before the opening bell. it's tuesday, august 21, 2018. "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. all right. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. we did see the markets higher yesterday. they gave up some gains after some of what joe mentioned, those comments about jay powell and the fed. we'll talk more about that in a bit. this morning green arrows once again. dow futures indicated up by 63 points s&p is about 0.6% off a record close. dow down by 3% nasdaq off by 1 is.4%. let's look at what happened overnight in asia.

you will see green arrows there across the board modest advances for the nikkei hang seng up by a half percent. in europe you'll see in the trading that's taken place in the morning hours there, for the most part there are gapes across the averages ftse is down by 0.10%. italy is up by 1 is.5%. treasury yields in the united states, the ten-year below 2.9%, 2.841% microsoft says it has uncovered new attempts by tacketack er hackers targeting political groups t they created fake websites that mimicked addressed that looked like the u.s. senate

there's no evidence the hackers were successful in getting anyone to click on the fake sites. if they had, the hackers could have tried to trick members of political companies with phishing attacks or steal sensitive information to try to get passwords and user names microsoft's president and chief legal officer brad smith said attacks against democracy are broadening and encouraging americans to ensure elections are secure he says democracy requires vigilance and at times actions by citizens to protect and maintain it. microsoft is offering a free service for candidates, so this is a new wrinkle in the hacking attack attacks. >> hack attacks. it rhymes. that's good. let's talk epa remember the simpsons movie?

epa? >> no. >> it was the epa in the simpsons movie we'll keep an eye on coal. coal stocks after the epa signed a plan to ease regulations on coal plants. the new proposal would scrap many federal environmental restriction the leaving a majority of the regulation up to the individual states. the full plan is expected to be unveiled officially within the next coming days toll brothers reports an earnings beat. revenue above by 1$100 million stock is up big in the premarket. up in the mid 30s. the highs are in the 50s, mid 50s. it's a rebound today but that's a weird chart for a supposedly p%, 4% g -- 3%, 4% gp

i don't know whether you pop the champagne corks on this, better than expected but you saw the chart. if it's supply, that's one thing. that makes talking about a lot of this stuff complicated with oil. it makes a difference whether it's supply or demand. >> if it's demand, it's concerning for the entire globe. >> if it's supply, it's unique it's always a bit of both. you can get better insight into the overall macro environment if its demand bhp billiton reporting an annual profit rise of 33%.

they say they are more apprehensive due to trade tensions between the u.s. and china. shares are down by 1%. hertz shares are falling after announcing a new cfo will take over. shares of nordson are down by 8%. it's a maker of adhesives. third quarter earnings in line with forecasts president trump renewing his criticism over the federal reserve and jay powell himself eamon javers has more. >> the president saying to reuters yesterday something similar to what he told joe kernen earlier in the summer in terms of his relationship with

the fed and expectations for what the fed ought to do look at some key points from the interview. the president saying that he is not thrilled with jay powell for raising interest rates, and said the fed should be more accommodating. the president also said i should be given help by the fed he said he will continue to criticize the fed if it continues raising rates. he also made news on a couple other topics he talked about twitter and took says it's dangerous for those companies to self-regulate content on their platforms he also said that china and the eu are manipulating currencies so the president speaking out on a range of topics. i talked to sarah huckabee sanders yesterday after reuters published that interview with the president, i asked if there's something intentional going on in terms of the president's messaging about the fed, is he deliberately targeting the fed, he said, no he was just responding to questioning about the reuters reporters. this is not deliberate timing by

the white house. when youto officials from the white house, you get the sense this is not a model forever the way the president wants to operate this president feels he's going into the midterms, a 2020 re-elect, and he's worried that the fed will pull the punch bowl away from the party and cool down the economy at a time when he wants the economy to be heating up there are the two men in happier times when the president nominated jay powell for the fed. the question is how will jerome powell take the comments will the fed be affected by this conversely does this lock in the fed to doing what it had suggested it might do just to show that they're independent of political pressure so a lot of unknowns about the way the president is carrying out this strategy. >> i thought it was significant that the comments were that he was not thrilled with jerome

powell, but he took it further than that. joe asked the questions initially. he responded in a way people did not expect he went to far as -- so far to y my advisers told me -- >> he said he thought he would be a loose money guy >> right >> you know, having known jerome powell for a while, talked to him on the show, i'm not sure why he would get that impression jay powell seems like a guy always straightforward, he will look at the numbers, he will do what he thinks is right at that moment >> all that was probably in a briefing book kicking around the white house at the time the president nominated jerome powell for the job the president, you know, looks at this and his advisers look at this, there's a feeling inside the white house that the macro economics don't support the idea of raising rates now, that that will cool off the economy.

