hooking that thing up. it's friday, may 25, 2018, "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. >> good morning, everybody welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. sitting in with us for the hour is steve grasso director of institutional sales at stewart frankel and a cnbc "fast money" trader good to see you. ready to go? >> couldn't be more excited. >> about the market or the weekend? >> sure. both >> exactly let's look at futures. as you will see right now on this friday before memorial day weekend, you're looking at green arrows dow futures indicated up by 75 points s&p futures up by 6 1/2. nasdaq up by 32 points yesterday the market initially

traded down after news that the u.s. north korea summit canceled the u.s. averages did close near session highs. let's look at treasury ten-year falling below 3%. closed yesterday at 2.987% stocks look like a better place to be as treasury yields come down a couple stories we're watching disgraced hollywood producer harvey weinstein expected to turn himself in to police in new york this morning on sexual assault charges. you're looking at live pictures of nypd's 1st present, that's where he's expected to arrive. this would be the first criminal charge brought against weinstein since scores of women accused him of harassment or assault harvey weinstein denied all allegations of nonconsensual sex. we'll bring you the latest as this develops.

it's not just a story about harvey weinstein, but the start of the metoo movement. >> this particular charge they're talking about is pretty egregious. goes back to 2004, i think don't know the actress's name, lucia something. this was -- in her rendition of the events, it was not close to consensu consensual >> three years ago they did not prosecute him on similar charges. >> i'm not saying there's another 49 nonconsensual, but this is sort of glaring. i don't know how this -- he's in a heap of trouble. morgan freeman yesterday >> that's another story. >> different story as well in canada this morning, police are on the hunt for two men who set off a bomb at an indian restaurant. this happened overnight outside of toronto 15 people were injured in the

blast. and south korea now offering a rather measured response -- >> north korea -- >> did i say south korea >> you did >> north korea offered a measured response to president trump's decision to call off the summit with kim jong-un. we'll see whether those talks happen or don't. we'll go to eamon javers now in washington who has more on where things stand >> good morning. the president said yesterday that he was canceling that june 123th summit in singapore with the north koreans to discuss full denuclearization of the korean peninsula now the question is what happens next i want to play a sound bite of the president talking with reporters in a little exchange right after he made his announcement yesterday he seemed to give an indication that he knew why these talks had broken down. take a listen. >> the dialogue was good until recently i think i understand why that

happened >> why was that? >> i won't say that. some day i'll give it to you, you can write about it in a book i believe we have a great opportunity. we'll see whether or not that opportunity is seized by north korea. if it is, great by them, great for the rest of the world. if it isn't, it will be just fine >> the president there trying to keep an optimistic tone at the end of his remarks saying he thinks he knows why this happened earlier in the week he speculated that the chinese president was to blame here, xi jinping, having gotten to kim jong-un at some point at their second meeting in china. the president suggested after that second meeting with the chinese, the north koreans became difficult to deal with. the question is what does all of this mean for wilbur ross, the commerce secretary's trip next week to china to continued trade negotiations the president suggesting that the chinese wanted the north koreans to take a harder line on the u.s. in order to gain leverage in their trade negotiations those negotiations are now

ongoing. some of the folks i've been talking to inside the white house suggested that the president was taking a less stringent line on china trade in the run up to the june 12th summit and communicating with people overnight, the indication is in the absence of that june 12th summit, the president could revert to a much harder line he was letting steve mnuchin take the lead and keeping sort of peter navarro wing of his white house in check now those roles might reverse. watch for a change in stance for the president of the united states on trade going into next week >> eamon, thank you for that we'll watch and see how the markets react to all of this >> yeah. it's very -- these guys are masters in duplicity we are used to responses that are so over the top with the

slightest thing, you look at north korea wrong and they talk about fire and fury. >> they are not coming with good intentions to this >> the "journal" has a good piece. kim got to play peacemaker without offering anything. got to be recognized as a world class diplomat it was apparently -- apparently south korea sold it more than they should have >> we were all eager to do this. >> it's not over yet >> the north has not been acting in good faith when they were supposed to go for a pre-meeting in singapore to set things up, their team never showed up, left the u.s. people sitting there yesterday. yesterday when they talk down some nuclear facilities, they did not allow inspector to come in. >> weren't they damaged any way? >> the story is they were not being used anymore >> we'll talk about alexa in a bit. i won't even have a parrot in my

house. you wonder what's going on, tony, kiss me, kiss me, the husband's name is frank. the parrot gives it away alexa is recording everything. >> has to be recording everything and alerted when you say alexa. it has to be listening >> i have one, never hooked it up >> i have no problem with them >> andrew, can you imagine if they recorded conversations i have at home and sent them to you? you have any idea how embarrassing and -- >> i love and drew >> you know how awkward and embarrassing that would be >> all of our dates at bed bath & beyond, you have been planning them >> the minute i get home, you can't believe the duvet andrew was looking at no taste colors clashing. i immediately go off i was told to get back to this this must be important we'll talk about it in chairs. oh, tony that happened. >> yeah. >> some guy -- they're wondering

whether parrots can be -- testimony can be used in court someone got killed >> what? >> yes >> urban legend. >> maybe >> gap same-store sales at gap brand stores was down 4% they had to move to heavy discounts to move clothing off the shelves. sales at old navy missed expectations for the first time in four quarters breaking in real quick, mr. weinstein is arriving at the precinct >> we can take a look? >> we will go there now. these are live images of harvey weinstein -- there's some action outside the precinct there as he turns himself in >> contessa brewer has been standing by at the courthouse. what can you tell us about the

meaning of all this. >> yeah. so he's eight blocks away at the precinct where he's going in to be photographed and to be fingerprinted at this point. and then he's going to come here to the courthouse and have an initial court appearance nbc news learned from three different sources that the complaint against him involves allegations by two different women, two sources say that harvey weinstein is expected to turn over his passport, to wear an ankle bracelet and beallowe to leave on $1 million bail later today. the nypd has been investigating harvey weinstein for months. we know will lucia evans, that weinstein, she told police, had forced her to perform an oral sex act. so we're waiting now to see whether she is part of the complaint. nbc news has not been able to

independently confirm that you're seeing the media crush outside of that police precinct where harvey weinstein just went insi inside i want to mention harvey weinstein's lawyer reminded us that he continues to deny allegations that his actions were anything but consensual >> we will continue to watch the scene outside the precinct there's quite a crowd gathered to record what's happening here. this is the car we assume is harvey weinstein's, waiting for him to emerge to go into the precinct >> very few images of him. the last image was a paparazzi shot in california, the first time he had been back to california on wednesday. it was taken at lunchtime. he's been spending most of his time in arizona at ma whiwhat mb described as a rehab clinic of sorts.

>> that's been a controversial thing, too it's one thing to say that you have an addiction with consensual sex, it's another to say you can be rehabbed from what the victims at least say were not consensual acts the entire idea of rehab in a situation like this has been questioned as contessa pointed out, harvey weinstein's lawyer said he denying nonconsensual sex acts, but there are dozens and dozens of women who say otherwise this will play out in the courts this is the first step in all of that harvey weinstein expected to surrender today. from the reports that we heard, again, these charges today would involve two different women. >> two different women >> two different women a lot of this dependent on many reports that are out there at this point but we're talking about potentially first degree rape

charges in one and third degree rape in another case that's according to some reports out there. >> all right we'll continue to keep this in the background very significant moment. not only in these particular cases but on a blooder scene of what's been happening. >> i was in the middle of my ross stores story, remember? weep ski we'll skip that. wasn't that where all your wealth -- >> wherever the ross family was, it was not connected to mine >> really? >> no. >> you intimated that? >> we have nothing to do with that i don't know about the ross stores >> is there some other big inheritance in there no why else -- >> never made it to my side of the family if that's the case. >> you got like six jobs, i guess if you had money -- >> let's talk about the broader markets.

joininging us now is steven wood from russell investments our guest host this morning is steve grasso we are getting to the end of may. looking at memorial day weekend, you think of that old adage, sell in may, go away does that hold true this year? >> i don't think so. we'll see continued volatility we'll test the markets more. every time we test these markets they hold critical technical levels as we've seen this week yesterday with north korea headlines once again, the markets shrugged it off in a couple of hours. i do think you should be careful with your money. i still am a believe their we go higher in the markets and go with the old adage never short a dull market. if the volatility and liquidity are in line, the markets could still rise >> the markets never really got all that much of a bang out of the idea that we would have peace talks with north korea to begin with

markets have always been skeptical with dealing with what we know as a volatile regime and following through with this. we did see some upside, but only a percentage point >> i think the markets disregarded north korea, not rallied on it, but another thing on the long list of things the market set aside >> steve what do you think. >> we look at the fundamentals i think the market could chop side ways from here. volatility will pop up last year was a freebie for investors. investors got paid last year for great earnings this year, and a lot of fiscal policy as the fed normalizes policy, as earnings come off the boil, i think sideways and fixed income space and equity space in the u.s. seems reasonable. for us it's an opportunity to look globally. europe, emerging markets,

commodities, asia where monetary policy and valuations are more friendly >> i'm glad you brought up interest rates it's probably no coincidence that the ten-year fell back below 3% not big moves but -- >> in this environment small moves can have big information you're getting a rally in interest rates, and sequencing so repricing of inflation risk which was appropriate coming into this year also as we move 1 1/2, 2 years out, as the yield curve flattens, it will invert this time next year, we need to price in the probability that there will be a cyclical downturn in the u.s. by 2020 even the composition of earnings in the u.s. seems to be an increasingly global story. this is more multi asset and more active. the last couple of months will show that value. >> you're saying if you're going to be active, you would be directing people away from the

writes >> i think both. look at using some -- nine year of strong gains in the u.s our work also would support that as well. and then as the u.s. dollar based investor goes globally, active can add more value in less liquid, less transparent markets and emerging frontier. real assets, liquid assets from a global perspective that active budget can pay off more globally >> what are you telling people to do? >> when you look outside the united states, and you're looking forward, is that because there was an under-performance there? when i look at corporate tax rates at 35%, now 21%, a lot of these things are blended in, but that tailwind is hard to deny and hard to combat when you look at a lopsided outside the u.s. coming back here and exposed

dollar, treasuries and the above. when you have a clear cut picture with small cap names that have an aggressively low tax bracket or effective tax rate, they have not seen that since 1941 there's no way an analyst can calculate it >> so maybe it's more than a six-month gain >> yes >> if you take a broader multi asset perspective, you get a different perspective. >> so you're still only talking about the ten-year sitting at 3% >> correct but if we take a global perspective and from a u.s. dollar based investor, this has been a great run there are opportunities now based on valuation, cycle and global markets which are real and just diversify away some of those gains. the italian situation now, about 2.40 on the ten-year the european central bank will be laser focused on that

tremendous liquidity there when you add those up, it's not an opportunity to rebalance. >> italian ten-year at 2.40, versus at 2.90 or 3.0. what would you rather earn, paper from the united states or paper from italy >> i think paper from the united states the ten-year on italy means the european central bank's policy is -- >> is going to change. >> so the likelihood the european central bank will exit qe, that's there as well >> i agree with you on face value, no matter what's happening behind the scenes you should be buying u.s. paper versus that. there should be a way different variation of rates >> you're talking about the stock. >> yes >> not specific to that paper, but the broader monetary environment for an investor. >> i guess okay i see that thank you for coming in today. it's great to see you.

