"squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." >> good morning, everybody welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is out today our guest host is "new york times" corporate media reporter, ed lee, also a cnbc contributor. thank you for being here have some big stories going on today. let's look at the u.s. equity futures. you will see right now there's some slight green arrows talking about slight green arrows after a mixed day yesterday. the dow was down by 7 points or so yesterday you did see gains for the s&p 500 and the nasdaq was the big gainer, up by 1.4%, thanks to strength and technology news today's story is the jobs report and what is happening in asia based on all these trade talks

overnight in asia, china tumbling once again. the shanghai composite dropping by 1%. it's down 17% year to date that big drop causing china to lose its position as the world's second biggest stock market. the financial times says the chinese stock market is valued at just over $6 trillion. that comes in behind japan's 6.1 trillion dollar market valuation. the u.s. market is number one with a $31 trillion evaluation. by the way, with apple crossing $1 trillion, i did the math, if you take the ten largest market cap stocks in the united states, apple, goggle,microsoft, facebook, berkshire hathaway, jpmorgan, exxonmobil, bank of america, those ten companies alone add up to all of that chinese market 5.9$5.979 trillion. >> 6 trillion practically.

>> the same number you're looking at for the entire chinese market all of this trade talk is causing concern in china european equities, you can look at them the stocks are up across the board. gains of a half percent for germany and france looking at treasury yields, the ten-year note at this point looks like it's yielding just below 3% 2.977% those job numbers today will dictate some of that trading we see. >> the jobs report hitting the tape at 8:30 a.m. eastern time forecasters expect a payroll raise to $190,000 jobs unemployment at 3.9% we'll watch for that at 8:30

heineken is selling its china operations to cr beer, that's the country's biggest brewer it's also going to be taking a 40% stake in cr's parent company in a deal worth 3$3.1 billion china resources has 90 breweries across china snow, is the world's top-selling beer even though it's only sold in china until 2016 snow was produced by china resources and sabmiller. heineken will license its name to cr beer and the deal comes as heineken has struggled to get chinese consumers to buy lower priced brands over more popular local beers. there have been changing tastes to alternatives like wine. same story here in america, how younger people are drinking wine

or cocktails over beer check out shares of heineken, up over 2.5% >> i just drank a beer -- >> this morning? >> that would be good. >> it was a grapefruit beer. >> no. >> you heard about this? >> yes >> it was like a cocktail in a beer >> you never drink that's such a weird thing. >> it is let's talk about cbs, it is the story of the morning beyond the numbers which are the next story of the morning. it was business as usual for les moonves on the conference call with little mention of the elephant in the room, the harassment allegations against moonves himself. julia boorstin has more on what took place on the call >> well, les moonves said nothing about the allegations of sexual misconduct or the pending litigation with shari redstone

those two issues are hanging over cbs stock the only comment came from the evp of investor relations, adam townsend >> in loiight of pending litigation and other matters, and on the advice of council, the scope of today's call will be limited to the revenue numbers. >> moonves focused instead on the company's results. they came in a penny stronger than expected. revenue grew to 3.$3.47 billion. moonves is targeting 16 million subscribers by 2022, and again, no comment on the investigation into sexual harassment allegations or his legal battle with redstone. we'll have more on what moonves'

focus was on in the next hour. >> stay where you are. we want to bring in two other reporters who also have been following this story ed lee from the "new york times," and you have a book out about the redstone drama can we talk about one thing before this, the subservient nature of the analysts on this phone call there is a q & a it's one thing if they said we're not really talking about this then we got to the q & a and people decided they would start asking about it, which is what you would expect to happen but these great brave souls started asking about the streaming numbers. i was in a state of shock. >> it was amazing. they were going out of their way to find things to ask about that were not the elephant in the room >> do you think it was all coordinated in advance were there certain people -- >> they pick certain analysts, who will get to ask questions.

i don't think they're vetting them ahead of time, but certainly the friendlier ones are the ones that make the cut only about eight analysts got to ask questions. they also made it clear at the top we won't take questions about the harassment allegations. >> you think everyone thought -- you didn't think everyone in thought they would get -- nobody wanted to ask? i didn't listen to the whole thing, was there any parts where people hinted? no hint at all >> literally zero. just because you they say you can't ask doesn't mean you can't ask, just for body language and tones of annoyance >> there were plenty of questions to ask about that are related to the issues of the pending litigation and then the investigation into sexual harassment such as the fact that les moonves doesn't have an official successor we could talk about the fact that joe ianello is the natural

successor, but there's no written succession plan for cbs. there are plenty of analysts who have written notes talking about the fact that this is an issue, this is an overhang on the stock. it's unclear what will happen next but it would have been reasonable to say without commenting on the investigation, can you tell us what your success plan is for the company should there be a change in management rn so there were some ways to get information without asking the direct question. >> you can talk about the quarter all you want but does it matter at all for the stock because there is this much bigger overhang. >> the stock has taken a dip on these revrevelations, and if the analysts are representing their clients, these are relevant questions. >> i would argue they are much

more relevant rather than anything sticking around this quarter. this quarter is over and does not dictate the future of the company. if you want to know what's happening, nothing they said yesterday matters. >> the broader context is for whatever leverage the analysts have in these things, the board controls the situation they're taking steps, they hired law firms to investigate, but the fact they have not indicated much about the succession plan -- >> this is cbs saying we want business to continue as usual, but this is anything but bu business as usual. >> are the redstones listening in on this call? is shari redstone in on this call shari >> shari is on the board, and at least three members of the board

were aligned with the redstone company. we had reported over the weekend that there were people that thought les moonves should step aside. that's not what happened, but you can tell there's not total agreement among the board. >> do you believe they have at least an interim success plan on the table now? >> i have not seen anything close to it. joe ianello is a close second, but he's a second. that's not a long-term solution. >> it's worth noting, you're talking about the board. yes, there are at least three members on the board who support shari redstone and national amusements, the vast majority of board members support les moonves to such a great extent they're backing him and his battle with shari redstone so this board is largely aligned

with moonves >> shari herself, when she was trying to combine cbs with viacom, she wanted or presumably still wants les to run both of those companies. in a lot of ways les has had the backing of the redstones for a long time. a big part of cbs's success has to deal with the way he operates >> that could change with this information. >> that could change now, but cbs's fortunes have been so closely aligned with les's stature, his leadership. once you divorce him or potentially divorce him from that company, it puts the company in more trouble. >> i guess the question becomes this action in the stock, it's acting as if les is not there at this point >> i think the action of the stock speaks to the great uncertainty about both of those factors, the lawsuit as well as the future of the leadership of cbs. but i think -- the reason i was most surprised there was no

commentary from moonves because between friday morning and when the call started yesterday morning, cbs lost 9% that was entirely due to uncertainty. after decent numbers from the quarter, the stock did not go up >> for those who stay up -- who don't stay up late enough, was there any repercussion -- stephen colbert did his show the other day, a cbs show, he was surprisingly critical, even though he has always been supportive and les has been supportive of him, but raised the whole les moonves issue. any blowback within cbs? i was fascinated to see him do that >> just from reporting around cbs, what is clear is that the company is shaken to its core. les moonves put on a good face,

his tone was upbeat, but behind that mask -- >> the knives are out. there's a story in the daily beast this morning about his wife, julie chen, the knives are out for her within cbs it sounds like an all-out war. >> when these allegations come to light with big, powerful, hollywood figures, i believe these stories. this person should step down we should take a closer look that's not been the reaction within cbs and out it's more fractious. >> we'll leave it there. thank you. when we come back, get ready for the july jobs report it is due out at 8:30 a.m. eastern time we'll bring you predictions and analysis after the break later, apple was the first u.s. company to hit $1 trillion market capitalization. who will be next we'll break down the front runners at the bottom of the hour let's begin.

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welcome back shares of gopro seesawed after the quarterly report late yesterday. the company posted a loss of 15 cents a share, better than the 22 cent loss than wall street expected revenue also beat expectations the stock jumped as much as 10% after the report before giving up those gains and turning negative shares are up by 2 .2% this morning. gopro has expanded its product line to gain traction. and huawei says it may become the world's top smartphone maker by the end of next year. huawei is focused on the chinese market because it has been effectively shutout of the united states, australia and other nations over fears that the government could be spying on these devices rbs announcing its first

dividend this ten years once a settlement with the u.s. justice department has been finalized. they were accused of selling toxic mortgages in the u.s. in the run up to the 2000financial crisis the bank will begin paying a dividend of 2 pence per share after that settlement is finalized. the settlement will pave the way for the uk government to sell its1% stake in the bank after the 2008 bailout. we are two hours away from the july job's report. joining us now is sarah ketter, portfolio manager of causeway capital management and brett ryan, senior economist from deutsche bank. let's talk about what you are anticipating pretty good numbers expected >> should be a decent number,

we're at 188,000 >> that's about in line. >> that's fine the market will focus in on the average hourly earnings number >> because we are so concerned about what may be happening with inflation? >> it's all about inflation. it's all about the fed with the ten-year sitting at p%, if you get an upside print in which the year over year rate could be 2.9% to 3% range, that could be a big beat, that could test the highs right now we expect 0.3%, a year over year number that's unchanged, but it could round up to 2.8%. what would the fed do if the number came in higher than expected >> september is priced december you're at 60% at the moment you would have to price out

starting march of next year. you have to be more confident in the fed's hiking path if you get the strong wage growth at this point you're getting there, 0.7 below of where the fed is there's evidence of nonlinearities what does that mean. >> nonlinearities. >> when you get this far below the rate of unemployment, things happen >> so inflation could spike up because it's hard to find workers. more than 50% of companies say it's the hardest market to find employees. >> on almost every metric we look at and that the fed looks at, the labor market is tight. you can argue one or two things here that show signs of excess slack, but this is an aging demographic, people are retiring, we need to replace them with workers. >> sarah, let's talk befoabout t

this means from a market perspective. would a higher than expected inflation number be bad for stocks >> that's hard to say, but stocks have a chance to outperform and are correlated with rising interest rates globally we know we've moved monetary policy to more tightening from accommodative. that's happening just about everywhere so that gives these more undervalued stocks a chance to shine. their growth counterparts, the discounted rate on those long duration stocks, where much of the cash flows will be delivered far in the future. thoseusually get hit harder the rest of the market, this is a global phenomenon, that should have a chance to do quite well >> beyond financials

