have been through it, there's ways of dealing with it, and we know about mind over body, and there's a way of making it much more possible to succeed, and that's what this app does, i

think. >> yes that's correct about four years ago my partner was diagnosed with nonhodge skins lymphoma when you receive a -- i have a background in market research and data analysis, and so my first thing to do was to go to the internet and try to figure out a way to make this better, to alleviate some of his concerns even with an mba from columbia, i left feeling debilitated and overwhelmed because it was just too much information out there i didn't know what applied to him. i created my own system i digitized that, and then i was able to recognize patterns, things that were related to his highs and lows that's essentially what created the idea for chemo wave was so that we could put this same

system in the hands of patients so that it could benefit not only them, but countless patients in the future >> when you say the highs and lows, are you talking about the different treatments he was receiving, his diet, or how all of that kind of combined >> so his overall condition. his -- the symptoms that he was experiencing, whether it be nausea or digestion issues early on, actually, he was really struggling with the digestion issue, and i noticed that on those days that that symptom spiked, he was also taking an anti-nausea medication, and so we took that to our doctor, and asked if that could be what's causing it, and our doctor said, well, that is a side effect for some people. let's switch it out and see if that makes a difference. that was the first big aha for us because we didn't even know that we had options, but when we switched out that medication, his digestion issue was alleviated, and it was

everything from the amount of water he was drinking to how much exercise he was getting, and we started to see patterns rick could actually see that he felt better. he experienced higher highs on the days that he was more active that motivated him to be more active because he was tracking water, he drank more water. there were countless benefits. those were just to name a few. >> it seems -- i know you have considered broadening this out beyond chemo because it seems like this is something that would be useful for just about anybody who is going through a disease, an illness, anything along those lines. that's one of the biggest problems with our health care system is the doctors don't talk, and unless you are a case manager yourself, a lot of these things slip through the cracks >> yes in fact, this system made our time with our doctor much more efficient. we were much more connected to him. when he would come into the room and ask us how the past week had gone, we could actually point to

the issues and so it facilitates those types of conversations we also -- as we've talked to care providers and medical research organizations, we have realized that this doesn't just apply to chemotherapy treatment, but whatever the treatment might be, whether it's dyalysis or h.i.v. or fertility treatments, when a patient is engage enga d engaged -- the doctor can work for efficiently. >> we have a lot of time the technology is moving so fast, maybe someday we're hoping you don't use this it's -- you are going to have to stay on top of everything that's happening and help with that treatment as well. you will have to hire some people and watch every scientific development, but certainly i think you could

extrapolate the same thing all the new therapies as well. wha t dai nt.>>e veheetlsex "squawk box" will be right back.

people don't invest in stocks and bonds. they don't invest in alternatives 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 facebook drawing outrage after

an article record on the social media network enabling advertisers to direct ads to people with anti-semitic views julia borstein is on the story and has the latest good morning >> good morning to you, becky. well, how to burn jews, interest in why jew ises ruin the world these are some of the categories facebook self-service ad platform offered to advertisers. it removed them after being contacted by replica now, they documented a test promoting posts over 2,000 people who expressed interest in anti-semitic topics. facebook removed those catego categori categories, which were the result of users inputting those descriptions in approximate education and employer fields. an algarhythm to input that into the self-service ad platform facebook now saying hate speech and discriminatory advertising have no place on our platform. our community standards strictly prohibit taing people based on their characteristics, including

religion we prohibit advertisers from discriminating against people based on religion and attributes as people fill in their education or profile, we have found a small percentage of people who have entered offensive responses in violation of our policies. the statement goes on to say keeping our community safe is critical to our mission and to help insure that targeting is not used for discriminate other purposes, we are removing these self-reported targeting fields until we have the right processes in place to prevent this issue now, this comes as facebook's ad sales practices are under scrutiny by special counsel robert mueller looking at russia's purchase of facebook ads after the 2016 election. facebook says on that end it continues to cooperate with authorities as necessary becky. >> one of the weirder things the story point the out was that if you wanted to combine -- if you wanted to do jew haters, there weren't enough, but if you combined it with second amendment, it turned out there were plenty of people that you

