"squawk box" begins right now. >> announcer: live from new york where business never sleeps, this is "squawk box. good morning everybody welcome to "squawk box" on cnbc. we're live from times square i'm becky quick with andrew ross sorkin here to cover this historic meeting with president trump, we have nicholas burns, former u.s. ambassador to nato, and fred kemp, the ceo and -- thank you for being here today. >> we'll talk about the summit in a moment. but first, vladimir putin just arriving in helsinki president trump is set to arrive shortly. later this hour, they'll begin a summit that is expected to last 90 minutes we'll bring you more as it

happens. a check on markets the u.s. equity futures. indicated higher after two weeks of gains the nasdaq closing at a record high on friday you can see the nasdaq indicated up another 13 points the dow futures indicating up by 35 points. the s&p futures up by 1.5. over night in asia, japan's nikkei was closed for the marine holiday. growth came in at 6.7% that met expectations. but it was down a tenth of a percent from the first quarter print. the hang seng was relatively flat the shanghai composite down by .6 of a percent early trading taking place you will see a mixed picture dax slightly higher. the cac in france is flat. the ftse down by .4% the ten-year here in the united states yielding 2.83 4 2%

"the new york times" reporting that goldman sachs expected to name david solomon as the next ceo. he's currently serving as goldman's president. blankfein would stay on for an interim period this is something that's been signalled and telegraphed, reported on before but the timing earlier that some have expected. shares of goldman sachs little changed in pre-market trading this morning deutsche bank better than expect q2 results they expected revenues to be at $7.7 billion that tops expectations of $7.4 billion. shares are moving higher in germany and german trade >> our man in helsinki, back to the top story of the morning the summit between president trump and vladimir putin let's go live to helsinki where eam eam

eamon javers joins us. >> a little sight surveying and cultural research. i tweeted out in finnish over the weekend. a little bit of a different thing. you're looking at live pictureps we're seeing vladimir putin arrive he's arriving a little late. we expect him to make his way to the one-on-one meeting with president trump. they're going to meet together for up to an hour and a half one-on-one with translators in the room we're told. we'll see how that unfolds the president setting the tone for the summit meeting with vladimir putin saying our relationship with russia has never been worse thanks to many years of u.s. foolishness and stupidity and now the rigged witch hunt so the president blaming previous u.s. presidents, not himself for the bad relationship between russia and the united states also calling that mueller investigation the rigged witch hunt despite the indictment of 12 russian members of the gru on

friday by the deputy attorney general back in washington, d.c. that tweet, by the way, has been liked by the russian foreign ministry that is getting all sorts of attention in helsinki this morning as it appears that vladimir putin and donald trump are on the same page in blaming previous american presidents for the bad relationship both sides clearly hoping that they can get off to a clean start in terms of the relationship a lot of skepticism. a lot of the democrats wanted him to cancel this because of the indictments of the 12 russians the president brushing off those kwchlts he's determined to go forward here unclear what the deliverables will be. we'll see a joint press conference later this afternoon. helsinki time. at that point, we should get a read-out if what if anything has been agreed to crimea, syria, nuclear weapons are among the topics the question of whether or not

donald trump will raise that issue. russian meddling in the elections. he doesn't believe this is determinative of the election that resulted in him becoming president of the united states. you are -- back in the news with what looked like accidental -- it's funny seeing the commentary, which is just hyperbolic. eamon depending who you talk to. if you go way to the far left, he's a russian agent, president trump. he's going over to meet his handler and how to undermine democracy. i guess that cape out after the latest mueller indictments have you seen that, eamon? it's like some -- like he's

getting his marching orders. i don't know how he could be responsible for the bad relations when he's working for the guy. probably is not wrong to say that a reset is something that the united states would probably look for i don't know how you do it if you're trump without looking like you're too close to putin in the first place. >> that's a delicate balancing act for the president. not giving his american critics more fodder. at the same time, he's been on a fairly disruptive world tour here last week he was in brussels demanding that nato allies spend more money on defense up to the 2% commitment they had talked about. the president held an impromptu press conference at the end of his trip saying the allies agreed to spend more than the previous committed but others came out and said that's not true. we didn't agree to anything that was not put on paper the president gave an interview to a british tabloid before

going to london in which the british audience, anyway, felt that he had insulted theresa may by her handling of brexit. that brought a rare apology from president trump over the weekend while he was touring england disrupting the special relationship, saying it was more special than ever and the nato alliances and we'll see what disruption, if any the president does today. >> the presidential candidate from the other party went as far as to say, the world cup is over now that the president is going to russia, he needs to figure out which team he's on whether he's on the russian team or on the u.s. team. so that's not even daily beast that's mainstream hillary clinton -- >> talking about the hillary clinton tweet. >> tweeted that out. he has to figure out which team he's on. >> drive the white house nuts. they argue that the president is here to look eye to eye at vladimir putin and see if there

are ways to lower the tensions around this relationship and see if there are ways that the united states and russia can decon flikt and -- and crimea of course the white house says this is an important summit meeting between these two leaders to accomplish something. they don't like the kind of ankle biting that they're seeing >> it's tough. it's a tough line. silence on crimea will be interpreted by critics as being complicit in crimea. i don't know how he walks -- we're going to talk about that we've got unbelievable experts here. >> we're getting a couple of protesters here behind me in the square where we've been set up for our live position. we've seen both pro-trump and anti-trump protests. >> eamon, i thought they were protesting you. >> they're protesting trump. >> they don't know you >> they would be for me generally. >> javers go home.

no that's not -- that's good. we'll come back to you we have a live picture right now of president putin who is walking down the steps from his plane as we speak. for more on the trump/putin summit, let's bring in fred kemp who is here this morning the president and ceo, nicholas burns, former u.s. ambassador to nato and former undersecretary of state both are cnbc contributors thank you guys for being here this morning >> i just want to go through the headlines here you'll see the president sets low bar for putin meeting. that's the "wall street journal. the times says seat at table gives putin upper hand the washing fon post, low hope loose plan for trump summit. ft summit stress. indictment casts new light on trump's meeting with putin what can possibly go right here? >> first of all, this is a meeting, not a summit.

i wrote a book that looked at the vienna summit. it was dinner, it was wives. >> everyone is back and forth about whether it's a summit or whether it's a meeting i would just ask why >> nick has done this on the policy side. you can answer it. my own view is when you're meeting the head of government, head of state, it's a suchl immt in terms of actual dinners and all the -- >> pom and circumstance. >> don't forget that crews chaf considered kennedy to be weak. a year after that you had the cuban missile crisis bad things can happen afterwards they don't usually happen at the summits. we're looking at five baskets. one is arms control, you could have good news there syria, you already have the

russians moving in on the southwest. they've broken the cease-fire. they're supporting assad to move on there they would like to have assad recognized an the u.s. eventually get out so you have arms control, you have syria, you have ukraine you have election meddling and then you have the atmospherics of the whole thing i think it's worth watching whatever comes out on any of those five areas. >> talk about this idea of threading this needle. joe is right to the extent that there is a huge community of people in the u.s. very anxious about this meeting and what it means, how we're going to treat russia in relation to our allies and what's been said, whether about nato or theresa may or justin trudeau and how we actually get through. >> i think the president is right to meet trump. a lot of people will criticize trump for going to the summit. this is the worst relationship we've had with moscow before the

end of the cold war. you have to go back to the early '80s before gorbachev, no trust, no communications. given the stakes, they should know each other. >> because if you could get to that level of trust that you're talking about, there's going to be other people on the other side saying we can't trust that. >> too much trust. >> right now, united states should not be in a position to compromise on anything right now, you've gop got put annexing crimea. i think he -- from the secretary of state and secretary of defense if he did that and certainly from the allies. given the grand jury indictment, talking about a conspiracy about 12 russian intelligence officials, the first cyber attack from russia, which happened two years ago, there's been no response from the united states the president even in tweet doesn't acknowledge it he hasn't prepared the country so rather than just ask putin, hey, did you launch a cyber

attract against united states, he's got to go at him and warn him about consequences if it happens again. most members of the senate agree with that. that's the standard of what has to happen. if you look at the tweet, the president is tdenying there was cyber attack. >> but you think he should meet with him >> i do. you've got to have strength here and show putin there are consequences when he crosses a line whether a trump line or a obama line or george w. bush line. >> i was going back to george w. bush saying he could see into his soul you need to meet with him but you need to do what when you're there? >> you have to establish a relationship of expectations right now, two big lines have been crossed the annexation of crimea in 2014 and the cyber attack that's what it was it wasn't spreading fake news.

that's a detailed grand jury indictment that came out on friday it has to make us think about how we defend. part of that has to happen today. the president has to be strong on this. >> what are our allies thinking? what is china as they're watching this? what is the eu looking for >> there's a summit taking place at the same time they're drilling down on tariffs and may form a coalition as o. whan what they view as american protectioni protectionism. i think what our allies will be watching, if there's progress on arms control one of the most successful arms corolla greemts of all-time was the 1987 inf agreement ond medium range missiles. you removed them from europe russia looks to be violating what will happen there a renewal of the new start agreement which runs out february 2021. looks as though that's established level. that's positive. negative, some sort of trade,

syria for ukraine. where the president becomes softer and sanctions i don't know how he does that with congress having voted the way it does. where he seeds that assad will be in charge and he's going to allow the russians to move forward with their allies and that putin gives lip service to the fact that he's going to pull iran back from the israeli border and reduce iran's role in syria. i don't know how he delivers that positive arms control, negative syria -- >> i'm curious whether you think it will get raised >> i think it will putin will make him in the next couple of weeks much the russians have always been part of this. they're not as influential as is china. putin, you don't want him to be a trouble maker. i think ths an opportunity for donald trump in two areas. one is to get putin to buy into the strategy on north korea.

second, on nuclear weapons stability. you have to worry about that that's why you want these two guys meet. they've got strategic missiles and intermediate missiles and we need new agreements on them. >> if you could spend time with trump before the meeting on the election issue, how would you tell him to talk about it but also talk about it in a way that he could create this trust that you're talking about how do you both? >> the president is unwilling to you or i might say, he can point to republicans in the house and senate and say i'm going to face a rebellion among certain parts of my own party, if i don't raise this with you and have you commit there's not going to be a repetition of this attack or the president can say here's what woef to do if you launch another cyber attack on our elections. not just going to defend they have cyber operations as well. >> you saw coates. what was he talking about?

