august "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. markets are higher yesterday, but this morning red arrows across the board dow jones down by 68 points. nasdaq down by 13. it is the ides of august, so far the dow is down for the month. the s&p 500 and the nasdaq are up look at what happened overseas in asia. the nikkei was down 0.7% then you saw some losses in china. shanghai down by 2%.

the hang seng off by 1.5%. big losses there we'll continue to follow that. in europe you can see red arrows across the board the dax is down just barely. the cac off by 0.2%. the ftse off by 0.4% finally check out treasury yields here in the united states you'll see the ten-year at this point looks like it's yielding 2.882% still back below that elusive 3% turkish president doubling down on the trade war with the united states. he's jacking up tariffs on american made cars, alcohol and tobacco. the company's tax on american cars doubling to 120%. on american alcohol, 140%. the trump administration announcing friday it would double tariffs on steel and aluminum imports from turkey the lira trading against the dollar this morning, down another 3% a big deal in the energy

space. diamondback energy buying rival energen for 9$9.2 billion all-stock deal but it does include a bit of debt. this is diamondback's second major deal in the permian in the last week. on thursday it agreed to pay $1.2 billion for ajax resources. >> i think the rear lira is up today, isn't it? it's up 3% today >> we should go back to that chart. >> i think that chart is showing the higher it is, the higher -- versus the dollar. the prompter it said it is rising against the -- >> that's what i thought but then the way it -- >> depends on which way we look. >> on the very right it looks like it is down. doesn't it >> that's what i thought >> it's up, so it looks down in the teleprompter it is up this is the chart of the

dollar -- this is the dollar versus the lira. >> so it's up. >> the dollar is down, the lira is up. >> okay. then the lira is up. bitcoin is up. >> it is >> how did i not -- were you here for that? you heard my update on that? >> no. >> i tried to buy it i went on to coin base >> why >> i don't know why. because it was at, 8,300 >> it's at 6,300 >> the vacation mentality surged >> did it work >> i couldn't do it. it wouldn't take my debit card >> good thing. it's down 2,000. >> believe me, this is like a sports team. this was uncanny >> i tried so many times on that

monda monday >> good thing you're too dumb to buy it >> sometimes you protect yourself >> i've been there >> as it was going down, i was like -- if it was going to be worth a million dollars for bitcoin, i wanted to have one just to have one >> did you see brian kelly, he was saying it's capitulation, it's the retail investors who are panicking and who can't take the ups and downs. but i think the retail investors pushed it up above 10,000, too are they out forever who will give me a nil ondollmi dollars for my bitcoin >> nobody. >> maybe in the rest of the world it may be worth a million dollars. the only thing you need to remember, if it's ever worth a million dollars, that means the market cap of bitcoin is $22

trillion, basically the size of our economy, our debt, all of it just think about that. that's all >> that's impossible >> the market cap in total for all cash in the world is about $60 trillion the market cap for gold is about 10 >> norin other words, it may ta while? >> you have to believe it will be better than gold. i think there's a decent chance it gets to 20,000, 30,000. i think that we have a -- we're totally off on a tangent there's a chance it goes up over time outside of the united states, it has a real impact it's like a real thing a lot of places -- turkish lira is a good example. argentina. >> that's a sound analysis >> so you finally did the

article on bitcoin scammers targeting affluent neighborhoods and sending the one that came -- didn't come to me, it came to somebody else, who was not married who said i'm going to tell your wife what you have been up to you can try and tell her, it won't happen, because i'll tell all your neighbors and your community what you've been doing. here's how you give me -- >> it's the nigerian e-mail that we all used to get >> we're all back. >> we're all here. >> back to normal. >> for like a week >> i don't know, i think becky's hair is straighter i like the way it looks today. >> you're in yellow. >> i was in the yellow zone. don't want to be in the yellow zone it's on the way to the red zone. >> i appreciate it thank you. >> i withdrew that i don't know what you're talking about. i made no comments about your appearance whatsoever. >> thank you

>> several states have wrapped up their midterm primaries yesterday. in vermont, voters made history nominating democrat christine hallquist, this is the nation's first transgender candidate to win a party nomination she faces phil scott in november that was interesting even more interesting was that vermont has a republican governor >> yeah. >> the home of bernie sanders had an incumbent -- >> next door to judd gregg's home >> he's in new hampshire >> right next door >> yeah. yeah in wisconsin an easy win for governor scott walker who earned the gop nomination he will face democrat tony evers. in minnesota, tim pawlenty lost his bid to return to the state house for a third term

he's down by nine points to jeff johnson, he won the democratic farmer labor party nomination. i was reading different stuff. sorkin, this was on huff post. >> yep >> i saw an analysis of why tim pawlenty left. they were glad because he became a lobbyist for five years for wall street banks. >> they said this means republicans and democrats will not take somebody who has been taking money -- >> that's not the only thing i saw. they went back and quoted what tim pawlenty said about trump, where he said he's unfit, blah, blah, blah they tied it that he was unable to -- even though he later said i voted for trump, i don't like his behavior he tried to walk it back, it was too late i don't know how the midterms

are shaping up everybody has a different view >> i don't know that i would believe anything i saw because the polls have been so off >> we will learn on november 9th. >> i wouldn't believe anything i saw any way. nothing surprises me >> are you guys going to do that little thing, remember that really cool chart that shows the percentages that was 99% on the "new york times," then an hour later it was 99% the other way >> are you going to poke fun all day? >> it was not the new york times alone who got this wrong >> i love the way that thing inverted one minute i looked at it -- >> so you do read and watch. >> is it was on a website. >> let me tell you about some other business news. warren buffett loading up on apple and several other big names. leslie picker is here. she has some highlights of berkshire hathaway's latest 13 f filing with the s.e.c. >> good morning. warren buffett's berkshire

hathaway continued adding to its stake in apple upping it in the quarter by more than 5% to hold a position worth upwards of $50 billion in the trillion dollar company. also some repositioning with bill ackman's portfolio. the founder of pershing square slashed hits stake in adp where just a year ago he was kicking off what turned out to be an unsuccessful proxy contest ackman doubling his stake in united technologies and disclosed his share ownership of lowe lowe's other notable moves were coatue dissolving a stake in snap and david einhorn preferred gap and t.j. x ajx and value act cut its stake

in 21st century fox. all these stakes are as of june 30th and may have changed in the six weeks since. >> einhorn s he's like walki, h like -- >> ouch. >> he's everywhere that's bad right now. >> he's unlucky in a way >> don't stand around him. sputnik will fall on his head. sorkin, he has got -- sputnik, remember that? >> i do remember >> it was going to come down or maybe some other thing he managed to find everything that's bad >> he's famously short tesla >> he short shorts, the tweets, all of it.

>> you know that elon musk's next plan is to sell sho short shorts online. >> seriously >> yeah. >> i thought that was a joke >> i don't think it's a joke >> they're back, i heard >> tesla short shorts. >> for guys? i don't know he hasn't done the candy yet >> he knows everything about tesla. >> i'm trying to think of you two in short shorts. >> yeah. not good for anybody no >> i don't like short shorts in general. >> no. >> not a fan >> the long ones look good >> yeah. verizon is going to be offering customers who sign up for the new 5g internet services a free apple tv box and a subscription to the youtube streaming service. it will only be available in four cities for now.

verizon is rolling out 5g in los angeles, houston, sacramento and indianapolis that's all happening later this year that's the four cities it will be starting off with with the big 5g rollout we'll talk all about that with hans vestberg, this is his first television interview since taking the job he will join us at 7:00 a.m. eastern time >> back to the equity markets. joining us now is jonathan gallob and kathy wood. i was reading some of your stuff, kathy i was getting depressed, then all of a sudden there's a but that comes into it concern that the nine-year bull has overstayed its welcome not you. many strategists talk about the narrow leadership. f.a.n.g. stocks, 75% of the s&p 500. in many mines the har bi-- minde

harbinger of a bear market but you don't take that view >> no. the bull market can continue to strengthen >> yes, we believe the bull market began in earnest in december of 2016 before that the wall of worry was scaling. it's still scaling we have china, tariffs emerging markets we have the flattening yield curve. still concerns which are helping to build this wall of worry and a strong bull market >> do you care about fundamentals december of 2016 was the month after the election of 2016 you're saying the bull market started after trump got elected? >> it seems business sentiment took off after that. a lot was centered around tax reform and --

