it's july 2nd, 2018. "squawk box" begins right now. >> announcer: live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" live from the nasdaq markets. it's a hot market at times square i'm andrew ross sorkin joe kerr anyone is back in town. becky quick is hopefully enjoying time off in the heat. look at u.s. equity futures. dow will open off. we'll explain why. nasdaq off about -- the hang seng was closed for a public holiday. the nikkei and shanghai markets down falling more than 2% take a quick look at european equities we'll show you there what's going on as well across the board, down with tech

at least a percent the italian ftse off a percent as well as what's going on in spain. melissa? >> breaking news out from computer maker dell. dell is buying out its tracking stock where the cloud software unit vm publicly traded on its own will pay $9 billion dividend it has nearly doubled in value since issued michael dell will be on squawk in the street at 10:00 a.m. eastern time in a cnbc exclusive. meantime, back to the pressure on the futures the eu is planning retaliatory ee owe they sent a written statement to u.s. commerce department outlining plans to respond. the eu could impose as much as $300 billion in tariffs according to the document. president trump wants to wait until after the midterm elections to move forward in a

nafta -- canada imposed new retaliatory tariffs in response to the president's tariffs on steel and aluminum canada imposed a tax on 80 u.s. exports, including coffee, beans, ketchup and strawberry jam. u.s. commerce secretary wilbur ross, that's today at 7:00 a.m. eastern time right here on "squawk box. >> tesla, ceo elon musk announced a production milestone for the model 3 sedan. we've all been waiting to find out whether they would make it or not he sent out a tweet over the weekend. we're joined with more from phil la bow. >> andrew, most thought they would be close or barely make it to 5,000 model 3s being manufactured in a week yesterday the official word came from elon musk sending out not only a tweet about how proud he was for his staff, but he sent an employee e-mail if you look closely at the bottom there that's a model 3 that says

5,000th on it. he also in the e-mail that he sent to the employees, he said not only did we factory gate 5,000 model 3s but we achieved the s and x production target for a combined 7,000-vehicle week it was a rush to say the least there are reports that there was plenty of cheering and celebrating when they finally completed the 5,000th model 3 early in the morning sunday morning. so basically a few hours into july 1st, the deadline that the company had set, the target they had set was we will build 5,000 model 3s per week by the end of the second quarter they just made it. now the question becomes, first of all, what happened overall with q2 deliveries we should get the numbers later today or tomorrow from tesla and then the big focus will be, what happens now in terms of sustained production you see that the stock is up more than 5% today guys, the analyst notes will all

key it in on the sustained production fantastic to hit your target of 5,000 per week or for one week at the end of the second quarter. what happens as you do the third quarter into the fourth quarter? >> phil, that was the question that i was going to ask. 5,000. by the way, 5,000, it seems like depending how you paragraphs some of what's going on on twitter, 5,000 in seven days are they working a 24-hour a day schedule right now >> yeah. working seven days, basically going 24/7 and that tent that we showed you there, that's a makeshift assembly line that was built very quickly i'd say about two weeks ago, and that tent has been controversial because veterans of the auto industry are looking at that and saying, wait a second, that is not the way to ramp up your production by putting up a tent and cranking out cars. having said that, they did hit their target of 5,000 model 3s

in one week at the end of the second quarter >> how much of that was manual production, how many workers they had to divert from other parts of the factory to go on to the model 3 assembly line. >> absolutely. >> what i found interesting, elon said i think we just became a real car company hours after he tweeted that they had hit that 5,000 mark, 7,000 vehicles, right in seven days. >> right. >> ahead of emea ford said 7,000 vehicles in four hours sort of a back talk to elon musk we do this all the time. it's no big deal, guy. >> i brought that up to a friend who is a big tesla bull. you know what he said. check out the market caps. so i mean, you want to go back and forth. it's childish at the end of the day to sit there and go back and forth on twitter but there's no doubt there will be people who look at tesla's production push. remember guys, we've seen this before from tesla.

where they have a big push, a burst of production for a short period of time and then the three to four to five weeks afterwards, they say well now, wait, we won't be able to keep the production at that scale so that's why there's going to be so much emphasis on what the company says in terms of sustained production and whether or not we hear anything. it's unlikely we hear anything when they announce delivery numbers for the second quarter more likely is that color comes at the end of july, early august when they report the second quarter earnings. >> check out the market cap. if you're a tesla bullu, you ca say that it depends on your viewpoint if someone says that, i know what they're saying. it's on the other side, like check out the market cap of tesla based on normal metrics. i hear what you're saying really high multiple and a great market

cap. hindsight, two, three, four, five years from now -- tesla is amazing. they have great cars. >> right. >> but i'm just saying that kind of comment could come back to haunt you. >> joe, in announcement, this announcement, it elicited just a reaction you wouldn't believe on both sides melissa is familiar with this. fast money at 5:00, i'm sure you hear from a lot of people. they came out of the woodwork yesterday. they immediately the skeptics started focusing, why didn't you use the word production. they're noft not really producing 5,000 in a week. on the other hand, the bulls saying, here you go. give elon and tesla their due. >> who is crazier the tesla certificatians or the skeptics in the past, certain companies -- tesla has more going for it than some of these crazy story stocks of the pabst.

who do you think is more unhinged >> it depends on the extreme portions i'm not trying to play nice here but i hear from both >> you're not talking about politics now, talking about tesla. >> the extremes in terms of tesla bulls or bears. >> there's no rational discussion with them at all. i'm sure it's like that with a lot of stocks. in particular this one when you talk with the extremists, they are completely, i don't care what you say. i'm not going to listen to anything but my viewpoint. >> social media. people live in echo chambers all they hear is their own -- everything is getting worse. watch this show. >> nobody bothers to go on to social media to say it's okay. they want to express an opinion. >> everything is like -- where are we we're going to have to talk bitcoin later. all i know is shatner was on her show talking about -- that's

where the sublime meets the -- >> he could have knowledge that bitcoin does become the -- >> from the "uss enterprise. >> you read that in the script >> i don't know. he's 88 years old. he went somewhere and got a potion or something to be able to still be traveling across europe in the amazing race at 88 years old. right? don't you think someone told him something, whispered something you know what, he didn't tell spok unfortunately, spock is gone. michelle is here. >> when i'm not here, are you free to be yourself or only when i'm here >> trust me. trust me she is herself >> she's eulls herself. >> do you have a preference? >> i mean, who would you rather face off against >> you know, i love everybody.

>> you punt and i go -- were you a punter on the team that was such a punt you punted too what's your answer i'm not even up yet. you have two guest toss get to before me. >> here's the rundown. >> portfolio manager at jpmorgan in reading your comments, scott, both of you, i think jack to some extent realize that all we talk about is trade and trade wars both of you seem to think that while we're in sort of a news vacuum with other things, not an earnings season. so everybody is talking about trade wars there's an old expression, just because you're paranoid doesn't mean people are out to get you i know this. just because you're saying it's not trade wars doesn't mean it's not about trade wars. >> it is that's why we're pausing people are worried all these other great things that are happening, this is the

fly in the ointment. this is the thing that could unravel and sort of be a headwind with all these other great things >> you're right. we're talking about this there's another old adage that comes to bear here. >> i love that can you mix a metaphor for me. >> i think it's a straight statement even in markets, this may be true even in life as well the least anticipated risk is most dangerous the most anticipated risk is least dangerous. the threat of trade wars, i'm knot dismissing the real possibility of an accident, an escalation but it's a pretty apparent risk. i do think in this vacuum before we get second quarter earnings reports, no news on monetary policy may be jackson hole. there's a vacuum the only thing to talk about is trade and tariffs. >> is there any way for the market to move higher if it's front and center >> not for the next few weeks. as soon as we get better evidence of what happened in the

second quarter corporate earnings, which will be more positives. >> there's still positive? >> i think sentiment can and will shift very quickly. think about how quickly trade dominated the headlines. whether that was a function of companies going to the quiet period, whether that was a function of just give us news releases, give us cash flow updates. give us, are you sitting on your hands management until you understand what the rules look like three months from now, six months from now, maybe a year from now or because at this point in time, ife we're throwing addage out. you have to climb a wall of worry. how do you commit capital spending nm you know what the supply chain looks like. how do you know that, until you have a better idea of where the tariffs may or may not be. it leaves us to come back to, what leaps to the front page and right now the front page is being dominated by trade trade idea, counter point to trade idea and you're left with,

wow, there's nothing really good that i can anchor off of. >> no one wins in the trade wars is another adage is it possible he can win? >> effectively they're going to lobby and negotiate. >> just a big bonus. is it possible for -- president trump talking about a hammer with the auto tariffs. he can change behavior based on threatening the movement. >> this white house takes a different approach to so many things, trade being one of them. previous administrations talked and talked and talked and in the absence of a conclusion, levied sanctions or trade or tariffs. this administration starts with the threat and says do i have your attention now, let us talk. i think you can win from a negotiating standpoint by doing that remains to be seen whether that's the case or not this isn't the first kind of trade tip we've gotten into it reagan went after the japanese

industry, clinton after the european auto industry the difference is in the details but the broad path is we've been down it before. >> i don't know what we can talk about. do you like when i bring you in? >> sure. >> why wait? you're going to introduce her -- either one of you gentlemen think -- this guy is a new kind of president >> obrador >> what do they call him. >> lopez obrador >> amlo. >> i thought -- lopez obrador. amlo >> i'm going to redo that for you because you weren't here on friday unless you were. >> no. but you know i'm watching. i stay in european hotels. >> should know what it is. >> amlo. didn't i already say it? >> look what i have to do in the morning. >> i didn't twris your arm here.

she was great. >> the two of us together. [ overlapping talking ]. >> from the ft the arc of history bends towards davos. >> are you writing for the financial times? >> it's a good newspaper they do a good job. >> i saw something in the op-ed pages of "the new york times." >> of "the new york times" that said the supreme court is weaponizing free speech. then i looked at it, it was on the front page i thought it was an op-ed piece. it was the lead story. is that not an op-ed >> no. one of the justices said that. >> which one >> you know who it was, right? >> no. which one. >> i'll get you the answer it was one of the four and not the five. >> duh. >> you guys, we're finished with you. see you come back any time either one of you. we've got the so -- >> it was nod an editorial it was a piece -- >> i saw that much it was a front page

unbelievable that that is now -- my buddy abe rosenthal were still around -- >> it was -- who said it. >> he's rolling over. >> that is not true. i withdraw, your honor. >> [ overlapping talking ]. michelle is here with more on mexico's presidential election. >> an extreme leftist and nationalist will be the president of mexico. he won in a landslide. he will be inaugurated on december 1st his name is andres manuel lopez obrador. let's get to any of these elements, guys there we go. there's the v.o. joe, i saved this full screen for you. amlo is what he goes by. it's an acronym for his name like i said before you paul him president lopez

obrador. two last names we lat ins are difficult for that he trounced the traditional parties like we've seen in a lot of places in the world he came in with about 54% of the vote look at the number 2 and number 3. distant second and thirds. did he not run on a hard left campaign as he's done the last two times he moved more towards the center ran very much on anti-corruption and anti-crime president trump tweeting out late last night, congratulations to andres manuel lopez obrador on becoming the next president in mexico. i look forward to working with him. there's much to be done between the united states and mexico you want to watch how the peso trades, as he softened his leftist rhetoric, markets grew calmer when he spoke last night, i didn't see the speech myself but it was conciliatory. >> gotten better and better in the polls?

