thank you for watching the show thank you to michelle and scott. make sure you catch your interview tomorrow morning and scott a little later today in the meantime, join us tomorrow "squawk on the street" begins now. good morning welcome to "squawk on the street." i'm david faber along with jim cramer we're live from the new york stock exchange carl as the morningoff we'll get a look at futures. you can see i don't know i guess we're going to be -- what are we going to be, jim >> mixed

>> mixed yeah mixed. european markets, though, have been open. we can tell you what they're doing, including spain and italy. almost everything down expect for the ftse in the uk the 10-year is climbing a bit from last week we're at 2.982 4.1% gdp and there we are crude above $70. we'll talk to jim about that we'll get to the road map this morning it starts with media and leslie moonves they're discussing the misconduct allegations against the ceo. and cat's record quarter the industrial bellwether pumps up the full year forecast. and facebook's face plant. high flying tech stocks hit some head winds certainly last week

but facebook and twitter we'll talk to jim about whether there's still room for growth in the faang names. yes, he coined faang he knows a thing or two. welcome back, jim. it was great, you know, pinckney days you want. that was well done last week. >> yeah. >> it was the 90th anniversary of a bucket list thing three-day fishing trip and listen, big mouth, we won in the trout category first place in the white trout category we caught it off 99 baker which is a decommissioned oil rig. i threw that back, it's too small. i brought in el monstero a 7-foot black tip shark i let him go but i had to fight him for about an hour. i want to thank the captain and january and dr. carl and, of

course, bob. who helped me bring in el monstero. >> of course bob. >> it was not necessarily the best timing. >> no, it wasn't. >> david, in five years, i will not be able to -- i will not -- >> good for you. by the way, you never looked better wow! look at you. you look totally cool there. >> a double header red snapper now we have to talk business that's enough about fishing. let's talk about cbs andm moonves. >> that's an el onstero situation. >> it is what we know at this point the cbs board is meeting later today. they're going to be discussing the future of mr.m moonves who was the subject of ronan farrow. it falls under the headline of

sexual harassment that included potentially payoffs, or at least and/or intimidation. it wasn't good the question and always, i think, with these, as the cbs board is prepared to undertake an investigation, jim, is there's always seems to be more out there. you know, a guy spends eight months working on a story. i can tell you that's a long time you're trying to convince one person and then another person. and you have the third who will do it if the first two do. there are plenty, potentially, who won't at all who fear -- >> tell me more about that. >> fear intimidation i don't know but i think we've seen in these kinds of cases that just because you can cite six people on the record, doesn't mean there's more. so we'll see i think the challenge for mr. moonves continue in the role and convince the board they're best

serving in the role. is he better off, perhaps -- these are decisions that, you know, right now in real time, i'm sure, going through a lot of people's minds and subject of a lot of conversations better off saying okay let's figure something out here for my best interest and those of the company. i'll tell you, of course, this board has heard time and again over the weekend, i can assure you, you need to do what is the best interest of the company and yourself as a board member and not necessarily what is in the best interest of mr. moonves. >> it's the most radio active topic there is now in business i think most people would say go today. >> has to go today. >> yeah. >> this is a different time. >> yeah. >> even though the allegations many are many years old. >> he admitted -- >> yeah. >> look, there's a statute of limitations for a crime.

there's no statute of limitations on sexual misconduct anymore. the fact is, he did not say this has never happened he said, yeah, it happened but it was a long time ago and that was a very candid statement and candor in this particular topic is radio active. >> yep they went with the defense being, listen, i did make advances but i always knew when no was no. i respected that. >> consensual. >> but i continue to wonder whether, in fact, again, if there are more out there that may come forward he received internal support from women that come out publicly and supported him no doubt about his talent as an executive. that goes unquestioned in terms of what he's been able to accomplish there i've spent the last nine months or less than that but it feels like it, talking about the growing antipathy between his and his controlling shareholder ending in the extraordinary lawsuit that the cbs board of

directors filed to strip her of her controlled position that's scheduled for court in delaware in october. >> i think a lot of feel like, look, i absolutely love les. when i worked for les, i thought he was the greatest boss he was terrific to me. i find this incredibly sad my wife is on the board of bucknell bucknell is distancing themselves. >> i saw that. >> he was the commencement speaker not that long ago. here is the problem, david the fact you have some guy saying he's the greatest guy in the world is irrelevant. it's irrelevant because of the time who cares i think he's the greatest guy there was nobody -- i mean, les was terrific les was terrific to everybody that i know. and i think that one of the problems, because i was trying to get him to be able to help bucknell, one of the problems is the shock. he's the greatest. >> yeah. >> he is the greatest. >> frankly, not shock to that many people because these rumors

have swirled around for a long period of time i must say it was many, many years ago i first heard about, you know, rumors of behavior, to a certain extent we'll see. it was mr. farrow who spent a lot of time and effort on reporting on this. real quickly, what it means for the potential of a deal between viacom and cbs remember the two sides had agreed on a price but could not agree on much else of course, it came down to sher sher sherry redstone to have bob backes in the company. but it came forward in the result of a lawsuit. she'll be in the board meeting today. it will be interesting to see how much she asserts herseshar

shari redstone laurts have said probably not a great idea it makes more likely, jim, this deal will once again see the light of day why we saw the moves we did on friday. >> now, david, other articles say they're trying to pick it was like yeah to examine -- >> fox picked paul weiss it was disastrous. >> yeah. you have firms that you just simply can't buy and when they bring in a serious outside counsel, i think that -- >> disastrous you mean disastrous for the companies. >> right wells is back. because they got rid of -- it was the board that was in question and the fed reserve didn't like

the board. wells addressed the issues so the stock is going almost back to where it was, but and fox, well, all is well it ends well the fact is, when they brought in paul weiss it was you did the chips may fall and chips may fall is damning. because if you verify that article, okay, and you interview those people, then i think the board is in advanced spot in terms of trying to keep les. i think that the conversations he's the greatest guy. how can this happen? i'm sad. not angry. sad. everybody has a right to be angry. but, i mean, those who read this i feel sad i mean, sad that he was like this sad that he -- because he admitted it. he wasn't like he said this is all a pack of lies and, you know, he said no is no. but the article was like no/yes. it's not no is no.