>> you see a cause and effect there? >> it just so happens those two things happened at the same time >> that would be coincidence is that a cause and effect or -- >> do i think the reason the market is up because of trump? >> no, no, because of deregulation >> do i think the tax -- if you look atings are, yes >> you can say congress, if you want >> it doesn't make a difference. better policies helped the markets. i do think we would have had a good market any way? yeah, i think so the economy was picking up steam it's healthy it will continue for the next couple of years. let's say hillary did win, would we be where we are now >> i didn't say it didn't help >> you think we would be flat with october of 2016 or up from 2016 >> i think that the deregulatory back drop, the ease on the banking sector has all been

helpful. i think if you look at the unbelievable earnings you're seeing now a big chunk of that coming from these tax breaks the difference between the u.s. fundamentals and the rest of the world is largely because of policy differences you know, you do the math on that >> is the jury in on tariff p l policies and whether they're positive or negative >> i'll give you my read we're looking at what happens if we have a trade war as opposed to bringing down trade barriers. there's such a willingness to look at the downside case here nobody wants more restrictive trade. if the result is the opposite and we address some of the one-sided trade deals, we could end up better.

i don't hear anybody making that side of the case >> can i chime in here >> yes, please >> i do think we have to give president trump credit for a lot. he got tax reform through in one-third of the time that president reagan did and deregulation, we've never seen anything like this. cause and effect yes. as far as trade and tariffs, i think he's thinking about those the same way he thought about tax reform cut taxes, cut tariffs larry kudlow is having an influen influence. cut those tariffs. that's another tax cut and ip reform in china, that's more deregulation. it's very simple, i think, in his mind cut taxes, deregulate. let the markets work let animal spirits work. >> it has been at least just recently, didn't used to see it, recently push back on the idea

that we're the only ones at fault here in terms of putting new tariffs on a lot of european ministers, they say this is outrageous. what do you think? then you say you already have these tariffs that have been existing for years then they sort of don't have an answer for that. that story is out. if everybody would get rid of tariffs -- >> to have an automaker say let's go to zero, that's provocative. right? >> that would be a shock if it was something. down the road that is the holy grail. >> we're getting there the market is smelling it. certainly investor time horizons are extending. >> you kind of agree on that >> yeah. several months ago trump said, fine, you want to not argue? let's take it to zero and everybody got quiet. so the market's concern is this

tail event will happen it could, but i don't think it will >> with china, it's not necessarily about tariffs. it's about the whole business model. it's nice to let someone else do all the r & d, you sort of bring it in. >> it should be more about intellectual property. i'm not sure -- >> they won't change that way. >> if there's a fight, that's probably the bigger one. >> you think they might? >> i think everything is on the table. i think they want to grow. i think they want to become the greatest economy in the world. they will free up business >> jonathan, thank you >> great to see you both when we come back, we'll talk about garth brooks. he lost his crown as country music's highest paid star. we'll tell you who took the top spot next. and at 7:00 a.m. eastern, our interview with the new verizon ceo. hans vestberg.

it's his first television interview since taking the job earlier this month right now as we head to break, here's a look at the biggest premarket winners and losers ok, show me what you got.

i am going to vote for myself using nothing but this remote and the sound of my own voice! vote for... -wait, wait, wait. that's not a talent. any xfinity customer with an x1 voice remote can do that. watch this. i want to vote for... obviously not you. ooh, that guy.

cast your votes during every live show. just say "vote for agt" into the x1 voice remote. that's luke bryant the reason we're talking about him, he de-throned garth brooks as the highest paid artist in country music. he earned $52 million over the last year, most of it from touring revenues he earned restaurant endorsement deals and he is on "american

idol" as a judge garth brooks, 45.5 million i would say i like kenny chesney more than luke brian >> zac brown band. >> we were on vacation, we have sirius or y2 country and there was a week where it was zac brown band >> i listen to them. >> 31 million. >> blake shelton, 23 million >> i wonder if those numbers are inflated they use revenue numbers on the concerts >> and the question is how much do they get of that? >> and it should be -- i believe it's revenue x costs but not for the band do you have to share it with band members >> 5 it mi2 million, it's okay

>> short of the ge power conversion revenue model now ge will message me that was uncalled for. i'll withdraw that i've been doing that a lot >> a lot of withdrawing? >> the last 20 years >> 25. >> glass door releasing its ranking of the nation's highest paying jobs. these are physician, pharmacy manager, pharmacist, entrepreneur architect and corporate lawyers. all of the top ten jobs have a base salary over $100,000s bud light is giving out free beer when the cleveland browns win a game the brewer placed victory fridges in bars across cleveland. they are currently padlocked at the moment they will be opened when the browns break their 17-game losing streak. it's been 599 days since

cleveland last won a game. >> a regular season football game you know who they beat last week the giants >> i wasn't watching >> exhibition. >> the jets looked good. the jets were beating the falcons. >> buffett loves this kind of insurance. at golf tournaments they have a million dollars for a hole-in-one. it costs like 800 bucks. >> because nobody ever hits them >> i'm long budweiser on this. >> they have basketball games, if you get the shot or the u.s. open if you hit the ball where it's supposed to be. >> is there an expiration date on the beer? >> cleveland will win a game maybe. eventually i think. coming up, the dean of the wharton school sounding an alarm about president trump's trade war. geoffrey garrett will join us to explain. and then hans vestberg, he just took over the beginning of

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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. one of the stories front and center, a big earnings report around 8:00 a.m. eastern time. a quarterly report card from macy's the street expecting 51 cents a share. other retail news, eddie lampert offering to buy the kenmore brand brand for 400 million in cash that's contingent on lampert's hedge fund getting funding from an unknown partner >> reading through this, it seems crazy to be able to cherry pick the real estate you want, to cherry pick the best parts of it and leave the rest for the

shareholders >> i hate to say that was always the backup plan. i think that was always the backup plan. he structured this deal when he first bought the whole thing so that if the whole thing went sideways he would still be okay. support for president trump among farmers has dipped as the trade war drags on that's according to farm journal research trump received about 70% of farmers votes in the 2016 general election, but now only 54% said they would vote for him again. look at u.s. equity futures and see how things are setting themselves up. dow opening off about 104 points nasdaq down close to 40. the s&p 500 looking to open off about 11 points. trade war or a new cold war? that's the question being posed by the wharton school's dean about president trump's china policy joining us now is jeis geoffrey

garrett. when you look at this as a cold war, you're talking about a cold war between china and the united states >> yeah. we're not in a second cold war, but i think the -- if you go below the surface on the trade war stuff, you get two other things that remind me more of the woeld wacold war the first is the u.s. is saying the entire chinese model of economic development is is unfair and illegitimate. why? because the state has its hands in everything in the economy the second one, the kicker is to say that a lot of that stuff, particularly where technology is concerned is a threat to american national security, and therefore we have to be -- there's an override on all the economics that says hey, this affects national security. i think the economic

interconnections between china and the u.s. are so immense. that wasn't the case with the soviet union 30 years ago. >> what you said, those two premises, i don't think they're complete ridiculous arguments to make this is a different situation than when nixon first approached china. you're going back a long way and china's economy developed greatly over that time what do you think it's time for a change in how we deal with that structure >> if you look at the rational below the twitter headlines, that is what the administration is saying. the post-nixon consensus on china which said more economic engagement will lead to reform in china, trump administration is saying is hasn't happened china has benefited more from the economic relationship than the u.s. has both points are true it's probably also true china is the only potential military rival to the united states in our lifetime my trouble with the administration's policy is that

i think you could probably do that -- you could still do more of encouraging reform in china rather than doing public shaming the way it's been tending to act. >> you think the public shaming is not one that works in china where they're concerned about saving political face? >> the government is concerned about saving political face, but the bottom line for the chinese government they need to deliver economic growth to the chinese people, there's more wobbles in the chinese economy today than there's been in the last decade, which i think means there's a chance mr. trump will, in fact, win the trade war. i'm just concerned about the longer-term ramifications of that >> i did read something today, we're thinking about trade in ways that we have not in a long time somebody pointed out going back to adam smith we look at free trade as a good thing. something that benefits all parties involved with it that's probably still the case it's hard to look at trade deficits and say you're beating us by this much when you have

people here doing business with people there with china it's a different scenario than just about any other country that we're doing business with because of some of these other issues intellect cal properual propertt >> i think that's true then you add two other elements. china's incredible ambitions now to get to the technological cutting edge in areas like ai. so this is not -- this is not a poor country it's now a country that has enormous innovation aspirations. second, we're not talking about a small country. we're talking about the second largest economy in the world the world's largest trading nation taking a hard look at chinese model of development when xi jinping has said for more than five years he will open up the domestic market and it looks like none of that has happened, that's a big deal. >> transition to a consumer-based society, it's

important with the size of the population that they continue to make gains there just recently, i don't know whether it's our propaganda or how it's working, there's been articles written that there's some undercurrent of criticism of president xi coming out of the communist party in china, that he's been too strident about keeping things status quo. some finger pointing is starting, whether it's the stock market in china, whether it's the yuan, whatever it is, you would have never seen that i'm wondering whether that's the beginning of a few cracks. >> of course that tends to be the case when you had an incredible centralization of power, as it's fair to say we have seen under president xi an enormous amount is riding on him personally and his control as i said before, the bottom line, legitimacy of the chinese government is not the political system but the fact it delivered to many economic developments. if there's a pause, i don't

