>> announcer: live from new york where business never sleeps, this is "squawk box. good morning of the welcome to "squawk box" here on cnbc live at the nasdaq market site in times square. i'm melissa lee. >> and bobby brown is here. >> how do you like that? not too early. >> poison. works with the poison pill >> right, right. >>let get a check on how we're setting up on the monday morning open looks like -- the dow looking to lose 17 at the open. s&p 500 down by 3 1/2. the nasdaq down by -- the s&p 500 for the fourth consecutive month of gains overnight, the action asia really driven by that spike in

the yen that we saw overnight. drove the nikkei down. there was a report out of reuters that the boj would consider pairing back on the stimulus and be higher the hang seng and the shanghai composite finishing higher today. european equities, taking a check there. we see red arrows across board down by .2 of a percent. the ftsoo ftse down by.4. the two years at 2.587%. the ftse down because shares of fiat chrysler tumbling on news that sergio marchionne is stepping down. phil lebeau joins us with the latest on that >> wilf, he's not just stepping down remember, he's the ceo of

ferrari as well. here are the developments with regard to sergio marchionne. a quick moving weekend in terms of the board taking actions to ensure that the leadership and the transition, especially as they head into earnings later this week is as smooth as possible there's no doubt that this was a crisis brought in within the last couple of days. sergio marchionne replacedas ceo. he will not return to work this is not a case where he's not feeling well and not there for a while. he's not coming back to work the reason, a rapid decline in his health following surgery three weeks ago. he had shoulder surgery. we don't have any details beyond that in terms of what's happened with his health. but the chairman of ex-or who holds large stakes in fiat, chrysler, cnh international. john he will kin who has been by his side the last 14 years as sergio put together fiat chrysler, he issued a statement

saying he taught us to think differently and have the courage to change, often in unconventional ways. always acting with a sense of responsibility for the companies and their people what's next for fiat chrysler? the new ceo is mike manley he's been running the jeep and the ram brands for a number of years. he has a strong operational track record this isn't a figurehead who we're going to put you in charge of the entire company. he's worked hand in hand with sergio marchionne over the last ten years. many people have said eventually he would replace marchionne. his elevation to this position, not a huge surprise. take a look at shares this morning, this is a company that reports earnings on wednesday. that's when we expect to hear from mike manley not only about this transition very quick and sudden transition into the top job at fiat chrysler, but also what other changes. we don't expect any that the company might make as they're

transitioning from the sergio marchionne era into the era with mike manley in charge. guys, back to you. >> i was going to ask you, in terms of mike manley, sergio had a remarkable license inside the company and from john elkann to make decisions including around smart cars and not to invest in those but to pursue partnerships, do all sorts of things that his tore chicago a ceo might not necessarily have the freedom that he had before will mike manley have that same freedom? >> i'm not sure if he will initially, andrew. he doesn't come in as somebody who is a caretaker he comes in as somebody who understands the task at hand and the goal of where the company is headed, which by the way, might include a possible sale or merger in the future that has long been many believe, the goal of the elkann family to

see fiat chrysler to another position where it's mernld -- mr sold if the price is right the price has never been right he understands the blueprint, how to implement that blueprint. i do not believe he comes in with the same mandate that sergio marchionne did. marchionne, if he saw the right deal and went to the elkann family, company x, y, z made this offer, or we should merge with these guys, that was influential. he could say this is what we should do. if it made sense, the board would sign off on that i'm not sure that mike manley has that same mandate. >> historically, phil, ceos new to the role are less lick lie to want to sell the company do you think that bid, the takeover bid dwindles a little bit with mike manley taking over >> no. i think that it's probably the same as it was before. i don't think that they're going to look to make a huge decision

with regard to fiat chrysler either because mike manley is in charge or sergio marchionne is not in charge. it comes down to price when you look at the global auto landscape, there are not a lot of potential dance partners for fiat chrysler. which is with why many said do they split up the company. do you spin off jeep or ram? do you take dodge and chrysler, which really are -- they're not valuable relative to the other brands do you take those and somehow coddle them together with other assets and then spin them off to somebody else or sell them to somebody else? i think it comes down to price, melissa. even though sergio marchionne is not in charge, that equation doesn't change. >> thank you very much, phil lebeau in chicago. the big story this morning, out of washington. president trump taking on a iran in a late night tweet.

eamon javers joins us with that. >> the tweet came in just about six hours ago. about midnight east coast time this is what the president said directly to iranian president rue many never ever threaten the united states again or you'll suffer the consequences few have suffered before. be cautious. exclamation point. the president was responding to comments made by the president of iran rouhani over the weekend. here's what rouhani said that got the president's attention. he said, don't play with the lie on's tailor you will regret it peace with iran would be the mother of all peace and war with iran would be the mother of all wars is it possible that earn in the region sells their oil and we stand idly by and watch. the efforts by the united states

to clamp down around the world on oil sales, putting pressure and leaning on allies around the european region to stop buying iranian oil. that's frustrating to the iranian who counted on some of that revenue coming in rouhani reminded that they control, the iranians the straits of hormuz. that's a vital shipping choke point and the iranian president not shy about reminding the american president about iran's capabilities in that areament a war of words everyone in washington will be watching where this goes today is this similar to the war of words between the president and kim jong-un of north korea last year which ended up with the two men shake being hand and standing side by side or is this different something we haven't seen before? >> that's the big question of the morning, eamon how much is there a parallel between this and north korea right now? >> the rhetoric is similar

the president calling him rocket man and demented >> it's a complicated military situation. the united states has been in a frozen cold war of sorts with iran for a long time at this point, that's a similar situation to what we had in north korea. the question is, are the politics in iran similar to the politics domestically in north korea. does the iranian president have the flexibility to negotiate ar is he subject to pressures of his own domestically that kim jong-un might not be subject to. >> will they welcome the tough talk on iran given the softer starts against russia in recent weeks or will they focus on the difference in tone against the two and question why there is that difference in tone? >> i think they will welcome in to some extent they'll certainly welcome a change of storylines in the russia storyline that dominated most news coverage last week that was frustrating for the president. he tweeted a number of times over the weekend about how great

his summit with vladimir putin was and he wasn't getting enough good reviews in the media for that this gives the president another aspect of the world to concentrate on today also, i think it will remind republicans of their tough rhetoric against iran and remind them of their relative unity politically against the obama administration's iran deal which the president has torn up and called a terrible deal >> okay. eamon, we're going to leave it there. i imagine we'll be talking more about this. finance leaders from the g20 nations gathered in argentina. as you'd expect the top of the trade was front and center here's steven mnuchin. >> these trade issues didn't occur overnight. president trump is determined to have free and fair and more balanced trade and we just want to make sure american and american workers are treated fairly

>> the official statement from the ministers at the meeting say the global economy remains strong but growth is less synchronized in risks over the short and medium term increased. mondelez is recalling ritz crackers and ritz bits over concerns that an ingredient may be contaminated with salmonella. one supplier recalled whey powder due to presence of salmonella it includes fever, nausea and gastrointestinal problems. papa john's, this is why we were playing the poison song bobby brown's new song pennsylvan pennsylvana -- they're adopting- aimed to prevent the controversial founder from securing a controlling interest. the board has been trying to sever ties for quite some time now with john schnatter. after it became public he used a

racial slur with a pr firm schnatter owns about 30% of papa john's shares and signaled he won't be giving up control of the company without a fight. papa john's rights plan would trigger once a share older has acquired a 15% interest in the company, but the board says that his stake has been grandfathered in sort of being held hostage by owe o. >> he's being held hostage -- >> no, the board is being held hostage by him. >> they're holding him up to get out. >> yeah. meantime the shares have been suffering because of this whole thing. let's check on the markets it's the busiest week. more than 160 companies reporting results. joining us now is katie stock and david leeb vich. welcome to you both. 35 prs of the s&p 3500 points earnings this week, including from the big tech names.

i hate to say this week make or break. but it could be make or break. amazon and google. >> it's clearly very important week for s&p 500 profits i think it comes at a particularly key juncture. over the past couple of weeks you have begun to see confidence indisease take a hit and the trade rhetoric begin to weigh on the data this comes at an interesting time where the tug of war between fundamentals and what's happening in the political sphere has been escalating watch and wait it's going to be a pretty good one. obviously tax reform is helping. but the trend of that 85% of companies continuing to -- looks set to be maintained over the course of the coming days. >> at the same time, katie, where do you see the markets the next test is the january highs? right now we're 2.5% off record highs. we've seen a pull back in small caps a great week in transports last week. >> we did. the market has cooperated from a technical standpoint the momentum is there.

short-term, long-term. s&p 500 managed to clear it march high that contends with final resistance from january. surmountable from a momentum perspective. i don't see any major signs of exhaustion and the small caps pullback looks healthy to me had the runup quickly in august terms. >> what do you think about the sector performance we've seen. financials enjoyed a bit of a bounce is that enough to be the sector leadership going forward from here >> it seems to be spreading out a little bit into financials and industrials which we're very much overdue for a -- in relative terms tech is the standout performer it continues to exhibit leadership and those up trend are very much intact i would take advantage of pullbacks. >> how do you factor in a currency war >> that's the big risk in an environment we're expecting, solid economic growth and rising inflation and higher

interest rates, the more cyclicly volume u oriented sales, they should do particularly well. now you have this overlay with what's been happening with the chinese from -- that makes the dollar important to watch the back half of the year. if global momentum picks up, that takes value out of the -- if we continue to have this back and forth relatively uncertain environment, i think the dollar may -- >> do they reflect that or does -- >> take on the dollar is a contraryian view the dollar index has recess stands on the chart. the dollar weeken over the next two to three months. >> the u.s. was the only gain in town, it made sense that the dollar was strengthening this resinkization, seems to be corresponding.

