live from new york where business never sleeps, this is "squawk box. good morning, welcome to "squawk box" here on cnbc. we're live at the nasdaq market site in times square i'm melissa leah long with joe kernen and mike santoli. guest is carrie firestone. let's see how we're setting up in the futures this morning at this hour. we did see the dow and s&p see the biggest gains in more than a month yesterday. we're looking to build on the gains. the s&p looking to open higher dow opening 60 points overnight in asia, we had early gains and then they reversed we got ppi data out of china, six-month high there pressured by commodity prices. we do see the shanghai could he mod at this close higher

the nikkei was up by .7 of a percent. what is going on in the europe government sand. we are seeing the ftse up by .2 of a percent taking a check on treasury yields $69 billion in supply hitting the market the ten year note at 2.869%. the ten-year note at 2.869 note. the wo-year note at 2.569%. president trump making his much-awaited announcement to replace justice anthony kennedy. >> tonight it is my honor and privilege to announce that i will nominate judge brett kavanaugh to the united states supreme court. >> kavanaugh is a federal appeals judge. graduate of yale school and also a graduate from georgetown prep,

i'm told he shares that with powell, i think, and gorsuch and jesuit educated that's all i need to know for prep school. interesting. he's already a bushy i saw w made some positive comments george p, jeb's son, made some comments interesting. that was one of the thingsthat i thought might not play into his nomination he's going to begin meeting with senators today the divide is centered on president trump's supreme court pick and the confirmation battle in a couple of minutes. pepsico out with quarterly results. sara eisen is here with the numbers. >> good morning. there are low expectations coming into this one pretty solid beat. earnings per share, 161. analysts looking for a solid

beat 16 billion the estimate was about 16 billion. as for the metrics that go inside, which you don't have to look at the top line of pepsi, snacks and beverages frito-lays you contributed. organic growth up 4%. >> i don't need them, i love them. >> there's not a bad toe the north american beverages though are not doing too hot down 1% organic revenue groeft analysts say we're looking for a positive number. they were saying that was set to improve. it looks like they're having a little bit of trouble. >> when you talk about organic growth don't you get confused when you're talking about -- >> food organic? >> yeah. i get confused, you mean growth without acquisition? >> yes >> not talking about the fru-fru

cale chips >> yeah, right. >> no, but that's where the growth is organic growth >> private labels for millennials. annie's macaroni and cheese which is owned by general mills. >> look at you that's why you're here i say it -- we haven't prepared this at all. >> well, packaged food has been a pretty weak sector it's been weak in the markets. weak in terms of growth. so to see 4% organic revenue growth from a company like pepsi and frito is strong. thy launched gatora gatorade millennials are going to smaller, more interesting brands when it comes to sports and away from carbonated brands

coke's got a turn around plan and getting more aggressive on market share that's where will -- that's supposed to be a big market share. >> that's been taking away from aqua fina and some others. that's the gloet, sports drinks. >> sports and juices are now in the penalty box. >> they have calories. whether it's -- and the other ones you have stuff you're not sure of. >> total energy drinks. >> those are 80 calories. >> you can on -- >> lacroix. >> snacks. >> joe was thinking of something else >> yeah.

the way you. -- but here's my question. so the pole land springs or even perry a, all of them, there's another one, pelligrino. >> those are from nestles that ? >> throwing up >> no problem with that then >> no. it's better than bland wa tefr. >> it's a preference >> europeans like to go with the bubbly >> the more you know sara eisen, thank you. carrie, where do you stand on consumer staples, particularly coke versus pepsi year to date coke is a better performer than pepsi. >> coke zero has made a comeback you take the diet out of the word. >> they added sugar.

>> they added coke zero sugar for some reason it's picked up a lot of mow men tunnel. we have constellation brands in costco >> arreus, it was you've gott grams. in the time of nero it was equivalent to 25 coins a radio. >> we can quote you on our website. gentleman, i was wondering about that that's absolute obviously au. >> it begins with a. you're looking for your investment company to start at the beginning. >> in the yellow pages >> yeah. >> aa. >> that was part of the idea >> all right moving on here, tesla's

raising prices on its model s and x cars by 20% in china the move comes days after they proposed 25% retaliatory tariffs. according to tesla's chinese website prices rose between 22 and $37,000 over the weekend depending on the model of government denounced major cuts for auto imports. the new tariffs have erased that it ships more than 15,000 cars a year and sales are accounted for the time see how he's here. british prime minister theresa may is facing a brexodus i think wilf might be on later,

sedgwick he joins us now. he was irate when we tossed to him during the royal wedding and we said he was in london and in fact he was in westminster which is such a huge mistake that someone made you're in westminster. we can't really call that london, right? i want to make sure i don't make you mad. >> reporter: his knowledge of the topography, geography is at least as good as mine. i've been in the city for so long i don't care how far it is. at the movement the bubble is consumed with the feature of theresa may. she's turning into the great survivor you have to step back and remember that for 13 months she

hasled with the support of the drp. she's had rejections from various members on the brexit side boris johnson is the most well known international politician last night we understood she was going to potentially face a no confidence vote from 48 of her own mps, brexiteers who were indignant. after that meeting at chequers over the weekend, now it's going to be about the johnson and davis of gun some brexiteers are stilg in cabinet. if she can keep those on board, she may well keep her job.

i've been speaking with someone on the absolute end of the party, a very important politician here. she wasn't -- he thought not only was she as strong before the resignations he thinks potentially she's even stronger as well she as hanging on in there back to you. >> okay. is -- what else -- is there like a soccer game or something coming up for you or what's happening there? >> we've got a minor distraction going on soccer game, football people might call it in the other places of the world. tomorrow, the big run good the world cup is a truly international concept. tomorrow england is playing

croatia. whoever can wip the final -- win the final. >> i bet you the remoaners, if they had a chance of staying or bringing the world cup back, they would give up the remaining to get the world cup, right? >> that is the sads state of affairs with this country. i think if you went to the country tomorrow for a referendum on you can win. it was 1966 last time -- >> get your priorities straight. take a picture of that trump balloon if you see it. >> i'm covering that for you wilf will be there i'm on protest to watch. that's my brief for you guys. >> i can't imagine if we had a head of state here and we put up some big fat -- i don't think

that makes you guys look have you j-- >> to croatia. >> really know how to make friends, joe. >> influence people. >> let's get back to the broader markets. for that we're joined by sam soval, chief analyst and what did you think of yesterday's rally? >> very happy to be a part of it opening it all it's a confirmation. we've seen the nasdaq hit all-time highs and it's pulling the large caps we're less than 4% away from the all-time high. i think investors are saying, you know what, we can put this trade stuff on the back burner let's focus more on earnings which are expected to be very strong. >> this earnings season sets up

very interestingly because the downward revisions going into this season have been minimal compared to the past they're lower for the second quarter versus first quarter because growth hasn't been as strong last quarter earnings was not a catalyst for the stock market. why should we be different this time when it seems like the setup is very different. it looks like we could actually plab miss expectations because first off investors why we fell into thmpts we expected it to be up 16.7% and as it's done, actuals succeeded so he think investors were worried about this is a peek quarter 90% of the companies, granted

that's a small count, 90% have beaten on both the top line and bottom line and what we're seeing is investors are reacting favorably to this. so i think what's happening is that investors are saying we should be paying more attention and that we should not be worrying about a peak. >> i was going to say just to build on that, no matter how good numbers are, no matter what the beat rate is, no matter how the market rewards it, it isn't going to end this debate whether we are in fact on a momentum where do you come down on that >> one of the things we find moesz positive we added 600,000 people to the work force who were maybe sitting at home. we are still well below the rate of workers from 2000 there's 11% short.

if we can stay at a 4% unemployment, that will keep wages at a reasonable rate of increase 2.7% we can handle that and keep growing and not worry about whether or not there's a recession around the corner because of short tangs, real shortages in different labor markets and also very high inflation rates. so that was encouraging. in terms of earnings growth, we're having a very good year. next year a 10 plus% people are using. those are decent numbers >> it does seem to hinge on 2019 whether the 10% starts to look plausible after you get closer to it. >> of course people who have been sitting on the sideline saying, we're near the peak mark was up 21% nchs we're gist starting july. >> sam, goose to see you

i guess wf ilf was in windsor. >> which is a completely separate town, more than an hour away from london. >> it's like saying i'm from new york out in westchester. >> it's like saying you're in white planes. >> say you're in new york. >> london and windsor are different cities >> good luck to england and croatia. >> yes good luck to everyone. it's an accomplishment making that car. >> i had no preference as kidding. i'm preempting -- >> the hate mail >> they're very excited about this national news and everything else i'm just hoping somebody scores. has that happened? >> it has happened. >> okay, good. >> late goals which actually i think has been the drama i'm completely removed from it,

too m too. >> they score on penalty kicks. >> that's not a score. >> no, it's like rock, paper and scissors. >> now the hate mail is going to come >> good luck, england. go, england. coming up, a close look at president trump's -- and croatia. may the best team win. the supreme court nominee. this will not stand, this guy. he's like, well, i'll figure something out. we'll talk about the shift in the court and what it can mean for american businesses. "squawk box" will be right back. find the remote yet? nah. honey look, your old portable cd player. my high school rethainer.