know it's very important that this keeps moving if it's a small percentage point slowdown in the way things are going, that makes a huge difference >> yeah. you mentioned two of the important indicators troubling indicators coming out of china already. the third one i would add is the amount of debt that is sitting not only the central government books but on local and provincial government books. we do -- it's hard to know how much of that stuff there is. but there's some evidence that debt is now trading at a big discount real estate, there's always concerns about real estate bubbles. you look at those indicators, it looks like the economy -- china came out of the financial crisis incredibly well. that was extraordinary they did massive fiscal

stimulus, struinfrastructure all that worked. now the economy is less strong, so the trump administration has a chance to win because china needs to make concessions. >> i'm hesitant to have this conversation in public because it will embolden the hawks and the president himself, if he thinks this is working an navarro sees blood in the water, we could go to 500 billion in tariffs. that might not be good for anybody. >> i think a trade war is manageable you know, could it tip the -- could it slow down the buoyancy of the global economy? maybe. i think a pure trade war is manageable i'm more concerned if the u.s. position becomes everything that happens in china economically is illegitimate because the government is involved, what will we do with a company like tencent that wants to be more active in the u.s.

we've seen it in zte you can buy huawei phones everywhere in the world but the united states. do we want to server all of that with saying the economic model is illegitimate and national security >> national security rings truer with me with china than with canada >> how do you feel about american companies doing business in china? there's talk about google going to china apple has been in china for a long time but recently changed their own policies so they're using a joint venture for the icloud business for chinese citizens >> a subtle shift is happening now, but it's an important one company like apple has used china as an assembly line for a long time. it's a taiwanese company, foxconn that has done the assembly now chinese costs are so high, and with the tensions in the u.s. relationship, looking for a

country like vietnam to take that assembly line roll, that's possible but the chinese market that's the story for apple than gm. gm sells more vehicles in china than in the u.s. >> it becomes a very important market except for the challenge of then what do you do in markets where there is all sorts of other restrictions? >> i think what american companies have said for a long time is of course it's hard for us to do business in china but the upside is so high we'll do it any way. would gm rather be independent in china they probably would, but they accepted a joint venture term because the outcome is so great. >> geoffrey, thank you very much coming up, a new survey measuring small business confidence the results of that next. and then the next steps in elon musk's bid to take tesla

private. at the top of the hour, don't miss this, the new ceo of verizon, his first tv interview since taking the job, hans vestberg will join us live on vestberga hotejoin us live on that's why we created expedia's add-on advantage. now after booking your flight, you unlock discounts on select hotels right until the day you leave. ♪ add-on advantage. discounted hotel rates when you add on to your trip. only when you book with expedia.

welcome back cnbc and survey monkey out with the latest results of a quarterly poll on main street sentiment. kate rogers has the details on that season as soon as and survey monkey have the q3 small business survey fining c confidence is back at a record l high of 62 58% of businesses say their conditions are good, that's up from 53% last quarter and 39% this time a year ago jobs and the economy are the top priority for one-third of all the small businesses polled followed by healthcare and immigration. look at this one big problem is skilled labor. more than a third of small businesses planned to increase headcount over the next 12 months 16% of small business owners reported having openings for

at least three months. the problem is worse for businesses with 50 or more workers, where 41% reported the same issue almost half of all business say a lack of education is t blame for the inability to fill skilled position this data reflects what we've seen from the nfib and wells fargo in recent days regarding increased confidence on main street another thing that all of these surveys have in confidence is the labor issue. the nfib cited labor quality a top issue and wells fargo discussed hiring quality talent. that's something we talked about earlier this month with trucking shortage and it's hitting different sectors across the economy. >> kate, thank you very much we'll hear more from you later today. coming up, the next step for elon musk's plan to take tesla private. a former -- a formal takeover proposal i don't know if becky heard

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welcome back to "squawk box. >> elon musk wants to test for private but they have no plan yet. the ball is in the hands of the special committee. tim higgins is here. good morning to you. to the extent that you have an idea of what a structure of a transaction like this would look like, what would it be >> well, elon on monday suggested that he does not think he'll need as much data as analysts have been believing, there is been the idea that there is $70 more to go private. two thi two-thirds of shareholders would remain the question is how many of these investors can stay and

would stay >> i ask you that question because i have been doing a lot of reporting the last couple of dn days and it is complicated there is number of mutual funds that may in fact want to roll over and there are other active funds that can't because their p provision in their own agreement that prevent them to moving to private entities are there any investors that would end up financing the rest of it even if you assume that elon musk is correct in terms of the structure. you have to buy out whether it is 10 or $30 billion from investors and that money got to cumbersome whe come some where. >> if you look at here in the valley the last few years, there is a lot of foreign money flowing into fund the next elon musk and the next tesla and

automotive space you look at companies like neo getting a lot of company >> zooks raised hundreds of millions of dollars. you will have to get a lot that's a whole different story to compare with tesla. >> absolutely. >> here is a tesla and here is that opportunity to get with elon musk to be on his team. i am not saying necessarily to that huge, there is a lot of people lining up with billion dollars check. there is a lot of interests being in the elon musk world >> let me ask you separately from a structure perspective there is big question about how you can roll these investors in. the s.c.c. has laws of how many

physical investors can be invested without requiring the same dough shuisclosures that ac company elon musk trying to avoid would have to commit to. >> absolutely, some are looking at spacex of a testimomplate of he'll do tesla it gets to the idea that he'll shock the world out there without having done the homework to back it up. now we are seeing the board and him, we'll need to figure out how to do this >> what is the risk of the operation of the company during this period? >> that's the thing. you go into the circuit valley and the guys invest and being excited to watch what elon is going to do next adding additional risks at this time to tesla. you have to remember it was just

a few weeks ago that he met this long missed deadline of making 5,000 models a week, making the company profitable and something that elon is trying to do this quarter and next quarter going forward. do you have any reporting around the saudis and at least from my own reporting it is unclear whether the saudis will press ahead with the small investment or any investment at this point. >> it is unclear to me and unclear to the saudis to have the money in place there is questions around that it is really unclear what the appetite is. >> is there is anybody else? soft bank has not indicated that kind of interest that you may have thought i do believe there are conversations earlier that relates to this. they put money into the cruise and business at general motors

even on a dollar bases it would be too little to make it work. >> right, we are not hearing a lot of big names at this point >> can you put the tooth paste back in the tube let's say the musk team have explored the opportunity and decided against it i imagine how you hear it come out. what would they do then in. >> tesla needs more cash to help it expand and do the plans he wants to do. >> we'll leave it there. thank you. nice to see you again. when we come back this morning, new verizon's ceo will join us live we'll talk about the company's new 5-g roll out plan. later, quarterly report card from macy's, "squawk box" will

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. "squawk box" exclusive verizon's ceo joins us in the studio hans vestberg will tell us why he thinks 5-g is the future of the company. >> other fang stocks are putting billions of dollars to work. >> betting on some of the biggest asian companies. warren buffett reloading on apple and goldman sachs. the second hour of "squawk box" begins right now ♪ live from the beating part of business, new york this is "squawk box.

>> all right, good morning everybody, welcome back to "squawk box" here on cnbc. we are live in times square. i am becky quick our guest for the hour, she's ahead of the u.s. equity of strategies it is good to see you. thank you for being here got a lot to talk about. take a look as you see right now, the dow is off by 140 points we were down about 68 points an hour ago s&p is down by 16. the nasdaq is off by 48. half way through this month, you are looking at the dow for the month. we'll talk more about that it is a busy morning for economic numbers just about 90 minutes from now, we'll get the latest reading on retail sales later on investors will see

industrial production figures and the survey from home builders we'll get quarterly result fs fm macy's an hour from now. they are expected to post revenue at $5.6 million. warren buffett and hathaway have boosted stakes in apple. the number of teva shares rose 7% >> in other stocks to watch today, moving around a little bit, rbs is going to pay $4.9 billion it is the largest fine imposed from a bank and run up from the

financial crisis rbs announced in may, it will reach that lockheed martin winning nearly a $3 billion contract from the u.s. air force for three satellites it will provide improvement and more survivors in their words against emerging threats china, tencent profits drops 2%. a decline in pc gains. you are looking at the shares i hong kong. >> verizon's new ceo is taking over the range two weeks ago joining us now for his plans in the company starting big news with 5-g, hans vestberg is here,

