good morning here are your top five stories at cnbc global headquarters. breaking news out of london. the stock exchange now returning to normal after a technical delay delayed the opening. warren buffett and jamie dimon is calling for an end to a widely used wall street practice. president trump talking trade with the japanese prime minister at the white house today. carl icahn reportedly building a stake in one well known company. and why an rv maker is sending a warning sign about the economy. it's june 7th and "worldwide exchange" begins right now ♪

we have a great team i was referencing that song about 20 seconds ago you played it, good job. kudos. good morning welcome from wherever in the world you may be watching. i'm brian sullivan we'll try to build this city on the stock futures because if you're getting ready to work, consider wearing a raspberry beret. your rbi has to do with prince, we'll explain. a higher open this morning, not a lot. we're up about 41 points on the dow futures. still may see some gains coming off yesterday's 300 point rally. tough talk on trade. italy's political problems all be darned, looking pretty good for the nasdaq as well also on the rise you have to keep an eye on ten year bond yields once again. because we are creeping inching being sort of pulled back toward three. look at that 2.99% so get ready for those red

graphics right here on cnbc. ten year yield hits 3% should hit it today in fact if we see the continuation of the moves we have seen in the last couple of days oil also moving higher coming off of yesterday's drop for that big surprise inventory build which sent prices down many traders seeing that big jump as unsustainable. we'll find out by the wti crude and brent crude up about one quarter of 1%. japan and long long higher domestic stocks, they declined and in europe, we have some slight gains across the board as led by the 40 in france. that's your big gainer let's stick with europe because we are getting breaking economic news out of the eu plus get more on the delayed opening of the stock exchange. >> yeah, so you've got it. the latest data has come out at 0.4% for q1 reading.

of course this is below the fourth quarter reading of 0.7% and the slowest growth that the eurozone has registered since 2017 much of the data came out disappointing but at the last ecb meeting draghi played down some of the concerns and said he expects the growth impact to be transitory and going for the numbers to pick up a little bit. we have seen euros spike you can see behind me a euro/dollar is up about 0.4% because there's expectations that going into the meeting the ecb meeting next week, they may start sounding a little bit more hawkish. so we heard from the chief economist yesterday who suggested that perhaps it's time for them to start thinking about whether or not they should start unwinding the asset purchase program. and of course the head of the german bun disbank they should think about winding down the asset purchase program at the end of 2018. that has boosted the yields as well as you're referring to.

one quick point on the ftse. the uk index opened one hour later than usual it opened up 50 points higher, but it's dropped about 50 points it's a big week as far as uk politics is concerned, we have key brexit votes coming up as well back to you, brian. >> we'll keep an eye on the index. all right, joining us is james liu, to sort of tie in everything we have been talking about in the last couple of weeks and why, james -- good morning, by the way. >> good morning. >> it's 5:04 in the morning. >> great to see you. >> let's start off on a happy note has most of the easy money been made in the stock market already? >> last year and between this year, the market was going up. because it was about unsynchronized, unfettered growth and we're seeing a much more healthy market this year i mean, it doesn't feel great but it's a lot healthier in a lot of the risks are being

priced in. >> so that's -- it's interesting because what you're saying is making money the easy way. you can throw a dart and make money last year. for the last couple of years for that matter. that's a better scenario, that harder is better, why is that? >> i think so. because what you're looking at is, you know a lot of risks that are out there. they're either country specific. argentina, turkey in the headlines in the last few weeks. they are either macro, based on interest rates fears that the fed may overtighten or they're structural the specific factors for long term diversified investors, you know, those will hopefully will be resolved. we think they're less of a concern that many investors believe they are the structural - >> less of a concern >> less of a concern, yes. we still like international equities here. it's been a tough slog here. it's a more difficult time getting the returns but if you're disciplined here, meaning you're investing based on valuations and looking at where

