could possibly be coming up on this tuesday, november 7th, 017 as "squawk box" begins right now. ♪ 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 and andrew ross sorkin. let's take a look at the u.s. equity futures this morning. as joe mentioned, closing at record highs for all three of the major indices yesterday. guys, it is now 57 times this year that the dow has closed at a record high. 52 times for the s&p 500 if we close today at another record high 53 times, that would tie thor record number we saw in 2014 for all of 2014 it was 53

tiles. the total number of the record for all time, 77, 1995 >> i thought you were going to say the total number of trading days we still don't have that >> no. but i was trying to think about it i think there's 53 days left which probably work out to 44 trading days for the rest of this year. i did the rough numbers yesterday -- 25%? >> look, there were 220 -- i mean, there were 222 or something weekdays i don't know how many of those days were closed or trading sessions >> that's good enough. so it's something like 25% >> 25% of the time you've still got another potential up to 40 trading sessions left. >> let the good times roll that's the bottom line >> yes bottom wlien is, we have seen a lot of record closer it's not just here in the united states joef night in asia, green arrows across the board with the nikkei up by almost 1.75% another 389 points added to the nikkei once again to a nearly 6-year

high >> jump just visits the area and this is the kind of stuff that happens. >> the hang seng up by 1.4%. the shanghai up by .8% europe this morning in the early trading, things are kind of muted, a little bit mixed. dax is up by .1% cac and the ftse 100 are slightly weaker. if you take a look at crude oil prices, still very confusing, but one thing the oil market knows, it is turmoil and as a result crude oil yesterday was up by 3% it settled at 57.35. that was its highest settlement since july of 2015 this morning, it's still hanging in at that level 57.35. the big buzz right now in the media world after david faber reported that disney held talks to buy much of 21st century fox, those talks took place over the last two weeks. the two are not currently

holding discussions right now. the deal would have created a powerhouse in media giving disney another movie stooup studio, significant international exposure including fox's part-ownership in sky. fox would primarily focus on news and sports. those stocks first soar yesterday. shares of fox are now down slightly shares of disney are about flat in early trading the two questions out there right now is, a, do these talks somehow get reignited at some some point or if they don't, does this signal a shift in the way the murdochs are thinking about fox and if they're prepared to sell to disney, would they be prepared to sell to somebody else >> president trump is tweeting he's apparently busy actually, he started with a couple -- that was three hours ago about meeting with the troops

then he said the stock market hit yet another all-time -- this was about 26 minutes ago the stock market hit yet another all-time record high yesterday there is great confidence in the moves that my admin vacation is making, working very hard on cuts for the middle class companies and for the middle class companies and jobs and then he's actually tweeting about this big race the in virginia, which it's election day. >> for new jersey and virginia, the two gubernatorial seats are open >> it's not close here >> no. >> it's not close. and the george washington bridge has played front and center in so many of those ads >> and this is bizarre in virginia ralph northum he says will allow -- that's the democrat so the president says he would allow crime to be rampant in virginia, he's weak on crime, anti-second amendment and has been horrible on the virginia economy vote ed ka lepspy today and that's

where they had that for the first time i saw that political ad that they're now blaming on bots or something where there's a car with a ga lepspy bumper sticking chasing down minority children >> seriously >> yes >> i don't know who came up with that, but it didn't go over well but that's what it's up to at this point >> an ugly season. >> but now they're blaming it -- i didn't look at the actual story, but they're saying it had something to do with bots. >> robots created the ad >> i don't know how they came up with that. we're talking now about president trump's trip to asia, urging the international community to do more to tackle the north korean issue kayla tausche joins us now she is in seoul and has been taking it all in kayla. >> good morning, becky

north korea is one of the things that the president is not tweeting about today he's been perhaps uncharacteristically dispassionate about the issue. he's rarely addressed it on this trip unless he's been asked directly but just a couple of hours ago in front of a press audience at the blue house here in seoul, he said he hopes to god not to have to use the military option with north korea and the diplomatic channels are not only open, they may be working >> i believe it makes sense for north korea to do the right thing. not only for north korea, but for humanity all on over the world. so there is a lot of reason, a lot ooh good reason behind it. with that, yes, i think we're making a lot of progress i think we're showing great strength i think they understand we have unparallel strength. >> those comments coming after the third bilateral meeting between president trump and his south korean counterpart, president hoon since president moon took office

in may there was a lot of pomp and state craft today, a very grand welcoming ceremony at the blue house, which is south korea's equivalent of the white house. but president trump in these meetings and in these asides often leading on economic talking points, talking about how the u.s. would be making military equipment sales to south korea in order to reduce the deficit. in a visit with president moon to camp humphries where they shared the bill for those military resources, president trump was telling the soldiers how good the economy would be when they got back and just how many jobs they would have to choose from when they returned. tonight in seoul, there is a gala dinner planned. there would be executives from many companies that are expected to attend and south korean officials, guys, are reportedly trying to find a way to commemorate the eve of the anniversary of the election. you see the president tweeting about the virginia governor's election clearly, elections are something that is on his mind and apparently on the south koreans'

mind, as well. >> no fish feeding today kayla? >> no fish feeding and we should note that there was a lot of misreporting about the fish feeding you're mentioning, i believe, joe, when prime minister abe and the is president were in front of the koi pond. they were using a spoon to dish some food out to the pond and then there was an image that went viral of the president dumping his bowl and the pool reporters wanted to clear up that prime minister abe did that first. the president was mimicking what he did but no fish feeding. but there was a friendship walk -- >> wait, wait, the pool reporters didn't want to clean it up? i think they're the ones that started the whole thing by not running the previous video >> the pool reporters don't decide what the networks run >> i don't know how -- i don't know how it -- it started with tweeting >> it's what people share on twitter, the full video ended up

out there. >> yeah, it did. pretty amazing, though but, you know, sort of par for the course anyway, thank you, kayla tausche. and on wall street's agenda today, there is just one report on the economic front. consumer credit will be out at noon eastern time. speaking out, randy quarles is making his first public speech today since being confirmed as the vice chair of the bank of super earnings we're going to get royal caribbean and tapestry, the retailer formerly known as coach, and we'll look at that one. and then marriott and snap coming out after the the close a lot of people will be focused on the snap numbers. speaking of snap, evan spiegel breaking a two-year twitter hiatus to shoot down a rumor that snapchat was closing down next week. he called that report fake news.

and stocks continue to power higher he. let's talk markets now with paul hicky of the investment group and andres garcia. we have another couple of gentlemen on in the seven. there's a lot of similar comments i will tell you, it's hard to -- and basically, guys, paul, you can start. it's all about earnings and pullbacks are impossible to predict. so stay long there may be a pullback, but earnings are driving this higher and you expect that to continue. >> well, you come into earnings season speccing 3% growth. we got 6% growth we've got double that. and companies are raising guidance at the highest rate since 2010 if you're seeing that correlation to the stock market price is the highest thing correlated is earnings we can talk about fed driving the rally, buybacks or anything bub long-term, earnings drive markets and earnings have been strong so it's hard to get overly concerned. but, again, the last time i was on, joe, we were talking about

how we had a little bit more apprehensive, raising a little bit of cash. not being bearish, but when we're looking at the internals of the market, certain things, you know, we want to see confirmation of the rally. >> when was the last time you were on? >> that was in september >> that has not happened >> oh, no. the -- >> why did you bring that up that you said that i wouldn't have brought that up. >> full disclosure i don't want to be -- >> guy has a little negative -- no, the point, we weren't negative at the time, but just looking at -- it was just when markets go higher, you don't want to become more aggressive you want to just, you know -- >> in this case, it would have made sense >> in this case, it would have made sense but when we're looking at the internals of the market, two out of three things we follow closely. two out of three are confirming, so that's a -- you know, two out of three ain't bad, as they say. >> joe, one thing to keep in mind, though, is that if you look abroad, we were just hearing from asia, emerging markets up 33%

so something that i've discussed in the past is not necessarily to be out of stocks is to look abroad for more exposure considering the s&p outperform emerging markets for the better part of six, seven years, it is now emerging markets' turn even though this year we've seen outperforming, that tends to go on for quite a long time, fought just for a couple of months. >> what do you attribute the asia moves to right now? >> well, if you look at earnings, it's not just driven by what's happening here, right? there is a synchronized global expansion occurring and earnings have not benefited as much in emerging markets as they have in the u.s. so now it is their turn, ins eps. >> the ten-year looked like it was headed finally up above 250 and it didn't get there. it's back. >> i think there's a couple of different things going on. one, the main one in my opinion is the german bund has fallen after the ecb basically decided not to -- b. >> still not us. our ten-year is not trading on the united states.

>> i would agree it's hard to pin it down to one thing. but i would say the fact that where -- if you look at where germany is, where japan is, that is sitting on our yield and is affecting where the ten-year should be. >> so, paul, at this point, you're doubling down on the september cost >> no, no. we're -- we're just saying, you know, you shouldn't be -- you know, margin to -- >> i don't know -- what are you saying stay long or is the party ending >> no. we think that we have a continued strength in the market here we think we're going to see a strong market into year-end. strength be gets strength. >> so stay fully invested? >> no, no. we would raise a little did it. >> raise cash? >> in our portfolio, we have 20% cash this isn't go party -- >> what's holy invested for you? >> 100%. >> so you've raised 20 in september and stayed there >> yes >> but don't add -- >> yeah. so at this point, there's nothing -- the internals of the market haven't deteriorated it any more if anything, they've gotten a

little better. but you can't just throw caution to the wind. when you see these kind of markets and, you know, overall, we're looking for a positive environment. but the higher prices go, you shouldn't become more -- more bullish because values are -- >> so this tax bill, if that looks like it's going to pass, then is that a time to sell or is that -- >> if it looks like the tax bill is going to pass that is a good thing. right now we're still not pricing a lot of it, of the tax bill into the market i think most people generally assume that the tax bill is not going to get passed this year. i think if you look at the performance of stocks, the high tax stocks haven't caught up to the low tax stocks >> yeah. >> sell on the news or keep buying >> if you have to sell, sell here is buy abroad that's the way i would put it when it comes to stocks. in anything, i'm more nervous about junk bonds, i'm more nervous about the bond market. expect azs not just here but

globally are starting to pick up >> there are people recommending high yield it's a great time for companies. they're not -- even the risky companies are doing well >> unlike earn eggs on the equity side, if you look at where yields are, that tells you a lot about what type of returns you're going to get. yes, they can compress the spread but it's pretty tight. if you look at the european junk bonds, their yield is lower than the ten-year here. >> are you kidding me. >> yeah. >> so that -- it doesn't seem normal to me could it continue? sure >> why would you do that instead of buying if ten-year here >> if you look at german bunds, they're at -- >> sure, but again, why would you buy european junk bonds instead of buying the ten year here so our ten-year yield is never going up if that's the case. >> again, it seems abnormal to me and for that reason i'm nervous more about junk bonds than i am -- >> sure. >> thung see you guys again

coming up, disney reportedly held those talks to buy much at 21st sen terry fox the deal has been called off at least for thou, but a game changer and netflix killer if it were to go ahead that story and the reaction, next

not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.

