it's thursday july 12th, 2018 and squawk box begins right now. ♪ >> this is squawk box. >> good morning, welcome to squawk box here on cnbc. we're live at the nasdaq market in times square. becky and andrew are off today we had the dow down by more than 200 points at the close. looking to add ten points at the open up 146 points. the nasdaq is up 24. we're keeping an eye on the nasdaq meantime over in asia a reversal of the losses we saw in yesterday's session as the asian markets start to digest a new threat of a new round of

tariffs. the nikkei was up more than 1% and the shanghai composite managed to close higher by 2%. mostly higher across the board right now the dax is up .3% and the cac the same there taking a look at treasury yield wes keep looking at that spread and the spread is the narrowist. yielding 2.86% morgan stanley coming out and revising it's forecast for the ten year 2.75 verses the previous forecast of 2.85 they're overweight there >> in deal news, cnbc parent comcast increasing it's cash offer for british broadcaster sky for $34 billion. that period tops the current bid of $32.5 a -- $32.5 billion.

>> broadcom is buying ca technologies. >> software. >> englewood cliffs. they had a large facility right behind us in ft. lee the old computer associates. $19 billion deal all cash $44.50 a share for ca and the tie up comes four months after the trump administration blocked broadcom's take over and the stocks indicated broadcom down almost 7.5% and ca up nearly 20% and four straight winning days. >> losing days. >> that was last week. >> it was up until yesterday we

had four straight days. >> and then snapping right back and nothing has changed. >> you mean snapping back today. >> yeah and nothing has changed because yeah, snap back friday after -- it would have been four straight losses in the dow and actually went higher >> is that your -- >> i don't know. i don't know i don't know i'm always amazed that like what happened between yesterday and today, they were up triple digits today they're always saying, you know, it seems like when people write stories for the news services they usually say something they'll say as trade tensions moderated or trade tensions eased and they don't know why else it's up >> re-signing as chairman of the company after admitting to using a racial slur on a conference call in may and that call with a

pr firm was arranged to prevent further bad press after stepping down as ceo. >> he allegedly complained colonel standards never faced backlash for using racist language he terminated his contract with papa johns after that incident he admitted using the racial slur and apologized and said racism has no place in our society. papa johns shares fell 6% before recovering to close down 4.8%. it's the founder of the company founded in 1984. >> used to do the ads and was never really good at the ads it looked like filming the ads, already take 94. and he did a lot with peyton manning. >> peyton manning had shares in the company in exchange for being in the ads. >> it had a lot to say and looks really hard to -- i don't know

it's just the ill presentation that i got because the final product was like what? he wasn't great. he was a better founder than spokesperson. >> obviously. >> he's not a spokesperson. >> he was describing things that colonel was able to say with impunity. >> effort era. the era we're in is that this follows netflix firing a communications office for using also racial slurs. that's the corporate environment we're in. >> right. >> president trump about to depart the nato summit for london we're joined with the highlights of the president's visits to brussels. >> we have a developing situation at nato. nato is in an unscheduled emergency session at the principles in nato we're seeing reports that president trump is about to make an unscheduled statement to the press. not clear what's going on and change of plan which was a

series of bilateral meetings or multilateral meetings with georgia and ukraine and we're told the president is going to make a statement to the press and scrambled the reporters on site at nato headquaters right now they're being rushed into a room where the president is going to be clear when that's going to happen. aids traveling with the president to get more clarity on this situation you know that the president has been extremely frustrated throughout the trip to brussels this week demanding that they spend more on defense up to that 2% agreed upon cap and the president reiterated his frustrations saying it's unfair to taxpayers demanding they pay 2% and demanding over the past 24 to 48 hours they pay 4% of

gdp in techbs spendidefense speg we believe that will be on the topic. no clear if the emergency session has yielded some results but we are told from wire reporters on the scene that there is an emergency session at nato and we're told from the white house that the president is going to make a statement in a few moments time and i'm checking our wire reports here and full reports as we go. what we're told from the white house is that the statement is no other information beyond that >> i can think of a lot of scenarios. after all the criticism at home about his comments it would be weird if something actually positive came of it that quickly. i don't know what the motivation -- i don't know why nato would -- or the other members would just say okay. is that really what's going to

happen >> we don't know, joe. we're going to monitor the situation. the nato general secretary, he responded very tepidly to the president's demand the agreement was to do it in the out years. >> yeah. >> fighter jets. >> the nato folks do not respond well. >> fighter jets scramble and reporters scramble they're scrambling to get somewhere i think. it sounds like it would be the opposite. >> egg skracramble. so it's getting them together and not scrambling them all up they're gathering everyone into a room it's interesting. >> they're pulling the reporters traveling with the president in a holding area, those reporters are now being rushed into a room where the president is going to give some kind of statement and we don't know exactly what the

president is going to say. e-mailing sarah sanders and checking with other people there and we're getting guidance from the reporters that are scrambling we're told that it will happen in the next ten minutes so stand by for that. we work hard to write things to keep people viewing like these teases we try really hard and sometimes they're a little bit contrived and that's a good one. we can stay tuned for the next ten minutes. >> let me get through. >> get to this other story so many facets to the saga today. the president is headed to london that's where we find our own wilfred frost. i had something ready for you. i don't really hear it yet but i never heard of the song three lions --

>> that's cruel, joe. >> i never heard of the song three lions before i don't know what it meant but we found it and we were going to play it for you. it has to do with the three lions on the coat of arms for england i think. that's where it comes from it was a big popular song in 1998 do you remember that wilf. >> it was first out in 1996 and repeated every tournament since. and it's title was exactly three lions. it still brings a tear to the eye even though we're out this song it has so much passion behind it ♪ >> it's not coming home this tournament but it will come home in four years time. >> see what i do for you i found that we're playing it you came home. so if you're an it. >> and president trump is coming to my home country so perhaps we should pivot forward and talk a little bit about that joe.

and he arrives here roughly lunchtime. about 5 or 6 hours away. his first significant engagement is going to be this evening. hosted by the prime minister and attended by business leaders and then tomorrow he'll display the military academy he'll have a working meeting and her majesty the queen in windsor before heading to scotland for the weekend and there will be no alliance more important in the years ahead than the u.s. and u.k. one and despite the headlines aman told us about the negative absolute tone from nato the u.k. should be relative winners. they do spend 2% of gdp on defense and pretty much always have but clearly points of contention as well tariffs top of the list. prime minister teresa may said

they were unjustified but there's also concern here about the trump-putin summit particularly following the attempted murder here on british soil there will be protests against the president. that's not going to help the tone they're not orchestrated by the prime minister and then there's the comments by the president before he left saying that the british political system is in turmoil at the moment and just on the note i want to mention the tweet that came out about 20 minutes ago. the former deputy prime minister under david cameron. he said i'm going on the anti-trump demo. i had no intention to do this but his crazed attacks on the eu, nato and the wto changed things and it shows the impact that g-7 meeting has had before it and the possible tone that could be expected when the president arrives.

>> i will say that i thought that right after the shock in the second half of that -- i hate to return to this but after the shock in the second half of that goal, i mean, for awhile t tea, the tead fans seemed shell shocked and it got close and as we know hit to go to almost the very end of the second half and then the very end of the second half of the extra 30 minutes but it was, you know what, i became a believer in what you tell me. it was amazing to watch. >> it felt like a kick. >> i bet it did. >> but they were -- >> but back to what i said after the result last night, 24.5 years old is the average age of this england side. they overachieved and they'll come home with a hero's welcome and not much condolence to them in the short-term but they'll be

back just not this year. >> now we have to pick a team for sunday one of the guys on frances team is like needling the three lions, he's 19 years old one of the stars so it helps, if you're going to run like that. >> he's already pretty talented. >> have to say i go to the under dogs but i can't believe they go ahead with every tournament is this third place playoff no one wants to may in it and belgium and england have to turn out for another match and all they want to do is lick their wounds and come home but as i said on closing bell last night, theth if i have one piece of advice he should not try to make fun of that on arrival it won't go well i don't think the protestors would react kindly to that. >> now, i was trying to rub

salve on your wounds. >> salt on his wounds. >> savl lve on his wounds. it was a great holding. >> let's get back to the breebr markets. she's at bk asset management >> just like bill marr are you related? >> no. >> you're not going to say something unhinged are you >> no. >> we just heard someone say 275 now. who was that morgan stanley on the two years? not 325. >> that's not good. >> what does that mean >> that's good isn't it?

>> if rates are going up it's good you think about flattening the yield curve that's where banks can get into trouble if you're positioned right going into this and the raising rates were no surprise no one should be sitting around saying i'm surprised that the short-term is coming up. the folks borrowing short and lending long. >> we'll have pat on do you think the worst case scenario is going to happen for the stock market >> i think everyone is fearing the worst case scenario but so far things haven't been that bad. earlier he said the marks are take everything in stride. we vn sehaven't seen the true b

news hit we haven't seen data wise a significant slow down and we have inflation data from the u.s. coming out. >> that's early though isn't it? >> it is. >> it's way too early so we're still on pins and needles. >> right and until we see that no one is going to panic and the federal reserve is not going to panic. next week we have retail sales they'll still be descent so there's only so much forward looking you can have hope is still resonant in the markets. we can still see progress and stability. >> is that where we see the emerging markets and the real systemic trouble could come from. >> that's where the real pain could be surely. right now you're seeing the u. s. dollar perform well and that's causing strife in the region and with china also using

their currency as a employ to offset the tariffs that's also going to effect what's happening in the emerging markets. so far everything has been limited and everyone is worried about the impact of the trade tensions on u.s. consumers and i think for the most part it's a lot of bark and very little bite so far at least i hope and i think, you know, we really need to see the evidence show up before everyone starts with the fire alarms. >> we're seeing that too. >> the commercial lending is pretty good. i'll share one story with you. i think it's relevant. we have a client that does import household goods from china. you'd think they'll be really concerned with what's going on these days they just built out a brand new warehouse. we're financing a $24 million credit facility to do that and when you talk to these guys this company was founded in 1962 so

they started during the cuban missile crisis they don't get easy phased they tell us look we import today from china we used to import from korea before that we used to import from japan we know people in vietnam. we know people in mexico their products haven't been impacted directly yet but they say well, you know, we'll see. hasn't really shown up. >> but their products must be on the list of the $200 billion in goods. >> they're next up so they look at it and they say they'll have to find an alternative source but they don't say let's stop the business and especially they're in that. >> sorry we have to interrupt. president trump is speaking to reporters in brussels after that emergency session. let's go straight there. >> we really accomplished a lot with respect to nato for years presidents have been coming to these meetings and talked about the expense, the tremendous expense for the united states and tremendous

progress has been made everyone has agreed to substantially up their commitment they're going to up it at levels that they have never thought of before prior to last year when i attended my first meeting it was going down, the amount of money being spent by countries was going down and down very substantially and now it's going up very substantially and commitments were made. only 5 of 29 countries were making their commitment and that's now changed the commitment was at 2% ultimately that will be going up quite a bit higher than that so we made a tremendous amount of progress today. it's been about, at a minimum, they estimate and they'll be giving you exact numbers but since last year they have raised an additional $33 billion that's been put up by the various countries. no not including the united states

and the united states commitment to nato is very strong and remains very strong but primarily because of everyone and the spirit they have the amount of money they're willing to spend the additional money that they will be putting up has been amazing to see the level of spirit in that room is incredible and i hope that we'll be able to get along with russia i think we will probably be able to the people in the room think so. but they really stepped up their commitment like they never have before we took an additional 33 the number could be higher than 40 the secretary general will be giving the numbers today in his concluding press statement but we are doing numbers like they have never done before or ever seen before and you'll be seeing that and i guess you'll be

hearing that a little bit later. okay we have our secretary of state as you know and john is here so if you have any questions for the three of us. mike pompeo just got back from a third trip to north korea. he's become a true expert on the trips to north korea the best way to get there. best way to get out and he gets along very well and he's doing a great job over there yes, ma'am. >> i told people i would be very unhappy if they didn't up theirs substantially. the united states has been paying probably 90% of the cost of nato and now countries will be upping their commitments. i let them know yesterday.

