live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and wilfred frost. joe is off this week let's look at the u.s. equity futures. it was a mixed picture yesterday for the markets with the dow down about 13 points the s&p up by 5 points the nasdaq up by 21. this morning green arrows across the board. the dow indicated up by triple digits if we were to open now, the s&p would be up by close to 12 points the nasdaq up by 63. in asia overnight, you will see that after a rough day monday for asian stock markets, that yesterday -- or overnight the session was a strong one hang seng was up by 1.4% the shanghai was up by 1.6%.

in europe, early trading has taken place. there were also green arrows across the board there the dax is up by 1.5%. the cac in france up by 1% the ftse up by 0.80% markets in italy and spain higher looking at treasury yields questions about what the bank of japan will do pushing yields up across the spectrum. the two-year now at 12.629% ten-year yielding ining 2.95%. on earnings agenda we will hear from eli lilly, united technologies, harley davidson, 3m and verizon after the close, the latest report from at&t. campbells soup's pep rinl fa pepperidge farm is recalling

goldfish crackers because of the risk of salmonella no illnesses have been reported by either company. >> ritz cracker did this yesterday. i saw goldfish this morning. >> they did it yesterday the surprise presence of whey protein. >> you think crackers and carbs, yet the salmonella coming from the whey >> i still need to look at the back of the box. i don't know where the protein part is in a cracker alphabet's profit blowing away estimates joining us is michael graham good morning to you. did you -- did anyone expect this

some people expected this. did you anticipate this? >> the results were strong it was google's strongest quarter in a couple years. the revenue growth has been on a good trajectory. that was solid the thing that was changed was that the gross margin improved they had been suffering from expenses going up, that was weighing on margins. that's been going down a lot for the last couple of years this is the first quarter that you actually had a modest increase sequentially. that's a bit of a game changer they definitely called out some things that could be temporary >> like? >> the biggest thing is desktop search what has been going on in their business, mobile search is growing faster youtube revenues are growing faster than everything else. both of those weigh on gross margins. desktop search, their legacy

business, had been declining, and just sort of losing share. they called out desk stop search was strong >> so showing growth >> yeah. a strong contributor they didn't necessarily say that it was a strong contributor. so you have to wonder how sustainable that is in this era where mobile is taking over everything >> how much do they get for ads put on desktop search versus mobile >> the rates are similar in terms of pricing, but the difference is the costs they have to pay out on the other side because they pay traffic acquisition costs to share with partners the desk tom margin is smaller on desktops. >> speak about this $5 billion fine from the eu >> this is a one-time charge that wall street is looking past for now.

goggle said they will appeal the fine so we'll see what happens there. typically these eu fines over the years have not really been a big factor i will say that with the eu also going after the other big internet companies, and with sort of a general uproar around the tech community, around the data that google and facebook have amassed with the user bases, i think that, you know, this time could be a bit different. this could be a more sustainable drag >> do you think that's true of everybody? >> i don't think it will be a big deal in the near-term. in the near-term these rules are likely to push more advertising share to the big guys. because they can more readily comply >> that's what i was going to say. there's a flip side argument which is that regulation will protect the incumbents >> it's regulation designed to

protect consumers, but in a weird way it's probably going to benefit the larger companies more so than the smaller companies. >> that's true for gdpr, but with the fine, could it be true that android's attractions across the consumer business in the future in the eu is much m diminished >> i think the fine is strictly a google phenomenon. i don't think it impacts google's relationship with advertising customers. the big issue is if in order to comply with gdpr going forward google had to change its relationship with advertisers and offer them less targeting and less data. that issue should be structural. one thing about google and these companies, they are apply a lot of resources to a problem like this and move faster than others >> you started out by saying looking at desktop being a

strength, maybe that's not sustainable. you are suggesting you wouldn't buy the stock at these levels? >> our stance on google stock is that it's probably going to be a good stock relative to tech and a good stock relative to the stock market more broadly. >> that's pretty good. >> tech is leading the way >> i cover the internet sector and i think there are better buys in the internet sector. i think facebook is better for value relative to the growth amazon is the strongest grower and has a long-term growth trajectory i'm not saying don't buy google, but if you had a choice buy facebook first >> where do you land on the cost of alphabet given that they do make it more transparent as to what is going on >> they hired 4,000 people this quarter, which is a stunning number they'll hire more in q3.

those hires are going towards engineering, cloud service that's a big number. >> you have amazon hiring more >> yeah. it's a battle for talent >> many of these companies are getting paid for growth. >> on thn in the united states, especially when you have the president not tweeting about google but about amazon whether that raises the risk profile for everybody. >> we talked about what may be going on with president trump and the "washington post." we have not seen u.s. regulators come out in any way as strong as the european regulators have come it's always been a european thing. let the u.s. figure it out i would be surprised if you got activism in the u.s. some lawmakers are trumpeting

about it >> you also have trump complaining to the eu about slapping google with that fine >> i think it's all a mishmash of political interests i don't think you'll see a lot of headwinds from the regulators in the u.s >> can i ask one more question on traffic acquisition costs in mobile, you said they have so to share with partners coming in who are the partners who are making money if google is doing well in mobile, what stock should we be looking at that should be doing well, too? >> a big one is apple. google has to pay more for that revenue than they have to pay to a samsung or android manufacturer even though apple and iphones have a small share relative to the global smartphone market, their share in the highest ad revenue generating gee ographges

in the united states is higher >> am i wrong, is it a straight revenue share? i thought there was a big number up front that has never been fully disclosed, so nobody really understands how the rev share takes place. >> agreed. google never disclosed it. apple never disclosed it we think there have been lump-sum payments. >> do you think it's true rev share? >> i don't think that's the only payment. i think there's payments as they go >> given the dollar volume you're talking about, you would think you can figure it out? >> you can see it happening. you can see google traffic acquisition cost and map that to mobile searches relative to desktop searches >> what would be your conclusion based on what google made last quarter? >> it's not that big compared to

apple's p & l. they have a huge business selling hardware >> what are we talking about ballpark >> services is the stuff building at apple. >> i don't cover apple, so i don't have a great answer in terms of percentage, but it's not significant in terms of the overall revenue base >> thank you ubs's second quarter profit beating the street forecast helped in part by its investment bank the wealth management business just missed consensus. as for the third quarter ubs says market volatility remains muted. shares of whirlpool are down by almost 10%. the appliancemaker reported a surprise second quarter loss whirlpool also cutting its full-year outlook. they cite poor performance in europe and also that u.s. steel tariffs are driving prices higher.

this is not just an issue of tar refs raising t-- tariffs raising the costs, but the dollar as a headwind td ameritrade's third quarter earnings beat forecasts as trading volumes and commissions jumped after the joining us now is richard steinberg from steinberg global asset management and richard, we've been discussing google earnings does that keep you interested in the broader tech sector and we have the likes of facebook and amazon to report later this week >> yes we're still overweight tech. we own google.

there is an issue of tech driving returns this year, but this will be an earnings-driven story for the rest of the year earnings are coming in strong ne and the market is trading at 16 1/2 times earnings. margins are staying strong you're seeing costs coming in higher than usual, but the offset has been the tax rates. i think overall money will flow to technology. a healthier move would be a rotation back towards value. so we also have an overweight in financials which are trading at 12.5 times next year's earnings. >> karen, broadly on earnings, are you surprised markets did not have a more positive reaction >> we're just getting started. i think investors knew it would be a good earnings season.

i think they are, as we continue to move through earnings season, they will be more positively surprised. i think that the headlines with trade and the strong dollar are weighing on investment sentiment. at the end of the day, those fund tamentals will continue to move the market higher earnings are doing well. i don't think the tax cut is really working its way through all of earnings. so we have some good additional earnings on the horizon for the rest of the year >> richard, you mentioned financials, they had five positive sessions out of six can that continue? is it sort of stock specific or linked to the yield curve? >> i think the traders are playing the yield curve. it's been an underperforming sector and i think the move yesterday to have a healthier ten-year is good also on friday gdp will come out. i think the administration will do a victory lap if that number

comes in north of 4% so i think if we get away from the inversion conversations of shorter terms being higher than longer terms and we get to a normal yield curve, financials will benefit from the spread >> guys, just want to press pause for a second harley davidson out with earnings harley earning 1.45 per share for the second quarter, that comes in 11 cents above estimates. that's a gaap number including a 7 cent charge for manufacturing optimization costs worldwide retail sales did fall, and harley confirmed its full-year guidance for motorcycle shipments, but all of this amid this big debate among trade and a war of words with the white house. >> if we go back to the broader discussion, karen, in terms of the trade war that we just mentioned, do you have hopes that that could clear up there's a big needing this week

between mr. juncker and mr. trump. do you think that could yield positive what's priced into the market on that news? >> i think we've been talking about it for a while it's all been negative news. we have not been pricing in potential positives. if we do work something out with europe we could see earnings go higher i think we are pricing in the negative none of the positive if we do get positive news on the trade war, i think it will be good for markets. with china, this will be going on for a while it's not something that will be cleared up immediately investors will have to get used to it talking about trade. >> would that boost international markets too? >> absolutely. i think we'll see that if we can get a good meeting and see positive results between america and europe, definitely we'll see some good markets in europe as well >> rich, what's your weighting between u.s. and international equities at the moment

>> in our index exposure it's about three quarters u.s., 25% international. in our stock picking portfolios, we're starting to see some value there. to karen's point, i think even if the news is less worse, it doesn't have to be better that the market may get a boost from that international markets have lagged i would still wait on emerging markets, just because i think there's still some headline risk with china if the news is less worse, especially when it comes to autos, i think we could see some rally in those names >> guys, great stuff thank you very much. rich steinberg and karen calf knew. > calf knew when we come back, a new report shows that americans are cord cutting at a faster pace than expected. details next let's begin.

