Skip to main content

tv   Squawk on the Street  CNBC  July 31, 2018 9:00am-11:00am EDT

9:00 am
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 sector
9:01 am
lower the past few days. high flying faang stocks negative for the week. apple is coming up on the last trading day of the month, the nasdaq is looking to reverse the three-day slide it's at the lowest level in weeks. stocks and futures are pointing to a higher open. >> and a boost for wealthy investors. the trump administration looking at ways to bypass congress and cut another $100 billion in capital gains taxes. stocks are poised to open higher including facebook has tumbled 20% in less than a week. netflix down more than 20% since june nyse, faang plus index down 10% from last month's record high apple due after the bell tonight. bear markets and netflix don't happen that often. >> no. i think the run up in this was incredible i mean, look, i like facebook. i should have liked them when it
9:02 am
was 215. what has happened is anybody connected with cloud or the companies involved in on boarding cloud the plus have been getting crushed because people feel facebook has to be a deceleration of the web. look, there's no slow down it just is not internet of things nxp, it's why i like nxp it's about cloud as a digitization i had evan green berg on last night. he's spending a billion dollars to get digitized i mean, so we can easily think that what matters is the instagram or whether old facebook is bad. or we can accept the fact that the strongest this quarter so far has been microsoft azure it's been amazon web services
9:03 am
and google cloud they're very buried within the huge companies but they have been the stand out. i'm going the other side of the trade on this. >> and those that sell into them, as well. >> yeah. it's not just about growth and cloud and all the money being spent to continually put up new data centers or compute power, but providers into -- all though intel, well, actually, they did okay >> it smokedintel. facebook was one of the worst conference calls relative to what happened. okay relative to how bad the quarter was. so in other words, i want to
9:04 am
distinguish between a bad conference call from a bad quarter and then upbeat conference call from a horrible quarter. >> right it creates some space, though, for growth i'm sorry for value overgrowth the last fewdays we had james dimon on yesterday and you interviewed him. >> i had nothing to do with the interview. >> no, you asked some questions. >> i didn't ask any questions. >> you were on when it happened. >> correct i listened. >> oh. >> i listened,too.
9:05 am
>> let me stop you there before bowing down the jamie dimon stuff. >> let's not do it for once and move on to apple you talk about 12 to 13 times. yeah apple trading something like that >> yeah. why is that considered not a value stock? >> it's up why isn't alphabet a value stock? >> it is just a second, let me take a phone call [ laughter ] i interrupted you. i got apple reporting after the bell i was curious look through the samsung results. we don't talk that often about the corporation in south korea by far one of the largest in the
9:06 am
world. >> please, do you have anything? i would like something to say tomorrow i'm like what will help me it was a great quarter. >> how about you heard what easterbrooke and mcdonalds said about what china what he thinks it may be doing to same-store sales there. apple sells $45 billion of goods to china. >> i think it's a status symbol. it's like -- it's a communist country. you can't have a big house god, what is it with you and me? >> i'm just saying are you kidding me they pushed back on it but have you seen the lines in paris outside the stores they bust them all in. that's thal do is buy luxury.
9:07 am
>> okay. i just want to say that china is -- i care about service revenue. when you have service revenue, you get a priced earnings. you get a multiple you can't get a multiple it's too hard. that's why this is such an important part i'm glad you brought it up and switched the narrative to apple. that was an olive branch. >> thank you. >> i think michael is every bit as good. i think moynihan is good. >> all right. >> all right
9:08 am
wells had a decent quarter. >> wow. >> you're going to throw them in there? >> yeah. it's more of a kind. it's like a five four fives but that wins whatever you're throwing at me. >> most likely it does most likely it does. i will not play cards with you or fish with you, either apparently you do very well. >> i brought home the bacon. >> as you'll see from jim's twitter feed the last few hours. >> oh, no. we're talking about a big win. despite the recent slide in tech the dow is on the best pace since january. dow up more than 4%. month to date s&p 3.1. nasdaq is on track to extend the monthly win streak to four despite the tech, guys, nasdaq is 2x what the s&p has done. >> nasdaq is filled with companies. bio tech, gaming is major
9:09 am
resurgence you take a look at something like resurgence down 40 points from the top it's still up for the year it is hard to find nasdaq stocks that are down for the year and look at qualcomm he's probably going to blather on about the dutch standard. i have to tell you, that qualcomm is -- >> wait a second i got to blather on. let me do that i'm kidding. >> do a faber report. >> you're right. say that set a range of prices which it's willing to buy the stock where within the range they would like to sell. if at all. purchase price is the lowest price at which qualcomm can buy back an aggregate of $10 billion worth of stock. >> that's a buy back and a half. >> yes, it is. that's a buy back of a different color. >> yes, it is. qualcomm said it's between 60 and 67.50. >> i think judging from the actual -- it started flat today, david. it's now up $2
9:10 am
so, david, i turn to you and ask you, explain this to people if you're bullish on qualcomm, you do what? if you want to cut your qualcomminqualcomm position, what do you do >> tender in. >> right. >> this is maybe the referendum? >> right. >> see how your shareholder base looks afterwards over a relatively short amount of time but this is immediate. almost immediate. >> and if apple they settle with apple -- >> what do you think >> yeah. >> apple goes to 70. >> yeah. >> by the way, when we talk about nasdaq, what is so interesting you pick up stocks and the stocks are selling at 11 times earnings 12 times earnings. you know, these are not expensive stocks
9:11 am
but all anybody talks about is amazon and netflix amazon and netflix. >> so much of the market cap, jim. it's not it's not. >> no. they're goliaths and i got these davids, no offense, that are small. >> we should, before we go to break, get to proctor and pfizer guide light on organic sales they see zero to one implication out of fact set is 1.4. >> oh people thought it was going to be two. but, you know, you've got shaving down single digit. everybody knows this is a selfie generation so beauty is up 7 by the way, they're raising prices that's all they need like that's going to stick i'm going and getting the kirkland band. this is an exercise -- costco has its own brand. >> thank you i've never actually -- >> no.
9:12 am
i know baby family down two baby care down high single digits baby care. it would be one thing if people stopped having kids. this is organic. it was a bad quarter nelson peltz nelson is talking about maybe changing the corporate structure and bringing out more value this is exhibit a for nelson pelts. >> this is cincinnati. >> yeah. the culture has been what they -- >> they are trying to get them to push decision making to the individual units the same way that ge said it
9:13 am
will do. >> how do you like -- do you know how many times -- >> you're talking about ge the digital. >> yeah. >> being part of it. >> yeah. devastating piece. >> yeah. devastating. saying basically -- >> so much money -- the previous ceo came up first. >> apparently not we'll talk about cbs around the bell. >> yep. >> is that what it is? >> yeah. >> at least a downgrade to talk
9:14 am
about it. >> yeah. yep. we'll come back. the white house also said to be considering $100 billion tax cut for wealthy americans without congressional approval we'll talk about that. another look at the premarket here, as we said july set to end positive tech that is dented some of the gains for the month. we're back in a moment the line between work and life hasn't just blurred. it's gone. that's why you need someone behind you. not just a card. an entire support system. whether visiting the airport lounge to catch up on what's really important. or even using those hard-earned points to squeeze in a little family time. no one has your back like american express. so no matter where you're going... we're right there with you.
9:15 am
the powerful backing of american express. don't do business without it. don't live life without it.