welcome back, everybody. some stocks to watch today, sales force is entering a partnership with google's cloud platform gsuite to expand its base here is what saleser forces ceo mark beennyoff told jim cramer last night >> you look to google, you see this incredible world of information, you see the advertising, but you also get google analytics fwoogel analytics means both of our customers are going to have customer insights that they've never had before that is really exciting. >> you saw that the stock was up by almost 2..5%. sales force issuing some upbyte beat guidance for 2019

toyota listing its annual profit forecast the company is feeling the pressure of competition. shares of the diop line travel services firm are up about 30% so far this year, although they're giving back about 11% this morning >> let's get back to the big media buzz story of the morning. 21st century fox has been tolding talks with disney. good morning >> hi, good morning. >> so there's two pieces one is let's call a spade a spade. at the moment, we don't think the talks are happening, correct? correct. but there is wiggle room >> how much room do you think there is for these talk toes be re-ignited >> now that this has become a very public thing, a lot of

people are taking them very seriously. people inside the room are taking it seriouslier or all of us are taking it seriously >> i would say both. all the chess pieces start to look different on the board once you realize that is happening. >> so your expectation is that a transition does happen >> this would certainly make all the m&a scenarios we're looking at more interesting. i'm not going to say this tim particular deal is going to happen >> the to me, i don't think this deal is going to have because disney does not like doing deals in the public. they hate it, they hate it, they hate it and the is second anything is public they usually stop although their stocks are up on this >> i know, but i'm not so convinced they're going to be thrilled about this. my question is, therefore, does fox sell these other pieces to somebody else? >> i think a lot ofpeople got really excited about that prospect when the news came and

the number one thing that we have learned from these talks is the murdoch media empire is not quite as locked down as everyone thought. we thought rub either murdoch wanted control of these companies and was going to pass it on to his kids. >> clearly rupert was contemplating at least being prepared to do this. what is that about for a guy who has spent his whole career controlling an empire? >> i think it's about size i think a couple of years ago when fox tried to buy time warner, that told us they don't think they're big enough and now that everyone else has gotten even bigger, the at&t deal is maybe about the to be approved, they're not big enough >> what happens with disthee if they don't do this deal? clearly, disney is looking for sh ways to change things up

again, too i know they could pick up viacom, which is not normal for them to think about doing, but it gets you into another strange place. but i think there's a better chance that viacom and cbs get tony together, even though they didn't want to before. >> where is sky tv >> isn't that -- doesn't that make it less -- are they going to be able to -- will they get a thumbs up on that transaction or not? >> what we're hearing is that

that transaction is full steam ahead.with the talks cooled, it's receiving scrutiny. when that happens, they said what about sky are they selling assets or buying assets? >> right as far as we know, that deal is proceeding no question analysts are saying that, for sure if not disney, where would fox go you mean to tell at these particular assets? >> yeah. >> the piece that disney was able to get, it was able to get for regulatory reasons it was leaving behind fox

broadcast network because it had to structurally, it didn't make the most sense, to me, anyway. there might be some other players out there. >> if not fax for disney, there something else for disney? the big speculation has always been if you're talking about a mega sort of good-bye transaction, you do a deal with apple. >> there is a lot of closeness between disney and apple as we've known for a long time. that's always been if the back of people' minds the tech players are the ones everyone is looking at when they're looking at these deals that's what the media companies are afraid of. it's entirely plausible that they would have to gothere in the end. >> fair enough thank you for coming in. >> thanks for having me. when we come back, president trump tweeting his support for saudi kill soloman and the crown prince after that percentage of argueful princes in the kingdom. we'll talk about all of this, next right now, take a look at yesterday's winners when it

comes to the s&p 500 and then the losers, too. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

t-mobile family plans now come with netflix included. that's huge. that's right. t-mobile's got your netflix subscription covered... ...when you get a family plan with two or more lines. really? that's incredible.

so go ahead and watch however you want. you're messing with me, right? all at no extra charge. this is awesome! another reason why t-mobile is america's best unlimited network. mic drop. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

welcome back you're watching southbound live from times square. good morning, everyone welcome back to "squawk box" here on cnbc

let's take a look at the u.s. equity futures this morning. yesterday, all three of the major indices closed at record levels this morning, the dow futures are indicated positive once again, a gain of about 24 points if we were to open here. nasdaq and s&p are slightly weaker we'll keep an eye on it as we get choser to the opening bell trip adviser recording second quarter revenue lower than estimates. that stock is down by 9.5% avis budget group's third quarter results beat forecasts on demand for rental cars. but the company is cutting impacts citing hurricanes that hit the united states in august and september and as a result avis shares down this morning. weight watchers easily beating estimates. the stock, which is trading at a

record high has nearly quadrupled this year it's up 12% this this just this morning. general electric is considering options for its leasing operations including the sale sale of all or part of that business this says ge could decide to sell it or spin off. you know, got 1300 planes, why not send two or three just in case the second one has maintenance issues stock is back up to below 20 the yieldis almost 5%. >> wow >> so we'll see what happens >> if they actually cut the dividend >> appearing the databasing reports that it moved offices

from ireland to jersey the alleges was made in the paradise papers that came out. an analysis leaked by documents -- or leaked documents by the international consortium of investigative journalism, apple says that the report contains inaccuracies. it says the 2015 reorganization was specifically designed to preserve its tax payment to the united states, not to reduce its taxes anywhere else. apple says it told regulators in the u.s. and eu of the move and that its tax payments were not reduced in any country did you see this, sorkin what's that? the. >> the bare mattresses in the -- you don't look at clutch, i guess. the bare mattresses they're supposedly sleeping on it was the lead story on grudge. they had pictures on of some of the princes sleeping on bare mattresses >> to get out the message that

they're not being treated royally? >> i guess >> i was e-mailing with somebody in sawedy this morning who was saying they're getting room service, though. and that's good room service >> it is it was at the poor princes that are on the bare mattress where is prince al walee right now? >> i do not know >> okay. >> to me, the question is what happens once and if they leave the ritz carlton >> what's the next step? >> they're not going to take over the ritz for the rest of their lives. >> and then you've got the president. you've got a lot of people cynically viewing this as a power grab and then you've got the president totally come down on mbs's side saying a lot of this these guys, in his word, this is a quote from a tweet, some of those they are hashly tweeting have been milking their country for years. >> it could be both. you could be using this corruption because it's a way of doing business in saudi arabia

you can be using it as a way to consolidate that much like president xi has been done but you only use it against your political enemies. >> are they.popular among the locals and the millennial generation >> they like the crackdown so he's playing to -- dare i say, playing to the base he's doing very well internally on this. >> income inequality some of them were in the hotel last month when it hosted the investment conference. they are now sleeping on the floor, oh supposedly those rooms are huge for more on the developing story, we're joined this morning by joseph west fall. good morning to you. you've probably heard a little bit of this conversation is this

a betweenin effort to root out corruption, is it an effort to are the out the enemy's list and can it be both >> i think it is both and it can be both. there are people with who opposed the crown prince's rise. i think it's to eliminate any opposition that can come i also think corruption is a big issue. when i was there as ambassador, we discussed it a lot. the united states is against any corruption with respect to our companies and how they function there, but that is not the case for the europeans in many cases and is with the asians so corruption has been an issue. it's been endemic. it needs to be addressed is this the way to address it? i'm not sure >> so this is the question

does this make saudi a more attracti attractive place for investment or from the u.s. or elsewhere given that these investors were just there we covered it two weeks ago. or do you say to yourself if you're an investor this morning, you know, i don't know if i want to put my money the there. who knows whether my employees or myself are going to be arrested if i get on the wrong side of the crown prince or the king >> i'm not sure it's quite on that sort of personal level, but i think you raise a really important point. as an invest either, i would want to make sure i'm investing in a company where my business is protected through some type of rule of law, a legal system that allows me the ability to defend should i have a -- let's say an argument with a partner, a saudi partner, that there is a system in place that addresses this adequately. and i don't think that's there

>> you don't believe that consists today >> it does not we worked aggressively with the crown print. i spent a lot of time with him talking about removing and restoring the system you could do it under va ree ya law. but they need help with that so i would be very concerned about that and i think a better way to address this issue is to reform the system >> can you speak to the relationship between the crown prince and prince al wahleed given that the prince has been the face of audi for so long >> this is a big family, but

they have clashed. when mohammed was rising in stature and position to crown prince, that was not supported by some members of the royal family by the way, his father clashed with the with founder of saudi arabia much, you know, years and years ago and basically the family has had a tough going with the sauds >> and play this out for us. as we mentioned the at the top of this segment, joseph was talking about these mattresses all of these folks are apparently holed up at the ritz carlton. where would they go from here? how do you see this? what do you see happening? >> yeah. well, i don't think you have princes and i don't think you have ministers lying on

mattresses i think that's much lower level staff. i'm sure there's plenty of rooms and is places to stay. why would they go? they would simply go .be put under house arrest unless it was something so egregious that they could prove they never broke the law >> so they're never going to go to prevent >> well, they could b, but it's unlikely they would probably be under house arrest >> do you have any concept of what's going on there now? is there some kind of tribunal taking place at the ritz itself? >> there is. there are investigations going on, some books are being looked at by the judiciary. the new minister of the justice there is interviewing and i think they're going to have judicial proceedings >> and final question for you, kingdom holings, the stock has gotten hit pretty hard in all of this the company says it continues to operate as usual

they have their own ceo, they their own management team and continue to press on and say that they continue to support the government of saudi arabia is it possible in your mind that those assets somehow get frozen and impact public investors? >> it is it is always possible. we were concerned about that when our congress passed the jasta bill, we were concerned that countries, including saudi arabia, could potentially do to our investments the same thing that we allegedly would be able to do to theirs. and what we did to the iranian assets here when they took over our embassy. so there is that possibly, yes they cannot take over u.s. government assets, but they can take private assets. >> fair enough thank you, ambassador. we appreciate your perspective fascinating a as we watch all of

this play out. >> thank you coming up, president trump is speak can in south korea overnight. we'll talk to david malpass, undersecretary for international affairs. then, media merger monday talks, disney consider ago purchase of 21st century fox we'll talk with michael nathanson. a lot of "n"s. feeling about about these. later, we'll talk taxes with virginia senator shelly moore capi t capita ayuned you're watching cnbc

welcome back, everybody. ee begin's president says that president trump is improving the fragile security situation in the middle east. he said the united states has regained its weight and its role in the region. he made the comments in as exclusive interview with cnbc answers hadley gamble. he said he would are respect term limits and not seek a third role as leader >> he will not be able to continue another term without the will of the egyptian people.

in both cases, it is eight years. it doesn't sioux suit me as a president to stay one more day against the will of the egyptians. >> president el sisi will not confirm whether he will be standing for a second term in next year's vote you can watch more of that interview on cnbc.com. and tiffany launching a new line of everyday products with out of the world prices. it includes a rose goebl straw, a $425 protractor and a $9,000 ball of yarn the luxury retailer selling a sterling silver when you bird's nest with tiffany blue bird eggs for a whooping $10,000 >> are you getting ready for christmas, holidays? yeah i don't think any of those are going to make the list >> no? >> no. but interesting. >> justin has his credit card out. >> maybe not >> i like the bird's nest, yeah. i'm thinking no, i don't know maybe not. those -- we see a lot of things.

but if you watch robert franks, a lot of things for people that have -- too much money >> too much money. >> money to burn, yeah the challenges of a modern military we will talk to the secretary of the u.s. air force, heather wilson she will join us right after the break. right now, though, as we head to that break, let's take a quick check off what's been happening in european markets this morning. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker.

