it's tuesday, august 7, 2018, "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. i'm wilfred frost along with andrew ross sorkin joe and becky are off today. joining us for the hour, michelle girard from natwest markets. good morning to you. >> good morning. >> thank you for joining us. andrew, thank you for having me. >> thank you for coming in on short notice, no less. >> >> alwaalways a pleasure. equity futures following a day where we saw slight gains. nasdaq up 0.6% the s&p up this morning the dow is up 76 points nasdaq up about 20 points. it's been a strong session in

asia, shanghai up 2.74%. hong kong is up a percent and a half european equities up nicely. about a half percent or so a bit more than that for italy germany is up the better part of a percent. japanese real wages came in than expected overnight ten-year yield this morning at 2.95%. getting closer to jamie dimon's 5%, but maybe not. >> not bursting through. >> we had 3% last week it will take some time >> his point over the last few weeks, interest rates are the big surprise to markets, but he says rates going up is a good thing. i don't think it's a big, gosh, this is terrifying

>> that's true the important thing is what's driving them higher. if it's real yields pushing up because the economy is doing better, that's a different story. >> in terms of the flattening yield curve, he said the reason it's flat is for a lot of reasons. one is international yields anchoring the long end that's not pointing to a u.s. recession. >> exactly i mentioned a catastrophic wildfire in northern california is exploding in size overnight it's the biggest in the state's history as fire crews are working around-the-clock to contain that blaze it's scorched 284,000 acres of land, destroyed 75 homes it will take several more days to contain the blaze the weather is not cooperating it is hot, it is dry, it is expected to stay that way. this turning into its own humanitarian story but also a business story because of the

economic impact. separately china lasting trump again over the ongoing trade dispute. beijing accusing washington of being double faced the country's state media says the country is showing zero sincerity when it comes to the ongoing trade dispute. a live report coming up in a few minutes. you read the state media there, somebody is angry. >> absolutely. >> the articles read almost like our president's tweets >> absolutely. i think the push back is coming. eunice will join us with an update on that stocks to watch, twilio reported a second quarter adjusted profit of 3 cents per share, beating expectations of a loss of 5 cents per share. the stock is up more than 200% this year. wow. up some 19% overnight.

etsy's second quarter earnings did fall shy of forecast, but revenue topped analyst's estimates. the online marketplace now expects revenue to rise as much as 35% this year that stock is up 9% after hours. up 200% over one year. etsy's ceo will join us at 7:30 a.m. eastern >> the last time josh was here, he brought me an etsy made picture of myself. i don't know if you remember joseph likes to show that image of me on a dune in saudi arabia. so they had that turned into an illustration >> really? i did not see that >> by the lovely folks at etsy maybe he'll come with illustrations. >> i came in late notice >> there's a lot of crafts, craft gear on etsy as we all know >> it's kept its uniqueness. a lot of people thought amazon

could launch its own crafts sub tab, but no such luck. weight watchers second quarter earnings beating forecasts. the company is raising its guidance for the year. shares are lower today because weight watchers reported a small drop in subscribers from the previous quarter that stock down 4% stock is up since 2015 when oprah bought in. >> what's going on here? is oprah not talking about weight watchers as much as she used to? >> i think it's still up 100%. >> i know, but is it the summer? >> subscribers are up 12%. >> but not the same growth what do we think -- are they going elsewhere? >> i was going to say, there's got to be seasonality to this. >> i would think q2 would be the best quarter, getting ready for the summer >> first quarter, january. >> no one goes to the beach

then >> but that requires real willpower. in the beginning they pay, then they do it, then they don't do it, then they think about it during the second quarter. you think about it during the second quarter >> yeah. we'll ask the ceo. mindy grossman will be joining us at 6:50 a.m. eastern. also keep an areas on shares of zillow today. that stock tanking today zillow was disappointed that the new homes business had no revenue in the quarter on the conference call analysts asked several questions about the business like why it's taking longer than expected to generate revenue when the u.s. real estate market is so hot listings showed a slowdown in user growth to 4% versus the high teens a year ago. separately the company announced the acquisition of some mortgage lenders of america for an

undisclosed sum. sa zillow says the deal gives the potential to speed up th home buying process for users who use its service. zillow's ceo will join us also this morning >> is this the time to be getting into mortgage origination? they didn't disclose how much they paid for this business. >> all the concerns i get all the time about the impact of rising mortgage rates on the housing sector i'm sure the timing is something people are questioning >> and this used to be a new tech media company that everybody could get behind, now their morphing into a real estate company >> and you have to imagine the margins, they won't grow it's a different story. just hitting the tape, investor carl icahn issued an

open letter to shareholders of cigna. he says he will be voting against cigna's planned $54 billion acquisition of the pharmacy benefits manager express scripts. that would transform the healthcare industry. he calls the deal "a fol lolyfo. says cigna is vastly overpaying and is encouraging them to pursue a multi-year partnership with an existing benefits company, possibly express scripts. he also calls amazon a threat to companies like express scripts we've seen them with the pillpack deal and others let's get over to eamon javers he's in washington he has a round up of the top political stories. as we mentioned, the president is clearly awake and he's on twitter this morning >> that's right. let's start there. the president tweeting about those iran sanctions that snapped back into place.

the iranians have said they'll be following the terms of the deal for the time being, but the united states reimposing sanctions on iran. here's the president's tweet from a few moments ago he is awake and tweeting the iran sanctions have officially been cast these are the most biting sanctions ever imposed and in november they will ratchet up to another level. anyone doing business with iran will not be doing business with the united states. i am asking for world peace, nothing less look at some details on those sanctions. you can see exactly the sectors here that are impacted by these new sanctions. the president putting in place a couple of sanctions here that will impact automotive sectors and others that's a result of the u.s. canceling that iran deal the civil aviation sector affected gold and other metals affected the white house says it wants change from iran and a host of iran's behaviors in the region,

not just on the nuclear front, they want broad change from iran that puts the eu in a difficult position some eu officials say they deeply regret the u.s. decision and that puts european companies in a difficult position. a number of them have said for now they will be going along with the united states sanctions because they prefer to have access to that enormous united states market rather than the relatively small iranian market. diplomatic feathers being ruffled there. also some dramatic testimony at the courthouse yet in the case involving paul manafort. that's the president's former campaign manager his top aide, rick gates, was in court yesterday testifying about his role and what he said were crimes that the two men committed in the years before they got involved with the donald trump presidential campaign rick gates on the stand yesterday clean-shaven, he said he did not report a number of foreign off-shore bank accounts

at manafort's direction. he said he lied to accountants by not reporting income or accounts he submitted false expense reports, and he said he embezzled hundreds of thousands of dollars from manafort himself. rick gates testifying he was committing crimes with paul manafort, but also that he was stealing from paul manafort at the same time. you can expect that paul manafort's lawyers will make a lot out of that saying the testimony is not to be believed because he has lied and he did commit these crimes. ultimately the white house will point out that all of these alleged crimes took place in the years before both gates and m manafort joined the campaign they say it has nothing to do with the trump campaign or the russians a lot at stake here for the white house. >> lots of topics. i want to add one more to it it's a story that emerged over the last 48 hours, but i think it will continue to linger

throughout the week, what's going on between canada and saudi arabia and where does the u.s. stand in all of this? the story is the ambassador getting kicked out of -- the canadian ambassador getting kicked out of saudi arabia there's been a tit-for-tat and back for forth between them. we've always been allies to both the question is given that our relationship is frayed with canada, is that giving license to saudi to be more aggressive >> it could be a ripple effect when you see the united states relationship with canada fraying as it has ever since the president was in canada for the g7 the president and his relationship with trudeau has become fraught the question is what are the real world indications of that is this an example of things that can happen in the real world when you have a spat between the two men?

a spat between the united states and canada over trade. this is the president's approach to the world broadly, he feels whether someone has been an ally in the past or not, ultimately the trade trumps pretty much everything else in the president's view american workers have been getting the short end of those deals for a generation or more, and he wants to fix that other presidents have taken a different approach this president saying ultimately he wants to side with workers and manufacturers inside the united states. and we'll see how all those ripple effects play out over time >> eamon, i want to go back to the tweet about iran and the fact that sanctions were reimposed overnight. it ruffled some diplomatic feathers how does it poll now that they're getting put back in place, does that poll well into the midterms and other special votes? >> that's a good question. i have not seen poll numbers on that i would imagine that it would poll well.

iran is not popular in the united states. the president is taking a strong hand here in dealing with it i would imagine it plays well on capitol hill where republicans will look at that and say this is the president fulfilling a campaign promise the president said he would take a tougher stand on iran. he said the iran nuclear deal signed in 2015 was one of the worst deals of all time. naturally he will rip it up and put those actions back in place. the question is whether this will bring the iranians to the table or push the regime to further extremes that's a decision that will have a lot of play in terms of iranian, domestic, political power balances we don't know enough, i don't think, about how the iranians make decisions to forecast accurately what they're going to do as a result >> eamon, great stuff. thank you very much. oil prices up about a her senator so let's get to our market roundtable joining us for that is michael tyler from eastern bank wealth

management, chris burtelson, and michelle girard our guest host from natwest markets good morning to all of you michelle, if i start with you, in terms of state of play economically, pretty good still domestically nothing to complain about? >> the economy is doing well we saw that echoed with the earnings results from companies that have continued to report great earnings i'm confident about the economy, the momentum, the second half holding up i think we'll see growth 3%, which is something that we have not seen since 2006, to see the growth we've seen in the first half of the year, sustained in the second half of the year. >> michael, do you agree do you think the earnings picture followed up the strong macro economic data? >> sure. there's no question. you're looking at second quarter numbers in the books now

we have 24% earnings growth on almost 10% revenue growth. what is surprising is those numbers are stronger than the first quarter. i think that's something that caught most of us by surprise. we were expecting the same or slightly lower the real challenge is the market still has not gotten past its january highs despite a real pick up in earnings. what is holding it back? >> what is holding it back in your eyes? >> i think the key thing is that there's a fear that you can never predict peak earnings growth you never know when it will start slowing down it's not provable until it's pa passed the fact is that as michelle said, the economy is looking at its first 3% year in a long tichlt a time all the leading indicators are a positive there's nothing right now that is telling us a recession is