>> for sure. s problem with the peso is -- the situation with nafta when he's gn conciliatory and talked about spending less, the peso rallied there's a lot to go between now and december 1. >> i think amlo will stick. >> the same way with lieu la became the president of brazil i think everybody will call him a.m. lowment. >> you're sensitive about caruso-cabrera. >> it's wrong if you call me cabrera. >> that's interesting. >> you call me caruso or -- >> you would never call him mr. ha lup, you call him mr. slim. [ inaudible >> you had at the top of the show they said lebron james for me was moving. like i need to -- thank you. that's the next story.

that's pretty good $154 million that's sorkin-like. >> for the contract. i know. >> sorkin is a lebron james of cnbc. >> in this case, it's pesos. >> i would have gone for more. that was actually o-- that's th upper limit. >> lebron in l.a can you imagine the -- thank you for this three-time nba champion lebron james bidding farewell to cleveland again. he's going to get $154 million over four years. he's likely to make the lakers an instant contender yeah people say he was playing with a junior high time i shouldn't say that he led cleveland as far as it went on his back obviously in the western conference, the golden state warriors have three of the last four nba tiitles this is probably great for the nba fans, probably not great for

the -- our friend the lone guy. >> dan gilbert >> it was a great tweet from bill simmons last night. i didn't realize this. seven of the best 13 players will have worn the lakers jersey in their prime careen, magic, wilt, west, kobe, shaq and now lebron. >> wow >> because it's show time. that's what they call them it's show time and it's l.a., the forum. before your time dieian cannon, cary grant's wife used to be there jumping around. it's a spectacle. >> he's got a place already. that makes it easy. >> who doesn't >> and the sponsors. >> think of that. >> from there that -- if you're lebron, is there that much more sponsorship money in l.a. for

lebron >> new york is the same except new york can be really tough >> something is wrong with new york >> l.a., they embrace their -- >> haven't had good basketball in a long time. >> other than the traffic -- the weather is nice. >> traffic, the smog. >> i'm thinking he'll figure this out but knicks -- >> we have relationships with a lot of the nba owners. i have a lot of knicks. >> you have skin in the game. >> 76ers >> they were there yesterday. >> the bucks they've got did he vincenzo, mark laz -- >> 76ers won at l.a. yesterday not the whole team but they were trying to get lebron it was a last minute yesterday it didn't happen all right. >> coming up, the latest jurassic park movie rocketing close to a billion dollar haul we have a box office rundown, next

just another day on the farm. or is it? this farmer's morning starts in outer space. where satellites feed infrared images of his land

into a system built with ai. he uses watson to analyze his data with millions of weather forecasts from the cloud, and iot sensors down here, for precise monitoring of irrigation. it's a smart way to help increase yields, all before the rest of us get out of bed.

we all want to know you know, the new, new thing. with xfinity's retail stores, you can now see the latest. want to test drive the latest devices? be our guest. want to save on mobile? just ask. want to demo the latest innovations and technology? do it here. come see how we're making things simple, easy, and awesome. plus come in today and ask about xfinity mobile, a new kind of network designed to save you money. visit your local xfinity store today.

jurassic world fallen kingdom, once again taking the top spot at the weekend box office according to com score the sequel ook in $60 million domestically and it edged closer to the $1 billion mark $932 million so far. i'm confident, like drexel, i have a high degree of confidence it will reach a billion. >> not to be -- not to bring up any rivalries or anything. but would we say that our

jurassic franchise did a little better than the other mouse company that had star wars thing? how did the latest star wars -- >> you want to build up business that's fine. got your own you bring up the incredibles i bring up the flop. >> i like lay a little bit of rivalry. >> i like the rivalry, too i'm glad we're going to hit a billion dollars here they're looking for a new han solo >> you're not putting your name in the ring? >> are you volunteering? >> they might bring harrison ford back if it's me they need a young guy. is that a franchise in and of itself han solo >> i think it could be why not? >> it wasn't that great. personally speaking. >> timing issue. had they waited another six months there were story issues there. >> no reason to suck up to disney, i don't think. >> who is their guy?

is that what's his face? >> bob iger? >> no, no. the guy. >> rhymes with >> jeff glor or the other place. >> is it cbs >> i don't think there's going to be any opening over at abc with that david what's his name? >> yeah, yeah. >> you need to be talking less >> there's no reason to suck up -- >> giving you advice. >> david muir is not going anywhere, my friend. >> let's talk straws you want to talk straws? plastic straws. >> i worry about the metal ones. to seattle now here's the news in the morning becoming the first major u.s. city to ban drinking straws. i should say plastic drinking straws compostable paper and plastic straws are available under the ban. people with a medical need for a straw are exempt normal plastic straws are out and could result in a $250 fine

for food services business that is don't comply. according to the strawless ocean campaign, most are not heavy enough to be processed by industrial recycling stores. for starbucks based in seattle will be one of the first to test this the famous green straw it's going to have to become a paper straw. >> how about the stopper in the lid. keep the coffee from coming out. >> is that out too >> it's plastic. should go full out, right? >> i'm sure they use more of those than straws. >> i don't know what the answer is there's no real great answer. >> because the paper straws are so soggy and terrible. >> you can put on -- should be able to figure out a way to make a paper straw that lasts new york city? >> how long does it need to last >> how long are you drinking that beverage? >> here's the story. >> the best paper -- there's one company in the u.s. that's making a paper straw that they can guarantee for about 18 minutes. >> 18 minutes?

>> to drink your beverage. >> it's going to be perfect form. >> in water, though? what if you have something more acidic. >> it starts to degrade. >> 18 minutes sounds good. >> i mean, i guess if you're at a restaurant for kids, you might need -- maybe them get a second straw. but then are true straws worth more than plastic? >> compostable coming up, get ready for the second half of the year. i just don't say certain things at certain times anyway, your playbook for retail sector after the break here's a look at friday's s&p 500 winners and losers

you're gonna do great! thanks, dad! break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at aflac.com.

- anncr: as you grow older, -your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again?

- anncr: prevagen. healthier brain. better life. ♪ >> announcer: welcome back you're watching "squawk box. live from the nasdaq market site in times square. good morning red all over the place mondays are kind of not unusual. but there are trade fears. there you can see the dow jones down 164 points, the s&p down 15 or 16. the nasdaq down almost 50. look at it two ways.

they talk about pouring gasoline on the economy with the tax cuts that was already rip roaring we're definitely -- look at rates. rates are, where are they today? 2.83 >> there's no silver lining to a trade war, obviously for a lot of people that said we're growing too fast, maybe this is the time that you try to thaw some of the inequities. that's the issue computer maker, dell make up your mind. public, private, public, private. buying out the shares of tracking stock in vm ware. cloud software unit. the stock was created two years ago. the deal makes dell a publicly traded company once again. holders of the vm where tracking stock can receive $109 in cash or shares of a new publicly traded stock michael dell, unbelievable in terms of private, public he just seems to get richer and richer that's fine.

he started it in his dorm room at university, at austin, right? >> yep. >> be on "squawk on the street" at 10:00 a.m. eastern time discussing the deal in an exclusive interview. by the way, do you remember when carl icahn said that dell was basically ripping off the shareholders >> i know. i wasn't -- you know, if you can do it, michael dell has made some great moves over his history. he keeps doing better and better i respect that >> you >> i respect it. >> before we move on -- >> i remember being more on michael dell's side at the time thinking that carl icahn was just trying to push up the price. >> right. >> i didn't appreciate what was clearly either knew or thought he could accomplish. >> yeah. >> have i been wrong all these years when i call you mr. sorkin is it mr. ross sorkin? >> mr. ross.

>> i mean, do you have a preference >> michelle caruso-cabrera. >> it's not a -- you go -- mr. sorkin is okay >> is ross sorkin preferable >> no. but dr. sorkin or professor sorkin is nicer. >> when you call a bald guy curly or something >> first half of 2018 in the books. what is next for the retail sector >> it's been a strong first half for retail consumer confidence is strong, unemployment is low. the strong economic backdrop, one input for the outlook for retail going into the second half from the summer on is where you'll fine the three biggest shopping holidays of the year. amazon's prime day historically in july, we don't know when yet. but we think we might know black friday and cyber monday fall in november double digit growth across the board for those three shopping

holidays analysts predict that prime day will play a big part in back to school sales for many parents. some wait until the fall either way, they predict the prolonged school shopping spending season, try to say that three times fast the cycle that began after last year's back to school season ended. next up, it's time for retailers to deck the halls. last year's holiday spending was stronger than expected making the bar that much higher for 2018 now as president, china, europe, canada threaten tariffs, holiday sales could end up a trade war casualty retail groups say tariffs are a tax paid ultimately by consumers because it increases the price of goods if americans pay more goods in the second half of the year, it could be the grinch that steals christmas. melissa, back to you. >> stick around, courtney. a closer look at retail in the second half of the year, randy connick at jeffrey

>> courtney mentioned the tariffs. i'm curious, when you think about tariffs and the tariffs that could be put on goods but u.s. consumers would buy, which ones are the most concerning to you in that the more they pay for, x, y, and z, the less they'll shell out for nike sneakers or whatever. >> look, the biggest risks are to the apparel and footwear spaces, 80% are produced in china. boat makers like brunswick that produce in the united states of america but also golf equipment companies are less exposed apparel footwear are most exposed. >> in terms of tariffs or trade war affecting the supply chain, if there's an increase in tariffs in autos, for instance, which we will see or likely see, does that make me more concerned about the companies you cover. are there certain goods that consumers have to pay more money out of their wallets for these goods that will make them less likely to

spend during the holidays. >> high average ticket goods will be an issue but our view is we're bullish on retail right now i cover apparel, footwear and a lot of sectors i actually feel good about the consumer now they're showing their ability to spend. they're actually paying up for things trading up haven't heard that word in probably 15 years. >> randy, what do you think about the fashion cycle. we hear a lot of people say that's benefiting some of the retailers, in department stores. yes, maybe their strategy is getting better, but they're getting lucky because the fashion cycle is something that people want to buy into. >> we have a denim cycle and color in the marketplace it's interesting that no one talks about companies are seeing store traffic improve while they're e-commerces businesses improve as well. tjx, plus abercrombie and gap and others doing well in the marketplace. the other thing, companies do well in retail despite amazon.