...saving time when it matters most. stay with me, mrs. parker. that's the power of and. and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing.

watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more.

>> joengs right now is the secretary of the air force she's here to talk about veterans day and the challenges of our modern military before we get to all of that, madam secretary, thank you for being here >> my pleasure >> we do have to ask you about what is on the front page of every newspaper today. the killings in the texas church over the weekend 26 people dead the perpetrator is a former airman, devin patrick kelly, who we should have known

he should have been able to get a gun, but the air force after he was involved in the situations where he fractured the skull of his infant stepson, it was never reported to the fbi. it never went in what happened? >> what happened in texas was absolutely awful, and i think all of us on sunday just were heartbroken. we have an initiated a review in the air force to find out why his fingerprint records were not transmitted to the database. we'll find out why >> do you know if this is a broader problem? is this more an institutional problem? is this more of a one case >> we don't know, but we are checking all of the air force databases, and there are several of them to find out and confirm that all court-martial convictions for these kinds of events are reported in the civilian database. >> does that have to do with army and navy and all of the branches, you would think? is there any reason to think that they don't do it either or that things are missed there as well >> the defense department

inspector general is also going to be looking across the department to make sure that everything is checked and that all procedures are clarified we'll actually be doing a stand-down in the middle of the month to do complete training of t the offices responsible for this >> have you thought about whether the air force will have to accept some form of liability from the families as a result of this >> i'm more interested in responsibility and taking responsibility and we're going to find out what happened and fix it >> i realize this happened before your watch at the air force. we would love it if you could follow-up with us and let us know as you learn more in the investigation. >> sure. >> meantime, you are tasked with running a department that has 660,000 people, airmen, who are under your responsibility. $132 billion budget. what are your top priorities as secretary? >> most important thing we have to do is to restore the readiness of the force, and right now, of course, as you know, we're under continuing

resolution nine out of the last ten years we started with a continuing resolution >> it congress doesn't get its job done, what does it do to you? >> we're putting about 1 00 weapons a day on isis in -- from the air on isis in syria and iraq, but i can't start new contracts, increase and replace all of those weapons it really constrains the force, and it really impedes our ability to modernize the force >> have you had conversations with leaders on capitol hill and expressed your concerns and let them know what this does >> i have. i think the message for the congress is, you know, we need to take this off autopilot we need the congress to work

through a budget and make all those tough decision and lift the cap so we don't go through a sequester. >> you were going to say what your second -- >> modernization we have a very old air force we have modernization across the board. the d-21 bomber, f-35 fighter, tankers, space assets. there's modernization across the board. >> how are you feeling about prospects for being able to complete some of that modernization? >> it's actually moving forward fairly well. the b-21 bomber, we've signed contracts to move forward on the development of the new bomber. the f-35 fighter is now operational. we have over 120 of them now we're continuing to build out more fighter squadrons of course, space is a place of continuous modernization and enables a huge amount of american industry. >> we've had an astronaut here recently who told us one of the big concerns when they were on the space station is trying to look out for the junk that's in

space. there were some very scary moments when you don't know when you are going through a junk field if something is going to puncture the space station >> in fact, united states air force since the 1950s has kept a catalog for the world of what's up there, and we warn people that their satellites might be hit, but gps, you know, used by a billion people every day, it's run by a squadron of 40 airmen in colorado springs for the world. every day. the blue dot on your phone is provided by the united states air force. >> secretary wilson, we really appreciate having you here we looked into some of the statistics you are the first pilot to be named secretary. you are the first graduate of the air force academy to be named secretary. we really appreciate you being here, and we hope you come back soon >> member of congress too, right? that's where you really -- >> that ruins my reputation. >> and roads scholar >> and we all want to help anecdotally, are things improving at the v.a. from what you can tell

>> i don't spend a lot of time in the v.a., but our focus on it is to make sure if any airmen is -- does leave the service with a disability, they're always a part of the family. they're an airman for life, skps we need to i that care of them >> thank you, secretary. >> thank you coming up, when we return blockbuster media deal talks disney considering that purchase of 21st century fox. those talks stalled, but what does it mean we're going bring you the esenpridt's comments from overnight from seoul squawk begins with two big hours in just a moment

shield annuities from brighthouse financial, allow you to take advantage of growth opportunities. with a level of protection in down markets. so you can head into retirement with confidence. brighthouse financial established by metlife.

>> president trump in south korea. we've a live report from seoul coming up. big buzz in the media world after disney reportedly held talks to buy most of twenty first century fox. we have the latest on what this deal could mean for the media landscape as the second hour of "squawk box" begins right now. ♪ along with becky quick and joe kernan take a look at the futures this morning. the dow looks like it would open up higher by 28 points the s&p 500, which puts us in the red, turning green for a moment here, as has the nasdaq get you caught up on the big headlines. adp's annual meeting takes place. hoping to win three board seats

there. he told cnbc yesterday that adp shareholders have won either way with management now motivated to make positive changes. >> he will lose once the results from that shareholder vote are out, adp ceo will join cnbc live zbliefrmgt the rally rolls on for japanese stock market this morning. the nikkei rose 1.7% to finish its highest level in nearly 26 years. since january of 1992. back then stocks sold nearly 38 times earnings now the number is at 14. maybe there's still a market then the earnings just in for the company formerly known as coach now called tapestry. it's now called. reporting a profit of 42 cents per share. the latest quarter 6 cents above estimates. revenue did fall below forecasts. however, the company says its results were impacted by the recent hurricanes as well as inventory challenges a few stocks on the move this morning general electric is considering options for its aircraft leasing

operations, including a sale of all or part of that business this was in a reuters report that says ge could decide to sell or could spin off or could eventually end up keeping up the business the company's aircraft leasing unit has a fleet of roughly 1,300 planes worth an estimated $25 million. sales force is entering a partnership with google's cloud platform g suite to support its expanding global customer base the deal also integrasbeintegras force with google analytics. here's what the ceo -- sales force ceo told "mad money's" jim cramer last night. >> you look to going and you see this incredible world of information you see advertising, but you also get google analytics. it has sales and service and marking. it means that both of our customers are going to have customer insights that they've never had before

forecastingry avenue now jump up to 20% president trump meeting with the south korean president north korea likely to dominate the president's time there kayla is standing by she joins us with more on the president's trip to the region kayla, good morning again. >> they will lift the payload limits and continue testing them throughout the region. they will continue cost sharing. to that end, they are consulting on purchases of u.s. military equipment. the president of south korea

would not expand on exactly what that would entail, but president trump did earlier in the day >> the amount of equipment and things that you'll be ordering from the united states will be very substantially increased, and, therefore, we'll be bringing the trade deficit way down, which is very important to our people we have trade deficits with numerous countries, and we don't want to have trade deficits. >> it's almost the exact strategy an argument the president was making with japan prime minister shinzo abe yesterday this military purchase as a way to chippewa at the deficit the $27 billion with korea has been an acute focus for the president, and the countries did announce today that they would be expediting trade negotiations over this 5-year-old free trade agreement that they've been tussling over for the last few months interestingly, a large share of that is autos. there's a quota here in south korea on imports of u.s. made automobiles, and that's something that the industry has

really been focused on here's what the american automotive policy council said in response to the president's comments in japan. they said, "we continue to have high expectations for, but realize those expectations will require addressing korean technical barriers and currency problems that are slanting the playing field and holding back our market share we'll see whether autos figure into that equation as they expedite these talks president trump putting a little suspense out there tonight at a gala dinner here in south korea saying, "we're going to have an exciting day tomorrow for many reasons that people will find out. we'll see what he means. whether that's his speech at the national assembly or something coming in beijing where he lands later in the day for now, back to you >> thank you, kayla. meantime, a major story that we're following right here c nns reporting yesterday. twenty-first century fox had held talks with disney about selling assets that deal, if it were to happen, could prompt a new media

landscape. here to brake it down is michael wolf, contributor at "the hollywood reporter." and author of many books including "the man who owns the news, inside the secret world of rupert murdoch." the talks are currently stalled or not on or we don't know exactly whether they're going to get reignited. the question is, do they get ignited, and if they don't, what does it say about fox? >> i think it's clear that they will reignited because it seems very -- it seems the most likely sncenario is that fox reached ou to disney. i would say with just this side of formality, this is a company that is in play, that is exploring its options. i would anticipate disney is the first move, and i would also think that the leak of this story came from fox.

game on. >> if not disney, who? meaning as a potential partner >> i think any of the tech platforms, the telco platforms is it possible that cbs suddenly has interest yeah, sure i think across the spectrum everybody is looking at this today right now. >> and before we get to the investment implication, i wanted to ask about the murdock family. you have a piece that's coming out in "the hollywood reporter." >> i do. >> what is this about in terms of the murdock family. will he be losing control? is he trying to keep control >> this is all -- yes. this is all internal stuff the playing field is that there are two sons who are going to be running this company one of them is going to be running this company they don't particularly get along. it's a fight for dominance

it's very much connected to the deal for sky television in the u.k. a deal that james has pursued a deal that looks less and less likely their bid for scale was to do the sky deal >> right >> there's also this other interesting aspect, totally fascinating, with the saudi prince prince alwalid, who has always been the money that has supported and maintained murdock control of this company. the prince is now under arrest in saudi arabia. what happens to this company if they don't have the prince's vote very important >> that's a new term that's not something that would have -- they didn't know this was going to happen. >> what, do you think it's just coincidence that the day after the prince gets arrested this story is leaked? this is completely connected absolutely, they know. >> would they have an idea that if the regulators in the u.k.

