"squawk box" begins right now. ♪ >> live from new york where business never sleeps, this is "squawk box. >> good morning. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the futures. after a mixed day yesterday, you will see this morning that the nasdaq is coming under severe pressure down by 53 points below fair value. thank netflix and amazon prime for some issues yesterday. s&p futures down by 4.5 points the dow indicated higher again it was bank of america that powered things for the dow yesterday. this morning the dow up by 10

points we have three dow components that will be reporting during the course of the morning. overnight in asia, stocks were lower. the shanghai was down by a half percent. stocks in hong kong, the hang seng off by 1.25%. the nikkei was up by 0.4%. this morning in europe, mostly green arrows these are moderate advances, everyone but but spain higher. spain down 0.2%. treasury yields yesterday, the ten-year note at 2.864 this morning. president trump enduring criticism from high ranking republicans and his closest personal allies for a summit in helsinki where he side stepped an opportunity to confront vladimir putin he equivocated on whether russia

interfered with the 2016 election bucking the consensus of his own intelligence community and placed equal blame on russia and the u.s. if it did happen >> dan coates came to me and some others, they said they think it's russia. i have president putin, he said it's not russia. i will say this, i don't see a reason why it would be i do want to see the server. but i have confidence in both partie parties. >> in a rare rebuke coates said we have been clear in our assessment of russian meddling in the 2016 election and their pervasive efforts to undermine our democracy and we will continue to provide unvarnished and objective intelligence in

support of our national security president trump is back in washington today this conversation will dominate the news waves and conversation in washington as well. >> even the devin nunes report, which is vel fi vilified by the that came up with the same thing. >> it was not a good day for the united states. >> i don't get it. >> you don't want to, on foreign soil, go against your own cabinet and intelligence for what seemed like over-the-top hysterical conspiracy theories, we know who they are, it plays into the notion that maybe they're right. i can paint a scenario where the

president is thin skinned, self absorbed all he thinks about is this russian investigation. questions whether he was legitimately president and just because your thin skinned and self-absorbed, doesn't mean your enemies don't buy into that. and even giving an inch he thinks takes away from his election, or maybe there's a better than zero percent chance -- how do you know putin at this point doesn't have anything it plays into everybody's -- >> i'm left speechless >> you have to acknowledge the possibility that maybe -- here's how i would have done it

we know you meddled. it wasn't under my watch obama didn't do anything about it you don't admit it we have to disagree on this. know there will be consequences if you do it again i want to reset our relations, have a good relationship with russia don't try that again >> if you can't acknowledge the election issues, you still have syria, the idea that we are propping up a government >> also not on his watch crimea not on his watch. you can blame everything on obama and still move forward >> not using poison on uk soil that did happen on his watch any of this could have been brought up >> andrew, the more shrill people on your side of things are going nuts >> i'm trying to remain calm and quiet. it was not a good day -- >> it's a great day for you. >> it was not a good day for our

country. i think it sets back not just -- not just the efforts that he wants to have in washington, now there are people who will not go along with what he wants to do it sets back our role in the world. >> it gave a huge win to putin his whole thing is staying strong in the eyes of other world leaders. this gives him a huge -- >> so that he can play this back home >> this gives him a huge win but it's -- >> interestingly given that we're a business network, markets don't care i don't understand t but i do. >> it went from the original thing that came out, that -- i tell you one thing brennan is like unhinged i can't believe he was in charge of something as important as the cia.

he goes from treason -- treason is punishable by death you would think if we're going to convict the president of the united states of treason, you would think the market would not be up six points the sun did come up again, but there are questions about the motivations of our intelligence agencies and about mueller's timing on the release of this thing. the gamut is this wide >> the gamut, if you were to weigh it out would be -- whew. rand paul and issa up here >> before i would have said the pee-pee dossier, that's wacky, it's your version of -- >> glad you're coming around >> how would you ever know now what's going on? how would you ever know? >> while we were on the air we

had people make a mention on the way in -- >> i would have done it, in the room in a respectful way yach wa afterwards -- >> you want to get along >> you don't like the exact opposite, but this was the exact opposite >> it's in our best interest to get along, especially china being our economic competitor, adversary. now we're parsing these words. >> there's a dow component -- we decided bank of america is is not a dow component. wasn't it before i don't know it's goldman sachs and jpmorgan. united health out with quarterly results. earnings came in at $3.14 a share. united health raised its

full-year outlook. the netflix thing is unbelievable >> you kacan't netflix and chil now. >> is it starting to be valued like a financial asset now? >> not yet >> but it was subscriber growth. >> this has always been a story of growth. the second growth slows, if you have continuous quarters of slower growth, can you assign that valuation to it netflix's second quarter results sent the stock tumbling. we will show you where it is now. down about 12% this morning. the company releasing disappointing third quarter guidance and lower than expected suspected subscriber growth. you may remember this conversation yesterday about subscriber growth. that's what we were talking about during the program >> when does netflix become priced like a normal financial

asset? >> if you talk to any media ceo they will say the playing field is not level >> never happens >> some day, but for the foreseeable future they have so much momentum. >> terms of growth >> as long as they hit the subscriber numbers, what wall street expects, their growth is unstoppable. >> joining us now for more on the result is barton crocket from b. riley fbr. that was cynthia littleton from yesterday morning from variety magazine do you agree with that assessment, this is all a growth story? when there's a lack of it there's a problem? >> i do think netflix's key metric is subscribers. this is a company that tries to tell you what they're doing in the next quarter and they try to play it down the middle of the

road they beat it the last few quarters, then they missed our checks were suggesting into the report that the consumer interest and new netflix originals is about the same second quarter in year as last year so what i think we have to watch out for is maybe the kind of high wire act these guys have been doing of creating more impactful content quarter after quarter after quarter that maybe that's something that can't continue forever maybe they're running into what every other content creator runs into, your occasional dry spell. if that's the case, the stock is mispriced and needs to reset >> so what is a fair value for the stock? >> we're arguing $315 is what we

come up with you think about the cash flows and try to discount that it swings hugely with the subscriber growth. i think the most important thing is where this levels out when you hit maturity what we saw last night was a hint maybe -- maybe that we're seeing maturity somewhere on the horizon. in terms of whether this is a one quarter situation, which is what it seemed to be, which is what reed tried to indicate on the call or something larger afoot, how do you think about it >> i think the key is can they get their mojo back in gear in the quarter we're in now and create content that people care about more than they did last year last year in the second quarter they had this show "13 reasons why. "it was hugely impactful

tons of buzz nothing in this quarter came close to matching that can they come up with something that resonates out of this 8 billion, 12 billion content span can they fire the imagination like last year if they can't continue to do that, then you have to wonder is this company starting to hit a maturity wall. >> barton, let me ask you a broader question valuations in media have been driven largely by this competitor, this unbelievable competitor that netflix has been if netflix does start to slow, i realize this is just one quarter, if we continue to see that, are we facing a situation where disney may be overpaying for fox assets and everybody is chasing these things at valuations that no longer make sense? >> i think you can question how much disney is paying for fox.

how much comcast wanted to pay for fox and is trying to pay for sky. these guys are jack up the price of assets that the markets said were worth less not long ago whatever happens to netflix, the thing is happening whether netflix is eyeing maturity or not. there's other ways to get this hulu, other skinny bundles so all these content guys will be doing direct to consumer subscription offers. >> what about the spend? do you look at the amount of money they spend on content and think they're doing it efficiently? >> i have no way to gauge that they tell you that they're not seeing any type of dimmunition of return on investment. the only way we've been able to

judge them is by subscriber growth the number of new subscribers are no longer accelerating from what they were adding last year. that suggesteds to me that maybe i should question the idea that they're getting the kind of returns they used to get or there's no dchange in growth >> is there almost a land grab for everybody trying century fox, doe anything to that calculus? >> not yet the consumer wantsg content. i don't question netflix

subscriber growth curve, but i question the price >> thank you >> thank you. it was a rough start for amazon's prime day sales event courtney reagan has more on this amazon and netflix on the same day. >> interesting two of those fang names having a stumbling. 15 hours in, 21 hours still to go for amazon's fourth annual prime day event. the shopping website and app are more stable now but that wasn't t happening at the start people trying to get on the site saw sorry something went wrong with dog images. this lasted for about two hours. hours into the outage, aonded se haver difficu having difficulty shopping and we're working to resolve this

issu in the first hour of prime day in the u.s., customers ordered more items compared to the first hour last year if shoppers were determined to buy, the outage could have diverted spending elsewhere. many surveys showed consumers were intending to shop other sites and compare prices before deciding to buy on amazon. last prime day large retailers saw online sales increase 35% on average. all the big players are running competing sales this year. plus the percent of traffic that ends up buying fell on prime day 2017 compared to the year before thank is one thing, but you have to convert the sales last year there was a britt of a slowdown from the year prior

so this stumbling block is not something amazon wanted to see out of the gate. back over to you >> thanks. you would think the importance of the fang stocks would have the dow down kind of weird. nasdaq is getting hurt it's a market of stocks. >> the dow just turned negative, too. >> just turned negative. i thought given the -- given the press conference, given everything going on, i would have thought the uncertainty engendered, i thought we would see the dow down a couple hundred points, but the dow was still up >> you still have earnings coming in. >> you do. things are still percolating in terms of the economy >> walmart just made a big push to take on amazon in a bigger way. the company entering into a strategic five-year partnership overnight.