>> far beyond. industrials, telecommunications stocks, all the areas left behind at some point in time someone will say look at those enormous dividend yields and low multiples, maybe i have to wait longer but it's worth it >> are you telling people to start nibbling now >> absolutely. we've been very, very encouraging with what clients are saying after this very long growth run, it's time. the value, the growth to value premium is at an extreme growth stocks are very expensiv expensive. >> do you have a few names you like better than others? >> if you want a bit of income, a lot of income and safety, go right into china, like a china mobile with a 6% dividend yield, working on fifth generation

telepho telephones >> what happens with the yuan? if that comes under extreme pressure >> it has already. there's probably a limitation of how undervalued it can get before it creates a problem for china. this absolutely -- this company is so solid, we think they can do at least mid to high single digit earnings growth. the meantime you get 980 million customers, who has 980 million customers? not all of them are 4 g, but many of them will end up being 5g customers we like to go where the fire is the hottest. right now it's in china. >> brett, let's talk about what the trade and tariffs could mean for our economic numbers we talked about how the chinese stock market is down 17% it's gotten het hard over the last six months on this.

is there a time numbers come back to our economy and put pressure on stocks here? >> with the 250 billion that have been announced -- >> in tariffs. that will roll in between now and the next few weeks what that works out to, when you apply the tariff rates, about a $70 billion tax. the tax cut was worth about 122 billion in terms of income for the consumers. we have gas prices that are up 50 cents year over year. each one penny in the gas price is $1 billion in consumer spending >> 50 billion on gas >> and they can't pend is othspr places add that up, 50 billion in gas, 70 billion in tariff tax, if we go through with this, you have

offset much of the gain from the tax cut. >> which means what? >> which could mean a tenth or two to growth. we don't think it's a major problem, but if we're going to expand that trade war into the auto sector -- right now 250 billion of chinese goods, we import 2.25 trillion of goods. if you want to include the auto sector, another 360 billion of goods, now we're talking about over 20% of imports. >> that sounds like less of a concern today than last week >> at the moment, yes. the rhetoric shifts every five minutes, so -- >> we'll watch and continue to see. sara, other thoughts you would leave people with today? >> picking up on autos, some of the world's best automotive companies are trading at low valuations no matter what happens, companies are becoming more efficient and profitable

they have incredible valuable brands, there's porsche, audi, the volkswagen brand you get all of that in the specter of trade tensions, which we believe has to disappear after the november elections >> apple's market cap trading at more than every major automaker in the world added together. >> not surprised >> thank you for coming in coming up, an early read on the jobs report from manpower, they're focused on worker training to address the skills gap in america we'll talk about that. as we head to a break, a look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning among the stories front and center this friday morning, apple hitting a market capitalization of $1 trillion yesterday. it's the first u.s. publicly traded company ever to reach that milestone, though shares are lower this morning bringing

it back below $1 trillion. we'll talk about the next companies that could hit that milestone coming up. shares of cbs are lower despite the company reporting an earnings beat. on the earnings call no one asked about ceo les moonves's sexual harassment allegations against him. and heineken inking a 3$3.1 billion deal with china's biggest brewer the dutch company is selling its china operation to cr beer and taking a 40% stake in the brewer heineken up by 2.25% the u.s. equity futures at this hour are in the green dow indicated up by 20 points after closing down by 7 points yesterday. s&p 500 closed up yesterday. it is indicated up another 2 points or so this morning. the nasdaq was the big gainer, up 1.4%.

>> stocks to watch, toyota saying profits rose 19% last quarter. results helped by higher sales in the u.s. and china. toyota cutting its full-year sales outlook in north america aig's second quarter profit fell 17% aig took a big restructuring charge and saw lower investment income and had a weak showing in its property and casualty insurance unit aig shares are down about 5% look at shake shack. they're down about 5% as well. the burger joint reported a second quarter beat, but shares are down after the company said it is delaying restaurant openings and that impacting the stock price. horse racing is legal again in massachusetts after a 36-hour unintentional band the state legislature failed to extend laws that permit racing

as they scrambled to finish their legislative session on wednesday morning. they failed to address the vote this time. because those laws expired on tuesday, the state's gaming commission was forced to suspend horse racing lawmakers worked quickly to fix the gaffe, but it was too late for yesterday's races. the tracks will be up and running today. now a look at the state of the labor market on this jobs friday we'll get the number at 8:30 we'll play all sorts of prediction games before that, let's bring in manpower group's becky frankowicz let's talk about the skills gap. what you folks are doing, and where the real gap lies no >> it's interesting. we're seeing skills gaps across america and the reaction from employers is what we find interesting. we surveyed 2,000 american employers and found 30% of them

are relaxing education and experience requirements to attract more candidates. what's interesting about that, we know skills are changing at the pace of technology so helping people understand future is much more about what you learn and apply than education you had. so we need to make sure these workers are prepared for jobs when they don't have the education or experience to do them >> give us an example where the rules effectively or the threshold has been relaxed >> it's really happening across all 13 sectors of the economy. notably around high-tech manufacturing. these jobs are no longer our grandparents jobs sitting in a factory. they're actually digitalization of manufacturing we call it digi manufacturing where people have to have technology skills, soft and hard skills to achieve manufacturing in today's economy

>> help me if you could, the idea is -- i'm assuming that somebody who is going to get a job at where in silicon valley -- you tell me where, and they historically needed to have a college education and now they're taking a high school education? >> we have a plant, a client of ours in indiana that is food production historically they retired a high school degree to work on the plant line they say no longer do we need a high school degree, and we're increasing the wages from $11 tw workers in we're also seeing that on experience a typical resume would say what have you done in your last job that applies to this job employers are now relaxing those requirements around education and experience to attract more applicants in. >> what is the tightest part of the labor market now if i could choose a major so i

could graduate from college there two years, what sector would i want to pick >> it's interesting how you asked the question because we assume college degrees are required for every job, but today the tightest labor is around skilled trades, machinists, mechanics, electricians we believe the u.s. administration's pledge to bridge the gap between training and industry demands is important. manpower group signed up to support 130 worke,000 workers, educating them, assessing their skills and providing on-the-job opportunity through a program called my path we need employers to join us and take that pledge >> who is doing the most interesting things and maybe who is spending the most money on the reskilling issue right now is there one or two examples of companies out there in america that you think are spending a

substantial amount of money and doing it in an interesting way that's working >> 55% of employers are spending on learning and development. probably the most interesting thing i've seen are people offering unique benefits we have one client offering nfl sunday ticket as a premium to employees. free lunches free popcorn free soda. i'm not talking about silicon valley i'm talking about midwestern american manufacturing companies. everyone is getting more creative >> i'm missing the connection in terms of reskilling -- what are the football tickets having to do with it >> i thought you were asking to attract candidates >> no. i'm interested in -- you hear companies say we need to reskill our workers. then when you go look -- by the way, you can look in their quarterly reports, see what kind of money they're using to reskill workers. the number is very tiny.

so if you're a ceo watching this show this morning, you can say these guys are doing it, we should be doing it like them >> a lot of examples of companies and industries partnering with trade schools and high schools we're seeing a lot of investment in digital training. on the vob d-the-job digital tr. historically education and employment have been two separate events. we're seeing those converge into one. so you're learning while doing the job. that possibly is why you're not seeing the spend as much, there's a lot of on-the-job training, so i may have to be trained today and then six months from now. becky, thank you >> thank you when we come back, apple was the first u.s. company to reach $1 trillion market capitalization who is next? dom chu has a list of the front-runners. approximately one out of every four apples grown in the

united states they are exported. so what happens when two of the top importers slap tariffs on our fruit? a live report from hudson valley orchard. and it's jobs friday we have more predictions coming up at the top of the hr.ou you're watching "squawk box" on cnbc people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ 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

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welcome back to "squawk box. the world knows that apple has become the first u.s. trillion dollar company what firm could be next? dom chu has a few names. >> by now we know amazon is in second place so the front-runner has to be amazon.com if we look at the biggest market cap companies within the s&p 500 and what the current market caps are and what it will take with share counts as you can see, amazon is in second place it has 12% to get to the $1 trillion mark. alphabet needs about 17% to get to that trillion mark. a bit more work to do.