9:16 am
are you ready to take your then you need xfinity xfi.? a more powerful way to stay connected. it gives you super fast speeds for all your devices, provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome.
9:17 am
the white house reportedly considering bypassing congress to grant a $100 billion tax cut to wealthy americans with the maneuver that would cut capital gains taxation in a comment to the new york times secretary mnuchin said the department is looking. mnuchin emphasized he concluded whether treasury has the authority to make such a change. a lot of discussion on squawk as to whether or not markets sort of take inflation into account in their gains. >> look, when all the years i worked with larry kudlow, this was a central theme, which is, i mean, he believes if you that president kennedy, he wrote a book about it. if you cut capital gains it helps business formation when you listen to martin today from paychecks saying we're not
9:18 am
getting the big formation. they don't really benefit that much from tax. they would benefit these are all the things that larry talked about i mean, he is hell bent on getting rid or lowering the tax. this is a way, i believe, a loophole that treasury can exploit. not unlike the loophole that queens its own jack lew did to set down the allergan deal. >> they did. they might get challenged in the courts you might get a response in the marketplace almost immediately. >> i think so. and i believe that, look, i don't want to say if larry is right or wrong i did push for lower taxation on dividends. i think a lot of people would watch the show proctor is up, by the way. a lot of people watch the show want to have dividends and i think it is but i think that overall people would say this is just a benefit for the rich i'm not going to disagree with
9:19 am
that. >> yeah. times does say 86% of the benefits would go to the top 1%. i can't disagree with that that's empire call larry would say absolutely what matters is those people are able to spend. those people, i mean, you by you recognize more businesses -- >> that goes back to counkohn. >> yeah. you could say that's a trickle down larry has a lot of evidence that indicates that businesses can get jump started by it there's views on both sides. i think the most important thing that larry has done is really interject a very serious, rigorous analysis that had not been there i think larry is changing the dialogue i think larry was central to how well the trade talks went in washington last week look -- >> we don't know how well they
9:20 am
went. >> right even dimon's comments. >> yeah. he said he would be upset because president was told there would be no retaliation and there's been repeated retaliation. >> right you weighed in on that he actually said -- he hasn't been well advised. >> i was on with you at the time i was questioning you. >> right. >> that's right. i remember you i think people have to recognize -- that's being facetious for me you have to say i said that jamie dimon is now in trouble with the white house [ laughter ] he argued with the white house remember gary kohn argued. i think it's birthday this week. i think he's near you out there. >> i've seen him. >> yeah. you see him around. >> yes. >> yeah. we have a chat but i think that, yeah, you know, you don't disagree with this president publicly, privately whatever you don't.
9:21 am
>> i disagree with that statement. >> all right. >> disagree with my disagreement all you want. >> all right we'll get cramer's mad dash and count down to the opening bell on the tuesday year, i am sorry about that. [music playing] (vo) progress is in the pursuit. audi will cover your first month's lease payment on select models during summer of audi sales event. with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates...
9:22 am
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 the nation's largest senior-living referral service. for the past five years, i've spoken with hundreds of families and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities are better than ever. these days, there are amazing amenities, like movie theaters, exercise rooms and swimming pools, public cafes, bars, and bistros, even pet-care services. and nobody understands your options like the advisers at a place for mom. these are local, expert advisers that will partner with you to find the perfect place and determine the right level of care, whether that's just a helping hand or full-time memory care. best of all, it's a free service.
9:23 am
there is never any cost to you. senior living has never been better, and there's never been an easier way to get great advice. call today. a place for mom -- you know your family, we know senior living. together we'll make the right choice. we counting down to the opening bell about six minutes from now caterpillar reported earnings yesterday morning. you want to talk about it now.
9:24 am
>> right caterpillar goes up. i mean, this is too granular but goes down. it was down $5 then $4 and finishes down. and at the end of the day, it continued growth but already appreciated the steepest let me give you my feeling on caterpillar. the analysts are now watching how stock acts and when it doesn't act well, they say it's not going to get valued up. so turn your position. that's a new theme that has just developed for 2018 which is it ain't moving it's because of tariff, trade, because of the different cross turns. it's time to go. and that is something we have not seen this whole year which is basically i can summarize as its down. >> right. >> basing their calls on price actions as opposed to fundamentals. >> right they raised numbers. the demand is really strong everywhere but people are saying, hey, it's late in the game they're trying to anticipate
9:25 am
micron at 60.62. do youknow micron sells at fou and a half times. >> i didn't know that. >> you can make the market cap because they're buying back a huge amount of stuff this is the new affliction, david. >> all right yeah that's a high one. >> yeah. all right we get to the opening bell in a minute here. stay with us on "squawk on the street." i'm april kennedy and i'm an arborist with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california.
9:26 am
pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.
9:27 am
♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest. ♪
9:28 am
acan echo throughout ane entire community.nge that's why we proudly support, invest and volunteer in communities like yours. because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible. you're watching cnbc "squawk on the street" live from the financial capital of the world opening bell in 90 seconds a bit of a spike in futures here bloomberg is running a headline that said the u.s. and china are having private discussions mnuchin and the chinese vice premier about ways to reengage in negotiations. no time table.
9:29 am
but added there's agreement among the principles that more talks need to take place >>well, look, we've got a real -- this is a true dispute it's almost like in the apprentice there's a team that is lead by mnuchin, which favors talks. and then there's the lighthizer peter navarro who would say don't believe it our foot is on their jugular they'll take things up today on that there will be a reaction from the navarro camp. >> to jim's point on china, the pmi misses on both manufacturing and services still above 50 but i think services is the lowest of the year, maybe. [ applause ] >> i would make the case that
9:30 am
are navarro is right the costs are going up in china. and i look at this and i say i can understand if i'm the president. i'm not letting up i'm not letting up [ opening bell >> i'm looking at the cloud kings and talking about companies like adobe and service now. they're not up enough. you know, those can be repealed. now i think, you know, can be repealed if there's any sort of diminution of what mnuchin may be doing. >> was that diminution of mnuchin. >> i kind of like that. >> i do, too we're having a bounce.
9:31 am
that's what i see here. >> cat one of the leading stocks >> cat and proctor and they're good face boox facebook is down. >> it is down. >> it was down as much as 4 or 5% yesterday at one point it ended down less than that. >> that thing has to stabilize if you get rally in tech, facebook must stop here. okay >> okay. i did want to talk about one of my areas i like to focus on charter communications reported earnings. >> oh, come on it also impacts the parent
9:32 am
company of this network. yeah you stand at attention when i say that which is, by the way, comcast shares -- >> comcast had a great quarter like anybody cared. >> charter apparently had a decent quarter, aswell they're spending so much on cap x. they're in a weird dispute with new york state where new york state is trying to make them leave the state and sell their business because they haven't hooked up to the high speed the parts of the state up state new york that'll take awhile to play out. you can see the stock is reacting positively to the actual number this morning and comcast our parent network up nicely. i saw it above 36 for a moment there. >> yeah.