imminent or a smmajor slowdown imminent markets should continue to power higher >> chris what about your view? is it time to start to rotate into slightly more defensive sectors? >> i think there's good opportunities. i agree that 80% of companies reporting have beaten, more than 80, and you have the best quarter in the 16-quarter presidential election cycle up on average and i think with all the guidance that i've seen go up, i think the fear of an earnings peak is a little overdone. but i think it is time to rotate into value names to me, you know, the internet stocks in particular, social media, they look like they're in the rearview mirror. i think they're about done >> one of those is rer viz veri

that right >> verizon, unlike at&t, they didn't go out and make an acquisition or vodafone. they stuck to rolling out 5g it's our chance to catch up with china as far as 5g is concerned. it's huge. it's a big change for we want to get streaming video and everything faster and better 5g is the answer yes, i would look at verizon >> michelle, some of those dividend stocks can look attracti attractive, but in a year's time will yields look more attractive >> i think we'll see yields moving higher. we talked about jamie dimon and 5% yields, it's hard to think we'll go that high if we don't have an inflation problem. so i think there will be more challenges i think that fixed income yields will move up but i'm not sure it will be necessarily taking away the luster the real question is to the extent that you see any kind of

a weakness in equities and a shift into fixed income from a more fundamental standpoint. >> i have one question for you did you see this larry somers piece? in the ft, i'm curious what everyone thinks about this he's knocking the administration and saying that the u.s. should not get credit for what's going on in the markets. this is what he says it relates to where you put your money. it appears growth has accelerated and exceeded expectations more outside the u.s. than within the country, suggesting that whatever is driving america's growth is a global factor rather than something for which the u.s. policy can take credit he goes on and on. >> not true this year. last year. >> it's a last year phenomenon, right? >> there's no question the u.s. economy benefited last year from strong global growth the story this year has been the outperformance of the domestic economy because of the investing. talking about where we are in the cycle, michael was making the point we had gone -- not

here, but he has written about the fact we had a profits recession, and we have come out. we're earlier in the equity cycle. >> michael, weigh in on that >> the fact is that the u.s. now is doing better than the rest of the world. we're pulling the rest of the world with us. we did have a profits recession, so earnings growth was negative from 2014 to 2016. we are earlier in the cycle than most people think. unlike chris, i would say you have growth companies growing really well now. a prospect of higher interest rates especially if inflation picks up, which, to me, means there will be pressure on the rust bucket defensie iive compa and growth companies can continue growing for a while >> we'll leave it there. chris and michael, thank you very much. >> thank you more coming up on "squawk box. the doj explaining why it's appealing at&t's $85 billion acquisition of time warner

and china's crackdown on peer to peer lending is sparking protests a live report from beijing in just a moment. let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

chinese authorities cutting down on risky peer to peer lending platforms, and that has led to protests. eunice yoon has more >> thank you very much the calm has returned to beijing's financial district, this is after the police crackdown yesterday on protesters organizers were telling us that thousands of people had taken to the streets around the area of the banking regulators office, and that hundreds of police then swooped in to try to clear the area they were angry because they lost money in the peer to peer lending industry which matches regular investors who have money to spend, with ordinary people who want to raise capital in order to start new businesses or buy something new. in china it's difficult for people to go to the mainstream

banks. with these peer to peer lending options they've been able to get money and higher returns 8% to 12% on average compared to 3% at typical banks. after the explosion of this industry we've seen a crackdown from authorities there's tighter regulations as well as a liquidity crunch issues that lenders have faced because of that so many have started to fail. that's why there were these protesters going to the banking regulator. it is not common to see protests, it is common to see investors seeking a bailout from the government the concern that people have here is that the troubles in the peer to peer industry could spread now to other sectors. a lot of small companies have

been borrowing from the p to p lending. in the past week there's been some reports about router companies as well as a convenience store chain that have been facing financial difficulties because of p to p investments. separately the state media has been on a tear criticizing and mocking president trump. the two official newspapers have been criticizing president trump's tweets from saturday which had suggested that the fall of the chinese stock market was a sign that the u.s. was winning the trade war. i want to read some of these the people s daily described th belief as wishful thinking while the global times posted an editorial with the headline volatility in chinese stocks doesn't signal a u.s. trade war win.

this could be posturing meant for the bo mdomestic audience, e officially the chinese do want to talk. there's been a lot of discussion about google's potential return to china the peoples daily wrote an article called china welcomes back google as long as it adheres to chinese policies. this was discussed widely here and including the chief rival of google in china, which is baydou's ceo, robin lee. he commented that if the two companies come head to head, baydou will win again. google has been blocked here since 2010, but there's been some rumbling that google could be coming up with some sort of search engine that would be allowed in the china market. by the way, guys, while we've been talking this entire time, i've been completely censored because i started the discussion

with the p to p lending. so all day we've been taken off the air or censored, blacked out because of this very sensitive topic for the authorities. >> okay. eunice yoon, we have to leave the conversation there i have a million questions i know you're being censored, we'll try to get you back on this program so we can talk about what's happening in china, both on the google front and specifically some of this rhetoric back and forth and whether it is just rhetoric or whether there's more to it thank you for that report. still to come, tech stocks on a roll helping the nasdaq post its first five-day winning streak since may we'll find out which big tech names belong in your portfolio. and as we look ahead to the rest of the trade, here were yesterday's s&p 500 winners and losers

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box. among the stories front and center, investor carl icahn has opined in a new letter to

shoulder how old shareholders of cigna oppose in them in express scripts. president trump reimposing u.s. sanctions on iran the sanctions were lifted under the to 15 iran nuclear deal. the president tweeting anyone doing business with iran will not be doing business with the united states. i am asking for world peace, nothing less also we mentioned this at the top of the hour, there's a catastrophic wildfire in northern california. it exploded in size overnight. it's the biggest in the state's history. fire crews are working

around-the-clock to contain the blaze. it scorched 284,000 acres of land destroying 75 homes in its wake look at u.s. equity futures on this tuesday morning. dow would open up about 88 points higher. nasdaq up about 20 points. s&p 500 looking to open higher as well. the u.s. department of justice releasing its argument for appealing acquisitio of time warner judge loeon approved the merger back in june the general counsel said the doj appeal is a desperate attempt to redo the decision. the takeover is closed so it's not quite an appeal. >> i will also suggest that

there are those who believe the appeal was also a shot across the bow at other deals in this category one of those deals would have been comcast trying to buy 21st century fox's assets >> but it wasn't quite the same category because of the vertical horizontal aspect. >> different, but nonetheless they were going to do that both the idea that disney already had their deal locked up and the doj deciding it was fine to do the deal with fox. the big still deal still out there is print >> i thought you were going to say comcast and sky. >> thursday is the deadline for that >> we'll hear from bob iger and whether he's willing to back off

and let comcast get sky. still amazed the real winners are sky shareholders less than 8 pounds before the first fox bid, now at 40.75. >> did the sky shoareholders mak out better or the murdochs >> all the sellers have done well we'll have to see what happens >> we'll see in five years from no now. >> you've given a long time to deliver. they're both long-serving ceos >> michelle will tem yll you wee at the end of a economic cycle >> no, michelle won't say the end of an economic cycle it's a long cycle. it may not even be late cycle. >> i was giving five years. >> >> in five years we will have a mini downturn, maybe back out. >> we're late in a stock market

rally relative to history. >> this is the second longest expansion. if we make it through the middle of 2019, it will be the longest expansion in the post-war period equity cycle extended as well. but i get that question all the time it's late in the cycle we're looking for what and we were speaking earlier about the injection of fiscal stimulus seven years into the expansion is really almost unprecedented. i think it changes all of the dynamics then about really how long can it go >> okay. facebook and the rest of the f.a.n.g. names rallying on monday pushing the nasdaq back towards the 7900 point level for a deeper look into the tech stocks, gene munster is with us. good morning to you. >> good morning. >> so, how should we look -- let's talk directly about facebook how should we look at facebook by the way, i want to get into it because it's so interesting what happened with info wars

yesterday and the tech names let's talk about the f.a.n.g. stocks and valuation right now. >> i think it's been a safe tray we're positive more broadly on tech we think there will be a divergence with the f.a.n.g. stocks over the next year. the haves will be apple, google, amazon, tesla entering that mix. the have-nots will emerge as facebook and netflix yes, it had a good day yesterday, but i think there's something structural that investors should keep in mind as they think about this basket the reason why these stocks have done so well over the last couple of years is they've been grabbing new markets in facebook's case it was an advertises market they were grabbing massive share in netflix around video content apple, google, amazon had their markets they were going after. in the case of netflix and facebook, those two don't have massive open-ended markets that some of the apple, google and

amazon have. to answer your question more broadly, yes, facebook is a behemoth 4$450 billion market cap, but i don't see outperformance from that name over the next year >> so, just to put a fine point on it, even the netflix story and the facebook story to some degree are different, correct? >> totally different but both share this idea of for those stories to keep going up, they need to capture some new markets. they have big markets that they're going after. i think investors need some big kind of untapped markets the other names in the f.a.n.g. group have that kind of growth potential. >> we're adding tesla to that? >> i don't know how you figure out the acronym with that, but tesla is a much smaller name $60 billion market cap nix is up netflix is up 80% in the past

year it was part of the f.a.n.g. sub 1$100 billion but with the tesla story, there are polarizing investor groups on this. the june quarter and the september guide i think laid the groundwork for this company not being in any sort of cash dire straits. and if they can be profitable on the model 3 and scale that, this is the best product lineup of any company, if you think about their mission of renewable energy, energy capture and usage with the cars. so i think you'll see tesla move from this polarizing cult-like story to more of a mainstream accepted investment. >> gene, i want to go back to potential differentiation in the f.a.n.g. names moving forward. is a company based on subscriptions versus advertising also an important differentiator >> it definitely is. that's a plus for apple in this

case netflix is a subscription business entirely, but keep in mind with netflix that they don't have new markets they won't go after self-driving cars, healthcare, some massive untapped opportunities so yes the subscriptions are important. a quick thought on apple as a subscription we have this belief there's a paradigm shift going on in terms of how investors are thinking about the apple story. more broadly we're referring to apple as a service that's not reflecting the services segment, this is the concept that the hardware is performing like a subscription every three years people show up, buy their iphones. if that's the case, i think the multiple on apple will go up yes, services, subscription is important. and i think apple is emerging as a leader in the services segment. >> how do they tackle video content without it becoming disproportionately expin sieensr what they get back >> it's one of those things they

want to invest in. what the roi, direct roi and the video segment will be low initially. they've talked about they did a half billion last year, we're guessing they do 1 billion in content this year. netflix original content is 6 billion, 7 billion so it's less than that the roi on this is creating more services in this case a video offering paired with a music offering the roi effectively is to help sell devices at least in the video case >> do you want to comment on just how apple, facebook, spotify, everybody dealt with this info war situation yesterday? i thought it was fascinating, and whether you think that will have an impact on their businesses or regulation long-term. >> i think it's going to be a big firestorm more in the near-term. ultimately if you look at

facebook, the cambridge analytica analyticas, the substance coming out of this is unlikely, so we don't expect many changes. >> gene, thank you. have you ever tweeted anything you regret? those tweets could come back to haunt you. now sports agents are helping athletes scrub their twitter account so they don't get fired. and weight watchers shares under pressure after the company posted an earnings beat but subscribers were lost last quarter. mindy grossman will join us.