microsoft at 21% facebook, because of that big drop, needs a double to get to 1 trillion >> where was facebook two weeks ago? >> 23%, 26% higher from what it was. we had a decent drop there if you look at where the analysts think the stocks will go, the 12 to 18-month price targets, looking at amazon.com shares, it's the only one with analysts commentary that will have it there. 1,838 is where it is now it needs about 2,050 bucks to reach the trillion dollar mark right now the average analyst price is 2,017 so within the next 12, 18 months we could see that from amazon, if the analysts are right. joe always says the analysts don't often get it right out of all those companies at the top, that's the only one

that is close. >> that's the one i would put money on >> it clearly will get there at some point do you think whoever -- apple dips back down below trillion, if amazon gets there, do they stay there longer? once they hit it, it's the realized value >> it's funny you mention that oftentimes traders and portfolio managers look at relative strength the chart. if you compare apple and amazon, these are fantastic growth stock companies. they have been for the better part of a decade within the last five, six years, that trajectory, move higher for amazon outpaced a lot of other companies. if you look at that, the relative strength near-term, it could be that amazon gets there. it gets there faster on a relative basis than apple did. if it stays there, maybe it speaks to this idea that there are moving parts within this mega cap technology companies

that will drive it amazon web services is the thing everybody focuses on now we saw similar moves with microsoft and alphabet with their growth initiatives so you're getting to a point where you're moving the needle with some of these smaller business and people said that will never move the needle all of a sudden investors are heating up on that >> the cloud is giving profit for amazon, that gives them room to do things on other fronts, whether it's healthcare or whatever other industry they want to break into i have my profits because of cloud, i can experiment with low or no margins and grow my business >> with alphabet, it was cloud, internet search revenue and advertising that gave them the runway to do what they do. moon shots aside, the cloud driven stuff within alphabet has been given a lot of that resource because of what they did on the other side. >> piece of history, i feel like you're a historian when it comes

to the market, if you look at the biggest companies or the companies that had the biggest market caps and market share at the time, 10, 20 years ago, what would those companies look like today? there's been some interesting stories around employment, the size of a company. beyond employment, how big were those companies? >> they were bigger shares looking at the weighting within the s&p 500, the one that comes to mind is ibm it was the behemoth out there. forget about overweighting in technology it was a large part of the market and the dow are today's companies bigger or not? >> today's company is probably bigger in terms of employee size, total revenues i'm not sure inflation adjusted how it looks, but you speak to

this employment component. companies like them are trying to figure out ways to change the employment component they want people trained to do new jobs the technology component about whether or not those take away real people jobs will be the discussion point for these companies going forward. the idea that you can create tools, create all of these technologies that will replace us as human beings i would say this to ibm's credit, they are trying to spearhead these initiatives to train people outside traditional four-year type of educations to give them jobs, whether or not that's the paradigm is the fascinating discussion for me. did i need my four-year degree to do what i'm doing now >> dom, thank you. more to come we'll get you ready for the july jobs report due today at 8:30 a.m. eastern time. send in your expectations. we'll play price is right rules.

>> we also want to know average hourly -- >> we want three numbers >> and the wage. >> average hourly earnings >> so we want the number, percentage and the average hourly earnings. >> right >> that's the game seema mody is picking apples, not the trill ondollion dollar but she's in the hudson valley good morning >> good morning. one of the items getting caught in this ongoing trade dispute are apples one of the few items being slapped with tariffs from multiple countries what that means for farmers and your wallet when "squawk box" returns. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated.

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welcome back, everybody. mexico, china, and india sl slappisla slapping tariffs on u.s. apples. our seema mody is looking at the impact on farmers. seema, what do we see so far >> apple farmers across the region say the triple threat of tariffs from china, mexico, and india will cause serious damage to their farms and their business we're here at chryst brothers

apple orchards they harvested 20 million pounds of apples last year and they've been expanding their farm to accommodate growing demand from foreign buyers but if the onset of tariffs and the potential oversupply of apples in the domestic market go up, it could put many here and other orchards at great risk >> the margins are already pretty thin to begin with. razor thin in some situations. if that falls a little bit, we're looking at an unprofitable situation. if that happens, we stop investing, we stop buying equipment, we stop with hiring wages. if it goes on long enough, we'd eventually go out of business. >> and the pain would be felt across the nation. new york is the second largest exporter of apples behind

washington the fastest growing nes ining international market for apples, guys, india. it's a thriving, growing market for u.s. apple producers from coast to coast you take that market away or add an additional tariff and that could significantly hurt their bottom line. farmers' bottom line here in hudson valley. let's also talk storage. unlike meat and cheese that you can put in cold storage until demand picks up, apples have a relatively short shelf life. they spoil after about a week. farmers are going to have to take care of this inventory that will come to market in about a couple weeks' time there is one storage option here it's a high-tech storage option that is relatively expensive it preserves apples for about 11 months don't ask me how the science works. it's something about limiting the amount of oxygen that gets

to the apple but that is one option farmers here are looking at especially given the ongoing uncertainty around this trade dispute. >> when you first said that, the idea of preserving them for 11 months but it sounds like it's not preservatives. it's just keeping oxygen from getting to them. they would still be the same apple not filled with preservatives to get to that point? >> i believe it's a mix of chemicals but also a cold freezer option that farmers can look to that preserves the apple and slows down the aging process. it also suspends the apple at some degree or direction that, again, will just slow down the aging process. but that is something farmers are looking into again, razor thin margins is something they're already dealing with so looking to a storage option like that would significantly increase their costs as well. >> all right thank you. we're going to see more of you throughout the day seema mody we want to thank ed lee for being with us this morning one thought on the cbs story

before you go? >> so i think succession planning is key for this company. they need to figure that out sooner rather than later even with the allegations, there's a lawsuit he's engaged in with his parent company he could be out because of that already. once they get that figured out, i think it'll be an important thing to know about. >> do you think there's a settlement >> yeah, i think shari redstone -- i'm sure the redstones want to trial before it gets to trial >> do you think that les -- >> oh. you know what? it's hard to read him now. he's going guns blazing on all these elements whether it's with these allegations or taking the parent company to court >> ed, thank you for being here. when we come back, we'll talk about what's next for cbs also don't forget, folks today is jobs friday big number coming up we're going to talk more about that number. we are getting to the point we are about an hour and a half away from the jobs report which elusbo t ilaonnfti and what to expect next from the

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moonves sticks to the script the embattled ceo of cbs delivering an upbeat message about the company's future and avoids the elephant in the room. a sexual misconduct allegation jobs front and center. we are less than 90 minutes away from the number of the month we're going to talk markets, the economy, and what you can expect when the data hits plus peloton is spinning its way to success we'll talk about the latest round of funding and how they're disrupting the fitness landscape. as the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, new york, this is "squawk box. >> good morning and welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square brian sullivan is in for joe kernen today joe is back next week. take a look at u.s. equity futures at this hour let's show you what's going on a lot of this may well change at 8:30 we will get the jobs number which may turn things in all sorts of ways. dow looks like it would open now about 22 points higher nasdaq up 12 points higher s&p 500 up about 2.5 points higher the president has not tweeted yet about whether he thinks this number is going to be good or bad. mind you, if you get a moment, there is a piece in courts today that they got all the e-mails of the people inside the bls e-mailing each other about

president trump's tweet two months ago and it's fascinating it is a fascinating story to read >> was it -- can you summarize it >> i will come up with -- >> did you send it to them >> e-mail is evidence. >> what are they saying back and forth to each other. did you do it? i didn't do it did somebody show it to him? >> we'll go to it in a second. we have other headlines to bring you first, but it is a sight to behold meantime, the other sight to behold, apple shares hitting a trillion dollars modestly lower this morning in premarket trading coming after they surpassed that big milestone. a trillion dollars in market value. only three other companies are remotely close to that level we talked with dom earlier about this google, apple, microsoft, and amazon if there's a list of those in waiting, those are the ones. they have market values of $800 billion to $900 billion right now. so they could get close. we're about 90 minutes away from

the july employment numbers. expected to show the u.s. economy added 190,000 new non-farm jobs last month the unemployment expected to drop to 3.9% from an even 4% in june we're playing the game on twitter. if you have a guess, a vote, a number to put out there, tweet it to us becky also want yous s cayou toi the average hourly earnings. >> the increase in that. >> average hourly earnings, the increase you see in that >> we need all numbers to play the game general motors seeking a tariff exemption for the buick envision that model is built in china it would be subject to tariffs on chinese imports most of those vehicles are sold in china it was business as usual for les moonves on the conference

call yesterday with little mention of the harassment allegations. julia boorstin joins us with more on how that call went down. >> well, becky, les moonves did not utter a word about the allegations of sexual misconduct or the litigation with shari redstone and analysts didn't ask about it after investor relations said the scope of the call would be limited to quarterly results moonves instead focusing on the company's better than expected 8% earnings growth take a listen. >> as you can see, our strategy is clearly working our base advertising business is strong, and we continue to grow new revenue streams from all the licenses and distributing. key to the success is the expansion of our direct to consumer services across entertainment, news, and sports programming and internationally as well. >> moonves announcing that the company's streaming services are

growing faster than expected with a new target of 16 million subscribers by 2022. they have 24 pilots in development for cable and streaming services such as amazon he also talked about the opportunity created by new rules around sports betting and said they're interested in buying more stations. now that those rules and limits have been loosened again, throughout the call, not a single comment on either the investigation into the sexual harassment allegations or the legal battle with redstone becky? >> julia, thank you very much. joining us now with more on this is william cohen he is vanity fair's correspondent and cnbc contributor. also mary uhl-bien welcome to both of you william, why don't you just weigh in and tell us what you think. maybe not a surprise to see that cbs tried to run the conference call this way, but what questions are left >> oh, obviously, becky, there

are a lot of questions left. i think that's what these law firms that were hired to provide this investigation obviously that's going to take time they're going to be deliberative they're going to spend a lot of money. they're going to do everything they can that's going to take months. and of course people want answers now. they want les moonves to show contrition they want him to -- >> or explain what happened. >> you know, you have to be realistic about some of these things he's the ceo of a company. he's not, you know, on-air talent he's going to be deliberative. he has an 87-page contract there are all sorts of ruling in that contract that both sides have signed about what he can be relieved of his duties for for cause. and if he has good reason for leaving, he gets a huge payout so this is going to take time and to expect anything different, i think, frankly, was

a little naive and wishful thinking >> hey, bill the stock market has already weighed in it's not waiting to see what is happening with this. what would you say given the stock is down about 9% right now, what do you think investors are thinking with this are they acting it's already resolved and he's not there? >> i kind of disagree with that a little bit too the investors are reacting to, okay, if les has to leave which may be inevitable, i don't know. >> i don't know either but there's going to be something that comes from this >> what they're worried about is -- >> we don't know who's running the place afterwards or what happens. >> they're worried about shari is going to force a deal with viacom and they don't want that deal she's intent on doing it for family tax planning purposes and i get that that doesn't mean cbs shareholders are going to like it >> right mary, you've been watching situations like this for a long time maybe this is a little unique when something that comes up -- i mean, it's hard to try and dig

through all of the different story lines going on behind this nobody cares about the earnings at the moment though there are some big overwhelming issues they are trying to weigh through. >> no question >> mary, what do you think happens just in terms of board expectations at this point what should the board be doing what do you think of the plan they've laid out so far? >> well, i agree with bill that there are a lot of issues involved with this one i think it's interesting compared to other cases we've seen, how slow the board response has been. that is different. that's unusual compared to other -- things that were happening in the past. even if you look at urban meyer at ohio state right now and the fact he's on paid administrative leave, the response is usually quicker. you could make the case that they were being careful and cautious and going to investigate. but i think that the investor call last night was really problematic. i think there might be some pushback from this >> what signal do you think it

sends? >> well, i believe people were looking to see that it was not business as usual. and that was clearly business -- >> who do you think is going to provide the pushback i think -- the one fascinating piece of this and bill is absolutely right about this, les moonves is not the on-air talent, if you will. and as a result the people who are going to hold him accountable at least from a commercial standpoint are the investo investors. if they said we're not going to do business with cbs anymore when you talk about why certain things have happened over time, they've been done, you'd like to think for moral reasons. more often or not, they've been done for commercial reasons.

