good morning welcome to "squawk box" on cnbc. we're live from the nasdaq nar k market site in times square. joe is joining us this morning as our special guest host. good to see you on a friday. we'll make you work for all of us, tell us what's happening with the markets, with the economy and what you see looking quickly now at the u.s. equity futures at this hour. you can see there's some big upside potential if things stay like they are now. dow futures indicated up by 146 points this comes after a strong day

for the markets yesterday. we saw some wobbling in the morning here at this time. the futures actually ended up picking up, and all through the day the indexes were trading higher dow was up almost 100 points yesterday. s&p up by 17 points. that's the best day for the s&p in three weeks this morning the s&p is indicated up by 12 points. nasdaq indicated up by 45. this is the last trading day of the quarter. right now those major averages are lower for the week they are higher for the quarter. we'll see if the dow, s&p 500, nasdaq can hold on to that for the quarter and month. joe, you say it's the fed that we will be watching. >> it's the same story i said now for a while. i want to say something new, but it's the same story. the yield curve continues to flatten. twos and tens, which is the spread i like, it was around 32 basis points the other day you look at financials, that index was down 12 straight days.

that's not the trade war that's not italy and europe. that's the fed, rates, the fact when you have a flattening yield curve with relatively low volatility because of fed policy, you can't make as much money. >> do you have the flattening yield curve because of fed policy or in part because of what's taking place in europe and other places, their central bank is not going to raise rates as quickly, so every time we raise rates, investors come pouring in to our treasuries because you will get a better return and that drives down rates. >> that's part of it if you look at the u.s., our yields are way above the two countries with higher yields than the u.s., greece and iceland. >> that's crazy. >> everywhere else has lower yields new zealand, australia >> that explains a large part. as an investor what would you rather have? >> right now you would rather have other countries, as crazy as that seems. that limits the ability of the

long rate to sell off. the thing is if you look at the futures market, and how much the market expects the fed to hike, the market thinks the fed will hike another 60 basis points >> talking about this year >> the next year >> the fed says it will go twice that you look at the curve a year from now, it's already flat. so if the fed keeps hiking, the curve will invert. i get worried that the fed will make a policy mistake. >> the inverted yield curve is a concern because that's the indication of a recession. >> mechanically when the curve inverts, the cost of funding for banks is higher than what they could effectively invest in. that's part of the story the other is the market and wisdom of crowds does suggest that there's little inflation pressure globally.

so this tightening of policy may have some effect >> we'll talk more about this in a bit. let's look at what happened overnight in asia. the markets closed higher there as well. if you look at what happened with the nikkei, it was up by a tenth of a percent much bigger gains looking at the hang seng, up 1.6% the shanghai composite up by 2.2% with the early trading in europe this morning, you will also see that there are green arrows across the board a gain of 1.2% for the dax in germany. the cac in france, up by 1.3%, and the ftse up 0.8 %. eu leaders hashing out a major deal on migration. all 28 leaders signing off on a slew of new measures focusing on strengthening external boarders and internal controls. this could stave off the collapse of angela merkel's

coalition collapse in germany. and disney and fox setting a new date for their shareholders to approve disney's proposed $7 billion takeover of fox assets investors will vote on july 27th the move raises pressure on comcast to decide whether to raise its bid or walk away the other options in all of this, they could decide to walk away and go after sky. if they don't walk away, they have to bid a lot. we'll see what investors think of that. >> what is the timeline on this now that we have a july 27th date >> my understanding is that comcast would just want to get ahead of that. if they're going to do something, they would want to get ahead of that by a couple of weeks. however, once you bid that

doesn't stop bizny frdisney fron again. if you're bidding at this point in the ball game, do you just have to have a knockout bid? a bid that is so crazy in terms of how high it is that disney doesn't come back. is this still a step, i will bid here that's -- there's a lot of things we're into game theory now and what disney would do >> what do you think will happen if you had to guess? >> my guess -- it's complicated. my guess is that maybe comcast ultimately walks but then pays and pays a lot for sky. if you understand the true motivation, sky is what started this and that's not to say they

didn't want the other assets, the other assets were less important. the question is can you still pick off sky will you have to -- how much will you have to overpay for that >> not to mention having a regulatory environment that would favor you there. >> potentially >> but then somebody could come in and bid for sky, right? that's always a risk >> that's always a risk. >> who richard thiel is the winner's curse >> the original 21st century fox assets, when disney first came privately, they were going to pay $23 a share. then it went up to $28 then comcast came, $35 we're now at $38 think about where the murdochs were literally six months ago. we're doubling -- the whole thing is -- so now you have to decide at what point does the math make sense? >> liz murdoch was a year ahead of me, she was good friends with a friend of mine, she was a

cocktail waitress at pete's tavern on college avenue met her once thought that was interesting >> working her way through >> entrepreneur early. >> that's great. let's talk about another big story we've been covering. nike reporting a big earnings beat after the close yesterday shares of nike, which is a dow component, you can see they're up almost 10%, which can explain some big gains we're seeing this morning. joining us now to break down the numbers is susan anderson senior research analyst from bf riley thanks for being here. >> thanks for having me. >> huge reaction in the market you were already ahead of consensus at 66 cents, nike came in better than that at 69 cents. what was so unexpected about this quarter >> the key thing was we saw north america turn positive, up 3%, total sales up 13%

really all geographies outperformed and they were firing on all cylinders. they were working on their innovation pipeline and it seems to be paying off now >> is nike doing this because of a strong economy or because it's able to steal market share from competitors? >> the economy is helping. the consumer is in a strong position and they're out there spending also the two closest competitors, addidas and under armour is not on top of their game as much as they were. adidas, while still strong, we're seeing promotions on things like the sam smith who has been blown out to the masses they're at the tail end of the cycle. after nike was working on innovation they're really outperforming in the marketplace. >> how much of this is a sick click

cyclical story and how much of this is a situation where you think nike can assert its dominance and hold on to that? >> i think nike can assert its dominance and hold on to that for a year, two years, depending on how well adidas comes back with new product, which we don't see a whole lot coming out in the back half of this year nike could be in a strong cycle over the next year or two. >> which means what? we're looking at a stock market up 10% today what do you tell people to do in that situation have you already missed the opportunity to buy is there more room to run? >> yeah. it's trading -- we have a neutral rating on it, $76 price target, which is basically 25 times our next year's numbers. well above historical average of high teens pe multiple on forward year earnings. we think it's fairly valued here i think we would have to see very significant outperformance in the top line. they did guide the top line to

single digits for 2019 which was up from mid single to high single digits. if they can grow above there, you may see more upside. at this point we think it's fairly valued. >> susan, when becky asked about the economy, the economy is doing well, but what things in the past might nike cite as potential headwinds? do they focus on gas prices? higher gas prices? teens are a big consumer of footwear currency fluctuations. is there any granuality when they do these calls? >> product cost is becoming a headwind rising commodity costs rising oil, even transportation costs. then gas prices for consumers. we have not necessarily seen that impact consumer purchasing habits, but that could be a problem down the road if they do continue to rise >> susan, i want to thank you for joining us good to talk to you.

>> thanks. let's talk about the financial sector now reaction to the second round of fed stress tests, it was bad news for goldman sachs and morgan stanley and even worse news for deutsche bank leslie picker will break it down for us >> the u.s. subsidiary of deutsche bank is the only entity that did not receive approval by the federal reserve for its payout plan. in effect morgan stanley and goldman sachs faced the same fate theyreceived a conditional nonobjection by the fed, so those two firms are limited in the amount of buybacks and dividends they can distribute to levels from previous years the fed found the new tax law created a one-time height to the v hit to the value of their portfolios the fed put them in this middle ground area. state street, too received a conditional nonobjection

three nonobjections is a record as are six so-called mulligans or banks who had to make adjustments to their original capital distributions and resubmit them. this is widely seen as the toughest stress test in the eight years it's been around much of the banks are rallying this morning, especially deutsche bank, which was up 3% today. >> when you talk about the toughest stress tests, they set it up against 10% inflation, unemployment -- >> it's actually absurd the numbers they got these financial crisis happen every 70 years, and they had one worse than we actually ever had. >> goldman sachs said they were hoping to convince the fed that their numbers were correct how do you come up with different numbers for these

things >> according to senior fed officials, which we've asked them kind of why the discrepancy here i think it was kind of a surprise yesterday receiving those conditional nonobjections when they did both put out statements saying actually our numbers look better. don't read too much into this about our plans for capital distribution at the end of the day the fed is giving the test and the fed can say, you know, we didn't see much here that would give us comfort. you actually raise the level of birth dugs distributions you plan to give out. >> in the case of deutsche bank, they need to raise capital instead of giving it back to shareholders >> because this is the u.s. subsidiary, this is up to the parent company >> back in germany >> to joe's point, if this is that tough of a test, there's got to be some wrangled feelings out there, that you're coming up with an impossible task. >> and in the case of goldman sachs and morgan stanley, the reason they were dinged this time around was because of the

tax law. it was passed in december. which is around the time they start gearing up for these things they were not able to shift things around to prepare for this >> stick around for a moment the director of bank strategies is here this morning we want his take on what's happened here. given you know these tests are coming, what happened? >> well, nothing happened. you all are focused on a few outliers let's focus on the super regional banks that had 30% plus increase in dividends and 50% increase in share repurchase those are the banks that got relief, pulled out the 2$250 billion and below you're seeing them react positively and get a lot of

freedom in their ability to return equity to their shareholder shareholders >> i will go along with you for a minute, then you have to go along with me. if you're going to invest in the banks now, you invest in who >> you invest in the super regional banks who can leverage what's going on with regional banks going high and having to leverage return capital to shareholders >> you don't think that's built into the stock price >> not at 10% lower than we were in january no, it's not the other thing is that missing in this whole thing is the payout ratios did not go above 100% when you look at their ability to increase the capital returns next year, they're in line for another 20% plus return increase >> indulge me on morgan and goldman. how are you supposed to read what the fed said and what the

company said >> you're supposed to read into this that there's a differentiation between the fed and company reports ever since we've been doing these stress tests. when you look at the conservatism in the fed and what they put out, they're ring fencing the biggest banks in the country. they said any banks above 250 billion, we'll have that bear hug. we'll still look at ways to increase losses. we'll look at ways to hold these capital levels higher than what we had in the last financial crisis this is a reflection of that. >> just real quick i thought with quarles taking over there was talk of the fed dialing back the frequency of these stress tests, changing some parameters. is that still happening or did i misread different reports? >> no, that's still going to happen on an annual basis. what we're doing is for most of these banks, everybody below 250 billion, they're not going to have to do this thing on this regular scheduled at this day.

