live from new york where business never sleeps, it's "squawk box. good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm michelle caruso-cabrera along with andrew ross sorkin and mike santoli u.s. equity futures a flat open. the s&p would open up by 2 the dow jones flat, and nasdaq up by 4. overnight in asia, big news out of the bank of japan policymakers kept their rates unchanged but signaled they would allow more flexibility when it comes to a key interest rate it would go to 0.2 rather than 0.1? >> bank of japan micromanaging

>> that's the world we live in japan's knnikkei closed flat shanghai composite was slightly higher last week there was all this speculation that pushed the ten-year u.s. yield higher as a result european equities at this hour ahead of the open are also flat across the board >> you said the u.s. open -- my brain was in another mode. >> i thought you were talking about golf >> that's the other one. >> that's over >> let's show you what's going on with treasury yields. ten-year yield at 2.947. yesterday got up to 2.97 moments it touched 3%.

apologize for my humor at this hour. here's what's on deck. the federal reserve kicking off a two-day policy meeting today the federal reserve expected to hold rates steady and then rising inflation likely to keep the fed on track for another two rate hikes this year we will see how politicized all of this gets personal income and spending data for june and the consumer price index for may. on the earnings front, we have three dow components, pfizer, procter & gamble and then after the close the big one, apple reports. >> big "a. earnings news, bp reporting 300% surge in profits this quarter. the results were boosted by higher oil prices. production also higher thanks to rising output from major projects

bp also hiking its dividend for the first time in four years that stock up $3.40 a share. >> chipotle shut down one of its restaurants in a suburb of columbus, ohio after two customers said they got sick after eating there at least two customers posted on a food safety website that the experienced nausea, vomiting and fever after eating there in a statement a chipotle spokesperson said we acted quickly and closed this single restaurant out of an abundance of caution business insider reporting during an inspection last week that the local health department found the restaurant was not storing lettuce and beans at the proper temperatures. food safety is a top priority for brian niccol who took over in march a series of high-profile incidents in 2015 bruised the chain's reputation and stock price. last year they retrained kitchen crews after identifying a sick employee as the cause of a neurovirus outbreak at a store in virginia. chipotle plans to reopen the restaurant in ohio today if it

receives approval by health officials. >> i assume this happens at restaurants -- i hate to say it happens at restaurants across the country. chipotle have had an acuteand real problem before, now are we moving to a different territory? >> it seems like guilty until proven innocent situation. the fact that we have a website and you opt into it and say this is why i think i'm sick. it's a good test the market used to freak out every time the stock would go down. now it seems like they're not as sensitized to it >> the trump administration considering bypassing congress to grant 1$100 billion tax cut t wealthy americans. the administration could change the definition of "cost" used to calculate capital gains.

the 20% capital gains tax rate applied to the difference between the asset's value when it is purchased and when it's sold the times report that the administration has not concluded whether it has the authority to make such a change, but if it does, it would have a huge implication for investors and y viewers of this network. >> it's been thought about in the past if you apply it now to investments made years ago that's a windfall. >> i want to understand something. they would -- you could adjust it for inflation >> yes that's the whole idea. >> so there hasn't been that much is the thing, right >> if you owned something for 20 years, it's still -- inflation is a decent component of it. >> even in this time period? >> yeah. couple percent a year is a big

percentage of return >> you think why do you want to lower taxes? historically so you can boost the economy or maybe you have a view you don't want somebody to be double taxed or overtaxed there's the economic strategy of it an then there's the philosophical strategy this, i would argue, comes from a philosophical perspective rather than an economic perspective. >> i think if larry kudlow were here he would say going forward it would create more incentive to invest more >> you could announce you were doing that you could announce going forward, we're pressing the button from today on, we're doing this. >> there's also a theoretical argument against it. you are paying in dollars that have been influenced by inflation. the dollars we have today are

the result of whatever inflation we have. >> we'll do an economics class rater in the program >> your favorite story >> it's a fascinating story. cbs appointing an outside law firm to handle an investigation into sexual misconduct allegations into les moonves. cbs is leaving moonves in his current role for the time being. joining us with more on this is author of the new book king of content, sumner redstone's battle for viacom, cbs and everlasting control of his media empire good morning >> good morning. >> i don't know what you think the expectation was. after the show yesterday you could see sentiment growing that maybe what was going to happen is they would suspend him during some kind of investigation >> that was james stewart's

opinion. >> there was even a report on deadline.com that les moonves was thinking about it. what do you know and what do you think is going on? >> this board is in a pickle if they get this wrong they're in trouble, but it's also a divided board. it's a board at war with itself as has been demonstrated there's this litigation going on between the controlling shareholder and the five independent board members. >> how much of the board is still controlled by les? >> the vote, the last time,was 11-3 so, 11 on les' side, for the previous issue, which was about the control of national media. >> how much does the previous issue inform their decisionmaking about the issue at the moment? how much do they think they need him there to compete for control of the company

>> the first words out of cbs's mouth out of this on friday was like the timing of this story is strange. which was an implication that this is all about the fight for control, which is amazing that they said that >> but ronan farrow says that i not the case >> and then how much of the cbs story is the les moonves story entirely as far as investors are concerned. les moonves is the ceo >> i know morals are supposed to enter into the equation, just play it out commercially do we believe that advertisers on cbs and/or actors, directors, what have you, has anyone publicly or privately -- i haven't seen it publicly, so it

must be privately, have they said we don't want to do business with this company because of this situation? that's when it gets complicated in a different way >> we have not seen that yet we saw some senior cbs executives come out in support of moonves there's been an outcry from women's groups, from candidates. there's apparently a mob out there to get him >> but this is very xhoccommon you must get on board to say whether you agree with it, believe it or not. it's a risk that people will feel compelled to do what andrew suggests might happen. >> completely, and if more welcome forward, and if the board good nothing >> walk us through the timeline.

tell us what we'll be hearing over the next several weeks. >> the next thing we'll hear is the law firm being selected. they said we'll pick a law firm. i expect that to happen this week there will be an investigation >> would be the goal to be to get to this date in october, this date in october is -- >> the first week of october that's when the trial is for the showdown >> on who controls cbs >> they just blew the calendar up saying august 10th they will not have the shareholder meeting. >> if les moonves were to be suspended or removed, would the rest of the broad say fine, we have to recombine with viacom? >> that's a big leap

independent directors are saying we don't think it's the best thing. so short-term, no. it's going to be tough to do the merger long-term, ever since friday, it looks more inevitable. >> so the reason les moonves is still in charge of the company today, based on what we think we know about board discussions is because they're suspicious about the article, that it might have been related to trying to get sherry re stone credstone contr the company, and he's so good at what he does, there's concern about the future of cbs. those are the two reasons why he's still there. >> and the other reason is they need to do due process they're treading carefully they need toshiba careful and do things officially. >> 1$180 million is also on the line this is les's compensation, right? >> that's his exit package >> if you were to quit, he

doesn't get it if he were to get fired, he doesn't get it >> fired for cause >> has there been broached conversation about a settlement? >> there are folks who believe the chances for a settlement have increased since friday. if i were a betting person, i would say that's the most likely outcome. >> if you're betting, how does this end will you slow walk the situation to the last possible second or do you think someone is trying to figure out how to find a resolution to this ffrnlg we see >> if we see a drum beat, more women and more issues, that would be a factor. look for a settlement in august maybe. >> thank you one of the biggest minds on wall street sounding off on a what he thinks are the biggest

risks to the economy >> it's trade if the skirmish becomes more of a war. i would say the reversal of qe, i don't want to scare the public, we never had qe or the reversal regulations are different. governments have borrowed too much debt. people can panic when things change we tell you it's changing. we know it will change it happens it may have some effects that people don't expect, and i think it is bad policies bad policies lead to bad outcomes >> let's talk about everything he said. futures now are suggesting a flat open in the united states joining us is james lew, and andre ma yshg ee.e.e.e.mayez. where do you stand on the future

of the markets >> i'll start with tariffs where a lot of the comments were mentioned. i think if you look at the sources of return for equity markets, dividends, earnings growth, and then the multiple that you're willing to pay for those future earnings. we have seen the multiple affected because of the uncertainty around tariffs the question is are the actual earnings going to be affected if this continues so far what we have seen is now seeping into the conversation. 40% of companies of the earnings calls have mentioned tariffs last quarter it was 25%. so it's a topic of discussion, and other companies like caterpillar are saying, y input costs have gone up but they've been able to pass it on to clients, so earnings have not been affected. i think it's too early to say this is really bad

it is already fair to say this is bad for multiples >> you would see compression, right? >> that's how i would put it. >> james lew what do you think the selloff that we've seen in f.a.n.g., people will open up the paper and see that the f.a.n.g. index is now in correction territory >> what does that say about the broader market >> this is clearly an earnings driven market. 22%, 23% earnings growth for 2018 that's a spectacular number. the challenge from here on out, where it relates to areas like fang, a lot of that is priced in you look at the market, we're at fair value if we got back to the heights of valuations we saw last year, maybe a bump there but there's a lot of uncertainty and volatility out there over time that 22%, 23% number

should come down over the long run maybe 10%. so he what we think is the market is fairly valued. things like f.a.n.g. were inevitable because they had run up so far. so we like the market but we would not overinvest in the market we would be defensive. >> we have a fed starting a meeting today. not really much expected out of it with regard to jamie dimon's comments, in the background has been this idea, maybe we're late in the cycle and monetary policy is acting as a restraint how much do we have to think about that >> we have to think about that alou l lot. there's uncertainty. >> i believe the strategists at jpmorgan are not particularly alarmed, but that's a different story. >> it's something to clearly watch. the bigger issue is everyone has

a story around the yield curve now that we're getting close to flat, everyone has an excuse for why it doesn't matter. our view is, look, the yield curve is powerful because there are always exceptions but it's telling you it's consistent with the fact that the unemployment rate is low. inflation is starting to pick up all these indicators tell you they're fairly late in the cycle so we need to keep that in mind. >> what does that mean being late in the cycle if you agree we are in terms of where you want to be with asset allocation >> late in the cycle does not mean the end as we learned this cycle is already ten years in, does that mean late end cycle mean three years or six months? all we can do is look for signs for the turn so far we have not seen those signs if you look at

unemployment, confidence, pmis you mentioned asset allocation, talked about global diversification. we believe it is important to start looking abroad the headlines are scary. there's a lot of talk about china slowdown evaluations do matter. they tell us something about expected returns from that perspective we believe international looks more appealing than the u.s >> thank you, gentlemen. >> thank you. coming up, you should be promoting this michelle's interview with secretary of state mike pompeo we'll show you what he said about iran and why the consensus may be wrong about the sprint/t-mobile deal we'll discuss that after the break.