and this reporter is not -- he's not some yellow journalist herse hurst organization from 1898 we respect him as a journalist. >> right we'll be dealing with this in the hours and days ahead we'll get to the market this morning. the s&p and the dow are each looking to extend weekly win streaks to five. as we begin with what will be another busy week for earnings it starts with caterpillar also, did issue up guidance for the full year. company said order rates are healthy and the backlog remains solid. you want to wait for the conference call. >> i was going over the previous conference call and, i mean, there's a language there was one moment where the cfo said the -- the previous quarter. the first quarter will be the high water mark. then people questioned that. they went right back and asked did you really mean to say that? and because that was the jaw dropper. and they came back and said --

excuse me. >> you were on a fishing boat too long. >> yeah. i'm sorry. you know, this is the hottest story ever. >> i know. why they're calling now, i don't know they know we're on tv. >> you take it i'll take it. >> no, i'm not going to take it. >> tell me more about caterpillar and the conference call. >> it was shocking that they renarrated it. no, you heard us right so it isn't like it was an offhanded comment. it was like, no, you don't understand i think they can go back and say hey, listen, we're not out of the woods here with these tariffs. we're not out of the woods with the fight with china and i think what happens is that if you buy it ahead of this conference call, that would be almost like buying facebook ahead of that conference call. well, you know, nothing. that was the benchmark i mean, i was, you know, i was deep in the gulf i was 50 miles offshore and no radio. no tv. couldn't call me but you still got it it was bouncing off the oil

rigs that's how bad the conference call was we had a great quarter you know, you don't start like hey, it was a good quarter and yet well, i mean, especially, by the way with the insiders sales 17.1 million shares $3.2 billion worth. >> save it up. save it up we got to take a break. >> it was ill advised sales suboptimal situation. >> we have to talk. >> get that. >> no. >> that could be the call. >> it's not going to be the call but we got to talk more about facebook when we come back you'll hear more of the reaction to the punch last week and the $120 billion one-day loss of value as a public company. there's a look at facebook it's potentially going to be higher another look at futures overall. you can gauge how we're going to open in the broader market this morning.

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value. this, of course, after it wasn't really the disappointment in the actual earnings report, jim. all though we keep citing that it was more about the incredible downdraft in guidance taking margins down dramatically and their growth rate. i still have people who are puzzling over it wondering what they saw or whether they saw something or what really is going on. they just don't seem to have a complete grasp on the investor fund what it was. >> we don't. look, nothing is more important than the insider buys when it comes to the cfo they were buying the heck out of the stock in june. now, are you telling me that they had no knowledge? could they have really burned that much money buying back stock? >> $3.2 billion worth of stock i think an average cost of -- >> yeah and, you know, when you buy that stock, you know, you don't buy a lot. do you really not know how

badly? now, to some degree, when you're on the conference call, there's an other worldly decline by single digits going down it's a 20% grower at year end, which is why it has a market multiple i think what concerns me, but the thing that concerns me here it's not a growth stock if that guidance is true. >> right. >> it's a company that was a once great gross stock with a trajectory that would indicate, at this point next year, that you have a company that doesn't really -- that has expenses going up dramatically. that revenues are decelerating dramatically that's the prescription for a short sale h >> how could that be facebook? >> i don't believe it. i don't believe it to be this

bad. now they have to try to get ahold of the spending. i mean, remember when ruth came in to alphabet and said, you know, we're done with the willie nilly spending we know they obviously had very little concern for these privacy issues we know in the previous quarter they said things had not been impacted so i think a lot of people would have felt that knowing that april was not that impacted, they should have come out. because they indicate that april wasn't bad they should have indicated in may. i think a lot of people are like are you kidding me it was a situation where classically, david, in the old days you would have issued a preannouncement. >> do you think it has to do with people my grating to a certain extent to instagram or becoming the key platform or stories but not being as monetizeble, at least this point, as the news feed? >> yeah. i think you got a combination of that not being as monetized but

old facebook is better than new instagram. you have the alphabet call they talked about you have to spend more if you shift to mobile it didn't look like facebook had to spend much more now i can feel otherwise they were the ones, obviously, they're talking about they hurt. what seemed disingenuous on the call, i use that word not that lightly. every time they were asked about the deceleration, they talked about currency. >> right. >> currency. i mean, give me a break! you know, if this were a company, and with the insider sales by facebook, you would say $17 million shares we need a shake up here. >> by the way, when things are good, these people are champs. when things were bad, they were completely helpless and out of their element. if theis was the nfl and it was the beginning of the season and they had 1-3 are they real? no they're not real

they're not a real growth company. now twitter came out and was another nail in the coffin you think social media but in the end the advertisers come back i think their guidance was too conservative i would not sell the stock if i owned it. >> all right it's not assured david, what was it >> i don't know. >> what was it >> it was regarding the topic at hand. >> the business we chose >> this is the business we have chosen i know what that's from. when i come back, we'll explain it. >> we have the mad dash when we come back. one more look at futures nine minutes before the opening bell more squa"squawk on the street" straight ahead this is a story about mail and packages. and it's also a story about people and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service.