9:33 am
i mean, look they got back to business as opposed to the endless chatter being what is going to happen and this is better than expected we forgot the stock was at 42 before they got embroiled. they make a lot of money. >> after a strong second quarter 2017 earnings number, there was a lot of love for the stock, and a year later the shares had a rally to get back to a price that is $100 below where it was. >> that's fascinating to see cable. we talk about value. value working. this is value. it's become value. very important. >> of course, the other media story today is the ongoing story of cbs as the company, the board
9:34 am
said they'll hire outside counsel. moonves is in for now. the negative factors outweigh the strong fundamentals. they say it may be unfair given the fact we haven't completely vetted the claims in the article, but in their words, you have to play the hand you've been dealt. >> yeah. and i think that confirming something that david reported yesterday. all we keep reading about the board new. the board knew how about the board sue if they knew. >> if they knew. and another question if the board did know about the potential behavior of these accusations, they should have initiated an investigation sometime ago. >> yes you come out of that meeting yesterday. three hours long, at least and, frankly, many people are curious as to the decision not
9:35 am
to at least suspend mr. moonves pending the results of the investigation. i haven't spoke ton anyone who said that makes sense. unless he were rebutting it and assuring the board there's no other allegations to come. as a board member, you have to wonder why they didn't take that action they didn't. mr. moonves remains in charge. it will be interesting to see if he shoes up on the conference call for earnings. also, worth noting they moved their annual meeting it was supposed to be scheduled for august 10th. perhaps they picked the investigation. we don't know. we want it to be concluded prior to addressing the shareholders the only other possibility, this is pure speculation on my part that he is in the midst of negotiationing some sort of settlement, therefor, it wasn't in their interest to say
9:36 am
anything and, boy, did they not say anything in yesterday's press release. i made note of the fact they didn't tell you what the investigation they were beginning was about. >> how much did they necessarily know >> i would love to speak to her. >> e with would. martha is fabulous we should get her on cnbc. >> you also have the controlling shareholder in the form of shari redstone representing national amusements in the meeting, as well or part. perhaps she's choosing to sit back now i think i know how the movie ends but, you know. >> one reaction came from ste n stephen colbert on cbs about moonves who arguably made his career take a listen to this. >> les moonves is my guy
9:37 am
he hired me to sit in this chair. he's behind the show while we were struggling to find our voice. he gave us the time and the resources to succeed and he has stood by us when people were mad at me. i like working for him but accountability is meaningless unless it's for everybody. whether it's the leader of a network or the leader of the free world. >> see how that plays out over time. >> any resolution at this point. i'm not nearly as negative about viacom. >> you aren't? >> i think there's more to the company. i think every one of these things would be a disaster i mean, look it's a disaster like mission impossible. >> yeah. >> no mission impossible i thought -- >> no, i'm saying that we continually think that paramount is a bunch of idiots. >> they have new management in charge. >> they made the point today
9:38 am
>> merging with a good movie studio i think it's overdone on the downside. >> it's just if you're trying to keep track, obviously. we don't know what law firm has been hired to conduct the special investigation into the allegations of mr. moonves for sexual misconduct. that's what the investigation is about. they have a lawsuit that is still peending in delaware for october where they're trying to defaang their controlling shareholder. take her voting stake to 20% roughly. and you've got this just incredible antipathy between mr. moonves and redstone and the board of cbs behind him and seemingly behind him for other things whether it's lawsuits or anything else. they're all in >>well, you know, a lot of people are in until an advertiser said i don't want to be in. >> we'll see what else emerges here it's been a key part of every
9:39 am
one of these stories. >> what happens if big advertisers in the nfl say we're not going to put our ads on cbs. what happens i'll tell you what happens he's fired the next day. you said you saw the movie i saw the movie, too it was a good movie. >> let's talk about a good movie. kla 10 quarter which is in the same industry as -- up 12. it's a star of the show. that is very important and positive for micron and for broad com. i would point out broad com has done nothing but go up he should come back and talk about his acquisition. it's being well received >>well, you have a good call on this one. >> thank you. >> right. >> you found it. >> yeah. avgo it was around 200.
9:40 am
>> yeah. >> 197. >> yeah. >> wow. >> it's a man and i believe it i also think that the merger between, you know, let's put it this way, that merger would have been blocked by the chinese. >> blocked by the chinese? >> well, the chinese block everything that's not fair. they're not blocking, i think, they need the approval of the chinese for particular deal they're trying to do now and they're confident that the chinese are going to say good for the acquisition. i think that confidence could be misplaced but the quarter was so good people are returning to some of the stocks.
9:41 am
>> facebook has to close up. if facebook goes up here, and then twitter comes back. >> wow. >> yeah, did get an upgraded twitter today. they go back to neutral. they keep their target at 31 but they argue expectations have been appropriately reset. >> right and the downside of 14 give me a break. but, you know, the twitter quarter multiple times and the one thing we have to recognize, even though it was not a great quarter, advertisers want to be on the web and there may be people who say twitter cleaned up the act it put ads on it facebook is on the way to hell. >> before we get to bob, i want to mention start the citi deal it's been out there for awhile 25.35 in cash for fce. it's a large deal. >> 11.4 billion when you add in
9:42 am
debt, obviously. that includes debt star board and scopea own about 14% of the company. >> it's a major family. >> it is expected to close in the fourth quarter. there's no financing it's a large deal. but the stock still moving up nicely. >> and you combine that with the excellent quarter. it's an excellent quarter and start saying wait a second should i continue with the brick and mortar no the surviving retailers are proof. >> right i noticed ralph lauren's gross margin up 120 year on year. >> that's so impressive. >> yeah. that's discounting. >> i mean, it's amazing. and, you know, i've got to tell you this one has been straight up because they really solve the conundrum of how to become more fashion guard.
9:43 am
they got rid of underperforming stores, which is key they close a lot of stars. it had been taboo. all apparel is doing well but the management turned the jets on. >> we'll get to bob. the dow up 99. >> open here three to one advance declining. u.s. and china are back in negotiations it's about 120 point -- 10 points on the s&p. pretty much where we've been the usual tariff stories semiconducts, industrials, tech, consumer discretionary, materials, transports are having a good time of it. we have a modest rally i would say modest in faang but a lot of damage has been done. we talk about the problems with faang. we take a look at netflix and facebook they're down 20% from the recent highs. amazon and alphabet and apple not down nearly as much. i've been saying it for days many tech stocks are down 20% or more from the 52-week highs. a lot hit highs in june.