this endangered species is getting help from some unexpected friends. these zebra and antelope. they're wearing iot sensors, connected to the ibm cloud. when poachers enter the area, the animals run for it. which alerts rangers, who can track their motions and help stop them before any harm is done. it's a smart way to help increase the rhino population. and turn the poachers into the endangered species. ♪ ♪ broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills?

aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com.

president trump said yesterday he's willing to meet with the iranian leader without preseasons historically the u.s. has demanded concessions before agreeing to such meetings. i interviewed mike pompeo

immediately after the president made those meants yesterd met yesterday afternoon. >> the president said he would meet with the president of iran with no preconditions. are you on board with that i am, indeed we've said this before, the president wants to meet with folks to solve problems. if the iranians demonstrate a commitment to fundamental changes, how they treat their people, reduce their malign behavior, agree it's worth while to enter an agreement that prevents proliferation, the president said he's prepared to sit down and have a doconversatn with him >> athere are reports last week that they rebuffed numerous attempts for conversation. >> i'm not going to discuss private conversations that may have been had or may not have been had >> the iranian currency is getting pummelled, this is ahead of the snap back sanctions that

are taking place are you happy about that >> we're not looking for the real to collapse or anything else what we are demanding is a change i the behavior of the regime you can't launch missiles into riyadh, you can't arm hezbollah, you can't fight with iraqi militias, that's not behavio that's acceptable from iran. those are the changes we're looking for. we're hoping the iranian regime will see it that way and change their behavior >> the president said no preconditions, mike pompeo himself listed some preconditions he would want to see before they sit down >> you tell me i feel like part of the president's strategy has been -- the biggest shift has been no preconditions on anything. almost to say, okay. let's sit down everybody wants to try diplomacy? let's do it.

let's see what happens >> so a year or two from now what will we think of this v strategy >> i don't know. we'll find out we spoke about a new era, trying to expand a new indo-pacific strategy we'll air that in the next hour. the administration would never acknowledge this is pushing back against one belt one road by the chinese, but that's clearly their attention. t-mobile u.s. is now naming nokia for its supplier in 5g network gear concrete evidence that a new wireless upgrade cycle is under way in april t. mobile agreed to a merger with sprint. i should say that's the subject of my column this week i came out and i hate to say i'm wrong, but when the deal was

first struck, i had a bift of the kn the knee jerk response everybody else did these have not been approved by regulators there should be a red flag the idea of going from 4% to 3% would create more problems, not less i would say i spent too much time poring through the testimony, the exists who testified, and other information submitted, and now i went back in this column and said i revisited this, and i have come up with the opposite view. >> so if the merger were allowed -- >> at least in the short-term, by default, it would create more competition. i can't promise the long-term. in the short-term, the idea of going from 4 to 3 kracreates a e

stronger market. at&t and verizon is serving effectively wealthy customers and business customers if you ever wanted a third player that could compete, this would give them a shot once you get into 5g, they would be completely left behind. however the question is longer term and the only way that they will be able to compete, the most interesting part of all the math and reading is the only way that they'll ever be able to compete is on price. if you were worried they would get to the party, the amount of money they have to invest -- the only way it works is to steal customers. the only way to steal customers is to have a lower price at&t with time warner they can now offer perks like more

exclusive content. >> so over time t-mobile and sprint could get into the content game >> the only thing they can really offer is price. they can still operate as the rick what 10 years, 15 years from now, like the airlines, they decided to rational ice their pricing behavior, that could be a different story. >> right now we live with two did y duopolies. there's verizon and at&t and sprint and t-mobile. >> they are different markets. >> they are. there has always been concern that lower demographics would not be well served if you had more players >> it's a mature market. >> they have to start serving those customers if they want

growth >> the other piece i like about it, if you can accelerate 5g, you will create competition in other pmarkets. so there are real benefits i think the old measure of measuring the market has to be rethought. who is the one person who has not commented on this? comments on every deal in the world. >> the president >> stunning silence. >> you trying to tease him out >> maybe >> come in, the water is warm. coming up, earnings alert. we expect results from pfizer and procter & gamble in the next half hour.

let someone else do the heavy lifting. tripadvisor compares prices from over 200 booking sites to find the right hotel for you at the lowest price. so you barely have to lift a finger. or a wing. tripadvisor. [stomach gurgles] ♪when you have nausea, heartburn, indigestion, upset stomach, diarrhea... girl, pepto ultra coating will treat your stomach right. nausea, heartburn, indigestion, upset stomach, diarrhea.♪ try new pepto with ultra coating.

♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning among the stories front and center at this hour, chipotle closing down one of its restaurants in a suburb of columbus, ohio after at least two customers say they got sick eating there in a statement to cnbc a chipotle spokesperson said we

acted quickly and closed this restaurant out of an abundance of caution cbs appointing an outside law firm to handle an investigation into sexual misconduct allegations against les moonves. the cbs board leaving moonves in his position for the time being. starbucks reportedly teaming up with alibaba. the coffee chain is set to link up with a food delivery unit that offered snack and coffee delivery in china. a quick look at u.s. equity p futures. dow opening up about 20 points higher s&p up 5 points. nasdaq up 5 points a number of big dow companies reporting this morning apple out releasing its third quarter results after the bell

today. joining us now to talk about what to expect is enterprise and consumer technology analyst at maxim group. is this a quarter we're smouppoe to care about or not >> we called it a lame duck quarter before one thing with the september quarter guidance coming up is that the year ago quarter, you had a delay in the iphone ten release. so you probably have easy comparables. that said we are definitely concerned that guidance could miss where the consensus is given what we perceive is now a slowing smartphone market as well as coming off a big upgrade cycle. so we actually downgraded shares back on may 30th citing a decline in the smartphone market and when we do the math around subscription services we can't get their offsetting what we believe will be -- >> what do you think is a fair

price for the stock? >> we have fair price at $200ings that's earnings plus net cash. is there a significant down side probably not but you also do have risk of multiple compression >> more than -- because they trade at a discount to other -- >> people think of the hot tech stocks apple always has the lowest multiple >> would you call a single digit year over year revenue growth a hot tech stock >> touche. what do you think -- the x was so controversial success or not it raised average selling price. increased margins. >> yep it's met with, i don't know, shrug of the shoulders >> i would say there's cool stuff in there, but in terms of what matters to the consumer, do you care that you have greater

security with face i.d.? probably not that much >> i thought it was crazy and that i would hate it i love it. it's so much easier. >> i love it except when you're trying to get it under the table. you can't look you're trying to do this thing, make it look at you. but you can't. >> you mentioned delay of the phone last year. give us speculation for what you think will happen this fall? when do you think we'll hear an announcement about the next series of phones what will they look like >> my assumption is that it will be regular cadence, not delay. >> so late september >> late september, probably september 20th we'll get an invite coming out early september. >> you think we'll get guidance -- >> no. >> can you read into some of the things they're saying today

relating to what's coming up or no >> unlikely. the only wildcard out there is a september guidance could disappoint what's built in is 13% year over year for the september quarter, which builds in 12% for the june quarter. so the next i phone siiphone cy be strong. >> why are people convinced next quarter will be strong there will be a bigger version of the x, similar version of this, the 11, with some new, cool features, and something else >> i don't think the analysts think the next cycle will be strong if you look out to fiscal year '19, year over year revenue growth is in the mid single digits not the mid teens. >> on the subscription side what would surprise you, what would excite you for the stock in

terms of services? there's been all this programming they've been talking about. investing all sorts of tv progr programming. a magazine service >> and they're doing well to begin with >> they're doing okay. >> when we did our downgrade, we did a deep dive on sub skscript services long term operating margin when you look at the comparables, dropbox, netflix, spotify, they are all in the 15% range apple maybe gets the average to 25%. so it's not exciting from a margin operating perspective >> subscription services are not a higher margin business they are 25% margin business

>> i would think it would be higherments. >> then you have your rpu and the attach rates the kicker is what are the attach rates of these services the attach rate of iwork to iphone is 9% now let's think about a video service they'll come out with? there's an entrenched company. that's netflix what is the attach rate? probably very low. what's the other subscription service -- >> your point is taken, that's why they're struggling when it comes to that front. >> we have not even launched video yet. >> we will all keep our eyes on the big number this afternoon. appreciate your perspective. we'll have to have you back. >> thank you coming up, countdown to mid term elections, we'll talk to mike allen about the next 98 days of campaigning and president trump's threats for a

government shutdown. then thomas fanning will join us on set plus earnings alert, expecting results from pfizer in the next couple of minutes, procter & gamble as well stay tuned i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.