the president wants help with the economic recovery. he feels like he's not getting it he's frustrated. >> like the movie airplane, picked a bad time. it's never a good time on january 20th trump changed from this is a big old nasty bubble, inflated by the fed to, wow, we can't raise rates. >> go, baby, go. >> on january 21st the economy is ranki icranking because of h. that's the nature of the business >> we've seen it before. >> i don't think he's going to call powell into his office and say i am firing you if you don't play along >> that raises a great question, can he fire jay powell there's apparently a provision in the law that would allow the president theoretically to fire the fed chief for cause, but then you get into the question

of what is cause it's never been done before. >> because you're raising rates. >> cause is a nebulous thing what cause is. 20mi 200 million if they don't come up with a cause. if it's 204, and he's hitting on someone, is that cause >> it may not be cause at the time, it would be cause -- there's a morals clause, all sorts of things. >> something in there about sexual harassment. >> i don't know. i don't know if it's been pushed too far. >> eamon, do you have a contract >> i do have a contract. >> are there more zeros on his >> i'm out if they fire me, i'm out >> you have to take your -- you'll be carrying it yourself >> a little cardboard box.

>> how much does jerome powell get paid if the president fires him? trillions of dollars >> in venezuelan currency. >> right we're in unknown territory there. but the president is sending a signal >> we do have this week jackson hole, which will be leaving people a lot to talk about >> yes >> i don't want to talk politics, but last night -- >> but -- >> but let's go ahead. >> the jurors asked for ten more minutes. i was thinking it's going to happen they had like -- i don't know. >> they wanted to go instead of 5:00, they wanted to go to 6:15. >> right >> i don't know. >> something is going on in that jury room it will be a fascinating story. >> they switched seats did you see that >> why did they think they needed 45 more minutes it's a mystery clearly the government thought this was a slam dunk case.

>> they switched seats they sat in the same place, then they came in yesterday and they were sitting in different seats. the defense was thinking that meant something. >> isolating the holdout >> i don't know. aligning your side, my side >> yeah. >> we should tell the viewers what we're talking about this is paul manafort's trial. the former campaign chief. awaiting that jury verdict >> we have to go i didn't want to go there. >> yes, you did. >> depending on what they come back with, they could have a market reaction. >> yeah. >> paul manafort's lawyers feel this is good news. they feel like this is good for their client the your is really thinking about this not just automatically biting on the government's case. it would be politically damaging, i think, for the special counsel if they don't get a conviction here.

>> i don't know. >> there's another case, other possibilities, but -- >>do they consider precedent >> this is the first one, it would set a bad tone for the special counsel if they lose this one >> all right, javers don't leave that chair >> i won't >> let's talk more about this with the peter chiceney, you're from canter fitzgerald and lamar villeree just reading that, i just think you have a great gig here. it's a family company. >> family company, over 100 years old. >> based in new orleans. you don't need to be based in

new york or new jersey can be based in new orleans, have the food, the music >> yeah. >> there's not enough major corporations still in new orleans. >> that's true >> you went to new orleans >> i used to do the show once a year from new orleans. we would -- we would always look for these great companies. some people have outposts there. what's happened? >> post kakatrina? >> it's even better. there's a start-up scene now >> all these entrepreneurs >> young people moving down there. katrina in some ways left the city better than it was before. >> can't you still get cajun crawfish >> it's not crawfish season now, but you can get great food and great crawfish >> are you bullish you like the way things look now? >> we are. we are domestic only we are not -- there's an impact

to the international market. >> yeah. overall. >> we are primarily small and mid cap u.s. >> you pick stocks >> we're bottoms up guys things look great. >> how many stocks in your portfolio? >> generally around 20 >> 20 stocks, 2.1 billion. >> yeah. >> can you give us an idea of themes favorite ways to go? >> sure. generally more u.s. focused. getting rid of those risks one thing we've been playing with is autonomous cars. we're not jumping in saying we're going to pick the big winners there, but that will be an increase in data storage and wireless needs so there's different ways to play that. stocks that are not high-flyer startups, but profitable now and have interesting optionality >> like who?