it will be spread out at different times. you will have freedom to make your own independent decisions the restrictions on those banks have been brought back >> so that will help the super regionals more than the larger banks? >> exactly if you think about the financial crisis, we learned the biggest banks are sifi, significantly important. we want to make sure those banks don't ever end up in the jeopardy we had back then. >> okay. we'll leave the conversation there. marty, thanks for joining us great to see you >> thank you don't miss wilfred frost's exclusive interview with deutsche bank's ceo, they'll talk about everything from the bank failing the stress test to europe's trade fight with president trump. when we come back, it has been six months since president trump signed his signature piece of legislation, the tax reform bill we will talk about the impact of the bill and the potential for

round two. grover norquist joins us after this break let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling

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today marks the six-month anniversary of president trump signing into law the tax cuts and jobs act while the administration praises the tax plan, looming tariffs could cast a dark cloud over the success. joining us now is grover norquist thanks for being here. >> good to be with you >> six-month anniversary how has the tax bill changed, affected the u.s. economy? >> there's what happened and also a comparison with what the democrats said would happen. the opponents of the higher taxes. every single democrat voted against the tax cut. every last one of them they'll all run in november on that we've seen the 3% 93% of americv more take-home pay you have an increase in disposable income, 3.4% in the first quarter.

revenue of the federal government, which was supposed to collapse, up 2% year over year in the first quarter. all the things proponents of lower taxes said would happen, people are seeing lower taxes. 22 million americans have significantly less complicated tax returns. 4.5 million people used to do the alternative minimum tax, that's down to 200,000 you're getting simplification in real terms, lower taxes for 93% of americans a tax cut is a pay increase, because you get to keep more of your own money all the things that were suggested, even surprises like 100 million households are having lower utility bills, when utilities pay lower taxes, they have to pass that straight through. over 100 utilities have done that you have to ask the government

for permission to reduce the rates, so each of these things is helpful you've seen the numbers on unemployment down to historic lows, 6.6 million job openings available. the increase in employment, 3 million since the president took office all of these things moving in the right direction. you mentioned one area where taxes are being discussed going up, that's tariffs the good news for the economy is that the tax cuts that were passed in december for the business, for businesses, corporate taxes, those are permanent. the ones for individuals are good for ten years the. the republicans plan to extend them when you have permanent lower rates, businesses are starting to make decisions. 305 billion has already come back in the first quarter of this year from overseas. >> a lot of good numbers in the economy, but why is it that americans are looking at this tax bill less favorably than

they were just back in april there was a new poll out this week that showed 37% of americans support the tax bill versus 44% from back in april. a lot more of them are ambivalent about it. it was 24% have no opinion on it versus 17% in april. what's happened? >> one thing that surprised a lot of people is that as soon as there was less withholding and peoples take home pay went up in february, it didn't really change the numbers very much 93% of people getting a pay increase paying less in tacks, y taxes, think that's more impactful. 83% of americans have direct deposit. there was an effort for americans to look at their pay stub many americans don't see their pay stub because the money gets directly deposited one thing republicans want to do is have another vote to make the tax cut permanent and have a discussion on those things even when the president talks about it, it's in the context of

about 20 other things in a speech >> but what does that mean for republicans who are planning on running on this in the midterms in november? that's before anybody will do their taxes for next year. does that mean it's a losing g argument for them? >> no. i think people who understand the higher growth will see the growth rate for the second quarter, which looks to be impressive and strong. we were told by democrats you could never do more than 2% growth we had 2.9% in the first year. >> grover, we talked about the household side seems to me the part i liked about the tax bill was the corporate side isn't that what matters most in terms of lifting capital, the supply side and the economy? doesn't that matter more and ultimately give higher wages to households >> the permanentwage growth coming from higher productivity is going to be a result of the lower corporate rate, from the

35, which had us almost worst in the world down to 21, which makes us competitive and full business expensing, which some people think for a number of industries is as big a deal as the lower corporate rates. those are permanent and kicking in that's bringing capital into the united states. the giant sucking sound is capital coming here, not other places >> grover, it's a longer conversation come on back i have about a million questions for you. have a fantastic weekend >> you, too. when we come back, the dow rebounding 100 points yesterday fueled by bank and tech stocks futures pointing to gains at the open we'll talk strategy next as we head to a break. look at yesterday's s&p 500 winners and losers

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you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box. let's look at u.s. equity futures. things are still in the green but you're looking at the dow futures up by about 90 points, well off the 150 we were watching a half hour ago nike, a dow component, up by almost 10% it alone is spongesibresponsibl about 45 points of the gains almost half the gains you're

looking at are thanks to nike. we'll look at this and see what it means hat tip to peter for pointing this all out s&p 500 futures indicated up by 8 points nasdaq up by 27. after a positive day for the markets yesterday, we are looking at some gains for the futures this morning, just not on the high levels of a half hour ago shares of novartis rising after the company announced a plan to spin off its eye care devices unit called alcon. the swiss drugmaker is also launching a $5 billion stock buyback. and synnex is buying convergys for $26.50 that deal is valued at 2$2.4 billion. shares of convergys had been rising on reports of an acquisition. analysts say synnex shares are likely down this morning because the company also reported earnings last night and weaker

than expected. >> and shares in kb home are rising after the company's earnings and revenue beat the street. the average selling price rose 4% during the quarter. let's turn to the broader markets. chris retzler is here, and our guest host is still here guys, this has been sort of a crazy week the beginning of the week, we thought there would be a trade war. now there's no trade war, or maybe there's still a trade war. then you have the healthcare situation with amazon. what are you doing >> if you can put the trade war issues aside, we're a ways away from a recession we have a fiscal stimulus. interest rates are low the earnings are coming in well

again. there are pockets of opportunity. there's rotation issues. growth is expensive. but some good stories still with small cap value and internationally. look at uk you have a preponderance of energy in the ftse and opportunities to be had. we still have the geopolitical issues that keep showing up. >> so, let me ask you one other question we were looking at stocks that took off yesterday where are you on technology in terms of pricing >> you're about three quarters of the way to bubble pricing >> does that mean you're not buying technology? >> i think it's a little expensive. >> where do you stand? >> i love that we talk about small cap value. that's where we like to play there's a lot of small cap value technolo technology, which is still cheap. we've had multiple compression you now need to grow into the new multiples, which i think we were paid for last year in a lot of these big cap companies we still see the value in the

small caps we expect to see m&a come back as money is repatriated. we have been deploying capital in the past few weeks. there's been a big outperformance of growth to value. is there precedence for that gap to grow? >> sure. we're at three times the price to book of growth relative to value in the s&p 500, and we got to four before the bubble burst in 2000. you know, that's why i say sure, the president is there the average is is two times. we're getting frothy >> the growth causes a pullback in business sentiment and things of that sort >> the trick with value is by a casual definition of value you have a lot of financials if you're looking at a basic value index, we have some head wind with the flattening of the yield curve, but there should be

normalization on the long end of the curve that should help financials, that also bolsters the value story. >> you've been talking about the small caps, how well you think they'll perform against the other major averages what bothers you when you look out on the horizon what could mess that up? >> the headlines out of d.c. and what sort of rhetoric we're hearing and whether this trade war continues to increase. how does that then filter down into confidence. that would be a concern we're watching here in earnings season in july. what about higher input prices which we're hearing from a lot of bigger companies out there. i would guess smaller companies have a little less wiggle room when it comes to dealing with higher input >> you're correct. there's unintended consequences. the steel tariffs are causing higher input prices. there's an article this week about a nail company that may go into bankruptcy because of paying higher steel prices

that's a part of the trade negotiation. ultimately i think this gets resolved it's a question of how long does this take and how much damage will be done to the economy. we'll have mexican elections next week. hopefully we can move forward with nafta i don't think it will be all that great because you're bringing in an anti-american president that we think will win there. i do think at some point there will be negotiation. the economy does look still strong the high yield market doesn't show any sort of weakness yet. so we're still bullish growth is out there. >> i thought this was the most interesting story in the "wall street journal." there's a column called street wise with the headline if you want to do good, expect to do badly. we've been having conversations on this set for the past year or two about all these esg companies, this whole approach to esg investing, how everyone is trying to invest in good things this guy has a fascinating

column where he really spells out how there are so many companies who would technically be in the bad category that are actually doing remarkably well i'm sort of curious, investors and clients call you about some of these issues. what do you tell them? >> there's a lot of people who say they're interested in esg strategies the flows have not quite been there. the millennials do seem intent on putting their money where their mouth is in that regard. it's a challenge >> thankfully i invest mostly in technology i don't have that issue, but train companies, they're moving coal around. are you not going to invest in a train company? for what we do -- >> i was curious they walk through coal miners,

globally they returned almost 20% in the past 12 months. not a bad way to live if your goal is to make a profit >> capital flows freely. you may have people who don't want, but someone will move into that void. >> guys, thank you great to see you >> can i point out a story you missed in the "wall street journal." >> what was that >> i thought it was better pickle juice drinkers go public. people hiding for years that they drink pickle juice are out in public with it because it has sports benefits. >> i think you might have missed this we drank pickle juice on the set. >> no! >> on wednesday. >> it's like drinking urine. >> i wish you were here for this we had the ceo of sonic on sonic is now selling a frozen pickle juice >> ugh >> it's like a margarita, but a pickle juice margarita without the alcohol.