9:44 am
look at the internet content like s.n.a.p. and twitter, yelp, and ebay these guys have been tough this year they've had a hard time of it. some of the big data, the software names and enterprise names and splunks they're down noticeably and the enterprise names are also weak. i want to the point out if you include the tariff and the higher costs, industrials haven't had a good year at all, either that's 23% we've seen for american airlines. cummings and illinois tool works, caterpillar talked about higher costs these are the guys hit one way or another by the tariff costs or by higher costs in the case of american airlines elsewhere guys talked about proctor and gamble i'll make it simple. this is what low growth looks like low organic growth they were talking 2 to 3% of organic growth health care and grooming, guys are not shaving as much. they said that baby and family down about 2%. proctor and gamble in showing
9:45 am
this down 12% so far this year that's proctor and gamble down 12%. finally, where are we? people keep asking right now with the value and growth story, there is a rotation going on but we're not sure how strong it is. i get assaulted on the street from the bulls stop talking about value bob it's a loser q 2 is strong. and the evaluations reasonable for 2019 just off the highs now up 100 points carl, back to you. >> thank you, bob. we'll get to chicago pmi rick santelli in chicago hey, rick. >> reporter: oh, boy it's exciting our july read on chicago purchasing managers survey comes out 65.5 definitely higher than 62.5 expected subsequently it follows 64.1 it's the strongest numbers since april when it was -- wait a minute i'm sorry. it's the strongest number going
9:46 am
all the way back to january, which was 65.7 so it is now the second strongest number of the year and do remember in december of last year, 67.l not much higher than where we're at that was the best number going back to march of 2011. as for the markets, first day of the fomc, of course, bank of japan giving more latitude to the market they're tinker with how they tinker it should give everybody confidence we'll wait and see and latch the yield curve and some parts of the curve like the 40-year bond that are not tethered to the restraint that the bank of japan puts on. with respect to the last fed meeti meeting, it was june 12th and 13th let's look at a two-year note deal it's kind of a 45-degree line up we constantly make a couple of steps forward and very few steps back ward as we hoover at the
9:47 am
highest level since 2008 if you look at a 10-year it's almost like a u-formation. it describes as we lead into the meetings the long end firms up a little bit that is significant. the dollar index, okay, this is, you know, just like an ekg it's kind of wild but it isn't going anywhere and that is significant. the s&p 500 cash market. it isn't quite like a two year but it is aiming higher and certainly not being hurt but at least insofar as what conclusions we can draw based on the timing of the fed and the tightenings. and, finally with china in the big center of all discussions, here is a june 1st, 2017, dollar yaun another high for the dollar in lieu of a weaker yaun. we read the "wall street journal" maybe the chinese are feeling the activity of the administration
9:48 am
time will tell back to you. >> rick, thank you later on this morning, former fed vice chairman alan binder is the central bank on the right track as we begin a two-day meeting today? dow up 107 s&p up almost 11 back after a short break hi, i'm joan lunden with a place for mom,
9:49 am
the nation's largest senior-living referral service. for the past five years, i've spoken with hundreds of families and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities are better than ever. these days, there are amazing amenities, like movie theaters, exercise rooms and swimming pools, public cafes, bars, and bistros, even pet-care services. and nobody understands your options like the advisers at a place for mom. these are local, expert advisers that will partner with you to find the perfect place and determine the right level of care, whether that's just a helping hand or full-time memory care. best of all, it's a free service. there is never any cost to you. senior living has never been better, and there's never been an easier way to get great advice. call today. a place for mom --
9:50 am
you know your family, we know senior living. together we'll make the right choice.
9:51 am
chipotle closed one of its restaurants after several reports of customers becoming ill. a spokesperson saying the the protoc ttocol identified -- and closed the restaurant out of an abundance of caution the company tried to get head wind out of national aftvocado y today. >> going to do that at my bar? >> you probably should, yes. >> it will kill my margins.
9:52 am
>> the avocados are expensive. >> it will kill my margins, it says this is injuyour chance tot in i think the company is very well run. i think that brian nichol will get through this i agree with jeffries, i think this company is coming back. national guac day. it's a fortune i'm not going to hurt my july. close my july out. >> close your july out first. >> we'll get stock tdirang with jim in a minute. "squawk" is back after a break
9:53 am
at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.
9:54 am
you'll only pay $4.95. are you ready to take your then you need xfinity xfi.? a more powerful way to stay connected. it gives you super fast speeds for all your devices, provides the most wifi coverage for your home,
9:55 am
and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. time for cramer and trading. >> the high growth cloud kings are getting hit again. i would point out people using industrials off the china story and very good number from eat. cummings is doing quite well the metal bending companies that need growth from china are all doing well off the quarter and the idea there will be help here from mnuchin what is not working is high growth facebook is about to reverse it's in charge of all nasdaq because it was so disastrous disastrous. >> you'll have apple to work
9:56 am
with tonight. >> yes, and we've got a company called pool. they do quite well and thcypress reported a good quarter, value semis are doing very well. it is value that's doing well and it's industrial off of mnuchin and the facebook market is negative. >> we'll see how long that dynamic stays in place, jim. we'll see you tonight. >> excellent. >> 6:00 p.m. eastern time. when we return, former fed vice chair alan blinder with the interest rate picture with the dow up 82. don't go away. in testing our pe, at the lexus golden opportunity sales event. lease the 2018 is 300 and is 300 awd for these terms. experience amazing at your lexus dealer.
9:57 am
9:58 am
9:59 am
♪ >> good tuesday morning. welcome back to "squawk on the street." i'm carl quintanilla david faber at the new york stock exchange solid morning for streelz as we get raised guidance trying to see how much tech can hold in after a few down days as the fed begins a two-day meeting and apple earnings tonight
10:00 am
busy session, boj saying they are going to be more flexible. chicago pmi 655 the best number since january. as conference board comes to the wires. let's get to rick santelli in chicago. >> the litany of data of continues. we're looking for our july read on the conference board consumer confidence expecting a number north of 125 in the 126 area we're waiting our last look -- here it is, 127.4. 127.4. sequentially higher than 126.4 the last read. boy, that's another very, very solid read 127.4 is the second best number of the year going back to february, which was the best number of the year that was 130 and change. that was the highest read going all the way back to thanksgiving of 2000. so this is an excellent read
10:01 am
to is chicago and of course we've seen markets move a buiit the dollar index on the last number crawled into positive territory. want to pay attention to the foreign exchange side with tomorrow's announcement although nobody expects rates to change sara, back to you. >> rick santelli, thank you. our road map for the hour starts with the tech meltdown facebook and amazon and apple and netflix and google's parentparent alphabet in correction mode. a look where you should put your money to work in the sector straight ahead. >> a boost for the wealthy, the administration looking to bypass congress >> america's 1 billion dollar estate, the most expensive residential listing in america. first up new report says the us and china are seeking to restart talks to help defuse the trade war.
