♪ . >> announcer: live from new york where business never sleeps, this is "squawk box. good morning everybody welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin futures are higher both saw a sixth gain out of the last seven weeks you'll see the dow futures up by 81 points. nasdaq futures up by 26 and the s&p futures up by close to 7 points s&p less than a percent off of their high you can see overnight in asia, the nikkei down by a third of a percentage point stocks were higher the hang seng up the shanghai composite up by 1.1% some of the early action in europe, you're going to se green arrows across the board. the dax was the biggest gainer

look at treasury yields in the united states. the ten-year is yielding 2.857%. check out crude oil prices crude last week, wti saw a 7th straight negative week that's the longest losing streak since 2015 wti down another $.03 to 65.88 gold saw the worst week since may of 2017 last week. this morning up by $10 $1,194. breaking news overnight. pepsico officially buying soda stream $3.2 billion is the price tag. sara eisen joins us on the squawk "newsline." good morning, sara. >> good morning, aaron this is going to be the biggest in many years for peps owe it only represents 10 or 11% premium. friday's close of soda stream doesn't tell the whole story they came off of a blockbuster quarter. the most successful ever

more than triple the forecast for guidance over the last 30 days, it's a 30% premium. sodastream shares surging to match the deal price this has been rumored for years. they had a partnership a few years ago in a class where pepsi tested brands on the sis tep why now? i talked to hue johnston, the cfo and vice chairman of pepsico overnight. he said soda stream got the product portfolio in the right place. they need the ability to expand into more countries. pepsico has that exposure. it's in more than 200 countries around the world johnston said it's a good incremental growth opportunity for us we get access to business that we don't have. home beverages we don't play in this comes off the heels of a january deal for rival snapple merged with keurig keurig coal was a flop compared

to soda stream the di yfrmt beverage market is one that has been growing. i can tell you that this deal came together in a matter of weeks. it was fairly quick. even though that relationship was there. the intention is for soda stream to remain independent. and beyond the at-home beverage play, guys, this is a big bet on sparkling water, which has been a fast double digit grower in this country growing faster than bottled water. it's a big bet on sustainability and the sthift that consumers have made towards healthy and also less more environmentally friendly beverages and products. because the bottles are reusable for the beverage industry, this is going to be a big shift the ceo of soda stream told me it's a complimentary fit and excited to merge these companies after 11 years of getting suitors. is this a finale for them in

terms of last transactions that is part of her legacy, if you will >> well, hard to tell. she'll be the ceo until october. but certainly appears to be her last deal. one of her biggest deals, i asked hugh johnston if this represented a change in the way they were thinking about if you recall over the tenure, the playbook has been smaller acquisitions less than a billion dollars. they've done that mostly in this portfolio. healthier alternatives, fits with that. they said it's not a change from strategy this was a good opportunity and fits in a lot of plans, which is to be more sustainable and to be healthier, to cut the amount of sugar and bring that product portfolio to the right place he frames it as a continuation i would see that management shift with a new ceo coming in as someone who has been inside the company leading a lot of the international markets as a continuation as well

>> sara eisen, thank you appreciate it. >> thank you following a major developing story out of venezuela that nation taking dramatic economic measures over the weekend. venezuelan president, nicolas maduro devaluing the nation's currency by 95% and announcing plans to raise taxes and the minimum wage doesn't sound a lot different than what the democrats want to do in this country in this case -- in this case the minimum wage goes to $30 from a dollar a month >> right. >> a month >> a month from a dollar a month to $30 a month. socialism, if it's put in effect tiffly, somehow socialism is on -- >> socialism, corruption, management -- >> they didn't do it right.

>> it's this comes as inflation is spiraling out of control. the imf says venezuela's inflation rate could hit 1 million percent give or take by the end of the year. >> horrible, horrible story. >> people have lost the amount of weight -- there's no food left of the there's nowhere to get it more than 2.3 million people 'em freight grate and -- emigrated and tried to leave the country. >> run out of other people's money. we need new courses, new professors, new attitudes around here anyway, turning to asia, a big week ahead for u.s. china's trade talks. the vice -- set to kick off two days of talks starting on wednesday. this is the first round of formal negotiations since the u.s. imposed tariffs on chinese imports. a live report from beijing at the bottom of the hour apple reportedly removed 25,000 apps from china's app

store over the weekend the "wall street journal" said that apple carried out illegal apps that sold lotto tickets or gambling services. cnbc reached out to apple for comment. a spokeswoman would not confirm the number of apps removed but told us gambling apps are illegal and not allowed on the app store in china tesla shares continue to be under -- elon musk is rejecting a plea from huffington to slow down and rest. huffington was on the line over the weekend posted an open letter to musk on friday along with a tweet saying dear elon, please change the way you work to be more in line with the science around how humans are most effective you need it, tesla needs it. he tweeted back, ford and tesla are the only two american companies to avoid bankruptcy. i just got home from the factory. you think this is an option?

it is not. like midnight or 2:30 on saturday morning the back and forth was sparked by the interview that musk had given in "the new york times" which said he had the most difficult and painful year of his career sacrificing time with friends and family to help tesla meet production goals separately, he spoke to youtuber marcus brownlee about the future of electric cars it could take them maybe three years to build a $25,000 car it's tough to do given the competition in the auto industry that interview is worth watching to see his demeanor. there's a sense he was breaking down in this interview that he gave on thursday the youtube interview was taken on wednesday and posted the day after. he doesn't look like he's falling to pieces in the youtube interview where you actually get to see the video spriteth separately, reuters reporting that the fund that could help fund his -- it's now in talks to invest in an

aspiring rival, lucid motors this is a condition that's trying to compete with tesla sources say the pif. s the sovereign law fund could invest more than a billion dollars and lose majority ownership. that might make it more complicated to -- >> that's going to -- >> about 8% on friday. >> based on just people going what's going on here >> right >> part of it was the interview. >> ariana -- >> inserting herself. >> she's been here talking about sleep so many times. hot topic here >> always a hot topic here >> but sleep is her big thing. i mean, this makes total sense the intersection of elon musk and -- >> i mean, i'm sorry, i can't help thinking about jack nicholson sitting on the side of his bed in the shining and so tired and unable to sleep. i can't imagine. like i said, i can be in mid

conversation at home and fall asleep it is frightening to think that i'm so tired but i can't sleep if i take an ambien, i still might not sleep? that causes the stocco owe. >> one thing to think about as the stock goes down -- >> but it's way down below remember on the convertibles it's back down below where it was. >> i don't mean he's tried to take the stock down. if the stock goes down, he could have a better chance of making it private the math never made sense to take it private at $70 billion ever by the way, the market cap rate is $50 billion if it's closer to 40, all of a sudden the math makes sense. >> you got to be a little careful. he's bore poed against his holdings if it falls too low, he'll get a margin call. >> you would need the market cap to probably go in half

more than half. >> not more than half. it's 200-something is where some of the margins -- >> obviously not thinking this through. the point last week is that he should have never tweeted the 420 numbers. it makes it harder to take it private. now you're saying he's acting like ailun particular to drive it down below. >> i said i don't believe that's what he's doing. it could have the effect of being able to buy it and make the math make some sense if they could make this whole thing make any sense. >> at moment it doesn't. >> needs time to probably step back and let it play out for a little while >> there are psychological profiles throughout history. we know about some geniuses are erratic. you just have to decide -- they get a lot accomplished and then it almost looks manic at times you have to decide, is the genius -- does the erratic part of the behavior finally take away from what the genius is

doing or is he actually nuts some of the -- i think on friday that was the conjecture, that this person needs to take some time off, you know what i mean just not stable. you know, i read all the scuttlebutt about some of the tweets i mean, the rumors about what was going on, i don't know if -- they're probably not true. >> he debunked -- >> banks, i don't think she has any idea what was really going on what she was claiming was bonkers. it was crazy middle of the night -- >> i went back and read all the stuff, too >> for a big market cap company, if you're a shareholders -- >> we talked about it on friday. >> you can always say he's a genius you're going to have some erratic behavior >> this is why you want the adult, sheryl sandberg in the room to help the eric schmidt or whomever is going to do -- >> ariana comes to this idea

about sleep through her own experience where she passed out because she was so tired let's get to this week's big political stories. eamon javers is here and has more. >> good morning, becky the president spent a chunk of his day venting on twitter about a new york times story that revealed that don mcgahn spent ex tentative time working with the special counsel's office providing information to them. "the new york times" reporting that the president's own lawyers don't necessarily know what don mcgahn has told the special counsel's office at that raised a question of with bl mcgahn was turning on the president. the president did not like that suggestion out there yesterday here's one of the tweets that he posted yesterday saying the failing new york times wrote a story that made it seem like the white house counsel turned on the president when in fact it's just the opposite. the two fake reporters knew

this this is why the fake news media has become the enemy of the people so bad for america. the president there arguing that his strategy all along in all of this has been to cooperate fully. he authorized don mcgahn to cooperate fully with the special counsel's os the times reporting an additional piece of nuance to that according to their reporting, mcgahn and his lawyer had become concerned at some point that the president was setting them up to take the fall for any potential wrongdoing it may be that mcgahn was cooperating with the special counsel's office out of an eye toward protecting himself. we'll see where all of this comes out. meanwhile, the president's own personal attorney, rudy giuliani was on television ex mange all of this. he made a comment that attracted a lot of attention yesterday this is the interview with chuck todd. >> when you tell me he should testify because he should tell the truth and shouldn't worry. that's silly

it's somebody's version of the truth, not the truth he didn't have a conversation -- >> truth is truth. i don't mean to go -- >> it isn't truth. truth isn't truth. the president of the united states says i didn't -- >> truth isn't truth mr. mayor, do you realize what -- >> no, no. >> don't do this to me >> don't do truth isn't truth to me >> donald trump -- >> rudy giuliani saying truth isn't truth on national television that's the type of sound bite in politics that can come back to haunt you. the context of what he was saying there, guys, he was arguing that from an investigat investigator's perspective, if you have two witnesses to the same conversation and they both testify something entirely different about that conversation, it can be difficult for the prosecutors to know what the ultimate truth there was. but what he said was truth isn't truth. that ricocheted around the internet yesterday a lot of people focusing on that comment from rudy giuliani, likening it to the alternative facts from kellyanne conway.