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welcome back to "squawk. we are in the chairs if you're in the media world or

a media executive listen to this a new report says cord cutting is set to jump more than 30% this year. it expects the number of u.s. adults who canceled pay tv service to hit 33 million. i will repeat that 33 million by year's end streaming platforms are reaping the benefits the report says viewership for youtube, netflix, amazon and hulu will accelerate faster than first thought. there was always anxiety that at some point there would be a step change towards ott >> i would have cut myself if not for two things -- >> i don't want you to cut yourself >> foreign sport and the fact that we work in news, so you kind of need all the news channels if you're a pure consumer, it's hard to argue why you bother >> can i raise one question in all of this? >> yeah. >> i have been complaining about this report since i saw that we were doing it this morning

>> okay. >> because e-marketer is a trade group that basically represents marketers in this report that they put out, they say marketers should not be paying as much for advertising on these things. i've been trying to find out the methodology for it it's based on an analysis of quantitative and qualitative data from research firms, government firms, top executives it's not a survey of 1,000 or 10,000 people asking them what they'll do now they may be right, they may see additional cord cutting. they say it will be more the satellite companies than the tele cos but the projections assume that you're continuing to see the same amount of money poured into netflix and amazon and all these other places, and that the series are successful and bringing new people in they may be right but i

question -- i want to be the one voice that says, look, i question those numbers >> i think you'll -- i think this is on the right -- i think this survey is closer to the right side of history. >> i would love to see the methodology. >> the other question is whether there will be a bundle soon which includes the new companies, the netflix, hulus and other companies. i think that counts as a cord cut from how we used to see things >> i think you're seeing with amazon prime, they will become the new aggregator they'll have the channels, then you can get hbo, showtime, you can pay it through one bill. you can see it with youtube. you can attach 100 different channels to it >> netflix you can add to your cable thing, too they have a mix in for many of these cable companies. >> right but i think there truly is a

massive disruption of the cable business >> i agree i think there are never watchers who are probably more so i think kids who have never had it put in because it's such a pain to get the cable guy to come and put in something is a different story. the never cable people are probably in a bigger class than the cord cutters at this point they may be right. i just don't understand the methodology. i would feel better about a survey that asked 1,000 people or 10,000 people about what they're doing. >> the other thing is the hardware apple tv may be easier to use than the traditional set top box. even if there's a cost differential, would you be happy to stay if the one single box does everything. i think that's an aspect of why comcast wants to buy sky on the sky now box, it has all of these apps built in so you have subscription, you can argue over a 10% price cut

if you take them separately. >> that makes a lot of sense >> that's an aspect that i think brian roberts is attracted to in sky, to export that technology and have that kind of box. speaking of streaming content f you'if you're a fan of "stranger things" you might want to travel to this corn maze which will open on september 14th, and stranger things takes place in indiana so it's all coming home with this. the unemployment rate for african-americans is at an all-time low, but there's another metric which explains why millions are locked out of the capital markets, credit scores before we go to break, let's look at yesterday's s&p 500 winners and losers

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until the day you leave for your trip. add-on advantage. only when you book with expedia. ♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back to "squawk box. shares of alphabet hitting a high after reporting a big earnings beat. the parent company reporting solid earnings growth despite the eu's $5 billion antitrust

fine shares are up close to 4% in the premarket. whirlpool reporting a surprise second quarter loss and cutting its outlook for the year whirlpool citing poor performance in europe. that stock is down nearly 10%. and nike is about to give 7,000 of its employees raises. the retailer is also changing how it awards annual bonuses to its global staff this comes as nike tries to address concerns about pay equity and corporate culture. let's show you u.s. equities at this hour on this tuesday morning. right now you're looking at the dow, it looks like it will open higher by 98 points. nasdaq opening 59 points higher. s&p 500 opening 10 points higher. eli lilly out with earnings. earning $1.50 a share, 20 cents better than expectations revenue also beating forecasts it was driven by increase demand

for its newer drugs. separately allay lily announced on separating its animal health unit right now the stock is responding well. up 4%. david ricks will be joining us at 7:00 a.m. eastern time. a new report indicates that north korea has begun dismantling key facilities at a ballistic missile site that's according to satellite images hackers working for russia claimed hundreds of victims last year in a campaign to infiltrate the control rooms of u.s. electric utilities homeland security officials say that campaign is likely still continuing the hackers broke into secure air gaps or isolated networks

own the by the utility companies. they penetrated the networks of key vendors who had relationships with the companies. official say the number is in the hundreds after years of identifying profitable patterns in corporate market strategies, the track maven founder and ceo has published a book "the creative curve. it's full of interviews from those like david rubenstein and yours truly. i have a cameo in the book the book attempts to debunk the notion of creative genus joining us is the author, allen gannett. good morning >> thanks for having me. >> you interviewed all sorts of people what was your takeaway >> people think there's all this

magic as to what becomes a hit especially with consumer products, people think there is taste maker status, but there's all sorts of science that what drives people to like things and dislike other things there's all sorts of reason. >> give me some of it everybody peoples like creativity is a femoral idea >> so, we think what becomes a hit is a magical thing the reality is scientists have been studying this stuff for years. and what really becomes a hit is based around two big things. we have this urge as humans where we crave things that are familiar we like things that are safe enough to feel comfortable but we also create things that are novel, new an interesting and display potential sources of reward so the ideas that tend to become hits are a blend of the familiar and novel. >> give us something trapractic.

tell me something that somebody in the book said that you think was sort of the highlight for you. >> one thing that's interesting is that these great creatives, one thing they do is they are huge consumers of culture. so we think oftentimes around creators, they're doers, constantly doing stuff but these people who are great at creating hits whether it's a hit song, fashion, product, they spend a lot of time consuming things what allows them to learn is what is the right level of familiarity. >> if you talk about something like netflix, which is pretty radical when it started when the industry, i would say that does involve creative genius. it sounds like you're critical of people with unbelievable ideas. >> what you find is the ideas that are most successful are really not look at steve jobs apple in the '90s it was a failure. it was a leapfrog innovation,

but too new. the ideas that have been successful for apple are the blend of familiar and the novel. the ipod was a better mp3 player the iphone was an ipod with a phone. the segway is now used by mall cops it was too much of an innovation >> do you look at the segway and say that was a failure >> i think so. it's hard for us to say that something was creative if it didn't end up being successful >> where would you put elon musk there's a huge debate, "new york post," one of the journalists called him a fraud other people say he created all these companies. where would you put him? >> i would say he's a creative genius but also a great example of someone who fits the pattewe

creativity we think of him as tony stark. when he created spiacex, he hird all these scientists to get it off the ground we have a notion of a lone genius creator, but he's not that he has great executives. >> give him credit, he's rich because of paypal. >> do you have a view on age age, create ivity and entrepreneurship some of the most shoot the moon successes, entrepreneurs, all did it in their 20s, before they hit 30 >> there's a study that came out last week that said the most successful age for a number listed startup is 47 >> 47? >> 47. >> there's still hope. >> when you look at it, we have this american culture, the creative look like the young genius type -- >> the founder is 47

>> yes >> i love hearing that >> do you see more successful innovation in 100%-owned entrepreneurial companies versus the big listed corporate giants? >> there is some interesting studies that founder ceos tend to outperform hired gun ceos i think that's because there's a critical role and moral credibility and vision the book argues it's not discounting the idea that there's a magical genius thing, they're saying it's just not that magical it feels magical, but the reality is this thing which seems special is a result of a huge amount of preparation, of skill, ultimately pattern recognition. >> if these success stories that you've analyzed are not down to creative geniuses, can you predict what the next one is likely to be based on tastes and the factors you're saying? >> when you see some people are able to hitafter hit industry after industry create these products that seem culture changing, i found from interviews that half of them are aware of what they're doing.

the other half have subconsciously tuneded in ed dr they are when you talk to people, they will tell you their thing is not that special when you interview super successful kracreative achieves, they don't think it's that special. >> they don't think they can do it for years and years >> one thing about david rubenstein, he's such a curious person he has an interview show now one thing you find is the best teams are a combination of people from the establishment and people who have more fresh and novel ideas. david is a great example of this he's constantly bringing younger people into his or bbit and constantly learning. >> do you think people have many good ideas in them >> i think people are able to develop many good ideas. when you look at all the science around creativity, we've been

studying this for years, we know creativity is a learnable skill. it's something we talk about as if it is a fixed asset >> the book is called "the creative curve." >> still to come, reaction to earnings from eli lilly from the ceo, david ricks he will join us in the next half hour. and plenty more big reports on the deck ket ocket. we'll bring youresults and action from wall street. eli lilly outperforming. "squawk box" back in a couple minutes.