yesterday i let them know that i was extremely unhappy with what was happening and they have substantially upped their commitment and now we're very happy and have a very, very powerful, very very strong nato. much stronger than two days ago. you're very famous on television >> the united states was not being treated fairly and now we are. i was firm yesterday i know a lot of the people in the room i was here last year

i let them know last year in a less firm manner but pretty firm if they raised $33 billion i think going to $40 billion but $33 billion as of today. today and yesterday i was probably a little bit more firm but i believe in nato. i think nato is probably the greatest ever done but the united states was paying for anywhere from 70 to 90% of it depending on the way you calculate. that's not fair to the united states in addition to that, as you know, we're in negotiations with the eu and we'll be meeting with them next week we have been treated very unfairly on trade. our farmers have been shut out of the european union. now you can say they're different but to a large exten they're the same countries so we'll ultimately be treated fairly on trade and i can tell you that nato is a fine tuned machine. people are paying money they never paid before. they're happy to do it and the united states is being treated much more fairly

yes, sir >> did you winnie concessions in your meeting and discussion with the german chancellor when it comes to german defense spending and this issue of purchasing energy from russia and secondly what would you say to your critics that say by creating the scene here at nato you're only enabling president putin in russia to further disturb things in crew yukraine and georgia. >> if you consider putting up tremendously, additional funds at a level nobody has ever seen before i don't think that's helping russia i think that nato is much stronger now than it was two days ago i think that nato was not doing what they were supposed to be doing, a lot of the countries and we were doing more than we should have been doing we were carrying too much of a burden that's why we call it burden sharing. i was using the term a lot today. burden sharing we had a fantastic meeting at the end. 29 countries and they are

putting up a lot germa germany has increased very substantially and germany is coming along and we still have to figure out what's going on with the pipeline because the pipeline is coming in from russia we'll have to figure that out. nobody brought it up but me and we're all talking about it now and actually the world is talking about it now more than anything else and we'll figure that out but and frankly maybe everybody is going to have a good relationship with russia so there will be a lot less problem with the pipeline but to me that was a very major point of contention we discussed it at length today. germany has agreed to do better than they were doing and we had a very good relationship with angela merkel. >> yes. >> go ahead. >> after all of these years, i know margaret. >> thank you maybe i'm being dense here but

could you just clarify, are you still threatening to potentially pull the united states out of nato for any reason? and do you believe you can do that without congress's explicit support and approval >> i think i probably can, but that's unnecessary and the people have stepped up today like they have never stepped up before and remember the word, $33 billion more they're paying. you'll hear from that's from the secretary general in a little while. he thanked me. everybody in the room thanked me there's a great collegial spirit in the room that i don't think they've had in many years. they're very strong. so very unified. very strong. no problem, right. >> no. >> no problem. >> mr. president, you have said previously you wanted the countries to step up spending at 2% yesterday there was a suggestion it might be 4% or 2% in a much

quicker timetable. can you clarify what did they commit to doing? is that satisfactory to you? >> what they're doing is spending at a much faster clip they're going up to the 2% level. some of them have parliaments and their own congresses and a lot of things they have to go through so they're here as a prime minister or a president and they can't necessarily go in and say this is what we're going to do but they're going back for approvals. some are at 2% others have agreed to go to 2% and some are going back to get the approval which they will get to go to 2%. after 2% we'll start talking about going higher but ultimately we should be in years in advance, we should be at 4% i think 4% is the right number now the united states depending on the way you calculate it was at 4.2% and i said that's unfair and we have the largest gdp by far, especially since we have increased it by so much since a thing called the election.

our gdp has gone way up so that means we're paying for period even more which is very unfair so i explained that. we will go to much higher than 2% into the future but right now we're getting people up to 2% and that will take place over a fairly short period of time. a short number of years, okay? >> we understand -- >> congratulations, by the way, in soccer. >> thank you we understand your message but some people ask themselves will you be tweeting differently once you board air force one? >> no, that's other people that do that. i don't. i'm very consistent. i'm a very stable genius go ahead. >> thank you, sir. jeremy dimon with cnn. how are you? quick question with germany and the comments that you made

yesterday. do you feel given the threats you made about leaving nato and insulting germany's sovereignty do you feel that's an effective way to conduct diplomacy and secondly would you be able to be more specific about the commitments that you secured today. is there an updated time line? are there specific countries you can site because the majority of them were already planning to meet the threshold by 2024. >> no, many of them, in fact, germany was going to be in the year 2028 or 30. it's a very effective way to deal but i didn't deal exactly the way you said i have great respect for germany. my father is from germany. both of my parents are from the eu, despite the fact they don't treat us well on trade but i they will change also and we'll see that because on the 25th of july they're coming in to start negotiations with me we'll see. and if they don't negotiate in good faith we'll do something

having to do with all of the millions of cars that are coming into our country and being taxed at a virtually zero level. at a very low level but it's been a very effective way of they gauche wrnene they -- negotiating. nato is very important it's helping europe more than it's helping us. at the same time its very good for us so we have now got it to a point where people are paying a lot more money and that's starting, really last year you were there last year and last year we had a big impact again we took in $33 billion more and if you ask secretary general he gives us total credit meaning me i guess in this case total credit because i said it was unfair now what has happened is presidents over many years from ronald reagan to barrack obama they came in and they said okay,

do the best you can and they left nobody did anything about it and it got to a point where the united states was paying for 90% of nato. and that's not fair. so it's changed. we had a really good meeting today. we had a great meeting in terms of getting along i know most of the people in the room because of last year and because of the year and a half that we have been in office. year and a half plus but we have a great relationship everybody in that room by the time we left got along and aagreed to pay more and they agreed to pay it more quickly. >> yeah. go ahead, phil. >> you tweeted yesterday what good is nato and you have talked about nato as an alliance that benefits europe and defends and protects europe. do you see any value of nato to the united states? does it help protect the united states from russia in your view? >> it's another very strong ally as together it's much stronger than obviously individual

countries. i think it's the way we have it now, i think nato got, you know what was happening with spending prior to my getting into office. the numbers were going down and now the numbers are going up like a rocket ship the numbers have gone up a lot and they have gone up rapidly and they're now going up further so nato is going to be very effective. he's done a fantastic job in putting it all together and i was were the ones that gave him an extension of his contract as you know he's done a really good job. i think that when i was saying that i am very concerned with the pipeline i don't like the pipeline and when i talk about nato and say how do you have nato and then you have somebody paying the people that you're protecting against but maybe we'll get along with the group that we're protecting against that's a real possibility. i'm meeting with president putin on monday and i think we go into that meeting not looking for so

much, we want to find out about syria. we will of course ask your favorite question about meddling i will be asking that question again but we'll also be talking about other things we'll be talking about ukraine ukraine was here today by the way and you know it's very interesting to hear what they had to say excuse me. he may what am i going to do? all i can do is say did you and don don't do it again. he may deny it you'll be the first to know. >> wall street journal if the germans and the canadians and others don't come up to 2%, what is your fall back position? how will you up the pressure to make them actually -- >> well, they will i have no doubt about it they all made commitments and they will be up to 2%. it will be over a relatively

short period of years. >> i want to ask about -- >> georgia, they were here today represented. >> yes and we will talk about georgia in meeting with president putin. >> they were here and they made a very favorable impression and we listened to their plight. it's a tough situation with georgia but they made a very fair impression in the room, okay >> go ahead. i had a question as well will you recognize -- will you recognize crimea as part of russia >> that's an interesting question because long before i got here president obama allowed that to happen

that was on his waf atch and non my watch people like to say crimea. they built bridges to crimea they just opened a big bridge started years ago. they built a submarine port. so that was on barrack obama's watch. that was not on trump's watch. would i have allowed it to happen no but he did allow it to happen so that was his determination what will happen with crimea from that point on i can't tell you. yeah, go ahead >> regarding your summit with president putin will be be raising arms control issues? would you like to extend new start and will you raise concerns about violations of the inf treaty >> yes. >> and as is follow up to the nato meeting today will you suggest to him or would you consider stopping military

exercises in the baltic states if that's something that he requests >> we'll talk about that but we're going to be talking about those three issues and many more we'll be talking about it, jeff, okay >> i'd like to know if you're planning to guarantee the taxpayers that this flow into nato will be spent in the best possible way especially with the countries that have problems with public finances. >> the money will be spent properly we have many wealthy countries with us today but some that aren't so wealthy and they did ask if they could buy the military equipment and could i help them out and we will help

them out we're not going to finance it for them but we'll make sure that they can get various other payments and the united states makes by far the best military equipment in the world the best jets and missiles and guns and everything. that's one thing that i guess a assume that prior to taking office but i really learned since being president our equipment is so much better than anybody else's equipment when you look at aour companies lockheed and boeing and what material, the equipment that we make is so far superior. everybody wants to buy our equipment. can they make snit becauit beca are doing very well. so we are helping some of those countries get online and buy the best equipment yeah, go ahead >> did any of your allies express specific concerns?