>> we know what he meant watch fox news and tell me about that truth or read the "wall street journal" editorial board and tell me about that truth versus other papers i won't mention and their editorial board and read it. even today -- >> you can get met a physical pretty quickquickly. >> the truth about this story. read the journal in the lead editorial. trump waived all executive privileges to let mcgahn speak, the journal is making it a case that wow, maybe he thinks he's got nothing to hide. >> that's the -- >> that's not what you got out of a politico report where i read that the whole strategy of being open is backfire because of the -- >> the piece on mcgahn >> mcgahn and politico piece it's 180 degrees on whether this is showing -- one side said it

means trump wasn't afraid because he had nothing to hide the other side says it was the wrong strategy and mcgahn was getting thrown under the bus and trying to save his skin. i see truth -- for me, i see that every day i find it hard to find the truth anywhere i mean, i look hard for it but people have their own version of truth look at how the country is divided right now. truth to one person that tweets me versus another person on the president of the united states, they could not be more diametrically opposed on what the truth is. >> it reminded me of that comment from bill clinton during his scandal when he said it depends on the meaning of the word "is" is he was making a point but people ridiculed it for decades when you say something like this it gets out there -- >> alternate facts is a lot better. >> truth isn't truth is pretty

straight up, right >> it's owe o. >> that's another one. >> it's a difficult situation for the president. he's arguing, he didn't do anything wrong he told his people, cooperate fully. go out there the nuance in "the new york times" story is that mcgahn according to their reporting felt he was being positioned to be the fall gaia la john dean in watergate. now we see the president tweeting about john dean, the watergate -- remember, he was in the same job that don mcgahn had in watergate he was the white house counsel for nixon. he said he was a rat tweeting about mccarthyism also. >> one thing we see a lot of eamon, obstruction i'm wondering how that would play out in a divided country if it turns out that that's mueller's eventual, when what he

hangs his hat on is obstruction and no collusion found anywhere. if they do -- because democrats are now arguing that the don jr. meeting was already collusion or when trump made that off the cuff remark about i hope the russians find the -- they're already arguing that is collusion, which i don't-- >> they're hoping that the rush shantz would provide them something. >> remember when he said it, i didn't take it as a please go find i took it as -- >> that is literally what he said, though. >> it was before we knew that anything was -- i'm saying, how the country reacts, if they decide to go full force on obstruction and i know it's the cover-up not the crime i've heard that expression if they go tore the obstruction deal, that won't be well-received by a large part -- >> i agree with you. i'm not a lawyer i can't -- >> only play one on tv.

>> not every day i can't argue the legalities of this with you. i agree with you on the politics of it. if you come up with an obstruction case that's based on a situation where you're also saying there was no underlying crime, that politically is a much more difficult sell, especially if you're thinking about an impeachment proceeding. >> 2/3 of the senate especially. >> exactly obstruction without an underlying crime the question is whether molar would move forward with some charges for somebody of conspiracy to commit computer fraud, conspiracy to commit wire fraud, defrauding the united states those things could be the crimes there that under lie the overall obstruction piece of this. those are separated. i agree with you >> you think we get a verdict today, eamon >> it's interesting. the jury in the case sent a note asking for clarifications on a number of different points >> right. >> we're talking about the president's former campaign manager here on trial in the

eastern district of virginia for a number of things the jury requesting some clarification. it seems like the government felt like they had a pretty open and shut case against paul manafort alleging that he has held all this money. >> got another trial to go through with even more -- they got even more stuff on him supposedly. >> the jury may see this as more economy indicated than the prosecution does have you seen this thing on netflix, i am a killer >> i have not. >> huh-uh. >> it's freaking unbelievable. i didn't see it. but it is unbelievable. >> what's it about >> about guys that really detail, they're on death row to go through the crime on both side, from the victim to the trial. the way it works i'm sorry about michelle wolf. >> what about michelle wolf.

>> her show was canceled on netflix. >> why i'm sorry >> because i feel bad for her. coming up, we'll bring you a -- going to talk about a big winner and really big loser at the weekend box office plus new numbers behind password sharing on the streaming services welcome to at&t innovations where we give you more for you thing. and here's where we shrink the biggest names in entertainment so we can fit them into our unlimited wireless plan. who's first? no. this isn't permanent, right? ask him. [terry squeals.] get unlimited data, live tv, and your choice of an extra on us. more for your thing. that's our thing.

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welcome back to "squawk box. u.s. futures up again. it turned around on friday supposed to be down because we went up 400 but it closed up a hundred on friday. close to highs on the s&p. one of these days the doi might even eclipse it. >> it's only 3% off the dow. >> not much. anyway, joining us now janelle woodward, co-head of income strategies at bmo fixed income you must be staying up late at night trying to figure out strategies we're going to have another guest if we can bring him back todd salomone i. we lost him. let's stay with fixed income everybody needs asset al occasion and lessen the risk of a 100% equity fort foportfolio.

>> should we just take our lumps and not have a big exposure to fixed income >> i think we've been hearing that a lot recently. one of the places we like to be in the marked is the invest grade world. the second quarter earnings that came out, earnings are really strong we saw companies on the credit side continue to -- at the same time, we hear some of these headlines risks as it relates to inflation and tariffs and certainly currency we think investment strikes that right balance between being on the risk spectrum but not too far down the spectrum. when we look at yields of investments, we are now at 4%. doesn't take -- we can step back and say we were below 2.75%. >> a guess we know you're going to get your money back, right? how long do you have to go for 4%

>> that's the average duration of four years on the corporate index. >> four years. >> flattening. i think when you look at the flattening of the yield curve, there's attractive places to be in the corporate world without taking too much interest rate risk. >> people saying that cash is finally an attractive a alternative. i don't know they've been bears for a long time their still sticking to that doesn't look very attractive to me. >> when you look at corporate earnings, you have a lot coming from tax reform. credit spreads back to where they were at the end of last year for us, it's worth the incremental risk fairly high quality. but really stepping out a little bit to pick up the incremental yield of being in the credit market we still think there's room for treasuries and mortgages and a balanced to portfolio. especially a balanced balance to headline risk that we see.

>> i think we have you now, todd he's gone again. we had him, we don't have him. we'll stick with the fixed income it's a 4% for four years in a market if you're a little bit worried about it, there's some things swirling around, end of cycle thinking and profit margins peaking and inflation finally coming back. that almost seems viable i guess. you could at least park it there in the meantime. you don't think there's credit risk in -- if you have a decent rating a or better. >> there's always element of credit risk. that's what you're getting paid for. i think the other backdrop is where we are in terms of the monetary policy cycle. this week we'll be watching the fed -- to come out and the meeting towards the end of the week to give us a broader perspective on fixed income markets which will be important and the tariff talks as well we have seen a fairly

significant move up in yields and here from a carry perspective, you're fairly insulated right now, again, corporate earnings were really strong. we think that's the right tailwind for that part of the market >> janelle, thank you. we'll end it there i like the shot a lot this morning. >> great. >> put full. >> yeah. miami. otherwise it looks like -- spot on >> coming up, 78 days. 78 days until mid terms michael en from axios joins us with a look at how president trump changed the game for political debates. >> that's next as we head to break. here's a look at friday's s&p winners and losers

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reach them through the grocery stores plays into the fad for sparkling water. i like the way people are trading up. >> we have a soda stream and i don't dig it i drink so much sparkling water. >> i give you my private review after the next commercial break. >> fair enough. >> venezuelan president nicolas maduro devaluing i by 95%. hiking wages from a massive amount going from a dollar a month to 30 d a month. this all happens as inflation spirals out of control in that country reaching a million percent is what is expected. it's a hundred bolivars is worth three pennies. if you want to buy a cup of coffee it cost you that much. >> it used to be one of the richest countries in latin america. they have the most secured oil supplies of any country in

world. >> we'll talk more to someone about this in the next hour. tesla's going of a private transaction is much less developed than previously thought. that is the conclusion of a rornt out from jpmorgan chase. the analyst notes that the tesla price target, they're putting it back to $195 from the current price target of $308 that target had gone -- following elon musk's tweet about going priet. the funding is secured the stock this morning down on friday, it's down more this morning to 29841 in the meantime, a quick look at the equity futures at this hour. you will see they're up across the board. futures up by 68 points. the nasdaq up by 23? >> we have exactly 11 weekends left before the midterm elections. president trump spent this one

lashing out at enemies on twitter including john brennan, robert mueller and the media both social and traditional. joining us right now is michael en, co-founder and executiallen. >> are -- there's a different goal you don't go out in the debate to get your message out or to try to stay above the fray you go to the debates to win so two top democratic debate coaches, who has done the debates back to '92 they're out with sort of bible guide for democratic candidates. what do you do when you come up against a trump wannabe. what do you do when somebody has

a trumpian tantrum their key point is that the debates are more combative and you have to be prepared for that you have somebody who is as -- going after you -- when he's punching wildly, that gives you a chance for a counter punch they warn you, you're not running for editor of politico facts. whatever outrage being said on the stage, stick to your message and leave the fact checking to the fact checkers. >> you shouldn't be the fact checker. do facts matter? we heard from rudy giuliani. when truth is not the truth. >> subject line of today's axios -- my top ten is 1984 in 2018.