the earnings growth are we think it's a positive environment. >> we were not -- not we, but many people had been concerned about 3% yields on the ten year. it's not bad but it was on the march to 3.5 or 4. we fell back off of of the italy turmoil. we're back to 3% this morning, do we have to fear 3% yields >> not 3%, no. at some point we think that the neutral rate will be a lot lower. if we get to 4, 4.5 it will tighten to the financial conditions 3% is still very, very low given how flat the yield curve is. >> history suggests that you're indeed correct, but opponents to that will say, well, it's not the absolute number, but the momentum of the trade and the fact that we were so much lower just a year ago. >> yeah, so it is about shocks right, so what you saw during the taper tantrum in 2013, 3% was not exceptionally high then

but it was a big shock to the system some of the shocks were the structural issues, dollar denominated debt for instance, that's a big problem if interest rates rise too quickly that can shock the system, but overall if we get to 3% even higher than that, you know, in a measured way, which is what the fed is aiming for, you know, of course the fed has their meeting next week, then you know the system should be able to absorb that. >> what is biggest risk globally then now >> where we are in the cycle. >> where is that where are we in the cycle? >> we think we're fairly late cycle. look at the u.s., unemployment at 3.8% as of last week. we're pretty late. so the biggest problem is either that, you know, we basically run out of capacity, you know, run out of workers in the u.s. and then some of the structural problems that have been a concern for investors abroad start to become serious. >> so should our viewers and listeners worry more this year about return of capital than

return on capital? should they stop trying to make money as much and worry more about how to keep what they have made over the last eight or nine years? >> you want to be balanced but it's a fair time to be invested. global growth is real. there are some who believe it's a mirage or it was a flash in the pan last year. we think it's real obviously some of the numbers have slowed down especially in europe but, you know, we think that this is a trend that's going to continue if that's the case, then international, you know, growth and returns will still be positive even if they slow down a bit in the u.s. so you know if you diversify internationally we think that you can still see good gains in the portfolio. >> optimism there. listen, you took complicated stuff and made it clear, thus the name of your firm. two of the most powerful men in the world are joining forces with a warning for corporate

america. jamie dimon and warren buffett say that so called short termism is harming the economy and so they are calling on public companies to reduce or eliminate the practice of estimating quarterly earnings dimon and buffett making the case to becky quick in a cnbc exclusive last night. >> america -- the largest companies in america are owned by literally 100 million people includes veterans, retirees, teachers we feel a tremendous obligation to deliver in the long run to build up great companies and therefore corporate governance is important i really learn and this by listening to warren, some of the ills and problems of people making short term forecasts, particularly earnings forecasts. not transparency, not openness, it can put a company in a position where management, you know, from the ceo down feels obligated to deliver earnings. >> well, see, when companies get

where they're sort of living by so-called making the numbers, they do a lot of things that really are counter to the long term interest of the business and i have never seen a company lose performance -- whose performance has been improved by having by some forecast out there by the ceo that we'll earn "x." because it's sending -- it's not only sending the wrong message and delivering the wrong results to the company and to the country, but it's teaching the people that work under him or her that quarterly performances is the end -- the end game i tell our managers, just pretend you're going to own -- it's the only business you and your family will own for 50 years and you can't sell it and you'll make the right decisions. >> powerful stuff. you can catch the powerful interview at "squawk box" this morning at 6:00 a.m. we'll get some comments from a couple of fund managers about

what they think of that. what if the companies stop issuing quarterly guidance as a fund manager how does it change how you invest and who you invest in? we'll find out all right, well, if you own these three stocks listen up because they're in focus today number one, allergan carl icahn has built up a small stake in the company and there was a letter pushing the company to overhaul the management it is unclear what his intentions may be, but he's a long term supporter of the ceo five below on the rise the retailer reporting better than expected first quarter earnings and they boosted the sales forecast for the year. finally okta, it reported a smaller first quarter forecast and it's expanding the operations in the u.s. and europe

