all right. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is off today joining us is kerry firestone, ceo of arias asset management. thanks for being here. >> thanks for having me. >> let's look at the u.s. equity futures. yesterday was a wild ride for the markets. the dow was up nearly 286 points at its highest levels. it ended the day down by 165 points as concerns crept back into the market. it was that interview with steve mnuchin on "squawk box" yesterday that started things, got people thinking that maybe the trade talks, all the tough talk buwas going to be ractchet

down again the dow and s&p 500 are negative for june, and the nasdaq is holding on to a gain of 3 points for the month. we'll see as we go crashing into the end of the month what will happen this morning dow futures are indicated up by 55 points. s&p up by 7. nasdaq up by 22. looking at what happened overnight in asia. there were negative closes there the knnikkei ended relatively flat. the shanghai down by 1%. hang seng off by a half percentage point if you look at early trading taking place now in europe, there are red arrows across the board. the dax is the biggest decliner, down by two-thirds of a percentage point at this point, the ten-year is yielding 1.833%. >> i want to talk trade and the

mnuchin interview in a moment. >> i didn't see the interview. i read about it. >> maybe you'll have a take on this it depended on how you parsed his comments we all thought initially this was a walk back from the expectation, but if you start to think about it, you realize this is just another name for not tariffs but -- maybe not -- >> protectionism >> protectionism i'm not sure people appreciated that point he made a couple of comments, a couple lines where he still talked about china he said no, we're still -- i was curious how you read it. >> it feels as if they're testing the water. you have this period between the end of all of the earnings reports. we don't have anything coming up for a few more weeks this is where the administration can see how much effect all of

these announcements, suggestions, comments are having on the market. we had a bad day, peter navarro came out then saying it won't be that bad people were feeling better then that interview started to give people the creeps, oh, no maybe this is for real you saw that dive at the end of the day again because there wasn't anything so positive that he said. he didn't say, guys, we're not going to hurt anybody. >> kudlow came out later and said this is not us going easy on the chinese that's also what spooked the markets. when you look at this, i was trying to take a step back and read through some of it, if you have mike pompeo getting on board saying in is -- this is a better way to do it because we need their help with north korea. you are look at a softer stance potentially.

>> we mentioned this to the secretary on the air he tried to say it was not the case then i talked to a number of ceos that in some ways this creates more uncertainty rather than less. now you basically have this committee, this commission that will just decide things ad hoc when they think it's a good idea for country, when they think it's a bad idea for the country, but there's not a true set of rules. in some cases that may be better than one big bright line that scares everybody but if you're a business person trying to make a joint venture now, do you say to yourself i can't even try if i try, will i embarrass myself what's going to happen here? >> right now there's nothing else to latch on to than these comments

this is what the market is looking at this is what business investors have to be looking at every day they wake up >> ultimately it's been settled by the white house every time wilbur ross comes on our air, you will hear something that spooks people every time mnuchin comes on, you will hear it walked back a bit >> how can they really go to a point that's extremely restrictive if half of the revenues of the s&p 500 come from overseas. a lot of the support of the republican party is from ceos, corporate executives who really need to have their global revenues feeling secure or at least have a road map that is not going to be so structured that they really don't know how to sell anymore. >> we'll get back to this topic.

we have some other corporate news amazon announcing a new last mile delivery zservice. it says it will offer incentives for entrepreneurs to set up their own delivery service amazon unveiled a dark gray van with a prime logo. this would offer classes on tax, payroll and other small business challenges this is all part of amazon's latest effort to solve the challenge of getting goods the last mile to customers doorsteps. a live report from seattle in the next half hour it's fascinating we talked about all the things they tried to do to compete with the post office. this may solve the real problem. in certain markets they don't have the infrastructure to get you the product in the hour or two. so this is it. interesting they're doing it this way this is like an uberization of the last mile

they're not going to own -- amazon has always been a capital heavy business they have not contracted out everything this is another version of contracting it out >> yes and no. bezos says he lives on what was built before him it's capital intensive for what they've done, what they accomplished has been capital light. >> when i say capital intensive. alibaba and ebay are capital light businesses, they're marketplaces this is probably one of the only companies with the exception of walmart that has built a true frix infrastructure around the country to deliver this stuff. if they didn't have that, this wouldn't exist at all. >> isn't this a nice test to see the participation rate of labor

in the united states if they can grab thousands of people who are available to set up these delivery companies who have not been in the work force before, it's a tight labor market out there when they talk about truck drivers, you can't find them if they find a lot of people willing to drive these vans, i would say that the participation rate is low enough and we can grab some more employees >> this goes to the whole idea that everyone always thinks e-commerce will kill employees that may be true with ai in the end, but i think it takes more people to get you the box at home than it does for you to go to the store always shares of chipotle are under pressure the company's new ceo brian niccol rolling out a big turnaround plan during the investor call. he said chipotle will close between 55 and 65 underperforming stores in the coming quarters.

he also said the menu changes were coming including knasnack foods and a happy hour the chain will also test a new loyalty program that will launch next year. shares of chipotle right now up -- actually they're off in the premarket trading by 3%. it's a nice chart. in washington, president trump planning to make his mark on the supreme court with a second pick in less than 18 months eamon javers has more on that big news eamon? >> anthony kennedy, so often the swing vote on the supreme court, may now swing the supreme court fundamentally for decades with his retirement opening up an opportunity for president trump to nominate his second justice to the supreme court this justice was appointed by

ronald reagan in the 1980s. a conservative, but also voted with the liberal wing at times he had the label of swing voter, which kennedy himself didn't appreciate he saw himself consistent over the years on the constitution. this is an opportunity for president trump. he was talking last night about how long he thinks his court with influence jurisprudence in the country. >> we have a pick coming up. we have to pick one. we have to pick somebody who will be there for 40 years, 45 years. >> over the next couple of months it will be an enormous fight in washington, d.c mitch mcconnell saying he hopes

to have a vote on the president's nominee by the fall. presumably before the midterm elections when it's possible that republicans could lose control of the senate. the president has said he will pick somebody from his list of 25 conservative seal of approval justices and judges out there as candidates for the supreme court. this is something that will make some very happy. big opportunity for the president. >> eamon is there anything to stop what -- whoever this nominee is what do you think the democrats are going to do in this instance >> it's unclear. democrats instinct will be to fight, but there may be some democrats in red states who are up for re-election who may not want to go all the way to the wall on this one the other question is what happens with republicans

john mccain has been ill and absent from the senate so there is the question on whether there are other republicans in the senate who would get wobbly on a trump pick >> there have been some thoughts that murkowski or susan collins may not vote for a candidate who would pass the litmus test of roe v. wade. that's an issue that conservatives have been adamant about. both of those republican senators have said they are opposed to a situation like that they see roe versus wade as settled law. so you will have a potential battleground there >> this will be a proxy fight for roe versus wade. the long-term future of the court is conservatives want to

bring another case up to the supreme court where they can try that law and see if they can get that overturned as a precedent the question is who will the president pick here? he has said he is extraordinarily pro life he rallied evangelical voters and said he will pick a constitutional conservative. will he pick somebody who he thinks is on one side of that, but try to obscure it a bit and not get it pinned down specifically >> wanted to ask you this, i don't think it will happen, but as you know depositions are demanding that the senate majority leader delay the confirmation proceedings given the midterm election citing mcconnell's refusal to consider the obama nominee back in 2016 >> right what mitch mcconnell did in 2016 is that a president should not

be able to nominate a supreme court justice in his last year of office because mitch mcconnell did not want merrick garland sitting on the supreme court. so mer kick garick garland did d up on the supreme court. this year it's a midterm election year, not a presidential election year, but ultimately they don't have the votes. it's less a question about these mythical rules that are being set up and more a question of raw political power. in washington you either have the votes or you don't that's what it comes down to >> eamon, thank you. >> kerry you know one of the key people who has been mentioned, one of the leading contenders to take this job. >> he was a judge the last time

they were looking for a supreme court nominee. he's a judge inpittsburgh, he is a smart guy well considered by people i know in pittsburgh. people of all political persuasions. i'm sure his name will be mentioned again. i saw a picture of him yesterday when they were doing a "nightly news" segment on it. >> a lot of names will be mentioned. let's get back to the broader markets. joining us is ed keon from qma, and kerry firestone, our guest host is still here thank you for being here, ed >> great to see you. >> let's talk about the whipsaw in the markets why do you think up nearly 300 and then 165

>> i think the trade war and the various factions has been pushing the market around the last month or so yesterday you correctly pointed out that secretary mnuchin's comments were interpreted in a way that was less market friendly >> where do you think this plays out? take away the day by day or week by week kind of back and forth struggle we've seen. this is the key issue that is pulling markets or pushing markets. >> i don't flo nobody, includine president, i don't think anybody wins in a real trade war it raises cost force americans, it raises costs for others around the word. it puts upward pressure on inflation, reduces choice. i hope we'll be able to get to a point where the president is able to achieve his objectives of reducing the trade deficit some what and opening markets to u.s. goods but how we'll get there and how

long that will take is anybody's guess. >> toyota came out and said that any tariffs on this, any tariffs on overseas foreign cars would mean higher prices for even cars produced in america. they said $1800 it would add to the cost of a camry in america 165,000 or 135,000 toyota employees in this country. how does that work >> we already have a 25% tariff on light trucks coming into the united states. that raised the prices and improved profitability of those vehicles for decades since the tariffs have been in place the consequences of tariffs are always the same. raises prices, reduces choice. whether tariffs themselves which are a blunt instrument, will be able to help achieve the objectives after more op-- of me markets remains to be seen >> kerry, yesterday steve

mnuchin said he is excited to see the numbers, he doesn't have access to early prints on the gdp, but he has tax receipts today ian shepherdson still thinks 4% plus is a number we will see, but a 5% plus print is possible it's hard to figure out what that means and how that translates to the market >> i think it's odd they're building expectations for such a high number when after the quarter there are many people who can come out and say if you were to impose tariffs that number would only be -- and it might be 30% less. building expectations with this 5 handle, 4 handle -- >> they would probably try to counter concerns coming out in the market now >> i get that, but if it were to pass it will reduce those future

earnings i think that the economy is good we've said for a long time that this quarter was going to be very strong. the rest of the year will be strong then you look into 2019, right now s&p earnings are 10% no one wants to be back into the mid single digit number. so, you know, they're playing it both ways. everybody wants the number to be great. nobody wants to see this fall off for next year because the market can't sustain that. >> kerry will be with us for the rest of the hour ed, thanks for coming in >> thank you coming up, luggage company away has announced it has become profitable two years after its launch making it one of the fastest growing female-led startups we'll talk about their path to success next