>> just the opposite of concern. they actually, and they'll probably come out with a little bit but they actually thanked me for meeting with president putin. i look forward to the meeting. they thanked me. they thought it was a great thing that i was doing it and they gave us our best wishes -- their best wishes. now with that being said, we'll see what happens just a loose meeting it's not going to be a big schedule and we'll see where it leads but it could lead to something very productive and maybe it's not. but i think meeting with people is great we had a great meeting with chairman ki chairman kim and mike pompeo did a fantastic job. i might ask you to say a few words while you're here. just one second. >> thank you plfmr. president. so i did i returned, actually came straight from north korea with a couple of stops here to

brussels we had a productive conversation there remains a great deal of work to do but i think most importantly my counter part made a commitment consistent with what president trump was able to achieve with chairman kim which was they intend to denuclearize and they going to accomplish it and now the task is to get it implemented. >> i think just to finish on that, it's so important that was an amazing meeting i thought an i think we established good relationships. we'll see where it all lands there's been no missile tests, there has been no research they have blown up a site. i hear they're blowing up another missile site they have taken down all the propaganda in fact there's no more music playing at the borderline. it was going on for many years they said recently wow there's no more of the heavy music and propaganda they have done a lot of things and we got back our three

hostages so it's a good process but the main thing is there have been no rocket launches. there have been no missile tests and no explosions for almost nine months. >> your trip to the u.k., there's lots of protests planned in london and elsewhere. how do you feel about that >> i think it's fine i think they like me a lot in the u.k. i think they agree with me on immigration. i'm very strong on immigration i made a point today i said you have to stop. you're ruining, you're going to have a lot of problems you see what's going on throughout the world with immigration, right probably at least partially won an election because of immigration. if you look at italy, gespie who i got to know quite well he won his election because of strong immigration policies on italy.

a lot of the people in the u.k., i think that's why brexit happened i don't know what's going on with the thnegotiations who knows? that's become a point of contention we have nato and then we have the u.k. and then we have putin and i said putin may be the easiest of them all, you never know but i'm going to a pretty hot spot right now, right with a lot of resignations butly say that immigrations a very important thing and i told them today the eu, the european union better be very careful because immigration is taking over europe and they better be very, very careful and i said that loud and clear yes. go ahead >> what will you tell president putin about this summit and about nato >> i think he'll see about this

summit this has turned out to be a very successful summit. nato is more put together and more coordinated and there's a better spirit for nato now than perhaps they have ever had it's richer than it ever was the commitments are made at a higher level than they have ever been made aand the money will be paid out faster. far faster the 2% was a range , a goal it wasn't something they're committed to it's a big difference. the 2% number. that's why people weren't reaching it or hitting it. it was just a number out there now it's a commitment. a real commitment. he's going to see there's great unity, great spirit. and we will have a good meeting. it all came together at the end.

it was a little tough for a little while but ultimately you can ask anybody at that meeting, they're really liking what happened over the last two days. there's a great spirit leaving that room. >> do you think you'll get along with president putin and why do you think that? is there something that you admire about him >> well, he's a competitor he's been nice to me the times i've met him he's a competitor. somebody was saying is he an eastbou enemy? he's not my enemy? is he a friend no i don't know him well enough but i hope we get along well i hope we get along well ultimately he's a competitor he's representing russia and i represent the united states. in a sense we're competitors not a question of friend or enemy. he's not my enemy and hopefully

so day maybe he'll be a freiend i don't know him well. when i did meet him most of you peel we people were there. >> on brexit, because you are going to the u.k., what will be your message on brexit >> it seems to be turning differently where they're getting at least partially involved back with the european union. have no message. it's not for me to say i own a lot of property there. i'm going to scotland while i wait for the meeting i have a magical place in scotland. one of my favorite places. i'm going there for two days while i wait for the monday meeting but it's not for me to say what they should be doing in the u.k. i have great friendships my mother was born in scotland have great friendships over there. we have a wonderful alabambassa and woody is doing a great job

it's not for me to say i'd like to see them be able to work it out so it can go quickly. whatever they workout. >> is it heartbreaking i thought you said it was heartbreaking. i said that might be going a little bit too far is it heartbreaking? a lot of things are heartbreaking. no i would say that brexit is brexit it's not -- when you use the term hard brexit, i assume that's what you mean the people voted to break it up so that would imagine that's what they'll do but maybe they're taking a little bit of a target route so i don't know if that's what they voted for i just want the people to be happy and they're great people and i'm sure there will be protests because there were always protests but there were protests the night of the election both ways but in the end, we got 206 electoral votes and one state said you know it

was interesting one of the states we won, wisconsin, i didn't realize this until fairly recently that was the one state that ronald reagan didn't win when he ran the board his second time he din win wisconsin and we won wisconsin, so we had a great night. protests, there might be protests but i believe that the people in the u.k., scotland, ireland. as you know i have property in ireland. they like me a lot and agree with me on immigration that's why you have it in the first place is immigration. >> what would be the best deal with putin when you come and don't you think that you're playing to the same goal as putin with your harsh diplomacy toward eu and nato

>> i can't tell you what would be the ultimate. no more nuclear weapons anywhere in the world would be the ultimate no more wars no more problem, no more conflict let's find a cure to every disease known to mankind or woman kind that would be my ultimate, okay. and we'll start from there. >> yeah, go ahead. >> i would like to ask you, mr. president, that afghan president is going to be here. >> he's here now. >> he is here and are you going to meet him and what are you going to say to him and when the war is going to end in afghanistan because people are fed up now and they want to know. >> a agree with that it's been going on for a long time and we have made a lot of progress but it's been going on for a long time. we have made a lot of progress in afghanistan yes, your president is here right now. he's in the room when i'm finished with this i'm going

right back into that room. >> please, please. mr. president can you tell us what do you think about future m member sship of georgia in nato? >> at a certain point they'll have a chance. not right now. >> are you going to continue to support kurdish forces in iraq thank you. >> i think the kurds are great people they're incredible fighters. they're wonderful, warm, intelligent allies in many cases. as you know, it's different groups of people yes go ahead please. >> mr. president, you said putin isn't an enemy, isn't a friend, just a competitor. >> competitor. >> do you consider him a security threat for europe or

the u.s., thank you? >> i don't want him to be and that's why we have nato. and that's why we have a united states that just had the largest military budge ever, 700 billion approved 716 billion next year. no i hope that we'll be able to get along. i've said from day one, whether it's china or russia, we're working on trade with china right now and i don't say that's an easy situation because that's been years of abuse. i've taken over a lot of bad hands and i'm fixing each one of them and i'm fixing them well, but china is going to be, i think, very successfully ultimately taken care of. i have a great respect for their president as you know, president xi. spent two days there and i think we'll end up doing something very good with china.

right now we're in a pretty nasty trade battle but i think ultimately that will work out. i really think we have a big advantage. we picked up $8 trillion in value and worth since i became president and we're close to two times the size of china. a lot of people don't know that. we're going to negotiate a fair deal if that's possible. okay. and russia, russia, i think getting along with russia would be a very good thing. >> we have seen escalation of tension between you and the iranians -- >> i would say there's an escalation, you agree. they're treating us with much more respect right now than they did in the past and i think -- i know they're having a lot of problems and they're economy is collapsing, but i will tell you this, at a certain point they're going to call me and say let's make a deal and we'll make a deal but they're feeling a lot of pain right now. go ahead.

go ahead. go ahead. >> mr. president, do we expect the rise of the russian influence in macedonia following the starting of negotiation process like we've seen in montenegro and what will nato and the united states do to counter that russian influence in the western balkan? >> we never talk about our future plans. go ahead, ma'am. >> thank you very much, mr. president. i'm from iraq. my question is about the government of iraq. after two months, the government in iraq has not been formed, what is the role from usa and you want to talk about syria with president putin can i have any information about -- >> i hope we get along well with iraq. we've spent a great fortune in iraq and many, many lives on

both sides, which i always think about both sides, not just our side and they had an election and i hope we'll be able to get along and we'll see how that goes. we've already been talking to the people that won the election. i was not in favor of that war. i was very much against that war. i never thought it was a good thing, but that's another deck of cards that i inherited and we'll do the best we can with it. i think the election was pretty conclusive and again we've spoken to them and we'll see what happens. go ahead. >> we have time for one more question. >> good. >> i come from a very small country in northern africa. my question, mr. president, we really admire what you are doing in north africa and we really wish and hope that something, again, would be done in the middle east to avoid people --

more wars and more blood and more killing, just peace process that gives everyone -- >> we're looking for peace and africa, as you know, it's on our very strong list, but we're looking for peace. we want peace all over. we want to solve problems. we're looking for peace. africa got problems like few people would understand. they have things going on there that nobody would believe in this room, if you saw some of the things i see through intelligence what's going on in africa, it is so sad and so vicious and violent and we want peace. we want peace for africa and peace all over the world. that's any number one goal, peace all over the world. and we're building up a tremendous military because i really believe through strength you get peace, but we're -- we'll have a military like we've never had before. we've given out orders for, you

know, the best fighter jets in the world, the best ships, the best everything, but hopefully will never have to use them. that would be a dream. to buy the best stuff and have the best stuff and have the best equipment in the world and to never have to use it would be a really great part of my dream. thank you very much, everybody. thank you. i'm going to be going -- leaving in about a half an hour. thank you. >> the president with comments -- obviously, going to need some more specifics on -- it's interesting to see the nato secretary when he makes his comments. we'll see if that align exactly with the president. >> with what he said. it's important strides made, though, if it is true that the allies have agreed to 2% within a shorter amount of time including germany and canada and -- >> a hard 2%, not like we'd like to get to 2%. >> exactly. >> but we'll see.

eamon javers will have some comments on this. we'll talk to him. we'll take a quick break and we'll also talk to delta air lines and the ceo because the company is set to report some numbers. we'll have an interview with ed bastion. we're less than a week away from a alpha conference. we'll also be hearing from former white house chief strategist coming up next wednesdayall day on cnbc. stay tuned. you always pay your insurance on time.

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breaking news. president trump wrapping up a headline making nato summit. he heads to the uk next to meet with theresa may and the queen. the ceo of delta air lines will join us live as a second hour of "squawk box" takes off right now. ♪ announcer: live from the beating heart of business, new york, this is "squawk box." good morning and welcome back to "squawk box" live from the nasdaq market site. u.s. equity futures at this hour. today's top story up 192 -- melissa's in for becky, as you

can see of the president trump wrapping up a nato summit by holding a news conference where he said allies have committed now to raising their defense spending beyond 2%. >> we've had a very amazing two day period in brussels and we really accomplished a lot with respect to nato. for years presidents have been coming to these meetings and talked about the expense, the tremendous expense for the united states and tremendous progress has been made. everyone's agreed to substantially up their commitment. they're going to up it at levels that they've never thought of before. >> joining us now eamon javers in brussels and mike allen in washington. a mon this is an impromptu news conference that the president held after an emergency meeting of nato. i'm wondering how we heard the

other side of the story, have we heard from germany saying that this commitment is, in fact, a commitment >> reporter: we don't have any of the details yet. what you saw was a very confident president trump taking a victory lap of sorts saying that he's gotten agreements for an additional $33 billion in funding from those countries for their own defense. that 2% cap is not nato dues, that 2% cap is funding on their own military that's all the countries have agreed to. the president saying he's extracted promises from most of those countries to up their spending. the details will come from the nato secretary general so we'll see what the final numbers are here. the extraordinary moment that we saw there that a lot of people here in europe are going to be focused on, the president was asked if he's threatening to pull the united states out of nato and if he feels he has the unilateral authority to do that. the president said, i think i probably can, but that's unnecessary. the people have stepped up.