>> what might come later whatever comes next in the comey report, in the -- whatever comes next in the mueller report, they're trying to have pounded in. >> freudian slip with the comey report >> mike, you don't think mainstream media takes any share of the blame for where we are now. it's about discrediting mueller. you don't think i can see black and white all the time total wiggle room in what i believe when i read or watch any -- i can watch one network on tv and watch another one and see another one. i can tell you truth is not truth based on what i see. i don't know if it ever was really. >> it's why people watch cnbc and read axios as i travel the

country. >> i'm trying to help you with that so you don't get too far out on a limb talk about discrediting mueller's investigation. turn on cnn. tell me what's truth and what's not. >> the danger is, there are things that are true one of the most popular -- >> facts matter. >> i understand. plit fa-- poe lit fact. someone fact checked the fact checkers it was shameful that the way that they were interchanging things they knew them not to be true. drawing different conclusions. they were leaving out things that influence what was being told i read fact checkers now we need a fact checker for the fact checker of the fact checkers to check them. >> this, unfortunately --

overl[ overlapping talking ]. >> there are things that are true falsehoods. unfortunately, they seem to be conflated in all of this >> it's true >> mike, on a separate matter, let's talk business, which is this it's business in politics in this case. the trade talks with china, clearly there seems to be an effort afoot to get them either finished, done or something by the midterms as part of the mid terms. does that make sense to you and what's going to happen >> there's some conversation about that andrew, i can tell you that the president feels very strongly that he's winning on china and he's all in on china within the west wing, there's still a very strong feeling based on our top sources that they want to be confrontational with china the journal had a story over the weekend about some movement but, of course, remember, people in

china say they never know who is speaking to this government. sometimes they're not even sure if president trump speaks for president trump. if you pull back the camera and you lock at where this administration is on china even larry kudlow, free trader, your former colleague is a china hawk it's one thing that the west wing agrees with they disagree on auto tariffs. just about everyone in the west wing besides the president thinks they're a bad idea. similarly on the hill, the hill is very much with the president on china, very much not with him on the other tariffs they want him to focus on that they say it makes them more defensible for them back home if he would give up some of the other -- >> mike, we'll leave it there. always great to see you. >> have a great week. >> round up on tesla it's down another 2 today.

>> yep. >> are you on break going to share your sodastream story? you're not going share it. >> we have a sodastream. >> you're lacing your water with carbon pollution, which makes no sense for anyone to do >> you're conflating truth >> no, i'm not. >> and fake news. >> it's carbon because no one says carbon dioxide anymore. i don't know what's going to happen to you. i'm expel millions of parts per million. >> that's just from your mouth >> that's only from my mouth much more concentrated from my ears coming up -- you heard >> coming up stocks in china rising overnight on optimism over trade negotiations. we'll get a live report from

beijing next then we'll get you ready for the retail reports including kohl's, lowe's, target and -- council of economic advisers, kevin hassett. he almost looks live there kevin! kevin! stay tuned you're watching "squawk box. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

time for the executive edge. we're talking china. stocks high overnight. eunice yun joins us from beijing. a lot riding on this what's the chinese perspective on that? >> absolutely. the chinese delegation is led by the vice commerce minister he's going to be arriving in washington on tuesday for talks on wednesday and thursday. the markets have taken heart that there could be some sort of resolution but still here on the ground, expectations are low that anything meaningful will really come out of these talks at this stage. my sources have been telling me that the two sides see these talks very, very differently the chinese see it as a first step to negotiations that could

lead to a final deal when the two presidents meet on the sidelines of international conferences later this year. but the u.s. side, even though washington initiated the talks are apparently seeing these talks more as a let's check out how things are at this stage because they're being led by the u.s. treasury, which doesn't have overnight over tariffs. also, whiches in conflict with the ustr it's unclear whether it's playing an active role in the discussions. that just leads a lot of people here to believe that the u.s. is approaching this in a wait and see approach >> eunice, this is interesting issue that i've been reading over the weekend china doesn't want to have any meaningful talks on this until november that this is a way to put off some of the impending a tigs al tariffs that -- additional

tariffs that koccould have been levied have you heard more about that is that true >> it's hard to say. i heard that as well there's some talk that maybe president trump after the mid terms won't be as powerful as he is now it's better for the chinese to wait but i think right now, the chinese would love to have a deal to get the trade war behind them it is seeing the country is seeing an impact when it comes to the economy or exports. over the weekend, the banking regulators specifically asked banks to support exporters to help stabilize employment. there is a fear that there could be an impact but at the same time, a lot of people here, chinese officials as well as other chinese businessmen that i talk to are nervous about whether or not president trump or his administration can stick to a deal if they were to come up with a deal any time before

november as of right now, everyone is waiting to see exactly what's going to happen. maybe some are more hopeful than others that this could be a first step in trying to broker a deal later down the line as of right now, it's looking more and more that people are uncertain about how the situation will play out. >> eunice thank you. eunice yoon. when we come back, row tail stocks were huge movers last week with all mart up nearly 10% and macy's down almost 20% we'll talk about the retail reports next on "squawk box. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates.

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all right. welcome back everybody it is a big week for retail. joining us right now with the breakdown of the biggest reports coming up including kohl's, lowe's, target and gap we're joined by our guest. thank you for being here. >> great to see you. >> i was under the impression that we had made it through the rockiest points of retail. we had come out the other side, we knew who would be strong, we knew who wasn't. wouldn't be seeing the massive

swings i was wrong. what happened? >> i think everything you said is right except for massive swings nordstrom's a winner >> macy's a winner >> kohl's is clearly a winner. >> macy's was down 10% when they announced. there was nothing wrong with their release. they had good numbers, good gross margin, good expense control. done all the right things. growing the off price business >> that's because stock has run up sharply up 36% from the crash. up 86% from the bottom something like that. yeah it's been an enormous run. i don't think that explains the big crash. everybody state profit taking. i'm sure something else is going on in the mind of the investor i think they're worried about the space itself as you know, bond time went broke. belk's the other players in that space.

macy's will win the space. >> what does that mean for the stocks reporting this week >> i'm scared to death we'll have great reports and bad transition to whatever is happening with the investor, right? i don't think we're going to see problems with the reports. >> they're trading in or out for some reason. it's not what the earnings release says >> decent reports. >> you're not sure what that means for the stock prices. >> i'm not thrilled with the mall-based retailers in general, their second quarter is going to be better than what most people anticipated when they started the year. just because the consumer is so strong having said that, i'm not a fan of gap i think they're doing poorly and old navy is doing well i'm not a fan of l brands. i think bed bath and -- bath and body works is doing fine and victoria's secret isn't doing

fine and isn't likely to do fine those are issues those won't trade as well obviously. we'll see in general good reports from most retailers. i think 70% of my universe is probably -- >> we have to have you back soon to talk about what we see from retailers this week. it's great to see you, jan. our morning nuss maker kevin hassett is going to join us and much more on the deal of the morning. pepsico buying soda stream $3.2 billion we'll talk more about it "squawk box" rur ia mentetnsn on our planet than people. we're putting ai into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain.

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trade talks.

council of economic advisers, chair kevin hassett will join us from a -- the news making interview just minutes away. >> ariana huffington telling elon news tock slow down >> how are you doing >> the latest on the production loans and the possibility of going private is straight ahead. >> plus, golfing for a good cause. pga player morgan hoffman has become a champion for health and wellness since being diagnosed with muscular dystrophy. he joins in the battle to find a cure plus, rory mcilroy joins us live from the course as the second hour of "squawk box" begins right now. >> good morning. welcome back to "squawk box. live at the -- take a look at

u.s. equity futures at this hour we'll show you what's going on opens 65 points higher nasdaq up about 23 points. the s&p 500 up as well about six points a couple people making headlines. turkey was the focus of the markets last week. increasing attention this week now turning to venezuela the president there devaluing the country's currency and ordered a substantial increase in a minimum wage as well as new taxes. that's prompted an out cry from venezuelan businesses. saying it would drive more people to leave the country. more on that situation in venezuela in a couple of -- values of tesla -- the automaker does indeed appear to be -- the process is much less developed than it had previously thought as a result, the firm is cutting price target on the stock to $195 from $308

being off, 9% on a friday. the government separately trying to force facebook to break the encryption in the popular messenger app. that's according to reuters. prosecutors want to listen to a suspect's voice in conversations in a criminal probe and facebook is said to be contesting the justice department's demand. this is a large debate >> facebook -- obviously apple and many, many more. >> we have breaking news this morning from the beverage industry pepsi buying sodastreasodastream we're joining with more. good morning, sara. >> this was long rumored for a while. the deal came together fairly quickly. pepsico buying sodastream. they announced at 2:00 a.m $144 a share if you look over the last 30 s

days, it's a 30% premium sodastream actually had what they call their best quarter ever and tripled their guidance for the fiscal year. they've really seen a comeback in the business since the stock price hit around 12 or 13 just in early 2016. they've marketed more toward sparkling water. cel seltzer. i talked to the ceo, vice chairman of pepsico. i said why now he said they've got their portfolio in the right place what they need is the ability to expand to more countries that's pepsi's strength. more than 200 countries. it's good incremental growth opportunity for us we get access to business home beverages that we don't play in. also talked to the ceo of sodastream he's going to stay on board and

run it remotely independently. it leads to mega trends in the beverage business, sustainable and healthy consumer shift that's what sodastream marketed itself about the sustainable piece, right we don't use bottles anymore it's reusable bottles. made from tap water. it's not the disposable bottles that we're used to when it comes to bottled water that's been a huge focus and explains the rationale behind this deal. >> i was thinking just last week or so that i drink so much sparkling water nowh it would make sense to get one. getting there very painfully and slowly. >> do you like the flavor? >> i like the lacroix peach pear. >> i like soda except -- >> what do you mean? >> we talked about it. >> now you even hear of -- like

crazy claims about -- you've seen the conspiracy claims about the sweeteners that it can cause this or this. >> mostly on -- >> eventually, it starts tasting like a diet coke at least it has the fizz what's the downside? >> i'm so prepared for this. andrew asks me. >> do i get kidney stones? >> sparkling water is much healthier alternative. >> there's acid in it. >> do it in moderation, right. you don't want to be guzzling acidic sparkling water all day if you -- >> if you drink it, drink it with a straw of the that's what i've heard. >> so it doesn't soak your teeth. >> use a metal straw by the way, we were discussing i have a sodastream. i don't love my sodastream. >> why >> because you have -- the cartridges run out very quickly.