a republican super pak ck i gearing up for battle. america rising is digging up dirt on billionaire executives and wall street titans and could be an opponent for president trump. they are looking to dig up dirt on mark cuban, who said he wants to run as a republican howard schultz, tim cook, jamey dimon, bob iger and tom stier. it is looking for weaknesses in

those political figures. the prime targets are senators carmilla harris, elizabeth warren and bernie sanders. the game of politics getting dirty even before the game has begun. to trade turmoil listen to what one of wall street's most powerful men said about trade at the delivering alpha conference >> the president is right. over the years we've generally left the table with a deal inferior to our trading counterparties the current strategy, i don't understand, but i'm not party to the strategy itself. we have had an open battle with many of our allies on many fronts that was ken griffin you can now watch the full 30-minute conversation that i had with him on our website, deliveringalpha.com. and a high-end towelmaker in japan launched a new line of sweat absorbent business suits

the suit jacket weighs 8 ounces. it is designed to absorb sweat the jacket and pants are made from a towel material, but it's hard to tell one suit costs $140. sort of a big gross, isn't it? the idea that you want to absorb the sweat? >> you do. you want the sweat to -- you don't want it on you >> ultimately you don't have to sweat so much that you need a towel. >> that's true >> i hope you wash your suits like every day if you're using them that's so nasty. >> it's like wearing a nike outfit and then keeping it on after the gym. it's great because it's sweat absorbent. >> you want sweat absorbabsorbe. you know i'm always talking about men's underwear and i have

new socks. if you have sweaty feet, $8 a sock >> tommy john underwear -- >> the underwear is made by tommy john >> going back to tommy john, that's not absorbent it's that super thin wicking material >> the t-shirts are not absorbent. if you have sock problems, i have discovered the problem. >> do you have suit problems >> why would you not want underwear that is absorbent but then a suit that does? >> this is true. >> towel material would also make you sweat more, wouldn't it >> i don't know. they said it's only 8 pounds i guess it's light i think it's a bit -- bit gross. >> we need to see it. coming up, the unemployment rate for african-americans is at an all-time low but many are still locked out of capital markets because of low credit

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welcome back african-american unemployment may be at an all-time low, but there's more to financial security than just having a job. joining us with more on that is john hope bryant, founder, chairman and ceo of operation he john, it's great to see you this morning. >> good to be here >> for people not familiar with operation hope, you've talked with us about it in the past give a quick explainer for it. >> we're the nonprofit start-up for financial inclusion. we're raising creditscores in months and we're doing it for millions of people and we've been doing it for 26 years. we're a nonprofit financial inclusion organization >> you're in bank branches, supermarkets >> we're in many employers, credit unions, grocery stores where people stock shop and really financial literacy at scale in people's lives.

>> it's for anybody who doesn't have a great credit score on the lower end of the spectrum in terms of the money they're bringing in. when you see things like the african-american unemployment rate dropping, that must make you feel great what's happening behind the scenes that you think need addressed? >> it would make me feel great if it were relevant. the point is we have an opportunity ghost. because the people who are talking about getting jobs that aren't going to be here tomorrow getting jobs in retail getting jobs at fast food restaurants. these jobs are going to disappear. robotics and automation will have these jobs gone within 20 years. so you have an opportunity ghost because they're being employed into nowhere making matters worse, abraham lincoln created the freedom bank to teach slaves about money and he was killed. we're not dumb or stupid it's what we don't know that we

don't know as a result of that, 44% of all african-americans have a credit score below 620. that may not sound real relevant except you can't get a business loan >> what are you doing to increase scores? >> we're a private banker for the working class. we lean into their lives most have an error on the credit score. first thing we do that the banker can't is to help you challenge that with the credit bureaus. when they remove it, your credit score goes up 40 points. what happens to your self-esteem when it goes from 580 to 620 now you're ready to lean into the free enterprise system now you deal with the other issues we get you up to 700, now you're part of the game >> do the banks embracewhat you're doing do you work closely with them on this >> yeah. in fact, suntrust banks have ordered a hundred hope sides

we're in 40 different banks as well as major employers. this is what health wellness was a decade ago >> it's not just something they're doing out of the good of their hearts you're creating customers and these customers are worthwhile too. >> but i like they're noble. i prefer this is good business, right? this is not just being a ph.d. this is doing well and doing good a hundred million americans have a blemish and they're locked out. >> why does the law prevent banks from doing it themselves >> because of discrimination because of red lining in the civil rights era, the banks were really discriminating back then. so now they must in response to that take every application that walks in the front door and can't tell you what you know you'll never be approved they know when you walk in this will never work. they can't tell you for fear of being sued they must treat everybody the same we lean in 20 feet from them and

say that credit report looks like a bus accident and we can help you fix it. >> is there a problem with how the credit agencies are pulling these scores together in the first place? i mean, you're saying you're arbitrarily boosting people once addressing it, but should it be solved at source >> the client is boosting it we're helping them empower themselves >> is there a systemic problem within the credit rating agencies themselves about how they're assigning these credit scores because if there is an error on as many of these reports as we're talking about here, it seems there's a larger problem >> there's a huge problem including the fact you don't get credit for things like paying rent, paying auto loans, paying utility bills. these are forms of credit but you don't get credit for them. don't be late for it they'll get flipped. then you'll be dinged for it there's a lot of problems. we don't have time for that on this show. >> what have you seen about other financial services companies. like some of these new firms,

companies out there trying to create their own credit scores effectively with different types of al gor rit ims, looking at different type of information, payingtypes of bills is this the most accurate indicator? >> it does indicate whether you pair your bills or not this is about class, not race. this is about rights we can pay off a credit card before we go for an application because of our income flexibility. if you work at the post office or you're a teacher, you may not have that flexibility. so it is a biased view against that person. but i think it's unintentionally biased but it still hurts the same. these firms you're talking about are what i call bougie finance young people coming up through trying to track a new customer

and we will. a hundred million american who is could be boosting gdp we're opening up hope locations inside of branches and places to give the economy the extra boost. 500 scheduled by 2020. >> great to see you, john. >> honor to be here. we just got some earnings crossing the wire from united technologies 11 cents above estimates revenue beat forecasts also raised its full year forecast as you can see, the share price not doing much in the premarket. pretty much flat, but it's down over the last six months the net sales coming in at $16. billion. and 11 cents ahead on eps. when we come back, david ricks will join us "squawk box" back after a quick break.

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earnings kick into high gear harley david son, verizon, and eli lilly reporting results. plus david ricks joins us for a first on cnbc interview. the trade war with china hitting the currency market. what is the president's end game and are more tariffs on the way? we'll hear from leland miller. >> and dennis rodman is getting into the entertainment business. details straight ahead as the second hour of "squawk box" begins right now ♪

live from the beating heart of business, new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc we are live in times square. i'm becky quick along with andrew ross sorkin and wilfred frost. our guest host this hour is jason trenert. he is from strategis market. the futures are in your favor this morning if you take a look, we're seeing strong arrows on the u.s. equity futures. you saw the dow down slightly. this morning dow futures are indicated up by 111 points the nasdaq up by about 62 points in our headlines this morning, shares of alphabet rising in

premarket trading. the company beating forecasts on both the top and bottom lines for the second quarter helped by increased advertising and cloud computing revenue. also a new proposed tax reform package is expected to be revealed today house ways and means chairman kevin brady will outline his plan among other things, the new proposals call for making the most recent tax cuts permanent and the cost of travel is on the rise that's according to a new forecast from the international air transport association. they say airfares will rise by 2.6% in 2019 with hotel rates up by 3.7%. but the group does say those numbers could be smaller if ongoing trade disputes impact travel plans i want to look where markets are heading. to walk through today's trades, we got tom manning cfo of putnam management also joe little's here from blackstone good morning to everybody here you know, so we had a great

report from google last night. but meanwhile, you have this high-flying small caps vulnerable to tariffs. we may have a trade war. you're very positive, it sounds like where are you? >> positive. i think everything's in place for the s&p 500 to hit 3,000 by year end they're in focus and i know this is a big week for company reports. there'll probably be 180 companies reporting this week. when you look at early results, the results so far, looks like earning growth in the range of 20%-plus right in line with what we saw in the first quarter i think the earning strength is there. on the risk size, tariffs are one of the big risks out there for now we've got the earnings strength in order to offset some of those risks >> talk about inflationary pressure how much do you worry about the fed trying to slow this down by the way, the president doesn't want anybody jumping in

front of the tracks. >> i think the fed would like to slow it down a little bit. but the signs they're seeing aren't so bad that they really need to do that much i mean, we do think interest rates are going to rise. and they're going to rise on the long end as well as the short end. this fear of an inversion of a yield curve i think is overblown. >> is the opportunity still big tech or do you think some of the small caps which have been battered have a real opportunity here >> listen. i think from a tech perspective, i think the big opportunity is in capex oriented rather than faang. i would never short faang. they'll probably double from here but my opinion, the full measure of the efficacy would be in capital spending in my opinion, there are signs we're seeing that companies that are investing in capex are actually outperforming companies that use their cash flows for other reasons whether it's share

repurchases or balance sheet repair i like capex oriented tech >> you're making faces >> yeah, to jason's point, so far in this cycle companies have done everything rather than capex. as a result it is incredibly old in the u.s that's point number one. point number two, we're seeing bottle necks whether it's labor shortages or other issues out there it's causing delays. and you couple that with accelerating growth. i think you've got a real capex story. that could be the last leg of this cycle >> i wanted to ask about the yield curve. we've been on a 2.8% handle for some time. broke out of that yesterday. 2.95% the yield this morning is that a trend in the upturn? >> i think it depends on how you define meaningful. it's likely to stay above 3% as we go through the end of the year we agree the economy is quite

strong fundamentals are strong. earnings are strong. for the market to continue to rally and move towards that 3,000 level or at least threaten the old highs, i believe the market has to broaden out a l t little bit tech is only going to take us so far. >> john, let me ask you. dan loeb made some comments yesterday in a letter picked up by cnbc. he said he's still constructive on the markets thinks the growth will be there. says the one thing to really watch is the federal reserve would you agree with that? >> i think it's right. the reason to watch the federal reserve at this point, we know we've got increased deficits there's going to be more need to add. you've got this mismatch between supply and demand. thang could push treasury yields higher we've been in this area of quantitative easing for so long, that's all changed

and i think that's got implications for markets that will last for years. i think 2019 could actually be a much more difficult year for the markets because we'll have slower earnings growth, right? because the growth rates are going to slow simply because the year oth comps are -- >> so you're positioning yourself for that or you don't even try >> you want growth in an environment where earnings growth is slowing, you want own growth you want to own small over large. you want to own companies that have the ability to sort of grow faster or have pricing power it's not an environment where you want to have defensives. it's not an environment where you want to have dividend yield strategies or anything like that you'll have higher inflationary efforts to worry about it. it's a different environment for investors. different than anything we've seen over the last 30 years where you had this giant bond bull market. i think those days are over. i think we could be in a period for higher yields.