welcome back to "squawk box. guardians of the galaxy director james gunn is the latest high-profile figure to be fired over old tweets. old tweets are haunting some pro athletes, now sports agents and teams are reaching out to players in an effort to clean up their acts eric chemi has more on this. >> it started with baseball players in the last few weeks. at least three of them got

backlash because people found tweets that were derogatory. a lot of them came from when they were in high school let's say you're 25 years old now. seven years ago you were a teen in high school and you say dumb things that you do in high school it's been nothing but bad press for the players, teams, major league baseball. this is a trend. it's not just sports, it's affecting real jobs in the real world. so these players will not lose their jobs like someone else in the real world would, but teams, agents, they're all now working to go back and clean up years of twitter history, which, as we know, you have to keep strolling down >> i thought it would delete it, the way-back machine or whatever is out there >> you're hoping that it just gets one way of removing a screen grab from popping up. you're hoping it pulls it down maybe they don't find it on the way-back machine

at least it's not sitting there directly on your twitter feed. it could be too late for some people, but at least they're trying >> given the trends of the last couple of years on this, it's a bit late to be trying to clean it up now. >> you would think they should have done this as soon as they got drafted, as soon as you went to the pros and not waited until you became an all-star people didn't think this would be an issue. >> do we think in years ahead there's a chance people become more used to past tweets and not caring about them so much? >> no. people say just delete your twitter account. stop having it as soon as you go pro, shut the whole thing down, start a fresh one. you don't need those high school tweets why do you need them >> maybe we should all do that >> i was going to say, this applies to almost everybody. >> eric, thank you when we come back, big news in the headlines weight watchers earnings beating expectations, but posting a dip

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welcome back to "squawk box. weight watchers out with second quarter earnings the company meeting revenue expectations and beating on the bottom line as it raised full eps guidance joining us to break it down is ceo of weight watchers you're seeing that stock this morning, mindy, i hate to say it it's in the red this morning what do you make of what you said yesterday and the reaction? >> you know, we had a great quarter. subscribers up 28%, revenue up 18%. gross margin up 430 basis points >> is this a comp issue? terms of what we're coming up against? >> the stock is up 100% on the year i think it's people understanding kind of the cadence that we're in. it was our first summer program. and actually if you look at the subscriber numbers and where we ended the quarter, it was kind

of not much unchanged. so if you adjust for seasonality, we were pleased with the results particularly of summer >> there were some analysts commenting on the media buying program, it's been in the digital world. has that had impact in terms of your reach >> we did run tv for summer. we said we were not running tv for fall which is actually the shortest time frame for media. and for me coming from a media background and understanding the power of our digital marketing, we're a video marketer it's just a matter of what platform we use. so you're going to see a lot of weight watchers for fall, you're just not going to see it on a linear broadcast you're going to see a lot of social platforms you're going to see a lot of story telling in media >> using who talk about the celebrities involved this has become a celebrity business to some degree as well.

>> you know, there are influencers that we think have impact and what was great for summer, using our influencers, we're diversifying our base. we saw more men. we ran our first father's day campaign with kevin smith, chef eric greenspan so we're really seeing the diversification. that's important for us to be able to grow >> talk about this -- oh, i was just saying the summer program we were speaking about that earlier. what time of year and q2 how did that go? >> well, it went extremely well. and the premise was that people want to be healthy 12 months a year, not just in january. so we ran our first summer campaign in the company's history. and hence you're seeing the results. in addition, we had the launch of our first in-app invite a friend which was very successful. so if you think about it, we had a 70% conversion on the invite a friend and 70% of those were new. and we didn't even market it

heavily. that will be a big factor in our fall campaign as well. >> do you see healthy food companies, protein shakes, those types of things as a rival or not? are they a different service >> i said it before. the biggest competition is people thinking they can be healthy themselves you can eat anything you want on weight watchers, we're just giving you the tools to understand how you make choices for the healthiest way you can eat. whether you want to lose weight or not >> quick ten seconds on intermittent fasting >> there's always the sexy new thing is people come back because it works >> okay. thank you. eating less is usually what works. i would think fasting would really work. >> how about sustainability? >> sustainability is the problem. thank you. >> thank you good to see you >> and a special thank you to michelle for hanging out for this hour. appreciate it. wilf is sticking around. a lot more to come -- >> otherwise you'll be on your own. >> you're holding down the show at this point. disney set to po aerrertft the

closing bell today what to expect straight ahead.

breaking news. carl icahn calling to block the $54 billion tieup of cigna and express scripts. the letter sent to shareholders coming up. new this morning, president trump tweets about the reimposed sanctions on iran. the move in oil markets straight ahead. plus "squawk box" gets crafty shares of online marketplace etsy moving higher we'll talk to the ceo live on cnbc 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" on cnbc i'm andrew ross sorkin along with wilfred frost in for joe today. becky is out our guest host this morning, stephanie link from nuveen happy to have you aboard >> thanks for having me. >> the goodship "squawk box" this morning we want to show you equity futures this morning we do have green arrows across the board. dow would open up 90 points higher s&p 500 looking to open about seven points higher. check out the price of oil if you want to buy a -- buy it by the barrel. barrel of wti will cost you about $69.59 right about now here's what's making headlines this morning carl icahn has shooud an open letter to cigna shareholders to buy express scripts for $54 billion. he says cigna is vastly

overpaying he also says amazon.com represents an existential threats to shares. express scripts slipping 2% in the premarket today. the labor department will issue the june jolts report this morning. it's expected to show that the u.s. economy had 6.65 million job openings at the end of june and has been highlighting the fact many companies can't find workers with the right skills to fill their jobs. alcoa has asked for an exemption to white house imposed tariffs. for the purchase of canadian aluminum it uses to make beverage cans. they say they can't source from u.s.-based manufacturers and a developing story we're following. a catastrophic wildfire in northern california exploding in size overnight it's now the biggest in the state's history. fire crews are working around the clock to contain the blaze it has scorched nearly 284,000 acres of land and destroyed 75

homes. they say it will take at least several more days to contain it. the weather is not cooperating it's hot and dry and it's expected to stay that way. >> okay. want to get back to the broader markets. is the rally broad enough to support new highs? mike santoli is here to join us with that story. >> we hit on it yesterday. it's been a big question, right? you had the s&p 500 less than 1% from its january high. but people have been kind of picking apart this rally since let's say february and say, well, it's too narrow this is a look at the s&p 500 year to date as well as the equal weighted version of the s&p 500 that's traded in this etf. you'll see the orange line is the s&p, it's outperforming the equal weighted version by about a percent and a half year to date obviously the largest stocks have had a greater influence on this rally but the most democratic look is also participating to the upside i would say it's a selective

market it's been rotating from strength to weakness depending on the group. only three sectors in the s&p are outperforming the s&p itself the nasdaq 100 up 16% year to date tremendous performer it has been big tech then small caps up 10% basically this mix that has not been there at some point, if you have this spread between the stock, it does kbk a less stable market. but i don't think this is something to be too concerned about right now. most stocks are still up >> a massive relative outperformance compared to other markets as well. >> without a doubt so you can look at that tier of performance across the world and it's big cap u.s., small cap u.s. then the average u.s. stock and for the most part the rest of the world. >> mike, stick around. let's continue the market

discussion joining us now senior market strategist good morning to you both and of course stephanie link on set with us as well. julian, if i start with you, the target for year end s&p, have you altered that much as the year progressed? and where are you at the moment? >> we're at 3,000. we've been there the whole year. it's been a roller coaster we were not disturbed by the activity in february and as mike pointed out, the fact that people are trying to pick apart the breadth of the rally is a positive for us you know, we look at the underlying advance declines cumulatively and they are at their highs. and very often over the course of this nine years, the advance declines have led the s&p higher so we do expect new highs. >> stephanie, what's your view on the breadth but also the lack of volatility we've seen >> i'm okay with the lack of volatility there are plenty of stocks to

find but i think mike hit on it perfectly this is rotation we saw faang lead and growth lead then we saw the rotation to a little bit more cyclicals. it's been much more of a defensive rotation that's leading us. financials if you want to put that in the defensive bucket, health care. that's also value, right value versus growth. that said, technology is still accounted for 55% of the s&p returns year to date so you can see why people are taking gains in technology, rotating around. i think u.s. is still a very interesting place you want to be because the economic growth is fine it's not going to continue at 4.1% but if you look at the components of gdp, if you look at the components of the nonfarm payroll and the revisions, look at what the consumer is doing in retail sales you're looking at, like, a 3% second half of the year gdp number that's good enough for corporate earnings that's good enough at 15.5 times

earnings which is the valuation, right? we have a nice attractive valuation. that said, i don't think you want to ignore international altogether because i think the sentiment is so negative. >> that's the question >> well, you have stimulus too right? the ecb, the boj, china also >> we keep talking about how the opportunity in europe and elsewhere is supposed to be so much better. the larry summers piece today in the ft tries to claim that all growth outside of the u.s. is what's making the u.s. grow. that's not as true, we think, today. >> i don't think today but you can look at the first six months of this year and say what did companies benefit from? massive tax cut win fall as well as the quarter in the last decade where you had all economies firing globally. that just means there's this big acceleration in earnings nobody expects to continue. i don't think you would say the domestic economy performance has really been a matter of the

global economy lifting >> but at 15.5 times forward estimates, you're not asking a lot. even a deceleration in earnings. even if you don't grow 25% in earnings, you grow 10% it's still attractive. >> u.s. or overseas equities >> right here we'd stick with the u.s. over europe what do we know? well, we know historically august and september are troublesome months also on august 31st, this will become the longest bull market in history so late in the cycle you see more volatility. we're just kind of building on the themes we just had they've actually -- s&p 500 companies have increased the current forward four quarter forecast usually that drops 2% to 3%. that's rare. tariffs are not impacting a good thing. but we talked about the advance decline. technology, all those advance decline lines are really strong.