>> katie, does that mean you should buy international equity markets as well? >> the merging markets are more compelling when the dollar pulls back boy, if they're not oversold on the relative basis, still even in long-term up trends they've done some models to me, even if it's a short to intermediate position, there's interesting setups there >> we'll leave it there. good to see you. thank you. i need to correct myself separately >> why >> i was thinking bobby brown all morning with the boys -- bell biff deveau do you remember this >> i didn't know either name still don't. >> i'm familiar with bobby brown. >> i'm glad you corrected it i figured -- i should think we have one of our eagle eyed viewers on twitter >> there's so many out there good for you. is your uber driver live streaming your ride? one driver in st. louis was

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"squawk box," we're back tesla, it's interesting. it's asked suppliers to refund some money it says it wants to do this to help it become profitable. when is the last time you wanted to become profitable by getting a refund tesla said it was essential to continued operation and characterized it as an investment in the car company to continue long-term growth. as odd as this sounds, it is worth noting there have been instances in the auto making world where the suppliers invested ar granted rebates to companies. this is a little bit more complicated. >> sounds like a paid deposidep.

it doesn't flash the right kind of signal. already worrying about cash position. >> short sellers taken over twitter this morning are out and about. >> they've taken over twitter way before this. >> with this news then this morning. >> tesla burns about a billion dollars a quarter. >> see where they land. >> 27 billion last quarter we'll see how much cash they have and see if it fills in the story or if it doesn't. >> by the way, also, i don't know if you saw this this amazing review on friday in the "wall street journal" of the tesla 3. >> and then he was runoff twitter by the twitter trolls. >> elon tweeted over the weekend, wall street you saw it too. >> check it out if you haven't had a chance in the meantime, lighter tesla news as well elon musk has settled an argument over i don't know why i have to do this story. a farting unicorn.

you heard me right my children would like to be watching this part right now musk tweeted in february of 2017 that it was quote, maybe his favorite mug ever. month later, the artist learned that the image had been included inside the operating system of tesla vehicles and on an accompanying christmas he wanted to have a discussion about the copyright. at the time musk said legal action would be kind of lame since the lead of the tweets on friday, the artist said it's been settled in a way -- >> i think it's good news. >> for the artist. >> and the unicorn snien. >> he deserves credit for his creation. >> do you think he got a tesla model 3. >> that would have been a very good settlement, i think. >> i don't know. maybe he wants more. >> i don't know if they have spares at this point there's a long wait list.

>> likes to tweet in an unrestrained way >> like blankfein wants to do. >> i actually look forward to that >> he's already -- yeah, yeah. >> he's going to be. unrestrained what's he going to be saying >> i don't know. that's the excitement. he decided to wait until he's out of the role. something elon has not done. not been restrained. if you knew your uber driver was broadcasting to the world, would you get in >> i don't think i would an uber driver was send tg to twitch he claims he hasn't broken the law and the passengers don't have a reasonable expectation of privacy. since the st. louis dispatch broke the story, both lyft and uber have deactivated the man's account. >> live streaming it. >> i wouldn't go as far as -- >> i agree

confessions on hbo at night it was pretty late-night stuff you couldn't put it out there in the day time. >> stuff happened in the taxi. >> stuff might have happened in the uber. >> even if you're not live streaming it a lot of the taxis now, whether it's a camera on the front and the back in case they're in a collision, they also have a camera inside to record in case -- security reasons. >> even if it's not live streaming, what happens to that? you're sort of sitting there awkwardly, might be the worst thing. >> there was a reporter that uber was going to implement a camera inside or literally think about it in the app so the phone that sits -- you can see inside the car. >> they would be recording in case anything happens. all part of their -- uber is trying to say they're the safest service out there. >> another data question who would own that and where does it go afterwards? does it belong to the person

paying for the ride at the time and does it delete automatically if nothing happened? >> think about all the public places you go or semi public places or buildings you walk into -- >> but you're not paying for that service set if you're paying in an enclosed space, the only person present. >> you walk into a store and pay. who owns that camera >> slightly more private moment when you're in the back of a car. >> i agree seeing what we've seen on taxi cab confessions -- >> i don't know what you do in the back of a car. watch all you want it's boring. >> next story. the next olympics in 2020 might seem a long way off. but the tokyo 2020 team is drumming up excitement unveiling the mascots for the olympic and paralympic games the mascots' names, ma rye tower which fuses the japanese words for future and eternity. it is exciting that that's still to come. world cup finish now -- >> now the olympics.

>> goes back to china. the winter olympics will be back in beijing in 2022 >> remember when 2008 was the big coming out for china imagine what it will be in 2022. >> tokyo is hosting another tournament before then. >> the rugby world cup. >> i have it on my calendar. we're all going over. >> are you >> when is that? >> it's october next year. >> in the mean time, when we return, the washington week ahead. we'll get you ready for talks on auto tariffs president's taking on iran on twitter. dan lipman will join us from s&p and look at the winners and losers squawk returns in a moment

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improving efficiency is what we do best. energy lives here. ♪ >> announcer: welcome back you're watching "squawk box. live from the nasdaq market site in times square. good morning welcome back to "squawk box" here on cnbc among the stories front and center at this hour. treasury secretary steven mnuchin spoke to finance leaders

in argentina over the weekend. to negotiate free, fair and balanced trade new details about the ipo offering 14.9 million shares expecting $17 to $19 per share works out to $264 million if it prices at the top of the range sorkin family is a -- so nos family here's what's going on kicking things off before the closing bell hear from google parental fa bet which will impact the market futures at this hour see how things are setting themselves up. opened off -- off 35 points. the s&p 500 off 4.5 points it's a battle of the sequels. sony's r-rated equalizer 2 took the top spot with $38.5 million. it was denzel's washington first

sequel it edged out mamma mia here we go again it brought in more than $42 million internationally. it gave the first film bitter reviews than the first one >> i think it's a step too far, this one. >> did you see it? >> i haven't seen the second one. i did see the first one. kind of liked it it's a bit too cheesy. this looks like it's doubling down. >> go big or go home. >> it's going to find its audience >> he used to be james bond. now look at him. >> he looks great for his age. >> look what he's doing. >> in the meantime, i want to get back to our top story of the morning. it is out of washington. president trump tweeting late last night to the iranian president. here's what he said. he says never ever threaten the united states again or you will suffer consequences the likes of

which few throughout history have ever suffered before. we're no longer a country that will stand for your demented words of violence and death. be cautious. daniel lippman is here with us dan, good morning. >> good morning, how are you >> what's the inside line? what are people chattering about this morning when it comes to this tweet >> i think people are thinking back to last year when trump threatened fire and fury on kim jong-un and north korea and you saw them battle it out and then they had a summit in singapore a few weeks ago. so maybe people think that this is going to happen again with iran you might get a big summit in dubai or somewhere to try to hash out another deal, which is what trump said he would probably get a few weeks ago he said they would probably have

i a deal with iran >> this looks like fire and fury 2.0. >> fire and fury 1.50 caused consternation, they thought it was out of school to be speaking this way on twitter about another leader do you think that has now changed in terms of the tone and the shift? is there going to be the same type of outrage that there was then or are people going to look at this and say, look, we don't know if it worked out withnort korea, we should say, look at least what happened as a result? >> it kind of seems like trump is a paper tiger the more times you tweet in all caps threatening death and destruction on another country, you know, it just becomes less strong in how people perceive that iran does not have nuclear weapons. if there was a war, it would be really bad but it's not like iran is going to nuke israel and that would happen if north korea would

definitely strike south korea and japan if we got in a conflict with that country the risks are really tough but not as bad as a nuclear war with north korea. >> daniel, what does his own country think about this rhetoric on iran and does it go some way to repair what happened in the helsinki summit >> his own party, they don't want him to tweet thing like that it gives them headaches. they are in line with his policies on iran they mostly supported him ripping up the iran deal that obama negotiated the problem is that if he does negotiate a new deal with iran, it's go to be inevitably compared to the one obama did and it could come out weaker that would be -- would cause a lot of headaches in terms of headlines for trump. you never want to look weaker than obama or bush or any other leader >> to that point, dan, it sound

like the president would want to be tougher part of being tougher could be not granting sanction waivers for allies when it comes to dealing with iran and oil. i mean, it seems like in this grand seem or this grand bargaining with iran, the permutation could be cutting iran off of the oil markets. we sort of backed off of that. >> yeah. i think there's a fierce war going on in the administration and then getting lobby advice. their -- -- trying to preserve iranian oil or not get black listed from the international financial markets. so that battle has not concluded yet. treasury seems to be going back and forth in terms of how they will deal with this important issue. >> wanted to switch gears real quick to trade and in fact, what