are thinking this is less likely that they're going to okay it? does it have anything to do -- >> the murdocks? >> do they know it's going poorly >> of course >> from recent stuff >> everybody knows it's going -- >> the o'reilly stuff too? >> the o'reilly stuff, the tory government, which they're defend e depending upon grows weaker by the day. i mean, i would say that this deal has always been -- rupered murdoch said to james, if you can get this dole chb diehl done, it's yours >> investment side, you saw the news hit the tape, and you thought what >> absolutely. number one, surprise right? first off, as you mentioned, the murdochs have never been really sellers. they've always been buyers just from a political perspective that's pretty interesting. second, you've got two of the largest media companies out there looking or thinking differently about scale. right? disney needs to get bigger in

order to launch their own over the top services and perhaps fox is thinking we're not quite big enough if the sky deal doesn't go through. again, you see a much -- a much higher premium put on scale across the media industry, and as we said, i think 2016, 2015 was the -- were the years of distribution consolidation, and it's time for another round of content consolidation across the board. just given the importance. you have entrance of apple, facebook, amazon, google into the industry, and traditional media companies need to get a lot bigger in order to compete >> you want a prediction >> yeah, i'll take a prediction. >> they unload as many assets as they can they take this -- they take the rest of the company, which will still be a substantial company -- >> sports and news >> they take it private. they roll back the newspaper

company. they roll it back. >> they don't have to listen to anybody after that >> they don't have to listen to anybody. they get rid of twenty-first century fox and news corp. returns as the family company. >> i like that >> can i ask you a disney question >> sure. >> this makes sense from that side of things because you keep talking about the fox side >> from the disney perspective, i mean, we know they want to go over the top they're thinking as a company that i've got to compete with netflix that has an $8 billion a budget a year on the over the top side they're thinking about amazon continuing to increase its spend of $6 billion now, i think, the number is. you know apple, facebook, google are going to try to get into the business, and, you know, in order to compete they need to get bigger >> we're looking at disney shares higher on this news also. fox shares higher on this news what stocks do you look around and think, okay, if the dance is on, the dance is on for a lot of players. who do you like? >> well, you know, the secondary play, i think, is clearly

discovering. what is disney seeing in fox global scale, right? global channel scale as well as ip that's something that discovery has. especially if it completes its acquisition. >> discovery came under a little bit of pressure after the latest earnings news. >> absolutely. >> you would be buying as a -- >> yeah, look, we've had a huge round of -- we've had another round of fears around cord cutting, right you have a tale of two cities where you have three companies trading at ten times ebida, and the rest of the group trading at six, and discovery is trading at 6. all the companies that are trading at 6 times ebida are perceived to be subscale you know, i do think it would make sense for continued consolidation within the space >> do you buy any stocks on the actual news, or are you already owners >> we're already owners of a lot of these stocks. at current valuations for fox cbs and discovery, those would be where we would be investing >> that's where the knock-on effect is going to be. >> yes yep. >> okay. thank you, guys. michael, thank you >> thanks. >> always good to see you. coming up, we have another

record close for the markets we'll talk how to put kwlur money to, who next, and, later, the administration's economic agenda treasury undersecretary of international affairs david malpass will join us to discuss the president's trip abroad, trade policies, and partnerships stay tuned you're watching "squawk box" here on cnbc will they stay true to their words? or did they promise you one thing... only to do another? right now, congress is talking about tax cuts that will add trillions to our national debt and hurt our economy. it's time to tell congress... don't borrow more money from china. and leave more debt to our kids. keep your word. tax cuts shouldn't add to the national debt.

the nasdaq down yesterday. nasdaq hit record highs yet again right now. the futures are indicated more of the same. today at least for the dow the s&p is down just a couple of -- not even a point same with the nasdaq joining us now is jeff, accident chief investment strategist at raymond james, and on set jason pry, director of investment strategy at glen meade we gave jeff our person to talk to you from our staff. if i ask you a question and you give the same answers, we're going to be done in, like, ten seconds. you gave one-word answers about everything, which we like because you're certainly not waffling, but do you like this market, earnings are good, and it has years to run, theoretically, the bull market >> yeah. secular bull markets have three legs

the first leg ended in may of 2015 the second leg started in september of 2016 when royal bank of scotland said to sell everything but high quality bonds. the second leg is usually the longest and strongest. that's when earnings start to come on stronger, and the economy improves i think that's where we are now. >> what do you think >> i think this is a point where investors need to start to get nervous, and some investors are on the basis of valuations we do see valuations as a little bit stretched in the equity marketplace. the same time we're at a point in the economic cycle where we're probably hitting that last stride that could actually last for quite a long period. in fact, you know, historically speaking, equity market valuations have remained at these levels or higher in the back part of an economic cycle even though they should eventually come back down. that can last for we've seen five-year periods or longer than it lasted in these valuations before >> jeff, what do we do right, or is it just serendipitous

>> this is going to be one of the bulls of all time, and people are still skeptical every step of the way, and you're saying -- i mean, how long does the skepticism continue? all the way up >> no, they are usually in the third leg and that's when people throw in the towel and get bullish. the third leg in the 82 to 2,000 secular bull market began in late 1994 or early 1995. i first heard it from a contributor to you all this is years ago. he said this is going to be the longest and strongest secular bull market in my career it's going to be bigger than the 82 to 2,000, and i agree with him. >> we had him on yesterday maybe we just have him on from now on, where youjust -- do we need to just talk to him you get -- >> he is one of the best -- he is one of the best strategic thinkers on wall street. i like rich a lot. >> i'm sorry i got something sent to me

when does the third leg start? it's already started, or when does it start? >> no, i think you're in the second leg it's the says and strongest where. >> the first one is you said could be three or four years >> three or four years down the road, exactly. i think this market has another seven, eight, nine, ten years in it >> that's amazing. i'm surprised, jason, that we haven't screwed this up even from monetary policy or some local -- >> you think about it. we haven't really done that much in terms of monetary policy. the geopolitical risks -- >> what do you mean you haven't done that much in ermz it of getting out of it? >> the needle in terms of tightening >> i mean, is that the $4 trillion that we -- >> the tightening is normally what ends up causing the tail end of the expansion >> the massive liquidity that central bankers have injected,ing is that in part -- is that the right thing to do? that's why we're enjoying this

>> i think it helped during the down turn. it set us up for something that we have to unwind. we're dpog so gradually, and there haven't been dramatic enough moves in the monetary policy to put a dent in this expansion. i do want to count on one thing, though i think this conversation is hitting a little bit the wrong direction because what we haven't talked about is what investors should do in the environment if we do believe this expansion ask ongoing we think certain things are over valued u.s. stocks being one of those areas. you can actually take a defensive posture in the u.s international interestingly, is still in a reasonable valuation or arguably in some places discounted, and that's where investors should be taking the risk >> u.s. stocks are over valued >> well, you look on normalized basis we're 19.5 normalized earnings that's certainly above the historical average about 15.5 times we could say the same thing about abroad, right? the difference there is that abroad markets are trading about

16 times normalized earnings somewhere in that ballpark a good solid, like, 15% to 20% discount versus u.s. markets japan is even cheaper than that. emerging markets is even cheaper than that. fundamentals are better. >> as a u.s. investor, you need to think about punctuations, and if we are raising our interest rates at the same time everybody else is continuing to liquidate things, you can look at a stronger dollar. that could hurt you. >>. >> you do have exposures unless we're talking about emerging market currencies, the hedging costs on euro and yen are -- that shouldn't really affect the valuations of the underlying equities. european being quits are reasonably valued. i think japan is probably the best deal that we've seen around >> the thought process you should have at this stage of the expansion is where you take your

risk take your risk where the valuations and the opportunities are greater. >> jeff, i'll ask you what that would be -- that would be russia >> was it the central banks or -- i mean, why do we deserve this what do they do? what stars align to give us this unbelievable long-running sector, or it just happens technology what is it >> i think -- no, i think you have elongated the mid-cycle, where the down turn was so severe, and the recovery so muted. normally at this stage of a recovery, most economists would tell you that you are in late business cycle i don't think so i think you're still in mid-cycle, and you have years left to go in mid-cycle wrrn. >> doesn't hurt maybe that we get some policies that are pro-business either, i guess, right? >>. >> yeah. absolutely i agree with that >> okay. thanks, jeff >> you bet >> all right thank you. >> coming up, a number of countries are looking how to spend more on u.s. missile

defense systems right now. we'll look at the companies that could benefit. the news cycle in the last 24 hours. then the president's prayed policy is in focus during his trip to asia we'll speak to treasury undersecretary for international affairs, old friend david malpass. "squawk box" returns after a break.

your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

>> a clars 600 first aid kit, and a $ -- protractor. i don't know what that is. >> it's right there. >> the stupid thing they use in math a $9,000 ball of yarn. the luxury retailer is also selling a sterling silver bird's nest with tiffany blue porcelain eggs for a whopping $10,000, and, yes, it's -- >> you can't do -- >> yes protractor i haven't done it in years >> when you say protractor, i think of a medical device. >> that soupds -- >> sorry >> where does that go? somewhere? somewhere painful. >> still to come here on "squawk box" undersecretary of the treasury for international affairs david malpass will join us at the top of the next hour the big question is --

twenty-first century fox as assets and what a deal could mean for the media industry at 8:30 eastern time. senator shelly capito will talk to us about tax reform and much, much more. take a look at u.s. he equity futures right now. dow in the green up close to 28 points. back in a moment because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital.

i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

zblools here are the stories from the center. americans go to the polls today for election day state and local elections are in focus this off year. we should say voters in virginia and nnl new jersey, they will be choosing governors here in the east new york city mayor bill de blasio will be choosing all 36 nations, 100 largest cities will be holding mayoral elections isn't that face natuscinating. you remember when we're in the

second term this is no -- there's nobody anyway. a new teardown of apple's latest iphones showing the iphone 10 as a higher profit margin than the iphone 8 despite the more expensive parts that due to the higher retail price. takedown from tech insight says that the iphone 10 has 64% profit margin compared to the iphone 8, and the labor department will be out for its latest jolt report later this morning. that's the monthly measure of job opportunities and labor turnover at last look we can tell you that job openings were near record highs, and fewer workers were quitting the jobs they already have imports would come over the next few years u.s. beef is back in chinese markets after a 14-year hiatus following a trade deal struck by the trump administration earlier this year. china blocked u.s. beef in 2003 after a mad cow scare, and

australian and brazilian exporters rushed to dominate -- i saw the subtext said china beef i thought we were arguing with china. i thought we got into another argument this is actually about -- >> yeah. >> this is not a beef -- this is -- >> this was opening up >> did you see it? >> i did i saw what your problem was. >> what is this. what is this i thought, oh ah, he is over there. is he going to be going to china, and now we have another beef with china over beef. >> no, it's not about beef >> it is about beef. >> but the beef is not about the -- it's about overall trade. >> where is the beef, andrew do you know? >> the north korean threat is front and center as president trump visits south korea, japan, china, and other asian nations this week. the president is pushing allies to spend billions on more american military equipment and the manufacturers of missile defense stand to benefit morgan brennan joins us now with a look at the latest systems and

the companies that make them morgan -- >> they are put together and sent off to japanese warships as part of the bigger lockheed martin-made missile defense system now, the increasing threat from a north korea ballistic missile attack is fuelling growth for companies like ratheon, which has a hand in every one of america's missile defense systems. >> very strong demand signal for increases in missile defense just because of the threat situation in the world today >> there were four different types of u.s. missile defense systems that are currently in use. patriot, thadegis and the midcourse defense. all are receiving more money,

more orders. they're benefitting companies like ratheon as well as lockheed martin, boeing, northrop drummond and orbital atk the floodgates have opened for international sales. in addition to domestic, there's a demand abroad. countries like saudi arabia, poland, and japan where president trump talked up military purchases just yesterday, and they are now looking to spend billions on these big ticket systems in the case of sm3, for example, this model ratheon is gearing up for production and then starting next year delivery of its next generation version of this missile and just last night as part of a broader $4 billion request for missile defense spending, president trump asked congress for more money for even more of these new next generation intercepters. guys, we're going to bet into all of that, as well as how all of this ek it nolg works in much more detail as the day goes on back over to you >> all right, morgan thank you very much.