>> this is like the environment before 9/11 in terms of warning signs of what can happen with a cyber attract. is he saying russia could shut down our grid at some point? >> there's a new book out called a perfect weapon he talks exactly about this. what the russians do with it, turn out the lights in times square i thought director coates, this was a republican conservative from indiana, he came out swing saying we've got a major problem in trying to defend. that's how the president might go at this if he's unwill to do what we are people might say it has the numbers of the units in gru, the addresses of the units. the spoofing, the spear fishing.

this is a shot across the bow because it says, we know this level of detail. >> by the way, not just russian citizens they're involved in government. >> putin had said before these are on a private russia. kids, this says 12 members of the russian military. >> at this point, we had the discussion last week fun discussion people getting all up in armts about it what do we call putin and what do we call russia right now? do we refer to russia as the enemy? do we prefer to putin as the enemy? do we refer to him as the adversary, a competitor, the rival. do you have a good word for it >> i do. he's our adversary one of the most dane rugerous - he's not an enemy. an enemy is about who you're about to fight >> you're ready to go to war with your enemy. the adversary wants something for his own side and you want something for your side. >> two grades up from the competitor

i was asked by jeff glor yesterday on cbs, the eu is not a foe. >> economic foe. >> not even. >> chinese -- the media being a foe. >> that i agree with you >> i thought it was faux fa-a- x f-a-u-x. >> sustained, argumentative. withdrawn. do you ever get that ambassador burns >> frank burns >> mr. burns >> we'll be back in the next hour and fred is going to be with us until 8:00 a.m. this morning. >> okay. when we come back, one of the world's biggest air shows is currently under way in the uk. we're going to talk to the ceo of bombardier about the partnership with airbus. that is next right here on "squawk box.

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one of the world's biggest

air shows currently under way in the uk phil lebeau is there he joins us with a special guest. good morning, phil. >> good morning, joe it's a very busy air how we've had a number of big orders announced, especially from boeing we expect more from airbus all the major players. one of them is the ceo of bombardier we're fortunate to capture you a few minutes after you met with theresa may, prime minister of great britain. you met with her a few minutes ago. give us a sense of what you're sensing from her when it comes to trade and where things stand right now. >> thanks, phil. the purpose of the visit was to focus on our new partnership with airbus and visit the airbus 220s, which is the series in the aircraft. >> of which you're a partner now. >> obviously, given the topic, we had a chance to share our input and talk about the importance of global supply

chain. we're a global player for multiple countries around the world. i think that it was well-received. the importance of free flow of goods and services and people. so it was very receptive. >> have the trade tensions, whether it's the u.s. and canada, u.s. and europe, canada and europe and china, all of these interplaying actors, have your costs gone up >> we haven't seen anything like that yet obviously, we're tracking this very closely and monitoring it we're working with our respective governments where we have operations. and so far, i mean, we haven't seen any material impact. >> you're also close to what's happening with nafta negotiations being a canadian-based company what's your sense in terms of some type of a deal to be

reconstituted this year. do you look at it and say i don't see it in the foreseeable future >> i'm not at the tables i don't have the inside information. i would just say it's a good thing to have, like free trade between canada and the u.s we've been very good partners for many years it's benefited both sides and hopefully they'll find the right solution moving forward. >> crj market for you guys, the business jet market and the c series/a 220 with airbus, are you seeing any slowdown with demand right now >> no. the partnership with airbus on the c series, which is the airbus 220 will strengthen our ability to win more campaigns. there's actually an increase in campaigns right now and this is very good. i think we can benefit

tremendously towards trade, for shareholde shareholders we're seeing an uptick after many years of flattish demand. it's starting to go up we're very optimistic about that on regional jet market, i think that there's like good momentum in the regional -- in this regional jet market. we see a demand for roughly 3,000 aircraft for the next 20 years. we think that should be good. >> alain bellemare, the ceo of bombardier what we're hearing from alain is from all the ceos. if you thought there was a downturn in aviation market, commercial, aviation, they're not seeing it. the orders continue to come in back to you. >> okay. phil, thank you for bringing us that interview while you were speaking, black rock reporting their earnings. >> 666 for the second quarter.

>> 666 >> beating them by 11 cents. devilish on the upside the result helped by growth and fees and larger profit margins as well as lower tax rates of course, there's long been questions about whether you can not only increase the margins but hold the margins on this business boy, have they held up when we come back, a lot more to talk about president trump set to meet with vladimir putin in finland this morning. we'll continue to monitor the summit not calling it a summit. calling it a meeting depending on your nomenclature. >> we'll bring you highlight as they happen. amazon kicking off their prime day. get ready to click there's a big sale coming up as we head to a break, a look at the winners and losers

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♪ >> announcer: welcome back you're watching "squawk box. live from the nasdaq market site in times square. good morning welcome back to "squawk box. among the stories front and center president trump expected to begin a summit the white house calling it a meeting with vladimir putin this hour it's expected to last 90 minutes. we'll show you any developments

as they happen goldman sachs expected to name david solomon as the next ceo. blankfein will likely stay on for an interim period. we'll hear that news as early as this morning bank of america expected to talk about quarterly results. we'll have reaction from wall street u.s. equity futures at this hour amid this summit dow jones looks like it would open higher. s&p 500 -- i like that it was in the green before it turned red the nasdaq up as well. amazon's prime day kicks off at 3:00 p.m. eastern time. the holiday generated $2.4 billion last year. joining us with the expectations for this year is courtney reagan. >> every year prime day gets bigger and bigger. prime day is going to be six hours longer this year than last. 17 countries are participating this team. four more than what we saw in

2017 plus, there will be deals at whole foods stores and on amazon.com this time around. there's more than a million deals in total compared to hundreds of thousands of deals in 2017. what's it all worth? research predicts $3.4 billion will be spent on amazon on prime day. that is up from 2.4 to $3 billion last year. remember, it is longer now last prime day was amazon's biggest day ever at the time four months later, though, amazon did set a new record. still, it pales in comparison to other shopping days. black friday brought in $5 million. cyber monday, $6.5 billion prime day sparcompared to aliba singles day. it's not a zero sum day. this is interesting. retailers actually benefit from the elevated attention to online shopping

e-bay, macy's, koils, target they plan to shop on other retailer sites this year that's up eight percentage points from the intent last year adobe says that last year retailers with a billion dollars in sales or more big retailers saw online sales increase 35% on prime day. becky, back to you. >> court, remind me. this is a relatively new phenomenon when was the first -- >> this is the fourth prime day. the first one in 2015. >> they wram ramped to that much in a few years >> it's third party seller sales is a part of that. >> total spent on the website on that day. >> news you can use. help me. what kind of stuff is for sale electronic stuff >> typically electronics

that's the biggest category. almost every year what ends up being the top sellers. amazon's own devices three of the top five were amazon devices market track did a quick look at the deals. we really just started to get the list this morning. just about three hours ago >> can you send it to us >> yeah, i will. the amazon device rs on average 42% off from normal and other items about 39% off compared to normal prices. >> i need a new kindle, good. >> joining us now to talk more about this is michael graham he's senior internet analyst and michael, thanks for being here. >> i used to tip my hat to haul mark for making up holidays like valentine's day. this is one and above of all that >> prime day, the sales that amazon gets out of prime day are important. the bigger thing, it draws attention to the prime offering,

the prime ecosystem. drives more prime subscription signups. as mentioned in the segment, amazon is in a bunch more countries. all of them are on average 50% cheaper in terms of pricing for amazon prime for an annual subscription they should have a bigger impact this year than before. we estimate around 110 million global prime subscribe eshs. over 50 million in the u.s >> this was a big issue for wall street earlier this year when amazon flexed its muscles saying it would raise price that is it charges for prime membership it doesn't look like there was any push babbback from prime members. it's almost as if they're willing to pay whatever you ratchet up to. it's not like net flick where they raise prices. >> the netflix subscribers, that's a different animal. as jeff bezos said, he wants to

make it so compelling that it's irresponsible for a household not to use prime it combines so many benefits, like your media subscriptions, costco membership and other things like that i think the fact of the matter is, in the u.s. that's a really attractive price point for all the benefits you get the benefits are extending i was in whole foods this weekend and the cashier there was trying to get me to integrate my prime app with the whole foods app. so the reach keeps extending. >> michael, hold on for a second this is russian president vladimir putin arriving at the palace in helsinki for the summit i believe president trump is scheduled to arrive sometime in the next eight to ten minutes as well we'll keep an eye on that. vladimir putin arriving for the summit we saw his plane set down at the top of the hour. we'll continue to watch this president trump is expected to arrive soon. >> better than kim jong-un's plane. >> that wasn't his plane

it was borrowed. >> putin but -- >> the air show, phil can pick out -- >> i have an amazon prime question for you this is, again, selfish question i read a blog post by a fellow who literally went through his amazon prime subscriptions to figure out whether he could replicate what he was doing at a cheaper price basically on walmart and all the other places now that he can store his credit card in the web browser, whether he can make the whole thing work -- >> was he -- >> the question is, what do you think the upper tier -- by the way, he was a single guy, no family. >> what about video and the rest of that? >> he didn't have amazon but he had netflix and he was trying to replicate the whole thing without -- >> a guy with a lot of time on his hands. >> by the way, he would have more time. he explained at the end, it took more time to get these better

prices by really doing a constant search for everything, which is at this point by the way i'm constantly buying and i'm almost price insensitive on some of the things. >> is this a lost -- >> increasingly, the difference is shipping. you'll find prices on other websites that are comparable to amazon's, when you factor in the free shipping you get from prime, then it's a better deal. >> do you think we'll get to a point where people using technology will be able to replicate something close to the experience at a cheaper price and at what price point does that happen? >> the portals and the search engines and the browsers, america online and yahoo and google over the years have tried to create sort of omni web shopping services. so far they haven't worked. >> can i throw in the thing the hardest with that, i've tried to do this, to buy things from other site you can't guarantee it will be will in two days or a day. i tried to order something