10:02 am
kayla. >> that headline giving a lift to the market, where the talks could potentially be headed. the crux of the article published by bloomberg news says stephen mnuchin and counterpart in china have basically been restarting talks to figure out how to avert a trade war a couple of points that should be raised about that nugget specifically number one the treasury secretary said on cnbc last week, quiet conversations between the u.s. and china continue though he would not comment on the status of them and said if china were to come to the table with a serious offer about changing market access and long term economics of the relationship between the two countries, then they would consider it, but signaling that essentially there had been a stalemate on that front. another point i would raise is larry kudlow a couple of weeks ago at delivering alpha said while there had been conversations between the u.s. and the mid
10:03 am
level and high level chinese economic officials, that the buck stop the with president xi and he appeared unwilling to do a deal and the ball remained in his court. i would caution that while there is reporting that the treasury secretary and the vice premiere in china are talking, that may not be new and it also may not be enough to get a deal. i spoke with say treasury official who said it is still the department's policy not to comment on the status of discussions with china this report says one of the catalyst for these talks is the potential imposition of new tariffs this week. there's a $16 billion traunch of chinese exports being studied for new tariffs and comment deadline that expires today. an administration official says it will take time to process the public comments that have come in and it is not tlikly the tariffs will go into effect this week we might have a little bit of wiggle room on that but we'll see whether we get any more details about exactly what conversations might be taking
10:04 am
place and how formed they are and whether in fact they do have the sign off from president xi, which appears necessary at this point to move forward. guys >> good information, puts a lot of meat on the bones regarding the headline we got a half hour ago. we'll come back to you in a bit. she said markets are higher. the last trading day of the month despite the losses and dow and s&p on pace to have the best months since january and nasdaq on pace for the fourth straight month of gains as investors continue to watch big tech after yesterday's sell-off let's bring in the chief investment analyst and sun trust. good to see you both. >> hi, carl. >> how are you >> liz ann let's try to game out what this headline and kayla's reporting may mean, maybe delay the tariffs and get back channel discussions warming up what would that mean to the markets? >> i think it would help but to kayla's point about xi needing to be involved for anything
10:05 am
definitive to occur, i think that would be probably the headline in advance of anything announced. it would probably give comfort to markets that there were -- the highest level of players are actually having these conversations. i heard larry's comments at the conference and what was little bit disconcerting was the assertion that there really wasn't much in terms of formal negotiations going on. i think the market had a little trouble with that. >> meanwhile, keith, we've got the mnuchin headline we're talking about. pretty good guidance out of hard core industrials like eden and cummings and that's drawing interest even as we're trying to see if the last few days of trouble for tech can come to an end. >> i think in general this market has been extremely resilient and in july up about 3% and i think after the s&p being up nine years in a row and having a big year last year, being up 5 or 6% is pretty good especially in light of the headline risks we've been
10:06 am
talking about. >> so i can't get a straight answer liz ann on technology is this the opportunity of a lifetime to buy these stocks on sale or is there complete rethink of this entire trade >> i think it's too soon for any of us to know for sure i think it probably represents a consolidation phase like this sector has gone through many times in this bull market. if you look at some of the technicals, it's not taking out some of the prior support levels i don't know i would consider it the buying opportunity of a lifetime i do think you are starting to see value players come into the market, clearly not in the technology space but you've seen a pretty significant pickup by value overgrowth in the last few days because momentum broadly has been a characteristic that has been most rewarded, if that momentum shifts and finds its way into the more value oriented places, it could take a little longer before tech finds that
10:07 am
construction bottom. >> i mean, bob pisani pointed out, we had a few fakeouts where it's time for value to shine over growth and growth resumes and tech darlings are in demand. is this time different, and are some of those tech stocks now looking like a good value with facebook trading at 23 times next year's earnings >> i think again in context, even with this 5% correction in tech, it's still tied for best sector year to date and crowns the s&p since the bull market began. short term i agree it's more likely to consolidate. there's going to be better areas of the market short term to invest in. whether that be financials and talk about industrials earlier if we have any positive news on the tariff side, i think there's still upside there and those are more value type sectors. i do think some of this rotation we've seen recently is likely to continue at least in the near term >> but keith, to your earlier point about being happy with 5%
10:08 am
year to date you think the market is sort of tapped out here in terms of further gains for the year >> i don't think we're tapped out at all it is a midterm election year. it tends to be choppy. the fourth quarter is where he we tend to see most of the gains but in general, i think we've held in there really well. we're looking at revenue growth this quarter above 9%. that's the best since 2011 so i think this rotation is actually healthy to broaden out the market i think other parts of the market like financials and like industrials will pick up some of the slack from technology. >> to his point, liz ann, 99 days until the midterms and president tweeting a lot this morning about collusion not being a crime. do you think midterms are going to affect the way we trade in the next three months? >> i do think so now what we don't know yet is whether the 10% plus correction we got concentrated in february was sufficient to be that
10:09 am
midterm corrective phase the average mid-term drawdown is 17%. that's going back in the post world war ii period. tends to be concentrated in the summer months. from the trough of those mid-term corrections the subsequent one-year return, not next calendar year but from those troughs wherever they occurred is more than 30%. now the pattern doesn't repeat itself perfectly or this would be an easy trading game. but i do think there could be more volatility leading into the midterm and unless we're completely rewriting history to the extent we got that and a bit more of a drawdown, the chances we get a lift once the uncertainty with regard to the midterms is past us, it wouldn't surprise me. >> interesting that's going to add another layer of complexity to trading if that in fact does happen. after all we've had to deal with with regarding trade and earnings and tax cuts and so forth. we'll talk to you soon thanks again. >> thanks, guys. >> thanks, carl. >> a bit of an unusual mover to
10:10 am
watch today, shop a fy are moving lower, shares actually rose initially on the report and the guidance half hour later saying the first one should be discarded due to multiple revisions, none of the headline numbers were different but the stock did turn sharply lower, down almost 6%. shopify saying the changes between the two releases were immaterial it had been a big winner up almost 50% for 2018. when we come back, a boost for the wealthy? the administration looking at ways to cut another $100 billion in taxes and the federal reserve kicking off a two-day meeting, former federal reserve chairman alan blinder weighing in on the show. the dow is up 124 points right now. hi, i'm joan lunden with a place for mom, the nation's largest senior-living referral service. for the past five years, i've spoken with hundreds of families
10:11 am
and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities are better than ever. these days, there are amazing amenities, like movie theaters, exercise rooms and swimming pools, public cafes, bars, and bistros, even pet-care services. and nobody understands your options like the advisers at a place for mom. these are local, expert advisers that will partner with you to find the perfect place and determine the right level of care, whether that's just a helping hand or full-time memory care. best of all, it's a free service. there is never any cost to you. senior living has never been better, and there's never been an easier way to get great advice. call today. a place for mom -- you know your family, we know senior living. together we'll make the right choice.
10:12 am
you know your family, we know senior living. are you ready to take your then you need xfinity xfi.? a more powerful way to stay connected.
10:13 am
it gives you super fast speeds for all your devices, provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. shares of cbs rebounding after yesterday's board meeting in the wake of sexual misconduct allegations against the ceo leslie moonves let's get out to julia borse sten good morning, julia. >> good morning, les moonves is staying in the corner office despite allegations of sexual misconduct reported in the new yorker after yesterday's meeting the cbs board of directors issuing a statement they are quote in the process of selecting outside
10:14 am
counsel to conduct an independent investigation. no other action was taken on this matter at today's board meeting. leading up to the meeting there was plenty of speculation they could ask moonves to take a leave during the investigation or push him out entirely or moonves himself could opt to step back. analysts weighing in about the uncertainty surrounding the company. slashing cbs's price target to $50, titling the morning note chaos isn't a ladder, it's a trap door. saying the downgrade is a reflection of the fact that the added overhang of an investigation of uncertain length with an uncertain outcome will make share outperformance difficult, given the real sell-off we worry about the impact on company operations in contrast, jp morgan has an overweight rating on the stock, $75 price target citing a favorable long term view but also warning quote allegations of sexual harassment against moonves likely to create near term overhang to shares and we
10:15 am
believe moonves had an outside influence in the long term investment these sis for cbs since friday morning, shares of cbs lost 11% while viacom shares gained 3.5%. the next big event for cbs, its earnings thursday afternoon and moonves typically leads that earnings call. >> julia, there's no shortage of people who have expressed surprise, i think to most mildly call it at the board's decision to just sort of maintain i think going in there seemed to be a lot of expectation at the very least that mr. moonves might be suspended pending the results of the investigation are you hearing similarly? >> yes, i mean, i think the question is what the investigation yields and it seems like we might hear something from moonves in his defense on thursday. i can't imagine that he wouldn't have to acknowledge this in his comments on the earnings call. but it seems like if the
10:16 am
investigation finds anything, the board will really owe it to shareholders to suspend him at the very least >> yeah, well, at this point i guess we don't have -- we don't know the name -- they haven't chosen the law firm as far as i'm aware that will undertake the investigation nor do we have any sense to the timing of it or how long it's expected to take >> exactly i mean, i would expect we would hear more detame details such a firm they are choosing to manage it by the earnings call. at the very least we can hear by tomorrow but it seems like there would be pressure on the board to get this investigation moving as soon as possible. simply because of all of the uncertainty, not just for investors but also for employees. you can only imagine what kind of environment this would create in the workplace >> julia, thank you for the update >> we'll keep following this developing story when we come back, procter & gamble sales missing street
10:17 am
estimates as competition begins to eat into the company's business the stock has turned around though after that long conference call. i'll give you a full briefing on what executives said in the state of the consumer from p and g ace standpoint it is the worst performing dow stock of 28.01 "squawk on the street" will be right back stay with us medicare options before they're on medicare. come on in. you're turning 65 soon? yep. and you're retiring at 67? that's the plan! it's also a great time to learn about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. here's why...medicare part b doesn't pay for everything. this part is up to you. a medicare supplement plan helps pay for some of what medicare doesn't. call unitedhealthcare insurance company today to request this free decision guide. and learn about the only medicare supplement plans endorsed by aarp. selected for meeting their high standards of quality and service. this type of plan lets you say "yes"
10:18 am
to any doctor or hospital that accepts medicare patients. do you accept medicare patients? i sure do! so call unitedhealthcare today and ask for your free decision guide. oh, and happy birthday... or retirement... in advance.