happens to the tariffs on automobiles and the outcome or what you're seeing, chatter in washington where this is headed given the strange bedfellows inside the white house and outside they seem to have a different view of all of this than the president. >> trump, he always talks about how many german cars he's sees on the streets in america. he told merkel that he doesn't see that many american cars on germany streets. so the one consistent thing you hear from republicans is they can't defend this administration on trade you actually talk to people in the white house, political shop and they say that's a compliant from lawmakers as well when are you going to stop threatening the global economy and our stock market gains if you tariff and tax every product coming in. >> dan, there's two other things going on here. i'm trying to square this circle the wall street surgery reports

support at least among the roochs the approval rating is about 45% right now. you look at news stories in some of the towns hit by the trade war, you see horrible stories about where there's go to be massive layoffs and the employees are interviewed and oftentimes say, well, you know what, maybe we're just a -- somehow collateral damage and the president is trying to do the right thing. historically, those are not the words we've heard from the electorate >> that's a great point. it seems like our trade wars and tariffs have not hit home in terms of voter support for the president, at least among republicans. it's going to take a while once you're out of work for month, you might think twice about whether you should blame the president. you have a lot of hometown

congressman among republicans saying this is bad policy. maybe that will trickle down so far it has not yet. i'm sure that it might eventually because people, they want to be able to work and trump is supposed to be the pro business president. yet, he is pursuing these policies he says he's playing with the bank's money. if the president did get some kind of deal or rhetoric suggesting a deal is on the way on autos with the eu, how big a win would that be for the president in the short-term and that it might suggest his rather abrasive tactics could end to good results long-term >> i think it will be -- washington and the rest of the country, they are not focusing on the auto tariffs as much as paul manafort's trial starts on wednesday. they're going to have jury selection done there will just be more headlines about potential ball

summit with putin. this doesn't seem high on the agenda a lot of american consumers in terms of voters and the median in general. >> dan, one final question i don't know if you saw the cover of new york magazine this morning, but they have ehllizabh warren with the term front-runner, question mark. is she the front-runner for the party in 2020? >> just one magazine cover doesn't make her the front-runner but the energy she's getting from traveling around the country, my parents saw her in massachusetts. packed crowd she's the real celebrity in the democratic party right now it takes it hard for -- makes it hard for others to get -- like bernie sanders >> thank you dan lippman we have an earning alert

hasbro quarterly earnings at $.48 a share. well above estimates topping forecasts, this all coming despite revenue because of the closing of toys "r" us stores the store is popping by 5% in the markets. coming up, president trump taking a hard line on iran in a late-night tweet we'll get more reaction from wall street at the top of the hour and kbhents to joe last week that he's not happy with the ted interest rate policy he has every right to put them on notice. mark grant will join us. yoreu' watching "squawk box" on cnbc it's pretty amazing out there. the world is full of more possibilities than ever before.

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it's been six months since president trump announced first tariffs on washing machines was supposed to help contessa brewer joins us with more. >> good morning. this afternoon whirlpool announces earnings that investors will look for an indication about whether the 20% trump tariffs are paying off to the american manufacturer. whirlpool korean makers samsung

and lg were taking them to the cleaners 20% tariffs on washing machines were announced in january. they were among the first that the trump administration slapped on imports and there was an immediate i am pack. the share price shot up. whirlpool added 200 employees to its factory in clyde, ohio and lg announced it would hike prices of washing machines by roughly $50. customers started seeing costs of washers and dryers climb. up 20% according to the bureau of labor statistics. we've seen the biggest monthly increases since the agency started keeping track. whirlpool share prices down about 15%. told investors it is paying substantially more for raw materials, in part because of the tariffs on steel and aluminum we'll hear from ceo marc blitzer how the trade war affected the company and what the investments

in the united states will have on whirlpool perhaps having anticipated that this would come down the pike, they have been courted and wooed by municipalities across the nation to build plants so that they will avoid tariffs. >> the other issues, it's a tiny portion of the respective earnings, it's not something that they need to battle to alter too significantly. >> no. it's such a big part of whirlpool's earnings and, again, they've missed three out of the four consensus in the last quarter. we're going to be watching to see if they continue to see that decline and whether it's made impacts. if whirlpool gets parts from other countries. do they -- they have a big presence in brazil and other countries in south america do they export from the u.s. >> it's a great question we've heard this from the ceo on an investor call we're paying so much more now for steel and aluminum and that

makes up the bulk of the weight of any washer and/or dryer the costs have gone up significantly. >> contessa, thank you still to come, what's working now? we'll bring you stock picks from barr barron's a quick check of what's happening in the european markets. trading, not too significantly about half a percent or so, italy down because of fiat re dlier'secne mo to come on "squawk box. 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,

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welcome back to "squawk box. we're seeing some mixed performance from astrowe management the world's largest asset manager blackrock is lower year to date. our next guest is here to discuss a new article from barron barron's associate editor jack howe good morning to you, jack. thanks for joining us. >> morning. >> let's start overall the big picture for why now is a good time to buy asset managers you'd have to say market's been strong the last couple of years already. >> as a group, credit suisse

calls it the cheapest they've been since the 1990s think about these businesses you don't get much better economies of scale than this -- these businesses the added money adds profit. some of them are remarkably cheap right now. >> you mentioned assets under management growth. i mean, how crucial is scale is this a recommendation only to buy the giants we've seen some of the medium sized ones merging together. if you're not one of the big guys you're not worth earning? >> you either need to be one of the big guys or have some money flowing in the door. flows haven't been great for some they're all over the map blackrock is cashing in on the money flowing into etfs right now. the index investing craze. t. rowe is one of the best

lately invesco is a mix between the two. you can pick and choose where you want to be as the market heads higher, you can bring more money in the door you can get appreciation in assets and this market wants to head higher we started last week with the stinky in helsinki the market didn't care is the market going to care this week i don't know this seems like a stock market that wants to push higher for awhile >> talk to us about blackrock which has underperformed year to date is that a screaming vibe of the list >> blackrock, it's a multiple on blackrock but it's going to have better than average going forward. >> better than pierce or better than market? >> better than the market. yeah, i think it's going to have gooderings growth going forward. if you're not sure about what's going to happen with index investing, will this continue forever? if you're not sure, you can buy

a couple of these. you can buy blackrock and t. rowe and be okay either way. we've had cycles in the past where money has gone towards index investing. tends to go well in the market and those cycles tend to reverse. you can find some of these other active measures right now that end up bouncing back >> so you want to hedge it then. when you look at blackrock's results, you saw shares into the lowest since the second quarter of 2016. many say maybe this is peak etf at this point. maybe the stock gains might be harder to come by. that's not the environment you want to be in. when things are great when everything is going higher >> it makes sense. if you believe this is peak etf, you'd want to be in a company like t. rowe but it's more of the smart beta type of etf that can continue to

attract assets there's other deeply discounted merchandise out there like franklin going about half its market cap in cash and investments. that's a little more challenged because they have a lot of bond exposure you know, if the price is right, it's a good deal for someone out there. >> do you expect more consolidation whether from the likes of blackrock doubling down on their businesses or the likes of morgan stanley where they're trying to boost their deposit base could we see more takeovers happening? >> it seems to be an industry that's ripe for it there has been some pressure on fees investors have smartened up. they don't want to overpay for asset management anymore if you've got that pressure on fees, one way is to combine forces, lower your costs >> jack, thanks so much. coming up when we return, two big hours of "squawk" ahead. fiat kchrysler abruptly replacin

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behind the wheel fiat chrysler replacing sergio marjion amid health issues president trump tweeting saying don't threaten the united states again or else you're suffer consequences.

ritz cracker recall, we'll tell you why as another hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box. good morning welcome to "squawk box" right here on cnbc i'm andrew ross sorkin along with melissa lee and wilfred frost this morning take a look at u.s. equity futures at this hour we have red arrows nasdaq off about 35 points and the s&p 500 looking to open down six points hasbro one of the morning's premarket winners. reporting a quarterly profit of 48 cents a share that beat by a wide margin revenue also coming in well above street forecasts and the most widely anticipated

coming after today's closing bell we'll get the latest number from alphabet this afternoon. analysts there looking for earnings per share of $9.50 per share on revenue a little over $32 billion. that would be nearly 24% above year ago levels. we'll also get a latest read on home sales national association of realtors releasing its report for june at 10:00 a.m. eastern time. top corporate story this morning, fiat chrysler is replacing ceo sergio machionne phil lebeau joins us with the latest. >> there had been rumors he was not doing so well in terms of recovering from surgery about three weeks ago. we heard about that in the middle of last week, started asking a few questions then this picked up speed over the weekend. on saturday. here are the developments with regard to sergio marchionne.

