quarter report followed by citigroup and wells fargo. so, don't make any plans this morning. seriously. it's friday 13th "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning, welcome to "squawk box" we're live in times square i'm melissa lee becky and andrew are off today our guest host for the hour cnbc guy. >> i'm here. >> i know you are. i want to cast dispersions. >> who is on at 7:00 >> and then joe teranova >> what is that telling you, joe? >> i'm just watching actually, you know, what happens

on "fast money" the market analysis and the trading and advice and things like that. it's a perfect compliment to some of the pre-market stuff that we do >> it really is. >> this is, no, see what he's doing there. he's taking a different tact he's trying to be gracious >> by 9:00, someone here won't be here and i wonder who that will be. >> i have you as a co-ank arlot. you know, she's fine she's not trying to take over or anything and this just totally happened. >> this has taken years and we're now at the point, at the day where it's going to happen >> the barracks upstairs we're all here all the time anyway >> let's take a check on u.s. equity futures big day in the markets particularly for technology and build on those gains on the nasdaq looking to open up by 3.5 points we had all-time highs a from

amazon and microsoft the dow looking to take off about 10 at the open and s&p 500 down about two points. in asia new trade data overnight swell to a record hitting a monthly high of nearly $29 billion in june. that was up $4.5 billion from the prior month. analysts say that is one off exporters rushing shipments between tariffs took effect in the first week of july shanghai a little change there we're watching the action. europe has suffered two straight weeks of gains dax higher by 0.02%. taking a check on treasury yields and watching the spread which is still the narrowest since 2007 ten-year at 2.28%. and as for the dollar, we saw pretty much stability, although the yen was weaker overnight and here we have the action. not too much change here >> no.

today's top story, corporate story anyway the justice department is appealing. at&t $85 billion takeover of time warner. that blockbuster deal won court approval back in june with, i mean, at the time, you read judge leon's ruling and it seemed so air tight. but the doj, they -- i don't want to cast dispersions on a government agency far , seems le we'll take this to the next step if i was the appeals court looking at the ruling, don't you look at that or is it a totally new deal when you look at it do they come up with their own rationale? try to find something in his ruling that -- >> we had a former doj on closing bell and the appeal has to be based on a matter of law you have to argue that there was a misapprehension in the story

>> what is the story now, the conspiracy thererists. >> wanted to make sure the disney/fox deal would go through that you pick up the phone and you say, hey, throw a wrench in this until we can get the shareholder on. >> comcast would get clearance because disney, the studio concentration with disney taking over is even -- >> it's not vertical the idea is if you're challenging vertical mergers, that creates more grounds to challenge a comcast/fox. but even if you didn't have that kind of intrigue on who was driving this, maybe the doj wants to put this gesture out there saying, look, we're not going to sit back. we're not going to say, fine, we lost, we're going home just send the message. >> it's clear. >> the consensus was --

>> we're going to talk to him. and that's okay. but i already talked to him about it he thinks that, i don't know i wouldn't say there's no merit to it, but definitely people in the know think that it's not really likely that it's going to go -- back the last time this happened i guess since you usually don't sue the government, the whole foods merger ten years ago or something. and the government did win on appeal but they didn't reverse the merger they just asked for some concessions or something anyway, randall, is going to be randall stephenson join us live with julia from the sun valley media conference at 8:15 a.m. eastern. they already changed the name of some of the assets and i don't know how you would even start to unravel -- >> they did it quickly

they should have >> but the real question is, at&t went lower when this was announced and approved at&t went lower when it was on air. the point is, i'm not saying it is a failing business, but what is the problem with at&t no earnings growth and huge balance sheet issue. what is the right place for the stock? i think it's lower than this that is the question to ask mr. stephenson. >> we will. the ruling out from the uk takeover for british broader sky. a complicated story thus far disney would acquire control of sky in its bid for a variety of assets nbc universal parent comcast yesterday raised its offer for control of sky which fox currently owns 39% the regulators rule that disney might pay the equivalent of 14 british pounds for each ordinary share of sky the comcast bid announced yesterday is worth 14.75 british pounds per share sky is still trading above that. meantime a jury ordering

johnson & johnson to pay a record $4.7 billion over allegations its iconic baby powder causes cancer the jury in st. louis awarding damages to 22 women and their families that they failed to warn that it could cause ovarian cancer six of the plaintiffs in the case died. the jury awarded $550 million in compensatory damages and added $1.4 billion in pune ittiitive damages. j&j says it's deeply disappoint would the verdict and plans to appeal the company succeeded in getting many jury verdicts overturned including a case where the plaintiff was awarded damages. the stock under pressure down under 3.25%. the lead attorney for johnson &

johnson in a lead exclusive coming up at 8:30 a.m. eastern time. president trump, you've probably seen this, especially in "the sun" the exclusive interview. blasting british prime minister theresa may's brexit plan saying it could threaten that bilateral u.s./uk trade deal that we're going to do. wilfred frost joins us live from london i like to gauge wilfred and see if everything is okay. wilfred, will you -- would you not be in london right now if there was a different outcome. would you have been in st. petersburg or do you not even want to talk about -- am i scratching off the scab or something? let's not even -- never mind i withdraw the question. >> you've already done that, joe. no, i wasn't going to go to the final but i was looking forward to watching it it in a pub in london somewhere but instead

i'll be flying back to the u.s but let's get to the explosive comments from the president to the "sun" newspaper which has turned this presidential visit to the uk on its head just as theresa may was trying to pull out all the stops to impress the president over dinner. the awkward and embarrassing headlines started to hit the wires from this interview. "sun" headline may has wrecked brexit that potential deal was meant to be a win for the prime minister, if she could secure it from this trip instead, here's what the president had to say about her negotiating tactics with the eu. >> she didn't listen no, i told her how to do it. that will be up to her to say. but i told her how to do it. she wanted to go a different route. i think the deal she's striking is not what the people voted on. a much different deal than what the people voted on. it was not the deal that was in

the referendum >> and here is what he had to say about boris johnson who, of course, resigned earlier this week and weakened the prime minister in the process. >> let me tell you, he is a very talented guy i was very saddened to see he was leaving government and i hope he goes back in at some point. i think he is a very -- i think he's a great representative for your country well, i'm not pitting one against the other. i am just saying i think he'll be a great prime minister. i think he's got what it takes and i think he has the right attitude to be a great prime minister >> the president undermining his host at one of the most vulnerable moments of her premiership in domestic politics the prime minister's office saying of that "sun" interview, quote, it will be dealt with due to arrive at chequers any minute now gosh too, be a fly on the wall

for their first conversation in private. we will at the end of "squawk box" be able to see their joint press conference guys >> yes the old fly on the wall. we've got to take that we'll be watching closely. he does -- >> it's so tough for her, joe. because -- >> he didn't say pitting one against the other. in a perfect world or in a different world maybe be a great prime minister but he didn't come out and say you should replace prime minister may with boris johnson. >> i agree i think the most tasty, if we use that word headlines from that interview weren't necessarily on boris, the point about the trade deal it rests on a hard brexit and advise may to negotiate differently. this is the key issue of the day for the long-term future of the united kingdom and the short-term future of her

government she is under unbelievable pressure from this government and he thinks she is going about it the wrong way the press conference i've never been here in the uk with a political press conference, she has just been essentially made to sound weak by the president how does she respond if she responds quietly poli politely and on the brexit issue the issue has risen because amendments to her soft brexit bill, as the president would put it extraordinary moment and the president is getting very involved in domestic politics. >> i thought theresa may was very, you know, sort of a lot of support at president trump that seemed to be calculated,

too, will. the way that trump is in front of everyone talking about nato and then one on one supposedly it's like totally different. i don't know what happened he could, at some point say, you know what, i now have spoken to prime minister may she's assured me about brexit and i think the trade deal is back on. i mean, it could happen that quickly, which could also -- >> it could. that would probably help her so, we have to see what happens in the next 24 hours will be pretty interesting stay there >> i will be don't worry about it you're absolutely right. he could change his position i guess the critics, if he does in support, will say it's less sincere than when he was caught earlier on this. you're right to mention this point, joe relative to other european democracies, leaders, theresa may has been one of his supporters this uk government has been his supporters this trip was designed to impress him and despite that

attempt to be his supporter. i think the question from people in the british political press is this. was that a calculated attempt to try and bring his friend boris johnson closer to power? if it is, unprecedented in modern day politics between the u.s. and uk. if it isn't and accidental off the cuff comment, still pretty awkward for him and the prime minister >> all right, wolf, i like the shot where you are now you brought us some nice ones. >> i don't know if our cameraman can pan across that's a pretty good shot. if the sun wasn't facing this way, we'd be in front of an even better shot which is london bridge all will be fine regardless. london is looking pretty beautiful. >> it is great weather, too awesome, wolf. all right. we will, we are, you know, some

bank earnings coming today, too. we'll try to bring it all in, wolf wolf is the big bank guy, too. >> it is >> no banks for me today soaking up the sun >> okay. i know you'll have half an eye, one eye, quarter eye thanks, wolf. let's get back to the markets and the nasdaq matching an all-time high closing at a record high bolstered by amazon and microsoft and also alphabet which all hit new highs. counting down to new bank earnings jpmorgan and the chief investment officer and still with us our guest host guy jason, good morning to you are you comfortable at this point with the leadership in technology and at this point what do you think is fueling or continue to fuel this leadership >> i think this is interesting economically speaking, profit wise, this feels like a pretty decent cycle just generally for

the economy. we haven't had that many negative preannouncements coming into this earning season and second quarter, second quarter is the time when the number is down we have seen risen about 0.8%. which is not bad market leadership is a little bit different of a story i feel this little bit of a tension in the market here right now where we are sitting at above average evaluations generalfry tly for the market ae have the tech behemoth rising really fast. really the ones to keep your eyes on are amazon and netflix with how much they are risen on a year to date and how much investors are confident and maybe even overconfident behind them and how much of the story is actually a little bit broader than those guys. there seems to be the underlying, i think the underlying story of businesses that are really spending what

they would otherwise have in profits. spending their profits down to gain market share and a lot of business is doing this not just amazon and netflix. a lot of smaller companies we see it in the smaller cap spectrum, as well. just feels a little bit unnatural to me that so many businesses are doing this at the same time. at the end of the day, i kind of wonder if you step back, everybody that is doing this, trying to grab market share. can anybody really grab that much market share from each other that all this extra spending is really all that worthwhile and investors should really be rewarding this many companies with that much valuation as a result of it. so, i feel like there is this unnatural tension that is not necessarily good and probably a little bit ugly, eventually. >> by the way, watching a live shot of president trump who has arrived with prime minister theresa may at chequers, the retreat of the prime minister. returning back inside. we're keeping an eye on what is going on over in london. >> i knew it wasn't, i just knew

it wasn't the hamburger joint. >> this chequers is with a q >> it's not named after nixon's dog. >> the game. so many different checkers >> i'm not a crook that was a speech. >> nixon was -- >> i read history books, joe >> you didn't live it, though. >> okay. one last question to guy jason, good point in terms of it technology not just the fang stock. cloud stock on fire and a broad swath of technology do well. >> wrap your head around evaluation then you can continue to see the market grind higher. to your point, though, as leadership starts to wane and gets more and more narrow, what does it mean for the broader market i don't know still seems to grind higher. at some point you have to have broader leadership by the banks. joe mentioned jpmorgan

you have to get some performance out of the banks at some point otherwise this whole thing is built in sand. >> we have been trying to put magnitude to this run of technology and stocks this time around versus past cycles. if you want to compare this to past cycles like the nifty 50s or the tech bubble we think we're in the bubble of half to two-thirds of the way distance from normal, settling territory for that so, we definitely see, i feel there are underpinnings here in the amount of excitement that is getting behind these sort of businesses and this kind of growth but the magnitude is not there to be overly concerned yet coming up, surprise merger challenger, maybe a surprise we didn't know they weren't going to do this the doj is appealing the deal between at&t and time warner and then later this morning

we're going to talk to at&t randall stephenson live from the media conference out at sun valley "squawk box" coming right back are you ready to take your wifi to the next level?