you can get two glasses in one bott bottle it's a lot going on. >> they are a -- they're the biggest of its kind. remember keurig tried to do this they launched it a few years ago. >> bubbly all day long. >> they've been going into this. coca-cola has another one. it's a big driver. there's a fight with nestle waters they have a lot of the imported. pellegrinos and sparkling waters no question, this is where the growth is. as a soda all terron tich and millennial consumers never quite interested in soda. >> pulling streams >> delivered to our house. i have four different. my favorite is peach pear. >> could be a -- >> sort of said that i haven't had any today. >> how long does it last overnight. >> i don't drink sparkling water.

i like regular. >> i've done this research too that's why i pour it in a class than out of the bottle it decarbonates some of this. >> is hassett still there? big week for trade negotiation ws nafta a lot of practice on the china front. squawk news maker. counsel of economic advisers i'm not going to say speaking of gas -- >> it's the high point in the history of the show i think. >> i think that would be a low way to intro a week ago you were saying nafta or at least mexico was close what can you tell us the this morning, the latest? >> i know the mexican team was here most of last week we're even closer. i said at one show late last week that i now hope that dustin hoffman doesn't show up at the wedding. that's how close we are. >> you mean pounding on the class screaming and everybody

curses at him. is canada watching going, what happened to us they could be -- they're not though >> i think what will happen after we close the mexico deal, canada is going to look at it and see stuff they like and stuff they want to modify. it's going to make it easier to make a deal with canada because we have to deal with mexico. >> i'm worried about truth, kevin. what's truth and what isn't truth. the articles written last week about china, it seems hike they're, i don't know, it seems like they're being affected by what's happening and that they're coming to the table. is that the truth? >> the facts they're definitely coming to the table. there are people coming this week the chinese economy isn't doing so hot and it's not doing well

not just because of what we're doing but they had a debt overhang and had to recap tal eyes their banks and so on there have been a lot of -- they're talking. they're coming >> their economy is not so hot ours is doing pretty well. where are you on the current quarter. atlanta at five. what are you hoping for? is it really possible to be above three or four again? >> yeah. >> four is hopeful above three is pretty solid. we get some of the data already. the retail sales and stuff i'd say that right now we're looking at a really strong quarter after a rile strong quarter. two quarters in a row of growth north of three that's almost unprecedented in the last decade. >> what would you need in the fourth to get that 3% trend for the year >> i guess it depends what we

get in the third right now we're looking at a third quarter north of three and really no reason to expect that the fourth quarter will be different. >> there's plenty of reason to suspect. everyone is telling me -- [ overlapping talking ]. >> larry somers is will to wait. and just hope springs eternal. >> eventually. we'll have a bad number. the point is, we're putting all the factories online now buying all these machines and what's going to happen is -- i think if we look forward to the next two, three, four quarters, we've got so much capital investment that second shoe dropping of more outpit because we've built a factory is the gdp is -- >> how do you -- what do you attribute that weakness to >> housing is one of the weaker parts of the economy i think there are a lot of reasons why the cost of building a new home right now are higher

because interest rates are higher and because lumber is expensive. i think that's a temporary thing and that housing will pick up by the second half of the year. >> everybody is changing jobs because there's better opportunities. can get more money the lead story in the journal, fewer u.s. workers moving to pursue new job opportunities changing family ties and more openings in your home making people less willing. this almost looks like the first thing in an economy gets better, you might have to move you get a better job now you would say this is positive the better jobs are near home now. this is not -- this is not seen as a negative? >> there is something of a negative there the two things we see in the data, number one is that people are quitting their jobs like crazy. so that's kind of a good thing if you're quitting your job, you know you have another job waiting. also people are moving much less often than they used to. so the question is, if you don't

have a job because you're in rochester and you see all these jobs for people like you in teaneck, you ought to move to teaneck. people aren't doing that i think our economy could be more dynamic but it's still the case that the job market are suggesting that people are doing well. >> anybody worried about the deficit? i get that all the time. republicans only care about the deficit when it's a democratic president and now they're going nuts trillion dollar deficits, cutting taxes, not cutting spending you ever going to whisper in the president's ear that maybe spending should be cut. >> i think the literature is clear, when the deficit is large, that's a policy opportunity. it's a -- the president is disappointed in the trajectory of the deficit this year i would dpguess between now and

then, we'll be doing a lot of talking about that. >> his base is convinced we're -- he's convinced this base we'll never do anything with entitlement and it's unsustainable. could he ever make that transition to telling his base, here we go with truth is subjective but would he ever tell them the truth that someday entitlements need to be cut, whether it's medicare growth or social security those are facts not alternative facts. >> the president's base expects the truth from him the question is, at what point do you do entitlements over a 20, 30-year horizon you have to do it. my guess is the conversation picks up, yeah. >> kevin, can you speak to this. there were reports, we talked to mike allen about it earlier, the idea of the meeting that's going to happen, trying to resolve this trade war, whatever you think the resolution is and the timetable being set around or at least related to the midterms,

true -- is truth true today on that >> well, yeah. definitely david malpass is meeting with folks and going to be down in the weeds and if you want to start a deal, you start in the weeds he's our weed whacker. he's in treasury and knows the details of stuff that we really have to bring to the chinese the fact that they're here this week, it's a positive sign. >> november is coming. so anything that happens around it is going to be tail wagging the dog accusations. we'll see whether mueller does anything on october 31st too that could be construed as -- i don't know we don't know what truth is anymore. i've thrown it out the window. >> or trying to. trying to distinguish. >> get on andrew's side of truth. we haven't been there for eight years. we've had alternate facts. anyway, thank you kevin hassett. >> i think you're doing -- it's

a disservice to go along with the idea that somehow truth is not truth. i really do. it undermines the idea of what we try to do every day on the show, on this network, in the news media whether you agree with it or not. i'm sorry to say. >> you don't think that there are -- [ overlapping talking ] to the analysis of perspective it -- >> i'll tell you when you don't -- >> here's the issue with what giuliani said. you can have perceptions of truth. what he said is, the trump said this, the other guy said this. who do we believe? that's a situation where ultimately you should be able to find the truth that's not a perception. >> that's true in terms of whether -- the terms of the comey discussion, one person says one thing and one says the other. >> may be impossible to determine the truth, but there is truth. >> if it's not -- you don't have

it. >> that's a factual situation that there was a third party -- >> [ overlapping talking ]. >> look at the huffington post if you really feel like you're getting objective truth from "the new york times" editorial board, that's your alternative fact i don't think it's a fact. >> the editorial page of any newspaper is a perspective and opinion. it's not a fact. however, the news pages -- >> the front page. >> i think that's wrong. i think it's unfair. >> that's why we have alternate truths. >> i don't think that we -- i think we do follow the truth i do coming up when we return, ven venza -- after the break the crisis in venezuela. >> the longest bull run without a lease.

a 20% drop we'll find out if there's more room to run. quk x"etnsn "sawbo rur ia moment it's what this country is made of. but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides. donate to your local y today. because where there's a y, there's an us.

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venezuela descending further into chaos after a massive devaluation and greece will be exiting its bailout package. we have a guest to break the stories down they're tag fascinating. >> the banks are closed today. becky mentioned the massive devaluation. they're going to introduce a new currency removing five zeros from the country's biggest bill. some economists say it was worse than it was in the wie march republic the largest was 100,000 bolivar note it's worth .03 u.s. cents. they're going to raise the minimum wage by a thousand percent. it can sell for more millions are trying to flee, what some are calling the

somalia of south america price controls and state control of resources "wall street journal" reporting goldman sachs facing losses on the heavily criticized purchases of venezuelan bonds last year. in june, they marked them at 18 cents on the tdollar. >> who owns the bonds? are they in mutual funds >> yes it doesn't permit banks to take positions. they bought these and sold to clients and sitting in a lot of individual accounts. the clients would have taken on the risk of that. >> when was the last time? how long ago was venezuela a country you could visit it >> you could visit it up until -- i mean, when it was -- >> what i'm getting to, when was the minimum wage not a dollar a month? what was the best -- they're getting the $30. what was the best it was was it ever $200 a month or a

normal western what you'd think of as something in the americas. was it ever 5,000? >> this descent into chaos started under chavez you had the very rich and the very poor and no middle class. venezuela has suffered from having too much oil. countries that have too much oil, we have seen often make very bad decisions >> there's so much -- >> nobody will invest the oil -- >> you can't take a risk >> does everyone know that the -- it's a dollar i read a dollar a month. that struck me i didn't realize just right down in venezuela >> apples to apples. they've had massive

devaluations maybe that particular -- it was actually a livable wage, right it's been devalued so much >> they're only going to $30 a month. >> that will be worthless. they keep raising it because inflation is so bad. >> i'm curious where we get this number there you can't get it out of venezuela directly it used to be a guy at home depot who would quote -- google it on to greece today is the day that it exits the nine-year bailout. you recall the massive protests that engulfed greeks for years uncertainty about whether they would follow the pailout rules to pay back the european banks would move the dow 400 or 500 points in a day. not anymore. what does success look like?