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and judicial centers john created a short list of successors from the late justice scalia not that the wall street journal is the end all be all, but i read the op ed pages quite a bit. i have a lot of respect for the editorial board there. they love this guy, john probably means "the new york times" editorial board hates this guy is there an objective view on this guy that isn't based on the political prism? >> sure. brett kavanaugh is one of the eight people who i said would make a superb choice yale law school. worked for justice kennedy worked and was a partner at a prestigious law firm worked at the solicitor general's office, office of independent counsel and was an

advisor to press bush. he's issued over 300 opinions on a wide variety of areas. a lot of it administrative law and some constitutional law. whether you agree with him or disagree with him, he is a superb writer, incise sieve thinker and that's why he is well respected by people across the aisle and judges all over the country. >> we'll see if that helps in this tribal environment that we're in right now, if you just were to say set politics aside and look at this man's qualifications and you were forced to do that. if someone were going to pay you a million dollars not based on politics but based on qualifications, what the person seems to be like as an individual, you couldn't possibly probably say this is

something we need to throw everything at to stop but that is what's going to happen. 50% of the country's going to believe this guy is one of the worst human beings on the planet by the time they're finished with him by the time the left is finished with him, that's what we think i guess you throw up your hands and say that's the world we're living in? >> that is unfortunate yesterday a station went out to a college campus and asked about the pick and they said, he's a racist >> i saw one of the politicians said a lot of people are going to die because of this i think they said women are going to die because of -- they're connecting the dots of turning over roe v wade. i heard that about tax reform. a lot of people are supposed to

be dieing from tax reform. i guess there's going to be fatalities all over the place by the time -- >> yeah, it's a pure scare tactic the left has been predicting roe's demise ever since the nomination of sandra day o'connor there's only one justice, clarence thomas, who's explicitly called for roe to be overturned they move very, very slowly. john roberts is still on that court. they're not going to be in any hurry to overturn roe versus wade and may not at all. >> john, you're an expert. give me the soft underbelly of him. >> hard to see one he did serve in the white house -- >> the left loves bush now compared to trump. >> they didn't love him at the time. >> they think w -- before they didn't they think he was the greatest president except for obama. >> you know, that could be they could latch onto the fact

that he was the author of the starr report to congress they'll pick at a particular opinion that they didn't like, probably one upholding exec opinions and lower view articles eventually it will be fun to watch. heitkamp, the other guy. >> done knowly. >> they were hiding yesterday. no, we're not coming but we're looking forward to meeting him but we're not looking forward to meeting him that much. they don't know whether to -- you know, that's going to be really fun to watch because they're in states where there's some -- you know, there's some trump supporters but also some reasonable people. if you just go all out and pretend that this guy is -- it's not going to fly, i don't think. they're in a tough spot. >> yeah, no, it didn't fly with neil gorsuch either.

they add john tester and doug jones. it will be an interesting hearing. >> yeah, it will. i don't know sad. the whole thing. anyway, thank you. appreciate it. >> great to be with you. >> okay. well, today is the day scott cohn will reveal the top state for business scott, where are you what do you have coming up >> reporter: i'm not going to tell you yet where i am. we're going to drag this out a little bit to remember the top state from a visit we'll recap and tell you what we had this morning very interested morning unveiling our america's top ten states for business.

welcome back you're watching "squawk box," live from the nasdaq market site in times square. good morning welcome back to "squawk box. we are looking at a higher open building off of yesterday's gain the dow and s&p yesterday had their best gains in more than a month. the s&p looking to be up by 5 1/2 points dow looking at 62 at the open. nasdaq 25 above at the open. s&p banks up by 2.7% on today's agenda, president trump is kicking off a week long

european tour today his first stop brussels for a nato summit. he'll meet with prime minister theresa may and russian president vladimir putin we'll get the data at 10:00 a.m. eastern. there were more available jobs than people out of work. is he really meeting with the queen? >> that's what's supposed to happen. >> i would be nervous. >> about what? >> i don't know, anything. if i'm meeting the queen, you would not be nervous just in general for what might happen in terms of just -- i don't know, you've got to do everything by the book i don't think you're allowed -- >> i know. and i find that appalling. >> okay. i won't -- >> it's fine it's fine. >> you sure? >> we have plenty of cameras to

capture it >> but with the queen, it's serious, right >> very serious. very proper. >> and i love the president but, i mean, it's trump so, i mean, it's -- i don't know. >> i'm sure she -- she's prepared for everything. >> he's going to do the hard ball handshake, do you think what are you afraid of >> i don't know. you know, i don't know. >> listen to the protocol officer. >> i'm sure. >> do you think he's been briefed and everything. >> he's probably even a little nervous, even donald trump is probably a little nervous. >> okay. i just hope everything goes well. stocks to watch. softbank is buying $2 billion worth of yahoo held by altaba that's what's left of yahoo after verizon bought the internet business. they'll buy back stock from softbank after they've thinking japan yahoo! will rise. takeda has received approval

to buy shire that will need approval in europe and whine that. brands include pillsbury, hungry jack pancakes. the company expects to adjust the earnings by 20 to 30 cents a share. the big reveal day for cnbc's top state for business scott kuhn joins us from a secret location with some big hints. it looks like it's dark there but maybe it's not dark. so where -- you know that we're going to be -- we're going to try to -- whoa wait a minute now it's light behind you. do you have a monitor? so d.c. is the -- okay so maybe we don't know where you are. you're not there that's a fake green screen whoa you're right up the skreet in

times square, scott. we can do whatever we want. >> diabolical back to him. >> i asked for a whiteout like you were in antarctica we have ten of these and people are going to be so messed up your clue sounded buffalo like, scott. i'm thinking colorado. >> that's interesting. that's interesting a lot of people guessed that the exciting thing for you guys especially, for the first time in our 12 years doing this, we're going to reveal the top state right here on "squawk box" t. will happen later on this morning. what we'll do is tell you about this now next hour we will reveal the runner's up, squawks will show you in the final hour of the top

state for business we'll look at what makes this state competitive and what makes other states competitive as well the way we do this is a study we've been doing for 12 years now. we used hard data to grade the states in the categories that they used to sell themselves we look at things like work force, technology, education access to capital, the list goes on what we do every year is we give you our diabolical hints let me recap what we were telling you yesterday. woolly bully noble prize. perennial favorite dog heaven and hot, hot, hot we have a lot of exceeding plans for you as -- >> deliberately inskrutible.

>> dog could be canine or hot dog. designed to throw you off. >> georgia bull dogs. >> yeah. >> you know, what parts of georgia are pretty far away. >> scott yesterday, did you see him sledding down a sand dune. >> hot, hot, hot like hot sauce. >> yeah? >> all right. >> didn't you say there's maine skeet. >> no, someone else said that. i wanted a greater variety of back drops for you we don't have them now you're right next to me. that's weird. >> in your ear -- >> oh, yeah!

okay i see it >> no, i wanted the great wall or something >> that wouldn't be a state, would it >> that would be good though he's standing there. >> all right we'll see him again. >> we will see you again, scott. that's cool that you're doing it on our show. thank you for that we'll look forward to it coming up, a new read on small business optimism. we have the results of the latest nfib business analyst nick marked for identificationy will dig in. president trump preparing for an important european trip. eamon is already there. running a small business is demanding. and that's why small business owners need more. like internet that's up to the challenge. the gig-speed network from comcast business gives you more.

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still historically hi, joe taking a dip to 1 point 72 despite this drop this is the sixth highest reading in the survey's history if you take a look at the chart over the past year you can see optimism has continued to hold strong under the trump presidency the conservative lobbying group's index has averaged 105.4 to 92.4 under president obama. its historical average is 98 the biggest moves in the month's gains were inventory, satisfaction and jobs. sales expectations and the number of business owners who believe now is the good time to expand saw the biggest declines. a stubborn problem continues here labor quality the top issue out pacing taxes and government red issues and red tape. we're told sales are strong and to meet demand output is needed to produce more workers -- sorry, to produce more, more

workers are equated. skills is the bottleneck, especially true in construction and manufacturing. despite all of the concerns over trade war, we haven't seen a big din in this retail is the most if they do see a dip in this and if you believe now is a good time to expand, we have the historical high the. srnl it can't handle a trade war because if commodity and trade wars go up they're lessee equipped to pass on the costs to consumers. >> absolutely. they're going to feel it so much more in their bottom line. >> right >> basically what bill was saying, they're focused on the here and now, getting through the day, the week, the month so they don't have time to worry about that until it actually

hits them and they really feel it. >> i do think it always makes sense to draw the contrast between nfib membership and the russian 2000 it's basically genuine mom and pop, local >> absolutely. >> you did talk to him >> yes. >> on the phone? >> yes. >> every month >> yes. >> he's got the moustache? >> he's in jackson hole. >> he's in jackson hole? >> he's speaking and fishing. >> does he have a moustache? >> i can't confirm if he has it receipt now. >> that's what i need to see that >> the moustache >> yes, it was off, back on. >> what does it correlate to, moustache on >> pretty bullish. >> maybe it's full beard >> no, no.

