it's wednesday, july 11th, 2018, and "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." good morning welcome to "squawk box" here on cnbc we are live at the nasdaq market sites at times square. i'm melissa lee with mike santoli and joe kernen becky and andrew are off this morning. u.s. equities, we're feeling some pressure. threat of tariffs on $200 billion worth of goods on china. the s&p and dow looking to snap a winning streak the dow is down 206 points the nasdaq looking to be lower by about 70 points overnight in asia, we did have a

selloff initially. down as much as 2% on shanghai as well as the nikkei. the nikkei closing down 1.2% shanghai down 1 3/4% the yuan testing at a low there. over in europe trade concerns lower there. the dax is down by 1.3% and the cac is down by 1.2%. taking a look at treasury yields, we saw overnight a bid for safety the ten-year note is at 2.83%. the two-year note at 2.557 >> we have some breaking deal news in -- you saw this playing out yesterday. the word was that fox was going to raise its bid and it happened 21st century fox upping its bid for sky, the british broadcaster. 18.60 and that tops comcasts

offer. it secured the backing of the independent committee of sky for that deal. comcast, a parent of cnbc and nbc. this is a part of the whole overall -- it's really interesting. it's a bidding war for the assets of fox which people think there aren't many things like that left around to buy. who knows how high it will go. not like limbo, how low it goes, it's how high it goes. anyway, let's talk with javers i think he was over there. anyway, president trump already making headlines on the first day of the nato summit in brussels eamon javers is there with the highlights we have to revisit the game yesterday quickly and then you can get to it, eamon, because you were in the middle of it all. >> sports and then geo politics. >> yeah. i'll tell you what struck me, i was watching when the guy hit it in with his

head on that kick, immediately belgium -- belgian fans were so depressed and france was so excited. the whole half was left but people know there's no way there's going to be another goal in this game i mean, you know, you got one already. >> once the spirit is thrashed, it's hard to come back. >> in most sports there's hope if whole half of the game is left there's hope there's no score. but there was no way people were leaving. belgium, they're -- that's the thing about soccer oh, my god, we scored a goal, we're going to the finals! that's sad they have to make it look good >> i'll tell you what, it was an exciting game in belgium the belgium fans were hanging on to every second 6 it i'm not a proefessional. >> they went for the head balls,

they couldn't get the vertical height the french were technicaler and jumped in well the auoughauto -- he kept with a strategy wr i -- the belgians had a chance and just didn't get their foot on it right there was one where a guy was almost in position to hit it with his head and it was about a foot away and unable to do it. today you have croatia and england -- wilf, i don't know where wilf is. >> in england. >> in an airplane, right >> in a field position he has one of those recliner seats. he really wants this he wants it more than -- yesterday he said he doesn't care about brexit. >> imagine -- >> he doesn't even care about breks it.

>> imagine france, england and brittain but, boy, when you get onto the pitch you have no idea what's happening -- >> they should change it. >> it's drama, anxiety a lot more goals, right? >> yeah. >> don't you think >> it's too hard to just use your feet. >> it would be rugby if you did that >> it is hard. i played it poorly and it is hard. >> they want to talk trump, nato so i thought we were -- i thought russia was controlling us trump is saying russia's controlling germany? >> reporter: yeah, look, it's a contentious start. at breakfast the are president

went after germany here's what the president said at breakfast this morning. >> if you look at it, germany is a captive of russia. they supply -- they got rid of their coal plants, got rid of their nuclear. they're getting so much of the oil and gas from russia. i think it's something that nato has to look at i think it's very inappropriate. just before we went on air we got a response from the german defense. i don't understand what he's saying i hope he goes with resolve to his meeting with vladimir putin. next week's meeting looming large over this summit they don't know what to make of president trump who comes in here with sort of verbal

fisticuffs off the bat the message from aides on both sides -- the president coming i very harsh criticism for germany. we know in the past few minutes as well that the white house is saying that the president is going to meet personally with angela merkel later today and is going to deliver the same message about the gas pipeline he feels that germany is paying russia for energy at a time when the united states is paying to defend germany against russia. a very aggressive president of the united states in brussels, joe. >> tough love. we'll see. easily walk through. i hadn't even connected the dots between all of that money that goes for energy. money's fungible they spend -- i saw something

about some of the soldiers in germany, she was on drugs. take it for what it's worth, using broomsticks to pretend they rifles. the defense budget was complete. i understand that, but you can also see it go directly, from us to nato to -- so trump is tying that to the money that goes to russia for energy. i hadn't connected those two, but trump has. >> the approach the united states has taken since world war ii -- >> yeah. >> the approach the united states has taken since world war ii, it's worth the cost of paying for nato, in terms of trade in order to spend diplomat

diplomatic >> it's very diplomatic. >> world war i, world war ii >> that will generate the economy. >> fool me once, fool me twice the eu the words about it, i understand all of that. >> the president's signaling right here -- >> go ahead. >> go ahead. >> you go ahead, i've got nothing. >> the president is signaling right here that he knows that germany has a weakness with the pipeline the united states doesn't like the pipeline because it doesn't give anyone else the chance. it gives russia too much leverage over germany. the president is criticizing me. i'm going to put my finger right

on it being very aggressive with all of the u.s. allies in france and we'll see how it plays >> 2:00 our time, right? >> what? >>. >> england, croatia. >> i lost track of what you were talking about. >> so much there >> we did alot only 6:09. can you imagine? >> amazing unbelievable let's get to the other big political story of the morning this is one that will surely affect the markets the trumpp imposing new tariffs. >> more exports needed to be included the new list covers the $200 billion figure in exports that will be evaluated for the next couple of months and then subjected to a new hit

it's designed to tighten the newest a senior administration official says -- this new list now includes a dozen piece of types of fish, construction materials, consumer goods like printer inc., skis, many categories of appar apparel. the apparel and footware group wasted no time about chiming in. they said if the administration continues to add tariffs, congress should step in. the senate finance chair orrin hatch said he supported the moves up until now

then the statement from kevin brady saw otherwise, the result will be a multi--year trade war. >> you've tweeted out a list and extremely specific do they seem to tilt more towards the cop summer on bun of hands you do have those items like human hair and toilet water you have hand backs, leather pulls and during the study of this $200 billion group of tariffs, we asked senior administration officials, how exactly are you going to 25i8 lor and kraftd this list to exclude the consumer here? that has been the goal all along. the way they were talking is not by the types of goods but by the fact that this is a 10% tariff,

not a 25% tariff they're trying to judge and see if the impact is lower this time around. >> the retaliation is what is feared in getting up to 250 bld in goods, we're getting to the point where china can't retilliation it's strong when it comes to approvals of new business investors over seas. so much u.s. companies are dependent on. >> that is true. kevin hassett figured out on this program a few days ago is worried about licenses and

passing certain labor tests that the government imposes and we have seen the government not back down from somewhat imposing arbitrary restrictions to serve a regulatory black mail. certainly they have a lot of tools in their quiver but the u.s. is gambling that they have the upper hand. let's get to the impact on the markets. joining us is ed keon and our guest host, bob dahl senior portfolio manager gentlemen, good morning to you both ed, you're under weight equities. >> we're under weight non-u.s. equities. >> does this worry you

>> it does we pulled back to get more in balance. >> are we at the point, bob, where we can back away from the markets? the impact of the tariffs on that amount of goods, we're at the point where we're looking at retaliatory measures that aren't quantitative economy >> that's what's wearing the market the uncertainty is not good. as ed pointed out, thankfully we have a massive head wind and that will provide the other side of the coin. tradesmen off the back burner and we're there. now it's on the front burner and we're trading. >> the context of this pull back

may be right up 3% in four days in the s&p 500. the news hit of the $200 billion in the product futures immediately go down and kind of sit there. it seems as if the market has had a reflex reaction. >> trying to be dispassionate. the bull would say this is all noise. all a bargaining tool to kind of get them to come to the table on their knees, et cetera, et cetera the bears would say when you start a trade war, you can't stop it. i lean towards the view that earnings matter more than anything else. that's what's kept the market going pretty well. >> i found it interesting that they decided to do it after the market was comfortable >> yes the yuan is not recovering we inflict pain and then we feel it here. if you look at where we are, we've been in this trade war they've been hurt much much more >> i wonder though, ed, if that tells you that it's a negative

sum game, right? we're hurt less. they're hurt more. everyone's hurt. >> that's right. >> free trade it's a positive sum game >> in terms of pure affected economies. what about the end game for intellectual properties? maybe that's positive. >> there were a process that this is a process and not regression >> i don't know. everybody agrees the u.s. needs to take a tougher stance against china. there is a sense that to some degree whether some may disagree about the tactics, but the need to take a tougher stance the market has been remarkably calm the market is still up 4.5%. you're still getting a good

amount >> the market has been the same since june 15th. >> very docile market. very quiet more volatile than last year. >> jumpy within this range. >> and in recent weeks, it seems like we've had sort of a rotation towards -- a defensive tilt away from technology is that going to characterize -- you think the markets are going to go higher here. is that going to be the sikd half story >> i think the second half story will be pretty broad because it will be compelled by over 20% earnings. >> we haven't been compelled by earnings this year. >> oh, but i think we have under the surface you have why are you up by 5% midway through the year with all of the concerns about global trade and so forth it's because of earnings and stocks are not as expensive as

they were. there's still reason for optimism again, this is not a big deal. less than a 1% drop with the futures right now. so the market has taken us astray. >> ed, thank you very much >> coming up, pfizer announcing some drug price changes after a conversation with president trump. meg tirrell, what do you have coming up about this >> joe, we've never seen something like this. after a call from president trump, pfizer did something we've never seen before. we have all the details coming up imagine traveling hassle-free with your golf clubs.

