it's friday, june 15, 2018 hopefully the wind will be blowing again in shinnecock. "squawk box" begins 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. happy friday i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. yesterday was a mixed day for the markets. the dow was down, the s&p and nasdaq were higher this morning there are som arrows weighing on things. s&p is off by 10, the nasdaq off by 13. look at treasury yields. yesterday the yield sunk further, down to 2.948% this morning 2.928%

probably has something to do with what we heard from the ecb yesterday. we'll talk more about that in a moment check out what happened overnight in asia. you will see that the nikkei ended up by a half percentage point. hang seng was lower, and the shanghai was off by 0.7% in europe and in early trading already taking place, things are a little mixed the cac is higher, up by a third of a percentage point. stocks are flat. in germany, the ftse, italy and spain seeing pressure. in london, stocks down by 0.7% in spain, down by almost 0.9%. >> a couple big stories we're watching president trump expected to announce tariffs on chinese goods worth around $50 billion. we'll head to washington and talk about all of that in a couple of minutes. regulators in china close to approving qualcomm's $44 billio merger with nxp semiconductors

reuters reporting that the deal has not received a final green light. shares in both companies are higher on that news. another big deal this morning to talk about, at&t completing its $85 billion acquisition of time warner that comes after the justice department said they would not seek an injunction to stop the massive merger we'll hear more about this this morning at 8:30 with randall stephenson other stocks to watch today. adobe systems second quarter earnings and revenue beat forecasts. results were driven by strength in the digital media business, which includes the creative cloud software shares are down today as adobe expects third quarter revenue to fall in line with estimates. they have given expectations they should stay out of the short-term expectations busin s

business h & m is lower this morning. they are trying to reduce a record level of inventory. >> the white house is planning to release the list of products from china that will face a 25% tariff kayla tausche has more sounds like the chinese are ramping things up, too this gets us back to the question of whether we are looking at a trade war >> this ends that one-month truth that the treasury secretary was doutding in t itoe middle of may. the first step is releasing a new list edited down from a preliminary list released two months ago of products that would get charged at the u.s. border from china. the new list is about two-thirds the length of the lidge nall li -

original list. according to the a.p. the value of the products in the new list is roughly $35 billion, two-thirds the original goal the white house may stily to reach the $50 billion figure by adding new products to the list. here's the catch, only items on the original list could be taxed immediately. the white house is seen as moving quickly to put these tariffs into effect, circulating talking points wednesday and uploading the products to a database for implementation. the white house has not commented specifically about our reporting yesterday. here's what the press secretary said >> since i'm not making any announcements, it would be hard for me to give details of an announcement we're not quite ready to make. whether or not we will, we'll keep you posted. beyond that i can't get into details. >> the spokesperson for china's foreign ministry said today the country would be retaliating immediately as they have said before we'll see what that list looks

like and what china does in response >> kayla, what does this mean? i try to figure it out it's a frenetic policy it seems we're dealing with in terms of what we're expecting from the chinese and what we want you hear the zte decision, how we are dealing with things, are there areas where we will cooperate and areas where we want more cooperation from them? >> i heard for several weeks that the president was not likely to implement these tariffs until after the north korea summit was over. i also heard he was still in favor of doing so and that he believed the u.s. would be negotiating from a position of more strength if the tariffs were in place rather than just threatened that's one element you have the zte deal, but there's a report in china overnight that a merger between qualcomm and nxp semiconductors has been approved.

now people in the market are saying that was the quid pro quo here maybe it was the zte reprieve for the clearance of that merger and that the economic issues and trade issues will be dealt with separately on a longer-term basis. we'll see if that merger gets cleared that would be an interesting development. i'm told the president believes he's negotiating from a position of strength if the tariffs are put in place >> for so long we have seen trade negotiations as part of a national security sort of broader discussion maybe that's what is being split at this point. those two issues won't necessarily be linked. >> this is different than the steele and aluminumimports -- >> i mean we're cooperating with the chinese on these issues because they're helping with

north korea, maybe we're breaking that bind >> critics say they still need china's help with north korea. now is the time to have promises secured and put the fine print of this denuclearization agreement together that's why the secretary of state was over there it's time to secure real commitments. at the same time you heard the president say china has gone soft at the border with north korea. maybe they're not able to do as much as they say they are. and he wants to move forward >> kayla, thank you very much. kayla tausche. moving to the broader markets, this week the fed announced a rate hike of a quarter percentage point on wednesday with two more likely later. in europe the ecb declared it would end its buyback scheme to walk us through the events, we have brett ryan from deutsche bank and jack cafferty from jpmorgan private bank. what is the joke

>> caffry. >> as i was saying it, i know jack it's not that i don't know jack. >> it's in the ballpark. >> maybe i don't know jack, by the way. >> it's in the ballpark. >> you're not the first person to call me jack cafferty >> okay. so, help us with where you think the market is right now relative to what the fed has now done relative to the idea that we're still growing. europe seems to potentially be slowing at this point, now we will throw tariffs on top of this >> okay. so let's start with the fed. the fed gave us more hawkish outcome this week, dialing back the forward guidance as expected, raising the 2018 dot that was a toss-up between this meeting and last meeting they did raise the 2019 dot as well so we have a modestly more hawkish outcome there. the ecb started off hawkish with signaling the end of qe, but

then went dovish and precommitted to a period of not raising rates through the summer of 2019. where does that leave us ten-year rate is unchanged for the week, and the bund is down about 7 basis points >> once again, it looked like we were about to hit 3% >> we did hit 3% we were dragged down by europe >> this is a global game again >> part of that precommitment is buying an insurance policy on the part of draghi given the recent events in italy. buying more time there the second quarter is not going to rebound as strongly as it is in the u.s u.s. looking at 3% plus growth in the second quarter. it doesn't appear europe will be bouncing back as strongly. so they may need more time that's why the governing council, the ecb governing council did what it did yesterday. >> jack, what do you do about

all of this? >> you come back to expectations i think expectations today in the equity market are more reasonable than in the middle of january. we think you can turn good enough growth into 8%, 9% earnings growth. we wind up 12 months from now probably high single digits higher >> did you see the -- some of the articles are at 4% in the second quarter i saw that, i like it, but it makes me nervous that's hot >> at the same time when you have europe, you can only raise so fast, right your real rates -- >> once again they're holding us and their money will come in here >> right >> you don't want -- you see the euro yesterday it's perfect timing. leaving a week from today, right? i'm hoping for 110

>> i wonder why you were watching the euro so much. >> think about that. just take my dollars we don't need to do an exchange really, i don't think, right >> one for one >> hard for me not to smile about this >> one thing we kept hearing for the last six, eight months on the set were analysts and investors coming in saying we think there's a bigger opportunity in europe than the united states. >> let's do a quick sweep of the markets today. euro stocks are up about 1%. s&p is about 4%. u.s. ig credit down 4.2% high yield credit down 1.25. emerging markets down 1.7 5. i think there's more stock gains to come, the economy will grow 3% plus in the u.s things are starting to diverge a

bit across markets that's something that people should be cognizant of as the fed continues to raise rates the fed is getting more confident in its rate hiking path >> i don't know if you saw the interview earlier this week with paul jones, he thinks interest rates should be going higher, and if they go higher he believes equity markets melt up as a function of that. >> i can't disagree with that argument if it's the beautiful normalization that people talk about, and that we don't have mix-ups along the way, and that the fed can manage a nice gentle glide upward path. >> jack, i don't know jack so tell me -- clearly, i apologize. it's an early morning. >> yes early morning. basically if we sat here at end of january, it appears everything was perfect unfortunately we're priced for something closer to perfection

than what we'll wind up seeing if politics get messier, if trend growth goes back to levels we were talking about three months ago, six months ago we have a world messier. the u.s. is maybe an island of better in that messiness that explains why u.s. equities are up mid single digits but that said, it's an integrated world >> 40% of the s&p revenues come internationally. we can't ignore what happens in europe or ignore what happens in emerging markets >> we have not talked about the tariff issue is this just headline noise? >> here's the situation. 2.5 trillion in u.s. imports last year. 50 billion of chinese goods, another 100 billion of aluminum and steele, th, that works out % of total imports is that a huge deal? probably not

the problem is retaliation and when you escalate it trump threatened to slap tariffs on autos if we add autos into the mix, that's 360 billion more of imports, now that's 20% of imports, and that's a problem. it's an escalation problem >> if you're running a portfolio this morning, either professionally or you are a retail investor thinking about this, is there something you're supposed to do about it in terms of positioning yourself one way or another >> at this time i don't think there's an obvious trade i think what we wind up coming back to, we see markets have trends in that regard summer tends to be more volatile i think what you should be doing now isthinking where will i find the dislocation they seem more likely than not over the next couple of months we've been talking about a return of volatility

we were getting something that was starting to fade as we were sitting here before we came on set, joe mentioned a technology company had great earnings last night, but the near-term guidance, yeah, it's what i told you three months ago. >> get rid of that guidance. fix it >> sure. >> doesn't mean it's not going to happen. that's the difference. >> there's guidance and there's guidance >> right if they don't tell us and know it -- >> you can't hold back >> i know. >> having a company beat by a dime and effectively the stock is off 4%. >> to be able to guide to within a benny for something that will happen a quarter from now or a year from now seems -- >> we would all like to think the world is -- >> i would like to think i would have more rateable revenues and more subscriptions and better coa control of my costs. that's guidance. does that mean i will earn 1.76 versus 1.75, that's shades

>> all right thanks >> thank you >> jack cassidy, thank you >> thank you apple reportedly expecting lcd models to make up the majority of the iphones this fall apple's transition to oled screens could be slower than some expected. the iphone x uses oled screens which contribute to the iphone's cost, that one $999 price tag. under $1,000 >> in other technology news, six former and current fitbit employees have been indicted in a trade secrets case the proceedings allege the individuals were aware that trade secrets were stolen and possessed without organization the six people were employed by

jawbone before working for fitbit f the companies reached a settlement agreement last year >> an amazing story. i don't know if you remember jawbone, you know, i don't want to call it a challenge, but failed in large part but part of the yishg waissue w they spent so much time worried about this lawsuit >> rather than focusing. >> any time that can happen. microsoft got dragged down in this justice department stuff. >> it's fascinating how this particular case, i think, had such a big impact. >> two yearsago i was wearing one. you were, too. >> i used to wear the jawbones all the time >> what counts steps >> fitbits >> my kids wear them >> we talked about it yesterday.

we want to get a lot of exercise >> while you're in europe, you're walking >> food. >> you are also walking everywhere >> right but we'll walk a lot take a lot of tours. we're thinking about it. >> the fitbit is good. i have it on my counter, just have not put it on >> you know what >> get 10,000, 12,000 a day. >> we can get a lot of steps if we go to the steps in rome >> that works. when we come back, why mcdonald's is ready to change the way you drink. and later this morning our exclusive interview with at&t chairman and ceo randall stephenson, that's at 8:30 eastern time >> randall stephenson.