>> i'll shoot him a note and ask. >> isn't one of the issues whether consumers are spending money so these are small businesses and they rely on people maybe walking in the door or picking up a phone and calling in an order. if you have consumers back to work earning more money, seems to me that's helpful retail sales are up. no more consumer ending. that's one of their big issues it has historically been one of the big issues and it's interesting watching it to fall to number two. >> great thank you. let me know. >> i will. >> okay. >> very important. microsoft is cutting prices on its surface devices introducing a $399 tablet to compete with apple's latest expensive ipads. the 10 inch surface go will begin shipping on august 2nd in the u.s. and over seas markets youtube stepping up its

fight against fake news and the company is enlisting six popular youtube stars to help. the youtube celebs will be tasked with teaching mid yeah literacy this is all part of a 25 mill$2 million plan to stop the spread. president trump saying nato be paying more that's really unfair i've seen people who aren't necessarily trump fans say he's right about this part. >> interestingly, donald tusk tweeted 27 minutes ago, so i'm not sure when the trump tweet crossed, this sort of seems to be a conversation they've having on it all. we spend on defense more much

more russian and chinese spending. >> numbers are numbers >> germany's, what, 1% >> of gdp. >> yeah. >> and germany's up there. they're why -- >> it wasn't so long ago it was not all that comfortable with all of these countries rearming. honestly -- >> no, i know. >> -- conservative all but face. germany from japan we're not talking about nato >> no. >> all right coming up, it is the end of an era for an iconic airlines sneak and as we ped to the break, we'll have what's happening on the markets. green arrows with the dax up by .4 of a percent stay tuned, you're watching "squawk box. at&t provides edge-to-edge intelligence,

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♪ now southwest says it's going to stop serving

complimentary peanuts. citing allergy concerns. southwest will now serve pretzels instead of nuts okay i'm good with that lower calories, really although nuts can be good for you. >> raw almonds >> pretzels aren't bad they're not like potato chips or something. american and united do not serve packaged peanuts on board either delta won't serve peanuts on board if a passenger notifies the airline of an allergy. the marketing gimmick's already other at ihop. after branding itself as ihob, the international house of burgers. ihop has returned to its roots so for awhile it was the international house of burgers the ihop marketing stunt was supposed to let them know about the changed new burger offerings. but now the name thankfully is back to the original >> they want you to go now for

burgers. >> i know. pigs in a blanket. >> it's on the menu there? >> no. like, sausage wrapped in -- isn't that what you get? link sausages mixed in pancakes. >> i can't mix salty and sweet >> haven't you put syrup on sausage? they have syrup flavored sausage. zp >> stop. america, by the way, it's not that -- mike can hit me but joe no i wanted to set the record straight let's get to our guest host for the hour carrie firestone is earning season going to be the catalyst in your view? >> i think earnings season is going to be good and we're expecting about 20% growth >> that's different from being a market catalyst. >> correct >> we need to see what expectations look like how guidance will be i think as long as there's a calm in the trade war interest rates and inflation fronts, so

those are big three, then we've got a pretty good runway here over the next month or so. we haven't seen interest rates move much higher inflation seems to be reasonably around the 2.2%. and earnings growth, the dollar has gone up but it's maybe plateaued right here so we have a few things in quiet mode you know, there's going to be focus on good earnings sales numbers are going to be good consumer spending will be good if you look at where the sflooipgtz(. if we put up a chart, you could see we're approaching that 2800 level. and if we get past it, then i think there's a nice move upward we haven't been able to breach that level for awhile. when the market peaked in late january, it fell over 10%. you can see we've had higher lows along the way if we can do that, i think the market has perhaps a nice run through the second half of the year >> is it still a growth-led stock market in the back half of the year

>> it seems to be. we've had good earnings from those companies. they're not big multiple stocks. if you look at facebook market multiple, google earning 23 times. apple, 14 times earnings that's where there remains a lot of interest, a lot of demand and energy is also another place that i think you can see a movement they're up 7% this year, the energy stocks. health care has been a laggard we're feeling pretty good about this earnings period and the market at this level >> all right k a r kari, thanks for joining us. we're going to look at media deals in focus we'll talk about the bidding war for fox with ken auletta more news seeping out yesterday about how it's happening between disney and our parent comcast. he's a staffri wter at "the new

yorker." "squawk box" will be right back. ♪ ♪ keep your insights from prying eyes, so they won't be used by anyone but you. the ibm cloud. the cloud for smarter business. the ibm cloud. 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.

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dow 25,000 the blue chip's marching back to the milestone. the biggest drivers straight ahead. happening now, president trump getting ready to leaf tvee white house for a major tour of europe he's set to meet with nato leaders, the queen of england, uk prime minister theresa may, and russia president vladimir putin. the suspense is building as cnbc gets set to reveal the best of the best 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 and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with melissa lee and mike santoli u.s. equities adding to yesterday's gains. up another 50 on the dow 23 on the nasdaq, s&p indicated up 5 well above the santoli pause level of 2,772 paused for a couple of weeks >> paused. >> you're micromanaging. it wasn't three. >> 2,711 >> you covered it less than -- >> i covered by -- yes >> we're not investing >> we don't trade. it's not a tip sheet, but we pause for three weeks then i said rumesumption of the rally after. >> really we've paused since

january. >> i just think you are even trying to do that is just rife with pitfalls. tough to be right. >> do you know what i do here? i talk about the market every day. >> i know. i know we need to anyway, here's what's making -t this morning from pepsico. they beat profits with $1.61 a share. we'll have more on pepsi's latest quarter in a couple of minutes. house republicans are asking apple and google parent alphabet for information on privacy practices. members of the energy and commerce committee are concerned that consumer data are being used in ways users don't expect. i guarantee that alphabet said it would answer the panel's questions. apple declined to answer >> in this letter written to the committee, one concern was that devices would be triggered to record audio which is creepy

>> that's scary, isn't it? >> really creepy >> everybody has seen and i don't shop or do any of that stuff normally but right after you look something up, ten minutes later you get an advertisement for what relates next to it. >> you're looking at windsor, let's say. hotels for windsor would come up flights to the uk. >> yeah. >> and of course the answer from a facebook or a google is that, well, you're accusing of just creating more relevant ads for our users. that's our business. >> okay. all right. i'm not complaining there. who'd say they members of the house house republicans -- i forgot what i just read who's looking into this? >> house energy and commerce committee. >> okay good so both sides. the number of job openings in the u.s. and the difficulty in filling them will be in the spotlight later this morning the labor department releases its jolts report

the number of unfilled jobs in the u.s. has been near record highs in recent months a few stocks on the move this morning jm smucker selling their u.s. baking unit for $375 million brands include pillsbury and hungry jack pancakes wynn resorted upgraded at stifel nicklaus. and the analysts pointing to head winds from ongoing changes to tax laws in the u.s. for ebay being downgraded president trump has picked brett kavanaugh to replace anthony kennedy. kayla tausche joins us now with a look at what the decision might mean for business. >> good morning. the president's seconding nominee to the supreme court is federal appeals court judge, two-time yale grad, and former

clerk to anthony kennedy at the white house podium, judge kavanaugh said if confirmed, he'd keep an open mind on every case >> my judicial philosophy is straightforward. a judge must be independent and must interpret the law, not make the law. a judge must interpret statutes at written and a judge must interpret the constitution as written. informed by history and tradition and precedent. >> it's kavanaugh's lengthy record that made him the favorite his opinions include rebukes of over-regulation and support for stricter immigration policies. his service to a california judge who resigned after allegations of sexual misconduct and his view that a sitting president should be shielded from investigation president trump thanked the senators who helped inform his

decision and said the senate should move to confirm him quickly. >> there is no one in america more qualified for this position and no one more deserving. this nominee deserves a swift confirmation and robust bipartisan support >> kavanaugh's 2006 confirmation to the lower court took three years. he eventually was confirmed 57-36 with the support of two republican senators who remain key today. lisa murkowski and susan collins. he will begin meetings on the hill as soon as today. melissa? >> all right, kayla. thank you. kayla tausche in washington. let's get back to the markets this morning the dow marching back to 25,000. the s&p 500 testing 2800 mike has been looking -- what? at levels we were just talking about. >> i didn't know this was coming up >> joe likes the introduction. >> i like when we introduce him when he's sitting on set with us >> i just turn to him like we're

having a conversation. >> yeah, it was fantastic. >> we have been looking at the 2800 level in fact, we've got a chart kari was talking about how that acted as a ceiling this chart shows year to date s&p 500 has made several runs up in that direction. we did get this pause in the last few weeks it seemed the market was loading up for another attempt to get up toward the old highs in january. we first hit 2800 january 17th of this year you see in the past few months, you kind of made an effort to get back there what i had these other lines drawn, that's the rallies in the beginning part of each month the first half of each month has been strong including in april we had a good run there. of course this current rally started july 2nd, but typically from higher levels right? i don't know if this rally is going to have the oomph behind it to get going. but it's interesting we have our best shot given earnings season coming up. and the fact we used up the

trade issue perhaps as a negative catalyst. where we set up otherwise, obviously 2800 is it a barrier, is it not early month strength, nasdaq still a leader is the question here too if you look from january 17th when we first hit 2800, the nasdaq up 26%, dow down 5.1% it's been the big stocks doing a lot of the work. yesterday they underperformed a little bit so we'll see how the mix shakes out. i still think the market can't make a serious run toward the old highs. i think you're kind of -- you're wetted to the big tech stocks as the engine, not the only engine but a participant in rallies >> okay. great. let's bring in a couple more voices into the conversation tom manning is president and ceo of putnam investment company christian mamani and just looking at both of your comments, guys, i think there's

a little disagreement here krishna seems to think things were better positioned in 2017 but still okay tom, you think it is down. if there's a risk it might be that you're too conservative looking for 6% to 8% upside. have i got that right? >> yeah, i think so, joe the economic backdrop has been pretty strong. we do think we're heading into a nice earnings season here. it's going to be interesting to see if corporations maybe tamper some of the expectations and maybe mute some of the good news that might be coming out of earnings otherwise it might be we're too conservative at this point in time >> krishna, were you bullish on the beginning of 2017 when trump was president? >> yes absolutely we have been bullish for quite some time. underlying trends are really good economic growth overall globally

is in a very good situation. inflation remains low and policy remains supported. this is basically still goldilocks with kind of things thrown in the mix every so often. trade being the latest example of that. the overall outlook for stocks was really dependent on what happens on the monetary policy side as long as that remains supportive, we remain in a bull market we don't think there's a drawdown coming for a couple of years. >> do you think things are narrowing and it's tougher to go higher that was some of the comments in your preinterview. >> things have narrowed a little bit. overall, though, i think the overall growth picture and earnings picture is actually quite good as the cyclical growth goes towards the end of the year, that's when the challenging period arrives if at that time the fed is

relatively supportive, we're in good shape if the fed overreacts, then it -- >> sounds like you're worried about the fed. tom, the biggest issue you point out is trade but you think ultimately it's negotiating tactics that it won't lead to anything that affects gdp in a big way >> with midterm elections coming up, do you really think the administration is interested in doing anything where the data is going to show up and show softening ahead of the midterm elections? i don't see that happens but if it wasn't for the trade rhetoric, what would we be talking about right now? the strength of the data and the market would be quite a bit higher i think also that yields would be on the 10-year through 3% i think we're going head back there the next few weeks. >> there are people that are certain you'll start seeing something in the data with the trade stuff if it continues to go as it is.