i think that's important shows you how strong the consumer is. >> for years, we would sit up here and all talk about how fashion was over that there were no new fashion trends >> right. >> people didn't care about fashion. all they cared about was experiences, all the money they had spent on clothes, they were now using for the iphone >> sure. >> was that a myth it was just an economic story, meaning the economy needs to come back or was there really some kind of fashion lull, all the fashion designers had decidedly become boring. >> we had some shifts. we have an athletic apparel cycle that took away from the denim cycle. we had a lot of hoopla around amazon they were taking market share. people thought the they were going to zero. retailers are fighting back, improving supply chains, consumer is strong not every single retailer is going to zero. there's a lot of rationalization

with the bankruptcy of toys "r" us that helps retailers get stronger and stronger as supply is taken out of the market. >> do you feel pressure as a retailer analyst to wear all that look at his cufflinks. look at the shirt. seriously, randy, you do, don't you? did you see jan nifen on earlier, he looked like tom wolf you guys -- the tech guys come in looking like bill gates, frumpy and -- >> wrinkled. >> i try to look the part. i try to look the part. >> i think that's appropriate. >> you've noticed, right >> he's a fashionable retail analyst. i have to say. >> you really are. >> the advice about socks or -- >> i can do both >> stocks and fashion. >> randy, thank you. randy koneik.

so tell me about that shirt. he will talk to you. is that a tom ford. >> are those american flag socks you have on? >> i try to be patriotic. >> can you get down there. >> he's sockless >> andrew is sockless today. >> i am sockless today coming up, when we return, commerce secretary wilbur ross joining us at the top of the hour to talk about trade and the president's tariff maybe he'll be wearing american flag socks as well and get more from carlos gutierrez. stay tuned you're watching squawk on cnbc when my hot water heater failed, she was pregnant, in-laws were coming, a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do. we called usaa. and they greeted me as they always do. sergeant baker, how are you? they were on it. it was unbelievable. having insurance is something everyone needs,

but having usaa- now that's a privilege. we're the baker's and we're usaa members for life. usaa. get your insurance quote today. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

welcome back to "squawk box" this morning time for the executive edge. dan loeb turning up the heat on nestle over the weekend. the activist investor urging the company to split into three divisions, telling its board to be, quote, sharper, bolder and faster in overhauling the company. criticizing the company for a lackluster effort to revamp its strategy nestle has initiated a large share buyback. a marketing deal with starbucks

and investment in blue bottle coffee the investments are not enough and failed to satisfy investors. stocks down for the year about 8% loeb is like back to the future. a classic loeb letter. dan has not written a letter like that for a long time. for those who enjoy reading these, you can google it it's sharp it's just a very sharply written letter >> what if both of those people are watching right now. >> both of whom? >> who are you talking about >> the two people interested in reading one of these. >> one of the loeb letters. >> they may not be -- may not have the tv on. >> after what he said, i might read it. >> all right let me see. >> i know nothing about it >> it's about him talking to nestle and what he wants nestle to do. >> dan famously has written letters to management where he

eviscerates them this is not the full-on loeb as i would say. >> half evisceration. >> it's sort of a half loeb. it's a good letter it's a good letter to read drake, in other news, dropped a new album over the weekend called scorpion. it was on spotify, apple music and amazon music 132 million streams on spotify and 170 million on apple music. >> huge at our house huge. >> really? >> you >> yeah. no not me i can understand how people like that. >> it's a lot of streams wow. coming up, it's jobs week in america. we'll bring you the results from a new survey that shows the highest talent shortage in the workforce in more than a decade. as we head to break, a quick check of the european markets. we're seeing pressure across the board here the ftse is down by a percent. the cap down by .9%.

more "squawk box" straight ahead. 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 near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. 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 &. & if your customer also forgets socks! & you could send him a coupon for that item.

looking for a hotel that fits... whoooo. ...your budget? tripadvisor now searches over... ...200 sites to find you the... ...hotel you want at the lowest price. grazi, gino! find a price that fits. tripadvisor.

welcome back to "squawk box. it is jobs week in america we have the results of a new survey that shows companies in

the u.s. and around the world are actually facing the highest talent shortage in 12 years. for more we want to bring in beck ry frankwoods thank you for joining us what's the problem >> good morning. thank you for having me. we're facing a new reality in the talent space of the american workforce. this digital age is giving rise to this growing divide between the haves and have nots. to get a current view, we asked 2,000 american employers questions. first, what's happening to your talent second, are there skills harder to find than others? and third, what are you doing about it 46% of employers are saying it's difficult to find the skills they need. that's up from 14% right after the great recession. over a 3x increase over that time we're definitely seeing the challenges of companies finding the talent they need >> let's just break it down in

terms of understanding what talents are needed and most importantly when you talk about the haves and have nots, this idea of reskilling workers the idea to take workers who didn't have those skills and get them into roles where they can fill some of these shortages >> let's start with what are the skills most difficult to find. topping the list is skilled trade jobs like mechanics, welders. followed by drivers. followed by sales representatives. those are the most difficult hard skills to find. on the soft skills side, we're finding that 61% of these employers are saying communication skills, written and verbal are the most important skills then in terms of your point of, okay, what are you doing about it how do you reskill workers many companies are investing in training and development that's up 35% in the last four years. up 7% versus just a year ago so companies are getting intine that you have to build your own talent as one approach to solve

this problem the second approach is you can buy your talent. you can go in the marketplace and actually invest in more benefits, higher wages, huge movement towards relaxing the standards around education and experience >> what do you mean by relaxing the standard >> yes, you might ask what does that mean. we're actually finding that the future -- because jobs are changing so quickly and the skills life cycle is moving so quickly that it's much more about what you can do than what you've done in the past. so the traditional way of i've done this my whole life is now a thing of the past. and we need to assess people on what they can do in the future so that's really around going in the marketplace and buying your talent then the third approach that employers are talking about in our country is actually borrowing the talent which is curating a group or community of professionals whether it's freelancers or independent consultants or temporary workers. curate the talent you need those are the three approaches. >> tin terms of relaxing the standar

standards, are you finding the employers are relaxing the drug testing standards. that's one that was found that they're willing to relax are you finding that as well in our survey >> yes, we are hearing from our current clients and honestly just starting to be heard that companies are looking at relaxing some of the drug screening. we're also partnering with a large manufacturer in the country on hiring non-violent ex-offenders when it comes to bringing people in the sidelines because we have a supply and demand problem in the country. >> you said 35% of companies were -- were you saying they are now spending money on reskilling that's up from last year >> 55% are now investing in training and development that's a 35% increase from just four years ago. >> what kind of money are we talking about total? >> yeah, i don't know the exact number, andrew but it's a significant investment and the real issue is or the real opportunity is we have to build our own talent we're not getting a new supply

of workforce in america. the workforce of tomorrow is actually the workforce of today. >> okay. becky, we're going to leave the conversation there happy july 4th thanks for joining us. >> happy jobs week next, trade wars heating up as canada imposes tariffs on american goods president trump reportedly according to an article which so many times has gotten pushed back, it's hard to see whether there's smoke or whether there's fire but maybe there is withdrawing from the wto wilbur ross might know something about this he will join us to talk about that and the president's trade policy when we return.

trade fight. canada retaliating against u.s. tariffs. taking aim at ketchup, whiskey, and soup wilbur ross will respond live. tesla hits its model 3 production goal and shares are jumping on the news. plus heat waves sweltering temperatures across the nation this holiday week as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc i'm andrew ross sorkin along with joe kernen and melissa lee. becky's off today. we'll talk about what's going on here in a moment, but the dow off 130 points nasdaq would open down about 40 points down. s&p 500 looking to open down

about 12 points. making headlines this hour, computer maker dell going public once again it is buying out the tracking stock in its cloud software unit holders can receive $109 per share in cash or the c-shares. michael dell will join the "squawk on the street" gang at 10:00 eastern time this morning. meantime, the european union has issued a warning to the u.s. of possible imp sigs on tariffs 37 if the u.s. imposes such tariffs, that would likely lead to countermeasures president trump threatening to impose a 20% tariff on all cars assembled in europe and exported to the u.s we're going to talk more about trade this morning with wilbur ross that's going to happen in just a couple of minutes. over the weekend kkr completed its transition from a

publicly partnership to a corporation. making it eligible to be included in stock indexes. in other corporate news this morning, tesla shares are rising elon musk says the company produced 7,000 cars. this included 5,000 model 3 cars so tesla beat the self-impoessed deadline for the mass market sedan. shares up by almost 7% this morning. >> i haven't seen any of those >> the model 3 i drove one. >> you drove one but they're not around >> we should note the model 3s being produced are not the $35,000 versions the model 3s are still the more expensive ones tricked out at these higher premium prices. which elon talked about the needing to produce the more expensive versions for the next couple of months before he can get to the $35,000 version which is the key to the whole thing on

a long-term basis. let's get to our next guest. he joins us from london where he's setting the president's agenda u.s. commerce secretary wilbur ross joins us this morning the first question, how do you expect the reception to be like so many things we don't know, we only hear what we're told here. there was a big brexit win there, i would imagine the perception that he's not going to be welcome in london, i'm not sure that's the case or not. can you tell us anything on that >> well, so far london has been very welcoming to me so i can only speak from that limited experience we'll see how it goes. it's going to be fairly brief trip to here because as you know, there's a nato meeting there is the big meeting in helsinki there's a lot of stuff going on. so i think we will have to play it by ear. >> the president tweeted

congratulations to the new president. i guess he's president-elect of mexico we haven't decided whether to call him president lopez obrador or amlo. whatever you say is what i'll do but what's that going to be like can you tell it was a very nice tweet that the president sent what's this guy all about? he has moderated some of his leftist views, but what are we going to be dealing with in terms of nafta and everything else >> well, clearly the reality is that mexico needs some sort of an arrangement with the u.s. where the vast bulk of their exports and they have a huge trade surplus with us some 70-odd million dollars but overall they have a trade deficit. so they need very much their

involvement with the u.s we think he understands that and it's really a question of when will the talks resume. will he use the foreman negotiators? will he pick his own people? how will the agenda work out those are a little bit unknown as of the moment but as i say, the reality is they need an arrangement with the u.s. >> wemay come back to nafta. they got so many things to talk to you about today you're famous for holding up the can to kind of show that it was not -- the effects might not be as big as what you read about. then in the media, got a lot of play, the 21,000 companies have already petitioned to try to get waivers on -- you know, we need to train people just to consider the waivers for some of these tariffs. and they're talking about layoffs, they're talking about bankruptcies, closing down is there -- i mean, what should

we -- when we read that, should we think it's more than just a can or more than just, you know, pennies that we're talking about here >> well, quite a few waiver requests have come in. more actually than we had had anticipated. part of the reason for that is a lot of businesses are kind of gaming the system. anything that they import right now in the way of steel or aluminum, they might as well put a request in and take a chance that it'll be granted. so i think there's a lot of duplicative activity one individual company put in itself over 1100 requests. hard to imagine that that company really has more than 1100 products than are simply not available in the u.s. market but we are dealing with them we will deal with the requests even more rapidly had congress

appropriated the money we requested. they did not they gave us a small fraction of it and they delayed even that quite a bit. so that has resulted in a bit of a backlog. but we now have gotten to the point where we're processing things more rapidly than the inflow of new exclusion requests so that backlog will start coming down. hopefully at a pretty rapid clicli clip >> at some point i want to talk about the journal's got a piece on they think it's a winning issue for the president with auto tariffs i want to talk about upcoming china tariffs that are going to happen then about withdrawing from the wto. >> there's no sound. >> did you lose audio, wilbur, or not can you hear us now? i don't know whether we lost audio or not it wasn't the question, right?