recently from a competitor, a big competitor, they promised me it would be there by a certain date it was for my son's birthday party. prime says they're going to get it there, they get it there. >> they do >> i'll ask you a question on the international. that surprised me that there are more prime members outside the u.s. than inside the u.s talk about today's international play, 3.5 billion, do you know how much is international. for amazon, by and large, is that going to be the bigger growth area for them >> for amazon, well over half of overall sales is international probably skews to the u.s. just because that consumer base is so entrench entrenched prime is priced differently. like in india, it's $15 a year relative to $120 in the u.s. clearly, amazon has been stepping on the gas in a big way, largely in india lately they see that as a big opportunity. there's more competition generally globally they weren't as early into the

mafrkts. they have to fight a little harder they're fully committed to a lot of the markets and they do well in western europe and markets like that. >> you're an internet analyst or retail analyst >> internet. >> you do a lot of retail. >> retail analysts we have found are -- they go to great pains, they are dandies andrew, you got to see this. >> what's he gost got going on >> you are so put together this is a beautiful sports coat. >> look at the socks and the shoes. they're like your blue suede shoes. >> it's summertime. >> the shirt matches you're not a retail analyst? >> no. but maybe i should branch out. >> you're talking about prime, that's like retail, isn't it >> yeah, it is. >> looks like tom wolf half the time we had another guy on, i don't think you were here last time when we talked about this. do you remember this discussion? these retail analysts and

courtney -- >> i was here for that. >> she was going to out one. but she didn't this guy goes -- putting things together all night long. mixing, matching. >> it's the scheme patterns. >> that's what i notice. >> did this myself, too, sir. >> honestly. >> yeah. >> not in the dark we're expecting quarterly results from bank of america in the next few minutes and the reaction on wall street. later, we'll head back to helsinki for a live report from the summit between president trump and vladimir putin stay tuned iss everyday thing in the news but big today. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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and you saw breaking news banner still up there. president trump and the first lady just arriving now at the presidential palace in helsinki. they're going to sign the guest book often you will see that. participate in an official greeting before president trump goes to that one-on-one meeting with russian president vladimir putin which is expected to last

about 90 minutes how long it lasts is also -- will be watched closely. there's a lot -- you got to fill me in on the conspiracy stuff. now it's like the translators. we got to make sure we have honest translators. >> that's true. >> you have to make sure who geds t gets the read-out gets it right. >> putin and the translators, they may go over all of what trump wants him to do. there may be a list of things. >> down the list. >> how will we know? the ladies on the view will know they know a lot about what's happening here. >> who are the taor the talkings on "squawk box." one of the two. >> the meeting will take place in moments bank of america just reporting, wilfred frost has the numbers. take it away. >> it's a beat

revenue is expected to be 22.3 came in at 22.6 billion. eps expected at $.57 per share came in at $.63 per share. once again, showed good operating leverage they were expected to show good operating leverage it's been a theme for them over the last sort of year or so. operating leverage of 6% is sort of line with what was expected expenses down at 5%. they continue that theme of cost cutting. the return on tangible equity in the release seems impressive at 15.2%. i think that's a slightly different measure to what some analysts usually look for. either way, that measure is an improvement of 4% compared to a year ago strong number of returns if we look at some of the trading performances, equities stands out that's up 17%. we were expecting an improvement of single digits that's the sort of beat in the trading revenue. the fixed income, commodities

and currencies is slightly higher year over here. investment banking revenues coming in at about 1.4 billion perhaps a little light expectation was for about 1.5 billion. a lot of people looking at what provisions are and whether loan quality is getting worse provisions for credit loss is about 100 million. perhaps something to watch but nothing severe from them will be a theme to look for, particularly on the deposit -- i haven't got those numbers yet. how much more they're paying for deposits they continue to grow the volume of deposits either way i'm sure they'd argue if they have to pay more, the deposits are still coming in either way on the surface, looks good share price, they were down in the pre market before the numbers hit. down three quarters of a percent on friday. up about half a percent. we turned around half a percent since the numbers got out. >> wilf, squaring the circle,

can't really do that turning to something we've been talking about. were you able to watch any of it yesterday? was it too painful >> i was in the air. i was unable to watch any of it. >> you missed the highest scoring game in -- i think maybe seven goals is the highest ever. i watched the entire thing, wilf >> there was action. it was really good >> wait. are you now a soccer fan, joe? >> i guess i am. >> oh, my gosh there's one thing to come out of things, that is -- >> it might be. >> it was great. i like those croatians i mean, france, at one point it was 4-1. i mean, it was -- >> i know. >> huge achievement for croatia to get that far. kudos to the french. a second world cup title. >> real quick, what do you make of the goldman news we're hearing about. >> interesting kate kelly suggest thag it could

be as soon as today. andrew, when we've been discussing this, we thought it would be this year, the transition perhaps late summer as opposed to early summer. i think when i interviewed lloyd back in april, he said that david still needed to learn more before they could hand over. when i spoke to sources to sourt david, that wasn't so much learning about the individual parts of the business which we knew well, it was more about learning the sort of financial pipes. of course, harvey schwartz, his contender, was the cfo so he really had a handle on that the timing is now, that means the board thinks lloyd is ready to take over remains to be seen if it is today. internally they have a management committee meeting this morning at 7:00 a.m that's when they could decide to announce it. we have to wait and see. they report earnings tomorrow. that's another timing factor to consider >> wilf, thank you very much also a programming note for you.

don't miss jim cramer's interview with brian moynihan. that is 6:00 p.m. eastern tonight. time now for the executive edge we're going to start with a look at the week ahead. today look for june retail sales. tomorrow, industrial production. then later in the week, housing starts and the fed's beige book on the earnings front. netflix reporting after the bell today. and we could hear about loil blankfein tomorrow if it doesn't happen today then j&j and united health morgan stanley, american express. and thursday we get travelers and microsoft. friday we hear from -- joe, you ready for that one general electric friday. >> can't wait. stock is up a little up a little last i looked. i do watch it. i don't know why $13.89, actually is it a turnaround it's a new guy we'll see what happens

i don't know what it's going to look like. it's not going to look like a dow component. >> you can't do the kitchen sink anymore. i think they've done that already. we told you about black rom's earnings beat. the firm earned $6.66 a share for the quarter. revenue also better than the street was expecting they talked about revenue growth 11%. that was helped by base fees, performance fees, technology services revenue then operating income, up 16%. if you look at eps, up 20% on a diluted basis. that was helped by all of those things we mentioned but also part of the lower tax rate maybe the amazing thing, total net inflows at a time the industry has seen slowdown in flows coming in. $276 billion in inflows over the last 12 months shows you a little bit of the power there. when we come back, we are waiting for the meeting between

president putin and president trump. it's expected to start shortly we're going to get a live report from hsii.elnk that is straight ahead right here on "squawk box. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered...

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good morning, everyone welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. we are looking at live pictures in helsinki. this is where he's going to be meeting with russian president vladimir putin you see he is walking in the steps of the palace right now. we saw that president putin arrived, oh, just about 20 minutes ago. there's the president and the first lady arriving walking up that same staircase. that summit between the two is set to take place shortly. it's expected to last 90 minutes. fred kemp is here from the atlantic council and is watching with us. a quick thought on what to expect coming out of this. >> the best outcome for the united states would be a stalemate. what i mean by that is four days after the sochi winter olympics, you had the annexation of cri a crimea now we're after the world cup and after the summit you have to watch what comes

next putin continues to surprise us he surprised us invading georgia, annexing crimea so there's worry he'll do something after the world cup and after the trump summit he plays a really bad hand well. let's not forget, he's got 8% of the u.s. gdp you know, per capita income is so low and the economy is so weak but yet, look how he's being treated. >> we're going to talk more about the russian economy in a bit. e mamon javers is standing by there with all of this >> reporter: you see those pictures of president trump. you also saw pictures of vladimir putin arriving for this summit what strikes me in watching all of this and being on the ground in real time is all the little details of this summit there's so much emphasis on the big headlines. we've got this apparent dualing delays here. putin touching down a little bit

late and the president required to spend nearly an hour waiting in his hotel before coming over here now there's some question about whether the president has been deliberately delayed as well here that could be gamesmanship, logistics as well. i saw a little gamesmanship on twitter. the president putting out a tweet early today in which he appeared to blame previous u.s. administrations for the bad relationships between the united states and russia. and then the russian foreign ministry a short while ago within the past half hour tweeted out this linking the president's tweet. we agree apparently they're on the same messaging point here going into the meeting. that's what the russians want to suggest to the world just behind me i don't know if you can hear some of this. we've got a group of protesters here we've got protesters all over helsinki not huge groups. relatively small groups. this group is concerned with an issue related to southern

cameroon we've seen a religious group, a whole host of people taking the opportunity here to use the global stage helsinki has become to broadcast their issue that's what's going on right here behind me in the square >> all right, eamon. thank you. we're going to continue along this -- with this discussion here joining us now american enterprise director of russian studies leon aaron fred kemp continues with us. and nicholas burns, former u.s. ambassador to nato former undersecretary of state leon, i'll start with you with this premise it has been put forth that president putin who's very popular in russia, a lot of that is derived from his ongoing narrative that i don't know whether i'd say america is the enemy, but that russia has been responding to threats from the united states. and he's gotten more popular by

saying we're at war economically or geographically. that's part of his appeal to, i guess, harkening back to the glory days of the europe european is there really a chance for putin to look like he's getting along with president trump will he do that or is it seen as a sign of weakness >> it's a good question. putin has to walk a thin line here you're absolutely right. i would not mince words. it's not just part of the appeal the dual narrative, russia is at war. it's not a direct war. it's a cultural cybernetic and all other kind of wars putin's popular is due to two

narratives one, the west led by the united states is at war with russia and he will restore it to at least some of the lost glory of the soviet union my sense is he cannot make any substantive submissions. he would like to have his proverbial sit-down with the president of the united states which is already a great boost to any soviet or russian leader. secondly he would like to have the optics of it to show that as he put it by the way in the speech on march 1st, they would not hear us, but now they do so this is putin's goal in the summit >> wonder, both of these guys in -- i've never met putin, obviously. but both these guys in person can be very gregarious and sort