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♪ all right. welcome back to "squawk box. mcdonald's announcing today they will start testing alternatives to plastic straws at some locations in the u.s. this year.

it's also switching to paper straws at all of its restaurants in the uk and ireland. mcdonald's has come under pressure from environmentalists who say plastic straws are not biodegradable and necessary. >> have they nailed a way to make the paper straw -- >> i don't know, but this is one of the worst things for the environment. >> when the paper one gets too soggy at the end -- >> you have to go with just drinking it at the end >> it's not that hard to -- >> drink like a normal person. >> yeah. >> but if you have the lid off in the car -- >> i know. >> there are lids, like on coffee lids that you can sip out of instead >> here's my question about the straw thing. it feels like we're at a tipping point on the straw thing somehow the year of 2018 we'll give up the straw. >> you know who first mentioned

this to me bill murray at pebble beach said that's the worst thing you can do stop doing that. >> what about the bottles? water bottles? >> that's terrible i'm trying to wean us from that. >> what about cans >> you bring your own can and wash it out every day. >> straws per bad. the numbers per day are bad. >> the ones at mcdonald's are thicker. i like them. >> haven't we been talking about straws for a decade now? >> i didn't know until february of this year >> when the ship started running into an iceberg the size of texas, and it was all plastic -- >> i'm glad we are doing it, but people were and are still upset about the plastic on the top of cans >> because that would get around

the wildlife >> i want you to take your concern for sugar, co2 and start redirecting. >> he's not a sugar -- he eats a lot of it. >> i do, unfortunately >> it's heroin basically >> i'm an addict i'm an addict, of the sugar part >> clarify >> i just want to be clear >> let me apologize to kellogg kellogg is recalling a popular cereal see? give me sugar. hold the salmonella. because of possible salmonella contamination. the cdc has linked honey smacks, which i like, to more than 73 illnesses in 31 states it's hard to pick a cereal, right, that i don't like the jerry seinfeld -- >> i love cereal >> don't you >> yes >> there are places -- i will get to this. stay where you are

don't move i will get back to this. there's places that a line goes out the door a mile that sell milkshakes made of post cereal have you been to one of those? >> i have. >> not honey smacks. >> no but it tasted like a frosted flakes thing >> a new thing at business meetings across america, people bring doughnuts sometimes or something for people to show up at the meeting people show up with boxes of sugary cereal, milk, bowls, and they eat cereal during the meeting. >> again, not honey smacks can we finish this >> kellogg announced the recall after being alerted by the cdc and fda. says the bacteria has not been found in honey nut cheerios. >> is that one of your favorites? >> lucky charms. >> is it bad if i put artificial

sweetener on it? >> what are you doing? >> there's so much in it already. >> not honey nut regular cheerios they need sugar. >> that's fair >> you two looked at me like i was -- >> i thought you said honey nut cheerios you put sugar on top of it >> i might >> mr. eight doughnuts, don't judge me >> no judging. check this out a herd of more than 180 goats are clearing vegetation to help prevent wildfires in southern california this coming ahead of the dry season the goats providing a defensible space, which protects the area by removing dry fuel for a fire. goats are more efficient and effective than humans because they don't struggle with the terrain or heat. >> goats can eat anything, even poison ivy >> they're sweet, too. they're almost therapy goats, if you go to some of those small goats, they hang out >> they can be mean. >> they can pee anywhere

>> they can knock kids over. >> the little ones >> headbutting >> the little ones >> the teeny ones. >> i sat there for hours it's like you're at peace. >> really? >> except they do pee a bit. you know -- yeah yeah who am i -- >> we like you >> day two of the u.s. open tees off this morning course conditions were rough yesterday. so great i think -- i loved aaron hills, but 18 under at u.s. open, not what you're looking at only four golfers shot under par yesterday. best shot of the day came from d.j. out of the bunker on the 8th hole his two playing partners, justin thomas and tiger both had birdie putts. neither one of those guys got a birdie d.j. was in trouble in the bunker that was sort of a presage to

his 1 under score. he has -- that's what they're saying now he had a couple of real tough losses the one where he didn't know he was in a bunker. he thought it was a waste area he lost the tournament to kaymer >> look at that. >> now his skills are just so amazing. we'll see what happens only the first day not expected to have any rain. >> it will be smoother, glassier >> i'm hoping for more wind. there's always wind out there. you go out there, don't you? >> i go out there. >> you're sort of drawn out there. it's like a bug to a light with you, isn't it? >> what? >> coming up -- >> upper west side types >> yeah. >> you love the hamptons >> man of the people over here >> you need to see a tree

occasionally >> coming up, trade turmoil. the dean of the wharton school has a look at globalization and america's place in the world as we head to break, a look at yesterday's s&p 500 winners and losers back in a moment with the man of the people ♪ a hotel can make or break a trip.

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good morning, everybody. let's look at the u.s. equity futures. this morning we are looking at red arrows that negative sentiment has increased just over the last half hour. looking at the dow futures indicated down by almost 150 points s&p off by 12. the nasdaq down by 20 points after mixed day for the markets yesterday. the dow was slightly lower, the s&p 500 and nasdaq both ended the day higher >> the wharton school's 52nd annual global forum wraps today. among the topics covered at the global conference, globalization. joining us is jeffrey garrett, dean of the wharton school at the university of pennsylvania dean, great to have you. >> pleasure to be here >> i think just to start off the conversation, you can't help but notice the weird synchronous

global reaction to globalization, and how it didn't happen here and then spread, it happened simultaneously. the push back to some extent on globalization. there was brexit we look at italy now look at what happened in the united states. it's strange that the same forces were at work globally >> but it's the biggest topic. if you are asking me for my overall perspective, the first thing i would say is that i think we overtalk trade a lot. trade is easy to explain in politics exports are good imports are bad. if you look at the global economy, you don't see a lot of that anymore you see global supply chains, global distribution networks we should talk less trade. investment, market access, those issues are more important. if it comes to explaining populism, i think two other forces are more important. the disruptive effects of technology are massive and the fact that in the u.s. and the

rest of the world we had flat incomes for 15 years after 2000. that was a recipe or made the world really ripe for populism and in populism you tend to want to blame the foreigner, either foreign markets or immigrants. >> david ricardo, that became dogma. it's true. comparative advantage, you don't need to make things if they can be made better or cheaper. >> the more i think about this, the more i think that's a profound point from an economic standpoint, difference is a good thing division of labor, comparative advantage. you do what you're good at, i do what i'm good at, we trade, we do better. in politics difference leads to friction when globalization was a positive, we leveraged difference, it was comparative advantage. when the politics starts getting more powerful, you see differences are negative and that creates more friction that's the tilt we're in

>> i want to get to the china stuff. i would say you don't have necessarily a consensus view on what we'll see today you're at a business school. the normal academic at one of your yuuniversities now would ke jerk and say any type of trade war is bad i don't want to put words in your mouth, but you think china is a threat in terms of technology to the united states and the future, and this may not be a completely justified thing. >> threats are powerful words. i do think what we're witnessing with china now is much more about innovation and investment in the future than it is about trade and tariffs. >> they don't do it fair either, do they? >> that's the big question intellectual property theft is clearly unfair is it unfair for governments to regulate their own markets

everyone does that but then it becomes a matter of degree >> is it unfair we send a car there, they slap a 25% tariff on it, they send one here, we slap a 2.5% tariff on it. >> yes, but what's happened in the last 25 years is tariffs all around the world have gone down. it's true that china still has what's been true for all emerging markets for a long time, strong industrial policy they tend to promote local firms over foreign firms the problem with china is it's too rich and too big >> they're the second largest economy in the world >> that's the inflection point the chinese mentality is we're still an emerging market the rest of the world says you're a gorilla, not an emerging market. >> you teach still, right? >> you know, it's a rather full-time job. >> how long is one of your

classes? >> i tend to do executive training sessions. i've been doing a lot of things on u.s./china both for chi nez chinese executives and for americans. >> we need a half hour more. i have not learned everything. i will flunk now you have to come back. can we talk more about this? i don't think we got to talk enough >> i hope i'm not too wordy, but -- >> no, no. come back and talk more. i don't know how to handle this trade stuff. i don't know whether we sit back and thank you, sir, may i have another or whether we do something that could result in a real -- something beyond a skirmish you don't think that will happen >> i think trade war is a fantastic headline, but it's more complex than that i think the questions you asked about fair market access, those are really big ones in a context where china is now an innovation economy. there's no doubt about that.

china is an innovation economy, that doesn't mean they're inventing stuff. they're adapting and adopting technology from the west and scaling it vertically. >> or stealing >> the stealing part, that's clear. when it's int lebt waellectual y theft, that's unfair and illegal. other things are more complicated, i think i just -- i think my position would be that we should be encouraging the chinese that they want to do themselves any way, just do them more quickly so intellectual property regimes would be a part of that. the more important chinese it becomes, the more they have a regime >> you're an hour away, one of the finest schools, bar none, wharton. thank you.

will you look for my daughter? i printed a picture. >> i look forward to meeting your daughter in the fall. >> i mentioned that to you earlier, never mind. thanks coming up, a report on worker happiness at google and then at 7:00, mario ga bebelli l be our guest host, and then at 8:30 an interview with randall stephenson back in a memont hi.

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all right. time for today's executive edge. the facebook public relations chief is stepping down he has led facebook's response to the scandals involving data privacy and election meddling. he's the third high level executive set to leave the company this year. that begs the question, was he trying to put out the

information about the scandals to down play them? was he involved in the actual business practices itself? we found out long after they said they stopped, they had not. you can't blame him for not being able to spin that in a better way, can you? that goes to the business practices of the company, not their pr response to it. >> elliott says he has been thinking about going for a long time >> there should be something you can get on google. you say give me the resignation letter that says i had this planned all the time >> sheryl wrote a nice statement about the wonders of elliott >> she googled that, too >> i think he was in a difficult position elliott was a significant member of the team at the highest level. so he had always been a part of the early decisions. >> okay.