>> no, no. it wasn't. we do need to talk to him about the wt o rko. one of the things i want to talk to him about is the china and cfius situation. there's still two ways to read the cfius situation in my mind one is still backing away from a hard line stance the other is this is a hard line stance without saying it's a hard line stance which is to say it gives you all sorts of flexibility to be as hard line as you want to be. >> if you tried out something that's even harder and pull it back a little bit, it doesn't make it less -- >> but there's a separate issue which you're a ceo in america today, without the bright lines to some degree there's even more uncertainty. meaning do you go for it and try to do a transaction? do you not know what's really going to happen on the other side these are things i want to talk to him about given the fact he's lived through some of this i don't know if we got him back or not >> well, this is where we can use some of our expertise.

because i'm going to use the word efforting have you used that word? >> on tv live on tv no >> because it's not a word but you see these reporters using it we are efforting to get back into his ear which involves phoning and redialing and everything else. so it's not happening immediately. so this gives us an opportunity -- we're going to effort to make some money and go to a commercial break. >> yes commercial break right now we'll try and bring ckba commerce secretary wilbur ross on the other side. stay tuned

let's get back to u.s. commerce secretary wilbur ross i said about six things. i think we lost you, wilbur. i said we want to talk about the journal piece. >> yes, you did. i hope it wasn't an editorial comment. >> no. we thought you did that. like, oh, gee, i can't hear anything did he ask me about the wto withdrawal no where do you want to start does the president think that auto tariffs are a good way to hammer his point in the eu that's the journal piece talk about that to start andrew wants to ask you about the cfius stuff. and i wasn't here last week for a lot of your analysis but is that in the president's mind, he thinks he wins a trade war with the auto issue in europe

>> well the auto 232 investigation is just underway we've asked public commentary. we got a commentary from the european commission just this morning. and we're getting lots of commentary from other participants the next phase will be toward the end of july. we'll be having two days of public hearings. and then after we've collected all those data, then we will start preparing the rural rouep preparing recommendations. so it's quite a bit premature to decide how the report will come to a conclusion. >> and how about -- i mean, someone's going to ask you about the wto dpo you know what's goin on doesn't congress need to -- wouldn't they need to be involved with that is it really possible to withdraw is the president just blowing off steam when he gets -- at some of these jonathan swann

cited sources saying he really wants to do this do you know? give us the inside scoop on that, wilbur >> well, we've made no secret of our view that there are some reforms need ed at the wto. in fact, i was on panels both in davos and the world economic forum and at the oecd in paris a few weeks ago. wto knows some reforms are needed so i think there really is a need to update and synchronize its activities and we'll see where that leads but i think it's a little premature to talk about simply withdrawing from it. >> go ahead. >> mr. ross, i wanted to ask a broader question as all of these go on as we levy tariffs, et cetera, i know you in the administration have made the point the economic hit based on tariffs alone is small to the

u.s. economy and perhaps we're in a position after strength to deal with a trade war or tariffs at this point. but the concern on wall street at least for stock investors is that it's not just the direct hit the tariffs will put on the economy. but it's also this period of uncertainty. and the longer this goes on, the more uncertainty there is. the less businesses are willing to commit to investing capital and that even a small economic hit could mean a bigger hit to the u.s. stock market. the stock market has always been a score card for the administration how much pain are you willing to endure on that front >> well, capital expenditures actually have been very, very strong and so has capital repatriation from abroad. and the first three months after the tax bill alone, $300 billion was brought back from overseas capex is very strong employment is very strong.

unemployment is so low that we now have more jobs available than there are total unemployed people the first time in history. so we don't see any signs right now of any weakening in the economy. we think the june quarter will be a very, very strong quarter well above 3% and maybe even pushing closer to a 4% annualized number. so i think all these claims about the sky is falling are at least premature and probably quite inaccurate. >> to that point, mr. ross, yes the data has held up but the stock market has not the s&p is down 5% as a forward looking mechanism, the stock market is anticipating trouble ahead. is the administration not concerned about that at all? we've seen an increase in volatility as well in the past few weeks. >> well, the stock market hates

uncertainty. in fact, business hates uncertainty. everybody hates uncertainty. and the worst fear is the fear of the unknown but eventually the arithmetic prevails, facts prevail. and fears either are realized or they go away >> what's the number, wilbur that's the question with melissa. i'm not sure how much of it is directly discounting trade wars, but there must be -- i mean, is there a notion that you've got 40% to work with on the gains or 35% since the election and you won't be -- if we got to 20% down from the highs, would you at that point think maybe we're inflicting something with the stock market become something at that point >> well, first of all, the stock market is still well up from where it was before -- >> let's say it wasn't let's say it was down 20%. let's say it went 20% off the

highs if this continues. >> there's no bright line level of the stock market that's going to change policy the president is trying to fix long-term problems that should have been dealt with long time ago, weren't and there obviously is going to be some pulling and tugging as we try to deal with very serious problems so there will be some hiccups along the way. >> so there is no bright line. subpoena there is there a dull line i guess investors want to know whether or not the administration will pursue this at all costs or if there a is line in the sand even if it's not a bright line if they say you know what? this is not worth it investors want to know whether the administration has got a put under this market when it comes to the trade wars and the impact in the markets >> well, the last thing we're going to do is to announce that there's a certain level in the

stock market that will change policy that's not -- >> whisper it to us. >> that's not how you make policy you have to make policy based on what's fundamentally good for the economy, what's fundamentally good for the long-term. you can't deal just with day-to-day stock market fluctuation. >> i want you to help take us through the thinking on last week regarding china, intellectual property, and ultimately using cfius rather than some bright lines that might have been enacted. some of the market took it as a little bit of a step back in terms of how the government was approaching it others said, look. cfius actually gives the government flexibility maybe to do things in even more aggressive ways. but in a context that doesn't feel that way. what do you think is going on?

>> we think that the various legislative versions that are going through congress right now are very good pieces of legislation. and we think that they give us plenty of tools to accomplish the purposes that we want to accomplish so we think it's a very good example of where we can work in a collaborative fashion with the congress and achieve our collective end >> but does it create more or less uncertainty because without those bright lines, if you're a ceo and you have been for a number of years, in ideas of trying to prevent a joint merger, this changes that calculus without knowing exactly where the line is, right >> well, the two bills, the house bill and the senate bill, are relatively similar so there shouldn't be an awful lot of confusion on the

legislative side in terms of filling in the blanks what industries will be affected, as you know, the president designated that the commerce department should do the research about what names should be added. what categories should be added. so it's not going to be wild deviation from where we've been. but there will be a heightened emphasis as there should be on intellectual property and on high-technology products in fact, it's an interesting symbol of the importance of that a couple weeks ago the president presided over a ceremony where we issued the 10 millionth american patent. no country has come remotely close to 10 million patents. and that simply emphasizes the critical importance of intellectual property and especially the technology part going forward. >> hey, wilbur, real quickly

just to clarify once again with this crazy -- i saw the three democratic senators introduced something about the short sale last thursday. when you do a short sale, you don't own the stock. you short it and then you cover later by buying the stock to cover your short position you didn't have a second trade to cover the trade they're talking about, you own the shares but weren't in possession of them. so you sold. and you didn't have to cover the short. all you did was provide the shares you had to cover that position that you borrowed am i correct on that then why do they keep -- why does it keep talking about -- i mean, you did benefit from selling the stock before the negative article, obviously. but it's not strictly speaking shorting the stock right? >> no. it certainly was not all it was was a technical thing because i didn't have physical possession, didn't know how long -- >> they're still saying you did

though they're still saying it in the -- i don't understand it >> well, fake news >> all right i wanted to get you to say those two words once either way, secretary ross, once again we appreciate all your time this morning. such a wide array of subjects. >> thank you sorry we had the telephone disconnect >> you should have -- >> i hope you got your questions answered >> you should have saved the i can't hear to that short selling thing again. that's when i would have -- i would have pulled it out for that question. thanks, mr. secretary. coming up, the buzz story of the morning. lebron james is heading to los angeles. the details on his payday when "squawk box" returns are you done yet?

does it look like i'm done? shouldn't you be at work?