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away luggage company is packing on the investor support. the startup is announcing a $50 million series c this morning. they are profitable after only two years in business. the co-dpoufounders of away arer now. when you started this thing, did you ever think that a bag company was going to get a valuation like this? >> i think there's a lot of things that happened at away since we started that we never anticipated. we did know that we set out to create more than just luggage and make travel more seamless. so the ambitions were big. the way the business has grown we could have never expected >> can you speak to that idea of beyond luggage what does that look like >> it started out a design around luggage, but we found a

huge gap in luggage. >> you will make it easier for me to book my flight and travel? >> yeah. >> so really, long-term what does away do when you sold investors on this new valuation, what do they think you're doing i think they think there's more than luggage coming. >> yeah. >> they've seen over the last couple of years, even though we only sold the suitcase, they've seen people coming back to away because they trust us as a travel brand which makes things easier, that's why we expanded into a media arm we have here magazine, our editorial division >> is the media component a marketing arm or marketing device for the luggage or is it ultimately meant to be a profitable business that is completely different and -- >> it's both it's revenue generating media business and -- >> is that a lead gen business

for hotels and airlines? what's the model straight advertising >> when we started t we thought worst case scenario, away will have a great blog, best case scenario it will be a revenue generating business. i think hotels see that this magazine is going to a targeted group of consumers >> is the idea more moving media towards travel and for your customers to use it for travel or to start to push out more items, tote bags, gym bags, products themselves or just using for the travel linkage >> the media arm originated because customers so trusted us in the travel space that they started calling our customer service number, saying i'm going

on a trip for london in april, where should i stay or what i do do with my free time or my family is going for a strtrip in september, so people were asking us for travel advice, so we were thoughtful in giving that to them i know you're a customer >> i am. they're good bags. and the charging matters on the charging, this is a serious thing. i know the batteries are removable so you can get them through tsa. long-term are you worried about the battery issue at all >> no, we're really not. all the major airlines estimate on any commercial flight of theirs there's 500 power banks on it. our power banks are at the highest safety standards of anything on the market if you check your bag, you

press, it pops right out >> when you pack a bag to go under the plane, do you lock it? >> i do lock it? >> yeah. >> or do you wrap it in that plastic stuff? >> i don't do that depending on what i have in the bag, i might lock it but i'm more likely to lock my bag if i'm leaving it unintended somewhere. >> doesn't tsa break it open if they want to >> you have these tsa special locks. >> tsa has their own key if you lock one of our bags, no one will get in but you or the tsa. one situation where the locks are handy, checking into your hotel, the room is not ready, you're leaving your bag, you're going out to explore, you want everything to be in there when you get back, you leave it locked >> fun story >> thank you when we come back, the doj e cleared the way for disney to buy assets from fox.

we'll talk to ed lee about that. right now a look at yesterday's s&p 500 winners and losers you always pay

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good morning welcome back let's look at the u.s. equity futures. things are looking better than they did at the closing bell yesterday. dow futures up about 80 points as we know anything can happen yesterday we did see a huge swing whr tere the markets were by 260 points, then closed up only 165 we will be watching bank stocks during today's session financials are moving slightly higher in the premarket after posting 13 straight days of declines in the market that's their longest losing streak in history. amazon making a big announcement about its new last mile package delivery program courtney reagan joins us now she has more from seattle. good morning >> good morning. if you're waking up today, you work for fedex, u.p.s., dhl, your client also just became your competitor because today

amazon is announcing its new delivery service partner program. the e-commerce giant is recruiting entrepreneurs that will be vetted by amazon to ultimately run their own local delivery network of up to 40 vehicles, delivering amazon packages so each delivery unit will start their day at an amazon station they'll grab their packages. currently there's only 7 5 of them in the united states. it's an algorithm that is aimed at maximizing efficiency that will ultimately determine whether that package order on amaz amazon.com will go to an amazon station or a station run by an external delivery partner. >> we have a great relationship with u.p.s., dhl, we use everything to meet our scale and meet our needs i don't see that changing in the future >> clark says that the new

program is necessary to help it meet the e-commerce growth that it is experiencing, which is more than he says the external delivery partners can handle on their own and in a cost effective way. last year am zorn spent nearly $22 billion on shipping, almost double the cost of what it spent two years prior. amazon says entrepreneurs can begin this program with as little as a $10,000 investment amazon will help them get access and discounts to programs to run their business like fuel, insurance and benefits to help recruit those employees. back over to you >> why did amazon in this instance decide to approach it this way the idea of helping entrepreneurs start their own businesses as opposed to -- they spent lots of money on infrastructure over the years. why did they decide not to do it themselves >> no kidding, they have planes,

7,000 trucks this is something that amazon says goes back to its roots. it's got this marketplace which now is responsible for more than half of everything that is sold on amazon.com. most of those are actually sold by small and medium businesses it's amazon sort of providing the infrastructure, the network, the software, giving tools to these entrepreneurs, small businesses, and then letting them run their own local delivery units it is a partnership for certain, but amazon is not getting involved in every detail that will be up to those small businesses in their local area it's that last mile delivery, the most expensive part of that journey. >> and they now own the doorbell company, is the anticipation that these types of businesses will end up going inside your home they'll not just be delivering stuff to your doorstep but will

take stuff into the refrigerator or kitchen >> not into mine >> exactly so that's not something that amazon is nnouncing as part of this program but because they are piloting that already, one can imagine all of that will be integrated at some point in the future in areas where it can be available. >> then it gets more interesting, you have contracted employees, freelance employees who are going into peoples homes. >> i'm a huge fan of amazon, i'm a huge customer. i signed up for the amazon prime credit card. >> i've been talking that. >> this is a step too far. >> to go inside the home >> fair. fair >> call me in ten years. >> no way. >> courtney. thank you for waking up early for us >> you got it. >> the other big story of the morning, the justice department approved disney's acquisition of fox's assets, that decision

coming after disney agreed to sell off the regional sports networks let's find out what it means for a potential comcast bid. ed lee is here, cnbc contributor. basically all things that -- you're like the aficionado of this transaction >> yeah. how many ways can this one go. >> clearly a surprise in terms of how fast -- >> six months. >> the government moved on this. even when disney first announced this, they said a year or so, which is normal for a transaction of this size it feels like this was fast tracked. >> let's talk about that do we believe it was fast tracked for political purposes >> i don't have any reporting on that but look at the facts. they announce it in december, six months later they approve it the antitrust executive at the dodge -- >> the same executive who went

after the at&t/time warner deal. who said that was not political. >> butversed his own decision >> he was appointed, a few months after he was appointed, he said i think we should sue to block that deal. they failed, but it took two years for that at&t deal to close. with fox and disney it could happen soon after they have the approval >> now the timeline looks like what >> there was a july 10th shareholder meeting date that fox set to vote on the disney deal, the original offer comcast came in at 65 billion. disney came back with 71 billion. they have not set a date yet, now that they have the doj approval, i wouldn't be surprised if in the weeks or month or so after that date that they set a date. >> the expectation when the new bid came in from disney was that

comcast would counter with a higher bid now comcast needs to -- if they counter at all, they need to counter with a huge bid. >> much bigger >> because that transaction likely would take a year to close. >> a year to close sources tell me that comcast has been supplying a lot of information to the doj to help out on the disney merger agreement. so what they're saying is they already have a lot of materials any way. if fox goes with us, doj is already involved in it but it would take six months or longer at the fastest. if you're a fox shareholder, you could be saying i'm losing out on six, seven months >> was kind of price are we talking about that comcast would have to come back with to make this interesting the "wall street journal" had a report yesterday that comcast

has been talking to private equity firms >> looking to raise money as high as 90 billion that's way high. i think that's sort of an upper bound number that maybe if you're lending the money you want that number out there i don't think it will go that high that's way too high. you're not buying all of fox >> take us inside the corner office at comcast, in terms of the thinking is the thinking the game is over is the thinking, okay, we can come back with another bid >> because that shareholder date is now postponed and indefr nat, comcast executives feel like we have a bit of time let's be smart about this. last time we talked about this i said they might partner. that's a possibility they could raise more money to do that. what number they have, that's still a question >> this is all because of what's happening with netflix, streaming, competition >> that's the bigger context

here >> if you talk about $90 billion, that's 11 years worth of all the programming that netflix produces a year. that 8 billion number, 11 years worth of the highest number ever >> the other context ever is there are only so many of these properties left. if the bidding war gets out of control, in this era of consolidation of big media companies, there are only so many foxes out there >> you are still talking about 11 years that's a long runway you can't spend $90 billion in programming this year. >> that's a lot. >> if you think about the network's context you could spend $90 billion on your own content, your own streaming service without buying something. >> that's my point >> how long would it take you to build that. >> the accounting for that, they hit you immediately. if you actually acquire it -- that's part of the problem

>> in terms of the cash flow, in terms of what they're putting out, it's much higher. >> ed lee, thank you >> sure. when we come back, how the escalating trade war is affecting american manufacturers. we'll talk to the ceo of snap-on tools. >> and then a cabinet secretary double play. rick perry will be joining us. plus we have agricultural secretary, sonny purdue. he will update us on the trade impact for america's farmers stay tuned, you are watching "squawk box" on cnbc

google reissued its internal employee conduct rules the company uses internal communications platforms that were thrust into the public spotlight last year after an engineer's comments about gender differences went viral if you remember, he was fired. the new rules specifically prohibit what's called doxing, when personal information or contact details of a person are released without their consent

the policy tells employees to avoid blanket statements about groups and people. it says the goal is to understand more, not to be right. it's an interesting issue. it's a very tough thing to police they want to have a very sort of open first amendment style, you can say what you want. yet -- >> as long as you don't offend anybody. >> good luck with that >> very interesting. when we come back, futures have been picking up some steam. you can see the dow is up by 121 points that's triple what we started just about 45 minutes ago. s&p futures are up by 14 nasdaq up by 38. plus we have a comeback story from atlantic city today with two casinos set to reopen under new names. contessa brewer is there what can you tell us >> they're hoping that lady luck is with them after years of watching casinos along this