so how would trump pull back on that >> you may see it, but i don't think it's going to be resulting in lower numbers i think it's going to be less strong so i think that the u.s. has a pretty strong happened right now in these negotiations and they're going to play it and if they start to see the data, maybe that's the point in time where they resolve these things >> do you see 3.25% on the 10-year by the end of the year >> no. we think we've probably seen the highs in the 10-year because overall inflation is fading or the direction is fading and growth towards the end of the year will probably start moderating >> tight labor market with wages, you still think inflation has seen worse levels? >> i think so. the labor markets are tight, but what we're finding out as the unemployment report kind of told us over last week, there's still a decent amount of slack whenever we have decent growth, people materialize and wages

don't go up. look at japan. unemployment rate there has been very low for a long period of time without significant wage inflationary pressures >> okay. all right. krishna, thank you tom, thank you did you guys see this latest trump tweet? that's a lot of alliteration thank you to all my great supporters really big progress being made other countries wanting to fix crazy trade deals. economy is roaring all capital letters for roaring. supreme court pick getting great reviews. capital letters there. a new poll says trumptalking about himself i like when he does that. trump at over 90% is the most popular republican in the history of the party ending with a wow. w-o-w, exclamation point >> all caps. >> no. great reviews was all caps, roaring was all caps coming up, the street takes on pepsico shares are rising. we'll talk to an analyst next.

at 7:30 a.m. we'll talk media and the battle for fox with ken auletta. then 7:40, the moment of the morning. scott cohn reveals the top state for business >> cohn will be here unveiling the top -- the runners up. five, four, three, and two we rank all 50 states. and these states are the elite, not quite the top state, but they are among them. we will have that coming up as we begin our countdown later this hour on "squawk."

welcome back to "squawk box. futures right now for most of the morning have been up somewhere around 50. now we're up 71 on the dow s&p indicated up seven there was a little weakness in the pound recently, but given what's happening in europe, not too bad in terms of dollar strength but it is a little stronger there. 1.69 on the euro pepsico reporting better than expected. joins us now nik modi. good to see you. why do you think the stock's up so much? >> expectations were pretty low

coming into the quarter. a lot of head winds facing all the cpg companies. any company with exposure is feeling some pain. pepsi had a very good quarter, but optically, the beat was actually -- looks a bit overdone in the sense they sold a bunch of assets that effectively caused the beat. so it's a very inline quarter from them considering the circumstances. >> margins were pressured by rising commodity costs is that going to be ongoing? what's the trajectory of those costs? >> we know what's going on with the logistics situation and gas prices going up. other commodity prices are going up we think that costs are going to be a problem for the rest of the year >> wall street okay with the snack business being offset by the beverages. i know companies like to talk

about splitti inting up the com. is that what we'll hear more about. we have to do something more dynamic than spend more on advertising. so coke refranchised all their bottling operations. their independent bottlers are executing better than pepsi's bottling we think pepsi at some point is going to have to unleash and off load the bottling assets so they can be in the hands of those operators who do this every day. so pepsi can focus on marketing. that is something they need to do hopefully we'll get clarity on that by the end of the year. >> coke or the pepsi >> coke. coke has outperformed generally speaking over the last let's call it 12 months since quincy has taken over we think they have the better strategy in the sense they've refranchised they're not just focused on building brands. >> i was going to say we talk so much about how the pendulum has

swung in favor of the retailers. right? they're there with the shell pricing or whatever. has that peaked in terms of retailer strength. or could we see the pendulum swing back the other way >> at the end of the day, if you look at what goes on even online with amazon, leading brands are always front and center. that's what draws on the consumer our point of view has always been that brands are critical if you're the leading brand in the category if you're a tertiary brand, the retailer has the power but you're bringing the people into the store because of a deal or what have you, then we still think the leading brands have a lot of power in the market place. >> and private label is not that much of a threat for pepsico's label. >> no. you see private label become more of an issue in food and some of the household personal care areas, but beverage has been immune. >> i mean, you would never buy,

i don't know, faux-ritos >> but that's a good brand >> they serve them on airplanes. >> the fake doritos. >> and i still eat them. >> you do? >> i'll eat anything aren't you hungry on planes? after sitting on there -- >> it's a captive audience >> it is i will say that over the years it's funny watching -- for awhile it was like home depot, lowe's it's funny watching pepsico. i thought we decided they had the right strategy because they had the snack division and coke was struggling but now quincy came in and you're saying by refranchising -- >> that took five yooers to get done >> by the way, that's another thing that's waxed and waned you buy them in and then sell them off. >> there's a whole rationale on why they had to buy the bottlers

to begin with. >> because the investment bankers thought it was a better move then to sell the viacom/cbs thing was funny we've got to split these up. how's merck going forward without -- you got to get rid of that investment bankers are just -- >> well, the reality is if you're coke or pepsi or any cpg company, focus on marketing and innovation let the distribution in the hands of someone else who does this for a living. >> okay. so you would fade this 2% move this morning >> yeah. we think the stock is fairly valued at this moment. it was a fair number when you x out on the amounts overseas. >> all right thank you, nik modi. coming up, hugh johnston will be appearing on "squawk on the street" at the 9:00 a.m. hour we're getting closer the big reveal of the top state for business this year scott cohn is a man on a mission this morning he will join us at some point

and actually going to reveal which state won this year. stay with us whoooo. looking for a hotel that fits... ...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. hey! are you taking the tissue test? yep, and my teeth are yellow. clearly my whitening toothpaste is not cutting it. time for whitestrips. whitening toothpaste only works on the surface. but crest 3d white whitestrips safely work below the enamel surface to whiten 25x better than a leading whitening toothpaste. hey, nice smile! thanks! i crushed the tissue test. yeah you did! crest whitestrips. healthy, beautiful smiles for life. also, whiten and protect your smile from future stains

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we've got a news alert

a thai military official says all 12 boys have been rescued from the cave. their soccer coach is on his way out. so we've got very good news this morning coming out of thailand >> wow >> amazing rescue. >> all 12. that's so great. we're going to switch to some corporate news. microsoft cutting prices on its surface devices. introducing a $399 tablet to compete with apple's least expensive ipads. the new 10 inch surface go they're calling it will begin shipping on august 2nd in the u.s. and other markets it's aimed at the same potential buyers as apple's 9.7 inch ipad. that starts at $329. a russian cargo supply ship made space history today it docked with the international space station after a journey of under four hours this breaks the previous record of the trip. the mission was to deliver three

upo tons of food and supplies. spanish officials say the three men injured in today's running of the bulls were not gored. the quickest dash yet at this year's festival in pamplona. the runners are just mildly bruised and likely to be released after treatment hundreds of people test their agility and bravery to race with six animals in the bull runs this lasted 2:15 and that is the fastest one so far >> it looks like the -- you got to wonder why are the people behind the bulls running >> right >> haven't they cleared the danger like, you could stop running you could stop running >> and like with the bear chasing, you don't have to be the fastest. you just have to be faster than the slowest. coming up, this morning's top stories including a new read sllusess arica "squawk box" will be right back.

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good morning and welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and center, small business confidence declined slightly last month although it remains near a monthly high. the national index from the independent business slippslipped 0. of a point in june difficulty in finding qualified workers was the reason takeda needs approval from regulators in the european union. the price of crude oil is jumping this morning after hundreds went on strike in norway that disruption has added to concerns about supply with slowdowns already evident in countries like libya, venz ezuea eamon javers joins us now.

eamon, you have not seen scott cohn over there, have you, walking around i mean, he's doing his -- huh? >> i have not seen him we've been doing a lot of research here. we went to the belgian beer museum yesterday dropped by there gathering a lot of data. that's what we're doing here >> the beer museum is there any drinkable beer there, eamon >> they specialize in beer here. they've got beer, steak. fabulous eating here the mussels are spectacular. the president doesn't come until tonight. but we'll get some tape up for you as soon as we get that available. the president firing off a tweet here on his way to e the nato summit this is the annual nato summit it's a traditional event this is going to be unlike what we've seen in the past tweeting this morning, getting ready to leave for europe. first meeting nato the u.s. is spending many times

more than any other country in order to protect them. not fair to the u.s. taxpayer. on top of that, we lose $151 billion on trade with the european union the president here expressly linking nato spending with trade. and here's what he's frustrated about. when you look at this map of the world. take a look at the nato countries. and look at the countries that are actually meeting the targeted 2% of gdp level of spending on their own militaries you see not many of these nato countries are meeting that threshold. a number of them have pledged to increase their spending. u.s. officials have stressed that they believe that things are going in the right direction in terms of military spending in nato that's going to be a big contention here. we spoke to one former nato official here yesterday who stressed it might be that the president is getting in the way of his own message here in terms of the tone of his rhetoric. here's what he said. >> he's right because the europeans are not spending

enough since me 1990s. but he's wrong because the message has become so polarized and toxic that european leaders will struggle to sell to the europeans that we need to spend more because of trump. that's not going to work politically. that's why it's important that he should have kept his message private and let the european leaders do the hard work >> so the president is speaking right now as he talks to reporters on his way to marine one. we're getting a couple headlines. the president talking about the event next week that sort of looming as a shadow here in brussels, he's going to be meeting with vladimir putin later in the week. he's asked if vladimir putin is a friend or a foe. the president says he can't say right now. puth season a competitor the president says he also citizen the solution to the immigration problem is

migrants should not come to the united states illegally. and another headline about some of the turmoil politically in great britain that's happened over the past 48 hours, the president says it's up to the people of great britain whether the prime minister may should stay in power or not so the president making a number of headlines there as he leaves washington headed here to brussels in belgium. i've got to say the other big focal point here is the world cup match this afternoon between belgium and france a lot more attention being paid here to that big soccer game this afternoon >> yeah. you better -- if belgium wins, i mean, just -- that place is going to go crazy. >> this place is going to go nuts >> yeah. you got to watch your -- >> they're big rivals. they're neighbors. belgium and france a lot of history there all of these bars behind me are just going to absolutely erupt just around the corner from us is the historical market square,

the heart of brussels. they've been setting up a huge rock concert stage there this place is going to be ecstatic if they win of course the opposite will be a lot of drowning of sar rows in belgian beer >> i think that's very telling that trump people want him to say all kinds -- they watch closely what he says about putin. a competitor that's interesting because he is a businessman. then the other thing, remember when trump was supposed to go to the uk six months ago and may had no questions about her tenure there it's a totally different position for her government right now with him coming over i mean, it's a really weak position i would be -- i don't know you'd even want to curry some favor at this point.