>> my understanding was he was not somebody who -- >> who was just brought in to pr >> no. he was at the table. >> so he's taken the fall for sheryl and others? >> i don't know if that's the case nonetheless. maybe i'm being generous but we've known elliott for quite some time. before that at google, by the way. we're learning about google's work force. the company reporting on its fl employee attrition rates the data was included in the annual diversity report. the attrition rates were the highest for black employees and latinos. fewer women leave than men and hr experts say attrition rates are important to track because they can tell us how happy and included workers feel after they join a company. interesting stuff. >> it is >> yeah. be careful generalizing on some of those things.

>> yes small companies say their top concern is no longer taxes or regulation but finding the right people to bring on board kate rogers joins us with more on the skill shortage hitting main street usa. good morning >> labor quality has been outpacing taxes and regulations as main street's top issue for five straight months now per the nfib economists say the labor shortage is hitting businesses across industries and skill levels >> reporter: mike frederick is desperate for workers. the owner of mcm composites says he is short 15 people at the company which manufacturers custom thermoset molding >> there are no workers. there's a huge demand. the economy picked up, everybody is looking for additional workers, but the market is s thin we can't find them. we have gone to extraordinary means to find people that will actually work.

including going to the local county jail and recruiting people to work from inside the jail >> reporter: he's looking for low-skilled workers who he's willing to train and pay above minimum wage like many small businesses frederick is crunched by a tight labor market bob traber is also feeling the shortage at boston engineering, which has 65 employees he needs 12 more engineers and says the strong economy doesn't make competing with large businesses for hires easier. if he can't find the right people his bottom line will suffer >> if we can't satisfy the demand of clients because we can't staff the jobs, and there's only so much we can do with temporary-type resources. you have to have the core people here to deliver the quality clients demand >> now both of these companies offer benefits and competitive wages. frederick paid out safety bonuses, but neither of these

gentlemen have been able to find the right people for these jobs. >> kate, thank you very much we know it's happening all around we heard it from ceos of big companies, too when we come back, it's 5:00 somewhere. why not set up a "squawk" bar here in the lobby of the nasdaq. we have a famed mixologist ready to school us in the big business of cktlsocai stay tuned we'll be right back. ♪

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♪ welcome back, everybody. cheers you know, there's a national trend of speakeasy inspired cocktail bars around the united states joining us to talk about is the president of drink company and the leading mixologist of classic cocktails featured in "drinks crime and prohibition. thanks for being here. >> i'm happy to be here. >> what's up with speakeasies? >> i think what it is is it's kind of bringing these old drinks back, right you're talking about classic cocktails made with classic techniques so, you know, if you think about the '80s, this is a dark

wasteland of drinks. blue, angular drinks and long even before prohibition, we had this great sort of culinary cocktails that were made by bartenders with a lot of skill >> koz mo poll what's your backh this we know you were a mixologist. what does that mean? >> i call myself a bartender usually. but what happened along the way is i started bar tending and it started for me as a job. there wasn't all this history and skill behind it. then i started learning. and there was so much behind it, it was really a part of this americanculinary heritage. and so i got really geeky about it ultimately as i learned, i started progressing, people became more interested

you saw the rise of speakeasies and cocktails. then i opened my own bar which was named the spirited awards last year >> mixologist just makes drinks. bartender, don't you need a psychological degree in. >> exactly you need to be able to be a bouncer, a chef. >> making a drink. but being a good bartender, that's -- yeah >> do you think people's tastes have changed over time or there's been a better marketing effort over certain types of drinks >> probably a little of column "a" and "b." i've seen growing interest in these cocktails. even whiskey and gin over vodka and, you know, rum so we've seen this growing interest in it but also people like myself and other bartenders out there have been really pushing it there's definitely a marketing effort behind it as well. >> is it obsessing about the

perfect margarita? does that mean my taste glands aren't good enough >> any cocktail you can obsess over >> do you have a favorite? >> dry martini hands down. >> do you have a favorite margarita? >> frozen. >> how about just on the rocks tequila? >> i love that >> quantro >> that's great. but agave as well. >> it's excellent. >> silver tequila or colored >> silver tequila. >> okay. and got to shake it. you do >> definitely, like, this cocktail culture has risen and one of the exciting things is that some of it draws before prohibition. some of it draws from prohibition itself this cocktail that we've served here at, what? 6:30 in the morning?

is made with rye whiskey, dry vermouth, grenadine we made ourselves. and this comes from 1924 >> no kidding. >> so 1924 there was this contest to name somebody who breaks the law for prohibition. >> is this a scoff and it kind of backfired, right? >> it backfired. a week later, bartenders were using this word to name a cocktail >> well, thank you so much for joining s. thank you for bringing drinks to the set and enriching us a little bit with history on this. >> my pleasure >> appreciate it derek again is featured in smithsonian channel's "drinks crime and prohibition. coming up, there's no better guest host for today than mario gabel gabelli. he loves when companies love each other and there's a lot of that going on.

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done deal. at&t wrapping up its acquisition of time warner as comcast awaits the outcome of its bid for fox assets mario gabelli is here to talk media merges and what is next for the sector. president trump looks set to go ahead with tariffs on china the latest buzz from the beltway is coming up day two of the u.s. open already drama on the greens. >> there's that d.j. bunker shot again. >> the latest from the u.s. open is straight ahead as the second

hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box. >> good morning. welcome back to "squawk box" on cnbc i'm andrew ross sorkin with becky quick and joe kernen look at the futures this morning. dow looking down about 123 points and the s&p 500 off over nine points at&t now closing its purchase of time warner. that follows the judge's ruling earlier this week rejecting the justice department's challenge the government still has 60 days to appeal the ruling but agreed not to ask for a stay of the deal while it considers its options. that's something the judge had specifically said to the

government said please do not ask for a stay nonetheless, separately new york state legislators have hit charter communications with a $2 million fine it also threatened to revoke that approval. charter failed to expand service availability as fast as it had originally promised. and then apple would emphasize cheaper lcd phone screens in the new iphone lineup announced later this year. apple used the more expensive screens known as oled screens in the iphone x but they are significantly more expensive to produce >> what's the better part of it? >> oled screens are -- the technology is a better technology they're more bright, vivid screens. but they're -- i believe they may take less battery. nonetheless, they cost more to

produce. as a result the iphone x has been much more expensive biggest news of the week, obviously, judge leon's decision and of course comcast's bid for 21st century fox media assets. our guest host for the hour, minute who knows this landscape as well as anyone. mario gabelli is the -- you're a renaissance man. you were the first one to tell me about pets and what was going to happen there. you nailed that 15 years ago >> i started as an analyst about 40 years ago i started following harts mountain they had products for the pet market >> demographically you found out people would have three dogs and treat them like children >> well, not three dogs.

but certainly there's 94 million cats and dogs. >> they treat like children. >> yes >> they have salons. >> yes >> they get their nails done >> yes >> and they feed them chicken with rice. >> and they have a jacket that keeps them warm. >> i'm just telling people how right you were >> you're awfully kind >> not to everybody. this i'm sure doesn't surprise you what's happening now i wonder if you can pine on that tell me if there's anything that does surprise you. what i also want to get out of you, is this all defensive with old media? is it off? or is it somewhere between offensive and defensive? >> that's a great question basically i think the notion of direct to the consumer, judge leon's report covers that whole landscape as well as anyone could do you don't have to read the other -- >> if only all judges were as

good as this guy >> and he even quoted bob dylan. this is good independent of that, skrojoe, tk back when the ford in manufacturing, jeff bezos is doing the same thing contracting and what judge leon indicated was manufacturer, intermediary, retailer, consumer you're going directly from the manufacturer to the consumer direct to the consumer and netflix has demonstrated that that works. they have 120 million subscribers globally they'll go to 200 million in the next few years s that a powerful argument about where the money's going to be. but, you know, i wrote this in 1975 when i covered mca. give the consumer what they want when they want it and do it at a low cost what you're talking about is the compression of the cost structure for me the consumer to watch when i want when i want. >> sounds like you're saying it's defensive then. >> not necessarily because the free market system allows companies to come in and change the business.

but look at walmart. they bought jet. they anticipated what bezos was going to do in part when they bought whole foods so you've got to adjust. you've got to -- >> this is good for at&t if comcast buys -- >> whoa, whoa, whoa. that's a different issue then you go there u the metrics. 1.1 billion shares coming out today of -- that are going to be issued by at&t that got absorbed they've got a dividend coming up in the first week of july. so you got half a buck how is the market going to absorb that? what are they going to do about the debt they still have a relative amount of capex. then there's something different. analysts are tough people to deal with. but think about talent think about individuals that -- how do you deal with tom cruise? so they're going to have a learning curve >> so you think that's going to be a learning culture for at&t >> that's a good word. >> in terms of growing the hbo

business, for example, to compete with a netflix or the like, how much money more do you think they're going to be able to invest in some of these businesses to try to be competitive at a time when you're talking about the debt and the dividend and these other issues that backs to the culture issue. >> that's part of it from the point of view of what happened with directv, there were changes all the time in the distribution habits. this was a good deal for at&t. the wild cards are what is verizon going to do. how do they put money into and green light what they want to show and can they do it cost effectively? and you've had companies in the movie business forever coming up with $200 million duds i mentioned it the other day you know, think about "heavens gate" if you go back so yes, they will put money in they will have to green light projects somebody's going to have to anticipate what the consumer's going to do. how do you deliver it to them?

and how do you do it globally? how do you distribute to the eyeballs around the world? there's billions of people >> which media companies do you own? >> i own a large, significant amount but we have been concentrated on, obviously, fox that's a large position. >> cbs, viacom >> we own that in addition we own distribution companies on content then what we did, just to go back to joe. we created an etf, but we also created something called a media mogul. we track what john malone is doing. we track with brian roberts is doing and what is going on in that world >> you just said that at&t, you know, it's a good deal except if you look at the price, basically. >> no, not necessarily the price was fine i mean, you know, they have -- they picked up $50 a share in --