[ mockingly ] "shouldn't you be at work?" todd. hold on. [ engine revs ] arcade game: fist pump! your real bike's all fixed. man, you guys are good! well, we are the number-one motorcycle insurer in the country. -wait. you have a real motorcycle? and real insurance, with 24-hour customer support. arcade game: wipeout! oh! well... i retire as champion. game hog! champion.

welcome back to "squawk box" this morning the king is headed to l.a. lebron james signing a four-year contract worth $154 million with the los angeles lakers last season he appeared in the nba finals for the eighth straight year where the cavs were swept by the golden state warriors got to figure out what's going to happen to the cavs next >> and, you know, he was scoring like 50 points per game.

still got swept. so it probably isn't a huge -- you know, not necessarily the money, right it'd be nice to go where you really got a shot. >> where you got a shot to win >> it's going to be good though. this will be good for the nba. coming up, this morning's top corporate stories including tesla hitting a self-imposed production target. plus a heat wave sweeping across the nation before the july 4th holiday. when "squawk box" returns. you always pay your insurance on time. tap one little bumper and up go your rates.

what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. but prevagen helps your brain with an ingredient crowne plaza. originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square among the stories front and center, summer is here most of the country baking this week under a sweltering heat wave nbc's blake mccoy joins us live from new york central park it is july, right? >> reporter: yeah. breaking news, it's hot in july, right? look at all these folks behind us people out early trying to beat the heat

we have now reached full blown heat wave status in a lot of the midwest and the northeast. we're talking places like chicago, philadelphia, boston, and right here in new york city. to qualify as a heat wave, the temperature has to be at or above 90 degrees for three days in a row or more we are now there this morning about 60 million americans are still under some sort of heat advisory or warning. at the nascar event over the weekend, it was so hot in those cars 108 degrees inside the cars as they were doing nascar outside of chicago one of the drivers chase elliot actually got out of the car when he finished the face, wiped the sweat off his head and walked straight to an ambulance to get more fluids. that's how hot it was. it's going to persist through the first part of this week. >> like, they're two inches away from the other cars going 190 and it's 108 degrees >> reporter: and you can't turn on the ac because you can't take away power from the cars

i don't know if they even have ac >> that is nuts. i did see something weird, too, blake. to just judge whether temperatures are really that much hotter globally than ever there, i think oman is where the highest temperatures are recorded and for the first time ever, the lowest temperature of a 24-hour period was, like, 109 or 108 or something. and that's -- even middle of the night. middle of the night and it broke another oman record. i think it was oman. anyway, thanks keep us informed and it's already hot today, isn't it i can tell >> reporter: yeah, it is hot out here i guess if you want a put a business angle on it, ice and water sales through the roof in the tri-state area >> there you go. now we're going to talk about water bottles and what to do with those and straws. >> it's a whole other thing. >> all right thanks, blake. we'll see you again. meantime, global news for

you. mexico has now elected a leftist and anti-american historically what does this mean for nafta and oil investments? michelle caruso-cabrera is back with a look at the implications. do we call him president amlo? how do i do it just aamlo >> i think you just say amlo. >> not president amlo? >> i'll see how it actually works out. but president amlo might work. >> they don't do that with president trump. they jus call him trump. >> we're talking andres manuel lopez obrador. when the polling numbers came in, he was very well ahead much to the left economically. very much a nationalist. on social issues, he is to the right. libertarian nightmare. big landslide victory. he'll get inaugurated on december 1st what we've seen in mexico,

establishment powers were trounced thus with the counting in he's got 54% of the vote and the other two establishment parties who have ruled mexico in the last hundred years, only 23% and 15% respectively once again, throwing out the establishment candidates we care very much about what he's going to do when it comes to the nafta negotiations. in his speech last night, acceptance speech, he did not mention trump or nafta we'll see how that plays out wilbur ross also took a wait and see attitude when he was on a few moments ago. other issues we really care about. he's talked about rolling back the oil reform which allowed into the oil sector. they need it take a look. this is what's been happening to oil production in mexico mexico used to produce 3 million barrels a day. they need help on deep water they need help on improving what's going on there. and it had been completely controlled by the state for 70 years. foreign investment was finally going to help them turn around

the production rate. the other issue that is a big deal for us, i think, we haven't talked about it as much is can they re-establish law and order in mexico? the homicide rate is through the roof take a look. record number of homicides year after year after year. the column on the right looks short because that's only 2018 year to date if it continues at pace, it's going to be another record-breaking year for murders. look at this 120 of them. if you can't beat them, kill them is essentially what happened >> i have one other thing to ask you. so the idea is that there hasn't been according to i guess a lot of people in mexico, enough progress on helping people that are poor in mexico >> uh-huh. >> i read 125 million people half of which are below a certain level of income -- >> there's still very much endemmic poverty they're still the lowest >> more entitlement?

more social spending is it a possibility this ends up where a similar situation in venezuela where you cut off your nose to spite your face? >> we wait to see. is he going to be chavez or lula of brazil. a lot of promises about changes that were coming to mexico have not lifted people as much as has been desired. i would argue the reason for that is the fail ed education policy the education in mexico is horrific it's controlled by unions in a very terrible way. and you look at the number of people who actually go to high school in mexico, it is 53% of people in mexico actually attend high school. the oecd average is 84%. china is worse than mexico, but that's -- >> this is on immigration but even some are coming from south of mexico. >> from central america. productivity levels haven't

moved in mexico for 20 years that's because education is horrific when you look at american productivity versus mexican productivity look at this look at this productivity prosperity it's terrible. >> paul krugman could make the case they tried the private sector guys for the last 20 years and got nowhere. >> i would disagree. i would say there has been an emerging middle class that has happened the democratizization happened those things happened not fast enough and education is the biggest problem for sure it's still controlled by the unions >> thanks, michelle. >> see you later shares of tesla are jumping this morning afterest lon musk announced they pushed out 7,000 cars last week meeting its model 3 goal phil lebeau joins us if there were word smithing involved in this memo to employees. he said they front gated 5,000 model 3s but hit the production

targets for the model s and xs why the difference do you think in the verbiage? >> this is a company term that they use for production. we specifically asked the company did you produce 5,000 model 3s and the company said yes, they were produced. they've been inspected this is not the shell of a car and said it was produced or elon musk used the terminate factory gated. they're saying they built the vehicles here's an e-mail he sent out early sunday morning not only did we factory gate 5,000 model 3s, but we also achieved the s and x production target for a combined 7,000 vehicle week along with that e-mail was this picture of the 5,000th model 3 after it was built

it's dark, but you can see it says on the windshield, 5,000th. so that's the company saying early sunday morning, it had built 5,000 of the model 3s in one week not only that, in the e-mail and this might be more significant, elon saying what's more, with the widespread productivity gains throughout tesla and the new production lines spooling up, we are on track to reach 6,000 per week for model 3 next month. some of that coming from a makeshift tent the company built three or four weeks ago. this is where they put the third assembly line for the model 3 as they were cranking up production that clearly is going to stay for some time. it's not like they're going to take it down and elon musk putting in that e-mail we expect to build 6,000 per week some time in the next month. yes, they are moving higher. we get the second quarter delivery numbers later today or tomorrow

usually happens within the first couple of days of the third quarter. we'll see what they had to say in that note when they announce the full deliveries for the second quarter back to you. >> all right thank you. phil lebeau in chicago for us. let's get back to the broader markets now. off the session lows the dow looking to open lower by 139 points s&p looking down 12.5. joining us is investment strategist at blackstone and chief investment strategist at nuveen glad to have you with us brian westbound i' brian, i'll kick it off to you how are you assessing the risks here going into the second half of the year? >> our mid-year outlook is still risk on. we think the fundamentals, the strong u.s. economic data, the strong earnings numbers that we think we're going to start to see in the next few weeks outweigh the risks from trade. certainly it feels like those trade risks, those trade

protectionist risks are linking into psychological in a way we didn't anticipate a few months ago. >> why are you so confident the risks will be contained and offset by the fundamentals like earnings numbers when earnings numbers and earnings reports haven't done much for the market so far this year even though they had been strong >> where these two things meet for the second quarter is going to be what do companies say about what they're going to be doing with this extra tax money that they're still getting are they going to be using that to invest or are they going to pull back on capital spending because they're concerned about things like where am i going to build goods overseas >> how are you feeling these days, joe? >> we're pretty bullish. we think the second half is going to be good for equities. in a couple words, it's what brian just mentioned analyst expectations are about 20% earnings growth year over year that's similar to what we saw? the first quarter. if you look at what the market did, i think if you ask the average investor about the market performance in the second

quarter, they're going to describe it as something fraught with risk and trade and everything else. it was a good environment for the s&p, but you saw small cap beat large you saw small value beat growth. you saw energy discretionary and real cyclical sectors beat defensive sectors. if you step back and look at that market performance, it's really consistent with an earnings driven bull market. in other words, the headlines are telling us there's one risk out there with trade if you look at what was happening in the market, it's telling you that equities are behaving the way they should >> when i look under the hood of the market, what it tells me is the top ten stocks in the s&p 500 are accounting for most of the gains for the year the top four stocks on the s&p 500 were 84% of the s&p 500's gains in the first six months of the year so those performances being put in really masking what is happening overall in the stock market aren't you worried that all these proclamations, it's the

top ten companies doing exceptionally well >> the russell 2000 was up almost 8.5% in the second quarter. value companies are more exposed to it, they're more cyclical if you actually look at kind of among the smaller caps and things like that, it's telling a pretty good story. that concentration of performance among the top four s&p 500 companies, that is a little bit worrisome that is one way the market says, like, hey, earnings are going to slow or we're going to have some problems as we concentrate that leadership but i think once you take a cut below that, you know, the energy outperformance energy was up about 12% in the quarter if you look at the earnings, energy actually had the strongest earnings revision out there. so i think it's actually all pretty normal. you know, the bigger concern is this disconnect in the bond market where the treasury yield peaked at about 3.1% in may. now it's trading off at about

2.82%, 2.84% there is where you're seeing the concern over trade that's something that has us worried because i think the market is saying that could slow but in this case i think the market is wrong. >> do you think it's because of trade concerns or what the ecb is doing >> i think it's to keep the interest rate that low we're at nominal gdp growth. it could be as high as 6%. we have a 10-year that's about half of that so yes certain ly demand coming from being lower elsewhere i think we will see interest rates move up before the end of this year. >> you're chief investment strategist >> yes >> what's bob doll >> he's chief equity strategist. >> who reports to whom >> neither reports to the other. >> are you broader

>> i work in cross assets. u.s. equities, international stocks, bonds, real estate >> okay. well, let's say that you feel -- let's say bob, you know, every once in awhile he'll get a little less bullish and i have to hold his feet -- >> you call each other >> right so who -- can you tell him get more bullish or can he tell you chief investment strategist seems higher than equity strategist have i got this? >> doesn't quite work that way we have equity business that he reports into >> what about? is there a -- >> not going there >> when you said that, he -- >> oh, i was going to scratch. >> don't want to get in trouble. >> do you say optimistically cautious or cautiously optimistic because he alternates. >> i think cautiously optimistic >> okay. >> thanks. coming up when we come back, they call them and i should say

this is vetrepreneurs. they support military veterans in the business world. when "squawk" returns a this

the country gears up for fourth of july celebrations, one group of americans are gearing up for their business supporting veterans with a business idea to become successful entrepreneurs joining now with more on -- how are we describing this >> vetrepreneurs >> when i said it, it sounded like -- >> veterinarian. that's not it. >> vetrepreneurs mark served in iraq until 2008 we welcome you to the show you also brought beer which i want you to explain. i don't know we can drink this early in the morning. >> it's 5:00 somewhere, i suppose. but the street share foundation has partnered with sam adams just a great american brand. to support veteran entrepreneurs or vetrepreneurs as we call them we're giving $25,000 away each