western digital is one the stock pulled back, but you look at the storage that will be needed as all this data gets created, a wireless car creates a spectacular amount of data that needs to be stored somewhere. >> you say small caps have less exposure to the eventual etf online is that something in our future? >> we think it is. passive has been incredibly popular. it's grown rapidly over the last several years. if you look at it, the bulk of these investors don't realize what they're investing in. it's like the nifty 50 all over again. people are pouring money into something that has done well because it's done well you look at people putting money in the s&p sort of blindly without realizing that that's a cap weighted stock >> so there's no avoiding you,

peter. short u.s. rates are going up. that means a stronger dollar and rate hikes in emerging markets that means weakness in the emerging markets, global economic slowdown, weaker global assets >> that's why you -- >> i was going to try to talk to him fofrr the entire time. >> the biggest mistake you can get too bearish too early late stage. perhaps i'm making that mistake now. >> this is because we're looking at such a long bull run and because we've seen so many gains? >> we're keying off interest rate vol, which was a key early in the year. it was predictive of the vol we got in february. i think that's what you need to start to key off of to try to understand the way the global economic market sigh cam cycles. central banks are now acting

globally we have to pay attention to the boj, the ecb and the fed there will always be great stock picking opportunities. id yo siosyncratic opportunitied companies growing in the united states however i get paid to worery about what's happening next. >> would expect them do something else or do you think if the fed starts raising rates it will screw things up. >> history often rhymes, and the fed is notoriously known for being behind the curve no offense to the smart people who have run the fed over the decades. they get overly aggressive, the yield curve inverts, there is a causal mechanism in inverted yield curves i could expect that is likely to repeat itself. we've been calling for a yield curve inversion for the entirety of the year. if the yield curve inverts this time, it could be different, just because you're talking

about that global market >> yeah. >> we could see an inversion of the yield curve because you're looking at our ten-year versus the german bund. >> i hate that phrase, too but the fact is assets are sort of the tail that washington wan this market cycle. we have to look at asset prices and how they're leading markets and the cycle. >> that's a schtick, like we avoid bears. that plays into the bears that have been bearish since like -- some have been bearish since 800. >> through >> we're at 2,800 on the s&p, they still think if we allow bullish people to say things, they think it's our fault. it's bubble vision have you been better off staying long in this market? better off listening to these guys with all their -- >> we have been talking this week about how we are

potentially looking at the longest bull run ever if the market gains continue and if we set new highs. if we go back to that. i can understand, it's getting long in the tooth. >> i'll start with you first next time. i promise. i will >> it's a big tent >> we don't have a -- it's not bubble vision. i hate that. >> it's a big tent we get all sides >> we do >> i only started with him because i was thinking about new orleans. i was thinking about gumbo not kidding. >> did you bring us bignets? >> you travel with the mix >> who are you thinking of coming up, a disruption in the banking sector we'll have details next. and a programming note, tomorrow on "squawk box," target

is set to report and its ceo, brian cornell will join us at 7:00 a.m. eastern time "squawk" returns in a moment

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. welcome back time for a cnbc exclusive. cnbc.com reporting that jpmorgan about to launch a new broke ran app with an appealing price tag, fee. it will roll out next week, it is called u you invest anyone who downloads the app or the website will get at least 100 free trades in the first year the free trades become permanent for premiere level accounts. joining us to talk about it s, s hu san how did you figure this out? >> two years ago jamie dimon is at a financial services

conference, people were asking about fintech. he said we can do better, we can do it for free every time jamie talks about it, you would see the stocks of schwab and es-trade go up and down it's been two years of them testing this >> you think this goes directly at the schwabs of the world? >> i don't think it. i think the markets think it >> what amazed me the most is what he said he got this idea from jeff bezos, the idea of wanting to be everything for your customer, delivering that with $99 prime account this is their version of that. >> 100%. i was at a jamie dimon conference once, he used the word amazon or bezos about 100 times. if you're a good customer, they want to keep you within the ecosystem of jpmorgan, which they will continually build out. >> how much of this is about attracting a new customer into

the network? >> they showed us a slick tool yesterday at their headquarters. they said it's about switchers and about savers so for savers they want first-time people, people who have never invested before, people who find investing to be tr too intimidating >> so millennials. >> millennials, people who are also older than that and switchers, people cho have a jp chase account, but they trade with schwab or vanguard because jpmorgan's digital offering was bad before this. >> i was shocked to see it, they were offing trades at 24.95. there's a fee schedule online where it says 24.95 per trade. >> is this going to be a jpmorgan branded project or a chase-branded product? >> they call it you invest people will think of it as jpmorgan i think it's jpmorgan. >> in terms of the pricing