the president their asserting his authority as the united states to pull out of nato in a nato facility on a press conference here in brussels is an extraordinary thing but then also saying that he doesn't need to do it because the defense spending commitments were made by those europe be allies. the president implicitly threatening there to pull out of nato if the spending was not made, the spending commitments were not made by those european allies. that's an extraordinary thing and something we haven't seen before from an american president. the president saying today, this was a terrific two days. he feels confident of the there was a tremendous spirit in the room and it sounds like he got most, if not all of what he wanted. >> mike, sounds like a win for the president. we don't know if the country's will actually step up at this point. it's still too early. the president made it clear that these heads of states would have to go back in some cases to their parliament to get these increases approved, but he went in there with a checklist and

he's walking out with the checklist mostly ticked. >> the president says it's a fantastic couple of days but for him, but for so many of our most important allies these couple days were worst case scenario. the president saying what they were afraid he was thinking and for these countries this is not thee owe reticle. the country's very much depend on the united states for their security. the president has to -- we have to talk about how unusual this style is. we shout him go ahead as if he was on the jersey turnpike and talking about the wisconsin/michigan results. playing his own greatest hits when he said i'm a very stable genius that flashes back to january right after michael wolff's book came out, they were questioning the president's mental stability and i just got that. i just got an email and he said

for the allies, president trump has been such a shadow over this that even when they try to ignore him, they're comments seemed aimed at him. all the things they're saying seemed to be trying to defensively explain the value of nato and the president finally said it, the president finally said there when they were talking about russia, he said that's why we have nato. i can tell you our allies wish he had started there instead of ending there. >> when it comes to russia, the president mentioned specifically about -- he mentioned the pipeline. he said we're trying to figure out what to do with the pipeline at this point. are we hearing anything more about germany's deal to have this pipeline from russia? >> reporter: the german defense minister was talking about that pipeline saying this is a private sector business decision. now, there's some indication that the german government has

nodded its head in approval of that business decision but ultimately the german's government position has been we can't reverse that. it's very complicated. it's a private company, dealing with a private company and therefore that's moving forward. there's some criticism because the former german chancellor is working on that deal as a business person now and there's criticism that there's conflict of interest in that deal so maybe there is some way in the future to unravel it but in the first blush there isn't seem to be any impetus to get away from that. the president of the united states standing in a hall at nato and threatening to break out of nato, to pull the united states out of nato -- >> and it's still on the table, for all intents and purposes, as you mentioned, it's still on the table. he's keeping that chip in terms of the leverage if they don't fulfill their end of the bargain. mike, how, if at all, does this translate to the president's ongoing negotiations when it comes to trade whether it be nafta and some of the bilateral

agreements the president wants to reach with canada, mexico and china? >> the president's aides think he has a very strong hand and that's why we see him coming out here and taking a victory lap, but you look at the trouble that ran through this meeting about the headlines about the allies rattled. something that will not fly with this president when he was talking about -- it's complicated, this president doesn't respond to that or listen to or use as an excuse or even an explanation from an ally that he wants to take to the wood shed. >> is it just too simplistic or naive to say that the president got what he wanted and how its unprecedented and mean and like his tweets or did he not get

what he wanted is he overstating the commitments he's getting from nato i don't know how -- i know how politico was going to portray it. i was hoping that axios would portray it differently. >> no, joe, you're trying to cause trouble here. you can unpack how both sides view it without getting bogged down in process or the swamp right here behind me. the president came out and was able to say that he got what he had pushed for -- >> did he really that's all i want to know. i want to know whether he's hyping it in terms of just putting the best possible face he can after what you were saying was kind of a tumultus couple of days or did he really extract what he wanted and its great for the united states and for taxpayers here that we're not footing the entire -- the

lion's share of the bill >> it's complicated. we don't know yet. eamon pointed out that everything in that room doesn' instantly become reality. we have to stop here and point out that the president's aggressive approach has worked and north korea doesn't seem to be going too well, but the approach -- >> when you say that, there's a reuters headline that says macron says they will hit the 2% target by 2024, so is that a change or not? >> this val dates the trump point of view that what was done in the past wasn't working and whatever headlines or whatever -- >> they already agreed to that, mike, france had already agreed to go to 2%? do you want to comment on this eamon? >> reporter: 2024 was the agreed

upon date in which they would all hit that 2%. there was some doubt whether all the countries would hit it by that point. some of the countries are there already. the rest of them still have a ways to go. there was some doubt whether they would all make the deadline. what macron is saying there is that they'll all hit that deadline by the date and that would be a win as far as the white house is concerned. what are the details here? how much money are we talking about over what time frame all of that the president left to the side of the he was declaring victory and getting out of town. he left that threat to remove the united states from nato very much on the table and he did not deny when he was asked about it in the room that he had threatened that behind closed doors to the nato leaders and that's an extraordinary thing we'll need some reporting on. >> we got to go, guys. >> real quick. steve, the reading between the lines. the allies are smart. they want to put out a statement that trump can call a win. they all think about it, they plan for it and that's what was

happening there. >> all right. thank you. eamon javers in brussels, i guess you're coming home now. >> reporter: we're on our way to finland now. >> you got to learn how to do the tango. >> there's a summit there. >> i need a lot of work. we're going there for trump/putin next week. >> right. that is happening. if you have any spare time, tango. >> i covered a summit in helsinki. >> did you tango in finland? >> i did not. >> are you serious >> i'm not kidding. >> really? >> i wouldn't kid about that. today's top corporate story comcast upping its bid for sky. let's get to julia boorstin. i have a lot of questions, so tell us what you know. >> reporter: well, comcast is cnbc's parent company increased its offer for sky to $34 billion. this topped fox's offer earlier

yesterday for $32.5 billion and its up from comcast previous offer of about $30 billion. after initially approval fox's bid, sky's independent directors accepted comcast offer. the cable giant who's ceo is here saying it expects to close the deal by the end of october. no word yet from fox on its next move whether it plans to make another bid but all of this comes ahead of bit taken's takeover panel which will announce the price that will mandate the disney pay for sky should fox acquisition be completed. this is due to a rule tieing sky's value to the price of the majority owner which is fox. this rule could dampen comcast interest in continuing to bid for fox should that sky deal go through because effectively fox would be bidding against itself and bidding up that value. a number of folks here are telling me that strategically it makes more sense for a pair up between comcast and sky and fox

and disney. nba commissioner weighed in. take a listen. >> i'm a big bob iger fan. disney's one of our huge partners so in a way i'm rooting for them. comcast has a lot of -- i know they have incredible executives. whatever happens will be positive for us. >> reporter: silver was talking there about the future of fox, in particular of fox and disney. they have those long-term deals with disney. media consolidation including at&t's recent acquisition of time warner is a win for the sports rights holders in general for all of the leagues. it brings more technology and data and tools to their fans. back over to you. >> so, julia, i'll tell you what my question was and there were a lot of articles written yesterday before the raised offer and that was, you know, rupert and brian are both out there but they can't talk to one another. how would they -- and iger too,

how would they, if they really wanted to not get in to something that is extended and cost both companies a lot of money, how would they come to the table together to split the baby up if they wanted to? and there were these scenarios where comcast would show its intention that what we really want is sky and sort of read the body language that we're not going to stand in the way of you getting the rest of fox assets is that what we're seeing here because it would be cheaper for comcast and disney and everybody would get what they're wanting is that where we're headed, do you think? >> reporter: i don't think what we're seeing now is signaling if that's what you're asking. i think what we're seeing now is the fact that sky is right now in play and that's because of some of the quirks of the british laws and the fact that the takeover board is about to announce basically what the minimum number is that fox could go for, like resets the bidding

process -- i'm sorry that sky could go for based on this rule that ties together the value of sky and fox. i think what's going on now is sky's in play and both sides are trying to figure out how much sky is really worth for them, the valuations of both sky and fox have gone up dramatically over the course of this bidding process and i think everyone's doing the math and trying to figure out if these higher valuations are worth it. go ahead. >> if rupert doesn't come back and i think was it you that asked him and lachlan, i think they're together, asked him, you know -- it sounded like this is it for the sky offer. if they didn't come back that would say to -- wasn't there a source quoted from comcast saying that they were less inclined now to try to go for all -- for the whole thing

wasn't that part of a story that came out >> reporter: yes. i reported on this yesterday. rupert and lachlan when they walked in yesterday were very vague. they were not going to answer my question, but the question now is sort of will fox respond with a higher offer and what happens if comcast does get sky and what i'm hearing from a source close to the situation is that, just looking at the numbers and looking at this british law that ties together the value of sky and fox is that if comcast gets sky and then were to go back and bid again on fox, that would raise the price of sky and that would mean they would end up having to pay more for sky than they had already commit today paying and it just sort of would be a weird situation where they would end up raising the price of everything. so i think right now the next steps all depend on who ends up getting sky and how much they end up paying for it. >> okay. >> reporter: if comcast were to get sky at the current price that they just offered, maybe

then they'll think long-term, maybe they're willing to go up a little bit more on fox. i think the future of what they do for fox is still uncertain at this point, but right now everyone's focused on sky. i think that's going to be the deal that's resolved first and the next big shoe to drop is going to be what this british takeover panel announces in terms of the price that disney/fox would have to pay for sky. it could be higher than the number that comcast offer or it could be between what comcast and fox offered yesterday. >> really complicated. >> reporter: all eyes are on sky. >> it's a weird formula. any way, thanks julia. >> reporter: yeah. >> it's dark out there. let's get to ed bastian in here. delta approved a 15% dividend

hike and it expects its fuel bill to be $2 billion higher this year. stocks trading higher on this news. ed, i think one of the things that the street likes is that you're really not lowering guidance for the year, the guidance is looking for 5.74 and that's the upper end of the bracket that you gave for the year even with oil prices much higher than they were previously, so i think they're saying, delta's still going to get it done, is that your view >> thanks, joe. we had a really solid quarter. demand is very strong. $12 million in revenue. our highest revenue in our history. in the month of june we had six of the ten busiest days of delta's history. while fuel prices are up and it's causing short terms pressure on earnings, the long-term outlook is very strong and more people than ever are flying delta. >> so but my question is, do you

think that one of the reasons that the stock is up is you're really not lowering -- you're not lowering guidance for the year based on fuel prices, are you? >> we did. >> you did lower your own -- okay. >> for the internal but relative to street consensus we're largely in line. >> exactly. so they already had that factored in, you had to get your own numbers down to where they were, but not below where they were >> right. fuel prices are going to be $2 billion higher for us this year. that said, overall year on year our earnings should be largely consistent with where they were last year. >> as far as these other metrics that we see, the load, traffic, capacity, all these things were either in line or higher than you were expecting prior to the quarter? >> yes. so our initially view on revenues for the year is we'll

be up 4% to 6% year-to-date. as i said, the strong pricing is holding in and loads are very high. >> is that just -- is it just as simple as the economy, the employment rate is so high, unemployment's low, consumer confidence is high. that's pretty big -- 9%'s a lot better than your forecast. that's amazing. why? >>, in fact, 9%'s the best i can recall. it's not just in the u.s. while the u.s. economy is doing well. international is actually going even stronger than domestic, so on our international, particularly on the transatlantic we're seeing double digits in revenue. the brand is healthy. i think we'll outpace the industry in terms of total revenue production for the quarter and the people of delta are doing a great job. that's what's bringing the traffic in. >> the airlines have been a tough trade as you know. your stock is down 10% this year. there's some fear among investors when all the airlines are at capacity to the system,