the retail giant will use microsoft's technology to power wider use of the cloud and artificial intelligence. walmart saying they are looking to make shopping quicker and easier for customers we'll continue to watch this through the morning. when we come back, despite public controversy, business is booming for the nfl. we'll look inside the league's finances next. and a programming note for you. tomorrow is the eighth annual delivering alpha conference in new york speakers include larry kudlow, ken driven, and mark lasry is also speaking. >> bitcoin investor steve bannon >> yes alerts -- wouldn't you like one from the market

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deals. that's according to financials which were revealed by one of the public companies the green bay packer the they sell shares from time to time to raise money. according to the statement each nfl team pulled in 2$255 million that was a 4.9% increase in the national revenues year over year gains were attributed to the tv deals and the thursday night football package becoming more valuable goodell, that's the one thing whether you think he's done a great job or could have handled things better in terms of revenue, that's why he makes a lot of money makes 40 million, $50 million a year i tried to figure out how much they make in addition to the 255 million, because the cowboys, the most valuable team in

franchise sports, i think, like $5 billion that's not on a 255 million, i'm not sure what they make with their own ticket sales, concessions. >> all that stuff. the fanatic stuff. lucrative. we're talking about u.s. football we have to be clear now. >> now that you like the other version. >> are people that think football is what do you with your foot. in terms of the "s" word >> we all should have bought an mls team in the past two, three years. >> because they were cheap >> they were cheap now i think we're finally at a turning point where soccer -- soccer is a real thing >> i think lasry and west eden bought the bucks they bought the bucks for a song all of a sudden you saw balmer

comes in with his fat cat money and everybody gets marked up >> and live sports was so much more valuable because you have to see it live >> look at movie studios, they can have a five-year cold streak, they can put out bomb after bomb like networks, remember when there were five networks -- >> it's a subscription business. >> what caused the million subscriber shortfall >> the expectations. >> expectations based on they're spending all this money to develop stuff and it will work what if there's not another "stranger things." >> i think there will be >> i think they'll have a solid base that's not going anywhere

fast this is people saying -- >> right other people get in the content business and get on a hot streak >> there's no sure thing no way to guarantee you have magic in a bottle every time let's talk about warren buffett. he donated roughly 34$34.4 billo of berkshire hathaway to five charities. this is in his longstanding plan to give around his fortune the value given away at 3.4 billion. that's where berkshire shares are right now. the largest block went to the bill and ma lielinda gates foundation, others went to charities run by his children. after those donations, buffett will be ranked as the fourth richest person in the world behind jeff bezos, bill gates,

and -- >> bezos beating bill gates now by $55 million. >> he's been making a couple hundred million a day. that's been pointed out in a snarky way, that supposedly his employees can't go to the bathroom i saw it on some website so buffett, the "squawk" gofundme jet program was not part of his -- >> i don't think that rateson his list of things >> he could write it off an old, used crappy jet. >> boeing business jet they got rid of those. >> i'll take a kim jong-un jet coming up when we return, the reaction in washington to

president trump's meeting with vladimir putin. before we go to break, a look at yesterday's winners and losers ron! soh really? going on at schwab. 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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♪ 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, netflix shares are plummeting after the company reported subscriber growth fell well short of forecasts in the second quarter in the u.s. and internationally. didn't really meet any of the numbers that people had been anticipating amazon suffering glitches at the start of prime day the sales kicked off at 3:00 p.m. yesterday shoppers reported several errors on the desktop site and the mobile app amazon saying some customers are having difficulty shopping many are shopping successfully two more dow components are set to report this morning waiting for quarterly numbers from johnson & johnson and goldman sachs. we already saw an earnings beat from united health that company raised its full-year outlook.

the dow set to open off by 23 points the s&p 500 off by 9 points. president trump receiving widespread criticism for yesterday's hell sink helsinki h vladimir putin for more reaction let's bring in jim vandehei the tabloids say see no evil open treason what happened? >> what's most amazing is the criticism is not just coming from the media or democrats. you're hearing from more republicans than we have heard from in terms of condemning an action or a move by the president. even on fox news, which is typically friendly to the president, you had a dozen different commentators who were in disbelief or disgusted by

what the president said in front of vladimir putin. we are hearing from white house officials, and almost nobody is defending the president. nobody is trying to explain the president. i think they themselves were dumfounded by the president's performance with putin the only explanation you hear from anyone on the inside is that the president has had a hard time when he feels like people are saying his election victory is illegitimate and the mueller problem is legitimate, he has a hard time separating that from the intelligence community almost saying the same thing about the russian interference >> even if he is thin skinned on that, if he will never see that, the idea that you don't say anything about the annexation of crimea, you don't say anything about syria or pretend to take a hard line on those stances or on the poisoning of those two individuals in the uk, i don't

understand why at some point, you don't stand up and say anything will he see this as a blind side and reset his tone >> there is no way that the president will change his mind and say i made a mistake with vladimir putin yesterday if you look at the snippets with tucker carlton, he will double down and maybe say i should handle that differently. so a lot of republicans are saying what's up this is so unusual even in a presidency with unusual moments. you look at that john mccain statement, you look at dan coates, the head of intelligence for the president's team, that's why you have all of them putting out statements and telling people that they just disagree with the president

we can argue on whether the president gets too tough on coverage, but every person involved in the intelligence apparatus, republicans, democrat, new, old, they all have come to the same conclusion about russian interference there's no ambiguity here. there's nothing to debate. there's a uniform they said. they said that putin clearly tried to interfere in our elections. you have the president almost alone in saying it's a bit of us, a bit of them. >> so what happens next? what does congress do? and if president trump were to try and say we are going to do things like ease the sanctions on russia, is there a chance that anybody else would say no, you're not doing that? >> i don't think anything happens. i don't think white house officials will quit in protests or that house republicans will hold hearings on the president and his relationship with

vladimir putin long-term it could have consequences while this is unfolding, robert mueller is racing to get the vast majority of his work done before the end of summer it's possible we'll see a report from robert mueller on a big chunk of that investigation. for those republicans that want to give the president the benefit of a doubt about his relationship with the russians, it makes people wonder what's going on why would he sit here with vladimir putin, a thug >> that's what i thought in terms of the lunatic fringe of the left, watching that maybe you think it's not a zero percent chance colbert, like i said, the lunatic fringe are convinced now there was collusion. putin has evidence of the collusion. he'll use it if trump doesn't

stay his lapdog. that fed into that narrative yesterday. >> yes >> my question is trumen migp, g did happen in that way he can say it is so ridiculous they think that, i will not even try to not to give that impression. i don't even care. i want to reset relations with russia it's in our best interest. it's the other nuclear superpower other people have failed after looking into his soul and hitting the reset button with hillary clinton, and i don't care, there's no collusion but for people who think there is, this is almost a gift. >> it is a gift. i agree with you, most people think it's a conspiracy theory do the russians have anything on the president?

up until yesterday i would say no but to watch it again and turn off the volume. don't even listen to the words, but look at his body language, this is a president who prides himself on being the tough guy in the room. the way he shrugs, the way he puffs out his chest, the president himself slouching down, the dynamic between the two -- >> it was all carrot and no stick. to our allies it was like equal amounts of kafr rot acarrot andk >> no stick at all in a case where it should be all stick or mostly stick this is a guy whose enemies end up dead, his own government interfered in our election this is a guy who has been a thorn in the side of u.s. interest overseas. it's impossible to say you want to reset it. other presidents have made a similar tactical miscalculation,

but never in such an absurd, obvious way that made the united states deferential to putin. we looked small. we looked tiny it's not just that he looks small and tiny, we do. at a time where we look confused and are dealing with other allies you are saying there are things the germans could do different they could be better trading partners, but the idea that you will street vladimir putin better than angela merkel given what she's done and what her country does, what it stands for in terms of their relationship with us, that's befuddling to so many people. so we'll learn more as the months move on there has to be more to the story. >> jim, want to thank you for being with us. i know you said there's no repercussions on this. what comes next? what happens >> i don't think there's

anything republicans can do. we talk to them, they're like what do you want us to do? they won't march over there in protest. they would say we validated what the intelligence community said. we have done the same investigations, came to the same conclusions. this is not a debate everybody has come to the same conclusion that putin tried to interfere in our elections and they may have been successful >> trump in the past has been sdrag dragged kicking and screaming where he has acknowledged meddling, but it was always with a qualify. yesterday it was anew, saying i don't know why -- the one sentence i don't know why they would. he says they didn't. i don't know who to believe. we're both at fault. that's what did it >> freeze frame that moment.

there's so many moments. he's sitting there saying eh, a little bit of us a little bit of them there's none of us you tried to interfere with our election >> he's talking about strzok and page he's still thinking about that. >> how it plays, my gosh >> great to see you, jim >> thank you. johnson & johnson is out with squauquarterly results. good sales number. 20.08 billion. adjusted net of $2.10, three cents ahead of expectations. that rev flew number is qui-- r is above expectations. we have an outlook the company gave us seeing 2018 8.07 to

2018 8.07 to 8.17. we have got some breakdown of the sales. in the u.s., 10.$10.64 billion sales. medical devices, 7 billion orthopedic sales, 2.26 global pharmaceutical sales, 10.3 billion this is a multi-faceted company, drug force clinical use and also stocking the shelves of every walgreens and cvs with j & j products you don't even say it's a bandage. you call it a band-aid >> they said currency impact on the second quarter was positive one. up 1.9% of that. just the sales growth they're

talking about, domestic up 9.4%, international sales numbers up 11%. >> we will talk to cfo joe wolk. he'll join us to talk about the quarter. later, we will talk about the trump-putin summit with rkma warner that's at 8:30 a.m. eastern.

time for the executive edge. chinese ride hailing giant didi planning to spin off its car services unit. they want to raise 1 billion to $1.5 billion on the deal and has tapped investors including softbank didi also getting a $500 million investment from booking holdings the two companies announcing a strategic partner. glenn fogel will join us today at 88:00 a.m. time big deal for glenn and for didi. speculation continues that didi will go public in the next 12 months that will be a big deal here

when we come back, the johnson & johnson cfo will talk to us about the quarter. the dow component out with numbers better than expected but the stock is trading down by 2.5% maybe that's because of the guidance even though they beat this quarter, not raising guidance for the year we'll talk more about that in a moment. and goldman sachs is set to post quarterly numbers coming up in the next hour we'll bring you that report as soon as it hits the tape at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. 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 &.