structure, you say it's like a schwab product, but how much will this compete with a betterment product or one of the robo at vidvisers? >> this is a two tier rollout. we are talking about the brokerage trading app this is for people who want to trade on their own. the second is robo, that's coming out in january. the biggest benchmark for this is robinhood they are a fintech no commission trading app. they have like 4 million users and a 5$5.6 billion valuation so the disruptive thing about this move, they have 46 million users of apps and their website. the second they flip the switch on this app, everybody gets it >> you look at zell, for example, you know about zell the payment transfer -- >> bank of america >> jpmorgan/bank of america.

how is that doing now relative to venmo with paypal and other services how much of this sort of traditional big bank brand what that means relative to some newer -- >> to millennials, too >> zell, despite articles about it wasn't getting adoption that great is doing well compared to the pipioneer, venmo it's expensive to get customers. people like chase have millions of new customers >> very cool we will look forward to it when we come back, earnings alert. we will hear from kohl's and tjx later this morning then we get lowes and target tomorrow you can see kohl's and tjx trading higher. right now a look at yesterday's s&p 500 winners and losers you always pay your insurance on time.

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originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. ♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back to "squawk box. among the stories that are front and center, microsoft out with a big warning. the company saying it's now

uncovered new attempts by hackers targeting u.s. political groups ahead of the midterm elections. microsoft says it discovered six internet doe mamains created by groups with ties to the russian government and in particular attacking two conservative think tanks. >> this is now out of control. this really has got me now i'm incensed now at this they're attacking conservative groups now this has to stop this is an assault on our democracy. >> sit up and pay attention. >> this is a bad kind of hacking now. >> thanks. >> joking. >> sorry sarcasm. car a sarcasm. >> joking. joking joking i always thought it was bad. i love democracy >> coal stocks could be on the move today after the epa signed

a plan to ease regulations on coal plants. the new proposal would leave the majority of regulation up to individual states. and hertz is down more than 3% after its cfo is resigning to pursue other opportunities that stock on the screen look at u.s. equity futures at this hour. let's show you what's going on the dow looking like it would open up about 30 points higher nasdaq up about -- 60 points higher nasdaq up 60 points higher -- sorry, dow jones up about 60 points nasdaq up about 27 points, s&p 500 up about 6 points. if you're watching, you can see all the mistakes as i was speaking >> most people think there's a roof coming up when we get to the old highs. >> a roof? >> a ceiling >> a top >> a roof? >> it reminds me of how we come in here every morning for the

last three weeks and there's no reason things are going up it reminds me of 2017. >> 400-point gain, you would expect something -- >> why is it up again? that was like 2017 for the whole year until january 30th or whatever it was. we made very little headway since then do we stop that's the question. i read some highs in for the year we'll see. keeps melting up it seems like >> a big reason is because of what we've seen from earnings. it's a busy week for retail earnings kohl's set to report later this morning. target will be releasing its quarterly earnings tomorrow morning. joining us now for a sense on what to expect is patrick mckeaver let's talk about what to expect from kohl's. you're maintaining a neutral ahead of earnings. why is that?

>> yeah. for me it's the traffic at the stores that's still not so great. the overall same-store sales have improved. they're managing inventories well they were down about 7% per store at end of the first quarter. if you look at store traffic, you make adjustment force this strange shift in the retail calend calendar, the traffic was actually negative in the first quarter. so my concern is broad based some of it is amazon it's growing its apparel business twice what kohl's is growing its online business. that's a concern it's been a great stock this year it's been a good stock this year >> not just a good stock, it's doubled in the last year you have been neutral the entire time >> yeah. i've been neutral for a while now. again, it's some broad based challenges that i see.

including the shift to online. retail so far this second quarter earnings season, the stocks have been doing well. numbers have been good the comparisons are easy we get tougher comparisons in the back half of the year, particularly in the fourth quarter when kohl's cycles a% increase in same-store sales, kind of an outlier in the fourth quarter of last year i expect weak numbers as they cycle that this year i've missed the run this year. i still do have those bigger picture concerns >> let's talk about target we'll be hearing from target tomorrow people have been looking at that and hearing what we heard from walmart what we her last week. what are your expectations >> target i like it's my top pick for 2018. i'm looking for good things from target they have been generating -- accelerating traffic their traffic in the first quarter was up 3.7%.