could advertise to it's a convoluted web. >> i think facebook's point is that it wouldn't have been possible to target just jew haters because the way they limit advertising, they don't want you to target just 2,000 people the fact that you can go in there and there are all of these systems in place to pick up what people put into their profiles makes it a very weird world. >> julia, thank you. we have data we have to run jim is standing by, and he has those august retail sales. jim, go am >> good morning, becky as a reminder, last time this set of data was solid beat a month ago. now we have empire manufacturing that comes in. 2 24.4 better than expected the retail sales numbers look soft the advanced month-over-month came in down .2. we are expecting plus .1 x auto came in plus .2, but we were expecting plus .5 x auto and gas came in minus .1. we were expecting plus .3, and lastly, the control group came up as a negative .2, with we are extending a .2 the retail sales part is clearly

disappointing. on balance, the retail sales is a little more important. i would say it's a bad data set today. the stock market lost about a half a tick. we were down 2.5 coming in, and now we're down three yields came in at 2.20 now they're a little below that. 2.199. back to you, becky >> jim, thank you. >> for more reaction let's bring in cnbc senior economics reporter steve liesman safe time at the end, steve, because i think we're burying the lead here. >> you don't mean the drudge report thing, do you

>>. >> do you have any idea the fan mail i get when i put on a cap, people complain >> this is a study from the oout of pennsylvania. then they do quote larry david anyone can be confident with the full head of hair. but a confident bald man, there's a diamond in the rough >> a heterosexual guy wearing a pink shirt i'm comfortable. >> i'm getting rid of the -- >> imauto going to stop taking this propecea stuff. >> get rid of that and get rid of the rug and join us over here, joe. join us. >> should we do the numbers? >> who comes -- >> executive producers are laughing he is not even telling us to move on. >> i'm here to humble you. otherwise, who would do that >> that's true >> becky does pretty well. i liked your answer yesterday. i'm not even going to repeat it. i'm not going to repeat it >> apologies here. look, i just want to set the stage here this is a hurricane -- potentially hurricane related number how the hurricane affects retail

sales in the overall economy is a question you can imagine people buying stuff ahead of time and then it's falling off there's a bad non-hurricane related number they revised down july from 06 to 03. then we're off .2 from that. that's the minus 0.2 >> building and garden equipment down that could also be hurricane-. grocery store sales were elevated bottom line it's going to be difficult. >> that doesn't make sense, though people come in before a storm is approaching, and they clear out the aisles of the grocery store. >> you saw those pictures of the

empty shelves at wal-mart and target and every other grocery store. >> i saw a picture of that even in emergency they left the vegan food >> what's interesting, you had a big pop in nonstore retails. those are internet sales down 1.1%. some side effect there what happened is these storms straddled the month. the thinking is that you are going to get a negative effect in august and a positive effect in september just cutting to the chase, how is the fed going to look at this i think they're going to mostly look through this, wait a little bit until this stuff settles you had that pop of jobless claims >> as you said before, they wouldn't necessarily raise rates this time around because they want to see how this all plays out. if they had any intentions >> but it's -- you mentioned that i want to show you what's happened here to the outlook for that december rate hike. if you guys have that chart in the back, what's happened to the probability, folks, these are the reuters probabilities. they're not the ones you get from cme they're a little different sometimes they're the same

i think directionally, the same idea december probability has now popped along with the higher yields that are out there on the two-year and in the ten-year 44% probability now for december >> is that -- has november stayed the same? has november declined? >> november has come down a little bit >> those people -- >> this december contact, as far as i recall, was trading as low as 27% probability >> i do remember when we talked about that >> we talked about that. that's -- we were talking -- i thought the market was a little bit, you know, underestimating >> now they may be overestimating >> i think they are right. i think a 50-50 chance is right. remember, we got the cpi yesterday. there are still three more inflation reports before the fed makes that decision, and if that starts to creep up, we may get that quarter point >> i take the under on that just with what mark grant and others have told us they're not going to want to be raising rates when we're in the position of needing to borrow money to help with the funding efforts of rebuilding. >> i have great respect for mark grant. i don't think the fed is

thinking about that. i think the fed is thinking about normalizing interest rates and getting it to a point where it's right, the right monetary policy for the current economy, and i think that quarter point is a distinct possibility if the inflation numbers go >> love having you here to talk about it too >> my pleasure >> i do. i -- steve and i -- we've been having these conversations for more than 20 years >> a very long time. >> we were cubicle mates, did you know that, back in the day at the wall street journal it. >> maybe a little bit. >> just a little more. >> we're going to go to break. coming up -- >> there it is >> coming up -- >> you do look better. >> no, he doesn't. that's the one thing it doesn't work for him. >> coming up, cnbc goes under cover. >> it doesn't work for him >> morgan brennan got exclusive access to l.a.x. did you see how quick they got this back on found out how the major infrastructure staysece. 'lbeig bk. sur my experience with usaa has been excellent.

