♪ >> live from new york where business never sleeps, this is squawk box ♪ >> good morning. welcome to squawk box here on cnbc live from the nasdaq market site joe is here. he's officially back and morgan brennan is here. this is a first time for you in for becky quick. >> it is. >> welcome. >> first time to the three hour ordeal that is squawk box. >> the ordeal. it's, you know, it's a descriptive word. >> party. >> descriptive word. >> just wait >> party is just starting. >> normally we don't have rootbeer sodas but. >> floats. root beer floats our cliff hanger tease right there. >> are you ready >> so ready. >> love a cream soda.

>> what about with vanilla ice cream in it like a root beer float. >> a cream soda float. do you like it better? >> i think i'm truly a rootbeer. >> where i grew up we had it not a and w back then but they had a great history too. should be interesting. >> everyone is going to get out their root beer floats early in the morning. >> i think they're not low cal and i like it with a straw i don't know where we are on that now. >> i read that you're still using because you're worried about your teeth with the carbonation or something i saw the twitter stuff. i see the most bizarre things. i saw you do some other stuff too that -- my viewers, i don't know, they're going, actually. >> might be too. take a look at u.s. futures on this monday morning. it's been a heck of a weekend. lots to discuss on trade right now dow could open off

about 3.5 points nasdaq about 7.5 points. overnight in asia, let's show you what has been going on right now the shanghai composite there down about a little over 1% a little bit of a -- a little bit, a lot a bit depending on where you stand with trade issues with china and tweets over the weekend and how china may be reacting. european he inquiries the at this hour. you're going to see it's pretty much across the board and treasury yields up this morning. briefly when you were out, the ten year notched over three. >> didn't hold though. >> all morning long. >> pretty small gain. >> small gain but moving these

down on trade jitters. >> by the way, it's not just china who focus with trade but it's also japan with the nikkei ending down fractionally today one of apple's biggest suppliers was just hit with a major computer virus it's back up and running and shutdown several factories friday night and hit by a virus it blames the issue on the installation of new software and not on hackers usually prepare for disruptions. that's the other thing that happened last week >> my point was apple five years ago is going to be the trillion dollar -- and everybody else was also one of the people that said i'm not so sure and mentioned

some of the others and based on what analysts are going to say should have been there three or four years ago. it's nine times earnings and look at where the other ones are. who would have thought that amazon would be within spinning distance at the same time. it's like 880 or something isn't it microsoft 850. i don't think the stories that everybody else almost got. no one thought microsoft, 200 or 300 billion was all of a sudden going to catch up. theoretically if this tech rally continues, there will be three or four trillion dollar market cap. we're going to look at over five years. alabamason vers-- amazon versus apple. >> you think amazon. >> absolutely. >> dramatically up more than 25

million. >> do you see this goldman report over the weekend? >> buy backs >> no, how everybody thinks the entire market is concentrated in these four or five stocks. >> it's all computers too. >> but goldman says no they think it's much more broad based which is good news for the economy. for those of us that want america to be great, again. >> you're really good at this now. >> thanks. >> you're on -- you're like on a triple a team somewhere aren't you? what you do you do now >> i do squawk alley at 11:00 a.m. eastern. >> cutting your teeth there and now you made it to the big game. >> it would appear so on this monday morning. >> excellent you seem ready with that -- >> well, we still got a long way to go here. >> i'm very optimistic. >> it's good that we're strong out of the gate here like a horse race i guess. >> in other corporate news the next ceo of goldman sachs is

starting to put his team together he is naming jim esposito global co-head of the division. it could happen as early as today. >> goldman, keep saying it over and over again said it about six times and it's 6:05 hsbc posting a small rise. it's renewed focus on developing in emerging markets is paying off but the company is setting aside 765 million as part of a civil settlement with the justice department or the sale of toxic mortgages, the u.s. before the financial crisis. you're kidding still all the way back then. time for tbtf. soft bank's first quarter operating profit rose 49% as the company cashed in on several investments including the sale

of its stake eak in india's fli card to walmart. and beating forecast, underwriting profits at geico rose five fold and benefitted from higher demand for shipping and car dealership financed more purchases. >> bull market could soon become the longest in history at least by one measure and joining us to make sense of the market milestone is mr. santoli. >> a series of milestones. seems like it's all in the air right now. not just the fact that by some measures we're going to reach the longest ever bull market mer merrill was talking about this last week. when the s&p goes up and doesn't have a 20% decline which means we're pushing more than nine years here but other milestones would also be of course we're coming up on the tenth anniversary of the

financiacrisis crash there's going to be a lot of talk of hoe at $1 trillion so all of this discussion of the milestones seems like it brings up the question is how much more is ahead and i think you can answer each one of these in-turn and basically the bull market at the longest ever is subject to a lot of different interpretations a lot of folks will say in 2010, 11, 2015 you had these very sharp corrections that more or less did the job of a bear market and we didn't start making new all time highs in this bull market until 2013 so the clock might not have started in march of 2009 so that basically says this pull market is young for its age if you want to call it a nine going on ten years bull market the other one is the ten year gains since before the absolute pit of the crisis are really not that extreme basically thereturn of the s&p is 10.6% that's good. that's the long-term average but normally you're pushing 15 or 20% ten year trailing returns so

you haven't gotten all of that stretch over these ten years and the trillion dollar apple thing you have to put it in context. one of the things is just by inflation and the size of the aver all market apple's size is not extreme. in late 1999, microsoft is $620 billion at the end of '99 at 30 times sales and 70 times earnings that's the equivalent of 950 billion right now relative to the size of the market and inflation apple should be here it's at four times sales and whatever 18 times trailing. >> that's been the point, right? it's the trillion dollar value play essentially. >> it's the value play and just a trillion dollars is 4% of the market and the largest stock in the market was often much bigger than 4% of the market. >> but if this gets rerated as a subscription oriented nonhardware business, think of it. >> it would be enormous. everyone is premature in saying

that's going to happen i they bolsters the valuation but doesn't mean we're going to transform this thing into adobe because everyone thinks it's a magical subscription platform. >> the software is tied with the hardware, right? >> always. the hardware is the addressable market. >> adobe. >> adobe is an amazing stock and everybody decided that's the model they want to follow in terms of getting everybody on subscriptions. >> it's still fresh in my mind when apple is going to introduce a phone, i have a flip phone motorola that's so cool. why does apple need to make a phone? i look at my kids and the world now and everybody is walking around with a spare computer that they would have had on their back and it changed the world. >> totally did so the benefit of that it's going to last more than 11 years. >> but it wasn't just an add on product. it is apple. that's what i think about.

>> totally. >> and this is viewed in a political backdrop at times. if you go back to 1999 and do the compound rate of return, we had -- >> s&p was 1500. >> you go up from there it's like 4% a year it's been a below average return from 1999. now if you go to 666 at the financial crisis lows then it looks like a great -- it's gone nowhere. >> if you start the clock at the craziest moment in history for stock valuations, the returns aren't great from 1929, when did you get even in the 50s >> if you look at ge at the bottom of the financial crisis at 5.5 a share. >> it just depends on -- >> no, absolutely. it's all the frame. >> so your last thing you did a lot of work on that. >> i did a lot of work two months ago i said the market

looks like it's going to pull back it did. >> but if you're going to do this microanalyzing, where are we now with all the trade stuff, this is killing peel that wanted the market to go down because of the trade stuff. we're 2505 on the dow. >> this is not a very trade dependent economy and the companies are -- >> so where are we are we at a santoli pause or ready to go higher. >> the buys are not in the market is not showing you a lot of energy right now but it's pretty well supported. >> this week. >> this week, no idea. >> that's what you were going with >> the next 3% is probably down not up that's what i said. >> what about now? >> buffet says don't swing if you don't like the pitch. >> let's bring in megan green. global chief economist

and head of investment strategy at proshare advisers megan i was looking at some of your notes that's where i came up with dog days there's not a lot of data points that we're going to see, are there? but the cpi number coming up that could be at least headline could be interesting i guess >> yeah so it's not a super busy week particularly in the u.s headline cpi will probably stay con stabt constant at 2.9% what's interesting about that is that we just got average hourly earnings last friday and that came in at 2.7% again which means that you'll have headline inflation running ahead of average hourly earnings so workers are going to be falling behind which is never a good thing for the economy so even though we had this incredible gdp growth people aren't feeling it in their pockets. >> i feel like we didn't get the bang for our buck because of the

revisions. if we had known on the previous two reports that they were going to be revised 59 -- whatever it was -- those would have been unbelievable reports that came out at that point. so the 154 which looked disappointing, you factor in those revisions, i don't know. i just felt like we didn't get the bang for our buck for how strong in this late cycle economy it's incredible. >> so it is incredible although i think that the quality of the jobs is much more important than the quantity so i tend to ignore that headline figure absent of some huge aberration anyhow much more important is the wage growth data and it turns out that we're adding most of our jobs in the sectors that produce the stuff that we are con sewelling which is fsewel -- consuming which is far and away services so even though we're adding tons of jobs even this late in the

business cycle, we're adding them at the bottom of the pay scale so on average i think americans aren't feeling like this recovery is really benefitting them a whole lot and that has social and political implications. >> i'm going to push back on that a little bit because we also saw big numbers again in manufacturing. 37,000 i believe last month. >> 500,000. >> so those are typically higher paying jobs. are you saying that services is, you know, having a more outside defect than those obs? i'm going to go to earnings. to the point about the market you see it in earnings results

the s&p is only trading at 17 times 2018 because we have 25 or 27% earnings growth but to the point value stocks had almost the same growth as the high flying tech stocks but it's tremendous support and the economy is doing fine. >> and maybe this idea that we'll start see this great rotation to value. is that where you think investors should be focussing more right now >> tech stocks are stretched on a relative basis but it's the support for the whole market that's important at this point and also the one thing that we're seeing lately is a rotation away from small caps. small caps get a little bit of a head wind from raising interest rates because they're quite leveraged so as much as anything if you're going to stay on the small side you need to focus on quality. so may not be a deep value rotation but a quality play to make sure that you're still getting the earnings growth.