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because that is going to be inflated for trump's visit to greet him. >> is there one for the mayor. >> a go fund me for it in three days they had enough for a rival balloon. pfizer announcing it's going to postpone some price hikes after an extensive conversation with president trump meg tirrell joins us now with the story. jawboning maybe? it's kinds of a novel concept but did they need to raise prices or not? >> well, that is an entirely different question drug companies don't roll their prices back. that's what we saw last night from pfizer. pfizer raised prices on 31 mode since on the 31st. some by 9% and some by the

second time of the year. he said pfizer and others should be ashamed they raised prices for no reason. they're taking advantage of the poor while at the same time giving bargain basement prices to others. investors are upset. that wasn't the case this time trump tweeted that he spoke with pfizer and that they are going to roll back the price hikes we applaud pfizer for this and we encourage others to do the same they said they would roll it back to help the president work on his blueprint they will remain into effect until the president a's had a

chance to get to it. they said they took the increases and went to all of the middlemen in the system. we don't know how much would have benefitted fieszer or pbms, this is the argument. >> ready to sell pfizer to do an inversion, then he was p precluding this. i fully understand that drugs, only one in ten make it to market, costs hundreds of millions of dollars to make the drug totally understand that. no one says that however, they get certain patent protection that no other

marketplace affords any other products they get that to recoup their initial investments. they have waste of gaming that they have the legal ways of keeping generic competition out. they do extended release versions >> they get the 12 years and that's still not enough. okay. >> are you talking about viagra? >> i've for the grengot friends. at $50 a bill. >> the back story. >> bob, i wasn't going to out you on that. >> too late. >> i feel your pain, $50 is -- >> and the generics, as you pointed out are $45. >> i didn't point it out i'm pointing out what you pointed out. >> this was going to -- the july

increase will be the second price increase this year making that drug -- >> that should be off patent now. >> it is off patent. >> true generic kpe particulaco. some day the democrats will control congress again, right, joe? >> i don't know. from your lips to my ears. >> meg, thank you. >> coming up, friday is the official kickoff for earnings season, jpmorgan, wells fargo. take a look at yesterday's s&p 500 winners and losers

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welcome back you're watching "squawk box," live from the nasdaq market site in times square. good morning futures this morning deep in the red after the u.s. prepares to unleash $200 billion worth of new tariffs against china. right now we're looking at a dow looking to lose about 188 points at the open. s&p 500 looking to be down by 19 points keep in mind, this is less than

a is roo 100% down we're seeing dollar strength we're seeing yuan weakness, yen strength we're seeing pressure on commodities picture with oil down two bucks a barrel on brent. tesla is ditching the north american car orders. now reservation holders and new customers alike must pay a $2500 deposit to move the model 3 order forward. that deposit becomes nonrefundable which they see information commissioner's

office says facebook failed to ensure cambridge analytica deleted user's data. the intended fine is nearly $665,000 >>i don't understand what that means. do you understand? what does that mean? is that good, bad? is it just a logical progression of what happens when you're introducing it, start with 1,000. 2500 sounds like you're locked in even more with 1,000. >> initially when it first launched $1,000 was also refund ablg so they took $1,000. it was refundable for a certain period of time and now it's $2500 and -- >> they need the money up front and they want to lock it in. >> that's what the bear case. >> the bear case, the 2500, it used to be 1,000 now it's 2500 and we get it?

>> my pocket on the other hand, if there's a huge number of people -- >> there's still a backlog there's still a wait demand is not the issue. >> the one i see all the time, the s -- >> with the gold wings is the s. >> no, i don't the other one, the one that everyone -- >> yes. >> what is that retail, 120. >> base. i think you're well above -- >> those things. >> a honda, everything the stock would be $1,000 stock. >> that's the problem. you have to get from here to there and you have to produce what you say you're going to produce otherwise you need some cash >> that's why it's a compelling story. >> they did end the quarter with $3.2 billion in cash the needs aren't immediate but when they're talking about

memorandum of understanding to open in shanghai -- >> "fast money" loves it. >> love battle grounds. >> absolutely. >> bitcoin's battleground. for a time apple was a ballotle ground >> you love that. >> you love the confrontation and the heat though, right >> can you find anybody neutral on tesla >> what's interesting is when they stop being a battleground so is netflix still a battleground people are afraid to bet against it. >> son of "fast money" does it, too, "halftime report. look at ackman, right? >> true. >> they love -- we don't do that here on -- >> it's coombaya on "squawk box." >> i look at you, bob. >> i'm here. >> how long's it been? >> since the beginning. >> 25 years. we go way back. >> wow. >> you look the same. >> is there ever anything that i could say to you that would hurt you or make you -- we're like

brothers -- we're almost family, aren't we? >> yeah, we have been. dinners together. >> everything. >> we were at that secret meeting of conservative -- what was that >> that was christy. christy was announcing for president. >> it was at midnight. >> especially now. >> anybody >> we're looking for -- looking at a big week. >> like "casablanca. >> big week for big banks with jpmorgan, wells fargo and citigroup. to prepare us for the numbers, we have david long from raymond james with us. that crummy ten year is just not delivering though on the yield curve for banks. strong economy is nice. >> thanks. good morning thanks for having me on your show

yes. the ten year is not cooperating. looking at bank earning season which will kick off on friday, us investors are looking at the net interest side. we have some pressure coming from the flattening of the yield curve and also deposit betas which are rising for the banks the short-term rates are moving higher which is a positive they will provide some head wind on the loan growth side we have a strong economic backdrop the tariffti tiff is causing a t of a head wind we don't have the demand from the customers. the customers got a news tax inversion and we have the bank facing more competition. a lot of these are non-banks

providing business including private equity funds, insurance companies. so when we look at earnings season approaching, we are neutral or this attractive back drop we think it's a stock picker's market and not a time to be buying a basket of bank stocks at this point in time. >> so what does it include the big money center banks, regionals? right there you just talked -- the list we looked at was just the well-known money center banks. is that where the action is in your view? does recent deregulation finally make some of the medium and smaller banks more attractive to you? they ought to be able to fare a little bit better at this point? >> yes the midcap did under perform materially last year despite benefitting from regulatory reform and tax reform.

we think there's more of an up side to them now and they have a bit of a comeback. they have more up side to loan growth whether it be a niche or hiring veteran bankers from their larger bank peers. banks that can grow loans regardless of the regulatory back drop as well as banks that can expand the net margin. not all banks will experience margin expansion despite that. the banks are better positioned. to name a couple, silicon valley bank out of santa clara. win trust bank will benefit in the near term from the rate hikes still. >> have you seen any actual data that shows that these smaller lenders are able to give loans or feel less encumbered by the expenses there were a lot of regulations

that they had to be aware of, every quarter. some people thought it caused them to pull in their lending horns? are they seeing it or for small businesses. >> banks are willing to lend they have plenty of capital. it comes down to demand and are not attract tiff to the larger insurance companies. the bigger banks have more available to them. we've seen better loan growth out of the small midcap sector than the others. >> so back to the big picture, you make the case, and i agree, the fundamentals are mixed positive valuations are certainly cheap

everybody loves the banks, when the stocks have good earnings, they tend to sag. >> the backdrop with regulatory reform, tax returns, the companies returning capital, sure thun of that and you see the tiff with the tariffs and the trade war with china, you get some apprehension. we had a time in june where the xlf, the etf was down 13 or 14 straight days. the banks have under performed over the last couple of weeks despite some mixed performance on the year. so when we look into the quarter here we do think friday will be very telling wells, jpmorgan, citi on the tape will set the tone for the rest of the earnings season.

>> very good we appreciate it appreciate your time this morning. we'll check back we have a couple of names from you. >> thank you. >> we'll have more thank you. >> thanks guys coming up, president trump making headlines at the nato summit in brussels saying germany is a captive to russia we'll talk to former nato ambassador nikko lus burns and we'll bring a live interview with tim armstrong he's the ceo of oath stay tuned, you're watching "squawk box" on cnbc ♪ ♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. we'll talk to former nato

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president trump is at the nato summit in brussels. he'll be meeting now, we're told, with german chancellor angela merkel later today. we're going to monitor the comments from the summit and bring you updates throughout the show and all of this bad day for a summit with england playing croatia. >> it's crazy. >> no one's going to be -- you need people in england and croatia watching, they're not going to be. i'll tell you that much. >> it's going to be evening over there in theory. >> i know. but it's going to be going on at

the same time as miracle maybe. >> you thought he was on a plane to nato the other day. >> 3 oompts 15 local time. >> six hours. >> no, i know. he could have been watching. time for the executive edge. the competition for the world cup isn't just on the field. nike is guaranteed to come out on top all three remaining teams are sporting nike emblems. france will face the day's winner and both nike clubs the on field success says nike is up nearly 5% since the world cup kicked off in mid june >> what makes you wonder is the market forward looking

we knew the market was coming. >> analysts said this would be a catalyst for nike. >> it's interesting. >> yeah. it is the last straw for american companies they will be offered eco friendly, biodegradable straws and wooden stirrers. the changes will roll out this month starting in airport lounges and flights. american estimates it will reduce it, it's good if we could make these all along, i don't understand why we used plastic. >> the technology evolved. >> they get soggy. >> yeah. >> you have to look at how much it costs down the road in the ocean. >> true. >> like an island the size of texas. not really, but that stuff is