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all right, welcome back, everybody, two new casinos launching in atlantic city with investors hoping it is turning a corner contessa brewer, they've got heavy lifting to do. >> well, they sure do. but you look around today and this famous boardwalk is getting a big makeover with hard rock taking over what was the trump taj mahal and just down the strip a little bit, you are seeing the ocean resort casino take over what was briefly for two years rubble this was a town where you saw nearly half the casinos go belly up over the last decade or so. new york, pennsylvania, offering stiff competition. atlantic stay gaining revenue, dropped by 50% and 11,000 people lost their jobs. long time taj mahal mechanic ken

pernell was one of them. >> some people were commuting 50 miles one way to pennsylvania casinos to work as dealers and some actually moved away, left the area so to see happy smiling faces again was really exciting. >> reporter: ocean resort casinos adding about another 2500 other workers and the strategy here is not to rely so heavily on gaming revenue, instead allow entertainment to be a big draw in dining options. of course the beach as well, hard rock has really scheduled out some 300 acts or so the denver person who bought it at a fire price of $200 million says he hopes his investment pays off in the very near future. >> well, the road, can i, would i want to do that for years? probably not but can i weather the storm for six months to a year

absolutely. >> reporter: analysts tell me this is rather a tight wire, though, you are adding 3,000 rooms to competition, especially problematic after labor day and, of course, it will be a tough calm, becky, to make people, market tourists to rethink their image of atlantic city >> contessa, you are right, kerry our guest host brings up a good point, there are so many other places that now offer gambling how much of a head wind does that create? >> reporter: it's a big problem here and especially because unlike las vegas, which has moved to non-gaming revenue as the majority source of revenue, this is still a gaming revenue hef industry in atlantic estimate here's the thing, take hard rock, for instance, which is totally amazing inside the taj mahal, these 300 top name acts to be the draw here, they're hoping they can fill them in on the week even after labor day and convention business during the week here will fill in those gaps.

>> we are going to be speaking later, in fact, to the head of seminole gaming, that's coming up at 8:40 eastern time, also, jack morris, who is the developer, who helped produce all of this. so we will be digging into this a little later contessa, we will see you in a bit. >> time for a quit parting shot from our guest host this morning and ceo, good morning, i shouldn't say good morning, i should say good-bye almost, but it's almost over sorry. leave us with -- no, here's my question on the parties also, we've had people come on the show two weeks ago, we had this interesting idea presented, interest rates were going up by the ends of the year and at the same the market was going to melt up at the same time >> i've heard that >> what do you think of that >> well, let's start at the top. interest rates going up. we don't want interest rates to go up much i'll tell you why. who wants the money?

who is really pushing interest rates higher you need to see more demand. right now, we've got this trade issue and people are concerned about spending so i just don't think it's so easy ocome up with the demand or borrowers for money to push rates up that's one we don't think rates are going up, on the other hand, in terms of the market melting up, you need those earnings to come through. if we have a calming down of the trade war talk and there are continuing to be good earnings, the gdp number comes through nor this quarter i think the market can keep going up, melting up, that's a bold statement i would never want to predict that the market was up 21% last year. i'd be happy if we were up 10% this year. >> thank you great to see you appreciate it. coming up, two big hours and two cabinet secretaries will joins live first, energy secretary rick perry, he's at the world gas conference in washington and

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market whiplash, trade chatter from washington has investors on edge. the latest from the white house and what you could expect in today's trading session straight ahead. a read on the manufacturing sector snap on ceo joins us to discuss the president's push to bring jobs back to america despite harley-davidson and doing business overseas. >> secretary rick perry talks about oil prices 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 at the time's square market joe is off today take a look at u.s. equity features this hour the dow is opening higher, about 68 points higher, nasdaq is 21 points up. the s&p 500 opened up about nine points higher. let's get you through the big headlines, apple and samsung, they now settled a seven-year iphone patent dispute putting an end to a long legal battle terms of the settlement were disclosed. apple had first claimed they had stolen the look and other design elements of the iphone this had put them at quite

logerheads as you know samsung makes the screen for iphones strange bed fellows. bj's whom sale returns to wall street today the initial public offering prized at $17 per share. the upper end values the company at just under $2.2 billion they had gone private back in 2011 what is old is new again we get the final reading on first quarter economic growth. >> that will happen in 90 minute's time. consensus calling for an annual growth rate identical to the estimate out a month ago we will also be getting the labor department's weekly look at initial jobless claims. >> all right we have a few dow component. >> our first breaking alert from wva, by the way is wall greens boots alliance the dow jones industrial average, the headline you care the most is they're beating earnings estimates, a buck 53. yesterday it was a buck 47

also authorizing a $10 billion share repurchase program and raising their dividend to 44 cents. the dividend goes up a few cents. $10 billion thorgz share of a purchase reprogram -- authorization-of-share of a purchase reprogram overall the head quarter numbers or headline numbers for our newest dow component, wva, walgreens boots alliance >> check that out now up 1.9% just on the news it was getting put into the dow we will continue to dig through this we got an analyst that will be joining us in just a moment. all right, president trump backing down from hard hitting trade policy against china the move should, at least should temporarily diffuse some tensions, for now. kayla is joining us now from washington, where i suspect it's not that easy? >> reporter: no, and those tensions are diffused for at least a day the president dialing back the confrontation

with china, but leaving the question of regulating tech teams in congress' hands for now. at a rally in north.com, he says the u.s. will get along with china and he stepped on allies like the eu and canada >> we are going to treat our workers, our companies, our farmers fairly if you are not going to take our farm product like we take your farm product, then we're going to tax all of those beautiful mercedes benz' that are coming in, and we will tax bmws that are coming in. >> a popular applause line on the touch. on sunday, canada will hit the u.s. with new retaliation on various produce worth about $4 billion. europe is preparing new retaliation for potential u.s. auto shares, you heard the president invoking the u.s. car industry says that could carry a cost for them of about $45 billion.

a certain of tariffs has spiked over the last month. mentions of trade on conference calls rose 43% over 2017 and tariffs were mentioned four times as often as the next trade category, like nafta, china and brexit so it's certainly a huge concern nor corporate america. as for what happens with china, a lot of outside observers still expect the president to go ahead with the $34 billion import tariffs next week and say that this deescalation, while it is significant, might be more dempstial to congress than to china in the long run. >> kayla, thank you very much. i have a feeling we'll see new a bit. thank you. all right, we are more than a week away from president trump's additional 25% tariff on over 800 different chinese products of course, china has threatened to retaliate, which could potentially harm the u.s. sector, joining us now, chairman

ceo of snapon, nicholas pinchuck almost entirely sold in the united states? >> almost everything are made right here at u.s. steel >> i want to ask you the question first you are kind of near harley-davidson. you are a wisconsin guy. >> that's true >> what if you decided you would increase production more in india, let's say, because you wanted to produce a less expensive tool for the less wealthy indian consumer. >> right >> and the president came after you about that what would you say to him? would you say, mr. president, i respect your view but i feed a cheaper product for a cheaper consumer would you push back? how would you handle that? >> snap-on before donald trump came on the scene is made in the markets we sell. generally we make in the united states that's our policy. we tend to make in other places. we have factories in china and places, we tends to do that. it's hard to lob we have 70,000 skus.

it's hard to lob 70,000 skus, different products, lob them 10,000 times in 12 different time zones it's inefficient we use the united states for the one inalienable advantage, that is proximity to the world's greatest market. >> what do you think of the president going after harley they're your neighbor over there. >> hair smart guys >> they're in kenosha. >> that's minnesota. >> he's coming back, in harley's back on its heels, we're the most american company in the world. >> i know, i would have argued snap-on is the most american company in the world >> use snap-on to fix your harley. >> it's a different thing. okay the president goes after him. if he didn't come after us we wouldn't like it we could defend ourselves. every other banker is thinking of cruising on his harley in retirement you know, he's not dreaming of

twirling wrenches. that's a big difference. so they're much more rooted in the white collar people where we're in blue collar america the garages of america, the factories of america >> you think you are safe? >> i don't think we're safe. who would come on a program like this and say we're safe. we use american steel. we talk about that with our people we're endorsed by that with our customer base. >> what's happened with the american steel you are using i'm hearing the tariffs are making price increases >> it's gone up i think previous 18 months before they talked about the tariffs, it went up 30%. we ate it. though >> how much since this i heard it's gone up pretty significantly. >> would you think less of me if i don't know exactly but the thing is i think 8 or 9% since then but on the other hand, look this is what you do when you manage a manufacturing company. in 2015, we had $43 million for us, we're a $4 billion in

currency fluctuation the euro is floating around. the r&b has been up and down you manage those things. we've had big numbers. our oi margins went up, operating margins went up 100% against that >> you are dealing a higher economy, higher costs, how do you add it up here is the environment we have? is it challenging or a great with un? >> we think it's a great one they have a great data point they survey manufacturers every quarter 14,000 and how optimistic are you optimistic about the future 91.5% optimistic this is the highest ever ever 18 months ago, it was 62%. >> wow >> so it's a new thing so when i talk to people like that these are manufacturers, big and small, they're very positive but i walk through the garages and through the factories, those people are very positive about this because they see this through the lens, you know, through a

different lens they see it as advancing person jobs they don't think trade wars are good or the idea the lens of promoting american jobs is a powerful thing in these places >> the other thought, though, that at this particular time, given how strong the economy is. if you are going to get into a trade war, this is the time to do it? >> that's right, if i say it, if you are a manufacturer, i say it's a risky time. i say risky versus what? we just had 50 basis points of improvement in tax right. okay so you'd expect the world the break always if your way that's why they have managers so when it breaks the other way, you manage over it and keep going. if you have the higher steel costs, we have something called rapid continuous improvement you physical out ways to have less steel in your product and have it as strong and as capable as a snap-on too many. >> can you compete with china? >> sure. >> in coin >> sure. sure >> and make it in america?