of charming and they can win people over. what happens when these two guys get together what if they -- what if there really is a beginning of, like, a bromance we know that putin certainly won over w what was he? 43 won over 43 with his personal charisma we've all seen the jujitsu shots riding bare back shirtless and things like that i wish i could listen to what goes on there. >> beginning of a beautiful friendship, huh? look, i think it's all theatrics and stuff. at bottom when these leaders meet, 90% is driven by the geopolitical necessaries and

goals. another informal agenda-less summit that puts this two nations or the leaders of the two nations meet at the time where there is really nothing to agree on and nothing to sign. not just treaties but even agreements that four-part agenda. you know, nuclear non-proliferation, arms control. all of that stuff that used to provide at least some type of ritual for these summits the goal is either opposite or russia won't do any of this. so i think, yes. definitely there'll be slapping of the backs and pressing of the flesh. for their domestic audiences, this looks good. i don't think there's going to be any substantive agreement >> i may disagree with that a little bit because there may be an agreement and the one-on-one

period is, i think, fraught. the reason you don't do one-on-ones is you don't want to have concessions misunderstood as concessions and you don't want misunderstandings. there's enough going on regarding crimea and ukraine and enough going on regarding syria. and enough regarding arms control that signals can be sent and the difference is -- and i don't think it'll just be theatrics. maybe more that way for president trump. but vladimir putin goes into these meetings as a meticulous planner. the president weans it a little bit more and he's going to go in there knowing what he wants out of it. he studied trump for 18 months he looks at psychological profiles the way a kgb person does so that's why i said earlier that stalemate could be a good outcome. if there's no agreement, i think that would be a good outcome the signaling here, you know, i wrote about the '61 summit between khrushchev

and things turned out badly after that >> exactly and the idea here precisely that the best outcome would be do no harm because, indeed, putin is going to listen very carefully and shall we say the president of the united states is given to some verbal problem. should russia be rejoining g8? it's one thing to say this off the cuff, among friends, among allies but i would not try to sow any in putin's mind. >> i just say the goal to diplomacy is not being friends, it's not getting along it's getting your way. and what we need to do at this summit, i think if you talk to pompeo and mattis, is push them back warn them on a cyber attack. that's the most important. >> you agree that the approach

that you just described -- this idea you're not supposed to be friends is at odds with trump's approach to life which is we have to be friends >> yeah, it is >> right he wants to be friends with putin. by the way, also wants to be friends with the leaders of every country if possible unless he doesn't >> look, i give trump this i think he was right to meet kim jong-un. we may not see much from it. he's right to meet putin we have a channel. even if you have a negative relationship, you need a channel. >> would you agree with the idea of having other people in the room >> i would you have interpreters. our interpreter will make notes. but it's not going to be definitive you need someone like john bolton or mike pompeo in the room to listen and make sure the russians don't twist what trump says >> do you think there's going to be a recording of what's said? >> no. we don't record diplomatic meetings. >> you never do? >> we never do >> you don't think someone secretly does. >> the kgb will have one

>> we have senators in moscow a few weeks ago. they were complaining after their meeting it was said that they didn't really raise the election meddling issue much at all. they of course say that wasn't the case at all. this is the problem with no one else in the room is both sides can portray it the way they want to to a certain extent this protects president trump what i also say, nothing's wrong with wanting to be friends i think president trump didn't get close enough to other foreign leaders. but i think president trump can also send tough signals. i think that was a good thing coming together. and he has to be friends on the outside but as you said, signal on the election meddling and ambassador huntsman, a friend of both of ours, said ahead of this meeting that would be a unique opportunity for the president to do that. his tweets aren't indicating >> leon? >> well, i think there is

definitely a need for the two leaders to meet. there hasn't been a u.s. summit since one came to see obama. so all of this is good provided that president trump does not go and meet, as they say, putin halfway. putin will definitely be looking for it on sanctions, on ukraine, on syria, all of those things. provided that the president is well briefed he knows where to draw the proverbial red lines i think there is no harm coming out of that meeting. and potentially there is going to be some good stuff. >> now we're looking at a live shot of the presidents meeting here see if we can -- you know, we don't have a body language expert with us i'm sure the other networks will do this in hindsight

president trump's not -- both look very, very serious. haven't seen the hand shake yet. maybe it already occurred. but you can hear the gaggle of photographers. >> what they call the spray. >> the smile so it is beginning it is beginning in earnest leon, you said the last summit and i was thinking about that. was that really between the top leaders of the united states and russia because it wasn't putin. >> well, it wasn't putin but pro forma, medvedev was a place holder but it was the last full-blown summit, indeed >> pro forma >> discussions between putin and obama and now putin and trump. it was not the first time they've met.

>> this will go on for awhile, i guess. then they will be sequestered and i don't know >> must be their interpreters on either side of them right now. >> exactly >> -- a really great world cup one of the best ever from what everybody tells me, one of the best ever. also for your team itself doing so well. i watched quite a bit. in the united states we a call it soccer and i watched quite a bit of it. i watched the entire final and the semifinals they were really spectacular games. but it was beautifully done. so congratulations on that

most importantly we have a lot of good things to talk about and things to talk about we have discussions on everything from trade to military to missiles to nuclear to china to -- we'll be talking a little bit about china our mutual friend, president xi. i think we have great opportunities together as two countries that frankly we have not been getting along very well for the last number of years i've been here not too long, but it's getting close to two years.

but i think we will end up having an extraordinary relationship i've been saying and i'm sure y you've heard over the years and as i campaigned that getting along with russia is a good thing, not a bad thing. we are the two great nuclear powers we have 90% of the nuclear and that's not a good thing. it's a bad thing and i think we hopefully can do something about that, because it's not a positive force. it's a negative force. so we'll be talking about that among other things.

and with that, the world awaits. i look forward to our personal discussion which i think begins now. and then we're going to meet our whole team you have quite a few representatives. we all have a lot of questions we'll come up with answers it's great to be with you. thank you very much. thank you, everybody thank you.

thank you, everybody thank you very much. >> okay. that was the introductory statements we heard from president trump and russian president vladimir putin let's get back to eamon javers in helsinki about what we just heard. eamon, you know, these are formalities at this point. but anybody who was looking for a tough message coming from president trump didn't get it there. >> reporter: yeah, a couple of things stood out to me the stern faces on these leaders here you get a stens both understand the stakes for them internationally and back home. also struck by the fact the president opened with a bit of flattery congratulating president putin on the world cup. and the president brought up a topic that hasn't been that much discussed when listing what was on the agenda today. a lot of folks focusing on

ukraine and syria, but the president also said they'd be talking about china. what exactly does president trump hope to accomplish with putin in terms of china? of course the president's been sort of triangulating against china in terms of trade. does he hope to leverage russian support in terms of trade. that was one of the topics that hadn't been the focus of many people going into the summit >> let's talk a little bit more about that, ambassador china coming up. that is an interesting play. as fred mentioned earlier you have china and the eu meeting at the same time. >> i'm not sure it means much. it may mean they want to talk about it there was no mention of crimea no mention of the indictment and the russian meddling

now, trump doesn't acknowledge this at all. but that was a weak opening by the president. given all the problems in the u.s./russian relationship, you take the opportunity publicly. any previous president would have to list the areas of disagreement >> the question is, could you have done thatand then continued to have a friendly discussion how would you have approached it i'm not saying you shouldn't have done it >> leaders disagree all the time putin would respect trump more if trump was more frank about our differences. i think petutin feels is weak in the way he's framing this relationship it's not what reagan would have done >> you can do it in a diplomatic way. you can say, look, this is a bad relationship right now we have to improve it. the areas where we can do a good amount of work is ukraine and crimea and -- >> you mean simply listing it. because he did say our relationship as not been a good one over recent years. >> you know, these indictments are the elephant in the room

because right now it's no longer debatable that there was intervention from the russian side >> so you think he should have said straight up we're going to have to talk about what's happened here. >> yes this is an issue in the united states we're going to be talking about it and at least you wouldn't have all of us now talking about why they didn't talk about it. >> leon, do you buy that i don't know the opening remarks, i was not expecting to hear that would you have done that right off the bat? just looked over at putin and said you hacked our election, we need to talk about it? >> of course not there is a -- there's a proto l protocol you do pleasantries and then you start real hard stuff w one-on-one as pleasantries go, he did mention a few things that indicated disagreements, world cup, well, he did not thank putin -- or he did not praise

putin on his re-election at this point. so that's good world cup, we all watched it i enjoyed it i think it's a perfectly acceptable initial pleasantry. >> okay. all right. we appreciate that thanks, leon aron. fred kemp. burns will be staying with us throughout the day on cnbc as the trump/putin summit unfolds we'll get a -- it should be interesting to see what comes out. it's happening right now it should last maybe 90 minutes. >> take a second look at it maybe before the end of this show >> or maybe not if it goes longer we'll see. >> we will >> okay. coming up when we return, financials in focus. blackrock, bank of america we also have some news potentially coming up either later today or tomorrow related to goldman sachs and lloyd blankfein's successor. we'll give you a recap of the numbers. also wall street reaction.

futures right now as president trump and vladimir putin speak in their summit. dow looks like it would open up about six points higher. nasdaq five points stay tuned you're watching "squawk box" here on cnbc

♪

welcome back to "squawk box. blackrock out with second quarter numbers this morning the asset management firm earning $6.66 a share. beating consensus by 11 cents. overall profit more than 25% from a year earlier. revenue also beating street forecasts. and reporting this morning, bank of america earning 63 cents a share. that was 6 cents above estimates. revenue also above for bac bank of america's ceo brian moynihan will be jim cramer's guest tonight on "mad money. that starts as you know at 6:00 p.m. eastern time. one of the world's biggest air shows is currently under way in the uk. phil lebeau is there and he joins us with a special guest. phil, good morning again >> reporter: good morning. i'm joined by the ceo of qatar airways. let's begin first off the qatar

executive jet. are you finding you have a number of your customers saying i need more than just a qatar service in an airline. i need it with an executive jet. >> it's very strange more and more people are not choosing to fly with qatar because of the standard we give them we already provide very high standards on our airline so we see a huge uptick. this is why we're buying so many of the corporate jets. >> reporter: it's been a very turbulent year for qatar airways. in terms of traffic, the relationship to those near qatar. >> forget about the relationships with the neighbors. let us talk about the more positive things. you can see our traffic is growing again, we are expanding. we continue to introduce more network. we have six aircraft here. one of them is, of course, our s subsidiary in italy.