morgan brennan as we've been mention, president trump arriving in south korea overnight for the second stop on his asia tour. trump urging north korea to come to the table and try and make a deal on the nuclear issue. let's talk more about america's strategy abroad with david malpass. he is treasury undersecretary for international affairs. steve liesman, also joins us this morning david, thanks so much for being here >> thanks, becky hi >> let's talk about this asia trip overall i mean, this is a time for the president to go out and try and make at least some bilateral connections. if we're not going to do tpp, there are a whole lot of issues of trade with asia how do you think things are going to far >> i think it's going fine so far. look, the trip is going to move from the security issues toward economic issues. there's a coherence. both of those go together. >> they're tied together pretty well >> they're tied together we want to be strong in asia we want them to perceive us as strong and welcome that. they do. then on the economic side we have to be stronger as an economy and we hope they are as

well then we'll be seeing the economic message coming through that we want you to grow we want to grow. the endo-pacific region is critical to where the world is headed, and that's what he is engaged in i'm sure it will go well the bilaterals are really important. he will be meeting, for example, with indian prime minister modi, and that's an important meeting because india is such an important growing economy. >> the beginning of the trip with japan, he has a very good relationship with shinzo abe, the prime minister there in south korea it's a little more tenuous now there have been some good signals coming out of those, the comments that the president from south korea was making almost sounded like they were picking up talking points from president trump's own thing, talking about how he is making america great again. what does that tell us about the situation in south korea not only from the economic perspective, but very importantly, from the security perspective with north korea >> you know, relationships are

changing in asia as people get used to president trump, as he shows leadership and then as north korea creates more and more of a threat to all of the countries. what we see, you know, there was a united nations security council resolution sanctioning north korea. that's where the world gets together and says something is wrong. the president is leading that effo effort south korea recognizes that. i think the relations there are strong and focused on the right thing. that's the north korea problem >> those relations, there's some talk that they're going to be either sanctions or some kind of quotas put on when the president gets back. how much is the president going to use that tool available to him when it comes to trying to balance trade between the countries? >> we recognize that there's a sizable problem, and i invite you to think about that problem that the u.s. has simply been for years and years accepting

goods and having a different non-reciprocal relationship. often with countries in asia where we had open markets and they didn't. that really is the focus of what he is going to bring out the need to have fair and reciprocal trade relationships with china, with south korea, with each of the countries, and that, i think, is a constructive relationship if they look at it and say, wait, you guys are getting -- american companies are getting to -- are buying goods easily from asia, but it's not done the other way. same with investments. they can invest openly in the u.s. they make it very hard for the u.s. to invest in china. i think a lot of -- a lot has to change in china to make it more market oriented. >> that's a really tough message when we are so concerned about north korea. obviously, security is going to take the number one stance china knows that china understands that we're more concerned about security

with north korea than we are about trade. >> i think the trip will show the evolution of the -- or the combination of those two things. you have the defense security theme, which is strong, but then almost equally strong is the economic theme china gets that. >> yeah, but just watching what the president has done, there was a lot of tough rhetoric before he was elected, even at the beginning of his presidency when china started to cooperate a little bit it looked like on north korea. our president trump, understandably, was kind of saying, okay, we need their help on this, and so as a result we're going to back off. >> i really think we ought to put the two together as equal themes both powerful. those will be brought out in the trip as it evolves right now he is in japan and south korea. very close to north korea. that's what you are seeing on the images on the tv as he moves -- as he moves to china, vietnam, and philippines, you are going to see a lot more focus on the importance of us being strong economically.

in china, they are fully aware of that. in a lot of ways they want the same things for themselves security, economic growth. >> tell us what's going on globally one of the best stories is how global growth has helped the u.s., and even some countries around the world going faster than the u.s what's the overall situation as you look at global growth? >> you know, it's a confluence of circumstances that's positive you've got europe finally growing. you've got japan growing you know, we used to sometimes wish for synchronized global growth we've got that going china had a slowdown in 2015-16, and has picked up some they are the second largest economy. i think what's happening simply is as you begin to change policy toward a little bit less dominance of regulators, of regulation, of more and more government control, you change the tone

that's going on even in several european countries where they want to see, you know, president trump says i want to see wages going up for americans well, that message plays just as well in europe just as well in japan. they want to see their people getting better that is sparking business investment durable goods are way up that's a really positive sign. >> we would all like to see our employees' wages going up. hopefully america and around the globe. does that eventually lead us to global inflation >> i'm not as concerned about that if central banks are independent, they're looking at that you know, you see every meeting of central banks they talked about, boy, i wish the inflation would be a little higher, but not too high i think that is achievable by good regulation, effective regulation of financial institutions we changed a lot and learned a lot, i think, since the 2008 crisis one of the things is simply to have effective -- try to find a way to have effective regulation

of the major banks europe is not actually going as far, i think, as they could in finding a way to have their banks be safer the u.s. has made quite a bit of progress there that gives us a platform for growth going forward >> the other big issue in the news in terms of international affairs, saudi arabia. and the implications for american investors, for american companies. there's a piece in today's "new york times" about all of the saudi money that's come into u.s. tech companies by soft bank i know what the president has said, but what's the take inside treasury what's happening over the past couple of days >> i've got to say a lot of things i'll take a crack. with saudi arabia, the intelligence is still coming in. the understanding of what actually has happened and what they're going to be able to achieve. i want to duck that a little bit, but what we should say is the persian gulf reasonable, secretary mnuchin was just over there and good meetings throughout the region, and the persian gulf reasonable is

changing pretty rapidly. i think for the better let's give it a little bit of time to see exactly how that all ea evolves. >> it also involves the imf and -- what's the overall strategy of the trump administration when it comes to those two organizations? is it to withdraw from being so central in this organization or is it to keep the level of engagement about the same? >> not to withdraw we should make very clear that there's not an isolationist bend what we want to do is show u.s. leadership on behalf of american workers. that's very different from withdrawing from now, what we do need to do is have more efficient multi-lateralism one of the things that's happened over the last years in my area alone, there are nearly 100 programs that have been -- that have mushrooms over the years. all with people working on them, traveling, you know, and making

policy decisions, and that's simply too much. i'll be testifying tomorrow to the house financial services committee on imp world bank issues and global growth i think what we need is people to recognize there's a lot of private sector capital the best way to allocate capital is through markets, and so that means less growth for multi-lateral institutions maybe no growth given that the world is doing pretty well >> your name keeps coming up >> there's a lot of openings on the fed.

>> that's really not on my radar screen i've got this giant challenge. we just went through some of it, and we didn't even talk about foreign investment in the u.s. there's a lot more going on there. >> how tall was volcker? wasn't he 6'9" how tall are you >> i'm 6'6". what we need really is -- >> do people know that david was an economist before he was the treasury secretary he would talk about the fed and think about the fed. >> we need global growth that's good for american workers, and that's really what i'm working on every day >> david, i have to thank you, and i hope you come back and sit around the table with us again it was a real pleasure >> good to see you all >> thank you coming up -- >> i have a lot of work to do, joe, but sorry, you are stuck with me for a little bit longer. >> you go on tour. >> i would >> before you became a --

>> a fed head. >> southwest grill looking for ways to expand in what's been an oversaturated fast casual restaurant market. i like that. oversaturated when we're talking about this why the company thinks that going mobile could be the answer the company's president joins us after the break for some taco talk actually, burrito talk check out the futures at this hour they're a little mixed we'll be right back. accused of obstructing justice to theat the fbinuclear war, and of violating the constitution by taking money from foreign governments and threatening to shut down news organizations that report the truth. if that isn't a case for impeaching and removing a dangerous president, then what has our government become? i'm tom steyer, and like you,

i'm a citizen who knows it's up to us to do something. it's why i'm funding this effort to raise our voices together and demand that elected officials take a stand on impeachment. a republican congress once impeached a president for far less. yet today people in congress and his own administration know that this president is a clear and present danger who's mentally unstable and armed with nuclear weapons. and they do nothing. join us and tell your member of congress that they have a moral responsibility to stop doing what's political and start doing what's right. our country depends on it.

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation.

flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. southwest grill going mobile they're treating fans to a traveling restaurant concept fast casual sector has largely underperformed the overall market as it struggles with falling mall traffic really and oversaturation since 2010 the number of fast casual restaurants has grown by 13%, while the country's population that is increased by just 4.9%. same store sales across the

industry falling over the past year joining us now bruce schroeder, president of mo's southwest grill. it's the tour deburrito. who came up with that,ing and, bruce, tell us about it. >> well, first of all, let's get this off to the right start. welcome to mo's. thanks for having us the tour day burrito, we're 17 years old now at mo's, and we did a deep dive to understand what we were doing well and what opportunities we had, and one of the things we learned is that our freshness wasn't coming through. we go to great lengths, time, money, and effort to serve fresh food we decided to make some changes to our restaurants, but rather than wait for that, we thought we would bring the restaurants to the people and show off our freshness across a lot of different aspects of our business >> so what -- how does it actually work, and who gets to do it, and what you would actually see the way that the food is constructed firsthand? >> yeah, exactly yeah what we did is we put out an

invitation for special seatings across the country, so it's a tour working down from new york where we're in atlanta today moving down to tampa and orlando, and we actually sold out the seatings within seven hours. as part of the process, we're doing our fresh prep, sharing a lot of the statistics of the lengths that we go to. for example, when you prep over 60,000 pounds of chips, each and every day across our restaurants, things like dicing tomatoes, 25,000 pounds of tomatoes plus, we're bringing in all sorts of new very hot and interesting peppers as part of their fresh salsas serving all this up to social media and other media along the tour >> so you got 700 restaurants. just for comparison, do you know -- how many does chipolte have or baja fresh are you -- do you have a lot more expansion capabilities because i haven't -- are there any in new jersey? >> yeah, there are there are about 23 in new jersey, i think, and as far as the category goes, we're unique in the mexican segment there's three of us.

chipolte is over 2,000 qudoba and moe's is 700 each we split the company up that way. there's a lot of newcomers in the segment as well because now mexican has outgrown pizza as the second largest segment second only to burgers >> wow i mean, i -- i didn't have haired time choosing, but i think it's -- i don't blame you. i think it ub sh tied -- actually, all three should be tied i'm thinking about all three of them right now do you need scale? do you need more scale is this to get your name out what's the -- what's behind this i guess you always need to get your name out. what would you -- would you like 2,000? is there a market opportunity with chipolte's problems for you? >> there certainly is. our footprint somewhat limits us in terms of national media fortunately, with social media it works very, very well because it's so geo-targeted the other thing is that the business is really going off premise, meaning outside of the

four walls of the restaurant any more, the in-rers restaurant traffic is being affected by the changes in retail, and certainly changes in technology that allow us to give our guests our food wherever and whenever they want it those are the things from scale perspective that help us as we grow >> yeah. you can always use publicity where is the nearest moe's to times square just wondering how quickly you can get something here if you wanted more. >> actually, pretty quickly. we have three restaurants in that vicinity. >> did you think about that? with the -- did that cross your mind do you have a p.r. person or communications person? >> we did bring the chips and salsa here remotely. >> huh >> we did bring the chips and salsa to the remote location this morning >> someone is holding out on us. >> that does us absolutely -- you know, you -- we talked about you today. you can get talked about tomorrow if you want to make good on this >> okay. we'll have to take care of that.