quarter to support these veteran entrepreneurs as well as speed coaching events. >> is the idea to get to hire more veterans or support veterans who want to become entrepreneurs and start their own companies? >> it's the latter so we're supporting veterans to become entrepreneurs veterans make great entrepreneurs, right they enter entrepreneurship at a rate of 45% higher than non-veterans once they're in, they succeed at a higher rate as well. the challenge, though, is if you put yourself in their shoes, they were overseas fighting in a foreign sandbox. they were not here building the network and business contacts they need to succeed and so the mission here is to provide them with mentoring, a network and the funding they need to get. it's a major component >> so you're providing loans >> no. >> you're providing equity what's the setup >> street share provides grants. >> straight grants >> yes. >> so you're not taking a piece

of the action and it's not a loan on the other side >> that's right. >> and the amount is >> $25,000 each quarter. sop four times a year. >> to multiple different entrepreneurs? >> we run a contest. it's a lot of fun. they apply with a video. we pick the top eight or ten finalists. then the public picks the winners. first, second, and third place so it's a contest once per quarter to give these veteran entrepreneurs the seed money they need. >> what's the most recent business you funded? >> last quarter we had one called call sign brewery which is launching here in about a month in kansas city this is a veteran who started a brewery, so a great fit for our partners at sam adams. each of the beers is named after the call sign of a downed aircraft so military aircraft all have a call sign while they're flying if they go down, if they crash, that call sign is sort of memorialized and so each of his brews is named after one of these

call sign brewery, steve siroy out of kansas city >> this is a good blueprint. i wish the private sector would get involved with this we have a brokerage firm that hires vets but we just -- we all look at the situation and, you know, we hope that the veterans administration gets, you know -- plug some of the horrible things >> what's your experience dealing with venture capitalists on this? >> in raising money for my own company -- i'm a veteran myself. i was in the air force for nine years. came back in the summer of '08 so the crisis was just kicking off. bear stearns had collapsed when i was raising money for my own business, i said, hey, i'm going to go out and fund veteran entrepreneurs. so on the for profit side that's what i do. i lend to veteran entrepreneurs at street shares and i was meeting with a west coast venture capitalist and he

said, are you sure you want to do this? aren't these folks more risky? you know, ptsd and all of this he is glad i was in the air force and not an army or marine guys because some of my marines would have punched the guy in the face i've got to be honest. that is soinfuriating. that is taking the standard stereotype that is not true and perpetuate it. veterans make great entrepreneurs. they're so gritty. they're so tough no matter what you did in the military, you've been through some crucible experience some basic training difficult type experience. so veterans don't give up. right? and businesses -- small businesses female for one reason and one reason only. that's because the entrepreneur gives up everything else you can solve with time and money. veterans don't give up they're fantastic, gritty entrepreneurs. so we fund them on the street share side and give them grants with sam adams on the foundation

side. >> it's a great message. we're glad you're doing it come on back we like to hear success stories. appreciate it. >> thank you coming up this morning, stocks to watch. "squawk box" will be right back. but popping these things really helps me...relax. please don't, i'm saving those for later. at least you don't have to worry about renters insurance. just go to geico.com. geico helps with renters insurance? good to know. been doing it for years. that's really good to know. i'll check 'em out. get to know geico. and see how easy homeowners and renters insurance can be. yes or no?gin. 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 twirling cards e*trade. the original place to invest online.

i know, right. we are seriously ikeeping up with the joneses.. i know, right. we are seriously keeping with the anderson's. we are finally keeping up with the ford's. keeping up with the garcia's. keeping up with the harvey's. keeping up with the wahh-the-wahh the romeros. carters. patels. the allens. wah... wolanske's. right, them. no one is going to have internet like this. no one is going to have internet like this. gig to more homes than anyone. not just the joneses'. over here. xfinity. the largest gig-speed network. all right. today's stocks to watch, wells fargo is upgraded to equal rate from underweight fargo's passing grade removes a

join downside concern. we're going to go back to break one more time and then come back for the 8:00 coming up in the 8:00, canada retaliating against the u.s. tariffs. among the targets, ketchup a live report from a kraft heinz plant in ohio. that's next. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

you'll only pay $4.95. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.

trade tension. markets in the red as the eu threatens more retaliatory tariffs. >> there's no bright line level of the stock market that's going to change policy >> the news-making comments from commerce secretary wilbur ross straight ahead dell will be a public company once again the computer maker buying out its vm ware tracking stock and hello, hollywood lebron james is heading west to the l.a. lakers. details about the big money behind the big move coming up as the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box.

>> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with andrew ross sorkin and melissa lee. becky is off today mr. ross, mr. ross sorkin, or mr. sorkin you decide >> this is in reference to amlo. you can just call me ars >> we do call you ars. you're a huge ars. >> you said amlo >> you can go with ars but not -- >> not the ars >> no. >> i don't even want to give you this jrk. >> yeah. you're right >> no comment. >> i forgot about that >> i'm an idiot. why do i even -- the futures right now indicated off -- >> thanks. >> you're welcome. >> even better than yours. >> down 127. or joe ker people go with that. >> the other is better

>> 128 or so treasuries, it's not a silver lining but we certainly aren't at 3.5% yet. we're at 2.83 tr%. for people that thought we were, you know, adding gasoline to an already hot economy with tax reform, maybe that's the time. i don't know how i feel about this i'm swayed sometimes on both sides of whether now is the time to address some of these inequities or if it's always a bad time to start a trade war. i don't know do you do you have any doubts -- you're a democrat you're supposed to like trade wars the democrats in ohio, they like this stuff yet i can't even get you on this one to come over to -- you're not sure >> you know what the issue is? >> you're not a big private market guy >> that's the biggest issue. meaning we all know what the end

goal is. it's how do you arrive at that end goal without upsetting the entire world order >> no matter what you would upset the world order. that was built on what exists now. right? all right. news alert here. nestle is in reports to acquire a majority of champion pet foods for more than a billion dollars n that is according to "the wall street journal." comes as dan lobe is pressuring the company to split into three divisions. by investing in areas like pet care, bottled water, and coffee. new this morning, computer maker dell is going public witness again. it is buying out the tracking stock in its cloud software unit vmware shareholders could set $109 in cash or the newly created class c shares you wouldn't want to miss an exclusive vinterview with michal dell on "squawk on the street" to discuss this deal trade tensions heating up.

the eu planning retaliatory tariffs in the u.s. moves ahead with new duties on european cars the eu sent a written statement to the u.s. commerce department outlining its plans to respond the eu could impose as much as $300 billion in tariffs according to that document commerce secretary wilbur ross joined us in the last half hour. he responded to this report saying the u.s. investigation of the automarket is still ongoing and it's premature to make any decisions on the auto tariffs. we asked him about reports president trump wanted to withdraw from the world trade organization here's what he had to say. >> wto knows some reforms are needed so i think there really is a need to update and synchronize its activities we'll see where that leads but i think it's a little premature to talk about simply withdrawing from it.

>> drafted a bill to declare the wto rules. we got a condiment stuck in the middle of trade tensions canada slapping a 10% tariff on imported u.s. ketchup. seema mody is live at a kraft heinz plant. ketchup or catsup? >> reporter: here's the story, joe. canada retaliating with tariffs targeting of all things ketchup. specifically kraft heinz iconic tomato ketchup we're at the larnlest ketchup plant where over 2 million bottles are produced every day right here in these small industrial town of fremont, ohio the strategy is twofold on

canada's part. not only does kraft heinz dominate 70% of the canada ketchup market, but this is a politically sensitive state. it almost always determines who wins the u.s. presidency we spoke with residents of this small town, many of which are president trump supporters who say this ketchup plant is a big source of jobs for people who live here. >> kraft heinz is a very big impact on this economy in fremont, ohio. it is the mothership of all kraft heinzs it makes the most ketchup in the entire united states very big >> heinz is a staple in fremont. they've been here for years and years. as long as i can remember. and i'm pretty old is. >> reporter: republican senator patrick toomey in a senate hearing last week expressing his concern about the impact of those canadian tariffs on kraft

heinz. experts now say that kraft heinz has to decide soon on how to respond to this 10% tariff on ketch ketchup. absorb the cost or pass it on to the consumer but this latter would be risky while heinz is the market leader in canada, it is facing rising competition from frenchs who is a made in canada alternative to kraft heinz which is imported from the united states overall, kraft heinz sees canada as a big market for all of its products making sellingover 2. billion products to canada last year back to you. >> yeah. frenchs has ketchup too. that was a weird hybrid there we heard. he said ka-chup. >> reporter: did he? >> did he say catsup >> i think he said catch-up. >> all right

it doesn't matter. i do like it you know what? it's not a big calorie problem, really >> sugar >> it's true >> sugar >> and salt. sodium, too. >> but it's not like dressing. think mustard is like a zero and back to after a week -- you know, four of five days -- oh, jesus. not weight watchers. but after italy, it's -- i'm out of control do you know you could have carbonara three meals a day? >> i know. yeah >> it's possible it is possible it is possible to order carbonara first thing in the morning. you know what else you can do? you can do it as a starter or as a an entree. i did both >> you had it as a starter and entree >> if i didn't have it as an entree, i had it as a starter. >> we're going to talk about carbonara and trade now. if we can. and mexico, by the way

we're joined by former commerce secretary and national foreign trade councilman carlos gutierrez. good morning you can weigh in on joe's dieting choices in italy if you like but i really want you to weigh in on the election of the new president in mexico and what it means for nato >> look, there's been a lot of speculation about -- >> not nato. nafta. i said nato. nafta. >> it's all tied together in this global world. you know, there's -- i heard the discussion about whether he's lula or chavez i think it's somewhere in the middle he reminds me of a mexican politician of the '70s and '80s. he talks about self-sufficiency. a lot of distrust against u.s. multinationals very nationalistic very populist, left wing so in many ways, it's going back

to the era before nafta in mexico and i don't think he's going to make the negotiations easier because a lot of what he would like to do will bump up against nafta. so this is not a good event here >> some would say, though, that amlo might want to improve the conditions of the working class by increasing wages which would then make mexico less competitive as a next site for a u.s. factory wouldn't that play into the u.s. in terms of what we want to accomplish out of nafta? >> well, i'm sure there'll be a lot more pressure from labor i think that's something that will come out of an amlo administration i don't see wages rising so much that mexico starts inching closer to the u.s. but there will be populist policies more social spending

unions will be more powerful he may roll back energy reforms which are a big -- which would be a big problem, a real shame he may have regulations against multinationals go back to, perhaps, in some areas, price controls. so we're talking about mexico before nafta and it's very ironic because this is happening right in the middle of these nafta negotiations he's not going to back away from his instincts. and hiss instincts are anti-populist, left nationalists >> i want you to weigh in on the other news of the morning. we talked briefly to secretary ross about this. he suggested, by the way, these reports were premature this idea effectively of ripping up the wto or getting out of it. what do you make on that >> i'm glad he clarified it's not a done deal. that would be the collapse of

the world trading system the problem is we have nothing to replace it with so it would be the wild, wild west everyone decides based on what is good for them at a given moment and we've just taken the world back, you know, five, six, seven decades. so it would be extremely unfortunate. we have so many wto demands and so many complaints that if the u.s. rules against the wto, that will motivate president trump to do something i hope we can keep cool on this one. that plus the auto tariffs i'm glad success tear ross said that wasn't a done deal. nothing is as big as this 232 on autos. if that goes into place, then we're going to have tremendous ripple effects throughout the economy. >> what do you think the answer is on the autos?