you say demand is strong. walk us through what the dynamic is for pricing when it comes to tickets for the consumer, demand is increased, you've got rise in fuel >> capacity for us is up about 3% and pricing is up 4% on top of that. that's what's leading to the strong revenue production we're yielding. we did indicate in the release that we're going to be lowering our second half total capacity some where between 50 to 100 basis points from what is out there for sale currently, but relative to expectations, i think we're doing well. >> why are you lowering capacity if your pricing is strong still? >> capacity's not being lowered. capacity is still up in the second half of the year but it's going to be a little bit lower than was originally planned largely because of the higher fuel prices. >> are you guys -- what are you planning when it comes to employment and are you finding any constraints out there when it comes to finding the workers

you need for your business >> we're hiring a fair bid. this year we'll hire probably 7,000 people into the business. we're getting a lot of qualified applicants. we're not having a challenge with that. the economy is robust and delta we are growing not just in the u.s. but internationally as well. there's a need to join delta. we'll be hiring probably about 600 pilot there's year and 2,000 flight attendants. >> i'm worried about the bathroom size. i keep reading these articles that it's getting smaller. i don't understand. >> it can't get smaller. >> no, they can't. >> it's not possible. >> are you part of this, ed? you guys getting together and saying let's make these bathrooms -- you'll get one more half of a person stuffed in some where, what's happening there? >> we haven't changed our seat size -- we've grown the seat size a bit on the most recent

triple 7 and the airbus 350 but we haven't changed any of those dimensions in quite a number of years. we have a minimum pitch of 31 inches that we are religious about holding too. the seat width on the new configured triple 7s, we actually grew it and it's the largest in the u.s. industry. >> is that -- dc 3 behind you right there? >> that is. that's one of our originals. >> tell us where you're going in terms of buying new airplanes and what's coming, what can we expect i am, by the way, a million miler, i'm platinum this year. i just want you to know that. >> thank you. >> it's up to you whether he goes to diamond. >> i'd like some better planes. what do you got coming >> and bigger bathrooms. >> we have a lot of new planes coming. we have the airbus 350 which is the newest international plane that we continue to take delivers and 330. the airbus 321 is probably the

aircraft you'll see us grow the most. we have 70 new aircraft coming into the fleet this year. >> incredible safety record faa. are there things -- still improvement that's need to be made in your view and is that happening? >> there's always need for improvement. we're never complacent. every single day we make sure we provide the safest, most reliable product in the sky. the thing we've talked a lot about the last several years is the air-traffic control systems and the ability for congress to unlock the funding mechanism so we can all invest more heavily in a longer term basis. the efficiency of the air-traffic control systems, with that said, our safety is second to none in the transportation industry and the world. >> ed, one last question here, in terms of the trade war, how do you think about the trade war with china when we start thinking about qualitative ways in which china might retaliate as opposed to just the tariffs on goods.

is there a way in which you're concerned that perhaps your growth in china could be stunted or limited during this period of trade tensions >> it's early to speculate on that. we haven't seen any effect at all. we have the highest revenues in our history we post this had quarter. our chinese business is doing very well. we've invested actually in a chinese airline, the shanghai based carrier we own 4% of. we're not seeing any signs. longer term it would be hard to note where that could go, but right now all signs are that things are quite healthy. >> all right. when anyone's delayed not on delta or whatever, they don't use maintenance or weather any more, they just say air-traffic controller. there's something that happens that's just a lot of planes and you want to be safe, but it's very tough to do it on time.

i just whether we need to upgrade some things or what. i guess it's all about money as it always is, right? >> well, it is about money. it is about congress giving the faa the authority to go make the long-term investments need today improve the systems and it's also about governance. there's a lot of users in the sky in addition to the commercial airlines. general aviation and other private interests. there's a lot of stakeholders that need to be brought together to improve. consumers are demanding it and we need to make the change. >> very good. thanks for your time today. appreciate it. here's the way news works these days. according to -- i think this is a reuters feed. president trump told allies to raise spending by january 2019 or the u.s. will go its own way. two sources and then france's macron says, trump never threatened to leave nato.

so -- >> we will be hearing about this. >> i guess it's how you say it, whether you say it -- >> i think there's conflicting information. >> it's a hard exit or soft exit. >> we have some more news coming in on the bidding war for british broadcaster sky. the uk government says it will not oppose a bid by 21st century fox to buy the part of sky it does not already own. comcast now has a bid on the table that exceeds fox's current offer. it now opens the door for fox to come back with an even higher offer. it rages on. coming up, jay inslee is in the big apple this morning. he will join us to talk trade, the economy and why his state was ranked by cnbc as a top state for business. stay tuned. ♪ ♪ keep your most valuable insights hidden from your competitors.

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cnbc rolling out the 2018 top states for business this year. jay inslee governor of washington state. welcome to "squawk box." >> thanks for your honor of our growing economy. listen, it's competition. we understand competition.

we've been in the top two for three years now and i'm pleased what we're doing, but we have concerns about what's going on right now job losses associated with this trade war. >> you're seeing job losses associated with the trade war because we haven't seen it hit the economy at all. >> they have investment decisions on hold as a result of the anxiety associated with this. our apple producers have been hit with responsive tariffs from mexico. our aluminum builders have issues about aluminum prices associated, our cherries now which are just going crazy in china, but they're going to be hit as well. yes, i've talked to quite a number of business people who have investment decisions in effect on hold pending some type of confidence activity. we have people been hurt, lack of a plan from the administration, we have a lack of allies on this issue. there's a lot of concern right now. >> when we talk about economists

trying to wrap their head around the impact to gdp they limit that to the exact hit those -- the financial cost of the tariffs. in your estimation because you're saying this is going to have a great impact on your state, what is the impact to washington state from the tariffs in your view >> our analysis is, we probably have the greatest job loss ultimately associated with the tariffs -- >> what's the number >> 5% -- about 5% of our export market of jobs are associated with this. we have about $1.8 billion of exports that are already going to be effected adversely by these. these are big numbers and big employment numbers. i used to represent the area that's the biggest apple growing area in the nation and cherries. all of those are adversely going to be efbted for employment. the number you can't totally quantify at the moment. i'm talking to people who are very concerned about this already of the these are people who building businesses.

i was in vancouver, washington, the other day. they make low-income housing. they're concerned. >> you house some of the biggest tech companies in your state. >> yes. >> how do we get that done if we don't have any sort of pain in the process? >> we've been working to protect ip in china for decades. i've been involved with that. if you talk to people in the tech sector, they'll tell you it's a lot more effective if you have an alliance, if you have an international pressure on china and unfortunately we have an administration that has had a spectacularly go it alone strategy in this regard. most of the tech people i'm talking about would prefer to have a more concerted alliance where we didn't have a president fighting with our allies, where we didn't have a president, frankly, lying to our allies. you heard it in your last segment in this regard that weakens your ability to have a more successful international effort. >> you're on the phone with

bezos and you've gotten this from them directly. >> i can't quote those in this regard. >> i was just curious. >> what we have found is your more successful when you have a plan this administration has no plan. they are a successful in this as they have been reuniting children with their parents. they just don't have a plan. >> speaking of plans, did you visit aiowa >> yeah, i was there a couple weeks ago. >> what are your plans what are your plans for 2020 you've been mentioned for 2020 as a possible -- >> you look forward to having a president who will have integrity -- >> is that you i was talking about you. are you thinking about running do you have integrity or the current president does not >> of a great concern that the united states doesn't have a president who you can trust on some basic matters and you've

looked at the collapse of our security alliances around the world and our economic -- >> who do you think is the current leader of the democratic party in your view >> the people we work for, it's the 24-year-olds that are concerned -- >> they're not the leader of the party. >> they are. they are the leader of the party. >> is it tom perez or barack obama or hillary clinton or elizabeth warren do you have somebody that should be running in 2020 the rock, i don't know. michael avenatti or something. you saw that right. he hasn't ruled it out. oprah? who do you think should run in 2020 for the democrats >> you're going to see good talent emerge. i'm serious about this issue that this is a bottom up effort and the reason is so much energy is bubbling up. i can't tell you -- >> a lot of it, governor, is democratic socialism. is that the right root she's a national figure already, the one that beat crowley.

is that -- will democrat mainstream part of the party move even further left than it has already in your view is that a good idea? >> we'll have a party that will be dedicated to economic growth and a platform that will blowup the republican myth that if you invest in education, if you invest in infrastructure, if you increase your minimum wage, if you provide paid family leave and if you protect people's insurance, even though they have a preexisting condition, we will blow up the republican myth that somehow that hurts your economy and the reason is, we have done those things in my state and what do you get, according to this station, you get one of the top two economies in the united states. so we will show and my state will show that if, in fact, you develop a platform of bringing people into your state, being competitive, bringing those computer sciences and those biologists to your state and grow your economy, that's a recipe for success. >> it might be -- there's pretty good growth. that may be a hard thing to run

on or at least the current administration may be able to run on growth -- >> when this current administration starts taking insurance away from people just because they have arthritis or a preexisting heart condition -- >> we got it. >> thank you, governor. >> thank you. our trade conversation is just getting started. next senator pat toomey. -here comes the rain.

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president trump is pushing forward with his trade agenda. meantime the senate just voted overwhelmingly in support of legislation that would let congress play a role in implementing national security designated tariffs. joining us now is pat toomey, one of the senators behind the tariff vote. it's not binding but you're still holding -- you and corker are holding out hope that it becomes binding. can you handicap whether that's a real possibility or not? >> yeah. >> is it a possibility >> i don't think the president would sign a bill into law that would make it binding today, but i think the circumstances are changing and the attitude about

this is changing. i want to also be clear. what our amendment yesterday focused on was exclusively the section 232 tariffs, those that are justified on national security grounds. it is not a national security risk for us to buy the modest quantities of steel and aluminum we buy from canada, mexico and the european union. this section has been misused. the goals are economic. they're not -- i don't share the goals that the administration has in that space, and it was a big deal i think that 88 senators went on record saying going forward we want to have some say in this. we've got to define what that looks like, see if we can build a coalition that will support that. i think there is fallout from these tariffs and as the fallout becomes more and more obvious and painful, support for restoring congress's constitutional responsibility, really, in the realm of tariffs

could happen. >> i was actually just -- i ask everyone these questions. a lot of republicans are saying, look, we're watching, we're waiting, we're hopeful it doesn't last long, we pledged a little patience at the start but our patience is, you know, is not going to last that much longer. we need some, at least, make it so it looks like there's some successful resolution that will bring an end to these tariffs. were you there initially and now it's gotten past the point of the expiration date? >> yeah. there's something to that, joe. let's remember these steel and aluminum tariffs were not the first protectionist measure that the administration has taken. we got a terrible sugar deal with mexico that was very protectionist. then we got tariffs on solar panels and dish washers, then it was the steel and aluminum, now the threat is that they're going to use national security as an argument to impose a huge tax on

imported cars. this is -- this is the wrong policy. i think they have the wrong goals in mind. >> i thought of one thing, senator. we ran out of time already. a lot of people say, look, these tariffs are eventually going to have an effect on the economy and actually bring us lower gdp than we would have had previously. that made me think that the previous status quo with all the tariffs that were already preexisting, weren't those tariffs cutting down on our potential on where we could be growing? we've accepted them for years and years and if suddenly tariffs go on and they hurt or gdp now, aren't those preexisting tariffs hurting our gdp already? >> absolutely. this is a whole new wave of tariffs so it makes it worse. zero tariff world would be the best economic arrangement. >> we'll see whether this -- we don't know fully what happened at nato, but if you look at the

most straightforward explanation some tough love might've worked and maybe the tough love thing works here too. we don't know, though, at this point. >> we need to have the right goal in mind. the end goal with respect to canada and mexico, unfortunately, is for changes in nafta that make nafta a better agreement not worse. >> okay. senator, thank you. >> thanks for having me. >> you're welcome. coming up, jobs in america linked in's dan roth is here. details on who's hiring and where when "squawk box" comes right back.