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okay the u.s. department, u.s. justice department taking an unexpected crack at stopping at&t's acquisition of time warner the government will appeal a federal judge's approval of the $85 billion deal joining us corporate media reporter and cnbc contributor ed i needed -- but in this case, it was just to get your expertise on what was happening. >> i appreciate it, yeah >> because it's my initial reaction was judge leon's decision was so air tight that makes me think the dojs are soar losers or spoiled. >> they're sending signals they're not going to sit back and let these things go through. we did not think this is the doj thinking the merger is going to go through >> did they read the decision? >> clearly, they did not your

point is well taken. the decision -- >> so clearly laid out >> clearly laid out and also very narrowly targeted that is what makes an appeal much more difficult for a doj to win because the merits of that specific case and it does not imply anything outside of that that's how judge leon wrote it >> when it happened, what a great country where you can take on the government and if you have the facts on your side, to just score this resounding victory. i'm back, you can't fight city hall no matter what they can come back at you >> they can't. >> annoying, though. >> that is what is great about this country you're at the end of the endless appeals process. you have it like no one else i think it's going to be much harder for them to win delays, whatever at&t's ultimate plans are for time warner. >> could it happen where they say we want this, this and this. this is unconditional with leon.

could some conditions come back? >> that is a good question i think if they come back with conditions and try to finagle something out of it, i'm pretty sure randall is going to say no to it. >> he said he is willing to take it to the supreme court. he is going to fight this until the end. >> if it goes that far and they think they have the law on their side. >> interestingly, one of the aspects of judge leon's decision in the case itself and the criticism of the government's case, they presented a narrow case, right? they did not take it in all of its possibilities in terms of where this merger might go because they wanted to not kind of bump up against what we are in favor of net neutrality and other priorities of getting rid of net neutrality. they really have to say, they can't say, look, at&t came out with an unlimited data plan and, look, they're doing what they said we're going to do >> maybe the doj wanted to at least pull back on the idea that the media landscape is wide open for mergers now.

it's like, go for it everything goes now and say, way to hold on >> there was another deal that they did approve relatively quickly which was the disney/fox deal so, granted there was a pretty big condition attached which is selling the regional sports networks, that's true. but that's a horizontal merger those are the ones harder to get through and the vertical merger at&t time warner complimentary businesses another effect here which sends a signal to comcast because there was this merger game theory going on with comcast just really wants sky and willing to back off fox. there was a chance that they could come back and bid more for fox to force disney to come back again higher and because of the chain principle takeover rule bid higher for sky the idea that you forced a bid a bit higher for fox and high and they'll back off sky and comcast will get sky now, though, with this ruling,

rupert and the board would look at a renewed offer from comcast and say even if it's higher, we don't think it will pass regulatory >> down to rupert versus zucker -- >> you mean the whole fox -- >> it's worth mentioning because you cannot disregard that effect on what's going on here. the appeal, the whole case that they brought in the first place. >> want to really hang something controversial. >> exactly not exactly. okay withdraw, sustained. >> but it is spicy and interesting. >> but where is this whole attitude with the administration of what the business -- >> normally, you would think but then cnn got in the way. >> cnn got in the way. >> that would be -- >> now you're blaming -- >> i think yesterday the

president said something, someone said something about, even the "washington post" said something and a lobbying arm for amazon he sort of threw that out. so, you do see -- >> you want to be aware of who owns what newspapers that is perfectly fine >> certainly point to anything that rupert. i mean, they undercut anything in any rupert-owned paper, as well >> rupert is a very -- >> where are you now >> in our show when the music plays, it means they have to go to a break and mel says something -- >> with this takeover, we have to go. thanks, ed randall stephenson is going to join us live from the media conference at sun valley, at 8:15 a.m. eastern. >> there he is there he is on the phone. still to come, today is the official kickoff to earning season jpmorgan report in the next few minutes and wells fargo and citigroup in the next few

minutes. right now as we head to break, we'll take a break on the s&p 500 winners and losers >> that was wonderful. >> bravo. >> i love that >> that was pretty good. >> that wasn't bad >> parts that weren't very good. i didn't really like it. iwabae.s pretty terribl >>t s d. year, i am sorry about that. [music playing] (vo) progress is in the pursuit. audi will cover your first month's lease payment on select models during summer of audi sales event.

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning, among the stories front and center this morning president trump blasts british prime minister

brexit plans as he visits the uk and we'll take you live to london at the top of the hour. less than a half hour away the justice department, meanwhile, says it will appeal at&t's $85 million merger with time warner. at&t ceo randall stephenson will join us at 8:15 a.m. eastern and a missouri jury ordering johnson & johnson to pay a record $4.7 billion over allegations that its baby powder causes cancer. the company's lead attorney will join us at 8:30 a.m. in a cnbc exclusive. i know it sounds like baby powder but, honestly, 20 years ago, i started reading about things like that. you can get baby powder that has talc and baby powder that has cornstarch i like baby powder but i made sure that i haven't used any talc in 20 years and here's why

we will have the lead attorney on a lot of ways you can disrupt the normal genetic structure and it could be radiation and carcinogens and also the way something is shaped. and i'm not conflating baby powder with asbestos but we know it was the shape of that molecule goes into the double helix and disrupts the normal shape. and there are some people who thought talc had that characteristic it seems like you should be able to do some very strictry controlled studies to see if this actually happens. i don't know if this is the, you know, what do we call those lawyers that band together and chase every ambulance -- >> after your round of golf this afternoon, i'm sure you're going to play. on one foot put baby powder and

on your right foot a little cornstarch and ee. >> cornstarch -- >> 20 years ago. i remember i asked one of those guys larsen or william and they, for a long time, j&j acted like you were out of your mind to think of it. it wasn't that far fetched 20 years ago. i like sugar and, i eat bacon. i'm not worried about preservatives. >> the problem is there are other cases alleging that the contaminated talc was causing other forms of cancer, as well they can appeal this and another case alleging it causes mezlothelioma. >> all right, so, we'll have their lead teeattorney on and t to get the light on it luxury carmaker aston martin may have big plans to expand phil lebeau joins us from

england with a special guest >> thanks, melissa i'm joined by andy palmer ceo of aston martin we'll talk about your future and potential ipo and your expansion. let's start, first off, with who you spent last night with along with other business leaders. we're going to go right to it. you were with president trump last night give us some perspective in terms of how european business executives see donald trump and his administration >> he is a colorful character and he drives different opinions from different people and that's fine i went because i had respect for the position of president of the united states and my perspective, i think, my colleague's perspective is he is a businessman and you need to treat him and deal with him as if he's a businessman and his negotiating techniques are rough and straight forward and as we would do in business so, you know, i don't think we

should look at him through the lens of politics we need to look at him as if he's a business guy and negotiate with him as if he's a business guy >> have european business executives, i know this is a broad, blanket statement, but in general from your perspective, have european business executives underestimated the trump administration and donald trump's resolve when it comes to trade issues >> i think everybody has underestimated him to some extent during the election process, he wasn't caricatured in europe in a particularly friendly way. and i think that you never underestimate the position of the presidents of the united states and, in that sense, donald trump's approach to it. so, perhaps they did, but they don't any more >> which brings up the question of auto tariffs from european automakers, exports to the united states. the idea has been, hey, let's eliminate them altogether, that's been advance by german

auto cheexecutives what do you think is the likelihood of that happening or is it possible that we could see a tariff slap on autos brought into the u.s.? >> clearly the threat of 10% or 20% is there how you get that through the senate or not is something for the u.s. side to think about i think auto executives, including myself, will tell you all day long what we really want is tariff-free borders so, the thought of getting to zero zero would be very acceptable on both sides the issue, as i understand it, of course, is it goes beyond autos. because there's an imbalance of trade. and, therefore, if you want to balance it up, you have to balance it up with something other than cars. and that's where it starts to get complicated because it goes outside of the realm of simply automakers supporting the idea of zero tariff >> you are a luxury automaker, you have vehicles selling from

between $150,000 and $300,000 in the united states. if there is another 10% tariff slapped on or 20%, would that spook your sales in the u.s. or scare potential buyers away? >> no. we're in a fortunate area where we have tariffs around the world and customers that pay significantly more than 10% or 20%. we don't want tariffs. that's clear if they come, we'll cope with them you know, there may be a few people outside of the capability, but for most people, if you're buying an auto luxury car, you can afford it you can afford it because you want to. there isn't a natural competitor for our cars in the u.s. if you want an aston martin, you'll buy one irrespective of the price. >> i know you're not going to announce anything today, but what is the likelihood that we might see aston martin as a publicly traded stock in the next year or two >> we're looking at all the

options. i've been asked by my shareholders to look at all the options. as a chief executive, it's not my place or even within my right to say this way or this way or this way what is within my right is to maximize the value of the company. and, obviously, the shareholders will enjoy that throughout whatever means that they ultimately release their stock we're going through a huge here with the second century plan and, naturally, you're seeing a significant increase in the basic value of the company and, obviously, my shareholders are pretty pleased about that. >> seven new models in seven years. has aston martin ever been this strong >> i can say for certain if you measure it on a combination of v volume and on metrics we are perhaps even in 2017 we're perhaps more than 2.5 times more profitable than we ever have been at any point in our

history. between 16 and 17, we saw bottom line profit swing of a quarter of a billion pounds. a huge, basically, that being done and this year we have advantage and then we have the dbs coming in 2019 we have our first suv. after that a mid-engine sports car. >> on the way. >> and we have a lot on the way. seven cars, seven years. >> andy palmer, ceo of aston martin guys, this is one of those places where you have to come to see it to believe it, especially if you are an aston martin fan, ultraluxury auto fan >> i have thought about those cars that's all, phil thought about them you see one parked and it's like you have to walk over to it. what is that they're awesome. and not going to bring up those cool on the wheels where the things go out and they start spinning and if you have road rage, you can take the other guy

out with an aston martin do they still have those, do you know >> i don't think they have the actual tricked out james bond automobiles here >> they don't. >> it would be nice if they did. >> that's not an option -- they had other things, too. smoke screens, ejection seats. you know anyway, coming up, jpmorgan set to report in the next few minutes. i'll bring you the numbers as soon as they cross the wire. amazon rolling out some deals for its prime day next week. courtney reagan going to break down the strategy behind had made-up retail holiday next. stay tuned, you'reatin wchg "squawk box" on cnbc competitors at bay.le keer the ibm cloud. the cloud for smarter business.