>> yeah. the policy mix right now if you look at the trump administration's policy mix, you're deregular rating financials, fiscal stimulus, deregulation in general, and trade. all of which are more trade tensions all of which are inflationary. if you add them all up, the focus is increase in nominal gdp growth which also tends to be more highly correlated for confidence >> what are the risks, by the way? and this goes to the faang stocks we were talking about google given the commentary we're seeing on twitter that the president has about amazon, whether you think that there's going to be larger regulatory efforts against the faangs largely. >> listen, i think that's already started. i think the presumption that those companies are virtuous, always virtuous, i think that started to fade when amazon bought whole foods in my opinion. that was last summer you started to see some changes where people

said, is it so great -- >> when they bought whole foods they became less virtuous? >> no, no. people said is it good they have as much power as they have and other things came about whether it was facebook and privacy issues listen there are -- whenever you get this powerful, you become a political target i don't care what company it is. >> isn't it surprising they've become a particular target given their -- given the conversation around trying to create jobs and trying to be a free market supporter? >> well, you could argue, though listen amazon has 1/8 the employees walmart has. >> but it's adding rapidly >> it's good for consumers to get cheap flat panel tvs, but you're potentially putting a lot of people out of work as well. there's a populist element to this i'm not necessarily arguing for or against it, but amazon is a -- it's a strange animal in a

way. it's good for a lot of consumers but it also is putting a lot of people out of work >> okay. we're going to leave it there. thank you, guys. appreciate it. thanks for sticking around. >> thank you some stocks to watch today motorcycle maker harley-davidson just out with earnings harley earned $1.45 per share the second quarter coming in 11 cents above estimates. that's a gap number and does include a 7 cent charge for manufacturing optimization costs. worldwide retail sales did fall by 3.6% during the quarter harley did confirm its full year guidance for motorcycle shipments. the stock is up 0.5% ubs second quarter net profit beating forecasts helped by investment bank. as for the third quarter with ubs says it remains muted which is less favorable to client activity coming up when we return, eli lilly just out with earnings we're going to talk drug pricing

and the results with the ceo and later, what's the president's end game when it comes to china we'll discuss what's coming next stay tuned you're watching "squawk" right here on cnbc what about him? let's do it. ♪ come on. this summer, add a new member to the family. at the mercedes-benz summer event. lease the glc300 for $429 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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welcome back to "squawk box. futures right now pointing higher coming off the back of decent session in both asia and europe the likes of the german dax up 1.5% the dow's up 110 points. s&p up 10, nasdaq 60 we saw slight gains for the nasdaq yesterday financials led the charge as the 10-year treasury note rose significantly. all right. let's take a look at eli lilly the company earning $1.50 a share for the quarter. that's 20 cents better than the street was expecting separately eli lilly announced plans to separate -- an ownership of less than 20% joining us right now first on cnbc is dave ricks he is the ceo of eli lilly thanks for coming on today >> good morning.

>> it was a number that they weren't expecting. >> we're in a period now where we're growing based on the back of our newer pharmaceutical lau last three or four years 9% top line growth growth internationally and in the u.s. all driven by volume. and then in the middle of the income statement, we've been focused on productivity. costs are down 1%. so the bottom line is up 35% eps. strong quarter that beat street expectations. going forward, we're raising guidance again and really increasingly confident about our ability. >> when it comes to drug prices, one of the first questions that comes up from the street is what happens with president trump saying he does not want to see an increase in drug prices

he pointed out you're going to be looking for revenue growth from volume. you're not raising the prices on any drugs? >> we have new medicines that can make a profound difference for patients our goal is to get those medicines to the patients. so that's what we're doing now, since the blueprint was announced, we have not changed any prices in the u.s. as we're saying today, our guidance doesn't include any u.s. price changes either. in fact, on our most widely used product insulin, we haven't changed price in over a year we're sensitive to the debate going on we know consumers want us to strain and we want to see what comes from this blueprint. we think it's time for change so we're watching this carefully. >> how would you like to see that change take place >> i think the administration got it right when they said it

is oriented to the system not the patient. so we would like to see the patient rewarded with lower prices at the pharmacy counter versus lots of actors across the system each having their own complexities that's what's been happening in the last five years. >> what's the problem? are you talking about the drug distributors anybody along the line do we feed fewer middle men? is that what you're saying >> everyone is trying to do their job, but the effect of the system is the one where the patient is paying more that can't work. i think that's what the administration is calling out. that's what we've called out in our response to the blueprint. let's change that. let's work for the patient >> part of the problem is that list prices for drugs are often not the price that is paid by the employer if the employer is the one insuring the company there's that split between what pharmacy -- between what insurance companies pay, what companies pay, and what the

average consumer is along the way. is it fair to say we should be squeezing the difference between the price paid and the list price? >> i think that's a good direction. really the only person out there is frequently the consumer when they're in a high deductible that's what needs to change. >> let's talk about the spinoff of the animal health unit. why are you doing that >> well, last october we said we were going to look at this unit after years of strong growth and an inorganic agenda that grew this business to be global scale. we've been taking about nine months to look at all our options with the goal of pursuing one that would maximize the value to lilly shareholders. we looked at holding the business, potential sale, or ipo. we've concluded that initial public offering is really the best path forward to separate this business through time which will not only produce value for our shareholders but allow elanco to focus on their

customers. and lilly to focus on the mission of bringing life-changing medication to patients >> how much is it the street values americans are willing to spend so much on pet health care right now? >> you know, oddly, multiples in the animal health segments are above human pharmaceuticals right now. i think pet owners in particular are spending more and more on their pets that enables this decision in part i can't say more right now because we're in the quiet period under s.e.c. rules. but we do plan the ipo this fall >> dave, let's talk about your pipeline right now that has been the question that has been out there on investors' minds is how many of your drugs are going to come under pressure as they roll off patent. what are you looking to as the big drivers of what would be your big revenue generators in the future >> yes, well, we've had of

course those that we started last year. they go on to be cheap for patients but the difference about our company right now is we're growing through that period on the back of our big products we plan as many as five more launches in the u.s. in the next 18 months. so lilly's really a bit unique and really relative to our base of revenue, we have tremendous stable of products to have that growth continue for some time. that's why we've put out this midterm guidance and why we're confident we're going to exceed it >> you have a drug for rheumatoid arthritis forgive me if i say this wrong berasitinib? >> correct >> that is priced lower which is 60% lower of humara's version.

>> we're seeking change in the system and we're taking our own decisions about practices looking forward. in a category where there are expensive alternative. after they failed on a product and we have patients with commercial insurance are rheumatoid arthritis really need a lower cost alternative given the high deductible plans. and looking forward we do anticipate what you were describing before. and we've positioned the product just for that. >> where do you stand on trade issues and the battle that the administration is taking on with china? how do you come down in terms of what you'd like to see happen? >> well, you know, for a long time, our industry and lilly have been pro-free trade like many parts of american business. but at the same time we

recognize there are significant imbalances in how these countries allow market access, support ip, or support pricing so we want to see positive change internationally in the policy environment that we face and in that sense, i think we're for making change in places like china which in pharmaceuticals is moving rapidly to improve their system places in canada and europe, we want to see improvements while on the one hand we would prefer not to have tariffs or these actions, on the other, improvement is needed. >> dave, want to thank you for your time. right now looks like eli lilly stock up more than 5%. >> thank you very much see you next time. folks, when we come back harley-davidson's announcement it will move production out of the united states putting pressure on the stock in recent weeks. that move also sparking an angry reaction from the president. this morning the company's out with quarterly results we'll find out what analysts are

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♪ welcome back to "squawk box. expect to pay more to travel next year. new industry reports say the global airfare and hotel rates rise in 2019 some carries have attempted to hike fares and higher hotel rates driven by an increase in demand for air travel. campbell's soup, pepperidge farm recalling goldfish crackers over salmonella. no illnesses have been reported by either and. i'm still wondering how whey is -- there's whey protein in these. hard to know what's going on we just got earnings out

from verizon better than expected numbers it looks like on an adjusted basis, revenue slightly better than expected. they also talk about the retail postpaid churn being -- fios customers up by 43,000 tv customers up by 37,000. and when you look through some of the other numbers, it looks like retail postpaid of 134.56 already that stock looks like it's up by 2.25% more discussion to come and more earnings to come throughout the show including dow component verizon as we just said. harley-davidson as well. we'll break down the details of both of those numbers and talk to analysts who cover those companies. also up next china trade relations hitting