he has been replaced as the ceo of fiat chrysler he will not return to work this is not an interim move. this is a permanent move it's due to the rapid decline in his health following surgery about three weeks ago. john elkin issued a long and poignant statement one of the quotes from that statement that he sent to employees said, sergio's definition of a lead ser truer today than ever. what really matters is the kind of culture he leaves behind. the best way to judge a leader is by what the organization does after him. and what does fiat chrysler do now? the new ceo is mike manley he is the visionary behind the expansion of jeep. he also has run the ram brand over the last couple of years. he has deep operational

experience and under him, jeep sales globally have more than tripled since 2011 but the challenges he faces are numerous this is a company still in transition first of all, there's a five-year growth plan the company just announced mike manley helped put that together as part of the team the implementation is the big challenge. do they continue to expand jeep sales which they expect they will especially in china and asia then there's the question of could there be a sale or a merger of either all of fiat chrysler or part of the company? sergio marchionne made no bones about the fact he believes there needs to be consolidation within the auto industry. it will be is there the right move for fiat chrysler to make in the future? look at shares of the company. they're under a little bit of pressure today following the news of this change at the top of the leadership of fiat

chrysler remember, they report earnings on wednesday and that's when we believe we'll finally hear from mike manley in some capacity with the switch of him replacing sergio marchionne. >> thank you for that. meantime, i want to bring in the editor at the revs institute he's reported on the auto industry for more than 30 years and one of the great auto experts in journalism. paul, thanks for joining us. help us understand both sergio's legacy and where you think this company is going >> well, first of all, let's hope his health recovers for sure but his legacy is remarkable i think it's hard to name any other ceo really in any other industry that's compiled his record over the last 10 or 15 years. there are some excellent ceos in out of the auto industry he fixed fiat which was on death's door when he took over in 2004. and then he got control of chrysler in america's automotive

bailout. and turned around chrysler in time for chrysler to prop up fiat when the european economy went down. one of his more remarkable moves came a little less than three years ago when he took public off the shares of ferrari. and since then ferrari has been the top performing automotive stock in the world he had the guts really to sharply increase production and develop some new models of suvs due soon which took a lot of courage to do that because ferrari's image has always been based on exclusivity. he said we could bring production up a lot more we can broaden it a lot more and maintain that exclusivity. >> when you think of mike manlemanle manley, does he have the license

to make the bold decisions sergio made? >> i think he'll have to, yes. the times call for it. and look he's got an incredibly good record -- an incredible record leading jeep and ram so he's obviously a natural and excellent choice for the job he's filling some tough shoes. ford did not fair well after malali left a few years ago. i'm sure that's not necessarily going to repeat itself at fiat chrysler, but it's one of those things where history suggests that really great leaders are hard to follow >> 3% or 4% decline in the share price this morning whether looking at fiat or ferrari is that a surprise to you? it's fairly pronounced when there's been no outright news as it relates to earnings or anything else. it's just purely the change at the top. >> it's not a surprise at all.

this company was so identified, it really was created in its modern form by one man sergio marchionne i'm not surprised at all this has got to be a jolt to investors, certainly >> when you look at manley's -- phil -- >> i was just going to -- go ahead, melissa >> you were pointing out he had overseen jeep and ram, they were two-thirds of the revenue last year you'd think he'd be the right guy for the job. what's your interruption of why the stock is pulling back. >> paul, you go first. i'll echo what you had to say, i think. >> well, yeah. either way is fine it's uncertainty you know, i mean, a great leader has left the company

investors don't like uncertainty. it's as simple as that >> i agree with that and also you knew what you were getting with sergio. you knew he believed you had to have consolidation within the industry you believed there was a deal out there and the leadership at gm we're like, no, no, that's not the right thing. sergio never changed his viewpoint in terms of it's the right thing to do. if you had the courage, you would make that move but you knew that as an investor you knew what he wanted. and so that's why i think this first earnings call will be important for mike manley, a chance for wall street and for the broader public to hear from him. look analysts already know a lot about mike manley. it's the broader public, the investing public that they have to hear, okay. here's what his vision is. and look, i don't expect him to come out and make wholesale

changes. he's going to continue down the path that he and sergio have laid out >> you already had spoken about manley's performance and request f -- qualifications there one in particular about whether tariffs should be removed or not is high on the agenda. marchionne had made the president is few time ss. will manley have less weight or power? >> definitely it's a different face in the room meeting with president trump if there are meetings or meeting with his staff as they're doing nafta negotiations and bear in mind fiat chrysler has a lot at stake in terms of their operations both in mexico and as well as in canada so this is critical for them that the nafta negotiations of which mike manley has been a key

figure in working on that. that is important at least if you look in the near term for fiat chrysler. >> we'll leave you with the last word i have one question which goes to smart cars and just the investment in some of this new technology you know, sergio had a specific strategy which was effectively to partner with some of the companies opposed to doing it himself. do you see that changes in the future >> well, chrysler and fiat are going to have to do something in this regard. they already have this partnership with google and driverless cars. but it's kind of small so, look if they can't find the right partnerships, they're going to have to put out the money. this could be helped their investment picture on this could be helped by the fact they've paid down a lot of debt under sergio so that could really help them step up to these investments but i think you're going to try to find -- you'll see a heightened effort to find more

partnerships in this area. >> you think there's an independent company in 12 or 18 months from now? >> yes i do 12 or 18 months is not a long time don't ask me much beyond that. >> okay. we're going to leave the conversation there paul, thank you. appreciate it. >> thanks. >> and phil, we thank you as we well are you guys sitting next to each other since you're both in chicago? >> we're about two mile ace way. >> see you in a bit. thanks "the wall street journal" is reporting that tesla has asked some suppliers to refund some money to help it become profitable it was essential to continued operation. characterizes it as an investment to continue long-term growth the stock is really taking a hit this morning down by 3.7% on the back of this article and of course this comes with questions about its capital position all right. coming up, here it comes

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we all want to know you know, the new, new thing. with xfinity's retail stores, you can now see the latest. want to test drive the latest devices? be our guest. want to save on mobile? just ask. want to demo the latest innovations and technology? do it here. come see how we're making things simple, easy and awesome. plus, come in today and ask about xfinity mobile. a new kind of wireless network designed to save you money. visit your local xfinity store today. welcome back to "squawk box" this morning take a look at futures right now. we are in the red this morning dow looks like it would open up a about 28 points. nasdaq off 28 points let's also show you oil prices

perhaps reacting i don't know if we want to say there's a reaction here or not to this tweet by president trump against the leader of iran this year marks six months since the s&p 500 surged to make its last all-time high >> so this week is the six-month mark of that all-time high it's thursday, i don't know if anybody celebrates half birthdays. i'm not sure this is a celebration. has this six-month period been a regrouping after a strong 2017 or the beginning of a topping process? that's a six-month chart it looks like sort of constant struggle if you look at a two-year chart which encompasses this as well, it looks more like a bit of a plateau within a very long-term upstre uptrend. that's kind of the broad picture here it does seem as if it's not

uncommon to have a six-month period when the market does just digest strong gains. they're penalizing the market a bit for anchoring ourselves. we're down 2.5% on that. the market is up 4.8% year to date it's on track for a 10% return the fundamentals look fine the market has become less expensive. there's no leading indicators of recession. so all those things would tell you that the bulls retain the benefit of the doubt en though the market is showing some aspects of being later in the cycle and things like that it's kind of a close call, but i think you still have to give the market a little bit of credit that it's still within a bull market even if it struggles before seasonally it turns a little bit better >> the tech earnings this week, how crucial? >> it's all very crucial but i think expectations are very high. i think you're getting companies penalized for missing even a little bit

because, hey, you guys got a tax cut. you got repatriation in the last six months we've had in ten years and you still couldn't impress us. that's why i think the give and take of the reactions is a little bit noisy, but tech is definitely leading right now >> when they miss some numbers, the rest of faang didn't really sell off you thought in the after-hours session, this is going to be a weak moment for faang oerl we didn't see that materializing. we saw it as it should be. >> i jokingly said there was a flight into alphabet it kind of about that. it was all just a momentum trade. everybody owns the same stuff. it's going to shake out all at once >> all right thank you. see you for "closing bell. joining igents, very good n

good afternoon i'm talking "closing bell" there. good morning >> in the uk it's afternoon. >> i'll start with you you have a cautious take on the markets at the moment. is that right? >> i think we have this continuing tug of war with really fantastic fundamentals. near term fundamentals especially in the united states. in terms of earnings, we're going to have another blowout earnings season. when all is saidand done, it could be 24% year on year. it will definitely be more than 20%. full year earnings are going to be up something like 22% we get gdp this week and that's going to be another very strong number but we've got this continuing drark cloud over our heads in the escalating trade tensions. that's something that's keeping the market in this range that mike santoli talked about earlier. >> but those trade tensions aren't playing out in the

earnings we've seen so far >> certainly not if you run the numbers with that earnings growth, we're only trading at 17 times. if we only get halfway to the multiple we are now by the end of the year you still have 10% upside in equity markets >> it has led to some of the domestic companies doing better of recent months does that continue and particularly when we look at the small caps >> i think there is an opportunity there. right now small caps are trading at about 25% discount to large caps they usually get to parity before that run quits, but the head wind there are small funds. there is sensitivity to the small end of the curve >> i would think that input costs would be an input cost pretty much across the bother. particularly for industrials i would think small caps would have a harder time absorbing

those costs. or they'd have to pass it through which customers would not like as we move through this trade zpu dispute. >> i think that's a concern. but we continue to see wage growth pretty tepid. i think what fueling the trade is -- >> input costs are input costs not just wages steel, aluminum, all those things >> well, i mean, one of the things we've seen more recently is industrial modties are down that's associated with the china complex trade. with china being sort of the main victim of the trade tensions that's easing things a bit on the margin. >> i think your thought on input costs is important focusing not just on small caps,

to overcome. you can only capture some of that tax cut if you have the pricing power. so there are a lot of reasons to focus on companies with pricing power, not the least of which was rising input costs >> simeon, one of your recommendations is to buy uk stocks right now >> more commonly their valuations are between the europe and the u.s there's overweight compared to the s&p and ftse if oil stays high, doesn't have to keep going higher i think you have an opportunity. obviously brexit is the hair on that, but it looks to be priced in >> final question, midterms coming up. is that something a strategy investors should be looking at depending which way it goes? >> i think so. you know, dween now and the

midterm elections, i think we're going to have the trade issue hanging over us. depending on how the midterms are resolved if we do get this blue wave everyone is thinking about. i think that will -- you know, that may be one of the things that could cause president trump to maybe find a different tact on this or rein him in a bit i think until the dark trade cloud tensions are brought in, you'll continue it coming up when we return, mondelez recalling some ritz cracker products we'll tell you why next when we return "squawk" returns in a moment

welcome back to "squawk box. mondelez recalling ritz products over risks there is an ingredient tainted with salmonella one of the suppliers reported

whey powder. the situation can be serious in children and others with weakened immune system i'm surprised there's whey powder in crackers given there's very little protein in crackers. >> that's interesting. i hadn't thought about that. >> whey is a form of protein i always think of crackers as carbs. this is the way my brain is thinking this morning. >> yeah. i'm not sure about the ingredients. but there we go. all right. check this out thousands of people swam from asia to europe across istanbul's strait yesterday it brought together swimmers from 50 countries. 2,000 swimmers swam for about four miles to the finish on the european side. a swimmer from cypress came in first with a time of 46:58 >> i nearly did this about four years ago. >> what stopped you?