horrific scenes from a deadly flash flood in small town america drew national attention. but now the cameras are gone and the locals have to figure out what to do next. the problem is the rivers a combination of climate change and too much real estate development turned water from an asset to a liability diana olick has more on the rising risk of real estate >> as our weather becomes wetter, real estate is becoming a role in how we deal with water. one town in america is imagining a drastic solution >> reporter: it would have been called a thousand-year flood if the same destructive deluge had

not crashed through ellicott city, maryland two years before. the first time around in 2016, on the city's nearly 250-year-old main street shop old owners like donna sanger worked tirelessly to rebuild. >> there was this enthusiasm, let's put on a show. let's bring the town back. >> reporter: but this time -- >> this is more like a funeral >> reporter: now they feel these floods are the new normal. because this historic town is a blip on the map but a blueprint for developing disaster. real estate development in the face of increasingly wet weather. joe sexton is a scientist who uses satellite images to map changes in ecosystems. you had two 1,000-year floods within two years of each other how did that happen? >> the overwhelming factor was intense rain storms. climate change due to warming oceans, changing atmospheric patterns more water is falling.

on top of that, we're intensifying land use, clearing natural vegetation and replacing it with concrete, asphalt, through which water does not penetrate. >> reporter: ellicott city was built north of the patapsco river. several tributaries run through the town to the river. nose water currents were the energy for this town built around a mill in 1772. but since 1991, real estate around the popular main street exploded, developers submitted more than 100 plans to build residential and commercial buildings in about three square miles around the city. most were approved >> we have flood maps that were drawn based on conditions that are no longer true. >> reporter: in the most recent storm, nearly eight inches of rain fell in three hours intense water with nowhere to go sexton's maps show how development increased the intensity of the flooding by up to 30%

and ellicott city is just one example. we saw it on a bigger scale in houston last year. so what is the solution? last friday the county for ellicott city put a halt on new development in the area, stopping about 600 housing units that were in the permitting process. there's also a proposal to tear down some of the historic buildings on main street to give the river more space and create green space where the water can go pretty drastic >> certainly is. good report, diana thank you very much. dow component pfizer just out with its earnings. the drugmaker beating estimates by 7 cents quarterly profit of 81 cents per share. pfizer did lower its revenue guidance due to foreign currency impact that stock is moving -- we'll call it up marginally. we'll tear through that report in a bit we'll bring you more when we come back. coming up, the countdown to the midterms is on

we'll tell you what to expect from the trump administration in the next 98 days as we head to break, a quick check on what's happening in european markets now they're positive not by much. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item.

we're less than 100 days away from the midterm elections. president trump now talking about a government shutdown if he doesn't get funding for his border wall. joining us now is mike allen from axios >> thanks for having me at the adult table. >> it's nice to have you in person >> where's the kids table? >> it's where we should all be the lead editorial in the journal asked whether president trump was trying to lose the midterm elections and they question his reason to suddenly raise the issue of the border wall on sunday even though he had a deal with the gop not to do that. maybe because of the advice of getting motivated with things that get them excited to vote. >> so the answers to that are no and yes. so the no part is the white house is beginning to realize how miserable their life would

be if they get a speaker pelosi back that not only do they have subpoena power going to their e-mails and budgets to constantly call them down to testify. you no question have the start of impeachment proceedings distracting from everything. but if you look at this topic and i think that the house republican leaders will head off any kind of shut down. they know how bad that would be. but absolutely trump is talking for the reasons you pointed out, that he has to turn trump voters into republican voters right? like a lot of the people that came out for him in 2016 are not necessarily going to come out for a republican candidate who's running this november. president obama found that out in both of his midterms. >> you always see this in midterms incumbent president always struggles at that point. >> that's why he's hyping these up we have a story about the trump

effect talking about how he's changing the reason -- now it's all immigration, crime, gangs. >> do you describe him as the most consequential president since? >> if you look at how much he's changed the party and how much trumpism is going to outli him, he's -- that everything republicans believe as long as we covered them is different and with enough people it doesn't change with a president pence. it doesn't change in four years. it takes a long time now >> one of the items is running on top of drudge, bob woodward has a book coming out this fall. >> so rewardian to have it come out on 9/11. >> so what do you think he has >> bob always has -- he's like robert mueller he always has more than you think. so the -- as we know, bob

woodward very plugged into the national security community. i imagine he's been spending a lot of time at the pentagon. pentagon has distinct differences with the west wing and bob woodward tells the story in "the washington post" today how he got that title. the president, he was doing an interview with the president during the campaign and he was talking about how you get real respect. the president said fear and bob woodward privately said he thought that was a shakespearean aside. >> nice. >> one of the things you mentioned is the candidates are de-emphasizing economic efforts. now we hear the tweaking the capital gains tax law. and the treasury secretary steve mnuchin has talked about it. but this is part of the trump plan which is not really a plan.

but the trump plan is to have always talking about him and that's part of why we're talking about a shutdown it's an example of him having no fear >> we've got to leave the conversation there come on back we've got to talk tech and privacy. >> we'll be back to squawk square >> thank you for that. also known as times square the fed kicking off a policy meeting today. we have the fed survey straight ahead. plus we're going to talk to thomas fanning he's going to join us here on set. "squawk" returns with two very big hours. back in a moment let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service

that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

the fed in focus a central bank meeting started today and a lot is on the line the high expectations straight ahead. biggest fears. jpmorgan ceo jamie dimon warning the market is dealing with something they've never season be f-- before and that has him worried. chipotle getting rortss it people getting sick. we'll have the story "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box. >> good morning and welcome back to "squawk box" right here on cnbc live at the nasdaq market site in times square i'm andrew ross sorkin along with michelle caruso-cabrera and

mike santoli in for joe and becky. take a look at u.s. equity futures. dow looks like it would open up 46 points higher s&p 500 up about eight points. got to couple of big headlines coming up today from some dow components including pfizer. pfizer reported quarterly profit of 81 cents above share. that was 7 cents above estimates. pfizer raising full year earnings forecast, but lowering its revenue guidance due to unfavorable currency rates that stock relatively unchanged. also a relatively busy day for economic numbers one of the reasons leisman has joined us at the table we're going to get personal income and spending for june at 8:30 eastern time. giving us a little bit of the wave there half hour later, the shiller report on home prices at 9:00. 9:45 eastern, we get the chicago purchasing manufacturers index

then at 10:00 a.m. eastern, i know everyone's going to be at the edge of their seat, the consumer confidence index comes out. the bank of japan pledging to keep interest rates low for the time being -- had been speculating ahead of the meet i ing. if you're planning to travel to tokyo any time soon, it's having an impact on currency this morning. earnings are just out from procter & gamble 94 cents per share that was 4 cents above estimates. revenues did fall short of forecast perhaps why we see the stock off a little more than 1% in the premarket trading. we're going to start reading through that report, see what we can dig out of it. jamie dimon thinking a lot about central banks around the world. here's what he told cnbc in an exclusive interview and what he thinks are the biggest risks for

the economy. >> it's trade if the skirmish becomes more of a war. we've never had qe we've never had the regulations different, monetary difference and people can panic when things change we know it's going to change might have some effects -- lead to bad outcomes. >> we have the results of the latest survey and our own steve leisman joins us this morning with the details >> the story we're getting from the fed survey is goldilocks with two asterisks trade and monetary policy. let's look at monetary policy. we'll look at trade later on today. looking at a 90% probability of a hike in september, 100% probability of no hike this week now, you see that? how many rate hikes this year?

3.7. that's telling you there's a 70% chance they do that fourth rate hike this year we're darn near up against that number four rate hikes coming. that's up from the june survey more policy tightening expected. there's the debate for next year 2.5 which means we're halfway between two and three hikes next year the fed will go above neutral, 63% say so let's look at our probability distributions here is that the next screen there? yes, it is there we go. everybody has decided on four with little bit of risk of fewer. the bottom is the number of rate hikes. evenly divided between two and three with risk going outward. couple more screens i want to show you here. this is the outlook. they kind of go flat in 19 and 20 they still got a long way to go.

but maybe not as far as previous hikes. there's that long run. 3.3. that long run rate has gone up quite a bit. it used to be 2.3. it's gone up a full percentage point. will the fed go above neutral, 5 3% say yes i want to read you one quote of from oxford. the good news is the fomc has reached their inflation. not tightening too much or too little peter boockvar also saying he doesn't think the fed can do it. >> don't move, steve for more let's bring in tom fanning chair of the atlanta fed and chairman >> great to be here. >> you saw steve talk about 3.7

rate hikes, right? which is probability for four. >> i could have rounded up if the fraction confused you no >> the president has made it clear he's uncomfortable with four rate hikes. what do you think of you sitting on the board of the federal reserve, what do you think about it when historically the president is not supposed to comment? >> i think this administration has been great for business in terms of tax reductions and in terms of rollback in regulation. generally speaking, i would ignore commentary around the fed. the fed does a great job jay powell is a fabulous guy leisman and i were talking before we came on the set this morning. i couldn't agree more with what he says. the real issue here, when i think about the fed and what they do with interest rates, it's almost like dividend policy don't get so excited about the here and now and what's going to happen in september or what's going to happen in december. rather the second chart you showed, the long run trajectory is what really matters

this trajectory will follow, it will go up it's just a matter of when and how long it will take to get there. that's the job of those guys >> to the point related to the president, do you worry about all that it becomes politicized? even if there's a conversation -- the fact we're even having a conversation about it being politicized >> i swear to you, i have been in the board room. i have been with these folks they are apolitical. everybody says that's. impossible i tell you whenever there's a hint of politics in that room, it is shut down. >> i think i disagree with you on this. first, 83% of respondents think the president should not be commenting on monetary policy. the problem that i have and i think you're right about jay powell i think you're right about the board, is the perception once you get to a close call, is it a 50/50, 49/51 chance we

should hike rates, i think the fed gets into a difficult position where it has the problem of being perceived to be political and i think if the president didn't say anything, look he's got his guy in there. he's got his number two in there. he's got another number two coming he's got his people there. he has no reason to comment. >> ignore the rhetoric watch the action >> you know, it's the president of the united states i keep hearing that -- >> i'm telling you it doesn't matter >> for most of the supporters is don't listen to the tweets except when you wake up on sunday morning and the president threatens to put a 30% tariff on mexico or canada, i think i have an obligation to pay attention >> as a reporter you do, but someone who makes long-term decisions -- >> forget it >> yeah. listen when we make long-term decisions, i just said it, right? it's long-term