don't tell you that we don't bring unknown names. okta, a name for this morning. we are just getting started on "worldwide exchange." up next how america's labor shortage is hurting the real estate market. also, why a company named after a norse god may be a very important incar ditoand what it's saying this morning landon dowdy has that after the break. this cnbc program is sponsored by -- ibm. e unexpected friends. e unexpected friends. these zebra and antelope. they're wearing iot sensors, connected to the ibm cloud. when poachers enter the area, the animals run for it. which alerts rangers, who can track their motions and help stop them before any harm is done. it's a smart way to help increase the rhino population. and turn the poachers into the endangered species. ♪ ♪

all right. welcome back today may be the best day of the year because look at that it is the annual vladimir putin call-in show on russia now, if you're not familiar with this, this is an annual event. this is a real thing, folks. russian citizens ostensibly chosen from random get to call and ask vladimir putin any question that they see fit of course, we are going to monitor this event for you and we'll bring you any headlines that may develop out of the annual vladimir putin telethon all right, now to norse gods and large vehicles shares of rv maker thor under pressure this morning after the rv maker posted an earnings miss this would be a canary in the bigger coal mine we have more. >> analysts were expecting $2.58 a share and revenue was in line

with estimates though. the labor costs have moderated, it's experiencing price increases in certain raw deal and commodity based part and that's caused by head winds of the imposing of the steel and the aluminum tariffs other actions and higher warranty costs, but thor says it should offset the higher costs over time. half of the materials comes from canada, and thor says bad weather in several markets did hurt the start of the retail selling and delivery season, but the company is still confident of strong sales growth this year that's thanks to the improving u.s. economy and continued consumer demand. it says it's seeing sales growth in the high single digit to low double digit percentages in states such as texas, california and florida. shares of other rv makers also falling in concert today look at this rev group and winnebago.

we are seeing the tariff talk. >> i love talking about this segment of the economy it's nichy and it's cool and "b," people view this as a purely discretionary item. there's no reason to own one, but you buy it because you want to so it's a real indicator about the consumer economy, overall. does thor remain relatively confident? because they are the leading voice in the economy >> so they have been struggling with rising material costs and labor costs even before -- >> but this is different than whether or not the dowdy family wants to buy the rv. >> you don't see me driving the rv >> you're living in california - >> i have talked to bob martin the ceo and they're confident, but at some point it will cost the company or it's going to cost the consumer. they also doubled down on production we saw them add another plant. air stream back in february. >> air stream very high end. >> and very hot too. the cool thing to do as a millennial is to redo those and make them trendy again.

>> physically, if you touch them in the sun because of the silver outsides - >> aluminum. >> you got it. nothing gets by you. big story on thor. a high stakes sit down president trump hosting the japanese prime minister at the white house today. will that meeting calm tensions on trade or ramp them up and redrawing the map. some stunning new images from outer space showing the utter destruction from mount kauilea in hawaii. the latest on that developing story when "worldwide exchange" comes back

all right. welcome back beautiful shot of the capitol building there hello, 5:20. out of the fine city, the president is hosting the japanese prime minister shinzo abe at the white house today let's get more about what's on that agenda with nbc's tracie potts who's live at the nation's capital. >> good morning. they're talking about the north korea summit, but before that, president trump heads to canada for the g7 and according to "the washington post" he really doesn't want to go because he doesn't want a lecture from u.s. allies on trade. canada and the europeans are furious they'll be paying more to ship steel and aluminum to the u.s. president trump imposed in tariffs last week. it's expected to be the main topic at tomorrow's g7 summit in canada. >> i regard this as much like a

family quarrel i'm always the optimist. i believe it can be worked out. >> the other countries do not expect to work things out but president trump is likely to get an earful from long-time u.s. allies. >> when the bush administration 43 imposed steel and aluminum tariffs it was eventually overturned by the world trade organization. >> canada is responding with its own tariffs. even some republicans fear this could start a trade war. >> tariffs is a very controversial issue and he should listen to congress. >> mexico, not at the meeting, also faces u.s. tariffs. they have already responded by taxing american pork, cheese, apples, potatoes, bourbon and other products "the washington post" reports president trump considers the g7 a distraction from his upcoming meeting with north korea's leader japan's prime minister shinzo abe heads to the white house today to talk about that