>> i love pickles, that's so nasty. >> it's a sour drink, but there's a little bit of sweetener to give it a kick. >> yeah. >> okay. we all drank it on the set for the viewers. glad you missed it or didn't >> sorry i did miss that not. thanks let's tell you about some news out right now axios is reporting that president trump repeatedly told white house officials he wants to withdraw the united states from the world trade organization the president says that the wto was designed by the rest of the world to screw the united states, according to the axios report >> that was the word, screw. >> the story was released just about 15 minutes ago that's about the time we saw the futures go from up 145 to 190.

a lot of noise out there concerning trade talks, trade disputes, trade wars this is the latest in what we've been hearing we'll continue to follow this. the dow futures up by 125 points s&p up by 11 nasdaq up by about 40. when we come back, mohamed el-erian will be joining us. that's at the top of the hour. he thinks we will avoid a full blown trade war. plus fda commissioner dr. scott gottlieb will talk to us about the crackdown on online o opioid sales. and if you're headed to the hamptons, robert frank will beat you. there he's taking off in the next hour. we'll track him through the show stay tuned, you're watching "squawk box" here on cnbc. ♪

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time for the executive edge. yesterday during the show we told you about amazon's plan to buy pillpack that news combined with the new foray into delivery wiping out 17$17.5 billion from eight companies alone during

yesterday's sessions fedex and u.p.s. lost nearly $3 billion in market value combined drugstores walgreens, boots alliance, cvs health and rite-aid lost $11 billion in market value and cardinal health, amerisource and mckesson lost nearly 3$3.5 billion in market value combined shares of amazon meanwhile, let's show you what's going on, they went up >> wow >> in a very big way we'll talk to ana gupte about all of this in about 30 minutes. a record breaking heat wave settled over scotland. the temperatures are just too l high for a building at the glasgow science center photos show the roof is literally melting in the sun according to the science center, it's a weather-proof membrane that is melting and the

integrity of the building is not in question. heat waves are coming here, too about a third of the nation will be 90 degrees plus starting today. look out get ready. when we come back, sam fox will join us he's the creator of a restaurant empire that includes 13 different restaurant brands, brands like zinn burger, he will talk about his plans for expansion. right now as we head to break, a quick check of what's happening in the european markets. up across the board. the dax up by 1.1% the cac is up by 1.25% "squawk box" will be right bk.ac at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got

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welcome back, everybody. our next guest is an american success story. sam fox dropped out of college 20 years ago he used his tuition money to start his first restaurant now this entrepreneur employs 40,000 people around the united states let's welcome sam fox. thank you so much for being here today. >> good morning. thanks for having me >> for people who aren't familiar with your restaurants, i want to tell them about it when i was reading through, i wasn't familiar with a lot of

them every one sounds delicious you've got restaurants like ablanco, modern tacos and tequila. the arrogant butcher which is upscale american comfort food. the henry which is classic american all day fare. first of all, why did you come up with 13 different restaurant brands what did you see out there that you thought might appeal to a restaurant format like this? >> yeah. it wasn't something we started out to do. it was something that sort of happened by accident going from this first restaurant to where we're at today originally was we had a successful restaurant early on a piece of real estate became available next to us that we thought would be a great opportunity for another restaurant forced us to come up with another new restaurant that was 1998. fast forward to today, we caught the bug. we love creating and cultivating new ideas. and bringing them to life and

then growing them into brands around the country >> what was the very first restaurant and what was the new one you came up with for next door >> yeah, the one in 1998 was wild flower in tucson, arizona, which is still open. and our flagship the one next door was sauce, a fast casual pizza concept. app long, long time ago we were early in the game in the fast casual business. >> is that one still open too? >> that one is still open too. we sold that one about four years ago. we grew that to about 13 units and sold that. most all of our restaurants are still open today we have a pretty good track record >> the restaurant business is notoriously tough and consumers are fickle what do you think it is that you've figured out in terms of the american psyche and giving them what they want? >> you know, we listen to our guests a lot i think we're not trying to be the most trendiest person in the room we're trying to be ahead of the

trend. and so we're really into healthy fast casual dining and we're into so many different categories that we learn a lot when we do all these different restaurants. so if we're working on something for flower child, for instance, which trends healthy that might get woven into our other brands or might spark an idea for something new we're always learning, always educating ourselves, always trying to figure out what's next and what people want to eat. >> expanding takes money i know you've got some investors like cheesecake factory. why do they look around when they've been so successful and say hey we need somebody else to help us come up with the next big thing. >> cheesecake has become our partner last year. i think companies like us, we're really a big company but we act like a small company you know, we have 50 restaurants. we have 4,000 employees, but we

are able to curate, cultivate, and grow it a at a pace it wants to go. and then what happens is as we get to a certain scale whether that's six, seven, eight, nine, we get a lot of interest from people around the country. seeing what we're doing. and then after awhile, people will knock on the door to get our brands >> i want to know what you think the next big trend in fast casual is. i mean, is there some food category or something we have not seen that you're going to tell us about? >> well, i don't want to tell you the next big one because i'm keeping it to myself but i think you're seeing a lot of healthy everyone is growing towards health you hear about it. and there's a lot of people out there that that's the way they want to eat and that's the way they want to live their lifestyle. so you're going to continue to see that we're in that with flower child. i also think you're going to see in a lot of different other things where restaurants are -- we have a restaurant called the

henry and it's three parts and also a coffee bar and people are also using it as a we work space. >> sounds like starbucks >> yeah. you're seeing a lot of restaurateurs trying to figure out, we have this real estate and need to use it all day long to make our margins. so they're opening their doors longer and providing different opportunities -- >> why has nobody nailed a truly national successful chinese food story. and i know there's some out there, but nobody's really -- >> p.f. chang's. >> yeah, but -- >> p.f. chang's was an early adopter and grew they're probably the only national one at the time you know, and -- >> and i always thought that sushi would hit. but it never hit on a truly national scale what happened there, sam >> i would say the person that's successful in the most national level is nobu and are successful around the country >> real quickly, if your success is acting like a small company,

how scaleable is this? you've got 50 restaurants right now. how big could you get? >> we've sold a lot of things along the way. we've sold over 40 restaurants and so, you know, we like to stay in that sweet spot of being between a mom and pop and a big corporation. and so we're -- you know, we take it one day at a time. i don't know exactly where that is every single day, but, you know, we continue to open stores we have a big growth ahead of us this year. while we're growing, we'll just take it one great restaurant at a time >> sam, thank you so much for joining us great talking to you >> thank you for having me >> and we want to thank joe for hanging out this morning have an awesome weekend. >> stay cool >> i don't know if we provide a held cicopter service though we might have a car for you. but robert frank will show you the helicopter when we come back, our guest host at the top of the hour, mohammed el-erian is here with

his read on trade and the trump economy. ttebwe'll talk to scott goli back in a moment

global markets trade and bank stress tests in focus what you need to watch ahead of the final trading day of june. amazon's purchase of pill pack packing a punch to the pharma sector wiping out billions of dollars in value more straight ahead. and the weekend is here. the latest and greatest way to get to the hamptons. robert frank flies to the beach

as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, this is "squawk box. >> good morning. welcome back to "squawk box. we're here at the nasdaq market site in times square brian sullivan has made his way from hq to times square. welcome to you >> thank you >> u.s. equity futures it's been a wild ride all week dow looks like it would open up on the morning about 97 points higher and the s&p 500 looking to open about eight points higher. helping drive the rally this morning, big gains in nike here's what happened beat estimates on both the top and bottom lines also reported, the first north

american sales increase in a year then the federal reserve has approved capital return plans for 34 banks that's the good news the one it did not approve, deutsche bank. had material weaknesses in the capital plan u.s. shares are moving higher. there's an interview coming up later today with the ceo of deutsche bank. and the government will be out with may personal income and spending numbers both expected to post increases of 0.4%. well, a few stocks on the move this morning. shares of kb home are rising the company's earnings and revenue beat street estimates. and the home builders average selling price rose 4% during the quarter. meantime, disney is turning up the heat on our parent company comcast. both disney and fox have set a new date for their shareholders to approve disney's proposed $71 billion takeover investors will vote on that deal

july 27th. and that expedited move raises the pressure on comcast to decide whether or not to raise its bid. softbank's ceo is raising his investment to the united states to $72 billion. that was more than what he previously pledged the president made the announcement in wisconsin yesterday with masa son in attendance the ceo spoke, but didn't reference the figure we're going to get to a quick check on the markets with our news maker as guest host this morning mohamed el-erian always makes news when you speak. help us understand what was a wild and wacky week. the trade issues, how they may or may not have been resolved at least relative to china wednesday or thursday and now really how things have turned

around toward the end of the week >> i see it more as a return to normality. okay we got used -- >> this week, there's nothing normal about this week >> what's normal about this week, the markets are sense tiff to what's going on they're sensitive to what's going on for two reasons they're less confident about the pickup in global growth. so the economic backdrop is less comfortable. secondly they've realized central banks are not coming in. they're going to let the markets deal yes, the markets are more volatile, but they're more sensitive to what's going on around them. long-term, i think that's a good thing. >> let me flip this around where are you on just how we're growing and what the fed is going to do? what i can't figure out is the anxiety in the market really about the fed or is it the possibility of a trade war >> i think the anxiety is about

trade. >> you don't think it's -- because this seems to be a debate every day some people say this trade stuff has nothing to do with anything. then it's all fed. and then other people say, it's all trade. >> if you look at where various prices are in the market place, you would tend to go to -- the concern is the operating environment for companies. that is what the uncertainty is. i think people are comfortable with the notion that the u.s. will out-pace other countries. that the u.s. is solid that the major risk to u.s. is internal, not external and the fed will continue its normalization. i think we get three, not four rate hikes this year and i think the fed is on a good course >> okay. why don't we take a pause there because i know we have somebody waiting. we'll talk more about it >> we do in fact, the fda hosted a summit this week with internet giants facebook, google, twitter, and others to enlist the crackdown on opioid sales.