a good number. i'm looking for 4% sales growth. >> that's a lofty number >> yeah. i wouldn't be surprised if it's better than that walmart u.s. up 4.5%, best in ten plus years with same-store sales. i think target will look good with comps we'll see some of the same earnings pressures that we've seen from other retailers including walmart. >> patrick, thank you. brian cornell will join us tomorrow here on sq"squawk box"a 7:00 a.m. eastern time bertha coombs is here looking at a record run in the markets. one sector that went along for the ride, healthcare bertha, i like this. healthy returns. listen to that music we used that yesterday

don't let that distract you. >> i won't it's a sub sector of healthcare. the s&p healthcare sector has lagged the overall market over the last nine years, but health insure verse been a stans have t the managed care index up over 11% since 2009 the analyst says the consensus was that looming health reform would be bad for the sector. but the obamacare medicaid expansion has been a tailwind for insurers wellcare up 4600% since 2009, and centine up 2,000%. centine went from a $3 billion in annual revenues to 59 billion. the next best performers, the two biggest medicare players humana and united health, also

seeing healthy gains up better than 1300% since 2009. medicaid and medicare make up half of the insurance revenues for insurance. they continue to outperform. they are all expanding into complimentary business like pharmacy care, home care and pharmacy benefits to have more control over medical costs which has been the tailwind over the last few years analysts think the integrated care model can serve as a defense against some of those upstarts like amazon and alphabet, at least for a while >> here's my question. if obamacare was supposed to be so bad for the insurers so many of them dropped out, how come these players capitalized on it? >> when you look at the health insurance market, you have to look at different markets. so the individual market in obamacare was tough for them to navigate especially as the rules have kept changing. >> as premiums had to push

higher and higher. >> they had to move the premiums higher to offset that you had sicker people going in that's still an issue. but the wupd ones who have stan they found a way to price it right, which makes it difficult for people not subsidized, they have managed that market on top of that -- >> they're making money from the government money put in from it. >> and the premiums being paid so they're not having to pay out more in medical care than they're collecting medicaid is a separate side. that's for the working poor and for poor families. that has expanded tremendously over the last few years. because you also had a lot of people coming in who may not have known they qualified also coming if we are undoing obamacare and taking it apart, will these stocks suffer? >> that's part of the question except that even if you cut back on medicaid states, increasingly you turn to these invurer surer

the manage the program for them. it might be a smaller program but they will still be involved in it. one analyst said if we went to medicare for all, he thinks it would be medicare advantage for all. he thinks it will become a public private partnership from here on out, at least for the foreseeable future >> thank you >> great to see you. >> ow. this is hilarious. >> what's that >> you'll see. coming up, peta has succeeded in freeing some animals. >> yeah. >> they have been caged for more than 100 years they must be turtles or elephants. we'll explain next i'm kidding. you'll see i thought it was -- peta is the guy from hunger games, isn't he? >> yes he was the guy >> this is not him >> people for the ethical

treatment of animals as we go to break, the biggest markets winners and losers stay tuned, you're watching "squawk box" on cnbc ron! soh really? going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

welcome back goldman sachs is offering a new courier service to deliver employees breast milk to babies while those employees are traveling for work u.s. offices will deliver freezing kits to nursing employees hotel rooms and then a courier will get the milk and take it back to the baby for feeding. that mirrors programs at ibm, twitter and accenture. >> after more than a century behind bars, the beasts on boxes of animal crackers will be freed. peta called on nabisco for a package redesign it was part of their protest against circuses the cookie company obliged showing the animals walking

on the savannah rather than in circus cages >> i have three books axes, andi noticed something was different. >> so now when you crunch them, eat them, mash them with your teeth, you will know they were free before you ate them that's nice. >> will the old books become collectors items >> good question >> if you have closed books, it's usually better, but they would rot. >> you know the only place that eats zoo animals >> where >> venezuela >> that's horrible >> honest to god. >> he thought there was a joke >> not a joke. i feel bad for the animals, i feel bad for the middle class people, too. >> it's a horrible situation. when we come back, we'll talk about the trade war fallout. leslie pick ser in mier is in m. >> we're here at ransmattic, a

family-owned business for 50 years. this steel coming in through the door is their 1$1.5 million problem. we'll tell you why and what they're doing about it coming up after the break. tomorrow on "squawk box," a walk down retail road with the chairman and ceo of target brian cornell joins becky quick at the nasdaq for an exclusive interview ahead of the company's conference call. stn me tomorrow at 7:00 a.m. eaerti right here on "squawk box. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish.