>> you're exactly right in terms of the president's strength, right? here the president's coming, angela merkel in germany is in a weak political position right now. she's had to make adjustments due to political pressure. theresa may in england also in a very weak untenable position right now. the president of the united states has a strong hand coming into this nato alliance where all sides stress they want to show unity, but the president is coming here really to be a disrupter. to say to the europeans you're not doing enough you need to pick up the slack. that's going to be his message at a time when those leaders aren't strong enough on their own footing to push back aggressively >> that's the other thing i heard with the sound bite you had. the guys going, you really can't put these guys in a box by saying that. they don't know trump. he doesn't care if it makes them, you know, if it puts them in a box we've gotten used to it over here they'll get used to the -- to

that over there. anyway -- >> here in brussels, they're experts in diplomatic niceties but the president's not about that he's about say whag ing what he being blunt and direct the diplomats here, they told me they thought he would moderate over time. but the president has gotten stronger and tougher in his rhetoric >> okay. eamon javers, thank you. we are talking comcast this morning. reported lining up buyers for some of the fox sports assets to avoid antitrust issues meanwhile, fox shareholders expected to vote on the deal on july 27th. joining us now to talk about the latest twists and turns in the media industry, ken auletta, new york magazine staff writer, author of "frenemies: the epic disruption of the ad business and everything else. thanks for joining us. do you have any inside

information about what's happened the last couple of days >> no. >> what are you hearing that we read articles from sources about comcast talking to other people, maybe, about private equity, about taking some of the sports networks do you have any evidence that's true in. >> i have no inside information. except the bet knowing brian roberts and knowing the rivalry between he and disney, he's going to come in with a bid to try and top the last disney bid for fox. >> i imagine -- i don't know the comings and goings of brian roberts or rupert murdoch or bob iger, but there's something going on out west this week, isn't there? >> this is the conference that starts tonight they're all at an outdoor barbecue they're all coming and believe me, they will not sit at the same table. >> what if they catch each other? do they kind of wave >> it's polite

it's a wave, not a hug >> reading about all the scuttlebutt lately, if rupert had his way, he would just probably no matter where comcast is, he'd sort of push them away. is he able to do that? if he had his way, i don't think -- as a fiduciary he has to consider comcast. but he really seems to want to be a shareholder of disney for some reason. >> well, i think he also as he said publicly that he believes the share price of disney is a better investment long-term. and even though disney is not paying cash in their initial offers, he believes that the value -- >> i've heard that i've heard analysts say well, you know, disney is going to be $150 stock really three years ago you told me that disney has stayed right where it is in three years. so i don't know how -- then i guess i should mortgage my house and put every dollar into disney since i know it's going up 50% in the next two years. they don't know that nobody knows that. >> no.

"a," he favors iger and the deal and "b," he thinks it's a stock that's going to grow it's a good stock. there's a question about whether comcast needs to bring him partners because of their own debt load >> when you look at the deals, is your hunch that the murdochs really want disney to the point where it doesn't matter, almost, what comcast comes up with that is the deal it's going to be >> it matters. >> it does okay it can be stock. >> you can't have large shareholders and say to them, screw you. i'm doing the deal no matter what i mean, he's not an autocrat in this sense >> then the question is how high comcast can grow it's about balance sheets up against their balance sheets >> and how high disney is willing to go. >> in chasing that they've been fairly disciplined economically and this will test that. >> used to be that they said

four times for comcast would be doable if it goes to 47 or 49 a share, you're talking about five times. but they still -- >> talking about leverage. >> yeah. i still think brian roberts would consider what do you think he comes back at $47, $48 >> i wouldn't dare to climb in the trees and figure that one out. but i know this. with what's at stake are here two things that really matter to the kpaebs the ability to compete against hulu and netflix one of the reasons murdoch is selling is because of his fear to netflix and his inability to compete. the other one is international comcast is weak internationally. there are two attractive things. sky is attractive. and star in india is attractive.

>> well, now, supposedly fox is going to go up on the sky bid. that's supposedly imminent as well >> it's in the financial times this morning >> sorry to interrupt. we've got cape playback of the president on his way to bruss s brussels >> it's going to be an interesting dime with nato nato has not treated us fairly, but i think we'll work something out. they pay far too little. but we will work it out. both countries will be happy the uk, that's a situation that's been going on for a long time so i have nato i have the uk which is in somewhat turmoil and i have putin frankly, putin may be the easiest of them all. who would think. who would think. but the uk certainly has a --

they have a lot of things going on >> have you talked to teresa maize -- >> i have not. no, i have not boris johnson is a friend of mine he's been very nice to me, very supportive and i maybe will speak to him when i get over there. i like boris johnson i've always liked him. [ inaudible question ] that's up to the people. i get along with him very well that's certainly up to the people not up to me [ inaudible question ] well, we do have a lot of allies, but we cannot be taken advantage of we're being taken advantage of by the european union. we lost $151 billion last year on trade and on top of that, we spend at least 70% for nato and frankly, it helps them a lot more than it helps us.

so we'll see what happens. we have a long beautiful week. i will say also, last night was an incredible evening. rave reviews actually from both sides [ inaudible question ] i really can't say right now as far as i'm concerned, a competitor a competitor i think that getting along with russia, getting along with china, getting along with others is a good thing, not a bad thing. i've said that many times for many years so we'll see we're meeting with vladimir putin on monday. we'll see how that goes. [ inaudible question ] they didn't give it. but it will be given at a certain period i actually do -- i actually do

have a little gift for him but you'll find out what that gift is when i give it [ inaudible question ] no, i haven't. we really haven't. we haven't discussed [ inaudible question ] well, i have a solution. tell people not to come to our country illegally. that's the solution. don't come to our country ill l illegally. come legally [ inaudible question ] i'm saying this very simply. we have laws we have borders. don't come to our country illegally. it's not a good thing. and as far as i.c.e. is concerned, the people that are fighting i.c.e., it's a disgrace these people go into harm's way. there is nobody under greater danger than the people from i.c.e.

what they do to ms-13 and everything else. so we ought to support i.c.e not do what the democrats are doing. democrats want open borders and they don't mind crime. we want no crime and we want borders where borders means something. all right? and remember this. without borders, you do not have a country. thank you, everybody >> we've been listening to the tape playback of the president as you see there this is a live shot of the president. he justlanded at andrews air force base what we were listening to was tape playback on his way to andrews. in that playback he commented on everything from immigration also about the trip that he's making that he's got nato, uk which is in somewhat turmoil right now. and then there's putin and putin may be the easiest one of them all. he was also asked directly whether putin was a friend or a foe and he said he was a

competitor which is interesting >> he also said the confirmation for brett kavanaugh is going to be a beautiful thing which might not be the adjective i would use to describe what we'll see over the next coming weeks. we want to thank ken auletta july 27th is when we should know something, too, about shareholders >> unless it's postponed again >> depending on what comcast does and i don't know when we'll hear that either. but there's some nice weather in sun valley, i hear that anyway are you headed out there >> no. i actually have to be out there next week. i'm on book tour. >> oh, that's right. "frenemies." the story of "squawk box" and the anchors. >> awkward okay now the moment we've been waiting for. scott cohn is about to reveal some of the top states for business scott, give us the countdown >> all right, melissa.

there can only be one top state for business that's where i am. we're not going to reveal that yet. but it takes quite a bit to make it into the elite top five we rate the states in ten categories of competitiveness. it takes a lot to get here so for 2018, let the countdown begin. state number five. colorado the centennial state up from sixth place last year. >> the most pro-business state in america but with the highest environmental standards. >> one of the best educated workforce. colorado stem is a public/private partnership boosting education in science, technology, engineering, and math number four, virginia. the old dominion returning for the first time in five years a business in friendliness with bipartisan legislation this year to cut regulations by a quarter. at number three, utah.

the beehive state. up from eighth place last year with a buzzing technology sector, utah has added nearly 50,000 jobs in the last year and at number two, washington. the evergreen state. it was america's top state last year >> we're not thinking about last century's companies. we're thinking of next century's as well. >> america's fastest growing economy for a second year in a row. and the second best workforce. the home of amazon, boeing, and microsoft. but high costs and poor infrastructure prevent a repeat win. still washington remains in our elite. the top five for 2018. so what is state number one? now, every year on top states for the last 12 years we've tried to do things bigger and bigger and bigger. so it's not just one location where we're going to reveal this from we've got a lot going on so i'm going to get -- my ride is here. we're going to get ready for the

big reveal coming up next hour on "squawk box." i will buckle up like a good boy. all right, doug. let's get this show on the road. >> mike, that doesn't look like it could be -- >> stone mountain. >> oh, is that stone mountain? >> i'm just guessing >> georgia not being in the top five makes me think -- >> it does look like the west, doesn't it >> it does >> but they do it on purpose to trick you. >> i know. how could it not be in the top five my second home, you know >> hotlanta. >> yeah. very hot, hot, hot >> the bulldogs. >> how about dog heaven tho ugh? >> it's got to be. it'd have to be in the top five. >> you have a good track record in guessing the top state. >> i've gotten lucky the past two years. >> two years he's guessed it past couple of years, i think there were more clues. i had time to put it in the

algorithm. this is more on the fly. >> in the google machine >> on your epitaph he was really good at figuring out scott cohn's top business. that's sad. >> it's not to say he doesn't have other talents though. >> plus i called the three week pause. >> you were out of the market from the santoli bottom. >> just didn't chase it, that's all. >> you said don't chase it at 2100 all right. coming up, scott is back with the big reveal. state number one at 8:40 stone mountain, you have to be on top of the thing for it to look like that and then later on "squawk on the street," don't miss hugh johnston he's the pepsico cfo talk about his company's latest earnings reports futures right now, i don't know. the more scott cohn talks, it's just business in america up 75. we'll be back. ♪ ♪ build your next big thing to run in more places, without recoding.