>> sure. >> and the element there is criticality. we can compete anywhere where people think the mission is critical snap-on thrives where people think like an airline, where people say, look, the penalty for failure is high. the need for repeatability and reliability justifies a snap-on level product. >> have you seen the new chinese airline that they're producing >> i have not. >> it looks a lot like a 737 have you ever googled land wind? >> i think i have. >> google land wind and land rover. the point is they have a car loo looks exactly like the land rover. their ford pickup looks exactly like the ford pickup have you ever been ripped off in china? >> ownership of a handful doesn't tell you how to make it because it's in the manufacturing process. that's the deville in the details. the other thing we have been able do in china, i lived there 12 years myself. few are in a place the local

government doesn't want to lose employment so that somebody in the middle of china rips you off so you can engage them in the field. so it's always worked for us in protecting technology and trademark. trademark is our big question in china. >> thank you for joining us. new dow component walgreens out with earnings. we mentioned profit came in $1.53 per share. revenues beating forecast, the company authorizing a $13w08 share repurchase program and raising its quarterly dividend by 4 cents to 44 cents a share joining us right now on the "squawk" news line is john rans ransom, the stock is ut by 1.6%. what do you think of all the news >> good morning, becky first of all, what is new in here is the $10 billion share buyback. >> that is probably explaining it i think when you look at the numbers here, yes, they beat

earnings it looks worse and worse the more you delve into it revenue is 1% ahead of the street earnings beat on share count man, few look at the same store numbers both in the u.s. and the uk pharmacy was flat, retail on the front end of the u.s. was down 5 and the international retail the numbers were negative. the small wholesale division posted positive thanks to constant currency. if i could editorialize for two seconds. >> sure. >> obviously, if you look at the whole space and what vcs is doing. even what rite aid is doing. walgreens analyst say in may if you look at the tone of the q & a, everyone is asking, okay, what's your strategy you've done a great job cutting costs, your competitors seem to be moving upstream, walgreens which is mostly european management and retail centric seems to be sticking to the same strategy

that's why i think they've traded down four times earnings. if you look at the internals of the u.s. mark the prescription sales year over year is flat no one has cracked the code on the front end. front end has gone negative kind of from being flat so you can only, as you know, you can only buy so many shares and cut so many costs if you don't have top line growth there is a feeling some of the competitors are having more sustainable and out of value revenue streams. i think there is a feeling that walgreens is, we were a little surprised, frankly, of all the stocks, they chose to put walgreens in there i don't think they're perceived from a health care stand point out of the code. >> let me start with the retail stores, comp store sales, they say they were down 3.8% per quarter, we nexting on profitability. what does that mean? are they trying to close out their performs what's the justification behind

it >> on a same store basis, all these guys are trying to sell more private label and higher profitability stuff. it's more of a merchandise call. we wrote something in december we were the dreaded amazon, the most profitable thing on the front end is otc private label so robe us trobutussen is you he amazon basic you guys picked this up on your print media. they sell the same kind of stuff for habit half the price so while home delivery of drug is nothing new what is new is going on amazon and clicking and getting you know a lead for 4 cents a pim, for example. again, just to distinguish, otc is stuff that you don't need a prescription like prilosec or that sort of thing that's where the competition started with the dollar stores and its movement to amazon basic. and, photographically, nobody has cracked the code in my 15 years in covering this industry in getting people.

walgreens took a bunch of shares by discounting about 15 months ago back in the fall of '16, so their pharmacy sales went nuts and they added 40 million prescriptions on a basis of a billion. well, it doesn't move the front end at all so there is this straight hypothesis that people, there is more store traffic but people are either rolling through the drop through or they were standing in the back of the store. they weren't tempted that much by buying the medicine right there. so that experiment didn't generate any sort of recognizable bill. >> john, very quickly, as you have been talking, the stock has gone up from 1.6% to down just over.4 of a percent. what is your price target on this sock? >> we have been neutral. so we have four ratings. so neutral is the third, then there is under perform so neutral stocks we have a price to target. >> thank you for your time this morning and your quick analysis of the newest dow component.

appreciate it. >> all right thanks so much. coming up, when we return, after opec ran inventories, oil price versus made a more than 13406rs higher in just one week. we will take a look at where prices are headed coming up after the break. later rick perry is our special guest. we will talk trade policy, energy sector d anso much more "squawk" returns right after this short break what's a gig of data?

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all right, well cool back to "squawk box," everybody. we have been watching the futures this morning we heard from walgreens alliance, the newest member of the dow. we are watching what that meant for earnings first that stock was up 1.8% we seen the gains fall back. the futures picked up substantially before we were up 122 points. now are you looking at the dow up by 48 points, the nasdaq up by 18. we'll take a look at walgreens and see where that is trading right now. i believe it looks like it is trading at around 6550 >> here's a question, has oil moved too far, too fast? if you haven't been paying attention, they're spiking lately we have more on this big move in the last couple of days. >> good morning, brian, too far,

too fast it depends on who you ask. yesterday's high it rose 10 percent over the last week far faster than a ride we saw for brent. what is fuelling the gravity defying move three things, first the opec million barrels a day may not be that much in reality second, iran's barrels coming off, the amount could be far greater than the marshall an -- anticipat anticipated. almost 10 million barrels yesterday is very steep. it almost seems like the perfect storm is here to move us higher. investors and traders i've spoken to said they have been caught off guard by this they thought they were going to go higher. not so far that fast >> that oil can move higher from here the next stop, not out of the question it may not stay there all year going into the fourth of july, which is the peak of the summer driving season, it won't be a total shock.

i want to add hout the spread before the opec meeting to about $5 now when that spread gets cut in half like that it is thatles to the market wti is in more favor, it's in higher demand. >> that can be lingering as the u.s. is exporting more >> why do we think that spread has narrowed so much so quickly? >> it's an interesting question. when you look at the move brent has made, it makes sense this move is fueled by what's happening here it's a piece of that demand factor but also the fact that, you know, it's getting a little bit harder to move the oil around. this is something you and i have discussed for a while. we have a lot of it. we need to move it we need to get it out of the country. that's something that's on the trump administration's docket. but it takes time. >> we will talk about that withing is perry here in a few minutes. all right, coming up, investors cheering spin-off from madison square garden. details after the break. later on, we did catch up with

the aforementioned rick perry at a gas conference earlier this week we will join us. he will hit only what jackie talked about and iran and russia and there is a lot to talk about. "squawk box" returns after this break. you're gonna do great! thanks, dad! break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at aflac.com.

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welcome back to "squawk box," chipotle's new ceo is borrowing from the playbook to revive changes to chipotle's menu and boost digital sales by installing shelves where people can pick up mobile orders. they will start a happy hour promotion between 2:00 and 5:00 p.m. happy hour will start early with $2 tacos and beer and margarita it sells at most restaurants i just had a chipotle salad, i

bought into. it was a so forth late lunch, so i could have had a happy hour. >> is this a sign they are going to down scale? they always want to be the nicer taco >> wasn't that the idea when they brought in the taco bell guy, maybe not down scale but make it more accessible. >> booze >> perhaps madison square garden plans to explore spinning off sports business from its concert and venue operations this includes the new york knicks and the rangers franchises the sports accounts for roughly half of the revenue. initially shares were up sharply. they have still up 9% on this news >> coming up, diversity in the c suite, carla harris of morgan stanley will join us ahead of the multileaders conference. it kicks off today take a look at the u.s. equity futures at this hour we are in the green. dow up about 60 points jurassic world: fallen kingdom

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>> good morning, welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market in time's square i want to check out walgreens beating the top and bottom lines for the latest quarter, also authorizing a $10 billion per share purchasing program and raising its dividend to 44 cents per share. t-mobile and sprint are defending their merger to lawmakers. the sprint executive chairman and t-mobile's ceo will be telling a senate panel the merger would create jobs and pledge lower prices, also saying that sprint has struggled to break everyone as a stand alone company, part of the problem will be if you don't merge, sprint will have a tougher time. that was something t-mobile made before at&t blocked that

transaction. separately, equifax has struck an agreement with banking regulators in eight states it avoids the september 2018 data breach as a result. equifax agreed to boost oversight and improve processes and perform a detailed assessment of cyber threats the credit reporting agency said it had already completed many of those tasks prior to signing that deal. meantime a big day at morgan stanley, joining us now with more on the diversy in the c suite in portfolios. carla harris, vice chairman managing director and senior client adviser >> hi, good morning. >> so this is not just a classic diversity conference, it's different? >> that's exactly right. this is not really a diversity conference at all. it is a leader's conference, we're talking from global capital marks, crypto currency, nationalism, populism.