yes, the worry is 14% of the s&p 500 made up of just five companies. you go back in history, though, that's about average so to us, there's a lot of breadth. fundamentals are strong. going to be a rocky ride, but we still think double digit gains are an issue this year >> is that still kind of not too relevant until next year >> they're always there. and for us, actually, what's come out of the bank of japan over the last several weeks is very encouraging the fact that we're starting to see the first baby steps and they are baby steps towards some sort of policy normal and that means to us instead of worrying about recession in the u.s., the yield curve flattening is because of central banks on the long end that's a positive message for markets. recession is not eminent here. stocks going higher. >> your final word what's the top sector pick domestic at the moment >> right here we like value over

growth value is that contrarian play. again, digging deeper, financials yes the yield curve's been flattening it may stay low and start to steepen here so financials and value are two plays we like the rest of this year >> thank you both very much. see you later. and stephanie, sticking around a lot more to come this afternoon will bring a whole lot of magic for disney or not. we will see. the nemedia company set to repo. first time hearing from bob iger since winning the fox assets and maybe we'll see what's coming with sky, deadline coming on thursday. etsy higher after reporting earnings we'll talk quarterly results first here on cnbc stay tuned you're watching "squawk box. back in a moment ♪ ♪

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a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet. and over here i'm having my birthday party. dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today. welcome back to "squawk box. the u.s. department of justice releasing its argument for appealing the acquisition of time warner. ignored in his decision because he refused to seeing the deal having a danger of raising prices on consumering in the future the general counsel said the doj appeal is a desperate plea to

appeal the decision. sought to reassure the tech industry about the trade policies, the comments were made to tech industry representatives at a private meeting last weekend. the officials told the attendees the trade policies will ultimately aid their businesses. a source telling axios the administration, quote, did its best to suggest there is a coherent strategy behind the churn. talking about media deals, disney reporting its quarterly results after the bell today joining us more on what investors should expect is the equity analyst at morgan stanley. want to talk about the earnings, but i imagine -- i want to talk about what you want to hear on the call today because i imagine it's as much about the numbers as it is about what's happening with these assets both the 21st century fox assets and what may or may not happen with sky. >> sure. it's been an incredibly eventful three months since the last earnings call. we're focused on the numbers, obviously, but we also want to

hear from the company on the over the top plans and how fox may not -- >> first hit me on what numbers are you looking for? >> we're a little bit above for the quarter. a little bit at parks. it's a bit of a weird quarter. but for the most part, it looks past that. one area, the studio will be hit by hance sow low the quarter across media, we heard from nbc, subscriber losses slowing for the networks. >> fair value going in is what. >> 160 in the bull. >> what you want to hear, on sky, what are you expecting to hear >> well, it's a process that's heavily managed by the uk takeover panel and disney will have to stick to

the script on that they're probably relatively fine >> but your expectation is they let it go to comcast >> i think that's the market's base case right now. >> would you want them to let it go >> look, i think that when you look at the entire transaction around fox, there's two big thy themes obviously sky plays into that. but there's lots of pieces of the puzzle here. hot star in india. hulu which i think will emerge as a huge debate on disney stock coming out of this deal. >> let's have that debate right now though what do you think they should be doing with hulu? >> i think they'll go global with it. that's probably the biggest thing that will change >> and that, you believe, will be a desperate franchise than the disney branded ott service >> yes disney and branded ott service may be sold through hulu the way hbo or showtime is

but i think the press is focused on it as a netflix competitor. less investment needs. it's focused on families, disney brands we're estimating 20 million subscribers globally >> that's what hulu has today. >> in just the u.s., yes but hulu is a broad service. you've got content across lots of studios and brands. disney is focused on disney films. >> one of the issues will then become on the hulu side if you believe what you're talking about is true that there would have to be massive -- everyone who's been a partner with hulu in the past is going to try to pull some of that content back >> on the first part, i would agree with you second part, i would push back we think hulu is already losing about a billion dollars a year so it is a heavily invested product at the moment. taking it globally obviously

will require more capital. it's a lot of revenue. and it's 20 million subs so disney goes from a media company trying to figure out how to pivot their business to you close this merger day one. you have scale in ott out of the gate >> you believe they're going to end up buying comcast of hulu? >> we'll see >> espn is still a big chunk of their business and ebitda. we saw charter was better on their video side we saw comcast less bad. are we ever going to say actually it was good, actually we saw growth? is that ever going to happen >> i think the good news when it comes to espn and disney is diversification. closing fox the way the deal structured, over 70% will be outside of the u.s. bundle which is another way of answering. i don't think espn has this great bull case. it's in a tough spot i think disney knows that. it's about navigating that >> clearly you're bullish with

your price targets what would make you switch that view >> well, i think we spend so much time on ott and on espn for reasons that are obvious they're interesting. but the theme park business is the earnings engine of this business at this moment. it's bigger than espn. that's true as of last year. that's been a double digit income grower for years. if we saw head winds that suggest we hit the peak on parks, which we're not, that would cause us to be -- >> and you don't worry about competition from comcast >> on the theme park side? >> yeah. >> comcast nbc has been investing a ton in orlando all we've seen is more orlando more attendance. more growth. it's been incredible so far so good on that >> we had gene munster on talking about netflix. he is no longer a fan of netflix at the moment. he's splitting them off in the faang world. where do you see netflix -- by the way, where is apple? >> they're being dropped by

faang? >> in his mind he wants to see tesla. where netflix is sort of the -- dare i say the standard relative to other content players >> we think the pullback you've seen in tech and netflix is an opportunity in the stock i don't think there's a debate about whether or not netflix has won the ott battle globally. they won the question is what do you want to pay for it? our view is this a highly profitable -- people focus on free cash flow, but any media company spends ahead of amort e amortizati amortization every studio does it >> is there a risk that people start to give up their subscriptions where they've had it for a number of years and they only therefore hold it because another season of house of cards is coming out, something like that? >> that's always a risk. what i would say is this company has now something like $15

billion of asset value of content on their value sheet when you turn on netflix at home, the amount of money that's been invested there dwor -- dwarves everything you have in front of you and that number's growing. as long as they're average in terms of the shows they make, they've got so many at bat, so much capital, you're likely to stick. >> one more. can at&t make hbo a rival to these types of services and make them a bit more mainstream or is it just too kind of small? >> if you're going to start somewhere, hbo's brand and its global recognition and relationship with talent is a great place to start it's just which companies have the appetite to invest this amount of money. >> and do you believe that at&t does or no >> i think it's hard i think when you've got a dividend and earnings number that people focus on, it's tough. that's what we see with all these incumbents trying to pivot the business how do you manage that with what's in front of you >> netflix, it was a one quarter

blip in your view? >> if you look at the last four quarters of the last year, they've beaten their own guidance by 3 million subscribers. as i said to a lot of people, sometimes they beat, sometimes they miss. >> appreciate it still to come, why an american billionaire is close to a goal on the soccer field coming up next you might take something for your heart... or joints. but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.

odd. a soccer story i wonder why in soccer news, stan kroenke has made a bid to buy arsenal outright valuing the club at $1.8 billion. and a new full owner of the club >> surprised you didn't call it football >> i should have done, really, for this particular story. it's actually gone down very badly with the supporters. they don't like kroenke in the uk. >> because >> because he's owned the club

for a long time, majority stake. they see him as not investing enough in the team and relying too long on one one manager. running the club for profit rather than for victory and trophies on the pitch which comes at great costs and expense. >> on the field. >> right the field of play. >> pitch football okay >> we'll see if it works $2 billion similar kind of price to big nfl franchises >> i think you'd get more than $2 billion for an nfl. that's pocket lint >> i like the nfl. plenty things. >> a basketball team, like not even a great basketball team >> how much did tepper just pay? >> for the north carolina -- what did he pay? >> it was about $2 billion >> i think thinking of steve ballmer buying the clippers for 2 billion. now, we've got to go a lot more to come on "squawk. we'll talk to the ceo of etsy.

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♪ good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square shares of dean foods getting slammed in the premarket this morning. the company did match forecasts with quarterly earnings of 16 cents per share. but dean foods cutting its full year forecast due to non-dairy cost inflation among other factors. you're nodding your head in disgust. what's going on here >> this has been a terrible story. really truly it's a good management team, but they've been plagued with all kinds of cost issues now it's non-dairy it was dairy for a long time >> lactose intolerant, i don't know what you do >> i don't know why people are ignoring the trends in staples to begin with. they've had a nice run over the last couple of winds and still

have a lot of head winds ahead of them. you have to be specific on what you own in staples >> we're also looking at marriott international earning $1.73 for the latest quarter beating the consensus estimate revenue did come in lower than expected then there's china china saying president trump is engaging in, quote, wishful thinking when he says the u.s. is now winning the trade war the commentary in the official state newspaper says the president is, quote, starring in his own street fighter style deceitful drama of extortion and intimidation the war of words and rhetoric now officially heating up. >> the thing that's interesting here is when we look at the chinese currency weakening, often that's framed as a little win for china in the trade war relative to the u.s. and you know the impact on imports and exports. i think the chinese will be

terrified about that weakening of currency. they've got a lot of foreign currency reserves. but rewind two years when the currency was dropping fractions and it's been down 8%, 9% in the last quarter i think that's a much bigger worry for them but it's something -- >> that's why you're seeing such aggressive stimulus. that's going to offset this, i think, and help stabilize their markets. i mean, their markets are down 20% year to date their growth is decelerating but at least they're acting on a stimulus front which i think will hopefully act as a buffer >> but if you've already got that debt to gdp level around 300% and your currency falls 10% or so, that's much more expensive particularly if you're going to add to the stimulus more going forward i think it's the big factor that they'll be worried about internally although it's framed here as almost a win switching focus. meg tirrell is with us with a news alert on spark

therapeutics. >> this data is crossing the wire now highly anticipated clinical trial results for hemophilia a these were much awaited results. we are seeing that the gene therapy reduced bleeds and the need for treatment infusion for 12 patients in this trial. you see spark start to move in the premarket trade. looking for a level of a protein called factor 8. it got up to 30% of normal in five of seven parents on the highest dose however, two of seven patients on that high dose did have an immune reaction. but investors were looking for a 30% average level for that protein. it's a complicated metric in order to gauge expectations that's kind of where they're shaking out. so we will be watching spark's

stock this morning they are planning a phase three clinical trial in the fourth quarter. this is a hot area with a lot of competition going on biomarin has started their phase three. they've got treatments, but you have to take them for the rest of your life this would aim to fix the disease with just one treatment. >> just quickly switching focus on the other health care story we've got the letter coming from carl icahn >> "the wall street journal" had reported last week that carl icahn had built a stake in cigna and planned to oppose its merger scripts. we are seeing that letter today. he apparently thinks the price is too high. he worries about the pressure of amazon and the idea was he might try to get other investors to oppose the deal as well that shareholder vote is set for august 24th. so it's going to be interesting to watch >> and he's got about a half percent stake now in cigna thank you.