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were mortified that a taco bell guy was going to chipotle. >> exactly what they needed. >> thank you we go way back with my taco bell right? we do. >> i said the nasdaq was building a taco bell for joe for months >> it wasn't here and i'm not happy. the stock currently pricing in an aggressive recovery you can get nachos hold the salmonella now. he's got rid of that >> was anybody up in arms about it or did we just sort of assume chipotle customer would be up in arms >> investors loved it. because taco bell was doing so we well. >> there was a reflex

assumption i don't think anybody got excited over it. >> i was ecstatiecstatic >> you want the taco bell-ization of chipotle >> yes i want something they never heard of in mexico it was a cheesy queso rito or something. >> you want the inauthentic mexican. >> bingo theresa may meeting with her new cabinet today. wilfred frost is here to tell us why global investors need to pay attention. >> there's been turmoil in westminster, london for theresa may. what all of this means for her future, for brexit, and for the president's upcoming trip to the uk after this short break

brexit cramable. theresa may under pressure we'll tell you what it means for the uk's exit from the eu. earnings alert pepsico beats the street the reaction coming up plus the big reveal. cnbc's top state for business will be unveiled this hour we'll take you live to the secret location 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 i'm joe kernen along with melissa lee and mike santoli the futures now are solid. up solidly in the green. up about 60 right now. in between 50 or 70 on the dow 5 on the s&p and 19 on the nasdaq in europe, a lot of cross currents but the president headed there imminently we've got green except spain and then treasury yields have moved up slightly. not back to 2.9% yet, but 2.869% on the 10-year quarterly earnings out this morning from beverage and snack giant pepsico.

beating by 9 cents with quarterly profits of $1.61 a share. pepsi saw better than expected organic growth shares up more than 3% right now. don't miss cfo hugh johnston coming up on "squawk on the street." meantime, tesla will be opening up a new factory in shanghai that is according to chinese media. the automaker has signed an agreement to open a plant that will have an annual capacity of 500,000 cars tesla has wanted to open a china factory both to take advantage of a growing market as well as avoid import tariffs we'll talk more about this story with phil lebeau in a few moments. breaking news from thailand. all 12 boys and the coach have been rescued now from the cave that they were trapped in for more than two weeks. it's the third day they were wondering if they could do it all on the third day. they managed to do it. i think they got better at the procedure which was complex.

i mean, really a pretty good blueprint for, i guess this was specific just to this situation. but they've prepared and prepared and prepared. and then pulled the trigger with rains imminent and a successful outcome. >> hopefully the families have been notified. they've been keeping the families in the dark because they hadn't taken out all the boys they wanted to wait until all the boys were extricated also the fear of infection because apparently you can contract infection from the bat feces. >> yeah. >> hopefully they're out that's the first step we want. >> what is it called guano? bat droppings. you went to harvard. >> i didn't know about bats. >> let's write it down >> marked. president trump departing for a tour of europe this morning. he spoke to reporters before getting on the plane eamon javers joins us now from brussels >> yeah. that's right

the president left the white house just about half an hour ago. he stopped to take questions from reporters laying out what he thinks the going to happen here and in helsinki next week when he meets with vladimir putin. >> i have nato i have the uk which is in somewhat turmoil and i have putin frankly, putin may be the easiest of them all. who would think. who would think. >> so the president there suggesting that his meeting with vladimir putin might be easier than the meeting at nato part of the reason for that is he's going to ask them to beef up their defense spending. he's been hitting on this point again and again in his term as president of the united states he wants the nato allies to spend about 2% of their gdp on military spending. that's what they've committed to normally you would say here in brussels, all eyes on the nato summit not all eyes will be on that

today because a lot of people here focused on the soccer game world cup match this afternoon at 2:00 p.m. eastern time in the united states. that's belgium versus france joe? you want one, they're selling these right next to our live shot position here i can pick one up and send it back to you if you need it >> i do. i do because of who's here and i want to ask about that >> little soccer scarf >> yeah. wilf is here >> eamon, you're not supporting belgium, france, or croatia, are you? >> you got to jump on the bandwagon, right so here i am >> when in rome. >> yeah. got to support belgium. >> who's going to walk around there with a -- >> but against england, it'll be a different thing. >> he's going to walk around there with, like, the colors of france on. don't do that. >> red, white, and blue. could be the colors of the many erk -- america. >> we're going to get to wilf. president trump telling people it's up to the people of great britain whether may stays in

power. he said i love boris as well after back-to-back resignations in the uk creating more controversy in this process, the brexit process, wilfred frost joins us with more but first, about the soccer. i know how crazy you are about arsenal. >> yeah. >> is this bigger than that for you? >> 100%. this is the whole nation coming behind joking aside, you'd say the nation was coming together instead of brexit. the royal wedding brings people together the world cup brings people together it's the national team all together put it this way. the quarter final match or the round before i forget, 32 million people tuned in. more than half the population tuned in that was for the quarter final if we made it to the final or the semifinal, 75% of the people would. >> you know the other three teams -- are you hopeful,

confident, cocky >> definitely not cocky. take each game as it comes i think we are favorites on paper against croatia. so if we perform well, we should get through that game as we did sweden the last round. we won't be favorites in the final. but anything can happen in the final. the team is already massively over-performed >> if you win it all, would you be afraid to be in london? >> no. i'm going to be there. good timing going back for the trump visit. >> it is but it's going to be nuts. >> one game at a time. >> will there be drinking? >> not for the semifinal because i'll be working. >> not you in london. there will be drinking >> there will be -- >> there's been beer shortages across europe because of the world cup. >> a shortage of co2 apparently. >> but england football fans probably have something to do with it. anyway let's get back to the british political story. it was back to business as usual

for theresa may this morning hosting a cabinet meeting with a few faces missing. boris johnson and david davis. both resigned because they felt the prime minister's brexit strategy was too soft. johnson said, quote, the brexit dream is dying, suffocated by needless self-doubt. now, why resign rather than fight internally to change that position from within at least part of the hope would be that it would spark more resignations and confidence in the prime minister that has not happened. the necessary 15% of conservative mps or 48 of the 326 have not called for a vote of confidence yet. may quickly reshuffled her cabinet and appointed jeremy hunt he was a remainer but has since said he is a convert to the course of brexit he has a lot on his plate with the nato meeting and then welcoming president trump to the uk on thursday and president trump just addressing the visit and prime minister theresa may's place

asked whether she should be prime minister >> that's up to the people i get along with her very well have a very good relationship. that's certainly up to the people not up to me >> i have to say, those comments as i heard them play out 15 minutes ago, i could not believe how stark his words were and how hard this trip is going to be for the uk not only did he say that he said he was good friends with boris johnson. but the sound bite eamon played, he said the uk is in somewhat turmoil. putin is the easiest i cannot stress how much tension there is with them and russia following the novichok threats the uk sending no government ministers at all to the world cup because that tension with putin and russia is so severe at the moment and there's the president two days before meeting supposedly his greatest ally saying putin is the easiest. >> wait a minute we placed you with france, you know that. >> well.

that -- >> you didn't get that memo? >> he still says -- >> i know. i know we love you. but we don't like the balloon. whose idea was the balloon we don't like that if we're such great allies you're flying a baby trump balloon. >> the mayor approved that on grounds he says of freedom of speech but it doesn't help the term i agree. >> you're in a weaker position than six months ago. >> much weaker no doubt about it. i think for those comments -- it's been good to see woody johnson embracing the soccer >> but woody said i have no idea about the bilateral trade agreement where it goes from here right? >> yeah. there's a lot of turmoil in the government >> we're there in spite of some of the smart ass stuff. but we are there for you >> and i'm sure the uk would say the same thing >> he did not mince words.