>> think about it. all right, bruce thanks good luck. >> thank you >> okay. joe is thinking mexican food now. >> really always thinking. always >> all the time. >> always. >> when we come back this morning, we have more stocks to watch ahead of the opening on wall street, and later, we will talk tax reform and the president's check agenda with senator shelley moore catopi she will talk about all these issues "squawk box" will be right back. and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe.

it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more.

>> when we come back, a possible

mega deal that would shake up the media industry twenty-first century fox is holding talks with disney to sell most of the company, although the two aren't talking right now. still, the dance is on we'll talk about what a tie-up would mean for amazon and netflix and all the other players at the dance we'll talk about that straight ahead. in the meantime, check out the futures ahead of the opening bell dow futures have been positive all morning. up by about 16 points. s&p futures down slightly, and then the nasdaq down by five all three tseajofhe mor averages sitting at new highs yesterday. we come into this world needing others. then we are told it's braver to go it alone. ♪ that independence is the way to accomplish. ♪ but there is another way to live. ♪ a way that sees the only path to fulfillment- is through others. ♪

that our time here can be deep beyond measure. ♪ no one who chose interdependence ever found despair. ♪ because what the world taught as weakness, is in fact our greatest virtue. ♪ the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen.

my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] mmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. ...for a free kohler nightlight toilet seat with consultation or visit kohlerwalkinbath.com for more info.

happening now. it is d-day for bill ackman. the activist investor finds out if he wins or loses in his proxy battle with adp. plus, snap ceo breaks his silence on twitter oh, snap with two words fake news. we'll explain as the final hour of "squawk box" begins right now.

good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernan along with becky quick and andrew ross sorkin my nose -- now i'm getting nervous. let's get a check on the futures right now. indicated higher on the dow at least. for most of the morning. up 18.5 now. the nasdaq indicated to open about four points lower. the s&p down a point treasury yields have been moderating sort of inexplicably, i guess. you always have to look to europe to see what we're doing here sometimes it doesn't seem like it matters 4.1% unemployment. isn't it 17-year low and 2.3 on the ten-year >> as one analyst pointed out today, you have junk debt in europe that's trading at lower level says than a ten-year here, and where does it make the most sense in terms of what you're risking for what you are getting back >> things are moving all over this planet with money

doesn't matter >> super conductor collider with money around the globe >> let's get caught up on some of the day's top stories >> tapestry, the company formerly known as coach, is out with earnings reporting adjusted quarterly profit of 42 cents a share. that is 6 cents better than the street was expecting sales, though, fell short of forecasts. the retailer cited inventory challenges as well as the impact of recent hurricanes stocks is up by 1.25%. drug maker valent earning $1.04 a share for the third quarter. topping the consensus estimate of 88 cents. sales were above street expectations thanks in part to a strong performance from the bausch and lomb eye care unit. >> mallinckroot. the revenue fell short with the drug maker pointing to pricing pressure its specialty generic segment, and that stock is down by 8.6% in the meantime, toyota lifting its annual profit forecast the company says it expects a weaker yen to boost its bottom

line despite its key markets feeling the pressure of competition. stocks up by 1%. >> okay. apple is denying reports that it moved business from the ireland -- from ireland, rather, to the isle of jersey in the english channel to avoid a crackdown on irish tax laws. the allegation was made in the paradise papers. the analysis leaked documents by the international consortium of investigative journalism apple says it contains inaccuracy the reorganization was specifically designed to preserve its tax payments to the united states, not to reduce its taxes anywhere else. apple says it told regulators of the move, and its tax payments were not reduced in any country. now, to some politics. president trump kicking off a second leg of his asia tour in south korea. we've heard from the president already this morning on twitter. he tweeted the following he said stock market hit yet another all-time record high yesterday. there was great confidence in the moves that my administration is making, working very hard on cutting cuts on tax cuts, rather, for the middle class companies and jobs

kayla joins us now she is live in seoul good morning to you, kayla >> good morning, andrew. the president tweeting during some rare downtime during this very quick stop in south korea the economy is very clearly on his mind the very first topic in his public remarks has been trade throughout this trip, even as u.s. allies, their top priority, and you can tell by their first topic in their public remarks, is stabilization of north korea. today president trump and south korea's president moon announced closer military coordination in thwarting the threat from pyongyang. even as president trump says that diplomacy is progressing. here's president trump making some remarks at a state dinner just a few moments ago >> in addition to the fact i look forward to making a hopefully very comprehensive

speech before you and the leaders of korea, the relationship that we have is a fantastic one. >> that speech is expected to be about 20 minutes long, and it's the first made by a u.s. president in about 20 years. executives from gm, boeing, chevron, and united airlines all invited to attend and expect trade to come up in that speech as well. some 220 civic groups are expected to protest the speech outside the national assembly and reportedly 80,000 police on hand to try and keep those demonstrations peaceful. though, outside seoul today near the u.s. embassy near the blue house, which is the equivalent of the white house here, most of the demonstrations were pro-trump. the u.s. and its military protection are viewed very favorably here, as is its tough position toward north korea. speaking of north korea, joe, we just got word a few moments ago. according to the kremlin

spokesman, president trump and russian president vladimir putin will be discussing north korea on the sidelines of the apex summit that happens in a few days we still have china to go before then back to you. >> all right kayla, we're going to bring it back home here big corporate story in corporate news the big story we've been talking about all morning, 21st century fox held talks to sell many of its assets to disney david faber broke the story, and he joins us now. david, did you talk about exactly when the talks started and when they ended? what was it the timeline >> it was early october, joe right around, you know, after the first week of october. taking place for over a period of let's call it around three weeks. right until very recently. that sort of gives you a time. let's call it three to four weeks of talks between the two disney does appear to be the one that originally approached you know, they're not talking now. will they come back together

it's always possible certainly >> fox approached disney, david? or -- >> no, i think -- reply sense is -- >> michael wolf said fox is a -- he doesn't know. does he? >> no, he dent know. he doesn't know. i don't know why he would know i don't think that's right i think i would be in a better position to know i'm not going to argue >> i'm glad i asked you that just to hear you say, you know, they were -- i thought they wanted -- they were adding assets with sky, right i mean, and now they're -- does this mean they know they're not going to get sky >> i think it's certainly shedding light on their lack of optimism in terms of dealing with the u.k. regulators on sky, yeah i think that's one take-away listen, the reason i think the story is important regardless of whether these talks ever came to fruition, joe, is the very thing you raise, which is it shows the willingness on the part of certainly fox and i think we'll see others as well in traditional media to consider doing all sorts of different things that their shareholder

base probably never thought they would in the face of this incredibly rapidly changing media landscape. when you are fox and you see amazon and netflix and google and facebook and even a microsoft and linkedn, all the different ways that -- and netflix, of course all the different ways that digital video and just media in terms of distribution is changing you think do we have the scale to compete i think that is the key take-away here whether or not disney ends up with these assets that we reported, they were negotiating to buy from fox or not, you've got to consider that all of these companies are really trying to figure out what can we possibly do? the landscape is changing under our feet so quickly. >> david, dissect two pieces for me one is does this suggest that disney -- if disney really was the first mover on this, fields like they need to buy more content. if not fox, we've had a lot of conversations about if fox doesn't go to diz 234i where tox will go.

now where does disney go >> i think disney of all the companies, andrew, does still have the most scale, right if we're talking about a scale business and being able to compete, they can pull from netflix. they can create a direct to consumer offering that many people believe will be successful it certainly wouldn't hurt to have avatar. it wouldn't hurt to have the tv production arm of the fox studio it certainly wouldn't hurt to have all of that new -- what they like to call -- it's this new thing called i.p. now. intellectual property in media, for that direct to consumer offering there's no doubt about it. internationally as well, i think disney would love to have had -- or would love to have those assets what they're willing to pay for it exactly we couldn't determine. i think on their part there was a desire there is a continued desire to get bigger in these key areas. >> what would the stub do? what's leftover? >> it's funny, joe it's pretty significant company that's left over i think maybe that got lost yesterday in some of the reporting. i mean, you're talking about the

fox broadcast network. fox news fox business >> wait a minute >> the -- >> the business channel? fox has a -- >> the rsn's, reelkal sports networks, and fox sports that is a larger contributor of cash flow overall than is what they would have been dispatching in any deal with disney. they look a lot like cbs wouldn't they? it would be a news and sports company. very similar to cbs. >> they have been wanting to do that forever haven't they wanted -- the broadcast guys would love, and they would have to change fox news who told you this? how did you get this were you in a garage or something? was this like a -- >> tell us your sources. >> was there someone in silhouette in a garage and you met him there? >> still got a lot of people who i talk to, and they talk to a lot of people, and then i'm lucky enough once those people talk to the other people, i can talk to more people. >> so there wasn't like a deep throat there wasn't one person? >> there never is. there never is >> andrew, why didn't you talk to them first? >> he doesn't know

he doesn't know. >> he doesn't know, and michael wolf doesn't know. anybody else >> i love the way everybody tries to figure out. these are not tactical leaks all the time, right, andrew? >> no. >> this was not a tactical leak. i will say because i do know a little about this. this was bts a tactical leak he did some real shoe leather reporting there. >> there you go. >> completely genuine. >> all right >> i thought it would be -- >> thank you >> the movie won't be very good then so you're not in a dark garage where the silhouette -- guy in a trench coat. all right. >> not yet >> okay. faber, good job. >> all right, kernan, thank you. >> you're welcome. >> michael, thank you. michael nathan, co-founder of moffitt. nathan, you just listening to all that >> yeah. >> just going in sequence. what do you think? >> well, i think one of the interesting things is i would have bet that it was fox looking to buy something and disney looking to get out of something, right? that setup of basically disney wants to bias et ceteu buy asse.

disney wants to -- that was a role reversal. fox wants to divest companies? >> you have to rethink the whole equation and what you come up with >> well, fox is a really cheap asset. really cheap company they know that they can't compete long-term with entertainment companies like disney or netflix. you don't have -- they won't have the scale they're good at sports and news, and i think they realize that in the film business and television it's probably better to be a seller possibly than keep fighting this fight. >> could they be an independent sports and news company? why wouldn't their scale even be smaller? >> that will end up being sold to somebody else >> that's the worry, right that you get so small, you get smaller that the next set of nfl deals, nba deals, you'll be outbid by someone bigger getting more focused -- >> not a virtual cycle, but the downward spiral. >> yeah. i think what everyone in our world is worrying about the next nfl deal will be a lot more money. if you don't have --