and we had buying more airplanes. things for us is still really positive and we will continue to make sure we don't let things that is politic in nature to draw us down and we keep on expanding. >> but open sky is one of those political things you've got that resolved now, correct? >> all these people that spend millions in lawyers fees, what did they achieve we were already publishing accounts we don't want -- you know, we are not operating freedom from europe so they were creating a story about not being done by qatar. so we are happy president trump decided to end this fiasco that we were all getting through and wasting our time, wasting our energy, wasting our attention. >> from your perspective, what do you think of president trump? >> well, you know, i have always said that he is my friend. and in friendship you have ups

and downs. but it doesn't mean anything he's doing a good job for his country. i will again mention he wants to do what's best for his people. >> reporter: one last question for you. you created a stir for your comments about female executives on whether or not they could run an airline when you moved into the -- >> no. i think it was taken out of context. >> reporter: you did say that a woman couldn't run an airline. >> there was a lady sitting there that my first sentence she immediately tweeted and it got viral. but all the positive things i then said about the ladies was not taken. i am also creating new things for ladies and to announce so i really didn't say it in the context it was taken i didn't mean it in that negative way >> reporter: you believe a woman could run an airline >> well, there are many womans

now running airlines we have woman sitting on the board of governors and we are promoting more women to come take senior management positions. >> reporter: the ceo of qatar airways joining us here at the international air show guys, back to you. >> phil, thanks. coming up from earnings to economic data. as we head to break, take a look at u.s. equity futures stay tuned bcu're watching "squawk box" o n cn ron! something's going on at schwab. oh really? thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

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♪ good morning welcome back to "squawk box" right here on cnbc among the stories front and center this morning, we'll get the latest read on retail sales. looking for a jump also netflix with quarterly results after the bell today

expected to report profit of 79 cents per share on revenue of $3.9 billion that stock up about 150% over the past 12 months just remarkable. also u.s. economists maintaining a bullish outlook for corporate sales. new information shows that most think that sales will grow over the next three months. as will hiring levels. a majority of respondents said they were delaying investment and taking other response to conflicts with other countries something to watch for there let's turn to the broader markets right now. the futures have been in the green. joining us right now is anastasi anastasiya omoroso also jason drandao. all of these tariffs that have -- the first have been

implemented. now we hear of more looming out the there. >> i think they're trying to move on from trade war noise and they're doing so successfully because of now in the earning season if you look at the fundamentals of the u.s. economy, they're incredibly strong. where there's a consumer side, corporate side, there's a lot of support there. i think also china not coming back and immediately retaliating against the threat of $200 billion, i think that's also been a positive development. so that's why we've had this sense of resiliency going forward. i do think, also, you know, looking at the yield curve, i think some of those fears are overdone as well even though we're 25 basis points -- >> the flattening-year-old curve. >> yaeah. we still had positive returns a year out from an inverted yield curve. i think a all of these things together lead us to believe this has strong fundamental report.

>> i thought for awhile it would be hard to be selling off stocks yao goi you're going to see numbers with better expectations. but you are still concerned about the trade talk out there >> i think the market's underestimated that. we've seen the equity markets do very well. it's almost discounted the risk at this point in time. what we've seen is any time we didn't think we'd get an escalation, we've seen an escalation i think that was sooner than the market expected. and also the market didn't expect an investigation. there's not a lot of concern right now about the auto tariffs. so to me it's not so much that's the base case you're going to get it. >> but if you start thinking about the long list of worries you can have at any point, it's still tough to turn your eye off a strong economy and companies performing very well and they have a good tax backdrop do you get nervous telling people to drop out of this

>> we know summer is a lighter trading season you're going to get the extra tariffs on china it creates an environment where there's higher volatility. but there's no denying that. >> you've been watching this stuff for a long time looking at international relations, looking at the list of worries but also watching how economies perform >> you have new territory in the fact that so much has moved globally in a positive direction. but i think you're seeing some weaknesses in emerging markets right now. i think one has to watch that. i think the trade issue is -- how often have you had the head of the fed give a warning on trades when the president is moving in a more protectionist direction? i'd be interested in knowing how one factors this is. the chinese are going to have to respond at some point. they may respond to companies operating in china they may not do it through trade

measures, but they may do it through asymmetric trade >> i agree with both of you. this is by no means over yet i think because we had this temporary lull in the trade uncertainties, i don't think they're over yet you're right there will be a focus on the auto tariffs there's not been a whole lot of movement on the china/u.s. negotiating front. at some point there has to be progress or has to be to your point retaliation. how do we think about this in terms of market contacts and what we've told investors is we want to hold the positions because the fundamentals are there. but we want to hedge selectively. if i look across the universe, tech, industrials are the two sectors that stand out to us >> on the u.s./china front when president trump said they were going to talk about xi, that was a signal to president

xi, no >> it was mysterious none of us expected that to be in the opening statement i think we're surprised election meddling isn't there we're one of the three big guys. and his wording was our mutual friend president xi. he also then said trade in the same breath. >> yeah. but it wasn't, we're going to speak about china. we're going to speak him it was very personal what was that? >> well, that's -- they both spend a lot of time talking to xi so i guess they'll compare notes. the other thing i think is worth watching is where russia is a superpower is also energy and energy pricing you've seen the saudis and the russians coming together and the u.s. really -- that may come up in their talks about emergency -- >> one of the things that happened as the u.s. pivoted

away, russia pivoted to china. there's now stronger trade linkages and energy linkages of course china, one of the things it would buy from the u.s. is energy in addition to soybeans this is a bit of an adversarial look >> we haven't mentioned the fed. is that the thing we should really keep our eye on in terms of what ends this rally sfl. >> once we take trade away as we look into next year when the fed raises rates from this point on, that becomes the risk to the cycle. that's going to be underplayed a bit right now. >> i want to thank you both for being here >> you notice we don't talk about six different fed people speaking every week now. >> no. i wonder if we're taking our eye off the ball though. >> no. this is the way it's supposed to be get out of my life, finally. poor leisman, i feel bad for him, but there may come a time it's the actual economy. central bankers -- >> why were we thinking about trade, these other things when it's really the fed that does

what it always does and ends a rally. >> we have to normalize. >> what's normalization? this is the conversation we need to have. >> doesn't matter in a strong economy. they just weren't as important as we thought. in an emergency situation, you need the fed a little price stability, figure out where rates are. how many of them are there every time they utter a sound if they scratch themselves differently, we think it means something. it doesn't mean anything. >> it doesn't until it does. coming up, the inside line on bank of america and later today, don't miss ceo brian moynihan on "mad money" with jim cmerar. stay tuned you're watching cnbc

. coming up, continuing coverage of this morning's historic meeting between president trump and russian president vladimir putin much more live from helsinki is still ahead. plus netflix set to post quarterly results. we'll look at the content it hopes can be a game changer. shares up 108% so far this year. stay tuned

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netflix reporting quarterly results today. joining us with more on the company and where it's going is cynthia middleton managing editor at variety. >> good morning. >> what should we expect this afternoon and what does it say about everybody else out there >> the degree to which netflix has influenced the entire paid television landscape is really stunning in the last couple of years. even in the last couple of months last week netflix set a new milestone. not as much of a quantitative milestone but a qualitative milestone in leading this year's emmy nominations for the first time knocking hbo out of their number one perch they've had for 18 years it's really stunning >> in terms of the amount of money they're spending $8 billion is the number they've said there were a number of analysts that said that number may be bumped higher. do you believe that? >> there's often been a lot of talk about off balance for the

season it's been very opaque. it's been hard for people to understand how financing this just tidal wave of programming, so many shows that even the chief content officer has said, you know, it's even hard for him to keep them straight. to just know what's coming up and how much is going at any given time so they're -- >> does that suggest long-term -- you think they continue to spend this kind of money? or you think at some point they say, okay, this strategy of trying to push every competitor out of the way has worked to some degree. now we'll scale it back a bit. >> we're already seeing that a bit in they are canceling shows whereas before they would have shows come on and run for multiple seasons even if there was a sense they didn't have a large audience so you're seeing them get a little more selective about the programming they have. but in terms of slowing down the message they are sending to the creative community in terms of what they're spending, the

enormous checks they are writing to lock up top producers in deals, it doesn't seem like they're slowing down >> is there anybody that can compete against that hbo now part of at&t john stankey, there's been conversation about will they get more cash to spend and invest against netflix, what you think amazon will ultimately do? >> at&t -- part of the rationale of the deal from the time warner side was they promised to invest in hbo and give them a little more of a fighting chance against netflix. but they're not talking. hbo now has a programming budget of about $2 billion. i don't think they're talking about adding $6 billion to give them a level playing field with netflix. netflix is definitely the one to catch. whether anybody can do that in the next few years is, i think, driving a lot of the media m&a we're talking about every day.

