"squawk box" good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. happy friday end of the week is here. i'm becky quick along with joe kernen and andrew ross sorkin. looking at u.s. equity futures, yesterday was another down day for the dow. a decline of about 200 points yesterday. that brings us to eight losing days in a row. if you get to nine days today, that would be the first time in 40 years that that has happened, all the way back to february of 1978 >> yeah. >> you remember. >> no. yesterday we were up sharply >> one day we saw a few green arri arrows >> but it didn't stay.

>> i guess we'll be up today i don't have a high degree of confidence that it couldn't turn around you're back. >> i'm back. >> you got your clothes on. >> clothes on. >> you feeling cosmo >> you're on your way. >> yes yes. >> i think the euro is down. you may get -- >> it was 116. >> it was at 115 i thought it might have been -- >> i canceled a couple of restaurants based on that. downgraded a bit >> one less grade of the truffle. >> exactly one less that is true those things are so expensive. >> did you have a truffle thing while there? >> no truffles >> do you have a highlight other than your great reporting? >> that's all i do great reporting. >> we have sunglasses. we got caught up in the news, we never put them on. >> goodness. >> we were going to troll you. >> were you? >> apparently, according to

viewers, i am light sensitive. every time i took them off, i would get e-mails from people saying sorkin you clearly are light sensitive. put your glasses back on.squinth >> i feel your pain. there's places where you literally can't see. >> it's true with my little coloboma thing >> which darrell now wants to get one. people think it's cool >> i always squint more. >> same thing. i have light eyes. i think blue eyes are sensitive to it. so i squint the same way >> so you still have plausible deniability that you were ogling things that were happening around you i saw nothing? >> i saw nothing >> you were at a nude beach, you saw nothing. >> i went to a jon bon jovi

thing, that was school >> he had clothing on. >> yes >> every time we went to break, we thought you were rubber necking. >> no, but one time we were trying to lock around and see what was going on. >> joe, what did you say about naked beaches? >> i have been to some i've never seen anyone on the beach that -- they all should be wearing clothes. i wish they were wearing clothes. i have not seen anyone where i said wow, glad they're not wearing clothes. >> that's pretty much the situation behind us. >> is that what buffett is talking about? >> i don't know. a lot of people you could tell they must go to that beach every day because they look like leather. >> what is it about the people doing that that we look at and go, my god what is it about them wanting to show people >> maybe it's us maybe we're the weird ones we are the ones who are --

>> they're just free they're not doing it for us to say you look good. >> i will say if you ever took a shower in an outdoor shower, it is nice to feel the breeze. >> shrinkage >> the dow is up, the s&p and nikkei are also up >> the hang seng and shanghai both ended higher. shanghai up by a half percentage point. the hang seng up by 0.10%. look at what's happening in the european markets green arroei arrows across the d the big gainer is the ftse look at treasury yields, which have been below 3% for the ten-year ten-year is yielding 2.911%.

>> let's tell you about corporate news 35 of america's biggest banks got a clean bill of health all passing the fed's annual stress test, and the fed believes they have enough capital to withstand an economic downturn this is part one of the test next week the fed will decide whether or not to approve plans for buybacks and dividends in trade news, china's state media slamming the u.s. today. the official china daily newspaper publishing an editorial saying the u.s. is suffering from paranoid delusions when it comes to trade. the paper also calling u.s.'s protectionism self-defeating president trump threatened to hit beijing with an additional 2$200 billion on tariffs. >> on the stress test, it seems this is an all clear to see both potentially bigger buybacks, bigger dividends on the stock side and more loans. also just to suggest maybe the economy is humming along in a good way >> that's how i was feeling

about it >> i will read this story now. yeah we explain it at the top who owns mrs. butterworth, and who owns chef boyardee we said they might get together. those two brands pinnacle foods, whose brands include mrs. butterworth has reportedly restarted talks to sell itself to onagra. conag conagra's deal talks between the two companies fell apart last summer because of price. pinnacle has come under price to pursue a possible sale back in april an activist investor jana partner disclosed a 9% share in the company.

shares of pinnacle rose 3% yesterday on news that conagra had approached the company >> let's get back out to vienna. oil ministers have gathered there for a key opec meeting brian sullivan is there. >> we now know after weeks of speculation what opec leadership wants, it's another 1 million barrels per day on the market theoretically. i say theoretically because there's a difference between a real barrel of oil and a barrel of oil you cannot produce. here's what we're looking for from a deal later on today from opec we have not gotten a deal, just speculation and confirmation a couple minutes ago upstairs. the uae's oil minister telling cnbc live on "worldwide exchange" that 1 million barrels is what they're looking at here's the problem if i ask everybody to bake cupcakes and bring them in and you eat what you bake based on proporti proportion, it sounds good until you realize some people don't

have an oven or cupcake mix. some of these countries like venezuela, iraq, iran, they're unable to produce more oil whether or not that's because of in venezuela's situation they have a rolling economic disaster or with iran, they're at max production and now the sanctions will kick in later on this year. if you can't produce more oil and opec agrees to do that based on your current production cuts, that means a couple big players, saudi arabia, you could wait, uae come out as winners, while some countries are unable to produce. that's the fight also confirming on camera as well, this takes the political element up a notch, the iranian oil minister confirming to cnbc, that in addition to the number of barrels, they are looking for the opec official statement to denounce in some way or rebuff the united states' removal from the iranian nuclear deal i asked him directly, i said do you want a statement in?

he said we want, we want, we just don't think the other opec nations will do that iran wants a statement basically against the united states' removal from the nuclear deal. 1 million barrels a day is what we're looking at could be an hour, could be a couple of hours while they go upstairs and negotiate the actual terms >> and me. gentlemen. >> exactly >> i don't have output here, becky, i apologize >> you have been talking a lot >> all i heard was talk about music, bands, andrew's glasses i didn't know. the opening band was deep blue something, "breakfast at tiffany's. >> that looks like he's hard at work >> sounds hoarse, too. hope you're feeling okay you got to be ready. we're hitting the town

>> 24 hours from now, the kernen/sullivan summit >> we'll try to hook up. i'll debrief him on everything he learned over there. somehow i will expense it. i will get this paid for for more on the broader markets we're joined by ed campbell, qma managing director, also dorey wiley ed, let's start out with you dow down 8 days in a row talking about a decline of 3.4%. i would the divergence from the other parts of the market? >> we passed the point of maximum global growth momentum things are starting to slow. we've gone from a story of synchronized global growth to one of more divergence we're seeing continued u.s. strength and the rest of the world weakness that's causing us to take down risk on the margin in our portfolios we've mainly been trimming

emerging markets we're focusing on u.s. assets, especially domestically oriented assets which are exposed to that continued strength in the u.s. economy. >> i believe the two biggest decliners have been boeing and caterpillar. that has to be a reflection of the trade turmoil. is that overdone or warranted? >> it's going to be a tough summer u.s. markets will hang in there. the globally exposed segments will outperform -- >> we are talking about two specific ones, if we get into a trade war, there's going to be retribution that will fall on boeing andcaterpillar. if we don't get into a trade war, maybe there's a mbargain here >> a full-blown trade war is not in our best case scenario. the continuation of trade

tensions is something we're likely to see over the summer. that's why you will see markets range trade but u.s. markets do relatively well compared to emerging markets >> which is why the russell 2000 has done so well >> exactly that's a call we made. we wrote a piece a couple weeks ago that it's small cap's turn, and we think that trend has likes. >> what is happening with the banks and the stress tests we've seen all 35 banks pass the stress tests, but we're waiting to see what happens on the buybacks and other plans they may have what do you expect we'll hear? >> i think you'll hear good news we added 8$800 billion worth of capital since the crisis our banks look great they look very good. doesn't mean they don't have risk or that credit is getting more competitive out there, other than goldman, capital 1, and state street, everyone came through with flying colors

>> you think goldman, though, will not be able to do anything too interesting on the dividend or buyback side. what about morgan stanley? >> morgan stanley maybe so, but they did better than goldman >> what will happen there? >> it will be interesting. goldman is goldman we'll see what happens they're certainly not going to have the flexibility that others do the sfwresi interesting thing o the comparison to deutsche bank and other banks around the world. deutsche bank got downgraded by fitch, and they've been downgraded by s&p. they run about 3.6% capital. they never added enough capital since the crisis a lot of these european banks and world banks need more capital. >> meaning what as a row flefle of our bank s compared to their banks. >> i feel more comfortable with our banks. our banks have doubled the

capital since the crisis and they have doubled the capital, like a b of a or citi group doubled the capital of a deutsche bank. that makes me more comfortable as an investor >> goldman has been another big drag on the dow over the last eighth sessions. what do you do with the nasdaq and technology stocks that seem to keep climbing no matter what happens. >> we're overweight tech i continue to ride that trend in a late cycle environment momentum often rains at this point if you look at the technology sector and the multiple it's trading relative the s&p, it's not at the level >> what would change your mind about any of that? it's just been crazy this run that we've seen in the stocks. maybe they keep having the earnings power, maybe there's nothing to slow that down. what would change your mind? >> a blow off in multiples,

which we have not seen yet we continue to see good fundamental earnings in this sector >> we have to monetize this. look at that shot of ed. take that shot of ed again >> let me see. there's a huge pod thing it's not going to move it's right next to his head. it's not going to move as soon as this van moves. you will see this pods thing there's got to be a way to monetize this. >> we're giving it away for free now. >> i just looked up pods, it's a company that likes publicity i think this is totally intentional when you look out here every time you were talking, all i could think about was pods it will be this way. it will be this way all day long >> you want to put a window on the newspaper? >> we have mugs. we have telemundo mugs

>> for the world cup >> for the world cup look at poor kyle. he's earning his pay kyle is running around starting to sweat. >> wow >> you have yours? >> i have my mug here. water is in it >> it's what's on the mug that matters. >> take a slot of ed again that is not going to move all day long that's not going to move i was thinking, okay, wait until a green light. there's nothing -- it's not attached to anything that's there do you think that's -- they didn't do that -- >> intentional >> my guess is they didn't, now they are yahoo! >> remember when the truck behind us, the masters of sex truck? >> that was parked next to you, which seemed somehow appropriate. ♪ in twitter they said did you say you have a little coloboma or something? >> coloboma.

the eye issue. >> this guy said -- me and becky missed that you were talking about -- >> i don't know what you're talking about now. >> you didn't see it >> i missed the twitter. i missed the tweet >> this we needed to talk about. telemundo. have you been watching world cup at all >> i have. it's been on every television i our house. argentine fla loa lost yesterda croatia. >> what does that mean >> it's a big disappointment >> they're not out >> nobody is out yet >> did you talk to wilf? >> i did talk to wilf about this he's excited he thinks england is the way to potentially go all the way >> he'll be back at 6:40 he was sitting in your seat. >> keeping it warm >> yeah. >> we switched one globalist for another. >> ed, thank you for coming in dorey, thank you >> you didn't do that?