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welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. corporate earnings are front and center this morning. jetblue reporting quarterly profit of 8 cents per share. that was 2 cents better than expected operating expenses even those excluding fuel was up. united technology reporting $1.97 a share beating estimates by 11 cents. the company raising its full-year outlook. that stock is up by 2.4%

and a number of notable earnings out this afternoon as well at&t will be reporting after the closing bell also out with quarterly numbers. holding a public hearing today regarding proposed tariffs on $16 billion worth of products president trump just tweeting the following. he said tariffs are the greatest either a country which has treated the united states unfairly in trade negotiations, a fair deal, or it gets hit with tariffs. it's as simple as that and everybody's talking. remember, we are the piggy bank that is being robbed all will be great, exclamation point. kayla tausche has the latest rundown on where the trade war stands now >> certainly the president believes the tariffs he has put in place are the most powerful negotiating tool that have brought trading partners to the table with several meetings scheduled for the week that the president previewed

from the white house despite the eu president potentially not bringing a deal to washington, trump in his remarks yesterday sounded optimistic >> the european union's been very tough on the united states. but they're coming in to see minute on wednesday. and we'll see if we can work something out. otherwise we'll have to do something with respect to the millions of cars they send in every year maybe we can work something out. >> meanwhile with earnings season underway, goldman sachs tries to put a fine point on exactly what the point of tariffs could be goldman's david kostin estimated this if there's a 10% tariff on all u.s. imports from china which trump has said he'd consider, that would shave 3% off of s&p earnings a 10% import would shave 15% off earnings that is the semiconductors, 2016 proposed merger with

qualcomm it faces a wednesday deadline after several extensions and investors had been hoping that china would grant approval of the deal in exchange for the u.s. relaxing penalties on zte the white house and commerce department did that last month and just yesterday commerce formally did that in the form of a joint defense spending package that was released by house and senate negotiators they leave a public sector ban in place so zte can't -- and they do step up harsher investment review we'll soo whether that is received well by china whether that proves to be any sort of step forward in negotiations while the president is holding

meetings with europe and mexico, there is nothing on the calendar with china >> okay. great stuff. thank you very much. we're going to continue the trade discussion as it relates to china in just a moment. first some more earnings >> let's look at 3m. company just out with earnings and it looks like they came in with earnings of $2.59 a share on adjusted basis. net basis, $3.07 a share so let's call it $2.59 to compare to the street's estimates of $2.58 also revenue in above expectations too $3.8 billion versus the $3.7 billion the street had been expecting. sales up 7.4% and they talked about local organic sales up 5. %.

foreign currency translation increasing sales year over year. you see the stock is up by 1.6%. >> a lot of positive movers this morning adding to the gains we already saw. >> oh, check that out. after hearing from dow components, you can see the dow futures indicated up 134 points. we were up by about 110 earlier this morning let's get back to the trade discussion for the latest on rising trade tensions between the u.s. and china, let's bring in china beige book international ceo leland miller. also still with us is jason from st strategis. you say it's a nonevent. is that right? >> well, $500 billion would be a nonevent you've got another $200 billion announced. that is a done deal unless the chinese step in with an offer that the white house accepts we think that is likely for this fall you're on a cruise course to go into the $200 billion tariffs in

the fall if something doesn't happen. >> why are you saying the $500 billion does not market so much? because we already have significant tariffs nonetheless? >> i think it does matter. i don't think that's something we push. the question is whether any of this stuff happens $500 billion is the president's way of saying we will go all the way to the end with china. in terms of the initiation, to go to $500 billion, the president doesn't want to go there. he will. >> how closely will the chinese be watching this meeting this week between mr. youjuncker andr trump? is it slightly different where yao got an ally, less big trading partner. >> the chinese are sniffing for any clues they can they don't know what they're supposed to offer whether it will be accepted and if it is whether it will be held to that said, you've got -- the way

to look at this is you've got a trade war on two different trajectories one is with china and one is with autos and china is going ahead full steam. i think you're about to see the next set of this with autos. >> you this autos are going? >> i think so. the announcement of auto tariffs as earliy as next month. the president would like to see this as a battering ram to get what he wants. >> how much of the autos is a negotiating ploy for china >> i think it's based on canada andknocking them into nafta too. and getting the eu tariffs down. the president has picked a battle with everybody right now. and auto tariffs are not irrelevant to them, but that's a separate trajectory. at the same time the auto tariffs will be launched into and the president will be saying we're going to go all the way. the is is a political winner for me going to the midterms this happens or we'll see tariff

zbl >> what is the risk that china retaliates against a company like apple >> it is likely. maybe people show up to the store and say there's reasons you can't sell today maybe your shipments are not reaching their destinations. the chinese are masters at non-tariff barriers. >> that's so passive aggressive. right? >> they've also run out of tariffs to counter with. once you break $137 billion. then you have to do something creative and the chinese know how to do this they've got everything to push back against companies >> could i just ask you about the easing move that china made yesterday and as an economist we look at the price of copper falling, we look at this move by china. what do you think about chinese growth right now we get the sense it's slowing meanfully. but whether it's due to this tariff war or not, what's your

view >> we are more upbeat on what's happening in china's economy right now than i think just about everybody else is. we've got our second quarter data it was better. there was -- and one of the reasons it's better is this idea there's no investment right now and companies are being starved of credit, that's not happening. bank lending -- even though shadow banking is slowing down, bank lending has ramped up you're seeing firms get credit there are problems there but when the chinese announce weakness, it's when they've already stepped in to remedy the situations i think we're seeing a stronger chinese economy than people think. as a result you're -- they are planning to be strong against the trade war. but there are not the problems i think that people think more broadly on that. >> can they hold out for longer than president trump thinks? >> i think they think they can they can string this out for a long time. the question is whether trump will get bored after the midterms and trade strategies or whether the economy will drop. at the same time, a best case

scenario for the chinese would be to step in in october, come to a trade deal, and hold this off so they get 18 months of window to operate on the economy before the 2020 election kicks in >> leland, thank you very much leland miller. >> thank you coming up when we return, earnings coming in from verizon and harley david sson this morning. we'll see where they could end after the year "squawk box" returns with that in just a moment think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

♪ good morning welcome back to "squawk box. let's have a look at the futures. up about 90 points at the start of the show. up about 135 on the dow now. had decent earnings out from the likes of verizon, eli lilly, and 3m asia was higher, europe nicely higher today up about 1.5% for the german dax. harley-davidson reporting earlier in the show. harley earned $1.35 coming in 11 cents above estimates. that's a gap number and does include a 7 cent charge for

manufacturing optimization costs. joining us now is james hardiman good morning to you, james your headline coming out of this and then i want to get into the back and forth with the white house that this company has been involved in now for quite some time >> good morning and thanks for having me. yeah, i'd say the bottom line earnings numbers looks pretty good they were in line with our estimate but they beat the street i'd say the most important metric we typically look at is retail sales specifically u.s. retail sales and those disappointed a little bit. u.s. retail was down about 6.4%. that's worse than the street was looking for and it's a little bit worse than we anticipated as well. >> and in terms of margin as a percent of revenue, we're looking at what it expected 9% to 10% is that right? >> correct previously it was 9.5% to 10.5%. they lowered that between 9% and

10% to incorporate the expected tariffs and the fact they'll absorb those costs >> can we talk about the tariffs and the battle is there anything in the report or you want to be hearing on the call later on that particular issue in terms of the fight with president trump? >> well, if anything, you talk about the bottom line beat here. i think some of it probably had to do with some -- in europe, right? this was a well telegraphed tariff implementation. so i think it's safe to say both european consumers bought motorcycles ahead of tariffs going in place i don't think that's a lasting impact, obviously. i'd be curious to know exactly how much of the second quarter beat was a function of that. i guess bigger picture, i'd be curious to know just how quickly they think they can ramp production elsewhere so they're no longer paying those tariffs

>> are you a believer that will have an impact on sales given the sort of american brand that harley historically represented? >> that's a great question certainly if they were to manufacture motorcycles elsewhere to besold in the united states, that would be a terrible idea and i think that would impact demand. that's not what they're planning to do. i think it's an open question to some degree whether or not european customers care whether or not harley-davidson motorcycles are made in the u.s. or made in asia which is what it looks like is likely to be the case either india or thailand >> what's your expectation for the stock 12 months out? >> i don't think there's a ton of upside. there's a whole lot of pressure on these guys right now. they've continued to tease that on june 30th, so next monday,

they're going to lay out an updated strategy on their longer term plan to build a next generation of riders i'd actually be encouraged by cost efforts i think it has been under pressure for a long time i think the street is going to be, i think, understandably skeptical that the demand creation efforts, the next round i should say of demand creation efforts are actually going to work >> james, appreciate your time own perspective this morning >> thanks for having me. let's get to dow component verizon also out with earnings this morning $1.20 versus the $1.14 the street was expecting joining us now to go over this is jennifer fritzsche. let's run through the metrics. first of all, numbers a little bit better than the street expected better than you expected too >> yes, absolutely, becky. very clean quarter from verizon.

they exceeded our expectations i think the highlight to notice the growth and service revenue in wireless on an as reported basis, it's the first time it grew north of 2% 2.5%, i believe. it's a significant shift in an important milestone for them to reach. >> i noticed, i was reading through the release and i haven't done gone through it in detail now now they have fewer people on a promotional plan something like 82% are not is that where they saw the growth they're getting more people to pay full price >> exactly and they've lapped on what was called the eip, the equipment installment plan so we're getting fairly easy comps. so especially including a more rational service pricing environment as t-moblie and print has been more rational in the wake of their merger. >> let's talk about the wire line too there were 35,000 fios additions.

are those the key metrics to be watching there >> you know, for verizon, wireline is becoming de-emphasized. remember, they sold about two years ago three of their largest stakes to a company called fr fronti frontier that's important it's really showing wireless as more their focus i would expect the language and talking called on the point today to be surrounded by that >> what's it like to take on the churn when it comes to video sub skriebsers >> being de-emphasized there, that's not surprising. the first number i look at is the wireless churn that coming in at 0.75% is going to be the best in the industry when you're talking about 110 million subs, that's the bigger number to focus on because fios is a smaller part of the business