>> $192 billion is their gdp unemployment at 20%. that's down from 27% the population is down by half a million due to a brain drain and owe 248 billion euros. but they havea primary budget surplus. >> the brain drain is concerning you hear about the best and brightest taking off what are the future hopes? is it going to be a better place? unemployment is down to 20%. >> they need to do real reform within the economy that they've never been willing to to i don't know what makes their economy grow in a meaningful way until they protect every single industry like they do. >> making it hard to open businesses and competitors. >> hard to even join a profession you want to join a profession, there's all kinds of rules that make it extremely hard they control the number of triefrs there are in the country, they control the number

of pharmacists and teachers. you're in a great position if you get one of those jobs. if you can't make your way into it -- >> yes extremely hard. >> always a pleasure to have you on "squawk box." >> streaming services fighting an upward bat whl it comes to password sharing. questions about tesla going private and the company's financial help elon musk explaining much more to come after this

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good morning everybody we're live in the -- shares of cosmetics maker estee lauder are lower today. they beat estimates on the top and bottom lines for the fiscal fourth quarter however, it gave a lower than expected for the full year saying it expected larger than anticipated charges related to various sales initiatives.

bha whatever that means. stock down right now we're watching shares of nike. that's been upgraded to neutral at piper jahry. crazy rich asians was the winner at the weekend box office. the comedy took in $25.3 million in north american ticket sales the movie had a budget of just $30 million. >> millennials are going to extreme lengths to share passwords. an estimated 35% of millennials share passwords, 19% of generation x subscribers they're losing mass amounts of money. media experts struggled to pinpoint the cause the problem is worsening hulu loses in the neighborhood of $1.5 billion a year according

to recent financial reports by major stakeholders the question they face is what do you do about it do you block certain people? if you block people who have the password, are some of them actually really your customers what kind of ill will can you create in this whole episode >> do we know that for a fact. the previous thing that you talked about >> which one >> continue on >> really? >> i thought that was really interesting if it's true. >> in this case, i don't know it to be true. >> we do have a member of your family who is going to be -- >> you're talking about the other thing. passwords. >> no, no. i'm talking about people getting unfollowed and things. cross border merger expected to be approved by the european union.

eu regulators will approve between praxair and germany's lind the deal was held up over disagreements over asset sales and transaction was first announced two years ago. >> when we return, more on the deal of the morning. pepsi buying sodastream for $3.2 billion. is it a sign that sugary sodas are on the way out we'll talk about that. plus, how long will the bull run last anastasia om row so will be here to talk about the markets. as we head to the break, take a look at the u.s. equity futures. off the highs. still indicated up by 50 points. s&p futures up by five the nasdaq up by 19. "squawk box" will be right back. into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields.

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welcome back the markets are riding the longest bull run in history without at least a 20% correction mike san toll i has more on what he's calling a three act play. >> wednesday, this bull market as defined since march of 2009 will become the longest, become just a bit longer than the 1990s

bull market. by the way, this assumes that the january 26th high and the s&p is not the ultimate high if we go down 20% from here, it was over assuming that's not the case, it's the longest without a 20% pullback this chart shows you had about two years of very good upside of rebound from the steep low in march of 2009 into 2011. you almost had a 20% pullback in 2011 with the european debt fears. another severe correction in 2015 and '16 two years of gains followed by a year of sideways that's been the pattern. that seems to be what's going on three phases the longest as of wednesday but not the strongest. 15% annual gain. 18% for the 19 the 0s one. is it young for its age? you can make the argument that you had severe pullbacks, you refreshed the bull market, had the tax cut that gave an unusual second wind to corporate earnings and still liquid

conditions seems like an elongated cycle. you can argue that three acts is not where the play ends but we have to see how that works. >> you broke it down to annualized gains >> 320%. >> versus 417% if you look at it in those terms, you say wow, there could be room. >> it you pick that side effect? >> i said it sounded like an '80s arcade game. >> you didn't put that together? >> no. that's beyond my capability. that's the actual synthetic electronic sound. >> did you pass over this one? >> in the running? >> just so they know, i wouldn't -- elon and -- unfriended each other. >> he unfollowed her. >> that's what i was saying. >> we talked about a few other

things during the commercial i didn't know what you were talking about either. >> the sense that maybe grimes and -- >> they might have broken up. >> that's not important? >> i have to say in this environment it could be huge. >> the reason i brought it up, you said it might be the most important story of the day earlier. tongue in cheek. >> but investors often look at the romances, divorces of -- especially now in the midst of this craziness we'll have a tesla analyst on in a minute. >> we should get to our guest. we have amoroso on >> we're almost there. almost done. >> good to be here >> hey lot in the "newsline. mike will stay with us anastasia is here from jpmorgan private bank. >> amoroso >> omarosa is close but the vowels are switched. >> the first and last.

if you say it quickly, it sounds pretty darn close. >> that's a separate discussion altogether anastas anastasia, let's talk about this potentially the longest bull market but not the strongest bull markets don't die of old age but can get long in the tooth. >> the 2015 time period really provided important reset for the market we've had essentially recession in so many parts in the economy, whether a commodity sector it was wrapped into that since 2015, since 2016 we've staged this rebound. i would say we've had the initial recovery we've consolidated and experienced true growth. i do think there's room for the bull market to run the corporate fundamentals. >> also look at the consumer that's one area of the economy adding fuel to the fire. look at how consumption has driven the 4.1 gdp last year

last quarter rather and look at the personal savings rates >> i was going to ask you about that i read about it this morning with the personal savings rate getting up there is that because they can buy and save at the same time or what's happening? >> it's a technical revision the reason why, we're accounting for other sources of income, for business owners as well as interest and dividend income we have a better way to account for that i think the message that it sends, not only the job growth is strong and unemployment rate is low and people quitting because of it. but also consumers are not overspending it gives us more comfort in the market generally speaking. >> if you look at parts of the market that have been performing exceptionally well, e-commerce and all the things tied to that or consumer spending in general, you could look at the car networks for example they've done very well

you can look at warehouses that are supplying retail so anything that has to do with the u.s. con sueler is doing well >> we've had guest after guest that told us this is a stock picker's market. the time for watching the major averages continue to climb is over what you're talking about doesn't necessarily play into that >> i would actually -- you may have sectors that do better. you may have -- >> i think there was one sector in particular becoming a stock picker sector. that's the tech sector for the longest time we were comfortable with tech earnings and continuously revised higher, but it's reminded us the tech earnings revisions are starting to peak at the sector level. we have to look at specific sub sec force. software, how that's positioned in the business cycle. although we have concerns about some of the social media companies given the tech landscape that we're living in. >> mike, what to we watch next

>> i've watched the very kind of defensive leadership of the market right now even though i agree that there are the fundamentals seem like they stretch out in terms of consumer strength and earnings and stra georgia tech tri, all that looks good, the market is more uneven. it's shown a little more defensiveness in terms of what's working and what's not no longer leading -- industrial no longer leading. are they resting or coming back or not the market trying to signal a potential slowdown globally down the road. >> thanks for joining us coming up, tesla shares under pressure in the free market on a trifecta of headlines. elon musk rejecting a plea from arian a huffington to slow down and rest not following grimes p grimes not following him anymore. a couple of different platforms. should investors sit back and relax as well. we'll discuss after the break. here are the futures at this

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at it again. not another golf course. but this time at -- it's in the prompter dom, it's for a good cause at ridgewood. that's a tilling has course too like baltusrol and -- >> ridgewood is where they play the northern trust we're at arcola country club in paramus. the reason why, it is pretty close. it's only about 15 minutes from englewood cliffs it's where you are in times square it's a great cause because it's the first-ever morgan hoffman celebrity golf classic it benefits all kinds of research to fund muscular dystrophy. we're here, a host of guys and celebrities, a host of pga golfers out here morgan hoffman after the break we're going to be talking to rory mcilroy as well

he's also here helping to support that cause a lot of good golf and charity work coming up in paramus new jersey. >> it's going to be good you talked to rory yet >> oh, yes, i have spoken to rory they're here right now guys, if you guys wouldn't mind. i know you're busy getting ready for the golf round and not let's bring you in right now we've got a great lineup of guests morgan hoffman, rory mcilroy morgan the host of our event maybe morgan, tell us about what you're doing here for muscular dystrophy and why it's so important to you a lot of people in golf, outside of golf maybe don't know your story. >> i know we don't have a lot of time here. my story is i was diagnosed in late 2016 with muscular dystrophy. i didn't want it to be about myself with my platform, i can help so many other people. i've been doing so much research on holistic living and being as

natural as possible. i couldn't find any answers in the u.s. i went abroad to nepal for four months and been doing some treatment and now coming back. i have more oral treatment to take my goal for this is to build a health and wellness in florida we're raising money for it to be a one stop shop for health and treating muscular dystrophy. >> what are you looking to get out of the event >> for people to have fun and we have great prizes on the course. hopefully introduce my amateurs and biggest donors to some great professionals like rory here we're grateful to have. >> speaking of rory, you're supporting a great cause what brought you here and why are you here for this specific event? >> obviously morgan and i know each other from playing a lot of golf together. we live close to each other down in florida i didn't know about the struggles morgan was going

through until i read his tribune piece last year. i was so moved by it i thought, here's a guy dealt a bad hand but trying to make the most of it he's trying to help other people with the cause i was just really touched and moved by it. i reached out straight-away and stayed what he's doing is so brave and inspiring. i wanted to help anyway i could. that's why i'm here today and obviously lending my support to this great day >> the game of golf donates so much more to charity than many other sports combined. you have a foundation yourself why is golf and charity so closely linked >> i don't know. i mean, i think when you look at the guys that play professional golf, we know we're very lucky we know that we make a lot of money. a lot of us didn't grow up with that in mind so to have this access and to be able to help other people and have a platform where we can go

on tv and share stories about things that we want to help and people that we want to owe causes we want to help, it's a big thing. the pga tour is such a charitable organization. it puts so much money into charities and every community that we go and play. i think it's really -- it's a part of the fabric of the game. >> morgan, what's the next step after this tournament? what do you do from here >> we have so many things that are ideas right now. we had a yacht party in west palm beach a few months ago and did something similar on a smaller scale of a live auction and a silent auction the next step is -- i've been talking with the devils here in new jersey and i've played hockey my whole life and i kind of want to do something like that we had ken daneyko here and a couple of other players, palmieri and hall. we'd like to do a golf and

hockey new jersey devils game. we probably have ten guys who grew up playing hockey especially the ka thadians on tour >> how good is the ryder cup going to be? >> hopefully better for us. much better will the cup be this year >> i think paris will be a great venue the two teams are shaping up very well yes, it's going to be fun. i know, obviously, as a part of the european team we're trying to get that cup back, especially on european soil. >> reporter: well, guys, this is going to be a great event here in paramus we're not far from where you are a whole lot of celebrities back over to you >> thanks, that was great. that's are great, that guy is amazing. tell rory, ask rory if he's ever been to the jigger inn, if he respects, can you ask him that >> reporter: he has, i did, rory did say he remembers the jigger

inn. i've showed him the photo of you guys back towing there he says he remembers >> he was with his dad very nice. >> reporter: rory was with his dad, yes, absolutely so they're getting ready to tee off for that shotgun he says he remembers the jiker i -- jigger inn. >> there was no alcohol involved on either end of that, dom >> reporter: and if you believe that i have a bridge in brooklyn wn you. >>hewe come back, we will talk tesla and elon musk pah! that will never work.