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. johnson & johnson just out with second quarter results, earning $2.10 a share. they beat estimates by three cents. joe wilk joins us now along with meg tyrrell. we've been talking about the stock option the earnings per share forecast straddles where the street is, but what about the sales forecast is that lower than the previous forecast that the company gave or somehow below analysts' forecasts? >> good morning, joe it's a pleasure to be here thanks for having me on. when you look at the forecast, our operational performance

continues to do extremely well, so we actually took that portion of our guidance up what you see on a reported basis is the impact of negative currency, or better said, less favorable currency than we were experiencing as the dollar has strengthened here. >> so you're saying that currency factors caused you to lower the forecasts for sales growth >> that's correct. so previously in our guidance, it was worth about two points of growth now it's more like .8% of growth so, again, operationally very, very strong results as you saw in the quarter it's really the currency impact that we're experiencing right now. >> it's funny, because when currency is negative, the stock goes down, but when it's positive, analysts say it's just currency and it doesn't go up. it doesn't seem like it works both ways. so the old sales forecast just for viewers watching, the old sales forecast growth was what

and what is it now >> on an average basis it was 7 to 8% and now we're going to about 6.3% so operationally we're up a little bit higher, about a full point from the original guidance we gave in the beginning of the year in january. >> hey, joe, it's meg tyrrell. welcome for your first quarter we know you took over two weeks ago from dominic cruz, so we're glad to have you here. looking at the consumer units, it looked like you had a beat for consumer units and about a 20% growth for the quarter when you look at your best known brands like tylenol, newt utroga it looked like it went to half a percent. how are you planning to return that growth, or as goldman sachs reported in their upward growth, are you thinking about splitting

the company? >> immuneology, oncology continues to perform well above market we saw great signs of our medical device unit return to growth that's another business we're committed to improving the growth profile there then in our consumer unit, we were a little bit disappointed the growth was impacted obviously by a divestiture year on year comparisons and we had some unique factors with respect to relaunching our baby brands, retail restocking bleeding down a little bit in the quarter as well as a transportation strike in brazil. normalized that growth would have been about 2% which is on par with q 1, but it's a business we have strong plans for in the second half with a relaunch of not only the baby brands but also a number of new product introductions. tylenol, as you mentioned, did actually extremely well in the quarter so that continues to perform well specifically here in the u.s >> joe -- you have one more

thing? >> just in terms of meg's question about being broadly based, we see that as a strategic point for us we see it bringing solutions to health care systems around the world that patients not only want but really deserve. >> okay, thank you we appreciate it >> thank you >> your first interview -- i remember dominic, where is he? >> he's still there until september but i believe he's retiring >> thank you andrew >> two of the stocks, netflix stocks plummeting and amazon prime day got off to a glitzy start. goldman sachs, we might also hear, we're expecting to hear about a succession plan. "squawk box" returns right after this it's all so... smart.

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from capitol hill, fed chair

earnings alert netflix shares dropping after the company's subscriber growth falls short. we're going to hear from the company's ceo straight ahead prime problems amazon running into big issues on its biggest sale day of the year plus the changing of the guard on wall street goldman sachs set to roll out quarterly resorts. expected to announce a successor as "squawk box" continues right now. ♪ >> announcer: live from the beating heart of business, new york this is "squawk box." >> good morning. welcome back to "squawk box" on

cnbc live. take a look at u.s. he cequity futures at this hour dow jones opening down, nasdaq down as well s&p 500 down about 7 points. netflix is taking a market hit in pre-market trading. this comes after the video screening services mixed forecasts both on their own, and that defied analysts by more than a million the fundamentals, though, have never been stronger. that stock down about 12% in extended hours trading we're also watching shares of amazon prime day got off to a glitch-filled start yesterday afternoon with many shoppers having trouble accessing the website and others experiencing slowdowns. the issue has been largely

cleared up by now and prime day will continue until tomorrow afternoon. it really isn't a day, it's 36 hours. the dow component helped out with its quarterly earnings. 10 cents above estimates revenue essentially in line. the company also raised its four-year forecast we've seen that stock down about 1% the major indexes remain their january highs, so is it time to give the bears their due? mike santoli is here with the answer to that mike, good morning >> because we've been sideways in the s&p for six months seems like they're getting louder. i feel like let's get an airing of what the case is and try to assess whether there is any traction to it right now it basically has three components, the bear case right now. first, the bond market everybody starts reading some scary stuff on the shaping up of

corporate bond prices. i think that's probably exhibit a in the bears case right now. narrow leadership is a common criticism. others say it's only fang and the greatest percentage of gains is from stocks this year and peak everything. people can say it's peak and growth momentum, peak profits, peak margins, peak liquidity all of these things are thrown into the mix and people say it probably means the bear market is on its last legs. i have answers for this because i think the bulls still deserve the benefit of the doubt here. we've only been trading this fofo for a handful of time in history. finally the two-year note, when that yield is going up, that's actually a good signal that's a good reason for the curve to flatten because it's saying the feds will keep tightening and the market can

handle it. >> and you could argue the tenures being held up by other forces >> that doesn't really tell you much finally the rally is not that narrow up 50% this year just because the big ones have carried the weight, it doesn't mean there is only a handful of stocks so you can be past the peak of growth setup and not necessarily have this bull market be over. >> that was the question we've said that the fang stocks were carrying so much. >> you've not seen the overall market looking like it's going to buckle because netflix is going to be down a lot and give up, what, a few weeks of its gains? >> it's only been a few weeks? >> it's double this year >> that puts it in perspective >> the largest portion of the overall market cap gains have come from extremely large stocks that are up a lot. that's just saying that's how the math has to work

it's not like only a few stocks are up and the rest are down >> when becky interviewed and said you're going to have the answers, i was like, yeah, right. you took sand. i'm proud of you it's not over. >> there are possibilities >> let's talk to people about this joining us now, andres garcia and joseph kinehan andres, i'll start with you because a lot of your comments -- >> mike stole my thunder >> he did, about the u-curve >> yeah. >> the recovery has been moderate enough to extend it in terms of length because it hasn't been quite as sharp as previous recovery, so it doesn't have to be over here >> the main thing to point out is just because the u-curve is flattening doesn't mean it's going to zero. back in '94 there were many articles written because the yield got to ten basis points,

and they're saying recession, sentiment, there's going to be a 30% correction you fast forward and you had a tech boom that was just starting, right? it doesn't mean it's going to happen this time, but it is important to point on it that until it actually flaunts, you can't even make an argument. if you look at the last concessions going back 43 years, it takes 30 years on average to see a correction i think we still have a bit of a discussion around the table on bears and bulls, and you did do a good job describing that >> so joe kinehan, i wanted -- before mike's report, i was going to immediately go to the narrow leadership and the fang stocks that's one of the things the people said, the market is not really where it is you follow things like that. there is some truth to that, isn't there? is that bothersome >> i think the rally is stronger

than people give it credit for >> both you guys can leave can you stay >> the equal weighted version of the s&p 500, every stock is up about 3% this year even if you spread all your bets equally, it's okay now, that doesn't necessarily keep up with the overall market because the biggest stocks have done the best. >> one thing i would add on that is it's interesting from a retail point of view if you look at what our clients are selling this year, they sold facebook five out of six months. it still remains one of the largest holdings they sold apple two months in a year it doesn't mean they're relying on these stocks. they've been buying netflix every single month what's interesting to me is a lot of people turned to stocks like at&t this year and some of the utilities, you would say, why would they turn there because interest rates are the biggest story of the year so far and the fact that the 10-year is

still under 3% people are still going for a yield, so i actually think that what you started with was the market has been kind of flattish recently i would tell you if the market stays flat for the rest of the year, it's a victory for the bulls. the reason i say that is because we are up at all-time highs in every index and yet all you hear is bad news and people wanting to sell the market >> that's an argument for selling. >> i think we can actually get momentum from this and continue -- set the base, so to speak, becky when you own a market like this that's been an amazing market and not given any credit, in my opinion, whatsoever this year. in 2018 you haven't heard any good news of people saying, go out and buy the market >> and you tie a lot of it to how strong the employment is, and one thing you would like it wage growth. that starts putting a top on things >> look at the lower end of the market, though at the lower end of the market

you hear about people constantly being replaced by machinery, et cetera, yet there are still plenty of jobs for those people. with that, they're going to continue hiring. you're going to see the higher end of the curve, wage growth going there and spreading down it usually starts at the bottom and goes up. this may be at the exact opposite, and we've seen exact opposites in many things so far this market where things are starting more at the top and working their way down >> so, andres, how about your international exposure you've always been an emerging market study >> i knew you were going to bring that up, joe >> maybe it's fair >> it's fair so if you look at the beginning of last year which is when i started discussing international versus u.s., ui is up 25, s&p is up 25. we gave you will the gains the market saw last year this year, and i think it has to do with the dollar if the dollar continues to appreciate this year, i think it's going to be hard for international to outperform.