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♪ we have jim back from the big fishing trip the ceo of the company, right. >> and, david, when i was catching el monstero, the biggest shark out there in the gulf, el monstero became advanced micro not intel. this was a remarkable quarter. she has the right chips for the data center. she has the right chips fo gaming this woman person when this stock was down here. we're having the break out david, in all the years, i've been coffering intel from the berry sanders day and from the

andy grove days of intel this has never happened. >> never. >> never not once i feel like there's been times when it's happening and happening. >> it doesn't happen. >> there was a time that intel where people used to joke they kept advanced micro alive to make it so the justice department didn't force them to break up they kept it alive they aren't keeping it alive anymore. they have past intel when it comes to the key growth areas. and only nvidia, i think, can give advanced micro a run. >> wow that's saying something. >> you don't think it's done by a long shot? >> no. it's the beginning first she fixes the balance sheet over here. and then she starts developing the r & d.

then she does it it's not over. >> all right it's not over. >> we got an opening bell a few minutes away stay with us on "squawk on the street." a lot more stocks and stories to go over. i'm april kennedy and i'm an arborist with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

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the opening bell is sponsored by u.s. bank. the power of possible. we're watching "squawk on the street" live from the financial capital the world. the opening bell in less than a minute for now not a lot of time to talk about what is key to the market, jim is it faang or what is left of it >> amazon, netflix, nvidia, and alphabet n.a.n.a. i'm leaving out apple. apple is the key to the market we want to see how it acts ahead. if it runs into the quarter -- we can't have it run into the quarter. stock needs to pool up facebook came in with a full head of steam.

couldn't have been more nauseous and the stocks still have way too many buys on it. apple has similar number of buys it does not have enough skepticism going in. [ opening bell >> meta savings bank celebrating its 25. >> and remember when the banks reported, interest rates were going down. >> yes. >> and on the same quarters nothing new since then and the 10 year gets toward three. people fall in love with the financials it's way too fickle, david there's a core business away

from just the ten year nobody cares so if the ten year breaches three and we get a lot of people saying 4.1 means two rate hikes, then jpmorgan goes to 121 and that will be your favorite name. >> jamie diamond coming on potentially later today, actually in an interview. yeah not with you, though wolf got him sorry to break that to you you caught el monstero. >> i know for a fact he's a terrible fisherman. >> he's not getting on my boat

jpmorgan shares are up almost 9% for the year it does outpace the broader market you still believe, in fact, if we get above three on the ten year. >> two rate hikes. we begin to get multiples in the stocks there were notable disappointments last week. we have to talk twitter for a second. >> yes. >> twitter may have been one of those situations where when they cleanedou cleaned house, they didn't have any growth. >> i think, you know, they talked about a monthly average users. they seem want to focus on daily average users. which apparently is important. >> very. >> to advertisers. >> very. >> cthey didn't tell us the number. >> how can you seriously do that >> had they given it to us, it couldn't have been worse. >> what is the reasoning for not telling us that number

>> i don't know. >> i don't know. >> i don't know. i'm sure there's a reason. otherwise they would. >> let's contrast that with kevin johnson. who gave us more numbers than i'm used to. the numbers were not that great but the buyback showed they live in 50, david i also love the fact he donned the apron in nashville i thought that was great and then gary in a tour deforce with southwest combined with the capacity, slow down in american. that came back to rival the rails. >> there was a lot that was very good last week in sectors that were not previous. >> let's come back to twitter for a moment. >> sure. >> it's down another percent and a half $33.65. >> i mean, remember there was, at one point, sales force wanted it back here i would not sell it again. my theme is that people still want this audience

but i think that the audience increased because the alphabet and the amazing quarter from amazon it shows you lucrative they can be. the data center remains incredible but, you know, there was a moment, you know, you have a fine -- sorry to be -- you have a fine analyst she's trying to get facebook say i want your data center. couldn't you make a lot of money? no they were openly dismissive of developing over revenue streams. that's why the other worldly nature of that conference call i think twitter has a lot of opportunity to develop other revenue streams. i think they had a retrenchment to get rid of the phoneyness and the anger and dealt with it and going forward, i would want to own the stock. >> interesting it's worth noting that facebook is down 1.5% for the year. so while it was up a great deal, it's only down 1.5%. >> you have all the people who are hoping it would bounce and they can downgrade it. >> the amazon quarter, as you

said, jim, was so interesting because of aws at 49% revenue growth rate. >> wow you have the advertising business, as we talked about becoming a more component of earnings and then we still don't know how many prime members there are we're assuming over 100 million. $119 a year now, right so the retail business -- >> doesn't matter. i thought what was interesting about amazon, david. if you told me that they were going to show actual earnings power, i would say no. that's not their goal. it's revenue i literally when i read that call, i said to myself, they can't even hide the earnings they're making so much money. >> that's exactly it they can't control their profitability the way they have in the past. >> i've never seen anything like the analysts who are saying i hope they don't slow down as a

growth company because they're making so much money. you know, start giving money back. >> right. >> what bezos developed is a three-pronged engine that retails part of the equation but this data center where they have the spare capacity and, you know, they don't advertise all the new clients they got but i want to go back to alphabet and what happened there. because alphabet now there is so much business in data center that azure and amazon web services can't handle it it's the highest quality problem you can have alphabet will pick up a lot of business in data center. i felt good about that conference call. alphabet was a tour deforce call almost like they learned so much from what they've done wrong in terms of describing their business and talking about all these different bets they're making and how they're going toward profitability

alphabet changed the way people think of it. >> right that was the best of the faangs. >> right worth coming back to cbs shares, jim. down another 2. 5% after a fairly significant decline on friday. you got a couple of things going on here. one, people believing that the likelihood of a potential deal, at least, with viacom has gone up and, therefore, if you think about .6135 ratio they already agreed to, you know, maybe you don't want to own cbs there. but, as well, you have the potential departure of the moon who has run the company for a long time and run it extraordinarily well. >> magic touch. >> and worry it's not just his potential departure being mr. moonves but other senior managers of the companies and you have a dehabit dated company. >> how can our company be worth