steve grasso will stick around for the rest of the hour a u.s. jury decided samsung must pay apple 5$539 million in damages for infringing on patents covering some of the iphone's features. previous rulings determined samsung was at fault but the amount of damages owed had been hanging in limbo half a billion dollars, not nothing. design softwaremaker autodesk reporting better-than-expected earnings overshadowed by second quarter guidance which fell short of guidance. both, did you see samsung and apple shares both up on that news >> resolution. >> resolution, that's all? >> that's it when you have something that's known -- known unknowns, and un-huh

un-huh -- unknowns unknowns. i'm surprised you don't have a meter at the bottom of the screen >> we would have to take down our bitcoin little thing >> and disney versus netflix bug. >> all right did you see what i sent you? >> i did the parrot it's real. >> it's real it's real. it was a suspect in a murder the parrot kept saying don't shoot! don't shoot! it was in the voice of -- any way. we'll talk about it. a parrot only remembers a few things, alexa remembers everything. you said what? the story that has everybody talking this morning we'll tell you how an amazon alexa -- alexa, don't record this it record the conversation of one family and sent it to another user >> it was somebody in their

contacts list. >> we'll talk about it coming up >> stay tuned. this person was convicted, but the parrot was not a witness let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

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welcome back to "squawk box. attention alexa users. the story might scare you a bit. a family in oregon says their echo device secretly recorded a private conversation and sent it to a person in their contact list amazon 5:knowledges this incident and says alexa misheard a series of sounds in the conversation as instructions to record and send it amazon says it is working on a fix. if that doesn't make you feel better, no surprise. this is a story where we need more details i've been trying to figure it out. all i can assume is they were trash talking somebody, mentioned that person, matched

that person in the contact list and sent the message out >> a lot of times when you have siri, it's always listening as well if it's as listening and always with you -- >> don't you have to press the button to get siri >> you can put it on always on >> mine is probably not. >> probably not. mine is not. don't know if you have to step out of it i don't know if it's automatically -- >> i think you have to actively choose in the beginning to take it. >> i feel safe with siri i have never seen her translate what i've said that has -- is anything close to what i said. if i say something, she will be so messed up >> big brand bollydocks, hello tomorrow >> you may say something else, and it may send it off to something lse. >> siri comes up with some stuff -- there's no place in the known universe where that is

something someone is saying. it's something so obvious, a 3-year-old would want more information. >> why are they saying secretly recorded it's just listening? >> it's supposed to be listening for this word, the wake word, which in this case is alexa or echo -- >> is this where you always tell me i'm not woke? >> totally unrelated >> he's so woke. >> i never used the word woke. >> you used it yesterday >> did i >> that's not from siri? >> no, throwing shade and being woke >> don't you throw shade to people not have google doing this -- i have a google home thing. >> i have those things, but never hooked them up >> my kids know how to use them,

use them as phones they'll scream call so and so. you have no idea it's going. you could have all these conversations going on >> if you give people permission, if you have relatives, they can drop in on you, you hear a chime -- >> you don't have to answer the phone? >> you have to give them permission >> it's a constant permission, you can come in when you want? open door policy. >> open door policy. >> no way. >> by the way -- >> the idea i don't have to say okay, now is an okay time. >> you only do it to your mom or dad. >> you want your mom and dad in on every minute of your life >> you have to literally give certain people permission. >> is there a person in your life you would give constant check in on me permission to >> no. but it's in your kitchen >> some people have it in their bedroom and video. >> is there a person in the

world that you would want to -- >> let's yoke. >> let's yoke? people will get woke >> when we return, we'll talk about this and gasoline prices are rising ahead of the holiday three-day weekend. that starts today. many experts say prices could go higher this summer we'll head to the pump next to tellouhaisoi o y wt gngn. back in a moment kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. theextreme risk of burstd a pipes and water damage...y... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the first place.

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ahead of what will be a three-day weekend. you can be positive about that let me show you the markets as well dow up about 75 points nasdaq looking to open about 32 points higher. the s&p 500 is up about 7 points north korea is offering a measured response to the president's decision to call off next month's summit with kim jong-un. nbc news pentagon reporter hans nichols joins us now with the latest 6:30, you better be up we spoke yesterday you're like, i'm not up as early as you guys. i bet you are t the measured response had not come out when we talked last then it did come out were you surprised it was a little surprising these guys are usually over the top. >> there's a disconnect between the north korean actions and their rhetoric when you look at how this meeting went south, it is simply

because the north koreans were not showing up to these pre-planning meetings in singapore. they simply didn't send a delegation if you want to send a message that talks are off, don't send a delegation so in some ways when you look at the response from the trump administration yesterday, it shouldn't have been a huge surprise to the north koreans because they were not sending anyone real quickly in terms of the pentagon's position, they insist they're in a heightened posture but that their posture has not changed. they have not sent additional assets to the region one thing to look at, you have 13 ships deployed in the western pacific. one thing to look at is what happens with the "uss ronald reagan." that's the aircraft carrier, it's in port in japan right now. if and when they decide to send that back out, look to see if they put out a release moving an aircraft carrier is the strongest strategic message you can send from this building. secretary mattis is aware of that as is president trump

>> so many things swirling around with this i know you cover the pentagon beat, politically i don't know if you want to infer certain things, just so far kim jong-un did get a lot out of this. china got to ease up on some of the cross-border interactions without getting criticized because it looked like north korea was willing to talk. they did get a lot out of it but what are the chances that they say, all right, we'll play ball now, and that it comes back quickly. is that ship sailed? is it possible >> it seems from the white house perspective and from senior administration officials that this was not a employ to sort of call off negotiations, call off talks. it seems like they're dead just real quickly on the china thing, you might know more than i do in terms of cross-border trade. officials say china is continuing to enforce their sanctions. antidotally every now and then

you hear about more fuel trucks lined up at the border but at the pentagon they are saying they have not seen a softening on the chinese side. they'll look at this with satellite imagery, how many cars are on the street. they try to get market readouts on the price of diesel inside north korea. they're saying they have not seen a shift in china's behavior they continue to say that the pressure campaign, maximum pressure, that will continue you ask what that is that's putting military assets inside south korea that's the thad system, nuclear power, they don't sail under sail anymore but when they talk about assets going into the region, that's our cue that these talks have gone further south and that they want to send a strategic message from this building >> i wonder when we hear who's next we had trump, then the response --

>> we heard from the chinese overnight. they are sort of combating against this idea that we heard from trump last week that the chinese somehow forced kim jong-un to change his behavior the chinese are saying no. that's the latest overnight out of beijing >> all right you'll be busy today thanks for being on with us this morning. we'll see you. prices at the pump, there's always energy implications in all these stories, they're jumping ahead of the driving season joining us is matt smith from clipper data snuck up on us people driving more, memorial day. we're always like prices are like likely -- it comes every year, doesn't it is it just me? it's no surprise does that cause prices at the pump to go up? it's like pulse pricing or something. >> there's a couple of things. we do see prices tend to peak,

all else being equal ahead of driving season what you see is refinery maintenance in the spring, and then as we come out of that, we see prices peak as those refiners then produce more product which then gets consumed as demand peaks in the summertime we also have the influence of the crude price, quh mawhich map 60% of the gasoline price. as brent crude hits $80, the part that influences gasoline, we are seeing us hit $3 a gallon or are about to as we hit the start of summer driving season it's being driven by crude prices as much as demand >> when oil was on the way down from 100, we hit 60, no one said it was going to 40 or 30 now we're pushing 80 on brent. are we headed for triple digits?

is that the -- is there supply that comes in at levels around here >> we're seeing a pause hitting that $80 level it is this psychological level we do see that in the $10 increments that said, there is the -- so many pockets of geopolitical tension at the moment, the market is tightening in terms of supply and demand becoming more level there. so we could see prices move higher given some factor relating to venezuela or relating to iran not related specifically to the fundamentals in terms of demand there, but supply outage because of the pockets of tension there. >> you know who did say it was going above? >> who >> boone pickens he said it long ago. i saw hip yesterdm yesterday fo breakfast. >> 100 didn't give me an exact price on it >> good and bad on his picks

>> thinks big. >> he does >> how is he doing >> doing well. >> he's long most of the time. >> he said when have you known me to be short on oil. >> all right sorry, matt. all right. we got to go any way thank you. matt smith, appreciate it. >> thanks. >> always got that that's like your insignia, isn't it >> i'd like to think so. >> i think that's true all right. it works it's good. thanks >> maybe a vest, andrew. >> you guys should do squawk vests. everyone on wall street is wearing a vest now am i right any trading desk, it's a vest. this is naked now. >> it is >> but like a fleece vest? >> no, no. >> business -- >> business vest, that's his hallmark on wall street, it's the fleece vest, everyone has air conditioning >> there we go

>> sweater of the month. >> i think we have a vest -- with you, typically you're such a dandy, you would get a vest with lapels. those ones with six pockets. >> like the alpine ones? >> there are suit vests that have lapels. >> too much for me >> is it >> yeah. you are clean. >> i think the sorkin sweater of the month thing. i want to turn it into a business we have the logo >> it's the gift that keeps on give >> do you have pricing power netflix pricing? >> like a subscription box maybe 29.99 a month. then you get a different sweater each month you don't go too expensive >> like the jelly of the month club >> there's no middle man we can keep the prices down. >> are we still on air >> we are. >> hard to believe, isn't it >> when we come back, drivers start your engines the cryptocurrency craze is shifting into overdrive. eric chemi has that story. >> sunday is the indy 500, we'll

have the first crypto ochablkcin sponsor ever on sunday i'll talk about it when "squawk box" continues and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

cryptocurrency making its way to the indy 500. eric chemi has the story what network is that on? >> that's on abc for the last time starting next year the entire indy car season will be on nbc >> there you go. >> we'll all probably be there next year. >> rebirth resurgence i just said to you, i can't remember the last time i -- i find out who won the indy three days after it's over >> that won't happen again >> no, no. >> maybe this will get your attention. xyo network is sponsoring a car in the race. they are a blockchain company, they track your shopping, drones, self driving vehicles, all those things will need trust

list location data, and the driver, j.r.hildenbrand, he finished second seven years ago. he got admitted to m.i.t. but did not go, because of the indy deal the team, they get paid in straight cash, you can't buy a fast engine and make it go faster with tokens so they get cash so he's the perfect guy to bring this to the mainstream he was a pre ipo endorser of gopro. >> why is he even driving at this point >> he has math and science programs going on across california he has some crypto things going on, this education program he's a real interesting guy. >> maybe still holding on to the gopro. >> he told me he still owns some stock but sold a lot of it said it was an interesting learning experience on the good side andb

play, bringing in all the big clients like amazon. >> yeah. >> you're a midwest guy, i'm sure you grew up with racing >> i'm from indiana. >> i thought you were from new jersey >> now i am. i'm from indiana. >> remember the names? frnlg>> fittipaldi, rahal, all guys >> we don't talk that way. >> danica is in the race helio castroneves is in the race >> can we bet on it now? what kind of odds do you get it must be hard to pick who will win. >> that's what makes it fun if you're a gambler >> 30/1 odds >> 33 drivers, if you're 33-1, you're average everyone has a decent slot the best guy, the most well

known guy didn't even qualify. >> what do you mean remember i didn't know that >> james hinchcliffe is in all the national honda ads, there were 35 guys trying to qualify two didn't make t one of thshgss james hinchcliffe. >> eric might be like alexa now. ask him anything >> but i'm a real human. >> as he says. >> i won't send you stuff. >> you can keep a secret >> you could be an avatar. nice to see you. >> you have other things to worry about. it seems like there's a mail delivery kit for everything these days i want to sell the "squawk" sweaters, now babies are getting into the action. we'll introduce you to a company trying to disrupt the way we feed our youngest members of the family we'll do that after the break. first, as we head to break, ta ahe othke cckf e european

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is you. the dell vostro 15 laptop, with 7th gen intel® core™ processors. the market hit a record high, but you were wondering why. check cnbc, wherever you go. welcome back to "squawk box," everybody. in retail news, shares of deckers outdoor are rising, posting better-than-expected results and is now raising its annual guidance.