all this short-term stuff is volatility and noise frankly, that's negative for people like me and the market. volatility is bad. >> the president's tweets are volatility and noise >> for the most part, yeah >> if we get to 3% in a couple years, that implies no recession through 2020 or something like that most likely does that sound right to you >> that's certainly the objective. there's lots of signals out there that throw a little caution on this thing. we were both talking this morning. the fundamentals are fabulous. everybody ought to be delighted with the way things are going. the problem is and jamie dimon said it in your segment a second ago, this trade skirmish, hopefully it's not a war, does tend to weigh against all the advantages of tax reform and regulatory rollbacks so let's hope it's a skirmish, not a war. if we can kind of tread that line, this economy still has a long way to go i will say the growth has been

terrific gdp now from the atlanta fed is a great tool it is not a forecaster it does show that the things are good but i would say that my own data would show that while we're still seeing momentum and growth, the momentum is slowing. of the top ten industrial sectors in the southeast we follow, three are positive, one neutral, and six negative. >> i got to ask you this question you know a thing or two about the utility business >> just a thing or two >> and there have been reports of the russians trying to hack into the utility infrastructure in the country how vulnerable do you guys feel you are? how vulnerable is the broader infrastructure of the united states >> as serendipity would have it, today is the u.s. cyber summit so this is something i've been working on i help lead the electricity sector for cyber and physical

protection for the united states that includes investor owns, communities, and co-ops. okay we've been working hard over the last two to three years for finance telecom. so now systems, technology, information sharing regime we have been working well together we are now in a public/private partnership under the secretary of homeland security who will be there. secretary rick perry will be there who's been terrific on this issue and what you will see is alignment between public and private sector then one more thing that's important today, big news item, is that those who hold the bad guys accountable will be there in spades. d.o.d., fbi. hang on, hang on >> i want to know can the russians turn the lights off now? >> look. there was an article in "the wall street journal" that was way overplayed way overplayed it was a year old, that event,

and they got into one wind turbine in the united states they didn't get into the system. you can never say never, but i will say this. that the united states is as well prepared as anybody and in fact, an independent body called out the electricity sector as being exceedingly well prepared but this is something that's unrelenting. the attack surfaces change, threats change >> everybody's align, but what does that mean practically what is physically being done? >> let me give you an example. 80% of the server traffic for electric customers in america is being captured and analyzed today. it's almost like trout fishing every bite of data is equal to a molecule of water. we know that this part of the river is okay. that's the white board this part of the river is bad. we know how to treat those people what we're looking for is the

gray water the anomalies. we capture those and analyze them if i can change the metaphor to a bathtub. the water goes through the faucet into the bathtub, that's electricity. we can analyze what's going on now finance, telecom, fbi, cia, nsa. and all of a sudden what we're creating through this public/private partnership is essentially a realtime evaluation of potentially existential threats to america that's the capability we don't talk about very much but is happening every day. >> tom is with us for how long two hours? >> yeah right. >> can i just say one thing? >> go ahead. >> i know we got to go if they could put up the jgp, the japanese government bond it's back down to nothing. okay so what happened was there was a huge story about the possibility the bank of japan was going to

change policy. they spiked up in yield and has come back down this morning. by the way, brought the 10-year with it. where boj essentially widened the band it would allow the 10-year to trade in. they had a three day or four day chart. it's the much adieu about nothing chart where allof a sudden we spiked up, went flat, came back down >> i have an economics question. we were almost having an economics class the last hour about the tax proposal with steve mnuchin around effectively giving a tax break on inflation. it is calculation with capital gains. could be worth a hundred billion dollars. >> right >> what is the steve leisman take on that >> i think that stock prices already take account for inflation. it doesn't make sense to adjust

again. i'm puzzled over this for many years. where people want to inflation adjust their returns if you look at the stock market now, should you go back and inflation adjust the stock market for 1980, i say no because i say it's already incorporated the inflation -- and i've had this debate people don't agree with me necessarily. i think it's double counting on the inflation front. >> you think it's a double benefit. as opposed to a double tax what does tom fanning say? >> at a corporate standpoint, we think of dividend inflation. we want to grow the rate of dividend better than -- >> so you've already sort of taken that into account with your dividends >> the investors have to take that into account. >> do you think this is a good or bad idea? >> listen, i think it's a great idea anything we do to reduce capital gain rates effectively, this is just another way >> do you do it going forward

only because that would actually create -- that does create an economic incent i. or do you do it retroactive ly >> yeah, yeah, yeah. i would probably go forward here than retroactive if you want to influence behavior >> that's where i'm at i'm at if you're going to do it. >> how would you influence behavior what would you do differently if your capital gains were indexed to inflation >> that's a good question. we got to go to break. >> thank you very much >> tom, thank you, sir coming up, could wealthy american be in for that hundred million tax cut. we will continue this conversation next. you're watching "squawk box" here on cnbc 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. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

♪ welcome back to "squawk box" this morning the cbs board of directors saying it is in the process of picking someone to lead an independent investigation into allegations of misconduct by ceo les moonves. moonves remains in charge of the network. meanwhile cbs stock down about 10% since those allegations became public. joining us is managing director

at ljh managing investors. we welcome him to the table this morning. did the board of cbs make the right decision yesterday the wrong decision >> it looks like they did two things the real critical issue is still in limbo because they haven't even appointed the law firm yet. and, you know, so we could be running the train at an express level. i think the situation warrants it but the board has decided to take the local track >> if i put you on the board right now, you would tell them to do what >> hire the law firm i agree with professor sonn sonnenfeld i see now reason why it shouldn't be completed within perhaps a two-week period. this is mission critical to the shareholders of cbs, the uncertainty is just killing the stock. although i think the business is fine we can go into that if you care

to there's no reason for -- i think the article is credible. people are named there's multiple situations. i was a fan of martin sorrell in that he left very quickly. >> are you supportive of les moonves remaining in the role of ceo during this investigation? >> i think that's a decision for the board to make. and i think right now and i just said it -- >> take a stand. what's your view one way or the other >> i think it's really a board issue. >> but if you could poll every shareholder out there, what do you think the answer would be? >> looking at the information right now, i would think mr. moonves is probably well advised to leave his position. >> you do?

>> i don't have the information. i'm not looking -- i'm an outsider and you really need to be an insider to make the judgment i'm not on the jury here i'm in the courtroom looking at it looking at it right now, andrew, when we have a system in this country that says you're innocent until proven guilty >> absolutely. >> in a criminal court but this is business and that's different and the measures are different >> you know, right now the measures are if the allegations are even close to true, it would seem the right thing for mr. moonves to do and not with a whole lot of uncertainty to leave his position >> if that were to be the case, i imagine this would move relatively expeditiously towards a merger with viacom >> that is my assumption both of these companies are subscale i think there's economies here i think the issue of finding a replacement for moonves is a solvable with un >> you like the idea of the merger let's just put on the table, the

cbs board including les has said repeatedly this is a bad idea. the idea of merging with viacom. it's not the right natural partner. >> i disagree with that. the other people who own tv networks have also owned studios quite successfully and i think the thing that makes this attractive right now is the probability that paramount is on a turnaround a good track record at 20th century fox. they clearly have a viable franchise in this "mission impossible." they have a fair amount of real estate that's valuable if combined with another studio you'd have redundant real estate that could be sold for hundreds of millions of dollars i think paramount is a gem there's no reason in the world it shouldn't make $300 million you have there a $4 billion potential change in viacom

valuation. >> okay. we're going to leave the conversation there, but we're not going to leave the conversation i imagine we'll be talking a lot more about it. but thank you, this morning. >> appreciate it coming up, chipotle shuts one of its ohio locations after e orwh wrerntting sick thsty ene tu

coming up, forget millions we're talking a billion. cnbc takes you on a tour of the most expensive real estate liinevstg er staytuned. you're watching "squawk" on cnbc

♪ good morning and welcome back to "squawk box" here on cnbc we are live in the nasdaq market site in times square two components out with quarterly numbers this morning procter & gamble were 4 cents above estimates. however the stock is selling off. revenue short of forecast. organic sales growth only up 1%. it was expected to have growth of 2.3%. company cited a, quote, dynamic environment affecting the cost of operations and consumer demands in categories against highly capable competitors

a whole list of shoulds or things we're going to do to meet these challenges we will continue to drive cost and cash productivity improvements and demand creation programs a a long list of things they're going to do to turn things around >> and they're affirming the idea their organic growth will be for 2019 looking okay it's also a matter of whether investors believe it, that they can accomplish it. also pfizer. pfizer's earnings were 7 cents above forecasts. revenue also above forecast. pfizer raised its full year earnings outlook even though they said it would be impact bid unfavorable foreign currency trends this afternoon apple's going to be out with its quarterly numbers. apple is expected to report profits of $2.18 per share on revenue of $52.3 billion

that revenue figure would be more than 15% year ago levels. and check this out you ready for this a residential property hitting the market this week in beverly hills takes sticker shock to a new level. it has a billion dollar price tag and robert frank has all the record-breaking details. ♪ >> up this private drive is the first-ever $1 billion residential listing in america it's called the mountain of beverly hills. the massive 157 acre property is bigger than disney land, but there's no castle up here. in fact, there's not even a house. this plot of land is being sold by secured capital partners and it's listed by super broker aaron kirman for $1 billion.