how do you get what you want without a trade war? >> well, i think you've got to go to specific trading partners. so the president is not happy with germany and look our two largest imports are bmw and mercedes he should go negotiate with germany. if there has to be some friction, there will be. but not take on the whole world. what essentially it would be is every single car plus spare parts and supplies of automobiles would be taxed that's a tax for the whole world. and especially for u.s. companies. so i would say surgically, if this is a big deal for the president, he wants to make this a big priority go to germany. talk to germany and talk to them >> we've got to go, but i need you to weigh in on one thing the decision last week to use

cfius when it comes to intellectual property in terms of dealing with china. are they backing away from a more aggressive stance in terms of bright lines? or is this a way to do the exact same thing with the different name >> i think they're backing away from the broader investment restrictions where a u.s. company could invest, what partners they can have just a broader control and they're back to expanding cfius. so i think it's actually a good thing. because there were two aspects one was cfius reform and the other one was investment restrictions they've backed away from the investment restrictions and they're focused narrowly on cfius. i think that's good. >> okay. we've got to leave it there. happy july 4th >> thank you just a quick explainer ketchup, catsup, they're the same thing different spelling but same condiment which was first introduced in europe as ketchup. but it was a paste made from

fermented fish guts. so it has come a long way. until 1970, both terms were pretty close ketchup totally took over in 1970 and the only time you'd write catsup now is if it was with a specific type of product. and i was just looking at this and i saw mr. burns on "the simpsons" saying i'm shopping. he went shopping once and they have a picture of him looking at catsup versus ketchup and he's totally at a loss. like i am. anyway, coming up, president trump -- you got this now? it's ketchup seema was right all along. president trump sending a tweet over the weekend that has oil watchers on high alert details next you always pay your insurance on time.

tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782

on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

well, it's a whole day's worth of love songs. 300 minutes of baby videos. or, it's a million chat messages. a gig goes a long way. that's why xfinity mobile lets you pay for data one gig at a time. and with millions of wifi hotspots included, you'll pay less for data. it's a new kind of network designed to save you money. click, call or visit a store today. welcome back joining us now on what we can expect at the gas pump during the holiday season this week is patrick de han he is head of petroleum analysis at gas buddy in the last week, it's gotten a little scary again for crude i bet we haven't seen it yet then you combine that with july 4th. what's your estimated average price, patrick

>> i think we're going to get very close to $3 a gallon again in a matter of a few weeks we've seen crude oil pop back to $74. as we hit the road for july 4, it's going to cost more. look for us to get back close to the $3 a gallon average. we hit $2.98 around memorial day in may it's going to get uglier here in the summer >> do you think that job owning can help here? seasonal factors make all the difference, don't they it's going up no matter what we hear from saudi arabia or president trump. >> that's right. demand during the summer especially is insatiable motorists don't hold back. everyone wants to hit the road regardless of how high gas prices may go. it'll be interesting to see if the saudis will answer president trump's call to pump more. obviously gas prices lay in the fold ahead of the midterm elections. >> should i put like 93 octane in my car?

i've always wanted to ask somebody that knows. do i need to do that >> as long as your manufacturer says to only put premium in there do you need it but a lot of times you may be able to get away with putting regular in it. but follow your manual but if you put premium in a car that doesn't need it, you're flushing money down the toilet >> okay. all right, patrick we'll leave it there prices, they're going up but at least it's not $4 i thought we'd be there by now permanently but we're not. thanks appreciate it. >> have you been flushing money down the toilet? >> basically >> okay. you asked the question, we all want to know what you've been doing. >> yeah. i get 93 >> now you have extra money in your pocket. >> sorkin just, like -- i mean, you, like -- i actually saw your whole body twitch. >> what are you doing? >> he's putting 93 in his leased vehicle that doesn't need premium. >> i know.

i paid, like, $3.29 or something here it wasn't a good situation >> and you pumped it yourself too. >> i did pump it myself. you want to know what i want to know as an aside >> this whole sthing the aside. >> you press the thing and the ridges will hold for you there are the folk who is take the ridges things off so you have to hold it? what is that do you know about this, jackie deangelis? >> i know about the price of gas. i don't know that much about pumping it >> i like it when you can do it. >> just hold it. >> it's almost like not pumping at all. >> is there a law in new york state that prevents that i'm going to find out. sorry. >> pemeantime -- >> we have smart viewers that could tweet us >> president trump tweeting about saudi arabia saying he asked them to up production.

jackie deangelis joins us with more what's happening here? >> well, it's almost as if the president is flaunting the fact he's got a direct line to saudi arabia the president saying he spoke to king salman of saudi and he explained the turmoil in venezuela to have them increase oil production maybe 2 million barrels to make up the difference prices too high. he has agreed. so let's review where we are on the numbers here opec and russia a year and a half ago, they cut 8 million barrels a day. they put about a million barrels back on. but effectively it could be less the market was worried about that so this ask to the saudis to basically double that because of the shortfall from iran may end up being double on a roughly million barrel basis venezuela, they could lose half a million barrels as well. the situation here, he's trying to create a balance. it makes sense the president wants the saudis to make sure they will make up for all if not maybe a little bit more of what we could lose

here in the market the question is why. the midterms are coming up gas prices are already high as you guys mentioned and as we said last week, prices seem to be defying gravity nap is not good for the president and his claims that he's boosted the economy. so going into july 4th, the average right now $2.86. it's up 52 cents from this time last year. and melissa, you're right. he backed off those comments a little bit he said, look, they could raise that production if they need to. but right now it's a little bit of a sticky situation. you can see oil prices backed off today, but not that much >> is there any chatter as to a level of which they would consider an spr release? >> as of right now, not an spr release. we're not in that dire emergency situation. i'm guessing the president is going to sit back and hold that as a card to play later. >> thank you all right. coming up, the biggest basketball story of the off-season eric chemi is here with us and the move that has fans talking eric, we all know what it's

about, but what's coming up? >> we're going to talk about lebron james going to los angeles. this is a lot more than just basketball this is about money and his personal business. when "squa b" tus.wkoxrern

coming up, tech in the second half. we're going to talk to an analyst about what's in store for apple. as we head to a break, take a look at u.s. equity futures at this hour. we are in the red this morning

about 142 points down on the dow if we opened up right now. we're back in a moment there's one thing you should know first.

i don't know who i'd be without my family. ah! daddy! i'm coming for ya. ♪ skyscraper. rated pg-13.

♪

it is hot outside. that is what it is >> how hot is it >> i knew you'd say that good morning you remember when robin williams used to do -- what did he say? he had some great lines. >> becky has a good one with how cold it is hope could was it? lawyers have their hands in their own pockets. >> good morning. welcome back to "squawk box" where it is hot, hot, hot. we're here at the nasdaq market site where the air conditioning is good. we're in times square. among the stories front and center this morning, two economic reports set to come out at 10:00 eastern time. the institute for supply and management will issue its june manufacturing index while the government is out with may construction spending. also recently announced a buyout deal getting competition randa announcing a buyout bid

for perry ellis. the founder had struck a deal last month to take the company private for $27.50 per share also "jurassic world" the king at the box office it is the second week. the picture took in $160 million in north american ticket sales "incredibles 2" took $44.6 million. of course comcast parent company of our network now more on lebron james we're sure you got money angles. >> this goes beyond money. the basics, lebron james going to the los angeles lakers. four-year deal, $154 million he's the rare star that keeps moving around. this ask all about business. because there were better teams that were available. there were higher salaries available to him, but he gets to be in los angeles. that's where his growing media

empire is. includes movies, tv shows, digital media, the uninterrupted network. remember "cleveland hustles" that was a lebron james production he gets to play and work for magic johnson who may be the person in the entire world that's most similar to lebron. because he was a giant on the court but made a bigger fortune off the court. lebron looks up to magic johnson, sees him as an idol with what he's done. basketball, business, philanthropy maybe that's part of the attraction but this changes the outlook of the nba. if you're trying to watch these games, it's 10:30 p.m. tipoff in new york across the east coast >> so if the warriors are playing the lakers, what would they call that like a subway series in new york would be the -- >> it's the golden state series or the sun california series. >> can't call it the golden state series >> i'm not good as nicknames >> it might not be a state by then

>> what about the clippers like, if there's a -- >> it's like the yankees and the mets >> i know. that's the subway -- >> the mets not as good. i think the clippers are on a different dimension. we're in the same city but it's not the same >> what's going to happen to cleveland and our good friend dan gilbert? >> dan gilbert has probably lost a lot of value in his franchise right now? >> how much value? >> $300 million or $400 million. because lebron's individual contribution may be worth $100 million a year to that team. >> out of what >> $1.5 billion. sizable. yeah so what's interesting about this because of individual salary caps, the most money lebron james can make is set by the nba. he was either going to get $35 million from one team or $35 million from l.a since you can't pay him what he's really worth, he gets to pick where do i want to live

>> what about the 76ers? so josh harris, they all went there yesterday to try to make a last-minute plea >> courtesy meeting is how it was described. lebron apparently had no interest in going there but wanted to hear them out. maybe they could have said something that changed his mind at the last second but i think his mind and heart was set on playing in l.a., playing for magic, being a laker. it's probably good for nike. get an entire l.a. market. >> does he get a cut of the shoes or just have a standard fee? >> i'm sure he gets a salary plus a cut so the more he sells, the better it is for nike and for him but it's more than money he's going to be a billionaire at some point in his life. we know with selling a stock, there's a 50/50 chance your best asset is walking out the door, what's the impact? >> so midway into the season, wouldn't that be the perfect time >> he should have sold it as soon as they won the championship and lebron was still there. >> then you want to try to do it

again because that's -- >> that's the problem with these sports things. they go beyond our scope on "squawk box. it's not logical it's not rational. it's all this emotion gets involved >> okay. thank you. >> you got it. well, it is the first trading day of the second half of the year. what is ahead for the tech sector josh lipton joins us with that >> melissa, let's start with that tech ipo market activity we know this year has been the strongest since 2015. dropbox, spotify, and docusign that should continue in the second half. suhr va monkey filed for an ipo. vcs out here say to watch firms li like aptis investors might worry that apple could now get caught in the cross fire as trade battle heats up between the u.s. and china. some predict that apple's china business won't be seriously

impacted that's because ultimately beijing doesn't want to hurt the iphone maker, they point out with more than 1 million chinese working in some way on apple products finally, amazon is picking its new corporate headquarters and one serious contender here, indianapolis century located with access to several interstate highways. it's got a strong university system and a state economy that's both stable and business friendly yes, the city might suffer a relative shortage of skilled workers right now, but with this new headquarters, indy could attract them from chicago and the rest of the midwest. >> all right, josh thank you. josh lipton in san francisco joining us now for a look at what apple has in store for the second half of the year, will power from baird great to have you with us. josh was just talking about the launch of the new phones here. are we expecting will this be any sort of a -- i don't want to say a super cycle, but a big cycle for apple. >> thanks for having me. look, i think it will be another

nice cycle for apple our expectation is they'll have three new phones out including a bigger screen phone and similar to a cycle a couple years ago. that could open up new pockets of demand. i think we're at a nice entry point for apple, you know, in front of that which is a couple of months off. on top of that, you've got the wider platform effects on services which we expect to continue to manifest itself in good growth numbers. >> with so many products expected to be launched this fall, what is the most critical when you're taking a look at the possible impact on the supply chain when it comes to getting components from taiwan and elsewhere in the world into those factories, in mainland china. what are you worried about and what is sort of the most critical time period in order to get those components where they need to be in order to make that launch in the fall >> well, you know, it's interesting. looking over the years, i'm sure there'll be worry out there as we approach the launch cycle as there are every quarter.