time to get crafty online marketplace etsy out with second quarter results in the morning, releasing their annual report of diversity. >> good morning. we hear a lot of tech talk from companies with the decreasing number of women among their ranks. etsy believes it's walking the walk women make up nearly two-thirds of the management team and 29% of their engineering team as of the end of 2017. by comparison, alphabet's google, women accounted for 22% of their technical roles in 2017 etsy is a much small eer compan but the ceo says he's willing to grow without compromising on the numbers. women now account for 32% of engineers. jennifer cleavinger says having more women on the tech staff is consistently top of mind for the company.

>> it's not something you can create out of thin air or it's not something that comes from someone in leadership saying, hey, today this year we're going to focus on adversity. it's organic and has been created over time. >> i did spend some time with josh silverman at etsy headquarters he emphasized that etsy's really focused on good intentions and good outcomes. >> you know, that guy in the picture there looks very similar to this guy over here. >> i feel like he's here >> right over here thank you for that stick around because josh silverman is here right here etsy ceo can i ask one diversity question and it comes on the heels of indra nooyi stepping down. i don't know if you saw, we're now down to 24 female ceos of s&p 500 companies. i was writing a column about it this morning what i'm hearing from women --

i'm curious from other women at the table think about this women in very senior positions -- because one of the questions is when a female ceo leaves, why most often they are not replaced by other women. in fact, in history, a woman has only been succeeded three times as the ceo of a company. it's kind of a remarkable thing. and one of the things women privately said is they actually feel it's harder to promote other women than they think it is for a man to promote other women because they think their motives may be questioned in a way when a man promotes a woman, that they will be heralded as a hero i never heard this sort of idea. it seemed so counterintuitive to me both of you are women you could speak to this. josh, also you're thinking a lot about this whether that is an issue you talked about inside your company. >> i'm happy to start. yeah, for etsy, more than half of our leaders are women

so statistically speaking, at least half of the people getting promoted should be women 50% of our board are female. more than half, almost two-thirds of our senior executive team are women so we think we have amazing female leaders in the kpeen. and we've really focused on the discipline around is results based. and the results are that we're seeing statistically what race or gender you come from is not predicting how you're performing and getting promoted within the company which i think is critically important >> do you find it difficult to build that bench though? i think it's all about who you put around you but sometimes it's harder to find females, right? than males so do you find it hard to find i know you said 32% of engineers are women. is that a number you're comfortable with or do you want to see that expand over time and is it possible >> i'd start with 87% of our

sellers are women. about an equal percentage of our buyers are women so we think it's a business imperative to have strong female representation inside of the company to understand our customers. we posted strong financial results. i think in this success breeds success. etsy has been diversed for some time so great women want to come to etsy and succeed we need to continue to apply that focus to the market now we're looking at race, people of color, make sure we get the word out where etsy is a place they can succeed as well >> this is obviously important to the company you're much smaller than the other tech names we brought up these are fantastic numbers. but how do you keep them and keep those metrics in place as you continue to grow >> we have to be thinking about the pipeline of talent particularly in engineering.

opportunities in engineer rg not equally distributed in the united states. so we've got to think about and in particular, if you haven't studied computer science in high school, you're unlikely to major in it in college i'm also the chairman of something called script ed that goes into inner city schools and provides pathways to technology and over 85% of the students reach our kids of color. until we really focus all the way through the k through 12 pipeline, we're not going to see the earnings we want >> the question that i have is this the etsy skeptics long thought that somehow amazon was going to steal this craft business. that all the sellers were going to somehow get on the other platform why haven't they stolen your business and what are you worried about in that regard because there is a sense that they are still the elephant in

the room and if they decided they wanted to -- is it something where if they decide if they wanted to flip the switch, they could >> amazon is great at selling all the commodities of life. who hasn't been on amazon three or four times in the last week in the world of sameness, you want to buy something special. you want to buy it from another human being. etsy is about keeping commerce human. and when you want something that feels special, no one is better positioned to do that than is etsy and if you look at the traditional levers of commerce, it's about value, price, and selection. amazon delivers great value by offering 10,000 units of something which they can buy in bulk and pass along the discounts. if you can buy 10,000 of anything, it doesn't belong on etsy in terms of convenience, they warehouse everything in advance so they can ship it in two days. many of our items are made to order or customized so they

simply can't be warehoused in advance. and we offer more than 50 million items from more than 2 million sellers. so our selection can't be beat it's really not obvious that their advantages translate into our space. >> if you were owned by an amazon, would it be impossible to still have the kind of genetic makeup, as it were, that you do >> we're really focused on building our business as an independent company. we think we've got a long way for continued growth. >> you increased prices to 5%. what was your strategy on that and did you see any pushback as a result and also you've done a great job investing in your business and company and marketing in tools, search, a lot of different facets to continueto see growt and to see operating leverage. i'm curious as to what inning you are in on that investment spend. >> i think we're in early innings of where etsy can be we think the market is $155 billion and that's only if you

pick our top six categories in our top six geographic markets and only the online portion. we did raise our fees for 13 years. we've had the same fee structure. 3.5% commission on sales we raised that to 5% with 2 million sellers, we saw a diversity of voices around that. what's important is the vast majority of sellers really understand that this is about us being able to invest more in them and to accelerate their growth which i think our results are really showing and what we talked about in the earnings call yesterday is that we have not seen any perceptible behavior change at this time from our sellers no increase in churn no increase in prices. >> going to leave it there thank you, sir congratulations on the earnings. thank you. still to come, a new book reflecting on the financial crisis and the author has a warning. america's earnings crisis may not be over yet. he joins us next alerts -- wouldn't you like one from the market when it might be time to buy or sell?

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our next guest out with a

new book looking at the 2008 financial crisis let's bring in adam tooze autho of contra"crashed." welcome. >> thanks for having me. >> what's the new take of this book how widespread it was globally in so many different areas >> exactly widespread on the one hand and deeply entangled for me the most shocking discovery '08 was quite how much of america's bad mortgage the europeans have been involved in. we think about 29% to 30% of the final tranches of private label securitization went through europe that created a problem of endanglement that was really quite unprecedented. >> i think people thinking the eurozone crisis stemmed from the

u.s. mortgage crisis is not a totally new surprise other aspects you link it to are more of a surprise the war in ukraine, russia going in there you think that stemmed from the 2008 financial crisis? >> that's really the untold story of '08 you look at the countries which suffer the largest gdp shock in '08. the top 20 are all in the former communist block. the worst of all is ukraine. which is hit through a sudden stop of financing. and this comes on the heels of the crisis in georgia which we are celebrating the ten-year anniversary of basically today the beginning of the georgian war which shocked the entire region and that one-two bunch of the g geopolitical situation shocked the politics in a way they don't really recover from. >> i guess the country you would say didn't have such a big gdp shock is china so how did they avoid that

and were there lessons learned from it or other things drawn from it? >> the story of the entire crisis is like the cuban missile crisis we stepped away from the edge. on the u.s. side, it's the fed's intervention on the chinese side, it's a massive mobilization of fiscal resources and state-controlled banked pumping credit into the economy. and then off that sugar high to the present, rolling forward of chinese credit-driven growth is something that continues down to present day. there's a change in the expansion of credit at that moment it has to do with the rebalancing everyone is calling for. net exports make a contribution to chinese onwards >> how will history measure the policy makers that were at the helm during this period in this united states? >> i think we're going to do it bit by bit as historical judgment changes

as the carpet of history moves forward. if you stop the clock in 2012, 2013, you would have said b-plus this is a team which seized the moment, stabilized the economies. it was a triumph of liquidity provision by the fed and of course the historical carpet moves forward and we're confronted forward with a political crisis the likes of which we have not seen in either europe or the united states. perhaps since the 1930s. so our perspective constantly changes. and i think the questions we ask, therefore, about that intervention are constantly changed. one thing is for certain we prevented the apocalypse of -- >> just quickly to come back to china, can they deal with their current devaluation in the currency is it sustainable? >> going forward, of course, i'm a historian. i have a kind of professional ethic of not making predictions. but look at what happened in 2015, 2016 that for me is the interesting test on what did it take to

stabilize the yuan's value at that moment. there were two things. the really significant additional piece is janet yellen's highly moment the fed was about to raise interest rates the fed decides not to that was cooperative by the fed justified in extremely ware explicitly global terms. repeatedly to explain american national monetary policies so it takes those two elements, i think, looking forward for us to be optimistic about a soft landing. >> adam, thank you very much for joining us fascinating discussion adam's book is called "crashed." we're back here in a couple minutes. this is a story about mail and packages. and it's also a story about people and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service.