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news just out from pfizer. the drug maker announcing it will remake into three businesses at the beginning of the 2019 fiscal year one will deal with innovative medicines, another with health care, and another with patent and generic medicines. the organization represents a natural evolution of pfizer's businesses that's kind of interesting we were just talking about the way these things operate they need an entire company just to manage the generics and the branded. you know >> i mean, they're looking also to isolate the consumer drugs. >> i wish that the biggest part was the innovative medicines let's focus on that.

we've got all this basic science just churning it out with dna sequencing and all this stuff. let's take that from the lab bench into the clinic. >> it's been long rumored and looks like we're finally getting there. the stock's not doing anything which is a bit of a surprise >> we'll keep watching that. meantime, we are a week away from the eighth annual delivering alpha conference. a who's who of the investor community. speakers include larry kudlow, mark lazri, and many more. for more information, visit deliveringalpha.com. now we are joined by leslie picker for more. >> you wouldn't know there was a trade war going on in the private equity world this year alone, a record $62 billion -- i'm sorry 2017 $62 billion flowed into asia

private market funds this year carlisle raised a $6.6 billion asia dedicated fund. blackrock raised more than $9 billion for buyouts and real estate in the region and bain is reportedly targeting a $4.4 billion fund as well. sources tell me that the industry has been looking to asia because the market there is maturing particularly in asia. and as valuations have us around record highs in the u.s., private equity needs to turn for opportunity for gains. that said, fund managers have been pressured with questions of why now. for one, it can take years to raise multi-billion-dollar fund. most of this was negotiated before the trade issues are more of a near term risk but should be all right in the long-term, according to those i spoke to.

hopefully they'll provide more insight on this trend. >> who's that first guy there? oh, my god >> that's our friend >> it's the great american larry kudlow i didn't know he was going to be awesome. great. all right. thank you, leslie. what parting is such sweet sorrow how fast did that go >> one hour gone now we're all awake. >> yeah, we are. thanks to bob doll for joining us this hour coming up, watch out, world. president trump threatening $200 billion in additional tariffs on china telling nato that germany is totally controlled by russia. we'll get a live report from that nato meeting straight ahead. and we're going to talk to

nicklanic nicholas burns coming right up.

happening now. president trump meeting with world leaders at the nato summit a live report from brussels straight ahead trade war. global stocks under pressure after the u.s. threatens new tariffs on china plus big media, bigger names, and the biggest stories industry titans gathering in sun valley this week and we'll take you there as tim armstrong will join us live as the second hour of "squawk box" begins right now ♪ live from the beating heart

of business, new york, this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with melissa lee and mike santoli at one point the dow was over more than 200 this morning now down 176 the s&p indicated down 17 and change and the nasdaq down about 58 we've had a couple of pretty good sessions. we were going to have four straight days down last week on the dow. then friday rallied and then we've had a pretty good week so far. going to give a lot of it back today. at least at the outset, it looks like here's what's making headlines president trump is renewing his criticism of u.s. allies for not paying enough for defense spending to nato the president is in brussels for nato's annual summit not everybody is from belgium there, but a lot of people that

are are in a bad mood today after what happened. although they made it a long way. >> the world cup >> it was their last hurrah, people were saying it's a young team, but this was a big chance they'd never made it to the finals before. and they got so, so close. anyway, i like their colors. you could definitely tell the teams apart yesterday. >> it was red versus blue. >> anyway, he said the u.s. is paying far too much for the defense of europe. he also took aim at germany for striking a big gas deal with russia calling it very inappropriate. eamon javers will have more on the nato summit in just a few minutes. first to today's top market story. the u.s./china trade war the white house ready to slap tariffs on another $200 billion in chinese goods kayla tausche joins us from washington >> the u.s. needed to raise the stakes because china wasn't responding to the $50 billion level. they're now targeting the $200

billion in exports that would be subject to a 10% tariff. that will kick in as soon as the end of august. with the stock market here in the u.s. resilient, north korea rebelling and no near term catalyst in current talks with beijing. the new list, printer ink, skis, baseball gloves, handbags, and many categories of apparel wasted no time weighing. that be including these items, the administration has shown that it is not concerned about targeting the american public with its trump tax and said if the white house keeps up this strategy, congress should step in congress didn't receive last night's news warmly though orrin hatch who supported the administration's moves on trade up until now called this move reckless and kevin brady called for presidents trump and xi to settle this dispute face-to-face otherwise risking a multi-year

trade war. joe? >> all right, kayla. thank you. let's get out to julia boorstin. we got corporate news about 21st century fox upping its bid for sky. and the top cnbc parent current offer $16.60 a share julia boorstin oh, oh i got it i got it from the allen and company conference in sun valley this morning. i bet you the weather is great it's a dry sort of heat when you're there, julia. the biggest names in media are gathering right now. everywhere you walk, i guess, you sort of run into someone >> yeah. and the big topic of conversation here is what's next for rupert murdoch and brian roberts who we have seen here and now the focus is really

shifted away from next bids for fox to next bids for sky after fox put in that higher bid for sky this morning, we can expect comcast to reply fairly quickly within days. we are also awaiting a decision from the uk's takeover panel on the minimum bid that disney and fox could be -- sorry. disney would be obligated to pay for sky shares due to a rule called the chain principle rule in the uk that links sky's value and the minimum required to pay for those shares to the higher bid they're paying for fox we're expecting a ruling from this takeover panel any day now. a source tells me that comcast is now fully focused on sky. ask with my source tells me that if comcast does win sky, then it would reconsider whether to bid for fox. in part because of this takeover

manl to continue to push the cost of sky higher i think it's worth noting now their willing to shift over to what's going to happen with sky. that could resolve itself far quicker than what happens next with fox >> all right, julia. thank you. julia boorstin in idaho for us let's get to the reaction to this latest announcement on tariffs. we were talking about the run to 2800 yesterday we got there a few times now this could throw a wrinkle in it. >> yeah. we got almost to 2800 yesterday. so the question now -- i've been in the camp that said the trade issue has been certainly a net negative but not the major swing

factor for the markets more of a nuisance than a distraction. now the question is is it elevated to a level it's more than a nuisance? market today looks like it's going to twitch lower but not necessarily have a washout we'll see how the market digests this the russell 2000 is one that has been there that has unwound in the last couple of days here's the question. is it going to be risk off or a rotation again then the earnings calls. i think the earnings conference calls are going to be interesting. you're going to hear ceos weigh in on how they're thinking about it >> it's interesting you said risk immediately i thought about the bid higher to some of the traditional safety trades. not technology or staples. utilities. >> and we have seen some of that again, up until the past couple of days. that's because bond yields came down

it seems if it's a wait and see. take a little off the top. >> all right joining us now, george maris and david leibovitz. initially, guys, i was thinking ceos, one man's opinion. unfortunately these guys act on what they feel they don't know any more than us about how long this trade war goes and whether we go forward with the 200 billion that was just announced but if they pull in their capital expenditures or change something that they would normally be doing, then it would be successful fulfilling >> i think that's spot on. the real issues are, one, you've got the exact hit from the tariffs from an economic perspective. what does that really mean mark, you're right in the context of the $16

trillion economy, it's not terribly significant what it really is is what does it do to confidence? what does it do to your ability to go forward? are you going to invest in workers going guard? before we had this notion with tax reform it was all systems go, the trade wars and the trade conflict we have is creating significant uncertainty. if that's putting plans on hold, that is going to impact economic activity, et cetera. that's a certain negative. >> but we don't see the actual numbers. we wouldn't know whether gdp was a point lower or not when does it become something that the markets should pay attention to they seem to rebound from a day like today >> you're not going to see it play out in the numbers until it's too late. to my mind the issue is similar. it's an issue of confidence. and we have this corporate tax package. we have this two-year budget

agreement. i worry that coupled with the rise and price in oil we've seen so far this year, we could be undoing all of the positive tail winds for the economy that came into play back in january. so i think we need to watch confidence closely to your point, i think it's going to be a tug of war here. this tug of war between policy and fundamentals isn't going away at the end of the day, fundamentals win out but we're being forced to reconsider what these scenarios might look like as trade escalations continue >> there was a time when a lot of the economists that lean one way politically, they were latching onto before the trade war, that we had thrown stimulus onto a economy that was too hot. and this was the wrong time to do it. i don't hear them anymore because the 10-year suddenly seems like it's got a cap on it. is there anything to the idea if

there's ever a time to address china's intellectual property, the things that they display there. or even in europe, some of the things we feel is unfair at the same time, you're, to jason furman i'd say you don't need to worry about too much stimulus now is there anything to that? >> if you're going to go ahead and negotiate, you want to negotiate from a position of strength the u.s. economy is strong and getting stronger it makes sense if you're going to make this gambit, try to address the issues we've had, you do it when the u.s. economy is expanding, when jobs are plentiful. you've got growth. we're going to look at at least a 20% earnings quarter year over year you're going to deal with it you want to deal with this type of -- the ramifications of this type of action at a time you're doing well with