as a result, the stock is up 4.4% also, sales from its ugg brand jumped 6%, while teva more than 7%. all right, if you've been to san francisco lately, you have probably noticed a lot of electric scooters on the road. that may soon change the city's agency just released new regulations, and the rules will force e-scooter start-ups to remove their bikes from the street by this june 4th and apply for permits by june 7th. city's going to cap the number of scooters at about 1,200 for the first six months. >> by the way, i should have said teva. that's the shoe. i thought it but you started reading. >> we also have a historic day at the new york stock exchange today. a woman is going to be running the big board for the first time also, by the way, a woman runs the nasdaq stacy cunningham taking over from tom farley today. there she is she began her career at the new

york stock exchange as a floor clerk back in 1996 it's worth noting that the nasdaq, as we said, dina friedman took the job here last year, but a moment for both of these exchanges now. our guest host this hour -- >> speaking of the new york stock exchange, steve grasso. >> still here! >> not related. >> not related dick got all the money, i got all the work >> you must be related, years ago. >> somewhere somewhere. i'm sicilian i'm not sure where dick is from, but i've known dick for a long time big fan of dick's. he was a great guy when he was around, but i'd be remiss if i didn't comment on stacey i've known stacey her entire career she's done everything from clerk to specialist to now running the exchange big fan of her good luck. >> steve, let's talk a little bit about where the market stands as we head into this weekend. there have been a lot of volatility all year long i'm sure you expect that to continue, even in the summer doldrums >> you know, you do see that the

volatility -- we were in such a phase or an environment where nothing could shake the market and it was steady eddie and interest rates were low and the only alternative was to be in equities so, you had to be in risk assets now the treasury ten-year is obviously rising, but we're sort of stabilizing at this point the fed came out completely dovish the other day, and i do think that still the overall markets will be moving higher. >> what are you telling people just particularly? >> what? >> i don't know, i'm just laughing. >> i'll tell you later you don't want me to tell you right now, trust me. >> okay. all right. >> let's talk about -- >> the things that go on, on this -- there are. i'm -- >> i can't believe nobody else caught this. i'll tell you all. >> captured it all >> no way! >> i got it when i was sitting here >> it's his name i'm a big fan of richard grasso. >> announcer: this awkward moment has been brought you by

becky quick. >> i don't say it anymore. you knew grasso, right >> yes. >> you didn't, because you don't know dick, people say. that you didn't know grasso. did you -- >> mine, why is it a name then why is it -- >> because most people think you don't know him. >> i've heard that now i get it i get it now. >> i think on "halftime report," because there was a sporting goods company -- >> dick's sporting goods. >> sometimes when there's buyers and sellers, they've surrounded dick's sporting goods. >> talk amongst yourselves i'm done. >> it's 6:55. >> one final question for you. >> sure. >> new york stock exchange, tom farley's going to leave and do a spak there are more spaks out there everybody's starting a spac. is this a good thing or a bad thing? >> if tom farley, who i think is a bright cerebral human being is going to do it, i'd say it's still a good thing. >> we have a top there. >> yeah. >> dina took over here and all the bacon you can eat, right

once dina friedman took over here, i've had all the bacon, so you know, big improvements. >> in the breakfast. >> when they did the awkward thing, did they say you? >> i think so. >> they better have, because i was sitting here -- >> steve, thank you. >> i didn't even flinch. >> enjoy your weekend. >> you, too. >> coming up, we're monitoring the scene at this new york city police station that's where harvey weinstein is expected to turn himself in to authorities this morning on sexual assault charges a live report from the scene is straight ahead first, as we head to break, check out the futures. they're doing better than, you know, with nuclear armageddon back on, they're doing okay. yore wchu'ating "squawk box" on cnbc

north korea responding to president trump after he calls off next month's planned summit. market reaction and what's next for the possible talks, that's straight ahead. alexa, are you listening >> okay. >> how an alexa recorded a conversation of one family and then sent it to another user should be concerned? and a developing story shamed movie mogul harvey weinstein being charged with criminal sex acts stemming from incidents with two separate women. we will take you live to the new york police station as the second hour of "squawk box" begins right now >> announcer: live from the beating heart of business, new york, this is "squawk box. ♪ good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square andrew ross sorkin with becky

quick and joe kernen u.s. equities futures ahead of this three-day weekend looking to open up higher. dow jones up about 59 points, nasdaq up 25 points and the s&p 500 up 5 points. muted reaction from the geopolitical news yesterday around north korea and potentially the implications for a trade war with china we'll see where that all heads but in the meantime, some headlines to bring you europe's new tough data privacy regulation takes effect today. many companies still trying to make the adjustment. several u.s. media outlets were forced to shut down websites in europe while they adjust to the new rules. tronk, once called the tribune company, sent an error message saying it's looking at its compliance options i don't know how many e-mails everybody's been getting the last couple days, it's from like everybody -- >> privacy policy changes from everybody, places i had no idea -- >> you were on the list. >> right. >> and you have to opt in or opt out. >> right. >> and also, footlocker shares,

let's show you what's going on there, gaining in the premarket. the athletic footwear and apparel retailer reported quarterly earnings of $1.45 per share, 20 cents above estimates. comparable store sales fell by 2.8. that was smaller than the 3.9% decline analysts had anticipated. and be very careful what you say around amazon's echo smart speaker. it is the story of the morning apparently, alexa, yes, she is listening in all the time. amazon says one of its speakers recorded a private conversation, then sent it to the person in the owner's contact list that they were talking about! amazon calls this a rare and unlikely event, but it's looking into options to make it even more unlikely. the idea of it just being unlikely is not enough. >> right. >> i thought they just sent it to a random person -- >> they sent it to somebody in their contact list. >> i thought it was about the people they were talking about is that not true >> they didn't tell us that, but i was running through some narratives if they picked somebody in your

contact list, it had to be somebody you just mentioned, so the odds are, you were talking about them that's like running through the scenarios of what happened you were trash talking somebody in your kitchen or your living room and it sent that entire file -- >> you remember what i said about yardeni and leibowitz at the beginning of the show? we were looking for people to come in at 7:00, only people we could get. >> and alexa -- >> i like that you mentioned my name, doesn't matter what you said about me. >> i don't know if we've all had this experience. have you ever sent the e-mail that you're writing relates to somebody -- >> yes, yes. >> and then you send it -- >> the top line. our own inhouse thing, but instant message. >> there's no privacy anymore. that's all there is to it. >> i don't need artificial intelligence helping me make a jerk out of myself. >> i have a great story about that in the past, too, where cnbc managers have come in overnight to go in and root out something they sent -- this happened 20 years ago, but i mean, it's frightening

especially if you're in a management position and you say something, or non-management or whatever -- >> just in life. >> or just in life. >> yeah, bad thing a few stocks to watch this morning. better-than-expected first-quarter earnings auto desk, overshadowed by second-quarter guidance which will play into what david is going to talk about. fell short of estimates. and gap, first-quarter earnings missed forecast. same-store sales at the gap brand stores fell 4%, below estimate, as it had to resort to heavy discounts to move unsold clothing off the shelves and sales at old navy missed expectations for the first time in four quarters and we are following a developing story out of canada this morning police on the hunt for two men who set off a bomb at an indian restaurant this happened overnight in misisaugua >> not bad. >> i'm okay? just outside of toronto.

15 people were injured in the blast, some critically we'll have a lot more on this developing story as we get. >> as many ss as in mississippi in that. >> a lot of ss >> i'm going with just outside of toronto. >> we'll continue to follow the story. meantime, let's get to washington right now north korea offering a rather measured response to president trump's decision to call off next month's summit with kim jong-un. eamon javers joins us now with more on this story eamon, good morning, again. >> good morning, becky even as the president was canceling that summit yesterday, he was careful in his televised remarks to make sure that he still extended the olive branch to the north koreans that they could still reschedule this summit he said they could even still do it on june 12th, if that would work out his aides privately, though, said that is extremely unlikely at this point. so, extending the olive branch on one hand. on the other hand, though, suggesting that he's already talked to our allies in south korea and japan about who would pay for the cost of any war or military operations that could

erupt here on the korean peninsula in the weeks and months to come here's what the president said yesterday. >> i have spoken to south korea and japan, and they are not only ready, should foolish or reckless acts be taken by north korea, but they are willing to shoulder much of the cost of any financial burden, any of the costs associated by the united states in operations, if such an unfortunate situation is forced upon us. >> now, the white house was unwilling to answer a couple of key questions about all of this yesterday, including, one, whether or not the administration talked to the south koreans about this decision before it was announced publicly the white house simply not answering that particular question and then also the question of whether or not the president and kim jong-un had been on the

phone together directly. the white house suggested that their diplomatic teams, mike pompeo had spoken with his counterparts and with kim jong- jong-un, but silent on the question of whether or not donald trump and kim jong-un spoke directly the president seemed to reference a dialogue between the two men in his letter to kim jong-un, calling off the summit, but the white house not commenting now on whether or not the two men had spoken directly in the days and weeks leading up to this. so, we might have some more to learn here on how all this unfolded the key question now going forward is what does it mean for trade with china i've been talking to some aides inside the white house who suggest to me that one of the implications here is that the president could take a much tougher line on china trade, reverting to his more natural instincts. he had been sort of suspending those instincts in the run-up to june 12th. now with that off the table, the president could revert to a more hardline approach on china trade, guys. >> eamon, one of the things i hadn't realized before was just all of the things happening

behind the scenes. i knew about -- first i thought it was just because they called vice president pence a dummy, then realizing that they hadn't even sent a team for the prenegotiations for any of this, they being the north koreans, hadn't even sent a team for that, that they hadn't allowed nuclear inspectors to watch them dismantling some of these former testing grounds yesterday. i mean, all of those things spell that it was really the north koreans that weren't taking this seriously, not us. >> yeah, at some point, becky, a white house official said yesterday they just got radio silence. they couldn't even get north koreans to pick up the telephone anymore. they had been in regular contact. and remember, that is difficult to do in north korea, but they had been in regular contact, and then at some point, they simply stopped answering the phone a week or so ago so, this has been coming for a while. the question is, what changed inside north korea to push them to walk away from this what was the calculation that they made that said, you know what, this isn't worth pursuing anymore. >> all right three-day weekend. god knows what could happen over -- you know because there's going to be back

and forth, i figure. it's not just going to -- that hasn't been the way it's been in the past we say something, they say something, and it gets pretty -- you know, we've had some over-the-top rhetoric in the past it quieted down recently, but suddenly it started again with the dummy. and she also said one of the high-level officials said something about a nuclear war again, just yesterday or the day before, i think, right, eamon. >> they did. north korea talked about a nuclear-to-nuclear confrontation. the president of the united states said in his letter, you know, we have awesome nuclear capabilities and we pray to god that we don't have to use them so, the nuclear saber rattling is continuing here. >> eamon, you got an alexa >> my son does my oldest is 14 and he's get one in his room. it makes me a little paranoid. >> someone just said alexa recorded my conversation, but it was sent to yanni when it should have been sent to laurel >> you have comedians following you. >> i was hoping if trump doesn't have one, talking about little rocket man and it's sent off and they get it over there --