>> when you said they were being more rational, what did you mean by that? about regulators looking at this deal and what it's going to mean for customers' pricing >> i think listening to both ceos at the hearing they had at the senate hearing on i think it was june 27th, marcelo, the former ceo of sprint basically said that. that we can't do it alone. it's hard for the subscale nature of our model. together we will be stronger to be more pricing aggressive for the consumer until it happens, it's going to be difficult for them to be drunken sailors for lack of a better word with pricing you've seen that even the recent month when sprint has pulled some of their more aggressive pricing off the shelf. >> you think it's going to make things more competitive for verizon or less? >> as the dust settles, it'll be more competitive, better for the consumer, and a harder pricing bogey. in terms of getting the emotion

done, it could be a problem. >> what is the key thing to look out for when at&t reports? >> for at&t, it's all about the strategy what's been important to us is the divergent against at&t in the past month it's all about time warner and where we go from here in that integration >> which of these stocks do you buy? >> we like verizon a little bit better where i see at&t at this value, i think if they say anything right, that stock should see some relief here it seems very oversold to me >> great stuff thanks for joining us. still to come here on "squawk box," dennis rodman jumping in on the entertainment business also check out futures, nicely rngser following positive eain we're up 123 on the dow. back on "squawk box" in a couple of minutes we all want to know about the new thing.

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growth of the business >> and sales in north korea. >> i was going to make a north korea joke, but you got there first. our guest host this hour has been jason trenert it's been great having you here. >> thank you for having me i'm watching the financials quite a bit and yield curve. i think yesterday's move in the financials and the backup in 10-year treasury yields is i think meaningful because you've been in the range since late january this could indicate you're about to break out of the range. >> so you take the over? >> i would take the over because i think there are enough things right now and in his own way the president steepened the yield curve. >> by jawboning the fed. >> and of course he's an unconventional person, but it succeeded where others have failed >> what if -- what did the gdp need to be on friday to be a further positive surprise? >> i think the president himself unfortunately is going a little

too far. i think he said -- he's quoting atlanta fed at 4.8%. i think anything over 4% is going to get people's attention. the expectations are rising now. but anything with a 4 handle is something you haven't seen in a very long time anything over 5 and you could be up on yield quite a bit. >> jason, thank you. coming up, a complete rundown of this morning's market movers that right after the break wnitsiinzabeth warren ttg do wh john harwood that interview straight ahead. we're back with a big hour in a moment -omar, look. [ thunder rumbles ]

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get ready, get set, earnings season kicks into high gear. three dow components out with results. we've got the numbers and the stock reaction straight ahead. sounding off senator elizabeth warren talks tax reform and big tech. >> europe is serious about any competition laws and the united states is lagging. >> the headlines from the latest speakeasy series coming up plus, could trade troubles

freeze out the meat supply that story as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and wilfred frost. we've been watching the markets this morning and we've been in the green all morning. lots of positive earnings reports. dow indicated up about 120 points s&p futures up by 11 and the nasdaq up by 65. also, let's check out the treasury market. that was the big story yesterday. big boost. yields up across the board not just here in the united states but around the globe too 2-year note, the yield now at

2.633% for the 10-year, 2.958%. pushing ever so close to 3% once again. it is a very busy morning for earnings dom chu is back at headquarters to help us dig into the numbers. we want to start with 3m earning $2.59 a share. that compares to an estimate of $2.58. revenue also topping forecasts and 3m raised its full year outlook saying it saw strength across all of its businesses dom, what's your take on what's going on here? >> it's interesting with 3m. we focus on the idea that's one of the companies we look towards with the tariff issue. the idea they have grown sales in many of thafr regions is probably at least an optimistic sign that the stock is wavering in the premarket session when you get 16% sales growth and 7% in industrial, 5% in

health care. all of these units are showing growth the question becomes whether or not there will be a long-term effect in tariffs. a good amount of their business comes from china we'll see if that pans out >> united technologies reported profit of $1.97 per share. that beat estimates of 11 cents. the company raised its full year outlook. some color, dom. >> this is all about whether we see higher demands for the airline services whether the parts and services starts to pan out a little bit that raised outlook is something that we'll watch they can raise that from $63.5 billion to $64.5 billion. that idea that they could boost their sales outlook perhaps giving a little bit of a bid to the stock even though it's come off just a bit in the premarket trade. >> verizon beating on the top

and bottom lines the giant saying it added 398,000 subscribers. that beat analysts average on 52,000 subscribers >> you want the ones that don't prepay and actually use along the way. they are consistent customers that are going to stick around for awhile ver rise sob, one of those stocks that have become unloved in terms of the telecom side of things, as you perhaps start to watch that picture waiver a lit bit and the idea that these larger media cap companies become enveloped and taken over by the likes of a communications company, that's going to be something interesting to watch from a trade perspective as well maybe that does insulate some of their business even further. they're already kind of domestically oriented as well. >> lockheed martin earning $4.31

per share. that's compared to the estimate of $3.92 those results helped by higher sales from missiles and fire control systems. >> that's the thadd system it was a huge focus when the situation was escalating the idea that lockheed martin is going to ad add 400 workers. the president tweeting about it. he's always had that ia bit of g for the most expensive defense contract in history. the fact he's touting the idea that lockheed's going to add more jobs just to create more aircraft, that's going to be big to watch as well >> harley-davidson, a lot of focus on them for political reasons. $1.45 per share. if we look at the market reaction, not as encouraging as some of the other stocks

now it's jumped a little bit more but ultimately what are the key things we're focusing on here? >> whether or not harley-davidson can do anything to stem the decline of motorcycle sales especially here in the united states i know you had an analyst on saying they were going to look at their updated plans or a status check on their plans to build more riders into the fray. whatever they say on the trade trump era, it's clear they have to sell more motorcycles in the u.s. going back to 2005, 2006, this company has been on the decline. it's been on an uptick, they've got to figure out a way to sell more here. >> i guess that meeting with mr. juncker could affect it.

let's focus on alphabet, on google numbers on "closing bell" last night. clearly up to the upside almost all of the news coming out a surprised. >> google like alphabet, like microsoft, this idea that you can see megacap technology stocks, the biggest stocks in america generate the kind of growth that they are generating is pretty phenomenal if you think about it this is not in any way shape or form i'm a fan boy it's this idea that if you have these types of companies still able to find business units that can grow at double digit percentage clips and maybe this notion they have more especially in cloud, google shares, i mean, we've already talked so much about the shares are powering most of the gains. google's story here is pretty amazing. i'm not sure whether or not

you'll see them in the earnings call >> relative to say a netflix and -- is there a room for this this year? >> to be fair, for companies like -- i mean, facebook is already up there netflix is not near the market cap of google but netflix doesn't deal in the same kind of business netflix may have that even though it's posted a double so far this year. with alphabet, they've already had a good amount of that growth built in and people were worried about whether or not they could sustain it now we're starting to see evidence that their growth initiatives could be taking hold and could be able to power the overall -- they could move the needle so to speak and that's perhaps a little bit of the reason to see shares react positively remember for a stock like an apple or an amazon or an alphabet, those stocks, they're titanics

it's going to be hard to move the needle there maybe there is more runway left. >> let's talk about whirlpool. it is catching all kinds of attention this morning it plays into the center of what's been happening with tariffs and a potential trade war. now, whirlpool came in with a second quarter loss and it cut its outlook for the year talked about weakness in europe. but it also said that the steel tariffs here are having a big impact on its impact costs that's what i'm trying to figure it out how much of this is because of the dollar being stronger and that being a head wind for them? >> well, i guess the answer to your question is it's a bit of all of them. this idea that -- first of all, whirlpool is a company that was seen by some as a beneficiary of the trade and tariff side of things all of a sudden when you start making competing washing machines, dryers, anything like

that on more expensive on a competitive basis, that should make your products more attractive now the thought that they are on the rise and they are a victim of that plan they thought they were going to benefit from, some might say hey maybe there are wider ripple effects with trade policy if whirlpool does become that poster child so to speak for what's going to happen with trade and tariffs, that's going to play into whether or not some of the political bpundits out there will attack further trump's trade policies or there is a perhaps long-term benefit. whirlpool right now said they will take a hit because of this. whether or not the president in his longer term goals are going to be impacted, whirlpool could become one of those test cases that's something -- that's the reason why so many people are paying so much close attention >> the thing is the dollar

that's something the president has been complaining about i wonder how this is going to play out through the earnings season >> to be a little bit fair, the dollar has abated a little bit that move higher whether or not this becomes a kitchen sink type quarter where everybody decides to blame the dollar there, those currency head winds, that remains to be seen we'll get a better view after this week is done. but when the dollar rises in other currencies, emerging market currencies fall, it becomes stimulative for them the u.s. is a net victim on that front. everything you talk about with trade and tariffs, you might get a relief if you're an emerging

market that's that balance that mnuchin and ross and everybody else is going to be looking at >> you push here and it pops out here >> it's like the sausage factory. >> it is thanks great to see you let's get to phil lebeau with a news alert on general motors >> gm is getting into the peer to peer car sharing business a if you want to rent out your car you can rent it out. now launching peer to peer car sharing as part of its maven program. this is open to gm owners, lesse lesse lessees. if you've got a really old chevy impala, it won't be on there 2015 or newer. 60% goes to you. 40% goes to general motors and