my view is that this is more of a head fake, in essence, of the dollar rally versus last year was more of this beginning trend of the dollar starting to depreciate remember, we had a six-year run of dollar appreciation >> did you grow up in spain? >> colombia. we did well in the world cup but not as well as we wanted to. >> no. i'm thinking barcelona next year >> for vacation? >> yeah. have you been? >> i have. >> and >> there's some great hotels i'll give you my list. and some restaurants for you >> i was just there about four months ago it was great >> they don't think they're part of spain >> madrid i've been and portugal i prefer italy, but people say barcelona is -- thank you. colombia, i don't know >> are you going to be talking

down the euro now all year >> you know me, don't you? yeah i like the strong dollar >> strong dollar king dollar. >> he is one of our bigges gues tomorrow also the story about the big drop in netflix shares this morning. also, goldman sachs expected to unveil a ceo succession plan today. and amazon prime off to a rough start. we're going to check in on hour 16 today stay tedun, you are watching "squawk box" on cnbc because, wh, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it-

and see it through-with digital.

welcome back "squawk box" this morning. netflix shares disappointing on subscriber numbers we've been talking about it all morning, julie what happened here >> netflix missed its own subscriber projections for the quarter. it grew 5.5 million for the quarter. that's short of the 6.2 million that netflix projected puzzled with analyst questions, they pointed to growth in viewing hours as well as in paying subscribers, that means excluding the free trials. >> you noticed probably the paid

ads are up from a year ago and forecast to be up a year in q 3. and the fundamentals have never been stronger. our viewing is setting year over year records the shows that we have coming, so we're feeling very strong about the business >> hastings did not attribute the subscriber shortfall to competition, but he did acknowledge that competition is formidable and growing >> there's a lot of new and strengthening competition with disney entering the market, hbo getting additional funding, the different french broadcasters coming together. that's all normal and expected so it is what it is. we're not going to be able to change it. and then our focus is on doing the best content we've ever done, having the best user interface, the best recommendations, the best masht i -- marketing, all the things we've been doing >> netflix growth is bundling

services in with comcast and other broadband companies around the world. in the meantime, we are waiting to hear from goldman sachs this morning in addition to reporting quarterly results, they are expected to announce the next ceo replacing blankfein. he's also a vanity fair correspondent and cnbc contributor. thank you for being here we knew this news was coming it was advertised pretty clearly it was going to be david solomon. was that the right move for the bank >> it came down to the choice between david and harvey because david cohn had gotten up and left and went on to become economic adviser one wins, one loses. i think they made the decision that david was the right person and the board endorsed that. harvey called the question with the board, found out it wasn't

going to be him. left in march, leaving david as the sole heir apparent it was just a question of when he was going to leave. >> david is someone from came from bear stearns? >> yes he's chief second in command it's sort of like a bear stearns takeover of goldman sachs. >> speak to this how do you think the firm is going to change and transform itself under david's leadership? >> i think that's a great question it goes back to september 2008 when goldman sachs became a big holding company along with morgan stanley i think that changed investment banking as we know it forever. because not only is goldman sachs regulated like a bank, it's treat like a commercial bank, its prospects are more commercial banklike, more utilitylike. i think a lot of the risk takers

at goldman sachs have left i don't think they have quite the deep bench i don't think they have the team that got them out of the financial crisis -- >> that's interesting, but also potentially got them into -- >> right, on the trading and risk assessment front. i think david solomon has to reckon with the fact that when the next financial crisis comes, should there ever be one, he doesn't have the same players in place that he had in 2007 to get him through. >> i also make the argument they're not taking on nearly the same kind of risk they used to take >> partially because they don't have the people in place who understand risk. lloyd was the ultimate risk manager. >> let's speak to this in many ways david is an investment banker. >> that's what he is >> more than in many ways, he is an investment banker the culture of goldman sachs have been transformed over the years. jim paulson was an investment

banker the firm has transformed itself into a trading form. >> you have to go back to gus l levy who actually transformed it into a powerhouse. both halves of that brain were co existing peacefully after going public, he exploded both sides of that brain, and frankly it was people, you know, after the financial crisis when the regulations came in and they said, guess what, guys, we can't do that anymore. now, you could decide whether that's right or wrong, but that left a lot of brain drain at goldman sachs. >> william, if they're already being treated as a commercial bank as they have all this time and regulated as a commercial bank, what are the implications for the stock with these changes? is it kind of good news that they're embracing this and kind of fessing up to what's happening here >> they have no choice but to embrace it, if you ask me. let me look at what jp morgan

stock has done it's on fire so goldman sachs could only wish it was on fire the way jp morgan is it doesn't have the balance sheet that jp morgan has, it doesn't have the revenue stream. >> how far in business do you think they'll ultimately go? >> i don't think they'll open branches, but i don't think they need to, either. they can acquire deposits through the internet as they've bun doing with marcus. they can begin to take other steps to bring goldman sachs to main street. they have an incredible brand. they're teaming up with apple for this credit card they're doing things and i think david solomon is smart enough to embrace that he was talking to me the other day about cash management, okay? goldman sachs cash management is not something you usually think of >> a goldman sachs management account? >> goldman sachs cash management account. >> andrew would like a goldman account.

>> see, i'm at ubs because it's a swiss bank >> so you can say you're at a swiss bank >> because it's at large >> what? >> what is going to happen to the management at goldman sachs? because there's been a lot of people waiting for a very long time to move up the ranks, and a lot of people have stayed for a very long time what kind of transformation do you think you'll see at the top. >> there were two people on the fixed side of the house that left pretty quickly after david was elevated in march. pablo salomei was one and isabel -- i don't remember her last name -- is the other. eventually david will have his own team on the fixed side they have a deep bench they always have a deep bench. it's harder to get into goldman sachs than harvard university. they always have great people. they'll find the people.

>> assess the tenure he and david are the last people standing post financial crisis >> i think in that firm he was brilliant, and the way he handled the fair reputatio reputational barrage they experienced afterward was also brilliant. stock was in the 220s. he was an excellent steward of the firm he was an excellent risk manager. i think he's going to go down well as a historian of goldman sachs, he's going to go down well >> why didn't you go to work there? you would be so much richer. do you regret that >> not for a moment. i have 17 years' worth of scars at other firms, so i don't regret it. >> thank you >> my pleasure coming up, swinging for the fences, the winner of this year's home run derby is next. not coming here, but he might play for that team that -- the

city that had the stanley cup. i think i read that. futures right now are lower. stay tuned you're watching "squawk box" on cnbc it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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in sports news, a big show in washington, d.c. last night bryce harper won the mlb home run derby in his home ballpark he struggled through the season but not last night he hit nine home runs in a row in the final round for a comeback to defeat cubs left fielder carl schwaber. in the past, guys that win that, sometimes they really get up to the plate after the all-star game and start swinging like that and they don't get a hit. sometimes they're swinging for the fences and they forget how to -- >> but nine in a row >> nine in a row when we come back, fang stocks under suppression this

morning, and it wasn't just facebook amazon also following bad public relations after on-line glitches netflix down 12.8% we're going to get an inside line from tech watcher lee "squawk box" will be right back. who would have thought,

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♪ good morning welcome back to "squawk box" right here on cnbc, live from the nasdaq market in times square among the stories front and center this hour, fed chairman powell will give his senate policy report to the banking committee. it begins at 10:00 a.m. eastern time he will repeat the same performance tomorrow before the house services committee then the june production figures will be released shortly before the market opens economists looking for a jump of .7 of a percent we'll also get the latest sentiment index from the national association of

homebuilders then boeing raised its 20-year outlook. it now thinks the industry is going to sell 1,410 jets it's because of a jump in demand for single engine aircraft they actually jumped in their projection of wide body sales. amazon's prime day sales event is happening right now the start has been anything but smooth courtney reagan joins us right now with more on this. courtney, big problem or has it been resolved at this point? >> it looks like it's mostly resolved but some users still reporting issues the prime day event still has some time to go. it does seem like most shoppers are having better luck now than when the event began when it started at 3:00 p.m. eastern time monday, many people around the u.s. saw a message.

something went wrong with various dog images others reported slow times or difficulty checking out from their carts. hours into the outage amazon responded, quote, some customers are having difficulty shopping and we're work to go resolve this issue quickly many shopped successfully in the first hour of prime day in the u.s. customers have ordered more items compared to the first hour last year. it's inevitable that some sales were likely lost, but according to the database, market sales increased by an average of 45% with orders of 41% during the first five hours of prime day 2017 market sellers did see sales fall 5% early compared to the same hour last year.