the offsets. >> the offsetting piece to that is today everything is okay and we have this sugar rush in the u.s. economy which should problprop things up. what does its mean longer term when we get out of this environment? >> but that only matter ifs the tariffs are permanent. if you're of the view that the tariffs don't last more than 6 or 12 months, this is more akin to a price spike or a price shock in the markets it's something they get past only if you're in the camp where the tariffs are a permanent state of being >> it feels a little bit risky to be having this negotiation with the expectation that everything will work out favorably just in time for economic stimulus to fade next year to me the stars would have to align nearly perfectly and i think we're just -- this is a bit of a dangerous ball game we're playing here. and if you look at the worst case scenario and model out what the numbers look like, you can

see a full percentage point hit to gdp. >> that's with $500 billion? >> that's with $500 billion of tariffs. >> and to me it's about, does it create some capital flight from emerging markets and then you talk about a financial accident not really just a cost of tariffs >> but i think that's overblown. i think that's part of the issue of why markets are reacting so severely to this news. when on the headlines, it's not terribly severe. we're still dealing with the post-gfc world we're worried about a financial crisis all the time. you're not worried about a trade war causing a financial crisis that seems extremely remote. >> just a disturbance in the market >> completely. but i think you've got markets somewhat nervous when you see these headlines. i would argue that tax reform and deregulation are more powerful than in the current trade restrictions we're looking

at those are long lasting those are supply oriented, tremendously positive demand tools. right now we've also got to deal we the fact that we've got a president that likes to negotiate in public. so i think we need to probably adopt as market participants, more of a sanguine response. >> but it's going to be central to whatever happens in the back behalf of the year if the dollar remains well bid, there's going to be some of that i think u.s. equities can still grind higher, but if that dollar strength persists, i think it tempers the recovery which was a strong tail wind to asset performance in 2017. >> all right, gentlemen. thank you. george, david, thanks. appreciate it. coming up, nato leaders gathering in brussels right now. eamon javers joins us with a look at the headlines so far

>> reporter: that's right. it's a confrontational start this morning we're just getting in the first reaction from angela merkel to those aggressive remarks from donald trump details next on "squawk box. 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. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

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all right. let's check back in on the nato summit in brussels eamon javers joins us again. i like that little square where you are. probably the nicest part of brussels, huh? >> it's fabulous here. it's beautiful weather, too. there's a chocolate shop and pubs the other thing we need here is news from this nato summit we're getting some response now from angela merkel, the chancellor of germany responding for the first time to the aggressive comments we saw from president trump this morning merkel suggesting there's nothing to the president's allegations of russian influence in germany merkel saying the germans make independent decisions on their own and develop policies on their own. we'll see how that goes between angela merkel and donald trump later in the day today we're not expected to see that on camera. but we will, i expect, get a

read out they continue to press home his criticism of germany and in particular a pipeline between russia and germany that leads them to send money to russia and put european security at risk. here's the exchange this morning that ruled this. this was at breakfast between president trump and stolzenburg of nato. this is the exchange we're talking about all morning. because the president really aggressive here pushing back on the germans right from the start. here's what he said. >> how can you be together when a country is getting its energy from the person you want protection against or from the group that you want protection against? >> because understand when we stand together also when dealing with russia, we are stronger i think what we have seen is -- >> no. you're just making russia richer you have a country like poland that won't accept the gas. you take a look at some of the

countries, they won't accept it because they don't want to be captive to russia. but germany as far as i'm concerned is captive to russia because it's getting so much of its energy from russia >> so the president there saying germany is captive to russia because of the energy coming from russia. stolzenburg was asked about those comments after the breakfast. he said we had a lovely breakfast. it was a fruit plate and it was all paid for by the united states so european officials here eager to get over the differences. we'll see how it plays with angela merkel later here in brussels >> all right we're going to continue along this discussion here nicholas burns joining us now, former u.s. ambassador to nato he is now with harvard's kennedy school of government thanks for joining us. certainly a sort of a different approach, probably, than you're

used to when you were ambassador what did you -- i'll let you speak for yourself did you think of that exchange i thought it was fascinating just now >> well, it was fascinating. joe, i think two things. first, president trump's right to push this issue of defense budgets, because the urieuropea need to spend more, the trend lines are very positive in that score. there have been four years of consecutive defense budget increases. but trump's had impact on that as well. and i think he'd do better, frankly, to lower the decibel arguments. to say that germany is a captive nation of russia, that's an insult to the german people. so you wonder, you want to speak truth to power you also want to be effective. i think they're being ineffective as a member of nato.

he spent the last couple of weeks blasting the alliance. he's the leader of the alliance. they have troops with us in afghanistan. they've been fighting in the anti-isis coalition. they're cleleading the fight against the terrorist groups in africa telling it like it is, i know that has charm for some people rather, i'd have an effective president. right now he doesn't look effective. >> time will tell. you never know when you're in the middle of these things i'm always torn between whether the right path is tough love or speaking to power. or whether you coddle some of the -- some of our allies because they're allies and you don't tell them -- you tell them really what they want to hear. not what they need to hear i don't know i don't think we know yet. i don't think we know how it all plays out. so many times in the last year and a half we've looked back and

said, my god, was there a method to the madness sometimes there has been a method to it sometimes there hasn't been a method to it but as you said they needed to hear some of this at least do you think that germany should be -- you don't think there's any incongruity to signing that huge deal for gas with russia at the same time they're pretending, you know, that that's their biggest threat and therefore they need all the nato funding in. >> actually, i think this nord stream, i think it's a mistake by the germans to enter into this >> why not tell them and i know that maybe that's strong language to say you're captive, but they are captive. the lights go out if they don don't -- if russia doesn't deliver the gas. >> joe, here's the problem with it of course you want to have that argument with merkel behind the

scenes the question is do you want to consistently go after merkel the president's been going after her on the immigration issue for a couple of weeks now. she's your leading economic partner in europe. she leads the strongest country in europe. i want our leaders to be effective. at the same time the president says they're a captive of russia, she's been much tougher on putin on the crimea issue an russia interfering in western elections than president trump has. so i think the germans are going to say that our president's been hypocritical today i just want us to be effective in the world >> different approaches. that's for sure. i was going to say something about a cat. i don't think you can say that anymore. i love all animals ambassador burns, thank you. maybe try that

we did try appeasement and everything else for awhile and getting along. sometimes i think people are forced to do unpleasant things >> but we're making progress on -- >> we'll leave that as a takeaway we'll leave all the cats alone >> all animals leave them alone >> all right >> thank you, ambassador coming up, this morning's top corporate stories including pfizer reorganizing into three businesses u' wchg quk x" yoreatin"sawbo on cnbc you always pay your insurance on time.

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comings up, we'll head to beijing for the reaction to the latest tariff announcement then media titans are gathering in sun valley for the allen and company conference we'll bring an uate pdto you with tim armstrong stay tuned when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

♪ good morning welcome back to "squawk box" on cnbc among the stories front and center, jetblue is ordering 60 new airbus jets with an option for 60 more. the airbus a-220300.

jetblue is already an airbus customer moe telltel 6 is settling a lawsuit over guest sta da ta they had been providing lists to u.s. immigration agents. details of the settlement are not yet public, but attorneys say that will likely happen in the next few weeks apple's move into the technology the worker was accused of stealing autonomous driving information. 5,000 employees have access to information about the program and that apple may be designing its own chips for self-driving cars and pfizer announcing it will reorganize into three businesses effective the beginning of the 2019 fiscal year one will deal with innovative medicines, consumer health care, and the third with generic

medicines. in brussels right now, nato leaders are walking the blue carpet shaking hands with the secretary general. there will be 20 of these formal hand shakes. they happen in protocol order. let's just watch one happen here okay pretty routine looks good you hear the cameras clicking. everybody's smiling. okay oh, there's that -- oh there was an arm touch an arm touch in addition to -- here comes another dude all right. let's see how this one goes. there's the entrance there's the shake. there's the -- oh, whoa! there's kind of a little hug a little bro hug right there i can't see what they're -- okay let's move on. let's get to eunice yun. the trump administration announcing tariffs on another $200 billion on chinese goods.

tariffs on human hair has me concerned. is that for wigs melissa said -- is that what you seem >> i assumed it would be for wigs >> you know, there's toilet paper on the list. there's a lot of stuff on the list. >> bovine semen. >> paper for bibles is on the list because china is the biggest exporter of bibles and they make the paper for it it's really -- yeah. there's one guy who said to me, this is everything including the kitchen sink on this list. so there's a lot of stuff on this list. >> the hair thing hitting home anyway go >> well, not surprisingly china said it's shocked by this move and said the u.s. move is totally unacceptable the foreign ministry also described this as american trade bullying and the commerce ministry said china will immediately file a complaint to the wto and will

have no choice but to respond with countermeasures though it wouldn't say what those countermeasures would be people are asking that now is china's next move going to be because the fact of the matter is china only imports $130 billion worth of american goods. so even if it wanted to match the $200 billion, it wouldn't be able to. the other thing people have been talking about and especially that's been pointed out in the state media, is china's plan unveiled this week to try to safeguard chinese companies through this trade war there are four points. it's a four-point plan and the first two are meant to directly help chinese companies that could be affected so they said assessing the impact of the tariffs on these companies, also using the income that's raised by the countertariffs by china and plowing that back into some of these chinese companies as relief the second two points are meant to help these companies for the long-term. so they're already encouraging chinese companies to diversify their imports away from the