the opioid epidemic has been labeled as a national crisis fda commissioner scott gottlieb joins us right now it's always wonderful to see you. thank you for being here today >> thanks for having me. >> this summit with these players in technology, why how much is being sold how many opioids are being sold illegally through these platforms? >> more and more in 2015, there was data that came out that showed $15 million of online sales. but we're seeing more and more of the sales being shifted to the online i think as we start to reduce lawful prescribing, so a lot of the medical -- a lot of the addiction was people got medically addicted as we see doctors start to prescribe fewer opioids, we're fearful that more and more of the new addiction is going to shift to elicit sources. and a lot of those sales are taking place online. >> facebook, googlgoogle, binge,

twitter. what are they doing and what more can be done >> they've been helpful. they've been cooperative we've been working with them for some period of time now. they've taken steps. i think they're defensive. i think they don't fully see what we see which a lot of these sales online they want to be helpful. we want to work with the legitimate internet firms to crack down these sales we're also shifting a lot of resources, a lot of our criminal investigative sources for cracking down on the online sales. particularly what's taking place on the dark web and illegitimate websites at the same time we're doing that, we want to work with the people who want to be the good actors the facebooks, the googles of the world. there's things they can do they can deindex they can stop certain advertisings in listings they can redirect users to legitimate sites there are things they can do and they have been doing it. >> let me ask you this they don't see the things you

see. how do you know more about what's happening on their platforms than they do >> well, i don't know what they know, to be candid but we're looking. we spend a lot of time looking at what's going on online. this is an area of intense focus for the agency and we still see a lot of sales even on the surface web. so i think there's a lot of chatter that these things are taking place on the dark web and a lot of them are. things that can't be readily accessed but we still see a lot of sales on the surface web and advertisements i think it is that a lot of those are just set up to steal data from users. but a lot of them do allow you to complete transactions for illicit drugs. when you go online, you buy illegally. you think you're buyi ining vic and percocet a lot of what you're seeing a pressed fentanyl people are getting lethal doses

of fentanyl. >> so your hope is if we're talking about over $180 million -- did you say $180 million? >> it's well over that that's a 2015 figure it's been growing rapidly. it's just the pace of growth we don't have an accurate handle on the total amount of sales it's a lot there's 1800 packages coming in growing about 80% a year a lot of those packages contain them >> dr. gottlieb, i want to thank you for what you're doing on this front you are somebody who has been so actively involved in trying to do anything you can at the commission to try and change some of the problems that you see are out there. this is just the latest example of that. also want to ask you about some news yesterday amazon pieing pill -- buying pillpack that crushed a lot of stocks yesterday. it boosted amazon's shares just wonder what you see at the fda, what you think about a move like this, and if you've been

watching this arena in particular >> i saw the deal, obviously we work with the distribution system and the pharmacies to try to maintain a close supply chain. my understanding is pillpack operates as a pharmacy it operates 49 pharmacy licenses in different states. i'm not sure if they're also a repackager i'm not exactly sure what their business model is. i haven't taken a close look at it to be candid. but we do work with legitimate supply chains to try to maintain that it's important the rupps we have with them to try to safeguard the pharmaceuticals in the country. >> amazon getting involved in this arena, is that a good thing or are you concerned about it? >> i think competition is a good thing. i think disruptive competition is a good thing. anything to make these products more accessible to consumers and a lower cost is a good thing the intermediaries are a cost on the system so seeing more competition come into that place may promote

generics >> you're a markets guy though amazon buys this and wipes out $17.5 billion in value from these other companies. because you do have a market sense, does that make sense to you? >> well, i don't comment on equity markets from my current position we'll have to see how this plays out. i think there's still going to be a real important role for the brick and mortar pharmacies. people like to go into pharmacies when you go in, you pick up your pills and pick up other things as well. my sense is this is going to be a slower evolution in the market there's a lot of reasons why, you know, the incumbent players have built a lot of market share here and they're important. we work closely with them. and they're very important to trying to maintain the integrity of the system. but hope tli you'll see people looking for more ways to promote generic utilization.

to try to decrease prices and increase competition in the market. >> so you're in favor of things like the amazon, jpmorgan, berkshire hathaway idea to tackle costs you'd like to see costs come down, too, any way possible through competition. >> my sense is they're aiming at the employer markets they're aiming at something different here look we're seeing a lot of entrepreneurs come into the health services space. i think for awhile, you're right, i worked on the other side of this when i worked in venture capital. we saw underinvestment for a period of time i think we're seeing more investment coming into health care services more disruptive ideas. i think that's a good thing. we do want to change the delivery system trying to make it more efficient. >> commissioner, i want to thank you for your time. we always appreciate talking to you. and thebred breadth of issues u can discuss. >> thanks a lot. when we return, walgreens, cvs, and rite aid losing

billions as amazon buys pillpack anna gupta is going to join us to tell us what to make of all this meantime, check out the futures right now. we are in the green. stay tuned you're watching "squawk box" on cnbc it can detect a threat using ai, and respond 60 times faster. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it is... the cloud. the ibm cloud. the cloud that's built for all your apps. ai ready. the ibm cloud is the cloud for smarter business.

♪ the drugstore industry shakeup getting another jolt this week. news yesterday that broke during this fine program that amazon is buying pillpack. shares of pharmacies and drug distributors both took a big hit in response. joining us now to talk about this, what it means, is anna gupta. senior health care services analyst at lairing services. learned she has a son as duke. my apologies >> funny >> the market reacted in a big way yesterday. was it a fair reaction was it an overreaction i mean, that was a giant -- it was billions wiped out >> yep i think it was pretty rational the market is -- >> rational? >> rational. >> a 9% drop in walgreens is ra

sh -- rational >> in a sense. it's not happening overnight it's the future value. the present value, future cash flows. and the retail pharmacies are a threat there's going to be an overhang for awhile we've speculated for awhile. >> you're not a walmart analyst so you don't have to comment but when we see $3 billion wiped off the market cap of the world's biggest retailer -- >> by the way, when they could have spent $700 million to buy the thing. >> shoulda woulda coulda, i guess. but are we starting to overdo the amazon effect? amazon could sneeze and the market catches a cold, you know what i mean? >> that's fair >> amazon is going to kill everybody. sell everything. >> a couple questions. you know, my view on the walmart move is i think walmart and humana, we speculated there would be a deal. i don't know whether there'll be a full merger. i probably would say not

but i do think humana and walmart may deepen their relationship humana has state of the art mail order capabilities they manage prescription drug fills online for people with chronic diseases >> i thought everything was going online and we're going to preemptively react the second bit of that that we've seen away from that is a question as big tech as amazon, facebook, google become more and more involved, they've become systemically more important. suddenly they have a lot more responsibilities and expectations that's come with that you think that this will be -- this is when really amazon is going to have to take seriously its global responsibilities and it's going to have to deal with

the fact it's systemically important now? this will have huge implications >> two things that amazon brings to the table one is the drug value chain. the other is technology. so there is amazon, apple, google perhaps they could step in and develop the digital front door to health care you know, i don't think that's fully there yet. we don't have a consumer experience that's technology enabled. but as far as the drug chain, it makes sense, right they're in distribution. they don't do drugs. they've gotten into otc. i agree it's going to take a long time. maybe they get 5% market share after, you know, quite a while but that threat is going to be there and they will grow share over time. i do think walgreens and cvs have known this since cvs, the deal at aetna is pretty much in

defense because of the front store and the future threat of pharmacy walgreens is doing partnerships with united, with urgent care stores they're doing it with humana and so they are responding whether or not it's enough for walgreens, we'll see but there's definitely a threat i think of amazon coming into the drug distribution chain. >> we just spoke with scott gottlieb and asked him what he thought about getting involved in these markets he thinks it's good for competition. and that in turn could bring down prices. >> yeah, i think so. depends what they do do they just remain a drug distributor and do a great job of online order fulfillment. or do they take this to the next level with more transparency in the retail shopping platform the generics, they have 100 million strong platform. so they can get low cost generics walmart does $4 and $9 generics.

amazon needs to respond to that. maybe they don't do branded right away but that'll attract prime members into their so-called online front store so it's fairly, you know, a big cross sale move as well not just the 5% of the 500 million market >> anna, pleasure. thank you for coming in. take care. >> take care thank you. when we come back, more on the markets and on the global economy from mohamed el-erian. and later the cofounder and president of the lbgt chamber of commerce will be here. stick around "squawk box" right back. time now for aflac's trivia question what was the first guitar made by fender instruments? the answer when cnbc "squawk box" continues thanks, dad! break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?!

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a clean liftoff this morning on the spacex falcon 9. it launched at 5:42 eastern time now, this rocket is carrying more than 5900 pounds of supplies and experiments to the international space station included in the cargo is a floating robot head that will become an assistant to the astronauts on the station. >> what? >> before killing them and taking over. that last part i made up the dragon spacecraft is scheduled to dock this weekend it is the 57th flight of a falcon 9 rocket and spacex's 12th launch of the year. today's launch is the 15th of at least 26 spacex resupply missions to depart the space station. that was the longest rocket story ever. >> with your ad-libs >> don't bring a robot head onto a space station. like, thanks, dave what's out the window? time to go, dave >> question for you. serious question when i saw this, the spacex

launch, i thought my gosh what a busy week for elon musk. he's got -- >> right where are you going with this? i don't know anything about it >> fine. never mind andrew, elon musk hasn't left the production facilities at tesla for days and days and days >> meanwhile this is all happening. >> what does he do in this scenar scenario is he there for the launch >> and he's also dating. >> i hope this is the week you do tesla because you have to nail the 5,000 -- supposedly by monday, it's got to be going on. >> by saturday >> for all we know elon musk is on that rocket more peaceful up there >> that might be the case. when we come back, more of today's top corporate headlines. then later, the weekend is here which means a mass exodus from manhattan to the hamptons. robert frank is going to show us how the rich get there in style. he's getting ready to take off in midtown we're going to track his flight

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♪

good morning again, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories front and center this morning, a milestone for bitcoin this morning not a good one if you are a bitcoin investor the price of the virtual currency hit its lowest level in nearly eight months this morning. though now it has rebounded off the session lows right now you're looking at bitcoin up $29.03 to $5,869.13 bitcoin is down nearly 60% so far this year. >> i always thought if it went over 6,000, this would be the moment yeah and now we're here >> and you will do what? >> so the question is, is the downside -- the downside is still zero, right? that's clear but is the upside still $20,000?