>> so our family has contributed to the netflix success story but it's really through two or three things we watch all the time how is their revenue spread out? the big blockbusters that give them success or really distributed across the -- across all of it? >> i think the thing is that netflix has become for so many households a utility it's not a luxury. you can't imagine the kids screaming what you would do in the evenings if you weren't able to just pull up netflix and choose from that menu. >> it's become a babysitter. >> as at&t takes over hbo and the time warner assets, one of the things that has caused a lot of stir from john stankey now overseeing all of the time warner businesses is the idea that hbo as strong as it is and as prestigious as it is needs more engagement. needs people to see it not as a luxury but as a utility. as this every marketing study

tells you people -- >> what's going to happen to hulu what happens to it >> that is such a good question. because hulu is in absolutely the center of the battle right now between disney and comcast over the fox assets. there is a feeling that hulu will become the adult-oriented programming arm of disney. if disney's able to close that deal, disney would be the majority owner of hulu >> can they do whatever they want >> they've got interesting bedfellows including at&t which has 10% of -- still have the majority share so i think -- >> the contract, are they allowed? obviously you've got to negotiate to some extent but is there anything that prevents them from just, like, running rough shot over everybody else >> it'll be interesting to see how that plays out and how the majority if disney is able to

amass fox's -- disney will have about 60%. >> could you ever see a streamer buy a network or a series of other traditional tv networks. i'm thinking if you're an amazon or hulu, would you want to buy amc and all of those networks? or even try to buy cbs or viacom >> that question was the $64,000 question last week at the big gathering of media and tech moguls in sun valley the consensus coming out of that is that the netflixs and the amazons of the world may not need a studio. may not need the network platforms. they've already built them in a more efficient and more, you know, cost effective model of streaming. >> we're over time, but apple. they're doing all this original programming. but they don't have a library. do you think they'll need a library? >> i think they'll need some kind of bundled content to make a compelling offering.

but apple is also kind of a black box. they're spending money in the ability but not how they present. >> when does netflix become priced like a normal financial asset? ever >> if you talk to any media ceo, they'll tell you the playing field is not level because they are not judged on earnings >> are they amazon where they get a never-ending -- >> like it never happens >> some day. i think for the foreseeable future, as long as they hit the subscriber numbers i think their growth is unstoppable. >> and there's no -- just a huge barrier to enter i can't see why hulu can't be even with netflix. >> why can't walmart be even with amazon. >> saying they have so many

shows but the reason netflix has been successful is you pull it up, there is literally something for everyone in the household cradled there. >> and 25 million subscribers. hulu has 20 million. so the math becomes complicated. if you want to spend another $10 billion -- >> there's no -- >> if you want to spend $10 million a year, you can beat netflix. >> you can start slow. look at studios and networks just because you're on a hot streak doesn't mean you're on a hot streak in a year >> i just look at the scale compared to amazon nobody can catch -- >> i'm still on netflix. hbo's got -- what's this sharp objects? have you seen it >> my wife's been watching says it's fabulous i have not been. >> i've been instructed to get caught up on that. okay when we come back, we'll have this morning's stocks to watch. plus it is an exciting week to be here at cnbc. don't muss the eighth delivering alpha conference

it is happening this wednesday right here in new york city. high-profile speakers including larry kudlow, marc lasry, and many more. for more information head to deliveringalpha.com. "squawk box" will be right back. and laws to keep your workers safe and happy. but if things go wrong and an employee takes action against you, legal fees to defend yourself can be huge, even if you're not at fault. employment practice liability insurance helps cover these costs. trusted choice independent insurance agents represent multiple insurance companies and customize coverage to help protect you and your business. announcer: to find an agent, visit trustedchoice.com

welcome back, everyone our guest host is fred kemp. but you're right to bring this back to the idea of why this is

happening and why it matters for our viewers. just going back to the russian economy. >> in terms of nuclear weapons, they're close to parity. but look at the economy. they've got 144 million people so 44% what the u.s. has they have a gdp $1.55 trillion that's 8% of the u.s. gdp. >> that's crazy. we don't think about that. when you put them together as superpowers and doing that, it inflates their -- where they stand on the world stage >> if you look at the gdp, it's about the size of south korea. but it's three times that size in his head -- and this is sometimes what we forget in putin's head, two dates are important. two collapses of the country and government in one century for russia. so he fears that all the time. and he has no exit plan. he has no way of getting out

and so for him, for putin it's always about survival. and the economy is crucial to him. and that's why for him an easing of the sanctions and he's -- after his re-election, he's making some tough economic decisions the value added tax is going up. he's trying to reform pensions there have been some protests over that. so he's got to be a little bit careful at the moment. and hope for higher oil prices and more trade >> it's always a pleasure. thank you for being here when we return, continuing sticrage of this morning's hior meeting between president trump and vladimir puti putin.

happening now. president trump and vladimir putin holding one-on-one talks >> getting along with russia is a good thing, not a bad thing. >> a full report coming up earnings alert bank of america and blackrock out with quarterly results the reaction coming up plus a key read on the consumer we're 30 minutes away from retail sales data. we'll bring you the numbers as the final hour of "squawk box" begins right now live from the most powerful

city in the world, new york twhibthis is "squawk box." >> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin futures are up a little. the s&p is actually down, the broader market our top story, the trump/putin meeting. the pbromance, whatever you wan to call it we wish we were a fly on the wall but you'd have to be a russian fly that spoke english for us to understand you're looking at a live shot of the presidential palace. that's where the presidents with meeting. trump and putin holding a one-on-one president trump and putin, by the way, are scheduled to hold a

joint news conference later this morning. there was the hand shake it'll be from helsinki and it's scheduled to happen at some point in the next couple of minutes. but the meeting started late apparently president putin was a little bit late and then president trump stayed in his hotel so he could come a little bit late >> competing to be late. >> fashionably late. had to have the upper hand fred kemp had said, look, you wouldn't think anything was off. >> typically it's better to be -- >> the last one to arrive. >> it's better to be late than early. and i'm talking about -- not what you're thinking i'm talking about with meetings. you should never go to a meeting that could start without you do not go -- there's no -- it's not a meeting worth attending. >> what about a summit

>> if it can start before you get there, don't go. >> just like i don't want to go into any club. >> in the meantime, i want to get you caught up on a few reports this morning the bank beating estimates by 6 cen cents. revenue also coming in above street forecast. lower expenses and a smaller tax rate also should tell you a programming note this morning. bank of america ceo brian moynihan is going to be on "mad money. that's going to happen this evening at 6:00 p.m. eastern time also blackrock earned $6.66 per share for the second quart ert. that beat forecasts by 11 cents. revenue also beating consensus estimates. results helped by growth and fees and larger profit margins as well as lower tax rates and "the new york times" reporting that goldman sachs expected to name david solomon as next ceo.

he would take over from lloyd blankfein. blankfein would stay on for an interim period they're off just marginally. we should tell you goldman reporting earnings tomorrow. if we don't hear that news today, possible we could hear it tomorrow literally three minutes ago at 8:00 a.m. eastern time, goldman sachs began its management meeting where a discussion about this transition is expected to take place back to the trump/putin summit let's get to eamon javers who is in helsinki where the summit's taking place eamon, we are just about halfway through the anticipated time for this summit. what can you tell us at this point? >> reporter: yeah, the world just saw the photo op it's been waiting for. meeting together in the presidential palace here in helsinki we saw that hand shake and some of the body language has been intensely scrutinized around the world between the two men. the president of the united states putting sort of the best spin on the relationship and

what he hopes to get out of this in listing some of the topics he hoped they'd discuss here's what the president had to say just a little while ago. >> i think we have great opportunities together as two countries. frankly, we have not been getting along very well for the last number of years i've been here not too long, but it's getting close to two years. but i think we will end up having an extraordinary relationship i hope so. i've been saying and i'm sure you've heard over the years and as i campaigned that getting along are russia is a good thing, not a bad thing >> reporter: so the president there deciding not to mention poisoning of people in britain or hacking of election materials in the united states in his opening comments there with president putin by his side. the president opening with listing topics including china also nuclear weapons i tcan tell you they're about a hour into what we think will be

a 90-minute conversation here. accompanied only by translators. no note takers of one of the reporters in the room reported to us that president putin appeared to have a notebook and pencil on his side of the desk president trump didn't appear to be going in with any note taking materials at all so we will get likely a readout from this meeting. but it'll just be what the president tells his aides was discussed in that meeting. there will be nobody else from the white house in the room with the president of the united states we're also monitoring some protests here. you might be able to hear behind me we're in senate square just a couple of blocks from the presidential palace. we've seen pro and anti-trump protesters here. for the most part well behaved although people here have been shouting insults at each other through the megaphones we'll pay attention to this here and what's happening behind closed doors >> eamon javers, we will check back with in him

but joining us is evelyn farkas. thank you for being us today >> thanks for having me. >> obviously the relationship between president obama and putin was tense after the annexation of crimea where the two lead oers the two nations are speaking he does think it's time to start talking again. would you agree with that? >> well, i don't agree that it's time right now i agree with most of what nick burns says i think there's a need to have a discussion at the level of arms control. perhaps we'll see some kind of an agreement here to extend the time treaty that set the limit for strategic nuclear weapons. that expires in 2021

but there are many other things that the presidents should talk about eventually the timing right now is not good and that's because of, you know, what our president's been doing to our relationship with the europeans. and frankly speaking, the fact that there's no real substantive agenda aside from what i mentioned on the nuclear front so i think the timing is not right at the moment. >> we did not hear any of the hard points mentioned in the pleasantries we had ideas of whether that is indicative of what we might hear later. your thoughts on that? >> i think it's indicative because basically what's happening is this is putin's agenda we heard the president say yesterday he has no agenda this is putin's agenda the last thing i would say, too, i was working for president obama. the relationship started to take a downturn after the russians gave sanctuary to edward snowden who had violated espionage laws

in the united states they refused to hand him over to president obama decided to cancel a summit because of that and the fact that also at that time we had no real hope for any substantive advance in the relationship >> so what's the best case scenario what should we look for coming out of this summit >> i think the best case scenario is they agree to extend the nuclear agreement as i mentioned before that they agree to some serious arms control discussions and discussions about elements of the soviet military doctrine that are really dangerous. but i don't expect much more than that. and the thing is that, you know, we just heard last week from the head of the national intelligence -- so the director of national intelligence dan coates telling us that the lights are blinking red for a kind of 9/11 attack on the united states. what he meant is, if you remember a couple months ago we heard the russians are sitting

on the electric grids. we've heard this sitting on. meaning through cyber means, they've basically obtained a kind of position inside the u.s. critical infrastructure. so if they wanted to attack the united states and take down our energy grid or maybe banking or maybe water from you are, the russians can probably do this. at least to some extent. and that's part of the way that they intend to fight a war should they ever fight a war with the united states so what the director coates said last week is truly alarming. that's another reason the president shouldn't be meeting with the russians today. >> we're probably just sitting around with our thumbs up our nose do you think we could do the same thing we could take down their gdp which is 8% of ours we just found out. i wonder if it's mad on both sides. >> well, you know, we could, but we don't plan that way we don't have a doctrine to take down countries using an attack