10:19 am
10:20 am
now for our etf spotlight. i'll look at consumer staples down 6% this year and specifically procter & gamble which reported earnings today. here's am of the highlights, a beat on bottom line. sales came in a bit light though, especially that organic number organic sales growth 1%. street was looking for 2%. we did see pockets of growth in beauty and health care and home which helped offset the declines that p and g saw in grooming and baby care. on the plus side for p and g, the company did see volume growth and market share increases for a change and projected 2 to 3% sale growth for the year on the down side, pricing power is a concern pricing fell 2%. the company says it is going to
10:21 am
have to raise prices this year on pam pers in north america and puffs and charmin and bounty products by 45% because of rising commodity costs it's a tough time for consumer staples and especially for household products this follows very disappointing quarter for kimberly-clark colgate saw half a percent organic sales growth you've got pricing power concerns at a time when commodity costs are rising in a competitive environment. are they going to be able to pass costs onto the consumer that's what all of the questions were about. >> do investors have different degrees of doubt whether p and g can do this versus weather coke can do this? >> beverages are doing a lot better than house hold products. there's ady verge ens in the sector bothoca-cola, they are not in the 1% range but 3 to
10:22 am
5% range they are doing better and seem more able to price on -- to pass on those price increases to consumers. everyone is feeling effects of the stronger kplcommodity cost d all sell abroad and even for procter & gamble the feeling, they are the category leader can do that and that they are continuing to retool their business, focusing a lot on local empowering the certain businesses which was one of the fights to get on the board, which is now on the board. you saw that and big improvement in china sales which returned to growth versus last year. there's still a lot of work to be done on this front. and overall it's a pretty tough environment for the entire group. we'll see what shares do it was actually an upbeat conference call. company talking about market share gains and talking about returning to growth in certain categories like grooming, even though men aren't shaving that
10:23 am
much, something that the cfo always mentions. >> laments. >> that's part of the problem. >> the other problem is the online upstarts like dollar shave club bought by their competitive unilever and the shares did return around on the up beat note but down 12.5% this year. >> hanging in there around 80.62. when we come back, the federal reserve kicks off a two-day policy meeting we'll check in with former chairman alan blinder in a moment and a look at the estate that is breaki ror wn rur ngecdsheweetn.
10:24 am
10:25 am
good morning, everyone, here's your cnbc update for this hour the trial of paul manafort getting under way in a
10:26 am
courthouse in alexandria virginia this is the first trial for robert mueller since his appointment more than a year ago. a roadside bombing in western afghanistan killing at least 11 people on a bus, including women and children more than 30 were wounded. the bus was on its way from harat province to kabul. no group immediately claiming responsibility for that attack. a philippino soldier and four villagers killed by a bomb that exploded in a van that troops were inspecting in the southern province. the blast occurred after militia men flagged down the van at an inspection point. >> and actor alan alda says he's been diagnosed with parkinson's disease. the former m.a.s.h. star was diagnosed with the newer roy degeneral tif disorder three and a half years ago he says revealing the diagnosis might be helpful to others and says ease keeping up a very full life we wish him the best
10:27 am
that is the news update this hour sara, i'll send it back downtown to you. >> sue, thank you. the federal reserve is kicking off its two-day policy meeting today. kr cnbc fed survey is out steve joins yus. >> a modern return of bullishness with the outlook of stocks this is the trajectory for the s&p 500 for 2018 and 2019. you see it went down in may and it's come back up the last two surveys, 2892. these are modern returns compared to where we are, 6% by 2019 but beats flat and beats down let's look at the outlook for rates and yields the 10-year yield, this outlook has been very stable it is higher compared to the 298 we closed at yesterday but 317, it's over that psych logically important 3% mark but not much higher than it is now and 3.53
10:28 am
about 2019 it's interesting that stocks are seen withstanding this rise in yields but maybe the rise in yields attenuates how much the fed survey respondents think the stock market can go. take a look, president trump made some controversial comments on the federal reserve we asked our respondents what do you think about that 83% said they are inappropriate. 15% said they are acceptable 42 respondents what effect did it have? not a whole lot. 78% said no effect at all. 15% said it makes rate hikes less likely and 8% said more likely and how about the outlook for the fed this week. 100% chance of no hike but 90% chance we have the next. the hike in september, this 3.7, how many hikes this year, it tells you about 70% probability put on the chance of four hikes this year. that's increasingly baked in and a big debate about next year between two and tloo this is important here
10:29 am
63% say the fed will go above neutral. the number should be 53. my apologies, folks. sara >> it's always good to get the sentiment gauge that you give us, steve on all of these fronts i'm wondering the accuracy level especially on the forecast for the market. >> they generally follow the market it's no better or worse than i think anybody out there predicting the markets these are guys in the market and this is an average they are very good on gdp and monetary policy. more or less they follow the market up and down >> got it. steve, thanks. >> pleasure. >> meantime the "new york times" reports the trump white house looking into a potential $100 billion tax cut that would disproportionately benefit the wealthy as they take an axe to capital gains taxed, alan blinder joins us today as the fed does in fact begin the two-day meeting. alan, good to have you back. >> nice to be here, thanks. >> it feels like the dynamic of
10:30 am
this meeting may not be a hike since it's not expected but they are redeeming $28 billion in debt ja jamie dimon made comments about the unknown effects s of qe. do you think it's going to be significant or not >> the unwind has been going on for a while and it's been going at a very slow space you go back to when they first announced that i was sort of amazed how slowly they said they would start and of course they did start very slowly. the market swallowing this with ease it's completely forecastable, gradual. it's the kind of things the markets eat for breakfast every day. >> fitch last week, they wrote that they are talking about all four major central banks but say the net asset purchases by four majors will likely turn negative next year and impact quote likely to be significant despite it being widely anticipated. do you think the fact we've been waiting for it for so long will
10:31 am
make it easier to absorb >> i think so. i think the notion that it's going to have a large effect is predicated on what i think is a false belief that there will be some big surprises down the road now, when i say that, by definition, we don't anticipation the big surprises so as i look out to the future of these central banks, i don't see any big surprises. i could be wrong and if there is a big surprise, then the markets will have a big reaction >> so as steve's fed survey suggested, most investors think it's inappropriate to have the president commenting on monetary policy do you think it matters for investors or feds policy that weighed in so ver sifrously? >> i think so far it matters a little if he keeps it up, it could matter a lot as you've said, in the lead-in, nobody is expecting a rate height today, that certainly
10:32 am
includes me. we're not going to have a rate hike tomorrow i mean we almost certainly will have one in september that will be in pretty close proximity to the election. and given president trump's inability to hold his tongue or finger from the keyboard, we may get a more voe sifr rouse tweet or something from him. and i think the more frequently and the more ploloudly he says things like that, the more the markets will get upset about it. >> when you say matter, do you mean in the sense that the market would reactor that powell or the committee's viewpoint would be altered somehow >> i think much more that the market will react. i think the notion that this would effect the fmoc's decision, it's not impossible but at this point it's fanciful. it would have to get much worse. the fmoc would have to feel that
10:33 am