>> in his contact list, is that how -- >> rocket man in his contact list, and that happened! you're saying you don't know what happened. who knows? i'm blaming alexa. i am thank you. i love when we -- you know, we should just keep that ready, eamon. i love when we do the mohawk. >> no, you don't need to do that >> eamon, why don't you request that they do it to joe >> everybody needs -- >> yeah. you know how that works, right >> it's friday, eamon. >> stuff rolls downhill. >> you know what, you're going to do your thing today, weekend, you going to do that >> get ready get ready. it's only 7:10 in the morning, so you're jumping the gun. >> following eamon he's one of my select -- >> 113 that you allow in >> 112. >> you're down to 112? who do you block >> i just didn't add contessa. she begged, but i've got to get rid of people before i add i have an opening in the ls and the qs david lebbo wits is joining us

also adam ardeni adam, i'll start with you. liesman pointed out that the fed heads were taking a victory lap because they're now convinced they're not behind the curve you've been saying that for a while. >> i think this time they are either on top of the curve or ahead of the curve, and i think the u-curve, talking about all these curves, i think that's the message. because what we've seen is as the fed's been raising interest rates, the two-year's going up but a flattening of the yield curve suggests that inflation is not coming back -- >> why is inflation not a problem at 3.9% unemployment and with tariffs why is it not? is it productivity or innovation or -- >> remember when we went to school and they said it's a monetary phenomenon? i think we kind of grew out of that over the past ten years, because it hasn't been a monetary phenomenon. i think globalization, i think technological innovation and aging demography, major forces

are keeping down inflation >> david, i referenced you earlier. you were trying to address the notion that the market hasn't moved on that great earnings season it moved in anticipation of it and then some of the forward stuff is not as bullish as the current stuff, and now it may be sort of churning because of some disappointment for next year. >> i think it's a combination of things i think one, you know, the 20% earnings growth we're expecting this year was relatively priced in it's kind of you talk to everybody and they say 2018's going to be a great year for earnings so, when something becomes kind of a well-known fact, then the market doesn't necessarily respond to that information. guidance has been mediocre we still see net revisions in positive territory which points to further upside in equities in our opinion, but to ed's point, i think that there are a lot of other forces at play right now, political, monetary, federal and the market just has a lot on its mind it seems to be getting thicker skin with respect to some of the trade issues, but i think now the fed issue with some people

expecting four hikes total this year is coming front and center for the market >> neither one of you -- i read all your notes -- korea, geopolitics, is it in there, david? >> it's -- mine, it's a risk, but i think what's important to focus on is the signal, rather than the noise there's a lot of noise around all of these political issues, whether it be trade, korea, and i think what's really important is to focus on what action is the administration actually taking i think that this, obviously, the june 12th summit being suspended is a bit of a setback, but i don't think we should be making a mountain out of a mole hill i think that the way the administration has worked has really been two steps forward, one step back, and there's still potential for progress on this issue. >> the point on that is the concern -- the real concern i think is about china trade. >> yes. >> with north korea. >> yes. >> so, how do you think about that >> so, i think of the north korea situation as being almost a bargaining chip with the broader china trade negotiations at the end of the day, we don't think a trade war is going to

evolve we think a trade skirmish is a possibility. but at the end of the day, if trade between these two countries begins to break down, it's really not going to make anybody better off i'm a big believer that a tariff for a tariff makes the world -- >> one last point, ed. is this the first time the feds ever -- i mean, it's a pretty high compliment. they orchestrated this well. >> i've been at this for 40 years and the fed historically has tended to be behind the curve. >> behind. >> and now i think the bond market's telling us that it's pretty satisfied that it's on top of it, but the reality is, the fed's not the only reason why inflation's down >> yeah. and not the only reason rates are staying low with the rest of the world at, you know, 5/8 of a point or something in germany. ed yargeni, thank you. and if we talk about you, we'll use code names so it's not sent off. david, thank you. >> thanks. another developing story disgraced hollywood producer harvey weinstein is expected to turn himself over to police in

new york this morning on sexual assault charges. you are looking at live pictures of the nypd's first precinct that is where weinstein will turn himself in. this would be first criminal charge brought against weinstein since scores of women came forward accusing him of harassment or assault. weinstein has denied all allegations of non-consensual sex, but we will bring you the latest as this situation develops this morning. >> that's got to be tough, i think. he did -- he's a horrific person, obviously, i think, given -- but to be him right now has got -- i mean, the cameras and there's no redemption, i don't think, is there, from this point? >> i think there isn't, but i would also say, i don't know if you saw the jason bateman -- >> i did, yeah. >> i did. >> i think there's almost no up side at the moment in even talking about almost anything but the victim. >> right, right, but look at the cadre of -- he's one of the most famous people in the world for

one of the worst things you could possibly be famous for i don't know how you get out of bed in the morning, you know >> i don't think -- we'll continue to watch the scene. they're waiting for him to arrive. >> well, we'll watch it. it's about the victims, but we're all about watching him, so -- >> yes. coming up, when we return, dream hotels looking to add more ai integration to their accommodations we'll find out if the news about that alexa recording a private conversation has the company maybe changing its tune a bit. we'll see. the ceo will join us after the break. then later after president trump calls off a meeting with north korean leader kim jong-un, is there still a chance the two could meet or will the move throw the countries back into conflict we'll discuss that and its impact on china trade when we return thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too.

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♪ summer celebrations are kicking off this weekend millions of americans are picking out destinations for the season joining us right now is jay stein. he's the ceo of dream hotel group. and jay, thanks for coming in this morning. >> thanks for having me. >> for those who don't know about dream hotels, tell us about the brand, the different hotels that you're doing, why you differentiate yourselves. >> so, we're a branded management company we've got 18 hotels open we've got 18 hotels signed that are under development. we've got four brands -- luxury,

two what we call upper upscale brands, and one what we call upscale. so, all in the higher level of the tiers. the chat wall is our luxury brand. dream in time are our 4 1/2-star brands, and then unscripted is our four-star brand. >> what are you seeing from consumers in terms of demand across those different levels of hotel? >> well, everyone wants to stay in lifestyle hotels. we started it in 1999 with the time hotel right up the block here in times square >> right. >> and that's where even the big brands -- >> i'm just trying to get a feel for the economy right now. demand for consumers is at what sort of level? how would you compare it >> great the industry's been on a strong tear for a number of years now, and we continue to go up and up. >> we had an in-depth investigation taking a look yesterday at airbnb and what that's meant for the hotel industry, too. what do you see from airbnb in terms of competition, in terms of what you think when it comes to following the rules and regulations. >> so, the city here in new york has been putting some pressure on airbnb.

it had moved maybe a percent or two a couple years ago, but even a percent or two is a lot for us. >> a percent or two in terms of -- >> off our top line -- >> revenue >> -- from the impact from airbnb so it's great to see that start to come back as the city, as you know, has been cracking down, making sure that all the rules are followed, and looks like some new rules may be implemented. >> do you think you have to add either new services or make new capital expenditures to try to attract the kind of people who want to go to an airbnb? >> no, we're completely different. we're not staying in somebody's house -- >> of course not but i wonder, given the competition, does that change the dynamic at all in terms of what you do on a day-to-day basis? >> no. i think it makes us have to do better what we've been doing -- differentiate our products we have great fun food and beverage, nightlife, great pools, amenities that you're not going to find. >> one of the things you are doing is trying to work with technology and artificial intelligence to build it into the rooms. and that's been a story we've been talking about all morning, too, with alexa accidentally overhearing somebody's

conversation, sending it to someone in their contact list, and we're assuming it was the person they were talking about, which is why you would contact amazon and say there was a problem with these things. how do you do that safely and securely, to add these sort of amenities like artificial intelligence without worrying about a loss of privacy? >> it's tough. and that was one of our biggest concerns we're doing some tests in the time nyack property and also a dream downtown with two different versions so far, none of those kind of problems, but it's great amenity for guests to lie in bed and just say raise my temperature two degrees and not have to move. >> so, how much is it that how much of it is, you know, do a wake-up call -- you know, wake me at 7:00 a.m.? by the way, you know when you're in a hotel and press a button, some of them you can call and get an operator and say please wake me up at 7:00 a.m i always do that, even when they have the button that says the wake-up thing because i never trust the digital thing. >> yeah, i use my iphone anyway,

but i would -- that type of service is what these are good at more the mundane kinds of things that are just easy to say do this and it does it. so, i think that's where there's more opportunity >> and jay, thanks for coming in today. it's good to see you. >> thanks, guys. have a great weekend. >> you, too. coming up, when we return, we'll talk north korea saying it's still willing to meet with president trump. is a nuclear showdown on the table? we will talk about that when we return ♪ why can't we be friends >> announcer: time now for today's aflac trivia question. what was the best-selling video game of l altime the answer when cnbc's "squawk box" continues ♪ thanks, dad! break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at aflac.com.

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now back to our developing story. you're looking at a live shot of the arrival, presumably, of -- >> there he is. >> -- producer harvey weinstein. and that finally is taking place

right now. i think there are, i don't know how many counts we're talking about -- >> harvey what do you have to say about the 2004 allegation involving musha evans? >> musha evans, one of the individuals that is pretty insistent that harvey weinstein said everything was consensual, in this case insistent that it was not consensual so, but one of the stories of the -- >> of the year. >> -- of the year, sparking the me too movement, which continues unabated on a daily basis almost, most recently. now front-page news on morgan freeman -- >> in the workplace in so many ways obviously, hollywood's where most of the conversation's taking place, but it's extended to all of corporate america. this, of course, perhaps the most egregious example of course, he does, though, deny these allegations. we should make that clear. >> he denies the allegations, but at this point, there have been dozens and dozens of women who have come forward and told their stories. these charges today, we are told, concern two different

women, cases of non-consensual sex, they claim. there have been charges in the past three years ago there was charges being considered against harvey weinstein those were never followed up on. this is a different situation, and you can guess that these are going to be taken very seriously. >> given some of the tapes from the previous situation, some of the prosecutors are coming under fire for not, you know, being -- anyway, contessa brewer nearby at the courthouse. hello, again, contessa >> reporter: hi, there, joe. yeah, so, what's happening right now is that harvey weinstein will be taken into the police precinct he's going to be fingerprinted and photographed and then he'll be brought to the courthouse for his initial court appearance again, photographed. and nbc news has learned that the complaint is based on allegations by two different women, that they're moving forward with these allegations the nypd has been investigating him for some time on claims by

lucia evans that weinstein had forced her to perform a sex act. so, today he'll be in court for that initial court appearance. according to nbc news and two different sources here, a prearranged deal will have him paying $1 million for bail, agreeing to wear a monitoring device, and surrendering his passport "the new york times" is reporting that this second woman who is part of the complaint against harvey weinstein has previously been unnamed. we did hear from actress rose mcgowan, who responded to the fact that weinstein is turning himself in she said "i and so many of harvey weinstein's survivors had given up hope that our rapist would be held accountable by law. 20 years ago, i swore that i would right this wrong, and today we are one step closer to justice. we were young women who were assaulted by weinstein and later terrorized by his vast network of complicity. so, again, the police precinct is about eight blocks from the court. right now you're seeing him going into the police precinct and then we will watch for him

here in court. the media members are all standing by for that i do want to make a note that harvey weinstein's attorney has said that he continues to deny all allegations of non-consensual sex, guys >> so many things swirling around this, and listening to rose mcgowan 20 years later. >> 20 years later. >> think karma i think a lot of things. i think hollywood, and i think of, you can go back 30, 40, 50 years and some of the stories come out now that it went on for a long time. i mean, hence the term casting couch. >> it's not just hollywood, though things that this has brought out did. >> people in power. >> people in power. >> it's a dirty secret in hollywood that went on, and he may have been the poster child for it but -- >> and you have heard admonitions as recently as a week or two ago in cannes of

women saying, ey, there are more of you who are out here one note on this -- ben brafman, who is weinstein's lawyer who has been quoted -- we keep saying his lawyer points out that he says these were consensual acts. ben brafman is his lawyer, who was quoted saying that he was also martin shkreli's lawyer and dominique strauss-khan's lawyer, too. >> 50. go ten at a time that's a staggering number and probably doesn't include, you know, because it's so hard to come forward as a victim >> although easier once you have other people that's why you tend to see watershed moments like this, when one person speaks out and is listened to. >> you know who his other client was, michael jackson. >> really? >> so, a prearranged deal. that was new information we got from contessa, wasn't it, or was that -- $1 million bail -- >> he would be turning himself over, turn the passport over heard that this morning. >> so, there will --

>> contessa's here, too. >> i can't imagine -- >> reporter: yeah. >> -- the circus that the trial's going to be as well. when will we know about that, as far as timing? >> reporter: joe, you'll have to say that one more time just say that to me one more time. >> i wonder where it comes to -- i can't imagine that -- i mean, the trial is going to be just as much of a circuslike atmosphere. any idea on the timing of that >> reporter: well, i mean, for one thing, that's assuming that this goes to trial >> right. >> reporter: remember, there are dozens and dozens of women who have alleged wrongdoing on the part of harvey weinstein this is the first time we're seeing movement on the criminal side the nypd has received complaints before the district attorney had declined to file charges in the past and so, this time, they're moving forward with this we have to wait and see what harvey weinstein and his attorney decide to do with that, if they decide to let this go to trial or whether there could be

some sort of deal in the future. so, waiting on that. but what we know is that if he has agreed to $1 million bail, as nbc news has gotten from two sources close to the investigation, and will surrender his passport, that he was considered somewhat of a flight risk. that's a fairly significant bail amount, and that he has agreed to wear a monitoring device. so, again, he's going into the precinct, and that's the video you're seeing now of him going into this local police precinct in lower manhattan where he will be fingerprinted and photographed, and then brought about eight blocks away to court, where once again he'll have another photograph taken. that will be his official mug shot and then he'll have his initial court appearance and we'll be watching for all of that to happen, joe. >> obviously, some of these cases have been very difficult to prove or to line up evidence, when you have them in such

numbers, it's one thing. but again, you also have dealing with some of these situations going back more than a decade. in fact, i think some of the charges in this, today, go back to 2004, and it can be difficult to pull that together, but obviously, authorities have been working very hard to track this down in some of the reports, they say they feel they have a very strong case. we'll see what happens all right. again, this is the scene from the first precinct in new york where harvey weinstein has just turned himself over to the new york police. when we come back, the former deputy assistant secretary of the state for east asia, evans ar rev e revere will be joining us to talk about the situations out of north korea.