>> are we ever going to see data points that indicate that the trade war is going to come home to roost in terms of stock prices and dollar bonds. >> because they're counter factual. we don't know where they would be otherwise without the potential for the trade war right now, where would the market be. that's one of the most interesting. >> 25,400 is up like 35%. >> yes, i recognize that what i'm suggesting is you would have thought that the tax cuts and everything else -- >> you would not have thought that you didn't think that -- you think the market would be 15,000 anyway you would not think -- now you're saying it would be higher. >> that's a whole other story. >> are you on the train yet? we have to go back to the train? the train is down in the cayman islands. it went through florida and into

the caribbean. >> you have taxes on one side. you have trade on the other side. >> simion do you believe this? >> trade wars haven't dub anything yet they have to get a lot worse to really start to hit corporate earnings most of us are crossing our fingers and think it won't be that bad. >> you were predicting gdp up 5% and not on 4.1 think if the trade wars weren't happening. were you predicting 5% >> i'm so glad you're back from vacation. >> all right thank you. i got, i mean, i got overload too. >> i know. >> back up. >> i know. >> it's a shocker. >> you leaving too. >> i'm gone. >> carry you through. >> yeah. okay we got a lot more on squawk this morning including rootbeer floats we'll explain that but in the meantime real estate prices in

the hamptons taking a dip but the new tax law is partially to blame. details about that and a lot more when squawk returns in just a moment hey allergy muddlers. are you one sneeze away from being voted out of the carpool? try zyrtec®. it's starts working hard at hour one. and works twice as hard when you take it again the next day. stick with zyrtec® and muddle no more®.

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the median price dropped by .3% from just over a million last year. 975,000. that's under a million bucks this is not a home video head winds for buyers in the 1 to $5 million range. proposing limits on deductions of mortgage interest and state taxes. this one is not mine. >> just walking around. >> no, we talked about, what was

it the echos in the hallway. >> what do you mean was i around for that >> of course you were. >> that is a 1%er problem. having an echo in foyer. >> marble is very porus. >> you look healthy. >> could be the make you. >> over the weekend. >> we were out in the sun a little bit but i try to stay out of the sun as you know always wear sunscreen. >> that's good i don't think the sunscreen pills work. >> sunscreen pills, they do not work i have read about this it's a scam. you weren't in the city over the weekend. >> i was not in the city over the weekend, no. >> am ai getting warm, north, east, south, are you going to give me anything you weren't at your hamptons house? >> i wasn't at my hampton's house. i wasn't on the yacht this weekend. >> were you in connecticut. >> we were in a cottage.

>> this was a secret location with dick chaney did somebody comp you this where were you. >> we were with friends and had a good weekend in the sun. it rained over the weekend. >> it did. which is why we're going to keep this moving, daylight savings time might be coming to an end in europe permanently. it started with a consensus among people in finland parts of which are so far north they spend some of the year in never ending light or daylight making daylight savings virtually useless. they're required to observe it on the same dates ensuring seemless work and travel across the block. it could take awhile for the eu to come to a decision. i'm going to pull a brian sullivan and say raise your hand if you think daylight savings should go away. >> no. >> oh i don't like it. >> are you kidding me? >> no, not for me.

>> i look at this as another example of trying to fit a round peg into a square hole with the eu they don't even have a scentral financial economy and now they have some places it's light for 24 hours and other places, nothing works. it's a hodgepodge of how many different, you know, cultures and countries and you wonder why it's come lallapsing italy, are you worried about italy? >> no. >> it's beautiful but it's -- >> the food. the food. >> i know, the wine and the three hour lunches. >> it's a great place to visit not necessarily to live. that's my take on it as somebody that was just there recently. >> it's awesome. >> this one is -- you're going to think that i'm like kidding doesn't look like a super hero

action figure. >> russia has appointed overweight hollywood actor steven segal as a special envoy for tie with the u.s., segal's new position is unpaid and meant to deepen cultural art and youth ties between the u.s. and russia segal was -- man buns -- he was granted russian citizenship in 2016 russian president vladimir putin personally presented him with his russian passport the actor vocally defended putin's policies including russia's annexation of crimea. he also criticized the u.s. government we talk russia, i mean, are you going to tie this back >> i won't make a trump joke i'm thinking of one. >> i would make a dennis rodman joke with north korea. he's the russian equivalent.

>> who are you going to call ghost busters? dennis rodman, steven segal. it it's katy segal too. >> great actress. >> she actually is a great actress. >> and a great american citizen no less. >> who. >> katy segal. >> is she? >> i don't know. >> coming up, chinese media calling president trump's trade policy wishful thinking. we'll get a live report from beijing. that's next. as we head to break here's a look at friday'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. >> 6:31. good morning half hour no doubt among the stories front and center, firefighters in northern california continue to battle what has now become the fifth largest wildfire in the state's history. it's the so-called mendacino complex fire a pair of fires scorched 266,000 acres of the counts.

the twin infernos destroyed 68 homes and threatened more than 16,000 more structures in that bizarre story we keep references out of venezuela over the weekend, officials said it was an apparent assassination attempt on its leader from at least one drone it all unfolded on live television speaking at a military ceremony. you can see his body guard rush forward with ballistic blankets that they had right there to protect him. venezuelan officials say explosives allegedly dropped from drones. and the trump administration reimposing sanctions on iran today. these are some of the sanctions that were lifted under the nuclear deal they include autos, aircrafts and medals and they're saying the sanctions are going back in because iran is the largest state sponsor of terror. u. s. futures at this hour,

barely green up 14 on the dow up 11.5 on the nasdaq and up 1 and change on the s&p. and as a result you can get bigger moves at times. they say the adults really aren't afraid. >> that's even in the busiest time anyway. but isn't it -- do you expect it -- >> we have had late august operations if you will before with the markets >> it can move there can be some big moves. >> meanwhile, let's talk china chinese media blasting president trump's trade policy calling it

a street fighter style, deceitful drama of extortion and intimidation eunice is in beijing this morning to tell us how people really feel. >> thank you so much they said that other countries would not play along with president trump's script throughout the weekend the state media has been on a complete tear saying that washington lost it's mind and warned that white house economic adviser larry kudlow that the trump administration shouldn't underestimate china's firm will to win a protracted trade war. now the pr blitz follows china's threat to impose tariffs of its own on all american products that come into this country if the u.s. does follow through with it's plan to tax $200

billion worth of chinese goods the chinese tariffs would cover an additional $60 billion of some items and range from 5% to 25%. in response, larry kudlow described china's threat as weak also president trump had weighed in with some tweets of his own saying that the tariffs are working and helping to get the chinese to talk to the administration now it's unclear, though, whether or not the u.s. and china are actually talking, at least seriously, because the chinese already expressed that they want the white house to have a point person who they could deal with. specifically on china issues and also they have been saying that they're much more wary about president trump's approach >> eunice, thank you for that. helps us understand what is going on there but we want to talk about what's going on here right now with trade tensions. i want to welcome leland miller. our other china trade guru

good morning to you sir. >> good morning. >> what do you think is really happening? >> president trump is absolutely willing to keep going. so if there's a chinese retaliation, he'll move to the next step and then chinese respond and he'll move to the next step. in one respect -- you don't think this is all bluster? >> this is not bluster, however that doesn't mean they don't want to deal >> but there's a cadence to all of this. we're actually quite bullish it could be bad and there's a very clear deal if they want it. >> i'm assuming the government is effectively writing these editorials. >> they call it the papers and say -- do you think they physically write these things themselves >> they don't need to because they have been trained so much that you know what the party

wants to say to start with this is a very easy thing to write. they take different sides. it's not all hardcore but if the party wants to push back and show that they're ready to push back on anything trump has then that will be very clearly -- >> walk us through it because you suggested that trump goes here, china goes here but what does that look like in reality >> you have one coming in and it's in the process of going forward. we're talking about 25% and if the chinese though they're going to respond to that then trump threatens the next tariffs and a lot of the move from 10 to 25% was to push back and say you're not going to be able to devalue your way out of this or get around this. we're going to win because we have more ammunition than you. that's setting the table for negotiations where he says we

have the leverage. now to the come table and give us what we want. >> you said not ready to deal. do you mean there's a bigger vision in place with the trump administrati administration. >> that's right. what people miss is there is a trade strategy this isn't just shooting off the hip. the trump white house views the trade deficit as the creature of two things one china and the second autos part of that is coming to an agreement with mexico and canada and then you can move into dealing with china with more leverage the eu thing is hanging out there but one of the big baseball bats they might need is the threat of auto tariffs and people think they have been taken off the table. they have not. that was not dealt with in the statement. 232 is hanging out there and they're ready to announce

something when they think it's advantageous to do so. >> there's sentiment that we'll see a deal and tangible talks take place before the midterm elections. do you think that's realistic? >> i think we'll have nafta by the midterms the deal with mexico is se en l essentially done how do you get canada to the table? that's more difficult. >> what about china? >> the china deal is where the president wants it a lot of people think there's not going to be a deal there don't need to be signs we know what 85 to 90% of the deal is going to be. it's about deficit reduction and taking the 2018 numbers that are going to look bad for the president and getting a 2019 number that looks better and the sides will want it when it comes around. >> there's been a lot of focus in what's going on right now trading in bare market territory.

the other area coming and step in over the weekend. and tip over currency wars is that a real threat? >> i don't think it's a threat now unless you go ahead and goes forward and is implemented this is exactly what we told clients. there are 67 is not a number, 68 is not a number. 69 would signal it's depreciated under president and then the 7 handle is the big one and this idea that the chinese are going to blow past 72 and 74, you read about it all the time. you're not going to see that. >> thank you, sir, pleasure. >> appreciate it. >> coming up the president of the nba's milwaukee bucks is here to talk about the team's new arena. it opens to the public this month and then we'll talk about

it and the guest host will be tech investor. stay tuned we got a big couple of hours ahead. you're watching squawk box on cnbc at ally, we're doing digital financial services right. but if that's not enough, we have more than 8000 allys looking out for one thing: you. call in the next ten minutes... and if that's not enough, we'll look after your every dollar. put down the phone. and if that's not enough, we'll look after your every cent. grab your wallet. (beeping sound) (computer voice) access denied. and if that's still not enough to help you save... oh the new one! we'll bring out the dogs. mush! (dogs barking) the old one's just fine! we'll do anything, seriously anything, to help our customers. thanks. ally. do it right.