and they have already developed a relationship in fact the two have talked more than 30 times, brian, since president trump's been in office. >> tracie potts, live in washington, d.c., thank you very much let's talk more about what may be at stake with that big meeting with the japanese prime minister joinings us now is robin harding from "the financial times. robin, we have talked about in the states about our trade fight with canada, about the eu, about mexico and about china but we have kind of left off japan which is odd because it's a massive trading partner to the united states. what do you believe will be job number one for prime minister abe in d.c. today? >> well, for prime minister abe this is all about north korea. and i think the fact it's happening at all shows how nervous japan is about this summit between president trump and the north korean leader in singapore next week.

prime minister abe is determined to make sure that his message is the last thing in president trump's ear before he goes into that meeting as for trade, the japanese don't want to talk about it at all if they can avoid it. in fact, one japanese official i spoke with about this said he couldn't even predict if trade would come up at the meeting between prime minister abe and president trump. which i think shows you just how enthusiastic the japanese are about talking trade with president trump. >> what do you believe that shinzo abe's strongest negotiating tactic is? what does japan have to offer us donald trump likes to have a tit for tat so to speak. he wants -- we have this to offer, you have this to offer us what is japan's strongest position >> well, in north korea, japan is closely aligned with the u.s. japan's top objective is to see the scrapping of north korea's nuclear weapons, so i think

japan will be a staunch ally on that on trade, plenty of things that japan could offer but it wants to offer them in the equal negotiation. originally wanted to offer them in tpp but i think what mr. abe can do for president trump at this time is just be a friend and japan does not want any confrontation with the u.s. right now. so when it comes to the g7, whether europeans and the canadians are going to be angry, i think we can count on prime minister abe to cool things down, to take president trump's side a bit to not be as aggressive and hostile as some of the other u.s. allies may be on trade issues at the moment. >> robin harding, the bureau chief in tokyo, we appreciate it have a great day all right. let's get a check on the other top headlines outside of the world of money and business. philip meadow has more. >> hey, good morning house republicans are expected

to meet later this morning to focus on immigration legislation. hard-liners and moderates are still at odds over what to do about dreamers moderates are looking for a path to citizenship and more conservative members reject that notion meanwhile the number of immigrants trying to illegally enter the u.s. rose last month border patrol agents arrested about 2,000 more people in may than in april. totaling over 40,000 it was quite an unusual sight for some drivers in ohio traffic cameras capturing this driver going in reverse on a highway. the suv exits and then continues to reverse down the other roads. all while otherwise seeming to obey the traffic signals authorities say that no one was hurt and they believe that the car may have been having some transmission problems. and nine foot gator in florida refused to go down without a fight. it was hog tied which was wandering around in a neighborhood where children play as they were trying to get it into the truck, the gator head butts one of the trappers and

knocks this poor guy out cold. the good news is he was only out for a few seconds and eventually his team was able to relocate that massive reptile back to you. >> i'm not in the business of telling people what to do, but if your car is having transmission problems where it only goes in reverse, my idea is to pull over, use your cellular telephone to call for help and wait till help arrives >> a smart idea but maybe he wanted to show off the mad driving skills hard enough to parallel park, but what that guy did was incredible. >> maybe he was going forward and everybody else was going in reverse. ever think about that? >> you got me there. still ahead on "worldwide exchange," no more nine foot gators but we have some big opportunities in small cap stocks we'll give you a few names to consider as the russell 2,000 hits new highs. and the catch of the day, the video that's got everybody talking. d e machging stick around

calling for an end, a big change that warren buffett and jamie dimon want to see from wall street. we'll tell you what it is and bring you exclusive comments from both men ahead. labor pains, how the job market is taking a toll on one part of housing. bottom's hundred, how a foul ball turned into fair game during a padres game it's thursday, june 7th. you're watching "worldwide exchange" on cnbc.