>> instead i did a swim around brighton pier which was less glamorous. >> how cold was the water? >> it's fairly south, so it shouldn't be too bad but given you swim from one continent to another, it's an amazing title accolade it's 4 1/2 hours, not too far. it's doable. >> wilf, you, how'd you do >> double that i don't know doable with training >> backstroke? >> you wouldn't do the backstroke, no still to come, president trump tweeting a stern warning to the president of iran reaction coming up next. "squawk box" will be right back. an energy company helping cars emit less. making cars lighter, it's a good place to start, advanced oils for those hard-working parts. fuels that go further so drivers pump less.

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♪ good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and

center at this hour, hospital operator lifepoint health being bought by apollo global management the price tag is $65 per share 36% premium above lifepoint's closing price on friday. total value of the deal, $5.6 billion. that includes about $2.9 billion in assumed debt. would like to know about that on friday and check out shares of community health systems getting a boost as well. and the nation's biggest pension funds. both now cutting their targets for the year to 7% this comes among some caution among many public pension funds with the bull market now running for more than nine years i wonder what that's going to do in how people are recalculating what their own returns should look like. and high-end speaker maker sonos has given details of the

ipo. planning to offer 13.9 million shares at $17 to $19 each at the high end of the range. sonos would get $264 million snapchat is pulling the plug on snapcash. never managed to take off. >> that's because people don't want their money to disappear. >> ha-ha >> wow that was really shot down. last time i try to crack a gag this morning >> actually, it was pretty fun >> oh, thanks. new this morning, president trump taking on iran in a late night tweet. eamon javers joins us with all the latest >> the tweet was late night. about midnight east coast time president rouhani made a speech over the weekend about oil and the united states. here's what president trump said on twitter last night.

directly to the president of iran, never ever threaten the united states again or you will suffer consequence this likes of which few throughout history have ever suffered before. we are no longer a country that will stand for your demented words of violence and death. be cautious. exclamation point. here's what he was talking about. roux ma know over the weekend giving a speech over oil saying do not play with the lion's tail or else you will regret. he also said peace with iran would be the mother after all peace and war with iran would be the mother of all wars they were talking about u.s. efforts to tighten the demand for iranian oil around the world. rouhani reminding the united states in his remarks yesterday that iran can cut off the straits of hormuz and control militarily access to the global oil markets for a lot of the world's oil that comes through those straits. so dramatic rhetoric here from

both sides the question is going to be going forward, how do both sides respond today? are they going to ratchet these tensions back? are we going to see an escalation sort of like what we saw between kim jong-un. >> is there any whispers among folks on kal top hill right now in terms of reaction to the president's words. >> we haven't seen much yet. this happened overnight and this people are waking up to the news this morning i think a lot of republicans in particular will support the president here because "a," they want to tighten those oil markets. and "b," they've been skeptical of iran for a long time. skeptical of president obama's iran deal which the president had torn up. but iran has been abiding even though the president has gotten the united states out of it. so there's a lot of moving parts

here but i think generally republican wills support the president on this >> when you see the president tweet first and then see secretary pompeo tweet later, is there a conversation between them where he says i need to take the enl off this. >> i'll be the good cop. you're the bad cop >> how does it -- i know you may not know the exact specifics, but historically >> it can be less sort of tri aa an -- trianulated. try the director of national intelligence, he's supposed to know stuff about the world of intelligence he didn't know his boss had invited vladimir putin this fall how is it possible the director doesn't know what the president is doing

the white house aide said look at the council it's probably their fault. there's a lot of finger pointing on a lot of major issues in this particular case, i don't know whether this was coordinated or not >> all right thank you. great to see you president trump's pick for fed chairman has been at its job for about five months. but the president is now seeming to try to communicate with jay powell specifically, trump through a spokesperson on friday expressed concern about the two more additional fed rate hikes that the market in large part is pricing in let me ask you this question from a market standpoint would it be a good thing or a bad thing if the fed took its pedal offof the rate hiking move >> my opinion, it would be a good thing i don't think the fed needs to

be raising rates at a time when the congress over the tax cuts and jobs act is trying to grow the economy. i think that they've done a very effective job in growing the economy no matter what matrix you want to look at. and of course what the fed is doing by raising rates and they say it's based upon some kind of return to normalcy which i don't agree with but that slows down the economy. so basically you have the fed moving in an opposite direction from the government. >> and in terms of the moving the dollar that we saw was a dramatic move in the dollar index when we saw joe kern kernen's -- the first sound bite released on thursday through friday, we had about a 1% move in the dollar index. is that going to give relief to the u.s. it's a push/pull here. it does give relief to a lot of the multinational companies as well as emerging markets if we see this continue. >> i think the key is not, you

know -- the federal reserve bank does not represent the emerging markets or the european union. it represents the united states of america maybe a little is interesting here so the first central bank of the united states was in 1791 and the second in 1816 then no central bank for 81 years until we got to 1913 when woodrow wilson signed it into law. i reference one particular thing here in the fed's charter, it says and i quote, also the federal reserve must work within the framework of the overall objectives of economic and financial policy established you think any response with they feel like the fed is not working within the policy os they have

united states government, they have a right to stand up and say something. >> mark, what's your take on what the chinese central bank is doing at the moment? the yuan down another percent or so last week pst down 5% since mid-june and nearly 8% now for the quarter as a whole is that a concern either for the region in asia or for the u.s. or is it not too significant >> i think it's very significant. the chinese central bank is engaging, if you will, in a currency war by devaluing the currencies externally as you know they have an internal peg and an external peg yes, i think it's significant. they're trying to offset the potential of a trade war is what they're trying to do yes, it's a significant move >> you mention just now the central bank is part of the united states of america

certainly the chinese central bank has to act in a similar fashion. >> in my commentary out of the box i've said a number of times which i believe were engaged in a game of thrones, if you will the united states has been a dominant group for more than 50 years. china is out there trying to compete. that's their country trying to compete. they do have the second largest economy in the world having said that, our economy is about $21 trillion and the chinese economy is about $13 trillion so they're far away from the size that the united states are. >> we're going to leave it there. mark grant coming up when we return, the world of politics, sports, and business colliding this weekend at ozzy fest 2018.

more on that next.

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we were just talking as if we were during the commercial break, but now we're back on tv. big headlines over the weekend at ozy fest with guests like hillary clinton, a-rod it was held at new york's central park to give us a look at what went on, the founder and ceo of ozy is here. also ruth zuckerman author of "riding high" and a feature guest of ozy fest is here. good morning to both of you. the headliner was hillary clinton, is that fair to say >> no doubt about it she had comments on putin and the immigration at the border. >> and her interviewer was one that's a big investor in ozy >> has been very active in the media space.

you saw her acquire the atlantic for reactive and macro content so was excited to have her on the stage. >> how did you get hillary that seems like a get? >> yeah. quite a get. last year we were fortunate vice president biden joined us. we've had a number of prominent plie politicians. we've pursued her for a couple of years >> give a background for those uninitiated. what is ozy. >> ozy started as news culture ideas. grew into a television gram. including breaking big that peoples people like ruth podcast as well. but really our summer festival in central park is a lot of fun and kind of our heart beat >> and ruth, you just did this podcast? >> i did the show. yes. i had a whole episode. >> and in terms of what you're doing with fly wheel, i've become a -- i don't have a peol

t -- peloton. but i want one what's the difference in this whole space? >> between -- >> peloton, soul cycle, how do people differentiate >> i came up with soul cycle and fly wheel. many said adding technology to the bike wuch had never been done before. that was an opportunity to take the spinning thing to another level where the rider is more accountable, faster results, a more efficient ride. >> how much do people -- are people willing to pay per hour of exercise? and do you think we've still got an increase in that to come? whether it's london or new york city, it's very expensive. up to 30 bucks an hour or so >> more. 40 >> i think boutique fitness is

here to stay it's really about building community. people sweating together people connecting. app lot of times i'll teach a class and at the end of the 45 minutes i'll say you guys just went 45 minutes without your phone. so people are finally disconnecting from the phone, connecting with each other and themselves >> i have one more boutique fitness question though. it feels like the gym we used to know is being systemically broken down, if you will so there's treadmills now. people are doing running classes. and there's boot camps then there's the bikes row house is now doing rowers. there's rumble which is now boxing >> correct >> how many more can there really be? >> i mean, it keeps going. so apparently -- >> what's the next cool one we should know about? >> i wish i knew that. but maybe that'll be my next business who knows. >> i'm worried this is a coastal situation. >> i don't think so.