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>> here's the latest on what

police in london are now treating as a terrorist incident 22 people have been taken to the hospital, but it's a nonlife-threatening injuries after a homemade bomb exploded on a rush hour commuter train and an investigation is ongoing. officials have not yet said whether they know who is responsible or if the bomber had actually been on the train witnesses say there was a stampede to get off the train at the parson's green underground station. fire spread through the cars >> when we come back, behind the scenes of the second busiest airport in the united states cnbc got exclusive access to the inner workings of security at the los angeles international airport. we have the never before seen technology next. plus, apple's new face id may be innovative, but is it safe we'll dig into the security concerns right after the break "squawk box" will be right back.

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>> blz of dollars have been spent to protect america's airports since 9/11. experts say airports remain a prime target for terrorist attacks. morgan brennan has an exclusive look at the inner workings of airport security she takes us i understand had the scenes at l.a.x., home to the largest aviation police force in the country hi, morgan >> hey, good morning

so los angeles international airport spent over $200 million on security in 2016, completely funded by landing fees and other revenue at the airport, but with nearly 81 million visitors and 2.2 million metric tons of cargo passing through l.a.x. last year alone, surveillance is critical. >> there's where -- >> there's what's called the airport response coordination center, or arc various agencies monitor cameras, social media, and intelligence needs for possible threats. >> this is a 24-hour center that really controls ground movements and all it takes to make an airport like l.a.x. work >> what does all this stand for? >> to represent threats, significant issues that are going on all over the country right now. >> wow >> they may or may not be fully actualized at the end, but these are what people are responding to kind of in real-time. >> what's the destination?

>> there are 3,500 cameras and as l.a.x. expands ahead of the 2028 summer olympics, that number will double the force also uses radiation detection devices and touts a swat team known as the emergency services unit. that's a division that uses an armored vehicle, automatic weapons, and perhaps not surprisingly, even conducts some of its drills in what's called the dunes. this is an abandoned oceanfront neighborhood that is now part of l.a.x., which is sometimes used to film what else in hollywood movies for more on all of this, check out cnbc.com >> that was amazing. there are that many incidents that they're tracking at any point across the united states that are taking place in real-time thinking, okay, this is what we have to watch >> yes tremendous amount of threats possible threats activities that could take a turn for the worse, and that's why you have these airport police forces like l.a.x.'s with the swat team, for example, that

are constantly drilling and training for worst case scenarios. >> how does this compare to what we see at other airports >> l.a.x. is extremely advanced. they have a very large budget to be dealing with security they are the second largest -- second busiest, i should say, errant in the u.s. one of the things that they have on staff that you don't see in other airports are actually intelligence analysts. they hire two of them three years ago that are directly working for the airport and gathering -- on a daily basis, and gathering intelligence leads. they work with federal agencies and have access to classified information. in many ways they are sort of leading the charge in terms of what security at critical infrastructure looks like. >> they've been able to thwart things or prevent attacks or anything >> i actually spoke to the security analyst, the intelligence analysts myself, and they are just constantly calling information and sort of making sure the folks on the ground know what the most immediate threats are. you see something like, for

example, the shooting at the fort lauderdale airport that happened earlier this year they are gathering information around that, and then bringing it to the police force, and they're finding ways to implement additional protocols >> thank you very much >> in the meantime, analysts and iphone users sharing concerns over apple's latest facial recognition technology while apple's finger print technology has been mostly successful, concerns over privacy and security are surrounding the new face id at least for now. joining us right now is ceo tom -- thank you for being here today. >> it's a pleasure to be here. >> dana's software products company that specializes in biometrics those factors that are uniquely you. your face, your voice, your fingerprint. we use those factors to discuss trust between two parties. >> you have heard about the hooplah surrounding apple now putting this technology that's been around for a while into a phone. people say how safe can can it be is it going to work better than a password or a pin? what happens if a bad guy comes up to me and wants my

information, so he takes the phone out of my hand, puts it in my face, and they have access to it whether that be the bad guy or the police are any of those concerns warranted? >> it's important to be airaway of all of those concerns they have open discussions on them what wave seen with biometrics is consumers love them they enhance their security. if the consumer has a technology that they don't like, they want won't adopt it, and it defeats the purpose. with this technology it's proven that we've had great success around the world with it >> is it more or less secure than a pin number? >> it is more secure than a pin number >> why >> because people aren't disappointed in how they create their pins or pass words, and weave seen the data breaches most recently with 100 million plus people. all personal information is taken and it can be misused. even with touch id, it was released in 2013 it's been in the market four years. it's rare to see an incident of fraud and abuse with touch id. we believe the same thing will happen with fingerprint.