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dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today. want to get some final thoughts from our guest host this morning, stephanie link leave us with some good news >> i feel like i'm always telling you good news. i'm pretty optimistic. i feel good about the u.s. economy. i feel really good about corporate profits. i don't think we're going to go into a tail spin in term of growth and earnings. i think they're going to hold up very nicely. seasonality, we're in for maybe a rougher ride which is why defensives are leaving you want to take advantage of the cyclicals. pull back because i do think the growth is going to be fine good enough especially given the value -- >> what about the tech names everybody is all in on

>> you know, i actually nibbled on facebook last week. >> you did >> i did i mean, i own it i already own it i felt the pain. but i think it could be selective. we were just talking about paypal and how great that story is secular growers. they may stumble from time to time, but the secular growth is so powerful. statement, i think the semicap equipment names in technology have gotten cheap and you're seeing a trough there. so i like that so i still have pockets. health care i've been adding to as well. >> you said you were impressed by josh there. would you be buying etsy >> it's not my kind of style, but i am very impressed with the growth and with the investments. how could you not be impressed with that -- the female, the demographic at that company? it's impressive. >> and this is what i'd be asking if you were on "closing bell" later today. on disney -- >> we'll do that on thursday i think expectations are really high for disney. it went from a hated stock to a loved stock. that said, i think charter and comcast set the company up

pretty well because i don't think that espn is going to be as bad as people think so high expectations if it were to pull back a little bit. i think it's interesting especially given the acquisition. >> what if they continued to go after sky? rallied off the back of that not happening. >> yeah. i added comcast back into my portfolio most recently because i think should they get that piece and should they -- even if they don't, they have such a good cash flow great cash flow. it's huge. >> okay. stephanie, thanks. coming up when we return, evan bayh is going to join us. and later, john taylor is going to be our special guest. we're going to talk fed policy, rate hikes, ask what he thought of jamie dimon's call on interest rates in the future check out futures, though, right now. dow up about 85 points p 0 autix back in a moment you always pay your insurance on time.

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when activists attack. carl icahn taking aim at the deal to buy express scripts. details straight ahead

battle ground ohio a gop stronghold district facing a close challenge from a democrat in a race that's being viewed as a bellwether for november we'll break down the race as the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc i'm andrew ross sorkin with wilfred frost in for joe kernen today. beck is off as well. the dow looks like it would open up 81 points higher. s&p 500 up a little over five points nz dak looking to open 15 points higher let's also show you treasury yields right now the 10-year as we flip the board

around at 2.951%. down from the 3% we saw briefly last week. you want to tell everybody about the 10-year yield you were looking at >> the turkish one crossed above 20%. the lira had started a little bit of a rally earlier today but that's abated and back to sort of bad news and bad market moves for them it's been a torrid time. but yeah if you're looking for a yield -- >> actually thought you'd get paid back, it would be good. >> exactly that's the implication joining us for the rest of the hour, guest host monica desanso from jpmorgajpmorgan >> thanks for having me. >> some quick sum-up questions of the market views at the moment before we dive in earnings season's been outstanding. zblit has. >> good enough to justify valuations >> it has.

>> in terms of -- not much >> not much. more than 80% of the market cap of the s&p has reported. over three-quarter of companies beating. that's ahead of other quarters where the average was around 70%. >> and that kind of optimism, can it be derailed by more fed rate hikes >> i think it can. when you look at what's driving performance. it's strong fundamentals both in economy and corporates either one that could derail those could derail in equities faster than expected rate hikes and what investors think could happen could derail this also tariffs if that were to hinder demand and growth of corporate earnings that could be a problem. >> great stuff monica is with us for the full hour let's get to the big stories front and center at this hour. carl icahn has issued an open letter to shareholders of cigna. if i could channel him, he'd say listen up, folks he says he's going to be voting against the acquisition of

express scripts. he calls the deal, quote, a folly. and says that cigna is vastly overpaying for the transaction he's recommending that cigna instead pursue a multi-year partnership with an existing existing company he says just don't buy it. you're paying way too much of course that transaction one of the many in the health care space that would be reshaping it in light of a lot of anxiety about what amazon may or may not do of course they picked up pill pack just recently meantime, weight watchers second quarter earnings beating forecasts. raising the guidance for the year shares are lower today we should say after weight watchers had a small decline. the comps were tough here's what ceo mindy grossman had to say about it earlier on "squawk box. >> we had a great quarter. revenue up 18% if you look at the subscriber numbers and where we ended the

quarter, it was kind of not much unchanged. so if you adjust for anl seasonality, we were pleased >> we also learned she's not a fan of intermittent fasting. the new sort of trend in diet land etsy second quarter earnings fell just shy, but revenue beats forecasts. now expecting revenue to rise as much as 35% this year. you're looking at that stock it's going to open probably about 10% up this morning. etsy ceo josh silverman first here on "squawk box" this morning as well. here's what he had to say. >> what's important is the vast majority of sellers really understand that this is about us being able to invest more in them and to accelerate their growth which i think our results are really showing and what we talked about in the earnings call yesterday is that we have not seen any perceptible behavior change at this time from our sellers no increase in churn no increase in prices. >> another big stock mover this

morning, zillow tanking in the premarket. the real estate listing site reported second quarter revenue missing forecasts. also the new homes business which flips properties and just launched this spring had no revenue in the quarter separately the company announced the acquisition of mortgage lenders of america for an undisclosed sum. the deal gives it the potential to originate more mortgages and speed up the home-buying process for customers who use its zillow offers service the stock down 17% the ceo will join us at 8:30 a.m. eastern in a first on cnbc interview. close race in ohio today democrat danny o'connor and republican troy patterson are neck and neck. joining us right now is former u.s. senator and former indiana governor evan bayh good morning >> good morning. >> so what -- "a," what do you think is going to happen and

what do you think the true implications are for november? >> the final outcome really doesn't matter except for the addition of one seat possibly for the democrats. the real importance here is this is just more evidence of a growing tide for the democrats in special elections across the country. the real real part is how big the wave will be come november. >> when you say -- by the way, though other side would have a very different take on what's happening here there's a lot of -- there's a number of scenarios possibly including this one you might describe as idiosyncratic, no? >> sure. and alabama wasn't one off in the race any time you have an alleged pedophile, you're probably going to underperform. you cut through the spin and right to the middle of the fairway here, but the republicans are going to extraordinary lengths to win a

seat that's been theirs for 30 years. that tells you they're running uphill a little bit. >> not to push past november, but i would like to just for a second which is it feels like the democratic party is now split in two at minimum two, if not three different pieces a true far left socialistic, very progressive party there might be some that are a little bit more in the middle. then there's sort of a middle ground where you might even put yours. where do you think the party is really going to be >> that's a great question, andrew we won't know until after the election my guess is most of the base is a little bit further to the left but when you look at that middle of america, those swing voters, the independents who don't really owe core allegiance to either party, they tend to be more pragmatic and more toward the middle so my hope is the takeaway for both parties in november will be if you want to govern for the longer term, you need to put the

extremism aside and start delivering results for the american people. >> do you think it lasts until november and has a big effect? >> yes, i think it's going to last another three or four months that is one of the things to your point if you had a republican sitting here making their argument, they'll say the economy is great the second issue tends to be national security and fighting terrorism. the president's numbers on that is fairly high and midterm elections, the turnout tends to be smaller. so that means it depends to be wealthier, older, and whiter all those things favor the republicans. but yes, the economy will be good through november. but will it be good for the next two and a half years was the stimulus a one off that will just extend the aging recovery we've had only to then go back to 2.5% growth >> i knew you had a question, but what's your answer to that question his question >> as long as we don't have anything to market growth, what

concerns me is i think about looking beyond november, what about tariffs and the trade talk that could seriously impair growth and in that case, how does each side deal with that? >> you've got the tariff issues that could impair growth in the longer term. yes, it'll last through november but if i were talking about the president's re-election, that may be a different story maybe decelerating growth by then because of trade frictions or more like most economists think this is a one-time stimulus that may not set off the virtuous cycle which would mean this is a new recovery. is this just a one-shot stimulus or a paradigm shift for the economy? >> explain this and we've talked about this before on this program. amid what seems like we might be in for a trade war, you read these articles about these small towns that are clearly being hit by all of this where you hear companies are going to go out of business and there are going to be layoffs.

the people being laid off are actually intervooed in these articles and many of them still say, you know what maybe i'm just a casualty of this strategy. i still believe in the president. i believe in the strategy. but maybe this is just a one off thing. which by the way is completely counterintuitive to the way we historically think about this. this idea we all vote with our wallet by the way, maybe that translates differently two years from now if you're out of work for two years, you might have a different view of all this i don't know but are you surprised by that reaction >> not entirely, andrew. you could come to my state and go across the auto belt in indiana or the steel producing areas in northwest indiana and see a lot of those towns you mentioned where people have lost jobs and businesses have gone under because of predatory chinese and other foreign behavior there's a flip side of that people have seen in addition to that, people do vote because of their economic interests. to your question but that's not all they vote on. so there are cultural issues and resentment at the establishment,

the elites the president has paid attention on. paying 10% more at the walmart for a cheap product produced in china or somewhere >> going back to one of andrew's earlier questions, what type of democratic candidate in 2020 best grabs some of those back from the president would it potentially be a bernie sanders or elizabeth warren-type candidate? >> bernie does have -- it's interesting. bernie does have some appeal to the alienated blue collar worker that trump appealed to but if you're going to get them as well as that middle i was talking about, you do need a democrat that beliefs in markets, that believes in growth, that believes in strong national security and just doesn't play to sort of the populist or the socialist instincts of some elements in the democratic party so you have to reconcile those things you have to stay true to the fundamental values of the party and acknowledge the pent-up

worries to be sure but just more taxes, more big government, more of a socialist solution that's not really the answer substantively. and most middle americans know in their hearts that's not really the answer. it may be a short-term paltive, but in the long run, it's been tried in other countries, hadn't worked so well >> before we let you go, we were talking before the commercial break before you came on about the senate and the judiciary and that issue in terms of how you think that's going to play over the next two years. >> the power to investigate. if the democrats get even a small majority in the house, you're going to see a lot of that you know, it's going to happen >> and then that gums up the works for the next two years >> yeah. and a lot of people will be turning off their televisions because they just don't like that even if some of the investigations are legitimate and should take place. you'll see a lot of that that is going to gum up the works. the other thing, though, the

senate my old home -- >> by the way, that can work against the democrats as well. >> if the democrats look like they're being obstructionists, yes, that can work against the democrats. we should not overinterpret the results of this election the power to investigate, the power toconfirm judicial appointments the president, the republican party is in the process of reshaping the judiciary for a generation will that continue it's going to be a little marder for the democrats to get a majority in the senate because of the map but number three to end on the positive note, it is possible that the takeaway from this will be the democrats have a very slender majority in the house. the republicans have 50/50 or a slight majority in the senate. and you have a president who really has no fixed ideological or philosophical compass and he may return to his sort of deal making, quote unquote, roots and have both sides saying it's in our best interest to look for deals. that is a possibility. if i were a betting man,

wouldn't bet on it, but let's hope for it. >> senator, great to see you, sir. >> you as well coming up when we return, former yahoo cfo ken goldman is here to talk about the trillion dollar market caps and a lot more and later, john taylor is going to join us on interest rates and the trump economy. u' wchuned yoreating "squawk box" here on cnbc on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