beck, over to you. >> court, thank you very much. >> i bet it's clean. this is the way it used to be. 598 and the estimate is 466. that's what you used to see from goldman. 9.4 billion revenue versus 8.7 is what the street was looking for. operating expenses of 6 billion and stocks up -- i don't know if it's trade od on this already, t at this point it's up about a quarter of a percent can't say for sure that 598 is apples to apples out of 466, but just looking at it, i haven't gone into the actual press release yet, but that would be one of those outside beats >> we're used to seeing that for a long time. >> i think we'll hear from the company regarding the succession issue and we'll be hearing about david solomon's ascension at that firm. we'll get back to that in just a

moment but we want to talk a little amazon this morning joining us this morning is ed lee from the "new york times" and charlie is is also here, moody's retail analyst first of all, are we supposed to care about what happened yesterday, the glitchy situation? >> yes, it matters, of course. if you have a bad experience as a customer, you don't want to come back and you have a bad idea about it. the main thing, however, i think is driving prime subscribers that's what this is about. even if amazon loses money on a lot of deals they're doing, they don't care as long as they're signing up more prime subscribers. last time around they saw prime subscribers jump up 80% than that he usually do >> if that's the case, not the sales numbers but how many people order a prime membership, that's not a good omen when you lay it out in those terms. >> i think that's important. you know, it's prime day but

it's 36 hours. they stretch a day into 36 hours, so there's more time left i think if you're new to prime and you're one of the few americans who don't have it, it's still something to consider >> do you think there is a ceiling on the prime membership price tag? they just raised it about $20. we were talking about it yesterday. there are now people who are starting to say -- i've seen a little bit on line is the price getting to a point where it doesn't work? for my family it continues to work, but maybe for others at some point, it won't >> i think that's true, andrew i think that there is a practical ceiling for anything and i think when you've got a membership program, when does the saturation point get hit when you enter into a price comparison from that perspective, i think you're going to get to a point where people will take a look at it and say, hmm, am i really getting what i'm paying for? think about it, the old days with costco. you may your costco membership every time you're in the store

you're thinking, i pay x dollars for this membership every year, i need to get my bang for the buck, so you fill your cart. amazon is the same way >> nobody thinks about that as of yet what number sort of forces that psychological discussion >> there was chatter that as soon as they broke a hundred, it would be an issue because a hundred versus 99 is a magic number for consumers i don't think that really happened yet the monthly payment option has helped a lot of families where they can budget it a little bit better as they add more content. that to us has always been the key to the prime value proposition. it's been the value of the content, not so much the free shipping amazon continues to expand the content offerings and then with prime day, dropping the price of devices which is the entry of the ecosystem to make it more attractive >> and they have a lower priced

option >> the expectations that had been raised about earnings and their time of growth, amazon obviously has tried to build a video service. there is a big fight going on over the future of hulu. everyone thinks this is it, or this is the future did the earnings report yesterday change any of your minds about that >> wow i don't cover netflix, i pay attention to it. i look at it through the amazon lens there is a battle going on, clearly, for eyeballs and tv sets here with anything viewable, i guess. amazon is spending a ton of money as well as netflix, from what i hear. it's an arms race. >> the way to look at both these businesses, netflix and amazon, is they're both subscriber-based businesses the growth is going to come from international. i'm estimating with amazon prime maybe there's 80 million in the

u.s. with netflix we know it's 66 million. 100 million households is sort of the limit and they're getting closer and closer. i think with netflix numbers from yesterday, their international growth was a little off not off that much so it's not that bad >> can i ask another question with that same thought you just talked about andrew asked about is there a ceiling on the price for amazon prime. is there a limit on the number of members is there just a point where you hit the saturation of this entirely >> i think 100 million households is the way to think about prime membership and even netflix membership i think the closer they get to that, the closer it's a saturation point but i don't think they're using that as a way to defer a cost on anything >> what's the fair price for amazon we were talking about how jeff bezos' net worth is over $150 million. i think the margin is about $50 million before you get to number

two, which is bill gates the stock has held up in the s&p this year and amazon is one of them >> you're asking a fixed income analysis for an equity valuation, but i'll take a shot at it. we look at amazon through a long-term lens if you look at the fundamental part of it, it looks pretty soft i have trouble with the valuation because i have trouble looking into the future, which is what a lot of equity analysts are doing. i can't predict what amazon is going to do but that will be for q 3 2018 that said, i think the company's investments are start to go pay off. last year they increased the balance sheet by $30 million didn't really add any operating income we're starting to see some of that flow through. i think you're starting to see some more conventional, fundamental type metrics look better than they have over the last couple years. >> we have to leave the conversation there ed, thank you. charlie, thank you >> "new york times" has been how

long now >> a month >> a month and a week. >> we get to hang out all the time our desks are just that far. >> do they even pay you a salary my question is in terms of ed lee, cache, who you are, which is better? "squawk" appearances or "new york times"? >> every chance i get to come on here, i always take it >> you do. i noticed that >> yeah. >> so "new york times" is good, you got the credibility -- >> i get to hang out with you, joe. >> but in terms of just overall ed lee resume cache and "squawk box. >> i put them both up there. >> i think "new york times" pays him more >> if we pay him less and he still shows up -- >> that's how much i love you guys >> why is goldman down

it's the best strongest first half return in nine years. >> let's take a look let's take a look first of all at the shares. down half a percent, but yeah. those numbers were much better than anticipated w wilford frost joins us from the desk >> 14 .1% is their highest in nine years why did the beats come in there and why are they down? it was up 17% which was bordee d borderline currency up 5% that was in line because they had a poor quarter last year equities are flat, somewhat expected overall trading is in line that's not where the beat came from part of the beat, which is

encouraging, the shares that were up on investment banking, that came in at 2.5 billion. a very strong quarter for them in what is the area of investment banking they still lead the other reason -- the other two areas perhaps account for a lot of this beat and often is discounted, particularly investment and lending they performed at one point at 9.4 billion, the forecast is 1.6 billion. a lot of the beat comes in there and people don't give that a lot of multiples an estimate also came in at 8.4 billion. if we have any more reasons we might see this expense, we did see the noncompensation expense come in a little heavy but in general, a little bit of a surprise that we're seeing the share price down 0.4% given the strong ups beat, but it was up

strongly yesterday along with all the banks. >> thank you, wilford frost. when we come back, the investment world will be gathering in one place tomorrow at the delivering alpha conference trillions of dollars of money on one stage. leslie picker is here. she has to look at what we can expect leslie >> thank you, becky. last year we saw alpha picks from some of the brightest minds in the wldor we crunched the numbers to see how the picks have changed since then see you after the break. you always pay your insurance on time. tap one little bumper and up go your rates.

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well, it's finally here. tomorrow is the day the delivering alpha conference will be taking place in new york city there are always great investment ideas that are unveiled, and to get ready, leslie picker is joining us to look at how last year's investments turned out good morning >> good morning, becky if you piled some of last year's delivering alpha, we crunched the numbers until now, and by and large, you actually would have done incredibly well. they expected oil prices to be higher in a year he touted investments in mpx

energy which are up 86% and 88% respectively firstdata and shire are up as well, although they have a 12.5% gain over the same period. jim chenos took an opposite bet on the resources his bearishness was largely over accounting concerns. however, since chenos announced he was voting against continental, that stock rose 37%. jim smith made bets on terex but it is also trailing the s&p 500, guys >> how does that match up to what we've heard in the past, do you know we've heard strong gains from other years, too >> this anecdotally feels

better i don't think anybody saw this in years past and have been beneficiaryies of an 80% surge. it hasn't even been a whole year >> you have to be objective but what are the things you're looking for tomorrow that you're excited about? >> that i'm most excited about i think we have a lot of good speakers that can provide a good sense of what's going on globally on the macro side of things we've got john gray from blackstone he's spoken in the past but not really in this kind of format, especially since he's been president of blackstone. i'm really interested to hear what he says about what's going on with the trade war. it's the right time of year for some of these people >> i have ken griffin tomorrow so i'm excited about him, but i'm also really excited about bannon steve bannon, after the news of what happened in helsinki yesterday, plus he's a boitcoin

investor >> he is the closing keynote >> i can't wait to hear from rubinste rubinstein his lawyer has been involved in politics how does that get you to this position, what does he see now, because he has made some impressive calls in the past in 2006 he was worried about how the market was going sure enough, his comments foreshadowed a lot of what happened in 2007 >> with people like that, you keep hearing about all the uncertainty. if you can have a whole day where you listen to all these smart people, griffin, rubinstein, gray, bannon, and kind of get a sense of what they're feeling, you can take away -- maybe nothing clears up the uncertainty but maybe makes it seem more manageable. >> leslie, thank you very much as we mentioned, you can watch cnbc throughout the day tomorrow for all the delivering alpha coverage it's live from new york city

what would you place a bet on? >> i like the leather jacket, stubble look coming up, the inside line on goldman sachs kes e going to get an analyst' ta on this morning's numbers from the wall street giant, when we return. or where you trade, you'll only pay $4.95. fidelity. open an account today. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

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goldman sachs the dow component posting better than expected earnings joining us on the squawk "newsline," gerard cassidy i don't know if you would ascribe anything to the numbers themselves, but the stock is off a little bit, gerard and this is after a big beat on the bottom line, much better than expected results in the strongest first half return on equities in nine years so anything to the slight down trend in the stock today it's off a couple dollars. gerard >> joe, i think you summed it up well the stock has performed decently up until today, but what's interesting is i think it was an overcrowded long after jp morgan reported on friday their capital markets numbers were very strong s citi's were good, bank america's were good. so i think people were expecting good numbers, big numbers as you

described, but it was overcrowded long which i think is why it might be trading down a little bit right now >> i thought revenue was actually above expectations. this says total revenue rose to 8.4 billion below a fact set consensus of 8.7 billion do you have the revenue number as below expectation >> no, not at all. in fact, looking at their releases, their total revenues came in around 9.4 billion, and that was up over a year ago. as you know, the investment banking business is cyclical, so looking year over year is a better comparison. and revenues across the board, with the exception of equity trading, revenues across the board were better than expected and meaningfully above a year ago. >> okay. but in equity trading, that's where it was below last year below expectations >> below expectations. it was flat last year but below expectations

i think when you look at the consensus number, many people were just over 2 billion, it came in at 1.9, but was flat a year ago >> so the bread and butter for goldman sachs at this point in this cycle, in this environment that we're in right now, is what >> the bread and butter for this company is investment banking. you look at the advisory business very strong, the equity underwriting was also very strong, debt underwriting was good one of the real key tenets of this company was the investment banking business tied to that, though, was also trading. so when you take a look at the fic execution, they had a tough year last year in commodities trading. much better this year as well as the other areas of interest rate products and corporate products as well. >> so what are you expecting in terms of hearing -- do you know anything about the succession when blankfein is leaving?

what do you think of david solomon at this point? >> yes, i think it's a very good choice it lieeans into the investment banking area some of the legendary ceos came from rubien, as you might recall as we go forward, trading is more electronic than the human touch. i think the investment banking part is maybe going to dominate and choosing somebody from inside for any company in our view is always a positive move, and i think this is a smart move on the part of goldman >> all right, gerard, thanks stay tuned if we hear anything about concrete news on the successor, we will be bringing it to you, so leave your tv set on. we appreciate it turn it back on because you shouldn't leave it on when you're on the phone, probably. it's very confusing. there is a delay thanks for the quick analysis. appreciate it. coming up, this morning's top stories including much more on goldman sachs plus the ceo of booking holdings joins us live.