$20 billion when netflix at one time was $20 billion is anyone questioning? is there another thesis here which is it's time anyway? he's 68. it's time. you know,. >> i think there was a thesis previously that the viacom deal would happen you know, as a way to go toward the exit and engineer the deal and run the company for a year or two as shari redstone would have liked and bakish and move on and a production deal, potentially, with cbs. but all that now in question given the sexual misconduct allegations, the board review, eventually special investigation that will take place and, you know, it's very much unclear what will happen. >> david, we all read the article. the article does make it sound like this fall -- at a certain point. does your reporting indicate

that it may not have ended >> i think it does indicate it ended. >> it did? >> when he got remarried. >> if there's anything that can possibly make it so there's a way this guy can keep his job, as he says, listen, i really want to do, i mean, other than a couple of instances, which is never, of course, helpful. this did not go on it's a bad set of facts. that's the problem and the statement. he damned himself, david. >> it's going to be tough. >> that statement, i mean, you know, i'm not one to justify what he said but a "no comment" may have been -- >> and the article made it more about the culture of the company, as well not more about but that and brought in "60 minutes." >> yeah. a boys club. >> like what they discovered at -- >> they pointed out i think in

parts of the company more men than -- >> did you hear his commencement address? >> moonves >> no. everyone i knew in the business, obviously, i didn't know these people you know, kind of said you know what a nice guy. it was a great -- he was a great commencement speaker. >> these directors got their work cut out for them today. >> yeah. what happens in terms of the reportage? is it drum beat? >> yeah. >> we'll see what comes outs of the meeting today and if there are further allegations made by other women. >> and, you know, people, of course, tell me, you know, it's -- >> you know that is false. as far as i'm aware and my reporting indicates this was not part of any effort by shari redstone you got to remember, she's --

their economics are the same in both companies you don't want to necessarily now -- i don't want to say these two people get along they don't but, no. you know, these rumors have been around a long time the idea that mr. farrow has been working on a story for a long time. but no i have not -- i do not believe that miss redstone had anything to do with trying to aid this report >>well, on the one hand, why are some of -- obviously, you're close to the story but there are some of us who are shocked. >> yeah. >> and so i guess it wasn't, i mean, it was just in the air. >> yeah. >> those who are shocked. >> yeah. it's been in the air for some time but, you know, when it didn't come, didn't come, didn't come as a story many thought maybe there's nothing to it. and, you know, or maybe the reporting was done and, obviously, i didn't undertake

it it didn't show anything. we know different now. >> it's a huge story. >> let's get to some other things while you were gone, disney and fox closed not closed -- excuse me! shareholders meetings took place and approved the deal. the question is about close and it's one i raised, all though i tried to answer already. which is raised the heard on the street they need chinese approval for disney and fox and as you might imagine, given what happened with qualcomm and nxp, people say maybe it won't be as easy a ys you think. there seems to be a great deal of confidence on disney's part they'll get it done. with the ainnti-trust authoriti. >> i believe they will but, david, when i read the statements from the chinese government about the anti-trust problems of the qualcomm/nxp deal there were none. >> no. >> i mean, yes, they didn't

qualcomm -- one of the undercurrents we didn't want qualcomm to be more powerful they had a trust bust teddy roosevelt approach but that's a real stretch. otherwise that was just not a good call versus all the other mergers they just always said fine to. >> we speculated on what price nxp would inhabit after the deal broke. we have our answer, i guess. $95. >> your interview was powerful. >> yeah. >> with clemmer last week. they have a lot of cash buying back stock there's a possibility that nxp, we were concerned about, might not be able to get a lot of apple business because the tie up with qualcomm i know they're connected auto and people are worried and china, you know, the stock could go up if china does -- if

you get a europe out of china. how about larry kudlow predicting at delivering alpha there could be a surprise with europe >> yeah. >> almost as if he was clearly in doing -- >> or the talks, at least, took place last week. >> but china differs, obviously. but i think that nxp is being valued similar to the other companies in that business and it looks like everybody got washed out clemmer acquitted himself. everyone loved it. >> yeah. finally, jim, facebook is down 2.5% twitter is down 4% netflix is down 4%. >> microsoft is down. >> even microsoft. >> no, i mean, it's very strange, david there's just such a -- i did a piece this morning for "real money. literally we have these issues, david, people are saying, okay, the economy is good. let's buy tech

then the economy is really good, let's circle back to sell adobe. there's almost a limited pool of capital that is rotating and rotating and rotating. it's almost as if you cannot sustain a rally with that vision kind of rotation you have to recognize, there's so much money coming out of facebook alone, it will end up somewhere. and it can't just pile into it. >> or caterpillar for that matter. >> a man who knows a thing or two about rotation bob has more on what is moving >> reporter: we're seeing this morning. the value outperforming. we'll take a look at sectors we started 2-1 but moved slower as faang has gotten weaker crude is up 2% this morning over $70. semis are up and just turned negative here. we talked about the impact of tariffs.

those companies impacted by steel and aluminium tariffs, gm, whirlpool, and caterpillar look what caterpillar said they put a number on this. supply chain challenges to continue to pressure freight costs. but they have pricing power. prices increases will offset the impact you've got pricing power you're okay. you don't have it, you're in trouble. we see companies with limited pricing power. harley, for example. look at caterpillar. the earnings turn around is spectacular. put up a second quarter earnings for the last three years 2.97 now it was $1.49 last year look how much they have turned it around. revenues have gone up but not nearly as the issuings have improved that's why you see the spectacular chart. so we've got raised guidance a new buy back program from

caterpillar. the impact from the tariffs relatively modest. there's a great move for caterpillar. the backdrop is what matters the macro backdrop and that's why the earnings are holding up so well. that's why the sectors are just fractionally from new highs here the nasdaq had a rough day on friday nasdaq about 3%. the s&p is 2.5%. everything is 2% from the historic highs, essentially. the big issue is whether or not we're seeing any kind of leadership switch. i mentioned last week the market leaders, the first half of the year the russell 2,000 and the faang stocks this is happening today. the faang stocks, david, i currently noted they're done noticeably here. apple, netflix -- you see all the declines today this is leading to the old debate about value versus growth value has been a laggard for so many years just at the end of last week, we