again, i think that the reason why they went out of the big gyms and into the boutiques is so the individual could get more personal attention that's what we want. we want attention. >> but why need to go to the gym when vuk a peloton and be at home and don't have to go anywhere you can experience the sweating together without being next to anybody. >> there's just a difference between being in a room with physical bodies around you people hooting and hollering it becomes a whole experience. yes, you can get a great workout at home and the convenience factor is awesome. but you can do both. and people want both >> before we go, can you speak to what's going on in digital media right now? you have vox and buzzfeed and vice you have been called -- what a child between vice and the economist. you now have the podcast what does this look like in the end, do you think? >> it's been a beautiful

explosion in the last five years of digital media we think there's still magic to come though. are also doing things as you said multiplatform i think live events are special. it's what ruth was saying. i think people are so in their phones i think they're looking for some connectivity >> do you think all of these are going to be independent operations in the end or do they come together? >> i like where you're going look, discovery is buying scripts. at&t is buying timewarner. >> what do you say about the balance between advertise driven revenue or sub going forward >> i think those two are important. but i think we'll see a merger classified were disrupted.

but i think you'll see places like vox start to do things with dating services and learning >> really? all right. thank you. get on your bikes, people. you know we have people on their bikes this morning watching. you should integrate "squawk" in the morning classes. zbl >> i'll look into that >> we'll do a joint venture. >> also check out the new book "riding high" later this year. still to come, papa john's downgraded this morning following some news. stay tuned nus.e k box" back in a coupl mite hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question.

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channel checks which indicated that the domestic same store sales had been down in the mid-teens since the company's founder used a racial slur we think the fundamentals continue to deteriorate and we think the implications was significant to the company's profits as well as the franchisee's profitability which we think went down this year >> this move by the board to prevent the founder from taking back a controlling stake, is that enough to distance the racial slur from the brand itself and the perception and the damage it's caused with consumers? >> i don't believe it will serve that purpose i'm not sure how many consumers will recognize what a poison pill is. but i think their decision to adopt it really was to just give the board and the management team the time to assess without having any pressure fending off

a hostile takeover it's going to take awhile to assess the brand damage. it will probably be more apparent into the season where you have higher sales volumes. >> you mentioned the franchisees will likely need help. that their revenues or earnings could decline by a third and the parent company will have to step in and provide some help does the parent company have the wherewithal to do that or will we see many store closures to come >> well, i do think we'll see store closures, but i also think the company can do some things to help provide some financial assistance including royalty abatement or royalty relief. franchisees give a certain purchase to the franchiser which is papa john's inc i think they can reduce that rate in the near term. franchisees are going to struggle with also we think turnover delivery drivers are probably making less money, fewer runs,

scheduled for fewer hours. that turnover in a tight labor market can make it difficult for recruiting and training. >> chris, sum it up for us what's your latest price target following the downgrade? >> $38 12-month price target. >> all right chris, thank you for joining us. that stock down some 5% this morning. coming up when we return, made in america. companies that manufacture here in america will head to the white house for a showcase going to talk trade next first as we head to a break, take a look at futures this morning. you have the dow off about 12 points, s&p 500 off about 3 points stay tuned you're watchin"sawbo here on cnbc with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done!

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trump's twitter threat the president sending a late night warning to the president of iran. the reaction in the oil market coming up. under pressure shares of fiat chrysler in the red after the company's long-time ceo suddenly stepped down for health reasons. plus it's the busiest week of earnings season

the first tech giant out of the gate today alphab alphabet we'll talk to analysts as the final hour of "squawk box" begins flight. ♪ live from the most powerful city in the worl, new york, this is "squawk box." >> good morning and welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin along with melissa lee and wilfred frost. the futures as we speak right now look to open lower dow off about six points nasdaq looking to open 21 points down s&p 500 off about two points right now. also treasury yields at the moment, we'll show you the 10-year. maybe with a 30-year fixed mortgage, we can talk about that too. 10-year 2.88%.

check out oil prices on the move president trump tweeted to president rouhani, never ever threaten the united states or you will suffer consequences few throughout history have suffered before be cautious. this is an apparent response to the iranian president's comments in a speech over the weekend saying o confrontation with iran would be the mother of all wars. joining us now on the "squawk" news line is john kilduff to help us with this move we're seeing in wti and brent. john, is this all iran pretty much >> definitely. it's a measured response a tweet like that from president trump or any u.s. president, that directly challenging the

iranians it's good for a good dollar. that's what we're getting. about a dollar a barrel. you start to put on your analysis, your thinking cap about what the prospects are here and, you know, given the ingredients are there for any number of things to happen especially as this trump administration seems to be pushing for regime change. that's the end game here with the renewed sanctioned we have john bolton during the administration and during the bush administration he pushed hard for an attack on iran directly it's a had red hot caldron >> walk us through the steps in escalation we could see that could impact the oil market. logically, the next step would be that the u.s. could stop providering waivers to its allies when dealing with iran. iran could also close the strait

of hormuz and cut off the supply of oil from that part of the world. >> that's the real question, melissa. does iran get so pushed to a corner as they see it as having no choice. but to go effectively nuclear which is to try to close the strait of hormuz just to give some geography background on that, it is basically two 1-mile-wide shipping lanes they've also quickly said they could unblock the strait is anything were to occur keep in mind the bulk of saudi arabia's oil goes through all of kuwait and uae's goes through the straits. but that is really seen as again the nuclear option for iran because they would be alienating all the countries i just mentioned and what it would do to the oil markets

it would obviously impact a few friends they have. there's a question there as to how iran would truly go that fa for. but for now, the iranians have put down august 6th as a drop dead date for the europeans to come up with a plan to move forward. and things will start to get hotter from there. >> let's say there are no sanctions granted to our allies in dealing with iran how much would that add to the price of oil let's say iran goes the nuclear option, how much would that then add? and let's use brent. it's trading at about $74 right now. >> i don't see the administration granting a single waiver they are taking a very hard stance on this >> is that priced in already >> no, not yet i think there's a lot of hopeful analysis out there it would be too harmful to the economy and to the administration's position to go that far we started to see this price

run-up last month. when we saw brent prices get over 80 and wti back over 75 so we will see it towards 90 bucks at least for brent as these sanctions on iran take place. the numbers on a blockage or any kind of upset or military situation in the strait of hormuz, that is off to the races. pick your number 150, 200 it goes sky high because we are talking about an abject short aage of oil then. >> john, thank you john kilduff so what's happening elsewhere this hour? shares of fiat chrysler falling in the premarket longtime ceo sergio marchionne has resigned after complications from shoulder surgery. mike manley has replaced him "the wall street journal" reporting that tesla has asked

suppliers to refund a share of money to help it become profitable the memo asked some of the money be returned and the fulfillment was seen as essential to tesla's continued operation. that stock down nearly 4%. a few companies that manufacture here in the united states are going to be heading to the white house this morning for a made in america showcase but there is a twist want to get over to kayla tausche who is in washington this morning >> good morning. it's the second annual showcase of companies that make products in the u.s this could be different with trying to impact on trade and the impact of tariffs on their businesses one company in particular, south carolina based perception kayaks says its customers are pulling because of those disputes. and retaliation could hit up to 15% of its sales the attending list for today

include many we'll see how they plan to approach this conversation today. the event comes after a meeting over the weekend where it was warned it will affect global growth and hoping for breakthroughs with canada and mexico on wednesday president trump will meet with juncker the commerce department said it could conclude its investigation by the end of this month and potentially levy tariffs before the midterms mexico's incoming president wrote a letter to president trump saying there is a preference for all three countries. those sources say trump officials recently pointing to mexico part of a strategy. and then 230-- we'll see whether

many other conversations will bear fruit this week >> thank you for that. meantime, i want to continue this conversation. for more on trump's trade agenda is director of svc public affairs. thank you for joining us this morning. here's the question i have for you. there's a sense that trade is unbalanced and is unfair and i think everybody to some degree agrees on that fact however, there seems to be a lot of disagreement on how you fix it and what the approach is and what the tone is and i'm curious where you land on that. >> it's great to be here, andrew i think we're at a pretty chaotic point right now in terms of formulating that for stronger

enforcement. the question is whether or not we should be tearing up existing partnerships until we know what's going to replace them and how we're going to achieve that goal so i'm worried now because as kayla suggested, a lot of clients and companies need stability they need certainty. and that's not what we're finding at the moment. we're finding much greater instability. >> we were talking about this earlier in the morning so many will be affected by this in some cases layoffs or companies shutdown as a result yet you see quotes from these employees being laid off saying you know what? maybe we're just collateral damage in this, but we still support the president. >> that's what a lot of people are wondering about. how long until we see people recognize that the policies being put forthright now in washington have not been thought through. we're looking for a real clear