on their critical infrastructure it's just not part of how -- >> but we might be able to ours is so much bigger, what are you taking down? >> it's the same argument with china. who loses more if we get into a trade war? >> what did you make of the president's comments in the introductory remarks about the conversations they plan to have about china, particularly his good friend president xi >> well, i thought it was odd, andrew china wasn't mentioned before by either side as an agenda issue i will say on the nuclear context, maybe the president was hints at that. he did then talk about nuclear the russians are really worried about the chinese. the reason they don't want to come to any major agreement, new agreement to do a big lowering of the level of nuclear weapons, for example, you know, the start levels right now the russians think are okay they won't come down further because they're nervous about china. the smart military folks in russia understand that their threat, you know, their real foe

is china ultimately. but unfortunately the kremlin, putin, the people around president putin, they're focused on the west and the united states as their adversaries right now. >> what about north korea? how do you think that plays? >> you know, i think the russians like the fact that president trump has not been able to pull the rabbit out of the hat yet. they like to have their own influence on the situation and clearly they're exerting influence behind the scenes although china is the number one player and the russians just sort of scuttle up to the chinese and try to be able to exert their influence that way i doubt it's going to be a big subject for this meeting i think what will happen again it's going to be loosen those sanctions on me. you know, he'll try to get the president to continue to use this alarming language excusing the russian invasion of ukraine and the snatching, the illegal snatching of crimea. president putin's second agenda

item would be you promised to get the troops out get the troops out i don't think it's tenable you'll have continued terrorism and fighting against assad until you can find a solution to get rid of him it's about legitimacy. and people -- by the way, as we speak, there are about 300,000 syrian refugees being created. and of course there's the ongoing attacks on the united states through the meddling in our democracy. and the potential coming up in 2018 >> thank you for your time today. it's good to see you >> thanks, guys. coming up, shares of bank of america higher after the company reported its numbers we'll dig into those next. plus continued coverage of president trump and russian leader vladimir putin's meeting. they're scheduled to hold a press conference later this hour we've got about 45 minutes or so for that to pphaen hopefully

stay tuned you're watching "squawk box" on cnbc whento buy or sell?me with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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all right. bank of america beating the street for more, let's get to wilfred frost back after -- okay i'm going to give you five letters. no six. back at cnbc hq. fwiw imho >> there we go bac. bank of many erk. >> humble opinion? >> let's hit then on both the top and bottom line. eps 3 cents ahead of shares. since friday morning when the others reported, shares have outperformed despite beats from them as well kwh why? because they're not feeling the pressure as much as rivals and have continued strong operating leverage deposits grew over 3% year over year and the ceo said they give a lot of incentives to our customers

those customers, though, value more than just interest rates. he does expect those rates to rise, but it's seemingly less fast than for rivals the operating leverage improved for the 14th consecutive quarter up 6%. that was better than peers though in line with expectations overall loan growth of 2.2% year over year is relatively slow but not unexpected for bank of america who tend to be more cautious jpmorgan and citi for example were up. trading beat the cfo said this was done to increase volatility and markets and increase derifty activity. commodities were up compared to forecasts of down slightly investment banking revenues slightly behind expectations fell year over year by 7%. that was compared to, for example, a 17% rise for jpmorgan in what has been a strong

quarter for deal making. it's worth noting that the share count was down 4.7%. so buybacks have been and will continue to be a key driver for this sector. the shares up 1.25% premarket. guys >> all right, wilf you've got something coming up, i think. >> i do. indeed we're looking forward it to. mike corbat will be with us at 3:00 p.m we're looking forward to him joining us on "closing bell" at the stock exchange >> and cramer has brian moynihan on "mad money." >> i know. perfect time i'll shoot back from "closing bell," crack open a beer, and watch cramer versus moynihan >> won't we all. yeah definitely maybe a couple of brewskis >> it's monday night just the one >> and guac. >> although that's -- >> what's wrong with it? >> fattening let's get back to the broader markets --

>> as opposed to the beer. >> opposed to the beer you can do the ultra or something. 80 calorie i'm not endorsing that anyway, there's the futures up 27.5 the nasdaq up 8 points managing partner at douglas c. lane and associates here i was thinking about trade again, sarat i have a lot of people explain why the markets have not responded. and china's responded, obviously, and the currencies have responded we worry maybe we don't see it here in our numbers, but maybe it's a currency problem that happens. then there's emerging market stress that's how it gets us. i don't know we ever see it here do you think we eventually see it in results? and say every company that comes out says we would have been higher except for this impact from the trade wars? >> i think what you're hinting on is what a lot of people are

talking about. the underbelly an '09 what happened are we missing something so is this an emerging markets contagion? i think companies will talk about the uncertainty of earnings and say we don't have those sales we were looking for overseas especially multinationals. if you look at it in terms of where the market is, the industrial sector has dropped about 20%. the financial sector which a lot of people are blaming on this inversion potential, i think a lot of it has to do with trade >> so we're already seeing it. >> but you see all of those, it happens every time there's a trade dust up. it's not based on what they're seeing in sales. >> exactly they're saying potentially this could happen so people are, quote, shooting first, asking questions later. anything to do with trade and international has had a multiple compression. that's why you also see the

faang still hanging out there and doing well those are, quote, secular growth >> just looking at the way pundits have described trade you would have thought given all the vollies which over the past six months, it's gotten worse. >> yes >> the trade volleys people thought it wouldn't get this far the prediction would be you'd already see it in the stock market at this point to a greater extent and a lot of people that don't like trump or don't like the trade, almost there's days it goes down and they ease on the 300 point loss they almost seem happy see, i told you so it hasn't happened now, does that mean that the market knows something and is actually discounting that it's not a problem in the future? or is the market waiting for it to be a problem where it actually -- the market doesn't know if it becomes a problem >> underneath the market you have this multiple compression look at banks.

like the whole financial down since the beginning of the year. you look at the industrial sector come down you're seeing this defensive posture. you can also see 70% of the s&p is four stocks so there is an effect already? >> there is an effect already. could it take the market down 15%, 20% >> if you see that break in the etfs, you could see that correction. >> when we ask if there's a line in the sand, could they back off the trade war. >> and it could be something different. like the fed keeps on raising rates on the front end now we use the inversion -- >> we're going to stop talking about the fed. >> you're going to stop talking about the fed. i don't agree with that. >> i do think to your point a lot of investors don't think this is going to be a big issue. i think there's going to be opportunity in financials and industrials. >> are you buying financials right now? >> absolutely.

we are overweight financials and. market earnings. >> given you just bank of america today. what would you like next >> jpmorgan is the next i n.ow coming up when we return, breaking economic news we'll be back in a moment. making cars lighter, it's a good place to start, advanced oils for those hard-working parts. fuels that go further so drivers pump less. improving efficiency is what we do best. energy lives here.

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when we come back, breaking economic news on deck. we're going to take you live to the cme trading pit. the june retail sales data in st men ju aomt.

folks, we are just seconds

away from the june retail sales da data at this point the s&p has turned negati negative just barely. dow futures lower at 29 points above fair value the nasdaq looks like it would open up by another eight points at least at this point jim iuorio is standing by at the cme in chicago jim, take it away. >> becky, like you said s&p coming in steady empire manufacturing comes in at 22.6%. that's better than expected. not as good as last time retail sales month over month at 0.5%. that was as expected last month was revised up to 1.3% better than that already big beat last time ex-auto is 0.4%. a slight beat. another big revision on the backside ex-gas is a little less. also revision up to 1.3% last

time revisions are probably the bigger story mostly still steady. the 10-year was 2.84% and change it's gone up to 2.8436%. we've already seen some decent earnings this morning in b of a. last earnings season, every good beat responded with bad stock market performance after that. that's what we're looking for today. to see how we interpret this good news. back to you. >> hey, jim, quickly over the last couple of weeks what's the market been watching most closely the trade issues the economy and earnings has it been what's happening with the 10-year or spreads? >> all those things are in the cockta cocktail and the thing we don't talk about enough that i think is the overarching theme is rates that are probably rising. now, the 10-year has stayed in a range the last few weeks we've been kind of happy with

that but any raise is rates in treated very neg tyly. i think that's the most important thing. i think are all tied for second. >> all right, jim. always good to see you thank you. >> for more reaction, steve leisman is here as well. digging into the numbers, anything you see >> jim nailed it in that the revisions are huge revised up 1.3% on the top line. i just want to double check. and we hit the current number f somebody was talking earlier this year about the demise of auto sales but that would be greatly exaggerated. up 1% on the autos furniture and home up 0.6% some negatives in there that look like they're bouncebacks from the prior month not really concerned about that. general department stores are up

1.4% in may. that's kind of a wash. again, the non-store retailers up 1.3%. what i don't know and i need to call the census today to find out if they actually seasonally adjust for prime day you could imagine. it doesn't have to be that big what's the number -- >> last year was $2.4 billion. >> when you add that, of course it becomes annualized in the gdp data so it matters. >> what i did not get out of this, is this something people wait for spending? does this pull forward or push back any of that out there >> good point. i'm going to look at that on a monthly basis later today. that's a great -- you're a former retail reporter that's why you know exactly. i do want to talk quickly about the nape survey out this morning. very strong on all the top line numbers. sales. the net rising

these are huge numbers we have not seen these numbers in a long time jobs also strong 38 plus 8. 62% of the respondents saying they're raising wages. let's take a look at -- there's a push me/pull you in tax cut and trade. what we're hearing from executives on the tax cut effect, 9% saying they're hiring more. 10% more investment. look at the trade spresponse 5% delayed hiring. >> wait a second back that up raised prices, 6%, no change if you took the delayed investment -- >> it's bigger >> well, 10% was the people pushing forward. is this negating -- >> that's the point, i think, is there's this push me/pull you.