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we've been expecting goldman sachs naming a new ceo david solomon will be replacing long-time chief executive david bla blankfein who has been there for many years, brought it through a financial crisis here's the timing of what's going to happen. david solomon is going to take the ceo title starting october 1st of this year while blankfein will remain chairman of the company until the end of the year, and then david solomon starting in 2019 will be both the chairman and the ceo a memo going out to the company internally just moments ago. to the people of goldman sachs, lloyd blankfein writes, today our firm is announcing i intend to step down as the ceo end of september and remain as chairman when i've been asked about succession in the past, it's always been hard for me to think about leaving. when times are tougher you can't leave, and when times are better, you don't want to leave. i got a chance to spend some

time with david and lloyd late yesterday before this announcement was made. it is perhaps a huge changing of the guard, a new chapter in the life of goldman sachs, which has changed remarkably itself over the past decade, in large part because of the financial crisis and the shifts in the way the banking business have shifted. goldman sachs, of course, going from being a trading firm now, as we talked about earlier in the last hour, really transforming itself into both now a bank holding company and what that means and what it brings david solomon came to the company 19 years ago from bear stearns. i want to read a couple things lloyd blankfein did tell me. this appeared at a time when i'm feeling quite optimistic about our positioning. could it have been earlier, he said about the timing. could it have been later flip that screen around, if we could. you're going to see there, when

things are going badly, you can't leave, and when things are going well, you don't want to leave. so if you're going to go out on your own steam, he says, it's always going to be at a moment when you don't want to leave and by the way, that's why people sometimes stay too long he continued on to say a number of other things. let me just bring up a couple other interesting comments that he had made to me just yesterday. interestingly, he said this is a period of time when i'm feeling quite optimistic about our position he said, i'm not tired, i'm well that's a particular illusion he had been diagnosed with cancer a couple years ago and went through treatment, and he says that he is healthy. he says, i'm not out of gas, but he says david is ripe and ready and the right guy. here's what david had to tell me about all this he says, i know that in my tenure the firm will evolve. there will be changes, but

that's not going to be a revolution there is going to be an evolution at goldman sachs he said, i'm excited i'm humbled by the responsibility it's a big responsibility. i'm going to have to work hard at it, but i know enough to know that no matter what i think, i know what it feels like -- i don't know what it feels like to sit where he sat for the last 12 years. this is a huge changing of the guard, perhaps the most influential and watched firm on wall street. we want to head over to wilford frost who is also going through this news. wolf >> he says he's looking forward to unrestrained tweeting, given he's done restrained tweeting. you guys have been guiding goldman sachs through the financial crisis, and that was a huge part of it. only two ceos through that up until now. when you think about some of the

banks, merrill, bear stearns failing or being taken over. the share prices since he took over paints quite a picture. not quite as good as jp morgan but ahead of the big investment banks and during a period that wasn't that supportive of pure investment banks like goldman sachs compared to the universals like jp morgan and bank of america. despite that unfavorable headwind, though, you would have to say the second half of his performance not quite as strong, particularly against morgan stanley. a pure investment bank in the last five years, but still in very much positive territory the last five years. up 45% we could discuss why it's lacked more than stanley. perhaps focusing too much on pure trading clients, the hedge funds of this world, as opposed to the corporates.

again, something they are now addressing they remain the undisputed number one in banking, of course the question is who david solomon decides to promote and whether those promotions signal a move in the same direction or something altogether different this is confirmation of a change we were expecting. october 1st will be the change there. some of the potentials we could also discuss further >> we'll be continuing this conversation, but wolf, thank you for now. united health and johnson and s and johnson out with numbers this morning united health went down 10%. it experiences growth across all its businesses that stock, though, is down 1.7% then theirs johnson & johnson

earning an adjusted $2.07 a share. that was better than expected. revenue better than forecast an improvement in j and j's cancer drug. it's up by just over half a percent. booking holdings president and ceo, john fogel. it's great to see you. congratulations. how did this happen? >> we've been talking to people in china for a long time i spent a lot of time going there and our customers need this service >> let's explain for those who are uninitiated, it is the uber in china >> when our customers arrive in china, they need to figure out how they're getting around on the ground and didi is the way to do it the way we've done this transaction, we'll be able to use our app. so if people are going on booking.com or getting a hotel in china, they can go on that

same app, booking.com, and they'll be able to use the didi service and be able to get a car and pick them up and take them where they want to go. they don't need to go chinese at all and they'll be able to do it >> is the idea you have people coming into different countries, in this case china, who don't necessarily have the didi app? >> absolutely. they don't even know about didi. as you just pointed out, what is didi people going to china, maybe they look for an uber or lyft and there is no uber or lyft, what are they going to do? they use our service and they will see there is ground transportation right off the app. but there's even more to it. we're working with didi. didi has 550 million chinese customers. we want them to be able to see booking.com. when they travel around the world or even china, they need a place to stay. we want to make sure they're aware of our services, so it's going both ways. >> speak about the valuation of didi in the context of speculation and expectations that didi will soon go public.

>> there are expectations. a lot of companies in china are going public right now you've seen a number of them come out recently and there are a number of them in registration right now. the market is very attractive right now, so when they want to raise capital, they are going there. there's no doubt that capital is needed for some of these services didi is expanding around the world. they just went into australia, they're in mexico, brazil. they're going around the world >> is this part of a strategic shift for you to get into ride hailing or some other services across the board by the way, there are some strange bedfellows when you think about didi didi owns a piece of lyft. uber, which gave up its business in china, has a major piece of didi you're now involved. what does this ultimately look like >> it's interesting, there are complications all over the place. we're invested in the biggest travel company in china. we're in china ourselves we're in business with metswan

they're now testing out ride sharing and now we've invested in the biggest ride sharing company. we're not doing ride sharing ou ourselves. the point is to connect them with ride sharing. >> the relationship that the consumer has with you, historically it was that i went to you before i planned the trip and then, apologies, i didn't think about you again. i just went on the trip. >> yeah. we want you to think about us all the time from the time you leave that house or apartment at home, and you'll have to get to that plane somehow, or train, we want to help you get there then when you fly over and land, we want to make sure you get to the hotel. and even more, when you're in that city, we want to provi attractions. >> that makes sense to me when visiting china it's really complicated to try to figure out where you're going and make your way around, so i get it

but how many of your travelers are going to china and if this is to really ease that, we shouldn't expect to see you team up with uber or lyft here in the united states? is that because it's so complicated there or is this the ultimate gain? >> you've noticed this, becky. travel is a problem when there is a lot of friction we want to make it easier. we're using technology so that wherever you go in the world, at any time you're able to order easily off our app we know your credit card, we know who you are, we know what you want we make it seamless so all the payments will be easier. >> so that makes it sound like you will be teaming up with uber or lyft in places like america >> we want to make sure people have the best experience in the world. whether it's partnering or whatever, we want to make sure our customers find it easy because it's still hard. >> this goes back to the valuation issue, how you value these companies. >> it's hard, let's face it. a lot of companies growing very rapidly, losing a lot of money

>> that's where i'm going with this there's been a huge argument that silicon valley and others are effectively subsidizing all of our rides wherever we're going the past couple years. >> there's no doubt and that's not just ride hailing. we see people saying, look, the money is coming out of the limited partners of the venture capital who give it to the internet company who hand it out as a subsidy to the drivers, the car. we see and hear that somewhere down the road, these things will be very profitable which is why we put half a billion dollars into it. the kotsz acosts are coming dow. these ride vehicles make it extremely lower. when you have a human driving this stuff, that's how people see potential for much greater profits down the road. >> thank you good to see you. facing the brexit fallout. we're going to talk to a member of the european parliament who supports the u.k. leaving the

eu that's next. plus, much more on the breaking story david solomon will become ceo on october 1st. that's pretty fast for the transition you're watching "squawk box" on cnbc ♪ come on. this summer, add a new member to the family. at the mercedes-benz summer event. lease the glc300 for $429 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

the news that just broke at the top of the hour, goldman sachs announcing that lloyd blankfein will retire as chairman and ceo of the firm blankfein will step down as ceo on september 30th. he will retire from the firm as its chairman at the end of the year david solomon will join the board on october 1st lloyd blankfein told me the following. he said, quote, in explaining the timing for this, because there's been lots of speculation for years about when lloyd blankfein might step down. he's been there now for 12 years, one of the longest running tenures of an executive at that firm he said, when things are going badly, you can't leave, and when things are going well, you don't want to leave. so if you're going out on your own steam, it's always going to be at a moment when you don't want to leave. by the way, that's why people sometimes stay too long.