thank you for being here this morning. >> thank you >> we have about a million questions. you want to start with the 5-g news >> yes, we'll start with 5-g in minneapolis, where i have announced in los angeles and used in sacramento we want to launch this it is exciting we'll be the first in the world. >> there is the fundamental question of 5-g and we were talking about this is during the break, do you believe that 5-g is fundamentally long-term going to top end of what may be described as cable business, comcast, charter, effectively everybody. does the technology being able to effectively cut the wire up in the business or and i heard brian roberts say this before that you will always need the wire or wires under the ground that 5-g technology still base

getting as close to the home as possible >> you are still getting close to the technology. when we started 5-g, we decided we'll have a cordless, everything is wireless when it comes to five years, you have eight latency and security and better lifetime. that gives you totally new innovation how industry changes the way you think of technology. that 5-g is so different >> it is not just a classical phone. it is fixed line wireless and cable service effectively without the wire but it is also going to be all the internet of things >> autonomous cars, absolutely things that you have not thought that could be wireless >> there is no concerns of

technological walls that could be hit in the development? i hear it rains and foliage and i don't want to be in an autonomous car if it starts to raining it is not a problem with the technological barrier. it is millimeters. >> of course, the distance is short. that's what we are using on some of this. >> can i ask a stupid question >> i have phones from verizon and at&t i love the constant connection and at homie cell phone don't always work. >> of course, you want connectivity all the time and the speed you have never seen

before wireless. the limitation is 5-g coming into the home and wi-fi is spreading into the home. that's the limitation because you have one line coming into the house. >> is 5-g going to emerge as a real technology, not just on a handful of cities but on a nationwide basis this goes to a larger debate, it is about whether we ultimately think that regulators will want to approve the sprint team mobile deal which i am to get to it >> oh, you are coming to that. we are ahead of the game verizon is first in the world. we are doing commercials on 5-g. then we start rolling out and you will need devices so you need to be understanding and it is going to take some time >> is that a decade? >> we believe everything right

now. we'll have mobile phones in the hands of people the next year. >> it will cover everybody >> that's very nice. >> meant to cover everybody and make it where it is usable how much money for the industry are we talking about just an estimate >> remember where i come from. i come from the manufacture of equipment of technology. prices are coming down all the time and efficient it is dpoing going to happen. >> it is hundreds of billions of dollars. how much will that cost? >> the spending that we'll have today, i am not guiding what we'll do next year, we have seen the last couple of years of this very seamless investment even though we need a lot right now you need fibers and a lot before -- >> let me ask you the big question which is this sprint team mobile proposed merger, one of the thesis around this

transaction that they can catapole the industry in a way they would not be able to and putting more pressure on you and at&t to do so as well. is that accurate >> first of all, i can't comment on that. i am feeling confident with our assets and we are ahead of the game, we'll be the first in the world with 5-g >> do you think they have better spectrum >> spectrum you know is one piece of transporting data, identification is not there. technology advancement is the third. what we have is well fit for 5-g. >> do you think that's a transaction that regulators should approve >> you should ask regulators, i am not the regulator >> i am assume you have a team in washington who has commented or asked to comment on this transaction. what's the potential position of

verizon? >> the ones that know about this, i will let them decide i have no opinion about it >> let me ask you a separate question, strategically you have chosen what may be described as digital verses premium, a past that focuses on being the mechanism as opposed to one transmission plus content. at&t has clearly moved towards content and comcast and you know there is people say do you want to be the dump pipe or other people say they want to actually own the content that's on the pipe, how do you think of those two? >> dumb pump is a bad word because it is such a high-technology that we are talking about. i would not go there we think our technology network is our asset whatever partners we can get and we announced yesterday -- i

think we have another way with our assets and our distribution is fantastic people would take different strategies >> that's the criticism for s h verizon is that there is not many left and fox is going to go >> does it put you at a disadvanta disadvantage >> we want to see different from different carriers >> at&t asset competition? >> i am really happy >> hans, all right, that's nice. >> i think that's going to happen there are so many choices when you go into 5-g. you can play in so many different areas, we have chosen where we'll be with great assets >> what does it mean for oath? >> first of all, fantastic

confidence a.i. and m.l. that we need in the network and we have distribution chain of wireless and of course doing things in twe between them >> so it is not for sale >> there is been speculation and reporting around whether the company should either do a -- you would not -- >> nothing i have not heard about. >> 20% so that you can have stocks issued to employees to keep them there. >> no, nothing i have heard about. it is all about the rumors >> separately when we look back at this period right now which is the golden age for television and content of all this. do you think you are going to look back and think that the at&t and comcast of the world who bought content will make a mistake by doing that, five

years from now they're still going to own the content or decide if these things are going to be separate i wish i might have thought about that >> we have to. we think about that. i started old carriers for many years. it is the moment of the industry where you are going to have different choices. i don't think that you said somebody is stupid because they did that or that everybody is going to bet on their assets how they do it best verizon is taking the best which i am happy about it. i don't think you will look back ten years from now, ten years ago every carrier looked exactly the same and the same offering today all carriers are doing differently. >> you don't sound like you need a big acquisition obviously. looking at the at&t deal ones and going back to that and now the appeal do you think there is merit in the appeal of the department of

justice or do you think i got it right. do you think at&t has been unfair managing and pricing? >> no, i would not go into comment on that. >> you have to be careful. >> again, i think there dibs in the market i am so focused on verizon and doing the best for verizon and take the lead on 5-g and bring all of our assets out there. >> you are the chief of technology can you explain to me how 5-g works quickly? >> i need the details. do you understand it >> if you can give a lesson by all means. >> the speeds are 20 times higher to 50 times higher and latency is below >> i want to know how it works because it is wireless >> is it magic >> no.

remember, i started in 2009 of 5-g. >> i think it is magic i know there is scientific base for it but it is amazing >> it is amazing that you can bring out 7 gigs >> before we let you go. from a management perspective, how do you think you are different? >> i am swedish. >> of course i am different with different background the great thing is we have a common mission on what verizon should go and where it has been and we pertinespent a lot of ti together of course, i am different. i am trained in a different way and i come from a different environment but we share the same vision for verizon. >> thank you for coming in >> make this a regular thing >> you did so well, you come back as our guest host >> i would love to >> great auditions >> great >> thank you hans. >> when we come back, the dow

and the s&p both breaking four days losing streak yesterday with the s&p posting its best 'ltain nearly three weeks. wel lk strategies with our guest host, that's next. whoooo. tripadvisor makes finding your perfect hotel... relaxing. just enter your destination and dates. tripadvisor searches over 200 booking sites to find the hotel you want for the lowest price. dates. deals. done! tripadvisor.

our guest at this hour at bank of america and merrill

lynch. >> 100% going to verizon now >> very convincing >> is that an over invested area for you, do you think? >> telecom >> you know i think, i definitely don't think technology and telecom are over invested we are overly tech and i think basically it is the sector of the future i see it as - tech is not a sect sector it is a process. >> no fang fatigue and discomfort of how much it takes up on everything >> fang every stock in the acronym is different what i like are tech companies with healthy balance sheets that are generating free cash flows and what i worry about are companies sucking in cash are credit sensitives and not necessarily going to grow where the cost of capital increase >> on a given day do you feel

you're 60% bottoms up what do you think about? individual stocks or what? >> i think it is the stock market this year >> and stay that way >> i think it will stay that way. the easy money and being long of the s&p 500 is over. what's interesting right now is that i think leadership is actually broaden out if you look at the beginning of the year, fang stocks were all that you wanted to own and they were contributing 100% of the games of the s&p 500 today fang has actually, fang still works but other sectors are starting to kick in. so i think it is time to broaden out your sector beds we just upgraded industrial to an over weight yesterday and i think it is a great way to think about playing kind of mixing old economy with new economy we have been in this market environment where all that

worked is tech now, we are starting to see pick and shovel type of cap coming in >> all right you got until 8:00 >> we got an hour. >> we'll have more we got to make some money. >> coming up, when we return, macy's is ready to roll the quarterly results.