united states specifically calling out soybeans, autos, and seafood. and also saying that they're going to encourage more -- better use of foreign investment and in the state media, they've been saying this means trying to get more foreign investors to buy into chinese companies to help support them that way >> all right, eunice while we were listening, saw president trump come along he did the hand shake. dp he do the arm pat as well >> i'm not quite sure. i can't catch the entire interaction. >> we may need a replay. >> slow motion, maybe. >> at some point just to see. probably not i don't know, the guy didn't seem -- he looked a little frosty didn't he? the expression on the nato gentleman. >> could have just been that that was like the 80th person he had to do that with. you can't have the same -- >> keep an air of formality. >> respect >> i want to read something into

it that there's some tension there. >> you go ahead. we're not going to stop you. >> okay. new data this morning on the housing industry and mortgages. diana olick joins us now with the details. good morning >> good morning, joe a slight increase in the number of homes for sale may be helping the mortgage market. mortgage application volume rose 2.5% last week seasonally adjusted total volume still lower than a year ago according to the mortgage bankers association that's because of the weakness in refinances. now, mortgage applications to buy a home jumped 7% for the weekend, were 8% higher than one year ago potential home buyers have been blocked by a severe shortage of homes this year. still very tight but this is the first sign that the supply crisis may be beginning to ease a little bit and helping, too, the average rate on the 30 year fixed with 20% down fell to 4.76%

just a little drop but despite that drop, refinance applications fell 4% for the week to the lowest levels since december 2000. all these numbers are on cnbc.com back to you guys >> all right thank you very much, diana ol k olick. the center of the media universe is in the mountains of sun valley this week julia boorstin is there and has a special guest. >> thanks. i'm joined now by tim armstrong, the ceo of oath of verizon company. >> we're out here every year and just as cold as it is every year. >> that's right. just before we get to what's going on with oath and verizon and that changing landscape, we have to talk about the m&a news. we're expecting comcast to come up with a higher offer for sky what are you expecting >> i think there's an expectation that there's going

to be more m&a across the board just in terms of the media landscape. you know, there's been a lot of deals that have already happened there's a lot of deals in process right now. there's only a limited amount of beach front property out there i think that when you think about what you're seeing in terms of bidding cycles and things happening today, they're trying to stay with consumers and scale. so i think, you know, wouldn't be surprising if you see, you know, more things happen and, you know, more pricing changes, deals. at verizon and oath, we've taken our strategy going after digitals i think our strategy is clear. m&a really targeted where the linear world is right now. but i think it's a very active time i think the at&t time warner deal going through, people are waiting to see how the government reacted to that and that went through. so m&a seems like it's probably going to pick up >> what are you hearing about what's going to end up acquiring those sky and fox assets and at what price >> i would say overall, people are expecting the fact there's

so much limited inventory of things of that type of scale to do that. and there's a lot of interest in those type of assets pricing went b back two or three months ago, prices looked fairly reasonable and now they're starting to get -- i think people are putting in higher bids for things we'll see what happens overall but the consolidation people thought was going to happen two or three years ago is kind of happening today. and a lot of it's being driven just by the massive changes in usage for consumers and scale and how big some of the global companies are getting. i think that people are expecting, you know, people were expecting a lot of m&a you're seeing the output of what people are strategizing about. >> what does this mean for oath? there's been speculation about you might be interested in spinning off oath which is focused more on advertising. potentially buying it out, leading a buyout yourself. what are you going to do next? >> we haven't really spent any

time on that at all. we've been really clear that 5g is the clear of where speed and networking is going to go. verizon is the leader on that. we've tried to be the leader on brand. so we're in the middle of launching our super channels and sports news, finance and entertainment. i think oath has had a clear strategy we're one year into that integration. so i would say from our standpoint right now, our strategy hasn't changed. the news outside the company has changed, but if you think about the consistency of what we've said and what we're doing and what lowell really set up as the vision, that's happening hans is stepping in at a moment when 5g is critical. but that's critical for our business as well >> doesn't the news outside the company have to have an impact in your strategy you've had your biggest rival not complete the acquisition of time warner. also just for apnexus.

does verizon need a major acquisition? >> those assets are already in our ecosystem. today we partner both with a appnexus and time warner it has a potential to have some more scale for our business over time, number one number two is, it really does for the oath ecosystem and attached with the distribution, we're in a strong position to basically be a leader and i would say the dujal and especially mobile area we launched new mobile moments product. which is doing really well from our standpoint, look. the world is changing from linear to digital. and mobile and 5g are going to accelerate that. all these deals getting done are meant to catch up to where we were a few years ago we put an oath together and then added yahoo to it. we know it's going to be a competitive landscape. this is going through one of the best in the world.

>> with this urge to merge we're hearing so much about here in sun valley, isn't there more pressure on verizon to make more acquisitions just as these companies make greater scale what is the company that would be most valuable for verizon and oath >> our strategy. i'm not trying to avoid the m&a question, but if you think about where the investments are going right now, where the consumer's going, you would have to say that mobile content and having the ability to serve billions of consumers on mobile devices is really important if you look at the assets that verizon has, we have critical asset there is which is the giant nfl deal that's launching really this year we tested it in the playoffs and the super bowl last year so that's the number one rated tv program last 20 years it's been the nfl. you can watch almost all the nfl games on our mobile networks directly direct to consumers why everyone else has been doing mega mergers, we've been trying to go through the mobile landscape and add tremendous

assets we have partnerships to mlb,nfl. >> so we'll have to see. there's certainly been speculation verizon could be a buyer and oath may not permanently be part of verizon please keep us posted. tim armstrong, we appreciate you joining us guys, back to you. >> thank you coming up, dow futures set to drop triple digits at the open industrials are viewed as a proxy for the trade war. we will drill down on it with nick heymann he's making his way to the set that's next.

♪ welcome back to "squawk box. let's check on oil prices. they haven been down a little. time for a sector check. focusing on industrials this morning. joining us now nick heymann from william blair. great to see you, nick

we're talking about trade tariffs. industrials as a group has been hit pretty hard based on these fears. have you dissected who could be hit, what the impact could actually be? >> yeah. when we look at companies from the tariff standpoint, the probably biggest impact is higher raw material costs particularly for steel and aluminum the companies impacted there would be shorter cycle companies that are just in time producers opposed to those providing longer term contracts. so we don't see this as principally disruptive for our group. it's a big fear as it relates to margin compression we had that last year. was just going to be one quarter and it was the whole year. so it's back again but that's kind of restraining the group, i would say, particularly for the larger industrials. >> right are you concerned at all that perhaps the contracts being signed with , you know, over in china will slow down that the pipe line might get

thinner? >> well, i would say right now china doesn't have the same amount that they can put tariffs on in terms of trade that we do. it's a big difference. the biggest concern is pending approvals for large m&a deals. so one that's on the table right now that is supposed to close very soon is collins and that's a $30 billion transaction. and the only outstanding approval is china. so we're watching this and we've seen some in the electronics area as well so these are the kind of things they move beyond just tariffs on, you know, $130 billion trade we do with them. >> if essentially it's not much of a demand problem right now as far as you see it's mostly a margin issue with raw materials. does it mean they've gotten unduly punished as a whole or where it is in combination with the cycle that people are a little bit concerned about how

mu much >> i think that right now one of the concerns for the larger companies that are diversified industrials is everyone wants them broken up so we saw a big downsizing in emerson. they're in the process of rebuilding honeywell is going through this in terms of splitting off. ge has finished their plan but people are waiting for johnson controls, many others to go through this kind of slimming and focusing exercise. >> nick, if china just for lack of a better team totally played fair, like the rest -- like we think of the rest, i'd say europe but i'm not sure. nobody's really as fair as we'd like them to be in terms of tariffs and everything else. but intellectual property and not having to partner up with a chinese company to gain entrance to the market, they totally said okay, you know what? uncle. we're going to do it we're going to enter the world community and just do everything

by the book. how much money are we talking about that would benefit the u.s. economy >> it's probably a big number. you know, most of our companies have to turn over the engineering drawings or the proprietary -- >> think about that. >> it takes them for years and years and decades to try to figure out how to make or produce a reactor coolant pump. >> and then the counterfactual is by 2025, they don't need to militarily beat us they can just spank us with -- i mean, they're very industrious. >> they're resourceful >> yeah. they could own semiconductors. god knows what the artificial intelligence. they could own it all based on not being totally -- not playing on a totally level playing field right up until 2025. >> the trump administration clearly has taken a different page out of the book very confrontational and aggressive whether it's with

nato and getting everybody else to pay up for defense of europe. but i think right now this is jarring to the markets but by the time we're done and finished, it's probably not going to set us back at the margin, all we've got are some incremental to gain and the question is how much >> right these are things i bring up and people say, all you ever do is -- things that i use to rail against in the prior administration drug pricing, control, whatever. and i'm just -- i bring these things up. i wonder what it would be worth if there was -- if we just gained a little ground in terms of leveling the playing field. >> and for decades, we'd look the other way. we'd let our markets or borders or whatever it is be porous. >> we parade these guests out here that we're negotiating with north korea, negotiating with nato, negotiating trade deal we parade them out and as -- there's not a single

one that doesn't say what we're doing isn't wrong. and it just -- you know, i just think it can be pointed out. >> it's a big pinnacle point in arm wrestling in terms of the future economic influence and the global economy i bet you'll probably come out okay >> how about ge? ge going to come out okay? >> outperforming on ge. >> it's been a rough ride. the shareholders there are getting out of the cave in thailand >> how long have you had the outperform on ge >> since 2016 in the fall. >> ouch. >> so, you know -- sorry i take that back it'd be the fall of '15. you know, that's been a rough ride no doubt about it. i think the plan's on the table. you've got concerns about liquidity and dividend risk. and i think we still got work in process down at the capital to start it out.