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welcome back to "squawk box. want to talk with the impact of the cancellation of the u.s./north korea summit. evan revere is here, former deputy chief of the mission at the u.s. embassy in seoul and former ceo of the korea society, now senior adviser with the all bright stonebridge group we're thrilled to have him here to help us understand what's happened over the last 24 hours, or perhaps what we should say is over the last several weeks that led to this moment

first of all, do you think that these negotiations, which we talk about as being off, could quickly come back on, given the letter-writing campaign that went back and forth yesterday? >> i can't rule that out, quite frankly. the president in his letter left the door open to possible continuation of dialogue and interestingly enough, my former good colleague, the north korean first vice foreign minister, in his response to that, obviously, cleared with the north korean leadership, sent a fairly conciliatory and, by north korean standards, positive message in response and indicated that they are also interested in coming back to the table. so i can't rule that out, but there is a fundamental disconnect between the u.s. and the north korean positions on denuclearization the north korean goal is keep your nukes, get rid of the sanctions. the u.s. goal is get rid of your nukes.

that contradiction needs to be resolved it's the reason we've just had this blowup, a blowup that took several days to play out and until that contradiction is resolved, we'll see what happens. >> okay, was it that conflict, which has always existed, and especially among the elites in north korea, from what i understand, in terms of trying to toe the line on the defense issue, or is this really about china, which is what president trump has seemed to hint around the edges in the last several days >> i listened to his comments and read his comments very carefully. i don't know that that's the issue here, quite frankly. the chinese have an interest in tension reduction. the chinese are keen to ease sanctions on north korea at the end of the day so, from the chinese perspective, getting the united states and the north koreans to the table is the key to sanctions-easing, something that north korea wants as well. >> why do you think president trump has hinted about this role -- >> i'm not sure -- >> that he thinks or at least seems to have signaled may have led to this? >> there was the coincidence,

obviously, of the north korean leader's visit and the second summit with xi jinping i think the purpose of that summit was to make sure that china had north korea's back as the north koreans were preparing to go to the table with the united states. but i'm not sure that the chinese put the north koreans up to this outburst. >> you know, there's some kind of grand bargaining chip that relates more to trade than necessarily the security issue with north korea. >> well, i wouldn't rule that out, but i don't know that the issue is so much north korea/china cooperation or collusion as it is a u.s./china issue. >> eamon javers told us this morning that what we all need to watch for now is that the hawkish part of the administration, if you will, might now move into power when it comes to the china trade issue in a way that they weren't before and then what does that mean to our ability to get back into these talks with north korea >> to the extent that we go down

a rocky road in the trade area with the chinese, it's going to make the chinese, obviously, less willing to cooperate on north korea. and as i said earlier, the chinese are eager to ease those sanctions on north korea, if given the opportunity. >> look, north korea has been an intractable problem for decades and decades. >> sure has. >> you go back and try and figure this out. we were very hopeful, some signs that maybe we could bring them to the table how do you kind of gauge what we've seen over the last few weeks based on what we'd seen over the last few decades before that, compare. >> the mood of optimism bordering on euphoria, both in washington and particularly in seoul has been perturbing to me, because anyone who knows anything about the north korean bottom line knows that they're almost certainly not going to give up their nuclear weapons at all. they may be prepared to carve away pieces of it or trade pieces of their program, but they want to keep that core capability so, the idea of sitting down at a summit with the north koreans at which the goal of the summit

is denuclearization, you're asking for trouble there, because the north koreans are not prepared to go down that path. >> but that's not an argument for not doing anything, right? >> no, that's an argument for staying engauged, that's an argument for talking to them at high levels, i would argue not the presidential level and i think what you'll see in the coming days and weeks is some sort of re-engagement between washington and pyongyang, possibly at a reasonably high level, to try to figure out how to unjam the logjam that we have right now. but this contradiction i would not underestimate the importance and the intractability of this contradiction between a north korea that doesn't want to give up those nukes and a united states that says it will not accept, allow, or tolerate. >> is that why north korea didn't show up, didn't send a delegation to singapore for the negotiations that were taking place? >> i think the north koreans were playing an expected tactical game with the united states, pressing the united states -- >> don't answer the phone. >> -- both rhetorically and by

that action to try to up the ante and press the united states to begin yielding on some of its -- >> if that's the case, then trump probably did the right thing by saying forgot it. >> he did the right thing. i agree with that. >> final question from me. when you think about the way investors have thought about this whole situation, they've actually, seems like, tuned out a lot of the noise, though originally, we should note, when it seemed like there were going to be some talks, the market did move higher. >> sure did. >> if you were an investor today, having to bet on this, you would tell them what >> i'm just a humble, poor, retired civil servant. but i would tell investors to take a look at the possibility that re-engagement may happen in the coming weeks both sides have left the door open to continued dialogue we're not going down the path to conflict or confrontation right now, so everyone just needs to step back, take a deep breath, but not ignore the reality of this contradiction between washington and pyongyang's

positions on denuclearization. >> evans, thank you. >> you're welcome. >> appreciate it good to see you. now to the corporate impact. we have to do it as unseemly as it might seen the north korean meeting canceled helping push up the shares of aerospace and defense etfs joining us for a look at the sector, carter copeland, president and analyst. it's a real world, carter. we don't need to -- we need to at least bring in the caveats. but that did happen. what do you attribute the move in defense stocks to, i guess the possibility that we won't have a denuclearized korean peninsula? >> well, i think, joe, the question is, is this truly anything incremental here, right? defense stocks took a massive leg up in a rerating last summer when the president started tweeting about the rocket man. so you know, i'm not sure this is new from a military posture

standpoint i don't think that's changed at all, even as we got excitement about, you know, a negotiated settlement, and then now the disappointment i don't think that's really changed the underlying outlook for how the military positions itself and how the defense contractors will serve that demand. >> it's your job to sift through all of the rhetoric in terms of how prepared the united states is for any contingency i've heard that we don't have parts for things, but then again, i hear that, you know, that this 7% gain or whatever it is that the president got in the budget is the best we've had in ten years. are we in a good position, or are we in a weakened position? >> look, i think there are some facts that you could use to kind of define how to invest in this group. i mean, the world is an unsafe place. the geopolitical landscape is certainly a complex one. and the defense budget backdrop

is, as you pointed out, a very favorable one. so, the sector is definitely benefiting from the department's desire to protect against these risks, and you're seeing that go into the budgets, and you will see that make its way into the results of the contractors over the next several years the question for investors is, you know, how much of that is priced in, right i mean, have we revealed something that's true and newly incremental here that we need to chase from an investment standpoint, or is this largely in the price i mean, defense stocks on a clean earnings basis are trading above where they were at the height of the iraq war, they're trading above where they were in the aftermath of 9/11. so, you have to ask yourself, is that an option that you need in your portfolio and are willing to pay up for. some people are going to conclude yes and some will be a little bit more wary our advice to investors is be selective in the stocks that you choose in the group to make sure you don't get stuck into something that has a very dreamy forecast attached to it. >> okay, carter, thank you

i think we went through your list and we will hopefully not have you back all the time, but you know, no offense to you, but thanks for coming on this morning. i appreciate it. >> any time. thanks, joe. >> see ya. when we return, a live report from the courthouse, where harvey weinstein is expected to arrive after being processed at new york's first quk x"ilbeig b "sawbo wl rhtack. the sun comes up, the sun goes down. you run those miles, squeeze the toothpaste from the bottom and floss to set a good example. you fine tune the proposal, change the water jug so no one else has to, get home for dinner and feed the cat. you did a million things for your family today but speaking to pnc to help handle all your investments

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now back to a developing story, harvey weinstein turning himself into police in new york within the last 20 minutes on sexual assault charges contessa brewer is at the courthouse hi, contessa >> reporter: hi, there, joe. we're expecting to see harvey weinstein within an hour or two here at the courthouse right now he's inside the police precinct being fingerprinted and photographed, and then he'll come to court for his initial appearance nbc news has learned from three sources close to the investigation that the complaint against weinstein involves allegations from two different women. and according to what we've learned from these sources, we expect harvey weinstein to pay $1 million cash bail to agree to wear a monitoring device, an ankle bracelet of some kind, and surrender his passport after that initial court appearance.

we'll be keeping an eye on it here from the courthouse there are, as you might imagine, a mass of media attention, both outside the police precinct and outside the courthouse here. we have heard from rose mcgowan and other harvey weinstein accusers, responding to the fact that the nypd is moving forward now with criminal charges. they say that this day has been long-awaited and finally, they're having some hope of justice. guys >> okay, thank you for that. of course, we'll keep an eye on it, and i imagine we'll be talking to you many a times this morning. in the meantime, when we return, is alexa listening or not? well, aditi roy will join us on the water cooler story of the day. "squawk" returns with alexa and more offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service

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♪ ♪ it's friday, i'm in love ♪ monday you can fall apart welcome back, everybody. amazon is now explaining why alexa recorded a family's whole private conversation and then sent it to a random contact in their contact list aditi roy has that story aditi? >> reporter: crazy story, becky. amazon saying it was a highly improbable but not impossible series of events which led to an echo device recording the private conversation of a portland, oregon, couple, and then sending that conversation to a phone contact the company saying the couple's alexa device mistook certain words in a background conversation as voice commands this is from the company's statement. it started out when the couple's echo was triggered due to a word

in background conversation sounding like alexa. then the subsequent conversation was heard as a send request message request. it didn't end there. the company saying that the alexa device even asked the couple to home and interpreted a name in the background as a name in the husband's contact list. they're saying this shouldn't happen again, but there are privacy concerns about consumers worried about the pitfalls of being too connected in the home. amazon's hold on the home market could be slipping, saying amazon dominates two-thirds of the market but projects that lead will drop by 6% in two years while products including the google home will see a corresponding increase the consumer watchdog is already calling on amazon to have a dedicated internal privacy watchdog at the company. back to you guys. >> aditi, thank you. joining us right now is technalysis research president bob o'donnell.

this brings to mind bumper stickers, just because i'm paranoid doesn't mean they're out to get me. >> you're absolutely right this is the consumer privacy fear everyone was afraid of when alexa came into people's houses. so yes, admittedly, it's sort of a random corner case, but the fact that it's possible at all is obviously the big concern here and we've got to see amazon address this in a way that you have to be much more descriptive and discrete in the things that it will do without this kind of random opportunity. >> so, what happens next amazon has said that they are going to take steps to fix this. can that make us all feel safe >> well, it's not going to make everybody feel safe, that's for sure i mean, look, there are things that they can do where they're going to demand a response that's a little bit more specific like, if there's just random talking in the background, clearly, they need to know that that's different from someone stopping, making a command so, there are things they can do from a technology perspective. by the way, for people who are paranoid, you can touch the microphone button on the device when it turns red, that means the mike is off.

nevertheless, look, this raises security issues that people have been concerned about, and ironically, here remember on gdpr day, with all these concerns around privacy, and this happens, so, we've got to be watching out for this. >> right obviously, this is not an amazon-only problem. this is an issue with so much more ai and so much more technology built into all of our lives. is this going to stop people from using these things, or do you think this is just the way of the future? >> you know, it's going to stop a few people, but bottom line, it is the way of the future. the issue's going to be we need more awareness and you know, ironically, like i said, it's gdpr. there's no gdpr for these kinds of devices, but we need to think fundamentally, companies need to give people a better explanation of how this stuff is working, what exactly it's doing, so they can regain the trust because at the end of the day, this is all about trust and what companies do i trust and what companies, frankly, do i not trust. amazon is in reasonable shape. if it was google, i think there'd be a lot more concern right now. >> bob, thank you for your time. good to see you. >> thanks. >> i got more details on this.

a woman and her husband were talking in the room. their house whole house is wired it sent something to a random employee of the husband's company and he called and said turn off your alexa devices, you're being listened to >> listened to. >> yeah. they were talking about hardwood floors. >> okay, that's better coming up, when we return, former senator max baucus talks north korea, china and more. then, an econ showdown douglas holtz-eakin will join us, former economic viadser chair under president obama. jason furman, they're going to square off and talk markets and jobs your muscles look good, but we should be seeing more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck!