if that's the case -- >> you're shaking your head. >> he's like you're crazy. >> you have to understand how you got to $20,000 you got there because of the basis of those people who really truly believe in bitcoin was drawing by many people who jumped on the bandwagon. >> you think all those people have been so burned they're never coming back? >> bitcoin was 10 cents five years ago. people have made a fortune >> the move to $20,000 -- >> i had people who had never invested in any of this stuff who were saying is this a good investment >> i don't think you get all the way back to $20,000. but i think you need to establish a base whereby the people who really believe in the future of bitcoin consolidate. >> let me ask you a different question does the world really need a digital currency >> i suspect if you look 10 to 15 years down the road, we will

have digital currencies. but the private sector will have involv investment in them >> you don't think there's going to be one of them that has a private currency. >> it will but not in a sense we understand a currency to be >> these aren't currencies now. >> it'll be a means of exchange. >> it's a commodity. >> tell that on cnbc because cnbc on the website has it under fx. >> it's not a currency >> fine. let's call it a commodity. do you think bitcoin will be a store value ten years from now >> i do. >> and how will it be valued >> the weight of adoption will be much slower than what the believers think it is right now. yes, it will be. it's going to be around, but it's not going to be a currency. it's going to be another commodity-like asset out there >> that you can trade. >> that you can trade. and mainly as a store value. >> okay. >> like a bail of hay. >> do you own any of it? >> i do not. >> is there a price at which

you'd buy it >> there is. >> what's that price >> i said around $5,000. >> so you're a thousand off with me >> and i've said it consistently on that. >> and why $5,000? tell me why. >> the same reason you said $6,000 it's a gut feeling, right? >> unfortunately that's the problem with all of this. >> that is the issue >> all right let's talk about a couple other headlines this morning president trump has repeatedly told white house officials he wants the united states to withdraw from the world trade organization that's according to axios. the president is quoted as saying that the wto was designed to, in his words, screw the united states. at least according to this report on axios. however, withdrawing from the wto is considered unlikely we did see the futures move a little earlier as this news report was coming out on axios in the meantime, swiss drug maker novartis has announced plans to spin off to shareholders novartis bought alcon back in

2011 the company wants to refocus on its prescription drug business meantime, mexico set to elect a new president sunday in what could be one of the most significant votes in that nation's history and not just for mexico but for the united states as well michelle caruso-cabrera joining us now with more on this big election >> hey there, guys good to see you this morning come monday, likely the next president of mexico is the guy that everybody's going to call amlo stands for andres manuel lopez obrado you refer to him as president lopez obrado or president lopez. latins have long last names. >> thank you, michelle caruso-cabrera >> exactly he's going to wipe the floor of the two other traditional parties. take a look. the most recent poll numbers show him even further in advance. so, again, seeing in mexico we've seen around the world

traditional parties getting completely hammered. instead, upstart starting. do we have that element? no believe me he's going to wipe the floor at this point it's possible he's actually going to command the entire congress as well there was a long time that people were very concerned about this guy this is the third time he's running for president. third time is the charm. he has long been considered a full-on chavez autocrat. but he has softened his rhetoric he's moved to the center on a couple of titems. he's run on an anti-corruption campaign instead and more social spending the big question is what does he mean for nafta there was a time when more globalist members of the administration would whisper in reporters' ears that we need to get nafta done i think it became pretty clear that president trump wasn't all that worried about when it was going to get done. >> or if it would get done

>> and at the same time, there's now a belief that maybe it's easier to get a deal done with amlo instead because one, president trump might like him he's very nationalist. you know, strong man kind of thing. number two, one of the demands is that the u.s. says raise your wages. amlo likes that. do we have this element? manufacturing wages in the three nafta countries. in mexico, $4 per hour compared to the u.s. $39 per hour and canada $30 per hour. when you add in the decline of the peso, mexicans think they made more money in 2015 and 2016 because the peso wage went up. but in fact, when you include what happened with the dollar, when it comes to a u.s. company, hiring people in mexico, it's just gotten cheaper and cheaper and cheaper. because that productivity chart,

productivity in the united states has gone up dramatically whereas productivity in mexico has gone nowhere >> china probably stole more jobs from mexico than they did from us. how do we look at amlo remember everybody panicked around lula. now he's in jail but he wasn't as bad as we feared is there a chance this three-time guy who by the way chained himself in the public square of mexico city in 2006 when he lost, is there a chance he's not as bad as he think? >> he has certainly run that way and the markets have reacted that way when you look at what's happened with the mexican peso which is more of a result of trump and nafta than it has about amlo himself he said he was not going to raise spending dramatically. not going to cause a massive

deficit in mexico, right we saw a rally in the mexican pay so sew >> tell me again after the election if he wins, we are to call him president >> president lopez or president lopez obrado >> what's your mother's maiden names? >> manly >> brian sullivan -- >> robin >> andrew ross sorkin kernen. >> no, no. >> cabrera's is my mother's last name the mom is like an adjective. >> what are you telling everybody your maiden name for it's out there >> my name is brian sullivan there's six of us on my street >> michelle, thank you by the way, stick around for this conversation. let's get back to our guest host this morning

mohamed el-erian let's talk about not just what's happening with mexico but all of the things we've seen with the developing economies emerging markets at this point it's been not what we had anticipated based on what we heard from conventional wisdom over the last year or so >> yeah. i think this year in which emerging markets have gotten beaten up whether you look at currency, at local rates, et cetera, is a reminder that technicals matter. >> what does that mean >> it simply means that the crossover are much bigger than dedicated. sop they rush in, you get price overshoots on the way up then something happens and they go back to the home. why? because an off benchmark entails. technicals matter. for dedicated emerging market investors, that's actually good news because you get lots of opportunities. when you have contagion and

asset class, good names get beaten up. i think that you'll see that dedicated investors who have semipermanent capital, very excited right now. because they're getting opportunities that they haven't seen for a long time >> what do you do in a case like mexico >> so i think the key issue in mexico is when you go into power, does the fact that you have trading relations and open capital account meaning your currency can get beaten really easily, does that drag you to the middle or not? we've seen country after country -- brian mentioned lula. look at greece a couple years ago. that get pulled back to the center that's because the reality of governing with an open current and capital account, you've got to be responsible. >> he will be our guest for the next hour. michelle, thank you. when we come back, justin nelson cofounder of the lgbt

commerce will join us. plus they're being called the expedia of the sky robert frank is in this helicopters. he's flying to the hamptons. >> of course he is >> he's flying using blackbird that is the latest app to get you to the beach in style. that is mi ucongp right here on "squawk box. once there was an organism so small

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welcome back to "squawk box. pride month is coming to an end, but the lgbt community contributes to the economy all year long. joins us now is justin nelson. just give us a sense of how we should think about that relative to the economy because i think this is an issue that people don't spend enough time thinking about. >> yeah. i appreciate the question. thanks and good morning. thanks for having me on. you know, a lot of people think we are just gay all day. that's what we are the reality is, we're job creators we're businessmen and women. there are an estimated 1.4 million businesses owned by lgbt americans. and we conducted a study last

year that found our economic impact on the u.s. economy is over $1.7 trillion to the u.s. economy. that would make that community the tenth largest economy in the world. so i'm really pleased to be able to share that with folks today >> speak to this because i know it's an issue you care about anthony kennedy's retirement and what you think it ultimately means to the lgbt community. >> well, i think it's a loss, certainly. the reality is we have had battles before we'll continue to have battles one of the things we've done, i think, a great job of doing is creating relationships across diverse segments you know, a lot of people also think lgbt people are white people only. we are african-american, hispanic, pan asian, people with disabilities, veterans what we've been doing at nglcc is making sure we're creating

relationships. we started this organization almost 15 years ago in the shadow of 9/11 and george w. bush was in the white house. and as you all remember, probably as well as i do, marriage equality or marriage amendments were the big wedge issue in the 2004 campaign so we've been here before. we're not going to shy away. it means we've got to redouble our efforts. we have a lot of great allies in the private sector that are going to help us continue to push our issues forward. >> i'm curious there's been a lot of debate around north carolina and certain states where businesses are going based on some of the politics in those states you know, amazon and others have looked at that state for example, apple has looked at that state is your preference for companies to boycott states that you don't think treat the lgbt community fairly or is there an advantage to having a big company like an

amazon or an apple, get into one of those states and then try to change things from the inside? >> i think there are a lot of great communities that could host headquarters of amazon or apple. i don't think it has to be north carolina in particular i'm not a big fan of the word boycott. i think we can look at other places that are probably more palatable. and i don't mean that just because of those particular archaic laws they have but just looking at output of employees, do you want to open up a business in a community where they can be openly discriminated against? the average lgbt employee spends between 25% of their work week worried about discrimination or being fired from their job and certainly as a social justice activist, i find that abhorrent. but as a businessman, i find it even worse because it means 10% to 25% of that employee's productivity is out the window so i think there are better

decisions that can be made not only on the overall health of their employees but the overall health of their business >> justin, tim cook was recently interviewed and made the comment that he was very proud to have come out as publicly as he did and yet he clearly lost his privacy in that decision i'm curious how you think about prominent executives and about the idea of coming out publicly. >> i think it's incredibly important. not only for the overall movement of inclusion and equality, but even, again, back to camaraderie of colleagues we want to see ourselves in management and i don't think that's specific to just lgbt. if you are a woman executive, if you are a person with a disability, if you are ethnic minority you want to see there's upward mobility that you have folks within your organization that go all the wa

i to the top, that you can make it it's an incredibly important message. certainly when we have issues whether they're legislative, whether it's pending supreme court litigation and i'm proud to say we've been a part of several efforts to get the business community to weigh in on amicus briefs and so forth. it's very important. >> does it upset you, those that don't? >> i think it's very difficult for someone to be authentic in business if they're not authentic in life. >> justin, we appreciate your time this morning. it's a longer conversation >> thank you so much. >> thanks. when we come back, the weekend is almost here that means the hamptons will be busy the roads to get there, even busier and of course that in itself is a big business opportunity robert frank joins us with a preview of what he's got coming up robert, good morning >> good morning, becky well, it is a beautiful summer friday here in new york which means it's time for that new

summer ritual. heading to helipads like this one and boarding a chopper to the hamptons we're going to look today at the booming business of ride sharing in the skies and we are going to take you along for the ride live with the helicopter to stamonea hpt over all that friday traffic. all that friday traffic. coming up after the break. you'll only pay $4.95. fidelity. open an account today.