>> his hair was all jet black before that. thanks coming up, this morning's stocks to watch. then we're going to be joined by blackrock's rick rieder. first, though, as we head to break -- that's him right there on the left. let's peak ek in on the nato sut in breast else they're now lining up for the official photo together. where's waldo? he's not there anyway, stay tuned it's a nice ceremony you're watching "squawk box" right now. we're coming right back. 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...

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and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. take a look at stocks to watch this morning u.s. listed shares of china based companies are taking a hit this morning that follows the latest u.s. moves on trade listing $200 billion in products that may be hit with tariffs you see there a smattering of the tech names also keep an eye on fxi which tracks china fastenal is one of the companies beating estimates on the premarket trade. also announced a dividend increase wd-40 also beat forecasts on top and bottom lines the lubricant maker also reduced sales and profit forecasts for the full year. >> really amazing, that stuff.

>> it really -- yeah it works >> sounds go away. squeaky sounds coming up, president trump is in brussels meeting with nato leaders. we're going to bring you the headlines so far and get analysis before u.s. defense secretary. stay tedu'un yore watching "squawk box" on cnbc

a new trade threat, the trump administration readying another round of tariffs on chinese imports and stocks responding reporting to a lower opening on wall street. tough talk in brussels president trump calls out germany at the nato summit we'll bring you the latest straight ahead 21st century fox tops the bid for sky. the biggest names in media are gathered the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site

in times square. i'm joe kernen along with melissa lee and mike santoli our guest this hour blackrock's rick rieder. and blackrock, you know, you do some equity stuff, etfs and stuff. but you're a fixed income firm so for larry to give you that job, you must be pretty good we're glad you're here >> we're going to watch ppi and the data other than that, no, i'm going to hang out. >> will you need to call like what if something's a big surprise >> i may need to jump off for a bit if i get permission. >> how much is blackrock managing now i may not want to know i'll get nervous with you here >> to the nearest trillion. >> a little over six >> can you believe that? can you get ten basis points >> yeah. fixed income markets are pretty big. >> no, can blackrock charge ten

basis points on -- >> yes >> he's always smiling when he comes in here. >> markets are easier questions. >> let's look at the futures which are lower. are we 200 again 188. 188 on the dow trade concerns again it's like one day they're on, one day they're off. let's check out oil prices which were a little bit weaker on the session. and then for our guest host, look at treasury yields. we do that anyway. but the 10-year, $2.2.84% now. >> i think there's a good chance to get there what the ecb did by saying we're not going to move rates until at least the number of '19. put a cap on them. i think that took off of u.s. rates. hard to say what is the algorithm for that

i think it took 10 to 20 basis points off where our rates can go the reason we could still move up, the other one is we're showing so much debt the amount of debt we have to absorb, it's all about supply and demand we're getting with real yields to them, you're getting an awful lot. >> $69 billion in auction this week >> every week. you know, what pushed up the front end of the yield curve this a lot central banks were pulling it all out. now it's going the other way it's a different paradigm. >> it's not something that -- we try to make it harder to figure out where interest rates are going. that's got to be done.

>> it has to be absorbed by the way, at the same time japan is not buying treasuries like they used to to hedge the currency it has to be absorbed domestically which is part of what puts the pressure on it we're talking about moving up 30, 40 basis points. in the grand scheme of things for equities and risk, not talking about a momentous move >> that's where it has to be absorbed >> it's also a place you've got to be really careful the front end of the yield curve, it is now an alternative to other dividend stocks, utility stocks >> in our portfolios, we're willing to hold a higher level to the curve it doesn't drag on your return it's a really big deal that front end is important. >> more from rick there. does larry watch and think and call you and say okay you did well there >> i think he watches

periodically >> he's not glued into how you're doing right now >> we wonder if he's watching you. that's really the bottom line. rick's going to be here for the rest of the hour top global stories right now, trade in nato we've got reporters on the ground in washington and brussels kayla tausche joins us with the latest >> the u.s. upped the ante on tariffs after saying china simply wasn't responding to the previous tariff levels now officials are threatening $20 billion in new tariffs in the form of 10% charges on $200 billion in exports asked how the white house would limit the u.s. impact on kurnl consumers, if a package of half of all imports to the 10% tariff level instead of 25% saying that that would limit the impact. oxford economics said the u.s. tariffs alone notwithstanding future investment impact would shave 0.2% off gdp next year

overnight china pledged firm and forceful measures to retaliate but hasn't said exactly what those are since it buys less than $200 billion in goods from the u.s. it called the u.s. move bullying as for the timing of the u.s. move last night, a senior administration official denies the rollout of the list right before the president met with nato allies with whom he's tryingissues, he denied there was a connection there saying they are trying to work together to fight trade issues with china so we'll see whether, in fact, that comes up in the conversation or whether this is, in fact, seen as a warning sign to europe. joe? >> thank you, kayla tausche in washington the official nato opening ceremony under way we're looking at a live shot of that event

it's happening right now maybe they're looking up at that balloon. baby -- no, no that's in london okay let's now get the latest now from eamon javers in brussels. did we have a flyover or something? what was that? you don't know but anyway, what's up, eamon good to see you again. >> it's a miracle of modern technology, joe. we're here in breast elsussels the united states standing between the secretary of nato and tereheresa may on the revien stand at the opening ceremony. the president arrives here just a few moments ago. we also saw angela merkel walking in amid those tensions around the president's comments from this morning.

the president laid out a stark criticism of the german saying that the germans are really allowing themselves to be controlled by russia because of an oil pipeline that runs from russia to germany that's been in the works for a number of works. and previous administrations have talked about. here's what the president said this morning >> if you look at it, germany is a captive of russia because they got rid of your coal plants and nuclear. they're getting so much of the oil and gas from russia. i think it's something that nato has to look at i think it's very inappropriate. >> so the president there saying it's very inappropriate saying that germany is a captive of russia s the president really criticizing the germans for the same thing he's been criticized for himself which is being too close to russia or being controlled, effectively, by russia the defense minister responded nearly immediately this morning

on camera. here's what she had to say >> i do not really understand what he means by that. hard to say. but in general, yes, if there's a country in the region who has seen the change in russian behavior, then it is europe. and within europe it is germany, of course. >> so the germans there saying they've been tougher on russia than the united states has we'll wait and see what happens when the president meets with angela merkel. that's scheduled for later on today. they are saying right now that's not going to be open and on camera for the media to cover. so we might not see the interaction between angela merkel and donald trump. i'm sure reporters are going to see if they can get access to that but a confrontational start here, guys, to this nato summit. >> yeah. it's going to be interesting when it's all said and done. we're watching it happen as it's

going on thank you. got a guest coming up to talk more about this. william cohen. now chairman and ceo of the cohen group. and it's fun to watch, mr. secretary. i will tell you that -- diplomacy, there's a reason it's called diplomacy you think of it one way then you think of a way the president, our current president conducts it and it doesn't necessarily seem it's being conducted the way it has in the past. i will tell you, though, that people that elected him and some of the people that watch, i get a lot of comments coming in. and they're relishing the way he's talking to what they call european globalists. and they say is there anything better than watching trump lecture the european globalists? i'm sure you have a different notion than that but some of this stuff, you know, may be tough love. or do you dismiss it as

unproductive from the start? >> i think it's diplomacy by humiliation and intimidation i think the president could have really had a winning presence here and a good meeting. because the nato countries have been doing more much as bob gates and others before bob gates including myself have called upon the europeans to do more in their defense spending they are now doing more. they're spending a great deal more and it's not only how much they spend. it's how they spend it you might have smaller input, but greater output but nonetheless, what has happened here is on the one hand, we have a very good relationship with our nato allies and frankly, we cannot defend the united states without allies so to take a public posture of insulting and humiliating leaders of other countries or allies, it will undermine their ability to go to their constituents who will feel very

alienated from the united states saying they can't count upon the united states. if you pay up, you get our help. if you don't pay up, you're out. well, we've had the most successful military alliance in the history of this world. and it seems to me the president's going out of his way to publicly undermine that and i can't help forget it's such a short time ago he insulted the prime minister of canada, then flew off and basically hugged kim jong-un how did that work out for us and now we have a situation where he is public ll lly chast nato allies and then is going to see president putin. it doesn't benefit us but to conduct diplomacy with a matter of respect especially with your allies. don't treed your alleys worse than your enemies. so i find it hard to accept.