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and a local approach with a focus on customized insights. so you and your company are ready for today. that historic trump/kim meeting called off >> i believe that this is a tremendous setback for north korea, and ndeed, a setback fo the world. >> officials around the globe responding we're going to talk to former u.s. ambassador to china max baucus. markets now. futures pointing to a higher open on wall street as traders gear up for the holiday weekend. and new this morning, disgraced hollywood producer harvey weinstein turns himself in to new york police. >> what took you so long to

surrender, harvey? >> the final hour of "squawk box" begins right now. >> announcer: live from the most powerful city in the world, new york, this is "squawk box. good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market site we're in squawk square in new york city, joe kernen along with becky quick and andrew ross sorkin futures have now turned negative after being positive most of the session. got up to about, we were up 70 or so at one point on the lack of an escalation in sort of the rhetoric north korea's response was pseudo conciliatory. anyway, i'm not -- you never know if you're getting played or not. anyway, we're down 11 now, down 3 on the s&p 500 the nasdaq continues to trade higher treasury yields are below 3% on the ten-year now that a lot of people are starting to watch the two-year to really figure out what's

happening. 2995 on the ten-year. okay, astory we've been following all morning, perhaps all year, film producer harvey weinstein surrendering to authorities in new york city on sexual assault charges he arrived at the police station little more than 30 minutes ago. this would be the first criminal charge brought against weinstein since scores of women came forward accusing him of harassment or assault. weinstein has denied all the allegations of non-consensual sex. weinstein expected to arrive at the courthouse after being processed at new york's first precinct we will have a live report from that courthouse in just a couple of minutes more on that story and of course, its impact both in hollywood and, really, across the country and corporate america when it comes to the me too movement. in corporate news, footlocker shares are higher in premarket trading. they reported quarterly earnings of $1.45 a share, 20 cents above estimates.

comparable store sales fell by 2.8%, smaller than the 3.9% decline analysts anticipated shares of nike and under armour also rising this morning nike up about 1% and saudi arabia's energy minister confirming a possible delay of the saudi aramco ipo. at an economic forum in russia, the energy minister said the oil giant would rather likely go public in 2019 i was going to say not go public this year. we've been having this conversation about 2018 literally since last fall in 2017 when i was in saudi, i think michelle, you then saw mbs -- michelle caruso-cabrera's here, saw mbs in new york just a couple months ago. >> and the head of ram caramco o didn't want to commit to a timeline. >> and we had them on at davos and it's been this rolling, but we should say, as the price of oil has gone up, it's taken some of the pressure off of them. >> what i wonder here is are they not going to list in saudi

arabia because remember, we talk about everybody's oh, is it going to be the nyse or london? this sounds like they may not even list in saudi arabia, which would be a much lower -- >> already taken -- >> a lower threshold to even get listed. >> i remember when president trump tweeted out trying to put a little bit of pressure on aramco and the saudis to list here over the london stock exchange. also, another big story following today, north korea responding overnight to president trump's decision to call off next month's summit with kim jong-un michelle caruso-cabrera's here and she has the latest. >> yeah, they came crawling back last night when you see their statement. if you were at work yesterday, here's the background. president trump yesterday, middle of the morning, put out a letter saying that the summit for june was off he was upset by some of the really ckonkaco cantankerous sts out of north korea, but overnight, a new statement -- "the historic summit is now high on the agenda between the democratic people's republic of korea and the u.s., and the

preparations for it or being pushed forward at the final stage amid the remarkably great concern of the world we would like to make it known to the u.s. side once again that we have the intent to sit with the u.s. side to solve problems regardless of ways at any time" -- >> really use the word crawling back did you need to? they monitor -- >> this is the please do not break up with me letter. >> i know, but must you -- >> please don't break up with me or is it a signal to the world that we're not the ones that are calling this off, it's the u.s. and blame them >> what if he sees that and it translates that they came crawling back. you just ruined the possibility that they're coming back -- >> oh, yeah, me, i'm the reason why. >> but really, is this -- it sounds like they have been doing so many things over the last week -- >> so, my next full-screen was, this runs in direct contradiction to everything that senior administration officials says that they have been doing >> right. >> first of all, the u.s. sends a team to singapore to do the prep meetings. nobody shows up. >> three days. >> they wait and wait. >> like a vacation in singapore. >> right the phrase was, radio silence for the last week. >> they got ghosted.

>> they got guehosted north korea, they said, promised to allow inspectors who would know what was going on at this dismantling of the nuclear testing site instead, they picked some journalists to go. one journalist admitted, we really don't know what happened here because we don't know much about this, right? >> technically, how would we know -- >> how would we know this was actually done? so, then, to add one more thing from overnight, the president has intimated, suggested at least twice this week that he saw a change in north korea's attitude now we know what he's talking about, right suddenly, they're not showing up, not returning phone calls, and he thinks he knows why he suggests not so many words that maybe it's china. so, china last night comes out and says, "we have no secret intention. as we all understand, china firmly supports, one, the peninsula denuclearization, two, peace and stability of the peninsula, and finally, dialogue we have never changed. that's from the foreign minister trying to extract themselves. >> you add it all up, and it

is -- at first, when he said he was calling it off because of their change in tone, i thought it was because he was calling vice president pence a dummy. >> right. >> but -- >> i think that certainly added to it, for sure, yes. >> but there is much more here if you're not going to negotiate, it just seems like they never had intention of negotiating in good faith and there's no way president trump could sit down with them at that point. >> what i keep reminding people is mike pompeo, the secretary of state, went to north korea twice, right and they reiterated that there had been a promise the discussion on the table would be denuclearization as we define it, right and so, if they say that that's what they're going to do diplomatically speaking, you've got to start the process, right? >> show us. >> yeah, show us call their bluff, in other words, if it's not true. and so, this is where we've arrived. >> it just leaves you in this crazy position of the, no, we're not going to return your calls, but yes, now that you've said this, we're willing to listen at

any point. >> i don't know if you want to speculate on this, but there's two other pieces to this where the china trade piece goes, given what eamon said this morning -- i don't know if you heard. he made the point that the more hawkish contingent, the navarros of the world, will now come more into power, if you will, and those talks could get a little bit more spicy >> so, i don't even think you'd have to go to the navarro wing i think if you go back and watch this very revealing 35-minute impromptu news conference that the president held on tuesday with the president of south korea sitting right next to him, he made so many things clear about what he thinks and at one point, when china trade came up, he said i think about china trade and then immediately think about the border he's talking about the border between north korea and china, and that he needs their help, right? if he gets -- i think it's a simple calculation to make -- if he thinks he's not getting any help from china on north korea, guess what, the trade talks get

that much harder, regardless of if you're a larry kudlow or a peter navarro. i don't think there's any disputing that that's very logical. >> interesting what the chinese response is, not that we're still backing you up, it's we've never changed, so maybe we weren't necessarily helping you as much as you thought we were to begin with. that never changed. >> there's no passity there i pretend to understand. >> i don't think you're supposed to link trade with nuclear trade with north korea. >> it's inevitably part of the mix. >> it's a real world, but you're going it hear that. >> that is very much establishment political thinking and diplomatic political thinking -- >> let's bring in max baucus, speaking of establishment -- >> i'm not convinced of that, actually. >> stick around. >> joining us is max baucus, former senator of montana and also u.s. ambassador to china in the obama administration and senator, what context can you add to this conversation >> well, frankly, i think that china's very much in the driver's seat. china is very close to north

korea, obviously they're the big 800-pound gorilla. 90% of the korean economy, north korean economy, depends on china. and china will find a solution that suits china i think any solution in approach in finding a solution to all of this has to include china. >> and when china says that their position has never changed, what should we read into that? what does that mean? >> well, i think that's true i mean, china wants stability on the peninsula. they really don't like kim jong-un because they can't control quite as much as they'd like, but kim and president xi have now met twice in the last couple months. they're getting closer together. they're finding an accommodation. china just wants stability china wants denuclearization china would, frankly, like to see a solution so that u.s. troops leave south korea so that that thad missile system leaves. that's always been their goal and they'll stick with it. they think very long term.

>> do our needs and desires match up with china's? >> well, they do in many respects one, we don't want kim to push the button china doesn't. we don't we don't want a military solution on the peninsula. china doesn't either so, we're in alignment there i think we also tend not to want regime change. that is, we want to give kim security that he can still be in charge china wants that, as do we i think both would like to see north korea get a little bit more economic aid, the sanctions relieved a little bit. both countries want that. >> so, why is this so difficult? >> the big difference, though, is that -- it's because, basically, there's so many complications to finding a way to denuclearize the peninsula. it gets to proliferation, it gets to testing. it's extremely complex

you don't just with a wand get it done. and that's why the better approach, frankly, is what's going on now, namely, there's not a cancellation, but a postponement i think during this postponem t postponement, because both sides left the door open, we should cool it. dispense with all this superheated rhetoric that just causes more problems on both sides. and that's hard for triumph ump, but he must discipline himself, tweet less, not criticize kim, not fawn over kim, but be a statesman and be more direct about this, then work with north korea, with south korea, japan, and also, as i said, with china. china is so key to this. >> you do sound hopeful that there is something that can be resolved, some resolution that we can reach that's better than where we've been >> i'm hopeful, but it's going to take a long time. diplomacy is tough, grinding work it just takes a lot of work. it's a lot of details. it's not glamorous, usually.

but when we finally get some kind of resolution, then president trump and the president, chairman kim can sit down but you've got to -- you've got two big egos like trump and kim, each think he's the smartest person in the world and loves the flame of publicity, rather than getting -- more the flame of publicity rather than do all the hard work. that's probably not going to work the way they both want. >> all right, senator baucus, thank you for your time. >> you bet thank you. when we come back, ceo call-in session. the chief executive of xo group is here, parent company of brands like the knot that's a wedding marketplace he's going to tell us why the business of getting hitched saw an uptick after the royal wedding. we will be right back. ♪ so happy together what do advisors look for in an etf? don't just track an index, help me meet a client's need.