macy's second quarter are expe expected anything will happen this week with home depot or coach or any of those things cause you to modify your opinion of the environment for retailers? >> retail feels good second quarter numbers feeling good we have from steve madden, coach, whatever you want to call it they all have good things to say. inventory levels have been lane and consumers have high wages, they could afford to pay product innovations. >> depending on where you sit people are denying there is more

money in consumer pockets. do you see evidence of that? >> i have been doing shopping tours for years now. friday i was doing our shopping tour, typically from 10 to 12 it was a little slow. it was busier than it has been years past over the past four or five years and the level of promotion that's there, we track it year over year and a little bit less than last year at this time >> when you see consumer confidence numbers, you think those are evidence that something positive is happening and different wages. >> yes, something positive is happening because especially take a look at retailers wage increases have in part of the story. when retail increase wages of their sales associates, about 30% of that goes back to the stores >> all these retailers are doing

a good thing >> exactly >> it helps. >> does it hurt margin if you are paying every marginal worker a little bit more? that's a risk. >> keep in mind what we had going on, you are selling goods in full price that helps and balancing your market, all bets are off if these tariffs come into place and that's a big uncertainty >> cotton. >> cotton prices are up >> coach talked about the fact yesterday diversification is the key. >> who are these people who have more money to spend? >> story by story. i think we have some companies doing better than other. i think american eagle and

lululemon are doing kbbetter there are companies that are challenged out there jc penney are more challenged than others. >> and then there is amazon. >> what i have seen out there and on the web, it is full you need a retail physical format >> how is macy's doing are they flourishing or more work to do >> they always have more work to do 54 cents verses the street of 50 but i think can be better. >> are short sorts going horts o give it a boost? >> it is going to be denim jeans. >> thank you, exactly. >> back in jean shorts >> we are still wearing short shorts >> thank you dana tesley

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good morning and welcome back to "squawk box" this morning, we are live at times square mortgage applications falling 2% last week. the average 30 mortgage rate fell three base sis point >> you can inhale. the carona beer maker is spending $4 billion and cannabis producer in cannabis growth. 38%. also receiving a new warrant as part of that deal.

amazon now owns $1 billion worth of stock in other companies both public and private that's the news from the s.c.c. filing nearly triple from two years ago. back to the cannabis story, if you want exposure to the cannabis business, constellation became a way to do it. think about that >> yeah. >> and if you were the ceo of constellation regardless of your personal feelings about anything, you are probably - >> you are already in the business >> if you are seeing fewer people who drinking less beer along the way or different things and start thinking what are they doing instead >> right >> not a fan but -- >> i understand. i don't know what to make with it how do you do a breath -- do they have a breathalyzer now

everybody on the road being high -- >> and you can't tell? it stays in your system longer and they can do tests to see if you have done it in the last 24 days or something. >> you need to know what you have right now of your ability, are you impaired >> does not explain you are going 15 on the freeway instead of 55. warren buffett and berkshire hathawa hathaway leslie picker is joining us. >> in may, buffett says he would like to own 100% of apple if he could. bershire also boosting his stakes the firm did trading around airlines and banks

berkshire's ownership jumps to 21%. and airlines berkshire -- the firm says it wishes to avoid owning 10% or more of investee's shares many are purchasing shares, that requires berkshires to make adjustments. it is not their view of relative attractiveness >> yes, 100% of that, huh? >> a trillion dollars company now. >> a bit more difficult. >> it is amazing that he finally sort of threw in the towel >> it makes you wonder if he'll

make decisions like that on other investments. amazon he had such positive commentary on and jeff bezos and he keeps on saying he missed it. apple is a consumer product company and not a technology company. >> he wishes people would stop talking about apple and the same is true about amazon because he wants an entry point where he can buy into the stock at a price that he deems, you kn know -- >> if he thinks so >> you have done amazingly well from missing every big tech company, google would have been great. >> he spoke with the found erer early on >> what about facebook >> he knows zuckerberg but he spoken less about that >> amazon would have been the one closing in on $2,000 now, that's going to be a trillion, is it? >> leslie, thank you very much

let's talk about the broader markets now. joining us is our chief investment officer and head of fixed income let's talk a little bit about turkey, we have not mentioned much this morning. i have been watching from sidelines just getting back this morning. how big of an issue is this, when you see wobbles, is that something you worry about or something we'll work or way through? >> of course, we worry about it. it has a potential to turn into really bad situation and impact on emerging markets. the likelihood that turkey will lead to a contagion in the market is different. positions are different and inflation levels are different

and political approaches are very different i think all of that makes turkey a special situation, something that we should watch, however, the likelihood that takes down the emerging market, that story likely exaggerates >> when we see these moves in the u.s. market, they have been muted. for all concerns and headlines this is gotten, the dow is down 100 points that's a blink. >> in the global context, things are pretty good. economy and u.s. economies are doing especially well. policies and supported interest rates are low is where we are stocking out all the time and inflation is relative lily low well if we did not have tariffsturke market's globally will be higher >> sevina, you like the u.s.

>> it certainly has so far by a wide margin. i think where we are today, we have been climbing the wall of worries and there is a lot of negative headlines and we have seen the market soldier on the u.s. my sense is that there may be an opportunity to start adding exposure to other regions of the world. >> really? >> well, i mean if you look at the out performance of the u.s. relative to the rest of world, it has been whopping the year. i agree and the u.s. economy is doing better than other regions, earnings looked better than other regions of the world we got this whopping physical stimulus package in the form of tax cuts positioning at this point is firmly over weighs the u.s >> that does not mean that you would not tell investors it over

ways or it does? >> i like the u.s. i am wondering from here through the end of the year, what works the best maybe it is not just the u.s., maybe there is an opportunity to find some values in other regions of the world that's beaten down on trade risks >> absolutely, i agree with savita >> valuations in the markets are better they are better coming in than they wobble with turkey and other related issues >> you say that with investors and looking for investment return in dollars. >> absolutely. we think u.s. investors have a solid home country buys. their allocations into international stocks are lower than what those stocks represent in the global complex. retailing investors especially should be increasing the national >> where in particular >> valuations are the best in

t emerging markets and things can turn around than places like europe brexit we know it is an extended affair >> with emerging markets, they'll get hit more, they take a bigger hit when the u.s. feds raise interest rates >> clearly policy in the u.s. have an impact of emerging markets and flows in emerging markets. having said that because of reserve situations and other considerations, policies and things like that, i think that's going to be more mitigated yes, we are going through that phase right now. once things are stabilized, they can climb faster >> krishna, it is great to see you and sata ivis going to be with us for the rest of the hour >> you are watching "squawk box" right here on cnbc you always pay your insurance on time.

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liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ let someone else do the heavy lifting. tripadvisor compares prices from over 200 booking sites to find the right hotel for you at the lowest price. so you barely have to lift a finger. or a wing. tripadvisor. welcome back to "squawk box," our next guest is an entrepreneur who got into the newspaper business capital of investment, good

morning to you, mark >> you wathanks for having me >> you want to talk about newspaper newspap newspaper? >> there is been a rise in spaks. some people say that spaks are a symbol or signal of bull market or the top of the bull market given that people are able to hand over money oftentimes blindly as they say for investment what do you think about that >> i don't think that's right. we have been doing this for ten years and we are on our fourth one. the first three we created or invested in industry leading companies that provided returns for our public market investors. i think like all things some people do it well. spaks have done well and provided a great vehicle for investors and a great way to

certain companies to access to public markets >> is the trick though for those out there. i hear people get hit on different spaks all the time how much of this is about betting on the individual investor and on the concept, i am thinking by the way of our friend who's doing this ip 2.0 using spak to buy technology company. are there others that work >> we look across industries and geographies and the three that we have done, we created in 2009 mortgage rate of the bottom of the financial crisis became the third biggest mortgage rate. in 2015 we invested in the world's leading travel company and last year we closed on a

company called cesions when they are done well and you find the right company, that's align with the structure, it works really well. >> how often by the way, it has not happened to you yet but have spaks been raised and not ultimately spent there is the ticking tom biime b that goes on that you have 24 months to find something when a deal happens, investors are allowed to ask for their money back worse case they don't lose money and best case someone like me finds a great company and they get the benefit of that upside >> you have all these great success in business and now you personally, this is not a spak you bought the washington paper a couple of months ago now what was that about? >> you know i really believe in the first amendment, i really

believe in journalism, i have been frustrated being on the other side of it from time to time but as things get written, i think it is incredibl incredibly important institution to our democracy the city's paper have been important for our city for 40 years. jake tapper and david carr was there and amazing place to train journalists and it was fighting for survivors. this was my bucket it was something that i really wanted to do >> are you change ing the model? >> a lot of people looking at jeff bezos of what he's done to "the washington post." >> it is extraordinary what they have done. while there is a lot of focus on the problems and struggles for national journalism and publications, it is much worse

at the local level and local papers are going out of business all the time we have some ideas on how we can turn zar turn around and we have seen early tractions. our hope is we create a model that other local papers can follow >> do you have any desire that the president have put on mr. jeff bezos' profit making company. do you say to yourself, if my writers or reporters write something that infuriates the president or somebody else, it could impact my other businesses and how shareholders should think about that >> two things, when you invest in journalism, you know that's part of it i had things happened. they have not been real threats to my business but people call me and say can you kill this story or write this story? >> really? >> 100%. >> some amazing and it takes

them a long time to get them to that ask but at the end of the conversation, they do. >> that's so embarrassing. >> you would think >> but, i made it clear that i am not sbeinterfering. >> i wonder if trump makes this comment? >> i will tell you one thing to that when i did the washington post, i wrote a story about it and i got a handwritten note from the president congratulating me buying the city's papers >> i thought it was a nice gesture. >> he also says nice things of jeff bezos too. >> we'll seal what happee. i think journalists need our support and especially at the local level. >> mark ein, thank you, appreciate it very much. >> look at what i got? >> i don't know what you got