>> st. louis fed president speaking to cnbc europe about president trump's trade policy and pointing out hypocracy among america's trade partners they said countries that oppose the non-free trade policy should just drop all of their barriers to zeros, but they won't because they're protectionists. >> it's controversial that's for sure but i think the discussion that should be focused on what's the end state here the end state should be to reignite a global debate on trade. i think that has happened and to think about where we want to get to and what we want to get to is very few or none in terms of

tariff barriers or nontariff barriers to trade. >> they would be a better outcome to the whole world do you know what you got there >> what have you got there >> midwest common sense. you have to get out of, i'm telling you have to leave here occasionally, go to what you would call the fly over states. >> i don't call them the fly over states. >> icall them the best parts o america. >> since when? >> what he is talking about is what the ceo of harley davidson said to me last week as well t. fact that you have this tariff landscape throughout the world that's been unfair places like india where 100% tariffs on imported motorcycles, that they'redurable and it's not a free trade vierenvironmenn they'd like to see it get to that. >> don't act innocent here please you know, take down your trade

barriers and let's all go to zero, andrew, let's all go to zero can't we do that >> if you think that that's possible, plausible. >> did you see this movie yet? >> i have not but it's on my list. >> i saw it on vacation. >> how was it? >> unbelievable. >> mission impossible had a big weekend at the box office. it's called mission impossible fall out took hole the top spot second week in a row pair mou took in 35 million in the second weekend. just to give you a quick ranking, disney's christopher robin debuted in second place, something my kids want to see, bring in $25 million it stars mcgregor as the grown up christopher robin reunited with his childhood friends but back to the joe kernan review of mission impossible. >> when you watch action movies a lot of tiles if you focus in on the stars during the stunts

you can tell they're not even on die hard, it's not bruce willis in a lot. okay in this going through the streets of paris, 100 miles per hour on a motorcycle it is tom cruise it is tom cruise jumping at 25,000 feet out of an airplane and now i have, like, except for the scientology thing i have a major man crush on tom major, major, because he does all of these there's one scene where we know that he broke his ankle. >> he hurt himself. >> you can see him he gets up and he's like limping a little he finishes the scene i think. >> you think he keeps going. >> it almost looks like it but it's awesome i mean, once again there's some or something there's going to be a nuclear oblivion except for the mi guys and they have one like one second.

>> but there's less mi guys. >> the mi guys are good too. it's good. you have to see it. >> it's on my list. >> some violence though. >> what kind of curse words? >> guns and stuff. >> what about the words? >> not a lot of that. >> is it pg or pg-13. >> it's not r. but a lot of violence. people getting shot and stuff. >> we're trying to avoid that. >> i'm sure. coming up milwaukee's downtown has a new look thanks to -- right in the notes -- it's pfizer forum i don't know why we won't have the wishes of this guy not the.

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not a real positive character. anyway, time for some "squawk" sports milwaukee bucks about to officially open its $524 million, 17,500 seat arena they also struck a 25-year naming rights deal

the project is a center piece of a 30 acre development in downtown development joining us to talk about the new home court in the business of the nba, peter fagan that's what we were talking about. >> that's right. you made the negative connotation. >> no. he was crafty. interesting so marquette is going to play there. >> yes they'll have their home games. >> they're good already. i think that'll help >> it's great. they've got a good recruiting class. coach who's in his fourth year is excited it's important to have them in the house. >> i agree the more popular march madness in college hoops, now i'm interested in the bucks because of this guy that killed my xavier musk teeteers >> he'll play bro basketball

this year. that's for sure. >> naming rights it's 25 years with fiserv. it was negotiated by lasry's son? is that true >> well, alex is on our management team. but we had a group of people over a long period of time it's a complicated deal. you don't see many 25-year deals coming around anymore. >> they were initially i think fiserv but then metlife stadium it becomes synonymous with everything that goes onthere whether it's concerts or hoops >> it's a way to elevate both brands it's the brand on the building it'll be the brand across sports >> let's talk about gambling, the legalized gambling >> we can talk about it. >> adam silver even said this is important.

>> and really is on the forefront of adjusting on a league level which will start a road map kind of a data sharing deal. us in the league, it's following the league's example and really seeing what this road map is you know, today we all have a lot of local teams with casino partnerships, some online partnerships how this evolves is going to be interesting over the next year >> we've had west edens on and he says this is going to lift the valuation. >> i think it's a big revenue opportunity, no question, for the league and the franchises. you've got to think, there are tens of billions of dollars in sports books bets. >> is it direct or just additional interest and more intense interest in both the league and the actual games? what it could do for ratings >> it's both it's total engagement. and you're really capitalizing on something that's already

happening. and part of this is how we can capitalize as teams on the revenue side >> what's the most interesting debt you've heard about these days >> now on sports betting, it's got so surreal people are betting on who wins the tip and who scores the first basket to how many dribbles there are in a half. it's gotten -- it's way out there already. >> it's interesting they said that now that you worry about gambling and betting somehow seeping into what happens in the end. but they're saying the opposite might be true. you could see if something wasn't -- that the bookies would be the first to know if something wasn't happening purely based on sports that something was actually being gamed. they would know. so it'll actually help the integrity of the game. >> i think that's part of the tenants of getting nvolved >> maybe that's true anyway, good luck.

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trade war. president trump says tariffs are working and the u.s. and china are talking. a developing story video shows a drone assassination attempt on venezuelan president maduro. the government there now making arrests and a wider crackdown could be coming. the global implications straight ahead. plus bargain hunting the median home price if the hamptons dropping below a million dollars 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. welcome back to "squawk box" here on cnbc i'm andrew ross sorkin with joe kernen back from vacation. morgan brennan is with us. becky is off today look at the futures at this hour dow looks it would open up 21.5 points higher. s&p 500 up about 2.5 points. we do have breaking news, joe, though >> pepsico announcing narendra moody -- nooyi will step down as ceo october 3rd. jim cramer joins us now with more what's the background on this? >> i think miss nooyi felt she had spent a very good time -- you can only guess -- she beat all the companies during her

time as cfo and ceo. i know she wanted an orderly succession this is the best way to do it. i think she's going to focus on international right to the end and laguarta is going to take over he's got tremendous experience >> was this expected >> i think there were a lot of people who felt perhaps this is the transition year ever since she made someone a president last year, 2017, which may indicate why bother unless you think eventually you're going to have to go indra has always said to me, look i've got so many things to do. i want to finish up my job on a high which she sure did and move on to do some other things but of course let other young people in the ranks take over. this has been a remarkable consumer package, good stock during a period where we know most of them have been just

plane terrible >> jim, what do you think she's going to do next >> you know, i think she wants to do something that is more ambassadorial, so to speak she is a globalist i also know she is a family person plenty of time to spend with family she's been the one who's most vocal about how tough it is to be a mother and ceo. remember, she's always thought bigger than just pepsico she's thought more about sustainability she was the leader in that issue. i think she would like to be able to do something more with that but you know what? i think that indra will be known as the person who really thought long and hard about how to make food better for you particularly because she was someone who was dealt a hand of snacks, salty snacks that people would be like, fritos are you kidding me she's been the leader in trying to make food good but also good for you. that's what she'll be known for besides her shareholder return >> a lot of different toes,

don't they i like them all. anything in moderation, jim, right? doritos. tostitos fritos >> i think these will play overseas that's where the big growth is >> cheetos >> remember she introduced a million-dollar brand every year. and all of those products you mentioned are wildly, wildly popular. particularly overseas. >> still pretty popular. if you go to the carb-free route, i just wish there was something besides pork rinds that's why i still have a couple toes of some kind. whether it's a frito once in awhile >> jim, i have -- because i know you're going to see this headline today -- >> oh, gosh. >> no. in the s&p 500 right now has so few women at the top of companies, she is probably -- she is typically listed as either the most powerful woman in business if not the top three most powerful women in business year in and year out is there a comment on that