he said there's four reasons it's a record breaker. first, it sits on the highest point of one of the most expensive zip codes in the world. 90210. second, the land is zoned for a megacompound >> that means that the billionaire who buys this can build the biggest house in the world on top of beverly hills. >> third, the views are some of the best in l.a. and fourth, privacy. this long private road puts your closest neighbor a half mile away bottom line here, location, sheer size, and views like this is what billionaires love. but the truth is no matter how rich you are, that billion dollar asking price is a tough sell and the property had been shopped around back in 2014 also for a billion dollars. >> okay. for more on america's first-ever billion dollar listing, head to cnbc.com i should say you're not allowed to subdivide you cannot subdivide the

property which to me from an investment perspective, i'm not sure i could make the math work. >> one of the reasons it probably hasn't sold right? >> the potential buyers have to be on a list this long it's not like that many people -- >> it's the 0.0000001%. >> and by the way, the billion dollars is a little of a drk. >> marketing scam, employ? >> exactly i think the most expensive property recently was hefner's house, the playboy mansion at $100 million anyway, take a look at futures right now on this tuesday morning. dow reporting components and then apple after the bell today. dow looking to open 31 points higher s&p 500 up about seven points. joining us right now, chief investment officer and head of fixed income at oppenheimer funds. also chief investment strategist

at cfra. as we get into this earnings season, how -- let me ask you two this way are you bullish on the rest of this year? i got the sense the last time you were here that you were getting a little more anxious. >> no. we are still bullish i think over the next 6 or 12 months equities will do quite well >> what what does quite well mean >> 10% returns over the next year which is not 27% -- >> if you own the index. >> well, if you own the index and you will own tech stocks that have gone down a lot, i think the number is going to be higher as a result >> where are you on this >> i'm a bull but with a lower case "b. i think that maybe we end up over the next couple months with mid to high single digit appreciation i think we are heading into a volatile period which historically does happen before midterm elections. but i'm also encouraged by the

the months after midterm elections which have been up 18 of 18 times gaining 16.5%. so usually that sets us up nicely >> what do you think of the selloff in faang are you finding opportunity there? what do you think? >> i think the selloff is a small correction in the context of overall these companies have been executing really well facebook has a very idiosyncratic case away from that, i think the tech sector is producing the kinds of results you would expect >> so you'd buy this stuff >> absolutely. i think this is a great opportunity for us who have been waiting on the sidelines to get involved. >> more broadly, you can slice it two different ways and say it really has been a narrowing market where the leadership has been much more selective on the other hand, you know, the average stock if you look at the equal weighted s&p index, it is up this year is it showing you this kind of late cycle characteristic? is that what you worry about

that the market is getting more defensively or do you think it's a pause? >> it's a pause. if we hold above that, then i think the short-term rotation has run its course i think the technology -- >> that's about a half percent down from here >> it's going to be facing a couple of head winds not only going through the rotation, but also in the end of september, s&p is making big changes to telecom calling it communications services. taking about 20% of the total group in tech and bringing that over to communication services a similar amount from consumer discretionary. so the index itself is going to be vastly changed not only on the broad 500 level but also on the technology level >> real quick, you've been pushing emerging markets for a long time. >> yes and i still am if you have a 10, 20-year horizon, the growth is going to -- all the growth is come to come in the world.

emerging markets today, the growth is relatively stable. china is probably going to stimulate the economy again. >> if you told me that you think i have an easy chance -- i don't know how easy. i think a semi-easy chance based on what you said before to do 10% in u.s. stocks, what am i going to do in emerging markets? >> i think in emerging markets you do higher than 10% because valuations are significantly more attractive than what they are in the u.s >> much more volatile along the way. okay thank you, guys. good to see you. paychex just releasing joining us now is martin move c mucci. tell us about the data that's come out >> we continue to see the dropoff. but in a tight labor market, we expected this. from a level of hiring in small businesses it's across all regions of the

u.s., so we're seeing all regions down a little bit but still showing moderate job growth south a region of the country still the strongest. and from a sector perspective, other services still number one. so kind of personal services, those things that are spending discretionary money. although it's come down from last year, it definitely is number one there construction steady across the u.s. and strongest in the south. when you think about wages, wages have still moderated around 2.4%. that's still the big question. why aren't wages going up more in a tight labor market? why aren't we seeing closer to 2.5% to 3% >> do you have any idea why that is >> well, when we survey these small businesses, what we're hearing is profits just aren't strong enough for the wage increase and they're investing in other automation and things like that that will continue to save them money in the long run. they're not feeling enough

pressure yet to raise wages more than they need to right now. >> i always think of it in the reverse, right if unemployment is as low as it is, it becomes the buyers market, not the sellers market it's no longer up to the employer to say i don't have the profits to raise wages i need this employee and therefore i will pay them more because the demand is -- you see what i'm saying? it's the other side i thought would drive away wages >> that is the big question. i think in certain areas, you know, i.t. developers, artificial intelligence developers, those kind of things, they are pushing the boundaries most small businesses right now, they're feeling on the survey they're not making enough profits to be able to push that wage up. and to be able to push enough to get the job done >> you know, a lot of small businesses don't have enough to gain from tax reform so larger businesses, they're

able to gain from tax reform they're doing the pushing of the wage but small businesses under 50 employees did not see as much benefit there. so they're not gaining quite as much you're also seeing them fill in where they need to at a lower wage rate to see how that can go also more people want to work part-time. you're seeing it fill in with part-time and sometimes more benefits than wage changes >> interesting okay thank you so much. we appreciate it coming up, much more of the interview with mike pompeo including investment in the indo pacific region find out more next you're watching "squawk" here on cnbc as a business owner, you need to comply with countless regulations and laws to keep your workers safe and happy. but if things go wrong and an employee takes action against you, legal fees to defend yourself can be huge, even if you're not at fault. employment practice liability insurance

helps cover these costs. trusted choice independent insurance agents represent multiple insurance companies and customize coverage to help protect you and your business. announcer: to find an agent, visit trustedchoice.com

welcome back to "squawk box" this morning take a look at futures right now. couple of dow components reporting this morning we give you apple after the bell dow looks it would open up 24 points and the s&p 500 up about six points taking aim at china's plan through its one belt one road program. i sat down with secretary of state mike pompeo in washington

yesterday after he unveiled a new strategy for the indo pacific region is this the answer to one belt one road >> all the nations in that region, we want it to be free. we want it to be open. we're not looking for dominance. we're looking for partnerships others choose to behave differently. we want these to be commercial available projects led by the american private sector in a way that benefits the entire region and the world. >> there's a reason why some of these countries, though, like to get involved with one belt, one road right? those contracts are not transparent. they are state directed. we've discovered now since alo of them got into place that there's a lot of corruption. autocratic countries like that they don't want companies that don't want to pay bribes how do you convince those

countries that this is a better option that the way the united states does things is a better option >> look. i think some of the them have found themselves in a place they're not happy about. the way you convince them is that you demonstrate that over the course of history, over the -- even near term and medium term, the developing relationships with the united states, that having transparency actually turns out to be better for the leadership and for the people in each of these countries. i'm convinced that history supports that theory and i'm also convinced that the vast majority of the countries will agree with that >> the transpacific partnership wouldn't have happened regardless of who won, the left and the right seem to hate it. right? everyone is against free trade these days, it seems but my colleagues on cnbc asia, they were keenly interested in this they said if you really want to

have economic influence in asia, the transpacific partnership would be the way to do it. whap do you say to them? >> well, the right mechanism is to be determined but president trump wants free trade. make no mistake. president trump is an ardent free trader. zero tariffs zero subsidiesubsidies. zero barriers. he's looking to balance these relationships. and like i said, perhaps it's a multilateral arrangement they tend to prove more effective, better for the american people. and they'll get the outcome that president trump is demanding he's simply looking for fair, open, and reciprocal trade when we get that, we'll have free trade relationships with these countries that will benefit them as well >> is his methodology making your job harder? >> his methodology is leading to more in the united states of america. that's a benefit for any

diplomat or soldier. >> as part of the announcement yesterday, there are programs to incentivize in that part of the world. i have two questions one is -- this is more of a body language thing do you think he believes that there is a true opportunity to have truly free trade the way he just described or do you think that's a talking point? >> i think he desires it, absolutely, as a republican. >> no, no. do you think he thinks it's a realistic outcome if. >> i don't know the answer to that question. it's a new position for the administration that i think really comes from larry kudlow's presence in the white house. zero tariffs, zero barriers, et cetera that to me sounds a lot like a larry kudlow way to think. it came out from the g7. i think most economists would think that would be the best way to go. >> it's almost an easier ideal to hold out there, though, if

you think there's no shot of really having to get there and make the tradeoffs but if you think you can go through bilateral agreements and kind of work your way in that direction slowly, maybe that's okay >> it also serves to turn some of your critics into hip -- saying hold on we can't. and forces a -- i think a better discussion about what really are the intransient issues in trade. >> all right great interview. >> thank you that's kind of you coming up, a prescription for investors. we've seen numbers from pfizer, sanofi more ahead first let's check out oil prices this morning $69.83 for wti brent is at 75 h$75.06 stay tuned you're watching "squawk" on cnbc you always pay your insurance on time.