and that video by the way may be the most exciting thing to happen at the padres petco park this year hey, welcome back, by the way. 5:30 here on the east. good to have you with us, i'm brian sullivan here is a check of what's leading cnbc carl icahn is buying a small stake in allergan. and there was a letter sent to the company to overhaul the management it's unclear what icahn's intentions may be but he's a supporter of the allergan ceo. and one was using vulgar language about women he made the comments in new york and obviously we are not going to tell you exactly what was said. coinbase announcing it's buying keystone capital. this comes as the crypto exchange looks to become a

full-fledged s.e.c. regulated broker dealer. no doubt more on that throughout the day here on cnbc. here's how your money and investments look right now stock futures indicating a small jump at the open 54 points for the dow futures and the s&p and the nasdaq slightly in the green as well. also in the green more importantly, bond yields guess what we are inches away from 3% yet again on the ten year bond 2.99%. we call that one basis points in the biz. also watch oil yesterday, huge inventory build in oil sending oil prices down a couple of a percent. kind of surprised everybody. oil back on the move higher again today. we're a week and a half out of the arguably the most important opec meeting in a couple of years that will take place in vienna, austria. watch oil and inventories. let's talk about your money, your markets and what's happening globally david cats, good to see you.

which want to ask every fund manager today i presume about the op-ed that warren buffett and jamie dimon wrote, becky quick did an exclusive with them, they wrote that short termism is harming the economy we meaning dimen and buffett encourage all to move away from providing quarterly share guidance and as a fund manager, would you welcome the elimination of quarterly earnings quarterly guidance >> we would not. these are the two smartest guys in business. we respect their opinions and they're right on the longer term but we think a necessary evil of being a public company is that you're accountable over the short term, which could be in the quarters if it's not the quarters it's the year if companies don't give guidance analysts are still going to try to predict what they're going to do for the quarter there will still be disappointments and miss

we find when companies stop giving guidance actually the stock is impared by that or getting a mark down. because it shows a lack of conviction in europe it's every half year. every six months if dimon and buffett are saying if you issue a number, we'll make 24 to 28 cents for the quarter, you're sort of bound to that by all means you're going to try to do that whether or not it's taking from future earnings. >> they're 100% right, that's a problem, but it's a necessary evil of being a public company we prefer that companies look at it on the annual basis but at the end of the year they have to make the extra two or three cents up on paper it looks great. we think it's early and our hope is that the companies don't do that now because it would make for -- make for a more difficult environment certainly given the uncertainty going on geopolitically. >> there's the expansion, the atlanta fed thinks we can do

almost 5% this quarter for the -- for this country t corporate earnings were off the chart. >> we think that the dow is focused on the geopolitical issues if the trade issues get resolved we think that the market can look at the earnings and this was the best quarter in probably about five years the earnings are growing nicely. companies are doing quite well the corporate tax cut really has been a windfall. companies are investing in employees and dividends are going up significantly all bullish for stocks >> i know you like what you call value technology stocks. we don't usually those two words together what in your mind, give us examples, what is a value technology stock >> that would be a good technology company but selling under 16 times earnings. so cisco is a wonderful business great cash flow. very good dividend sells at about 14 times earnings we like that a lot

qualcomm which is caught up in the china geopolitical concerns, we think they have great upside. it's at 14 or 15 times earning. >> and the ceo speaking to jim cramer last night. we'll hear more today about the -- about trying to get that one through. if you're interested in qualcomm pay attention to jim's interview. you like media a big space. one that we are familiar with by the way. give us a media stock that you like and why. >> okay, so we think companies like cbs have very good long term prospects and sell under ten times earnings right now, a whole - >> there's a huge -- maybe there's a reason it's under ten times. they're in a massive fight. >> but both groups want the stock price to go higher we think something better is going to happen either the management is going to continue to manage -- with redstone as the ultimate owner. >> and the war between cbs, viacom and the redstone family, you you're willing to ride it