>> you know, andrew, i have two daughters. this is what i thought about last night when i heard about the move i said this -- she is the titan in the group we get fewer and fewer how is that possible you have so many company where is the person that does the buying in the family indra is a remarkable person to be able to be as balanced as she can with being a mom, a great mom, a great wife. also secondarily i think the person who runs pepsico -- i already see dr pepper up today but yes, this is not a good thing when it comes to the number of women at the top this has been a disastrous year, frankly. disastrous 18 months for that. i think we all feel bad. i obviously feel that this is something that should not -- look i don't want to call it a

national crises. but boy, i think it's going to reverberate. we're really going to have to start thinking long and hard about when a job opens up, a woman doesn't even seem to be in consideration very often >> one of the things i've noticed just about this -- morgan, i'm curious where you land on this there's always a thought if you could get -- it would therefore help create a culture where more women would have role models and therefore you would see more come up. one of the things that's so surprising to me is even in companies and you get a good example of this but you now have seen it in so many, the replacement is not a woman and even if you look at the management under them, it's not clear that it's somehow significantly more women >> you actually see quite a

number of senior and executive roles within that sector it's one of the questions i ask all of these women when i sit down and speak with them i know they are all very active in terms of that mentorship and implementing policies that make the workplace that much more attractive to women and encouraging stem not just at the high school level but down to the middle school and elementary school to get more girls involved the other thing i hear for many of those executives is they look forward to the day when it's not about the -- we're not there yet, but at some point, it turns into who's best for the job, right? >> that is true. jim cramer, thank you, sir >> can i just say, that was fabulous morgan. i'm so proud of people in the defense industry that they seem

very blind that i just wish that were the case more often instead of just all dads with daughters saying with -- i don't know maybe it's just not meant to be. >> jim cramer helping break down this news just breaking. india nooyi stepping down, retiring from pepsico. she is going to stay on as the chairman through 2019. in other headlines this morning, we are watching shares of berkshire hathaway. buffett's firm releasing quarterly results. beating estimates on both the top and bottom lines results helped by strong results in the insurance business. you're looking at that stock up 2% this morning. an $87 billion merger may be in jeopardy. linde says the ftc asking for more asset sales for the planned

movement with praxair. it was december 2016 when they struck that deal the two companies are now evaluating those requests. also turkey's currency has reached a record low against the dollar this morning. that comes after the white house said it was reviewing their duty-free access to the u.s. market last week turkey imposed retaliatory tariffs on u.s. goods in response to u.s. tariffs on steel and aluminum. >> you said duty >> i did now back to the markets. let's take a look at -- what do you think, morgan? would you -- you wouldn't say that on "squawk alley," would you? we're very immature. i'm very immature. 20 now up on the dow 13 and change on the nasdaq. up 2.5 on the s&p. joining us now is doug ramsey. worried about doug he's at leuthold group

you got one foot out the door. and barry james of james investment research. so i'll start with you, doug why do you -- i mean, is that fair to say? you've got maybe one and a half feet out the door? that the fun is gone the punch bowl we don't have -- i don't know. you make some fraternity analogies that the frat party is almost over because yellen and bernanke are gone and the market's going to have to come to grips with this >> yeah. we the the lenient frat house mom with janet yellen and it's replaced by a dude who's reputed to bemore strict sounds like things are going to be different at the fed. quite frankly, liquidity has been draining out for awhile almost no one looks at the money supply numbers anymore i grant you that emphasis is on the size of the fed's balance sheet. but m2 growth for the first time in seven years has slipped below

nominal gdp growth the money supply growth was faster than what the real economy could put to work. and that all flowed in, we think in the financial assets. explains a lot of the stock market boom. it's change at the margin. and finally the last couple years, that rate is now below the gdp growth rate. that's one of many monetary measures that we are seeing deteriorate. >> you point out some of the other more speculative areas you can say that's all fine and good and then it could turn around quickly are you saying that's a concern for you? >> it is i mean, quite frankly, the leadership is not what we expected this year i wouldn't say the market -- i mean, in technicians, i wouldn't say it's undergoing like a classic distribution where small caps and sort of the average stock are lagging. but we do have a situation that's more disjointed where you've got the russell and nasdaq up 10 to 12 on the year

and the dow roughly flat that's very disjointed it's not at all like last year where everything, even the laggards, were last year but they were all making new highs. we do think this tightening monetary situation is having an impact just not quite in the way we expected as to market leadership >>. >> barry, you're in xenia, really >> well, as we're looking at the market today -- >> barry, are you in xenia, ohio that's a simple question really you're just north of cincinnati? is that true >> yes that's very true. >> really? >> yeah. >> you got a big election coming up what's going to happen with that do you know? tomorrow >> i do not know what's going to happen with it it is being closely watched

around the country >> no kidding. yeah >> it will have an impact in the political world. >> i know. yeah, i know all about it. i remember years ago there was a horrible tornado like 20 years ago. well, you also are worried about tech to some extent, aren't you? or at least most of the stuff you're writing about here focuses on that. do you have the same view as doug in terms of it being sort of a tenuous situation here? or are you more bullish? >> well, if we look at it from two sides, one side the long-term trend is really good we're within two weeks of an all-time long in the bull market and you've got good earnings and a good economy and that momentum that we see in the market is positive on the shorter end of things, we're seeing that risks are really rising. if i can make the analogy of a ship, i was watching a ship wrecked show last night. when you get into dangerous waters, you've got to be very careful how you're proceeding. and some of the reefs we see out

there, of course the fed is doing quantitative tightening. we've got relatively high valuations on stocks we've got trade wars all of those things together, any one of those could cause the market to slip and certainly we've got the faang over with twitter and facebook both running into some trouble lately and basically kind of a mania in that whole area. so if we look at this market today, you say the risks are high you should be lower in equities. which is what we're doing with our golden rainbow fund. you should have a good chunk in bonds, probably not real long in those bonds. but that's probably the safe approach and the one area that's been so ignored for so long that they're now invisible are value stocks and we really think that's a place to be moving into. >> okay. both you guys, i don't know, we got the mondays or something

but maybe be a little more cautious it's been a great run. and we got, like, four or five companies almost at a trillion that's what we're going to talk to ann winblad about there's some rich valuations but it's different than the late '90s because these are real companies now. at least we've got that on our side anyway, gentlemen. thank you, both. coming up, trade fight is the top topic of the day president trump says tariffs are working and the u.s. and chinese are talking. but does beijing agree i think not. rilte going to ask former agcuure secretary. stay tuned with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

welcome back to "squawk box. we do have, we should tell you, breaking news this morning indra nooyi stepping down from pepsi. big move at that company meanwhile, i want to talk about china attacking president trump's trade policies for a look at how chinese tariffs may impact american farmers, i want to bring in mike espy he is the former agricultural secretary during the clinton administration he is currently running for tad cochran's seat in mississippi. good morning to you. >> good morning to you thank you for having me. >> so you've watched this trade war or at least rhetoric war take place over twitter and

elsewhere. when you think about the constituents that you care about, how do you think it's really going to affect them? >> well, we can already see how it's affecting them, because now we've seen soybean prices fall to a ten-year low. you see the world's two largest economies, each fighting for tariff hedge money that has not gone well for the soybean farmers of mississippi because china is our number one market for soybeans. it's just not a good thing when i was privileged to serve as secretary of agriculture, i believe now as i did then, that farmers can only benefit from open markets with rules of trade open and transparent we have every factor going in our favor. we have great technology we have great equipment. we have the know-how but we need the open markets and the fair rules of trading. and when you have tariffs imposed and then retaliatory tariffs imposed, it's just not good for the american farmer of the farmers i care about.

>> the administration has said it's short-term gain if you get to a situation where you truly have free and fair trading and you do have more agricultural exports from u.s. farmers to places like canada, china, europe, et cetera. is there a scenario in which that happens and if so, the fact that we're seeing the selloff of soybeans, other agricultural prices, i that not worth the longer term game >> i mean, the long-term resolution is really tpp because that was supposed to be the multilateral treaty that acted as a check on chinese hedge money over our markets and now we pulled out of that. and so i just -- i just really don't feel good about it, to be honest with you. i mean, the american farmer benefits from open rules of trading where they can make their own planning decisions and

they know how much they have to spend. and they have a good idea what the futures markets will look like as to what they're going to get from those markets i mean, the administration has now talked about a $12 billion stopgap measure from the commodity credit corporation but to be honest with you, the farmers i talk to do not want that aid it's very -- it's a band-aid it's a short-term measure. they want fair rules of trading. they want measurable outcomes. they want to be able to plan for the future and they want open trading with secure markets they do not want their soybean markets seeded to brazil, our number one soybean competitor. >> the farmers you've spoken to, are they already experiencing damages to their businesses? has it started to hit their bottom lines >> absolutely. they're now having to put off making decisions on buying

combines, you know, where to send the children to school. i mean, it's -- the farmers i talk to here in mississippi have seen their farm incomes drop to a ten-year low and it's not pretty. >> mr. secretary, we want to thank you for coming on this morning amidst this trade war. want to talk to you soon >> thank you very much when you see the world's two largest economies fighting for hedge moneys, it's not great >> thank you coming up, pepsico announcing a change at the top indra nooyi leaving the ceo job after more than a decade and then at the top of the hour, ann winblad. unay ted you're watching "squawk box" on cnbc

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♪ home sales have slowed this year in the hamptons bringing the median price below the million-dollar mark. second quarter sales fell from 2017 levels. and the median price dropped 5.3% from just over a million

last year to 975,000 that's according to muller samuel real estate cited rising interest rates and federal tax reforms as head winds for buyers especially in the $1 million to $5 million range new tax law imposed limits on deductions of mortgage interests and state taxes. sorky, the newspapers over the weekend, i always look and you see all the adds i don't know who the heck buys houses like that but in west hampton. except there you can get some -- i noticed that have you noticed it's not good, i don't think >> you're saying you found cheaper homes in west hampton? >> if you look at what's available in the, like, "post. >> depends where you are on the island >> a lot southampton or east hampton, it's -- >> over by the highway >> but the operative term there

is the highway >> only one highway. that's why you need the helicopter >> it's not the ideal place because you can't really get there on a friday. >> with the helicopter, you can. >> i think it's worth noting that with the cap on salt it's not just the hamptons. you're seeing it in other places as well. coming up, this morning's top corporate stories. pepsi naming a new ceo to take erorov f indra nooyi "squawk box" will be right back.