>> we'll see >> well, for those that have the nfl now it is the most important piece of programming, right? the risk would be the next set of negotiations should drive up prices if you are smaller, it's going to cost you a lot more on earnings than it would if you were bigger. it's obvious >> michael was here with us earlier, and i know what david just said about what michael was saying, but his guess on all of this was that they would take it private. the smaller company. so they didn't have to listen to anybody. they could run it as a family empire, particularly with prince alwalid not being there to back them up. >> well, the prince had sold out a couple of years ago. that's -- the reporting thathe was still an investor in fox and news corp., that was wrong these companies should all be private. they really should be. >> are we 100% sure about that the reason -- i was just with prince alwalid, and he handed me a piece of paper that showed the assets, and still talked about how he was in had business with the murdoch family >> really? there could be a joint venture

in the pan-middle east they may have a share of a similar business >> but you are pretty confident they're out completely >> well, committee asked a report of the "new york times," and the "new york times" reported that he had sold two years ago as a different strategy that's what we had heard from a report >> i need to go back and look into that. we'll find out >> basically, on your point i would think it makes sense if you are the murdoch family go private who needs the spotlight? >> as a family company >> yeah, a ton of cash flow. who wants to deal with us every quarter? it's a pain. right? >> then you wouldn't have to then again, you are stuck being small. >> yeah. but the fact that they would even think about going small is so -- >> it's against everything they're about. >> that's why the stock trades so cheaply is that they're worried about continued empire building, right? that's why people want to be part of a minority position because they're always buying more -- >> you think they don't get sky, or they do >> it's a good question. i'm afraid they won't get -- we

don't love that sky deal we would be happy if they never bought sky yeah when i say i'm afraid, i this i there's a huge risk. >> are their problems over are there still, you know -- since all that happened, roger ails, everything else, the world has gotten even -- i mean, you know, it's just one after another. >> right >> amazon and weinstein, or whatever a lot of the suits are still pending against some of the people that are still there. >> 32. then after that happened, you still resign it. i mean, that doesn't look like the culture has changed in this hyper-sensitive world that we're in >> that's a question that people start asking as investors. you know, where -- what don't we know about all these companies, right? it's a great question.

it's a great question. >> well, thank you >> thanks. >> thank you >> good to see you >> we usually have the other guy. moffitt. >> yeah. >> moffitt covers cable. >> hester moffitt. >> that's the silence of the lambs. this is craig moffitt. >> exactly >> her son, i think. >> no. michael, thank you when we come back, it is d-day for bill ackman and adp. shareholders are going to be deciding whether or not the activist investor gets seats on the data processing company's board. that meeting gets underway in just a few minutes we will take you there live. stay tuned you're watching "squawk box" right here on cnbc what are the ingredients of a life well lived? is it the places you go? the things you own? or the people that fill it with meaning? for 150 years, generations of families

have chosen pacific life for retirement and life insurance solutions. protecting what's most important to you. that's the power of pacific. ask a financial advisor about pacific life. you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income.

that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

>> leslie picker is at the adp shareholder meeting. she joins us right now leslie >> hey, andrew that's right in about ten minutes the meeting is set to begin here at adp's headquarters the company has been sparring with per shing square's bill ackman for three months over

whether they will put three of his director nominees on the board, including ackman himself. now, preliminary voting is underway it's set to close around 8:40, 8:45 interestingly, ackman has only gotten to this point in the proxy voting process twice before once in 2009 with target where he lost the proxy vote, and then in 2012 at canadian pacific where he actually won seats on the board there. the rest of his engagements have been settlements now, this battle, of course, comes at a critical time for ackman himself he spent, you know, the last two years with negative returns, and this year he is looking at a negative 3.3 returns through october 31st he thinks that his voice in the boardroom here at adp is valuable and investors will be voting to determine and reflect whether or not they agree with that

>> withholding one director spot that would pave the way for someone like an ackman to take that seat. that, of course, makes it much more challenging for ackman to win this one outright, and after the meeting we will have an exclusive interview with carlos rodriguez. he is the ceo of adp we'll have a lot to talk about, i'm sure, with -- once the meeting gets started, and we learn more about the voting results, guys. >> leslie, ackman is already spinning this as a victory no matter what. that even if he loses, he has pushed the company to make these changes. it sounds very similar to what where he heard with nelson peltz from procter & gamble. with nelson peltz it was legitimate it was a close race, and as a result, people say, yes, that's the case is that the case with ackman if he loses >> i think defining the word

victory in these activist proxy battles is a tricky term because everyone will point to dupont where nelson peltz lost the proxy vote, but then ultimately the ceo stepped down, they merged with dow, and people, especially from a shareholder return standpoint saw that as a win. now, whether or not he gets 50% of the vote or 30% of the vote >> we're just getting a headline just getting a headline crossing right now on dow jones that bill ackman received no board seats at adp this is according to sources it's a headline that's running on the dow jones newswire. we should point that out right now. what we had been potentially expecting, correct, leslie >> yes so i spoke with sources here this morning who have said that it's looking likely that adp will come out ahead on this proxy vote interesting thing with these proxy situations is that voters can actually change their votes up until the polls close it's different than what you would see with a political election where you go once and that's kind of it. you're done after that

theoretically if some of these big institutional investors change their mind, they could do so and sway the vote towards ackman's favor within the next 20 minutes or so it's unlikely, but that could definitely happen. we'll be sure to report back when we know what the -- >> so the polls are open for 20 more minutes even though this is running on dow jones right now, it's too early togs because the polls are still open, people could change their votes? >> i think it's too early to say definitively it's a very small probability that some of the big institutional investors and index funds will change their vote at the last minute. definitively for our audience's purposes, i would say it's a little too close to call outright >> specifically saying van garde and state street voted for adp black rock voted for ackman, but that would apparently swing to for adp. >> that's interesting too because with p & g we saw kind of a divide with those big index funds as well. vanguard was the one that ultimately voted in favor of the

company and then the other two sides of nelson peltz. we're seeing a divide again among the index funds. >> who is winning in virginia? do you have anything on that, the governor race? >> nothing on the polls just yet. >> that i don't know >> leslie, thank you very much we will check in with you just a little bit later folks, when we come back, we have more of today's top stories. stick around "squawk box" will be right back. businesses are thinking. factories are thinking. even your toaster is thinking. honey, clive owen's in our kitchen. i'm leaving. oh never mind, he's leaving. but what if a business could turn all that thinking... thinking... endless thinking into doing? to make better decisions. make a difference. make the future. not next week while you think about it a little more. but right now. is there a company that can help you do all that? ♪ i can think of one. ♪

>> up next, the senate, the tax bill expected later this week. we'll talk with west virginia senator shelly more capito about reform right after the break as we head to that aforementioned break, take a look at u.s. equity futures. up now on the s&p. up 20 on the dow down just fractionally on the nasdaq did yon the national debt?ssman get elected by talking tough will they stay true to their words? or did they promise you one thing... only to do another? right now, congress is talking about tax cuts that will add trillions to our national debt and hurt our economy. it's time to tell congress... don't borrow more money from china. and leave more debt to our kids. keep your word. tax cuts shouldn't add to the national debt.

♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical. fedex.com slash dream

>> tauls saw a fall below wall street's forecast, and it says it was in the early stages of a company-wide effort to cut costs and operate more efficiently then there's under armour. it was upgraded. this is good news for the company. to neutral from negative the firm says the apparel maker's business will be challenging for some time, but that expectations have been set too low, and now perhaps low enough against -- to guard against further down side. that's just a chart you don't like to look at. then there's lowe's. it was rated overweight in new coverage and key bank. that firm basing its rating on a positive view of the housing market lowe's is well positioned for an improved execution in the coming weeks. >> c northbound's confirmed that bill ackman has lost his bid for seats on adp's board he was seeking three seats he won't be getting any of them. vanguard and state street voted for adp. black rock voted for ackman. that's the word that we're getting right now. it looks like adp shares are down by about 2.25%. leslie is there.

she'll have more following the story. >> right now, though, let's get to politics and the next step for tax reform house weighs and means chair kevin brady unveiling an amendment to the tax plan. elan lily joins us right now good morning >> good morning, becky that cleared a committee on the party line vote. it includes a three-year holding period for carried interest to qualify for that lower capital gains rate it also restricts the new exize tax on private colleges and universities to those with assets of at least $250,000 for a student, and it allows you to keep putting up to $5,000 tax free into a pennedent care spending kkt through 2022. there are also some complex and technical changes to the treatment of foreign earnings. now, brady called these changes modest refinements the democrats were livid that this 34-page amendment was introduced at the last minute and things got a little heated between brady and democratic representative sandy levitt.

>> if you had ideas what was in the bill all along, and now you just throw this at us and you need to introduce each one of these separately you make a mockery out of this committee. a mockery. >> it's not in this amendment anything on health care. there's no repeal of the individual mandate brady said that he is behind other bills that target the taxes in obama care, but he said that he wants to get tax reform done first, and we'll get to those other bills immediately after that becky, back to you >> thank you swrech. senators holding an event for the need for tax reform today as they get ready to release their very own tax plan later this week. joining us right now is west virginia senator shelly moore capito, and, senator, thank you for being with us today. >> great to be on. thanks >> we have seen the details of the house plan this latest amendment coming through. although we got wind of that yesterday when we spoke to kevin brady here on "squawk box."

how similar is the bill? >> there will be changes, but the similarities will be much greater. we'll have the same program perimeters of middle east tax release for middle income earners, and tax relief. relief for our small businesses. those are the overarching perimeters, and you are going to see that in the senate bill. we're going to be dropping our bill on thursday i think we have great unity around the direction that we want to go there are still things that we need to have differences with the house to iron out. >> well, carried interest, will that loophole still exist in the senate bill? >> i think that remains to be seen i asked that question yesterday in speaking with the finance committee. i think it was something that obviously the president talked about a lot during the campaign to want that loophole to be closed, and so i think you see it closing on the house side until thursday comes i wouldn't

know for sure. >> i think through this tax plan offers tax cuts to a lot of people a lot of individuals, but there are going to be people who are going to be paying higher taxes. a lot of that will fall on upper income people who are wage -- earning wages versus upper income people really wealthy people who use carried interest. i understand what the house has done, but if you really think about it, it's a loophole because it's wages, right? if you get a fee for putting people's money into some investment, it's still a fee it's still wages if you are going to be talking about everybody paying more or everybody paying their fair share of the upper end to make sure the lower end can get in tax cuts, it seems ludicrous to keep it in, even with the three-year holding period. i get deferred compensation, and then i get to hold money for that, but i still pay real wages on that when that money comes back out why would we keep 15% interest on any amount of holding time for somebody who is at the wealthiest levels of america