>> python programming for the dinner i am going to python the crap out of you and i may upgrade us to 5-g hold on, relax how nice is that >> that's lovely >> one weekend spend the whole weekend writing python codes >> practice being snakes >> just wait would you like me to upgrade this place to 5-g. >> i may do it >> mark, thank you >> thank you for having me >> thanks for playing along. >> coming up, a multi billion dollar deal, u.s. energy, much more this morning, "squawk box" is coming right back prevagen. healthier brain. better life.

i am going to vote for ok, showmyself using nothing but this remote and the sound of my own voice! vote for... -wait, wait, wait. that's not a talent. any xfinity customer with an x1 voice remote can do that. watch this. i want to vote for... obviously not you. ooh, that guy. cast your votes during every live show.

just say "vote for agt" into the x1 voice remote. welcome back to "squawk box," diamond back is buying energen for $9.2 billion brian is joining us. what's going on? >> you just talked about the fang stock and python. >> they're buying alabama's based nnbas based energen. this is all guys about getting bigger in the shell base and in the premium base of texas. that's what this is. it is about two things it is about good rock and

cutting cost diamond back is adding the high quality stuff out there in texas. it will take them from 124,000 barrels a day to 200,000 barrels a day and also cost cut. we see the price break even coming down, but if labor cost goes up, the break even cost basically flatten out. in order to be more profitable, if your costs are not coming down one way, you got to do a different way which is buying other assets and what they call trim and prune and cutting costs b by $30 million a year which is what the combined company wants to do. $9.2 billion deal buying energen, diamonback is the biggest producer >> i am lucky i got through it

once top three producers, guys, diamond back's second deal in a week they pay a billion for resources last week. tast trou it is a rush to get bigger so you can cut cost >> diamond back's stock prices are up 51% last year could they make more money buying it a couple of months ago. a big player of energen, he bought into energen a couple of weeks ago, carl icahn. he owns over 3% of the company and his associates in there as well and kcorvex a bunch of big names in wall

street are making out and big league on the energy deal. >> brian, thank you. >> all right, our guest savita is here, i am giving up -- have you ever looked at something like this. >> python is great >> you know it, too? i teach it to my son >> i know hdml, that's it. >> maybe you can take a class. >> it is doable. >> that's what you said and it was one weekend. >> i had to do this python and i went online and i bought with money to have a skype conversation with somebody else. >> you understood? >> i kind of figured out what i needed to do >> one weekend

>> look at page five >> look at page five already >> absolutely. >> opens source language, i understand that part of it >> can i tell you guys something why i am bull issue ish on the ? >> we have this quantitative framework for this at this point we have got i think 63% of these have been triggered. >> that sounds bad but historically when 63% of the assigned posts are triggered, you have two and a half years until the market peaks yrsipleea you should keep that in mind >> savita, thank you, we'll be back with mace y's. >> thank you

earnings alert, retail macy's is set to report. the government's retail data for july >> automakers are going door-to-door in florida hunting for recall on air bags fill lebeau is there

>> michael ruban will tell us why erdogan is playing hardball 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, back to "squawk box," the future right now are down about 170 see if they'll come back down 148 search like s&p are down, trying to get an explanation. not even a % it is not weak today >> you saw sales for 2% in china in the markets there over night.

you are looking at some weakness as we walked into this >> on any given day especially in august, it is tough to find a good reason. you know the people that are writing it, who knows. when i looked, they say that as the traders are refocusing on upcoming earnings rather than the turkish era. >> we got two earnings today >> it is not immediately, i guess -- >> european and asia markets >> retail, macy's, kourtney reagan is joining us on the number on that >> it is a b across the board for macy's earnings coming in at 59 cents adjusted 51 cents revenues coming in at $5.57 billion. that tops the consensus forecast comparable sales, this is on an owned plus licensed basis, all of those products together, of a

half of a percent. it is the third quarter of comparable sales growth. that's a nice beat there, too. macy's is raising it for your guidance and retailers now expecting comparable sales to be up 2.1 to 2.5% >> now, i spoke to macy's ceo, and he says the strong economy is driving macy's sales. may was the weakest month of the quarter after the friends and family sales shifted through april. the momentum ended in july as the strongest month. higher transactions across the store but traffic looks to be in good shape many categories from women's dresses and kids from back to school is all strong he's also working on managing

promotions a little bit more ample unit retail of 5%. more shoppers are buying at full price this year compares to last >> becky, back over to you >> kourtney, we talked to dana t t tesley, he hadshe had a little a different number >> it sounds like a lot and it is a lot to run a company like macy's but it is a little lower. >> he also told me that he's proud of mhis employees and they started a new incentive program and 70% of them got it in the first quarter and they think it will be higher this quarter. >> any update of the stores, that's a big deal of how many stores they close. they're thinking of 690 right now and no further updates of the store focus.

that's the status quo for the time being here. we also talked a little bit of transportation cost. that's a little bit of issue for some of retailers and those are higher fuel prices have been higher and lower. nothing notable or materials and investors need to worry about with us at this point. kourtney, thank you. >> turkey president is fighting back he's calling for boycott on u.s. electronics. joining us now michael ruban, good morning to you. >> good morning. >> this latest salvo, does it change the game at all >> no, it does not one of the irony calling for boycott of electronics is two years ago. began w the basic problems in turkey are much deeper. erdogan is allowing the turkish

economy to over heat on the back of debt when he can get dollars for interest rate. now he's with debt on top of which there is a lot of private debts so turks are taking out bank loans in order to pay interests on existing bank loads. that's going to set up a financial bubble where you will see the whole turkey financial system collapse. >> right now financial contagion fear as you think of the those dominos and the contagion fear, how do you think about it? >> what happens in turkey does not necessarily stay in turkey everyone is focusing on the recent spat between the united states and turkey but when it comes to turkey's currency and weakness, just to forecast on the turkish's economy, this is a long time coming what president erdogan is trying

to do is whip up anti-american sentiment so he has someone to blame this on. even if this price was resolved, it is going to continue for some time even if this is resolved of the pastor brunson's case, the financial in turkey are very deep indeed. >> walk us through what you think is the end game here is meaning is this going to be a situation where we are turkey is going to need a rescue we talked about it on the program now this whole week. the did inf ever come to the rescue, would that happen politically? >> financial analysts who i talked to say that the turkish central bank is not able to get control over the currency and the turkish lira has strengthen the last couple of days. if it is 7.5 to the dollars or 8

to the dollars the american has the de facto veto power so we can see the brinksmanship growing in the short term >> when you think of the u.s./turkey relationship, is there a way to get back on track? >> at this point, i don't think so some people say turkey is so much of an important strategic ally to let erdogan get away he only wants 52% in the vote if you think it is free and fair. turkey remains a dopeeeply polarized economy. some people say turkey can pivot to russia or china let's put aside the fact that turk turkey's relationship to russia just as volatile as it has been with americans a year ago it was the opposite so we are in deep trouble. turkey is a member of nato, nato

is about collective defense in times of crisis. it is not about getting into a bidding war for loyalty of time of crisis which is why there is little trust between the united states and turkey today >> if you can speak with president trump this morning, you would tell him what? >> i would tell him to hold firm on his pressure. we had a deal over pastor brunson and turkey broke that deal and there is a pattern of president erdogan, if you make a concession, he only ups his demand try toing to be modern to him m not be the best strategy >> michael thank you. >> reaction to macy's, it was up and it was trading higher on that beat. and another read, well, it is actually down. we'll see what else is in the number we'll get data for july. fill lebeau, you are in miami

whar, what are you doing in miami? >> we are talking about deadly air bags and the efforts to get more of these off road you will be astounding when i tell you how many air bags where deadly ilanfters are still out there driving around that story is coming up next on "squawk box.

welcome back to "squawk box. future is down about 150 take a look at the shares of macy's which beats on certain metrics in the most recent now it is down 1%. it had a good rebound more than doubling in the last year. knows a lot of different forecast that the company gave and none of them you need to compare them for what expectations are for the year looking for sales to be flat what was the forecast? 2.2% >> second half of 2018 which translates to 2.1 to 2.5%.