our top corporate story this morning, comcast raising its bid for sky. watch closely yesterday, although i was watching the soccer as well. i thought one of the key things that came out was that, maybe you're starting to see -- i

don't know -- you tell me some body language from comcast that sky is more important than all the other assets and that maybe it doesn't help disney or comcast to just go absolutely nuts up to five times debt or something to do it and the baby getting split is a possibility now or not. >> they can collude and you know that and they're taking -- >> they can send signals. >> they can. they can send signals -- you picked up certainly i think on the theme that i was trying to communicate yesterday in my reporting and certainly what i was getting from people close to the situation, which is that -- that valuations on both these assets have gotten very high but particularly when you look from comcast perspective on fox and this is not to say that there's still not the possibility they won't make a bid to try to top the $38 cash deal that disney has in place, when you look at it joe, when you look at what

they'll get for the rsns which they absolutely would have to sell, not to mention potentially hulu as well for 30% or more of what they would acquire there, and you look at the multiple they'd be paying and the leverage they'd be taking on and this chain principle in the uk which also is playing a role here even though we don't have a final ruling that says, if you're going to pay more for fox, fox owns 39% of this sky asset and so you're bidding on that too and you got to pay more for that too. you put it all together, joe, and you know, you could say, hey, why not try and signal to a certain extent and say, disney, maybe if you back off -- nothing says they're going to, by the way, but if you do, then we're done. >> i would think that -- i mean i saw it laid out yesterday in a couple of pieces. ed lee might have wrote -- we were going to talk to him but

then the president was talking about nato. we were talking about how all these guys were together. they're all in a square mile radius out there. they're together but -- i don't even think they can look at each other. i don't even think brian could go like that to iger. i don't even think he could do that. they can't even look -- they got to look down or something, but if you were going to do it and send signals that is not collusion maybe rupert doesn't raise his bid above where comcast is on sky now and could that be a sign that you go ahead and that means we're not going to go -- >> it's -- timing is a key thing here, joe. the best i could tell, yesterday, and most of them are sleeping in sun valley -- >> they're on east coast. they don't switch immediately, do they? >> they don't. it's still 4:30. sometimes that pushes it. i wait till 5:00 usually.

disney doesn't have -- fox don't have to do anything on sky. they've got approved offer now as well. it's a lower offer to the 1475 that comcast has a deal with sky and sky's board, but they can just sit there and wait and under uk takeover law it's still at least 46 days, maybe even longer than that before you actually enter an auction period for the asset. the reason i mention that is, if comcast wants clarity on what's going to happen with sky before it makes its final determination to try to bid again it won't get it if disney just sits there. they need disney to actually say, along with fox, that we're done in some sense or to give that signal or for this thing to wrap up in a rapid way which is not clear to me. if you were comcast and you're looking at let's call it july 20th is the final date you really could make a counter bid for the fox assets because the

vote is on the 27th, it's unclear how this is going to work, joe and that will be really interesting to see in terms of to your point, do they publicly come out and say we're backing off. >> but that was your reporting yesterday was that the motivation to go all out which would be -- wouldn't be -- to get to where murdock -- >> it depends. >> what's the price? 49 it's awful. a price that puts comcast as five times -- >> i don't think they get there, if you went to 42 even, joe, and you assume the rsns after tax, you get 16 billion in proceeds, you're still levering up to almost 4 1/2 times potentially on the comcast balance sheet. they've done it before and there was a time when cable was leveraged even more than that. if you want to get to a higher

number, yeah -- >> you still see just an insane all out bidding war for all of the fox assets between comcast and disney or you stand by that it's less likely now >> yesterday i think i said the likelihood for that has gone down and i believe that's the case, which is why you saw fox drop yesterday, comcast go up, disney go up and obviously sky had a good day too because people were expecting them to come back. it's still trading above 14.75. 10.75 is what sky accepted and now they're at 14.75. murdock and the board at fox accepted 28 now they're at 38. everything has a limit, right, you would hope. >> david, can i ask you a potentially stupid question, but i don't care. the chain principal does that apply to the pricing of the deal even if the comcast bid for sky does not apply and what i'm getting at is, could comcast be looking to extract the most pain from disney should disney

prevail because they would have to raise their offer through the chain principle based on the comcast bid for sky? >> no, it would have -- if comcast came back for disney, let's say at 43 and then disney would have to go up, even though they have a huge timing principle and went to 41 then the chain principle would -- their bid for sky and it would have to go up by the same proportion. >> a lot of that's been done. >> at this point every extra dollar certainly is adding. don't forget there's also in the fox deal for sky, they have a provision that let's them do it with only 50% approval, given they only own 39%, they need just 12% to approve it. >> they all feel like they're worth 40%more than they were worth three months ago, right? they all think they're valued 40% higher, right? >> yeah. meanwhi

meanwhile, netflix at $181 billion market value? >> exactly. although, i'm even -- when i'm looking for something new content-wise, i go through what they're recommending on netflix now, that's a change, big change. >> what would you like to see happen here as a long time comcast shareholder? >> i'd like -- i'd like to get everything as a comcast shareholder and i'm willing for -- i don't care about near term because i think i'd like to see brian and steve run all these assets, but if they decide that it's going to be too prohibitively expensive, i love -- i love making disney just pay through the nose. i got to tell you, i enjoy every minute of that. i don't know why. why is that? >> i don't know why that is either. you'll have to explore that and get back to me. >> i need to lay down ona couch to explore. something about mickey mouse or something. the whole thing -- walt disney

himself, i'm not sure he was a great person. any way, thank you faber. i booked you. i usually don't book this. >> you booked me. i know. i saw the email at 6:50. i was like what is going on. >> thank you. >> sure thing. coming up, comcast tops fox upping its cash offer for sky to $34 billion. a live report from major media conference in sun valley straight aadhe.

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new this morning, president trump reaffirms the united states' commitment to nato. >> tremendous progress has been made. everyone's agreed to substantially up their commitment. they're going to up it at levels that they've never thought of before. >> now the president's heading to the uk. we'll take you there live. head to head, comcast raising its offer for sky topping fox. the potential next steps in the bidding battle straight ahead. plus earnings alert. delta beats the street and shares are flying higher. a rundown of the quarter coming up as the final hour of "squawk box" begins right now.

announcer: live from the most powerful city in the world, new york. this is "squawk box." good morning and welcome back to "squawk box" here from the nasdaq market set in time square. i'm joe cernan and the futures are a mirror image of what we saw yesterday. we're up about 195 now. we were down about 195 yesterday at this time. the s&p indicated up 13 and the nasdaq indicated up 31 1/2 or so. >> top story, nato, president trump wrapping up the summit in brussels and holding a news conference where he said allies have committed to upping their defense spending beyond 2%. the president also reaffirming the united states' commitment to the alliance. >> today and yesterday i was

probably a little bit more firm, but i believe in nato. i think nato's -- probably the greatest ever done, but the united states was paying for anywhere from 70 to 90% of it depending on the way you calculate that. that's not fair to the united states. >> president trump now heads to the uk to meet with prime minister theresa may and the queen. let's get to willford frost in london. what about those meetings? >> reporter: steve, so with the topic of -- excuse me the topic of defense behind us following the nato summit let's focus in on trade, which is likely to top the agenda between theresa may and the president of the united states. back in march, theresa may said, quote, she was deeply disappointed by president trump's, quote, unjustified tariffs on steel and aluminum and particularly the national security grounds with which they were imposed. let's look at the numbers between the two. the uk is, in fact, the u.s.'s

biggest export market within the eu, $121 billion of goods and services per year and the trade is fairly balanced. in total $230 billion traded between the two. the uk is part of the eu so it cannot be carved out from any u.s. tariffs yet. all of that depends on the topic of brexit, something that is considerably undermining prime minister theresa may at the moment. there's a headline today saying may sticks to her guns as brexiters prepare to strike. resignations earlier in the week. here's the president's moment ago addressing the topic of brexit. >> we'll use the term hard brexit, i assume that's what you mean, the people voted to break it up, so i would imagine that's what they'll do, but maybe they're taking a little bit of a different route, so i don't know if that's what they voted for.

i just want the people to be happy. they're great people and i do think i have -- sure, they'll be protests because there are always protests. >> reporter: it's the president's apparent willingness there to side with some brexit ares, he's friends with nigel fa rang. guys >> never get tired of that shot, i'll tell you. really beautiful. >> reporter: even be big ben under the scaffolding. still looks beautiful. >> it really does. it's a treasure, as you are, actually. >> reporter: no scaffolding here. standing tall on my own. >> you're like 6'9". you could use -- >> this bromance is incredible.

>> reporter: i probably need it in my old age but not quite yet. >> it is a bromance. in corporate news the uk government says it will not oppose a bid by 21st century fox to buy the part of sky it doesn't already own and julia boorstin is live in sun valley where i think it should be less dark than it was, julia. get a shot of you -- yes the sun has come up in sun valley. good morning. >> reporter: good morning, again, to you, joe. that's right. fox just gaining that uk regulatory approval just earlier today. that was very much expected, but, of course it does open the door for fox to make another bid to counter comcast's $34 billion bid which was the latest bid made last night. that topped fox's $32.5 billion offer which was earlier yesterday and of course that's up from the $30 billion that comcast had previously offered for sky. after initially approving fox's

bid yesterday, sky's independent directors accepted comcast's offer. comcast which of course cnbc's parent company, its ceo brian roberts is here. the cable giant is saying it expects to close the sky deal by the end of october. we're still awaiting an announcement from britain's takeover panel on the minimum that disney must pay for sky should that fox acquisition be completed. this is due to what's called the chain principle which ties sky's value to the price of its majority owner which is fox. this rule could actually dampen comcast interest in continue to go bid for fox should its deal with sky go through because it would be bidding against itself. the amount of both sky and fox's value have increased over the recent bidding really speaks to the importance of not just premium content but also the value of scale to compete largely with the tech giants and this comes especially when it means competing with the tech giants for advertising dollars. take a listen to what ad

agency's bill conisberg has to say. >> they'll have a much bigger basket to play with and the googles and facebooks a bigger run for their money and that's a good thing for us. >> reporter: we'll hear more from sun valley and the buzz here. back over to you. >> can you feel sort of an excitement out there, julia that the demise of old media was i guess greatly exaggerated. i said that everybody's walking around feeling 30% richer after we know what sky's worth and what those fox assets are worth, 40% more than we thought. >> reporter: there's certainly media ceo here and he's thrilled to see the higher valuations because it makes his company more valuable. the excitement here is the idea that there's going to be a flood of deals in the wake of that