what makes this a senior multi-culture leaders conference is we are targeting the most senior african-americans, hispanic americans, asian americans and asian indians in corporate america today. by virtue of who is speaking, that makes it different the content at all is not about diversity and inclusion the way we think about conferences >> so why have a separate conference that focuses on this audience you will not be talking any differently. >> i tell you why, when we looked around in the marketplace, becky, there was no conference where the most senior professionals in corporate america had a chance to come together as a woman of color when i am invited to a broad leadership conference, can you count the number of people of color in the room when i am invited to a broad leadership conference, can you count the number of women of color in the room. i started skrachg my head, where are they getting this business

content, this leadership content that we offer when we are having a conference so that i see when i'm out there. so i said it doesn't exist in the market you know how i feel about market gaps, inefficiency >> you feel when you look out at that crowd, do you feel encouraged or do you feel like darn it, i'm discouraged, we got work to do there is not enough people still in that market >> i have to say, at the market i am encouraged. i will tell you why, we have littled the audience to 300. frankly that's all we can get in the peer. >> not a bad place to be >> we have people on the waiting list, showing up show saying i hope somebody doesn't show up, can i get a seat >> that shows me there are more people that would like to be in that room. i am at the margin encouraged. >> how much of this have you done an amazing job bringing this group toke. how much of this group or the conversation ends up, though, being about inclusion and about

how, look, if i was a recruiter, i would want to be all over this conference >> that's exactly right. very little of the content, if any, actually migrates towards the conversation about diversity and inclusion. because these are business professionals and senior at that so there are discussions that they want to have that will impact the way they do business and the way they do business with each other. that really is what's driving the conversation outside of the room when we're not actually having a panel or fire side chat >> carla, how come none of these other conferences seem to have picked up on this? and you are speaking the same to these people, how come these other conferences haven't fixed out, there is a big part of the audience we are missing. >> i have to tell you, becky, i hear people in the marketplace say we can't find them it's difficult i have to tell you that it matters who's asking, number one, if you extends yourself you can finds them so i can't speak to why. >> i do a conference, i actually will admit i have struggled with

this issue in terms of trying to find the right mix of people >> isn't it the people that can buy the tick >> no, no, no, no right now, if you look at just women who are running companies in corporate america today, you have to be a unicorn. there is so few of them, it is so hard, it is truly hard to find >> yeah. but i have to tell you, i'm really encouraged about that as well, because i have been going to and speaking at, frankly a lot of women's leadership conferences over the last couple years. those conferences are growing in number number one number two, i'm really encouraged because the millennium women in particular have an appetite towards entrepreneurship and leadership. i think as we look out ten years from now, you will see more women. >> i think ten years from now, there is a whole new generation that will change the way corporate america looks. it's so interesting, even at this moment despite the

conversation we have, that it hasn't changed then. >> you need three things, intentionality, accountability and consistency. you can argue we certainly have not had the consistency. when i think about financial services, in particular, every time there is a bull market environment, there is a lot of focus, activity, recruiting. when we get in the bear market environment, it doesn't go away. the intensity goes down, when you have a bare market environment, have you restructurings and you lose your pipeline so what happens when it's a bull mark environment you are starting all over again, that is one of the reasons i think it has taken us so long to get there. >> that's an interesting point >> you investigationed us. you are a marking person you said you don't like marketing efficiencies, why are you doing it and constricting supply, if there is only 300 seats, carla, why not open it up or are you trying to create that sort of -- >> need a velvet rope. it helps >> it's new york, right? >> why constrict supply

artificially >> i tell you, in the beginning we wanted to be careful about supply so we could have frank conversations in the room. right. because we have really senior people and we want people to be able to say exactly what they think. so that's why we have been very careful about the number but this is our third year doing it and there is no debate now about the market demand. so we will among the partners, which include target this year and deloitte, they were actually with us at the very beginning. they are founding partners aarp is with us this year as a sponsor as well. we have to have a conversation post this conversation to keep it this size and keep the intimacy >> thank you for coming in >> intimate group of four and a few million. >> carla, thank you. >> thank you let's get a check on the new dow component. >> that is warm greens boot alliance as you know them. wva. get used to it >> that is the ticker. profit came in ahead of estimates beat by next el. revenue beat forecast as well. but the big news here may be the

company authorized a $10 billion share buy back program, also raised its quarterly dividend by 4 vencents per share to 44 cent per share. >> analysts we spoke to pointed comp store sales down 3.8 percent. that's a little concerning it may be why the stock is down as well. >> wva, you have to use that ticker >> i still am thinking wag >> all right on deck, another "squawk box" news-making interview. what will it take to get american output to 11 million barrels a day? secretary rick perry of the energy department will join us after the break. later on, the department of justice giving disney the go ahead on buying with one big condition. what that is coming up next. you always pay

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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. welcome back 7:41 in the east good morning let's take a look at stocks to watch on this thursday it is spice maker mccormick reported a quarterly profit of a buck two per share >> that beat estimates by a cool

9 cents. revenue topped the forecast. the company plans to announce at least $500 million of costs. meantime, consulting firm censure out with its earnings, $1.79 per share. revenues jumped, largely on improved sales of cloud-based services beth, bath and beyond, though, the other way, did not beat estimates. beat estimates on the topped and bottom lines but it saw same store sales drop by 0.6% while analysts had been expecting an increase. they were down 5.5% in the pre market >> coming up, we are expecting rick perry the top of the hour sblt offing a culture sonny perdue will be our guest. we will talk tariffs and the effect on farmers. "squawk" returns in just a moment l.

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european markets as well again, keeping calm, they're investing on, they're down, yes, germany is down over 1 percent we're seeing the footsie down .2 of 1%. overnight in asia, let's get a check if we can. the hang seng up a half a percent. japan's nikkei literally unchanged. oil, we will talk about in a second with the secretary rick perry. wti crude is down, brent crude up a half a percent. the benchmark ten-year note 2.85%. >> i saw 2.83 the last time. >> what is 2 basis points among friends? >> either way it ain't 3. all right, your next guest joining us from the world gas conference in d.c., which has been going on a couple day, let's welcome in mr. secretary perry. thank you for joining us >> all right >> well, i asked you on tuesday i think it was if you were going

to meet with your counterpart from russia, alexander nowack. you said you hoped to. could you confirm you didmeet with the russian minister this week, sir? >> yeah, we did, a topic of a meeting we had in january in davos. this is the second time we meet this year. we had a good, constructive conversation it's good to talk to people, whether you're at the high mark of your relationships or not, which we obviously aren't with russia it's good to have those conversations. >> could you take us into the room about the topics of conversation, i would assume opec was discussed, perhaps the u.s.tially boom, maybe their new pipeline to germany? >> yeah, all of the abovech it was a pretty broad ranging conversation we shared with them our concerns about some of the activities they have been involved with, whether it's crimea, ukraine the continual development of the

nord stream two. they're on the table they're not unilateral for the department of energy to make decisions. we can send messages i don't think there were any shocks to anybody in the room about any of theconversations that we had. they're going to be a major player in the european market. the u.s. lng is now going to be a very, very important option for eu countries to decide where they're going to get sure gas from competition is a good thing. basically, it was our message. we wish them well with their competition. we're going to future our shoulders to the task and try to get as much american lng into the european community as we can. >> you were kind enough, sir, to spends a couple day, on two day russian meetings you had indicated you thought if there was some kind of supply gap in the oil mark the saudis would be able produce more oil,

maybe even more than they had agreed upon at that opec meeting a couple days ago in vienna. did you also have a similar conversation, sir, with the russians, if there is a supply shock? because we seen the price of oil jump, as you know, sir, pretty significantly in the last couple days that the russians would be able to fill own holes in the global supply for any oil? >> yeah. i think all of the above are true from the standpoint of a supply standpoint. there is just a really substantial demand and some disruptions around the world, when you think about what's going on in venezuela, angola, libya, obviously iran with the jcpoa. all of those disruptions at a time that demands has really gone up. we got the summer driving season right here in the united states, so there is a need for crude, in terms of gasoline in the mark place. so the saudis are committed to trying to fill that void

i'm sure we did not speak with specificity about the russians on that issue, but i'm conversation that the -- as demand shows itself in the market, those that have the ability to hit that supply are going to do everything they can. >> secretary perry, what do you think a fair price for crude oil is at the moment we've watched it decline so rapidly. >> yeah, i'm not in the business of indicating the price of gasoline, 65 to $70 seems to be a place where most of the producers are comfortable that they can continue to do. i'm more concerned about the capacity issue in the united states that's my greatest concern is being able to build the infrastructure, get the permitting done. president trump sen at clear message early on in his administration that he wants to see regulations that are part of

a blockade, if you will, of being able to get this product to the market. do the cost benefit. if it costs more than his benefits, get them out of the way. and we've done that in a pretty substantial way. getting these lng permitting facilities or these export facilities permitted is very high on his list of things to get done so working more on the supply side and doing government's job. >> that is, here's the rules when you make the rules, here's your permit. and give that stability to the marketplace and american entrepreneurs, american innovators, american producers, they will responds in a very powerful way >> mr., i wanted to ask you about our relationship with saudi arabia in particular the country's ambition to take aramco public. this is something they have been talking about for quite some time now it has continually been delayed.

president trump has tweeted out his hope it will one day happen and hasn't in an exchange in the united states. how often do you talk to the saudis about the aramco deal and also the price of oil in terms of its diplomacy dependance to make that work >> we talk on a fairly regular basis. there is traveling to the kingdom, meeting with the king, hoteling with the crown prince, meeting my counterpart, others abdul aziz, king solomon, the older brother of the crown prince i have personal relationships with them. we correspond on a relevaativel regular basis. aramco doesn't come up that often. i think that's a closely-held

decision that the crown prince khalid will be making decisions about. a very country that we have a different relationships with it's not just on the oil and gas side, obviously. we're in conversations and negotiations, if you will, on a one, two, three agreement on the nuclear energy side of things. the united states would like to be a partner as they build out their nuclear energy portfolio they're talking about a very substantial growth in that area. so a lot going on in that country. we've got a history with them. they have been great friends, great allies their role in this short term issue of being able to fill the void, if you will, of crude going into the marnl plaketplacy will be very active in that. i think they will hit their goals of somewhere between 10 and 11 barrels >> mr. ing is, you talked about

infrastructure in the permian basin, we are now exporting 3 million barrels oil a day, something not only a record, unthinkable a few years ago. we are now exporting more oil than most countries produce. we seem to be peaked out in terms of getting oil to market, as you noted is there any short-term way to increase the oil and infrastructure or is it going to take many years? >> it's -- you are going to take some time. it's going to be, you know, first, second quarter 2019 i would say before the new pipelines get completed. with that said, you can still get that to market it's just more costly. you will be trucking it. and from the permian to the gulf coast is a pretty good piece but i can assure you that in the state of texas, and with the permitting process that we got with the federal government now, it will go faster than it's ever gone in the past to be able to get those pipelines done so this is an extraordinary

opportunity. we're seeing a lot of interest in infrastructure in the united states some of it foreign dollars come nook the occupation a great example is the golden pass over in southeast texas the qataris, our partners there building a massive export facility so a lot of infrastructure will be built in the united states. we will continue to be the world's leader in the production of oil and gas it's an exciting time to be in that industry. >> u.s. energying is rick per--. secretary rick perry thank you for your time. they have a warning for president trump. the auto maker says a 20% tariff on car imports would directly hit u.s. consumers they say it will affect every cost of the cars the camry would go up by $1800. meantime, items that you bought on amazon that used to be

dropped off by a ups truck orr maybe by your friendly local mail carrier may soon be delivered by an amazon van but not owned by amazon. listen to this amazon is launching a new initiative to let entrepreneurs deliver those packages now, can you lease the van from amazon you will get a shirt with the amazon logo on it. you will get technology support, fuel deals, et cetera. in return, amazon gets to ship more packages instead of relying on fedex or getting into the entrepreneur business in a way. coming up, agriculturaling is sonny perdue talking trade and the nation's farmers plus the doj clearing the way for disney to buy most of 21st century assets with one big caveat we will tell you what it is and what our parent compancoy mcast is likely to do. the future is up we are back right after this whoooo.