$53.75 in cash times the 800 million shares they picked up $40 billion of debt so they added $60 billion to debt then they had to issue stock based on the transaction last night and the number of shares they issued which is below the collar, they issued approximately 1.1 billion shares on top of their base so that is going to be absorbed by holders that don't want to own at&t they're going to be absorbed by etfs that have to make adjustments. it's just the short-term -- i think it'll -- it's a work in progress and randall is coming on at 8:30 he's going to have some interesting dynamics >> let's talk real quickly about this comcast/disney battle over rupert murdoch's company explain this just because we've been trying to grapple with it over the past 24, 48 hours the price of comcast has gone up in the past 48 hours but the stock price of disney has also gone up that has now made it harder in

some degree for comcast in terms of -- or made it less expensive for disney p what is going on here? >> i can't answer the last 24 hours. comcast stock is a bargain on its own without going after fox and sky. independent of that, i think the strategy of going outside the united states and getting the distribution and the content that you can bring to the table with comcast makes a lot of sense for them the problem i have is fairly simple it's math. it's called not what you get as a shareholder of fox but what you keep so if i'm murdoch with 13 million shares, assume zero tax basis. cash is 100% taxable if you live in the state of new york with a 10% tax that's nondeductible. that's 34% of your -- let's assume they get $35 a share. let's call it $40 because the math is easier that's $12 billion times 40%

he'll have to pay a $5 million tax. does he want to defer that how important is that? then allow the shareholders to figure out what they want. those are the issues that -- >> how does he defer it? >> well, there's certain tax dynamics the united states has created free trade zones much like puerto rico where if you go there you can eliminate federal tax. >> don't you think there's weak holders too? >> i agree with that. >> there's weak holders of disney and comcast they see they're both involved in this deal and they're like, gee, i don't know. then leon allows at&t to pay $85 billion for time warner. what does that mean disney's worth? >> i said comcast is a bargain, joe. >> that's what i mean. then you're going to let mergers go through it's going to be monetized at what -- >> well, no, no, no. my own reaction is you have to create -- look you're dealing with -- apple has got a trillion dollar market -- >> why isn't netflix selling for

$180 billion, why? based on that multiple then you look at disney and comcast. >> joe, 200 million customers. if they can create pricing power -- >> i know, i know. but still. if you're paying for an earnings stream and paying that for netflix, then seven times for comcast. >> i'm not going to argue with that one by the way, i like a bidding war. keep it up >> but let's just walk through the pricing as an investor i want to understand how you feel about the different prices and what different price points people can come in on. has brian roberts put bob iger in a box at his $65 billion bid relative to a 52 -- >> let's do the math i get $10 stub both pieces are taxable to me as an individual because of cash. >> under the comcast transaction. >> yeah. >> not under the disney transaction because it's an all-stock deal. >> to me the shareholder is not taxable and i get this from fox.

but it is taxable to the holding company and therefore they -- but they got to break because the corporate tax rate dropped from 20% only going to be the 7 or 8 they initially talked about on the call >> just -- >> i understand. you don't like taxes >> no. i do like taxes. >> he hates them you would never know it. just wanting to raise them >> i want the audience to understand the way you feel about this meaning at $65 billion for comcast, what does bob iger have to come back at? are you suggesting they don't have to come back at $65 billion? because of the tax break >> my wish >> yes >> disney iger goes to 0.31 share. all right? up from 2.75 so that gives them a little bit lower than the 35 cash 35 cash will have to be bumped

>> hold on i still feel like people aren't understanding. you're saying this is bob iger now, needs to get to about $35 in cash? >> no. >> what are you saying >> 0.31 shares of disney times 110 -- >> which is the equivalent of? >> $33 >> about $33 in all stock. >> yes >> so they need to -- okay >> no. >> then the tax implication comes into mix >> it's taxable to the shareholder of both the new fox as well as the old fox and that would cause rupert to have a $5 billion hit. now, rupert is a fiduciary and he's got to vote on this with everybody else even though he has supercharged -- >> he's got 17% of the vote. there's all kinds of shareholders in this >> i agree >> as a fiduciary responsibility as a board member, you -- >> you're going have to look at -- >> -- to say here's the better

offer. >> it's easy to understand what cash is opposed to figuring out how the stock is going to work >> next question then. if you are disney, do you have to -- do you wait until rupert murdoch and the 21st century fox board declares that the comcast bid is superior before making another bid? >> no. >> or do you hang out and -- do you wait for that moment by the way, would that moment come or do you have to make a bid effectively ahead of something like that? >> i don't want to speculate on what they're going to do my reaction is if i'm in that board room and i'm anticipating a kiss, i'm going to have to do it before the july 10th. i've got a certain number of days for the proxy to be alive so i would say somewhere in the next week or so, they should come to the table. you know, suggest how they're going to tweak the deal. from my point of view, it's almost like i would say, hey you want to own sky?

today the regulatory agencies are going to approve the comcast buyer of sky that's a $40 billion deal. you know, it's an interesting play because of the content that sky has. >> all right so -- >> if i give you all cash as a comcast bid or i come in slightly lower with stock on the disney bid, which bid do you like better? >> let me -- >> as a fiduciary. >> let's do it again comcast is going to come back with another bid they can't come out with their first bid without having a reserve. the next is $10 billion. this is not a significant incremental increase so it reflects the cash plus stub so it's got right now the arbiters are playing this game they understand it the judge said we're going to green light this with regional sports networks. are we going to allow two studios? >> all you care about is how much money you get for your fox. >> no. no and also currency. disney will earn $10

>> you're very definitive all the time there's a saying you may know nothing and you're in doubt. who's going to prevail here? that's all you've got with everything -- you're always definitive is there a 51.49 you got roberts -- >> apple announced -- >> so you have no idea who's going to prevail >> i have no idea who's on top >> he just cares about fox but you have any gut feeling about who ends up? >> when you're in the merger and acquisition business and you're in a bidding war -- >> i feel like there's specific questions that need to be answered if disney comes in at a lower price, okay? >> how much? >> let's say two or three dollars all stock. okay i want to know -- and let's say

murdoch sevens thaccepts that, going to sue him >> we've sued a lot of good people >> that's why i'm asking the question. >> no. not if it's $32 of disney paper versus $40 of cash from comcast. of course we're going to go cash at comcast >> you're going to take cash at comcast. would you sue rupert murdoch >> i'm not going to sue anybody. i'm a lover. and you call me dr. love i'm not like you the first thing you do is like a contingent lawyer. >> the reason i'm asking about the lawsuit because it's the issue of the fiduciary it's the issue of whether rupert murdoch is going to take the bid. >> stop the litigation you are so far ahead of where the world is going you don't litigate until this thing closes a year from now. >> that's not a no that's a not yet that's what you're saying. >> you have sued over the fact that certain companies have taken prices that you haven't felt were fair that's why i was asking the question >> wanted to know whether a lower valued deal will be accepted rather than a better,

higher bid >> not a complicated question with a simple answer >> what's the simple answer? >> it's not what you get at how much less and how much more and what's the currency. i don't think disney can come in with a cash offer for 20%. i think they have to stay with the paper and it's not a big number if they give an extra 0.4 share, that's an extra 72 million shares disney is going to have pro forma with over 2 billion shares out. so you can run the numbers, gather the data, then interpret it i hope both continue to make love >> with going to the fashion district to buy -- >> that was years ago. >> $150 for a birthday present you are -- you watch your money. ll do. anyway, we'll be back with randall stephenson next. causing a lack of sharpness, or even trouble with recall.

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welcome back, everybody. the white house expected to release a list of hundreds of products from china that will face a 25% tariff. kayla tausche joins us with more on this. kayla, this is the type of thing that makes people nervous. you see the tariffs here and then the chinese response. then we wonder what comes next >> and china has already responded overnight. the list the white house is expected to release today is going to be two-thirds the length of the preliminary list

put out in april that's what sources tell me. but it could follow up with a new list of products potentially subject to another wave of tariffs put in the back pocket as it revisits trade issues now that the singapore summit is over two people who have spoken to the president say he believes in not just upping tariffs. but ups the stakes and urgent for the trade talks. said the country would retaliate dollar for dollar and nix any progress the two countries had made so far. if they were to implement sanctions including tariffs, all results of the negotiations would not take effect. now, any new products the u.s. decides to throw into the cross hairs of potential tariffs would be subject to a new comment period meaning they couldn't be implemented immediately. but products from the original list which i'm told can and likely will. here is what press secretary sarah sanders said yesterday >> well, since i'm not making

any announcements, it would be hard to give details of an announcement we're not ready to make we'll certainly keep you posted. but beyond that, i can't get into any details >> despite the white house not commenting on the record wednesday, the white house circulated interagency talking points and uploaded those to a data base to move forward. so all signs are pointing in the direction that these could happen very soon >> all right, kayla. thank you very much. kayla tausche. when we come back, content, consumers, and your media stocks mario gabelli on what he is expecting to happen in the sector in the coming months. and check it out dustin johnson on the 8th hole yesterday at the u.s. open blasting out of the bunker the ball bounced once and did a loop around the cup before it finally dropped in johnson's in the four-way tie for the lead right fou we're going to head to shinnecock for what to expect on day two. and tell you how much it will cost if you want to watch this if you're headed to the course "squawk box" will be right back.

still to come this morning, it is friday we have dr. love in the house. we've got much more from our guest host this morning mario

gabelli. plus we're going to talk to bruin sports capital founder george pyne. as we head to a break, take a look at u.s. equity futures. and we've got randall stephenson coming up at 8:30 eastern me ckn montti uscles 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 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! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies see it- and see it through-with digital.

♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in squawk square. among the stories front and center today, kellogg's recalling about 1.3 million cases of its honey smacks cereal because of a potential salmonella contamination preliminary evidence linked the cereal to more than 60 cases of illness. kellogg's says it's conducting an investigation of the third party manufacturer that it uses to produce the honey smacks. i'm trying to remember the little guy --

>> the frog, right >> i think it's a little frog. cute >> he gives you a big high five. >> the little hat on meanwhile, shares of canada goose higher in premarket trading. the apparel maker reported a 9 cents a share. >> this story is amazing i thought it was going to be a fad. >> you got one of those for davos, don't you >> i proudly bought one seven years ago before the whole thing became a big deal. >> i thought we got those for davos. >> no. you might have >> i think i did therefore didn't pay taxes on it revenue was also above street forecast and a new government federal survey says your workplace is making you fat i could use someone to point the finger at. the survey found about a quarter of workers eat nearly 1300 calories at work every week. and that's excluding any food

that they brought to work or purchase from outside vendors. among the most common source of workplace calories, cookies, brownies, french fries, and pizza. >> warning soda is why you're fat >> you had eight doughnuts whap did we figure that was that day? >> it was a lot. >> each doughnut was about 1600. you did a week's worth on that day. i hear that eggs are a zero on weight watchers. and you love when i eat them too. you're not sure what that smell is you always look over at me >> 260 calories. >> huh >> 260 calories in one glazed doughnut. >> you did seven and change. >> i'm not proud of it. >> yeah, you are let's get back to our guest host this hour mario gabelli is chairman and ceo of gamco investors we've talked a lot about these big deals on the table this week there's a lot more that's happening when it comes to media

right now. >> yeah. like "the walking dead." amc stock has gone from $52 to $56 because the notion of deals and content, everybody's going to start talking so, for example, yesterday john malone says i like spanish and does that mean he's trying to put his hands around uni univision and televisa i'm buying televisa even though there's a presidential election coming up in mexico in about two weeks. i'm also buying something cal d ed peppa pig their stock is good. there's a company -- this is traded under london exchange and then we're buying companies that are spotify has created a new venue with regards to streaming music. who owns the composition, who gets the publishing rights how much does that mean for sony music?

so they've stumbled a little bit in their deals i think they're going to monetize the music when i look at that -- then i look at what malone also said. and that is cable is good. discovery is good. he just put $10 million into discovery yesterday. but that's not a big number. but it's a sign that he's focusing on some things again. so in the cable area, if you likes spanish, he's got a company called liberty international latin america. and i think he's going to buy a company called milicom there's a hundred million shares it's a nice tuck in in latin america and can consolidate that there's a lot in wireless. then the wild cards. what is verizon going to do? what are the japanese telecoms going to do? in terms of where they go next >> what does silicon valley do when you look at a netflix or

google do they create their own >> there's no question the number of scripted shows have gone from 200 to 700 and the bidding on talent is rising while they're increasing their investment in -- we don't understand and we're having trouble understanding how they're advertising some of the films. okay the movie studios have to do it a certain way. as we understand how to predict that so we like that ecosystem and we are also believing that cbs is an undervalued company and we think viacom is cheap >> let's take a step back. you have been in media stocks far long time. >> only about 40 years >> only 40 years in the last 40 years, where would you put this moment in time where media stocks are getting bid up >> well, you saw the takeover of the movie companies, you know, back 15 or 20 years ago, you know, nbc was bought in 1985

rca was bought by ge and you guys had bob wright here and so on. brian roberts has come along and malone has done it i would say that the difference today is that the scale of the potential disrupters is significant in terms of market caps and they have the power to do what they want. they prfragmented advertising 40% of the advertising has gone digital. how did they get back in the game how did they get the data to basically sell that on a precision basis? you know, rather than a shotgun on advertising those are the things we think about. >> you hear about prices being paid to people like shonda rhimes and these content producers. so content is still very valuable but do the companies trying to do it, are their margins going to get squeezed? >> the lust for technology stocks, the lust for technology stocks in terms of the ability to pay for what may be in the

future is no different than what happened to dotcom in 1999 at some point the metrics change to where you're looking at -- >> i just asked about content. why are you talking about technology i don't understand how you're answering that >> the tech is guys like netflix for $200 billion. >> sothey're going to pay up does that make it too expensive for old media to compete >> well, they are not large companies anymore. the old companies you thought about, viacom with paramount as a studio capex is like $200 million these are assets like hulu is going to be really important to whoever wins. >> that is an important element that nobody wants to put aside so whoever gets 30/30/60 and controls it. >> who do you think wants it more >> what? >> who wants it more hulu >> i can't answer that >> who needs it more >> they put a joint venture

together and randall will have 10%. those are things in progress from my point of view, you always have something new. the gaming industry in the united states alone is $100 billion. that's just to legalize gambling between the indian reservation gamblings and the lottery. how does that impact other things gen-z likes that live. it's the notion of gen z and the millennials. we went from the couch potato to the interactive couch potato >> all right >> mario is our guest host we're going to keep talking to him throughout the hour. >> thank you, sir. we're going to continue this conversation in a moment coming up, a "squawk box" exclusive.

randall stephenson that coming up in the next hour. but when we return, day two of the u.s. open. if you're planning to go to the course, it's going to cost you dom chu joins us with a preview. dom? >> all right, guys you guys were just talking about the experience factor. what everyone wants to do in terms of getting that feel well, here in the hamptons, it's probably the definition of wealth all these players behind me are getting ready to tee off today in what will be the most expensive get in for a ticket at the u.s. open in at least five years. we'll have more on that story and much more from t u. he.sopen when "squawk box" returns after this break into booking a hotel. with expedia's add-on advantage, booking a flight unlocks discounts on select hotels until the day you leave for your trip. add-on advantage. only when you book with expedia. add-on advantage. it can grow out of control, disrupting business and taking on a life of its own. its multi-cloud complexity creating friction...

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second round of the u.s. open is about to tee off this morning. dom chu, we were just talking about sports we're going to talk sports in a second and how great it is and i just said shinnecock how great is shinnecock for golf, dom? >> i mean, so i've never played this course. i hope to some day, but right here as you know, anybody who knows the hamptons area, this area specifically in southampton is home to a number of courses you've got shinnecock here you've got national golf links of america another top 15 course in america just over that way.

then next to that is another three top tier courses on the grounds. if anybody watched the u.s. open yesterday, the conditions were brutal we're expecting to be a little less severe today. it's cooled off a bit. we'll see if that helps any of the game play out there today. >> always windy, though, dom, i think. and that makes it great. and you know what? i've played all three recently that is the greatest stretch of land to put golf courses in the world. those three courses. they actually -- you can take a step off one of them and you're, like, on the other one they're that close to each other. it's just unbelievable to have three courses that great especially national and shinnecock >> talk about getting there. i mean, first of all i left this morning -- you guys know i live in connecticut >> you can't get there from here >> it took two hours at 4:00 in the morning to get out here. just to tell you something,

guys to get here, if you want to go and get a house here let's talk about ticket prices first of all, we told you before, it's the highest ticket price we've seen in five years according to tick iq, they say the get-in price for the u.s. open right now is 357 bucks. that's double what it was last year if you want to stay anywhere in the area, vrbo vacation rental by owner say there are 22 listings still left. it's going to run an average of $2500 a night. but the range goes from 600 bucks a night to over $12,000 a night. and if you really want to beat all that traffic that i just told you about, you can fly out here via sea plane or blade helicopter it'll cost you about 800 bucks one way to get out here. then whatever ground transportation costs you to get out here as well it's not an easy or cheap proposition. but this is the new york area, a big media market

>> labor day, you can't go to a place far night -- four-night minimum like $700 a night. meanwhile, becky -- if you're not worried about going to the hamptons, you go down to siegert, go south, young man go jersey shore. there's no reason to object yourself to that single lane highway to get out there and not get a restaurant reservation at whatever it is >> listen, i married a jersey girl >> yeah. >> she grew up -- well, here's the thing though she grew up going to long beach island there's, again, only a one-lane road, one bridge to get out there. >> listen. you can listen to born to run on the way. hamptons, go west, young man connecticut. that's north but anyway

par might win. that's what a u.s. open should be like. >> i got to tell you this. a lot of the buzz we've got out here is that it depends on when it comes to football and baseball, i do when it comes to zbof, i love seeing the fact that some of the best pros in the world can go out there and shoot on a tough golf course. tougher than what i play or you play but these guys are getting beaten up. >> 150 players 190 double bogeys yesterday. that's, like, more than one per player those guys, they may go through an entire tournament without a bogey normally >> tiger woods tripled the first hole >> we got to go. we could talk forever, dom >> we could talk forever, yes. >> we could. >> okay dom, thank you for that. the other major sporting event that began this week is of course the world cup although the u.s. men missed the tournament this year, our next guest says america is the place

to be for sports over the next decade joining us right now is george pyne founder of bruins sports capital. we have so much to talk about in the media space. you're a former ing man. >> that's right. we played at shinnecock together >> this guy's been around. >> george, because we've been talking with mario about media first, i'm just curious what your take is on the future, if you will, of the fox sports assets and what that's going to do to the pricing of teams around the country because depending how this deal gets structured. whether it goes to comcast or disney, or whether they have to divest these regional networks, how this plays out. >> those are a valuable set of rights with 22 teams it's actually more than 22 teams. most regional sports networks has a relationship with more than one team. a valuable set of rights

throws out real cash flow and will impact the valuation of the teams because those local teams, that's a major source of revenue. >> there's been a long question about the regional networks and whether over time they're going to be worth more or less in a unbundled world. >> right and of course it's interesting with what disney's doing with direct to consumer, i think it plays nicely into their strategy and yes, if you thought there was going to be a place where cord cutting would impact it immediately, you would think it would be the regional sports networks however, the buck's renewed at a nice price we've seen no evidence of that today. but it would be the first place you might see weakness but we haven't seen any yet. and i think to disney, these are valuable assets given the fact of their focus on direct to consumer and those -- they own the relationship with the sports fan in the sports market >> you think the better home for the assets is at disney. >> given what they're doing with bam and that acquisition in the espn, i think it's a strategic opportunity. >> do you think comcast would have to divest >> i'm not sure.

because it's really more an anti-trust issue and that's not my area of expertise. >> all right let's talk sports. you guys do a lot of different things tell the viewers, what does bruin do >> we invest and build in global sports companies we operate in -- >> just hockey, right? >> no, no. that's boston bruins we're involved in the world cup, cricket 2020, the european football championships, the nfl. we're a global business. and we're at the intersection of live events and technology >> but you're private. >> it's private, yes >> private they do a lot of the on-location stuff. we actually had your guy on from pyeongchang. you remember that? >> that's right. he was there for the ceremony given the award. >> help us with this gambling >> going to be good for sports

you're 19 times more likely to watch a game if you've bet on the game i think it's going to connect -- further connect yourself with avid fans. i think they'll learn how to get in the revenue stream. i think the other big interesting part is big data the big data is going to help you. >> what kind of stuff are you accessing as a function of the gambling trend that's coming >> well, we'll see we're live streaming in technology so i think there'll be opportunities for us to enable technologies i kid that i have an investment threshold of a 100-year-old man. i'm a little cautious. but there's going to be a diagnosis. >> also more eyeballs longer in an event and therefore advertising will help the sports like baseball. that's why we are buying the mlb team called the braves

he'll sell in two or three years. >> think about esports >> we own a company that represents brands. we've invested a lot of technology around the esports. >> like what live streaming different connections within technology that enables esports. >> because you think that's the better bet or teams are the better bet >> i think that's a safe bet enabling the technology that brings these sports to consumers -- >> it's like buying the blue jeans in 1849 opposed to looking at finding gold in a mine. he's got the right model >> that's right. >> thank you for coming in. >> my pleasure thank you for having me. >> are you going out to watch some golf? >> i'm not but we're the guys with the blade helicopters taking people in it's a good idea if you don't have tickets, i can take care of that for you. >> thank you appreciate it.