>> yeah. i mean, andrew, you're right >> i think the push has to come -- the push has to come from the investors which it's not. they were clear about that >> that was the analysts >> and the advertisers have not done that yet. or from consumeconsumers it's much easier to delete your facebook account or uber have else than to stop being a customer of cbs. >> you know, it's also the analyst community did not come off like shining stars last night. i know they were told not to ask any questions, but nobody bothered to even try to ask a question about these allegations. even vis-a-vis the stock price >> they could have been a little creative, i agree. although les has talked about that and he's talked about joe ianniello who was on the call being his successor.

so they could have gone about it in a nuanced way we can talk about what people wish they should do or hoped they would do or why didn't they do these things, but they are employees by and large of big investment banks and whether there's a separation obviously now of -- >> look. the journalism community would love them to ask these questions and they could get a nice headline and be praised by us. but they would look subserve i can't. >> they don't need to say, did you do it. they could say these allegations have damaged the stock price, by how much they could have asked in a creative way >> but i'm also suggesting that if you -- again, whoever was going to go do that was going to ask the question as much for themselves as they were -- >> and succession is a fair question that's something investors want to know at this point. i guess the answer, bill, is we

don't know who's calling the shots at this point or where this is going to take us the answers you get on that call may not be the ultimate end game anyway which is what investors are scratching their heads about at this point. >> i think it's very legitimate for the investors to question on this this is a major issue for the company. i think it sends a terrible signal that they didn't do it. in many ways, you can look at this this is pervasive throughout the media and cbs. we saw the charlie rose case last year as well. we can argue the board may be complicit in it. they know this has been going on it's clear that there have been cases in the past. >> we don't know exactly what the board knew that would be my question. jim stewart wrote a very good column this week laying out questioning what the board knew and when it knew it. we heard a report yesterday from the los angeles times saying they knew about a police investigation that i think was later dismissed. but what should the board have

known and what questions do you have on that front would you agree with mary you think the board is complicit or is this a different situation? bill >> oh. i think that there were rumors about this story, about ronan farrow's story for six to eight months i think to his credit he went about it in a very stealthy way. normally when somebody's working on a story for that long, it starts to seep out into the sphere of where people at the company might start hearing about it they did not apparently hear about it except for the rumors of it. so i don't think they thought it was, perhaps, coming maybe that's a fault of theirs and maybe les said, you know, maybe they didn't want to confront les about it or whatever clearly the board voted 11-3 to

proceed with this lawsuit and issue these dividends that would dilute the stake in the company by the redstones he had the members in his support when they last had a vote it's not clear what the board knew and when they knew it now they're going to do this investigation and they're going to spend a lot of money and they're going to do it libertyiliberty i -- deliberatively >> all right, bill, mary, i want to thank you mary, go ahead >> thank you i was just going to jump in and say -- i was going to say i think that's true. and if you look at the case of "house of cards" last year with kevin spacey, sometimes you can act too quickly and have to back track. it's now more at risk management versus crisis. it's okay for boards to take the time to really process through it but they have to signal that they are being serious about this that was my concern is they're not signaling.

>> bill and mary, thank you very much appreciate it. guys, hollywood reporter yesterday saying there's another farrow article about to come out in a week or two on moonves as well guys, you might have heard about this jobs number coming out today. will unemployment dip back below 4% will there be a trade trickle down effect? will the president tweet about it ahead of time we'll look into it as "squawk box" rolls on.

welcome back to "squawk box" talking about wall street. taking a quick look at the futures right now as we set up for the day. all of this, we said in about -- well, a little over an hour. it may change based on the jobs number right now looks like the nasdaq would go up 16 points, s&p 500 up 4 points. iran has been defiant and seems ready to re-nuclearize their program. if they did, what would happen to the price of oil? managing director, global head of commodities at rc markets and overall nice person joining us on "squawk box." halima we've talked about this

extensively. right now like the trade war, it's a lot of talk, not a lot of action if the navy were to inch toward the strait of hormuz, what would happen to the price of oil >> obviously if you have any u.s. ships within this climate, that woulgd put upward pressure on prices. the question is how high would it go? this is all really a relevant discussion on monday the sanctions on iran will snap back we're probably going to look at tougher rhetoric and action over august and september >> in terms of global oil supply, how many barrels of oil will come off the market obviously we're not going to buy them we're telling our allies not to buy them but does that mean nobody, china, won't buy them? >> china was out this week essentially saying we're not going to recognize u.s. sanctions. we're not going to reduce our iranian barrels. but importantly the chinese also said we're not going to increase

our intake of iranian barrels as well so the question is can the trump administration get almost everybody else out of the market i think you can get europe out of tmarket i think they will reduce, they may not go out entirely. the question is as we get to the end of this year, are we potentially looking at a million iranian barrels off the market now, opec has responded very early. we've seen opecproduction up 340,000 barrels. that's putting a lot of pressure on brent right now but the question is, is this surge from opec going to be enough when those iranian barrels start to roll. >> answer your own question, halima >> i've said before on this show i think this market will tighten at the end of this year. if we look at what's happening with venezuelan production, it continues to decline rapidly so i think the combination of venezuela falling and the

aggressive efforts to curtail iranian exports, i think that is going to tighten the market. right now we're in this period where opec has been the first responder. they've put these barrels on the market but we have yet to see how much is going to come off from iran but i think it's going to be very significant all signals are from the white house that they are being very tough with foreign refineries, they're going to their banks, going to the insurance companies and saying do not support the trade in iranian crude >> halima, if you're right and the oil market gets tighter and prices go up, we've already seen reaction from the president tweeting about it when prices get higher than he'd like. does that lead to any counterreaction from saudi arabia or others are they going to bend to his complaints and try to do even more or can they do even more? >> i think the trump tweets have actually been very effective and compelling opec action i think those tweets were the

catalyst for opec changing their policy at their meeting in june and putting these additional barrels on the market. but the question is at a certain point if we're looking at where saudi production is right now, they're almost at their record high they can take additional barrels from storage, but they are sort of reaching because they're at near-term limits in terms of what they can do so the question really becomes for the trump administration if prices were to get pricer into midterms, would they tap the reserve. i think that's what we want to be talking about in countermoves would you have stockpile releases from the united states. i think they may have gotten almost all they can out of opec in terms of these tweets and in terms of the diplomacy between washington and riyadh. >> halima croft. thank you. see you soon >> thank you when we come back, a preview of the july jobs report. then john foley of peloton keeps

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♪ good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site at times square toyota reporting best quarterly profit in two and a half years the company earning $6 billion for april through june quarter exceeding analyst forecasts. toyota was helped by higher sales and lower expenses in the

asian markets. we are awaiting the july employment report. we'll hear from them in about an hour there are other economic numbers set for release this morning the june trade deficit coming out at the same time the employment report is out there's a measure of the u.s. services economy at 10:00 this morning. also take a look at shares of symantec right now they're falling in premarket they gave a weaker than expected earnings forecast for the current quarter and lowered its yearly revenue forecast. also announced an 8% cut in the global workforce that stock is now down almost 11% this morning swiss re's officer says major hurricanes are now every ten years, not 100 like they used to be they're still reeling from the

costliest year on record following a series of fires and hurricanes and earthquakes more than half of the total insured losses last year were due to hurricanes harvey, irma, and maria. he expects the occurrence of multiple powerful hurricanes to become increasingly common in the coming years for more on that story and other headlines, check out cnbc.com. peentime, we are counting you down to the number of the morning, really of the month the headline jobs added number and the unemployment rate will get all of the glory and the headlines. but let's go deeper. who better to do that for us than steve leisman who joins us now. >> thank you another strong report expected as markets wonder, two factors begin to show up in the data tariffs and worker shortages there could even be one in this report quote, we expect nonfarm payrolls to rise by 175,000 on

the month. this would represent modest slowing from the recent pace of hiring and could reflect increasing concerns over protectionism. that is not the view on the market here are the top lines we're looking for. maybe we don't have that chart there. but if we did, it would say 3.9% unemployment down a tick the hourly wages up 0.2% is the expectation. don't ask me what that means june nonfarm payrolls 213,000. but it doesn't matter. you're in that 200, 190, 215 it's all in that range there related data heading in pointed to strong gains including low jobless claims and adp we brought you on wednesday. meanwhile a lack of skilled workers is the number one complaint of employers >> why don't they train people instead? >> i think they're doing some of

that i think they've been conditioned in a pavlovian way to rely on states to provide the training i think a lot of businesses haven't been geared up for many decades. they're looking to local community colleges we don't see a whole -- i don't think they're geared up -- >> for a private/public partnership. they're out there. the trouble is i don't think -- we did one remember we did the louisville thing where they were trying to get talent at the high school level. i also think that they need to internalize it as well there was a lot of competition between municipalities and it covered things where a southern state would woo a northern company. part of that was always this job training thing