saw the russell 1,000 value outperforming. so value is banks, energy, retail, by and large russell 1,000 growth is largely dominated by technology names. we've been waiting for a long time for value to assert itself a little bit last week was the first time we saw evidence of that i want to know morgan stanley's strategies this morning. mike wilson said friday's moves is a sign of market exhaustion and we think the shift toward value could be more sustainable. it's getting a lot of traction right now the dow is up but the s&p, david, is down 3.6. back to you. >> okay. thank you, bob we'll head to the bond pits now. rick santelli is in chicago. rick >> reporter: good morning, david. you know, you look at one week of tens, we popped up a bit. a basis point half away from 3% and the long ends leading the

show today 2s are up one. if you look overseas, bund yields, of course, popped, as well covering in the mid 40s. we haven't closed 45 basis points or higher since june 13th so it's going to be interesting to watch and pay attention to that relationship. you can clearly see the entire eurozone is is a little bit hotter today look at the italian 10 hovering just below 280 making the highest yields for the month of july, as we get ready to close this month out. yields hovering at 11. we haven't seen since june we remember the volatility to the upside and yields we have seen periodically in the italian curve. let's look at the currency markets for a second ye euro versus dollar doesn't look bad. when you open it up month to date they haven't gone anywhere there's a bit of consolidation going on it seems as though

we're squeezing the ranges a bit. and finally the dollar yaun. what is going on in china has been noticed getting noticed almost on a daily basis with respect to that currency is weakening versus the greenback now at the jim back to you. >> coming up, we're going to have the ceo of harley-davidson. we'll have an exclusive interview. we'll be right back.

looking at facebook. you can see another 3% let's

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which means he's fishing for all those big fish >> those big red snappers. >> lam research makes semicondusemio semiconductor equipment. great reporting by you and cbs i find it riveting it. >> it's an unfortunate story in all ways . >> i will take to you later. >> thank you >> see you tomorrow morning if at sooner. >> coming up we have morgan brennan's exclusive with the ceo of harley-davidson ne are integrated. atta, boy. & yes, some people assign genders to machines.

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as we kick off a new week, the dow remains in positive territory. the nasdaq technology getting hit hard again, after it got beat down last week. our road map begins with shares of cbs, falling again, this as the company's board plans to meet today in the wake of sexual misconduct allegations against les moonves. . >> stocks may be trying to recover from friday's losses, the s&p posted it's worst day in more than two weeks. and finally my exclusive interview with harley-davidson's ceo. breaking data on pentagoning home sales >> the street was looking for no

change sales still 2.5% lower than june of last year, and that is the sixth straight move of declines. a slight increase in the supply of homes for sale may have been behind this increase a measure of sales will buy existing sales home. as demand rises, prices continue to heat up total housing inventory at the end of june did rise 5% compared to june. sales increased in all regions of the country, rising 4.4% in the month, 1.1% in the south and 0.7% in the west sales were lower in the east and weakest in the west. >> shares of cbs are under pressure this morning, as the board discusses next steps for

that company after accusations of sexual misconduct julia is in los angeles and she brings us the latest this morning. >> reporter: a source tells me that the board will meet for a previously scheduled meeting about noon today six women accused les moonves of harassment and dozens more describe abuse at cbs. the source tells me we could hear details of the investigation, such as who's conducting it as soon as today and certainly by the end of the week the board will decide whether moonves will continue running

the company during the probe or whether he will be put on leave. les moonves released a statement and said i always understood and respected and abided by anyone's -- on speculation that this increases the chances of a murder between c merger between cviacom and cbs reacting to those stock moves. some female executives who have worked with moonves over the years have tweeted support for him. we are sure to hear more after the board call today and cbs earnings are coming on thursday morning. back to you. >> i mean one other possibility,

julia, of course as well that mr. moonves makes a decision to step down. i know you know very well, he's been among the highest paid ceos for years and years and has an incredibly lucrative severance package of this board is expected to take their duty very seriously to the company not necessarily to its current leaders. >> he could recues himself to step back during the duration of the investigation. but there are obviously a number of ways that could play out and we'll see what happens on this board call today i understand that it's a c conference call and obviously some of the other board members are in new york. >> what is the succession plan at this company? >> well, les moonves is very

closing to his chief operating officer ianello, and we heard a lot in the context of ianello of who could be potentially running viacom but moonves and david has reported a lot on this, wanted to make sure that joe ianello continued to be his number two he is close to moonves, but he certainly does not have the close relationships with both advertisers and content creators that moonves is so well known for. >> and there's a power a vacuum whether sherry redstone can come in and help run the company? >> that's going to be down the road i don't think that's front and center right now i think they're more focused on what can be done -- -- in an interim basis perhaps, or

perhaps for some period of time, and for your point, you might have directors being potentially replaced again or reconsidering a bad deal but that's not front and center this week. >> juliette, thank you we're going to talk more about this throughout the show in the meantime, let's get to the overall market both the nasdaq and the dow looking to extend their win streak to five but the nasdaq coming off the worst day of the month another big day for earnings, tesla, apple let's bring in brian bellsky, chief investment strategyi exist >> when we say hold up

as we look at the narcotmarket,e see kind of a rotation in these leadership especially fang those moves towards valuations, very much the way we thought markets would play out this year in an environment, with low rates and bond rates going higher that's the unusual or the an anomalous kind of environment. >> brian, you've got facebook down today apple earnings tomorrow. how does this move forward, especially if apple disappoints the stream >> we would say that so many investors are looking for that, quote, unquote, canary in the

coal mine, as to bias talked about. quite frankly the fundamental attributes of united states stock market are screaming value. from an investment strategy standpoint, we're less worried about apple because of where cash flow is and where dividend is facebook as had its issues, had the shot across the bow with respect to the congressional hearings so whether or not this is the break, i think it's been way, way over stated. i think technology earnings in general, has become the most stable earner in the s&p 500 than it is on a quarter lly

earnings basis most investors, we just got back from a week in europe, and they were behind the 8-ball and they missed the move again. so the rest of the year could be quite positive for stocks and we're going to move into value which is going to be very fundamentally driven >> we all expected 20% earnings growth and companies most of them beating, but what about the quite dan guidance >> even in the beats, we have seen a fair amount of companies like beating on tax rate or some issues on fx going forward, i think the numbers are good, the question is where do we go from here, they care more about the future really they care about what happens going into 2019.