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welcome back to "squawk box. helicopters hovering over as

it's cheaper than ever to book a chopper. the front line of the battle is the hamptons where thousands of choppers stream from manhattan to the east. robert frank is joining us ready to take to the sky is this just the commute for you here, robert >> i wish it was, andrew i will be driving back this afternoon as soon as we're done with our hits. but against the traffic so that will be nice as you mentioned last year, tens of thousands of new yorkers boarded a helicopter to the hamptons that was helped by these new ride sharing apps like blade that allow you to just go on the app, book a seat bli blade started four years ago with a seat price of $600. now they're in ten cities and blade just dominates the market to the hamptons. but this summer there is a new competitor that's a company called blackbird. they were started by a tech entrepreneur in the west coast and blackbird is a little bit of a different model. they don't own their helicopters

or operate them. but they're more like expedia where you can go on the app and see all of the helicopters and operators. if you said i want to go to montauk today at 2:00, they would show you all of the seats and helicopters flying there for the cheapest price the founder is rudd davis. he told us the sky is the new frontier when it comes to the ride sharing economy >> we are like airbnb for flights. right? so again, like most private flights, only have about 10%, 15% occupancy. tons of open seats so we bring those together for people to book >> now, this flight this morning that we're taking would be around $800 per seat but rudd said in ten years because of cheaper helicopters and all this new ride sharing technology, it will be only $50

to ride in the hamptons. we're going to look at the entire business of ride sharing in the skies and how it would cause controversy in the wealthy communities in which these are taking off and landing yes, we are going to take you live on our flight this morning to the hamptons so you see just how quickly we can get from manhattan to the hamptons. normally you know that's a two and a half to four hour ride you know, for some people, that $700 is worth an extra one or two hours on the beach this will be a lot of fun. you're going to follow us along as we take off and head to east hampton. it's just incredible the numbers in this business right now >> how quiet is this helicopter? the reason i ask is the noise factor is becoming a huge one in the hamptons and you have a number of municipalities including east hampton talking about shutting the airport down permanently

because there are too many of these things in the sky. >> well, andrew, you have hit the nail on the head as to the central controversy of this whole business and we're going to look today when we get to east hampton at the noise issue. and at the fact that east hampton and other airports could shut down by 2021 if they don't get quieter helicopters. what these companies are hoping for is that the electric revolution comes to helicopters before that happens. we've got uber air partnering in l.a. with quieter helicopters. but it's a race against time to find those helicopters otherwise this whole business is going to get curtailed we're going to show you all of that when we get to east hampton. >> safe flying, sir. have fun up there. we'll see you in a little bit. >> there he goes and he's off >> i thought he just put on a cape and flew himself. >> we need the superman music playing for this

>> se sort of has a -- like a strut on his way -- >> he's wearing white pants. >> he's in the hamptons. >> when in the hamptons, right >> he has the best job in the world. >> is he going to sit next to the pilot? is that what's happening here? >> that's pretty cool. >> that's why it's so cheap. >> i see all right, folks we are counting down to the opening bell on wall street. the futures at this hour have been in positive territory still. up by 134 points for theow d s&p up by 12 when we come back, we have more when we come back, we have more with mohamed and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered...

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trade turmoil. president trump reportedly wants to pull the united states out of the wto. the reasons and the implications straight ahead eight years ago today, a well known technology company became public. since then the stock up nearly 2,000% can you guess the name plus cnbc heads to the hamptons the high stakes high end fight for helicopter space a live report from high above new york as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york,

this is "squawk box. >> good morning, everybody 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 and brian sullivan joe is off today our guest host today is mohamed el-erian from allianz. if you are one of the many new yorkers headed for the hamptons this weekend, robert frank has a leg up on you. he just joined us live from a helipad in manhattan now he is getting ready to take off and race east. we are going to track his flight live see how long it takes him to get out to the hamptons. we'll be doing that throughout the hour so he better be there in less than an hour right now while we await that takeoff, let's get to the markets. the futures have been taking off as well. the dow futures indicated up by about 135 points this morning after the dow closed up 100

points yesterday you can see the s&p is indicated up by about 13 points. the nasdaq indicated up by 43. this is the last trading day of the quarter. and we'll come back with the first day in july. >> jeff hurst, i had no idea either he said the first trading day of july historically is the best da i for the stock market going back a hundred years who knew >> not me. >> so if you just buy on july 1st, sell on july 2nd, you've made a fortune you're richer than mohamed el-erian. >> a chance of a positive day. >> i thought it was bitcoins >> not today not this morning you're watching bitcoin prices meantime, couple big stories to tell you about this morning axios reporting that president trump has reportedly and repeatedly told top white house officials he wants to withdraw

the united states from the world trade organization kayla tausche joins us from washington this morning with the latest. >> it's a call the president has made frequently over the course of his presidency and campaign he's frustrated with the wto he doesn't feel it serves the united states. and he doesn't understand why the u.s. is still in it. but the important line on the axios piece which i've also heard from people in the white house is this. advisers never put in place a policy process to take the idea seriously. that can change, but that is still the case for now it does underscore trump's disdain for multilateral deals and institutions nato, g7, nafta, t r -- tpp >> if you don't want our cultural product, we don't want your cars. i mean, it's not such a complicated formula. and they're going to come back and they're going to say, let's talk frankly, don't tell them i said it, but they already have.

don't ever tell them i said that you'll screw up my negotiations. >> the white house declined to elaborate on what discussions are taking place ways and means chair told reporters yesterday, this, my understanding is there's a lot of discussion behind the scenes. the president trump asked us to have patience and back him on this challenge i think republicans clearry are. meanwhile, canada's going to be making an announcement today at 11:00 a.m. and white house officials say they're operating as if the tariffs on china next friday will take effect we'll see whether that's barring any last-minute deal that could be struck in the next few days >> all right kayla tausche in washington, d.c. thank you very much. aside from trade, we're also

watching the financial stocks following the second round of fed stress tests the headline, deutsche bank's u.s. unit failed that stress test leslie picker joining us now with a roundup of the results. >> you've got three categories theess banks can fall in here. the fed can object to a banks capital plan as was the case with deutsche bank's u.s. unit it can approve the capital plan which was the case with most of the firms tested including wells fargo. or the fed can give a so-called conditional nonobjection which they did with morgan stanley and goldman sachs. this essentially means that goldman sachs andmorgan stanle are required to keep their shareholder payouts around the same level as last year. that's as other banks are able to boost their distributions the fed said goldman and morgan were dinged by one-time challenges related to the tax law. bank of america and jpmorgan shares are moving higher in the market as each of them announced

to buy back more than $20 billion of stock each. wells fargo also gaining this morning after raising its dividend to 43 cents saying it would buy back about $24.5 billion worth of stock now, some analysts speculated wells fargo could get dinged by misconduct issues for the qualitative part of the stress test but that wasn't the cause. >> let's bring in mohamed. we've heard a couple of reactions this morning one being that these stress tests were impossibly difficult. that you were talking about problems worse than the financial crisis others that, look, the bank hs some time to figure this out and should have known. >> yeah. i'm in the second category what you're going to see is the stress test gets harder and other regulation gets softer that's going to be the combination that we see going forward.

i think these stress tests are not that hard to pass. if you recognize that once in awhile you will get these major shocks to markets and the economy. >> the idea that so many banks ran into trouble did so because of the tax law changes is that valid concern from the bank saying, hey, that hit us at the wrong time >> leslie and i were talking about this in the green room you know, i suppose that you could argue that but it's a bit of a puzzle because the tax bill was pretty well telegraphed these stress tests are getting harder and they need to take them more seriously. >> ang lot of critics are looking at this saying if there was a financial crisis at this point in time, based on the stress test as it was hypothetically tested, goldman sachs and morgan stanley will be subjected to the same kind of stress and pressure regardless

of the tax law or not. >> although, if you were going to go from where we are in unemployment right now to 10%, you would guess they would see it coming and would change accordingly. maybe they would see the signs and would change their positions accordingly. based on how they performed -- >> but remember and it's almost ten years, there is this notion of a sudden stop that's what happened in september. >> it was a sudden stop, but there were a lot of warning signals along the way, i would argue. it was much worse than anybody anticipated. >> 2008 i think the banking system is much, much stronger. and in fact, if you're going to do a stress test, it should be of non-banks nap is where risk has migrated and morphed so the non-banks -- >> who would you be stress testing right now? if you could be regulator for the day, how would you expand the stress test? >> i would start focusing on the non-banks.

>> like who? >> the asset management companies, for example there's been a lot of new vehicles that promise instantaneous liquidity on asset classes that are inherently liquid there are etfs and high yield. what are you telling investors >> there's etfs in everything now. >> play the dominos out. >> so the dominos would be -- >> the dominos in the etf market, what do you think really happens? >> so people enter an etf because it promises instantaneous liquidity at reasonable price there's a major shock to the market and they find out they cannot get is that liquidity do they do they sell something else as they sell something else, you start get iting the risk of economic con stagen. i think that probability is low, but the regulators have to focus more on the non-banks. >> investors in these tocks, leslie, they may hear pass or fail but because of the government they've got to add

this weird thing cno. we talked about it this morning. conditional nonobjection >> uh-huh. >> that's a fail, kind of? what is that >> in practice, it is. it prevents those two banks along with state street from -- so in practice it does restrict those two banks in a way a fail might restrict those two banks in that they're not able to go forward with the same capital plans that they intended and would like to do >> it's like putting your car through inspection they let you through but say you need to fix that these banks have work to do. or can they live with that cno and be okay? >> they can live with the cno and be okay. they announced plans to return capital to shareholder it's just not probably as much as they would have liked >> can i go back on the etfs thing? if you were to regulate the asset managers, what would the

stress test look like? what would you be trying to force them to do because the inherent nature of the etf market is such that i'm not sure you could put -- i don't know -- what steps -- just, it's only disclosure story. even if you disclose it, it's still going to happen. >> right but you've got to disclose it. ang lot of people is my gut feeling have got into etfs because it's offered on everything when something is offered on everything, it must be okay. i don't think they realize what liquidity risk they're taking. >> but one of the, i guess, benefits of etfs is they're passively managed. with an etf, it's more algori m algorithmically managed. for ensuring the liquidity is not at a risk of mismatch with kind b of the underlying

security >> they hand off that responsibility to someone else they pass it right off i think the issue is they are passively managed. and what we have discovered is that passive products increase contagion. right? what do you do when you sell a passive product? you sell the good and the bad. so you get now contagion that has been internalized into the system more, more, and more. that's the concern now, is it a huge concern? no but it's something that you want to focus on today so that in five years' time it doesn't become the biggest problem the word passive lulls people into a sense of complacency. a lot of etfs don't have to own the underlying securities. they just track it so you think there's a risk people are being -- don't worry about my dog, he's passive that dog may bite at some point, right? >> look at the short vol etf i think people were shocked.