>> 125 years ago, only like 12 rich dudes went to college and somehow the economy grew we did apprenticeships we've got to back to that kind of thinking. also hire some felons who are nonviolent who are pushed out because 20 years ago they did something stupid >> but let's think of the transmission of a horse and buggy versus the transmission of a car today. right? we didn't need people to go to college to do the transmission in the horse and buggy >> but the horse may have kicked you. >> you needed to know a thing or two about horses but now you need to know how a computer controls horsepower the companies are now more complex. i don't want to get back on my horse again. >> high horse. >> on the trade thing. but everybody says these jobs we lost, the point of economic growth and progress is to move up the value chain you want to give those other

countries the dumber stuff, the lower value stuff while you do the higher value stuff and that's how we continue to maintain our edge. we don't want to bring back -- now, some people may want to do those jobs as you guys were talking about earlier, there's the factory they are so different. you know the old joke. the factory of the future will have only a dog and a man in it. and the dog -- the man is there to feed the dog and the dog is there to make sure the man doesn't touch anything >> i don't know that old joke. >> it's an old joke. >> it's a russian proverb. >> if joe were here, he would bid economic humor >> there's nothing wrong with a bit of that in the morning joining us now is j, you betterg your economic puns seth, what are you looking for

today? what are the key numbers outside of the headline stuff? >> we are looking for a strong report we're over 200,000 we're at 207,000 the u.s. economy is just fundamentally strong i think the earlier report that was cited that tariffs might weigh on things, we're looking for that later in the year >> we don't have tariffs yet not many there's a few. >> that's exactly right. >> not much has been implemented yet. not a lot of stuff >> we think that's right by the time we get to the next round of tariffs on the next $200 billion from china possibly now given the events of this week, that's when you really could start to see some hit to employment. >> let's say we get the 25% on the $200 billion more. a lot of people think we won't, but if we did would you immediately and urgently ratchet down your numbers? >> we've already done that based on the assumption it's coming in at the 10% level. >> what does it take off >> we're getting down to 150k.

remember 150,000 jobs per month is not terrible that's not a recession but compared to where we are now -- >> and the average would be 190. so i'm thinking -- your base case -- it's early i'm doing the bad math if we got that 25% on the $200 billion, roughly you would estimate that would shave off 50,000 jobs from the economy in the fourth quarter every month >> probably even more than that if it goes all the way up to the 25%. >> jim, if that occurred, what would happen to the equity markets? what would happen to the bond markets? >> well, i think it would -- i think it's going to accentuate a challenge we do have in the second half. i think we're going to see both the economy slow down in part because of tariffs but also because of what people are focused on a lot which is how much monetary tightening we've done we've doubled the yields across the curve in the last 18 months. we've slowed the money supply in

half from where it was in 2016 we've flattened the curve. we've raised commodity costs including energy cost. real wages have been negative, fallen in the last 12 months there's a lot of negative forces, i think, that it's likely to slow growth down to 2.25% the second half. that's not on wall street's radar at the moment. if you put that together with any continued problem, maybe tariffs promote it any continued problem of rising costs and inflation pressures, i think that wage number to me as it has been every month, the most important number for wall street that's a dangerous combination in the second half >> we know this is a president maybe unlike any ever or at least recent memory. but also he referenced the stock market more than other commander in chief we know he's made comments about the fed. if we start to see the trade

effect hit the stock market, do you believe this is a president that would pull back from that commentary because in some ways he seems to view the dow as a reflerction of how his administration is doing. >> i do know it has to do with setting someone up as a fall guy if the markets struggle. he can point to the fed rather than take criticism from the trade approach >> jim, i just want to interrupt you for a second i think -- i disagree with one thing. i don't think the market's going to care. the market may even welcome taking 50,000 off of the job growth i think the market cares about profits. if companies start to report that profits are lower because of tariffs, that's one story but, you know, and joe has sat here for a long time saying, hey, that's good the tariffs take a little bit of the heat out of the economy,

slows it down. i think there's a lot of problems to that as a policy tool i'm going to throw this question to seth. seth, would the market welcome the idea that job growth was a little bit slower? >> i'm skeptical that the initial reaction would be to welcome it but if we do get this economic hit from tariffs happening in the fourth quarter and if it plays out as quickly as we think it will, you're going to see a sharp deceleration the fed's going to be able to see that before the december meeting. in our forecast, no. after we pulled on board this escalation in tariffs, we have them skipping the december hike. >> i'll show you the probabilities out there now. we're looking at 90% for september. we're going ahead to i think it's 60% or 65% for december and then there's a pause built into the market until june so you're saying that could -- keep the fed from doing another quarter point hike. >> if we're right about this and the imposition of tariffs coming in at the end of september shows up really

quickly and could reflect itself in the jobs numbers, spending numbers. >> you think it shows up quickly in the jobs numbers? >> we do so there's a chunk of these categories of imports for which china is 40%, 60% of u.s. imports. if that gums up some of this renaissance in manufacturing we're seeing in the u.s. economy, you could see much faster -- >> did you guys write that report i think it was ubs i'm sorry if it wasn't. >> if it was good, it was ubs. >> when you say non-linairty, it moves up and not down. >> somebody used the same phrase this morning l there was an out sized response. they used that to say you can't use the stuff that none of the models are good enough to know how the economies react to the

changes. >> another good example back in may, there was a fire at an autoparts producer in ohio, i think it was in terms of the overall value of the trucks it contributes to, small value. but it shut down for three weeks across a bunch of ford facilities the production of a vehicle. that's the kind of non-linearity we're talking about. >> let's make that the word of the morning. >> it is >> it's the weakest link in the china. >> jim >> steve, i was going to say i think there's too much attention on tariffs i think they're not going to have as big an impact as people think and not enough attention on the other negative forces that we've applied on this economy. we've had an incredible amount of monetary tightening and it's also happening globally a big -- you think the weak housing statistics of late have to do with tariffs i think it has to do with monetary tightening, for example. i think the real risk, you know, if we slow down an inflation and cost pressures back off?

i agree with you, steve. the market could react bullishly. but if we slow down and we still go through 3% wages, 3% cpi, and 3% 10-year, the investors all have a problem >> on the record there jim paulsen, seth, thank you appreciate it. when we come back, spinning and success. investors have taken notice. the company receiving a fresh round of funding we'll talk to the peloton ceo john foley right after this brk. eaquk box" will be right back. ♪ it is such a good time to kiss ♪

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all right. welcome back to "squawk box. happy friday good friday morning. the futures right now are up 74 points. a pretty nice turn we have seen. basically flats we've seen the markets maybe anticipating andrew some good numbers for the jobs number. or simply ratcheting back trade fear concerns. or it's friday and the computers are happy. >> we will see we will see. meantime, we have some big news out this morning on the market's hottest fitness brand spinning and streaming company peloton announcing a $550 million series of financing.

ceo john foley also saying an ipo, quote, makes a lot of sense. he's here now. we can talk to him about that. we should mention that cnbc's parent company comcast is an investor now in peloton. we think of you as a hardware company, meaning hardware in terms of the bike or this new treadmill coming out but you're really trying to turn yourself really more into a media company. >> absolutely. we stream 12 hours now actually 24 hours because we have the blue camp studio in the west village we stream 24 hours of live television content around the world every day. we have 10,000 classes on demand it is a media company. akin to a netflix. interestingly, our round was led by a guy who's been on the board of netflix for 20 years. so really good money not just -- >> netflix spends $8 billion a year on content.

you're not planning on doing that >> our investment in content is in studio. we're going to develop the best digital studio in manhattan. we're going to announce one in europe as well so we have foreign language coverage. but we are investing these areas. then the classes go into the on-demand libraries. >> for those uninitiated and to me this was a new spin on this we all think of you as a bike company or this new treadmill that's going to be coming out. we were talking during the break, brian was talked about this idea. he already has a treadmill but it's not just that you have to get the treadmill or you have to have the bike to actually be able to use the service. you're now going to be able to use the service on our ipad or on tv. >> 100%. you're right there are 17 million treadmills

in america today you can down load our software to your ipad, in a couple months android as well, so you can poud stream a live or on demand boot camp class onto your ipad or iphone throw it up to your tv in your home gym and be consuming one of those classes from new york city on your existing hardware. you're right >> so the question is what is the defensible mote around this business you can go online and on the phone and there are lots of folks who have apps. there are a lot of people who are trying to create or are having -- this is a little bit like the infomercials for the dvds except you're doing it live >> that's right. it is a crowded category for just the streaming digital what we have is the scale across our own hardware and other

people's hardware. we can invest more heavily in the best content because we're going to scale that content, that investment across our own hardware and across other people's hardware. >> my other question is, and i think this is a first. you're now actually allowing the equivalent of a financing arrangement for the hardware so this treadmill is typically a $4,000 purchase, but you're going to be able to get it on a monthly subscription basis >> that's right. last week we announced a $58 per month bike the treadmill coming out next month -- >> with no initial purchase? i have your bike it was 2 grand plus $39 a month. >> the $58 a month is to get the hardware >> so $58 plus the $39 >> and the $109 for getting a $4,000 treadmill, best ever

made >> going to the iphone model all about the monthly payment. >> here's my question. how long does it take you to amortize the treadmill or the bike because i'm assuming that if i had the bike for two years -- can i get rid of it at any time? >> yes >> it's great for the customer but when i want whatever the new bike is in a few years, then what >> if brian wants to sell his bike -- >> it's slightly used. almost mint condition. >> if you were to sell it tomorrow for 1700 bucks because there's no supply in the aftermarket, you could sell it and we would get a new subscriber with zero cossack we sigs >> that's actually a good deal it is jobs friday. i want to ask about jobs we all have my favorites my wife's favorite is cody trainer. i won't tell you mine.

we all have our favorites. is it hard i've been to your studio, by the way. because i wanted to see how you filmed it. then you can watch yourself in the class you record which is creepy maybe i'm the only one that did that >> probably. >> can you find trainers is it more like these are fitness gurus? and they're all in great shape >> they've all become celebrities. they're on instagram and everything else. you have to pay them more. >> we are getting the best instructors in the world to come to new york city or eventually london to be on camera to your point where making them global celebrities. we're trying to create the best place to work in new york city instead of being a hyper local celebrity where they were, now they're becoming global celebrities. >> very quickly, you make a lot of the product in china and taiwan what happens with tariffs? what does that mean? >> we're keeping an eye on it like all manufacturers you pay a tariff already

if they get hiked, we're anxious about it we don't want it to take place obviously it'll eat into our margins a little bit luckily pal ton eloton -- >> meaning you'll eat it >> yes >> are you bringing manufacturing back here? >> we're talking about it. you know, we're not announcing it today but we are talking about it. >> you going to do stuff like that in the future >> we'll look.