>> i did not >> look at that! we can't have -- we have to put our guests over here any way, coming up, the latest installment of the "jurassic park" franchise hit u.s. theaters last night. it's already generating a massive haul overseas for a good company. we have the details and some dinos next directv now gives you more for your thing. get all the good stuff about tv without all the bad stuff. yes! you can still stream your favorite shows... yes! ...with no annual contract. wait, what? it's live tv. yes! with no satellites. what? and no bulky hardware. no bulky hardware! isn't that great news? yes! noooooo! no! noooo. try directv now for $10 a month for 3 months. more for your thing. that's our thing. visit directvnow.com

♪ >> jurassic world: fallen kingdom hit theaters last night. >> who was i >> i loved newman. >> the doctor. >> i liked him okay. getting up there now

>> becky, when we were -- >> sam neil. >> who were we in that car together >> i think that is newman. >> i was newman? >> it may be me. >> newman. >> newman is in the car. >> his name -- 25 years after the debut of the original film -- wayne knight i didn't get that right away somebody else would have got that on jeopardy >> not andrew or i >> it has generated 4$450 millin overseas the film is set four years after the events of the last "jurassic park" and follows chris pratt. i like him more and more >> he's funny. >> down to earth and bryce dallas howard's characters as they try to save the last remaining dinosaurs which are threatened by a

volcano. seems timely fr . >> look at those dinosaurs they're above us now >> the ones on the left. >> you feel okay you see them they could come down here. we'd have a problem. >> the film is one of the first released overseas that didn't come with terrible recommendations and get trashed by critics it's done well overseas. >> are we going to be showing our jurassic trailer throughout the morning? >> i hope so >> i want to see that again. >> better than looking at pods what are these other things? >> people. >> other reporters >> from competitors? >> yeah. we can talk about that after the break. >> that's like the size of a closet >> in the meantime, want to tell you about chipotle testing new menu items >> which network >> the new items include -- joe,

this is your thing quesadilla >> little cheese >> a mexican shake chipotle built its business on a limited menu that allows items to be read quickly, but heating on the quesadilla takes 2 1/2 minutes versus the few seconds for a bore rita. burrito. if chipotle does the ca quesadillas, they will have to get new warmers. >> this is the fear of many. >> is the quesadilla not an authentic item >> i love them did you know it means little cheese >> i did not

>> you watch it every night. >> it's an obsessive thing >> i'm a fan, i just don't get the chance to watch it every night. >> i watch it to see how insufferable trebek can be how he pronounces things >> he knows the answer once the answer is on >> he does know the answers. >> because they're on the card >> i would love to see him play. >> he says i love being with other smart people he's insufferable. just the worst >> you're not getting invited on >> i don't want to >> "dancing with the stars." >> "dancing with the stars" is what i'm holding out for i can move >> yeah? >> no. >> you have your lululemon pants on >> if i do get invited, i can wear these all stretchy. when we come back, the impact of a potential trade war on the transportation industry we'll talk to the expert about

the higher tariffs on the industry that depends on trade flows. right now a look at yesterday's s&p 500 winners and losers this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

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♪ >> good morning. welcome back to "squawk box. let's look at the u.s. equity futures. you're going to see that at this point it looks like there are green arrows across the board. the dow indicated up by triple digits a long downturn for the dow, it's closed down for eight sessions in a row. if we were to close down for the dow again, it would be the first time that happened in 40 years, but right now dow indicated up 110 points s&p indicated up by 12 the nasdaq up by 22. red has the repot reportingr than expected first quarter results, but the second quarter outlook missed the street's expectations that stock is down 13%. reuters is reporting that tesla plans to close a dozen solar installation plants in nine states. the cuts affect facilities of

the former solarcity which merged with tesla in 2016. disney says it is willing to divest more assets from 21st century fox in order to win regulatory approval for its proposed deal. in a regulatory filing late yesterday disney said those assets potentially include fox's regional sports networks disney raised its bid to $71 for fox's entertainment assets, topping comcast's $65 billion offer. concerns of a trade war have investors wary of some specific sectors. joining us with a read on not just transportation stocks, but just in general what's happening, donald bratton managing partner and principle at bratton capital is that you? >> that's me >> not a separate bratton entity that would be weird. that would be a coincidence. >> took five seconds to come up with the name. >> yeah.

the first thing that i see that you told us is that so far you would see a potential trade war in the goods flow on the import or the export side and that's not been seen at all at this point. >> yeah. like everyone else, i read the economic history, milton freedman, what happens when you put up huge tariffs. so far we have not seen that at all. >> if we do, you have three sectors that you think would be affected, semiconductors, we usually talk about transports, and automakers in fact, there's an article written in the "journal" that the big bull market in the transportation group could end it's been a multi-year bult ml market in the transports, but this could end >> you are tapping into everything from the very raw

material stage -- >> great leading indicator >> dow transport theory does not work by accident the stocks are capital intensive companies. it's dow dupont theory devolvement 101. so if asset utilization is up, financials are up a lot. >> so we'll know if the trade war will get out of hand if we see a crack in the transportation average >> absolutely. we're seeing continued lumber shipment the going up. you're seeing the reason for the strength in the dollar versus the euro right now, european air freight is giving us a strong sell signal on the euro. >> really. so instead of watching the rhetoric, you watch the actual markets. what about semiconductors? >> the asian freight is a

leading indicator, not because everything we air freight is a semiconductor, but high value and low density. 70% of what we air freight in that area has one or more semiconductors in it that's why there's a correlation. i was here for the battle front conference across the board consumer and indust ram actirial activity is increasing >> what is the most clever new form of data you saw people scraping >> besides my own? >> besides your own.

you hear people trying to figure out how many cars are in the parking lot of walmart >> you would think that, but it's those using artificial intelligence taking old school data like mine and new school data and combining them, finding patterns that exist twine them like what we do with the semiconductors what does asian park air trafreh have to do with semiconductors that pattern does exist. >> automakers, you make some interesting points you would see it there, you would think it might mean that buy america would help some domestic automakers, but you don't think so because gm built good relationships with china. in you ruin that, that's contrary what about tesla >> i don't know about tesla. all i can tell you is that in

the short-term when i look at the goods flow, if anything we've seen an acceleration i can't believe that's because everything is trying to rush and get it shipped before the tariffs are put in place it's hard data it's not sentiment it's not opinion it's ton mile bs being moved frm point "a" to point "b. you can't argue with it. >> you have anything that will indicate whether nafta will get done watching anything? >> understand that 80% of mexico's exports come to us. 75% of canadian's exports come to us. you can't tinker with it too much without creating a recession if not depression in those countries. >> let me ask you one thing, if you are watching all of these flows saying consumer flows, all of these items are strong. is there any indication that could be some channel stuffing

ahead of potential tariffs or breakdown in talks >> it is certainly possible. that's the potential false positive in this data. you have to understand that in the essence of -- especially getting to the tech side of it, if you were toughing coal or steel, i might believe that. it's not a wasting asset you put the coal in the purr nas, yna furnace, you get -- >> maybe not three years worth of stuffing, but a short quarter ahead. let's get this in incase there's a momentary blip, we'll assume those get lifted later we don't want to get caught with anything and not have enough for the holidays >> that's the real risk. the other thing is that we have such high levels, because of technology, we have such high levels of supply chain visibility that there's a

reluctance culturally through the way companies are built now -- >> to not operate on an as you need it basis? >> correct >> i don't want to sound like an american firster, but canada is how much, mexico is how much >> 75% of the exports from canada come here >> and mexico? >> 80% >> either place goes into recession if -- aren't you saying we can win trade wars then we're not going into recession the other side goes into recession, not us? we won't we trade with the rest of the world. do we have leverage over those two countries then >> to say we don't have leverage is not paying attention to the facts. we have huge amounts of leverage should we strike share trade deals? absolutely i'm pointing out if you built huge walls and said we will not trade with them, it would create economic chaos i would argue if you did that to mexico, you would have a large

amount of the mexican population that would have nothing to lose. you would ensure the rise of a leftist government down there. >> which doesn't help us at all. >> the drug gangs are a leftist government that's not what we want. many -- once you get 150 miles south of the border, many of those villages, the difference between poverty and abject poverty is the money sent home from people up here working. i don't know that that's what we want to do economic history is clear. as long as it's fair free trade creates prosperity for everyone. doesn't matter whether you're in the middle of the african continent or rural asia or you're right here in manhattan the ability to get the best products from the best place to make them is a break for everyone >> okay. you're a thoughtful man. >> thanks for having me.