♪ good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and center at this hour, the biggie, pepsico announcing indra nooyi is going to be stepping down going to take place in october after 12 years in that role. that announcement coming earlier this hour. she will remain as board of

directors chair. that's going to happen until early 2019 she'll be exceeded as ceo by current pepsico president ramon laguarta she's going out on a high note shares of cardinal health rising in pre-market trading the company reported $1.01 per share. beat consensus estimate of 93 cents. cardinal health gave a full year earnings forecast range that largely exceeded analyst estimates. and then joe kernen's favorite movie of the moment. "mission impossible: fallout" topping the box office this weekend. took it $35 million in north american ticket sales in its second weekend easily topped "christopher robin" in second place which had $112 $25 million in ticket sales.

>> to go back to pepsico the fast it's up 0.5%, that's interesting news henry shriner releasing company estimates moments ago. stan bergman ceo and chairman of the company joins us on set. >> good morning. >> is this a sign that here in the u.s. strong economic growth, people have more dollars in the pocket they're taking better care of themselves and that's translating to more sales of your equipment >> i think the markets are quite solid. not only in the u.s. but around the world. for our dental products, medical products, and of course the products we sell to animal veterinarians. >> and you're spinning off and merging that business. how's that process going >> we are spinning off our animal health business into a

separate company and merging with vets first choice to create a leader of products and related services to veterinarians. very, very excited about that. think the opportunity to drive more into the office is high with this joint venture. >> the pet market's been a hot investment we seen a lot of m&a, a lot of deals, a lot of everything around that space right now. how are you valuing that >> well, of course the baby boomers are buying more. it's a great area to be in >> amazon has obviously been a big focus when we talk about your company as well as your peers in the past year the fact they're getting into the dental supply business a number of investors have come out recently and certainly it's not playing out in your earnings this morning and have said that, you know, the fear here has been overdone have you seen an amazon effect >> the retailers have not been successful in our space.

look we are selling to practices. we're helping office based practices operate a more efficient practice so they can provide clinical care. so we have a plethora of services we provide from the supply chain all the way to providing equipment, sales, service, laying out the office we have a very tight relationship with our customers on the advisory side and so with over 4,000 fewer cells around the world, i think we will continue to do very well as we have for the past 80-plus years. >> so if amazon or other retailers aren't keeping you up, what is? >> i'm actually sleeping quite well, thank you. having said that, what is very important is of course to be on top of your business and ensure that you remain most relevant to your customers providing a wider range of value-added services >> you've come in here over the years often times with

announcements of deals you like to make deals what's on the horizon for you? i know you're not going to give away the store on what you're actually going to do but to the extent there's tuck-ins or that you think you have an opportunity rather than a hole >> well, the goal is of course to have internal growth and actually since 2016 our internal growth has been in the range of 4% to 6% having asaid that, we augment that with inorganic growth and we're expanding our business from an inorganic point of view globally, markets we're not in yes there are tuck-ins >> what's the market you want to be in or service that you don't have that you would like to have >> we would like to value our businesses specifically adding onto our joint venture with henry schein one we set up this joint venture to provide value-added services in the practice solutions area. we want to add to that

we want to add to dental and medical specialty products and there's so much to add to the platform >> before we let you go, i just want to get an update that the ftc antitrust complaint that's been playing out for you and some of the other companies in the space this year, any update on that? >> we think it's meritless and we are vigorously defending ourselves. >> thank you so much for joining us today stan bergman, the ceo of henry schein coming up, a video showing an alleged assassination attempt on venezuelan president maduro michelle caruso-cabrera has the latest of that story >> besides an update on venezuela, we'll also have a look at iran's snapback sanctions. at a coming up on "squawk box" so don't move -omar, look. [ thunder rumbles ]

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welcome back to "squawk box. the futures right now indicating a higher open today. the dow implied to open up 16 -- oh, just turned negative down about half a point. the s&p up one point right now we're about 1% striking distance to that record high in the s&p

hit earlier this year. okay lots of corporate news to tell you about this morning tyson foods posting better than expected earnings. tyson said it was pleased with its quarter considering oversupply and a difficult pricing environment. then hsbc exceeded analyst forecasts. the banks revenue missed consensus. impacted by rising expenses and a settlement with u.s. regulators over sales of mortgage securities. st. louis fed president james bullard speaking to cnbc europe about president trump's trade policy and pointing out hypocrisy among trading partners countries that protest america's non-free trade policies should just drop all their own tariffs to zero because they won't because they're protectionists >> it's controversial, that's for sure but i think the discussion that,

you know, should be focused on the end stage here reignite a global debate on trade. i think that has happened. and to think about where we want to get to and what we want to get to is very few in terms of tariffs to trade >> lower trade barriers would be a better outcome for the whole world, he said he also reacted to trump's comments about fed policy during the president's interview with joe a few weeks a egg. >> i don't think it'll have any impact on the kmecommittee. the committee has a mandate to keep inflation low we'll just continue to do that and, you know, lots of politicians comment on fed policy their regular hearings in capitol hill, senators and congressmen comment. the most recent white house administrations have not, but previous to that, you did have

more commentary coming from the white house. so it's not unprecedented in u.s. history in wall street news this morning, the next ceo of goldman sachs -- global head of the bank's trading division. he'll be tasked with helping gloe goldman turn around. in the first set of anxiouses waved under the iran nuclear deal, will be reimposed tonight at midnight as a result of the u.s. withdrawing from that deal back in may. and chief international correspondent michelle caruso-cabrera is here with more on that. and also on the latest alleged -- why do we call it alleged? i guess we don't know. >> i don't know if it's real or not, do you? i'm not convinced. >> yeah, i don't know. what i would like to know who the -- do we round up the usual suspects >> six of them they rounded up six people >> did they? >> yeah. >> from the far right group in

venezuela? >> they didn't reveal the names. >> are the venezuelan nationalists >> they didn't reveal who they were >> can i get to iran if irs? >> they didn't have any affiliation with the united states, do they? that's the first question i saw. >> maduro would say probably yes. >> the first question chris wallace asked john bolton was did we do this >> interesting there's a rationale for that question which -- can i get through this first? >> let me just see >> this is my script >> all right go ahead >> all right let's start with iran then we'll answer those let's start with iran. the government of iran wants to get prohibited from buying u.s. dollars and trading in gold. as of today the government cannot buy or sell semifinished metals to u.s. jurisdiction, they cannot purchase iranian government debt and you can't do businesses with the country's auto or aviation sector. it's prohibition on food stuffs but we're talking about

pistachios and saffron companies that had attempted to to do business but didn't get too far, total, boeing, hyundai. but most of those companies were gone or going knowing the sanctions would be reimposed by the u.s. next key date for iran, november 4th. important to the oil market. that is the day that international financial institutions can no longer facilitate oil for iranian. now to joe's stuff the government says there was an assassination attempt against nicolas maduro here is the video. he's making a speech late saturday at a military parade. as he's saying, quote, the hour of our economic recuperation has arrived, loud bang everybody on stage flinches, ducks. watch this soldier then soldiers lined up on the boulevard below all run for their lives. government says a drone -- couple of drones loaded with c-4, that's an explosive -- went

over overhead. there's been we think four attempts to overthrow or assassinate maduro by members of the military your question i think is what is the u.s. policy? >> uh-huh. >> u.s. policy would obviously like to see free and fair elections. they would like venezuela removed from the organization of american states. president trump has proposed invadining venezuela. he did that during the u.n. last year they all told him it was a bad idea i have heard more than once no one in the government denies it by the way that he's brought it up before that that all possibilities are on the table >> i mean, you could in some kind of warped way and on a humanitarian basis, you could almost think that we -- it would not be crazy for us to think of trying something maybe not that but i feel bad for the middle class in venezuela >> it's gone it's been designated there's no middle class. they're starving >> they're in distress

>> yeah. it's terrible poverty. >> right >> the one thing i would say is we did invade a country based on those kind of concerns it was somalia way back when and it worked out so poorly. i think we as a nation are not quite ready to -- you know, you go in there, you break it, it's broken it's pretty difficult. what do you do do you encourage a military coup who knows. >> saffron i'm wild about saffron >> i don't blame you >> she's just wild about me. >> i'm more of a pistachio girl myself but iran, we've had reports that china's going to continue to buy oil from iran. we've had reports that other allies are pushing back on some of these sanctions what's playing out >> so bottom line, all these countries can say and do whatever they want when the united states says if

you're subject to u.s. jurisdiction, you want to use dollars, we're going to tell you you can't. if you get involved with iran in any kind of transaction, you will be sanctioned that is prohibited so it almost takes the decision away from any country that has institutions that does -- that have, you know, international banks, right so europe's really going to have a tough time china and india have institutions that in theory don't need access to the u.s. dollar so in theory they can continue to buy oil >> one random question, did you see the saudi news with canada over the weekend >> tell me >> saudis kicked out the canadian ambassador over the weekend and they're pulling their people out of canada over the tweets they sent around some women's issues in saudi arabia the question is, you know, would this be happening if the united states was on better terms with our ally -- or historic ally

canada or not? >> so i would say, one, the saudis are incredibly sensitive on the issue of activists. i've had conversations with senior saudis about the arrest of women and they said they are not -- it's not related to their pushing for the right for women to drive but other activities. and they wouldn't tell us what they were. i'm not sure i think i would turn the question around and say, it's not that we have a bad relationship with canada at the moment it's that we have a very, very, very good relationship with saudi arabia president trump has made very clear whose side he's on he's on the side of the saudis and we're going to back them >> the question is has that given permission -- >> it's possible >> you see what i'm saying >> we've got a lot to talk about. mostly root beer that's the next subject. >> very important subject. >> we've got to move on. does anything say american summer more than a root beer

float? not just root beer a root beer float. if you love the tasty treat, today is your day. we're going to do some taste testing and talk about casual ning you're watching root beer float "squawk" right here on cnbc.