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the trade spat and the impact on farmers. agriculture secretary sonny perdue speaks out first on cnbc. a key read on the trump

economy. another estimate on gdp data about to cross the tape. we will bring you the numbers. >> new this morning, amazon pushing further on the turf of fedex and the details and reactions straight ahead the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box. [ music playing good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in time's square i'm becky quebec along with brian sullivan and joe sorkin. we have been in positive territory all morning long you are talking up from 122 is highest i saw up to 9 points above fair value s&p futures are up by five the nasdaq up by 15, of course, this comes after a big reversal with

the markets yesterday, where we saw the dow run up over 260 points at the high of the session, only to end down by 165 points we have also been watching oil prices very closely. you will see right now wti is trading at 72.55 while brept is at 77.89 finally, treasury yields, which have been stubbornly down 10% this morning yielding 2.8% check out shares of walgreens. it is the now dow component, posting a profit beat estimates of 5 cents the revenue beating forecasters well the company is torresing a $10 billion share repurchase program and raising its quarterly dividend by 4 cents to 44 cents per share. amazon now announcing a last mile delivery service. the company says it will begin offering incentives to entice people to package their own business they will have a dark van with a

prime logo it added it would provide uniforms, fuming plans and insurance programs for fleet operators and offer classes on tax, payroll and small business challenges this is a part of amazon's latest effort to solve its biggest challenge of getting gods to the last mile to the customer's doorsteps, check out shares of ups and fedex will be competing with this new service as well. you are looking at both of those stocks down marginally president trump backing away from tough new restrictions on chinese investments in the united states. kayla, good morning again. >> reporter: good morning, becky the president is dialing back his confrontation towards china, if only temporarily, saying yesterday the two countries will work together and last night at a rally in north dakota saying they will get along now. last night the president offered a long defense of his trade policy he offered the trade rollout wasn't perfect but that it was necessary and it will all work

out. >> we're not starting a trade war, but we'll finish it and you know what, in the ends, you know what's going to happen? and it's already happening already happening. they're going to come to us and they're going to say, hey, let's work it out. we will work it out. it's very simple but remember, it is, it's the art of the deal. >> reporter: the trade moves have caused hands wing on capitol hill new data shows trade concerns spiking on earnings calls and tariffs far outweighing any other concern. next week canada will slap tariffs on $13 become of u.s. goods, ketchup, candy and toilet paper and tariffs on and from coin could go into effect after that outside advisers to the white house say yesterday's decision doesn't necessarily mean those are off the table. guys, back to you. >> all right thank you very much. meantime, we are getting new details on a planned meeting between president trump and russia's vladimir putin. let's get more to eamon javers in d.c.

>> reporter: brian, the white house just put out a statement that meeting will take place july 16th in helsinki, finlands. it's been a long anticipated meeting. for some months now, the president indicated he wanted to meet with vladimir putin you remember he met last year in hamburg, germany he also met with john bolton you see there in the security pictures in russia to talk about the stakes for this helsinki, finland meeting with president trump. just within the past half hour the president has been tweeting about russia take a look at this tweet from the president of the united states, about a half an hour before this announcement comes up the president indicating here that he gives some credence anyway to russian denials of meddling saying russia continues to say, they had nothing to do with meddling in our election where is the dnc server and why

shady james comey and the now disgraced fbi acts he denies meddling even though his secretary of state mike pompeo said told the united states senate that he believed the president would confront vladimir putin about russian meddling and tell putin that russian meddling in u.s. elections is unacceptable and the fact that the united states intelligence community has concluded and assessed that russia did, in fact, meddle in the u.s. election in 2016 on behalf of hillary clinton. the president there, though, citing russia's denials. so that sets up big stakes for this meet income helsinki, finland, judgment 16th over to you. >>ee eamon, thank you for that sonny perdue saying u.s. farmers understand the trade fight with china but iowa farmers are calling the tariffs catastrophic for iowa's economy

agriculturing is connie perdue -- sonny perdue is joining us. what do you think of farmers when they ask them what is happening? >> obviously there is anxiety. there is legitimate anxiety when you see prices regressing. farmers understand china has not been paying fair they're patriots but they know patriotism can't pay the bills. that's where they're concerned >> we've spoken with several farmers and the heads of several farmers groups on the show they do say they support the president's plan for now they definitely want to hear what the plan is to protect them what do you tell them? >> obviously right the president told me to tell them he's not going to let them bear the brunt of these disruption and make a plan for mitigation unless we are unable resolve the trade issue. that's obviously what farmers would prefer they would like to have trade. they want to sell their pollen counts they're the most productive in the world. they've come to depend on exports, that's their first

choice if not, they have to pay everythinger everyone else they can't have their livelihood reduced over the 50% it's down over the last five years. >> which means what? the u.s. would buy up those with taxpayer dollars in. >> again the usda has tools in our too many box we are not disclosing all those right now the market's dynamic we have to determine what a trade disruption, what a normal mark volatility in order to make those calls. we're calculating the components of trade disruptions on a weekly basis and making administration known. >> let's just talk about soy beans. they recently touched $8.41 a bush em, which is the lowest we've seen in nine years part of that may be the bumper crop we are seeing this year how much of that is because of this direct potential for retaliation from china i've seen one report that said if china imposed a 10% tariff on soy beans, you could see prices plummet by 18%

>> those are the things we are calculating on a weekly basis. our chief economist and i meet weekly to determine what we believe the components of trade drugss are you mentioned the bumper crop. every farmer knows there is trade volatility prices go up and down. they have to depend on that market when there are trade disruptions, that's a component beat we're determining the mitigation effort >> can you tell us how close you are to thinking there is, indeed, hardship felt by these farmers based entirely or what percentage is based on the trade talk >> well, it's not that simple, obviously. it's a complex calculation i can't tell you that right now. because certainly we want to make i ma make sure the timing is accurate as well to make sure we can resolve this before any of this needs to happen. we can see beans go up forth of $10. >> you maid the points that farmers have definitely struggled in recent years.

i have seen according to usda, their income has dropped steadily since the year of 2013. i know in some cases, they are living off the income they were living on 15 years ago we made the point several times, if you are going to have a trade fight or a dispute arc strong economic backdrop is the right time to do that. that you have a little bit of leeway that you don't have in tighter times. farmers are obviously a little more pinched in in this scenario i wonder how deep the reserves of support from farmers are in a situation where they have already been bearing such a heavy load >> well, that's a good points. obviously, the american economy is humming along at a pace we haven't seen in many, many years, if ever but the fact is, that's not necessarily true of the farm economy. our farmers are seeing prices they haven't seen as you said in nine or ten years on soy beans and others pork and other types of products are down as well so their income has reduced over the last five years probably

50%. there are very few businesses in america that could sustain that kind of effort in their businesses if their revenue was down 50% that's just what farmers deal with each and every year they don't take those kind of risc what they can't take on top of that is inordinate artificial type of trade disruptions that i have not planned for. >> mr. secretary, we talk all the time about intellect chum properties -- intellectual properties, that is the reason we take on this fight. we think of it belonging to a company like a manufacturer like boeing you point out farmers actually need to protect the ip too can you explain how that works >> well, yes i can many people don't understand in america how much technology there is in u.s.ing a culture today. that's -- owe u.s. agriculture today. that's why it goes with inputs we got a great example in agriculture. two years ago six chinese

nationalists were convicted of dig occupy corn seeds with the inher ene-- inherent corn seeds it affects agriculture and economy as well. >> mr. ing is, we want to thank you for your time today. please keep us updated oftn how those measurements are going >> we will do that thank you. when we return, a bullish call on ibm why one firm is calling big blue a buy. plus the hunt for fox the doj gives the go ahead to disney to buy some of those fox assets what does it mean for comcast? we will talk to analyst michael nathanson right after the break. tus. a check on the fure the dow gone from the green to the red. back in a minute