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 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done!

simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com

welcome back to "squawk box" this morning chipotle shutting down one of its restaurants in a suburb of columbus, ohio, after at least two customers said they got sick after eating there the customers posted on a safety food website that said their symptoms including nausea, vomiting, and fever. a chipotle executive said we acted quickly and closed out of caution. the local health department found the restaurant wasn't storing lettuce and beans at the

proper temperatures. food safety is a top priority for chipotle's new ceo who took over in march. a series of high-profile incidents back in 2015 bruised the chain's reputation stock price last year. a sickened employee was the cause for a norovirus outbreak in virginia. that stock down about 2% as we were talking about earlier, you know, i think that this does happen now at other restaurants. i don't know if it's endemic to chipotle. >> if you don't get a follow on report, it's probably a -- >> and the stock doesn't react nearly as it used to >> and it's had a great run. a number of numbers this morning. >> we had results from pfizer, sanofi, and shire. it's been a strong earnings season for the biopharma sector.

pfizer and sanofi both up a little bit in the premarket trade. for pfizer, it was a beat on top and bottom lines they slightly lowered their guidance mainly on foreign exchange reasons sanofi also was a beat on the bottom line. slight miss on revenue for the quarter mainly driven by their vaccines unit. which they acquired a number of years ago did look very strong as for shire, that company, of course, is waiting for its planned takeover by takeda nothing should change there for the deal itself. what we've seen in this earnings season has been characterized by beats. it's been looking very strong. but also a lot of talk about drug prices. and of course that going back to pfizer really starting that conversation after president trump called the company and got them to reverse their drug price increases that they were planning to take the beginning of july. and here he announced in a tweet

he'd had that conversation with pfizer's ceo and they were going to roll back their price hikes every single big earnings call, you heard their ceos give a pledge not to raise for the rest of the year or keep it within inflation. biogen was a notable exception with that. we talked with their ceo last week why they didn't have that kind of pledge but the entire industry is waiting to see what this drug price blueprint does it looks favorable to the industry less favorable to the middle men. so they're waiting to see what happens with that. we're waiting on the call today especially with pfizer people will also be listening about m&a. pfizer has tried to do a couple of giant moves in the last couple of years. >> so in other words, the pharma ands might be in a decent position by getting credit for saying we're holding the line on drug costs but then maybe the rebates and other things could

work in their favor. >> it does appear that way they're waiting for something from the government but they don't want to make anybody mad >> when president trump said what other countries do to us o this front is unfair because we the united states fund r&d for the world and, you know, i don't understand why other wealthy countries can't help pay for our r&d. is there anything that -- within this -- they're always complaining about trade. this is such a crucial issue when it comes to trade are they going to stick by that? >> they have talked about using trade agreements to try to get other countries to pay more. how they actually get that to happen is unclear. and of course they don't want to go to those kind of price controls in the united states. so bringing the prices down here are going to be done by other mechanisms which won't be across the board. >> okay. thank you. appreciate it.

coming up when we return, a lot more on les moonves and his plans to continue to run cbs amid the accusations against him. but will this be a distraction for the company? we'll do that next plus two former senators teaming up to tackle a threat to america bioterrorism joe lieberman and tom daschle are going to join us stay tuned ♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible.

at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

earnings alert, pfizer and procter & gamble out with reports. and apple after the bell the central bank kicking off a two-day policy meeting the exclusive results from the fed survey straight ahead. plus the bulltt gets a makeover can ford keep up with the muscle car race 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. welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin along with michelle caruso-cabrera and mike santoli strat bank expected to hold rates steady today rising inflation likely to keep the fed on track this year we will be getting results from the fed survey mr. leisman will be here in the last hour. a look at the markets. dow looking to open higher about 33 points. also show you 10-year treasury right now. right now 2.952% let's get you caught up on a few earnings out this morning. pfizer, the drug maker beat estimates by 7 cents with 81 cents per share.

revenues also beat forecasts that stock is lower by about 0.8% in the premarket. check out shares of procter & gamble reported profits of 94 cents a share. revenue did fall short of forecasts. and shares of qualcomm are higher in premarket trading. purchasing up to $10 billion of its shares somewhere between $60. they had intended to buy back $30 billion in stock how long do you see a dutch auction like this? >> not all that often. and this is of course the company is the buyer, not the seller >> right i get that >> when they have a huge chunk of stock to buy back, this is an official way to get that done. >> cool.

>> and it's 10% of the market cap. chipotle upgraded from buy to hold. also upping the target citing the initiatives having positioned it for strong same store sales and earnings growth. separately, though, you see the stock is down 8% after at least two customers said they got sick after eating there. in a statement to cnbc, a chipotle spokesperson said, we acted quick will to close the single restaurant out of abundance of caution a safety inspection last week showed they weren't storing lettuce and beans at the right temperatures downgraded to market perform. the analyst says between the fight for control, the potential of recombination of viacom, and sexual assault harassment allegations against les moonves, there are too many

unquantifiable variables the other big story of the day we've been talking about, shares of cbs slipping after a board meeting in the wake of the allegations against les moonves. want to get to julia boorstin who has the latest >> les moonves is staying in the corner office at cbs despite allegations in a new yorker article accusing him of sexual misconduct between the 1980s and 2000s. saying they are in the quote of selecting outside counsel to conduct an independent investigation. they could ask les moonves to take a leave during it or moonves could opt to step back or resign. the board also deciding to postpone the company's annual meeting with stokds to a date

and time yet to be determined. >> with all the directors are expected to focus on cbs' court battle with shari redstone and her push to combine cbs with viacom since the news of these allegations broke on friday, cbs shares are down about 11%. viacom shares are still up about 2.5% now as the board works on hiring a firm and starts its investigation, the next event is due out thursday afternoon we have to see what he december then >> thank you, julia. appreciate that very much. stay where you are want you to be part of this conversation as well brian weiser is joining us from pivotal research group your take on this given where you sit, do you think the board has made the right decision in

terms of how their approaching this >> oh, absolutely not. i mean, the bigger problem at this point is beyond les moonves. it's a board problem rumors of this had been around for months when you put in context -- all reporting that it had come out months ago the fact that the board hadn't already been investigating this matter is not stunning, i guess, but disappointing certainly. when you put in context of cbs which is not exactly a company known for diversity at the top company, it's really problematic. >> what do you think the board should be doing right now? >> the board should be investigating its own actions as to why it didn't explore matters earlier. yeah, obviously they should be -- i mean, moonves should

allowed to walk now. >>. >> you think so? >> it's a commercial pro >> can we speak about that problem. i haven't heard of any saying they haven't heard of a director or actor or actress saying they're not doing business with cbs. is that something you're hearing? >> no. well, there is one article yesterday certainly with a senior buyer talking about an assumption it won't be a problem because he'll step aside the impression is that -- the commercial consequences and it would be hard for an investor not to question this, is there would be talent that have chosen not to work with cbs if they have a culture of impunity it's not very tangible

it's not like we can see it necessarily as investors but you know it's there. and if you're a board member looking out for the health of the company, you could make a choice to say, well, les has great choices with programming enough advertisers are working with us and it's fine. it's hard for them to persist with that. i suppose it's possible. but there are commercial -- >> effectively saying how is it possible that les moonves and the board of cbs effectively sued and pursued that lawsuit against the redstones at a time when they knew that the ronan farrow piece was being investigated without pursuing their own investigation? >> exactly my point. and i'm saying this goes beyond movies at this point in time

and it's one of those things where how could an nefser have confidence in the board if the board wasn't investigating this. >> let me ask you a stquestion given the drop in the company's stock and just from the pure valuation perspective, does this sound like a great investment? maybe i can buy this on the cheap? >> it's recently fairly valued but the problem is if this board has less credibility going into what they're about to go into. the odds are that they're going into it inless favorable position we don't know what those terms will look like we don't know how and when it would they could have gone into

it a in stronger position. by not taking some sort of action earlier. >> so prospeject the head on th little bit we don't know the valuations of the relative pieces here but is the resulting company reasonably well positioned as it could be for this evolving media fortune without a les moonves presumably if he's not part of it >> well, it was always certainly a good probability he wouldn't be involved in some form even if moonves himself didn't want to have it. i think they're a challenged organization they have a lot of great assets. i think there's some durable assets inside of viacom. cbs has many durable assets too. unfortunately both the advertising business for the united states is a melting iceberg.

i think the revenues viacom can generate are also challenged cbs is a little bit better position to retrend as a revenue freedom probably persists. a slightly stronger business so there's growth. i just don't think a lot of growth >> i want to bring julia into the conversation >> yeah. i just think it's worth noting the concern about the uncertainty we saw that the cowen analyst was going to play out. many were surprised that the board did not ask moonves to take a step back even if only temporarily during this investigation. one thing worth noting is if the company is going to be investigating -- i'm sorry if the board is going to be investigating the entirety of the culture at the company, that could extend to ceo joe a

even the analyst note said the best outcome for investors a this point ro but that raises other questions about whether he needs to be investigated too as part of this broader culture issue. i think this is a time of a lot of questions about where this company's going to go. and, you know, even if it would make more sense to sell off cbs and viacom separately especially if moonves is no longer leading the company. he is so closely tied to the compa company. >> hey, brian. one quick final question that we just wanted to get at. in terms of the company remaining independent versus with viacom, is there one with a better outcome julia raised one of something completely different >> there's certainly possible

outcomes cbs is more as an independent entity if cbs were sold as is, in other words a caretaker ceo and an auction of some sort for the company. i mean, that's not optimal, obviously. but it might be a better outcome than recombining with viacom as a matter, cbs is more of an adjustable asset, a stand alone one. that being said, it's the redston redstones' company the oh problem is you have controlling shareholders who at the end o t the day, it's their company. >> thank you great to see you both. coming up, more of my exclusive interview with mai pompeo is the u.s. ready for a bioterror attack

they want to see what the trump administration will do about it. next wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital.