♪ welcome back to "squawk box"

this morning today is a very special day. it is national root beer float day. i didn't even know this existed. here to help us honor this most sacred holiday in addition to giving insight in the cut throat american restaurant franchise sector, the ceo of a&w restaurants which this year is 99 years young good morning to you. >> good morning. >> and this is it? >> this is it. >> you've seen us eat doughnuts on the set >> i've seen you eat doughnuts what's better than doughnuts but a nice -- >> this is like heaven on a monday morning >> a frosty mug of root beer float. >> so first, how did root beer float -- is this a made up holiday like all the others? >> it's a pop culture holiday. >> when did it start >> don't know that for certain what i know -- >> the last, like -- is this the first year >> no. we acquired the a&w business about seven years ago.

we found out there was a national holiday for root beer floats we said we need to own it. >> so what do you do on this day besides -- >> well, we raise money for veterans nonprofit veteran associations and this is our sixth year since 2013 we've raised over $650,000 for veteran-related charities. >> and people come in, get their root beer. how much does a root beer go for these days >> today from 2:00 to 8:00 across our stores it's free. >> what about now? >> these are free too. come on. >> you don't have a big group coming in to get root beer floats in the morning. >> no. it's 2:00 to 8:00 in the afternoon. we hope to raise over $150,000 >> we going to talk about the restaurant business? >> yeah, sure. >> what's it cost to get -- >> the initial fee is $30,000. then depending on the buildout costs it could be half a million to one and a half million. we've got 630 in the u.s. and

about 350 outside of the u.s mostly in southeast asia >> who do you now think of as your biggest competitor? >> pretty much anyone in the food category. the fast casual. those guys are coming up they've got most of the growth >> more burger joints? the shake shacks of the world? >> i would think so. >> or the chipotles of the world? >> they're in a different category than us burgers are still the number one consumed item in the qsr segment across all of the bifurcated segments >> what about classic like mcdonald's >> they're with us you know, formidable competitor, if you may they play more in the value arena than we do >> what's the average bill for a customer >> around $9 right around $9. >> but is it an individual coming in or a family situation or multiple? >> well, we cater very strongly to families. >> that's what i always thought. >> yeah. very much to families. although we're skewing younger

>> you mepntion that you bought out the brand in 2011. it's owned by the franchisees. it reminds me of the structure of the company the fact it is owned by the franchisees, how does that effect the way you reason the company versus if you were public or owned by a bigger restaurant group >> sure. great question really our franchise partners are at the table with every decision that we make that affects the brand. so that's number one number two is this is a long-term strategy there's no exit. this group of franchisees got together to buy the business six and a half years ago to protect their interest as franchisees over the long-term this is more of a generational play how that affects the business is we don't have to think about quarterly earnings we don't have vc people pushing us for growth. we can grow the business we can manage the business for the long-term, for the benefit of the long-term

>> that that's a very different environment. >> do you have people order a root beer float with diet root beer >> yeah, we do we do. >> trying to figure that out ice cream's in there but you still go for the diet because you don't want the calories. >> still go for the diet >> do you have a cream soda float? will you make that >> we do not >> people use coca-cola in some places but root beer is the best i think. >> of course it's the best a&w root beer is the best. >> i agree >> because we are talking about soda right now, any thoughts, reactions to the fact that indra nooyi is going to step aside as head of pepsico? >> not really. she's done a terrific job over 12 years now we expect that succession plan to continue that and we hope to continue our relationship with pepsi over the long-term. >> what about with dr pepper

>> dr pepper snapple group owned a&w canon bottle we have the exclusive right to dispense across the country. we buy the concentrate in which we make our root beer which is made fresh daily in all of our stores we buy that from dr. er -- dr pepper. and they're in the process of being bought out by keurig >> we got to go. cm wild about saffron >>ome up, ann winblad joins us for an hour. we'll be right back.

break k news a change of the guard at pepsico. indra nooyi will step down next month and ramon laguarta will take over. details straight ahead apple won the race to the trillion-dollar market cap and alphabet made it interesting. we'll talk to ann winblad. plus a streaming success story. a closer look at spotify's plan to beat apple, amazon, and google at the music game 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 and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with andrew ross sorkin and morgan brennan becky is off today the futures have been around the flat line for most of the session. they've been a little green, a little red they're a little red again down nine or so on the dow the nasdaq is up 4.5 the s&p is unchanged treasury yields are below 3% again. they did get up above 3% never seems to last that long. one of these days maybe. 2.958% this morning. and some breaking news this morning. the big headline, pepsico, the company announcing indra nooyi is going to be stepping down from ceo position after 12 years on the job

ramon laguarta will succeed as ceo. take a quick look at shares of pepsico right now. they are up just marginally. she will be leaving on a high note the stock performed about 80% over her tenure. if you put dividends 2in there, close to 125%. we're going to talk to jeff sonn sonnenfeld about that. the next ceo of goldman sax expected to name james esposito. the announcement could happen as early as today one of apple's biggest suppliers was just hit with a major computer virus taiwan semiconduct says it is back up and running after it shut down several of its factories because its systems

were hit by a virus. it blamed the issue on a mistake during installation of new software and not on hackers. analysts say the impact on apple will likely be limited as suppliers usually prepare for disruptions. our guest host today is here to talk tech ann winblad is here. she is the founding partner of hummer winblad venture partners. we are going to begin to have a conversation with her in just a moment about apple and getting to a trillion dollars. we were talking in the last -- i don't know if you heard joseph at 6:00. i know it's a little early, but we were talking about getting to a trillion dollars and who was going to get there first you were a little anxious apple wasn't going to get there. >> yeah. i was betting on amazon. >> but the story was amazon closed the gap and almost won. and microsoft almost -- i mean, they're all right there. i think that's the story apple was supposed to be here five years ago that's what all the analysts were saying. all these guys caught up >> i think it's realistic amazon

will get to a trillion it might take microsoft longer given their growth rates but the growth of amazon right now is huge. >> where do you put amazon relative to google if you look, they're coming up pretty fast as well. >> i think amazon has got a lot of things. and the trip by facebook has helped amazon on that front. amazon is really an opaque company. we don't actually know some of these numbers. also they are an enterprise software company i think you mentioned a few months ago that they could overtake s.a.p. as the fourth largest enterprise software company alone. they've got over 30,000 enterprise applications on their marketplace let alone their own software that is rapidly growing the enterprise software space. let alone their commerce we know where the growth is.

>> you talk about the trip facebook had how big a trip is that >> i think it's a bigger trip for silicon valley they're all about talent and i think how it damages the brand for people wanting to work there for people saying maybe now is the time for me to leave facebook i think that is real i do i think people believe in their mission, especially engineers. and there is certainly a lot of jobs for engineers in the valley right now with a lot of great companies. >> it's interesting you bring that up with facebook. so many times we hear about regular story risks and brand damage in terms of users designed to close their facebook

accounts you don't hear about the brain drain. >> it doesn't drain suddenly but i think it gradually erodes the company especially in some of the newer areas we're looking at really refined talent where they have had a head start in these specialized engineers, specialized marketing talent our industry is filled with specialists. and there aren't that many to choose from. so if there's any trip that a company makes where talent gets to choose to go somewhere else, it's almost impossible that is a hard work environment there. >> i'm not on facebook i understand it's great. everybody likes sharing pictures and everything

but is there -- you always come up with enterprise software is going to be the -- it's been the last five years and it's going to be the next five years. what does it mean exactly? how does it help -- it just basically helps regular companies compete better with whatever it is that they do. is that it it's not as sexy as ai or the internet of things or all these other -- you know, silicon valley types >> not very exciting at a cocktail party it's not a sexy topic of it. >> but it does involve a lot >> look at the spend the spend this year for enterprises meaning large companies are above medium sized companies buying software is about $400 billion that's a big amount. and that is growing next year close to 9% again after growing almost 10% this year that may be accelerating

that's why we see so many companies transitioning. cisco is a good example. >> we talk all about these big tech companies the one thing we don't talk about is or maybe enough amazon given the conversations with them, do you expect it at these companies? >> i think it will likely come here as well there's a big movement on privacy. that does affect any of the companies touching the consumer. i think there are bigger fish to fry right now. that there's a lot of talk about this, but the one difference

between the era of microsoft is there's not just a microsoft anymore. there's a microsoft, google, amazon, facebook, tencent, alibaba. there's tremendous competition between these companies that benefits the consumer. >> so when you hear people say amazon's too big or so-and-so is too big, you think that's a misnomer >> i do. i think that any individual company, their bigness impact is less than ibm in the '70s or microsoft in the '80s. and they have intense competition. that's one of the reasons these companies are growing so rapidly is they can't rest on their laurels. >> intense competition, but really among those already big companies, how challenging is that in terms of newer companies, smaller companies, start-up companies being able to break in and compete >> well, let's look at the next level of enterprise software companies. companies like sales force they carved out a platform

themselves starting with crn now their competitors are microsoft, biggest competitor. they have a much broader platform and they become a very successful acquirer as well. or newer companies like atlasian they marched right into a segment that microsoft owned they are right now one of the fastest growing younger companies with a significant market cap as well >> we'll talk more about that. it's gobbledygook. if you have a big project you want to manage, you go to atlasian what does that even mean can we talk -- i'm going to talk to you at 8:30 let's talk at 8:30 about it. it's not a -- i think atlastian is a better name what is atlasian >> they are australian

they have a great symbol team >> nice. soda was a symbol for -- anyway. >> ann's going to be sticking around we'll have a lot more to talk about. >> we're going to talk about project management software and what the hell that does. >> we'll give you a project. >> give me a project >> right >> and i need some software. you plug it in and the project's done >> you need to code. >> could have used that in high school well, coming up, the battle for streaming dominance. we'll talk about spotify's plan to beat apple, amazon, and google in the music game it's a story on fast company magazine the writer will join us next and later, reaction to the ceo shakeup at pepsico jeff sonnenfeld will join us on set. "squawk box" will be right back. of our new unlimited wireless plans. it comes with a ton of entertainment options. great, can you sign for this? yeah. hey, uh.. what's in that one?