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all right, good morning, welcome back to "squawk box. glad to have you here, joe

sullivan filling in. guys it was up a bit now we are down 23 points. s&p basically flat kind of like yesterday, we had things look okay then it collapsed because you had worry about technology and banks. bank stocks, one of the bigger ones down 13 days in a row so futures guys quietly turning around >> some stocks to watch. ibm, initiating coverage on that stock citing in part that ibm's cloud solution in nomura is differentiated in health care. that's an endorsement. also, bemo raising salesforce, bmo raises salesforce, it is bullish on companies like salesforce that can leverage pools on behalf of customers

in the meantime, the other big story we have been talking about all morning the justice department has approved disney's fox's assets it can be a battle against comcast. joining us to break it down, michael nathanson senior analyst at moffett did you guys flip a coin for who went first >> he started the company, but fair enough. >> so the last time we saw you, i think we said that comcast had put disney in a box. now it feels like maybe the other way around >> right. >> what's going to happen? >> comcast has got to decide quickly whether they're willing to be progressive in their bidding. because if we think it's going to close in two months, most of the people on the fox floor say this is a closing deal a bird in the hand i need a much bigger bid from comcast to keep this going

comcast needs to put in another 20% higher >> higher than where they are right now? it will always be 20% higher than whatever. >> disney is 38. you say look you need a $44 bid to get people at fox to pay attention. a $42 bid you can say it's 10% i can take the bid and close in two months so it needs to be a really big number >> 44 is your number >> we thought 44 is where this should settle. >> do you think the decision by the department of just the is to move this on such a fast track is political >> is it political >> yes i'm asking a fair question. >> is it good. >> waiting for a straight forward answer i don't know >> it looks that is accelerated in a political fashion it's so quick versus other - >> the normal course >> right it was complicated right. i'm always shocked you quickly this thing was decided right. when we heard last week it was two weeks away

most people said that can't be true there is no way this could be done so quickly. right? it actually is a huge advantage to disney that this is done. >> huge. >> a huge advantage. >> how much of this massive global deal and all this intrigue in the parks the businesses, everything like this comes down to whether rupert murdock's family gets their tax deal paid? >> well, there is no way the fox board would agree on a deal for that reason. you couldn't say i'm taking a lower bid. >> fox board is rupert murdock and everybody else >> i know the shareholders that own fox. there is no way they will sit by and let a deal done. >> what would they need to see from comcast >> i think they would say we need a much 450ier bid to wait time warner took way do long to close. by the time they closed, you argued, at&t got a good price. it took two years to close i would say the rick would be, yeah, i will need a higher bid >> at what price does this no

longer make sense for either side and is there a different price comcast can afford to pay and disney can afford where you say that makes sense and another that says it's a winners curse >> getting it above 40s is a curse. disney wants a global direct consumer product fox's content helps them do that quickly. so i would say disney has a better rationale they want to take fog's content. it should result in some long-term benefit to disney stock. whereas comcast can probably lever up more because their balance sheet, their business is probably more leverage than disney. >> i don't want to get to micro-- correct me if i'm wrong, disney made a fortune off marvel and sony, bizarrely, fox owns the rights to the biggest x-men character wolverine or the franchise than fox has

so does disney have this massive incentive maybe to andrew's point to overpay because they need the bring in the one marvel asset that they're desperate to get that they do not have >> so i'll open that to a broader question over the past decade when bob i can ieg /* -- bob i caneiger di deeshlg because they are actually able to take great content and really pump it through the parks, the film division will is a global consumer platform, they've always made those deals look good if hindsight. >> if comcast were walking away from this deal, you can argue they push disney to pay much more that was always a secondariesque, maybe not thenistthe initial goal what would happen to the -

>> we have buying stocks, it's been punished. in large part because of this deal the stock would go up >> go up by 10%, 20% 30%? >> i think from will be a question of cap allocation >> that this was something so out of the blue in terms of what people thought was going to happen at comcast. so it's going to go up i don't know if it's going to go up as craig's call to the 40s, but it will rise clearly back to -- >> the other question, is there an alternative option if you are comcast and you think i want to diversify my business and be international. maybe i want more content, i need to figure out a direct-to-consumer play, which is a part of the blue piece is about things like? is there something else? as you know, brian roberts is a merger master. that's what he likes to do >> right >> what else does he say

at some point you have to rationalize -- if you are not going after fox, you have to rationalize and say i'm not doing this, i can do it with that, because i think there are these other options for me still. >> unasked what happens to sky so there is a whole other bidding war happening in the uk on sky >> and the regulators there cannot be as potentially political as we think they may be here. >> they were political in the opposite way they did not want rupert to get bigger in the uk but in that situation, comcast has a higher bid than fox. right. so they have been more aggressive we have not yet heard what fox wants to do to top that bid. >> quickly to that point, listen, there are three members of the 21st century fox board that have the murdock and there are three other guys who run fox division there's seven votes automatically. i can't get around this idea i think the murdocks are, they're going to have to factor in that

estimated $4 billion tax bill, they're going to sad him their generations with $4 billion in estimated taxes. i know it's huge and all these different things. >> right >> ultimately this will come down to a family decision of what will cover? is it not? i can't get around that. >> you can't get around that i agree with you there is no way the board will take >> the board is the purchase dock >> whoever is independent will get sued for - >> take the pant suit off. >> i'm saying there is seven members that have worked for fox, have the last name of murdock. >> ultimately, that i have a fiduciary responsibility >> fiduciary responsibilities can be spun. >> if it's on the margin a 10% differential there is no question >> that's why i went to the pricing issue. you said 20% >> it will be hard to walk away if the spread is 20% 20% is a really big number with a ton of debt and they have to

sell the rsns like disney is selling, it's a less attractive deal >> reasons to buy the rsns >> i would say actually the fox the new fox. >> maybe they come back and look at it. >> interesting >> maybe you have a $4 billion tax bill some day. >> aspirational. thank you. >> great seeing you. when we come back, he has been called the or cam of tampa. he mansion the city's police and fire fighter peng funds. nsn ndne of the best performing peiofus in the states. he will join us on set at 8:30 eastern time people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all.

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the final news on tape we will take you live to cme for the numbers and reaction "squawk box" rolling on where the future is rolling over dow futures were up an hour ago. they are now down 80 points, trade fears, mark weakness seeping back into the mark 8:27 on the east coast 7:27.

welcome back to "squawk box. rick santelli here live on the floor with breaking news, jobless claims, initial, 227,000 up from an unrevised 218,000 we'll call it up 9,000, continuing claims moved from 1.726 to 1.75 million and the money number our last look at first quarter gdp. a bit of a disappointment. 2% our last look was 2.2, that's what we were expecting

down 2%. that's a tenth white if we look at the gdp price index. that's actually a little bit heavy. move from 1.9 to 2.2 and finally personal consumption expenditure quarter over quarter many like to look at this number it stays at 2.3. we can argue a little hotter on pricing. a little cooler on headline. it is an older number, especially when in front of us is a number that could be in the high 3s, even the 4% handle according to atlanta fed, so it's going to be very fascinating to see about one month from today interest rates hovering about a one month low yield in the low 2k3wr0r9z 10z. sulli, good to see you back to you. >> rick, thank you very much back to you. joining us is randy anderson chief economist at griffin capital. all right, number 230ir7x 23rs, randy, what do you think >> it doesn't surprise me a bit.

we have been below consensus for the entire year. that number is not too big of a change really from what we expected i think the real interesting pointmr. santelli made is what will really happen as we see gdp move forward into the next quarter we are expecting a number about 3.5 some is transitory effects of the tax reform. i think all the economic data is showing all the positive moves of the trump administration. what we are about to see in the second half of the year and we will see in 2019 and 2020 is more on the foot on the brakes we will see the effects of the higher libor and business decision and hiring decisions being delayed because of the trade wars worry expecting more of a one-and-a-half gdp number in 2019 >> one-and-a-half? >> that's right. >> why because there is no upside when

everybody is working when are you already at the top there is nowhere to go >> there is nowhere to go. it's ha ready to move gdp when everybody is working those extra dollars. >> how about productivity growth >> listen, i'm more concerned with business delaying some hiring decisions, some of the investment decisions i'm more worried about highly levered companies seeing libor jump way up. i think we have a low probability to recession we are looking at slower economic growth as we move into 2019 and '20 i think you have to look at durable and sustainable income i'd say the market agrees with us you look at what happened in earnings season, hey, beating earnings didn't do it. you have to show you can continue to do it and the it in a meaningful way, so i think we are seeing a change on sentiment from a risk on environment to a more defensive and protective type of environment. >> so what's the kooild wild card economically, either up or down what will move the needle up you will say i was wrong, it will be better or gosh things

look worse tan we thought? >> i think the economic needle is the effect doesn't want to disrupt this economy trump wants to be the growth president. the fed doesn't want to single handedly cause a recession we will get one more increase. they will stay relatively low. the job market will keep strong. we will stay out of recession. it still means we will be kind of in this soft world with sort of a sub 2% gdp growth it will be more of a defensive ral 4ri. we have been calling for that since 2017 you look at data and real estate have out performed the general equities mark which we certainly didn't see in '16 an '17 >> laying it out there cleanly thank you very much. all right. the unfunded pension crisis in the u.s. is estimated to be 230 3 to $5 billion.

the chief investment at hanes company it's in the fourth year as the sole manager of the tampa firefighters and police officers pension fund valued over $2 billion. >> four decades. and have you done remarkably with that. help us with this. one of the big news items of the week was the supreme court decision righting to pension, not to pension funds but specifically rates to unions i'm curious whether you will think that will ultimately impact pension funds >> i would say not in a big way. if you looing the road the-- los these pension funds have been going down, that decision will not impact that modem. now, i think we are in desperate need of reform on the pension front. because i think the current modem has proven to be a prescription for mediocrity. tampa the fire and police fund

has been the antithesis of that. they've done it just the option way. >> what have they done >> they have one manager we have been the sole manager for 43 years the fund has gone from 12 million to over 2 billion and they've taken out 1 billion. >> that's kind of unbelievable for a pension fund we talk all the time how pension funds are looking tore maybe 7% annualized growth. maybe that's little too lofty for some of them how do you hit 12% >> if they do, if they make these reforms, that i think they should make i don't think it's unrealistic for a return what we have done, we have the luxury of being an extraordinarily dedicated board. they've given us the luxury believe it or not of taking a 20 year approach. it's unusual we like the 20 year. because in the study we did there hasn't been a 20-year period that does not include a bear market and a bull market in

a recession in a war that's a great time frame to measure the competency of a manager. the other thing is the actuary is like 20 years it's a great snapshot of a public employee, firemen and policemen. so it kind of matches up >> when you take a 20-year time frame, what does that allow you to do? what investment do you make? >> it's a luxury we are not being jerked around by an asset allocator, trying to shift into, i call it, it's a multi-layer, multi-feed, multi-manager model. the other modem. tampa is one manager with a high quality long-term approach we are top down so we can look ahead. >> just for an example, what is one investment you might be able to make? >> i mean there have been several over the last four decades. my father forged a relationship with the early '70s, but i mean the decisions we made in the early, late '70s and early ''80s going back that far when paul

voelker came in on the monetary front and reagan kale in on the fiscal front, we decided that inflation was going to be coming way down, so we were able to over emphasize consumer staple names and flat line. we have a really good look out the coca-colas and the gillettes of the world we have been trying to join wtos, more ofocus on the commodity situation, what that was going to mean for global commodity prices right now looking out over the next years, we are a big believer in industrial revolution we think that will impact particularly on the capital spending fronts. i'm talking artificial intelligence, blockchain, robotics industrial automation. 3d print >> how complicated is your portfolio? >> we got about 60 it's a high quality balance approach the stocks are used for capital appreciation the bonds are used for income and stability and we got about 60 names