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amazon's fourth annual prime day is only days away and the retailer could break its own records again this year. courtney reagan joins us with more on amazon's made-up holiday. >> it may be made up just four years ago it held the first prime day and so successful it has become an annual tradition amazon's 2017 prime day sales brought in an estimated $1 billion in revenue, more than double that sales number when you add on the marketplace

sellers. amazon did tell us that sales were 60% higher in 2017 than on the prime day the year before and what is really interesting it becomes such a focal point that amazon takes in 70% market share when it comes to online sales on that day, compared to about 40% on average according to slice intelligence. since you have to be a prime member to participate, more shoppers joined that membership program on that day than any other day in its history that's really a big reason why they do this, to grow that prime membership now, amazon has built a big event with growth each year. the first year in 2015, the total was slightly less than a billion dollars it brought in for sales. prime day will generate more than $3.4 billion. that's total sales so, including those marketplace sellers. traffic floods the site during the event. it will go on for a day and a half compared to two weeks prior. prime day sales in 2017 were 92%

higher than a regular tuesday two weeks before profit jumped 58% on prime day in 2017 and ordners creased by 66%. this is according to a pricing intelligence firm for online sellers. so, you're going to expect amazon's own devices to, again, be really big sellers this year along with other electronics the category grabs more than a third of prime day sales last year, the amazon echo dot, the echo, the fire tablet, they were three of the top five best sellers along with the instant pot and the 23 and me dna test back over to you, melissa. >> thank you so much, courtney reagan i'm looking at jpmorgan. 229. i think that looks pretty close to the clean number versus 222 that would be 7 cents above expectations $27 billion in revenue, which looks almost like half a billion

above the 27.363, that is what we're looking for right now. stock doing? stock is up 40 cents or so corporate investment banking revenue just under $10 billion commercial banking 2.32. give all these analysts know what to look for, for example, revenue. $23.9 billion. i have no idea if that is above or below if you want a net number, it's $8.23 billion is what the company made which isn't bad for a quarter. i haven't gone into, have you gone into the press release yet, melissa? >> i haven't found it yet. but we will look into that we will look at trading revenue, also that is going to be key. they have indicated in may already that it would be mid single-digit range so, we'll watch that again, the stock is up a little bit on the back of these earnings they had been up by just about

3.7% going in. we're now up about 0.6%. last quarter we had decent earnings but traded higher into the earnings and now traded lower into the earnings. maybe a better setup for the banks. >> exactly is the setup better than last quarter? i would suggest the setup is much better. why are banks wane for the next two to three months. a think a lot has to do what is going on at deutsche bank. the market is saying some systemic risk there. awful for the last three years comes down to this for me, if you believe that deutsche bank is deutsche bank specific, then you value these opinions at price to book. my sense is, haven't seen it, book value around 69 bucks i think a reasonable valuation is about 1.8 times and you have about $125 stock and they deserve that kind of premium. so, that's how i would view the

banks, if you believe that deutsche bank is deutsche bank specific >> it seems to me you could explain how the banks have underperformed partly by the fact that they were kind of overowned, overloved and i think you had to have some o you have that sentiment washed out. the yield curve sentiment, it matters for the stocks whether it should or not is totally unclear, actually. the spread should not be that big of an indicator. i think it also encompasses anxiety about where we are in the cycle. right? just how soon will we have to worry about things like credit costs going up doesn't seem there's any evidence in the numbers you have to start worrying. >> i agree the yield durcurve going down, s in the 20s now might not be a big deal for the banks. but it's going to flatten. a lot of people say, look. market can still rally with

this but i think we find ourselves in much different times so i don't think that a flattening yield curve is necessarily as bullish as people make it out to be or perceive it to be. >> okay. so far as we know here, jpmorgan beating on the top and bottom lines. the stock is up slightly in the after-hours session. we're combing through the press release and will bring you any tidbits we have in terms of commentary and guidance. of course we've got more bank earnings coming up jpmorgan ticking higher up by more than 1% coming up, do not miss our big interview of the morning randall stephenson live from sun valley at 8:15 eastern time. he'll address the merger withtime warner. and as we head to break, look at equity futures on friday the 13th s&p 500 basically flat looking at a flat open the nasdaq looking up 10 pois. ayunednt

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♪ some racy ad was out there let's get back to our guest host guy adami. i saw an article it was some -- somewhere out there. >> about what?

why do you bring it up let's get it out >> i'll let you know trying to remember what it was i did see it but on fannie mae, do you ever bring up trade wars? >> in the context of the market. i think the president is focused on the wrong thing he thinks trade deficit is a bad thing. i have a trade deficit with my dentist. you have one with your hairdresser. doesn't mean he or she is ripping you off. i think he should be focused on other things but that's me. but we do talk about it if it effects the market we try to stay out of that lane. we're more the post game show of the marketplace. as you know. the show's been on for quite some time. >> grasso's over there >> grasso in the house why don't you stay increase our numbers here. >> it will be joe money now. >> you can stay if you want. go i got to go i t to go to work. >> all right check out that ad. >> thanks. see you later. and seamless experience across web and tablet?

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happening now. president trump's in the uk meeting with theresa may earnings alert three big banks posting quarterly results. plus global market reaction to it all as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box. >> good morning and welcome back to "squawk box." is this "squawk box" kind of feels like "fast money."

live from the nasdaq market site in times square. our guest host this hour marty mosby. and here's what i'm alluding to is almost a wrestling where adami reached out over the ropes. >> tag team. >> pulled in grasso. then at 8:00, we're going to do an hour with the half-time guy >> it's a common thing we all have vowels at the end of our money and "fast money" traders. we're interchangeable. >> kind of true. not all of them. >> well, the three here today. >> he has a vowel. >> okay. all right. u.s. equity -- and mosby sounds like it's a vowel. is "y" a vowel >> it doesn't count. >> it's not. >> you went to harvard. >> yeah, you learn vowels at harvard. >> i know it's not a vowel but it's, like --

>> sometimes it acts as a vowel. >> thank you i think in a song they say that. anyway, here are the futures right now. that's really flat up one right now they were doing better earlier we just saw the s&p go into the green by a tick, actually. and the nasdaq up 9.5. president trump has criticized uk prime minister theresa may's brexit plan. came in an interview with the sun newspaper. the interview came ahead of the planned lunch with the prime minister however, a spokesperson for may says she looks forward to bringing him up to speed wilfred frost is over there. he's going to have more on the visit with may in a few minutes. it's been a big week for wilf. he was so excited about this meeting today because there's so much swirling around it. he was so excited. >> about something else.

>> china's trade surplus wide at just under $29 billion up from $24.6 billion in may this obviously is amid the ongoing trade dispute between the two countries. and the justice department is going to appeal the court decision that approved the purchase of time warner. at&t expressed surprise at the announcement saying the court has a well reasoned and legally sound decision randall stephenson will join us to discuss the latest developments in this and other things he's out in sun valley with our julia boorstin looking forward to that at 8:15 a.m. eastern time. >> well, we just married frhearm jpmorgan well above wall street forecasts. the fee and market revenue performance for the quarter had a healthy consumer drive to

credit card sales and volumes. the stock is higher by 0.7%. we had seen it surge 1.2% but backed off that a little bit let's get more from marty mosby. steve grasso's here also of course cnbc "fast money" trader and market analyst marty, what'd you make of the quarter? >> well, right now we're seeing the positive earnings beats we'll start to see in the second quarter. that kind of then brings the expectations down. then also the sex quarter we second quarter seasonalties back and even investment banking kicking in >> in terms of the line items, are they matching forecasts or beating forecasts? trading, banking >> trading is coming in where we thought. it's down quarter over quarter investment banking is probably a little bit better. we're seeing a move there on the upward move.

net interest margins are about flat for the bigger banks. sometimes that's balance sheet related. in other words, you still get revenues because you get the balance sheet growth when we see the superregional banks come out, you'll see that coming through >> jpmorgan return on tangible equity of 17% or so in this quarter. that's obviously kind of stretching, you know, cycle highs. is everyone going to trend in that direction how's it looking to you? >> that's the key to this whole sector as the returns are improving, we are getting to the cyclical highs for this period. but we still have room to grow when you look last tomb at the highs before the crisis, it was 25 level we're going to get to the 18%, 19%. so that really is the fundamental trade is that there is this fundamental improvement from capital employment, interest rates going higher.

interest rates are 150 basis points higher than at the bottom that's a positive. >> no one's excited about investing in the banks these are guys that live and breathe banks. is there going to be a time when people rush back into banks or do we say it's just faang? >> well, i live and breathe bank for years. i have a good feel for what you have in either the cyclical and seasonal what happens this time every year is the seasonality really hits them in the face. they said we're not getting momentum there's no sequential growth if the first quarter. the second kwashter that co equs back the banks are constrained that they can't buy stocks when the stock price is under pressure. we get to do that right after earnings we get that back into the numbers. for the last two years in 2016, got to remember brexit and oil banks were down. back end they did well

'17 the same thing badly first half of the year so our call this year has been we're going to underperform in the first half of the year then the fundamentals will take over the headlines will drift off then we get loan growth. >> what are we expecting for citi and wells based on this >> these fundamental things, seasonality for wells is a big number the big banks, eps is down quarter to quarter you look at e the money centers. wells we should still see that momentum >> in terms of the commentary, jamie dimon is no wall flower when it comes to commenting on the administration and what he sees going on with the trade situation. i'm curious if you can see jamie dimon specifically shaping the direction of the bank trade by his commentary