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welcome back to "squawk box. it's been more than a year since yahoo was completed. joining us now is ken goldman, cfo of yahoo here to talk all things tech want to get your sense of what's going on we had an interesting conversation with gene munster on the program earlier we were talking about faang and faang stocks he said the grouping is about to break in terms of how people think about them that actually pas facebook and netflix in popular he believes are going to come

under some pressure. >> the people that say that are the ones that have been negative for some period of time. the -- i'm not going to talk about specific stocks, but if you look at those top five, you look at who the top five were ten years ago, it's a whole different list ten years ago you had the energy companies, you had some china -- you had ge of all things the reality is these companies in general have a lot of momentum i think technology in particular in the valley has never been on as fire, probably more so in terms of the number of different areas. i mean, used to be -- i came out of the semi industry and software and application now it's a whole bunch you can talk about autonomous vehicles software defined vehicles, i like to say. because i love my tesla. but you have mobility. you have ai. you have machine learning. there's just so many things going on at one time never been like this before. >> my question is, you often

hear now the big tech guys are too big. and that when it comes to either innovation, maybe there's innovation happening but it will ultimately get swooped up by those guys that are already in positions of power, not new companies. the reason i ask is you said, smartly a decade ago, we were talking about -- >> talking about ge. >> exactly does that roll over? ten years from now, will we be talking about the same companies? or will we be talking about different companies? >> my own opinion is you'll talk about some of the same as well as different i think there's a number of very large companies that are prime to go public more in '19 what's occurred now, everyone's wondering why we haven't had an ipo market the difference today versus six months ago, the ipos coming out are doing well the valuations for the first time in a long while are higher than their private valuations. so both the investors and the

company and management can see when they go public now, the stocks are going above they don't have -- they don't have to give more shares they don't have all these other things that are going public now. but the fact stocks are doing well in the public market, it's gone public, it's done -- i think the stock yesterday was 28 this is an example of stocks doing well when they go public >> how big a threat is data privacy to some of the goliaths. >> there's been many people on the show here that like to take stabs at some of the companies i think it's an important element -- i read this article for the users as well. when you think about what you put on social media and how it might come back to, quote unquote, bite you later on when you're looking for a job sometimes the users have to take responsibility for what they do. and the companies have to make it easier to make sure the users

can do that. so yes, i think privacy will be -- it's like a lot of things. it will be worked on people will figure it out. the companies will figure it out and the users will figure it out. yes, it's an issue but not insurmountable >> a separate regulatory issue came up yesterday where you saw apple take a leadership position against info wars. this is one of the conspiracy groups that was all over facebook and these sites for months now facebook has said we're going to allow some of this stuff on our site, but we're going to rank it as lowest possible but we're not going to delete it apple said, actually, no, no, no we're not going to have this anymore. and once they did it, then facebook said, actually, we'll take it off too. and spotify said we'll take it off too. but it's going to raise a real first amendment issue. it gets to this issue of whether these sites are publishers and media organizations or whether they're something else whether they're open or walled

gardens. how do you think that's going to ultimately play in washington? or among the public perception and the way advertisers are in these companies. >> in other words, these companies -- companies will react when they see a reaction by their consumers, their users, and users say i can't do this or don't do this. that's what drives companies much better in my opinion than regulatory environment so watching, you know, and how your consumers speak will help drive what the companies do. how long has facebook been around people like to sort of challenge them i say look at how well they have done it's incredible. in 15 years, $800 billion valuation or whatever? it's unbelievable. when you think about these companies that did not exist last century it's unbelievable. that's what i come away with look at microsoft. we forget microsoft. you talk about whether big company or small company here's a company that reinvented itself totally reinvented itself.

then i can name company after company. nvidia is great. all these companies are doing well >> given you sold yahoo to verizon, what do you think they're going to ultimately do they now don't look like the other guys >> i could tell you what i would do if i was in their shoes. >> please. >> i would do emc -- i would offload 20%. and the way you incent a company like that is you create a public company. you put roughly 20% in the public environment you hold 80% like emc held vm wear so you can motivate the employees. >> are we talking about verizon? >> yes verizon, aol, yahoo. >> do you understand

>> i'm following a bit >> so you want verizon to -- >> i would basically take aol, yahoo public i have a hard time getting my arms around that >> you want tim armstrong to take that public >> yes it's a public entity the employees now are motivated because they get stock in whatever company you want to call it. just like vm ware. how successful has that been super successful why? because it was run as a public company. >> and you don't believe that verizon ultimately needs to be in the content business? >> you can get the best of all worlds you can work those angles. you can work the distribution. in other words, if you want to put some of those sites directly on your phone, they can do that. and hopefully they do. because that's a great win/win i think the way you win/win, you know, if you're an employee, let me put it in perspective if you're an employee of yahoo,

you've been running as an independent company for 20 years. by the way, what we should have done is spun it off as a for profit entity and kept the yahoo operation public that's another story i have a lot of things we could have done differently anyway, i would do -- >> do you think the market will give you premium value by doing this >> then the market sees the transparency of an independent company. >> ken, we got to go we'll hook you up with tim armstrong. you can make that deal happen. if you do, come on back and let us know when you do. thank you. great to see you >> thank you still to come, shares getting crushed after zillow's results. the ceo will join us first on cnbc next.

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coming up when we return, the zillow ceo joining us after the break. we're going to ask him about the strategy next and where he thinks things are going. we're back in a moment

♪ welcome back to "squawk box" this morning right here on cnbc. we're live at the nasdaq market site in times square shares of bausch health are rising the company beating estimates on both the top and bottom lines. we haven't talked about valeant

in so long now they're renamed, we don't talk about it like that. they also raised their full year forecast stock up 3%. hertz global lost 19% -- or 19 cents if it was 19%, we'd have problems per share for the latest quarter. smaller than what was expected that stock is up 4%. i always worried if i misspeak that the algos will somehow take that and do something. >> we're premarket should be safe >> you never know. >> less liquidity, i guess >> hertz said it saw growth across all of the business segments disney issuing quarterly numbers after today's "closing bell." expected to see earnings jump. yesterday the stock hit its highest level since may of last year lots of folks are going to be on that conference call this afternoon trying to make heads or tails of what may or may not

happen with sky. it's going to be quite the call. in global news, the turkish lira dropping again today. now down about 27% this year the currency had rebounded a bit this morning, but reversed that. it's now up -- it is up a little bit today. it's up 0.6% the dollar there declining there's the one-year chart that tells the full story and turkey's 10-year bond yield topped 20% this morning. highest on record. it all comes amid worsening ties and worried about erdogan's influence over his country's central bank of course those twin deficits that turkey has, a lot of dollar financing needs compounding. the issue when the currency falls, questions now raising about various corporates and corporate debt profiles as well. so keeping an eye on that. president trump is going to be having dinner tonight with some executives from major

companies. eamon javers has a look at the guest list tonight and what's on the menu >> i don't know what's on the menu, but we do know who's going to be there. the president, of course, is in new jersey this week on a bit of a summer break the white house putting out a list of 13 different ceos who will be having dinner with him in bedminister half of those people were members of the ceo advisory councils that disbanded in the wake of the president's racially tinged remarks after the protests in charlottesville, virginia some of the ceos that will be there tonight include smith of fedex. weinberger of ey and others but a lot of those folks were on the band is getting back

together in the sense those ceos want to have access to the president, perhaps not all of them want to be on those councils and be publicly seen as identified with the president. but they do want to have dinner with the president tonight here's two ceos. indra nooyi and mark weinberger that were on the strategic and policy forum they put together no particular agenda, the white house says, other than getting together talking about the economy and business and having some dinner. >> if you were hosting, what would be on the menu >> if i was hosting? well, look there's a lot of -- there's ta -- a lot to talk about. sort of east and west, i think that's got to be topic number one tonight.