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all right. you better start pedaling. we have the jobs numbers coming. all the analysis you need to know coming. check out the numbers ahead of it dow up 68 points. happy friday we're back after this. 6,000 feet above sea level. but how do you really know that the beans journeyed to the port of mombasa and across the pacific? that you can trust they're 100% authentic? ibm blockchain. a smart way to track every step, ensuring this coffee did indeed come from 6,000 feet above sea level. and not a foot lower. ♪ ♪

jobs in america. just 30 minutes to go until the july employment report we have an all-star panel ready to react and tell us what the number means for the markets, the fed's next move, and much more. plus, what about politics? is a brewing trade war having an impact on the picture here at home find out as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick. ahead of the jobs report, we are watching the futures it is just a half an hour to go

before we get the report to find out what it means for the fed and stocks today and the treasury market, you can see now the futures indicated up about 55 points. s&p futures up by close to six points nasdaq up by about 25. right now let's introduce the jobs panel christina hooper is here austan goolsbee is the former cea chair and the professor of business at the university and mark grant is the chief global strategist and managing director at b. riley steve leisman is here too. he's going to weigh in on all of this let's start off talking about what the markets are doing today. christina, i'm going to start with you we're waiting for this number. but obviously we're a little focused on what's been happening with the trade talks too that's been a huge impact on china in their stock markets not as much here what do you think is really happening? >> well, actually, i don't think markets have reacted enough to

concerns about protectionism if you think about it, the last time we saw this was in the late '20s, 1930s. so it's very hard for investors to have a frame of reference as to how destructive this could be frankly, i don't think enough of the fear is priced into markets even though you could argue that they certainly have been suppressed >> and a lot of market players would say, look. this isn't something you can figure out because we think it's a negotiation at this point. we think this will not actually come to fru wiition. >> the reality is some tariffs actually have been put into action already and it seems as though the administration is hell bent on continuing to push forward with a very aggressive trade policy >> mark, i know you've been watching this closely. what do you think the end result is >> becky, my view is a little bit different. i think we're in trade negotiations i wrote a tongue in cheek piece recently which you get comparin

president trump to john white. i think what president trump is doing is he's saying, hey, pilgrim. now see this six shooter and he puts it on the table saying it's loaded, what do you want to do and that's the way the guy negotiates i think it's going to end up being a negotiation, not any kind of trade war. >> maybe it's more of a clint eastwood, go ahead, make my day. >> make my day. >> so you think the negotiation is one that ends because it's too painful for china to follow through even though they're so focused on saving face back home >> i think china are tremendously over leveraged. you can look at the numbers they release and maybe yes, maybe no. but i think they're in a very difficult position right now and i think they will do their best to save face. but i think they're going to back up way before we ever get to any kind of a trade war with them and by the way, i think that

europe will do the same. i think there'll be some negotiations there'll be some price adjustments, but i do not think we're going to have a trade war with europe or china >> austan, this is supposed to be a jobs panel and i hijacked it to talk about trade and other issues let's wrap it together you get trade, the economy, all the things we're following, the jobs report today, and the fed's got to be adding all of that up and thinking what? >> i think the fed is mostly thinking what they've publicly been saying. they think the economy is quite strong and they can keep raising rates as much as they want to try to get us back to normal i think for the smaller group inside the fed, it's still a little nervous they're wanting to know did a strong quarterly gdp number which followed the first quarter mediocre gdp number, is that a sign we're on some higher sustained rate or is this thing coming back

down to earth because of some of the temporary stuff on trade so they'll probably be looking at this job number somewhat closely. if we're growing at 4% on a sustained basis, we're going to have job creation numbers 200,000-plus also on a sustained basis. and so i think this one will at least have some bearing on what the fed is thinking. >> so answer the question what austan just brought up the higher numbers we've seen on gdp, is this sustainable or is this a short-term issue? >> i don't know that we all know the answer to that my sense is we're sustainable for the short run until we see more -- maybe more fury than fire when it comes to tariffs. but obviously that could take some bite out of things. the tax cuts, the question is when does some of that wear off if it does wear off?

those are still open questions for now at least until the end of the year, i think we're on the same trajectory. until we reach a neutral policy rate and then maybe they pause and reassess i fundamentally think things are a steady trajectory between now and the end of the year. >> i want to point out, mark, if this is a negotiation, i've been talking to several negotiators they are right to point out things with the barriers to entry. but they can't think of a worse negotiator than president trump. and they point out three areas specifically one, he goes after everybody so he goes to the fight with no allies he goes overseas and has pissed off everybody domestically so he doesn't go overseas with domestic consensus for his policies and three, he does so in a way -- he negotiates in a way that leaves his negotiating

partner no out that they can't think of a negotiations or a series of negotiations that has been less sensitive to the domestic considerations of our negotiating partners than president trump. and they point out that, for example, trudeau and canada might have been close and might have even given signals of conceding on the dairy issue but after the series of tweets from the president, trudeau's popularity rose and he cannot ever, never concede on the dairy issue. so it may be a negotiation, but it doesn't seem to be one that so far has been fruitful >> my response would be, as you said when you started your comment off, you were talking to former trade negotiators and the former trade negotiators for the united states under president obama and prior presidents dealt with things in one particular way donald trump is a very different kind of person like it, not like it

and he negotiates if you read the deal, he goeshnegotiates exy like the art of the deal he puts the six shooter on the table and says here it is, fellas and then after a period of time of going back and forth, he ends up with some place in the middle which is all he was trying to get anyway >> look, let's remember, john wayne was a movie actor. that wasn't a real negotiation that was a scripted thing. if you look at this, donald trump has not achieved anything in these negotiations. even in the things he tries to claim -- >> just some headlines hitting from china the chinese government says it plans to slap import taxes on about $60 billion of import items from the united states it says the measure is to guard its interest and keep trade frictions from escalating.

also says the import tax rates range from 5%, 10%, 20%, and 25%. and says it will immediately impose the import measures if the united states slaps on china imports which is rset to go in right about now. >> does that fit your bill with gun on the table >> yeah, it fits my bill with the gun on the table going to go back, forth, back, forth. then finally they'll reach some midterm grab i understand that john wayne was an actor but i'm just pointing out to you the way he dealt with things even though, it was a movie -- >> you were just tying it together we get that. i understand that all the talk these days about trade and tariffs, they're important however, we seem to have fror forgotten what is more important for the immigration policy you ultimately have to fill

positions and to also create new companies. how is this immigration policy and debate gotten so put on the back burner and replaced by trade and tariffs? it ultimately isn't immigration. more important to long-term job creation than trade or tariffs >> well, it's probably because the likelihood of solving immigration is as close to zero as you can imagine there are serious divisions on the republican side of the hill. obviously the democrats see this as an opportunity for political leverage there really is no incentive for either side to give up the political gainsmanship on the -- >> because every ceo that comes on cnbc says they cannot find workers. that's a small company to the biggest company in the world nothing about the tariff or trade fight is going to solve that problem so instead of solving a problem -- the problem is not enough talented people we're not dealing with that. we're talking about trade and tariffs. how do we solve that and get more people into the workforce so steve leisman can sit here some day and say 400,000 jobs

created last month >> you're right. trade and tariffs, these issues are 2018, 2019 problems. the immigration problem is a long-term issue we face in the united states. if we don't get this immigration system right, we'll have serious long-term challenges challenges to growth, challenges to our ability to compete internationally, challenges to our ability to be innovative that's not how the building behind me here thinks. they're thinking about the short run, political impact of this issue on the midterm elections which are a few months away. they don't care about the long-term. that's precisely the problem and why this issue never gets solved >> but immigration is a longer term issue we're not seeing that wage pressure yet maybe we'll see that today but the reality is the more immediate concern is trade i understand what mark's saying about the gun on the table, but the gun on the table creates economic policy uncertainty. and that is the big issue. that's what we're seeing coming up in the manufacturing survey comments, the federal reserve beige book comments.