i do think it's more linlted upside here through the end of the year and three things investors really want to get a feel for. two, they want to know where the fed is, and how far are they going to go and three is the midterms i expect we're dealing with october-november when investors feel a little bit more gusty the area rnarrowness of the mar anywhere from 45% to 50% of the s&p 500 constituents are actually beating the market index. but there's some weakness that outside of fang, the semiconductors also strugglidrsg at this stage >> we also need to talk about the fed meeting again this weeks and other stahl bcentral banks e

been policy meetings this week what about some of these major issues we have been watching >> we would say on a near term basis no because most people are still worried about the trade war and the midterm elections, i think longer term, the fed headed into 2019 will be a bigger theme officially again, consensus has been surprised and the fed will be adjusting their outlook accordingly and that outlook is going to be even more important we think heading into 2019, especially the second half of 2019, and into the election year, 2020. >> it will be interesting, guys, thank you. >> brian belsky -- when we return harley davidson's response, with the iconic manufacturer, nolling the president's attacks over

twitter, they're also announcing a bigger strategy. my exclusive interview with ceo matt levatich right after the break. >> i think as a business, we just deal with what we have to deal with. we are not a political organization, we have worked very hard to be apolitical in how which approach our business and our consumers anywhere in the world. alerts -- wouldn't you like one from the market

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welcome back, after three straight years of declining cease, harley-davidson is revealing the nuts and bolts of its turn around plan even a series of electric motorcycles. also new ways to buy harley gear including new e commerce and the company is betting on growing international righters i sat out with ceo of matt levatich to discuss the multiyear strategy here's criticism including from

president trump. take a listen. >> we have been working on this for the last six months. this is an unfortunate condition in the middle of work that we would like to do we would like to invest that money differently, we would like to spend our time differently. but behave to deal with the facts that are before us >> when you're talking about $2,200 more per unit it becomes a more difficult conversation with you and your board? >> it becomes a decision -- the first decision is protecting our te customers in the market. and we have to find ways to mitigate that cost, because we would rather invest in what will

help grow the business not just maintain the business. we would rather not be spending our time and our money this way right now, but we're doing what we have to do. >> were you surprised by trump's reaction >> i think as a business, we just deal with what we have to deal with. we are not a political organization, we have worked very hard to be apolitical in how we approach our business and our consumers anywhere in the world. we do what we have to do to maintain that sbintegrity as a country and a brand as we had to make difficult decisions as which did in this case, and that was just an unfortunate attention around some decisions we made that were rational under the circumstances. >> in light of that, it seems like there's been a lot of information, a lot of

suggestions by the union leaders by other folks that are coming out very strongly to shift this decision to some of that production the argument being that thfis ws potentially in the works before the tariffs. >> if we had planned this for very long, it wouldn't have taken us 9 to 18 mos to do it. we're working very hard to figure out how to eliminate that cost from our business as quickly as possible. and if circumstances change, we'll of course evaluate and shift where we can >> why do you think harley has experienced so much more attention over this than maybe some of the other companies? >> number one, we're a

115-year-old great mecamerican company, and we have manufactured our motorcycles in milwaukee since day one. we have always manufactured in the u.s. but we would rather not do this. but as i mentioned, brazil, 20 years, we can't see those important growth markets for the company and deny those customers the opportunity to get on our harley-davidsons so we do the best we can to protect the american qualities of harley-davidson because it's very important to americans and very important to us >> you probably don't get more iconic in terms of the american brand. now important is that to your international customers? >> it's a good point, but if our products are more expensive or

there's the potential for them to be half as expensive. harley-davidson, if you walk into one of our plants in brazil or india and when we start off in thailand, you'll see the same equipment and the same approach to quality that we have in every other manufacturing facility people gain confidence in that and can afford it when they're otherwise unable to, it's acceptable >> capital investment through 2022 of up to $275 million and i know that harley expects to generate revenue

harley's stocks are up about .5% on this news. >> it's great that you got him on the record, because i think companies have been so shy about speaking out politically and i wonder if they had to put out that release as publicly as they did i talked about people -- they say that was very public, it was unnecessary that they went out and hinted directly at the tariffs and the trade issues >> and i think probably that gets right to the point that matt said in that interview, that is an american company and they prefer to produce motorcycles in america it's also a u.s. company from a u.s. standpoint, when they make a decision not to do that, it has larger implications. that company is 115 years old.

right now they're having bike night as they do every week. and this is part of what's going on with this company is those customers and consumers, they demographic is aging in the u.s. they're looking to get -- >> interesting to hear a ceo say we just don't have all the answers yet either, that he doesn't yet know exactly how al the businesses will evolve when it comes to europe >> we zompdon't know where theye going to put that production, whether it could be india or thailand, and i don't think they have any ideas or any sort of details in terms of whether you see the retaliatory tariffs come

off. >> they were having other problems before the tariffs started, right i mean how much of their issues can you really point to the tariffs, and how much is the aging population of fans and other issues that harley's been dealing in. they're trying to right now, and something like tariffs and trade come at this really bad time when they are self-funding all of these new investments and all of these new motorcycles >> it's a great interview, and we're going to air a lot more of it morgan. also coming up on closing bell, an exclusive with jpmorgan chase, jamie dimon, an exclusive interview coming up.

time for our etf spotlight caterpillar reporting second quarter earnings and raising its full year guidance so that helped. >> shares of caterpillar were up

on that bullish report this morning. we have lost a little bit of momentum not nearly as high as we were earlier this morning with 3.2% gains. if we compare xli to the s&p 500 fund, you'll see on a year to year basis the -- that's going to be something to watch other sector etfs that have exposure to caterpillar. also the $3.8 billion fund iev and the ticker fivu. what we might pick up in intraday volatility is when caterpillar's earnings calls get under way. when the ceo brad halverson.