out? >> yeah. they're one of the media companies that's not only a survivor but they're prospering in the environment they should be worth 14 or 15 times earnings when you have netflix selling at $150 billion and cbs is in the $20 billion area there's tremendous opportunity there. >> cisco, qualcomm, cbs, some real ideas from david katz we appreciate it. >> thanks a lot. all right, time to get to the other top trending stories landon >> that's right. well, indiana shut the doors after staffers revolted over the owner's canceling a planned pride event. despite employees and patrons leaving the gym in protest over the cancellation the gym owners doubled down on the homophobia in an e-mail a crossfit legal researcher who called himself chief knowledge officer unleashed a stream of tweets supporting the owners crossfit's verified national twitter account said i'm crazy proud of the gay community and crossfit

later the crossfit account tweeted an update, effective immediately, russell berger has been placed on unpaid leave. you have to check out the photos new satellite photos show the dramatic changes in the kilauea volcano that's causing in hawaii's big island. in addition to the destruction of homes and roads, the lava has filled in the iconic bay it shows the before and the after displaying the power to change the size and shape of the island itself. >> incredibly dramatic. >> unbelievable. >> a lot of people are moved via helicopter it continues to get worse. it's been a bad situation. luckily that area of the island is slightly populated. i guess that's the only upside okay, we have -- this is my favorite trending story. >> i know this because -- >> you filed it. >> i didn't say a word we did a couple of teases. i'm a minor father's fan, padres. >> father yourself or --

>> no, the padres. >> a padres fan made an amazing catch with her beverage. now, seated in the upper deck behind home plate, a woman caught a foul ball in her nearly full beer. to the delight of the other fans in the section she finished off the drink. working around the baseball still inside the cup that's some team spirit. look at this she chugs this thing she's still going. >> anheuser-busch put out the tweet if anybody can put us in touch we are what, we'll buy her a ticket with a beer to the padres game. this is the most exciting thing that happened to the padres in a decade. >> in a while. >> i say that as sort of a semi-frustrated minor padres fan. a cool story. >> quite the catch. >> apparently it did bounce behind her and then plop in. still though - >> hey, better than i could have done. >> her name is gina demarco. >> wow you would remember that. >> i'm in the news i read the news.

>> breaking news. >> you know what we call that move in the industry dowdiesque thank you. >> thanks for having me. sticking with the sports, golden state came from the early deficit. and the warriors have the commanding 3-0 series, thank you refs in game 1 kevin durant had 43 points made it look easy. warriors could clinch the series with a win in cleveland tomorrow just lobbing up threes everything is going in coming up, housing's labor pain how a job shortage is hurting one key part of the market diana olick has more ahead. and warren buffett and jamie dimon with a message to corporate america, end quarterly guidance we'll get re omon the major story and an exclusive interview with those two gentlemen at 6:00 a.m. stick around

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all right. welcome back thank you for being with us. 5:43 in the east good morning the stock futures indicate it could be a relatively -- not a great morning but a pretty good morning for the stock investments. the dow is up 40 points. of course we're coming off of yesterday's big gains. the stock market is in the middle of a nice little run, something to pay attention to. all right, let's turn now to something else that is key to pay attention to -- jobs and housing. and there's something happening

in the labor market that connects the two that could take a big toll on real estate. diana olick? >> this may sound backgrounds but the shortage of skilled construction labor is causing an oversupply of new apartments which will continue for a few years. so how is that possible? all right, well, it's all because developers were trying to meet the high demand for apartments several years ago during the recession when home ownership plummeted to the record low but it took them a really long time to build what they started because they didn't have enough labor. so the construction industry lost over 1 million skilled workers during the housing crash and most never returned so a lot of the new buildings that were supposed to be finished when demand was high were not so - >> so what happened in the supply that was supposed to come out of the '16 pushed into '17 and what came on in '17 got pushed into '18 and now it will be pushed to '19 it has been a real challenge because every year we think aha this is the peak supply, it will

decrease now but what's been happening is it gets bumped into the following year. >> the number of apartments completed in the u.s. hit a 30-year high in 2017 according to real page, but occupancy was good at 95%. reit analysts are watching the supply very closely because demand is falling as home ownership rises. also, because of the labor shortage the skilled labor that is available is much more expensive. meaning developers can only get the math they need on the high end of the market but demand is strongest at the low end and that's where supply is leanest that's the conundrum, brian. >> it's a big story. i want to ask you another big story, mortgage rates. it was interesting the ten year yield shot up like a rocket and with all the trade turmoil they have come back down. it's back on the rise now. where are mortgage rates right now and how closely do they really track the ten year --