>> he is, again, the pillar of the sector when he talks at the very beginning of earnings season every quarter, it is important so yes, what he says will shape what we're about to see. the trade war is the uncertainty. it's kind of that wild card that nobody knows where we're going with that. in his perspective on that will have an impact on the group. so that's the one thing that's out there that can kind of for the meanwhile drive us in the different direction. >> so every time i look at the banks especially this year, we've seen the regional banking index outperform then when we bring that up, they say the carry always outperforms. why do we ever want to buy the xlf versus the kre why should they ever buy anything but a index what we've got to remember is two things the regulation that we went through constrained all banks above $50 billion for the last decade so the kre reflects those banks

that to grow faster. because their competitors have been pulled back the deregulation we're going through, some are going, uh-oh they're back around here talking to our customers trying to take that market share back the other thing is the takeout went into the kre because we had some acquisitions at that level. that is now into the number. what we're looking at in the back half of the year is again, the bigger banks get the seasonality being able to get the fundamental improvement. >> by the way, we're keeping an eye on what's going on in england with the trumps over there. we're watching right now the first lady playing bocce ball with some children good shot there. >> yeah. that was a -- i don't know how to play very well. >> don't they call it lawn bowling over there >> lawn bowling. >> something like that

>> we would have to ask wilf about that so there are checkers right now. we are watching this >> i can tell you the three "fast money" traders are familiar with bocce. >> any reason to say "fast money. well, anyway -- >> won't bring up "fast money" anymore. >> me neither. >> i love it. i love that show who's the big guy? >> pete najarian >> that's him. he looks different every time i see him. >> don't cross him though. >> he's on "halftime report" too? >> yes >> he's on both. he's got a brother too, doesn't he >> john. >> what's this is this "fast money" music the other top story this morning, the justice department appealing the at&t/time warner merger approval. and julia boorstin joins us now from sun valley, idaho it's dark. dark again should be coming up soon,

though but you're not in the dark on this and you have randall later, julia. >> that's right. the doj filing a notice of appeal of the judge's approval of the at&t acquisition of time warner leon imposing no conditions on the deal which closed quickly after his decision now, on this news, at&t shares dropped more than 1% in after-hours trading last night at&t's general counsel responding, quote, the court's decision could hardly have been more thorough, fast-based, and well-reasoned. while the losing party always has the litigation to awe peel if it likes, we are ready to defend the court's decision. now, a number of ceos we've seen here have avoided the cameras in the wake of this news. one ceo called the decision crazy. another refusing to comment because he said the topic is a hot potato he said he and other ceos he was

just with were shocked by the decision to appeal he said he had read the decision in its entirety which he thinks made it clear that the doj had no case. this ceo calling the appeal bad for business, bad for the market saying that the appeal seemed political. we caught roger goodell going into dinner when i asked him about the appeal he said i think everyone was hoping to move on. but when i asked him of implications on this, he said he was bullish on the opportunities to benefit his business and nfl fans >> biggest thing is having more opportunities to be able to get to your fans you want to be able to get your product to your fans on the platforms. we're seeing obviously through technology and some extent through the media mergers and acquisitions that there are more platforms. there are more opportunities for us to get to our fans. >> now, as for whether this

appeal will impact other media deals, definitely won't impact sky. but it could raise concerns about regulatory hurdles for comcast's interest in fox and it could dampen comcast's interest in making another bid for the assets remember the comcast bid on fox in the immediate wake of judge leon's decision a month ago. sources say we can expect this to be decide bid roughly february at&t said it would manage as a separate business unit until then or until any government appe appeal randall stephenson arrived here yesterday afternoon. of course we'll be sitting down with him in the next hour of "squawk box. back over to you >> thanks, julia 8:15 excellent. we will be here and looking forward to that. in the next hour, you'll billion joined by at&t randall stephenson live from the sun valley media conference. will go over all these things. coming up, we'll head across

the pond to the uk where president trump and theresa may are meeting. wilfred frost is there wilf >> melissa, the words of the president, i told her how to do she didn't listen. talking there about her brexit negotiation strategy they are meeting at checkers now for the first time sense those explosive comments from the president. quk x"etnsview and update when "sawbo rur are you ready to take your wifi to the next level?

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welcome back to "squawk box. the futures right now, they were flat at last check on the s&p 500. we did get better than expected earnings from jpmorgan not helping the s&p 500. down by about 1.5. the nasdaq showing some signs of promise up six points here after a big day yesterday with technology >> let's head back to england where president trump is meeting with both uk prime minister theresa may and the queen today. wilfred frost joins us with the latest wilf, i just saw something on the wire can you confirm, is the trump baby balloon down and deflated and gone it was up for an hour. do you know? is that true it's already gone? all that and it's gone >> it is it was actually up for two hours. apparently the greater london authority which is overseen by the mayor of london who operated out of city hall where we are now granted a two-hour license

you're right it was up and now it's down. on that topic, the trump visit, joe, was always going to be interesting. it was always going to be controversial. as you mentioned, the baby blimp particularly in cities across the country. but it was the prime minister and the government trying to do everything to make him feel welcome. keeping his trip outside of the cities like london where the protests are expected to be largest. going to windsor castle, meeting the queen, et cetera that's why those explosive comments he made to the sun yesterday have gone down so badly. here he is in particular throwing shade on the prime minister's strategy for brexit >> if they do a deal like that, it will most likely -- because we'll be dealing with the european union instead of dealing with the uk. so it will probably kill the

deal if they do that, their trade deal with the u.s. will probably not be made. >> now, the president has just arrived at checkers in buckinghamshire. and he briefly spoke on arrival and seemed to continue as if nothing was wrong. >> arrived here last night we had a dinner where i think we probably never developed a better relationship than last night. spoke for an hour and a half it was really something. today we're talking trade. we're talking military we just looked at some incredible anti-terrorism thing being done here. in conjunction with the united states the relationship is very, very strong >> may did not speak in a tone relatively awkward now they're meeting privately. one thing everybody is raising here, although there's

awkwardness in the short-term, in the long-term could this galvanize theresa may? could it possibly help the course of brexit or remain in a similar way to how when president obama came over here and tried to campaign in favor of remain, it backfired and helped the leave campaign back in 2016 before the vote? that remains to be seen. they're meeting privately at the moment >> i couldn't help the irony in thinking about that. what that basically showed was that the british people don't want outside forces telling them what to do which then again makes me think how do they like unelected bureaucrats in brussels watching over every move they wake in the court system and trading system. so the whole rationale for why brexit happened in the first place was from what happened there in the first place, wilf so i don't know -- >> i think that's a fair point i think it's a fair point, joe we don't know what's going to

happen long-term from those comments from president trump. but unquestionably, no one -- i'm not just saying in the uk. same if it was vice versa. wants to see a foreign leader come in and try and tell people how to do things and certainly no one expects their leader to be undermined. >> and it was about trade back then too i remember president obama used the word queue you're going to the end of the queue if you do brexit and now we're talking about trade again here now it's if you don't do brexit, you're going to the end of the queue. >> that's right. interestingly probably top of the list that the prime minister before this whole visit started was hoping to get would have been a verbal commitment from the president to say you are front of the queue now we will do a free trade deal once you've left the eu such that you'll be excluded from the tariffs we've imposed elsewhere. that would have been the holy

grail to come out of this trip for the prime minister and i guess it's still plausible depending on how things turn around ahead of this press conference maybe given what the president just said as they arrived, he's planning to tone down everything he just said but we'll see. this press conference in the last appearance is going to be watched across the country no doubt about it. >> the queue all right. is a bubbler a drinking fountain is that something i need to -- do you -- you ever say garbage >> what? >> bubbler do you ever say take the garbage out or is it rubbish for you >> i've adapted some words, joe. i've been picked up for asking where the restroom is. i said let's watch the soccer to my brother the other night and he nearly fell off his chair >> oh, no. >> but i don't think i say garbage. i probably still say rubbish i don't know what a bubbler is what's a bubbler >> a drinking fountain

>> but i don't think it was bocce ball i think the first lady there was playing balls. it's called balls. so usually something whose average age of the player is definitely above 50. it's not a young person's game >> well, thanks for that, wilf appreciate that. >> just saying she was at royal hospital chelsea which is where the chelsea pensioners are that explains that. >> have you heard that expression the youth is wasted on -- anyway, thank you, wilfred frost. joining us now anthony ambassador, thank you for joining us does everything end at 50? maybe you don't know yet at this point. but i still feel pretty good how are you? you look fine. >> life starts at 50 >> yes thank you. >> it only gets better >> we were just talking about all these things, and i know

that, you know, you were in the last administration. and just brexit in general were do you wish brexit wasn't happening at all would that be in a perfect world, do you wish there'd be another referendum or do you think that they -- that people really didn't know what they were getting into when they voted for it in the first place? or should there be a hard brexit i guess we'll start with that. >> that's water under the bridge look the referendum happened. i think it's still improbable that the vote will be reconsidered i think it's bad news for the uk i've said it from the very beginning. the uk basically had its way inside the eu. it had a lot of opt outs from the single currency to a lot of other issues now the government has been straddling two positions you just saw the white paper saying we want all the benefits of the single market in goods trade. it's also what we want to get out of the customs union but at the same time, it says we

want all the benefits through a proposal that frankly nobody understands. and it's rather sad to watch it's been sad to watch for me. i'm a resident of london for the last 18 months the rhetoric being ratcheted down to reality. let's be real. the probability is brexit is going to happen. the question is how to make it as least costly as possible. that >> that's the key. and you're over there. you saw what happened with david davis and boris johnson. i mean, their side of things is that, look there was a referendum and half measures that some would call the soft brexit that theresa may has decided on, that was her decision so for trump pointing it out, he's pointing out the obvious. those resignations had occurred. and the things had already hit the fan before he got there. i'm just wondering, is it that

surprising that he's just pointing out the obvious this not brexit. this is something other than brexit go ahead >> you know, look. let's be clear the comments he made were unprecedented for a sitting president to be attacking a fellow head of state during a state visit into the endorsing arrival. that's counterproductive you could have said certain things behind closed doors and said the path you are on in terms of alignment is going to complicate a deal with the united states. but let's be real about two very important things first, many american businesses informsed eed -- invested in tk because it's a gateway to europe in fact, they want to stay aligned with the eu. the second point that's important is that the real bone that sticks in our throat are the eu rules that impede us from selling a lot of our agricultural goods i'm thinking about hormone treated beef i'm talking about chicken that's

been disinfected with chlorine washes, gmos, all of these other things those are not going to be traded away by the uk there would be demonstrations in the streets. so it's unrealistic to ask the uk, just adopt our rules and forget about the pesky eu rules. >> all right thank you. i wish we had more time. i was trying to figure out whether we actually saw president obama tell the people not to vote for netanyahu. it was close but i don't know if it's totally unprecedented. anyway, appreciate your time today. thank you. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪

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♪ good morning and welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and center, we heard from jpmorgan chase but two bank earnings reports are out at the top of the hour we'll hear from citi and wells fargo. we'll have those numbers as soon as they are out. if you've owned shares of nvidia or netflix, you enjoy the best

shareholder returns of the past five years that's according to a new study by boston consulting group nvidia had a return of 76% over that period. netflix was second at 71%. wow. and walmart is denying a report that it's decided to sell its japanese supermarket chain seiyu. that came in the business daily thursday the retailer says it is not in discussions with any prospective buyers july 13th, that's today. it's friday the 13th it's national french friday. fry day. it first occurs in english in the 1856 book cookery for maids. >> thanks. >> ladies, he's on bumble. if you like what you just saw. >> i think also tinder and the

other ones just fyi >> is it bumble or bumbler >> anyway. >> anyway -- >> he's blushing >> he is the recipe cut new potatoes in thin slices, put them in boiling fat, add a little salt, fry both sides to a light golden brown color. c-o-l-o-u-r. whoever did invent them, seriouslseriou seriously, nobel prize seriously. >> you could have salad on the side or something. >> and it's not the end of the world to have a fry once in awhile. >> go ahead. >> i'm going to. i don't like to eat on air i don't like watching other people eat anyway let's get back to the broader market this morning. ryan payne is from payne capital

management still on set with us is marty mosby. and market analyst steve grasso. ryan, do you watch the bank or are you waiting for bank earnings or does it not play into your overall approach >> i like to take a macro approach but i think the banks are probably a good litmus test for overall in general >> really? >> i think inflation is going up which i think will be good for the banks. interest rates go up that's great for the banks i think all those things kind of play into the same story >> all right so as far as jpmorgan goes, not bad to start with. >> it's a good start to the process, yes >> what was -- now you're back, you've been in there crunching the numbers. >> well, we saw once you could crunch the numbers is that loan growth which is very benign in the fourth quarter actually core loan growth was at 2% quarter over quarter growth. which is your litmus test.

in other words, we see loan growth coming through and the bank earnings then the economy is generally starting to percolate. >> exactly right the economy is definitely strong i think that's a great litmus test for where we're going >> for the past three months the financials have underperformed the s&p 500. xlf went into this earnings season for the banks down more than 1%. s&p was up by about 5% if the banks can't rally off of good earnings what does that tell you as a trader >> the overall market wants to roll over. the banks down 2%, the xlf down 2% industrials down 2%. and you have the technology space up 14% then you have discretionaries which has a good portion of the technology space if no one else can do any of the lifting, then the market probably should roll over second half i don't think that's the case. >> we're flat year to date for the bank sector. xlf, by the way, berkshire

hathaway is the largest component of the xlf it's 11% of that sector. that's not a bank. it's a lot of things >> it's indicative of the overall -- >> it's very broad, but it's different from the banks >> jpmorgan was down over 3% in the last months. >> also i think the rest of the world tries to weigh on the other banks. >> if inflation is back, what does that do to the fed? because the fed has started to sound a little more dovish maybe they're taking larry kudlow's advice. and that's been a tail wind to the economy. or the market specifically so if you think inflation's back, does that put the fed back to be the head wind that we've seen it as >> yeah, i think it is they said that basically we could see rates go up quicker. we might even raise more than we said we were going to raise. i think inflation's here i think that's the one thing that people aren't talking enough about you know, just anecdotally i

talk to a lot of business owners everyone says they're having a problem hiring it's hard to find people to work i think that's going to be a big problem. so i think this economy is going to be on fire over the next 12 months >> that doesn't necessarily mean the stock market is going to be on fire. >> i think they're going to correlate, personally. >> okay. yeah what do you think? >> so if you look at -- we talked to a lot of people on various shows. and -- >> including "fast money." >> such as >> how about tony dwyer. >> no i'm talking about what other shows. >> oh. i don't know rhymes with uney >> where's he at now >> canacourt 3200 is going to get a lot of investors off balance. especially those who think the market might be rolling over so i think that'll be the shocker that most people don't

see coming down the pike >> trade, you worried? >> about trade >> about the trade wars. you look at that, right? grasso doesn't look at that. adami didn't look at that much they don't look at fundamentals. >> we do we constantly look at fundamentals you clearly do not watch "fast money" at 5:00 >> i dvr it. >> that doesn't mean you watch it. >> that's true >> we might not be concerned over it because there's inflammatory headlines involved around it. >> and that has been the trend to look for the trade war dips so far >> i think it's providing a great buying opportunity i think that's weighing on the markets. and at the end of the day, i think it's a negotiation if china is not going to be able to come back and tax as many goods as we can -- i look at it if i'm china's best client, i might not be happy my client wants a discount but i'm going give it to him >> all right thank you. and more to come from marty and

steve and the "fast money" crew. we'll be here. >> i know it pains you, but thank you. >> i know. i did it we're all one big -- >> happy cnbc family >> we are. coming up, the justice department is looking at the -- >> you touched me, by the way, just now did you notice that? >> i'm going to purrell in a minute downgraded at&t this morning randall stephenson will be interviewed. stay tuned you're watching "squawk box" on cnbc ♪ it is such a good time to kiss ♪

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provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. coming up after president trump finishes meetings in the uk today, he'll look ahead to his meeting with russian presidt adirenvlim putin on monday we will talk russia next

president trump is meeting with british prime minister theresa may right now. he'll then meet with the queen later today. on monday he'll head to helsinki for meeting putin. joining us now is the professor of international affairs at the new school and author of "the lost khrushchev. the context he's going into this meeting in helsinki is interesting. he went to nato, said very -- >> divisive things >> he told theresa may and the world basically that he told may how to do -- >> the job >> and she didn't listen to me should we expect the same in helsinki >> i think to some degree.

but putin has a steely gaze. i don't think whatever he was able to do around the world is not going to go down to well with putin i think he's going to behave himself. it doesn't mean he's not going to try to be that kind of flamboyant leader he has been so far. but putin is very good at controlling his own audiences. putin at this point feels that trump is his audience rather than the other way around. >> the other leader he dressed down in recent days is angela merkel maybe that's where they find some common ground here in terms of putin wanting sanctions to be lifted, trump wanting nato spending to increase by merkel can they agree on something here or no? >> i think they can agree on a lot of things. i mean, they both have slightly testy relationship with europe although this kind of common conversation that we always have that allies are very concerned

about trump, at the allies have met with putin themselves. but i think they can agree that europe can do more whatever it means for trump is that nato is that they can pay their share in nato. and putin can do more is that they can be accepting of russia more and the fact that russia has its own interests. in previous segment, they had conversation about britain that britain doesn't like to be dictated by other countries. putin also doesn't like that >> we don't know how to view russia anymore i hear stuff on cable that i don't just sign off. i heard someone -- >> trump called him a competitor >> i like that term. i don't like the term enemy for -- at least not for russia

necessarily. because russia isn't -- i mean, it's not defined by one man. i'm not sure -- i mean, after crimea were after the election meddling, after syria, after everything we see maybe enemy is too strong a word but maybe it's accurate when trump says we want a good relationship with russia and it's in our best interestto have a good relationship with russia, is that true or should we view russia as an enemy >> i'm a russian i really do not want to be an enemy of the united states >> i heard -- it was said yesterday it was a fact. that putin is our enemy. and i don't know how a newscaster decides -- >> frankly i've been following and participating in that conversation since at least 2014 since the crimea annexation. i think america was looking for an enemy putin presented a wonderful cutting figure for that he is kind of a james bond of

contemporary russiavil villain this is for your benefit it's not the russian benefit they don't care that much. >> yeah. he's got the martial arts. >> absolutely. >> do you have a problem with competitor >> i don't have a problem with competitor but we are talking about enemy i was watching how russia came from country that america deals with then suddenly became an adversary. then enemy now puth season a dictator i think those are harmful words because they also create perception competitor is a good word. i think they should do what reagan and gorbachev was doing trust but verify they can be on good terms. and i think putin actually -- or the kremlin came out just -- came up with a better word

they said we're going to talk about trump as a vis-a-vis what they meant was they're going to talk to him as an equal in world terms if america really does want to have any relationship with russia and it should because it occupies 11 time zones. it goes from what used to be germany all the way to -- exactly. has all the natural resources. so it is very wise to talk to russia >> the left needs russia to be an enemy for trump to be a pawn of putin so -- >> and these are my people >> might not change any time soon >> that's why i think the meeting is great but what's important is what the outcome would be because as political situation here in america, it may not necessarily be productive to implement whatever they agree on >> all right thank you. >> thank you coming up, raymond -- i was

shocked yesterday. watching that. it's like telling me how i needed to -- anyway. downgrading &thiat ts morning. we'll be joined with the reasons why next you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today.

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will eventually prevail but that this would be a major overhang for shareholders >> yeah. we were very confident last time that the government had a bad case and that at&t would win and we were correct. we still think that's the case i think this appeal is really ridiculous and they could prevail again. it does put an overhang on the stock. we spoke with our public policy analyst at mils and other contacts in washington last night. this is probably a six month process to go through this appeal there could be a couple of other proceedings after that so it's a downgrade as a reflection of the stock is probably going to go sideways. they don't want to take on the legal risk here and invest in the name and not so much our reflection as a company. with this overhang, it's going to trade sideways. >> frank, the idea there'd be an overhang as this appeal goes

through the process suggests that if the deal were basically broke up, that at&t would suffer financially the stock would go down do we even know that's necessarily the case >> i don't think that's necessarily the case as i've learned through my career, this makes it difficult for investors to get behind the stock and get interested in investing. and they tend to look elsewhere. i think that's going to be the majority of the view it's trading at less than ten times earnings and free cash flow whether they have time warner or not, we think that's definitely inexpensive. we think the time warner deal is great for them we think over time every ten basis points it churns they can lower their subscriber basis and start to compound that, it's

a great deal for them. even without that, we think that at&t looks inexpensive the reality is this is going to be an overhang and we heard this from so many investors they don't want to take on this legal risk so we're going to step on the sidelines for now. >> so far the consensus seems to be this would make a comcast bid less palatable for shareholders when it compares to the disney side of it you actually think, though, comcast comes in with a higher bid. why do you think comcast will stay in the fight? >> i think they've -- yeah we put that on our note. i think they very much want the fox assets i think they do have a higher number if mind in the mid-40s and then will soon come out there. you'll find out where that came out. an important part of comcast's ability to bid here. makes them less inclined from comcast's standpoint, they want the assets.

and i think a higher bid is forthcoming. we downgraded comcast after this deal on the idea they were going to be even more bold in going after fox. and i think -- i still think there's a higher bid for fox coming i think they really want these assets and might as well give it a shot i don't think the board is more inclined now we do expect a higher bid. >> frank, great to speak with you. frank louthan from raymond james. and don't miss our interview of the morning. randall stephenson we'll get his take on the merger that is just minutes away. final minutes here, steve grasso, our guest host your thoughts? >> everyone's been looking at this 2800 level on the s&p i think today is probably the day that makes the most sense for it to break out. we've had the banks report earnings we're going to see this cycle of earnings getting deeper and deeper it's hard for the shorts to press the market in the thick of

earnings season. and then you have the return of buybacks across all sectors, all spaces after that i would think higher markets are coming back half of the year is probably where you'll see the most performance >> all right great to see you here on set. >> see you later on "fast money." >> at 5:00 >> thanks, joe >> you're welcome, steve anything we can do coming up, earnings alert. we've heard from jpmorgan, better than expected earnings there and stock is higher premarket. up next we've got citi and wells fargo. reaction straight ahead. this scientist doesn't believe in luck. she believes in research. it can take more than 10 years to develop a single medication. and only 1 in 10,000 ever make it to market. but what if ai could find connections faster. to help this researcher discover new treatments. that's why she's working with watson. it's a smart way to find new hope, which really can't wait.