at&t acquisition of time warner and then once fox and sky are more resolved than we can see another bunch of deals come through. >> speaking of at&t, is randall out there? >> reporter: randall is -- i'm expecting him to come in today. we're actually interviewing him tomorrow morning so we'll be hearing more from him then. >> i'm wondering if he's got a nicer jet now. i wonder if he's going to be dressed really flashy like the hollywood type mogul. >> reporter: i wouldn't expect any change in his wardrobe. >> he hates to be needed about that but he's mr. hollywood now. he's a mogul, isn't he he used to be a phone guy. >> reporter: he would probably say he's more of a tech company ceo if you look at what they're trying to do with data. >> he can do whatever he wants now. >> reporter: he'd probably say it's more on the distribution or on the tech side, but it'll be interesting to see what he has

to say tomorrow about what they'll do with those time warner assets and the integration so far. >> it would be fun to fire some hollywood star. it would be fun to be -- instead of just worrying about landlines and stuff. thank you, julia boorstin for playing along. let's get to the broader markets. joining us now, phil gorko, jpmorgan and todd salla moen. good morning gentlemen. phillip, let's start off with you. 3% gdp for the u.s. economy even with all these concerns about trade, et cetera. what does that mean for the stock market because we've been in a pretty good growth environment in the stock market for all intents and purposes has been range bound for the bulk of this year? >> with the growth and really 3% is the top of our range, we're looking at 2.8 to 3% so that's

really there. what we're seeing the growth doing is really putting a bottom on markets right now. you have this ying yang of very good economic news, but you have the trade tensions and the tensions with nato going on that have really caused the discount on the market. about the telecom deals that you were just talking about, so even though the market as a whole may not have a double digit gain this year, maybe more like high single digits, there are individual opportunities out there that are absolutely fantastic that sometimes, because of this funk, because of the political noise out there, we're not always as open to take opportunities from. >> you wanted to key off that pretty quickly, phil. do you like telecom stocks here? you got -- at&t can now be categorized as more -- maybe not more -- as a media company in that bucket. it's got a six multiple right now which is far from the media multiple and far from a tech

company multiple as well. >> for us it's really more the tech company. so you have the game changers on one side, but then you have the objects, the people who are going to be purchased by some of these larger companies like at&t who actually have lots of cash still and even though we have had interest rates go up a bit this year, money is still cheap and so the debt is going to get issued by these large issuers who have very strong cash flow. >> todd, the market is technically strong you said and phil was talking about the bottom in the market being strong, gdp, we're seeing on the s&p 500 higher lows, but the highs are still firmly at 2,800 basically. what do you see as the potential breakout catalyst? what do we need to see from the markets here >> well, one thing i think -- ever since this titan cycle

began is what i've notice sd, even when it is expected that the fed raises rates, when they actually do raise rates, the market has really struggled in at least the four weeks following that rate hike and we just had that mid-june rate hike and here we go again. the market's doing what it's always done which is be flat. overall you look back to december of 2015, it's digested these rate hikes. now as far as the catalyst -- by the way, it's around 2785 is where the market was when the fed last raised rates. now we're at -- there's another fed meeting and that could be the catalyst if they stay on hold. the market is also been entertaining a lot of different things, the trade tensions,

whatever, digested that quite well, too. the powers in the fed and i think every time the fed holds, it gives investors more confidence and that could be the impetus for a breakout. other than that -- or just some of this uncertainty being resolved. >> thank you, gentlemen. coming up, delta out with earnings. a rundown of the quarter coming up next plus we'll talk to long time tech watcher ann winblad next. 2, down. back up.

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long-term outlook tor twitter to get better at artificial intelligence. he's expecting a raise in the second quarter. goldman sachs also raising estimates on twitter citing their ad and data check. two bullish notes sending the shares higher. stocks to watch. delta reporting profits of 1.77 per share beating estimates of 5 cents. netflix downgraded from neutral. this is a valuation call following a 35% run-up. the stock has more than doubled year-to-date. we're talk to the analyst who made this call in the next half hour. let's get to our next guest joining us now for what's working in tech, ann winblad. a lot of our guests say they're not like a special on tv, they're sort of like an episode. i remember everything you've

said over the years and it's a continuation of all of your comments which a lot of them we just watch them play out, but one thing we've seen is technology in general has just gotten more and more dear in terms of its prospects i think for investors and for the place that it holds in society. remember we've asked who's going to get to a trillion first and you had trouble picking between google and microsoft and apple and they're all -- they may all eventually get there it looks like now. >> yeah, it's been an exciting time for the software industry, especially enterprise software over the last year. >> yeah. can you explain what factors have caused demand to increase there and whether that continues and just -- forecast the future. it's a daunting thing for people

that don't have your skper tigs in technology to figure out where the entire industry is headed and what the most attractive parts are >> enterprise software is a challenging segment but it is a huge segment now. if you look at growth in the enterprise software segment, that's the software that every single eps in the world uses, there is no enterprise today that is not in process of a digitization process or a changing of their entire software stack. the software companies like microsoft, amazon, sales force and some of the newer vendors like service now, opta, that were ipos a couple years ago or last year are really strong participants in a massive growth area. we just saw the q2 estimates from analysts of it spend in enterprises globally and everybody's upped their numbers.

gartner says that increase is 11% and all of these projects that we're talking about that reflect the spend for these companies, specifically microsoft, amazon, sales force and others, we're in the early innings of those spends. that means that the growth of these companies can be predicted pretty easily over the next few years. >> just in looking at the -- what's driving the economy right now are all these blue chip companies and just in trying to do their jobs as effectively as they can, they need to upgrade their enterprise software. i don't even need it to reinvent the wheel here, i don't need to figure out whether it's the internet of things or whether it's a.i. or whether it's going to be the next generation technological movement we're talking about, i don't even need to know about that, i just need to know that commerce is benefiting and that's where the action is? >> that's the baseline. when we talk about things like

a.i. or blockchain or any of the futures, these are futures that have yet to kick in in the major battles in software. they're just starting. when we talk about software developers, you look at the major banks, goldman sachs has more software developers than they have bankers. you look at some of the m & a activity, microsoft buying git hub. that's a brand-new area called development operations where you're giving new tools to those software developers themselves. all of these other pieces that add on, the internet of things, the artificial intelligence, the home automation, all of these are built upon these new software stats that these global enterprises are putting in right now and they're only about a quarter of the way into these projects as far as software going to the cloud so the spend has just begun for these major software companies that have the contemporary and leading

software pieces. >> we need to keep the patent office open, probably. not everything's been invented. the quickness of the pace is what's daunt to go people like me. i wish someone would have told me that social media was going to result -- how long -- it's been ten years, that's it. and look at the world now and the iphone. it's incredible to me. >> well, if you look at some of the newer companies, one of my favorite companies is a company called service now. they're a $33 billion market cap. they've upgraded their ceo, they're scaling very rapidly. they're still growing 40% year over year so the growth rates of the company's themselves is pretty spectacular in this space. software companies are really efficient companies. the gross margins of these companies are 70 to 80%, so when they have a high gross margin

business like amazon has aws and they're advertising business, they are big money-makers and they have big treasuries overtime like microsoft does today. >> we all knew that you sell a couple of books and deliver them and you'll end up being an aws none of this -- can i give you money, is that possible? will you just handle mine? >> i'm not a stock picker. i'm a venture capitalist. >> i know. thank you, ann winblad. >> thank you. coming up, linked in out wit its latest workforce report. we'll talk to dan roth coming up next. you always pay your insurance on time.

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linked in just out with its july workforce report. joining us now, dan roth. what's the number, dan >> 10.5% increase year over year in hiring and about a 9% drop in month over month, so a little bit of a drop but that is coming off of superstrong number. >> nationally employment goes up 1.2%. >> yeah. >> what does this represent when

you say 10% up >> the bls is looking at a net job changes. >> just looking at all the hiring. >> all job changes all together. so in a market where people are quitting their jobs, they show up in our numbers. the big industry, manufacturing, construction, basically all the industries that are right now in the bull's eye of the tariffs are the ones in the last few months that have been driving all of the hiring growths. >> you did some work on those cities that are vulnerable to tariffs and those that are not. >> exactly. if these tariffs kick in, if they have the impact they'll have, this is going to effect the people -- the companies that are hiring right now are the ones who are going to be effected. you just had ed bastian on from delta. he talked about the amount of hiring he's doing. if those tariffs hit him, there's no way delta will do that kind of hiring. the city that's are seeing the biggest outflow of professionals in the last year are the ones

that are mostly the ones that will be effected bit tariffs except for seattle. >> the midwest and rust belt. >> the only city that is sucking up professionals that could be impacted is seattle. >> we have 25 seconds. what's going on with telecom >> all of this amazing hiring is happening. there's not a ton of need. those are the only cities that want telecom people. >> how long will it take me toln >> two seconds. >> you're not going to charge me. >> for you for free. >> people always want me to follow them and i'm not on it. >> dan, thank you. we got data coming up. stay tuned. is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices...

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welcome back to "squawk box." live with breaking news. continuing jobless claims move from 232,000 down to 214,000. now let's get to the meat. june. cpi up .1 on headline. it's the year over year numbers i'm interested in and there's a prize here. if you look at cpi year over year our last look was 2.8.

that was the highest since february 2012. we upped the ante by 2.9. as i go back in history here, 2.9, the last time we had 2.9 was february of '12, the last time we had higher was a 3% read in december of 2011. all right. the other year over year number is core, and that's up 2.3. that matches expectations. it's .1 hotter than our last look and the last time we had a 2.3 was january of 2017. but here's where it gets interesting. if you want a higher number than 2.3, you have to go all the way back to september of '08 when it was 2.5. so cpi in the context of what occurred with ppi yesterday really does continue it, although headline month over month numbers weren't very significant. if you look at real average earnings year over year they were up .2.

real average hourly earnings year over year unchanged. yields moved a little bit on that, 2.86 on tens but it packed tightly. dollar index up about a 0.1%. the dow futures looking like a strong opening. steve liesman back to you. >> it's a little light but not on the year over year, but all items up 0.1. >> it stays exhausted today, rick. it's low energy. he told me he's exhausting because he's tired of winning. we talked about that earlier. totally exhausted from winning. nato. all the stuff keeps happening and it's taken a lot out of him. >> it is exhausting, isn't it? >> the amount of energy required -- >> when your own president has a boat load of energy.

i'm always moosamused with trum energy. >> its exhausting. >> you're telling me. >> thank you, melissa. >> you had a five day sentence. getting a little fast in the furious accident in new york city with all electric street racing coming to brooklyn. cool story. these aren't go carts, these are what's known as formula e racers. joining us now is -- how fast can these things go? >> closer 200 miles an hour. they race on city streets. you won't always get the full speed because you have to navigate. these go around the world, about ten races in a year. similar to formula 1.