>> thank you for coming in when we come back, the uk voted to leave the eu two years ago. we'll tell you how the process is going and how companies are preparing for the brexit. at the top of the hour, our guest host is eric cantor. he is here to talk politics, trade, dealmaking and so much more. later, rick rieder will have a read on the markets and how you should be preparing your portfolio for rising interest rates. stay tuned you're watching "squawk" on cnbc because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital.

time for the executive edge. tomorrow marks two years sense the uk voted to leave the european union wilfred frost is joining us this morning with more on the key dates remaining until the uk actually leaves the eu tomorrow marks two years since the uk voted to leave the ex- eu the 29th of march, 2017, when theresa may invoked article 50 that set the departure date for two years later, 29th of march 2019, nine months from now and

this past wednesday when theresa may's eu withdrawal bill passed all legislative hurdles in the uk crucially without major destabilizing amendments added by remainders. afterwards may said it showed people in the uk and the eu that the elected representatives in this country are getting on with the job and delivering the will of the british people. perhaps, but the shape of the deal is not settled, so the long-term effect on the uk and eu's economy remains uncertain what is clear is that the economy has slowed, but is still growing and not collapsed. the ftse 100 and ftse 250 stand well above their june 2016 levels and the british pound recovered a large amount of its post-brexit falls. also the next key events are the upcoming eu summit on the 28th of june. the following one on the 17th of october, which is intended to allow enough time for legislators to ratify it before the 20th of march 2019

still a lot to get done in the remaining nine months. >> the divorce proceedings, they're calling them divorce proceedings. >> kind of like a divorce. >> is there a divorce court? >> what about best three out of five >> meaning >> they want another vote. they think it was wrong the first time >> the eu withdrawal pibill passing makes that less likely it's still not 100% settled. >> what line is theresa may walking? she's not a brexiteer by any stretch. >> people used to think before the campaign that she was a closet brexiteer, she campaigned for remain she's balanced what she's managed to do is continually kick the can down the road she hasn't had to formalize the faceoff within her party between remainders and brexiteers. >> what was our guest host --

elizabeth from allianz, she's from the uk. she was a remainder. but her rational was she saw it as a trading vehicle as a way to -- didn't want to merge the currency it's weird it's a pseudo unity in terms of -- >> i think the uk has never been part of -- >> that's what i mean. >> people felt if it stayed as a trading block they would have wanted to remain it was wanting integration that some people didn't like. there's loads of arguments at play the strong one that galvanized support for exit was immigration. that's clearly an issue that continental europe is talking about more there's an argument that

resonates with the remainer and the brexiteer. across a lot of continental europe the immigration issue itself whether in italy, germany, has risen to a fore you wonder whether there's time left now, there's only nine months, whether the eu could have made an offer back to prevent these things from bubbling over. >> i heard an argument yesterday for the first time that i had not considered before. that the uk was not able to have free and open trade with the commonwealth there are 3.2 billion people in the commonwealth and that anybody who looks at this breakout from the eu may see this as another trading potential to create all kinds of trade back and forth with former areas that maybe you should be able to. >> absolutely. not just the commonwealth but the world. there was an argument in the

'50s and '60s to have free trade with those partners on our doorstep that applies for goods the uk economy is 17% services services in this age you can trade with australia on the other side simply. that's a chief option for the brexiteer. the economy today is slowed, but still growing. >> did you move all your stuff from the uk over here? >> i did yes. >> if you don't have room, consider pods. i don't know if you saw, if you need extra room, go to pods. call 1-800-776-pods, you can put all of your uk stuff, store them there. we'll store them out here. if you come down here, get a clean shirt. we have a pod right there. >> wilf, thank you for all the world cup information.

>> who we voting for >> england >> who they any good? >> well, less expectations than in past tournaments. the pressure is off, but the blind hope picks up. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered... us. it's what this country is made of. but right now,

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♪ wilf is back there wilf is back there playing with the dinosaurs. >> resembled the whole idea of having -- there's a couple of dinosaurs right there. >> there you go. i see at least two on the screen right now. >> yeah, i don't like that anyway, the nba held its draft last night i got some comments here you're going to talk the money angles but it was pretty interesting overall. i feel bad for the villanova guy. i feel really bad. >> it was a good story >> he was so excited to play for the 76ers. >> his mom works for the 76ers and they interviewed >> i didn't see it >> they drafted him. he was celebrating posing with joel embiid and then the 76ers traded him right after

>> heartless >> yes heartless. >> maybe she traded him. >> my goodness i see dinosaurs behind him. >> you see him dante is now a buck. and treyvon blew it. >> here come the dinosaurs again. look at this >> there are some winners and losers in the sneakers war which we're going to talk about. plus big three basketball is back eric chemi joins us with more. we'll talk about this other stuff at the end anyway >> that's right. i'll run through my part fast so you have time to ask questions nba draft looast night. the top two players, these are athletes sponsored by puma puma didn't exist in basketball for the last 20 years, guys. now they're competing with adidas and reebok and nike they came out of nowhere ten days ago nike doesn't have a player in

the top five other than the european who came. luka doncic. that's going to be something to watch. then the other thing here is when these players become 40 years old and they've retired, left the league, they can play in big three basketball. that's the league three on three half court summer only. run by ice cube the rapper their first game is tonight. it's a summer only thing we talked to him he talked about how all these companies, they don't want to help you in your first year. they want to wait for you to make it three whole years and some of the uphill battles here's what ice cube had to say about that >> nobody wants to help you year one. you know, everybody says make it to year three and we'll just buy you. here we are, the big three with some of the biggest names in the world. and so we think it's a no branger. it's just convincing some smos

out there that it's a no brainer too. >> what's interesting about big 3, they have a four point shot they think the nba should look at that as an example. make it even further out then if you're down by eight, you could cut the lead in half in one shot. that's kind of everything going on last night and coming up tonight. >> i'd like a four-point shot. >> then the individual stories were interesting too one thing you can tell is how important the tournament is. i mean, dante went from a six man to a -- >> after research they said how you do in the tournament may be overreflected. but it's worth it to find your performance. >> you see one of the best players year long. but in florida state, he had five turnovers and only eight points didn't get drafted >> eric, thank you very much >> you got it. our guest host when we come back for the next hour is eric cantor right now vice chair is going to

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opec ministers meeting in vienna right now inching closer to boosting oil output the political issues most important to your money. insight and analysis from today's guest host former house majority leader eric cantor. plus a passing grade the nation's banks clear the fed's doomsday stress test 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" right here on cnbc we are live in times square at the nasdaq market site we've got dinosaurs behind us, jurassic park this weekend i'm andrew ross sorkin along with becky quick and joe kernen. take a look at futures on this friday morning the dow looks like it would open up about 124 points higher nasdaq up higher as well about 24 points higher s&p 500 up about 13 points oil prices are higher as well as opec members meet in vienna. appear to be confident any output rise won't result in -- brian sullivan is in vienna this morning and we will talk to him in a couple minutes. general motors will be building its new suv in mexico

that's comie ining despite prese from president trump also another prominent labor union in the news this morning the teamsters unit the current labor agreement expires on july 31st that's good news for u.p.s. and the workers. all right. financials in focus today. 35 of america's biggest banks just got clean bills of health they all passed the fed's annual stress test. that means the fed believes they have enough capital to withstand a major economic downturn. this is just part one of that test next week the fed will be deciding whether to approve plans for buybacks and dividends for those companies. >> in the latest trade news, china state media slamming the united states today. the fshl china daily newspaper saying the u.s. is suffering from what it calls paranoid

delusions. the paper also calling u.s. protectionism self-defeating earlier this week president trump threatened to hit beijing with an additional $200 billion of tariffs let's bring in our guest host this hour, eric cantor vice chairman, managing director at mullis & company. and the former speaker who doesn't argue all day long doesn't have to live in washington, d.c. and looks like you're having trouble -- yeah, i haven't seen you where your lips aren't like that in a smile. >> you know, it's just nice to be in a world where results matter and consequences for your actions are real so it's been a terrific time to be out in the private sector >> thinking back to what i know about a lot of your viewpoints, i'm sure you look at some of the trade stuff and have a problem with it. but i'm wondering, do you -- is

30% of you saying we needed to do something at some point and not just sit here and take it forever >> first of all, with china, i mean, there's a real problem -- >> intellectual property >> as we know, that country requires so much of american companies when they go into that market and giving up the ip. and just the intrusion of that country into companies is significant. yes, our intellectual property is at risk there i think something needed to be done i'm not so much that the sense of we need a bilateral trade war between china in the end is the right long-term play i think short-term it can rattle people and we're seeing that one of the positive by-products of what president trump's been doing, though, is that china has said, hey, we're going to open up our markets more. now, we'll see whether they're going to follow through on that or not but i think long-term -- look at where the chinese are.

and the size of that market. and the fact that, you know, they've got -- they have a card to play in terms of the treasuries they buy as well. when we see interest rates now where they are which are still low but signaling the fed -- the fed is signaling the fact it's raising rates increasingly, if china were to join in on that which not necessarily are going to be in their interest. >> if you're one of the biggest holders, why would you punish -- >> and they can always buy german bonds at a half percent >> that's the problem. which is not necessarily in their short-term interest. but think about it though. if they were to go in and essentially sell dollars, you know, what it will do is aggravate even further the interest rates in this country which obviously is not going to be good for us but i'm not so sure that they would do that. >> i'm not sure they'd do that, but maybe where you come back is on the car insurancurrency front

what if they just decide to go ahead and put pressure on it and drive the dollar up comparatively as a result? >> right and that's for them. it makes us less competitive internationally. because on the other side if they were to do the opposite, obviously it makes us more competitive and they wouldn't want to do that. >> we have more wiggle room because of the size and strength of our economy and the prosperity we already enjoy to some extent. we were just talking about canada and mexico and the kind of leverage we can exert we don't necessarily want to do that as the biggest person in the room necessarily but, you know, other countries might feel pain more quickly and maybe more than we do. and i think there might be something to that. >> the whole mind-set is, though, he's trying to drive towards bilateral relationships versus this sort of multilateral platform of the wto and the rules that have been put in place. i think that's where the other countries are in a bit of disbelief at this point of what