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at&t versus the doj round two. the justice department challenging the approval of the company's tieup with time warner a live interview with randall stephenson is straight ahead earnings alert citi and wells fargo set to report the numbers and the stock reaction coming up plus, blasting brexit. president trump speaking out about uk prime minister theresa may's deal >> we arrived here last night. we had a dinner where i think we probably never developed a

better relationship. >> the two leaders set to hold a joint news conference. we'll bring it to you live as this final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with melissa lee and mike santoli and our guest host this hour, another "fast money" trader. >> half-time, joe. half-time. and we've had one heck of a week >> half-time joe terranova. >> we had shaquille o'neal, jim cramer, to.j. oshie. and you better watch halve time today. >> who >> nancy davis >> okay. all right.

joe is senior manage iing collector. also earnings just in -- you okay we're good >> i'm great >> you look -- you got to come in at 8:00 those other guys we relegated. >> i was going through the earnings reports this morning. jpmorgan pretty good >> citi group just came out. quarterly profit of $1.63 a share. beating by 7 cents revenue came in slightly below forecast as far as the bottom line. a programming note, citi ceo michael corbett would be on monday to discuss the outlook for citi and the banking sector in general i think maybe wells fargo -- >> it's out. it looks like a miss on the eps side of things 98 cents versus expectations of $1.12. revenue coming in maybe a whisper shy. we're only getting one decimal

place here, but 21.6 versus $21.68 billion this is no surprise. i think the past five quarters, wells fargo has traded down on the earnings day so right now we are looking at wells fargo down about a percent on the back of this. >> but the results provide them the opportunity to buffer the downside with the more significant buyback than the street expected. i would say there might be an opportunity here >> they were up before >> absolutely. >> marty, wells fargo saying average deposit down 2%. what's the takeaway here >> well, your revenue was in line deposits would have impacted revenues if they were really pulling down wells fargo is still working out from under those operational issues, reputational issues. and there's probably embedded in here some things like marketing where they're running big campaigns. which is going to be temporary

and management decisions not business related when we start looking at these misses here. that's probably what we're going to see once we see all the details. >> what's your take on citi? >> citi is in line with jpmorgan i think we're going to see fee income is going to be favorable. because investment banking is really, you know, kind of hitting a stride here. which has some read throughs for some of the super regional banks that people don't think about. yet they have actually a bigger percentage of their fee revenues come from capital markets. >> i think what surprised me this morning with jpmorgan is the loan growth. we have to wonder if the benefit from the tax reform policy really is something that's going to build momentum in the second half of the year i think you're beginning to see a little bit of that unfold. you're clearly seeing the space going out, spending more, borrowing more, and i think we can expect that to really accelerate the second half of the year i don't think we have the full benefit yet of tax reform.

>> when do shareholders and investors in general start to look at the banks and say they're going to start buying back now we bid the stocks higher as we made the point before, the stocks in general traded lower into this earnings report. >> well, that is such an important point to look into because what you have is this is the only sector that has to ask the regulators every year can i go back and start buying back shares so if you imagine what happens through the year, they get their approval the kid gets their allowance and they start spending it by the time you get to the end of the year, there's none left things got soft with the banks unable to move in and buy their shares now they got approval again. they've they'll come back after earnings we have a natural buyer back into stocks. >> i think the 8:30 conference call with jamie dimon is incredibly important let's understand the expectations for financials really have been lowered in the

last month or so taken down a lot of the estimates. not much of the optimism that was there in the prior quarter has been there now so the bar is low. the opportunities for it to exceed and i would also point out from an investment standpoint, if you're an investment manager, you had the opportunity to look at financials and see the underperformance and say, okay i'm not going to be in financials i'm going to energy. because energy was providing you that same value opportunity. and you are seeing the performance. you get a little bit of a pullback in energy i think you'll see the rotation right back again into financials and again the expectation, the bar is very low. they don't have to exceed by very much. >> jpmorgan and citi are trading flat wells fargo is trading down by about 1.8% right now on the back of that eps. and slightly light on revenues here >> when it comes to a name like

citi, things have not looked as good as here is the stock captive to that or is that a misjudgment of what really matters here? >> i think it's a misjudgment. it's looked at that way because it's a proxy for that. what really matters for citigroup is two things. one is if you look at this capital analysis they just got, they can create over 10% returned to their shareholders from cash flow and dividends so that is a floor to the ability to see a return there. the second thing is as they're moving their returns on tangible equity above their average of 10%. is it can hold that or improve it then their tangible value goes higher right now trading at a 5% premium tangible book value. if you look at the growth over the next year, it's on top of the tangible base.

anything above the base -- >> at the beginning of the year, we were pricing in lifting of regulations especially for the regionals. is that something you should walk away from that thesis are we not going to see what we expected >> we saw some of it come through with the super regional banks returning much more capital than the group as a whole. just in the announcements. they'll do that again as they move into next year. the next thing is loan growth -- if you draw a line across the sand at $50 billion where regulation was, the banks beneath that have a loan to deposit ratio 90%-plus the banks above that actually have a loan to deposit ratio in the 70s. so you can see that regulation and how it constrains some of those banks. now that they've got a fresh breath of air coming out from under that that just got passed. we're going to start to see that materialize in the back half of this year because they'll take some of that market share back >> all right, guys stick around we're going to talk to a

portfolio manager. david ellison at hennessey funds. and you obviously have to put your money into your beliefs here and the themes that you talked about loan growth, lending margin, credit trends. any surprises on the three that we've seen today for you and what do you think is the best position? >> i think the thing i'm most impressed with, the comments you've made -- that have been made by you and your guests have been very good in terms of dealing -- understanding what was happening. i think the thing i would add is that credit metrics were good in the quarter. i've only seen jpmorgan. i suspect they're all going to follow so credit remains very good which is obviously something that's good for the banks, good for the economy as a whole yield and assets are rising which is important because obviously that's going to, you know, improve their net revenues long-term net interest income was over 10%

year over year your revenue's growing pretty good i think the other thing is they're turning equities 10% for jpmorgan which is well above what people thought they were going to be able to do in 2011 and '12 after all this regulation. they are earning a tremendous amount more than what people thought. i think the challenge is being able to grow loans again, as your guest said, they've got about a trillion four of deposits and only a trillion of loans. there's a lot of room there to grow loans the next decade or so to add to earnings the other thing i'd mention is they've got 32 million mobile customers and that's grown about 12% or 15% when you talk about moving into the -- they're moving that rapidly. >> overall are the things

dictating what you do now? are they macro or just individual fundamentals for you now? how does trade play in am that >> i think the stocks have been very highly correlated to the movement in the 10-year. and we've seen that pretty much for about a year now i can pretty much tell you what the stocks are doing if you tell me what the 10-year's doing. the question now is how much more is the fed going to move? i think they're going to go up then you've got some real value in the deposit franchise meaning the incremental cost of funds will not be 3% their margins will be able to expand we'll take time for the assets to get up to that rate so they're going to have margins expanding for a couple years now if not for another three years as the yield and assets catches up with the movement of the primary. so that's really the story here is getting rates up another hundred basis points

then if we get to that point where the fed stops, then we can really start to see the economy, you know, continue to grow because the fear of the rise in rates will be behind us. >> all right all right. very good, thank you thanks for your quick analysis, david. you guys are going to be here. good, great. coming up, we are awaiting the joint news conference with president trump and theresa may. it's expected to begin at 8:45 a.m. eastern time. we'll bring it live as soon as it starts. up next, though, another challenge for the at&t and time warner deal. appealing the decision to approve the tie up we'll get to our news maker of the morning and ask him all about this randall stephensonth, e ceo of at&t joins us live from sun value i will after the break news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident.

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the justice department faking another shot at opposing the at&t/time warner merger. julia boorstin joins us from sun valley, idaho, with a special guest. hello, julia once again, good morning >> good morning again to you, joe. we're joined now by randall stephenson the ceo of at&t thank you for joining us this morning. >> good to see you

>> so you had this big news break yesterday. what do you have to say to doj chief? >> i don't have anything to say to them. that'll be said in court filings and pleadings with the appeals court. >> so do you know on what grounds this appeal is being filed? >> we've been questioning on what rounds many things have been filed over the last six, seven months as you recall coming into the original lawsuit, people are say whag is the basis of the lawsuit. everybody read it and had a hard time discerning what was the basis of the complaint 25 million pages of documents are collected. we go through depositions. we go through an entire trial. and at the end of the trial we get a very i thought thoughtful, very thorough, very fact-based order. and, you know, basically said this is pro-competitive. now we go to appeal. at some point one has to question is the transaction actually pro-competitive

we don't know exactly what it is for the appeal >> so what do you think the intentions are of this appeal though i mean, is this going to be an expensive, costly process for you? >> it's been an expensive costly process already. the clock on legal fees has been running and it's been running on both sides the taxpayers legal costs have been running and ours as well. so it will be a costly process at the end of the day, it doesn't really matter that much to us. it doesn't change anything i'm going to do today other than we'll talk about this rather than the merits of the deal and what we're doing as a business but the transaction is closed. and we're executing on the transaction. >> so is this appeal political >> oh, i have no idea. i don't even want to get into that that's a question that's been asked from day one of this transaction. as to whether there are other motivations behind it, i'll leave that to others to

speculate. >> joe, you want to jump in? >> i worry about the timeline. was it a total surprise to you did you have wind of this in the last couple of weeks or even from when you initially got the ruling from judge leon, were you expecting this to happen or you had no idea or didn't even think about it? >> no, i had contemplated an appeal from the beginning. the government anti-trust division obviously seems very intent on pursuing this particular transaction and so we actually told our board after we received judge leon's opinion that it was a terrific opinion we thought it was a very thoughtful and thorough opinion. we thought it would stand up well in an appellate process so we were expecting an appeal they were getting to the point in time where they needed to file it if they were going to get it done in the 60-day time horizon. but no, we weren't surprised they appealed. >> see, that makes me think that

maybe in the back of your mind you don't want to comment on the political side of things but given the thoroughness and the logic in judge leon's decision, the motivation of the doj or the government in this case, it's hard for me to imagine that they're looking at the merits of their case rather than almost i said earlier that they're just sore losers or something. or it's political or something so i don't know how you -- i know it won't help you to decide it's political won't change things for you. but i'm trying to figure out what else it could be. >> i was telling julia earlier that the rumors and the suggestions around sun valley right now, it's all very interesting. people are speculating what's really going on. we'll wait and see what's in the appeal there will be, i'm sure, a legal-based reason in the appeal we're anxious to read it and see what it entails.