two, down and back up. our phones are more than just phones. they are pocket sized personal trainers... last minute gift finders... siri: destination ahead. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet. which could save you hunreds of dollars a year. plus get $150 when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. welcome back to "squawk box. ralph lauren beating estimates with the latest earnings

a profit of $1.54 compared to the estimate of $1.36. also beating revenue although same store sales did slide off to an encouraging start. in geopolitical news, north korea developing new missiles despite pledging denuclearization that's according to "the washington post. just before that report came out, i spoke to secretary of state mike pompeo about north korea and kim jong-un. north korea is part of the indo pacific region numerous times during the whole -- all the events around helsinki -- excuse me. around singapore, both you the president and other world leaders refer to the opening of the north korean economy has kim jong-un ever expressed the entire to have for market -- it's been long past stalin's death. is he interested in changes that economy in a way that's

fundamental? >> we've spoken to him about a brighter future for north korea. we've spoken to him about dollars not just from the united states although i am confident there will be americans that would want to invest in an open and rules based north korea. but japanese, south korea, and chinese too would all want to be part of that we told chairman kim, if we can denuclearize your country, there's a brighter future for the people he, too, understands that and has drafted better economic times for his own people >> i pushed him further. but does he really believe in market forces. he said we have talked to him about how important it is to make changes there my obsession with market forces. >> and what do you really think? >> i think -- i'm making this up, right? pop psychologist if i'm kim jong-un, i'm trying to think how do i stay in power longer do i stay in power longer by keeping tight control? or do i allow some

liberalizations that allow people to live longer and i get to stay in power longer? or do they see how the rest of the world lives and how we kept them under our thumb for 50 years and it leads me to losing power. >> secretary said an open and ruled based north korea would be a place people would wand to invest that seems like pretty far >> exactly all right. business leaders and experts meeting in the nation's capital today to discuss what they say are immediate biological threats. officials known as the blue ribbon study panel says the u.s. is not prepared for the next pandemic joining us now is tom daschle and joe lieberman. senator lieberman is co-chair of the panel. good to have you here. senator lieberman, let me start

with you you say the united states is not safe when it comes to bioterror issues explain why you think that >> well, there are a host of reasons. i mean, in the first case we don't really have an organized defense strategy, a plan as we do in most other areas secondly there's nobody clearly in charge in the federal government and our commission has made recommendations about both of those. third, as my work on this with others has gone on i'm thinking we have to fear not just the biological attack from terrorists, but an outbreak naturally of an infectious disease epidemic app hundred years ago, we had the spanish flu epidemic of 1918 killed at least 50 million people, maybe 100 million in 15 months if another one of those broke out today, we just don't have

the vaccine to deal with it. and therefore i think the major priority we ought to have is to have our government and the private sector cooperate and invest big in developing an international flu vaccine. we do it >> -- other recommendations that you guys make? >> well, i think the most important recommendation is what joe just was talking about the importance of leadership and a real national plan but advanced funding you know, businesses are an incredibly important part of our strategy here. and the private sector has a huge role to play, but we need to send the right message about the importance of being able to count on the federal government. being a full fledged partner and they don't have that assurance today. that's one of the things we're going to talk about later on today. >> so actually there was a point

where i spoke with the head of security for a major institution in this country and they raised this question about, okay. so we should have some kind of antedote for whatever it was at the time and they said but where do we keep it? all in the same place? distribute it to every employee? what if there's an attack and we need to get -- there's a lot of logistical questions involved. and you never know exactly what the situation is going to be it seems so insurmountable >> those are all good questions. but they all have answers. and if we've got somebody in charge and coordinating with the federal government in this regard, we discovered that the federal government couldn't figure out how much they were spending on biodefense it's all separated into different pots how can you have an effect -- we say the vice president should be

designated as the person in charge of this once you get some leadership here, you can answer all those questions. and if you do, then we're going to be a lot better prepared not only to save lives but as we'r save a lot of our economy. because a biological terrorist attack would hurt commerce hurt the economy and of course an infectious disease outbreak that threatened the lives of people. >> that was my next question senator daschle, what would it cost >> well, we know that today we don't have the resources at any one of the levels. one of the things we really have to impress upon policy makers is that this isn't just a federal challenge. we need first responders we need a plan at the local

level. we need a plan at the state level. what we do know is we're spending approximately one-half of the cost of one aircraft carry car carrier. so the imbalance between defense is something we have to address. >> okay. senators, good luck we the event today. appreciate you joining us today. >> thank you coming up, a cheesy story that could be disastrous for dary farmers contessa brewer has a look at what's coming up next. >> you're going to milk those puns for all they're worth, huh? listen we have more cheese sitting in cold storage in the united states of america than ever before we americans love our cheese, but why? why is so much of it just sitting on the shelf i'm going to explain to you right after this break on "squawk box. say cheese but the market was up nearly twice as much. that's a tough pill to swallow.

exactly. so i started trading. but with everything out there, 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 doesn't mean you're on your own. that's great. you're still up. alright. you're still up. if i knew you were gonna run the table i wouldn't have invited you over. call (866) 296-7451. act now to take advantage of commission-free trades for 90 days, plus get up to an $800 cash bonus when you open and fund a new account. ♪

here's a trip tip: when you search hotels on tripadvisor... enter your destination and the dates of your stay. tripadvisor searches over 200 booking sites... to find the best deal on the right hotel for you. tripadvisor. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

coming up, breaking economic wl rhtac weilbeig bk. to get my 8 hours. because a head full of work... a husband who snores with gusto... and marvin... are going to need a bigger bed. ♪ ♪ ambitions live everywhere. synchrony helps make them happen with financing and partner offers at over 350,000 locations.

♪ ♪ synchrony. what are you working forward to? ♪ ♪ when mit rocked our world.ailed we called usaa. and they greeted me as they always do. sergeant baker, how are you?

they took care of everything a to z. having insurance is something everyone needs, but having usaa- now that's a privilege. and i am a senior public safety my namspecialist for pg&e. my job is to help educate our first responders on how to deal with natural gas and electric emergencies. everyday when we go to work we want everyone to work safely and come home safely. i live right here in auburn, i absolutely love this community. once i moved here i didn't want to live anywhere else. i love that people in this community are willing to come together to make a difference for other people's lives. together, we're building a better california.

welcome back to "squawk box. breaking news. our june read on personal income up 0.4% as expected. spending also up 0.4% also as expected but on the spending side, we really doubled the revision horsepower up 0.2% original release now up 0.5%. nice jump there. if we look at real spending, it was up 0.3% following an upwardly revised 0.3%, the deflator month over month.

that's personal consumption. deflator up 0.1% month over month. up 2.2% year over year that's roughly in line arguably a tenth cooler. if we look at pce core month over month, that's up 1.9% -- excuse me. that was up 0.1% up 1.9% year over year okay let's get to the next number our second quarter employment cost index it moved up 0.6%, 0.1% light of expectations two tenthings beneath last look. it doesn't look like there's any major pricing pressures going on on any of the pce reads. although they're not cooler either ours, bank of japan interest rates. hovering at 2.95%. exact midpoint of the high yield close for the year and the

recent low at $2.78. andrew, back to you. >> rick, thank you for that. the fed we should say kicking off a two-day policy meeting today. steve leisman joins us now with the results from cnbc's exclusive fed survey this hour we're focusing on trade, steve >> we're staab ttalking about tk of monetary policy first i want to show you about this group of respondents. 59% approve of the president's handling of the economy. that is up slightly as you can see. also the disapprove is up. that's not true of their views on the president's handling of trade. the tariff impact, decreases growth 54% say the trade policies would decrease jobs take a look at the gdp effect. we asked two questions the threatened ones along with

the retaliation could shave 0.3% off gdp. we asked another question. who wins a trade war because this is part of president trump's policy the idea we can outlast them, we can get them it backs up the president's negotiating idea here, tactic. 90% say the u.s. is better for withstanding a trade war securities writes in with his responses. trade restrictions are the greatest threat to the expansion right now because they increase uncertainty and cause businesses and consumers to become more cautious the increase in risk aversion raises the chances of a policy mistake as the fed might move to aggressively so this is the thing out there i mean, somebody said goldilocks right now. but you read all the comments and it's like the --

>> on a multitrillion dollar economy is a lot of money. but ultimately i think the president and the administration might look at it and say 0.3%? so what? >> okay. it depends what you have to deal with if you think that 4% is the run rate of the economy, you probably can get away with probably just cumulative 0.1 be that as it may, if you're doing 2.5%, let's say for example my idea's right. that the administration may be successful in raising the growth rate potential of the economy from 1.8% to the 2.5% to 3% area you give up 0.4% of that, that's a lot. >> this idea of who wins a trade war is interesting it goes along the lines of which economies are more exposed to trade at all right? the u.s. has the advantage of just not being a very export-led economy. and therefore that's what it looks like when you say we can win it it's because we don't really rely on it that much

not necessarily the terms are going to get much better for us. >> i think that's right. and my question is also a political one. i kind of disagree a little bit with the panelists on the political side of this thing i think economically we can win this thing if that's the way we want to do it. i wonder politically he had to put his thumb in the dike of the farmers. right? and then there's going to be potentially autoworkers affected by this. what will the line look like of those who are arguing for subsidies or relief from the retaliatory tariffs? i think politically that's a problem for the president. before it becomes a problem for president xi because as a dictator, he can ignore his population. >> here's what jamie dimon told cnbc about the trade war and president trump's opinions on the trade war in an interview he did with cnbc. >> two of his advisers said there will be no retaliation

we said there would be and they were wrong. some people said there would be no effect on inflation and they're wrong. i want him to succeed at having better trade i think nafta should be done i mean, they've been talking about this for a long time it should be done by now mexico is a wonderful neighbor of ours and we should move on, do a deal. do a deal with canada. then focus on china. >> joining us now, wendy cutler vice president of the asia society policy institute good to have you here. >> thank you >> first, let's talk about what steve leisman was talking about and the impact economists or trade war would have on the u.s. economy. what's your sense of whether or not that those numbers are big enough to derail this administration >> it's unclear to me when they come up with these numbers are they anticipating $500 billion in retaliation against china i think so far the retaliation and counterretaliation has been

pretty modest in terms of numbers. but it could get a lot larger and particularly the counterretaliation can really hit pockets of the united states as our trading partners really focus on industries and workers that will hurt and therefore make -- be very vocal in either one support or ask for the policies to be withdrawn >> one of the other reasons we wanted to have you on today is mike pompeo, secretary of state, laid out a huge new vision or what he called a new era of economic expansionism for the united states in asia with his indo pacific focus yesterday what did you make of the announcement is it -- do you see it as an offset or some way to come babah one road policy? >> i've traveled extensively in asia the past year and a half. a lot of people here ask me what's with the united states on

the front. which involves a lot of different government agencies is positive that said, when i look at the funding for this initiative, using peter navarro's words, it looked like the u.s. $113 million is really a rounding error compared to what china is spending in the regions. tens and hundreds of billions of dollars. second, absent from this initiative is a coherent and effective trade policy it has always ban key part of any strategy in the asia pacific region we're not in the came. we keep talking about how we want a network of bilateral agreements but so far our trading partners haven't raised their hands and said, yes, we want to do a bilateral deal with you. >> just want to ask you a question about president trump's negotiation strategy or style. this is the thing that he touts the most and yet, what 18 months into the administration, maybe it's too soon to say, but we don't have a