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elon musk tweets $4 a share adds a lot more money for demand on friday, tesla stock dropped 9% that most directors are planning to meet with sec officials. here to discuss all of that, the managing director at needam and company. we will start this conversation. it's a longer one to have. but you think the stock at this price -- and it keeps coming down, even this morning -- is going to come down further and not just much -- not just a little bit, but a lot? >> well, i this they once investors realize that going private with a premature statement that the funding is not secure, we're a long way to go, to go private. then you have to look at the

fundament fundamentals the fundamental apples don't indicate a stock price at $300 it indicates in our view $200. you have to look at gross margin, going into next year, production, capital structure. >> are you talking about a big decline where the stock was before the 420 private deal? >> the 4 when the is the artificial it popped at 1k3ik9. >> but why do we now have to look at the fundamentals and we didn't before we even knew that going private talk was out there? because if now the complications of going private increased, is not a done deem, as indicated, those definitive statements saying funding is secured, we're going to be an ongoing kind of discussion about how they're going to go private. who is going to take them private? what is the structure of the deal none of the details are known. so you will have that overhang on the stock for months and months and months, right >> meaning raising the issue of

going private? >> is actually depressing the price. >> so in our note, we basically said why go private now? on the last earnings call, he said we will be profitable q3 going q4 why be private if you will be profitable a third of the valuation is short. if you demonstrate profitability on a kent basconsistent basis, l be short significantly >> initially he said he wants to take it private? >> you think that puts a creeling on the stock, not - >> it's a ceiling of the stock because it basically caps the rechanges -- >> the shorts. all right. stay where you are we want to get into this even more by the way the news that we just saw was he may have broken up with his girlfriend. it may not be a technical indicator for you, for some people it is when we return a lot more on what's happening to tesla. also the deal of the morning, pepsi buying soda stream for $3

billion. then later, ceo of akamai technologies will join us a lot more on "squawk" just ahead.

breaking news overnight, pepsico buying soda stream,

details straight ahead trade war, negotiation under way this week between the u.s. and china. we will talk about the prospects for a deal plus a closer look at an industry that could be hit hard by tariffs. plus, twitter backlash over netflix that inserts ads into binge watching sessions. we got the details 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, welcome back to "squawk box" here on cnbc live from the nasdaq market site, time's square, i'm joe concern none the futures right now are adding to thursday and friday's gains and pretty close, closing in maybe on a new high from the dow, but s&p definitely close and nasdaq, that's got to be up

about 50 or 60%, over 50%. >> it was down last week that was a rare week for the nasdaq we are less than 1% from highs for the s&p and less than 3% for the dow. >> either something good is happening or that's one heck of a sugar high for these markets ten-year note is at 285. a developing story out of venezuela. >> that nation taking dramatic economic measures over the week. president nicholas maduro devaluing the nation's currency by 95% also announcing plans to hike the minimum wage of $90 to $1 per month. they say it will paralyze the economy and about 2.4 million have left sentence the year 2014 we'll watch that closely shares of tesla under pressure

once again they say the auto maker does, indeed, appear to be going to a private transaction the process is much less developed than previously thought as a result that firm is cutting the price target on the stock to $195 from $308 let's get back to our guest the managing director, at needam and company, he has been explaining this idea of taking things private. if it's not a done deal, it makes people start wondering, why now? >> it does, it questions his motivation of send tack tweet out. what was the real reason behind it if there is no details put in place f. you look at what happened with dell, dem it took six months to arrange a financial structure, identify all terms, then they announced a deal was going to happen taking it private and there is a haggling over the price. he is doing the opposite he says priceing is secure

he sets a price on it of 420 then the board scrambles they're not aware of that it seemed leak an informal discussion, no normalized process. then he is indicating we will arrange the financing in one way or another >> you have been right all along on this, you are saying what was the motivation behind the tweet? it was 2:30 a.m. who knows, whasn't it >> it was in the morning >> the motivation could have been god knows what. that's why tweeting is not the best way to put out a corporate strategy >> right flof >> there was no 8k >> just an understanding where you are coming from all of his >> we don't have price ratings we have an under perform, which we think is a sell >> all the way up? >> yes we think the valuation is closer to $200. >> you've always to the that, though >> yes >> it's not a shift in terms of

your thinking from last week to this week? >> no, we had five concerns on the fundamentals, gross margin concerns going into 2019 we don't think they will make profit the battery packs are too expensive. number two, we don't know what the true level demand is for the model three. they have been selling high end vehicles we think the capital structure is unsustainable >> what do you think about the legal liability here explain the question of they're going to be meeting with the sec. what kind of dlieblt they have from the sec, legal costs of lawyers, there is a number, about three or four class action lawsuits that have now been filed, some of which seem to be worth at least several hundred million, if not more how does that play into any of your calculus? >> it does not in my view. it provides overhang around the stock and which you don't want to have is uncertainty around you know the management, uncertainty around the legal

implication of his tweet it causes more and more confusion. that to me it shifts the sentiment. if it starts to get negative to from the beg holders >> would it change your view if they hire someone they call the ceo or the president or give a ceo title, would that change the dynamic at all >> it depends on who, what his role will be we've had a lot of people exit out of tesla over the past several years a lot of people from intel move left, apple, former employees of those companies. sow know i think the other issue is how he manages the street is it equally as important as to how he runs the company n. a publicly traded company the ceo has to communicate targets that are movable. >> one of the things they talk about, this idea, we think he believes, half or two-thirds of investors willroll their share into a private transaction by the way, he would be a part

of that? >> that would be in addition to. >> you think - >> that's why i'm very skeptical of it. if you read his blog, his updated blog, his best estimate is two-thirds of the existing shareholders would roll over >> that implies he owns 20%. ten cent owns 5% he only had to finance 9% of the shares outstanding the raise would be 9 million >> what would do you with more than 5,000 small investors in this i mean they have a way to get around the rules for that. my other question is just from tesla's own filings, can yyou ce he has borrowed a begins a big chunk somewhere between 7 and 750ple that he's bar rode against his holdings on this, if that stock falls i don't remember if it was 218 or $207, he could have a margin that

comes true the company itself says that could put pressure on the shares >> that's the issue, his convertible note is due march of 2019 the convertible price is a little over that the stock price has to be above 359. if it's not above 359, then he owes 920 million in cash he can't convert that debt to equity that puts even more pressure on his operating cash flow. he has long-term debt of $9.5, cash of 9.4 become 50% of the cash is examiner depot its, people putting money down for reservation and restricted cash. it's not cash, cash. a lot is held up in restrictions he has current liabilities of 1.9 billion and assets of 1.7 b. accrued expenses that are due. he's burning through free cash flow currently

so we have been cautious on the capital very for quite some time >> becky raised the point, we were talking earlier, he lives off his stock around 217 or $218 is where the first call would be do you believe he has cash somewhere else through spacex now or through something else we haven't thought about? >> did you see the quote >> what's that >> 5%. not two anymorech we are down under 290 on it. >> i don't know whether he has cash to fund his margin calm i have not looked into that at all. what i'm looking at "profitability on a sustainable basis on the model 3 as we go into 2019. that's my main concern i think they have been selling a lot of high end vehicles over the last you know kep couple months these are 65 vehicles. the margins are high once he depletes the high end

vehicles what are the net renovationles of folks that want a $35,000 car or $40,000 car his whole strategy is to go into the mass market. that's what's driven price up over the last year or. so people have been on the wait list for over two years. i think a large percentage of those people have the intention of getting a $35,000 car also, you know, you have a $7500 credit that is going to be reduced in half starting in january, then it goes away so if you buy a $35,000 vehicle, you could offset that with a $7500 tax credit, basically, sorry, because it's an easy car. that credit goes away, they've reached 200,000 vehicles so - >> i got it. >> i think there's issues with margin i think there is issues with profitability going forward. >> thank you very, very much the other breaking news of the morning right now is in the beverage industry, pepsi buying soda stream $3.2 billion

>> the cola board turned into the sparkling water wars pepsico, buying israeli soda stream $3.2 billion. theft% pr 30% premium the last 30 days. pepsico could have gotten it cheaper in 2016 when the valuation dropped. but the company has turned around the business. two weeks ago reporting the best quarter ever tripling its guidance for the year. so why now i talked last night to hugh johnson, the vice chairman, he says they got the portfolio in the right place. what they need now is the ability to expands into wror companies. soda stream management felt the culture was the right fit right now. a little more deal news color for you, sodastream will remain independent in the pepsico university it will be run by the

current ceo, who led the nike business if israel he has been a long-time ceo of sodastream this deal happened fairly quickly over a matter of weeks don't think of it in terms of cost synergies, more growth synergies. the real play here, guys, is pepsi gets into a new channel, which is home beverages, diy beverages. they are doubling down on their bet on sparkling water, adding to bubbly and life water and they're going into this whole sustainability push. which is something the consumer is demanding pepsi calls it beyond the bottle it's reusable bottles, using tap water, that sort of thing. it's been a huge push. perhaps the last hoorah as ceo she steps down in september. there are reports they have plotted a road map to end the

dispute between president trump and chinese president xi the president leland miller, thanks for being here. >> a pleasure. >> let's talk about the expectations at first. they may be different on opposite sides here. what are the u.s. expectation surface what are the china expectations >> i think they're the same, for something that may happen in the fall the chinese are trying to get a semblance of what is happening, is there an idea for a deal they are desperately trying to figure this out the one entity misreading this is markets markets think this is the beginning of a snowballing effect of the deem it's nothing of the so forth you may see a deal later in the fall this is a group of treasury department authorities who have no authority over trade. they're mid-level. this is not the starting of a deal a path towards a deal >> it's talking. we heard from larry kudlow there was silence from the other side.