at this stage, i don't have any comment on what else is behind this >> well, specifically people are speculating that that will damage comcast's ability or hurt the regulatory perspective to make another bid for fox. >> probably can't help it. >> so what do you think in terms of that? is this intended to send that message to comcast >> i'm not going to get into what the department's intent is behind that. i'll leave that to others to speculate. but obviously it does affect that process you're in a situation where two entities are bidding for an asset. and this kind of action can't obviously influence the outcome of those actions but who knows whether that's behind us. >> analyst craig moffett who's written about this said it could focus on challenging judge leon's premise that a programmer could not take into account the parent

if this becomes the focal point of this appeal, how do you address those concerns >> i don't know. craig moffett's had a lot to say about this not much of it has been right so far. so i don't know i'll comment on craig's points but the merits of the case have been tried 25 million pages of documents, testimony, and a trial an extensive trial, extensive order. so at the end of the day, we feel like the law's on our side. we feel good about where we are. they think the appellate court will look on the merits of the law. >> perhaps at&t is being made the poster child or being made on example for the justice department to send a signal they're not going to step aside and let vertical mergers go through willy-nilly? >> i didn't hear all of the question, melissa. but i heard you talk about vertical merger. >> yeah. do you think that stepping in right now and challenging judge leon's decision is to send a message out to the markets from the justice department that vertical mergers just aren't

going to get the green light at this point is at&t being made an example? >> it's an interesting question. it's one we've thought about a lot. judge leon's opinion, again, a very good opinion, but probably it was so fact specific to our case that it probably doesn't carry a lot of precedent as you think about going forward. as this goes to an appellate court, circuit appellate court who's well versed in these issues if the appellate court upholds judge leon and there's a lot of people, a lot of lawyers i'm not a lawyer i just repeat what they tell me. a lot of legal minds think this could be a precedent setting so this could go a direction that could actually help establish law around vertical mergers. we thought that law had been established. 50 years of precedent. we stepped into this transaction with time warner thinking the law was established. the government challenged it so it threw that up in the air but this really could end up solidifying what the law is

around this. >> when we started this week -- sorry. go ahead, joe. >> no. we just talked about the uncertainty of comcast and their deal what about the uncertainty for at&t i'm trying to figure out how that would play out when an analyst is already downgraded the stock base odde based on thg and not knowing how long it's going to take. john stankey has been meeting with the watch tv paid tv service. do you see anything concrete or tangible that will be affected or delayed by knowing this is in the works? is that -- i mean, is the analyst right there would be an overhang >> no. no this changes nothing as i mentioned earlier, this changes nothing i'm doing today except talking about this issue on camera. this changes nothing we'll be doing over the next 30 days or the next 12 months we're about executing our plan,

joe. we think the likelihood of this thing being reversed and overturned is really remote. it's a very narrow path that would have to be traveled to get this thing reversed in any way so we're about executing our plan the merger is closed we own time warner john stankey is executing. so we're off and running nothing's going to change that so i don't see any impact from this >> it may not change what you do, but it may change the perception of investors towards your stock we are showing right now the stock trade of at&t since the doj first announced the lawsuit. the sock is down 8%. the point this raymond james analyst made in the downgrade of your stock this morning is this is going to be an unknown period of time where the stock will trade lower or sideways. what do you tell investors in terms of the timing of this and if there is at some point of

where you say we're not sure anymore. >> what i tell investors is what i just said to you doesn't change anything in terms of what we're doing. and i think the merit of the transaction has been played out in terms of what you're seeing with valuations of other media assets we feel really good about the assets we got. the great brands we got. in terms of overhang of the stock and uncertainty, there's not much we can do about that except address it in the court we'll work it as expeditiously as we can but it's in the hands of the court now >> all right >> mike, do you want to jump in there? otherwise i got more questions here >> i would just add onto that. you said you're going to execute the plan, but do you think there'll be any sensitivity while this appeal is ongoing toward rolling out any products, making any initiatives that might give the appearance of,

perhaps, bundling products in some ways that might provoke the criticism that, in fact, this is competitive as a merger? >> no, mike, zero. we made some commitments to the department of justice after the judge leon's order in terms of how we would operate and run time warner. specifically turner. the turner networks. that we would hold them separately, run them independent, have choir wafire s between them and directv those are the things we have to do anyway. when you have content players that are both suppliers and customers, you have an obligation to treat them that way anyway so this changes nothing about how we operate the business. it changes nothing about products we will launch. it changes nothing about other m&a we need to do like appnexus. we're off and executing. >> i want to hear more about how the integration is going so far. i have to ask you about your comments with sun valley with all the other media ceos

they were telling me it was open season for m&a they were thrilled about the high valuations that were going to come now it seemed anyone could go forward and move on the heels of the ruling. what's your advice to ceos down there about how to look at the potential for dealsing >> if it were a ceo looking at media acquisitions and deals, i don't think i would be looking at them today any differently than i did yesterday i think this is a process that will play itself out but i think there is such a slim chance of this thing being altered in some way that it wouldn't affect my thinking much at all judge leon's order was so fact specific and if i with for a ceo, i'd have looked at the at&t and time warner case, looked at judge leon's order and said his order was very specific to that deal and so i would have already set that deal aside as i were evaluating m&a

so i don't think that this changes anything >> joe >> no, i -- you know, i was watching in the news i was going to see whether randall was dressing differently. like the hollywood getup or something. whether he'd had some affected sort of -- you haven't changed but now i'm wondering because of this ruling, you're never got another change, right, randall >> i'm too old to change, joe. too old and too tired to change. >> this is going to make you even more tired. i know the ruling was -- i've said it before the ruling just seemed so specific that when you're challenging something, you don't challenge it anew. you have to go back and look at what the original court -- the appeals court looks to see if there was an error in the original court ruling. is that the way it works or can it start anew? >> they'll look at issues of law, not issues of fact. again, i'm not a lawyer.

but what an appellate court will look at, they'll say the judge gets the benefit of the doubt on the facts. they'll look at proceedings. did he do anything that was counter to law and so obviously you might well imagine we had a lot of appellate lawyers involved in this and in every minute of the court proceeding we feel really good. judge leon ran a tight process, tight courtroom. we feel pretty good about the ruling we got. >> what do you tell investors in terms of clarity on this do you think that we will know, investors will know what the results of the appeal is in six months, in ten months, in a year you're willing to take this all the way to the supreme court >> it's hard to say, melissa it will probably be, you know, five or six months but in terms of the uncertainty, again, this is -- if you're an investor, you're weighing probabilities. the probability of this thing changing we think is very, very low.

>> tell us how the integration is going so far. joe made jokes about you not transforming into a hollywood type, but there are questions about whether there's a culture clash between the at&t culture and warner media are you concerned about that >> am i concerned about it no i'm conscious of it. we're being careful and mindful of that. the way we've organized the business, it will be run for separately, very independently it's important that we preserve the culture. i mean, the culture of a media company is all about creativity and it's a company that every single night all your assets drive home so that's when we have to be mindful so stan kkey has spent a lot of time making sure he's touching the employees, touching the talent making sure they'll do what they do best. then we have some synergies to go after in this particularly the advertising synergies. there are some cost synergies at

the corporate level. those won't affect the creative side of the business but we feel really good about our ability to execute on this >> and what about hbo? there's been a lot of focus and speculation on how much you're going to be changing it. and how much potential risks to the brand if you change it too much what's your plan there >> it's an amazing franchise, amazing brand. so anything you do, you're going to do very cautiously understanding how successful it's been. there's been a lot reported about john stankey's comments. of we want to drive more and more engagement. that's what this is about, engaging the consumer. so engagement when people hear that they say that means they're going to be pumping more content into hbo maybe. but we're looking at different avenues. we have a lot of digital properties our directv now product, it's an over the top product it's growing like crazy. it's doing 300,000 subscribers added every quarter.

you heard joe talk about our $20 product. we're seeing good on that. we have a number of digital properties, we have the most watched news website in the world. so we're excited about that. how do you drive engagement across all these platforms and put that with 170 million customer relationships >> you also own some hulu. are you interested in selling or buying more hulu >> it's hard to say. we don't know who's going to be owning hulu when it's all done >> randall stephenson, thank you so much for joining us this morning. >> thank you good to be here. >> thanks julia and randall stephenson coming up, johnson & johnson was forced to pay millions to some women said their products was the reason they developed ovarian cancer the stock as you can see right

now down an exclusive interview with the companies of lead attorney next. and we're monitoring president trump's visit in the uk. set to hold a news conference with prime minister theresa may. we'll bring it to you live i heard the balloon was down it was up for two hours. >> it's up >> you had that made >> i did i think it's perfect >> and you think that's appropriate? options chains? tweet us of your opinion of the new balloon. and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go.