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welcome back to "squawk box. futures right now are up a little, down a little. take a quick look. now down 12. 12.5 on the dow. the s&p is going to open basically where it closed on friday at least if it were to open where it is right now the nasdaq indicated up about 3 points or so 3.5.

we're going to slip in a quick break. coming up, july payrolls were slightly below expectations, but we had some big revisions the prior month. and toys r us getting part of the blame for that miss. that story next. and later, we're going to talk about indra nooyi's tenure as pepsico ceo she plans to hand over the reins. jeff sonnenfeld is going to join us on set. ife is here... [telephone ring] ahoy-hoy. alexander graham bell here... no, no, my number is one, you must want two! two, i say!! like my father before... [telephone ring] like my father before... ahoy-hoy! as long as people talk too loudly on the phone, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance.

welcome back music streaming service spotify offered one of tech's biggest ipos ever this year at a $26 billion valuation in a direct listing on the new york stock exchange now, getting over the cover treatment from fast company magazine, robert sapian wrote the story. thanks for being here. >> delighted to be here. he doesn't do a lot of media i don't know if he's been on this show. i got to spend many hours with him over many months he does describe himself as an introvert. i found him charming and actually quite revealing if there are two words to describe daniel, it's unlikely and unconventional that applies to his company spotify as well also this came out of nowhere no one expected a small company out of sweden to change the

global music industry. now it's got a $30 billion valuation. what makes daniel and spotify was the early days if anything is just as intense today. they are successful as a public company. but now they're going up against the most voracious competitors and daniel recognizes this and the way he operates the company he is preparing it for operating in that kind of environment. i'll give just one quick example. he hires people as key leaders are hired for a tour of duty what he calls a mission for two years. at the end, if they don't reup and agree it's the right fit or time, they're gone his top leaders rarely last more than two of those cycles >> wow

>> which means this idea of change is constantly embedded. and at the same time high performance, obviously high performance and high creativity all the time. >> it's interesting you say that there's this near constant turnover it's very tcontrarian to other thungs we've heard >> i think daniel has a recognition that the companies that he's competing with and the environment we're in right now but that they have to move at a different pace what was innovative a few years ago is now table steaks and you have to be that much better. >> long-term what do you think happens to spotify does it remain an independent company? does it try to turn into a music video service? does it turn into something else completely >> i think it remains --

>> because music on its own as attractive as it is and i think daniel's built a remarkable business, i just wonder if apple gets into video, if netflix ever decides to get into human being. amazon is clearly doing all of it does it become harder to do the silo >> i think it's hard, but we all love music we want it all around the globe. so there is a real core passion around it in a way you may not have as much passion for some of the things you watch on video the way you might have passion for what you're listening to all the time recognize that spotify started by succeeding against a free product. right? pirating, essentially. you had to create something that was a good enough experience that you would pay for something you otherwise could get for free and that philosophy is what they believe will allow them to beat the competitors that are coming at them. so far they've been successful

whether that continues over the long run, you know, is a different story. he sees spotify's competition or spotify's model being more like youtube than it is like netflix. which is a really interesting and surprised me a little bit. you're getting musicians from all around the world to be able to contribute their music and have all of that ecosystem happen and empower it through the spotify platform >> you know, we talk a lot about facebook, even twitter and sort of these debates that are going on at these companies, things around misinformation. self-policing around the type of information that's on their sites. what they sensor, whether they sensor, et cetera. that's playing out at spotify as well >> yeah. they've had some starts and stops with this. they had some issues with r. kelly they tried now they took into wars off of their podcast. i think this is one of the

topics for corporate america right now. you know, talking about indra nooyi today. the performance purpose was part of what she built her strategy around it was sort of pooh-poohed but it provided some strong results for pepsi. certainly compared to its competitive set. these are challenges for all business leaders right now >> what about the churn in their user base? do we know much about that i mean, the cost of switching in this space is so low i hate to say since i am swedish in my background that i switched from spotify to amazon recently it is relatively the same. >> you said you switched from spotify from amazon? >> from all my music services to amazon music s >> because >> i love using my alexa i could put it on all my devices. >> you couldn't do that with spotify? >> it seemed easier with amazon to me. and also it had a lot of music

>> you know, i think at this point, you're unusual. but that is what their fear is at spotify that all these folks that are connected to other platforms whether they're amazon or apple, that it's just going to become easier for them to move over that's why their product has to be more -- you know, more compelling it doesn't sound like you're moving away from your spotify, andrew >> i'm still a spotify guy but i do think long-term about the business and whether the amazons will grab you either from a price because they're more competitive or whether they're more integrated -- >> remember, spotify's not making any money you know they're not producing profits. right? i had a conversation with tim cook earlier this year about apple music. and he sort of -- apple music doesn't have to make money for him. and daniel's got to compete against folk who is are making their money off of other things. that's a high bar. that's difficult >> is there any platform strategy here that you see if you really push on the business model that would be broader than where they are now

i know they have segments that's serving -- it's a b-2-b segment serving the artist >> serving artists is sort of the next wave they're adding on there. i also think they say tremendous opportunity in their core. when you talk to companies in china about why they don't go more overseas. it doesn't make -- they don't need to move yet i think that's the way spotify feels. >> is there a luxury brand in music and spot fi becomes the apple of music >> i think they sort of already think they are the apple of music, to be honest. that they are the premium brand. they have a paid service, free service, and sort of trade up to those things but they've been very successful again, unconventional ways and unlikely ways. this is not the company you would have thought would be worth $30 billion from a kid who

grew up in a working class neighborhood outside of stockholm. >> well, we're going to leave it there. thank you for joining us, bob safan. >> nice to see you, sir. toys r us getting the blame for the jobs report miss kayla actually mentioned this briefly on friday. leslie picker is here to break down the details >> one month ago toys r us closed for good. but the controversy surrounding the 33,000 displaced workers has amplified. it was a bleak reminder of the retail casualty belying the otherwise healthy picture. some are taking aim at the private equity firms that purchased toys r us. the pe firms paid themselves hundreds of millions of dollars even as they let toys r us slip

into bankruptcy. they have garnered support for members of congress who wrote to the firms urging them to do something to help. reports showed that the toys employees were on capitol hill last week asking for legislation that embed worker protections into pe investments. for their part, the pe firms appear to be willing to provide some aid for the former employees outside the bankruptcy process. in a letter back, they said they did not want toys r us to be liquid dated but it was forced by the creditors they said they did not profit from the investment, guys. >> thank you, leslie >> wonder how you do that though you want worker protection, obviously, but a lot of pes -- >> who pays for it >> and it's the old question do you want half the workers

still employs or all the workers not employed >> it's got son much more media controversy than the other bankruptcies that we've seen in the retail space okay coming up when we return, we're going to talk about pepsi's big news today india nooyi stepping down. we'll talk to jeff sonnenfeld who will be with us after the break. big news in the corporate world with her stepping down as we head to break, take a look ur u.s. equity futures at this dow off 13 points. back in a moment today, there are more sensors on our planet than people. we're putting ai into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer.

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♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square among some of the stories that we're watching that are front and center, crude oil is adding to earlier gains traders say lower saudi crude production and slower u.s. growth activity are both pushing prices higher. also in the mix, the renewal of

the so-called snapback sanctions against iran and shares of berkshire hathaway are higher this morning. warren buffett's firm beat estimates on the top and bottom line in the latest quarterly report the results were helped by a rebound in berkshire's insurance business and -- >> also the railroad >> and the railroad. and sales of mercedes-benz automobiles fell last month compared to a year earlier largely on weakness in the u.s. market where sales were down 23%. in china sales rose 8% from a year ago let's talk about the big news of the morning in corporate america. pepsico announcing that its ceo indra nooyi is going to be stepping down from her position after 12 years on the job. ramon laguarta will succeed her as ceo nooyi will be remaining chairman

until early 2019 joining us now someone who knows indra really well. jeff sonnenfeld from the yale school of management this is a very big day both for pep ssico and corporate america we were talking about female leaders in corporate america and how that has gone down, not up >> it's a big day historically and strategically for pepsico. and emotionally in there you're right you wouldn't think we would have gone down in one year 25% the the number of women ceos it's nice that in aerospace industry, a macho-heavy industry, women are dominating at the major aerospace companies. but, boy ind indra's going to be a big loss in there what a great tour of duty. you think of lloyd blankfein stepping down this year and the succession plan.