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harvey weinstein turning himself in to police in new york this morning on sexual assault charges. that's what you're looking at there, at the first precinct

meanwhile, contessa brewer's outside the courthouse in new york with what's next for the disgraced hollywood producer, and what's the time frame now, contessa shouldn't be long, he'll make his way over to where you are, i think. >> reporter: right, because we're just about eight blocks away, joe. we're expecting him within about an hour to be here currently, he's being processed at the police precinct, fingerprinted, photographed, and then he'll come here for the initial court appearance nbc news has learned from three sources close to the investigation that the felony complaint against harvey weinstein stems from allegations from two different women the nypd has been investigating for some time from lucia evans, who says that weinstein forced her into an oral sex act when she had shown up to the miramax offices in tribeca in lower manhattan. and so, he'll come here for his initial court appearance and then nbc news has learned that a preplanned deal will have

harvey weinstein paying $1 million in bail, agreeing to wear a monitoring device, an ankle bracelet, and then surrendering his passport before he's then released and the charges proceed against him from the district attorney here so, we're at the court i wanted to give you a sense, you see the media outside of the police precinct. back out here live, there is a crush of media here as well with different pens where the officers have set them up so that there can be a clear pathway to bring harvey weinstein in we're expecting to see him go right up here and into the court. we'll be looking for that. when it happens, we'll bring it to you live. >> and we'll know exactly what the charges are at that point, contessa, by the end of the day? >> reporter: yeah, we'll know what the charges -- yeah, we'll know in court because they'll read it out in public and we'll be in court as well. by the way, one more interesting thing. he was seen carrying books with him into the police precinct i wanted to mention what they are. one is a biography of the late film director ilea kazan, who

directed "from the waterfront" and "a streetcar named desire" and the other was "something wonderful," rodgers & hammerstein's broadway revolution read into that what you will. >> i have no idea what that means. >> contessa, what do you think >> reporter: well, i mean, ilea kazan testified during the whole joe mccarthy trials, the witch hunt on hollywood during the blacklisted part so he was a pivotal figure right then and really seen as an iconic film director in hollywood. i'm not a psychologist i did study psychology, but -- >> in hindsight -- >> reporter: and also -- >> yeah, wrongfully, there are some people who have stood up for him after his death, ilea kazan -- >> do you think the expectation, the reason he's bringing the books, even though they have this plan, is because he thinks he's going to be possibly -- >> reading material? >> well, no. i mean, that's what i'm wondering. i will say, by the way, covering many trials -- >> there may be down time.

>> -- people bring books because there is a lot of down time. >> he obviously put a lot of thought into which books -- probably not a good idea to be bringing a book about roman polanski, obviously. i mean, $1 million to harvey weinstein is not -- i mean, it's a lot of money, but that's why i asked -- >> it's easily accessible. >> that's why i asked what the charges are, contessa. is he looking at 20 -- is it a 20-year term we're talking about? i mean, i just wonder what we're talking about in terms of what the down side for the rest of his life is. it's bleak >> reporter: and especially considering that these are complaints based on two women, but the investigation continues. "the new york times" reports that the grand jury is still looking into other allegations -- >> that's what i mean, yeah. >> reporter: -- of sexual misconduct and also the financial payout, so they're looking at the money trail as well to see if there could be charges filed on the financial transactions. >> yeah.

okay so, once we find out the charges, then, i mean, you midly jump to what the, exactly what the parameters are for sentencing, but he's, what is he, 64, 65 i mean, he may never -- you know, this is all a legend at this point and it's obviously until proven guilty, but you're looking at some serious time here for what we're talking about, right >> reporter: yeah, significant. >> contessa, real quick, is it possible -- and maybe this is also another reason you bring the books -- is it possible that the judge won't accept the prearranged settlement >> reporter: yes, that's always a possibility, they go in, they make the deal with the prosecutors. then it has to go before the judge, and the judge has to okay that, and the judge could say, no, i think he's a bigger flight risk than $1 million and a monitoring device would warrant, and so, i'm going to change the terms of this agreement. that's always a possibility. and by the way, the lawyers are always very clear with the

clients to say this is our deal with the prosecutor, we'll agree to this, but the judge makes up the rules. >> okay. contessa, we will be checking with you throughout the morning and the day. we appreciate it when we return, we've got a lot more coming up how the parent company of wedding site the knot taking on the $100 billion nuptial industry we're going to talk to the ceo of xo group right after the break. stay tuned you're watching "squawk box" right here on cnbc

welcome back to "squawk box. the wedding industry rings in billions of dollars each year. michael steib is here, ceo of xo group, more on the business of love and the industry's uptick from the royal wedding i didn't even really think about that so, the uptick for the royal wedding would be what? >> well, it was nice for us. we were featured as the number one app of the day in the app store on a day when everybody's thinking about weddings. it drove some additional downloads. but generally, people in the u.s. are getting married they need help from the beginning, when they're discovering what kind of a wedding they want to have. they want to book a catering hall, book a deejay, create their registries we give them an app that does all of that and they do it with us. >> tell us about the change and how much people are paying for weddings right now. >> people spend about $32,000 -- >> on average. >> -- on average on their wedding. >> and how many people is that >> it's about 1.8 million people

throwing weddings every year. >> no, is that a 100-person wedding, 200-person -- what am i getting for $30,000? >> 100 friends and family at an event at a big, expensive hall with entertainment and food and all that stuff there's all this excitement about categories like travel an food and auto. in the year you get married, you'll spend more on your wedding than all of those categories combined. >> right what about wedding invitations have people gotten off of the paper-based? i'm hoping that you can take the cost down a little bit. >> so, what we offer, we've got this great product for managing your guests. you can upload your guests, send them the rsvp, the invitation, digitally and hook in that you're sending paper invitations as well. a lot of people like to have that keepsake from the wedding so for a lot of couples, they do it digitally and a lot of couples keep paper as a part of it as well. >> what's the average price for a wedding present these days >> the average price is about 70 bucks. it depends a lot on the retailer

you choose it depends a lot on the couple wedding registries is about a $15 billion business every year. we're the number one -- >> do you get a cut of that? >> we're a platform that helps you create a registry at any -- so, if you want to register at macy's or bed bath & beyond or zola or amazon or any of the others, you create a wedding website with us, you can go off and create your registries, send it off and manage your guests and when the guests buy the gifts for you, they come right back in. >> is the cash coming directly back >> we do cash, experiences, gifts, and charity you can ask your guests for all different ways to support the family -- >> but even if you buy something at macy's --

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welcome back to "squawk box. looking for preliminary read on our april durable goods. and here's the numbers down 1.7%. we were looking for a down number this is a little bit more down than we were hoping for, and it is preliminary it can change. it sequentially follows up 2.7 strip out transportation, though, and it looks a whole lot better, up 0.9, almost double the expectation, and that follows an upwardly revised 0.4. the important capital spending

proxy, capital goods orders non-defense, ex-aircraft, up 1%! that's pretty nice, up 1%, better than we hoped and much better than the minus 0. 9% we followed looking at shipments versus orders, also above expectations, up 0.8%, although last leook, i was down 0.7%. looking back, autos obviously put more negativeness in the headline number. you stripped it out and you looked at everything that followed on the preliminary, it wasn't bad the big news, almost 40 bis points on a ten-year bund, over minus 60 basis points on a two-year european shot we are getting close to 2.50 on an italian ten-year. so, the flight to safety in the bunds accentuated by what's going on with italy, which is underscored by politics. joe, it's a busy world out there! >> rick, and we have to be renaissance men. there are so many different

stories that qualify as biusines news at this point that you've got to read. i've got to read, you know i'd like to go watch netflix, but i've got to read reading, reading, reading. >> just don't read the balance sheets of those european banks you don't want to have a depressing holiday. >> i've got to keep up i've got to read what jason furman says, what douglas holtz-eakin is constantly saying, and i've got to read president trump's tweets, which i'm going to read right now. just moments ago, very good news to receive the warm and productive statement from north korea. we will soon see where it will lead, hopefully to long and enduring prosperity and peace. only time and talent will tell >> roses are blooming again. >> roses of love after caruso-cabrera put that they're crawling back. i want to take that down don't translate it into something that kim jong-un can read anyway, he also tweeted -- democrats are, in this -- i'm

not going to say it, but boy, it was unbelievable the amount of giddiness and glee that the talks were off with the left anyway, democrats are so obviously rooting against us in our negotiations with north korea, just like they are coming to the defense of the ms-13 thugs, saying that they are individuals and must be nurtured or asking to end your big tax cuts and raise your taxes instead. dems have lost touch." all right, joining us now, the aforementioned american action former president and former ceo director douglas holtz-eakin, on set. and harvard school professor and former council of economic advisers chairman jason furman i was thinking people retweet you, jason, but i think we follow each other. we've got a love thing going on, too. and i think i follow you >> i love you. >> and i see things, jason, where in my view,you're one of the good ones, you are -- >> one of the good one what's?

>> one of the good left-wing -- >> i was waiting -- >> left-wing economists. it goes without saying for you, doug, because you're on the right side. >> i'm doing something wrong. >> jason, lately, this is what i think, if i can admit -- correct me if i'm wrong in sort of paraphrasing what you're thinking big keynesian stimulus from the tax cut could result in a gdp number that was above what we've seen recently, but the capital investment we were hoping for from the tax cut hasn't been manifested yet, as hard as the right is looking for this, it hasn't been seen yet have i got that right? >> yeah. well, first of all, i think two things one is the data's so noisy that even if there was a big effect, we wouldn't necessarily be able to see it, and vice versa. we might get great news, but it's because oil prices are up, not because of the tax bill. i certainly think we will get a boost from the tax cut this year from a keynesian sense >> right. >> what really matters is what

it does for our medium and long-run growth in terms of increased investment capital spending that i'm not seeing a whole lot of evidence for, and i'm not, you know, hugely hopeful that we'll get a big long-run boost. >> because you -- you know, we have a little -- we go back and forth on this. you're going to be away -- there's going to be a way to explain away the 3%-plus that we might get that we didn't get for the entire eight years and you're just sort of pushing out the day of reckoning you figure '19 we won't get it, '20 we won't get it, and by '21, you figure we'll be below 2%, 2021, or back in the 2s again, right? >> i think a reasonable expectation for growth over the next decade is around 2% that combines what our demographic situation is now with what our productivity growth has been historically i think we should be doing everything we can to make that better, whether that's expanding trade, increasing investment, and the like i just think it's irresponsible

to build a budget on that. you just saw yesterday, cbo came out and said president trump's budget would add much more to the debt than president trump admitted, because cbo has numbers that are much more accurate than the administration's >> so, doug, you're going to respond. just know that jason has harvard university plastered all behind -- you've got a taco stand behind you with a little drawing of a piece of pizza >> thank you for that. >> is jason going to be right about these things >> i don't think so. i think if you want to look at the investment piece, which is the crucial piece -- i'd agree with that -- it's going about as one would expect you can't change all of this overnight. the first thing you should see is businesses bringing money back because they have to pay the taxes anyway so, they have a business decision, where do you want to do business now, u.s. or abroad? they're bringing the money back. that's good. next thing you can change are your plans, and we see record capex plans in morgan stanley

data, goldman sachs data, nfib, and now the durable goods orders were very strong, the core defense/non-defense ex-transportation is exactly what you'd expect to see, and that should translate into investment you roll the clock forward to, you know, 2020 or something, you have to see better productivity growth, you have to see better wage growth. those are the litmus tests of this in the end. >> in the crazy world we're in, i guess you at this point figure these tariffs are a head win and could get out of hand, and you can't use security on autos. that's just the way you do it because you've got the law on the books from '62, but -- >> it's ludicrous. it really is. >> it's ludicrous. whereas, jason, as i said, this crazy world. the only place that trump gets any support on these tariffs are from your side of the aisle with some democrats in the midwestern states, i think. >> i think my side of the aisle is the economics profession, and i think he's getting just about zero support there for this ludicrous notion first they said national