and again, he could have claimed -- taken a victory lap here saying i've been beating on these folks to do more they're doing more i take the credit for it instead, what he's saying is you haven't done enough and i'm going to continue to beat you over the head. i don't think that's the way in which you maintain friendships and we need friendships in a world of great danger whether it's cyber attacks, any kind of terrorism. we need as many allies as we can. and we don't want to offend them and offend their people. >> so you'd be surprise fire department we look back on this six months from now, a year from now and there's positive developments you think it's very unlikely that -- you said the near term and long-term, it's not going to work i mean, i heard that about, you know, little rocket man, too, mr. secretary. i don't know what finally happens -- >> how's that worked out >> i don't know. oh, you know how that's going to work out at this point with north korea? >> yeah, i'm pretty sure how

it's going to work out >> are you hoping it doesn't work out just so you're right? i mean, people are still optimistic that maybe something is averted with north korea. right? >> i'm hoping it works out, but the way in which you make it work out is to do your homewor first. lay all the pieces on the table, lay out with the implications are, what the strategy is, how you will manage that escalation as we go forward what we did is reverse let's have a hand shake and say let's make this thing work now we have a nice, slow process whereby the north koreans are doing what they've always done slow walking us saying there's a disagreement on language we didn't understand you were going to talk about continuing the sanctions while we denuclearize that's not what we understood. i'm saying there's a way to go about this i don't think this is the proper way. i hope the alliance stays together but when you take public posture

and insult your allies on every occasion, then i think you're putting a wrecking ball to the greatest military alliance we have on the ground we're doing fine with them. we're doing better with them and the president ought to take some credit for that he shouldn't take credit for publicly trying to humiliate them >> we're right in the middle of it we'll see -- we're going to talk to you about trade with china as well i don't know would i get a similar answer about how we're orchestrating this war, this trade war with china? is that a mistake, as well, in your view? >> no. as a matter of fact, i think the president deserves some credit for raising the issues that we have an imbalance with china it's not only on the trade issue. it's how the relationship has been conducted as far as american businesses having to have joint ventures and turning over intellectual property to the chinese. there has to be a structural change in that relationship.

you can have people like marty feldstein saying there's a way to go about changing this. but just looking at imposing tariffs may not be the most successful way so i think it's right for the fot have raised this issue with the chinese. we have an unlevel playing field. it has to be leveled so the president is right in doing it now, whether the imposing or imposition of these sanctions is going to b the right solution ultimately who's going to blink first, are they going to ratchet it up? then does the president go higher the question is what's the most successful way of making sure we have a fair trading system with the chinese? it's not fair yet. the president is correct in what he's trying to do. the question is this the best mechanism? >> well, we're looking at shots from breast else right now putin is next. we just cover it, mr. secretary. from where we're sitting, it's going to be something to watch over the next week or so

we appreciate your time this morning. >> my pleasure 21st century fox upping its bid for sky to roughly 18.$18.6a share. julia boorstin joins us from sun valley >> the media moguls are here in sun valley and the focus has shifted away to what the next bids are for sky with rooub ert mur-- rupert murc and brian roberts arriving yesterday, you can expect they didn't get much sleep. now we can expect a counteroffer in days. comcast is fully focused on sky where it sees an opportunity now the executives are waiting for a decision from the takeover panel which will announce the minimum bid disney would be obligated to pay for sky shares.

this is all due to the chain principle rule in the uk that can link sky's value to the higher bid disney made for fox my source tells me if comcast does win sky, it will reconsider whether to bid for fox in part because of the power of the takeover panel to continue to push sky's costs higher if fox's value continues to rise. now, also in the spotlight here, has potential acquisition targets, cbs and viacom as well as the controlling shareholder of both of those companies, shari redstone here as well. as tim armstrong said earlier on quarterback today, escalating bids for these companies point to the value of content and media companies. also the scarcity of media company assets back over to you >> there is so much talk about the tech companies being the next acquirers do they have representatives in sun valley as well >> i'm sorry say that again >> do companies like google and apple rumored to be acquired of

content. are they present >> yeah. so we haven't seen tim cook or jeff bezos yet we expect them both to be here they're both on the list there has been a lot of talk those tech giants would be the next big buyers of content it might make sense for a company like amazon to make an acquisition of cbs or viacom to bulk up their contents one thing that's interesting to no note, there could be backlash there. he pointed out the concern that there are these potential culture crashes. which is whae he saw with the merger 20 years ago. he sort of brought us that history lesson we do think there will be interest from them the question is just what comes next. >> then the regulatory potential backlash as well thank you. julia boorstin joining us from

idaho. coming up, today's corporate stories and we'll get back to our guest host rick rieder we've got dow looking to open lower by 176 points. u' wchg quk x" on cnbc are you ready to take your wifi to the next level?

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a change in the executive suite just announced at dunkin' brands nigel travis is retire david hoffman will succeed him as ceo change is effective immediately. dunkin' brands has been an outperformer relative to the s&p 500 for the past year. it's up more than 30%. and it's worth noting that hoffman was a veteran of mcdonald's he'd been there 22 years he really oversaw overseas expansion in high growth markets. that's an interesting fit in terms of capabilities. >> yes and the franchising business which obviously is part of the whole dunkin' model there. and of course dunkin' publicly targeted by jim chanos as a short. dunkin''s winning that argument

right now. now they're making a leadership change >> it's a coffee vendor. >> entirely. >> they sell the doughnuts. >> and sandwiches. >> coffee and breakfast food coming up in the next half hour, we're going to talk to matt shay about the new terror threat, the impact of a trade war on china in his retail sector we'll be right back. and serve with confidence that it's safe. this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. ♪ ♪ this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud. this is the ibm blockchain, built for smarter business. 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.

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coming up. breaking economic news we'll take you live to the trading pit for a key read on inflation. as we head to break, take a look at u.s. equity futures reeling to some extent from wel rhteser 'lbeig back. whoooo. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a...

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welcome back to "squawk box. inflation data ppi today, its cousin cpi tomorrow these are important data points. june reads of course on the headline number we're expecting a number around up 0.3%. guess what spot on. up 0.3%. strip out the all-important food and energy, and it's up 0.3% that's a tenth hotter than we expected but definitely a little bit meeker than our 0.5% last month. ex-food and energy it's hot. it really jumped over our last look at 2.4% and if we look at trade exfood and energy year over year, also a tenth hotter at 2.7%

3.4% year over year final demand all of these numbers are hotter than we expected but, you know, as we understand whether it's in japan or in the u.s., ppi can be hot sometimes the markets aren't we'll have to see if cpi tomorrow matches up. we still have wholesale inventories later in the session. we're still hovering around the mid-2.80s. everything will be around trade and tariffs and nato today squ joe, i think we need to give a refresher course to the world about what an ally is. what do you think? >> you know, i'm watching a lot of stuff come in across -- what is it? over the transom through the twitter sphere like so many things, i get both sides. >> listen, joe it's easy. it's easy. do you think angela merkel -- >> right why is it humiliating to speak the truth? some people are saying why is that humiliating your

allies >> because it's easier to go status quo that's called brussels in a nutshe nutshell here's my thing. i don't think merkel considers russia a real ally or china a real ally. but they trade with them see, you can trade with entities and still have acompetitive effort underscoring that but it doesn't necessarily mean when it comes to a missile flying over, those are your real allies i don't think merkel will see china and russia jump to her defense. but she trades with them, buys energy from russia these are the things we need to understand listen whether you think trump's right or wrong on trade, there's a lot of issues. i think the 25% truck tariff is going to be a contentious issue on autos i don't want to see the europeans put us in a box saying no tariffs on anything but in the end, it's okay to have trading partners and then try to negotiate

it doesn't affect the other side of the ally balance sheet when it comes to military and defense. >> right we have a lot of people that come on and tell us they have a lot of criticism but they were in a position to have done it differently and we still are kind of where we are right now after a lot of, you know, you can go back 10, 15, 20 years. we bring them all out to tell us how it should be done and criticize what's happening now but it doesn't seem we're in a great position based on what's happened -- you know some things are good, some are bad. we'll see. and it'll all be clear when will it be clear, melissa will it be clear in a year trade, nato. >> don't know. >> north korea leisman doesn't know he just doesn't fear the yield curve. let's get more reaction to the number steve leisman joins us now along with blackrock's rick rieder who doesn't fear the yield curve

either, i don't think, do you? >> i do not. >> just real quick on the numbers. these are hotter than expected you have in here this trade number and i was talking to the bls last month about this. this is the profit made by retail and wholesale on this. up 0.7%, 0.9%. i don't know why that number is quite so hot it's sort of a -- it's the added cost of the middle person in there. so that if you get a good from a producer and sell to it a retailer, the middle mans or the middle persons profit is the trade number not sure why that's quite so high right now it's been up for two months. i'm sure one of my econ friends will send me a note. the decline in foods i'm wondering if we're starting to see the effects of the trade in here and you've had these decline -- you're shaking your

head, melissa. >> i think so. the stronger dollar and the trade impact >> that could be in there. we know some foreign prices have fallen looking up the chain or down the chain i guess you want to call it when it comes to less processed goods, there is a little bit of inflation in the pipeline intermediate demand. 6.8% year over year. take out food and energy, it's 4.9% there's a little bit of inflation coming down the pike whether or not that gets passed along to consumers is another story. it doesn't always happen that way one for one. >> what's your interpretation of these numbers? >> they're a little hotter a lot of what steve said is right. we are going to follow going forward. there are so many cross currents around trade the dollar, how is that going to play through over the coming weeks and months inflation is trending higher we're going to see it in ppi ppi, it's interesting. one of the things the

president's trying to do is avoid the consumer why these numbers going forward which the markets tend not to follow as much as cpi will get a lot more focus >> you're noting food and the potential impact of trade. are we -- is the overall number impacted in the core number impacted in that could we see rising commodity costs on the steel and metal side impacting the manufacturing? so we're seeing it on both sides. >> but look. certainly -- you could imagine a kind of j-curve on this. where prices could fall initially. let's say i'm sending stuff abroad and i can't send it abroad anymore and have to sell it domestically. then you'd have a glut and prices would rationalize that way one thing we've seen in the past is when you have tariffs on imported goods american producers or domestic