he mentioned being a history buff, by the way, and noting folks both in the world of finance and sports who have stayed too long. he said this is a period of time when i'm feeling quite optimistic about our positioning. we saw their earnings today. very positive, ahead of expectations though the stock was down just marginally he said, could it have been earlier, about when he was leaving, could it have been later? i'm not tired, i'm well, referring to his health and the fact he had been diagnosed with cancer several years ago but has a clean bill of health today he says, i'm not out of gas, but david is ripe and ready and the right guy. i also spoke to david solomon. he said, i know that in my tenure the firm will evolve. there will be changes, he said, but there will not be a revolution, there will be an evolution at goldman sachs i'm humbled by the responsibility, it's a big responsibility, but i also know

that no matter what i think, i don't know what it's like to sit where he, meaning lloyd blankfein, has for the last 12 years. goldman sachs probably the most influential and watched firm on wall street, and again, transforming itself this morning. >> how old is lloyd now? >> 63 years old. >> he's young. >> he's young. >> a young man because he has such a great sense of humor, he says, now i'm on the job market. he goes, i'll probably follow people's advice and take at least a couple weeks off ka-ching nobody is laughing here, come on here's one thing i look forward to: unrestrained tweeting. >> honestly, if he's somebody who has not run out of steam, he still has a lot of gas, what comes next >> i don't think he's going to do this. i could see him go into philanthropy, i could see him become a university president, i could see him do all sorts of

things >> cnbc contributor. >> of course high on the list. >> that would be the pinnacle. i don't know if we want him. >> he could do stand-up comedy >> i would be willing to consider him if he sells himself. i don't know if we have any openings probably for him we might. >> we do >> i don't know what he's going to do next >> i can't believe these two guys spent their last night before this news came out, with you. >> thanks, joe >> how did that -- did you run into them by chance? >> i've known both of them now for many, many years, and we've had conversations on and off >> i think it's nice you guys were at dinner or something? >> no, we just met -- >> somewhere in a secret little -- >> no, we met on the 41st floor in a conference room near his office i went to goldman sachs last night. >> thank you for doing that for the show, i guess.

>> i had nothing else to do. no, no, this is huge news. also we should say the tenure -- i mean, this is one of the most storied careers on wall street between him and jamie donnelly, the last people who were really there during the financial crisis, we talked about the reputational hits that the firm took during that period. arguably unfair at certain points you really think about what happened during all of that, he talked about the existential crisis that the firm faced >> i also think about his commentary for that time which he said it's not as great as the beaches of normandy. >> when some guy was like, oh, i'm so scared. >> getting out of a mercedes-benz and walking into a conference room. that puts it in great perspective, that sort of sense of being able to steer through crisis >> he said -- you'll appreciate this he said, at the end of the day,

the firm during my tenure faced extensive risks and reputational risk which came about partly because we nav gaigated the existential risk as well as we did. i think it expresses what his tenure was about >> okay, we are going to move on and hopefully -- are these guys coming on? >> we're going to bring them on. >> that will be good our next guest has a front row seat to brexit, whatever it is, and the impact of the u.s. trade policy in europe let's welcome fayed kamall he's in washington today to meet with members of congress and senators you are a brexiteer. there are all these funny names. where do we stand right now? what was the main problem with prime minister may's soft brexit

among the people that, johnson or david what was the main problem and has that been rectified? >> thank you very much for having me on they reached a bit of an impasse, the way you negotiate you never agree to the first agreement, so everything that was suggested was declined in a very polite way. the government wants to shift the impasse and move on and decided to just come up with this white paper, the checker's paper, and suggest the way forward. i think what many people are concerned about, and i think probably some resignations, was if you have this paper and you put it to the eu, what the eu will do is come back and say, oh, we need to see a bit more detail, and they'll say, can you tweet this or tweet that

i think the concern was the government might compromise even more where we are now, the parliament will go into recess probably next week and negotiations will continue over the summer we'll see where we are then. >> so in the view or in the eyes of people like you, will it become a harder brexit, or will it stay mostly where it is and can you expect a harder brexit to come from prime minister may will she still be the person that's orchestrating this or is it possible that she doesn't survive this >> it depends on whatyou mean as hard or soft brexit some people define hard brexit as absolutely no deal whatsoever, the u.k. leaves the eu next year and we have to try to sign a new agreement in the future other people say a hard brexit is leaving the customs union and leaving the market

i think it was quite clear britain wanted to leave the eu and people voted for that. that does involve leaving the customs union in a single market there are all sorts of definitions around that. i think what will happen is the government will negotiate on the base of the white paper. no doubt the eu will ask for some compromises and it will depend on how much the u.k. compromises or not what the u.k. is saying is, if you don't accept this, there is a chance we will walk away that is a negotiating tactic from both sides. >> wow and then there's also the possibility of a lawsuit that was the president's idea. cy, thank you. we're going to leave it right there. lees come back and fill us in when we know more. there are a lot of unknowns left, but we appreciate your time thanks >> thank you very much when we come back, spiking lumber prices are hitting home donna olik is live in dover.

f foxcroft main with what's coming up ext >> can they rampprucon up odti fast enough? we're in the middle of maine with some answers on "squawk box. coming up next

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coming up, we're going to talk to democratic senator mark warner about the falut florom

the trump-putin summit that conversation a lot more when "squawk box" returns. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you?

♪ good morning welcome to "squawk box" in times square a news-filled morning for goldman sachs, the investment bank announcing that lloyd blankfein will be stepping down end of september to be replaced by david solomon lloyd will remain chairman of the company until the end of the year, at which time he will retire and david solomon will also take the chairman role title at that point. the shares are at higher

amounts. fanduel will be using a sports betting platform on the track in new jersey. i think we should make a little pilgrimage over there. and pipeline operator plains all american was rejected for tariffs on imported steel. they reported that suitable products were available from others president trump met with russian president vladimir putin. senator mark warner asking if the country isn't being defended in public, how can we trust what he's doing in private? senator, this is a situation where the president is being criticized not only by democrats but by republicans fairly widely in this context. what do you think happened yesterday? >> well, frankly what happened yesterday was an embarrassment to our country when a very weak

donald trump kowtowed donald trump on issue after issue when he threw under the bus the whole american community when he concluded that russians intervened in our elections. i had a remarkable occurrence that yesterday we had a meeting that was long scheduled, marco rubio and i did, with nations that had also been interfered with by russia, and they're saying, what is going on here when your president is denying what has been discovered happened in their own countries, which even facebook, twitter and youtube have all acknowledged, russian misuse of their platforms, where do we go from here i worry if the president was so weak in public with putin, what really happened in that couple-hour session in private, and i'm not sure how we as congress can get that answer we sure as heck need at least a

briefing from senior members of the administration about what the president may have said or may have promised. we know this president likes to wing it. vladimir putin is a kgb agent. he knows his facts he's dealt 18 years on the international stage, and i'm afraid the president may have gotten taken advantage of in that private session >> i asked a guest earlier, what would be the fallout what does congress do next he said nothing. what are the actions >> i hope that's not the case. congress was nervous enough about this trip, and congress, as we know, doesn't agree on a lot. but 98 senators, before the president took this trip, sent a message saying, we reaffirm our commitment to nato not only nato because it is a defense alliance but because we're alliances of democracies that believe in one man, one vote, that believe in free press, that believe in open society. these are not values that vladimir putin represents, and frankly, they don't seem to be values that donald trump is very comfortable with, either so i think congress could do a

sense of the senate. we could put in place bipartisan legislation that would strengthen our election system, but i think we need to send a message to the rest of the world from both a defense standpoint that we're still standing up for our values, and also from a market standpoint. i've been a business guy longer than i've been in politics it worries me when the president calls the eu a foe and when it says to russia he wants to talk about trade, russia is about 30th in our trade relations. all they do is energy and military products. frankly, we're pretty good in those areas, so i'm not sure what kind of stronger trade relations the president was talking about. >> senator, just on that very point, we had heard some rumblings in the past that some senators might get together and try and do something to prevent the president from being able to raise these tariffs on some of our allies that had not picked up a whole lot of steam before this does that change this situation at all >> i would hope so i'm supportive of that

legislation. i think the president ought to have executive authority, but when you're taking on our native allies, which i think was ill-founded, i think there needs to be some congressional oversight. i'm all in on calling on china's inappropriate stealing of our technology companies like zdt and allway. we've seen this from the president, and he immediately backs down when it comes to president xi this is a president that talks tough with our allies, but he seems to fold at first blush >> i think he said no one has been tougher on russia than i have been on russia, and we know he's stated that he'd like, like many past presidents, a reset with russia. he thinks the nuclear superpowers would be good to get along, it would be good to have someone aligned with you because china is such an economic power.