changing of the guard, changing of the generation of sorts in fact, for you joe it'd be like johnny carson's exit. you know, going out on a high opposed to his successor and i think that's -- she's managed to prove -- >> for you it'd be jack parr >> i remember it well. i know and dick used to write for him, by the way >> when unabout her tenure and jim was talking about this earlier. the idea she moved not just pepsi but the whole industry towards healthier products, is that the legacy? what is -- how do you think of her legacy >> that's an important part of the legacy she came in with spectacular performance. this company has gone up 162% in shareholder return >> that's inclusive of dividends? >> yes

every other year they now have 22 billion dollar brands aside from all the successes, and this is a good year. is that you can do well. we celebrate them and andrew you've written about it. as soon as the news broke, you really broke the news for us about blackrock's emphasize on social impact. she was there before anybody looking at nutrition before anybody the the food business getting out of saturating f fattefats and now in four of five years all of their products will be compostable or recyclable. this is why recycling is down. >> let's go forward though what do you know about the new ceo? >> he's of spanish origin. he led some of the most

dispersed regions. and then last year in this time, he was made president. a lot of people thought here's the succession plan. it was a trial assignment. he sored through it. the cfo is fantastic very strong bench strength in there. the first thing she did was to see her rival and say what does it take to keep you in here and he stayed for many years until he gotanother ceo position somewhere. >> it's big shoes to fill, right? would you expect her strategy and vision to keep getting executeed executed >> yeah. if you look in his background, it's what he's done with performance for purpose that he has some significant contributions there. so this is not something which

is just hyphenated a lot of times you see a cause dejure in this case it's institutionalized into pepsi which is a transformation. pepsi used to be a tough competitive culture. back when i started teaching, it was a scary place to go to work. now it's an employer of choice they date themselves really from the frito olay merger. it is a remarkable stability in this space >> what do you think she does next >> funny you ask if she was here right now she'd be tempted to do karaoke she's so excited she's a great singer but when she was little at the dinner table, every night the

mom would ask the kids what you would do if you were president or prime minister, take different countries around the world. i don't think she's going to run for office, but she's always had an interesting policy on washington i think now it's going to prometheus unleashed it's hard to see where she could be to have impact. but we'd love to lure her into acidem acidemia but she's too smart for that >> i want to go quickly back to the 25% decline in female leadership in the s&p. why do you think that is >> well, it has a lot to do with activists targeting women. you take a look at nelson peltz, the three years he put into ge where some people celebrate him as a champ and he's lost, i don't know, a billion or so

dollars in that three years here he was up 67%. but it was by not following his plan for pepsico you, of course, all remember that white paper he come up with to split off beverages and food. they used the backbone of the beverage distributors to get the snack food out there and who doesn't think that salty foods are good to blend with beverages? and he also wanted to heave off north america from the rest of pepsi. >> but you think that the reason why there are less ceos -- >> is because activists -- that's part. i think women are on a shorter leash in general it isn't just activists, per se. but you do see women are far more likely to be targeted by activists. i also think you can trip. by the time a lot of women have figured out in the taking charge process, because it takes two years, they often aren't given that chance. i think that's a problem i think denise morrison was going through a profound retrofitting of campbell soup. we take a look also in the food

business irene rosenfeld through mondelez but she had parts of the food business indra was moving away from as she moved into healthy foods. that's another thing, by the way. the fun for you portfolio when she stepped in was 70% of pepsico's portfolio. now it's only 30%. and the good for you food is up to 50% so it's -- but i do think they don't get the time she had the time to go through that transition, but the board didn't crumble like a lot of boards do when led by women. it's a great board, by the way it's stood by her. and nelson peltz turned out to be a good partner in the end when he figured he could trust her. >> okay. thank you. jeff sonnenfeld, thank you on this day it's important thanks softbank's operating profit rising 49% in its latest quarter as the company cashed in on

several investments. josh lipton joins us now from san francisco with more. good morning, josh >> morgan, the japanese telecom giant did say operating profit jumped nearly 50% to 715 billion yen or $6.4 billion in the period ended june 30th helped by investment gains in the vision fund specifically the sale of its stake in flipkart and the ceo is hunting for more. >> translator: we want to have global companies in our group. globally most advanced companies will downus. -- join us as our family and those companies will come to japan with new technology, new business model, and with service offerings.

>> now he formed vision fund last year. backers include saudi arabia and apple. the fund has invested $27 billion in29 companies from th end of june. he also talked about how synergies will be used to help those companies grow in the future fund stakes are now worth $32.5 billion. on sprint in that $27 billion proposed merger with t-moblie, he says they are working hard to move that merger forward as it builds its strategy. back to you. >> thank you coming up, much more from our guest host ann winblad and tomorrow don't miss former treasury department undersecretary john taylor that's at 8:40 a.m. eastern on "squawk box.

our guest host for the hour is ann winblad she is founding partner of hummer winblad venture partners. i think it's interesting i at least can understand -- and i'm talking about enterprise software and why it may not be the most sexy part of the future in technology. that there's money, it just -- it's like printing money at what they're doing. is that where enterprise software comes in? >> it does i mean, if you look at

enterprise software, it's -- >> why what is it they need they just need to know their customer and know exactly what the next move for their customer is going to be >> they need to know supply chain, the customer, every part that's outside of the walls of the company is on a digital pathway? >> and it's the expense side and the income side. they need to minimize expenses, maximize income. >> optimalize speed, agility there are more software programmers at goldman sachs than bankers >> did you know that, sorkin >> i did not >> there are more software people at goldman sachs than bankers. >> that's true of almost every big bank >> it's something i read last week, that general electric is kind of jettisoning this

software unit that was so important at ge. so much to build their own >> i saw it. it's not confirmed those digital assets are on there. i believe they're going to hang onto some of those assets where those services are concerned >> would it be better to pay someone else to do it? >> well, they do work with microsoft to a certain extent. >> it's a catch 22 for companies. they need to have proprietary technology much of that will be software. some of it they have to build to own setups they don't build it with all their own stuff. >> so you want me to buy atlasian and the symbol is team >> yeah. >> i have a project. >> you're in a broader market space there. >> who are their customers >> their customers are

developers, software developers primarily. although they've risen up in the organization to -- in the collaboration space. they recently did a deal with slack which you probably saw where they traded some of their collaboration assets and gave them to slack. so they're a very agile company. if you're a developer, it's called development operations or dev-ops. a big new space. if you're at goldman sachs, you want to give the best tools to your programmers you want to make sure they're dealing with = and faster. you want to make sure they're secure lots of private companies here i'm on a board in d.c. called s sonotype here's a good example of how this is interactive. i was a software programmer years ago and used to write lines of code. now i would go to an open source

repository probably the one governed by sonotype and download it together last year, 94 billion software components were downloaded 94 billion that's how much software is being created and how rapidly it's being created and atlasian sits on top of that including the management of the software development projects. >> you're thinking about facebook and all that. >> we're on the wrong track. >> it's "b" to "b. not "b" to "c. >> yes >> which is why ge is selling those assets maybe it's a good time to sell who noes we'll see. when we return, jim cramer's back live from the new york stock exchange meantime, take a look at futures right now. lower with the dow indicated to open down 28 points. we'll be right back. my personal. aflac!? no-good break. gooood break.

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get down to the new york stock exchange jim cramer joins us now. we're talking about whatever you want, jim. i was talking to ann and just relieved i don't have to write my own software code anymore i can have other people do it

for me and probably a load off your mind, too, jim, we won't have to do that. have you ever written any software code, cramer? >> i've been taught by some people but i find it hard and i've got to tell you, i think computer science at stanford means you can write code and you can get any job in the world i know sales force has done its best to get everybody to learn how to write code. as ann would tell you, this is the gaining factor in the whole country in terms of what people can accomplish people have to be taught code from a early grade and i'm sure you see it all the time people don't learn it until college. >> yeah. >> yeah. i didn't learn it until college but, you know, i'm an old in this category. i think people find it intimidating. >> yeah. >> there's a lot of things these days in business that it's actually not that hard to learn basic coding one of the reasons you need to learn it is not you're going write code but just so you can

talk to engineers. because you'll likely have a job where products are being built by engineers so don't think of learning how to code because you're going to be the architect of coding but because you're going to be working at company where there's lots of software engineers if you want to rise in the company, you need to know how to talk to them. >> you know i want sexy new frontier, jim, for technology. the next social media or whether tsa i or internet of things, and it's software. it's still software, according to ann and enterprise software and i don't know the companies are already out there. i don't know maybe it's not. >> yeah. i think the reason why nvidia is the great gpu semiconduct e company because the code writers love it. it's all software. people don't get that. they think it's hardware it's a complete misnomer a great discussion you're having. >> see you in a few minutes,

jim. you're covering the pepsi news and everything else happening today. also, "squawk on the street," also, "squawk on the street," don't miss the in a founder -- kyle bs also, "squawk on the street," don't miss the help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. this is a story about mail and packages. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business

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♪ stocks to watch this morning an $87 billion merger may be in jeopardy linde they're asking for more asset sales than previously anticipated. the deal was struck back in december of 2016 linde said the two companies are evaluating the requests. praxair down 6 percent and linde down. >> and i don't want to get too much into the week, but what is the language that everyone uses? i mean, you know, i was pretty good with high performance and a reverse, you know, i wasn't. what is it now >> you know, there are many languages. >> are there okay

>> java became popular a plus plus. the languages are different. people use scripting languages to knit together the components. >> i should tell my kids to absolutely take a coding class at this point? >> yeah, i mean, you should tell them they need to know the language of engineers. >> need to know the language of engineers. >> what language are you recommending python. >> that's a good idea. >> that's a good idea? >> he's going to drop a few names. >> i think that any course that you can take in coding in any language there are still people writing code in cobalt these days. >> that's what joe is doing. >> that's what i was doing. >> it's okay it's understanding what programming is about. >> isn't there software that designs the software now can't we make software that designs a software that designs a software >> people have attempted that. it's very challenging. but, yeah, there are modelling software, which is more important than programming

software so you see that in data modelling and artificial intelligence so more modelling going on in the data level than on the programming level. >> i love talking about this stuff. i don't understand it that well. sorkin, i mean, do you feel you're in a -- >> i was doing a little python this weekend no joke. i'll tell you about it. >> that's impressive. >> you're ready? >> i'm trying. >> thank you. >> thank you we'll see you. make sure you join us tomorrow "squawk on the street" is next. ♪ welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber pace of earnings wil