in the world happened -- >> i thought they led a lot of stuff that is patently unfair. they're teethless, toothless >> we've not seen the international organizations perform very well over time. >> are they toothless or is there a chance the wto will rule against us >> this is what we risk. if we're going to go flout these rules because the precedent is being set to use national security to go in and slap these significant tariffs on by july, we'll have all the retaliatory tariffs in place and we'll begin to see it. our economy' large and we can, you know, i'm not saying we can take that. but if it escalates from there, if we actually go into these moves in terms of europe and the autos, then we're into some serious issues >> short-term, we probably very likely could i thought one of the things that

was interesting was what happens if you break down a barrier like nafta and you truly punish the mexican economy? what that means is you're going to have security issue on your southern flank. >> no question >> and people who have much less to lose. >> as we can see, they're doing so well in washington trying to deal with that issue >> so what would you do there? >> what? on the immigration >> yeah. but how that relates ultimately to trade and how that relates to whatever partnership or relationship you think we're supposed to have with our neighbors. >> in the beginning when trump was first elected to office, there was a lot of discussion about trying to marry the two. we need mexico to secure its southern border because a lot of the flow is coming to its south. we need it to make some commitments to the infrastructure there too and the thought was that we were going to leverage that issue on security as well as trade. but, you know, so far all it's been is, you know, a typical move that we've seen this

administration take. you know, it's somewhat akin to what president trump did when he was a private citizen. as you go in and negotiate in such an extreme way and put a play out there to send this signal to all parties, don't mess with me, we're not seeing much coming off of that in terms of the nafta negotiations. so now you've got trudeau upset. >> how does that manifest itself both in terms of economically and the larger picture >> you know, again, i think that we've not seen any kind of bold moves on the part of the counterparties on this continent. like, i do think you're right that our economy is so big and we could inflict some significant pain, but again, politically in the midterms and ultimately i think two years from now when the president's up for re-election. it's this immigration issue that's going to be central >> and that security the secure borders is an issue too. we always talked about how we're in a different position than

europe where they have all of these problems we always said we were an ocean away ignores some of what's potentially happening. >> so while we're telling mexico to pay the wall which they're never going to do, there is a way to get them to pay indirectly if -- >> pay for a wall on their southern border. >> right that's what i'm saying if we can indirectly get them to do what they need to do on their border, that would then help us on ours. >> if you think immigration is going to be the central issue of both the midterms and 2020, how do you think it's playing inside >> i'm not sure it's a central issue. i think health care, honestly, if i look to see what happened in my state of virginia last november, exit polls showed number one by far issue was health care. rising costs of health care on the part of voters. >> but it didn't spread from here the immigration issues it's almost like it came up organically, separately in all these different places in europe

and everywhere you're hoping what's happening now hurts trump. but what came up with the pop lust fervor got him elected the oth other. >> midterm as we know off-year election always about turnout. who is more intensely motivated to go to the polls you saw there was a poll lately who said trump has turbo charged both sides both sides are -- and an opportunity to totally fix immigration. you were there then. >> people aren't going to forget that that's going to come back too. there were 60 senators, democrats. you had the house. you had the presidency you had it

what'd you do? what'd you do? you forced through obamacare >> images of -- >> look. the images -- >> images of kids in cages are not good and so they -- >> i know that but there's pictures of images from five years ago of kids like that >> but it's the policy the trump administration put in place. >> it's a policy kidnapping children it's a difficult position. >> so you're going with the kidnapping children. all right. >> six weeks ago they put the zero tolerance policy into place. he's since rescinded it. >> no one likes to see it. >> it's not a lie. it's a court ruling being interpreted different ways by different administrations including by this administration >> right and by the last administration so at the same time no one wants to separate children from their parents, on polls there are people that want zero tolerance. there are people that want to secure the southern border >> i hate to say you go on twitter and you look at europe polls, there are people who have been asked -- trump supporters

about the situation. they're thinking the photos are photoshopped >> when you've got people saying kidnapped, it doesn't help the situation. but i don't expect anything else anyway let's go >> we got a lot more to talk about with mr. cantor. but up next, opec's decision on alpha. brian sullivan is going to join us >> thank you and speaking of the trump administration, after today will the president of the united states be able to say that he helped push opec to raise oil output a decision is coming later today. it looks like he will. we'll be live from vienna, austria, right after this. hi!

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hey guys, i'm home! surprise! i got a puppy. add an ipad to select packages for just $5 a month for 24 months. upgrade online now. welcome back to "squawk box" this morning oil producers have a big decision to make in vienna brian sullivan is there right now and joins us live. good morning to you, brian >> hey, good morning thank you very much. listen the outcome it looks like we're going to get more oil. we're going to have a headline right now in vienna that says there will be more oil on the market in a month or two than there currently is right now that is the statement. the question is, how much oil are we going to actually see hit the market i'll get to that in just a bit it looks like that iran and saudi arabia have put aside

their differences and come together on some kind of a deal that would ultimately increase output now, this is where it gets a little bit confusing what they'd be doing is effectively reducing their previously agreed to cut remember two years ago in an unprecedented move, they got together and said let's cut production that cut is now at $1.8 million a day. what they're doing now is cutting the cut. which is an increase, my fifth grade math teacher told me we're going to get more oil on the market and we had a chance in the media scrum upstairs to chat with khalid minister of oil. he basically said everybody's on board that more oil is needed. listen >> the fundamentals call for more oil to be produced. and saudi arabia will continue to be a country that called for

reconciliation and to meet the demands of the market which are increasing in the second half. >> you keep hearing about this unity type thing the idea is because they were under pressure from president trump and that they needed to come up with something together to show the world that opec is still a force to be reckoned with i know you got kevin book, a smart guy coming up there on set on "squawk box." the question for him from here is if they add a million barrels a day -- that's probably going to be the announcement we get. not everyone can do that much production what i'm hearing is about 600,000. kevin may know more than i do. back to you. >> all right, brian. we are going to talk about all of that in just a moment in fact, joining us right now is kevin book he's the managing director of energy commodities policy and geopolitics at clearview energy partners i'm not sure you heard brian's

question but if we're talking about 1.8 million barrels a day cut two years ago, now you'll see a cut in the cut what makes the difference? how many barrels a day do you need >> good morning. i did hear brians' question. thanks, brian. when it comes to opec, two words matter words i probably see more than you sleek new yorkers. venity sizing. now that we're looking to placate markets and truly another audience entirely and that was president trump, it's a question of where you set the baseline and how you judge the gains. saudi second half production would be offset by saudi second half consumption of oil. 200,000 barrels per day for electricity on average then 100,000 barrels per day in refining run sop to look at a net million -- sorry. a top line, head line million, you might be at net 700,000 just right there. but the question of when you set the baseline comes to the end of the sizing issue i brought up.

>> i'm a little confused by that let's talk to politics on this obviously opec keeps saying -- the saudis are very happy that president trump end ed up -- is that what this is? this is a way of placating him but maybe still trying to show unity when it comes to the opec nations? >> the first is the request from the united states. still a major consumer of oil, biggest in the world and alsothe risk that the u.s. could change its laws. there's a law moving through congress called the no oil producing and exporting cartels. nopec act. it would make opec's ability to

move markets illegal under the sherman antitrust act. if that were to pass into law, it could create hardship for some of the opec producers also for some of the cooperating producers like russia. there's a need necessarily to show the end users of oil that opec is responsive that's opec's sort of headline reason for why they would respond. they want to make sure the market is well supplied. not necessarily to show they are answering or responding to president trump because as you say, they want to show that they are united and an organization of their own but probably to stave off the political and geopolitical risk that could come with passage of nopec to underperformance here today. >> that's the first time i've heard about nopec moving through and the idea of using the anti-sherman trust laws. that's really interesting. >> it's an interesting concept we've got the ability to sort of

leverage and do that producers have all the assets here that we could then go and file a claim against them and then execute against any judgment and violence of the sherman act. but as brian said, you know, the attempt to do that ten years ago was unsuccessful but, you know, we're in a different time now it's become hugely impactful >> we may not need them as much. >> right opec is in a different vein now. they're going to lose market share. it's not as if they are the sole determiner anymore i'm not sure, but listen in today's world with president trump and he's already been active on twitter this week. >> and the old playbooks have been thrown out the window >> you're darn right i think brian's right. the geopolitical risk of something going on in washington to undermine thefrt is real. >> are you guys still doing business with saudi?

you guys were advising >> we're doing a lot >> moelis and company. >> we are doing a lot in the region. >> finish. >> i was going to say on saudi, in terms of the relationship with the u.s. in terms of the way they're thinking about this and i know that you guys were working on the ipo that hasn't happened yet when i think about aramco, how do you factor that together >> not to talk about any of the actual business we're doing in specific, but i would just say generally in the region, listen. saudi arabia has some good news. the msci allowed them to join the index now. there's going to be flows of capital into that country. they are doing what they need to do to become a player in the global economy so all of this, you know, interaction i think will reflect saudi arabia's desire to do that and they want to be a place where capital can flow which mean this risk, the price of risk to do business there has to come down. i think they understand that

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"jurassic world: fallen kingdom" hits the theaters 25 years after the first film already generated an impressive overseas haul. the firm is set four years after the events of "jurassic world. follows chris pratt and bryce dallas howard's characters as they attempt to save the last dinosaurs. >> that's got to be blue, right? that's the one he raised >> so that may be this weekend's movie plans. >> that was the name from the last one >> blue. >> yeah. he's the alpha actually, chris pratt is the alpha. but blue is the alpha of the raptors. >> do we still have dinosaurs here in times square >> they're around. >> no but we have our pods when we return, ceo of

freddie mac will join us before we head to that, let's look at the u.s. equity futures. dow futures indicated up by 117 points nasdaq up 18 >> oh, my god. the dinosaurs are over there >> wlle ghba e' brit ck