>> i'm always interested when you have esports like they did in las vegas, they don't spend a lot of money and they don't gamble. the old fashioned -- >> oh, that's true that's interesting so the esports audiences don't actually spend real money? >> they spend money on food and beverage but not gambling afterwards >> yeah. >> you think people are going to start gambling on esports themselves >> i have two teenage boys all they do is play fortnite i can't imagine that some day there's money involved >> not only that, fortnite is viing to become content for moes so the gamers, the guys that create those games are becoming the new -- imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination.

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we want to thank mario gabelli for being here this hour next tomb come for two hours >> my privilege to be here and talk about my favorite subject how to invest in stock specifics opposed to etfs. >> love for bringing that to us. thank you.

a "squawk box" exclusive at&t ceo randall stephenson on the record after closing its deal with time warner. that news-making interview coming up. trade tensions flair president trump set to slap tariffs on $50 billion worth of chinese goods. and market response. stocks point to a lower open on wall street with just 90 minutes to go until the opening bell the final hour of "squawk box" begins right now ♪

>> 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 i'm joe kernen along with becky quick and andrew ross sorkin our guest host, we went to the bullpen. brought a new one in here this morning. jason trenert. he's been warming up, he's ready. strategic research partners. a big interview up this hour at&t ceo, that's six little letters i said at&t ceo, fyi, will be here. randall stephenson he will have us rotlmao after the merger with time warner. you think we should use all these? >> we can't get away from it with at&t and ceo. >> i guess that's coming up at 8:30 eastern

time they didn't waste any time >> no. deal's allowed to close, boom. >> it was last night i read like -- really? it must be like a mortgage, right? you just sign it >> if you're waiting for a long time, you probably move as quickly as you can >> you sign the box. >> and it happened it's a big deal. >> it is all right. let's get a check on the markets this morning we've been watching and the futures have been under pressure this morning dow down by about 99 points. we were down by 150 points earlier. s&p futures down six points. nasdaq down by three take a look at the treasury market we watched treasury yields on the 10-year move up towards 3% earlier this week after what you heard from the central bank here then we heard from the ecp yesterday and that has people kind of looking at our 10-year again and it's been pushed down to 2.932%.

regulators in china reportedly close to approving qualcomm's proposed merger with nxp semiconductors now received the final green light despite media reports. that stock is moving there stocks of ge continuing to slump on renewed worries of a trade war between the u.s. and china. the chinese telecom giant has lost part of its value we'll talk more about china and the tariffs in a couple of minutes. check out shares of canada goose. they apparel maker had 9 cents per share opposed to the estimate of 10 cents loss. that stock up 17% this morning joseph now apparently owns a canada goose coat. >> i think i do. i'm not a big fan of the canada goose itself you know what i mean you don't know >> you're saying goose in canada >> no.

when they come around, they hang out. they're loud they don't leave and they are very -- it goes through them like through a goose. that's why the expression is goes through them like a goose it does, am i right? >> they're kind of like dogs >> and then they finally leave when they leave, they make a racket too you know who doesn't like them at all my dogs do not like those. >> they probably like chasing them >> they do i like it when they chase -- no. no one gets hurt it's fine. >> in other news, sandridge energy has 17 potential bidders as it completes its strategic review process that letter from shareholders accusing carl icahn's efforts to mislead investors. accused of placing his own interest ahead of those of other

shareholders the broader market right now just 3% below its january peak so it time for a rest or another rally? mike santoli joins us right now. >> becky, good morning i think make a rest makes sense here it's kind of stretched up to this level we haven't been above since march. as you said, just 3% below that high in the history of the world, we've only been above this level for two weeks which is the last two weeks of january so i think a lot of indicators say a pause makes sense. but i think the key message is all the obstacles that the gain saying wow we got the fed stacked up this perhaps a tariff announcement and the market has held together i think that tells you the longer term uptrend has really remained intact through this whole period multiple months. i think it's uneven. off 4% year to date gain in the s&p 500. the best sector is tech.

it's up 14%. only four out of eleven are up year to date it's a selective market. so maybe it still feels like a summer range but i think it resolves most likely to the upside >> still willing to do this to try to call the market on a short-term basis >> oh. i don't think it -- you know, i don't think -- >> who would ask you to do this? >> no. nobody asked me. somebody asked me to be here and talk about the market. nobody said how to do it >> all right so you think -- if you call for a pause, i don't know. that's -- it feels -- never short a dull market. right? it feels to me -- it feels like there should be a pause. which makes me feel there won't be but we still get you to do it. you don't care >> and i don't think anybody should care. i don't think you should care about the next 3%. >> but to try to do it is just sort of, like, the uncertainty >> you guys, we got to go to

d.c. with breaking news just coming right now he the white house releasing a list of products that will face tariffs. kayla tausche has the news for us >> we're still waiting on the official list which will come from the office of the u.s. trade representative but we are getting a statement from the white house where the president is confirming that they will be moving forward with these 25% tariffs on what he references as a basket of goods worth about $50 billion in exports he knows that despite his relationship with president xi of china which he says is very important to me that trade between the two countries has been very unfair for that reason, he's moving forward with the tariffs he says the u.s. plans to pursue additional tariffs if there's retaliatory measures such as goods services or agricultural products raising non-tariff barriers or taking punitive actions against american exporters or american companies

operating in china which appears to be a direct response to the spokesperson for the foreign ministry who overnight and reiterated the officials yesterday who said basically china is prepared to respond to the u.s. it would happen immediately. it would be dollar for dollar. then any progress in the negotiations between the two countries would essentially fall by the wayside so he's challenging china that if they retaliate, they will be slapping on a second wave of tariffs. though he doesn't mention what exactly the size would be or exactly what they would target but certainly an interesting development that will heighten tensions not only between the u.s. and china but also within the market as it was the note from the treasury secretary about a month ago that the trade war was on hold that was atonic to the markets for the last month. we'll see what happens when the markets open today >> you point out correctly it

was steven mnuchin who told us he wished he hadn't used the words "trade war" that this is more of a trade spat or tensions that are there ramping up to this i wonder, what does a trade war look like if not i'll see your bid and raise you five oh, yeah i'll see your five and raise you ten. is that now what we're embarking on >> not only embarking on with china but also canada and the european union when we talk about whether this is the u.s. just posturing, at this point these tariffs are going to be put in place the steel and aluminum tariffs with allies are already put in place. china very likely they have said they will retaliate immediately and in kind for whatever the u.s. does. that being said, i think that this action publicly even though it will rattle the markets and it will have an economic impact, there are still talksgoing on behind the scenes. you had the secretary of state who was there yesterday. as i noted last hour, a couple of people who have spoken to the

president said they truly believe the u.s. gets more negotiatie ining leverage so the hope from the white house is still they get a trade deal out of this. >> kayla, thank you. kayla tausche with that breaking news out of washington i'm sure we'll hear back from her a little bit later joining us right now to talk about this and much more a jason trenert. also michael lippert jason, i want to start with you. i want to ask you about the pause versus rally, but this changes the situation a little when you hear this and the ratcheting up of things, does it concern you? >> it of course concerns me. by the same token i think we can't lose sight of the fact that you have an enormous fiscal stimulus and i'm told this morning we lamped the fiscal stimulus at

$800 billion for this year and the amount of tariffs at $80 billion. it was about ten to one. now, the numbers of the tariffs are starting to go up. so that equation is starting to maybe getting close to evening out. but i do think given the fact that you have a lot of fiscal stimulus in the u.s. economy, it actually gives the u.s. more negotiating power to the extent to which the u.s. economy and the front cover of the journal today -- >> lead story in the journal today. the u.s. is leaving everybody behind >> leaving everybody else behind so i know this makes people feel very uncomfortable, but i think this is just the way a commercial real estate guy does it i know it drives everyone crazy. it drives the stock crazy. >> does it work? >> i think it could work the u.s. in my opinion has never been an impediment to free trade. i mean, in most cases the u.s.,

it purposefully weakens itself from a trading position. that was part of the post-world order for a variety of reasons that's changing. and i think we have a get used to it. i think it also -- last thing i would say, this could be part of the reason why small caps are doing so much better than large caps >> staying in our own back yard. >> you have companies that are feeling the full effects of the tax cuts and the regulatory changes that don't have some of these issues from a trading perspective. you can't say it's good. i'm not saying it's good i'm just saying i'm not sure it's enough to derail what seems to be -- everything else >> let's talk about more of the everything else. this morning we had jack cav i rks -- caffrey on at 6:00 a.m he said it has been there that we've seen it pile up. >> i don't disagree with anything jason says. we focus on fundamentals the fund i run looks at secular growth sustainable growth it's the big changes going on

and you've heard the term. any company over the last six months you've seen earnings that's attached to or driving digital information, digital media, the fundamentals are terrific so as long as the fundamentals are going to continue to be terrific and i don't see anything turning that back, i think the stocks will be healthy. i don't see anything changing the fundamentals >> i've not really thought the trade issue would be the thing that was the swing factor for this market in a negative way. it's an excuse it's a distraction, i think, for most ceos and most investors it's a little bit of an annoyance. but it came along at a moment when we were all talking about is the economy going to overheat are we going to be having this runaway growth the stimulus jason talks about is a off -- and all that stuff

together i think nets out to the positive there is some threshold. gets too aggressive. whether there's some number that causes business to say let's pull back. i don't think we're there. >> it's like hitting your head against the wall feels good when you stop so you hit the upside. >> exactly >> so 2782, that's where the s&p closed but you know we're going to be down ten today so i'm not giving you that for the pause. you can't take this ten. >> we'll take the -- >> no, no. we're doing 2772 is where you're in at the pause. okay is that fair? but, you know, it does make it more interesting when we follow things okay so i'm not giving you 2782 see. i know you

i know how you -- you already got your pause works before it opens today. >> quick last word, jason. you'd say to people here >> if you're a longer term investor, look for pullbacks to buy the things that are growing. and so in particular i like financials quite a bit and i also like capex oriented technology in my opinion is going to be one of the stronger themes over the next couple of years. >> michael, your favorites >> i think cloud computing, software service, digital media is the leaders there amazon, microsoft, electronic arts, smaller companies like costar group and guide wire are the ones we like >> thank you both for coming in. great to see you big hour still ahead 45 minutes, anyway including our exclusive interview with at&t ceo randall stephenson that is at 8:30 a.m. eastern time first, though, it's official white house says it will implement 25% tariff on $50