-- but that conference call, david, certainly a focus here because of what happened last time around, back over to you guys >> thank you . >> when we return, the board of cbs les moonves has released a statement about his allegations of sexual misconduct clay koplovitz is going to join us and talk with us about it

s. good morning, everyone, i'm sue herrera. here's your news update at this

hour the wildfires in california are spreading. two fires erupted friday just 13 miles apart and they have advancing rapidly. they are burning more than 30,000 acres amateur video catching a violent hailstorm in mexico. officials say it injured about 40 people mostly from hailstorms caesar's entertainment firmly getting into the sports betting business in atlantic city this weekend. caesar's other ac hotel her aars s.t.a.r. starts taking bets again this weekend. atlanta ended up beating l.a. by 4-0.

but newcombe's night didn't end there. he issued a public apology for a stream of tweets that he wrote during his teen years. and welcome back to "squawk on the street," live at post nine at the new york stock exchange let's take a look at where we stand. dow is positive eight points makes like verizon and chevron and jpmorgan are leading, testimoniy financials are higher as tech continues to take a beating. the dollar is stronger ahead of some key central bank meetings and we have apple tomorrow >> apple, one part of fang apple down about .50% but not

nearly as much as netflix or google >> we're also following cbs, that stock is down right now, it did drop 6% on friday, the board of the company is going to meet today to discuss allegations against ceo les moonves. and this of course comes as there's an ongoing battle between cbs's board of directors and the controlling shareholder of the u.s. for overall control of the company joining us now is kate koplovich. knowing what we know about mr. moonves's behavior, if you were on the cbs board

>> it's complicated for sure, because four members have independent responsibilities, and they must investigate these charges, no question about it, but there's also activity or ongoing activity there's only one motion they have to consider today and of course it's all so koch indicated by lawsuits that are going back and forth between national amusements and ceo. but regard to les moonves, i think the board really does have to do the investigation and i think people shouldn't jump to conclusions with regard to that. but they do have to take action, they have shareholders, they have to take actions and we will probably find out later today, but they may suspend him while they're doing investigations, they may not, i think they will go to a full investigation before making a decision but let's look at it from les moonves's point of view for a

moment it's critical for him because if you are dismissed from a company with cause it has real influence on the effect of what your long-term payout is after leaving the company. it so there's a real different between leaving the company and being fired for cause. >> about a $180 million difference for him that's real money. carol what would you do, based on what you know about the behavior at this point would you want les moonves to step down? >> les moonves is one of the most gifted ceos in the country. the board members would not like to see him step down, but to look at it through the lens of 2018 where we are, they may ultimately have to have him step

down from his position if the allegations are true but i do think they should do the full investigation and not jump to conclusions. >> mr. farrell went on about the allegations against mr. moonves and described the culture overall. i'm just curious, what does something like this do to the management, to the ability of the management to function appropriately, whether they're going to continue to have the boss they have, or that boss's boss so to speak >> they don't know if the merger of cbs and viacom will take place. now their boss is on, you know, questioned as to what his behavior will be, will he be there, will he not be there? there are amount of challenging people at cbs, i don't think cbs is going to tank, but i think it will have further repercussions for the stock price if it continues.

and if i were sitting on the board, i almost would like him to step aside at least while the investigation is going on, because i think as long as les is sitting there, it's going to be in the press all the time, daily weekly, it will continue and maybe to take the heat off the company to do the investigation, it may be good for him to take a hiatus and if i were sitting on the board that's what i would be considering at this time >> kay, you referenced the legal battle over the counmpany's fute over viacom. but the big picture is the future of some of these companies, how they're going to take on netflix and other companies and a shift in this business model, i'm wondering if this scandal speeds it up or slows it down ultimately >> i think it will speed it up both cbs and viacom have to hav

a -- dividends to be paid or not paid, they're going to do to the delaware accord and there's really a lot to be decided sitting on the board of cbs right now is a complicated position to be in. but they do have to consider all the ramifications for what's going to happen in the future. but the fight directly to the consumer today, it's the netflix model, it's what netflix is attempting to do but when you put viacom and vbs togethvbs -- cbs, are there other compani companies out there for them to merge it there are a lot of issues that the board has to face as we go through the next few months. >> kay, it's funny, you've been

on with us many times, i have never asked you this, you've been in the media a long time, you're a woman -- >> thank you >> did you ever deal with harassment along the way. > -- and i'm sort of curious, given your view of it and if you have experienced it yourself, what your thoughts are >> bear in mind, i was a ceo, i started at the top of my company and i had a different position than other women did i wasn't in a motion to be compromise inside that way for me tepersonally no, but we l knew this was going on, not only in cbs, but in different networks across the industry, but it really doesn't matter, whether it's been going on 5

years, 20 years or 50 years, it was very emblematic for the industry it's not necessarily to say les moonves, i think the full investigation has to be done when you do an investigation, and you get into a lot of he said/she said, and if nobody can corroborate what happened, in this case, at least according to some articles that are out there, rowan and ferrell's article, who were told about the instances when they happened and so there is a record outside of the person that's making the allegations in many different cases. sand and a board cannot dismiss it because it was made several years ago. more from squawk alley

my interview with matt levatich coming up in the next hour, stay with us. [music playing] (vo) progress is in the pursuit. audi will cover your first month's lease payment on select models during summer of audi sales event.