♪ all right. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories front aerocenter black berry out with earnings. blackberry earned 3 cents a share for the first quarter. analysts had been suggesting a break even quarter revenue also topping estimates that stock's up by about 2%. the house delayed a vote on a compromised immigration bill republican leaders are trying to ensure it will pass. conservative members still have some objections including the omission of a requirement employers use the e-verify

system to check workers. and chipotle is trying another expansion. chipotle is going to be making quesadillas, nachos, and chocolate shakes all of it beginning at the new york city test kitchen >> i like the idea of a tostada. >> figures i'm thinking the quesadilla with chicken. he's with the kale i don't know >> well, the chocolate shake is supposed to be an authentic mexican one. i don't know maybe it's got a spicy kick. something along those lines. chipotle's ceo brian nichols successfully added items during his time as taco bell ceo. in the midst of the financial crisis, ten years out the economy is booming, the housing market is tight. freddie mac has also taken steps to make itself much stronger joining us is new ceo of freddie mac. we were just talking about ten

years ago what was going on. this was the summer. this was the moment. >> yes well, i wasn't -- >> i know. >> but it was as i said, a hot and sweaty summer in the financial markets. >> okay. so let's talk about where the housing market is and really how freddie has transformed itself specifically >> okay. well, the housing market, first of all, is doing great the good news is the government policies about mortgages and restructuring the financial system has been successful while the other big news there is, though, there's house prices going up nicely. maybe too nicely because there's a shortage of production of new homes. i don't know how much you've covered that, but we've never returned to a normal level >> and you don't think we're on track to begin >> it's stalled at about 1.3, 1.4 for several years now. that's providing a lot of pressure underneath to keep house prices and rents going up.

and a level some people think is a little too high. it makes credit great for us, but it's probably not good run policy >> freddie has now transferred on $1 trillion of the single family mortgages from taxpayers to private investors how's that happen? >> okay. first of all, that is probably the biggest reform we've done. the achilles heel of the gses and a lot of the mortgage specialty firms overconcentration in mortgage assets we're required to have public policy outlets and such. i came from the regular banking system and this kind of concentration risk is poorly regarded. not well regarded. so we undertook a program of issuing a new type of bond that literally takes the credit losses for us and we get reimbursed it was a test starting 2013. we invented the first one or two structures and it's taken off

so the $1 trillion is mortgages that have some risk. we have worked with the -- our regulator, on a more quantitative way to see how much risk is being laid off and the capital -- about 60% of the capital we would need to keep for credit risk on new mortgages is being laid off. >> how badly do you want to get out of conservatorship on a personal level. as the leader of this company. >> the answer is i took the job knowing it was in conservatorship and knowing i'd be done while it was still in conservatorship. >> so you don't think under the trump administration any time soon there's a chance to fix this >> that's slightly different just for the record, i was a retired old banker and it's not going to be in my time to come out i did this job as public

service. i knew it was a conservatorship. i knew there was no pot of gold at the end of the rainbow. i already had had my pot of gold before so i'll tell you the conventional wisdom in washington is that a legislative solution is not in the near term everyone says that it's not going to happen near term the new thing in the last year is the quiet alternative, what's called administrative reform is being talked about a lot including by several elected officials. and that's sort of the up and coming thing where people are focusing >> eric, what do you think is realistic? and by the way, are you a believer that shareholders and bondholders got ripped off >> first of all, i have to disclose we are representing interested stake holders in all this but let me just -- at moelis and company, but let me talk generally. when i was leader we had so much

difficulty gaining consensus on the hill i do agree entirely that the legislative iffics is not in the offing we saw yesterday the administration put forward its reform of government proposal. and one of those planks in that proposal was to allow for the gses to come out from under conservatorship. there's the talk of administrative reform is very real >> people always wonder why ten years on can't you come out, can't you fix this problem >> right >> there were now very well recognized in the gse system so it's a bipartisan agreement to not let us out as is. then it's, well, if we're going to change things, how do we change them? i'm an observer here we don't have a dog in this fight about how it comes out we're right at the heart of political philosophy differences. big government, big involvement

in the economy small government, small involvement in the economy >> you don't think it has anything to do with the profits the government has made off of you? >> not that i have ever heard anywhere in a meeting. >> in a meeting. but that is a truth. an underlying truth of what's happened over the last ten years. >> well, their profits are flowing to the government. how much that affects their policy deliberations i'm never in the room for. >> so the historic sort of difference was always between the two sides about the government backed stock. and i think now even in the administration's proposal yesterday or two days a egg wgot was almost an acquiescence now it was going to be a government backstop whether or not these entities remain government chartered or not >> do you remember we used to have conversation about there would be a fixed mortgage like that ever again. whether people should have five and ten year mortgages much more

like canada. what happened to that conversation >> that's the political angst that was surrounding that's where it started. at the end of the day, when members go home to get re-elected, they want to make sure their constituents can afford these home prices and 30 year mortgages allow that to happen. i think as you've seen now, even someone like jeff hensarling, i'm not sure he'd say i agree with the government backed stock. but clearly the trump administration is saying you need that. >> thank you coming up, the risk of a trade war, the immigration debate, and the looming midterm elections coming up in november. we'll talk about the washington issues most importantly wall street with our guest host eric cantor. first as we head to break, check out the shares of red hat. the stock getting hit after the third quarter outlook fell short of wall street expectations.

that -- you don't see this with % d hat. 14loss stay tuned you're watching "squawk box" on cnbc

all right. let's get back to our guest host

this hour. eric cantor is the former republican house majority leader and eric, it's an election year as it is so frequently in the house. but this time around people are really watching this the midterms, a lot of activity that's been around it. what's your read on what's potentially happening? >> it's sort of an unprecedent situation now where we've got such a great economy unemployment is almost nil you've got that going on but you've also got a president whose approval ratings are, you know, sort of staying in there, hanging in there at 40%. so there's a huge gap between economic optimism and directionally people are happy with where the country is going. i don't know in recent times whether we've had that so then that brings up the question of what is going to be that in outcome. >> usually it's the economy and

that dictates everything >> right and this year it could be is it just about the president and whether this is a referendum on the president, not the economy >> we've heard from some republicans who said we have farmers suffering from trade things but we're still standing behind how this plays out. >> let's say you don't make a determination about trump's popularity what in a normal midterm election will the party loses an average of 30 seats. so how do you know -- if the republicans lose the house, how do you know that's different than average >> right and then in the overlay here is a good economy because usually the party in power, you're right, loses seats in the midterm but it's mitigated by a good economy. and that's the thing >> i don't think we'll know until -- what's the election we won't know until the next day. i don't think trump's rating

right now, it's come up. god knows why. given all the coverage but it's come up to not much different than where president obama was or president bush was. >> and then the other question is, how much does the national mood, the national generic numbers matter when you're talking about where the elections make the difference. and you've got an interesting sort of swing factor now president trump's been able to appeal to working class middle class folks to say, hey, i need you in there that are now becoming the swing.

we saw that play out in virginia we've seen it play out this primary season where in the areas in which there are more highly educated voters, they are trending against my party. that's the challenge. >> if he's at 88% among republicans, where are the educated -- there aren't any educated republicans you're playing into a weird thing. so you've got to be affluent and democrat to be educated? >> in northern virginia where there's some of the most after flunt suburbs in the country in fairfax county you are seeing a hollowing out. one of the most talented members in congress. she's terrific she's now probably one of the most vulnerable in the country because she's got one of these educated, affluent districts where the social signals that are coming out of all the rhetoric right now is not

something that sits well. >> it's who the motivated voter is which is what you've seen in so many elections is it going to be disgruntled democrats. is it going to be democrats who turn out >> and whether we can end up on the immigration issue to fire up my side and the other side but what will -- that's the real question in four months' time now, who's going to be more motivated and honestly given what goes on today, each and aempd maevery d a difference >> you just said how the immigration gets fired up. how do you want to see it get fired up >> i don't think kids in cages will play well with suburban moms they're not going to pass an immigration bill listen i think president trump tweeted out this morning it's a waste of time -- >> get more republican senators. >> it's a waste of time because you've got democrats needed in

the senate to pass the immigration bill and the democrats have dug in. and they've said there is no way even if whatever president trump will give them, they're not going to pay for that wall >> eric, i still listen to -- i know where you sort of lived in the republican party so you -- the republicans put up this perfect candidate in mitt romney they couldn't win ohio they didn't win florida much less pennsylvania, wisconsin, michigan, and what they needed to win so because of that these uneducated voters you're talking about. you got gorsuch, deregulation, and tax reform so smile all right. okay you want to put up some -- okay. >> god forbid it would have gone the other way in '16. >> no kidding. >> look at where we would have raerhanon th tn w. >> okay. we've got to go. >> all right but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term?