single major deelt -- deal. in fact, some have said we're further from a deal with canada or europe than we were before. trudeau's popularity rating had gone up and he might have been ready to deal on dairy now he can't possibly deal on dairy. i wonder about your sense of the prospects of this -- i will say in context though. our survey showing we can win this trade war if we fight it. >> trade deals have to be win/win. and each country has to go home and be able to tell its people they've benefitted from these deals. and it seems the hard line tactics this administration is taking and the public statements they're making and putting our trading partners in boxes has really complicated the ability to come to agreement look it's too early and i know there's good news on nafta and the mexican trade secretaries

coming to town tomorrow and he's very positive about the ability to conclude a nafta agreement. so i'm not saying it's impossible, but i think the administration has kind of complicated their negotiating ability by putting our trading partners in boxes and in untenable positions in their own politics unless they stand up to the united states. >> wendy, thanks for joining us this morning >> thank you big question in the morning. are tariffs and cheese a recipe for disaster contessa brewer joins us with more on the united states' growing cheese glut. >> so the usda says we have a record amount of supply of cheese sitting in cold storage nearly 1.4 billion pounds. one of the factors here is that milk consumption has been lagging for decades, but milk production is way, way up. so a lot of the big cheese

manufacturers have been intent on opening new global markets, sending nearly 20% of dairy abroad according to the u.s. dairy export council and cheese, of course, has a longer shelf life than milk does mexico got 8% more u.s. dairy last year than the previous year china got 49% more both countries have slapped american cheese with retaliatory tariffs of up to 25% and already the big manufacturers report declining sales. but the worry is trickling down even to artisanal cheese makers like in new york which supplies farmers markets and whole foods. >> where i see it potentially affecting me is the companies who are producing a lot of cow milk cheeses are going to start to really be aggressive in the united states market which then would make me -- it would make it harder for me to compete in the supermarkets that i'm in and the supermarkets i'm trying to get into

>> the international dairy food association says it's not an oversupply it's increased inventory the same proportion of stored cheese to what we consume. but we're consuming a lot. 37 pounds per year, that's this amount of cheese right here for every man, woman, and child. to get rid of the oversupply, we'd have to talk about another three pounds on top of it. i don't know about you guys. but i could be responsible for three pounds of cheese >> me too. i love cheese. >> what kind >> i'd eat all kinds i eat it every day i just had some at breakfast so i'll help, contessa. >> what do you have there? is that bleu cheese? >> this one is -- this is co rr ado. >> what's right below you? >> oh, this one. bleu stilton by the way, these are all local cheeses made in upstate new

york >> bring that back with you. bring the whole warehouse. nice to see you, contessa. thank you. when we come back, more cheese behind the wheel of ford's new muscle car phil lebeau live in the city that helped make the mustang bullitt. >> the roar is back with the assistance of my producer megan reater listen to this car it is the bullitt mustang and it is back. atto wn quk x" returns. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. the number-one-selling - dad's got all the answers. w n health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again?

- anncr: prevagen. healthier brain. better life.

welcome back to "squawk" this morning ford unveiling its new mustang bullitt in the city that helped make the souped-up version in its glory days ford struggling to attract car buyers phil lebeau joins us from outside of san francisco this morning. >> there are assignments and then assignments like this one this is the new bullitt mustang which is going to be rolling into showrooms my producer starting it up for us the roar is what it's about. 50 years ago the bullitt mustang roared onto the scene thanks to the movie "bullitt." this is the third generation of it and for ford, the importance here is when you look at that muscle car category, if you

will, yes there are still people out there who want these type it is of cars when you compare the bullitt versus the challenger versus the camaro or the corvette, that whole category there, the mustang still holds up well. as they've imported mustangs around the world, this is one of the iconic areas ford has been building on. we had a chance to drive the bullitt here on the streets of san francisco yesterday. it lives up to the reputation. 475 horsepower behind this vehicle. top speed 163 miles per hour it starts at just under $47,000. for ford, they need a little bit of shine right now this is a company that is going through a tough period think about this their ending production of most cars the mustang is one example they're keeping around china and europe, we detailed this last week during earnings they're struggling in those areas. they're in the midst of saying we need a more extensive restructuring. and they lowered their earnings

guidance for 2018. this is a limited edition model, guys so it's not as though this is going to move the needle a lot in terms of sales, but it does bring up the question, do halo cars still bring people into a brand? ford believes there are still many people out there who want to hear the roar we had a chance to drive this yesterday. she's been told she has a little bit too much of a lead foot so she cannot drive anymore here in san francisco in the bullitt mustang. >> i've ridden with megan. that's the case. it's a very pretty car, phil it looks just beautiful. it would seem to me that as we move forward in the world, ford's not making cars as you mentioned, more and more people decided they're going to do ride sharing. but these cars become more important as a product because it really stands out as they reduce the product line elsewhere. >> right and the automakers all believe that there is still going to be

a core audience that wants to drive, that wants to shift the gears manually that they do not believe it's just autonomous drive vehicles that will lead us in the future. and look if you were into driving, if you were of a certain age where you still enjoy that, this is the type of car you want where you can really test it out. especially on some of the windy roads here outside of san francisco. >> yeah. and in this case, if you're of a certain age, you have to have an emotional attachment to a 50-year-old movie. >> ouch. >> no, no. by the way, i have that attachment to this particular movie. but do they actually have to do something given with automotive technology is right now to make the car roar like that in other words, you probably are not using a lot of -- >> you can adjust it give us some roar here so that's the loudest right now. but you can adjust it down if you want by the way, we're here at this resort i'm sure we've woken up a few people with the revving of the

bullitt mustang. but you can adjust it down >> okay. phil lebeau, what an assignment is right sometimes you get them and sometimes you get them we also have some other headlines to bring you this morning. uber ending its self-driving truck program. the ride handling service says it determined determined that as truck was not necessary to stay competitive in the freight industry we're moving forward with the self-driving car program and will continue uber freight which allows companies to find truck drivers to haul their cargo. this is a big decision to end that program it wasn't cheap. when we return, we'll get down to jim cramer at the new york stock exchange. take a look at futures right back in a moment what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals?

it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. i thwell wait. what did you meetthink 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. is part of a bigger picture. that bigger picture is statewide mutual aid. california years ago realized the need to work together. teamwork is important to protect the community, but we have to do it the right way. we have a working knowledge and we can reduce the impacts of a small disaster, but we need the help of experts. pg&e is an integral part of our emergency response team.

they are the industry expert with utilities. whether it is a gas leak or a wire down, just having someone there that deals with this every day is pretty comforting. we each bring something to the table that is unique and that is a specialty. with all of us working together we can keep all these emergencies small. and the fact that we can bring it together and effectively work together is pretty special. they bring their knowledge, their tools and equipment and the proficiency to get the job done. and the whole time i have been in the fire service, pg&e's been there, too. whatever we need whenever we need it. i do count on pg&e to keep our firefighters safe. that's why we ask for their help. let's get down to the new york stock exchange. what do you think of the tech? people will see and wake up and look at the "wall street journal" and see that the faang index is in correction territory. >> oh, jees. i think they're down because

people believe engagement is down online whether it's from facebook or twitter. i think that's ridiculous. the google cloud and azure were probably the three biggest star stand outs for the quarter and those are all things that reflect positively however, if apple is not that good we need to put facebook in the rear view mirror because that was awful i mean, that was the most awful positive by management call i can recall i mean, literally it was almost as if they were in a bizarre world. like this is great and we know it was terrible. we got to put that stake in it we need febreeze. >> what do you think of cbs? >> i thought jim stewart's piece was fabulous martha is really smart she's a board member i still think that you can't be

there -- look, i've loved les. it's completely, at this point, it's totally irrelevant. we know what has to happen i mean, come on. it's 2018. we know what has to happen like, there's even, you know, hire the outside law firm. make sure it's real so there's no issue yes, does it make amusement more likely to buy them does it matter it's a issue of conscience, an issue of morality. an issue of life. >> you're a lawyer what do you think when people say due process? as if it's in a court system >> no. he admitted he was doing it. i mean, it's much more like i plead guilty oh, so it stopped at a certain point? come on. >> and then the -- >> this is not a court of law. it's statute of morale that's a higher statute. easier standard. >> so, jim, then the crass business question as investor,

what do you do with the companies? >> well, i like viacom far more than the people who hate it. i think it's doing well. it's despised by everybody who loved les until we read this i think viacom is better than people realize i don't think it's a combination is bad there's a lot of pieces today that said it's hard to get back together those are what i call nonsense and i think that viacom has decent leadership. i'm alone on this. maybe the ceo of viacom agrees with me. but, look, this is devised outside counsel. dylan said you don't need a weatherman to know which way the wind blows i think it's accurate. >> got it. we'll see you in a few minutes don't miss "mad money" tonight. jim hosts that, too. "squawkbox" will be right back you always pay your insurance on time.

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 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

tech has gained over 10% in the past three months. after similar gains the trend tends to reverse a final check on the markets here the futures are suggesting that we're going to have slightly positive open when it comes to the nasdaq, which would be reversal of what we've seen. the nasdaq higher by 16 points and the s&p would be higher by six points, if we were to open here this is in the wake of a number

of earnings reports that come out and the dow components, as well and we'll see how it feeds through. we'll see if the tech continues. >> okay. mike santelli, thank you michelle, thank you. "squawk on the street" begins now. ♪ good tuesday morning welcome to "squawk on the street." final day of july, futures roughly modestly higher now as the s&p looks to avoid the first four day losing streak since march. two-day fed meeting begins we have proctor and pfizer out apple tonight. europe mostly green. and home prices for may up 6.4 the tech meltdown. facebook leading the