>> look, you've gotten it right. but the question is, the idea of a pension fund handing all their money to one manager does that truly make sense to you across the board >> well, the other consultant driven multi-manager model has been a prescription for mediocrity they're offering off a flawed multi-theory playbook. >> if i put all my eggs in one bask, what's going to happen >> well, if you let them -- i mean, there are plenty of high quall managers out there the advantage of having one high quality core manager is that, number one, the feeds, this current model that so many pension funds are using, the multi-layer multi-manager multi-fee model. if you take $5 billion public pension fund and you return 7% instead of 7.5%. over 20 years that's $1.9 billion less money for these

pension funds and i say that because the average fee for these public funds is 58 basis points so you will be helped on the fee side you will be helped because you won't be gyrateing from an asset management standpoint and let them focus on the long term. >> how would you let it ride on index funds? >> absolutely. >> that would be far superior to the current modem. right now if you look at the asset allocation decisions these funds have made, precisely at the wrong time they've reallocated in the late '90's and early 2000s there was a huge push towards the tech stocks there was a huge alternative investments hedge fun and private equity at the wrong time this is the tenth year of this bull market. we've compounded 15% per year, yet pub public funds have been reducing tear equity exposure right at the wrong time.

why is that? i think i know why it is, there is a third party in there controlling and being jerked around, indexing, absolutely >> inintoal question, if i double or tripled the amount of money you had under management, do you think you'd have the same kind of return >> our approach wouldn't change, absolutely in terms of focusing on the high quality long-term the themematic approach. i don't think it would approximate. i don't think it would be an issue. >> thanks, this is fascinating. >> thanks for having me. as we were conducting that interview, news out, amazon in a new deal, buying it's way into the pharmacy business. buying hillpack an online pharmacy for home delivery wal-mart had been rumored to be in buying pillpack prior to this we have talked a lot about the potential for amazon to get into the health care business and -

>> which, by the way, we should point out wall greens boots is the newest dow components, earlier it beat on a lot of levels the same store sales were disappointing for some on the street can you see the pressure on the dow the dow went up 122 points at the highest point i seen this morning. now the futures opened down close to 100 points. >> it basically came out that wal-mart was buying pillback in april. wal-mart was going to do it. pillback does if you have multiple medications they want to make sure you don't take the wrong numbers of medicationles. they package it for you in the doeszages you need i finds this fight between wal-mart and amazon fascinating. i mean, wal-mart buying jet.com for a couple billion dollars, all of a sudden, remember wal-mart was kind of the corporate villain. remember ten years ago small towns? now it's like wal-mart >> i heard all the arguments

made against wal-mart. now wal-mart supporters are using against amazon saying they're destroying the real retailers, those are the arguments they are using against wal-mart versus if smaller retailere-- the smaller retails. the dow is down, and so is the s&p. also, when we come back a big day in atlantic city with two new casinos opening their doors. we will talk about the men behind the n heward rock hotel that's right after this break. [ music playing okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies see it- and see it through-with digital.

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welcome back, everybody. it is a big day for atlantic city after years of doubts about the long-term health of the casino industry there. in just a few hours the city will be getting two new resorts. our next guest is behind the new hard rock casino opening jim allen is the ceo and jackson morris who is the president and ceo of edgewood properties gentleman i want to thank you both for being here and congratulate you on this new project that's about to open it's great to see you. >> thank you good morning >> thank you for having us >> it's good to see you. jim, let me start with you atlantic city has had its share of tough times and it has had a lot of doubts and a lot of casinos closing along the way. what did you see here? why did you think that the hard rock is going to have a different time what itself the future hold? >> most people don't realize,

atlantic city is still the second largest gaming market in the united states. when we saw the new energy between governor christy, the state of new jersey, the city of atlantic city and crda all coming toke to say, look, we still have an amazing population, 28 million people within three hours, we felt it was a great opportunity for the hoard rock band and our relationship with the family took it to the next level. >> jack, i know you reached out to carl icahn and close thad deal to buy the taj mahal in 30 days what did you see why do you think hard rock is the brand that can really turn things around there? >> well, becky, i knew that there was an opportunity in atlantic city, quite frankly without jim allen and the hard rock brand and the seminole tribe, there would have been no conversation with carl icahn and anybody else you needed the brands the entertainment, you needed to bring the life back into new york city.

last night was spectacular without even being opened and we think that there's a lot more to come and we're really excited about what it's going to do for the community and the social responsibility that we'll bring in i couldn't be more happy with how things turned out so far >> guys. i hope you are we are friends with the other than of the golden nugget there. have you talk of a casino in northern new jersey, the parks casino in pennsylvania, sugar house in philadelphia. how do you get people again to drive the extra 75 or 90 miles on the atlantic city expressway, throughway, whatever, to get to you guys rather than going ten miles to the smaller casino near their house? >> you know i think tillman is also a friend of mine and golden nugget is a great example. when he purchased that property, it was losing money at the operating line now, frankly, that's one of the more successful.

they focused on quality and service, obviously the guests respond to that. the casino customer is about trip frequency so we're all competing for trips. if you offer quality experience, atlantic still, l.a. city still has so many amenities many of the local products say in pennsylvania or even in other parts of the northeast just can't compete with >> what are you talking about, the boardwalk the beaches or >> well, i just think first of all atlantic city is a brands. one of the things we did do, we did a brands study nobody would dispute atlantic city has had its tough times it's a brands study, one of the more recognized brands on a global basis people were rooting for it we picked up in the study people wanted to see atlantic city succeed certainly you had the world famous jersey shore, the boardwalk. you look at atlantic city alone this weekend, over a million people are coming in, not just for the hoard rock the beach concerts and the amazing things that's happening i think we can humbly say the

other casinos in town and other entertainment destination versus really increased their game, if you will, based upon us announcing initially that we're going to do 200 shows now we're over 300 shows with a complete variety of complete variety of entertainment whether it's comedy, pit bull and carrie underwood and a great array of broadway entertainment, restaurant, shopping and that's what people want to see and we're delivering it not just here in hard rock in atlantic city. >> your expectations in terms of revenue or rather, i should even say profit coming off of gaming versus food and beverage, how do you see that break down? >> well, we would certainly agree that atlantic city is still a primary gaming, total gross revenue market and our goal is to continue to try to move that where it's 80%, 90%

and a 60%, 65% gaming and 35% or so non-gaming. >> and jack, let me ask you. in the past, it has been massive amounts of debt that take down these casinos where do you stand in this situation? >> i think we're in a good position we have no public debt the seminole tribe stepped up and they put over $400 million in you know, we're not going to be sucked down with the debt that some of the other casinos have had and quite frankly, we spared no expense here. they did an amazing job. you really ought to come down and see it and it outdid my expectations and i think it will be a game changer. >> thanks for being with us and congratulations on the new opening. >> thank you. coming up next, when we return, we're opening up cnbc's second half playbook for autos and airlines we'll check in with phil lebeau.

we'll do that next and as we head to break, take a check on what's going on with pharmaceutical stocks. they are under a let of pressure right now after news that amazon is buying its way into the pharmacy business acquiring a start up pillpack. we'll talk about that and more ♪ ♪ my ambition is to show my kids the world. ♪ ♪ the one in three dimensions. ♪ ♪ so they can look up and see the place they live. ♪ ♪ and prove that the real world beats a post. ♪ ♪ ambitions live everywhere. synchrony helps make them happen with customized rewards and financing available at over 350,000 locations. synchrony. what are you working forward to?

time now for the stat of the day. in the two weeks surrounding

welcome back to "squawk box," autos and airlines jet fuel costs put the brakes on all of that in the second half phil lebeau joins us with more on that. phil >> let's start with the auto industry when you look at the second half, really three things that will get a lot of attention, most immediately what's happening when it comes to tariffs. this will play out for the next couple of weeks if want for the next couple of months and will that lead to softer demand and the most immediate question, can tesla sustain a higher production rate for the model 3? the video that we shot yesterday out in fremont, california, showing this massive tent, this is where they have added an assembly line, one of three now for the model 3 as they try to make their goal of building 5,000 per week as you take a look at shares of tesla. remember that we will find out

those q2 delivery numbers for all of tesla's vehicle, but most importantly for the model 3 than that will happen early next week three questions that investors will be focused on in the second half first of all, will the carriers have to cut capacity as they face higher cost xs will demands stay strong? because jet fuel prices are soaring higher in the last year, jet fuel up more than 50% and there are some who believe that we can see it move even higher as we look into the third quarter. so that's why, when you look at the airline index and you see the earnings that will be coming out in a couple of weeks, be prepared that you will see lower profits and most people will prepare themselves and that's what to look for when you look at the airlines and the autos in the second half. >> guys, back to you >> thank you coming up on "squawk on the street," do not miss the ceo of

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here is a tifinal check -- man, it will be another rough day for the markets and your

money. i want to thank brian for being with us today. it's been great seeing you. >> this is like sleeping in for me. >> it's all going to get picked up right now with "squawk on the street." they will cover all of this through the opening bell and beyond thank you for being with us today. we look forward to seeing you tomorrow right now it's time for "squawk on the street. ♪ ♪ ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, and cramer has the morning off. the pre-market gains after the dow lost the 285-point lead wednesday and stir in weakness for walgreens now as amazon makes a push at pharmacy and we'll get you details about that, and germany down a 1.5%, and final q1 gdp revised down to 2. we will begin with trade uncertainty continuing the trade on globa