strategy we're looking for ways to try to achieve that strategy. again, working with our partners and not alienating them. right now tensions with canada are at an all-time high. the president seems to think that we might be able to exclude canada from nafta and conclude -- the three economies are so integrated and interrelated. we're also seeing tensions with china continues to grow. >> what's the answer how do you do it then? if you were in charge, what would you be doing right now >> well, i think we have to be real clear on what our goals are. and we know we want to be able to boost u.s. exports. we'd like to be less reliant on impor imports. but we have to work to achieve that kind of goal. this notion of my way or the highway is not leading to progress and we never succeeded by

dictating to the other side what they had to do we had to find a win/win solution and i think we can do that here. again, if we're thoughtful and strategic about that to build more of a consensus. otherwise i don't think we're going to be able to achieve what we're trying to do.juncker come. this week. do you think there's a deal to be done between the president and him? >> well, i think that will be discussed. president juncker is coming with molstrom i know they've been talking about what conversation they want to have with president trump. this is a great way to find a solution one day last year europe was a foe. a couple days later, it was suggested they could do a free trade agreement. we've got to have a steady

leadership look at it i mean, take car tariffs imposing 25% tariffs on autos and autoparts coming into the u.s. is not going to help u.s. industry >> do you look at that as a negotiating tactic or something for the industry you think in six months from now we're going to talk about the fact we're in a mets of a trade war. or be on the flip side, no tariffs on either end? >> i think of to be carefully targeted putting on auto tariffs is not going to help. >> what are the chances we are really going to be put on auto tariffs? of the things we've seen from this administration and the president is he has been a lot

of bark a little less bite >> sometimes it does and doesn't. right now we've got billions of dollars of tariffs it's not going to just hurt china. it's going to hurt u.s. workers and u.s. companies that depend on these to then export. and u.s. consumers are going to see prices go way up so again, this should be a weapon of last resort and what we should be doing is sitting down with our partners saying, look we want to reduce tariffs. how do we do that? rather than coming up with ideas to hurt the u.s. economy >> all right great to see you thank you. still to come, we'll get you caught up on this morning's earnings reports including hasbro we'll dig into their quarter with an analyst. that's coming up after the break. the stock this morning jumping

11%. we're back here on "squawk box" in a couple of minutes it's all yours. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital.

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good morning and welcome back to "squawk box. hasbro's quarterly earnings came in at 48 cents per share that's well above estimates of 29 cents revenue was also above forecasts. all this coming despite a drop in revenue because of the closing down of toys r us. eric handler joining us from mkm partners the stock is up 10%. what's your take on these numbers? was it a big positive surprise to you as it is to the market as well >> well, i think what we saw, revenue came in ahead of expectations and that drove the bottom line beat i think people were just concerned that the impact from the toys r us liquidation and the weak retail environment in europe was going to be more severe than we saw >> in terms of the underlying drivers, was this something that played strongly? things like the "star wars" toys

or things across the board >> well, i don't think "star wars" had that big of an impact because the solo movie was a bit of a disappointment. but you did see strength from key brands from things like monopoly, baby alive, marvel in those key brands. but the broad portfolio saw general weakness i think you need to keep in mind it's what people are really looking out for is what does th this we still have two-thirds of year still to come. >> there aren't too many holidays in the second quarter for the toy makers operationally they did pretty well managed inventory well increased 80 basis points above wh what they had. does this tell you it's a big

half >> hasbro has good products coming out there's a new nerf line coming out. hopefully will see more with magic. i think what people want to hear in the conference call this morning is what is the state of retail in europe and what's going to be the impact of rising oil prices on input costs and transportation >> in terms of the some of the lackluster enthusiasm you have there for some of those movie franchises and toys, do you think we've gone too far and had too many of these sequels coming out? and is that playing in directly to the toy business as well as just movie viewing numbers >> no, look. i think when you look at franchises and sequels, it's a cyclical business. as long as the content is good, i think people show up to movies we saw that with the avengers and ant man, incredibles i thinkwe'll see it this

holiday season, too, with the harry potter spinoff but as long as the content is good and you're engaging with young children, that bodes well for toys >> all right thank you for joining us eric handler and don't miss brian goldner tonight on "mad money. coming up, we'll tell you about the earnings parade continuing it's the busiest week of earnings season. we will talk to an analyst at 8:40 a.m. eastern time "squawk" returns in a moment greatness of an suv? is it to carry cargo... or to carry on a legacy? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground? this is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedes-benz summer event, going on now. receive up to a $1,250 summer event bonus on select suvs.

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♪ welcome back to "squawk box. making headlines, we are getting new details about sonos' ipo offering of 13.9 million shares expected to be priced between $17 and $19. $264 million if it prices at the top of the range also, coinbase has formed political action committee to spend on elections had not raised money yet as part of its latest public filing in may. they said it would revamp its

trading technology and create a suite of services to attract mo more and trouble for an uber and lyft driver and some of his riders as well caught live streaming his rides to the site twitch without the knowledge of his passengers. the driver claims he hasn't broken the law and that passengers in a ride share don't have a, quote, reasonable expectation of privacy since the st. louis post dispatch broke the story over the weekend, both uber and lyft said they have deactivated the man's account. basically a live reality show in his cab or car >> it's hard to crack down on this he could put it up on youtube after the fact and have the same impact >> we've been discussing the idea we're being tracked and followed by cameras all over but in the back of a car, some of the things that happen back there. >> but not sure what we get up to in a car, but even if you

take a phone call from your mum during it -- >> or your mother. >> or your mom but you know what i mean even if they're doing it for safety reasons or whatever, i think there's a line that's being crossed here we'll see. all right. coming up, what the fed. steve leisman is here with a look at the impact of president trump's criticism of the fed hi, steve. >> yeah, melissa wtf has a new meaning. will a trade war become a bigger problem. more when "squawk" comes back. . but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.

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cal-maine foods beating one cent above estimates. it warned of pricing pressures because of excess egg supply also oil field services company halliburton reported second quarter profits. increased deployment of oil and gas rigs by producers. then michigan-based i.t. company syntel being bought by atos. that's about 5% above friday's closing price. and president trump just tweeting when you hear the fake news talking negatively about my meeting with president putin and all i gave up, remember i gave up nothing we merely talked about future benefits for both countries. also we got along very well which is a good thing. except for the corrupt media, exclamation point. i think that's going without comment for now. >> no caps though.

>> media is not corrupt, we should point that out. >> i'm happy to point that out >> we should do so >> we should go to steve because treasury secretary steve mnuchin making his own comments at the g20 meeting last week steve leisman is here to talk about it with those remarks as well as a look at how the fed is and is not responding to all of this >> steve mnuchin speaking with reporters on the sideline of the g20 meeting this weekend comments coming after breaking long standing precedents criticized the recent rate hikes. i fully support the independence as does the president. the president was clear saying he supports chairman powell. steve mnuchin, that's his

determination of the interest rates. saying rate hikes strengthen the currency for its part, the fed has been eerily silent on the comments. only pointed reporters by fed chairman powell affirming the fed's independence st. louis fed president james bullard has only so far made the public comments saying he was not surprised by president trump's comments and they would not affect monetary policy he would take them at his word that the president would leave the federal reserve alone. privately, some current and federal officials are surprised it's taken this long for the president to put them in their sights they added there is no upside to commenting publicly on the president. >> so you think they're running scared a little bit?

>> they really prefer the president not make these comments >> given that he has, are they against the comments but are too timid to say something >> concerns that the president's comments get picked up in congress congress hz the real power to change the federal reserve act the number of governors. that kinds of thing. that would be the way that the president could that's the big concern what happens for congress i think they're just feeling like they were waiting for this to happen at some point in time. more and more i hear he is working at odds with his own desires here he's making the rate hike more likely it will have to be a higher bar not to hike in december. because it will be a question of political independence >> puts the fed in a box which for the markets, from the

market perception of it, is not necessarily a great thing. and i'm wondering if the fed funds futures actually reflect the change >> when people tell me the fed is in a box, they get paid to be in a box that's the essential job they have to manage inflation and growth in the right interest rates. so they're always there. now they're there in a new and special way. >> if we're saying that the fed is going to be more forced into or the bar is going to be higher, that's a bad situation for the economy. >> from a conservative standpoint, what happened in the past is when will you take that into account when you do something different? okay so to be truly concerned, why would i change things now. the reason why previous

presidents have been advised by their advisers not to make those comments because you could force the fed into makes a mistake >> has a president ever ousted the fed chair? >> i'm trying to think you know -- >> like we can't have this guy here anymore >> sort of ousted and arthur burns as well. but i'm not exactly sure about the circumstances by which they left they were not favored by the president at the time. and then also arthur burns was thought to have run policy badly. i'm sure i will get plenty of into on that >> interviewed for the role, they he must have known what his

views were on rates. there could have been a topic at some point of his tenure >> i think so. i think certainly powell knew who president trump was and his proclivity for making comments out of school, i guess is the best way to put it like i said, people at the fed kind of expected this to happen one day and relative to -- i mean, sort of getting back to the argument that you and i have had. president trump is graded on a curve here we had people say -- larry lindsay said this to us on "power lunch." relative to trump, it wasn't that bad and the other president they'd be shocked and surprised but also affirmed powell's what's the word, his powered it to set interest rates. then they thought it was not that bad in that context you have mnuchin with the second clarification from the administration on this >> the flip side, steve, is if the fed does decide not to raise rates for whatever reason.