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the commerce department hosting the 2018 select usa investment summit this week. our next guest will be on a panel focusing on the nation's infrastructure joining us now ceo of natural gas producer shineer energy. what do you make of -- i don't know if you've been watching brian sullivan, but what's happening in vienna and what's it mean? >> yeah, no. thank you, joe it's great to be on cnbc this morning. but, you know, i didn't watch brian this morning and i'm very pleased really because as we all know oil is

not priced off fundamentals. it's priced off of politics. that will drive our customer base to come towards sheniere and get a much more reliable source it works in my benefit. >> we -- i don't know. we took another wrong turn on the way to infrastructure. i think we've -- not that we shouldn't. these are important issues that always become front and center but are you optimistic that -- i don't know does the summit help will it be back in focus do you get that feeling? >> yeah, no. you know, one, i'm really pleased to be here to support secretary ross he's been a big supporter of lng around the world and of cheniere we've invested $30 billion in some -- what was probably the

world's largest infrastructure project over the last four years. and i want to show the countries that are here, i want to show the companies that are here, you know, america's open for business >> you know, the amount of infrastructure that's gone into the buildout of the -- what we've seen over the past five, six, seven years this great resurgence almost a renaissance of energy production in the united states that wasn't government, really that was all -- it can be done i mean, the private sector, if it makes sense, will step up and build out these things for people that say private partnerships don't work, i think we soo that can be something we can do without breaking the bank of the federal government. >> i would agree with you, joe we just announced our expansion project for our corpus christi site so our investment is going to be well over $33 billion in total

and on the expansion project, when we went out to raise the funds, you know, we had over 41 banks and we were able to get extremely good terms so the capital's there for good projects i'm extremely excited to be here and i hope i can help make these countries see that the u.s. is a great place to invest in >> that's good thank you. lng. clean. i don't know we're right at the cusp of, i think, a real boom in that as well you'd agree with that, i guess >> oh, absolutely. the demand has far surpassed the supply so we're in a good spot. the u.s. is in a good position thanks for having me on this morning. >> you're very welcome thank you. okay we want to thank our guest host eric cantor from moelis and

company and former republican house majority leader. thank you. >> great to be here. >> any great last words to leave us with? >> great to be here. i want to compliment you on the robust discussion on this show which is always great to be part of it. and i'm a steady observer. >> you know, you will see both sides illustrated here i've watched some other cable shows. i don't -- it's unbelievable what i see >> but that's why i'm saying it is -- i appreciate and thank you for the presentation of both sides. >> you're welcome. thank you. >> thank you for joining us, eric great to see you when we come back this morning, we're going to talk about a lot including what's happening with the markets take a look at the yield on the 10-year note we've been hovering below 3% not able to crack that in awhile last i looked it was at 2.911% for the 10-year. yeah 2.915% right now up next, we'll join rick ryder

stay tuned you are watching "squawk box" right here on cnbc

decision day for opec. and oil prices are moving higher a live report from the high stakes meeting coming up futures point to pop at the open as the dow looks to avoid its longest losing streak in over 40 years. plus how lululemon getting back in shape as it hunts for a new ceo. a conversation with one of the executives leading the retailer. as 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 live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin the futures right now are indicated higher we were at triple digits most of the morning. up 123 points on the dow now up 13 on the s&p and up 23 on the nasdaq.

and what are the prospects we hold onto these gains? you never know throughout the session. but if something hasn't happened in 40 years, maybe there's a reason it hasn't happened in 40 years. >> or maybe it's just time for it to happen >> if it hasn't happened in 40 years, usually the odds are good that it doesn't happen -- >> a lot of things haven't happened in awhile >> so it would be -- >> i wouldn't take a bet on it nine straight down sessions for the dow. and that hasn't happened in 40 years since 1978 but records are made to be broken >> i think elvis died around there. do you remember? >> that was when my brother was born i remember that. >> remember that '76 or '78 do you remember? >> i was born in '77 >> elvis was never around for you? >> clearly >> wow unless you were a prodigy. i'll find out. i think it was '78 or so anyway, i miss him treasury yields.

we need to check these because we're going to be talking to someone all about this in about 30 seconds >> he died the same year i was born august 16, 1977. >> 1977. >> yeah. >> so in your world, it's like m.j. more than -- yeah >> john lennon was around until about '80, '81 >> or '82 i think. oil prices quickly we've got an opec meeting wrapping up. better wrap up quickly i don't want crowds in vienna. you can see up 96 cents now. based on all the stuff brian sullivan has been talking about. let's talk to you about stocks we're watching this morning. shares of blackberry are higher in the premarket trading suggested a profit of 3 cents a share. analysts expected a break even quarter. the software and services company also saw revenue top estimates. stock's up by 2.1%

then earnings just out from carmax the company expecting numbers on the top -- beating expectations on the top and bottom. sales fell 2.3% from the previous year. those shares are up by 4.3%. also, we are just getting new details about the fatal uber autonomous crash yesearlier this year the police say the driver behind the wheel was distracted and streaming "the voice" on hulu up until the car hit a 49-year-old woman who was crossing the street it's not clear if the safety driver will be charged the uber car was in autonomous mode at the time of the crash, but the company requires a backup driver in the car to intervene when the self-driving system fails or if there is a tricky driving situation all right. let's get back to the broader markets with a focus on fixed

income our next guest host is rick rieder in your world, in the last two weeks was it the fed or the comments the biggest thing or trade what is it that's happening? >> a few things. the biggest is the front end of the yield curve moving up. so we're watching the fed to see when -- our view is you're going to keep moving this year next year is questionable. front of the yield curve is a big deal the second big deal is when draghi said we are going to keep rates where they are we are not going to move rates higher until at least the summer of next year you just put a cap on develop market interest rates. when trading at 34 basis points, it's hard for our treasuries to move dramatically higher >> i was going to approach that issue in a different way in that i think he was just echoing the current situation of growth over there. that was a reflection that things aren't what we -- you

know i don't know how many times i heard synchronous global growth. and i don't know whether it's good or bad that it tethers us i think we need to go higher, but it's going to tether us lower. i like that for the stock market but does it put us behind the curve? >> 100%. it's interesting when you're at the conference when powell said -- he made the comment about normally the fed says,down, we're setting monetary policy for the united states all of a sudden he changed a little bit and talked about global growth and about the u.s. sensitivity. >> you weren't there >> i was not there >> i've been it's a beautiful -- i can't believe i've been to that. but a beautiful, beautiful place. >> you have to be sensitive to global growth. the data has fallen off a cliff. i think it's -- if what you had was above trend growth accelerating back to trend >> we're going to hear it blamed on trade and we're doing something with

europe and tariffs there's no evidence it wasn't something domestic that caused that >> i agree the only thing you have to think about, you know, it's really hard cutting through the data. if you're running a big multinational and you're thinking about inventory build and what you can do on capex, it doesn't hurt why would data fall off so quickly? maybe you pause. there's no doubt u.s. growth is different than the rest of the world and will continue to be so >> we don't need a flat yield curve. i don't get that either. so the rest of the world is giving us a flat yield curve or something? >> the pension fund demand for the long end of the curve is extraordinary. the bid for the back end that comes from pensions, that'll be there. it'll go away somewhat after september. but that'll be there. >> so every time we see yields pick up, it just -- >> it's incredible but there's something important. when yields move shigher, the long end tends to sag.

but if the fed stops, then the curve is going to start to steepen out. one of those things you think about the yield curve is if it's bear flattening. you'll have a dynamic where interest rates move higher but it'll go the exact opposite way in the dynamic where the fed stops or growth slows. >> are you a believer -- and we've had this debate about sort of the trade war or trade tension whether that is -- that the potential for that has already slowed these other markets outside of the u.s or you think something else is going on >> i think some of it is i do think there has to be some, we're going to wait, we're going to pause if you are any multinational, you have to think about what your protection is going to be and what your distribution is going to be going forward. i think china is slowing significantly. they're going to put stimulus in both monetary and fiscal europe has slowed significantly. >> do you think that's a function of what's going -- of the rhetoric from here or is that a function of problems in those markets themselves

>> i think it's a couple of things first of all, nobody can determine exactly what is driving it entirely. there has to be some weighing on the market some weighing on people are going to spend money about what happens to trade it's with u.s. and germany >> but germany was bad before we did this >> totally there is -- think about what's been happening in europe the growth has been so far above trend, we would argue in terms of potential we think this is -- we don't think this is pernicious you have to relate some of it to trade. how fast this thing slowed we're not that worried about that as long as italy and the dynamic will stay where the rhetoric has sustained. >> some of the well known names like the call for market crashes and things like that, the thing

that they're talking about right now is 3.7% unemployment and low interest rates i guess they think they're just behind the curve and eventually going to spike much more quickly than anticipating. that's going to cause a big, you know, tumult in all the financial markets. it is weird. 3.7% unemployment and where fed funds are. it seems like you're asking for trouble. >> there's something that's really important by the way, i think we're going to 3.3% unemployment in this country. there are more job openings than unemployed >> that's crazy. >> so we could use wage growth before profit margins get killed, right? >> it will pressure some margins. no doubt but the dynamic around, you think about when interest rates spike. you're coming to the end of the business cycle, you think if growth is this strong usually inflation is moving dramatically higher oil is moving higher but you think about the range

it's moving higher you don't have spikes in inflation, technology is pressing it down >> weird very quick question it's the first time we've seen more job openings than workers is that the same -- >> there were a couple of times. there was one time in the '50s and then you have to go back to after world war ii but it's extraordinary you can't find that time it's only a quarter or two 200,000 jobs on the fund for over a year now. at levels where there's not enough people for those roles. >> people that are, you know, experienced to work in blockbuster stores too or record shops. so they're not -- we need to retrain people >> you're seeing something in trucking and home building where this is extraordinary. >> it's moving fast. i'm going to learn how to write code and speak mandarin. that's what i've decided on. on weekends. >> i'll hold my breath >> okay.

mr. rieder, not ryder. good to see you. when we come back, steve womack is going to be standing by going to talk to us next and then news just out of opec, brian sullivan is live in vienna tracking all the opec action brian? >> and there is a lot of action. in fact, it looks like we may have a deal, in fact, that is the talk here. everybody's scrambling into position waiting for the conference to begin to get the number if you stick around after the break on "squawk box" were we are going to make this opec for everybody. i'll do the simple math. we'll lay it all out when "squawk box" comes back right after this

breaking news out of the opec meeting let's get to brian sullivan who is in vienna brian? >> hey, joe. thank you. the breaking news is that it looks like there is a deal we are waiting for it to be officially announced you can see everybody is getting in place after the deal comes out, we will get a press conference from the secretary general and the uae. let's do a little math, shall we i know it's early. i know it sounds boring. but this is important. there's a lot of confuse out there about what we are likely to see

let's clear it up right now. here we go opec is likely according to our sources and others to announce a headline production increase of 1 million barrels per day. there you go but here's the thing 14 opec nations plus 10 other nations like mexico, russia, oman are in the current production cut deal. in other words, there are 24 countries currently involved they are agreeing to raise output by a million barrels. however, not all of those 24 countries can raise their output iran, venezuela, mexico, they're likely pumping as much oil as they can so what we're going to get is a real or a net increase of somewhere around 600,000 barrels per day as we have reported for the last day or so and the uae basically confirmed on "worldwide exchange" this morning. the head line number should be about a million. but the cupcake analogy i gave

you earlier. everybody can't produce more oil, so we'll probably get a net new number of 600,000 barrels a day. is 600,000 barrels a day going to be enough to reduce prices like president trump wants many think not because china's demand is growing. india's demand is growing. our demand is growing. and so that may not be enough to send prices down was that sort of clear >> yeah. >> yeah. >> there's a lot of players. and they all have their own individual issues. lots of different issues >> well, you think about it, joe. you've heard win/win we may get a win/win/win here's why president trump wants opec to pump more oil. he's said that on twitter. he's come out and said it. okay if they do d, president trump c say i got opec to pump more oil. saudi arabia would like to please president trump and pump more oil

iran's desire has been to not agree to an output cut would not. you want to know why i want to make it a little bit more confusing they're not actually going to agree to an increase in output they're going to agree in a cut in the current cut so technically, they will still be under the agreed-to deal like iran wants, but more oil comes out. iran can say they held to the deal saudi arabia pumps more oil. and president trump can claim victory over opec. we call in in our business is win/win/win. >> so do we look at it in terms of what the oil complex is doing, do we look at it as a buy on the room, sell on the news. or disappointment for those who want a higher output >> i think -- you'if i had to l i'd say a little on the disappointment side. i don't think based on everybody we've spoken with here that given the sanctions coming up in a couple of months, given the increase in global demand,