i understand that. but in terms of ablgctions, he increased the defense spending dramatically that's mostly at russia, the biggest defense bill appropriations we've ever seen increased weapons capacity and modernized nuclear weapons got europe to increase its defense spending primarily at russia, expelled 60 russian officials after the poisoning in britain. crimea happened under obama. the meddling happened under obama. what did the obama administration do that was tough? >> i'm not here to defend obama, but i'm here to actually -- we ought to actually not deal in hyperbole, let's deal in facts the only reason, the only reason that trump put sanctions on russia was because congress said, we don't trust you not to put sanctions and they passed

what was called katsa that took away the president's authority to walk away from those sanctions. on the question of defense spending, yes, we've spent over $7 billion on defense, highest ever russia spends about 70 billion my fear is we're buying the world's best 20th century military where russia has decided on cyber and information and misinformation to take aim >> what do you realistically think was the motivation for the approach and the words that president trump used yesterday what's really going on >> i can't fathom what was going on this is a guy who says he's a good deal maker. this is a guy who says he wants to present strength. to me i saw the weakest performance by an american president ever just think in a historic context. if john f. kennedy had accepted

kruschev's comment, the world would be different >> he has been criticized here at this table. what we have seen is a trump-putin fallout. realistically, what is the fallout from this? >> i think the fallout realistically, and you heard from the german foreign minister yesterday, i'm not sure if europeans, or for that matter, countries around the world will look to america to be a strong partner that will be there in tough times. i worry as well whether trump, in effect, embraced not only putin's approach but his view of the world. putin's view is not for democracy, not for one man one vote, not for a free press it feels like if you are a country that's looking for an ally, or for that matter, a trading partner that will stick with you when times are tough,

donald trump did not represent what has traditionally been america's approach under both democrats and republicans alike. >> senator warner, i want to thank you for joining us this morning. >> thank you coming up -- no, not coming up the price of lumber thanks in part to tariff oz on canadian lumber dia diana olick joins us now >> we're at a lumber company in maine with a big opportunity the price of lumber has skyrocketed, up 50% in the last year alone, and that's because of a perfect storm surrounding canadian supply, that is, first forest fires, then transportation issues, then u.s. duties imposed on canadian lumber it all spells a lot more green in these trees for u.s. lumber producers. here at pleasant river, they're

already blasting new ground, getting ready to expand production by 50%. they are thinking $20 million into the upgrade and are expected to hire 40 new workers. it's not just the tariffs that are doing it, it's the confidence in the u.s. economy >> given the playing field, the economy has a chance to grow we're meeting production, we're meeting the demand growth. >> now, the canadian tariffs are giving u.s. producers both the confidence to expand, but there is something they need they cannot grow in this forest, and that is steel. the u.s. just imposed new tariffs on steel that they need to expand this mill. back to you guys >> all right, diana. >> a good shot >> not a bad gig today a little foggy up there. >> do you need a helmet?

>> that always works, i would think. is it dangerous? there is a big crane behind you. don't walk under that, diana >> we were actually up on that crane yesterday. you will see that later today. it's too foggy to get up there today. imbalancing on logs, though. i'm not lying. >> thank you, diana. when we return, big story. how bot armies, bots on the internet, are taking aim at corporations we're going to talk to a ceo talking to uber when we return understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony helps make them happen with data, insights, financing and technologies. ♪ ♪

synchrony. what are you working forward to?

"squawk box" 2014 presidential election helping to open a discussion of influence out into the open, but corporations are often on-line targets, too, and our next guest says he's been seeing bots with the potential of damaging brands and tok prices welcome to the ceo of bots that are going after all sorts of companies. >> it's interesting. we're seeing where a lot of those same tactics and forces that are attacking our politics are now attacking companies, and they have no idea it's happening.

>> give us an example of what's happening here >> an example, we have a use case where amd, the chip maker, there was an unqualified report that came out saying that they had a chip flaw. >> fake news are we talking about here >> arguably fake news. it's called suspicious news. we saw a bot network spin up, start amplifying that story to the point where it started trending and then it got into the mainstream media >> how does that happen? who do you think is behind that bot? >> it's a really good question it's one of the most important questions. when we look at this and we look at modems behind these attacks, we look at it for different ways number one, financial gain, price manipulation >> do you think a short seller would be out there trying to manipulate these tweets? >> it's possible and it's more than just tweets, by the way it's across all platforms we're seeing this and it's happening all at once. number two, it's impacting corporate reputation, corporate

brands number three is cultural weaponization. >> what do you mean, cultural weaponization? >> i think, for example, when roseanne barr made that horrible tweet. we saw businesses spin up. >> these are businesses that emerge out of nowhere? >> is this a service like yours, the antithesis for these services, or is this a hedge manager? >> we've seen all types of different bot networks out there. some are services but a lot of them are tied to nefarious actors >> russia? what are we talking about? >> i think sometimes you can look at nation states that are involved with this a lot of other times it's groups, from political to financial. >> tell us what you've really learned, because you're service is aimed at trying to stop this, or at least to alert people who

have these brands that this is going on >> uh-huh. >> i assume to actually be able to track this stuff, you must have actually gotten to the bottom of who some of these people are >> yeah, look, this is a time we live in nowadays and these necessary anywhe nefarious actors are coming off an agenda. one of the things we see a lot are are bot networks that spin up old news, too, to impact a brand. we saw nestle get hit with an article from a publication about a year ago every single month a bot network spins up to amplify that same story about how they make money from free or inexpensive water, bottling it and selling it for billions, and that impacts its corporate brand monthly. >> if they were a customer, how do you go about changing that? >> we look at three things one, it's an element of situational awareness. so give them an alert the second it's happening

as soon as we find a bot network, it goes into a database, so we can alert companies as it's happening. number two, they need a new type of communications plan companies are not always, in fact, very rarely, prepared for this type of thing to occur. for example, if it's something that's impacting your stock price, have plans for your ceo to go on tv and say, hey, this is stock price manipulation. number three, there are technical strategies you can do, both offensive and defensive, to push back. >> can you create your own bot >> i recommend against that. i think it's better to look at this in terms of let's make everybody aware this is happening. companies need to be aware that they're getting hit. >> am i right to think of you almost as reputation.com where when false information is put out there you need somebody to clean it up for you? >> yeah, but on a larger scale so from a media intelligence perspective. it's coming from all corners of the internet the only way you can see this is with technology. you cannot see this with the naked eye. >> i'm assuming this is not

cheap, this kind of protection >> in terms of how much money you can save, it's very inexpensive. >> if i wanted to hire you to monitor the brand that is "squawk box," what do you charge >> for you guys, of course, we would give a healthy discount. but it would be in the six to seven-figure range >> wow >> your reputation is that valuable >> that's a deal right there >> it's a deal thank you. >> thank you, guys appreciate it. >> i lost hardly any twitter files. i already blocked them all i blocked about 3800 >> see, you don't even need him. >> i think we're going to cramer, but i'm busy botting people right now you'll see the new york stock exchange live in a few moments. dow jones off about 6 points,

dow jones off about 6 points, nasdaqges from happening in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital.

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get down to the new york stock

exchange jim cramer joins us now. you've got a unique insight into goldman sachs. there's a lot of news on goldman today. what do you make of it >> i think it's more important now. this is a great number i think those selling the stock are not recognized the second half has been when you buy goldman. at the beginning of the quarter. >> the -- you feel that's a good move, i guess? >> yeah. absolutely i met him. i think the main thing if lloyd stays on a whole new generation leaves and goeses elsewhere. this is a smart move it's the way the partnerships work and anyof these firms in order to keep the class of great people that you trained so hard,

you have to step down well before a lot of people think you're done. i think that's the case here. >> what else are you seeing happening today, jim >> i think the j.j. is a classic example. shoot first and ask questions later. i went through the release a dozen times. pharmaceuticals doing so well. they have double digit growth. we're not seeing a lot of double digit growth elsewhere the netflix, i get that reaction i mean, the company told you it was unhappy with itself. but the initial j & j down a couple of bucks seems silly. everything on thursday when the banks ran, it looked like it was maybe not smart that the banks reported it wasn't as bad as people thought and it came back i say be careful of snap judgments. >> jim, we'll see you in a couple of minutes. "squawkbox" is coming right back 'lchk twel econhe markets and end the show

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check out the shares of netflix. they've been under pressure since yesterday when the company reported that subscriber numbers

miss forecast. its own and provided by analysts by more than 1 million netflix called the quarter strong but not stellar the ceo said the fundamentals have never been stronger we have the stock down about 11% right now. >> 13. >> yeah. 13%. >> yeah. and i think puts it below a couple of its media competitors. >> a big question had been what does it mean for the markets overall? surprisingly, it looked -- you're looking at the nasdaq down today but surprisingly you haven't seen more pressure on the other indexes. we talked about how the faang stocks have been holding everything up. right now nasdaq down by 61. dow down by 11. >> and amazon suffered through website glitches yesterday many of the glitches had been solved as the day progressed with promotions set to continue

until 3:00 a.m. eastern time. >> and it is almost here tomorrow is the big day. cnbc eighth annual delivering alpha conference will be here. speakers include larry kudlow, and ken griffin. we'll be hearing from former white house chief strategies steve bannon make sure you tune in starting at 6:00 a.m. eastern time. our guest will be billionaire marc lasry delivering alpha all day long on cnbc. >> you have a big interview later in the day. >> right you have ken griffin. >> right and steve bannon it'll be fascinating to hear what he will say he's never one to hold his comments. >> you never know. he said things in the past and you go oh, my god. three days later it sounds like

he's on the trump train. >> and my interesting crypto, he's become a crypto guy so bitcoin. >> i'm going to bring in that letter about paying off someone who is blackmailing people with krip t -- crypto currency. >> make sure you join us tomorrow we'll have more of delivering alpha. right now it's time for "squawk on the street. ♪ good tuesday morning welcome to "squawk on the street." steady futures s&p looks to avoid the first back to back