say it's because of slowing growth or economic indicators, they sort of get cover if they did that independently, the markets would say uh-oh, we're in trouble but there's some cover if people believe that it could have been politically motivated. >> my take on the good thing about fed communication is the market and the fed move expectations virtually together. people complain about the these guys talking, we go into the meetings with talking about what has been done. and it works out okay. you're right if the data should weaken and then the fed expectations weaken, there would be a political taint to the next decision >> stick around, steve let's bring in the president of the peterson institute for international economics. adam, great to have you with us. what do you make of the president's comments and is there a worst case scenario on

the table? the real concern would be if this getting to congress and how it reports ultimately. >> yeah, steve and i discussed a couple days ago it is congress the fed fears, not the president. and certainly not the president's rhetoric there is precedent under nixon for the president to use massive dirty tricks to pressure the fed chair. that was with respect to arthur burns. and that led to arguably some of the inflation we saw in the '70s but in today's world of transparency and market consciousness, it seems unlikely that the trump presidency wouldn't have as much effect but the congress is the issue. and if at some point the right wing in congress, some tea party people that were already suspicious of the fed, you'll remember the audit of the fed

movement decides to pick up on the remarks and hold hearings, then the fed has to take notice. then the pressures on the fed mount. you already discussed this makes it a higher bar for them to pause or not raise rates as quickly as they currently plan there's good economic reason to argue for that but now it's going to be very clear on the data before they do that >> how crucial is independence overall? the bank of england's only had independence a little over 20 years. and it operated seemingly fine there before that. you could also argue maybe the european central bank isn't always totally separate from politics itself. is that a fair point to make that it's a fair point make. >> it's a fair point to make of the idea you could give legal

independence just like the supreme court usually doesn't decide things unless they're totally against the will of the people but you shouldn't go too far with that either my friends at the bank of england, they would all tell you prior to 1997 actually there was a lot of instability in the uk economy. so it does matter. but there's a difference between the idea that for prarkt political purposes as we saw in the statement for secretary mnuchin, you don't bully the fed too obviously without spooking markets isn't the same as independence is perfect. in the ecb's case, you could argue they have too much independence actually. because they're protected by

international community. >> in president trump's comments to cnbc along with his comments the next day, there's some interesting economics in there that the president seems to be learning that you can't just raise tariffs. there's other things that go on. the chinese yuan has fallen in value. the peso has fallen in value these counteract what's happening with the tariffs or partially counteracts what happens with the tariffs does this get the possibility of widening from a trade war to a currency war here? >> well, steve, you're absolutely right to raise it it's been visible for months or since trump took office that whenever he attacks the economy, you see the peso move down this is a general principle. that when you're the anchor currency of the world which of

course the u.s. dollar is and remains, if you start trade conflict with somebody, the other person's currency goes down this is also a general philosophy in economics if the tariffs matter enough to the macro economy, the exchange rate will offset. so the currency has to offset to balance that and then also you got the fact that the u.s. economy is going well compared to a lot of other people that's why the fed was on a path to raise rates the president is indeed defeating himself by this currency matter. it doesn't fully offset the tariffs. the tariffs had particular industries hard, but exchange rate effects do offset the implications for the bilateral trade deficits the president claims >> also higher fiscal deficits also create the need to import capital. and that also would raise the trade deficit. my question is this.

can the president get there from here i've noticed of late the trade deficit under president trump has increased. and to the president's credit, part of that is because of higher growth. one thing i've noticed and i did a correlation, the more we grow, the more we import because we get more products from overseas that become intermediate components. and we're richer so we feel better -- >> that message doesn't reach the administration >> well, i don't get it. but in any event -- >> no, no. you're absolutely right, steve and you were right to correct me or put in i forgot about the fiscal policy. we've been saying that a lot of people have been saying that for a couple of years. if you do this big blowout of cuts and spending, it may have good short-term effects. so the president can't get there from here directly because there's so many forces

pushing up the dollar. largely because of policy decisions he's made, but also because of the fundamental growth as you said, it's good -- i'm glad you're doing correlations all economies when they grow, they tend to feel better, consumer more, import more the u.s. is particularly given to that. so the growth and import response to growth tends to be higher in other countries. the only thing i would say, if there's one thing that's even more -- that the fed doesn't talk on exchange rates if the president decides to fight a currency war, he's -- >> we've got to go thanks >> thank you coming up when we return, a big week for tech earnings alphabet reporting after the bell today we'll talk to an analyst about what you need to know ahead of that report next who would have thought,

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welcome back to "squawk box" this morning we're going to hear from alphabet after the market closes today. scott kessler is here for more on "closing bell" today where wilf will be, we will hear these numbers. what do you expect the headline to be? >> so thanks a lot, andrew i think the headline really is going to be twofold. number one, continuing strong

growth we're looking for about 24% organic growth in revenue which is very strong we think for a company of alphabet's size then i think secondarily people are going to be interested to hear about the legal regulatory environment. we heard about the $5 billion fine last week from the eu and essentially what alphabet and google will have to do to manage that environment which i think they've done a good job of thus far. >> what is your expectation? in terms of what comes next on the legal front. >> so i guess a couple things come to mind the first is obviously they're going to work through the eu process as it pertains to android. but in their comments last week, the european commission also said that they're continuing to look at ad sense which is their advertising platform i think that's going to be a

stickier case to make, frankly, for the european commission. but we'll see in conjunction with that it was interesting to see the president commenting on the fine as another example of how europe is taking advantage of the u.s. in the context of commerce, notwithstanding the fact we've seen some members of congress pushing for greater scrutiny of google in particular so the president actually might have provided additional cover for alphabet and google in the context of what he commented on last week. and given that the ftc is part of the executive, i don't know if let's say pending additional charges are forthcoming. >> how big of a concern is regulatory at this point you had mentioned sort of the cover that president trump gives but also doing business in the eu is not necessarily easy these

days it seems like big tech target on their backs when it comes to ant anti-competitive practices and data privacy. >> you're right. what's interesting to me is that this partially is a cost of doing business around a year ago as you probably know, the european commission fined alphabet and google i think it was around $2.7 billion we all know that alphabet has a substantial balance sheet with over a hundred billion dollars in cash and short-term investments. the implications we think are that they're going to have to continue to kind of manage through a lot of these new regulations. and by the way, the gdpr regulations that were implemented in may, we think on some level and we've been saying this for a number of months, we think those are probably a net positive for a company like alphabet because they have talent and the resources to manage through

those when a lot of their competitors, much smaller competitors can't. so we'll see what they say about that the other thing i'm looking for is the, i don't know, balance between what they talk about in terms of search volume and search pricing, especially influenced by mobile we've seen pricing going down and we've seen volumes going up. i wonder if we're going to see a bottoming out of pricing that could encourage folks, as well. >> thank you we appreciate it. >> thank you when we return on "squawkbox" we're continuing the countdown to the opening bell. jim cramer will join us live from the new york stock exchange futures right now pointing down. s&p down 1 pntois. back in a couple of minutes.

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health concerns but how he wants to spend his remaining years." a number of major hedge fund investors over the years have become family offices. it's a question of recent performance. i saw a headline recently they rebounded and did well. >> in the second quarter after a big loss in the first. >> right so, you know, look, depending on where you are in life, it may be you decide i don't want have to deal with this. >> the regulatory headache. >> and the regulatory headache. >> but he does seem to be one of the, you know, it's just another signal in the evolution and the height of the hedge fund industry. >> that's true when you think about the big names that shut themselves down or turned themselves into family offices. what does that say talk to a guy that knows about that world live at the height of the hedge fund world

let's bring in jim cramer. he joins us from the stock exchange jim, rather than diving in on that, though, the faany reports netflix last week. what do you think is set up best >> it looks like facebook is i like the fact a lot of people are saying alphabet will miss or do inline tonight. the last few quarters it's been disappointing, in part, because they tell a story. it seems somewhat pro motional i would have said amazon but amazon has run so much i'm mindful of what happens when netflix ran. i think that, you know, i just like facebook. i think facebook, instagram is going to deliver great numbers by the way, i wish lee well. he was an inspiration to me. he was a research director when i was at goldman i think he'll be fabulous in a home office just as he was as a hedge fund manager.

>> jim, on the faang names do you think the reactors google tonight or people starting to differentiate with the stocks and allow them to react to their own stories? great question i think netflix shows you that they can be pulled down momentarily because there are so many etfs. then they bounce back as people realize what are they doing selling the stocks >> quickly, what do you make of hasbro >> it was an amazing quarter what happens when toys "r" us is completely through then it's like nike. wl hheanhieritilgoigr d gh

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welcome back to "squawkbox." breaking news regarding fiat chrysler they're under pressure premarket following the sudden replacement of long time ceo sergio. now there's word that alfredo, who ran fiat chrysler's operations in europe and the middle east will be leaving the company on an interim basis. new ceo mike manly will take over the responsibilities that

were part of his tenure in terms of the middle east and european operations so more changes at fiat chrysler back to you. >> thank you for that, phil. big news there thank you guys for hanging out this morning. >> pleasure. >> see you tomorrow. >> see you tomorrow and on "closing bell" and "fast money." >> there you go. make sure you join us for more "squawk on the street" begins now. goods monday morning, welcome to squawk "squawk on the street." welcome to the heaviest week of earnings season. 40% of s&p market cap. alphabet on deck tonight our first look at q 2 gdp friday europe is a little soft. ten year nea