>> did the guidance that the company says it was higher if you add in how they beat this quarter. >> they give you the range, the low end of the range includes basically, it is basically the low in of the range is where the street is for the beat of this quarter. >> but that's the low in the range of what they are giving right tu hard to figure out, you will hear more and we'll check out with kourtney, too >> diamondback is buying energen. >> and two of tesla's largest shareholders are cutting their stakes that comes from a regulatory

pricing. fidelity sold three million shares those moves were made before elon musk going private tweets and raised some additional questions by the way about what their ultimate interests may or may not be in roll over toing oa private company. would they be interested in investing more fully in a private company as we also discuss fidelity that we should note specifically, fidelity they also have a number of index funds, index funds would not be able to roll into their investment stakes because of the structure. the question is whether they would buy more in some -- >> or even maintain.

>> or maintain, exactly. >> more than five years after automakers started recalling 37 million cars with potentially deadly air bags. honda aggressively hunting for thousands of old recall models that have not yet been prepare phil lebeau is joining us now in miami. >> reporter: good morning. another hot day in miami it is the kind of conditions that worries people like honda people are driving around older vehicles and humid conditions may cause the inflater, this is one of them in the air bags to malfunction. when they malfunction, they explode and shooting out shards of metals. we went along honda repair team yesterday. they drive around based on the data they have and looking for older models that have not been repaired yet

honda is one of 18 automakers still looking for old vehicles that need to have air bags to replaced worldwide it is estimated of 35 million faulty takata air bags you need to make sure your vehicle haves been repas have bd 23 deaths due to faulty air bags the biggest threat is older vehicles in humid climate. here is what we had happened when we came across with one person of 2004 civic who had a faulty air bag >> i wish you can see my mailbox, i got a lot of junk mail toss mails tossed in there. it when you do get a chance to call in, sometimes you don't get a hold of someone right away or

your schedule does not work with it >> he's talking about the recall notice that he got many honda owners are getting these and a lot of time they think oh, it is junk mail and they don't pay attention to it 2004 model, guys, he was just getting it repaired. i should have had it a while ago and had other things come up and i didn't pay attention whether it was a recall. not uncommon we are hearing it from other people as honda is looking at older models >> phil, it is stunning when you talk about the numbers and many millions of cars that are out there and still have it around globe. i remember it was a while where once a week we were wearing of a faulty air bag i have not heard a story about it, is that because the media dropped it or there has not been many incident where the faulty air bag goes off recently

>> reporter: we have not had any element recently and there is also news fatigue. >> they're looking for recall air bags and i am like they're still doing it so that's news fatigue i never got a recall notice, that's the reason why so many of these are out on the road. i am glad you are doing the story and shining some light on it phil, thank you. >> andrew has a question i have a tesla question, i know you are a tesla gruru, we are talking about fidelity lighting up their investment in tesla, do you think it will make it likely that they'll roll into the remaining investment into tesla, thas is that a sign or anything else? >> reporter: i don't think you can read into it as a seen of competence when i heard that headline, i

did not take it as a sign of their confidence, no conferenide >> unless it is still in their capacity, i think that makes it more likely because they'll not have as much exposure and they'll be like tly to say, oka, we are comfortable >> phil lebeau, thank you. >> when we come back a lot more on "squawk," amazon aggressive expansion, a billion reasons that the retailer can b taking over the world. free beers, tlhere is a catch, free beers, tlhere is a catch, we'll explain it when we return. invest and volunteer in communities like yours. because the changes we make today...

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when we started at 6:00 a.m., we were talking about the dow future down at 68 points right now dow future down by 40 points the s&p by 14. this comes after some losses over night in asia you did see china market is down by 2%. you continue to see red arrows in europe where they are actively trading right now amazon is having a major

milestone. the company officially owned $1 billion worth of other companies. it includes investments many both public and private company. i have to say something i never thought about. we are talking about so much of amazon >> what do you do with the cash, right? >> like 1 million hundredths of a market >> alex jones violating the policies, he'll be blocked now for posting on twitter for seven days twitter says jones' account can be used to read other's posts but can't be used to retweet during the seven days, it is like a lockdown period like you are in a time out apple and facebook and youtube and pinterest removed contents

of alex jones. jack dorsey is sitting down with lester holt, you can catch it on "nightly news. >> bud light is giving out free beers if the browns ever win games. they'll be open when the browns break their 17th game losing streak it has been 599 days since cleveland last won a football game the giants did manage to lose an exhibition game last week. garth brooks have been dethrone as the highest paid the number one, luke bryant, he earned $52 million much of it from touring revenue. the top seven figures a night. hear the rest of his endorsement deal and his job as a judge on "american idol."

if you want to look at the top five million earners, garth brooks and kenny chesney with $31 million and blake shelton with $23 million luke brian is who you are listening to right now $45.5 million. >> when we come back, we heard from macy's, we'll be getting the government's data on july retails. we got the numbers and reactions and all of that is coming up take a look at our s&p 500 and dow jones, "squawk box" will be right back here's a trip tip: when you search hotels on tripadvisor... enter your destination and the dates of your stay.

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♪ we are just seconds away from july retail sales and second quarter productivity numbers in the futures are responding to some angst around the world, i

guess not necessarily related to the lira which is the story. it has been moving the global markets in recent sessions today. it is august the ten year treasury is below 2 and 9. rick santelli is standing by the numbers should be out >> let's start out with august empire manufacturing, 25.6 is a nice pop from 22.6 at best expectations, second quarter preliminary, nice numbers here of 2.9, about half a percent more than what we expected a subtle drop off of our last look union labor cost is moving a negative territory down 9/10. remember niethese are prelimina reads. let's get to july, retail sales,

up half a percent. if you strip out a lot of gas, .6 and sales plug into other data point, solid of 1% following a slightly revised of unchanged down to 110. the market is 287, joy, we were toying with 290 yesterday. i think 290 really gets you into a less safe harbor ramifications. 626 for 2-yr remember we are hovering slightly over 30 recently. we still have data points to go. yes, we are under a little pressure in the equity market but we are also pretty close to all time high levels watch the dollar index, it

continues the move higher and that does give the world a little odds in those dollars joe, back to you >> that's what it is all about well, they do have god apparently, they don't have dollars, they have god i don't know if that's going to help anything. >> steve liesman has more. they're not asking for reaction. >> they learned. >> what? >> what did i miss >> let's get to steve's reaction on the data and he had no reaction >> here is a reaction for you. >> i wanted a reaction. >> you have more data? >> i have more specificity and details. >> and more fill in -- >> the big story is the curious number july was very good there was a big revision

downward from june or injun. originally pointed to 0.5 now 0.2. put it together, you are modest and pretty good. retail sales are good. looking at details, one of the things we are looking at is the autosect auto sector which is up. it is up 0.2 we have stories of used car prices rising. >> i buy used cars >> what did you buy? >> trade explorer? >> how many miles? >> 40 miles. >> still under warrantee >> yes >> i drive-in to the city everyday i want a new car >> i hear you. >> one of the things i was looking at is the effect if possible of amazon prime date. >> how do you see it because it is every year, it gets bigger

every year >> it is hard to know because you have a 0.8% rise in non store retailer jur j.p. more januagan says it is r m mixed. >> exactly what j.p. says. >> steven and i used to sit next to each other and we cover the economy and we debate this everyday literally >> it looks like there may be some numbers going for ward. definitely has some effect on the numbers. look, two things we are looking for, one how fluent is consumers given the tax cuts are there consumers seem to be doing pretty well. we'll have to see these numbers, we are looking at tariffs affected and not necessarily easy to see right now. we also have a big energy affecting sales and up 0.8%.

we'll let this thing sort of play itself out. the big number perhaps with a capital perhaps right there is the 2.9% productivity number if there is an upward shift in productivity, the game is changing and the feds can go flat line on rates if we are going to have a strong productivity number. >> why >> you saw the union labor cost comes down and if all that growth has strong productivity underneath it, rather than stretching existing resources then i mean the fed will keep going but not accelerate in the. these are volatile numbers we are not going to call a trend change based on one quarter but we do need to watch it it is a good sign of productivity and check one box for i guess maybe tax reform or a rebound in just productivity overall. >> steve, thank you. >> my pleasure

>> talk to you in a bit. for more of the retail data. let me ask you, we have watched macy's this morning coming out better than expected and numbers across the board and the stocks were down 5% the last time i checked. have you looked at this or does that put you on the spot with this individual retailer >> macy's has been doing pretty well recently. they have done a lot of initiatives ranging in from putting lower price merchandise and they experimented with a lot of different things and they had new management in place. it does not surprise me but it is working for a lower comp as well we need to wait for the longer term trends and see how it does in another yahooer then ear the whether they are out of the woods or not