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tg official. president trump announcing the united states will implement a 25% tariff on $50 billion worth of goods from china. joining us now dan dimicco he served as an economic adviser to president trump's campaign. i don't even need necessarily can , dan, to probe your side of this. because anything you say will be different, most likely, than anything people ever hear about this issue because it's just -- i mean, consensus is so against this

that it's like you're a total outlier. you must think that's funny. it makes sense to you what's happening, i guess, right? >> what did i tell you about the stock market when everybody's going one way, you need to look the other way that's where the important issues are being dealt with. and this is an important issue by the way, becky, joe, and andrew, happy registered friday. in honor of our men and women of the military you should turn your mike down during the break because i heard some nasty language and a scream >> oh, yeah? a scream we weredoing -- >> it was a scream for -- >> it's a promo coming out >> it's a jurassic park promo. >> by the way, that was joe screaming like a girl. not me >> you got my attention. >> there was a raptor outside the window here in times square.

when we talk about this, we talk about the downside of the skirmish turning into a war. and how bad it's going to be i have never heard anyone say is it possible that if we stand up for ourselves and push back against some of these unfair practices for the last 20 years, is there any upside to it? i guess we -- trump wouldn't be doing it if he didn't think there wasn't an upside you must think there's one too >> huge upside absolutely huge. think about the fact that over the last 20 years, we lost millions of manufacturing jobs at a time when we should have been adding 5 million to 6 million manufacturing jobs because if the market in china was truly open, if it wasn't a game system by the government for political purposes and global glory, right? we would have added 5 million to

6 million manufacturing jobs in this country that's not the way it worked but that's the way it'll work in the future >> we develop a lot of innovation and technology in this country too and we know that china's not going to beat us in a shooting war, probably. that's probably not going to happen hopefully. >> not today not today. >> not a shooting war. but think if they're able to acquire our technology by however they do it. whether it's above board or below board. that is something that 20 to 30 years from now people might say why didn't you protect us better that's part of it too. >> absolutely. and the truth of the matter is we've already lost a lot to their cheating, to their --

we've already lost a huge amount now with their 2025 plan that the president of china has come out and touted, their goal is to dominate all the industries of the future now, there's nothing wrong with competition. and there's nothing wrong with china wanting to be the best the problem is it's the government of china that's using underhanded predatory tactics to keep american companies from being able to compete. and other companies in the world having being able to compete in china the way they can do things here and the way the rest of the world can do things here that is a basic fundamental flaw and they promised not to do that when they joined the wto and got permanent trading status from us and they've lied and cheated it's time for that to stop the whole world is going to be better off in the future and so will the people of china >> do you feel the same way about our close allies like canada should we be using security,

justifying some of our actions by saying it's national security when you're talking about one of our closest trading partners an allies, canada you okay with how we're approaching that >> i am and i'll tell you why. a national security issue which the 232 addresses and it's going to address on steel, aluminum, automobiles, and half a dozen more industries. and the blackmail of our companies to give up their intellectual property. that national security is based upon industries and every country in the world has an impact on the health of our industries via the attack by china. things come through these countries that are trans-shipped, mismarked, counterfeited. it happens through canada, mexico, europe >> we got to go, dan

>> well -- >> we got to get out >> thank you for the time. >> you're welcome. >> this is a good move >> i know you're like a steel mill like 40 years and never heard any language like you might have heard sorry that, you know -- i know how those guys are you probably blushed you probably really -- >> i did i blushed badly. >> yeah, yeah, yeah. i know those steel guys are -- >> love you guys >> all right love you see you. coming up when we return, we're minutes away from our news maker of the morning at&t ceo randall stephenson is going to join us exclusively closing the deal with time warner we will speak to him at 8:30 eastern time about where it all goes from here back in a moment (birds tweeting) this is not a cloud. this is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. this is a financial transaction secure from hacks and threats others can't see. this is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently.

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♪ good morning, everybody. welcome back to "squawk box" here on cnbc we have live from the nasdaq market site in times square. president trump announcing that the united states will implement a 25% tariff on $50 billion worth of goods from china. the first set of tariffs will apply to 818 products worth $34 billion. they'll go into effect july 6th. take a look at the futures this

morning. because as we've heard the back and forth about this, things ratcheting up, counterpressures from china and potential countermeasures on the countermeasures, the dow is down about 160 points s&p down 11 and nasdaq down by 19 after news of the tariffs we saw the markets decline again. among the stocks to watch this morning, adobe systems. that comes despite an earnings and revenue beat for the software maker for its most recent quarter investors may be focusing on a revenue forecast that's in line with expectations. that stock is down by 3% j. bill circuit reporting $1.66 a share. that beat estimates. and announced a $350 million stock buyback. that stock is up by 2% sandridge energy had signed

agreements with 17 potential bidders for the company as it continues a strategic review process. you know now about this. it's a done deal at&t and time warner completing the megamerger just days after it was allowed joining us now, at&t chairman and ceo randall stephenson thank you for coming on. >> of course, joe. >> and talking to us here on "squawk box. just thinking about -- man, you went through the wringer i mean, this was -- no, i'm thinking about the news cycle of the past couple years. everything that's happened you started this whole process before this whole new world we're living in. you've been engaged in this the entire time. trying to get to where you are now. you have to tell me. when leon said no conditions, it's done. what was your feeling? is it elation? is it relief

what was it. >> to your point, actually it's hard to believe that it's only been 600 days since jeff bewkes and i came on your show to announce the deal. here we are a short 600 days later and finally getting the transaction closed to answer your question, when the court ruled, it was relief we felt really good going into the court that we had a really good case. the law was on our side. and it was a an aggressively pursued case we live in an amazing country. the department of justice didn't like the deal, felt it was unlawful we got our day in court. and as much as we criticize the system, the system worked. we feel like we had a just and good answer. we felt good about how it came out. >> you're modest, but you put a lot on the line, randall and it's been said in some of

the papers not necessarily the journal. but i look at the post and the way it's been covered. you had all the chips on the table and i don't think it would have been a good outcome for you even personally if it hadn't worked out and you had a previous situation that didn't end so well. so you must -- those are a lot of nights you had to go to sleep with for 600 days. it's just -- it must be a relief it must be a relief and a combination of that and relief >> i take my hat off to our litigation team. they did an amazing job presenting a very good case on this transaction we feel really good about where it came out. >> now to this now there's this big bus going by and you're this big dog and i'm running after it and now you caught it. and now it's like, you know, you got this -- do you know what you're going to do with this now? do you feel confident you've got the right people in place to make this work >> yeah. i feel really good about the people we have in place. as you know and we announced, john stanke will be running time

warner but in place under john are the time warner executives and the team that jeff bewkes has built over the years and this is a world class team i mean, kevin sujihara running warner brothers studios. pepler, he's created an amazing franchise at hbo we're excited about investing more in hbo. the direct to consumer opportunity with hbo we're excited about that and then turner network. look, there's a mass iadvertising energy inside the network. and we have brought brian lesser over from wpp. one of the world's top advertising executives to build a platform to take advantage of that inventory you put this together with -- we had at&t had 170 million direct to consumer relationships. people with screens where they're going to be consuming this need and this content

and bringing all of this together comprehensively i think is a really exciting thing jeff yang, he coined a phrase that we're building a modern media company. with all of these capabilities and i think probably one of the more interesting aspects to this, joe, is this whole industry is kind of building a railroad from east coast to the west coast and hoping they meet in the middle. this is the first time we're going to be building 5g network capability, building user interfaces that are dijalty enabled all about the experience of the consumer to consume premium video and creating this environment. i think this is going to be -- >> let's talk about the culture of merging this. that's something mario gabelli brought up in the last hour.

look, it is kind of a culture clash putting all of these together you mentioned the huge number of talented people you have working here but there's also this idea that at&t is going to want to get involved and maybe get involved with the creative content and tell people what to do how does that work with some of these creative type who is are maybe used to running things themselves >> you used the word culture clash. my management challenges to make sure it's not a clash. they are different cultures. and you want to preserve the different cultures it's really important. this is a business we're buying that is all about creativity and talent and how can we ensure that we don't disrupt our interfere with that creative capability i sent a letter out to all of our employees last night where i committed that they would have all the resources and the flexibility and freedom to do what they have been doing so well for so long and so john stanke, this is going to be one of his

challenges we feel good about it. we're going to run these businesses fairly independently, but there are things we need to do where we create value together the advertising, making sure we're beginning to think about creating content that is curated and formatted for the mobile environment as well. actually, the creative talent within time warner is excited about that so the managerial challenges to make sure we don't create a clash, that we create a melding of these cultures have preserved what is really strong about each culture. >> randall, first of all, congratulations. >> thank you. >> to the culture question and the investment question because i -- from all the conversations i've had, there are questions about what kind of investment will be made and how that's going to work. there's going to be about $250 billion of debt on the company and how much pressure that's going to put you and them under. when kevin comes to you and says, look, i need to go spend

$250 million on some new movie, is somebody going to come back to him and say, actually, we can't do that? or if richard pepler comes to you saying netflix is spending $8 billion a year on content i actually need at billion or two, can they go off and do that >> well, i start with the level of debt. you said $250 billion. somebody slipped $70 billion of debt in i wasn't aware of. it's $180 billion of debt we'll have when we close this. i know that's gotten a lot of attention. but people don't put behind that this is a company that will have well in excess of $50 billion of ebitda and so while at the close, our debt to ebitda will be above levels that we have traditionally operated about 2.9 times. within a year, this thing levers quickly. it will be at 2.5 times. in four years, we'll be back to our normal levels of debt. andrew, this is a company that when you put them together is still going to be investing $22 billion of capital

and to the extent that we need to invest more to make this media asset better and do the integration, we will not be hesitant to invest more money into this. and that was the letter to the employees last night you should assume we're committed to investing in this business and so we're not going to be penny wise and pound foolish here you tend to invest you know what we do when we buy businesses i believe in the communications business if you're not investing at top tier, you won't remain top tier. i believe we're going to see the same thing in the media entertainment world. >> randall, wanted to get your thoughts on the media and telecom landscape. obviously there's the disn disney/comcast/fox transaction and there's sprint/t-moblie hanging out there as well. first on sprint/t-moblie because i know you know them particularly well.