>> well, they track it loosely that's what the experts will tell you when the yield fell and mortgage rates started to come down, they came down to the lowest level since april 20th, i was talking to the mortgage nerds does that mean we have a chance now, you can get in at lower prices, they said hold on, the trajectory is always going to be higher for this year. that's because of a lot of other factors because of the ten year. it will fluctuate depend on what the ten year will do the ten year will go up, because of what's going on in the economy and it would take the whole show to explain. they're moving higher again and should be back at the levels we saw in april if the yield goes over three. >> and many of the hottest areas of the markets, you have talked about how there's no inventory you can't sell a home unless there's a home to sell mortgage rates are on the rise we have seen in certain blue states like maryland, new jersey, you cannot deduct all your property taxes and change your mortgage interest is this a triple whammy on the

downside for housing >> it's triple in certain states, double in the others the problem is affordability the gains in the prices are widening so you're seeing them move higher faster and that's because of the very, very lean supply a house across the street from me put up an open house sale on it and then two days later it sold you're seeing such lean supply across the nation. that means that prices are higher. >> should have priced it higher. >> do you think? >> priced to move. well -- did i say that price, i said that price plus $50,000 thank you. on deck, we are on the hunt for big returns in small cap stocks we'll bring you names to consider for your portfolio. plus, a symbolic milestone for one of the greatest musicians ever to walk this ieah. its your morning rbi it has to do with prince stick around

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welcome back up topping your corporate news, two of the most powerful men in business teaming up to kill quarterly wall street guidance jamie dimon and warren buffett say that the companies should end the practice of issuing the forecasts every three months they call it short termism and they spoke with our becky quick last night about why companies need to make this change >> america, the largest companies in america are owned by literally 100 million people like teachers and we deliver in the long run to build the great companies and therefore corporate governance is important. one important step -- i learned this by listening to warren is some of the ills and problems of making making earnings forecasts. not transparency, not openness, not having quarterly reporting it can often put a company in a position where management, you know from the ceo on down feels

obligated to deliver earnings. >> all right that's just a small part of what the two gentlemen said you can catch the full interview coming up in "squawk box" starting at 6:00 a.m. eastern time it is a biggie. all right, in fact, let's talk more about this andrew ross sorkin with a look at what's coming up along with that big interview it than a couple of days -- has been a couple of days, spectacular interview with howard katz. >> the big interview of the morning the one that you mentioned and beyond the short termism is something you'll be hearing a lot of from them, becky got them talking about all sorts of things. politics you'll hear from warren buffett on uber for first time -- for the first time in a meaningful way so there's a lot of great nuggets in the interview and by the way, history in the making because they have never done it before together. you have never seen warren buffett and jamie together former governor jeb bush is going to be with us.

by the way like we -- i would have said that the jamie dimon/warren buffett thing was sort of a drop the mike situation but then add in jeb bush after that, you can add wilbur ross to the conversation in the 8:00 hour a lot to talk to them about and the former ceo of honeywell is going to be our guest host a lot of big names commenting on a lot of big issues this morning. >> we'll look forward to it. a huge -- it's bigly, it's a bigly "squawk box. andrew, thank you. joining us is mark travis, and i want to talk about small caps, the domestic economy and your picks in a minute but i can't not ask you about this buffett and diamond news. you're a fund manager, i'm sure you look at this do you think that companies should take their advice and end quarterly guidance >> well, brian, you and i both know it's a silly dance people go through every quarter you know, they whisper a number then they lower a number and