there are a lot of business owners out there that are very worried about it they've already said they're scaling back or curtailing entirely investment plans. and that is a real problem so it may be a negotiating tactic, but it creates uncertainty. >> i don't want to use the term collapsing, but it's certainly creating a weak chinese currency which could lead to a currency war much less a trade war. >> there almost is one if you think about the trajectory of things they put the tariffs on the currency devalued which offsets the impact, right? then you had -- it was only subsequent to that that you had the comments about interest rates. and that interest rate comment is effectively a currency comment. because the fed's trajectory on interest rates that keeps one of the things that keeps the currency robust. so if the fed were to back off, you'd have an easing of the

dollar so this uber comment by the president that the fed is undoing all that we've done and that has to do with both reducing, i think, growth because of higher interest rates. but also the effect of keeping the currency buoyant in the trade war. there's this sort of thing already happening. i think what the president's finding out is a trade war is a lot more complicated that perhaps -- and it's worth pointing out i heard the other day the president's advisers told him this was jamie dimon said this president's advisers told him there would be no retaliation. i would point out that our cnbc fed survey said there'd be retaliation and it was -- and, again, getting at the idea of this win/lose negotiating tactic, there is no choice on the part of trade partners to put on retaliation >> and china can play the long game right? we have a president for life in china versus a president that is really living until the midterm elections. >> the thing is this is like -- this is like the guy that comes

out and says, you know, you do as i say you light my house on fire, i'll set your house on fire then the joke's on you, my house is smaller than your house both of our houses are still on fire that's our problem if we get in these trade wars >> that's a little better than the economist humor we heard earlier. >> i have no problem with using the fires, the guns. i just think it's a very long way from having to pull that with, first of all, the allies that's how we won the cold war with the soviet union. i'm like, this is europe this is not the soviet union this is not our mortal enemies this is our ally they went from zero to defcon five >> you went from 0 to 60 to defcon 5 >> i switched it we are about 15 minutes away from that jobs number. we will be back with more of our

panel shortly. kraft heinz topping estimates with latest earnings and revenue. the company saying it expects profitability to improve by the end of the year. separately reporting that kraft has exploratory talks with campbells soup although kraft has not made an offer and is not likely to pay much of a premium for campbell then cbs reporting better than expected earnings and revenue after the close. but shares are trading lower this morning ceo les moonves did not address allegations of sexual misconduct against him during the company's earnings conference call we talked a lot about that this morning. and blizzard beating on the top and bottom lines the video game publisher did have revenue below consensus coming up, help wanted trucks are the life blood of american commerce. what if all the big rigs were packed with goods from amazon and there was nobody to drive them kate rogers joins us with that story. >> we will tell you all about

that labor shortage in the industry and what it takes to get new drivers on the road coming up after the break on "squawk. we all want to know about the new thing.

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more than 70% of all freight tonnage in the united states and they were all on the new jersey turnpike at the same time. but, boy, the industry is facing a growing shortage of certified drivers. kate rogers is live with the latest monthly installment of her series >> hi, brian good morning the industry is currently short about 51,000 for-hire truck drivers. companies are pulling out all the stops to attract and retain new workers including sign-on bonuses, loan repayment for their training, and more flexible scheduling. this issue was so acute, it caught the attention of the white house. take a look. >> and here representing the american trucking associations we're committing to 50,000 new opportunities over the next five years. >> that's big stuff. >> reporter: for dan england, former president of the american trucking association, the truck driver shortage isn't just an industry problem it's personal as he looks to find drivers for his family's fourth generation trucking company. >> right now about just a little

under 6,500 drivers. and gosh, if we had 500 more right now, we'd be very grateful >> reporter: the shortage has a ripple effect. impacting industries from retail to construction. and while the industry grapples with the driver shortage, a brewing trade war also stands to negatively impact the sector the ata says nafta trade generates over $6.5 billion for u.s. trucking companies alone. >> any interruption in that, anything in the dynamic or the relationship between the countries that would affect that is going to harm a lot of people we'd like to see the status quo remain >> reporter: beyond that nafta trade also directly employees -- any disruption in that relationship is a big concern to companies all across the country. >> let's talk quickly about the challenges in finding drivers. because the pay is actually pretty good. you listen to cnbc on the radio

and you hear advertisements, 100 grand a year plus $25,000 signing bonus. why can't they find workers? >> so brian, obviously this is a really tedious and tough job. you could be on the road for a long time. sometimes at age 18, people will go into a different industry and they won't return to trucking. that's another big issue there's congestion as you mentioned not only in new jersey but all over the country there's more freight than ever so there's also more cars and more trucks on the road than ever there's a lot of dimpfferent challenges that's why you're seeing multipresidemult multiple raises in a year. in order to keep drivers interested in the job. there's a lot of factors at play here >> great stuff as always especially on a jobs friday. thank you. >> okay. coming up when we return this morning, stocks to watch plus the countdown to today's big number the july report now minutes

away stay tuned you're watching "squawk box" here on cnbc hey allergy muddlers.

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it is now officially time for predictions from our panel we are just minutes away from the big number christina hooper what is your number? >> 205,000 we've got strong growth. tax reform is helping the economy. i expect a big nonfarm payroll number >> okay. >> austan goolsbee in chicago? >> i think 179,000 i hope christina's right but i think we might cool a little bit from the highs before >> do you want to add any additional information like we can go into other stats if you'd like, other metrics >> the real wage has actually been falling for the last year so not that optimistic on wages. >> all right lanhee chen? >> i think wage growth is also relatively flat. the more important number for fed policy going forward

>> okay. mark grant >> i think it's going to be 200,000 to 210,000 >> we're not doing ranges here >> okay. i'm going with christina then. 207,000, whatever she said i'm with it. >> okay. >> and i should add, wage growt i expect 2.8%. >> steve liesman >> 214,000 >> 214,000 says the model. >> i don't agree with the "price is right" rule you want to be plus or minus -- >> on for god's sakes. rick santee lee? >> where is bob barker >> 237,000 >> my b.s. prediction, 131,000 weak sauce >> we should take a look at futures before we go to this so we can track and see what happens afterwards

take a quick look right now. you're going to see that the dow futures are up by about 37 points s&p up by four the nasdaq up by 14. maybe we'll look at the 10-year note as well also check out where that's been trading. right now it looks like it is sitting at 2.98% this is all before that big number kayla tausche is standing by at the labor department >> becky, 157,000 jobs that was the nonfarm payroll addition for the month of july the unemployment rate ticked down to 3.9% that is the lowest since may as for wages, average hourly earnings for all employees rose 0.3% over last month. as for production of nonsupervisory employees, that rose just 1 cent over last month. for both of those, 2.7% is the increase over last year. as for revisions, both may and june were revised upward job gains for may increased by

24,000 job gains for june increased by 35,000 after revisions, jobs gains averaged 224,000 over the last three months as for the sectors that saw the biggest increases? professional and business services saw an increase of 51,000 jobs. manufacturing saw an addition of 37,000 jobs. and hospitality and leisure saw an addition of 40,000 jobs retail saw 7,000 jobs added on net. but that was a net number that accounted for a loss of 32,000 job losses in toy, game, and hobby stores black unemployment rose slightly to 6.6%. labor force participation rate, 62.9%. and the real unemployment rate ticked down to 7.5%. back to you. >> okay. kayla tausche -- >> wow >> wow wow is all i have to say we want to get right back to our panel for some reaction.

what are you looking at before we go? i was going to christina, but what are you looking at, lies n liesman? >> not much on the wages front i guess the earnings -- the main thing i think is the revisions the revisions tell you the job market was a bit stronger than we thought the three-month average which was coincidentally equal to my prediction is now higher it's 224 it was 214 going in. so the three month trajectory is higher i don't see too much in terms of saying the job market has meaningfully slowed. pretty good dispersion here. also temp help up as well. it's in the range. it's in the range. but i also think it's not as hot as people had thought. >> what would have a goldilocks number have been >> this is >> we should say the futures now have come down a little bit here >> well, a goldilocks number

would have been between 180,000 and 190,000. but i would argue this is not a bad number either. we should expect fluctuations month to month this could be revised upward by next month the reality is the economy is on a strong trajectory. there are risks looming. we're looking in the rearview mirror now and we need to be looking forward. >> to steve's point, austan, say this was 33,000 below consensus but june was revised up 35,000 you add them up, you get 190,000. manufacturing jobs jumping dramatically more than 300,000 new jobs in manufacturing have been created over the last 12 months 518,000 in professional and business services. this is a strong economy even if the headline number did not match consensus. >> i hope that's right >> it's right. >> as i've said all along, you don't want to take one job number or any one number as a trend. you want to see a lot of them.

taking an average is a better idea now, job creation is still going pretty well but has slowed compared to where it was three years ago. so the last 18 months are slower than the 18 months before that part of that's natural because we're running out of people. you know, if we get misses like this and i predicted, you see on the chart, i was the closest because i thought we're getting a little cooling down. if we get multiple months of this, then we might -- the fed might have -- start having to reconsider >> lanhee chen, is the fed going to reconsider? >> i think it's steady as she goes that wage number 2.7% year over year, that's about what we expected slow we're not seeing anything here i think is completely out of the ordinary that would allow the fed to alter course between now and the end of the year. obviously disappointing to the

downside is never good, but we'll see what this number gets revised to >> is this a bad news/good news situation? is that what's happening again >> it's what we talked about earlier, andrew. to be clinical about it, the market doesn't care about job growth only as a sign of -- >> yes >> and the markets shouldn't care the market is not a person, not a thing. >> we spent the last hour talking about job growth >> if it's a strong number in terms of that what i mean to say, what i'm looking at here, i'm trying to see if somebody could look at this thing and see some impact of trade and they don't see how they would see that manufacturing 37,000 these are good numbers >> i'll find it. i'll help you out. the pace of growth as far as my little scan here can tell in terms of wages and jobs added, the pace of growth is starting to slow slightly how about that >> i'm trying to think where we would see it in the individual

sectors. and if i could see it over a three-month trend or even a two-month trend, i can't see it. we did hear from mark zandi yesterday that perhaps certain multinationals, some of the bigger companies are out there and may be hiring a little bit less i would be a little skeptical of that until i saw a trend on that >> that sentiment is down for those companies as well. so i think we need to follow that closely but for right now, things look good i just expect that business investment will slow we've heard just such a chorus of concerns about tariffs. and people already saying that it's changing their business investment plans so i think it's got to show up in the data. >> mark grant, you've been talking about the potential trade war for quite some time. your take on these numbers >> my take on these numbers is a question of methodology. you're just seeing big increases in the may and june numbers. consequently it's likely we'll have an increase on the next report

disappointed i think this is a little lower but again, you have to look at the increases we just got may and june which takes us back into about the 200,000 person number >> it's crazy because this is all on the margin of error, anyway, steve, when you start talking about -- >> your 95% confidence level is plus or minus 100,000. we will revise it next month we'll revise this in the subsequent month and we'll revise it all in about 12 months and redistribute some of the stuff you've got to be a little careful. that's why we step back and look at the three-month average which i also think is strong you have strong job growth and it can be weak for any one of two reasons. >> any one of two reasons? >> one, it could weaken because of the trade, but it could also weaken because of worker shortages. okay and it really burns me up when i see people go off of a single number of anything from the household survey

for example, you had a decline in people entering the workforce. last month it was 600,000. this month it's 105,000. do you really think we had a 500,000 -- no, no. that's not the way it's working. there's a lot of seasonal stuff in here. but we do have an influx into the workforce. some people are coming off of the sidelines. it's a good thing. >> i think it's like the housing market which you referred to earlier. housing numbers are going to be weak going forward, i guarantee it because there's simply no inventory. you can't have existing home sales go up if there are no homes to sell. if there are no workers, how did we get that solved we talked about immigration policy if we don't have new people coming in to fill these jobs, why would we ever expect job growth to show up? we still have and let's not forget, 1.4 million people who have been on unemployment for six months or longer how do we still get people off the sidelines and into the workforce? if we don't do that, we're not going to grow.