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let's get over to the cme rik right now. hey, rick. >> judy, thank you for joining us today it's all so interesting, what's going on with trade with president trump to try to get in his opinion what's a more fair trade arrangement.

but currency manipulation can certainly void any policy, i'm calling it policy manipulation in terms of china, your thoughts >> you're absolutely right and i really applaud the president for focusing on generally free trade he's really taking the moral high road. by saying his real preference would be no tariffs and no subsidies. so all of those who are across the ocean talking about free trade are not really prepared to talk about authentic free trade. because the next big area that we have to concentrate on is currency manipulation, and it is president trump who has made this an issue. and we see that any country could neutralize the impact of a trade agreement where you have tariffs very carefully finessed to reflect the difference

competitive opportunities for the parties to the agreement and in one country, if they're allowed to depreciate their currency, can completely make up for their tariff disadvantage. >> it's one thing to say let's agree on something, but even central banking which is kind of the asterisk for kind of playing with your currency with respect to moving interest rates it's going to be very hard in the final analysis to prevent the manipulation of one's currency i just don't see an easy path. your thought >> there's not an easy path, but i think the beginning of getting on the right path is to focus on the importance of stable currencies to provide the right foundation for true free trade and for production of economic growth, i think we're seeing

that from this administration, the importance of stable currencies and not have this constant fluctuation and to pay attention to manipulation and to get any trade partner to agree that stabilizing the exchange rate among trading partners can key to preserving the appropriate keys to trade that will provide free trade. >> there's so much debate as to whether this is a good way to proceed or not do you have any thoughts on the notion that going through the bureaucracy of world trade organization versus trying to use tariffs. is it just a matter of expediency and efficiency, sam i missing something? >> i think it is proving to be expedient that the president has focussed on tariffs because it had certainly gotten the attention of our trade partners.

and sometimes going through the wto is not as expedient. >> rick santelli, thank you as always, dow down 18, when we teil back, marty feldsin wl be joining us to tell you why the federal reserve is behind the curve. we're back in a moment how do you know what to buy? well, i think my friend victor has just the thing for you. check this out, td ameritrade makes it easier to find the investments that might be right for you. like our etf comparison tool it lets you see how etfs measure up to one another. analyst ratings and past performance... nice. td ameritrade also offers access to coaches and a full education curriculum to help you improve your skills. that is cool. and if you still have any questions you can always chat with us on facebook or call our experienced service team, 24/7. yep. just because you're doing it yourself

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the u.s. economy growing at the best pace in four years in the second quarter all eyes are on the next interest rate decision the next guest argues the central bank is already behind the curve. martin feldstein, former chairman of council of economic advisers under president reagan writes save low interest rates for a rainy day. it is important for federal reserve to raise fed funds rate to 4% in the next two years. martin joins us now. president trump just voicing his opinion on cnbc on this matter says the fed is tightening too much, too fast are you arguing the opposite >> i guess i am arguing the opposite i think, you know, the federal funds rate, the rate the fed controls directly is less than

2% at a time when inflation expectations and actual inflation are both 2%. that means the real interest rate is negative and the fed should have started raising interest rates a few years ago so that asset prices wouldn't be way out of line with reality >> so you're saying what, the stock market is a bubble >> if it is not a bubble, it is very close to a bubble the s&p 500 price earnings ratio is now more than 50% higher than it has been on average historically so that's way out of line and it makes the whole situation very fragile. >> but you know we haven't seen inflation, we're just starting to see it creep up to the federal reserve preferred rate we haven't seen that in the slow

economic recovery in the past few years, whatever it is driven lower by, wireless plans, technology, you name it. that's why they didn't raise more aggressively, isn't it? >> well, i think by not raising it they created this fragile situation in which asset prices are too high, so it is not a question of inflation, it's a question of the stability of the financial system the fed focuses on the commercial banks, on whether they have enough capital, but the real risk is in the fact that the stock market and commercial real estate are way out of line with the prices that they should be so the danger is those could snap and we could see a significant downturn in markets and therefore in the economy >> martin, i want your thoughts on the flattening yield curve everybody is nofocusing on. longer term rates remain stubbornly low, and one of the

arguments has been made that they have been buoyed by the fact you see easy monetary policy by other major central banks in other key markets across the world if the fed raises rates faster, more aggressively, don't we run a risk of the yield curve in verting? >> we're not at a flat yield curve, not close to inverted yield curve. we're at a situation the fed fund rate is less than 2%, and ten year rate is a hair under 3% i think the important thing is for the fed, now that it can't undo the fact it allowed asset prices to get out of line, i think it is important for the fed to have interest rates high enough, so when the economy turns down it can cut interest rates substantially. usually it cuts rates by 300, 400 basis points

sure can't do that now when its rate is less than 2% >> i'm curious where you come down in this active debate on growth from here after friday's gdp report 4.1% growth, fastest we have seen in years. can it keep up with some of the stimulative policies like tax cuts and deregulation towards the 3% growth rate that the trump administration promised? >> we could certainly see 3% in the second half of the year, so i think the economy is basically very strong. it's got a lot of momentum households have increasing confidence because of the job market and because of rising asset prices businesses, thanks to the tax cut, are in good shape the danger is that asset prices are way out of line with where they should be and as the long rate rises, investors are going to say well, maybe i ought to

sell some of that stock, move into bonds when they start selling that stock, that's when we run the risk of a significant downturn in asset prices. >> martin, thank you for sharing your opinion on the markets and on the fed always good to talk to you martin feldstein. coming up on closing bell, don't miss an interview with asrne dimon, 3:00 p.m. ete time meantime, dow is down 22 "squawk alley" starts in a few eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.

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good morning 10:00 a.m. at harley-davidson in milwaukee, 11:00 a.m. here on wall street. "squawk alley" is live ♪ ♪