>> let's talk about retails, let's get to some of the questions he just raised how flush is the consumer feeling right now? what are your insights on this >> well, in the short term it is definitely flushed you have the tax cuts working and lower job markets, it is not surprise to see half a million dollars spent in july. we are in a situation where for the last several decades, we have not seen average incomes, inflation adjusted really increase even though we may have a great over year number between 2017 and 2018, i am not confident that by 2020 or 2021 we'll see the same pace of growth. that's the bigger challenge is that how do we get you know younger millennial customers to a higher income level and that's going to drive spending

overtime >> when do you think you will get more answer and clarity? >> another 12 to 18 months it is still too early to tell because we had so many unusual things that are happening in 2018 we have tax issue and this unknown of what's going to happen with tariffs if they affect consumer goods or not and they don't seem to be huge in consumer goods and maybe some appliances and some of the hard goods that are coming from china. the most part, the real effect would come if it hits soft goods and apparel and home goods part of the world that we don't have evidence yet that it is going to have a major impact really i think that to get a sense of what is happening with the customers and is this a long-term trend or is this an enthusiastic authority term burst in demand it is going to be a while as we know. >> we are looking at gasoline

prices, we are talking about below $3 a gallon. you are talking about a huge increase of what we saw a year ago. what does it mean for consumers? is it a point where it puts constraints on things or offsets some of the taxes or tax returns, i should say or is this something that you are not worried about at least when you look at it from a historical perspective? >> gas stations have been the sector within retail that's grown the fastest. it is actually growing faster and everyon electronics, that's definitely something to keep an eye on i think that you know some of that has been the momentum of lower prices over the last several months as the prices go up, i do expect a bit of retrenching and there is no way that the double digit year over year and growth and

gas stations are going to continue all retail is cyclical and i really hesitate to get too excited of great numbers for very long because ultimately consumers pull back. if there is a fixed pie of a few trillion dollars and it is really which sector grows or lose at the expense of those that grows >> all right, thank you, it is great talking to you and thank you for covering all the bases with us. >> my pleasure the future is under pressure this morning and all morning long among the reasons most, concerns of the prices in turkey and so is there any signs of improvement of diplomatic relations. we'll ask ross wilson, the former u.s. ambassador next why did i want a crest 3d white smile?

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welcome back to "squawk box" everybody, we have been watching the futures this morning s&p future is off by 115 and the nasdaq is down by 56 president trump just tweeting great republican election results last night so far we have the team we want. 8 for 9 in special elections, red wave >> that's better than red ties >> which is bad. >> all the place that is we

vacation >>. >> yeah, the whole day >> i wonder what's causing it. >> after a storms with some of the run off of lake okeechobee and the fertilizers there. >> now the latest tensions between the u.s. and turkey. let's bring in ross wilson, invest wi investor wilson, thank you for joining us you can see in the future and tell us how this whole thing finally plays out c, what are te ramifications on both sides and why does trump want it to badly and why is erdogan resisting it so much and affecting the global economy. >> i think there is a whole set of frustrations in washington with turkey. it has been building up for a number of years related to many different issues

pastor branson as well as three employees of turkey is a big source of hesitation for president trump who decided that this matter needs to be resolved turkey like wise kind of dug in its heels and president erdogan is quite difficult on this issue. how will it be resolved is tough to say will erdogan be the one that decides or the erdogan, the confrontational one to decide. >> erdogan is not our perfe perfecperfect perfect -- i guess leader for an ally we could be worse than him but

we would not be with this gentleman if it was not our interest to backing, there is a lot of downside under this particular vegetab particular >> erdogan has his own frustration with us and at the end of the day, turkey has been extremely important and valuable american partner for decades and it continues to be important to us just the last couple of years turkey is making available air facilities in its territory in combat against isis have saved tens of millions of dollars and making our operations more effective in syria and northern iraq this is a valuable country for us we don't want to have these problems hopefully erdogan, the pragmatist will step forward

>> any of the threats you seeing, do they have any teeth can turkey hurt us in terms of high-tech or trades or any types of embargo against us? >> president erdogan announced a ban on american electronic goods, was not clear of what he had in mind. the government today slaps some additional tariffs on american products turkey is not a huge american export market. i think in a macro sense, this is posturing by erdogan including as an additional measure to tamper down the raging economic problems that he now faces. but, it will have relative in of itself little effect on the united states. the bigger problem has to do with contagion as scrutiny with respect to emerging markets elsewhere in the world really

gets underway and then you can have some under tones that affect the united states >> so any talk to contrary is rhetoric at this point >> yes, in my view >> any talk to the contrary is rhetoric turkey's position in nato is an immense source of influence for it erdogan he certainly understood the value of the u.s. relationship i think he still does. obviously he's taking immense risk with that relationship and is now playing out and the others and one hopes that he'll find some ways to change his approach >> do you think that it is reasonable for erdogan to wants to send back that pennsylvania individual that he blames for the attempt coup

is that a reasonable request >> i think there is absolutely no equivalency is it a reasonable request of course, it is a reasonable request, turkey filed an extradition with the united states, that's a legal procedure and it requires evidence and involves a proceeding before a judge and for the information that's available, it seems ta turkey's case have bes have beer on accusation ans and shorter on evidence some efforts that washington made to work with the turks, i hope that'll continue.

>> ambassador wilson, thank you your time. you are in minnesota >> were you watching it yesterday? >> very much watching minnesota and also wisconsin and also wis. interesting developments out here. >> yes very diplomatic answer that's your forte as we know thank you. thank you for your time. >> thank you okay, when we return, jim cramer will join us from the new york stock exchange. the dow is opening off about 158 points, down nasdaq off 52 points and the s&p 500 off about 17 points. we're back with mr. cramer in just a minute.

all right. welcome back let's get down to the new york stock exchange jim, i need your help. looking at the macy's numbers i don't see any obvious red flags why that stock is trading down this morning you know more. what's going on? >> there's friends and family issues which i think that frankly -- i think that jeff explained very, very well. but it surprises people that if you take out friends and family it's not as good

he actually presents aid friends and family and then he adds it back in. friends and family is a big thing for macy's i say, why did the stock run to 42, this is a very good quarter. no one should panic. the number raise is very good. it is -- to me, another sign of inflection for jeff but the stock ran so, so much, becky i don't get that why should it run, even though you knew the numbers would have been bumped. people are surprised at that the comp stores aren't up that more. i say that's nonsense. it came in where it should. >> a little sell on the news >> definitely. i was watching the stock -- it was creeping up and creeping up. the real good ones -- look at home depot yesterday, another good one little more linked to housing. the stock was up two, down one people should just cool it don't take these stocks up ahead of the quarter not everything is going to be tapestry a lot more are like home depot.

>> jim, i was at the beach, but i was kind of watching with one eye, paying a little bit of attention to what was going on in the markets the turkey situation i didn't quite yet. but i did see you on twitter saying oh, they're talking about the scary sell-off of a hundred points and we're talking about what a big deal it is, but it's not showing up that much in the markets. >> it's not even a trillion dollar economy there are banks that are on the hook once again. there's a lot of stupid banks that make a lot of stupid loans. one in italy, a couple in spain. they may have to raise capital obviously. people saw indonesia raise rates, okay, it's contagion, it is really 1997 there are hedge funds that are long turkey. i don't know to me the most important thing that happened yesterday, warren buffett bought more -- he would more goldman sachs and you know what, he's not a sunshine patriot. he's a guy that's there for the long haul. he's not sitting here, wow, i have to get out of goldman because of turkey. i'm with buffett i'm against the people who are

panicked about turkey. >> jim, great to see you thank you. >> thank you by the way, coming up on "mad money" don't miss two big conversations. jim is talking to senator elizabeth warren and he'll be talking to the ceo of twilio, jeff lawson up 220% this year. stay tuned "squawk box" will be right back.

time now for your stat of the day.

in the months since the start of q2 earnings season financials have led after similar moves the sector tends to pull back the following week welcome back to "squawk box. we are watching retail stocks this morning here's what's going on macy's posted the stock down more than 5% though. a look at the retailer ins the red. jc penney's, kohl's and nordstrom and sears you can put on the list. eddie lampert making a couple of steps there to buy the kenmore brand. >> right i think $400 million is the price we had seen mentioned in the reports. let's take a final look at the markets this morning futures at this point are down by 160 points for the dow. s&p futures down by 17 the nasdaq futures off by 64 we have been in the red all morning long but we have seen those losses accelerated over the course of the last three hours. if you take a look at what's

happening in europe, red arrows across the board in fact, right now, most of the major averages are down by more than 1%. the dax when we checked earlier was almost flat. you can see the selling has excel rated there as well. this comes after weakness in asia overnight. folks, that does it for us today. make sure you join us tomorrow right now, time for "squawk on the street." ♪ welcome to "squawk on the street." i'm karl quint anea with jim cramer there was a miss from ten cent that hurt the tech names in general. europe is firmly in the red as you heard becky say. despite some decent retail sales numbers. productivity and labor costs the futures ar