the head of gm's service in charge of maven believes this could prompt people to perhaps afford a more expensive vehicle they'll rent out. >> what it allows you to do is truly afford maybe a more expensive vehicle because again this vehicle is going to make money for you. >> and gm believes there's a lot of demand out there for people who do want to rent out their own vehicle. when you look at the share business some users are active. some do it once every couple of months the rates vary depending on the service that's out there and when it comes to peer to peer car sharing, not just run through a company like zip car but you've got some smaller players. i mentioned zip car. take a look at avis which is the

company that owns zip car. they are one of the more established car sharingfirms out there. but that's a case where they own the vehicles so you are rending it on a daily -- all reporting their earnings on the same day lots of news coming at us tomorrow peer to peer car sharing, gm is getting into that business >> how much cheaper is peer to peer than renting from a zip car? >> it depends on -- first of all, you set the rate. let's say you are the owner. wilf, you could say you want to take my chevy silverado for three hours, give me 15 bucks an hour something like that. you set the rate. >> i want $375 an hour >> right we've done stories with members who have for example bought tesla model s's. and they paid for it by renting

it out to people who want to drive one for a weekend or for a week and that's how many people do it >> different than saying drive my chevy phil, i wasn't here yesterday. let me ask you about tesla what's your take on all of this, what's been happening? what's the up side, downside or anybody watching shares. >> you mean on the issue with suppliers? >> yeah. >> poorly worded memo. i have not seen it myself. but those who i have talked with is that have seen the memo have said wouldn't have worded it that way but this is not uncommon when it comes to auto makers >> is it uncommon you're asking for future discounts versus what they were doing with at least one or two suppliers it sounded like they even admitted they were asking for rebates on what they've already done >> you also get into issues such as productivity guarantees

and whether or not an entire system would live up to the guarantees that have been set in place. that is very common within the auto industry. look we usually don't hear about this, but there could be some really tough negotiations between established automakers and their suppliers. the moment here is not only the wording vrk you want to play rough with me, i'll play with rough with you and go public >> this is not that uncommon the problem is -- i know i've heard it from the tesla side of the world. but do you hear it from other automakers >> yes i talked with three people if the auto industry yesterday that said this is not uncommon. they did not look at this memo and say my goodness what is tesla doing, i can't believe that they're doing this. they looked at this and said, well, here's the supplier who wants to throw it back and went

public, it >> we hear constantly and then you go on twitter the short sellers are here what do they say about that? do they have the same opinion? >> they have a lot of respect for elon musk and tesla and the vehicles they're building and what they have built so far. having said that, there is a healthy amount of not chortling but chuckling at the way tesla and musk will throw out, we're going to build "x" amount of vehicles you know this, andrew. manufacturing is complex and as you ramp up and now you're going to potentially add in another facility in china over the next couple of years, that's really tough to do. and to ramp up as quickly as they're doing it and so say

you're -- there are many saying he's going to get there but not as fast as he believes folks, when we come back, what escalating tensions could mean for the oil markets we'll speak to james jeffrey who also focused on iran in the george w. bush aintriodmisatn. stay tuned you're watching "squawk box" on cnbc highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management. at crowne plaza, we know business travel isn't just business. there's this.

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welcome back, everybody. president trump's twitter war with iranian president rouhani has oil investors concerned about escalating tensions between the united states and iran joining us now is washington institute distinguished fellow ambassador james jeffrey s he is also a former u.s. ambassador to iraq thank you for being here today >> thank you for having me >> how do you analyze the tweets to this point? >> well, both president rouhani and president trump are using well known playbooks for both of them president trump, the same tactics he used against the north koreans back over a year ago. threatening a very, very bold

statements of military disaster if they continue their course of action and in the case of president rouhani as we have seen with other iranians, threatening in one or another the oil shipments out of the straits of hormuz that's roughly 20% of global oil consumpti consumption. so it's a big thing. >> do you think it's successful? the way of doing it? is trump correct in what he's doing? is rouhani correct in what he's doing? how do you think it plays out? >> both of them are playing the cautious running game to use a football analogy the u.s. oil sanctions are not going to kick in until the fourth of november countries cutting back on their import of iranian oil. so the iranians are beginning to feel a pinch

they have extraordinary domestic pressure from a population that's unhappy with the government and they're trying to show that if the world goes along with the american oil embargo, the world is going to arguably going to pay a price. whether they would carry through with that threat given president trump's repeated threat to use military force, that's another question. >> is this comparable to the back and forth with north korea or not >> well, no two diplomatic or military situations are the same and the other thing is we don't know if president trump if he gets what he wants -- with nuclear weapon capability and not to actually try to do anything to the oil sector if that would then open the door to eventually negotiations because with north korea, it was almost entirely about the

nuclear file, particularly long range missiles with iran it's a huge set of issues missiles, the nuclear account, their expansionist behavior. so it's a very complex situation. iran is a collective leadership with many centers of power unlike north korea so we'll have to see whether the president can move forward using the same tactic. >> ambassador, i want to thank you for your time today. >> thank you coming up when we return, the president of the european commission heading to the white house this week. could trade tensions between the u.s. and eu cool we'll talk to peter westmacott teth alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

welcome back can jean-claude juncker visit the white house and calm the fears between the eu that's coming up next. plus elizabeth warren on the record up next we'll bring you john harwood's latest speakeasy series >> what's too high for the top rate oh yeah. no. at cognizant, we're helping today's leading manufacturers

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to identify when and where extreme wildfire conditions may occur, so we can respond faster and better. we're installing cutting edge technology to provide real-time mapping and tracking of weather patterns. and we use this information in partnership with first responders and california's emergency response systems. to learn more about the community wildfire safety program and how you can help keep your home and community safe, visit pge.com/wildfiresafety ♪ welcome back to "squawk box" right here on cnbc among the stories front and

center, let's catch up on the earnings reports kimberly-clark reporting 2 cents above estimates. revenue fell short of forecasts. the maker of products like clooe nux and huggies calling a challenging environment. looking at that stock down 2.5%. upbeat report from sherwin williams it earned 7 cents above streemt estimates. revenue beating forecasts and raised its full year outlook similar story for centene. that's 3 cents above estimates revenue also bo as well. its revenue helped by a 5% increase cnbc editor at large john harwood sitting down with elizabeth warren john joins us this morning

john, the big question everybody's asking is, is she running? >> well, she has a standard answer to that so i didn't waste time asking it which is she's focusing on this coming election. the views of elizabeth warren matter because she's a leading senator now and a leading prospect in 2020 she made clear a top priority ought to be rolling back those tax cuts that donald trump and the republican congress just enacted. >> it's not about the number here's how i look at budgets and taxes. a lot of people think they're just numbers they're not. they are the expression of our values the values of the republican party that passed those tack cuts is to give trillions away

to the richest and corporations and let everybody else pick up the crumbs and i don't think that's the right way to think about it. >> what's too high for the top personal rate? >> it's not about a number that's what negotiations are all about. it's -- >> is 50% obviously too high >> look, there was a time in a very prosperous america, an america that was growing a middle class, an america in which working families were doing better generation after generation after generation. where the top marginal rate was well above 50%. >> 90% >> that's exactly right. but for me, the harder the question that you've got to ask, what constitutes a fair share in this economy look, it depends in part on what the economy is >> but it doesn't strike you as obviously, no, 90% is ridiculous >> yes, 90%, sounds shockingly

high but what i'm trying to get at is this is not about negotiating specific numbers >> now, one number that did not bother senator warren very much was that $5 billion fine that the european union levied against google elizabeth warren said the united states used to be a leader in antitrust and she sees the eu's action as a sign of where u.s. policy should go in the future european union just fined $5 billion to google. do you agree with that >> may make a pretty strong case what bothers me -- >> the president criticized it saying europe is going after american companies >> no. what it shows is europe is serious about antitrust lays europe is serious about anticompetition laws and the united states is lagging. we were once the leaders in the world on this. and no more.

>> and you can bet, becky, that the united states whether have a different attitude on antitrust if elizabeth warren is elected long way between now and then. there's a crowded field of potential democratic candidates that she's just one among them >> you're pretty clear obviously she has a padded answer when asked if running but all the signals are there. she's running, right >> she is -- she's making all the moves, sort of, off camera in terms of building up political chips and making her views known. traveling to conventions in places like california and nevada and the questions that i asked -- put to her were predicated on the idea that, you know, here's -- what do you think democrats should do in 2020 she did not shy away from that prospect >> i'm still stunned by her answer to the google question you put to her

i read online, i was going through the headlines on your interview with her is she said i am a capitalist. if you have to tell people and explain that to them -- >> well, in fairness, i asked her that question. but essentially we were talking about whether she recognizes and embraces the idea she's a polarizing figure. she said i don't think i'm polarizing i think i'm advancing the views of a lot of americans. i said come on now, wall street and business thinks you're very polarizing she said, look they're the one who is are polarizing because they are doing -- practicing behavior that cheats the american people. i said do you think capitalists are bad people she said no, i'm a capitalist. i believe in markets i don't believe in theft and that gives you an indication of how elizabeth warren wants to revise the rules of the road for american capitalism. obviously we have a mixed

system and everybody believes in some rules for the road she wants different ones than the republican dos >> interesting she uses that label given bernie sanders was happy to call himself a socialist. but do you think donald trump would welcome elizabeth warren as his opponent in 2020? >> yes he -- donald trump likes taunting elizabeth warren. he has used the pocahontas name, of course, for the controversy over whether or not she has indian heritage. look donald trump is going to have a big fight for re-election no matter who rehundrehe runs agai. but i think he wants to run against somebody who he can more easily use to generate enthusiasm on his side and push away people in the middle. elizabeth warren says he is going to make a better case to the middle, to those wiet working class voters than previous national democrats have