it's independence is being sorely threatened and that it needed to demonstrate its independence by showing it will do what president trump wants it not to do. i think we're a long, long way from that. >> alan, love to you you weigh in this plan floated from treasury that would adjust the cost basis for capital gain to account for inflation. good idea, bad idea? what do you think? >> i think it's a good idea, turned into a horrible idea. let me explain it makes sense to index the capital gains and interest and depreciation and some other things for inflation if you only do it to the capital gain and don't do it say to interest payments, you're opening the door to titanic abusive tax shelters it's a horrible idea secondly, you need -- you should make this revenue neutral and distributionally neutral it's been noted this is going to cost $100 billion or moreover a
10:34 am
decade that should be made up with something else it's been noted that almost all of the benefits go to upper income people. so that suggests to me there's something else that makes up the $100 billion or so of lost revenue. should be targeted at the people that could afford it, not what the republicans often like to do, target at the people that can't afford it. >> nobody is talking about tax -- >> i left out one -- pardon me yeah. >> nobody is talking about definite neutral, the return of the trillion dollar deficit and further potential tax cut -- economists like you are warning about it but it doesn't look like the market is worried about the sky high debtor anything else when does that become a problem? >> it's a really good question when does it become a problem? the markets i think are still deliriously happy they are paying lower taxes and the question is when will that start dissipating amidst irresponsible tax policy and irresponsible
10:35 am
deficit policy and irresponsible talk about the fed and might add 100 other things outside the economic realm so far i think they are just in dream land about the wonders of lower taxes. >> that sort of brings us to the reports of this study, that treasury is doing about capital gains. i assume -- i guess i can sort of guess your answer as to the value of that proposition. >> yeah, i left one thing out in my answer to the previous question it's almost certainly unconstitutional the constitution gives the right to make tax laws to the congress, not to the u.s. treasury i read in the newspapers that secretary mnuchin is mulling over whether they have the authority. i can give him the answer. they don't >> well, that doesn't mean they are not going to try to test it. >> that's correct. >> and that there wouldn't be a market response immediately upon implementation, even if it were
10:36 am
to be overturned >> you know, as i was saying before, the market seems so happy about having tax cuts, i think they will react with some joy, for getting about the constitution if secretary mnuchin says we're going to do this on our own authority. then i would expect to get overturned in the court. but i'm not a lawyer >> we saw why the market is happy about the tax cuts, 4.1% economic growth is nothing to sneeze at. how long does that stimulative impact of lower taxes last >> i think it lasts a while. i don't think you would think of it as a one quarter aberration the second quarter looks pretty strong right now, very, very early days but it looks -- the next following quarter -- i'm sorry, the third looks pretty strong right now, not 4% probably but a 3% quarter would be pretty good performance at this stage of the
10:37 am
cycle. and with potential gdp probably growing less than 2% per annum i think you expect some juice from the tax cut to last at least a year and probably more than that. >> we'll see what happens more near term as we await the decision tomorrow. alan, hope to talk to you soon thanks for the time today, alan blinder. >> thank you. >> as we head to a quick break take a look of shares of chipotle on the move shutting down one of the restaurants in the suburb of columbus, ohio the stock is down more than 7% at least two customers got sick after eating at that location. in a statement to cnbc a spokesperson says we acted quickly and closed the single restaurant out of an abundance of caution some old familiar problems for chipotle under a new ceo we'll see how the company reacts quk t"sawonhe street" will be
10:38 am
rights back. dow is up 108. don't go away. see for yourself at the lexus golden opportunity sales event. lease the 2018 es 350 for $329 a month for 36 months. experience amazing at your lexus dealer. ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest.
10:39 am
10:40 am
apple set to report earnings after the bell the key levels to watch for the tech giant on trading nation mi t seeauk onhetrt" cong right up.
10:41 am
welcome back, a residential property is hitting the market this week in beverly hills taking sticker shock to a new level. it has a billion dollar price tag and robert frank that's all of the details for us. ♪ >> up the 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
10:42 am
there's no castle up here. in fact, there's not even a house. this plot of land is being sold by secure capital partners and it's listed by super broker aaron kerman for $1 billion. there are four reasons why the mountain is a record breaker first, the property sits on the highest point of one of the most expensive zip codes in the world. 90210. second, the land is zoned for a 1.5 million square foot residential mega compound. >> 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 are what billionaires love >> but the truth is no matter how rich you are, that billion dollar asking price is a tough
10:43 am
sell and the property had been shopped around back in 2014, also for a billion dollars >> for more on america's first ever billion dollar listing, head to cnbc.com. >> i could watch that all day long. >> my comment the chinese yuan has lost 8.5% against the dollar, huge driver of buyers on the west coast has been chinese buyers i wonder -- there are many other factors obviously whether they get a billion dollars for a plot of land but that could dry up a lot of property investment that we have seen over the years. >> what was the size of the amount of the potential building you could build? did he say a million square foot. >> i like the way you said i could watch it all day and took it straight to currency. >> it's true i'll give you one name right there jack ma. he already bought half of the add dirn ak state park.
10:44 am
>> not worried about the fluctuations. >> no. >> let's get to the cme in chicago. rick santelli with the santelli exchange rick >> good morning, thank you jim bianco, special guest today. jim, we have a chart, i love following your chart, you update it every week. what holdings they have in the size of the balance sheet. hopefully viewers are looking. explain this chart of cumulative central bank balances and what's that other line on it? >> you take all of the central bank balance sheets and convert them to dollars and add them up. i got the idea from you, your famous line at all central bank stimulus is fungible let's add them together. because i convert to dollars, i show the dollar index too. the decline we've is because the dollar strengthened and that would reduce the amount of convergence that you have. you strip out the dollar facts and there's been no decline in central bank balance sheets. worldwide central bank stimulus even though the fed has been
10:45 am
pulling back is knocked down because the ecb and bank of japan continue to stimulate to more than offset it. >> if you look at the chart people, that basically around the beginning of the year to where we are now, balance sheet numbers are about the same and the dollar index is about the same. >> exactly meaning that there's a lot of stimulus left in the market and it goes to the point that i've argued that the fed got a free pass. >> they did. they played musical chairs in essence but we have a spot reserved for us is what you're saying. >> yes, they got to reduce the balance sheet in titan because the other central banks offset them the big decision for quantity take tif tightening is when they decide to step away from the table too because then the global balance sheet number could start to decline that will give markets more turbulence then looking at one central bank alone this week we have all three central banks having their meetings third most important meeting might be the fed and the most
10:46 am
important might be the ecb tomorrow. >> bank of japan did a little tweaking around the edges. i walked away and said it earlier, best phrase was a trader saying they are tinkering with how they are tinkering but it certainly doesn't look like they'll be pulling back. >> they'll keep adding stimulus. >> i'm jamie dimon, the great interview with will frost talked about one of the things that keeps him up at night the unwinding of the balance sheets and all of the policies. the big banks never complain when it was aiding them but as this reverses, there's going to be bumps another topic, interest on reserves, a boring topic, i discuss with a lot of ex-fed governors but you said something that floored me. listen to this >> if we get two more rate hikes this year as everybody expects, next year nearly 20% of bank profit will be interests on excess reserves paid and that could become a big political issue. why are we giving them this giant subsidy.