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johnson & johnson ordered to pay billions in punitive damages in a trial claiming asbestos in talc caused cancer in 22 women meg tirrell has more on the story and a special guest. >> thanks, joe it's the latest development in the years' long legal battle over the safety of its baby products with talc 22 women and their families said the talc in their products

caused cancer. j&j sells powder with talc and corn starch. all in the homes in the u.s. have beens s asbestos free. the data on talc powder and kae cancer risk is small the largest award until of course this week now joining us now in an exclusive interview, johnson & johnson's lead attorney bart williams >> thanks for having me. >> $4.7 billion in this award in st. louis. what do you make of this and then 9,000 lawsuits that are piling up here >> well, i think what's happening is that the courts haven't caught up to the science. and this isn't the first time that that's happened in the

history of american legal system with product liability matters it happened with silicone breast implants a number of years in the '80s and early '90s, there were a number of cases that went the plaintiff's way at first then there were scientific studies that had been around all through that period of time but ultimately were followed there was a reversal of how they started going at that point. and then basically what started with a bang ended with a whimper. meantime, though, the plaintiff's lawyers made a lot of money and the system ultimately worked. we think the same thing will happen here. >> when you're talking about the studies done around that time, are you talking about the fda study 2009 and 2010? they took samples of various powde powders. found there was no asbestos present. how about prior to that though >> the fda has been testing talcum powder for years an

years. the most recent one where they took off the shelf lots of off the shelf powder was in 2009 but they've been testing many years. there's so many organizations. the national cancer institute, the fd aa, o sha they have been doing studies for years and years. >> talc itself, there's nothing to indicate that the molecular structure is in any way carcinogenic >> that's right. >> it's a contamination that's at issue. >> it's interesting. i thought thfs the structure of talc itself was -- >> there are cases here with allege different things. >> sure. >> i've been using -- i can't -- i don't -- it's not easy to find talc baby powder corn starch is great you got aloe, all the others

that's what i've been using. why do you introduce corn starch in the first place was it in response to some concerns about talc? >> well, different people like different products corn starch has more absorbing capabilities but talc is smoother on the skin >> well, understand that in some of the cases where you've got the verdicts appealed, it's been on jurisdictional basis that these cases shouldn't have been brought in the places where they were argued. if it's not overturned on the science, how has johnson & johnson as a company reassure its customers the products are safe >> irs if of all, you should note they've been turned around also on merits for example, a case in california one i tried was one that resulted in a plaintiff verdict. but that case was reversed by the trial judge saying that the

science simply did not support it similarly, there was a large case in the state of new jersey where the court threw out the science before it even was presented to a jury. it isn't the case it's only jurisdiction nas grounds that are thrown out only two cases have been through the appeal process in st. louis where the biggest verdicts have come in and where this most recent verdict came in those two have been reversed there's a third upcoming we expect to be reversed swe ed as. >> we know j&j is relaunching the baby line and getting rid of ingredients. those aren't things where we've seen a lot of lawsuits they've just gotten rid of them because of consumer preference why not just get rid of the talc product and just sell the corn starch >> there's a policy question here johnson & johnson doesn't believe in putting warnings on a

product, cancer warning on a product that doesn't cause cancer johnson & johnson doesn't believe it should be intimidated into removing a product that's been out over a hundred years that has diapered hundreds of millions of babies around the world simply because the plaintiff's lawyers decided to put a target on the back of johnson & johnson. we believe the product works the product is beloved the best scientists in america have reviewed it again and again. and the remarkable thing is that the only response that the plaintiffs' lawyers have to all the agencies i just mentioned that have concluded that the science does not support the case is to claim that it's all rigged it's all -- they're all in a conspiracy and it's sad but there are some folks, some juries that will buy into such an argument even in the absence of evidence. >> thanks for being here this morning. >> my pleasure >> thanks to you. the tariffs on chinese imports could have an impact on

the largest and busiest container port aditi roy joins us with the latest >> good morning. not only is the port of lastz he -- l.a. here the nation's busiest port, but it's the largest trading partner with china. and imports at the nation's ports for the month of june were at a record high they also project that imports for the nation's ports will be at a record high in july as well while the numbers for the port of l.a. have yet to be issued, analysts expect they will mirror the national trend as importers are trying to beat the tariff clock. but that trend could be short lived. a economist in singapore says looking ahead export growth will cool in the coming months as the tariff effects trickle down. last year about $145 billion worth of goods between the u.s. and china were shuttled through this port. the director of this port says u.s. tariffs on chinese imports could hit 15% of goods moving through here and put at risk

240,000 jobs nationally. now, the people behind the global tracking survey say that as the tariff effects trickle down, there will be no winners in this trade battle only losers especially consumers. back to you guys >> all right aditi, thank you aditi roy at the port of los angeles. when we come back, president trump set to hold a news conference with prime minister theresa may. we'll bring it to you ve tlihe moment it begins stay tuned this is not a cloud. this is a car protected from storms by an insurance company that knows the weather down to the square block. this is a diamond tracked on a blockchain - protected against fraud, theft and trafficking. this is a financial transaction secure from hacks and threats others can't see. this is a patient's medical history made secure - while still available to their doctor at their fingertips. this is an asteroid live-streamed to millions of viewers from 220 miles above earth. this is ai trained by experts in 20 industries.

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let's get back to our guest host joe terranova so what do you want to talk about? >> i think we get an opportunity here to get away from the macro and really focus on the micro. it's still technology that is driving the appreciation in the s&p 500. it's still technology in which you're getting the fundamental bullishness. and i don't think sentiment aligns with it just statistically, the latest survey from lipper shows the equity based funds withdrew $1.85 billion. that's six weeks in a row. >> i was saying coming into this week one of the benefits of the trade war rhetoric was it got sentiment very subdued and people were defensive going into this week as we had this attempt again. >> so buybacks in financials, i think buffer the downside. and let's begin to focus on technology earnings next week. netflix, microsoft

so i think that's the micro meat of the market we need to focus on i think the market's offsides on this >> meantime, though, jpmorgan's conference call is going on. jamie dimon is addressing the trade concerns saying it's affecting clients' psyches but not their activity which is probably what you want to hear although the stock now is only up a third of a percent. >> look, mike we've talked about this on halftime over the last month. the activity both from the -- oil prices went to $75 consumer behavior did not flinch they continue to go out, continue to feel confident they're spending optimism is there once again >> all what you want to hear when it comes to the economy but it's not helping the bank trade. >> no, it's not. but listen i would say the banks are really in a conciliatory type of phase. they go through these experiences they're going through now where they

underperform the s&p and give the appearance that you want to walk away from whatever your allocated waiting is to financials i would argue that's not the right play i still think in the long-term you want to have an allocation towards financials they're just not going to give you what you're getting in technology where you wake up every day and, for instance today you see the price target on facebook go to $215 technology is such a growth opportunity. and it's a growth market right now. >> you tweeted out the baby joe balloon. >> because i wanted to get the viewers' response. >> yeah. i thought maybe it was up for a second and then it was gone. and now it's for posterity >> it was on tv already, joe it's not like you can take that back >> i retweeted it. >> see look. >> i retweeted it. i did. i retweeted it and liked it. i'll take the flack to get

trump's face off of there. that's fine. >> you're a true patriot >> i am. when we return -- and i'm going to scream like a baby and cry. which i do which you see me on break a lot of times yeah we're to head down to the new york stock exchange. jim cramer will join us live here are the futures right now, which are in the red, but just slightly a cinrit ckwereomg ghba when my hot water heater failed, she was pregnant, in-laws were coming, a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do. we called usaa. and they greeted me as they always do. sergeant baker, how are you? they were on it. it was unbelievable. having insurance is something everyone needs, but having usaa- now that's a privilege. we're the baker's and we're usaa members for life. usaa. get your insurance quote today.

with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer

and that these forests can be sustained and enjoyed by the community in the future. trump's brutally honest comments about how she handled the negotiations let's listen in. >> on his first official visit to the united kingdom. no two countries do more together than ours we want to deepen that cooperation even further to meet the shared challenges we face now and in years ahead this morning, president trump and i visited santos where we saw a joint operation. just one example of what is today the broadest, deepest, most advanced security cooperation of any two countries in the world whether it our pilots deterring the use of chemical weapons, our soldiers are the forefront of nato's presence in eastern

europe our neighbors in the pacific enforcing sanctions on north korea, or unparalleled intelligence sharing, partnership, thwarting attacks our security cooperation is saving lives here, in britain, in america, and right across the world. that partnership is set to grow with our integrating to a level unmatched anywhere and the uk, set to spend $24 billion on u.s. commitment over the next decade. today we discussed how we can deepen our work together to respond to aligned state activity, terrorism, and serious crime. in particular, on russia, i thanked president trump for his support in responding to the appalling use of a nerve agent in salisbury, after which he expelled 60 russian intelligence officers i welcomed his meeting on monday we agreed it's important to engage russia with a position of strength and unity and should

continue to deter efforts. turning to equipment cooperation over $1 trillion, we want to go further. we agreed today that as the uk leaves the european union, we will pursue an ambitious u.s./uk free trade agreement the agreement reached last week provides the platform for us to agree an ambitious deal that works for both countries across our economy. our deal that builds on the uk independent trade policy, reducing tariffs, and two of the world's most advanced economies, seizing the opportunity of new technology all of this will further enhance our economic cooperation creating new jobs and prosperity for our peoples for generations to come. the uk/u.s. relationship is also defined by the role we play on the world stage. doing this means making tough calls. and sometimes being prepared to say things that others might

rather not hear. from the outset, president trump is being clear about how he sees the challenges we face, and on many we agree. for example, the need to deal with the long standing nuclear threat of dprk, where the agreement in singapore has set in trade the prospect of denuclearzation, to which the uk is proud to be contributing expertise. all the need to address the destabilizing influence of iran in the middle east today we discuss what more we can do to push back on iran in yemen and reduce humanitarian suffering. all the need for nato allies to increase their defense spending and capability we saw significant increases yesterday. this includes afghanistan, i announced a further uplift to 440 troops an ongoing commitment to a mission that began as nato's only use of article v. finally, let me say this about the wider transatlantic relationship, it is all of our

responsibility to ensure the transatlantic unity endures, for it has been fundamental to the protection and projection of our interests and values for generations. with u.s. leadership at its foundation, its beating heart remains on democratic values and our commitment to justice. those values are something that we, in the uk, will always cherish as i know the u.s. will, too. it is the strength of these values and the common interests they create that we see across the breadth of our societies in north america and europe and that is why i'm confident that this transatlantic alliance will continue to be the bedrock of our shared security and prosperity for years to come mr. president? >> thank you very much thank you. prime minister, thank you very much it is my true honor to join you at this remarkable setting truly magnificent. as we celebrate the special relationship between our two countries on behalf of the

american people, i want to thank you for your very gracious hospitality. thank you very much. last night, melania and i were delighted to join you and philip for dinner at the magnificent blenum palace. it was a wonderful evening we won't soon forget. today it's a true privilege to visit historic checkers i've heard so much about and read so much about growing up in history class, and to continue our conversation, which has really proceeded along rapidly and well over the last few days for generations, our predecessors have gathered at this stunning retreat to strengthen a bond that is like no other the relationship between our two nations is indispensable to the cause of liberty, justice, and peace. the united kingdom and the united states are bound together by a common historic heritage, language, and heros.

the traditions of freedom, sovereignty, and the true rule of law were our shared gift to the world. they're now our priceless inheritance to a civilization. we must never cease to be united in their defense and in their renewal. before our dinner last night, melania and i joined prime minister may, mr. may, and the duke and duchess for a tour of the winston churchill exhibit at glennon palace it was after winston churchill phoned america after pearl harbor together, we achieved a really special, magnificent victory,

and it was total victory prime minister may and i have just come from a very productive nato summit that was truly a productive summit. my top priority was getting other nato members to pay their full and fair share, and the prime minister was right there with me. i want to thank you, prime minister, for the united kingdom's contribution to our common defense the uk is one of the handful of nations, five out of 29, not good but it's going to get better really fast in addition to the united states meeting the 2% gdp minimum defense spending commitment. during a summit, i made clear all nato allies must honor their obligations and i'm pleased to report we have received substantial commitments from members to increase their defense spending and do so in a