done we'll see if she could do it if she ends up running. >> it's going to be very interesting to see how they match up great to see you, john we'll see more of you in a little bit we want to talk about trade. trade troubles can freeze out meat as cold storage supplies pile up. aditi roy has that story this morning. good morning >> good morning. the usda just came out with its latest monthly numbers on frozen stockpiles of meat and those numbers show total bounds of beef in freezers were up 8% year over year in june frozen pork is also up slightly from last year all of these numbers historically big the amount of cold meat in storage has been on the rise because higher meat production anl riss say that ballooning supply outpaced demand now with trade tariffs in effect

and some on the horizon, some are also wondering whether the meat in cold storage will continue to pile up eventually raises prices at the meat counter. tariffs would have to be in place for awhile before it cuts into profits and lead to lower prices at the grocery store. but something they are keeping an eye on, in the meantime, we also reached out to cold storage companies who say they're not projecting tariffs to have a meaningful impact but it's something they're watching closely. >> thank you very much for that. and the president has been tweeting this morning. here is what he said tariffs are the greatest, exclamation mark either a country which has treated the united states unfairly on trait negotiates a fair deal or it gets hit with tariffs. it's as simple as that and everybody's talking. remember, we are the piggy bank that's being robbed. all will be great. joining us now, peter westmacott, the former british

ambassador to turkey and the united states. good morning thank you for joining us >> good morning. >> what do you think of the prospects this week of some progress mr. juncker comes to washington to talk to the president there's been some kind of sounds that there is possibility of progress do you think that's likely and if there is progress, how big a win is that for the president to suggest that his tactics are working? >> well, this is a president as we know who likes to set out his feelings by tweet early in the hours of each working day. we heard it on iran a couple of days ago and now we've got something about tariffs and unfair trade and so on of course it plays well because people are feeling there are other countries that are eating their lunch unfairly so that's the president's sentiment. as for juncker's visit at the moment, i would have thought the chances of material progress are not great. he will be talking about the

prospects for improving eu/u.s. trade and so on and dealing with the problems of the tariffs which the united states has imposed. we've got steel and aluminum so far. u.s. manufacturers deeply regret that because it pushes up their costs. the administration is talking about cars i'm not sure anyone has told the president that the biggest exporter of cars from america is actually bmw who sent 80% of their output to other countries. i would have thought with juncker they were trying to get across the point that tariffs, in fact, are not great tariffs simply increase the costs to the consumer and manufacturing industry and make you less competitive >> ambassador, you mentioned the tweet on iran we got a couple of days ago what are the european allies of the u.s. thinking on that topic at the moment? have they softened their view that of course originally was in support of the original iran deal and against the president's

decision to withdraw from it s or is it still pretty overtly against the president's attack >> they still strongly disagree with decision the president took and many ran around vigorously before the president's decision to see if there was some way they could improve the nuclear deal the jcpoa and make it more palatable to the white house the europeans would like it still to work because they think it's the least bad way, if i can put it that way, of stopping iran from getting nuclear weapons. so i don't think we've softened their view they think this was a misjudgment. and they do worry that if iran starts enrichment or moving towards something that was military, the risk is not only that iran becomes more dangerous. the risk is we have a nuclear arms ra is in the middle east. and we don't think that's in anyone's interest. so i think the answer is views have not changed

but the communication will continue both the united states and actually with tehran to see if we can stop this thing getting out of control >> just finally, there on the uk front, has theresa may survived and got through the latest threats to her government? and will she make it through now to the brexit date next year >> she certainly survived until today which is the end of parliamentary term she can go on vacation feeling she's achieved quite a lot at least survived. will she survive through the 29th of march? who knows. there is no agreement even within the conservative party on what sort of brexit deal we should be trying to negotiate with brussels. there's a huge amount still to play for there are many different options. hard brexit, soft brexit, no brexit, delayed brexit we don't know where that's going to go. i would think partly because there's no obvious successor and

partly because in their right mind who would want to do her job at the moment, i would likely think she's there until march. anyone who says that with any certainty doesn't know what they're talking about. >> thank you for joining us this morning. peter westmacott when we return, at&t set to return after the bell. 'lbeacwi tt in a moment are you done yet? does it look like i'm done? shouldn't you be at work? [ mockingly ] "shouldn't you be at work?"

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welcome back to "squawk box. after the bell today, we're going to get at&t's second quarter earnings we have will power from baird with us. good morning to you. want to understand what you're thinking about and this will be, i think, the last quarter we will see at&t's earnings separate from that of time warner. >> good morning, andrew. thanks for having me it is a momentous quarter for at&t from that perspective actually have a month of time warner in the numbers. i'm sure we'll get a break out of at&t on a stand alone basis too. this is really the first time for randall stephenson, the ceo, to lay out his strategic vision. now that they've closed that transaction, i think that's what investors are going to be looking to hear. more about what they plan to do with the time warner assets. what can they do with hbo from my perspective to dove tail with over the top investments they've

made in directv now. and of course he's been a big advocate with the digital advertising. >> when you touched on hbo there, one of the big question marks is how much money at&t plans to invest in that business whether it comes to content. i think hbo right now has about $2 billion what number do you want to hear? >> i think there's an opportunity to enhance that. i don't expect them to go to $8 billion. for netflix, that's the pl number the actual number is probably closer to $13 billion. as they've proven over time, they've been able to deliver great content. could that number go to $3 billion, $4 billion, that's probably more in the neighborhood of what i'd look for to further enhance that and still be, you know, competitive. but still be able to drive

overall cash flow for the business which is important for at&t >> at&t's stock is up in the premarket about 1% i imagine off the back of better than expected earnings from verizon, are there any takeaways? >> that's a good point verizon did have a good number this morning top and bottom line that was driven by wireless. one of the things we've looked for coming into the quarter is the impact of what appears to be a more benign competitive environment. we do think that will play out for at&t as well as well as some of the other industry players i think that helps of course they're also being ham strung by challenges in the linear tv business we'll look for more color there as it pertains to the margin outlook. >> will, speak to this you refer to it as benign. the analyst in the last hour also talked about that idea. in the context of t-moblie and sprint maybe taking their foot

off the gas a little bit while this transaction, the merger between them gets together or not, we will see on the regulatory front but long-term do you think that that deal is going to make the environment more competitive or less less >> well, that's a very good question t-mobile and sprint are making the case they'll -- i think because i made the comments, if the deal is proved and closes, we've been somewhat skeptical, they would have to be aggressive out of the gate truly longer term, generally speaking you would have fewer competitors than more. right. if you're one of the industry players. i think over time, you've got to believe it reduces competitive intensity, but, you know, it does provide them an interesting set of assets to be more aggressive, at least out of the gate. >> we have to leave the conversation there we'll look to you tomorrow morning. i imagine what kind of notes

you'll put out to the clients. thank you. >> thank you when we come back, jim cramer will join us live from the new york stock exchange. "squawkbox" after a quick break. this is no ordinary coffee. it's single-origin kenyan coffee from the nyeri highlands, 6,000 feet above sea level. but how do you really know that the beans journeyed to the port of mombasa and across the pacific? that you can trust they're 100% authentic? ibm blockchain. a smart way to track every step, ensuring this coffee did indeed come from 6,000 feet above sea level. and not a foot lower. ♪ ♪ tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782

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welcome back to "squawkbox." jim cramer joins us now. before we get to the host of earnings this morning, what about last night your take on alphabet. >> alphabet was spectacular. it was the first call where they explained to you we have to spend more money in order to be great on the hand held and not just the desk top but everything was terrific and, also, this was the first time they basically said here is where we're making a lot of money. and you got to understand we can continue to make a lot of money because billions more people need maps. billions of more people need search billions of more people need the translation. so they told a fantastic story it was the best call they've ever done. it was terrific. >> and it tells us some of the beats this morning, jim. which are you most excited about? >> i'm not excited about the beats. i'm not excited.

>> why >> this is not a good morning. tariffs are not great if you're in corporate america the president said tariffs are great. a lot is because tariffs aren't great. tariffs are costing them a lot of money you can take alphabet so far you can take faang so far. when it comes tocorporate america, i am astonished that many of these companies, whether it be whirlpool, kimberly, united technologies, harley, they're not telling good stories. and you're seeing people sell them down. i don't think it should be sold down i think the tariff thing is not nearly as dismal as a lot of these companies. but they're making the point it's almost like they're saying, mr. president, we know you love tariffs but they have not helped us and i think that a rlot of stock

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welcome back to "squawkbox." if you wanted to make a fast food treat at home, we have news for you. chick-fil-a is making the fantasy a reality. launching its own meal kits. they're going to be sold out of 150 restaurants in atlanta starting next month. when i say "sold out" i mean selling out of not sold out they could we'll see. it's classic chicken sandwich as well as other items like chicken parmesan and chicken enchiladas. how are you going to get the crispy outside >> it's really good. i haven't had it until recently. >> it's really good. >> kelley is a big fan. >> i'm a big fan. >> pretty tasty. >> folks, a final check on the markets now. we've been watching the futures. they've been in the green all

morning. look out for what cramer said. the dow futures up by about 140 points the nasdaq up by 74. also, pay attention to what has been happening with the treasuries we're looking a the 10-year close to 3%. ke keep an eye on that. wolf, thank you. make sure you join us tomorrow right now time for "squawk on the street." good tuesday morning welcome to squauk "squawk on the street." is this the break out the bulls have been looking for? the s&p futures looking to open nearly 50 points high. europe with solid gains. pmi in france and germany strong and the