>> that puts huge, huge pressure on it. particularly the fact -- i mean, i think all of the british government and the european allies are hoping nato goes more smoothly than g7 not sure that it will. and the fact the putin meeting comes straight afterwards, there's going to be a lot of friction no doubt about it. as everyone's discussed this morning, theresa may is not domestically in a strong place >> so as an elitist globalist that we've talked about before, would you rather have -- >> i'd rather win the world cup no matter what >> than remain >> you don't know if i would want remain or leave >> i think i know. would you rather have remain or -- >> win the world cup over everything >> that's good >> over everything regardless of brexit >> okay. >> it would be -- i mean, i can't even begin to tell you >> that's so nice. >> whole lifetime has been pain and hurt for england's soccer team we've always choked. and this young team, the average

age is 24.5. >> so they don't know that history. >> they just stepped up to the plate. as i said, they were bringing a nation together until the last 24 hours >> i'll be with you now on this. i'm with you okay that may not be good maybe i better not be with you >> no, joe it'd be my proudest moment to bring you along. >> let's get back to the markets now. joining us, jim iuorio managing director at tjm. he's also a cnbc contributor it's hard to talk, jim, about just, you know, your normal purview of the market. trump's headed over there. who knows what's going to happen with theresa may we don't know what's going to happen with merkel at this point much less putin. any of this play into your calculus >> sure. sure i think the market realizes now that trump doesn't necessarily

measure his words the way politicians have in the past and the market's grown used to that you get that sound bite an think that sounds stark and significant. so i don't think that's a big deal and the markets don't as much either what the markets think is a big deal is we started rallying on the buy the rumor sell the news on the tariff thing. i think the markets thought last night's nomination of brett kavanaugh was a victory for trump somewhat any time you can paint something as a bit of a victory, it's an implication they do better one thing, we could argue that the tariffs are asinine and misguided and ridiculous one thing we can't argue is they're in blatant advocacy of the u.s. sector. that's something the stock market can hang its hat on trump's doing his best they might not like the swings he's taking, but there's no question he's taking them in their defense. >> yeah. my favorite part of it is puth

season a friend or enemy he goes, we don't know yet he's a competitor. that's the businessman coming out again. and i think that that -- you could transfer that to a lot of the world view of trump on a lot of different issues whether it's china or the eu. it's all about money it's all about business and competition and making -- trying to get america its fair shake on a lot of this stuff. >> of course and that's what we signed up for here but i also think he says things to make the haters hate more i think he likes to poke the bear and i even sometimes think it's a little bit funny again, i think he probably should measure his words more. but we have to remember that we're in a different world he negotiates differently than any president we've had before >> okay. we looked at some overhead

resistance santoli does that all the time what do you see above us and below us >> 2800 has been my level, apparently everyone else's, the past few days. we got close enough to it. i think we pull back to 2750 if we go below there, then my bullish thesis would be damaged a little bit right now i think we could pull back 40 handles of the s&p we'll look at earnings season coming soon. probably going to be good again. we're in a little bit of a void right now. as soon as we start to see these numbers, we push through 2800 and head for the highs again >> okay. all right, jim iuorio. you're like a renaissance man ready to talk about anything thanks except for that jacket which is still just -- i know it's your uniform. >> it's fantastic. yeah it's a great jacket. >> okay. i think we should do that, mike. don't you think? two toned suits. >> i gave one to larry kudlow. the exact same model

i gave one to him the first time he retired from cnbc maybe i'll do the same for you if you're nice >> you don't see that on the runways in paris when they introduce new stuff. why aren't lapels different? >> the cow pattern suit too. >> yeah, yeah, yeah, yeah. he's doing chick-fil-a commercials now. coming up, new reports that tesla is planning on opening a new plant in shanghai. we'll check in with phil lebeau next also, the reveal for the top state for business here's the hint from yesterday woolly bully we'll take you live to the top state at 8:40 a.m. eastern time. . lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better?

>>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. yourbut as you get older,thing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish.

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huh. woolly bully bevo the longhorn the mascot at the university of texas do you know? >> could be. could be texas, yeah >> hot, hot, hot i guess just the temperature dog heaven >> oh, we're back. welcome back to "squawk box. trying to figure out where scott is looked like texas. i said yesterday and people were

giving becky credit for picking texas. texas should win every year. shouldn't it theoretically? >> you got to look at the formula. >> does the formula change every year >> no, i don't think so. hasn't won the last couple years, has it? >> i don't know. anyway texas was not in the top five either right? >> that's right. >> it's got to be texas. >> we don't know could be one >> you also don't know how many points can separate the top five >> could be decimal points futures are up been up all morning long the nasdaq up 19.5 s&p up 4.5 everybody is out of the cave all 13 people rescued. stocks to watch and we're focusing on analyst calls this morning. dow component walgreens boots alliance -- i'm still getting used to saying goldman sachs and nike >> they kicked woolworth out

>> they kicked ge out. what about at&t? >> no. verizon's in there >> all right downgraded from inline to outperform the purchase of pillpack is only one of several factors that could pressure the longer term outlook for walgreens. ebay downgraded from buy to hold at suntrust. recent supreme court ruling on e-commerce cited another stock to watch this morning. tesla shares moving higher premarket. elon musk headed to china this week chinese media is reporting that the automaker has signed a memorandum of understanding with the chinese government to open a plant in shanghai. phil lebeau joins us with details. this could be a big plant in terms of capacity. zbl >> it could be but there are a fair number of people out saying haven't they

announced these plans in the past well, this is different than what they said in the past they have said for some time that they will open a plant in china. and the reason is simple china is the number one for vehicles while tesla has been increasing sales, look at the level of increase here. it has not been a huge surge in sales. and we've been over to china we've seen some of the charging station there is about 14% of the sales last year were in china. the plans for building a factory in china are significant from this standpoint. it will be a place both for battery manufacturing as well as for final assembly of vehicles and most believe that it's the model 3 which is the mass market model that they're just starting to build herein the united states and deliver here in the u.s. as well as the model y which would be expected in the next two to three years and china is e the market to be in if you want to do better in electric vehicles. it is the number one market in the world in terms of overall

sales. it dwarves the u.s., germany, and france the government is actively pushing people to buy electric vehicles or plug-in vehicles in china. so when you take a look at shares of tesla, keep in mind this is where it needs to be it is also worth noting that tesla vehicles being sold in china right now are far more expensive today than they were a week ago that's because of the new tariffs that the government has put in place on vehicles imported from the united states. if you were to buy a model s over there today, it's about $27,000 more than it was a week ago. so for tesla, while this plant is important, they're going to be importing vehicles or exporting vehicles to china for time to come >> does dtesla have to have a - >> no. remember china -- that would be different. china has said it will scrap that requirement that you have a

local partner for manufacturing. tesla has not confirmed this tesla by itself and it's not with a local manufacturing partner, that is significant it would have a huge implication in terms of the ability to bring in the profits there as opposed to split them with a local partner. >> all right phil, thanks phil lebeau in chicago up next, trade and the economy. we're going to talk to chief economist nathan sheets. also cnbc's top state for business will be revealeded. here's one more clue noble prize. where's noble drilling at 8:40 a.m. eastern we'll be right back. and packages. and it's also a story about people. people who rely on us every day to deliver their dreams

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coming up, it's almost time. we will reveal cnbc's top state for business here are three more clues. perennial favorite dog heaven and hot hot hot. tweet us your guesses. but first, why there may be magic or no magic in the yield curve. steve leisman joins us with that story. steve? >> a new federal reserve paper borrows from bluoyer ce stult and says don't fear the yield curve. we'll be back with that story

after the break. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

♪

good morning and welcome back to "squawk box" here on cnbc they're rolling over in their grave, someone said. don't fear the yield curve you think the blue oyster cult has any idea what you're talking about? >> i'm doing my best here to make it interesting. >> well, it's not working. how many times have you been told don't try to be funny, don't try to -- >> once about 16 years ago by a guy who doesn't work here anymore. >> anyway. live from the nasdaq market site in times square, among the stories front and center don't fear the yield curve we'll get a fresh read on the labor market did you order the music? >> no, no. they're in the back. very controversial song, you know >> they're playing wrong >> really? >> sort of a suicide thing to it the romeo and juliet thing

i was reading this morning what the lyrics meant >> and you used it anyway. >> that's the title of the paper i'm going to talk about. >> really? >> don't fear the yield curve is the title of the pap per >> all right jolts are coming out for may did you know that? >> you're excited about jolts? >> always. the measure of job opportunities and labor turnover -j-o-l-t the number has been hovering near record highs. the national federation of independent business says its monthly confidence index declined slightly last month the most commonly negative factor, not being able to find workers for open positions in the widely watched rescue of the soccer team in thailand, all 12 kids have been rescued along

with their coach from a cave after more than two weeks. they were there for even longer than that, right >> june 23rd >> i thought they didn't find them for awhile. that's been exactly how long they were in >> i believe so. that's when they went in the cave after practice. >> divers took the last four players and the coach out within just the past couple of hours. that's a really good outcome that we were all hoping and praying for. a lot of concern that a tried and true recession indicator is flashing red. but senior economics reporter steve leisman says he fed has a different way of looking at it and don't fear the yield curve >> and i'm still excited about this story inching towards areas where in the past it is indicated recession.

at 29 basis points, that's where it was this morning. still 29 fed rate hike from near zero or the kind of level that we predicted. recession right there. now, some fed officials have indicated they'd be unwilling to support a move the paper don't fear the yield curve said there are distortions in the spread. indicator right now showing less concern than the 210 similar to the fed cuts. when the spread is negative the market expects cuts. the other way when it's positive it's just an expression of the outlook for the fed. i think it's not that simple everyone says how does the 210 do it? it predicts what the fed is

going to do. >> within a couple of years it's going to be easing >> right >> so recession. >> but that will be a couple years down the road. not like this 29 basis points where it is now. plus with the central banks owning all this paper out there and at historically low interest rates and all over the world, the 210 spread may not be what it was in the past and this other way statistically shows better reliability in terms of recession >> doesn't it also sound like greenspan listening to this conundrum the long-term rates would not go up. so the last cycle, we were also trying to explain away the flatness of the yield curve. >> it didn't work until it did much, much later so it was not a twie invest, right? it was like one of those broken clock indicators >> you need a more cow bell tie up >> one we do have is the outlook for the probabilities for rate hikes. if you look at them, they're still seeing the fed hiking.

they haven't backed off that although that third hike from now is not until june 19 if you have 50% probability so there is indication it slows down a bit next year what would that be that's be 2.5 on that third one there. so the market not so quick to think the fed gets there >> all right steve's going to stick around. joining us now is nathan sheets. nathan, good morning to you. >> good morning. >> should we not fear the yield curve? >> so i would -- i'd say the yield curve is a very important indicator. and i think the flatness of the curve that steve highlights is very much giving the fed pause but by the same token, i think it gives the most powerful signal when the curve actually inverts. and that has not happened yet. in addition as steve noted, there are some extraordinary factors that are holding down the long end of the yield curve.