we don't know. i think joe had some fascinating comments and i think it's right that we kind of see the market ignoring it. you have this downdraft that to me looks like it's linked to trade. then it comes back up. the net result is it's flattish over the course of the year with some of the indices up a little bit and others sort of down. and maintaining the gains from last year. >> i want to know whether the market is waiting for it to get bad. or whether it knows it's not going to get bad >> i don't know the answer to that a lot of -- there are upsides to this, right? which is to the extent you end up making manufacturing or products costlier overseas, you can have a response here in the states that would be positive for gdp. then you upset the supply and that could be a negative nobody's really lived through this where there were 3,000 tariffs. this is smaller than that. but the idea you might go to this $200 billion number, that

fs -- was the number -- it's not an actual numbers effect but when you get to $200 billion it's the old frad. couple billion here, couple billion there. >> i think what bothers me is it muddies the water again. every time you think you'll get a clear indication on what happens with tax policy. it's been fought over for decades and decades before this. you have another way to muddy the waters to say if it didn't work, it was because of this or if it did work, it was because of this. there's never going to be a great experimentation. >> everything's politically viewed too i just want to know whether the market really has this mystical quality to know whether this trade thing gets out of hand in advance. or whether it's waiting like us to know. >> why do you think the market, though, reacts neg atively to te news it always knows is coming

>> because 200 points is a negative reaction. but it's only -- what is it? >> not even 0.6% >> in reports i ket get now, when i started reading the initial reports, they would say is they don't happen more and more, though, the base case is that they do happen. >> earnings have gone up through all this time. you're looking at a pe ratio of -- >> but if earnings are going to be impacted it should know now >> maybe it does >> then why hasn't it gone down? >> it has if you look at it on -- >> it's a counterfactual argument >> it's four stocks that have gone up. >> even if the market's been treading water, you're still talking about a cheaper valuation on those stocks. >> paying less for stocks, right. >> right it's a cheaper -- >> i can almost see the

market -- you know, if this resolves itself favorablfavorabn see some of those numbers being bad based on some of this stuff that's already happened in the market well, that's in the past and it's already over. i could see the market never responding to where we actually see it in the numbers. we're going to see it in the numbers or not >> the counterfactual argument you're making together is the market would be higher but for trade. right? end of the day you've had this -- >> that's my view of -- >> no. consolidating a 40% gain is phenomenal >> but stocks are cheaper. >> your monthly return is going down it doesn't go up there is a sort of counterfactual market. but isn't because of trade >> it's also gone -- you know, it's rotated to where multiples are lower. >> fair enough >> unless you're a faang stock that's what i was going to say sarat made the point the whole

market is being held up by four stocks >> how will we know? that's what i want to know that's to becky's question >> we always know later. just wait. >> if china and the u.s. make an agreement and the market goes up 500 points on that day, we will know that the market was suppressed how much >> i'd like close to a thousand. >> a 700,000 point gain on that day, we will say that. >> you've got to talk percentage points again instead of points points aren't wa they used to be >> right >> thank you, steve. coming up when we return, two power players in the banking industry allen schwartz also the last man to run baer sterns we're going to get their take on the markets. meantime, continued coverage of the trump/putin summit you're looking live at the

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welcome back to "squawk box. we have some news makers here this morning guggenheim securities announcing it's buying millstein and company.

good morning how did this happen? allen, i'm going to you. you're the buyer here, right >> yeah. we're the buyer, but it's really about bringing talent together and jim and i have talked for the last couple of years we're good friends we have a lot of thoughts in common our main focus is attracting and retaining really talented people who are team players and broad thinkers and jim and his team could not fit that description >> this is not a bet we're about to go over the cliff though. because he does a lot of restructuring work >> it's a hedge. it's a hedge >> that's exactly right. i always say don't confuse a bull market for brains our m&a business and sales and trading businesses are doing great. it's a bull market so in the portfolio, having more restructuring. and by the way, not just corporate restructuring. which we already have. but jim and his partners like mark walker have been working on sovereigns and municipals. if you look at the cliff that's

coming there, being positioned to be a leading firm to deal with sovereign and municipals whenever a downturn comes is great balance to a portfolio of business >> you can see there's $5 trillion of outstanding dollar denominated debts. you know, with the interest rates, currency volatility we've seen in the last six months with the dollar being strong and against these other emerging market currencies, a lot of opportunity here you guys have talked about, you know, an issue that congress is continuing to ignore but we need to address the pension funding crisis this is a big issue at the state and local level. it's crowding out spending on things like infrastructure and education. so there's fiscal adjustments. >> you're always a good barometer of where we are in the cycle. where do you think we stand right now. the market is being propped up

by about four stocks >> the faangs, the s&p is flat for the year >> that's not entirely true if you look at small caps we've got to be kaufcareful. small caps are catching up here and outperforming. so you've got the faangs dominating large caps where there's a lot going on but you've got small caps outperforming everybody. >> but if you're looking at a lot of investors based in index funds, a lot of them track >> so how strong or weak are things really? >> well, look. you've got extraordinary stimulus coming from the federal government right? the tax cut, the spending bill at the end of, you know, an eight-year recovery where the fed has provided extraordinary monetary support to the economy. the fed's going toe other direction. now or is trying the tariffs are in effect a tax

increase it's so far just starting. but these things are hard to stop once they start and how the administration finds a way out of a full scale tit for tat tariff war you know, if you look at what they're talking about, ultimately that's 7% of gdp they're going to raise taxes on. >> i want to ask both of you this i'm going to start with you because you said recently we could be two years away from another big financial crisis hitting. and people should -- >> i haven't said a big financial crisis churning of the credit cycle and, you know, doesn't matter if pure finance right? if the base rate goes up, the discount rate goes up that we all use in our valuations, the stocks have got to come down >> so the fed is where we should be watching things >> yeah. look joe decried this eight years ago when -- >> tired of the fed. i'm making a point i want the

real economy to take the baton finally. >> okay. >> i don't want to parse every word that every fed official says >> that's right, joe that's exactly right but look at the things that would guide politics >> what's normal what is a normal rate now? you've been through so many different -- >> normal is not really the normal what's going to happen cyclicly is the question. when will they get out in front. >> you would have thought it would have happened by now if it was ever a pro >> no. because we basically have not gone to takeoff philosophy in. we're just getting to the target they've outlined so there's been nothing going on in the economy based on what the fed says they were looking at. that they would suggest. scott and i say we feel like we're in the eighth or ninth inning of the bull market. those innings can be strong.

the near term -- to your point, joe. the cyclical move in the economy is positive and is driving a lot of the things that are good for risk assets. but there are tremendous storm clouds on the horizon. >> so when you're in a board room these days, i don't know if you think it's getting there or not. there is deal after deal are you saying do this now because something bad is about to happen? >> the things in the board room are much more about strategy and reconfigure ig about where the internet brought about opportunity for scaled products to be delivered when smartphones came along, it disrupts those to dumb devices to say everybody wants what they want when they want, et cetera everybody is repositioning to play in that game. how do i keep the best of what i belt into the old model. how do i position myself for the

future you're not seeing people run out saying let me spend money and buy things you're saying what is the combination that gives me the best positioning for the future of the way -- >> does that suggest they're not paying too much. or is that not a comment on the valuation. >> the not too much will be based on strategically what you can do with the combination of the assets it's any strategic deal. one plus one has to equal three, not two. then you can pay a premium. >> what led to this for you, by the way? does this deal say anything about where we are >> i'm a met fan it's a bad place to be these days >> is that okay? >> sure. but you can -- >> diversity >> you have good seats, don't you? did he mention that? when you were talking merger, did he mention where your seats are? >> no part of the consideration. >> no. i had to call will to get him seats for the mets we already had the dodger seats.

>> all right answer andrew. >> i was talking about where we are on the cycle does that speak anything about your decision to do this deal? >> yeah. i mean, we were undersized for the opportunity that's ahead of us they have a great restructuring group about the same size as ours but more synergies between the industry experts so having the opportunity to work with, you know, the 350 m & a bankers and industry experts is a huge asset for us. >> yeah. it's important to point out jim has to do more than restructuring. there's a lot of things he knows we can work together on and it's important to point out we are more than an m & a advisory firm we are a full service investment bank we're already a significant underwriter in the structure product and we're expanding. >> what do you think about david solomon taking over goldman sachs? >> i think he'll be terrific. >> thank you

i appreciate it. we've had a long -- i guess it is still mad about that anyway, jim cramer will join us live from the new york stock exchange we count down to the opening bell

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tonight on "mad money" don't miss jim cramer's interview with brian moynihan at the 6:00 p.m. eastern time let's get to jim cramer to the new york stock exchange. you saw the earnings from bank of america what does that mean you want to talk about with brian today, jim? >> i think the efficiency ratio is unbelievable. i think they're making so much more than anyone thought with far fewer branchs. it's about digitization. i'm getting tired of vintech

going to 38 and it's shrinking for the banks even though they spent a fortune doing a good job to cut costs and make as much money as possible where rates are. bank of america doesn't pay as much of others for a huge deposit base they have a different configuration. i think this group is hated. more hated than i've seen other than 2009. they're making fortunes. i think that brian can help us try to figure out why people should understand that these banks are far more profitable than anyone thought at this point in the cycle. >> right jim, we'll be watching thank you. 6:00 p.m. tonight. "mad money." we'll see you at 9:00 a.m. by the way, two days away from cnbc's eighth annual delivering alpha conference don't miss larry kudlow, plus a special conversation with former white house chief strategies

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morning. j.b. hunt transport services reporting $1.37 a share. it beat estimates by nine cents. revenue came in higher than forecasted, too. and then our shares are jumping in the premarket trading, as well the aerospace parts maker is drawing interest from apollo global management. that stock up by about 12% and shares of deutsche bank moving higher after the german bank expects second quarter profits will be double what analysts are saying. >> after the press conference putin and trump. >> supposed to happen in an hour. >> if they didn't go into a meeting. >> it's going a little bit

longer we're over by about 10 minutes. >> 7:19 when they finished up the closing commentaries. >> we're going to find out soon. >> i hope he doesn't say in front of putin ah, you know, do the fake news thing. >> i would agree stay tuned to "squawk on the street." you'll find out about this and more see you tomorrow welcome to squawk on street. futures are steady to start an important week as the president and vladimir putin meet. earnings season accelerates. netflix tonight. europe just south of the flat line got nice