and all those companies will have a different perspective and angle. some will be beneficiary some will be net losers. and of course the president's moves on reimposing iran's sanctions, that's caused some tension with our european allies some european companies don't like that because they wanted to get into that iranian market how that plays out among all these companies will be different as well. >> eamon, thank you very much. >> you bet >> i could cook scrambled eggs >> for dinner? >> i like eggs for dinner. and it's one of the few things i feel confident in my kitchen skills >> the only thing i can cook is lasagna. >> really? >> yeah. it's my specialty. >> we'll have to have a party. eggs and lasagna >> the president would love it, i think. >> that's quite a menu zillow group reported a mixed second quarter company beefing up its portfolio announcing to buy mortgage lenders of america

joining us now to break all of this down is zillow group's ceo. wanted to talk to him today especially after this earnings report the stock is down at the premarket in a big way are you surprised by that reaction >> it's a little bit painful in the short-term i think the reason the stock is reacting the way it is is because we lowered guidance due to one of our marketplaces missing its revenue results. so we lowered guidance for the year i don't think the stock is reacting for the mortgage lenders of america acquisition about which i'm excited. >> just to put a fine point on it, the new homes business there was some consternation but this is a business that buys and renovates homes. had no revenue in the quarter. >> we launched a new company where we offer and then resell

it we think that's appealing to homeowners what's happening, though, is homeowners are accepting the offer from us and then they're going out to shop for a home and not selling the home to us for another couple weeks it's not until we get the keys for the home that we can do the light refurbishment and book revenue later. so there's a little bit of a revenue timing issue where we're buying homes, but not closing on them and therefore not reselling them so revenue is basically pushed back that contributed to the revenue guidance >> we have this sense that the real estate market is hot, hot, hot. yet the agent listings slowed in the quarter. what happened? >> i think you're referring to our unique user number the total number of people that visit the website. what's happening there is at some point we're reaching market penetration in term of the total number of americans that will visit a real estate website. we think there's opportunity to grow at the top of the funnel and we're working hard to do so. deeper in the funnel at the visit number and more importantly at thebottom of th

funnel at the e-commerce number where transactions are occurring, we think there's a lot of opportunity there so in our premier agent business which is 55% of revenue, what we're doing now has the potential to double the number of real estate transactions that come out the bottom of the funnel from the same number of visitors to the site because we're changing the way leads are distributed. instead of going to one premier agent, they're now going to the first premier agent. and if they don't answer the phone, we're ringing the phone to the second, third, fourth, and on premier agent we think that will seriously improve the number of transactions that come out the bottom of the funnel >> spencer, should you have disclosed the price paid for mortgage lenders of america? do you think that might have abated the share price decline >> you know, the accountants declared it wasn't material so we didn't disclose it. but it's a couple hundred employees. about 300 employees. they do about 4,000 mortgages a year it's a relatively small lender it's foundational for us what's important about this acquisition and the reason it's so on strategy is when zillow

offers buys a home and gets ready to sell it, we want to provide a home buyer with a mortgage that's the biggest impediment to them buying a home just as home builders have in-house mortgage, we want to be able to attach a mortgage. and earn revenue from an origination when a buyer is buying one of our homes. it's an important one for offers >> do you think it changes the way investors think about you? perhaps no longer a start-up, disrupt ef tech media company. instead a full service real estate company >> i hope that it's changing the way investors are looking at us. i hope they're seeing we're evolving from simply a place to advertise real estate information and instead we're becoming more involved in all parts of the home transaction from buying, selling, renting, and financing. we think and our biggest shareholders tell us that that dramatically increases the

addressable market i had one say, wow, now i'm starting tosee this company could become way bigger than i thought it could become. yes, we are absolutely changing. we're evolving to have a much larger market than just being a media company that's just selling ads. >> spencer, to that end, how do rates factor into your view when you think about this ramping up in the next few quarters at the same time rates are moving higher >> rates are up about a hundred basis points in the last eight or so months we're at about 4.3% on a 30-year fixed right now. that impacts affordability every one point increase in rates, that's about $270 a month for the typical mortgage holder. that is one of the things that's keeping people in their home because of that mortgage rate lock in. if you bought a home three or four years ago and you're at a 3% or 4% ortgage, it's hard fo you to sell your home now and flip into a 4.5% mortgage. it makes things much more expensive for you. that's one of the things that's

keeping inventory levels low in terms of how it impacts us, the mortgage lenders of america acquisition is about creating a mortgage for a zillow offers home i don't think it's going to -- i don't think these mortgage rate increases are going to impact that very much especially because we're still so small in that space >> you built this company organically but also through acquisition. i want you to react to this as a headline zillow needs to show some results before any more m&a. how do you think about m&aas part of your strategy at this point? >> we've done 16 acquisitions, and i'm very proud of our m&a track record it's accelerated our growth. to move into a different category, different space, or just improve our competitive advantage. this one i think is small but transformational i think that it allows us to monetize the zillow offers business a second way. so first we can make money from buying and selling second we can make money from

mortgage origination and third we can make money by passing a home seller who doesn't want to sell their home to us off to a premier agent and that listing lead generation business has large potential as well these two other businesses hang off of the zillow offers business the mortgage bank acquisition yesterday makes that possible and it dramatically accelerates the movement. >> spencer, always great to see you. >> thank you, all. >> thank you talk to you soon still to come, we'll get another news maker john taylor, we'll talk to him about the fed and the global n'gonyerony. dot awhe. we're back in a couple minutes

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welcome back president trump expressed his disappointment in the fed's interest rate policy in an interview with joe kernen last month. but the markets don't seem as concerned. the dow up nearly 5% in the six months since jay powell took over joining us now, john taylor. good morning to you. thank you for joining us >> great to be here. thank you. >> john, let's touch on that, first of all, the president making some comments about where he would sort of favor interest rates. i guess he liked looser policy already. what was your view on that slight intervention? >> yeah, i think people were aware of that. i think what it does is indicate how important it is for the fed to have a strategy they're trying to do that. some procedures they're using, sometimes people call them rules. and i think they're moving in

that directionand clarifying what they're doing i think that's all good. >> what about the policy itself? particularly given the shape of the yield curve. is there a fear in your eyes they're going too fast raising rates at the short end >> no. i think they're basically to some extent catching up. right? there's been this unusual policy for a long time. so they're doing that in a gradual way. they're signaling a lot. so i think it's about right. of course it's contingent on what's happening with the economy. but it's going in the right direction. they have people including the current chair who are trying to indicate what the strategy is. >> how much as well does the shape of the yield curve curr t currently rely on what yields are like internationally >> i think at this point, yield curve is influenced by global factors quite a bit. the european central bank has just begun to end their quantitative easing. the bank of japan is doing it still. and globally, there's a lot of unusual action still there's a global normalization

that's going on. and the more that can be predictable and understandable, the better it will be. so far it's been good sfor the markets. the u.s. economy is looking good that's partly because of this adjustment of policy i think the tax cut and the regulatory changes are part of that as well but monetary policy is by no means insignificant. improved economy. >> to follow up on that, how do you think it's affected the fed's decisions when you think about what the fed is doing and the bdoj? >> the fed is the one that's begun to move first of the major central banks. i think their decisions are influencing the rest of the world. and i think you can begin to see that already since it's been clear what the fed is doing. both with respect to mario draghi with a little bit longer lag, occkuroda at the bank of

japan. i think it's important this not be said and it be understood because there are ramifications throughout the world on this operation. >> on that note, we've seen a sharp selloff in the turkish le lira the chinese yuan as well is there risk picking up in those economies? >> especially with respect to turkey and of course argentina, i think these are policies that these countries have to get right themselves there's nothing that's difficult here that a good policy would not be able to fix the decisions coming up for turkey are really very important right now. china's is a little different. they've moved to a situation where the rate has been able to move more. that is the exchange rate. but as you know, there's been a lot of discussion the last few days about what they're actually doing. but i think if the rest of the world begins to understand clearly what the fed is up to, the better off we will be. those central banks will be able to adjust more smoothly and result in a more successful

world economy. again, the progress of the u.s. is good. growth is picking up quite substantially. it began last year and i think those policies are part of what's going on. >> and john, finally, in terms of the dollar, do you think given all these factors we've discussed that it is likely to rise from here? it's pretty clear what the fed wants to do. it wants to catch up and thinks it's good for the economy. i think other central bankers want to do that. no surprises as much as possible, the world is full of surprises as long as they're not caused by central banks, i think it'll work out fine. >> thank you very much. >> thank you when we return, counting down to the opening bell on wall street jim cramer will join us. here are the futures right now green arrows across the board.

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welcome back to "squawkbox." jim cramer joins us now. hey, jim

good morning to you. >> what a show you've had. over and over and over and the interview, holy cow! you nailed the guy that was a tough question. i mean, honestly i don't know the stock deserves to be down this way. i think you worded it correctly. i love sense. >> good for them to come on on a day that is down so much. >> did not duck. yeah, i agree. the mortgage lending what the heck? 19 holmes for sale whatever happened to did it top out? well done. >> jim, what do you think about disney later today >> it's up what can i say it's obvious that the narrative is changing rapidly. espn and espnplus doing better you have the acquisition that will change the dialogue as far as i'm concerned, we've been waiting for bob to win and tonight is the coronation. i see 123. >> what about 1.8 billion pounds $2.4 billion

is that a good buy for arsenal football club? >> i don't know. the supporters and the former players they were furious at the news of an offer i mean, yes, as far as i'm concerned, we know this business better than anybody. it is heated, it is difficult to figure out what is going to happen i rely on you. and, man united, arsenal, i don't know why don't you come to see it at wembley. i've been urging you to catch the wednesday game. >> we're going to do it, jim. >> are we really >> the fans don't like the purchase we'll have to see. >> that's very clear the fans are angry. but if you go to the eagles/jags. i'll go to one of your premier games. >> done. we'll do it. jim, thank you very much. >> i like it very few commercials >> exactly. >> we need like 20 goals per game. >> i don't think that's allowed but we'll raise it thank you very much.

we'll see you in a few minutes don't forget, coming up ahead on the show jeff katzenberg and meg whitman. don't miss katzenberg and whitman "squawk on the street" 100 m.asrnim :3a. ete te. ♪ hawaii is in the middle of the pacific ocean. we're the most isolated population on the planet. ♪

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just another day on the farm. or is it? this farmer's morning starts in outer space. where satellites feed infrared images of his land into a system built with ai. he uses watson to analyze his data with millions of weather forecasts from the cloud, and iot sensors down here, for precise monitoring of irrigation. it's a smart way to help increase yields, all before the rest of us get out of bed. the consumer discretionary sector jumped over 13% this year

through july similar gains bode well for the sector gaining another 10% the rest of the year okay most important news of the whole day. you ready for this we talked about earnings going up none of that matters we want to witch wolf a happy birthday today >> thank you very much. >> it's his birthday he was called in, no less, to be here on his birthday, at the last minute. >> right you were watching "mission impossible." >> it was excellent. i went to the 4d experience when was -- >> it's coming at you? >> it's water. it was unpleasant, frankly the film is very good. as i came out, joe was sick. there we go. no better way to start my birthday. >> happy birthday, wilf. this is a mission that is impossible. >> made simple made simple. >> yeah, thank you very much.

>> thank you thank you for being here. >> thank you for hanging out with us. it's been a great. hon can has been here. jpmorgan private bank. make sure you join us tomorrow "squawk on the street" begins now. ♪ welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer nasdaq shooting for six days up. the longest win streak since march. vix the lowest since january europe is solid. oil within a near shot of 70 as the white house imposes sanctions on iran. investors are shaking off the global trade tengszs oil and gas gaining. futures higher s&p closing in on