one important one is that the fed itself has taken a substantial amount of duration out of the market. it's in the process of slowly putting some of that back in but the fed and other central banks are holding down the long end of the yield curve so i think it's something they're going to watch and i think it makes sense to look at the 210s i think it also makes sense to look at expectations for rate policy over a six quarter horizon. but you also have to look at the fact that the unemployment rate is at 4% >> you're a big worry wort though although after you take it into account, you say don't worry about it but here's your worries. more controversial trump administration for trade you're row area economy has been crappy, basically. italy which is scaring everybody. oil prices are the highest levels in a long time.

continues to go up and they're more forceful in their language and emerging markets are in trouble. that sounds awful. then you say, anyway, that we still have considerable momentum >> economists are paid to worry. >> as are bond fund managers >> i do think there's more worry in the bond market than there is at the federal reserve more than even economists are feeling right now. when i look at there are a lot of uncertainties out there and a lot of them are quote, unquote manmade or policy induced uncertainties. but this economy both in the united states and globally as you said has significant momentum when i look at gdp numbers, globally. when i look at pmis globally when i look at the pace of investment in the united states and abroad all of these things give me some confidence that growth is likely to continue. maybe at a pace that's somewhat slower than what we saw at the end of last year

but the expansion will continue for a ways longer. >> you have a unique background for commenting on the trade issue. you worked at the treasury department in the international section. you headed that. then you worked at the fed so tell us how the fed -- what i've noticed from powell is a very gradual ramping up of rhetoric when it comes to the concern about trade. first kind of cited it from the beige book then all of a sudden they were hearing it and now the new step the fed has come to on trade is that it could affect the outlook how do you expect the fed to react? >> ur you're seeing here jay pol operate as the chief economist of the united states and the bottom line here is that

tariffs, trade wars, trade tensions create a lot of uncertainties and could be disrespe disruptive for the u.s. economy. and powell's warning about that. specifically looking at the mandate, tariffs are going to put upward pressure on prices. and the federal reserves' mandate is to achieve price stability. so it counters that. in addition, the fed is seeking to achieve sustainable balance growth and uncertainties associated with tariffs and the tariffs themselves could be very interruptive so the fed is going to be looking at the price of facts. it's going to look at the activity of facts. they may be polling the fed in opposite directions. so the fed's going to have to weigh those two things it's not clear how they're going to play through. but the fed will be watching at a minimum the fed will be watching and i think continuing to comment on these developments very closely >> maybe japan needed some

tariffs during their 20-year period where all they wanted was inflation. if there was a good time to do it and we -- and the fed can't get up to where it wants to be, why not do it now then >> the u.s. treasury wouldn't have agreed with the tariffs but, you know, policy induced inflation is not the way you want get it. >> okay. >> thank you, nathan >> i don't think it's the smartest way to create inflation. >> you were worried about it being too low though >> that's not the way i'd want to create inflation, joe why would you -- why would the president -- >> because you've got to -- at some point you've got to take a stand. you've got to take a stand >> through historic business -- >> no. this is the time you were worried about it being too hot. >> only three words for you joe. global supply chain. up next, cnbc's top state for business revealed. our scott cohn is getting ready to land in the number one state.

where the hell was he? okay we're going to tell you where he is right after the break is it texas? i don't know here's a final look at the hints. tweet us your guesses @squawk.

we've been teasing it all

morning. it's time to reveal once and for all the top state for business scott cohn just landed you were in -- where'd you come from and where are you >> oh, we're going to get to that in just a moment. let's get us safely on the ground first i'll tell you a little bit about that remember we rank all 50 states 2500 possible points on more than 60 metrics to get to america's top states we rehearsed this or we didn't rehearse this. anyway, it's such a big state. such a big and important state that we wanted to do this right. and so we really had to go all over the place to show it off. but to tell you exactly where i am, a native son, the pat green band

♪ year after year. ♪ ♪ girls from georgia are sweete than peaches ♪ ♪ ones from california made for bathing suits and beaches ♪ ♪ minnesota gals sure fill out sweater ♪ ♪ the girls from texas just a little better ♪ ♪ mississippi's got all them delta queens ♪ ♪ louisiana cajun girls be aat l i've ever seen ♪ ♪ kiss a girl from kansas you dang sure won't forget her ♪ ♪ but girls from texas just a

little better ♪ ♪ when i feel that southern drawl from the ones in arkansas ♪ ♪ they're so sexy in new mexico ♪ ♪ only ten i see, she ain't fro tennessee ♪ ♪ she's waiting for me in san antonio ♪ ♪ up in oklahoma they're more than just okay ♪ ♪ they don't -- find yourself a lone star gal and boy you better get her ♪ ♪ the girls from texas just a little bit better ♪ play it, boys. ♪ >> all right i think you figured it out by

now. we're at the enchanted rock state natural area near fredericksburg, texas, in he beautiful hill country let's see why texas is a lone star ♪ year after year from the hill country to the gulf coast, no state has more of what it takes to compete than texas. america's top infrastructure >> this is the energy capital of the world. >> ready access to capital and a culture of innovation. but this year texas has something else you can see it at the mulberry cafe in midland. one of the fastest growing cities in america. >> the city just became on fire. >> texas crude up some 60% from a year ago helping make texas america's top economy with more than 350,000 new jobs in the last year.

>> every ceo across the country when they move to the state of texas, i ask them why are you coming to texas. first words out of the mouth is the same thing that is because you have the best workforce in america. >> but texas does poorly in education. no state has a larger percentage of people without health insurance. crime is up. and the democratic nominee for governor warns about the messages sent by measures like a state ban on sanctuary policies for immigrants and a proposal to regulate transgender use of bathrooms >> i call them the job killing bills. you know, this needs to stop being the texas brand. >> but for now, this is a star of american business texas. america's top state for business 2018 show you where we were yesterday we were at the sand hill state park in west texas a beautiful place and a sandy place. we're still getting the sand out of all kinds of places what about all these hints we've

been giving you over the last day? woolly bully what was that about? texas is the largest producer of sheep and wool noble prize. the noble gas helium first extracted in the u.s. in the texas panhandle. perennial favorite refers to the tyler rose garden, the nation's largest rose garden. dog heaven, the nation's largest working fire hydrant is in beaumont and hot hot hot, the texas state pep ser tper is the jalapeno. you can see where your state ranks. all the full study now online at topstates.cnbc.c topstates.cnbc.com learn all about competitiveness and how we got to all of this. later today, we will talk to texas governor greg abbott about why texas is doing so well and the challenges that texas faces. and lots and more about our stu, the best states in all the different categories, the bottom states, the most improved states

all day long on cnbc remember go to topstates.cnbc.com tell us what you think about texas. america's top state for business 2018 pat green, take us on home ♪ ♪ girls from texas i'm a small business, but i have... big dreams... and big plans. so how do i make the efforts of 8 employees... feel like 50? how can i share new plans virtually? how can i download an e-file? virtual tours?

zip-file? really big files? in seconds, not minutes... just like that. like everything... the answer is simple. i'll do what i've always done... dream more, dream faster, and above all... now, i'll dream gig. now more businesses, in more places, can afford to dream gig. comcast, building america's largest gig-speed network.

get down to the new york stock exchange jim cramer joins us now. we got the big reveal. it's texas, jim. the only thing i was going to say, you know, richard fisher, our contributor. >> yeah. >> he took issue with the idea that texas is just oil and why it does so well. he always whenever he comes on, he said it has to do with, you

know, pro growth initiatives from the legislature and tort reform he brought up and deregulation, in addition to that, the oil-based economy. but that can be good or bad. and the last couple of years when it got down to 30 or 40 texas was doing pretty well. he went to great lengths to say it's not just about oil all though it helps at 75. i should put that statement number one. >> i have to disagree with that. he's an imperial thinker there are many companies that chose to relocate in texas from other parts of the world u.s. concrete they're talking about these huge construction jobs in texas because corporations want to be headquartered there. inexpensive versus where they may have been. i think that will accentuate after the tax reform rules yeah i think places like dallas, which is not nearly as involved with oil as the tv show makes

you make is booming. i think that, obviously, it's booming, too it's probably the biggest drilling area in the world now you have oil but you also have companies that want to locate there. i thought, as usual, scott's stuff was terrific and funny i love the song because of the other states that didn't make it. >> yes exactly. and, okay, moving on from there. we have trump going over to europe when six months ago it would have been a different trip, it seems like. it is crazy how quickly things change for everything that is happening. >> yeah. >> look, i think that the issue is nationalism they don't want to talk about it directly nationalism is code for a lot of things over in europe. but i want to see what he does with nato. i like the fact he's saying, you know, everyone does have to pay. you know, the way you pay,

obviously, you go buy things from our defense contractors we've been carrying all the weight i think everyone has to acknowledge that let's see whether there are firm earners that come to u.s. companies. >> all right, jim. we'll see you in three and a half minutes or so coming up on "squawk on the street," don't miss hugh johnston he'll join the gang at 9:10:00 a.m. eastern time. "squawkbox" will be right back 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. directv gives you more for your thing. if you've been waiting for a sign to quit cable, then here's some signs.

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time for your stat of the day. earnings season officially kicks off this week. two weeks after the start of q2 earnings season, the tech sector tends to outperform. final check on the markets here we're looking to open higher here in about a half hour. dow looking to be up by 73 s&p up by 5. nasdaq up by 15. we'll watch financials. >> and i can feel it, i think everybody and a lot of comments about the team is jelling. yeah the ensemble is jelling. we're going to be back tomorrow. >> yes. >> texas is the best state and this is a phenomenal, tremendous, i get all these words, you know, we can use them. >> exclamation points. 7. >> we'll be here tomorrow. >> nice. >> anyway, make sure you join

us "squawk on the street" is next ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber stocks approach key resistance levels q 2 earnings machine revving up with pepsi marginal gains in europe this morning. watch the ten year 2.87 as we await the bank earnings on friday earnings season is