>> it's reassuring, the yuan has been weakening it's a time for them to make clear, enough is enough. 6, 7 is not a deem 7 is obviously when you hit 6, president trump lab lourdesing over this yuan presidency that's way of prodding the bear and make sure there is no deal. >> what would it take to get to a deal that both sides would find attractive or is there anything >> there is one path to a deal it's about purchases, similar to what we would talk about in may. it would be a little different i think the goal past has now changed? >> they have been talking about ip and other issues. >> they have to have a gloss >> that is not instaptly resolvable >> the chinese have to admit they were stealing >> the chinese have to admit, that itself old way, this is a new way.

which don't do this. the basis has to be on purchases, getting the 2019 numbers for the trade deficit better than 2018 numbers so that president trump can run on that in 2020. >> if that's what it is, it doesn't sound like an impossible task this moving goal post, thinking you can understand where a deal, it changes. >> that's the key. if the chinese think they have an interlocutor, it's a deal they don't believe that anybody except the president, himself, can offer up the terms of the deal and hold to them. so that is why there is so much xi-trump summit because they think trump is the only one that can make a deal the u.s. will stick to. >> thank you sticking with the trade war, let's look at an industry that can suffer if tariffs remain in effect clarissa brewer joins us from tampa, florida

is it about boats? >> reporter: it is about boats, joe. you know, here in florida, we know it for the beautiful coastline, the amazing pary nas and the boating culture. but the boating industry is facing a triple threat for one thing, it imports steel and alluminum. that's untarider tariff the fiberglass, its navigation system then the retaliatory tariffs put in place by canada, the eu and mexico the u.s. chamber of commerce says those tit for tat tariffs could sink 270 million in boat trade in florida plus another 73 million in the state's yacht industry here wheer at bettwe're here ata yaungts, the balked a million dollars on a $4 million vessel a

lot to pay he says both of those sales are on hold. in fact, all of his sales to europe have stalled. so he has dry docked his plans for expansion, that means no more additional workers. he is concerned what the tariffs will mean for the 90 employees he currently has, he says he is not alone, his fellow manufacturers in the boating industry have seen their exports to europe dry up as buyers are waiting to see if tariffs disappear. it's a real problem in this industry, guys >> certainly s. that's not quite a 1%er problem yet, andrew, right? this isn't quite it. yeah, that's one i hadn't considered that, thank you, contessa brewer, tough assignment, once again >> once again. all right, coming up, when we return, why is magazine taking a look at this crazy looking airplane with a wing soprano

longer than a football field called a stratolaunch. and the ceo of akamai talking tiout the cloud edge compung stay tuned you are watching "squawk box" on you are watching "squawk box" on cnbcwe can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

cnbc >> the talk in texas, wire magazine out with a new article about a weird airplane that's calls, it's called 380 feet of crazy, the most audacious flying machine, there it is showing the image, it's so bizarre, tell us about this plane. >> it's huge and it is finally and i do mean finally after years of talk getting to the point where it may have its first test run. >> who is behind this plane? >> so this is paul allen's project. he is very early at microsoft a billionaire with a love of rockets. not the first, mind you, there are a lot of billionaires with love of rocks. >> total cost? >> goodness 385. >> the way it's going to be? >> oh, impossible to guess and so far over what we thought it was. >> the thing i can't physical out about this plane is what

it's supposed to do that's so much better than every other plane. >> well, better is one of those misqualifiers, i can't tell you that but what this plane is supposed to do to begin is take rockets up into the air and launch them. right? secondly the thing they have touted for years, can you read about in "wired" story is the secret project plaque ice that is going to be a manned spacecraft a shuttle if you were >> shuttle like you already had and discontinued >> did you ride on the shuttle >> one that consumers can go up in >> he hasn't said who will be the passengers for it. he is much more reticent than richard branson to say this is going to be a consumer product >> speak to this, though, there is now this race to space or race to the air, whatever, between now elon musk, who is being grounded right now with

the tesla situation and then have you branson running around, you obviously have jeff besos. is paul allen the fourth member of this troop? >> absolutely. he is the fourth he is broadening it out. they all have the became the goal what this says to some degree also is it adds more competition to the market it turns out president trump has been specific about saying we are willing and excited to spend on it. >> how much of this ultimately is getting government money involved, though all of these guys are laying out money now. i think with the intent that somebody else will peck up the tab later. >> we know the government has seen reports that they've spent $4 billion independent of six friends of the military, president trump pushes forward for a billion dollars on space vehicles and spacex is giving some of that money already so, the bet is, yes, governments

will be learning. >> who is the overall whener if spacex actually had the most commercial success >> it's the markets at this point, so, yes >> given we are talking all elon musk the morning in terms of the troubles at tesla. >> right. >> you look at the success of spacex why has there been success at spacex and it's been more challenging on the ground? >> elon musk could make the argument that spacex is struggling under what it means to be public, right? he's hinted at the fact he may involve spacex - >> do you think there is a different management structure the reason i ask, the man thwomt they say is running this company, it's unclear elon has a part fer if you will at tesla, he is running tesla? >> there is a serious advance

tesla is out looking for quote/unquote cheryl sandberg. and you know i kind of think that is all a bunch of bull the answer for all of these guys when they act too far out of turn, let's hire a coo, minds you, usually a woman to balance them out to do the operational heavy lifting. i think that's two simplistic an answer for tesla >> thank you nice to see you. coming up, we will tell you about a bin i winner and loser at the box office and new numbers on tesla sharing streaming services here's a look at the biggest pre mark winners and losers in the mark winners and losers in the dow.

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. musk says this past year has been quote the most difficult and painful of his career. >> as i say in my column it has a psychological dimention. no one can do all this alone >> the ftc probe is real, live they seem to be moving at a fairly quick clip. >> is the board able to do anything here? >> twice a year. better or worse for investors. >> better if you like writing calls, who wins when less information is really available? all right, welcome back, everybody, a lot we will be talking about this morning, including the small wild cater airlines taking on the big players, how they are gearing up for a flight take a look at the u.s. equity futures, it's been higher all morning long, six out of seven weeks the dow and s&p 5 hum closed higher. this morning all in thgrn.e ee we will talk about this in a bit.

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all right, good morning, everybody, welcome back to "squawk box" here on cnbc live from the nasdaq market in time's square health insurer anthem announced a new collaboration with wal-mart it will allow advantage customers to use planned allowances to purchase over the counter medications and health related items at wal-mart. anthem says they will reduce out of pocketcosts for consumers shares of estee lauder a erasing losses, the company had been given a weaker tharn expected full year forecast they did beat the recent quarter on top and bottom lines the forecast they were talking about was initiatives to boost sales you can see the stock is down only by 12 cents. mutual funds run by goldman sachs have purchase losses,

according to morning star data more importantly as of june 30 object before friday's devaluation of currency. the "wall street journal" says if you include the accounts, the losses come to more than $250 million. and a new low-cost carrier getting ready for takeoff. phil le beau joins us, he has a lot on the wildcater airlines. >> reporter: we heard from people saying you got six airlines, six large enough sizable airlines that's the u.s. service in the u.s the wildcater airlines used by an aviation consultant he looks at the smaller niche airlines and says don't fall asleep on these guys, frontier, spirit, sun country. these are guys getting more and more business because they are serving smaller under served markets, their flights are bigger location like orlando or

vegas, they're targeting discretionary dollars. while they are there, they are attracting people saying i'm in the mood, i got the money. here's mike boyd talking about the growth of these airlines >> the challenge we have is right now these entities, these wildcatter airlines are starting to overlap a bit they may be a real competitive threat. >> reporter: for the larger airlines the ones to watch is united why are we looking at you fightremember united is in the beginning of its domestic service in the united states checking smaller markets with their hubs to drive revenue. so they may be one of the first major airlines to bump into these wildcatter airlines more offer. it won't stop them take a look at allegiant and

spirit and the comparison is over the place here. they have been outperforming the airline index. you will see the growth not only in smaller city, they're increasingly targeting mid-size markets where the big boys placement they're doing it for limited periods of time. they look at this economy and are saying, hey, there are people that have the money, hey, we want to go to vegas, that's where these airlines step in >> go to vegas, phil le beau, thank you, sir joining us is mark chandler at brown brother, harryman and gary ross chief investment officer at black gold investments all right. mark, in terms of the dollar and how it trades against the dollar, so take your pick, where you want to go i think we said turkey a couple times, not like last week. >> they had to stop the currency

from falling generally speaking, the dollar had a good week. we finished with a pullback. it will continue ahead of powell's speech on friday. >> against the euro the yen. >> i think i still watch the dollar euro as the key exchange rate the foreign exchange market, 5 trillion a day a dollar and the euro they're struggling with the sustained move, i think we go to 115, that's top of the range before people sell it again. >> what's happening with the yuan, is this all new from the tariffs and the trade war or this goes back years the dollar yuan exchanged >> what's happened recently, chinese rates have fallen the ten year and short-term to credit control partly because of those tariffs. so the chinese markets have taken an effort to slow down the ability for foreigners to sell it, domestics to sell it