last year the oled screens were a big focus. i suppose they are probably going to be in focus again but there's so many intricacies behind the scenes. look apple has done a terrific job over time managing the supply chain. i don't have anything that i pinpoint today as a foremost concern. but that's always something to monitor. >> tech as you know has been a real driver of the s&p 500's performance in the first a of the year the top four stocks on the s&p 500 have accounted for 84% of the s&p 500's gains according to goldman sachs. i think you cover a couple of them at least. we've got apple, netflix, amazon in that top four when it comes to performance in the second half, do you expect it to be just as strong as the first half or have we seen the bulk of the gains behind us? >> well, yeah, that's going to be tough to predict for the second half. >> you got price targets, though, based on your price targets. >> yeah. look i mean, we continue to recommend apple. that's our top big cap pick.

they still put off prodigious amounts of growth. driven by iphone as you look through, you know, 2018 so we continue to like the prospects for that company to approach and maybe exceed the so-called trillion-dollar market cap. we also cover netflix. you know, we've been in a neutral rating to valuation. but look, this has been a growth momentum market in tech. josh lipton referred to this a moment ago looking at the ipo market, et cetera, they continue to put up strong subscriber figures. that price supports that as well i don't cover amazon, facebook, and google and others but they've had terrific trends as well >> how long have you been neutral on netflix it's been a double so far this year. >> too long, unfortunately needless to say, it's been a great stock. we thought expectations had gotten ahead of themselves for some time. we missed a heck of a run here over the last, you know,

year-plus, probably in that stock. and it's really hinged more on long-term competitive questions, cash flow questions. but this is a market environment that as you know is a little more focused on growth momentum and those numbers have been good on that front. >> we got to leave it there. thanks for joining us. appreciate it. >> thanks for having me. coming up, global hot spots in the markets we'll talk to longview global adviser's peterson next. futures have been done much of the morning. we'll be right back. barely enos man to take a bite of turkey. but for cyber criminals it's plenty of time to launch thousands of attacks. luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world. it's a smart way to eat lunch in peace. sweet, oblivious peace.

it's a smart way to eat lunch in peace. with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com

stocks to watch. tesla the electric car maker hit its goal of manufacturing 5,000 model 3 sedans in the last week of the second quarter. although it did need a few extra hours to accomplish that goal with the last car rolling off the assembly line several hours after midnight on sunday up almost 5% 15 pounints so far. nordstrom was downgraded at cow cowan. after a recent run up and the lack of a significant catalyst to boost store traffic and sales. walgreens was downgraded which

cited valuation along with a number of other factors. oh, yeah the newest dow component >> yeah. >> yeah. >> no, i was there i just -- is goldman sachs -- >> still in there. >> is it in there? nike >> still in there. >> i'm still working on those. anyway, broke a seix-session losing streak on friday. down nearly 12% over that. over the weekend yesterday, you heard leftist andres manuel lopez obrador winning the mexican presidential election. joining us now is global advisers president we talked to you last week you were mentioning it depends how big the win was in terms of whether there's a clear mandate and whether he can really form a working majority which would move what you call -- you call

this coalition to movement, not necessarily a party. but it was a big win, wasn't it? do we call this now a resounding mandate? >> i would agree with you. i think he outperformed the expectations he won by a significant majority 53% of the vote nationwide he has a strong position in the congress and both houses of congress so yes, he can move forward with his agenda >> you also point out in terms of social sensibilities, he may be more like trudeau that they have some similarities there in terms of wealth and income disparity and that may serve to have those two gentlemen more or less align themselves more than they would have in the past against us and the nafta negotiations is that fair to say? >> it's possible what we've seen is close cooperation between mexico and

canada in the nafta renegotiations they are working very hard to preserve the agreement and obviously to preserve it in their -- to their greatest favor. what we see now is a new leader in mexico who has a more progressive agenda who wants to have greater income equality and that broadly mirrors the theme that we see in canada and the leadership there so i think they're in many ways very aligned the question is, is does the white house want to have an agreement? >> with all of our strength in this country economically, we have our own issues with income inequality and trying to, you know, have it, you know, more fairly distributed i mean, how do you -- in mexico, they don't have this economic engine to the same extent that we have. and it just seems like, you know, we have our own debt issues

but mexico if they really transition to where they're spending a lot more on things like that, it just spells trouble. it would seem to me it's hard to do that. we've seen this movie before am i wrong on that or not? >> well, when we look at mexico's economic performance over the last 30 years, at a macrolevel, it's been very strong, very pragmatic export oriented, tied very close to the united states this has benefitted a fragment of the population. upper class, the elites, urban middle class, and the populations close to the american border in the manufacturing cities but there's a large segment of the mexican population, 40%, 50% that are not engaged in the formal economy that are laborers, day laborers on farms or in households that don't have the educational opportunities. and that's who amlo was speaking to this week in particular was trying to -- his theme is to

broaden economic opportunity through a range of domestic programs now, whether he can afford them, that's a great question. i think what you're pointing to is the fiscal challenges can he reallocate resources in a tight budget environment to achieve his goals? >> it's like -- you know, we have our arguments about trickle down and growing the pie and everything else, but you just know about the path to hell. everybody wants things to happen, but prosperity and private sector growth seems to afford you more flexibility in the long run and you don't want to end up, you know, like in venezuela or where middle class people don't have enough to eat. >> right and we have a very ambitious agenda the desire for change in mexico right now is great amlo's going to be a one-term president. six years. he probably has two years to get his policy plan in place and to start showing results and so it is a very tall order

for the mexican president. >> so what's finally happening with nafta, do you think is it pushed back to after the midterms or what happens? >> i don't see fast movement on this what we saw over the last few months is a growing belief in mexico city and in ottawa that there actually might not be a deal to be had that the white house and its n onerus appointed a reasonable person to serve as their nafta negotiator. but at the end of the day, if they feel they're pushed too hard, they will feel they need to push back so i think the interest in a nafta renegotiation that is disadvantageous to mexico and its citizens will be rejected by the new president. >> all right we had a lot of other -- we talk

global hot spots but we got stuck here but the election seems like the -- you know, that's what we got to talk about today i think. maybe we'll have you back, d.j., if that's possible >> good to be with you >> okay. good to see you. when we return, return, vi care even for the wealthy. a trip to the er could mean hours of waiting new medical concierge service could mean more. if you need to go to the emergency room, even in the middle of the night, it could be upwards of an hour depending on what part of the island you're on then there's the wait. now there's a solution for it, if you're willintog pay i'll have more coming up on "squawkbox." rely on their own personal property, like their car or home computer, to help them do their work. but they might not know that those items may need special insurance to protect against costly damage, theft, or liability on the job.

trusted choice independent insurance agents represent multiple insurance companies and customize coverage so business owners can focus on business. announcer: to find an agent, visit trustedchoice.com now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up

and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks. the eem has dropped over 10% th i'm april kennedy and i'm an arborist with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

welcome back to "squawkbox." we're down triple digits the dow looks like it opens off 157 points nasdaq opening down about 48 points and the s&p 500 looking to open down about 15 points we've been talking all morning about why it may or may not be the case. >> it's not too bad considering the vix is 11.5.

so you would think we would even see a bigger move in the futures. >> every third day we have trade concerns eased markets up. >> right. >> and who knows they're easing or not easing and it depends on the day. >> meantime, i want to talk about a new medical concierge service that a solution for lengthy wait times in the emergency room martha coombs is live in montauk. >> reporter: hey, andrew this is a manhattan-based start up that is trying to take concierge medicine to the next level. they have a private balance in the hamptons they have a portable x-ray machine and emergency doctors will come to your home, especially during the busy week of the summer.

>> reporter: when evan gets migraine in the middle of the night, they're debilitating. >> i would go to the er. >> reporter: when he an attack last month, he went to priority private care. >> they saw me and gave the attention i needed right away. >> reporter: the concierge emergency room in new york city offers 24 hour care. >> the only place with the c.a.t scan is the hospitals. if you go there in the middle of the night, you'll wait it was cofounder ben krueger dad's idea he wanted a better choice for his patients it launched 18 months ago. >> we found a radiology center and we were able to partner into it we are able to get access. >> reporter: annual membership costs between $3,000 and $5,000 per person, but you still need health insurance for evan, it's worth it.

>> when i would go to the emergency room the bills were several thousand and a membership is a few thousand so it covers one er visit without the four hour wait >> reporter: so the key to concierge medicine is to limit the number of members. so far they've got 1300. they expect to expand in the city within the next year and a half and by next summer a physical outpost here, as well folks want to pay for better access when they can have it back to you. >> okay. martha, thank you for the report meantime, we should tell you a programming note this morning. don't want to miss michael dell at 10:00 a.m. eastern time it's an exclusive interview. talk about the company going public all over again.

let's get started. show of hands. who wants customizable options chains? ones that make it fast and easy to analyze and take action?

how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. a final check. the markets down 160 now and those are close to the worst lows of the session. red, red, red. all over red rum.

red rum. let's check out oil. >> just relax. >> just relax. >> i'm relaxed. >> we're taking care of this. >> thank you we'll see you again. >> set your alarm. >> yes. >> make sure you join us tomorrow "squawk on the street" is next ♪ good morning welcome to "squawk on the street." i'm david faber. we're live from the new york stock exchange let's get you started with a look at the futures. you heard joe talking about it we're looking for a lower open th