but that was an illustration of what brian said. i think the etf community understands there are different types of etfs. more broadly there's a tendency to lump everything together.mohu >> meantime, coming up, the cofounder of marvel technologies is going to join us to talk consolidation in the tech world. plus we are headed to the sky high above new york. right now as it happens. we'll check in on robert frank as he races towards the hamptons you're watching cnbc right now that's him in the air as we that's him in the air as we speak. 6,000 feet above sea level. but how do you really know that the beans journeyed to the port of mombasa and across the pacific? that you can trust they're 100% authentic? ibm blockchain. a smart way to track every step, ensuring this coffee did indeed come

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in the tech world, it is all about getting bigger chip makers around the world are merging, buying, consolidating sometimes across borders joining us now is the founder and coo of lattice works and former founder of marvel technology group we want to talk to him about everything going on in the regulatory world, privacy, china, et cetera but you have a new product which you've just launched you have it right here we've been talking about it during the commercial break. we've all been talking about the

cloud. everybody's moving to the cloud. you've created something that's almost -- it's a cloud company, but it's a bit anti-cloud. what is it >> yes it is in essence a personal storage device but its operation model is a cloud model. >> what does that mean it's like having a hard drive in your home for everything you've got. >> correct >> but it's attached to the cloud. which i don't understand >> precisely the keyword is it is attached to the cloud. >> you can back up all of my stuff and save everything. my pictures, videos, everything down the road? >> yes you can be on the road you can take pictures. automatically backed up. you can even show your spouse what kind of fun yourself having at a moment in time to the tv. >> all of it is running out of my home on this device >> that's right. the data stays here, not the the cloud. but the cloud mold el is a use

model. you log into one account you see all the data that somebody shared to you >> so you could be at the grand canyon on vacation and saving your photos to, quote, the cloud. but it happens to be in your basement >> what if something happened to that box does it all go away? >> that is the question people do ask what if my house burn down or somebody vandalize and steal it. >> that's what they ask. >> that's the fundamental question though. because the good news using drop box or google or whatever it is is that there are, i think, probably something like half a dozen or a dozen copies of everything i have everywhere >> but that's also the bad news. >> also the bad news there's no free lunch in this world. unfortunately, you have to -- there is a slight tradeoff here. right? >> now, for the people that are super paranoid -- >> you have two boxes in different place.

>> can i get multiple boxes? >> you can >> can i put them in different places >> you can but you can also -- let me put it this way. maybe this is not the right way for most people, but we will say because active data is hard to protect. right? meaning if you put in the cloud, it's a problem in terms of privacy. but a backup data is much easier to connect >> how does it connect to your phone? do you have a specific app for example, if i'm using the iphoto app or photo store. how does it link to that apple can now save it on their cloud. >> yes so we have an app that is highly integrated app that consists of photo and camera roll backup it is also sharing. >> does it run as a vpn on your phone, sort of run in the

background >> we sell encryption and stuff but it is nevertheless encrypted. >> can i ask a technical question >> yes. >> the network for most people's home is meaningfully slower than the network that google and others are running on major backbones. so the amount of time it takes to upload and down load information, i imagine, is going to be a bit cumbersome, or no. >> most of the time, it's actually better. >> better? >> most of the time. >> why is that >> when i am traveling, that would be the worst time. >> be if i'm home -- >> but not so bad. why? because when i'm traveling, i'm uploading. download band width is much higher now, when you're at home, you get several hundred mega bits per second >> what's the cost of this

device >> that was my non-technical question >> well, retail msrp of $549 >> how much can i store on it? >> we come in several skews, obviously. one terabyte model up to four terabyte model. >> so far this has been consumer use. so i know companies that are still paranoid about the cloud do you see that being an answer for them >> i think we are start-up, so we love to be able to go everywhere but we will focus first on consumer i can see that small businesses, s soho, right? they will use it what's the difference between soho and consumer? little difference. >> what is the competitive advantage you have over somebody hardware is a tough, tough business and by the way, apple i think, for example, on their -- one of their wi-fi devices has a hard

drive in their wi-fi device that you could use to store at least back up things who's to say they couldn't turn around and just turn that into this or others >> i would argue that the big guys can do what we do, but that it's not their business model. especially -- i'm not referring to apple i'm talking about the other guys that you know. their business model is to learn as much about you and they want to stop your data. >> thank you for coming in this is fascinating. >> it's on sale if you order now. >> thank you for checking the website. >> i'm interested. you got me can i have that one, actually? >> thanks. >> this is engineering model >> thank you very much coming up, two very different stories about delivery first, big changes at dominos pizza. all right. listen up. kate rogers is going to pull up with that story. plus robert frank working on delivering a high net worth individuals to the hamptons.

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all right, everybody welcome back to "squawk box" this morning let's head to the skies right now and check in with our own

robert frank on his helicopter journey to the hamptons. how's it going so far? >> it's going great, becky we are about a little over ten minutes into our flight, and we are right now in great gatsby country around oyster bay. this is where great gatsby was kind of made and we're probably about 25 minutes from east hampton. again, about a little over 10 to 15 minutes into this flight. coming out here, you can even see the main roads going out to the hamptons already quite clogged with traffic from an infrastructure road perspective, you can see why this business not just in the hamptons but all over resort communities, martha's vineyard, nantucket, west coast california, is going to get big business just because of the traffic. we're going to be there about 20 minutes. we'll come back to you when we land >> as brian says getting our morning traffic update from robert frank headed out to the hamptons today we'll check in with him again soon when we come back, we'll

have breaking economic news. u.s. equities this morning have u.s. equities this morning have been ♪ hawaii is the first state in the u.s. to have 100% rene higheenergy goal. we're a very small electric utility. but, if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ "squawk box" will be right back. using smart sensors on their network that lets us collect near real time data on our power grid. (colton) this technology is helping us integrate rooftop solar, which is a very important element of getting us to our renewable energy goals. ♪ (shelee) if we can create our own energy, we can take care of this beautiful place that i grew up in.

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♪ all right. good morning happy friday dow futures up 132 points right now. we are just seconds away from personal income and spending numbers. as we know, there could be a good day for the markets the dow is down 0.8% this month. if we gain that today, it could be positive. let's go to rick santelli. >> our read on may personal income, up 0.4% exactly as expected spending up 0.2% if we go through this, last look was downgraded and we lost a tenth last month so subtle negative revisions but

well into positive territory spending a bit light real personal spending, it was unchanged following a 0.3% rise. the deflator up 0.2% as expected both front view and rear view. that's the same look as last time and if we look month over month, fed kind of likes to look at this one up 2%. maybe that's the most interesting feature of all on those metrics. it follows 1.8% and it's 0.1% hotter than what we were looking for. you know, yesterday basically we spent a lot of time around 2.85% late in the session. 2.85% is where we are now even though the markets have escalated and built on yesterday's rally. we could say end of quarter, end of half, you know, how many day settlement that it makes sense that yesterday and today are doing better we'll have to see how it closes. but one fly in the ointment,

dollar index down a little back to you. >> rick, mohamed's here. >> flatter yield curve again on cnbc.com it's again being talked about there are those that worry because of economic signals and those like me who say no technicals have been playing a major role where are you on how serious is the signaling from the flatter yield curve? >> well, my opinion is that the flat yield curve has a psychological issue attached to it as you're implying but when i look across the globe and i see all the securities and the coffers of central banks, that makes a difference. much of policy has made a difference you know, it might sound a little silly, but i look at it this way if i was the fed chief and i wanted a steeper curve, i'd speed up balance sheet reduction. you'd get a steeper curve. >> i agree with you.

but do we then conclude it will have no impact on the fed's plans to raise rates or do you think it will make them think twice about it? >> i think that if jay powell looks up at the boards and he sees there is such a narrow gab between seven and tens, abou three and a half basis points, i don't think he's going to make the decision not to raise rates because of that. but if he does raise rates and the curve inverts, i think this fed chairman will deal with the issue in realtime. and at that point, most likely make some adjustments. >> thanks, rick. >> thank you, rick we've been talking a lot about financials today following the latest round of fed stress tests. wilfred frost joins us now from the nyse good morning to you. >> good morning. yes, indeed. as you said, deutsche bank's u.s. unit failed the qualitative

part of the stress test yesterday. the fed said they had widespread and critical deficiencies in their capital plan and controls. i asked the new ceo whether he agreed with the fed's decision >> i think we have shown that from a solidity of the bank we have shown strong result and the stress test a week ago, we were happy about this because there was a lot of work we had put into this one. and on the control side, we he did efficiencies we have done good progress we are completely committed to work with the authorities to get that even better over the next year >> given the size of the unit relative to the bank and the problems it's causing you, do you consider getting rid of it as part of the restructuring >> not at all. for various reasons. number one, look at the size of the u.s. operations, what it makes for all of deutsche bank the u.s. is next to germany one

of the most important markets we are in and that will remain the case it's a key market for deutsche bank secondly, we should also see again what the stress test is all about. and from a robustness point of view, from the stability of the bank, we have shown above average results last year. we know that we have some work to do on the qualitative side. we are fully committed as a management board here. and therefore we are highly confident to get over this one and be a key partner here in the u.s. >> strong response there if we look at the share price over the last 48 hours, the response to that failure relatively muted it's just the u.s. unit and just the qualitative part the muted reaction the last 48 hours hides the decline we've seen recently. year to date, deutsche bank stock down 42% it hit another record all-time low earlier this week. and all of the problems that the banks face, we discuss more in this interview including the