>> i mean, the flip answer is we the business community raise the wages for people and that's what pulls them off the sidelines so the puzzle here as you start talking about worker shortages, why are they going down and not up >> the flip answer to that would be that health care costs are going up so much that companies are giving you a raise it's just in health care they can't give you more money in your may check. >> total employee compensation isn't going up that fast either. so that's perfectly valid hypothesis but we have the data to check that out. >> let's bring rick in for a second rick, you had been on the high side, my friend. i think you were at 237,000. >> that's because i see forward into the revisions, actually i should stop doing that >> good answer >> i love brian's comments from top to bottom. he wins the prize in my book construction spending,

manufacturing. these are all good things in terms of the revisions, listen there is not a material slowing in jobs. and the only way the housing market can reflect what's going on in the jobs market is if the realtors find a way to cover up 95 million houses and not -- pretend they don't exist anymore. we have plenty of employees that are going to come back into the workforce. a tenth better than last time. and the 2.7% year over year, we've had a zillion of those that is definitely the default rate don't see a deterioration there. yes, it's a little light but it certainly isn't reflecting some big slowing. can't see anything in tariffs there. i have a microscope the size of new jersey still can't find it. what i can find is all the equity markets are close to all-time highs interest rates hardly flinch there. actually, the short end sold off a little bit meaning the fed

probably still has two intersections with green lights. >> this is something interesting. i'm getting this off twitter kayla tausche said this and i wanted to point it out there was an offset of 32,000 in the toy stores toys r us stores that were liquidated that might be the reason the number missed the consensus. so good shoutout to kayla tausche who may have been indirectly pointing that out >> who knows >> anyway. rick, i appreciate that very much what -- >> let me just point out the trade gap widened. i think some of that was expected in the earlier trade report we get the preliminary trade report that's why we'll be looking for an effective gdp on that i don't have the table in front of me. there it is. 46.3 billion was the gap i think that was close to expectations

but that may have the bigger impact on gdp. exports were down a little bit and imports were up a little bit. that's how we got the wider trade gap. >> we're going to thank our panel for playing along before and after the numbers. always good to see everybody thank you. we'll be doing this again, like, in a month all right. coming up, jobs in america former vermont governor howard dean will join us to look at how a trade war could impact employment here at home. futures right now as andrew said earlier have come down they were up 80 or 90 points they're now up just three. so the market coming back a little bit on the numbers. we're back after this.

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z . welcome back to "squawk box. take a look at the futures we were in the green the jobs number out. we're going to talk a lot more about that it came in lower than expected dow looks like it would open off about four points. nasdaq, though, remaining up about ten points the s&p 500 up about two points. brian? we just heard the latest jobs number for july let's bring in our next guest to talk about the economy, trade, and much more. he is former governor, presidential candidate howard dean he's a guy that sits always in front of the same wall of books. i'd like to know what those books are, governor. but that's a different issue your state really an interesting sort of window into america. right? kind of rural, but it's got some cool industries as well. it's got pretty good employment, but yet i know a lot of businesses out there have

struggled to find workers. a lot are seasonal type work how do we get this job market reinvigorated? how do we get more people into the market >> it's pretty clear look, i'm not going to look at this through a political lens for a change capitalism works best when everybody's benefitting. we are still at a place where workers are underpaid for what they do. wages are historically low relative to what corporations and people are making. so our job shortage, worker shortage is not a product of seasonal unemployment and seasonal employment and all that stuff. we just don't pay people enough money. and one of the problems is that we're a small business state small businesses always have trouble keeping up with wages of large corporations we're not much of a large corporation state. we have a few big corporations,

but not very many relative to the mix and some of the other larger industrial states >> your other is 2.8%. that is effectively full employment most economists will tell you you're darn close to that. the only way to get a new worker is to pay that worker enough to he or she would move for that position why do you think companies are not raising wages? maybe they just don't have the margins. they can't >> i think in vermont, there's some truth to that they don't have the margins. the other issue is there's a number of people who could be in the workforce but aren't some of them left the workforce a long time ago when economic times are much worse they're not coming back in at the rate we'd like them to some of the squeeze on families are things like child care if it costs a lot for child care, and you have a choice between being in the workforce and not, you may not be able to be in the workforce because you may have to stay hope home and

take care of your kids there are a lot of factors that go into this generally you tend to see new england states with low unemployment rates lower than everybody els. but there are some in vermont people not back in the workforce. >> you have three people on this set that have young children -- children that are young. under 6, 5 years old i've got a 3-year-old. becky's got a new baby as well as other kids. >> yeah. >> and i love what you're saying it's not what you make, it's what you spend you know, and you look at the cost of child care you don't have to be a freaking harvard ph.d.. if you're a working family to say, i make $30,000 a year and pay a thousand a month on day car, then uncle sam, then i've got all this it doesn't make sense to work because i've got to put my kid in day care all day long how do we fix that problem especially so we can get people back in the workforce? that seems like a lot easier one than some of the other things we're talking about. >> well, the problem is that

costs money too. and some of the things we're talking about cost taxpayers money and people are reluctant to spend taxpayers' money. they don't like paying the taxes. there's another problem. one of the others we had when i was governor here was our taxes were too high. you know, i'm a democrat, but i'm fiscally conservative. >> did you say taxes were too high democratic governor dean >> yes >> i quit. >> there are a lot of people in cnbc land that may not remember how conservative i was when i was a governor about money we had a aaa bond rating and still do as far as i know. you know, i -- but when taxes get too high, then it's hard for businesses to do the expansion they need to do. you always have to have a balance somewhere. i think taxes are probably too low on corporations. i would have cut the corporate tax if i had been president. it would have been to 21%. it's going to come back and bite us in the butt sooner or later so this is very, very tricky

stuff. i think the right play is pretty much down the center in terms of economics. >> i'm sorry if i could get that stay-at-home parent whether man or woman back to the workforce because they're not spending 25% of their income, you know, on child care bargain. >> right it is but, you know, that's the trouble is from the big picture you're absolutely right. that somebody has to pay the cost of that it's going to be the taxpayer or the business owner and as individuals they don't want to pay the costs. then we get into the system we have now historically the government solution is the better solution. if everybody is in it together and you get the politics. >> are you bothered by what you see in terms of your party if you listen to bernie sanders, if you listen to the upcoming folks out there who don't worry about how to pay for these things i'm optimistic about the future of my party. it rides on the backs of people

who are not democrats which is kids the republican party is undergoing what it's undergoing with becoming the party of trump and all that the democratic party is undergoing a huge change younger generation is taking over our party if you look at the results in virginia it was shocking we've got 69% of the under 30. so these kids, these young kids are very liberal on social issues and inclusion and diversity and the environment they are libertarians economically at heart. i think my party has to undergo a big internal change after the next election. i think most of the people will win the new seats are probably under 40 some will be under 35. >> governor, great to see you. thank you for joining us today. >> pleasure to be here when we come back, cbs shares are trading lower this morning. analysts not pushing ceo les moonves to ask any questions

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moonves. it was business as usual, despite the headlines. julia joins us with more. >> that's right. les moonves didn't touch the two big issues hanging over cbs. and analysts didn't ask after the company said on the advice of counsel the call would be limited to quarterly results instead, analysts and moonves focussing on the company's stronger than expected earnings growth and news that streaming services cbs all access and show time are growing faster than expected with 16 million subscribers by 2022. moonves talked about political to advertising and legalized sports betting driving higher rating and advertising to possibly buying new stations but in a number of analysts notes out this morning, the allegations loomlarge.

the reremains is cbs remain a compelling investment without moonves. not a question about a succession plan on yesterday's call over to you. >> thank you all right. coming up full recap of this morning's big jobs number that has taken down the futures a bit. and "squawk on the street" more on cbs more on les moonves with jim stewart. my ambition is to get my 8 hours. because a head full of work... a husband who snores with gusto...

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[music playing] (ceo) the employee of the year, anna. (vo) progress is in the pursuit. audi will cover your first month's lease payment on select models during summer of audi sales event. if you missed it, the economy added 157,000 jobs last month. that was a little more than expectations the unemployment rate 3.9% you can see the futures this morning. the dow turned negative. right now indicated down by about 16 points. s&p is looking like it would

open flat and the nasdaq up by just over three points ten year yielding 2.971% not far off from what we saw before the jobs report. hope you have a wonderful weekend. brian, thank you for being here. right now it's time for squawk on the strooelt. -- "squawk on the street" good friday morning. welcome to "squawk on the street." dow futures had about 60 point lead but lost it as the july number for jobs coming in light. 157,000. break down the numbers as we also watch reports of new tariffs from the chinese on u.s. goods. europe is hanging on the gains 10 year yield eases back to 2.97 the road map begins with a summer