currency found some support here in the last few days >> this would be a big deal in >> i think the key level people watching is 7 on the r & b against the dollar i think the bank of china the central bank is protecting it ahead of theerk i don't think it has much to do with trade talks the previous guest was talking about, these are low level meetings the real key will be later this year. >> what if we went to $500 billion in tariffs >> i think that's what trump is threatening. >> what about the yuan it can be immune in a short run the chinese economy, the officials tell us it gross 6.5% or something. >> this plays into the oil the dollar strength? >> a strong dollar is not good for the oil prices, quick% is an emerging marks if you have a strong dollar the

ruop rupy is down >> the economies the demand might start to weaken? >> oil is traded in dollars. so it raises the price. >> of oil. >> to these economies. plus if the economies are pegged to the dollar in some fashion, they have to use fiscal po ills to offset the monetary timing. >> we, trump came out and said i don't like these at 75 i think so they have been very well behaved at 65. is this where it will stay are we setting prices? >> i think we have an important influence on prices. i think we will stay here for the time being it doesn't choke off consumers. >> i think the sortties would like the basis 70 plus so our 70-80 brent is what they're looking for. so we're a little at the lower ends of the range. we had a strong dollar the dhar

weakens, as suggested, that will help oil the next few days >> good summary, thank you mark taylor, thanks. >> stay close to your phone, mark i don't know what's goingto happen >> meantime, "crazy rich asians" the movie reportedly cost $30 million to make. it's the first romantic comedy in three years the movie is based on a best selling novel that tells the story of a nyu professor that travels to singapore and discovers he comes from an ultrarich family the bottom of the box office kevin spacey's "billionaire boys club" brought in a reported $287 not million. $287 >> earlier irsaw 127 >> it was his final project before he was hit with more than two dozen sexual misconduct

accusations. was it playing in a theater? >> in eight theaters friday it brought in $187. over two days, $287. >> what is it? is eight remake? >> it's based on a book. >> you remember there was a mini series. >> and the actual. >> judd nelson played joe what's his face he is in this one, an older guys, too. >> which was a scam that was running out in l.a >> and netflix confirmed it is testing promos for its original shows and movies that played between tv episodes while user are bingeing user, though, lashed out on 26th about the unexpected ads netflix says it's a test program to see if the promos help them

discover content that they will enjoy and they are skippable hop right through, you can >> netflix good, like i told you about. >> the documentaries can be pretty cool. >> i got to see it >> what's the name of it again >> i am a killer i've never seen how in depth they get with interviews, with guys that have been there a long time go over exactly what happened. i'm not a hard harvard individual you do see 30 years ago. they got 40 to go. you hear all the ramifications of how it happened i felt myself becoming a defense attorney some do not seem to be necessary le in the right spot i guess there is some criminal justice elements and reform in sort of the backdrop it's very well done on both sides. the victim's side as well.

it's done pretty well. >> let's talk about the streaming service, streaming subscribers are sharing passwords if record numbers, accessing or allowing others to access for free. a research firm found 30% of millennial's share their passwords, that compares with 19% of generation x and 13% of baby boomers post-mill len yannials -- millennial's, they reported a rate of 32%. when we come back the ceo o akamai will join us and the shift to edge xukt if you don't know what the edge is, don't worry, we'll explain why. welcome the cloud to the edge. we'll be right back.

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akamai technologies is celebrating its 20th anniversary today the company is leading the shift from cloud to edge computing. we will talk about that in a moment their work has major implications we will talk about 20 years at akamai joining us to do just that is tom leighton, the co-founder

congratulations. >> thank you >> i have known akamai a long time i did not know the or begins i started rooting around, for those that didn't know akamai is a hawaiian word that means clever or intem jent in there yes. >> the company akamai was started by you our a graduate student you were an applied math professor at the time daniel lewan, you built this incredible company that does all kind of cool things. let's talk about what it does, first of all you host things, you make the web a lot faster hosting content so it is actually closer to the people who need to get it. a revolutionary idea but part of what happened it's been such a strange journey. talk about what it feels like 20 years later. >> a lot has happened in tech and akamai has been in the thick of it. we help the internet a lot faster, a lot more reliable and

intelligent and secure >> cloud computing is something we've all gotten used to this new computing is edge. >> you got to be kidding, we're leaving the cloud and going to the edge >> think about it, you are going to get a bottle of milk. if you had to drive, say you live in the suburbs, you had to drive to center of milk where that cloud data center is. it will take forever, there is so much congestion where the cloud data center is if you can go to your local mart, drive down the street, there is no congestion a lot faster a lot more reliable that itself same thing that happens on the internet. there is huge congestion in the core where the cloud data centers are. if you try to get your movie, ott video from there, not so good if you get it down the block, great. that's what we do. >> which means what in terms of down load speeds sflits a much better quality, most homes have very good

connectivity into the homes. >> could the edge, could it supplement the cloud or replace the cloud? >> i think it's really the extension of the cloud it's what you need to interact with to get your video to do your transactions quickly and actually to do things securely we're in a situation today where these large entity versusco opted a lot of devices out there. they can flood the core with traffic. navenl, it's so bad today, it's enough that you could actually flood countries. >> the problem exists when akamai was founded now are you going from beyond the cloud to the edge, you've transitioned your business >> we've transitioned 20 years ago it took us 20 years to convince everybody we're important. that how we started the principles on the edge that's the only way you make the internet scale and be secure. >> i understand a lot of what you said, i don't understand the

security aspect. it seems to me if you put it 14 or 15 places, that itself 14 or 15 places that criminals can come how do you can make sure each of those places is secure >> 14 or 15 sounds lot, it's not the bad guys have millions of bo bots they can overwhelm them with traffic. they're very intelligent today they can easily spoof you, get into your bank account, steal your fun, we have to be intelligent and stop that bot traffic with machine learning to tell it's a bot trying to take over your bank account >> the rise of the fangs the big technology companies, that a good thing or a bad thing for your business? so many are your clients some may turn into your competitors? >> sure, some have been our competitors for well over a decade, it's competitive >> like an amazon our ibm?

>> yeah, for example, very large commerce, also compete with us in the marketplace, that's fine. >> do you think it makes it harder for a small guy to compete? >> well, they're very big companies, you got to be like akamai, very innovative, stay ahead and have a propelling prop session that those same big companies want to do business with us instead of their own services >> i mentioned you co-founded the company with daniel lewan. so this must be a bittersweet day for you? >> it is a huge loss, for humanity and technology. a huge loss. >> how did you two work together at mit >> very closely, it was a professor/graduate student situation. i viewed danny as my equal we were part first, there wasn't that relationship in our partnershiply want to say congratulations, as the phenomenal shore we are happy to have you here

today. >> thank you very much when we return, we will get down to jim cramer live at the new york stock exchange, i want to hear what he has to say about tesla this morning meantime the take a look at futures. futures. dow is up and we're

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all right. get down to the new york stock exchange if you were to propose cbc headquarters, carl quintanilla will go along with it. i'll go ail long with that. >> this is a hidden gem. i haven't been there it's one of the greatest places. frankly, i'm shocked that everybody doesn't, you know, this is where i would -- if i worked in silicon valley, i would go to google and facebook and just relocate there. it's cheaper, better, nicer. >> jim, the trail, did you go to the top? >> it started pouring on the last so i was not able to make it it was so cold and windy

what an unbelievable hike. i wish i had summited. >> on a nice day you look over boulder. you can look and see the continental divide it's heaven. it really is. >> i did know that thing is a special place and everyone should visit it i'm not kidding. it's special. >> you should. i'm ready when you are tesla, i saw you retweeted it or it was funny how do you catch a falling knife without cutting an artery. what do we do? >> i think a medical leave is reasonable i thought jim stewart's piece was rather a bombshell if i were the board or the board were active, i think i would say maybe we're not firing him go on a medical leave. get your life a little more together and we'll come roaring back without that, i think the stewart piece defined exactly what i would say is a run amuck ceo. and that's a shame i love the guy

he's got to get better. >> and nafta, china, retail earnings what is up this week >> i think china -- well i'm still concerned about tariffs. i'm stillconcerned about the ticking clock to tariffs the 25% that the chinese are going to put on. we need to get that cleared up i also favor, of course, like you do, fair trade with china. don't want to give it too much it would be a big mistake >>well, jim, the news cycle is moving fast. it's summer. so i don't know. once we get back. >> i could have said any one of those moving target coming up. there's so much big in retail. i love these companies we should be singing the praises of how well these companies have done they're the new leaders in this leg of the world market. >> do we want six months reporting or three month reporting? >> age lot -- i think a lot of time is wasted on six months

a quarter is a right length. the amount of work that ceos do to prepare for the quarter they're losing a lot of days they do more audits. how about putting the money into hiring people. >> thirds. one of those what are those called? >> but you need to hire more people. >> yeah. jim, we'll see you unless you take off for boulder, we'll see you in a couple of minutes nike is one of the biggest movers in the dow and we'll tell you why. ♪

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shares in walmart soared this week after beats of similar magnitude, the stock continues to outperform. all right everybody a big dow upgrade to tell you about. piper jaffra upgrading nike overnight. piper raised the price target on the stock to $93 to just under $80 a share. nike up this morning almost by 2.2% a couple of stocks to watch. tesla under pressure this morning. jpmorgan an analyst noting in

the note they're slashing the price target on the stock to $19 5 per share from $308. it's, of course, now below that already. it's not blelow the bottom part after elon musk said funding going forward for the deal but that's proposed. make sure you join us tomorrow now it's time for squawk "squawe street." good morning and welcome to squawk on the street i'm david faber along with jim cramer for the entire week for these markets. european markets are also ahead of us, as they are every