>> so relative, it's slower, faster, same speed >> it has much more zip. >> that's what i would think. those tesla's go 0 to 60 in half a second. >> definitely. they go quite fast on the city street. >> in terms of when they need to stop to get fuel or battery? >> on one charge. >> it would do half a lap and stop. >> you could do 30 minutes. a large number of laps and by next year it's going to double in capacity so these cars are going to get much bigger. >> this is the kind of headline thing you do but you do interesting really salted air stuff. you do tractors and all that stuff is electric or some of that stuff gas engine as well? >> some of it is gas engine. we have the largest fleet of electric scooters in the u.s. in california. >> i saw that. electric scooters and do they

make farm tractors electric right now? >> not of yet. >> why not >> farm tractors with solar power can be very -- >> why not >> can be a means to solve energy problems. >> you're investing a billion dollars in the united states. where's that going >> we're going to double that in the next five years so that investment is going in tractors -- >> double that is 2 billion is that what you're saying? >> that's correct. >> in the next five years. >> yes. we have 3,500 employees in the u.s. today with another few thousand with internet jobs and we're planning to double that. >> you have about 3,500 u.s. employees and 240,000 in india so that's the big part of what you do there. >> 240,000 worldwide in 100 countries but the majority of them under india. >> do you import stuff from india to the united states >> we import stuffsoome stuff b

goal is to be locally. we import from india or japan. that's where we import from as well. the primary part is to be local. >> india escaped the whole concern about trade and tariffs. are you concerned about the way things are going >> we fundamentally believe that free trade is good for everyone. now in the short run there may be policies when there are imbalanced, but for us, it's important to be in the u.s. for the long-term. our commitment is in the long haul. they won't impact us because we're looking at being local in everything we do here. >> when it comes to ev technology, where do you see the most growth? you can put it into a tractor or make a vehicle. so which segment do you like the best >> it will start with passenger vehicles. we start with a look at commercial vehicles for that as well. tractors will be -- >> what would the cost be of

that passenger vehicle >> we're manufacturing passenger vehicles for $10,000. >> where are they being sold >> in india. >> when you take a look at tesla with the model 3 with the list starting price of $35,000, do you think that's ridiculous? can that compete in an emerging market or -- >> there will be a cache for tesla and they may be some who want to buy a tesla as well. we look at different segments. the segment we're making is more for people that we get from a to b. we're also looking at higher end luxury cars which we'll be launching soon. >> you got a deal with the people that used to produce ferrari. >> that's correct. >> you're selling a $2 million ferrari type electrical vehicle. >> that's right. that's being designed right now. we will have the most affordable electric vehicle and the most expensive. >> are you going to give us a $10,000 electric vehicle

>> in the u.s. >> are we going to get one >> hopefully at some point in time. >> come on. come on. >> hopefully at some point in time. we have a lot more work to do before that. >> that's not your intention. >> we do have dreams of coming to the u.s. and we believe that as a number of other companies have exceeded from japan and korea, we have a company in korea as well that's number three in korea today and we them as well as with our indian vehicles we do dream of coming to the u.s. >> when do we get the electric ferrari? >> 2020. >> 2.3 million. >> anybody put a deposit on that yet? >> we have a few very interested buyers for that because it's a brand that's very well recognized. that's one that has all the cache. >> thank you so much for joining us. >> thank you. brooklyn formula e race. we'll take you back to sun valley for a live interview with

sofi ceo, anthony noto. that's next. we'll be rig bk.htac do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. with a range of suv's perfect for any adventureility, at the lexus golden opportunity sales event. experience amazing at your lexus dealer.

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to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done. ubs downgrading netflix this morning. the call based on valuation. joining us is eric sheridan of

ubs and quickly looking up earnings per share and the market cap, eric, because i'm trying to figure out, you know, now you're talking about valuation, what -- it went from 90 times earnings to 100 times earnings so 90 times was fine and 100 is not. i'm making those numbers up. you catch my drift. it's been overvalued for years and years and years. what changed to make it in your view two overvalued now? >> it was a combination of things. it wasn't just valuation. when we looked at our earnings preview based on the data and the science work we do, we're making a call that they're going to put up inline domestic subs and only a slight beat. so this is both a short and medium term call that you'll see less momentum in the business starting next week that certainly posts 117% move

year-to-date is not what's factored into expectation among investors right now. >> when you look at old media and i've done -- i could do some annoying netflix comparisons, we used to do that at a totally different time when these companies didn't even have earnings and we'd look at those, but i've done it recently with facebook. you can put together three of the most well-known companies in the united states and you can still and buy three of those companies for less than you can buy facebook. there are some great media -- you can buy four or five of them and not get to the market cap of netflix. with the growth and the potential, how do you value it is it on subs? you don't do it on earnings per share. >> we do it on a combination of out year free cash flow when they start generating free cash flow and discounting it back. it was interesting when talking to clients about the note, we are pointing out that you are already paying 40 times, ebitda

discounted back over the next four years. we think all the good news of mid-single digit price increase, 20% plus revenue growth and 2,000 basis points a margin expansion, you're already paying for that right now. >> eric, based on your work on u.s. credit debit card, you indicate that you believe -- subscribers are very stable here in the united states and you also say that based on consumption patterns, it seems like there's been weakening in the second quarter, that the third quarter pipeline looks pretty weak when it comes to new reasons and why people would tune in. are you implying that perhaps there could be increased turn in the united states because the pipeline is not as good? >> more just at the incremental growth might not come through to the way people think. at the end of the day what netflix is, is their investing in content, successful content drives successful subscriber momentum in the business.

when content underperforms, there's obviously less incentive for new people to sign up and possibly some incentive to churn off. historically when contents underperformed we do worry about the forward subscriber moment. every subsequent season in a title in q2 underperformed prior titles whether it was "13 reasons why," "arrested development" we think that's a little bit of something on the worrying side that investors need to focus on as to what that means for forward subscriber moment. >> it gets more and more expensive too and you know studios, networks, everybody has a cold streak and i don't know how you just do it again and again and again and third tier actors at this point if every single tech company is trying to put together content, all their pricing -- i just don't know how sustainable those multiples are, eric, and just seems like it's going to get more expensive and less for it, is that not right >> that's fair.

one of the points we make in the note is, the risk factors here which is they still need access to the capital markets because they're not generating free cash flow. competition for content is not going away. competition for eyeballs in users is not going away. apple, google, youtube, facebook, amazon. when you have a stock that's moved as much as this has, this was a stock below 200 in november, you've got a very big move off the bottom in this stock. you have to factor some of those risks in and that's just less -- >> why is access to cash a concern when you got a stock that's more than doubled >> they could raise cash via equity and doubt. no doubt about that. that's certainly not something that's going to go to the benefit of current equity holders. that's not a positive thing for the risk/reward. >> worth billions more than disney and comcast. i just don't know -- i don't know.

any way, things like that can go on for a long time any way and have been. eric, thank you. appreciate it. thanks for coming on so quickly after the call. >> thanks for having me. let's get to julia boorstin in sun valley. she joins us now with a special guest. julia? >> reporter: i'm joined now by anthony noto, ceo of sofi and before that, ceo of twitter and before that you ran a media and technology banking at goldman sachs and before that you were an analyst. you really know all of the players here in sun valley. you've been coming for four years. what's the buzz this year in terms of m & a and how does it feel different than in year's past >> one of the big differences this year is the regulatory environment is very positive and the capital markets are also very welcoming for companies to make big changes and there's a clear divergence in the growth that technology companies are able to achieve through innovation and getting a philosophy. media needs to scale their businesses both on the distribution and content side and we're seeing that continued

process. >> do you think we'll start to see the tech giants like amazon and apple make more investments in traditional media companies >> i don't. i think the technology companies have proven that they can use innovation to drive their scale and these media related products such as music and video and as long as they're able to leverage innovation, there's no need to do it inorganically through acquisition. >> interesting. now over to your job running sofi. you've been very busy. there are reports that you're looking to raise about $500 million. what would you do with that kind of capital >> i'd like to elevate it higher. our goal is to help people get their money right which means we should be the only place they need to go to work with their money and so we want people to go to the sofi app on their phone every day. people want to borrow money, they want to save money, invest money, they have to spend money and they want to protect money. our goal is to fill out that complete assortment and do that better than anyone else. the product we just recently

announced announced in beta is sofi money. it's atms, debits, checking, person to person payments, ability to deposit a check into your phone and it's one piece of the puzzle. >> what would be the next type of piece or product that you're missing? >> beyond sofi money, we're going to go after the brokage business. we do have a product today that sofi wealth where you can invest money in a model portfolio. you can add more selection. we'll add individual stock buying in addition to crypto purchases and continue to add things like etfs and maybe at one point some sofi branded etfs. >> and crypto coming when? >> 2019. we'd like to get their faster. we think there's a lot of opportunity to serve our member base so they can come to us every day and -- but i would plan for 2019. >> as you build out these offerings, how does this update your plans >> we are not prioritizing an

ipo. our number one priority this year is to strengthen our core products and number two is accelerating our investments and sofi money and brokage and also continue to add new products for our members and differentiate beyond the financial services. beyond the financial services. >>

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there it is, the robin's egg blue air force one painted air force one jet pulling in to the uk here. as you can see, that's president trump arriving some talk that he wants to change -- that was a jackie kennedy paint job that it got a long time ago. there was some talk he wanted a bolder red, white and blue that was a mike allen -- anyway, he's made it he is now going to meet with uk's theresa may and at some point with the queen i want everything to go well on both of those fronts i just get nervous about thinking of being in the same room with the queen. but hopefully it goes smoothly >> you'd definitely violate protocol >> i don't even have to do

anything just by me being there, some type of violation. let's get to the new york stock exchange jim cramer joins us now. there he is. jim, netflix now it's overvalued. if you are using valuation, i guess it has to do with growth prospects and subs he seems to think it's had a pretty good run already. are you in agreement there >> i think thwhat's interesting about his piece was he previously had a price target of $375 now he moved up to $425. that's very telling. googling to see how 13 reasons why, that seems too u.s. centric in a lot of ways

it is the evidence lab it is kind of like csi ubs i think this company's built to last maybe it does good at his new price target $425 but last i looked, that's actually higher. i don't know >> are we at a point where now where the fox assets and sky are fairly valued in are we getting to where people have to start worrying, that's just too much there is is a number that's too much for those assets. >> those are non -- those are growth assets. you got the premier soccer -- football i'm sorry. you've got some actors there that are indispensable and like the nfl. people do not cut the cord for the nfl.

>> problems yesterday between wimbledon and soccer >> tough day for wimbledon >> we'll be right back well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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final check on the markets this morning i think we're up almost 201 now.

we had reached 200 points on the dow. get back yesterday's losses, and then some. up 14 on the s&p, nasdaq indicated up 37. you want to be here tomorrow, don't lie. >> absolutely. he doesn't >> no, he doesn't. make sure you join us tomorrow, "squawk on the street" is next. ♪ ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jaime cramer, david faber at the stock exchange cpi, the hottest pace since '08. the president's just landed in the uk dealter, comcast, twitter,

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