from an antitrust perspective given the wringer you just went through, if -- does at&t plan to say anything one way or the other about the antitrust implications when this government calls and says is this something you're going to have a problem with. >> i'm not going to say anything publicly if the deal makes sense and ought to be approved, they'll say competitive. if i say kill, it's a deal that ought to be done so i'm going to remain quiet we're not going to engage in terms of either advocating or contesting the deal. i think they have an interest k road ahead of them in terms of the approval process i wish them god speed. i -- they've got a long road ahead of them. it's a horizontal deal not a vertical deal. so you're taking a competitor out of the marketplace so it's going to get an extra level of scrutiny because of that but since we tried to do the acquisition of t-moblie, the world has changed. so i think it's going to get a

different level of scrutiny and a different review than what we received but i wish them all the best >> randall, just speaking of that, the rest of the media world and technology, too, has taken judge leon's commentary and the ruling he handed down on t@said and this is something we can take and run with. this gives us a blueprint for what's going to happen do you believe that's the case or this was a one off ruling on your particular transaction? >> i've learned a lot about our legal system in the last six to seven months grinding through this and so forth here's one thing i learned that i think is really important. when you get into this process, the facts and circumstances about a particular deal is what matters. and on this particular case, at&t and time warner, it was the facts and circumstances surrounding our deal that were evaluated and were adjudicated so i don't know how transferable a lot of this is to the next deal that will be up to the department of justice and the

companies to sort out. but this one was very specific and the process was specific to our situation. >> randall, the day it happened, i said the same thing. a country. where you can -- you can't fight city hall. you spanked the government on this and, like, it must feel -- i mean, it's -- you don't want to gloat, i understand that but it is amazing. >> it truly is we have three co-equal branches of government. and the checks and balances in this situation worked exactly the way they were designed over 200 years ago. and so i just take a lot of satisfaction and a lot of pride in our country that this worked this way >> you push back on the notion it's a defensive move? that it's like something with google and facebook and netflix and everything it's something that you're kind of forced to do instead of choosing to do in a synergistic way? like sort of a -- >> no, look. i think there's something very important about the companies

you mentioned. and so google, facebook, netflix, amazon. what are they all doing? these are companies that live and die -- mostly live, they've all done quite wet -- by generating engagement on their platforms. what i find most interesting is when they say we need engagement amazon, if they want to sell more commerce, where do they go to engagement? premium video. i completely agree with that and then people who over the last year said this world of media entertainment companies are in decline, oh, my we're building out all new forms of distribution. i mean, 5g is coming there's going to be opportunities to distribute premium video like we never imagined we actually believed at the time that premium video was a great place to invest and to be and the tech companies are just demonstrating that to us so we want to participate in this and the more distribution pounts and customers we enable to

consume premium video, the more we want to invest in it. >> what do you think of the battle over 21st century fox's assets on both sides as a competitor with both now that you've gone through the wringer on the regulatory front, how do you analyze the situation? >> you know, i don't know where it lands i've listened to everybody's speculating in terms of who wins the contest here i think they both have very logical reasons for wanting to own this business. they're not much different than ours what do you want you want extensive premium content. you want extensive direct to consumer relationships and in a comcast situation, they want international capabilities. with latin america, we have the largest paid tv business in latin america. so pairing time warner with that and giving ourselves great international capabilities is great. so i'm kind of ambivalent as to which way it goes.

i really don't know how to assess the legal aspects of it i have my own opinions, but they're not really relevant to this we're going to run our play. i think what they're doing and what they're pursuing just reinforces a play we're running. we think we're on the right path and we're going to get there first. i'll let them fight their legal battles and let them fight to get the prize for fox. we're going to go execute our play that's behind us now we're about execution. >> randall, one other question and it's somewhat political. joe spoke about this idea that you did win this case and you did win it thoroughly and thoroughly what worry do you have about an appeal or retribution the president with us outspoken about this from the beginning. >> speaks highly of randall. >> speaks highly of randall, but at the same time he has now lost he has historically gone after all sorts of companies he doesn't like in all sorts of different ways whether it be

jeff bezos and amazon. not just this particular case, but the fcc obviously oversees a lot of the work you do does that concern you at all >> look, the one thing this case demonstrated is that we are a country ruled by law and so i take comfort in that and i think everybody should while the president and i don't agree on every situation and everything, you know, i have actually been supportive of a lot of the things he's done. his tax reform bill was unbelievable i just am amazed at what he's done i don't agree with some of the positions on trade we obviously have a lot of business in mexico all in all, no, i'm not concerned about retribution as we move forward. >> you said your job now is to go execute what, if anything, will the consumer notice as a change of at&t taking over time warner >> so i previewed in the courtroom one of the first things the consumer is going to

see. and that is as we think about distributing content, particularly to the mobile device, we will be launching and you're going to hear more about this next week we'll be launching a product called watch tv. this is a skinny bundle that every single one of our customers will get it will be the turner content. it will not have sports. it will be entertainment centers. and it will be if you're an at&t limited customer, it will be free or you can buy it for $15 a month on any platform. obviously these will be. supported models brian lesser, we hired him and we're stepping up a platform you should expect some smaller, not like time warner but some smaller m&a in the coming weeks to demonstrate our commitment to that >> so you haven't been just

sitting around for 600 days. randall, i remember, you know, merrill lynch. i remember i sold stock to people in 1985 i think at&t they got, like, seven of these companies. i mean, at&t -- it goes back to robert allen, i think. right? i think. >> that would be right >> so i've seen everything else. i just wonder. ha did you talk to whittaker? does his chest just swell in pride? >> i was actually with ed last weekend. we had a nice talk about this. >> that was before it happened, right? >> it was. ed obviously, he texted me when the ruling came down on our deal his quote was, i feel good i said so do i, ed >> and how about dorman? dorman must be smiling like a cheshire cat >> cnbc had dorman on earlier this week. >> yeah. before the announcement.

>> he's happy with what we're doing right now. he's been paying careful attention to this because he's chairman of the board of cvs and they're trying to do a vertical transaction. so i've spoken to him a lot. >> i haven't -- you know, i don't follow your comings and goings that goings that much, have you been out to l.a. and looking around for real estate when i called you mr. hollywood, you didn't really embrace that. >> i thought it was a joke i can't afford los angeles real estate, man. >> i think malibu. you going to stay in dallas? >> i love dallas you don't like dallas? >> i like dallas. >> it's a great place to do business business friendly. >> you're a mogul now. you can't stay in texas, i don't think. >> john stanke is the mogul. >> he can look over the landscape. he's like 8 feet tall.

>> you're exaggerating just under 7 feet. >> so i guess we're going to go now. there's so many ramifications. this has been close to a novel, honest to god. it's like "war and peace." the way the machinations. >> i want to thank jeff. he hung tough and never wavered either so this is a process we went through together and he was a real leader through all of this. hats off to jeff, as well. >> very good well, you know, "squawk box" has a great relationship, too. i don't know what it means for, you know, golf tournaments and stuff. [ laughter ] i can't imagine it's a bad thing. >> it's right around the corner. someday you'll make the cut out there. >> i made it the first year. i know you know that [ laughter ] yeah, but it's been, you know -- >> rick kicked your rear end. >> yeah, he did.

you know, after i was saying are you taking this game out and he did rise to the occasion. >> sure he did. >> he showed me. all right. randall stephenson, thank you. >> thank you. >> thank you great to see you when we come back, we'll get jim cramer's reaction to at&t ceo randall stephenson's comments and next week another big interview. ceo of hulu randy freer. i'm heading over to cannes wednesday 7:00 a.m. eastern time it's time a disruption disruption creates opportunity and i find that exciting as an entrepreneur. >> access to the retail's top influencers. this is next in commerce mobile device has empowered consumers to walk into a store and feel educated.

feel in control. >> so much can be done by taking a picture using augmented reality. it's fascinating and changed the landscape. >> this is the place where commerce, consumer behavior, and innovative technology intersects. >> you'll see more and more companies use data in rich and interesting new ways. >> i think the future of retail is creating personal experiences. >> anything that doesn't add value to the process with the customer moves to the background. >> hear from the smartest minds in commerce at cnbc.com/state of pais understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony. what are you working forward to?

we get down to the new york stock exchange and hang out with jim cramer what did you make of mr. stephenson's comments? >> well, i think you asked him that question about the additional billion i think he punted on it, andrew. i think that rule of law was more of the story than the possibilities of what they can do and i think it'll be interesting. what you read what moffit said this week about the $28 and possible dividends 7%. that's worrisome i don't know i think the story is the debt load and whether the carrying costs of the acquisition. >> and you're saying how you treat the stock, at this point. >> i like verizon more for yield. i like t-mobile more for growth. i think that this one is just

okay it's a bit of a bond that has a little more worry than the traditional bond no, i mean, i'm concerned about this deal. i think be careful what you wish for. they got it. but at the same time the core business is doing not well and that's what i focus on it's just a very difficult place to be right now. >> i don't know if you saw some of the comments earlier. we've been going back and forth about the fox transaction and what kind of price disney has to come back with and whether they actually have to match the $65 billion offer from comcast he suggested if it was an all-stock deal given the tax structure is it could be less. does that make sense >> i'm not buying that at all. index funds and they are going for a cash bid that is high. ve jim cramer. ha a great weekend, my friend. back in a moment imagine traveling hassle-free with your golf clubs.

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next year. i think there's -- two months ago there was a feeling that the tax cut wouldn't work and people are more worried and i have a feeling it's somewhere in between i think if you get a capital spending cycle, which we're chatting about, that can greatly extend the business cycle. >> thank you so much we'll see you on monday. time for squawk on the street. good friday morning. welcome to "squawk on the street." carl quintanilla with jim cramer david faber is off today the futures are down as the white house confirms 25% tariffs on $50 billion in chinese goods. china said they'll respond in kind europe is red. no longer sustainable. president says china's trade practices are unfair slaps that tariff on hundreds of chin