security for autos you know, everyone made fun of that then you had wilbur ross on your show yesterday saying economic security i'm not sure what's worse, raising prices for american consumers or costing jobs for the autoworkers in this country that depend on global supply chains and would potentially suffer from this as well -- >> look at doug nodding. >> this is so nice >> was wilbur just on yesterday? >> this is so nice, watching you guys too bad you're up there in -- are you in cambridge, jason? you guys could -- >> i am. >> you could have lunch later or something. >> you advertise this is a showdown we're not doing very well. sorry about that. >> you're really not i'm trying to figure out what you gentlemen can agree to disagree on, but -- >> everything else >> everything else yeah what a world, though, right, jason? i mean, in terms of just every day -- we live in interesting times. at least it's fun to wake up every morning, right >> i'm sure. we could talk about how to solve

the budget deficit and how our taxes are historically low right now and we can't solve it without a balanced plan that raises revenues and cuts spending >> i have found it just enormously entertaining to see all the old obama guys become such serious people about the budget they left behind something $10 trillion in debt -- >> we cut the deficit from 10% of gdp to 3% it went from 10 to 3 -- >> you came out of the recession. that just happens, jason you left behind a budget deficit with $10 trillion over the next ten years and now they have all this religion about no fiscal space and all that -- >> paid for all of the long-run plans, cut the long-run deficit, doug it was lower after we left than when we arrived. >> what was the deficit when you left for the next ten years? $10 trillion, right? now you're all up in nickers in a twist over an additional $2 trillion what about the first $10 trillion >> outlook for health care, health spending, long-run entitlements, better after obama left than when he came in. >> better, with the aca growing

at double-digit rates and medicare growing at 8% -- >> look at the number the cbo puts out, doug look at those numbers. >> they don't add up, jason, and you didn't do anything about it. >> all right that's better. thank you. jason, thanks. i'm glad you're in cambridge now, separate you too. >> we return in a moment thanks for the debate, guys. it took guts to start my business. but as it grew bigger and bigger, it took a whole lot more. that's why i switched to the spark cash card from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything. and that 2% cash back adds up to thousands of dollars each year... so i can keep growing my business in big leaps!

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breaking news. we are getting the first word on

charges against harvey weinstein, who turned himself in this morning police say weinstein was arrested, processed, and charged with rain, criminal sex act, sex abuse and sexual misconduct for incidents involving two separate women. we have watched him as we all saw in the 7:30 hour there and you're seeing tape of him walking into the precinct as we speak. >> carrying books. >> we talked about the books that he was carrying and really, this is the culmination of a story that's now lasted and really changed the face of both hollywood and corporate america and just the whole tone of the conversation in america about the me too movement in the meantime, we're going to segue now if you are hitting the skies this holiday weekend, you've got to beware, because it may be more crowded than usual. phil lebeau joins us with more on that story.

phil >> reporter: andrew, the skies, the roads, the rails, it's all going to be more crowded this weekend. we are looking at a huge weekend in terms of travel, one of the busiest since perhaps 2004-2005. and we're seeing an increase, not only in people traveling by car, which is where most of the people travel from, will be using to travel, a little over 36 million traveling that way, up 6. 8% for those traveling by plane and those taking a train, a bus, or maybe a cruise ship this weekend that's also seeing an increase but for the majority of the people who are driving by car this holiday weekend, they are going to be seeing higher prices at the pump. $2.96 a gallon is the nationwide average, but a number of states it's already well over $3 a gallon that's up 60 cents compared to last year. and in terms of the airlines, you're right, these planes will be packed this weekend, and this summer, the airlines will be adding more seats and more flights because of the strong economy and high consumer confidence more people want to get away

the average domestic airfare, if there's any good news for people who have booked a trip this summer, it's down 12% compared to three years ago however, concerns about jet fuel as well as whether or not the airlines will be able to deal with higher costs are one reason why you're seeing the airline index under pressure but guys, it will be a very, very busy weekend for travelers. back to you. >> all right, phil, thank you. >> thank you, phil. joining us now, flight aware ceo daniel baker good morning, daniel >> good morning. how are you? >> you know i'm a flight aware junkie, so thank you for being on tell us what we've got to know this morning >> well, the airlines have been saying this is going to be a really busy, not just holiday weekend kicking off the summer, but just a busy season they're looking at the demand and the ticket sales and low prices and just a lot of demand for traveling. so, it's going to be busy, which means get to the airport early the planes are going to be full. there's no chance you're going to have empty seats next to you. as we look at the travel forecast and the weather

forecast for the next few days, it's going it be a little rainy. we're looking at thunderstorms in the southeast that's going to affect delta's biggest hub, atlanta hartsfield, and it's going to be pretty we in the northeast as well so, it's not like one of those winter systems where we see, you know, massive cancellations and delays, but people should come to the airport prepared. there's going to be some delays. there's going to be some impact as the storms roll through, but that's summer, right thunderstorms roll through, it impacts the airport for a little bit, and then people kind of pick up and you're on your way. >> okay, so, news you can use. help us with two things. how is it possible that if i look at the flight aware app or go online, you guys often seem to know, sometimes minutes, often even a half hour or more, before the app, whether it's delta, united, what have you, about when the flight is leaving or not >> yeah, so, we're working really hard, not only to source a lot of information, not just from the airlines but from airports, from air traffic control, as well as fusing that with our own engines that are -- >> we've got to break --

>> daniel, we have breaking news here harvey weinstein is leaving the first precinct there he is getting into the car that brought him to the first precinct where he turned himself over to police if you hear the statement from the first precinct, they say that harvey weinstein was arrested, processed, and charged with rain, criminal sex act, sex abuse, and sexual misconduct for incidents involving two separate women. at this point, we do expect that he'll be taken down to the courthouse and be waiting there. >> do we know -- and i don't want to speculate -- was he cuffed there the reason i ask is if you look, it appeared that an officer put his seat belt on for him just then. >> i don't know. i couldn't see his hands >> a little bit -- >> he was cuffed our producers are saying he was cuffed, in fact, in that car now making its way to the courthouse so, we will continue to monitor what's been taking place this morning. >> from what we've been told,

from what we've reported, we had been anticipating there was a deal cut ahead of time that he would be posting $1 million bail he would hand over his passport so that -- and he will wear a monitoring -- >> one of those things put on your ankle. >> yeah. >> bracelets, yeah and we also just, contessa brought us the charges that were filed, which include -- and they were all seerks brious, but the charge, obviously, carries with it a long, long potential prison sentence >> again, weinstein and his lawyers have aid that all the relationships were consensual. that is not the story that at this point dozens and dozens of women have come forth with. >> contessa brewer is downtown and has been monitoring the situation for us, and we want to go to her with the latest. contessa >> reporter: yeah, so, we're expecting harvey weinstein to arrive here momentarily as he

has left the police station. he'll come here. and again, we now know the charges against him -- rape and sexual misconduct. we know that this was two different women at this point, and we are expecting to see the complaint itself after the arraignment here at court. when he gets here, he'll be photographed again for his official mug shot, and nbc news has learned from two different sources that the prearranged deal involves paying $1 million in cash for became it involves wearing a monitoring device and surrendering his passport as well very significant moment in this me too movement, as harvey weinstein and the allegations against him really kicked off this time's up/me too movement then to come here and now to be facing charges criminally, he's really the first person that we have seen facing criminal charges for this so, we will be keeping our eye out for his arrival at any moment he's expected to arrive just off camera now and to be taken

inside to the courtroom where he will be arraigned today for this initial court appearance just to let you know, the nypd has gotten involved at this point because they've been investigating claims by lucia evans that she had claims by lucia evans and that harvey weinstein forced her to perform an oral sex act. we're waiting to see whether she's one of the plaintiffs. in the statement today, they thank the women for their cooperation and said they were applauding their courageousness in coming forward. here is the video of harvey weinstein coming out, again, we're expecting him some eight blocks away now at manhattan district attorney's office to come into court here to have his arraignment on felony charges and then to receive a copy of the complaint that details the allegations against him. the grand jury, by the way, is

still convened and looking into the financial transactions when harvey weinstein was allegedly paying off some of the women after the encounters his attorney continues to say that harvey weinstein insists that all the sex was consensual. he denies any allegations of nonconsensual sex, guys. >> thank you we have to switch back to breaking business news that philip has for us. fiat chrysler. >> reporter: this is a massive recall that has been announced by fiat chrysler it includes a warning for people who drive a number of very popular vehicles 4.8 million fiat chrysler vehicles between 2014 and 2018 are being recalled because the cruise control may not be able to be disengaged by drivers. that is why fiat chrysler is issuing a warning.

an immediate warning for all drivers of these vehicles and there are 14 models involved they are told stop using cruise control until a new software fix is put in place at dealerships that will ensure that the vehicle can be controlled under certain circumstances. the vehicles jeep, ram, dodge, chrysler we won't go down all of right now but we'll have them on cnbc.com fiat chrysler telling owners of roughly 5 million vehicles in the united states stop using cruise control until a software fix is in place for the vehicles there may be certain situations the drivers won't be able to control the vehicles if they're in cruise control. guys, back to you. >> thank you 14 different -- >> 15. >> 15 different vehicles including popular ones like jeep i've been using it my entire life you have the brake you know what i mean you forget where the button is.

>> unless it doesn't -- if the brake i don't know that would be frightening. we'll get down to the new york stock exchange jim cramer joins us now. the overnight session was about north korea's response because we're 12 or 13 hour difference we waited and it happened last night, obviously, somewhat conciliatory response. and now this morning you saw president trump's tweet which was conciliatory. >> yeah. >> it seems to be dictating where the overall averages are not a whole lot going on down about 44 on the dow. >> it's really quiet i think the thing to watch is oil. oil seems to be rolling over because the saudi/russian collusion, perhaps it puts more oil on the market, which would be highly disinflationary. the interest rate is down. i don't think anyone is focussed on it. remember three it was all people

talked about then let's watch weinstein under three is big. >> and the more people either watch -- >> i got to jump in. >> we want to go to contessa harvey weinstein arriving at courthouse now >> reporter: we're downtown in lower manhattan. just watching for harvey weinstein's arrival here they cleared the space for him to arrive. this is a significant moment dozen and dozens of women who accused harvey weinstein of everything from harassment to rape over the years say they feel vindicated to see justice finally arriving today and for harvey weinstein a real difference because remember as the name sake company. he's seen his company dissolve and he's no longer a part of that his name in tatters at this point. and now arriving to face felony

charges. here we go felony charges on rape and sexual misconduct. allegations from two different women, at this point, the nypd pushing it forward saying their courageousness in coming forward, their willingness to work with investigators both in the district attorney's office and nypd >> reporter: do you have anything -- mr. weinstein -- really a pivotal moment for harvey weinstein and the women who are willing to come forward and say publicly at the risk of their careers to say that something happened to them felony charges today against -- guys, the prearranged deal nbc

has been told about has harvey weinstein paying million dollars in cash for bail and wearing a monitoring device and surrendering his passport but to be released here we'll get more details after the court hearing is or. >> thank you very much we'll be right back.

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we'll get a quick check on the markets as we're heading into the last trading day of the week three-day weekend coming up here it looks like the s&p futures are down by about seven points now. the dow futures down by 56 the nasdaq down by 1.5 it's a reversal from what we saw earlier in the morning the dow looking to open by more than 70 points when we started three hours ago. take a look at the ten-year note and see what is happening. yesterday you saw the markets reverse course as the three-year -- or the ten-year fell below 3% on the yeel. the yield is below at 2.94%. a bit of a switch and reversal you never know what is going to happen into a three-day weekend. particularly one the beginning of the summer doll drum season the unofficial start of summer

you have the three day memorial day weekend coming up. >> did we leave anything out today? >> no. >> china, north korea, harvey weinstein, stock market, alexa. >> umm, a good series coming up in hockey and nba. and the u.s. open is coming up >> all right. >> and the indy 500. >> we'll see you back here on tuesday morning. right now "squawk on the street." ♪ good friday morning! welcome to squauk on t-- "squawk on the street. futures have gone red this morning after a couple of days of stocks trimming their losses. retail earnings in focus europe is mixed. more political instability in italy and spain. ten year below