plans for restructuring, the employee morale, what it looks like and the idea of the trade policies all of that still to come here on cnbc throughout the day and on "closing bell." >> we'll look forward to that. thanks for that. appreciate it. mohamed, what do you think you work for a german company. allianz, german insurance company. it's the biggest bank in europe. how important systemically is deutsche bank? >> i think deutsche bank is in the process of redefining their business model right? is they had an outward oriented business model they're looking where they should concentrate the key issue is not deutsche. remains the holding of government bonds and part of the performance has been because the notion of -- italy has reintroduced a notion of sovereign risk in europe. that's the key issue for european banks

it's about sovereign risk. >> that's a nice way of putting it is deutsche bank in crisis or not? >> i don't think so. i think deutsche bank is in the midst of redefining its business model. and it's doing so while having to live with the legacy of many years of over-expansion. >> it's shrinking dramatically though >> it is and it's going to have to figure out what its core business is. and it's not as simple as for banks here because that domestic base is not large enough to be the core business it can be a core business, but it cannot be the core business >> separately, our fed, the ecb, ecb is probably going to raise rates in a couple years. there's trillions of dollars of corporate debt out there a lot of it held by private equity firms above libor is there any industry that you think is particularly at risk from rising rates on the debt side >> so i think you've got to look not at the industry but the amount of leverage and i think people who look at

that closely, where we are about certain yields, where there's been an expansion. that's where i would focus brian, i have a simple test. whether you are an equity investor or bond investor, ask yourself three questions how strong is the balance sheet? secondly, are there any obvious mismatches in terms of maturity? and third, how strong is the business model and that are the questions we had forgotten about during a period of massive liquidity and we're starting to realize now we have to ask these questions again. >> because the oil story a couple years ago was not an oil story. it was but it was a debt story and i wonder, andrew, i know you've talked about this how big is this debt -- we're seeing a supertanker of interest rates move it's huge and slow but it moves everything in its wake and i wonder if we're not talking enough about the debt side of the story. >> i think there's a huge side of the debt story.

the question is when does that the run aground? when does the trust run out? when is the confidence game over you have a better sense than i do >> i think it continues for awhile but it's interesting to see the warning of corporate deabt it's getting the attention of the multilaterals. it's only a matter of time before others start focusing >> by the way, can you put $2 in the acronym jar? you threw out a few in one sentence in other corporate news -- it's the story for you, becky end of an era at dominos kate rogers has more on the departure of the man >> pat doyle will be replaced by rich allison allison oversees more than 9,000 stores and all of the franchise

relationships the company has outside of the u.s doyle leaves behind as you mentioned a lasting legacy some refer to him as legend for the way he turned the pizza chain around he even appeared in ads. he'll be remembered for expanding the market share tremendously in the digital space with digital ordering as well as mobile since 20010, dominos market shae has increased from 9.7% to 16.4% in 2017. and its chief progression has grown from under just 20% in 2008 the stock performance under doyle's tenure is also incredible if you compare dominos to the faang names that were public when he took over in march 2010, it's outperformed all of those names with the exception of netflix. dominos up some 1900%. you also look at the faang names

from the time facebook went public, it's also outperformed over 800%. rich allison has big shoes to fill but they feel confident he will continue the chains of success meantime, we've got to check in with our man in the sky this morning. robert frank on his trip to the hamptons robert, we don't do this that much how is it going up there >> andrew, it's going great. from delivering pizza to delivering wealthy people. we are about 25 minutes into this flight. we just passed ft. jefferson so if you were in the car right now, to get to where we are is probably about an hour to an hour and a half. we are only 25 minutes into this flight soit really shows you that what you're buying for the $700 seat this costs is that time. and by the time we get to east hampton which will be in about ten minutes, you're buying an extra two hours on the beach so is that $700 extra per hour

on the beach for some people with the money, it's worth it. we will check in in about ten minutes when we land and a beautiful morning. >> not a bad day to be in a helicopter headed to the hamptons robert frank, awesome. see you in a bit coming up, can you guess this stock its ipo was eight years ago today. since then, shares have jumped nearmarket volatility may do to their retirement savings. that's because they have a shield annuity from brighthouse financial, which allows them to take advantage of growth opportunities in up markets, while maintaining a level of protection in down markets. so they can focus on new things like exotic snacks. talk with your advisor about shield annuities from brighthouse financial- established by metlife. the answer when we come back

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all right. welcome back it looks like a pretty good friday here. dow futures indicated with a jump of 127 points at the open s&p 500 and nasdaq also looking pretty good, andrew. >> okay. we asked you before the break what company made its debut eight years ago. the answer did anyone guess it right? >> i did >> brian was right >> tesla up nearly 2,000% since it went public phil lebeau joins us this morning from chicago good morning to you, phil. >> good morning, andrew. i can remember eight years ago at the nasdaq market site like it was yesterday we've got a look at what's happened over the last eight years. in particular, focus on the upper right-hand of the screen where you see the growth of tesla's stock price. >> we had a positive time with

some of the smartest informse e in the world ♪ >> welcome, everyone, to the model 3 unveil we have an amazing product to show you tonight >> the key to tesla's program here in kauai? this huge solar farm generating electricity that will be stored in 272 tesla power packs. >> what goes into making the model 3? frankly, we're going to be in production hell. welcome. with m >> i'm going to tell you about everything that this truck can do it blows my mind i think it'll blow yours >> that's going to ultimately produce half a million model 3s

and about 100,000 combined vehicles and maybe more if we can do it. >> all right so what are the four stocks in the s&p 500 that have done better than tesla since tesla's ipo in 2010? well, remember tesla's performance in terms of how much it returned, just under 2,000% there were four stocks that have done better. nvidia, netflix, and align technology the number one performing stock since tesla's ipo, abiomed up 4,218%. a performance even elon musk would that have to say wow by the way, we get the production numbers early next week >> we were talking about that earlier. he's got spacex that did a launch today but he's also been living at the manufacturing facility

how important is it for him to hit that or not? he's missed in the past. >> i think most -- becky, i think most analysts are of the opinion that when they announce the numbers, they will have either just hit 5,000 per week or what we've seen in the past when they announced their quarterly deliveries is they will hit a production rate of "x" vehicles for a couple of hours. and that if you extrapolate those hours over the course of a week, we would be able to deliver 5,000 vehicles per week. i'm not sure that we're going to see a huge reaction on the stock. unless it's dramatically below expectations but most are saying even if they don't hit 5,000 per week, they're close to getting there within the next week or two. it's whether or not they can sustain that rate. that's really the question that'll move this stock over the next month >> all right, phil robert frank is very creepily hanging over your shoulder right now. he looks like the genie over your shoulder, so we're going to

go to him and check in but thanks, phil lebeau. when we come back, robert frank is circling over the hamptons annoying everybody below him robert, where are you? >> becky, we are just over the bay. we are in the hamptons about 32 minutes after takeoff we're looking at the google map, it's all that solid dark red on the roads that means bad news already before 9:00 in the morning. so to get here by car, it'd be at least two hours we are here 33 minutes after takeoff. we will touch down with you in about six or seven minutes, come back to you live

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good morning welcome back to "squawkbox." live from the nasdaq in times square earnings out a few moments ago from constellation brands the maker of corona beer and many other brands they reported a profit of $2.20 a share. compared to $2.43. revenue was above forecast but they sent more on marketing and the stock is down by 3.88.

july market predictions are coming up. plus, robert franc getting ready to touch down in the hamptons there he is live on "squawk on the street," you on "squawk on the street," you don't want to miss your muscles look good, on "squawk on the street," you don't want to miss but we should be seeing more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, ceo of deutsche bank 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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here's the moment we've been waiting for. we've been tracking robert's trip to the hamptons it's a tough job but somebody has to do it he's just landing at the hamptons something like 38 minutes after he took off. robert >> yeah, becky it took around 42 minutes after we took off from manhattan we're touching downright now in east hampton now today we're looking at the traffic and this was a trip by car will be -- up to four hours. probably closer to five hours with the weekend traffic we're here you can see why this is, for some people, worth the expense we'll talk today about the noise, the controversy, the crowds and the booming business of ride-sharing the sky has brought to east hampton and other communities like palm

springs, nantucket, martha's vineyard the whole business of choppering to high-end resorts. it's caused a bit of controversy. so all that is coming to you today. a beautiful day to land here and we saved at least two and a half probably three hours by coming by chopper rather than car. >> okay, robert. have fun i know you're driving back if i were you, that's how i would drive back on sunday night. it was fun watching you flying. >> you thought it was a longer flight. >> yeah. i thought it would be 20 or 25 minutes. >> 25 minutes? you can't fly to jfk into 20 minutes. >> you've never been to the hamptons >> i kind of don't believe you. >> i've never been.

>> leave us with some parting words as we think about the rest of the summer. what are you expecting >> i would say it's a different world. we got used to alignment economic, technical liquidity was in the favor we now into diversion and dispersion it means we should expect three things active will outperform pass advantagement. >> finally. >> finally two, u.s. will continue to outperform the rest of the world. the third thing, is that don't under estimate the opportunities that are going to come from technical disruptions. we'll talk about emerging markets and the opportunities there. i suspectover the summer, ther will be more and more interesting things to do for the people who can react quickly. >> interesting meaning bad for anybody who has been complacent. >> correct. >> so look out going to be a bumpy ride. >> yeah. i think volatility has returned and will continue to be a major theme. >> is that the new normal?

>> i think it's the new new normal, yeah. >> there were 9,000 stocks in america 30 years ago now there's 2200 based utf you talked about active versus passive. why are you so confident i think conditions have changed. we've had a massive tide of global liquidity and everything goes up. global liquidity is slowly receding you have a choice. you want to be in products that are going to be challenged fundamentally because liquidity is going down or do you want to be actively managing that process? i think the environment has changed. >> so, mohamed, thank you.

one final final. end of the year stock market higher or lower? >> around where we are now but with a lot more dispersion. >> okay. great to see you hopefully see you soon i think you'll make it to the hamptons one of these days join us on monday. have a great weekend "squawk on the street" begins now. ♪ welcome to "squawk on the street." i'm carl quintanilla with sara eisen, mike santolli at the new york stock exchange. stocks look to finish on an up note nike near a record on a return to north american growth and europe is up on optimism over a migration deal. got ten year 2.85. road map