that's a consistent result that we've had. we've been deploying facial based as many as for wealth, banking, service, telecommunications companies for the past year, and we've had near zero incident of fraud or takeover >> what about where somebody says with the iphone, if the police pick me up and they want access to my phone, they can ge it by holding it up to my face, or if a bad guy gets me and wants access to my information, he can -- i guess that's something that's much less likely to happen than getting hacked by equifax? >> it isn't the threat vektor that a person responsible for a company has to worry about it is an important thing, and what they've done, we believe, is include liveness detection. >> what does that mean >> it would cause somebody to interact with a system to have it unlock. >> meaning you can't cut my finger off and put my finger on a fingerprint, and you can't stay the face of a dead person and stick it on? is that what you mean liveness >> it wants to make sure you aren't using a photograph or you are engaging with the system in

some way none of the systems are flawless, and so all of them -- you'll see it with apple they can be defeated somebody will do that. all these systems are enhancing security, but they're not going to solve it. most people, if government chose to get into a system, you know, they'll get my play list, other things, i appreciate the concerns, but -- >> nothing in there that you're worried about them getting >> i'm more concerned about my bank account, my payments. >> tom, thank you very much for your time today. we appreciate it >> thank you, it is a pleasure to be here >> jim cramer will come to us live from the new york stock exchange we'll get his take on the top stories when we return at fidelity, trades are now just $4.95.

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let's get down to the new york stock exchange. jim cramer joins us now. three records this week for the dow. it could be higher today we're above 22,200 now you've been stubborn about not really believing that any of these sell-offs would lead to anything long lasting. and so far so good >> yes. >> you think clear sailing,

momentum is with the bulls. >> hopefully what will happen is that with the absence of data and the absence of any rancor in washington, what we'll be looking at is a couple of companies that report it would be pretty good numbers and a couple of analysts meetings will be positive. i think people don't understand the magnitude of what the rebuild will be in this country, because we haven't seen these kinds of natural disasters in ages i think they'll be gigantic. look at gm, taking out its high. that's about the idea you have insurance, you can go by a car brunz wick last night. between 12 and 18 months you'll see a lot of insurance money, can't buy a big boat without insurance. they'll start buying the boats again. a lot of rebuild of a lot of different areas. >> that's one thing to think about. and then at this point are we too complacent i was making the point that inflation might -- we might not

be measuring it correctly anymore. i don't know how the internet held down what we would have thought of as sort of core inflation. and then i used to -- cocktail parties, i talked about the cloud a lot. i don't know what it is really now i'm talking about block chain stuff. people are, like, wow, talking about block chain. i'm getting a lot of play talking about block chain. this all is disinflationary, isn't it >> yes, it is. a lot of words up this week. that's like the '80s and '90s. the internet is a powerful deflator that's going to continue jamie dimond killed bitcoin at delivering alpha he killed it he just killed it. he ended bitcoin it is going to go back to where i recommended on the good wife a couple of years ago. >> all right jim, we'll see you at the top of the hour happy friday >> good game. >> stick with your eagles. it could be me

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steve bannon headed back to hollywood page six reporting the former white house chief strategist is getting back into the movie business with an interest in making westerns. he apparently has been taking meetings with movie companies since leaving the white house back in august all right, a final check on the markets this morning we have been showing you the futures through the morning. despite the global geopolitical tensions, we have seen next to no movement when it comes to the stocks the futures this morning dow futures up by 2 1/2 at this point. s&p futures down by 2 1/2. nasdaq down by 11. this comes after the dow has seen five days of gains in a row. nasdaq, s&p 500, ended three day winning streaks yesterday. take a look at the ten year note, the yield has been pushing above 2.2% back below that, after the economic numbers that we saw,

retail sales softer than expected the ten year is yielding 2.816%. and if you look at what has been happening with the dollar, down against the euro once again, 119.71 up against the yen at 110.70, down against the pound at 135.75 three seconds. and now it is -- now i already used it up make sure -- happy friday. join us on monday. happy friday good weekend "squawk on the street" is next ♪ this is how we do it this is how we do it ♪ good friday morning. welcome to "squawk on the street" i'm carl quintanilla three major events this morning, north korea missile launch, the explosion at a london subway station being called a terrorist attack and as becky said, retail sales that come in soft again, europe i