>> i think you'll see as we move through the senate bill that we want fairness is one of the hallmarks here also, to make sure that -- to make sure that we can target the relief to the middle earners, the person that can't make it to the end of the month has no leftover money i think that this is the discussion that we're going to have in the finance committee. it was interesting to me that it was included in the -- at least partially included in the house bill yesterday, which i think probably is a harbinger of what's going to happen here in the senate as i said, until we actually get that bill on thursday, we don't know for sure. >> you know, the other issue is, obviously, they were holding on to the details because they don't want lobbyists kind of swarming in, everybody trying to protect their house with the issues it's also difficult for the public because of that whto figr out what it will mean to them. what do you telegraph to people? >> what i would say to my constituents, 83% of them file a

simple form. you're going to get a doubling of yoo you are standard deduction. you're going to have a child tax credit that goes up $600 per child. that's significant relief for the middle income earner, and the simple fiction aspect which doesn't get talked about very much i think also it's an enormous relief to small businesses and to individuals all of the other pushes and pulls, i mean, certainly we understand that in order to get to the numbers that we need to get to, we got to tweak here and tweak there. we want to make sure that we can close those loopholes so that at the end of the day the story isn't the one that, you know -- the wealthiest individuals are getting the biggest breaks here because that's not what we want. that's not the direction the president wants to take, and that's not the direction i want to go either >> when we look at the senate bill, do you expect that we will see a permanent 20% tax rate for corporations, or is that just a heavier lift when it comes to the senate >> that's the goal, and it's amazing to me having sat through many, many meetings on tax

reform with my colleagues. we are very unified on this, and that's one number that we're very unified on. >> at the high end, if reagan was doing this, do you think that the high end would see a tax increase like what we're talking about here >> you know, i don't think you -- i don't know. i mean, obviously i think the last tax reform that was done under reagan obviously that was tax relief all the way through the system, but i think that when push comes to shove there are a lot of people that, as i said, don't even have $400 for an emergency for a month that's the middle earner that's where we're targeting where. >> but you do tax reform i don't know it depends on what your overall goal is. if it's -- if it's growth and that's why we're doing all the stuff with corporations, no one wants, you know -- if we didn't think there was going to come a growth come from cutting corporate taxes, i don't think anyone would necessarily want to cut corporate tacks unless it was going to eventually result

in growth. >> right >> if you believe that money left in the private sector, you know, is better spent there where, you know, it's deployed to -- you have assets, people are taking chances, people -- you have a vibrant economy if that's your idea, if it's not redes distribution, and you call it redistribution, that's fine if it calls for growth, you would seem to do it across the board. >> i think we're going to see growth on the small business side too not just on the corporate. obviously, there are some issues there with closing loopholes and making sure that we have that tied down. >> but -- >> if are you looking -- i'm sorry to interrupt >> no, that's fine >> if you are looking, you know -- if you are looking for the biggest bang for your buck, and the top 10% if they pay 70% or whatever it is so your tax cuts are being confined to the 30% of what you're talking about, we really -- you go to where the money is, and the money is being paid at the top

10%. if you just are taking that off the table and you are just going to raise taxes on the -- i don't know it just depends on what you are looking to do with the bill. if it's redistribution, fine then maybe we need that. call it that >> you know, i think -- yeah, i mean, i think where we're going to see the growth, obviously, is on the business and corporate side that's going to benefit everybody. the high earner and the low earner we know that that's where the real punch is to this bill that's where i think in the end if we get democrat votes, which we're hoping to get, that's where we'll get them because they know that this economy has been stagnant. we've been sitting around for years waiting for growth this is going to promote that growth you know, i think the benefit will go all through the earnings scale. >> i think grover said something like raising on the top 1% or top 5%, it's not the worst thing you can do, but it's in the top 5 for things today >> i'm going to see him today. i'll ask him about that. >> and i'm just arguing from that point of view i don't care i want you to take my state -- i

don't even care if you take my deductions away for state and local. it's not about me. it's just about -- >> as long as you get rid of carried interest >> it's just -- you know, if you are doing it philosophically for a reason, it just -- you know, the heritage or aei, those guys, you know, are -- they're not dead, but they would be rolling over in their grave if they were dead by raising taxes on the high end >> well, they're going to be at the press conference this afternoon. this morning, actually we're going to talk about that, but i think the bigger thing is the bigger picture here, and we don't want to lose sight of that, and, you know, there's the politics of it too quite frankly. >> oh, i know. >> we got to get to 52 >> yeah i mean, it's going to be hard enough as-is. there are some concessions being made to the class warriors because you saw what happens when republicans gave up on the obama -- on that that didn't end the class warfare charges. you're never going to end it it's always going to be -- they're going to say it's a tax cut for the rich no matter what you do, so you might as well go for broke. >> well, the other thing, too, is i think that rg aumt rings

hollow i don't think that -- i think the american people heard it so many times they don't believe it anymore. >> it can seem like they're still scared >> i think -- i think we're pretty emboldened right now. >> senator, one question, and it's a question i've been asking for several weeks now, which is when you think about the tax on estates, how does that really help growing the economy >> i don't believe i voted to repeal the estate tax every single time it's been up i believe the house bill has it staying in for six years and then completely going away i mean, i do believe in a double taxation aspect of that. i think it's wrong, and i think if we -- >> that's a philosophical -- my point is it's a philosophical issue for you. it's not truly one that you think is going to add me meaningfully to jobs in america. >> not really until you get to the large farms and the large property owners and the folks in small businesses who actually are the ones that really get hurt here. it's not the warren buffetts

that get hurt. it's that person who has a lot of investment in equipment and, you know, when they get right down to it, they don't have the money to meet the cash demands of an estate tax that's wrong that's wrong that's what we're fighting >> isn't there a way to fix that by simply raising the limit as the bill in the house does it raises it to $22 million for a married couple you can think about raising it above that if it was to take care of a business, but where the money really comes in are from the very, very wealthiest the estate tax only affects one out of every 500 people who pass away >> yeah. i think that's one of the things still in play on the senate side i think obviously you are trying to get to the 52 votes for some people that's sort of a line in the sand, and we're trying to figure out how to keep that line straight so we can get those votes. >> optics matter, and if it looks like you are protecting billionaires and protecting hedge fund managers and real estate guys who can use carried interest, that's a much harder sell >> i couldn't agree more >> when some people even in the

middle and bottom end of the spectrum will end up paying higher taxes years down the road >> yeah. i couldn't agree more with you there, and that's why i'm hoping that loophole that the president talked about and that i think should be closed is closed in the senate bill. >> but when you say closed, you're not talking about moving it simply to three years you're saying getting rid of carried interest altogether? >> yes, that's what i'm thinking >> how is our friend rand? broken ribs -- >> i don't know. >> if you got five broken ribs, it's going to -- you don't know when he is coming back will it be a week? a month? >> hopefully he will be back next week. the bottom line is yardwork is not what it's cracked up to be >> no. it sounds like he wasn't even on a riding mower it sounds like -- >> did you hear what the latest details are? it was over, like, some grass clippings being left on the side this is what neighbors -- >> i know. i told my husband to watch out next time he is mowing >> we know what makes good neighbors. >> good fences >> good fences >> thank you all zbloog senat >> senator, thanks the so-called trouble makers that's the topic of a new book by silicon valley historian.

e'gog jn aerheshs intooiusft t break. helping keep shoppers safe. 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 business. yours. ♪ ♪

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.

morgan stanley >> talks between twenty-first century fox and -- trying to keep up with the silicon valley. sill von valley historian and -- silicon valley's coming of age good morning to you, leslie. >> good morning. how are you? >> i'm -- good morning congratulations on the book. i want to get to that, and i do want to ask you because we've been talking a lot about the cross currents taking place in

media and where silicon valley is going to land in all of this, which is to say this morning we've been talking about disney and trebt e twenty-sfirs century fox, but now there's speculation that one of the big fang companies comes in to try to buy. what do you think? >> i think that silicon valley has been a big part of entertainment for a really, really long time i'm talking back in the 40s and 50s. you had this huge sign if you go down highway 101 in silicon valley, which developed bing crosby said he would not do his radio show anymore if he couldn't use the broadcast delay that ampex developed in the 1970s you had warner acquiring atari, which was the meeting of the great consumer tech company with sort of the matter of american pop culture at the time. even back then there was distribution, and that was one of the things that swung the deal for atari was that warner had managed to distribute 1.1

million copies of the eagle's hotel california in three days that was remarkable at the time. in the 1980s you had the rise of special effects companies using silicon valley tech. it's been happening for a long time, and not necessarily always in a scary way it's often been an enhancement of course, now what you have in addition is that the tech companies have all this data that really give them the advantage of knowing what it is that their consumers are enjoying and wanting to see more of >> leslie, the other big issue at the moment it's been the headlines the last couple of weeks especially is just sort of how the public and washington is thinking about silicon valley right now. there seems to be a lot of criticism, in are the pa, because of the russia propaganda piece, but also just questions about whether tech is becoming too big too fast >> yeah. i mean, this is a new issue for silicon valley i mean, the valley has really faced these sorts of questions

of is the sunsetting on the valley literally from the beginning it's been everything from the oil crisis in the 1970s to japanese competition in the 1980s. it's just -- the dot-comcrisis was going valley this is -- what's different now is that i think in all of this silicon valley had never before had sort of an image problem it always been seen as the is savior of the american economy and source of hope this is different. for me it's not the biggest threat to the valley but -- >> what's the biggest threat. >> asking these questions. >> shutting down immigration, restricting immigration is by far the biggest threat to the valley if we don't have immigrants, we don't have silicon valley. if you look at who the founders are of these companies and who the people are who are working in these companies, they are two-thirds of tech workers right now born outside of the united states, silicon valley tech

workers. >> we have to go do you think there's a disconnect between the mentality of silicon valley, which dare i say sometimes feels like a bubble to the rest of the country and perhaps the rest of the world? >> i think that silicon valley is such an important part of everyone's lives and at the same time, i feel exactly what has made silicon valley so great, namely awe dishs reach beyond its grasp can be threatening to the people around us i have high hopes that things are going to reconverge and we're going to be able to see silicon valley working in the service of everybody. >> leslie berlin, the book is "trouble makers", you weren't too much of a troublemaker we appreciate it. >> thank you. >> let's check in with jim cramer and get his take on today's top stories.

is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class

powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

jim cramer is in san francisco. what do you have coming up today, jim >> continuation of some of the things we talked about yesterday, obviously we're going to talk about fox. but this google sales force allows companies to compete

against amazon an even though sales forces team up with amazon, google has a great fountain of information that can be plumed by clients that haven't been able to before. it's big news and why the sales force is up. >> you figure out what's happening in the chip world? amd and intel. did you ever think you would see that >> i think these are companies that -- i don't want to say they are desperate but they are motivated to stop one company, which is nvidia or the broadcom tie-up broad com can get qualcomm it is fantastic for their bargaining position and good supplier to apple. sky works, last night all they were talking about apple but not allowed to mention apple they are very opaque but have to di deal with apple. >> i mean, it is formidable and

a lot of problems come with size, some of it is good but some of it you do become a target i wonder if these guys are need to think about that, absolute power, corrupts absolutely >> qualcomm absolutely, if they lose the case against apple, you'll want to tender to the broadcom bid they are a lot of people speculating they are so inquisitive buecause they are ou of room. i think qualcomm will be desperate and they don't have the relationship with apple broadcom has you're absolutely right, look at the market caps and this area has taken a lot of the intellectual property taken a lot of market cap and look at intel, intel figured out how to do intellectual property away from pcs and a lot of this is internet of things and guts of every device and everywhere and how intel figures they have to catch up with nvidia and broa broadcom has to catch up with

intel. >> your lighting is great out there or your makeup or something. >> unbelievable team out he.er >> thanks, jim, we'll see you in a couple of minutes. my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to?

all right, let's take a final check on the markets you're going to see that the dow

futures are indicated up by 25 points, s&p futures up by a point and nasdaq down less than a point. this comes after another day of records. it's now been 57 record highs for the dow this year. the s&p we are looking at 51. >> make sure you join us back here tomorrow. right now it's time for "squawk on the street. ♪ good tuesday morning, i'm carl quintanilla with david faber at the new york stock exchange and cramer at one market in san francisco. stocks up five days in a row the president in south korea and media world continues to react about the scoop about disney fox yesterday. oil not far from the two and a half year high the news that disney approac