10:47 am
>> hen serling already a little bugged by this jeb, are you listen? jim bianco, you always have something fascinating. back to you. >> rick santelli, thank you. coming up later, taking partnership to a whole new level. here's a look at an exclusive clip for tonight's brand-new episode of "the profit" and some strive in the family business. >> this is cute. so i think both boys, feel like i need to pull for them. >> i mean, just you make the decision, yeah >> what do you think of that >> julie >> oh, my gosh. >> you're like giving me anxiety right now. like i feel i could do this in five seconds, kind of stressing me out, all of this. >> do it
10:48 am
show me. >> all new episode of "the profit" airs tonight 10:00 p.m. eastern right here on cnbc looks like another good one. dow is up 103. more "squawk on the street" right after a break. with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about mouthfeel. i don't think about the ink card. i think about nitrogen ice cream in supermarkets all over the world. i think about the details. fine, i obsess over the details. think about every part of your business except the one part that works without a thought your ink card. introducing chase ink business unlimited with unlimited 1.5% cash back on every purchase. chase for business. make more of what's yours.
10:49 am
10:50 am
10:51 am
as tech stocks near correction, financials are on the rise jpmorgan ceo jamie dimon joined cnbc for an exclusive interview, warning the u.s. government policies could pose a threat to the overall market listen. >> it is trade if the skirmish becomes more of a war. i would say -- i don't want to scare the public, never had qe, reversal, monetary transition is different. government borrowed too much debt people can panic when things change it is changing, we tell you it is changing, we know it will change, it may have effects people don't expect and i think it is bad policy bad policy leads to bad outcomes. >> dimon's response being asked
10:52 am
what the biggest risk is to the markets. joining us, stifel chairman. >> good morning. >> what do you think about the warning, the reversing of qe, even if well telegraphed, going awry, disrupting markets in the economy? >> look, i think the fed has their arms around that we haven't done it any time they reverse policy and that hasn't been done, there's some risk, but i don't think it is something i am particularly worried about. i don't want to argue with jamie, it is not keeping me up at night >> you updated investors a few weeks ago on what to expect. tell us what you're seeing in the business as relates to the overall market activity and
10:53 am
clients' demand for risky assets >> you know, we are sort of a harbinger of what's going on in the marketplace. we had good results. more importantly my outlook for both the economy and for stifel and look forward to the second half of the year. >> what do you see that makes you so optimistic? >> there's a lot of things going well earnings are strong, inflation is subdued i think the whole trade war thing is overblown a lot of people are getting all angst about this it is very small to a $19 trillion economy we say that rocking the boat is a winning strategy, both politically and in trade talks but tipping the boat over is not a good strategy. we're not going to tip the boat over in trade. i think it is a little overblown
10:54 am
at this point. >> what do you think about tech sell off we have seen recently, not just faang names but broader technology do you see it as a longer lasting rotation out of the market darlings or opportunity to direct from a crowded trade >> well, first of all, it was a crowded trade. i think one of the things going on in the market we're going to see is it is not an index market any more i am not sure the faang will dominate as it has in the past it will be a stock picker's market one of the reasons i am optimistic look, the faang, the earnings i think growth is topping, and when you have to discount it back with higher interest rates i think it is not going to be as dominant as it has been in the past same with indexing i think indexing returns will be rather muted stock picking allows to have good returns
10:55 am
>> ron -- >> i know i'm talking my own book here. >> yeah. >> and you mentioned it a few times in the past. >> you talked about 2018 being a key year for you in terms of your platform and technology investments and i know you address this a bit on the quarter, but give us a sense, when you talk about making significant progress with digital transformation of client facing systems, i am curious what does that mean? >> you know, i look at technology as we're putting systems to help our clients get organized with their financial matters and we're using great a ago reallegati ago reallegation. once it does that, advice kicks in, as clients understand more of what they have, where they want to go, we provide the vi s advice to get them there. >> are you done with many investments on does that
10:56 am
continue over a longer period of time >> you know, i think it is going to continue. look, a lot of our industry is we kill way too many trees with paper. digital transformation anyone that's not understanding digital and technology really in any industry, but especially in financial services, we're going to have an on-going investment to the benefit of our clients frankly. >> ron, good to check in with you on the business and your thoughts on the overall market >> thank you. coming up today, what should be a major bellwether. apple earnings after the bell. we'll be all over it on the closing bell a preview, results, instant analysis and robert johnson on allegations against les moonves of cbs, starting at 3:00 p.m see you then, carl
10:57 am
>> sounds good. when we come back, keeping an eye on tech stocks, after faang fell into correction mode. 10% drop from june highs, including a bear market for individual names like netflix. we discuss that. 09w up 1 "squawk alley" starts in a moment there's a lot to love about medicare. there's also a lot to know. part a that's your hospital coverage, part b is all the doctor stuff... the most important thing to know? medicare doesn't pay for everything. and guess what that means... yep...you're on the hook for the rest. that's why it's important to consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. a plan like this helps pay for some of what medicare doesn't. so you could end up paying less out of your own pocket.
10:58 am
that's nice. and these are the only medicare supplement plans endorsed by aarp. selected for meeting their high standards of quality and service. it feels good to have someone looking out for you. want to find out more? call unitedhealthcare insurance company now to request this free decision guide, with aarp medicare supplement plan options to fit your needs. and learn how this type of plan works together with a part d prescription drug plan. here's something else good to know. with a medicare supplement plan, you have freedom. freedom to go with any doctor or hospital that accepts medicare patients. you're not restricted to a network. ever. and if you need to visit a specialist, you'll have a choice there, too. your coverage goes with you, too, anywhere you travel in the country. we have grandkids out of state. they love our long visits. not sure about their parents, though. call unitedhealthcare now to learn more
10:59 am
and ask for your free decision guide. want to apply? go ahead, apply. anytime's a good time. remember, the #1 important thing, medicare doesn't pay for everything. a med supp plan could help pay some of what's left. and this is the only plan of its kind endorsed by aarp. that's the icing on the cake... i love cake. finding the right aarp medicare supplement plan for you could be just a quick call away. so...call.
11:00 am
good morning, it is 8:00 a.m. at facebook headquarters in california, 11:00 a.m. in wall street. "squawk alley" is live ♪ ♪ good tuesday morning, welcome to "squawk alley." watching the markets closely got a nice pop of the open dow up 111 on headlines that perhaps there's resumption in trying to put together trade talks between the u.s. and china. we start with th

109 Views

info Stream Only

Uploaded by TV Archive on