they jump over a number and then the analyst community claps for the number so, you know, i think there's probably some long term merit in what mr. buffett and mr. dimon are proposing. you know, i think it goes really to both sides of the street though, brian. i think when i'm -- you know, i glance at the article, i know you have read it and i have listened to you on the squawk box here, but you have to go back to the mid '70s look at the '60s and '70s the turnover rate was 20 or 30% a year we dropped commission rates to make them almost free on, you know, may 1, 1975. now the typical fund manager has you know over 100% turnover. so you've got a lot of churning and activity that's probably not in my view as good -- going to create long term in value as not. mr. buffett talk about the ideal holding period is forever. you and i both know that private

businesses in our community, gosh, i'd like to own a share of that you buy a share of that private business you won't turn around every other day and buy it or sell it. that's how that value is created. i think that's why a lot of people prefer to be taken private so they don't have to go through that silly dance. >> we have seen a number of public companies drop by 50% in america in the last 20 years could this -- if companies listen to buffett and dimon could it be good for folks like you? active management is so hard with the booming etfs, but would it place more pressure on the good fund managers because you have to separate the cheat from the chaff -- the wheat from the chaff if you will. >> we have interns in in the summer, and the first priority is does it generate cash, so you know i want a business that generates increasing amounts of cash whether it's a dry cleaner, a gas station or a public company.

with the passive indexes you now have people buying things. not that i have a position of one way or another i'll use the example of netflix. i had negative free cash throw of $35 million and today it's in the billions they have to own it, so it keeps going on up. so it's all those things are curious to me. but anyway - >> we hear you let's get to why you're here i didn't mean to though you on the proverbial earnings bus, we have been talking for years you can handle it. >> we have football season coming up. >> don't get into the jags now let's wait until august on this one. >> do it till we die. >> i like fund managers who invest in stocks that are based around them. consolidated to mocha. i have only talked about it one time to david winters a deep fund value manager this is a land company in florida, based near where you're

another. why do you like the cto? >> it's been one of the largest land owners in florida in the c corp, there's a huge disparity between cost and the value. today they have got probably 8,000 acres all centered around the i-95 lpga intersection a lot is under contract. what they have done to try to defer the tax like mr. buffett prefers to do is they have done some 1031 exchanges into income producing properties so a lot of that land is under contract today. a lot of it will close you know, we have been involved with that company for a long time both as a debt holder and the values we think are materially higher than the $60 share price. >> i like it cto consolidated to mocha. thank you. see you soon by the way, your morning rbi was 35 years ago that prince changed his name to the unpronounceable

symbol by the way, prince would have been 60 today. one of the best artists of all time "squawk box" is next 6,000 feet above sea level. but how do you really know that the beans journeyed to the port of mombasa and across the pacific? that you can trust they're 100% authentic? ibm blockchain. a smart way to track every step, ensuring this coffee did indeed come from 6,000 feet above sea level. and not a foot lower. ♪ ♪

good morning welcome to a special edition of "squawk box. it would be a big day if we only had an interview with warren buffett. but today we have buffett, one of the most famous investors with jpmorgan's ceo jamie dimon, one of the world's most powerful banker. >> i believe this is the first time you have ever done a tv interview together. >> i'm thrilled to be with you, becky and warren. >> it's a "squawk box" exclusive and it all starts right now. ♪

>> live in new york where business never sleeps this is "squawk box. >> good morning, everybody welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick. our guest host for the hour is steve grasso, a director of institutional sales at stewart frankel and steve thank you for being here. >> good morning. thank you for having me. >> we'll talk about short termism and what investors really want to see you'll join in on the conversation in a moment. >> can't wait. >> let's talk about the u.s. equity futures and yesterday was a big up day for the futures you'll see this morning the green arrows are continuing once again. dow futures indicated up by about 43 points and the s&p futures up by over 2 and the nasdaq up by 7 points. the london stock exchange returned to normal after a glitch delayed t