600,000 barrels a day is probably not going to be enough to send prices lower if you're in a country like india, that prices oil in dollars, you're getting doubly smacked. right? for us, the price of gasoline goes up 35 or 20 cents it's annoying. but it's not devastating to a lot of countries where they rely on currency translation and higher oil prices, they're getting crushed. india as we heard putting a lot of pressure on opec saying we need lower prices. i just don't know if 600,000 barrel barrels is going to do it >> okay, brian it's as clear as we're going to get. thank you. meantime, we want to get to washington the house budget committee voting to advance its vision for fiscal year 2019 it's called budget for a brighter american future joining us right now to break it down, budget committee chairman steve womack, republican of arkansas good morning to you. >> good morning. how are you? >> we're great so many questions to ask you but in terms of the budget proposal that's now been put

forth by the house, just handicap it for us in terms of understanding whether you think this is going to move forward. what are the chances >> well, that's a decision that is going to be made by leadership, not by the budget committee. our job is to advance a budget resolution which we're required to do every year by law. and then once we report out of the committee and give it to the house, then it's up to leadership to decide whether to put it on the floor. now, let's be frank. one of the outcomes of most budget resolutions are what we call the 302-a numbers the numbers the appropriators would use to fund the discretionary side of government, about a third of spending and those numbers were set into law by the omnibus package so this sense of urgency to produce this particular budget resolution for that purpose was not as great but nonetheless, we've done our job and it's a reflection of

what we believe is the stark reality of the fiscal condition of our country right now unsustainable deficits year over year and $21 trillion in debt that is going to continue to grow over time and we just felt like it was time to sound the alarm and do something about it and this particular budget resolution does it >> okay. by sounding the alarm, tell us where you plan to shave. that's the only way this is going to work. >> well, first of all, let's understand the pie as it were of federal spending 30% of federal spending is on the discretionary side that's the trillion dollars-plus that the appropriators use every year as i spoke about the omnibus package. the other 70% is autopilot it's mandatory that's where you find the programs like social security and medicare and medicaid. we've already been told that the hospital insurance trust fund on medicare is going to be insolvent by 2026. that is eight years away

so automatic cuts are going to happen in those programs what we're trying to do is reform these programs for long-term sustainability >> how are you doing that? >> well, you do it through a number of ways by tweaking the age of eligibility on medicare to be consistent with what we have in social security. to combine deductibles on part a, part b. to do a premium support program that we think can introduce market-driven savings that a lot of seniors are going to want to take advantage of. so there's a lot of ways that you can get after what is one of the significant drivers of the deficit and the debt and that is medicare spending. eliminating the dual ability to collect unemployment and disability at the same time. but there are a number of ways you can look at the mandatory side of spending and come up with a kind of reform that make

them sustainable on the long-term. save these programs. >> while we have you here, we want you to weigh in on the immigration debate, the idea of separating kids from their parents. where do you stand >> you know,i don't like that. and i've said publicly that it's not who we are it has americans. and i think that goes with the consensus of a lot of people and i think it's part and parcel to why the president rescinded the policy of separation look, we've got a problem with immigration. it dates back decades as everybody knows. we have a problem on our border. we need to secure our border and we need to concentration on immigration reform that deal with the interior pieces of this whether it's e-verify or what to do with entry/exit, visa programs, whether it's a lottery program or a merit-based program. the president put out his four pill larcenies we're trying to wrap ourselves around those pillars and come up

with a document that can actually pass the house of representatives. that's been a bit elusive so far. >> not only the house. it also has to pass the senate >> that's always a consideration. >> is there anything that could possibly pass both the house and senate we heard from eric cantor today that not likely. >> well, it's been a challenge for the congress we deal with a lot of things here in the house and stack up a lot of bills in the senate the senate rules are problematic. crow need 60 votes over there to move substantial legislation through the senate i face it as a budget chair and as the cochair on process reform i fully understand the complications that go with the senate rules but that's how the sausage making in washington has been done that's how the framers designed it >> some people thought it was silly, but i'm going to ask you anyway what did you think of the first lady's coat yesterday? what was she trying to say >> not real sure i can read, but i didn't get that particular message. >> okay. we're going to leave it there.

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♪ good morning welcome back to "squawk box" here on cnbc among the stories front and center, opec has reached a deal an an output increase. according to sources, the official communique not out yet, but the increase is said to amount net to 600,000 barrels per day in real terms. opec will announce a million barrel per day increase, but the effective output will be lower due to production constraints. if you were watching brian sullivan explain exactly what we're talking about, not everyone can pitch in to get to a million. because they're already constrained in terms of production whether that's a disappointment

that it wasn't a greater increase in production -- >> it's not a disappointment from the bulls >> that's what i mean. or a lot of times it's a buy on the rumor, sell on the news. once it comes out and they decide i don't know $66, we've watched it for ten years or more than that and i don't know just looking at it, it looks about right. doesn't it look right? in terms of inflation adjusted dollars. i mean, $30 was too low. $200 was too high. and the super spike at $300, we would all be driving -- what are those little things called mini coopers or whatever or maybe we'd be on the city bikes or something then it stuck at a hundred for a long time. then it was at $30 so $66, i don't know, it just doesn't seem totally out of whack with where it should be. and you can do relationships to

gold with gold, relationships to how much a nice suit costs all these things over time on a relative basis are worse $66 doesn't sound that crazy no one when they see $2.87 gallon says i'm not going anywhere for july 4th. $4.87 gas, then there's some hesitation but $2.87 isn't causing anyone to put off plans general motors plans to build its new chevy blazer suv in mexico. a decision that drew immediate criticism from the uaw president trump's been pushing for u.s. automakers to keep production within u.s. borders roseanne barr's tv family is returning to the airwaves without roseanne she's been replaced by peter fonda, apparently. no abc has ordered ten episodes of a spinoff tentatively titled

request t the connors" in which all the characters expect roseanne will appear a roseanne reboot was taken off earlier this year amid controversy about barr's tweet involving former obama administration official valerie jarre jarrett. so people are talking about differing, you know, what is -- what the punishment is and -- >> what you can say is roseanne had a history. >> she did >> it was not a one off type of situation. >> but good for her to stepping down and stepping off the money. >> which she agreed to >> the whole issue was -- >> about the spinoff >> the whole issue for the past couple of weeks was how can you let these actors and crew go forward and not collect money. >> will it work without her is -- >> that's the legitimate question i mentioned quesadillas. i'm excited about the nachos too.

chipotle is expanding its menu at least in new york the fast casual chain is opening a test kitchen with five new items. avocado tostadas i'll tell you about that if you don't eat everything and put in the fridge for tomorrow -- >> that i know >> if you get avocados in a salad and you eat some tomorrow db. >> you need to eat them quickly. only got an hour or two. >> it's not even overnight >> that's a reason that sometimes if i'm going to get a cobb salad or something, i will not get avocados on it why aren't you excited about the nachos >> i'm excited about the nachos. >> you are you said you're excited about the avocados >> i'm into avocados if they're fresh >> let's go back down. i got to read all this don't skip me. there's a new chocolate shake coming out that's natural. and the snake inspired by traditional spiced mexican cocoa. a new chocolate shake too.