producers such as they are would not necessarily lower costs below that they would raise costs up to it. there could be as joe has suggested inflationary impulses. rick, i want to ask you a question here. looking at -- you were talking about the 10-year yield being at a place where it's kind of cool. especially on the short end, you're making money there. but let's look at it the way economists think you're supposed to look at it. inflation adjusted basis you're still making less than 1% if you look at the real 10-year yield, it's been below 1%. we know that the fed and especially powell likes this number as a sign of, you know, what does the market think about what the neutral rate is so when you see that, first of all, is that enough for you to say there's real money there if i'm getting -- what is that number it's below 0.8% on the real yield of the 10-year that's not a lot of money from that standpoint. what is the message of the market to the fed about where neutral is if that's the 10-year

yield. >> so i think first of all, this is a longer conversation about -- >> you have 30 seconds go with it >> when unctiyou think about whe real rate is, the mark today was telling you what they think the terminal rate is the fed is not going to ultimately go. the consensus economist view will go four times this year, four times next year market's dubious about having an economy operating incredibly well >> four and four, where would we be -- i think it's three next year where would we be on the fed funds of next year we would be well above where the 10-year yield is right now we're at the 10-year yield >> correct >> we think the neutral rate when you get to equilibrium, it's closer to three quarters. by the way, we don't think it'll need to go that far. we think the economy's surging today and is going to be really strong you're pulling forward

tremendous amounts of growth it'll be interesting to see where it goes next year. and you're pulling forward so much capex i wonder how much further the fed is going to have to go and whether they're going to get into the mid-threes. >> so 2.5% is your number where you think they stop? >> give it $2.22.75% but not muh further. it carries well, it doesn't create a lot of risk what's going to happen is if rates move higher, the curve could flatten. but you're going to get killed in the long-term of the yield curve. what happens if rate growth sloes, the front end will move so it's very directional around the shape of the yield curve which people don't talk about. >> all right i want everyone to stay. i even want you to stay, leisman, because our next guest has a support group -- >> friend of mine.

>> he's going to need us we're going to talk him down from the ledge really. he's going to need us as friends. national retail federation joining us now their president and ceo matt shay. recently wrote an op-ed stielted "to sustain the boom let's avoid harming ourselves. i remember the last time you were on. you weren't on a ledge you were like on the elevator to get up to the ledge. now you're on the ledge. first tell us are you going to be able to talk? or are you to disupon depondentl to us? >> i think we're not surprised but we're disappointed this is going totally in the wrong direction. we've been concerned that this was going to escalate all along. this is exactly what we were afraid was going to happen as

the scope of this widens there's nowhere else to go but to put tariffs on the goods that are going to be purchased by hard-working americans we're just talking about tax reform there a minute ago. tax reform made us more competiti competitive. it encouraged consumption and investment it was good for american families tariffs are exactly the opposite tariffs are going to discourage investment they make us less competitivcom. they're bad for american families it's completely an the kal all the progress -- with something we don't know what the end game is. some of these economists and observers, this is like a trillion dollars worth of economic activity potentially subject to tariffs tariffs don't work they never worked. they're not going to work this time either.

>> that's pretty dismal. any chance something positive comes out of this down the road? or immediately go back to the status quo >> you're seeing there's some ambiguity. we agree that the president's on theright track china is a violator. we don't agree the tariffs are the right way to go. you kind of can't have it both ways china is a violator. tariffs is not the way to go you've had chairman brady on how many times in the last year. chairman hatch both put out strongly worded statements overnight and this morning. and i think giving us a road map for what ought to happen next. you know, we need to get this administration together with the leaders in china and sit down and have a real conversation and let's talk about going forward. i mean, i think we're all hopeful that maybe the mnato

meetings would result in some unified action where all of the developed world or the nato countries in the u.s. would come together and force -- put some leverage on china to begin addressing these issues. i'm not sure that's going to be an outcome given the way the meeting started. >> i know you helped, you know, put forth the retailers case in washington but you got to admit, you know, i know all politics are local. but retailers are kind of domestic and only really care about what happens here. if you were a high-tech company, if you were someone trying to do business in china, if you were someone with intellectual property and for years and years and years you watched the way business was conducted in china with nothing being done about it, would you have a different viewpoint if you had skin in that game other than as a domestic business? >> first of all, i think retail is a global business and there are plenty of

retailers that have got operations in china. intellectual property. i don't think there's any question that china is a violator on intellectual property situations. we share those concerns. i don't want to diminish that in any way -- >> but don't do anything about it >> do something. but not through tariffs. punishing american consumers and american families with tariffs is not the way to get china to behave how do you put pain on the farmer in iowa growing soybeans, how does that help get china to the table? >> in response, china's punishing them i mean, that's the end result. but it's not -- that wasn't the -- that's down the road a bit from the initial transaction, right >> well, right and i think that's -- i mean, there's a certain circular logic here too when we put tariffs on china and china reacts, we say they're the

bad guys well, they're doing -- what do you do when an animal is cornered he bites back. that's going to happen until -- i think who needs to come back off the ledge are this administration and leaders in china. need to come back off the ledge. they're leading the entire economy potentially the global economy to a bad place at a time when we're seeing real growth. >> okay. what is it is it july we'll see how long this lasts. next -- maybe eventually it subsides a little, we'll have you back >> sorry to be gloomy. >> it's okay a lot of other good things are happening. got a big soccer game. >> we're growing a lot we had 5% growth in may. 4.5% year over year. forecast is still 4.5% without the tariffs. >> we'll end it there. thanks, matt coming up, tesla is ditching reservations for its model 3 we have the details next as we head to break, president trump just tweeting, i am in brussels but always thinking

about our farmers. soybeans fell 50% from 2012 to my election. farmers have done poorly for 15 years. other countries' trade tariffs and barriers have been destroying their businesses. i will open things up. i'm fighting for a level playing field for rms faerand will win, exclamation point. we'll be right back.

morning the stories front and center, tesla will no longer require reservations for buyers of its model 3 car doing a little differently now the automaker is now taking orders from anyone who wants a model 3 but customers have to pay a deposit of $2500 that becomes non-refundable once tesla assigns you a vehicle identification number. and are you attributing that five-point loss to this, melissa? or tough to say? >> it's really tough to say. >> yesterday, it popped almost exactly that much on this china news. >> the bears say they need money, is that it? >> even the bulls say that they need money or they should raise capital even if they don't need capital. >> yeah. okay when we return, we are counting down to the opening bell on wall street. jim cramer is going to join us live from the new york stock exchange check out the futures right now.

down 169 points on the dow we're coming right back.

i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know you didn't cut off the light.

the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls. together, we're building a better california. let's get down to the new york stock exchange.

jim cramer joining us now with trade front back and center again, jim you think these finally go on? >> look, i think that it's possible we could put tariffs on all 500 excess billion and i think that may only be the goal i know that peter navarro is strong about saying, listen, until they change their ways, we're going to keep ratcheting it up. will we go back to the rotation where buying utilities, buying health cares, selling industrials? i think that probably will play out for a couple of days we saw we were up 3% since we put on the tariffs last week yeah, i think there's a rotation that will go on. >> do you think, jim, that anything happens in terms of our relationship with our european allies now is it going too far? is it humiliating them, at this point? is it just a wake up call to pay

more for nato? how do you view that does it affect us economically >> look, our european allies are not really of any significance other than germany i think germany wants the export market they want export market in china. i don't think, look, they made a deal with the devil to get that passed they can get natural gas off israel they can take our natural gas exports we have coming once we're really full up and running from louisiana and i think he wants to see deals. he wants to seenatural gas and liquids go into germany. >> the businessman angle again. >> yeah. >> see you in a couple of minutes. oprah is betting on healthy. we're not talking about weight watchers right after the break.

we've got a news alert about oprah's latest investment. >> good morning, oprah is making a significant equity investment in true food kitchen a private chain of 23 health-driven restaurant in the u.s. it focuses on healthy living

they offer yoga and gardening classes. oprah will act as a lifestyle consultant we know what oprah can do for a brand. look at weight watchers. she invested in the company in october of 2015, the stock is up nearly 1300% her initial $49 million investment currently worth about $530 million christine marhon said oprah's team reached out after the star dined in their santa monica location the company doubled their revenues in the last two years she was struck by the fact that winfrey fell in love with the brand she did when she decided to join in 2016. added that the company has big dreams and the investment will help bring them closer to reality. over to you. >> all right kate rogers, thank you and thank you to our guest host

rick reader. how we going to nd >> well, we should point out that the futures now are back to the lows of the session. dow is down by 215 we saw a little bit of reprieve on the back of the ppi numbers and bounced back down to the lows. >> the point joe made these stories will keep going on the tariffs back and forth one of the ways to make money is trade the ranges think about what the range we saw. headline hits the rates market rally. you're supposed to trade these ranges we'll get it back and forth for a long time. it's presented a real opportunity. this isn't going away tomorrow. >> yeah. taking look caterpillar is down 1.5% boeing, as well. watching the ones that have typically the poster children of this trade war they're feeling pressure we have the bank stocks down by almost a percent across the board. we'll be watching the reaction and see if it lasts. >> yeah. the muscle memory is there

the question whether it has any legs behind it a lot of people are hiding in the familiar places. >> we'll watch nato and putin and england and croatia, too. >> a lot on tap. >> all right you're here tomorrow. >> i am here tomorrow. >> you're not. >> i'm not. >> make sure you join us tomorrow jauk "squawk on the street" is next good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures are lower as the u.s. trade rep ups the ante preparing an additional $200 billion on chinese good the president with a feisty exchange this morning at the nato summit in brussels. europe down about a perc