these are limited to just new york for now but are eventually expected to roll out nationwide. now, this is after the new chipotle guy, the ceo brian nichol who came from taco bell i love taco bell, but it is different than chipotle mexican food >> what did they try to introduce that didn't work >> who >> chipotle. someone said they tried to -- >> the queso it was basically like nacho cheese type of thing and that got a bit of a blow back at least i think that's what it was. >> i don't know. remember there were two kinds of people the people that said, oh, my god. what is a taco bell. the purists at chipotle thought how can you bring in a taco bell guy to fix chipotle. and he had no experience with salmonellas or anything. no >> yes >> actually, taco bell did have something. they had their own problem with the mystery meat or

whatever it was. no, no, they said it wasn't. like it had 20% beef >> remember the video? we did this on "squawk," there were rats at a -- never mind let's move on. people are eating breakfast. >> big rats. >> "jurassic world: fallen kingdom" hit theaters. joining us now is fandango's correspondent. let's talk first about the entire summer season what are we expecting at the box office >> well, so far, i mean, just in terms of what we've seen so far with "avengers: infinity war" and "deadpool 2," it's a big summer so far. another open last night of "jurassic world: fallen kingdom. i heard you have dinosaurs in the studio i'm jealous. >> we've already seen this movie has been out, what 15 days at this point overseas

it's just now going to be launching tonight. >> oh wow. >> what's the take on the overseas box office and what does that tell us about the international portion? >> so far it's made about $435 million overseas it did really well in china opening weekend. it hoped at about $113 million which is really a good sign. i think we've got some early numbers from last night here thursday night previews. they're talking about $11 million. the last "jurassic" did about $18 million. it's down a little bit when the last "jurassic world" came out, there hadn't been a jurassic movie in about 14 years. there was a huge anticipation. so they raced out to the theater. it's not really an indication of how it's going to do this weekend. but early numbers are saying about $130 million to $150 million which is nothing to sneeze about >> we have seen other movies that have opened first overseas. and for the most part, not with everything but for the most part it's been because maybe the movie wasn't expected to do

quite as well. it didn't do well with the critics. i've seen two different story lines with this. >> well, with this one i think what they were really trying to do is get a jump on the world cup. that's what i've heard because they know they're -- the audience is going to fall off after, you know, once that starts people like their soccer more than they like dinosaurs so i think that was the thinking with that. i don't necessarily think it had anything to do with reviews. >> all right else are you watching in terms of things being up is that just better content this summer you think there are other trends pushing audiences up this is you remember >> absolutely. i think the big story 2017 was that it wasn't a strong here at the box office there wasn't a lot of choose from there was some sort of tired franchises franchises that people weren't necessarily excited to see one franchise that has been going strong and i think they might have the biggest box office worldwide they've ever had is "mission impossible." "mission impossible: fallout" comes out in july. the latest trailer is probably

the best action movie trailer i have ever seen and these movies just keep getting better and better. you know, what we know about tom cruise is he keeps upping the ante and in this film, he's talked about -- i saw him at cinemacon a couple of months ago he talked about jumping out of an airplane. he had to do it 102 times to get it right yeah it's unbelievable. they only had abouta three-minute window every day. so it was 102 days in a row he had to jump out of an airplane and of course they have henry cavill in this film who is superman you know, he's got such a young audience and people love him so i think this one is going to do well. >> i saw a -- >> 102 days in a row >> anyone that questions tom cruise -- and i've seen him break his ankle on one of those stunts, the last one i think but that guy i mean, it makes me wonder whether he's all there >> he deserves his paycheck.

>> wasn't it from 25,000 feet too? there was oxygen they could run into each other that is unbelievable >> you're absolutely correct >> i mean, you got to love the guy. really >> oh, i -- he's hands down my favorite i got to interview him for the first time last year i never -- i don't usually get star struck because that's my job but i was completely star struck he's my favorite hands down >> i saw him in an elevator. every person in the elevator, he they would their gaze and nodded that's the way you build a fan base >> that's a class act. >> yeah. when he does red carpets, he talks to every last outlet he does not leave a single person out i met him as well prior to interviewing him he was the same way. he knows everybody wants to talk to him he goes around and will shake your hand. some people are afraid to approach him >> what got me is now those shots of him on the malaysian skyscraper, i thought they were

fake now i realize those were real. now it makes my hands sweat because i'm so afraid of things like that. but he was on the outside at like 105 stories or something. >> oh, yeah. and the last film where he was hanging off the side of an airplane most of the stuff he does, you know, they tell him it's really, really dangerous henry cavill talked about filming this film and felt like he was close to death a couple of times himself you just had to put your faith in tom cruise's hands. he was piloting the helicopter they were flying >> thank you it's great talking to you. >> thanks so much. all right, folks paper or plastic this isn't just some tongue in cheek straw poll more and more companies are replacing plastic straws with paper ones aditi roy joins us now from san francisco with more on this growing debate and why it's taking place >> good morning to you adding one more pun to the mix, it might be the last straw for the plastic straws as more and more companies are

choosing paper, glass, or metal ones plastic or paper that straw poll is becoming increasingly familiar at mcdonald's to starbucks. mcdonald's says it's fazing out plastic straws in the uk and ireland. the company wants to be an environmental leader >> whatever we can do around waste and reicycling, it's a bi part of our business. >> states have considered passing bans on plastic straws straw manufacturer which supplies to chains like burger king and kfc in asia and europe warns switching to alternative materials would cost four to five times more which could end up hurting consumers and there are a lot of companies in this mix. starbucks uses an estimated 2 billion straws per year. earlier this year, nearly a third of company shareholders

supported a proposal to faze out plastic straws >> before you go, who are the companies that maybe paper straws who are going to benefit from all the is >> it's interesting. there is oned aardvark, actuall. they have seen a 5,000% increase in the last two years in their sales. they say they cannot keep up with demand and they're actually trying to constantly build out their capacity to meet that demand. >> has anybody figured out a way to make a paper straw that doesn't get soggy. aardvark says it's very sturdy by comparison, there's another one here that's getting a little bit more disintegrated it's doing a good job. that's why they're sees so much demand. >> thank you when we come back, joe kernen's favorite company, lululemon. we're going to talk to one of three executives leading the company. joseph wears lululemon pants

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welcome back to "squawk box" this morning lululemon's executive v.p. for americas, she's one of three leading the company while it searches for a new ceo celeste, good morning. >> good morning. nice to be here. >> you do know before we even

get into this what joseph kernen wears every day. did you know about this? >> say that again? >> are you aware of the situation? >> say that again? >> i don't know if you're aware, joe kernen who's here. >> yes, joe. >> wears lululemon every single morning. everyone wears suits and stuff >> same pair, no less. >> i've heard. we love you, joe yeah we are super appreciative. >> there's five days a week. >> i know. i have one day -- and i'm going to have you guess which day. and they're stretchy and you know what else there's a little zipper. i got a little thin wallet and no one can -- they're going to have to use -- to pick my pocket, i think it's basically impossible >> good. i do expect seven days going forward so we can talk about that and you're in good company go ahead. >> just wanted to talk about where the business is right now.

comp store sales are up 20% year over year. what's happening what's changed what's been the turnaround >> you know what i mean, what i would say is we're really happy with the business we posted in q1 and the momentum we're seeing into e the business really the focus on the key strategies are working our product innovation, our focus on the footprint in north america, international in q1 posted 53% growth, and we're excited about specifically what we're seeing in china. and then our digital business. you know, q1 we had a digital comp of 60%. and really excited about how that is going to really shift us into the future. >> okay. so that's the good news. let's talk about -- i don't know if you want to call it bad news, but i want to understand it. there's a big search for a ceo going on right now i don't know are you in the running here? >> you know what glen spoke to the ceo search on the earnings call. so i don't have anything to add to that. what i can say is sun stewart,

myself are in really great partnership. our entire leadership team is really focused on the opportunities ahead of us. it's a really exciting time to be at lululemon. >> let's also talk about the atmosphere and the culture it had been described as toxic despite what has looked at least from the outside as great results, what's going on inside? >> internally our culture is really strong. i mean, i've been with the company for 11 years and am really proud about how the company feels internally today yesterday we celebrated international day of yoga. which is a day that we obviously really believe we're uniquely qualified to support i spent the day celebrating our here to be program internally and externally we raised what we hope to be over a million dollars that would go directly to 300 partners in our social impact program so what i would say is the company is in a really great

place and there's some exciting things happening >> you had mentioned the boost in internet sales. curious about your take on the internet sales tax issue given the supreme court's rule yesterday. >> yeah. i mean, our our dot com business has been fantastic. currently we operate in almost every state. the reality is we already collect revenue or sales tax on most of the u.s. revenue it's a nonissue for u.s. and our guests. >> is lulu on amazon now >> no. >> would you >> no. i mean, we're really focussed on our vertical experience. so we look at, you know, having a kind of differentiator we're focussed on product innovation and vertical is important to us as we own the entire guest experience. so, again, i feel very good about our focus and how digital and our stores support that.

>> okay. thank you. thank you. >> thank you for your support, guys thanks, joe. >> you're welcome. >> maybe a different color like a darker gray and blue. think about it. >> okay. we'll work on that. >> thank you. >> yeah, bye when we return, jim cramer joins us live from the new york stock exchange anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk.

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we'll get to the new york stock exchange jim cramer joining us now. we're talking about nine days. if we do nine it's been 40 years since the dow isn't down nine straight days. maybe we'll be up today >>well, it's funny the industrials i did work on them last night for "mad money." and people are waking up to the idea that the synchronized global growth story might be over guess what that's what the industrial decline has been about to realize maybe the world is slowing because of tariffs these stocks have been reflecting this. it's been since the peak in january. it's odd everybody is deciding i like the defensive domestic

stocks and hate the international stocks now, i mean, this has been a horrible decline and we haven't talked about it because it's been masked by faang and the retailers and a couple of domestic stocks. everybody thinks they're hunky dory i think maybe some of the international stocks because they have been down so much. >> what do you think of the supreme court and amazon, jim? is that a right decision is it going to affect things >> i don't know. i mean, it's interesting the real estate you get the sovereignty center stock had a huge move yesterday. yet a lot of these companies have been paying amazon was out there telling you they've been paying and i just don't think it's that much of a big deal i would have thought that wayfair, for instance, was going to get hurt more but people love these retail stocks, joe.

we saw a couple of neutrals put out. these stocks have been high. to discover them now, to discover lulu now. wait a second, where were you at 80 everyone suddenly decides these are good i don't like this. i think the better values are in the industrials, even though they're about to report negatively we'll see you in a couple of minutes. let's begin. yes or no?

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kpmg can help you anticipate tomorrow and deliver today. kpmg. our guest host today rick reader last thoughts on what we've been talking about today. >> i think there's a series of incredible things going on with the equity market trading down when people think about where do i get value. the fixed is down this way we think there are ways but people look forward to the rest of the year. are you getting free cash flow generation, where am i getting

covered. >> that's good news for which area >> equities. i think the role of commerce is changing commerce is changing i think it's important for the eco system. >> it's a pleasure having you here that does it for us. make sure you join us on monday. have a great weekend "squawk on the street" begins now. >> good friday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber the dow may avoid the first nine-day losing streak in 40 years. trade worries hit u.s. and asian stocks this week we'll get a russell rebalancing. europe is higher this morning. so is oil as opec agrees on a production hike lower than s