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welcome back, everybody. one auto parts maker has found itself in the middle of the trade war. leslie picker is in holland, michigan, with a profile of transmatic leslie >> reporter: hey, becky. this steel comes in through the door looking like this coils of steel that the factory floor machines then feed through and cut out parts that go into automakers and door locks. every household items like that. it's kind of like a cookie cutter, essentially. now, thanks to the tariffs, this steel has become between 25 and 30% more expensive for the company. we spoke with the cfo of transmatic yesterday, who told

us that there are about 6.5 million jobs, like those you see on this factory floor, with workers who do production of steel and that the tariffs are actually putting those jobs at risk to protect the several hundred thousand workers at the mills. >> in a trade war, which is essentially what we're in, there are clear winners and clear losers and unfortunately, there's a lot of collateral damage and people's lives and livelihoods are put between the crosshairs >> reporter: now, so far, transmatic has been able to pass most of those costs on to their customers, which represent about 10% of their 2018 bottom line. but that solution won't last forever, as they have competitors overseas, primarily in germany and europe that can produce the same components for cheaper and they risk customer defections verseas so now among the solutions that they're talking about, in order to prevent this from happening,

they're considering actually moving more production overseas themselves to their facilities in mexico and china. and if that's the case, that could cause potentially even more job losses here in the state of michigan. but it's what they say they have to do, potentially in order to stay viable,guys >> leslie, we have some components here. i guess, part for the air bag, a cap for the ultra come papacita. i sound like i don't know what i'm talking about, i really don't. but these are the parts and these get to the bottom line i saw a story this week, i think it was in the "detroit free press," talking about the impact this could have on the number of jobs, writ large >> reporter: exactly they say that 6.5 million workers in the u.s. are creating components out of steel, creating products out of steel which above and beyond dwarfs

those that are people who work in the steel mills themselves. now, it's fascinating, especially here in the state of michigan and in holland, michigan, in particular, we spoke with a mayor yesterday who told us that one third of employment in this town comes from manufacturing they're known for furniture manufacturing and, of course, the steel components that we see here so it is -- it means a lot for these small towns in middle america. >> you know, manufacturing has been something that we have seen a resurgence have they seen a resurgence in recent years in some of those industries, too? >> reporter: yeah, that's what they talk about, time and time again. and ting ti think the big fear , and this is what we've heard from several people we've spoken, people are concerned the tariffs are going to cause something like they saw in 2008, where there were a lot of layoffs in this industry and over the last ten years, they've enjoyed such a resurgence and times have been good and there's a lot of building going on in the town of holland. they were showing us the new civic center, new movie theaters and so all of that is a direct

by-product of the resurgence in manufacturing that they've seen. now everybody is very concerned about the uncertainty. it's potentially -- it has the potential to stall some of these projects, because manufacturing is such a big part of their local economy. >> great >> so they just want some clarity on the tariff front. >> leslie, thank you okay, coming up, when we return, a lot more on "squawk. we have an earnings alert. we're expecting results from retailer kohl's. and we'll be hearing from tjx later this afternoon and president trump taking another shot at fed chair powell as investors look to gather. "squawk" returns with two big hours in just a moment it's absolute confidence in 30,000 precision parts,

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the record rally rolls on. retail earnings, china, u.s. talks, and the president's fight with the fed all in focus. a breakdown of what's to come and where you should be putting your money to work is straight ahead. venezuela in turmoil neighbors are scrambling to close their borders to deal with the refugee crisis an update on the situation there is minutes away. and a shift in the way we work the gig economy is on the rise and it's disrupting corporations and policy makers. the author of a new book, covering the topic, will be here to discuss as the second hour of "squawk box" begins right now. ♪ >> announcer: live from the beating heart of business, new york, this is "squawk box. good morning welcome back to "squawk box,"

this morning, right here on cnbc we are live. yes, we are very live at the nasdaq market site at times square nobody is say this is ever taped. i'm andrew ross sorkccerkin alog with becky quick and andrew. a couple of pieces of news to bring you. tesla suppliers are said to be increasingly worried about the company's finances, this according to at private survey seen by "the wall street journal. 18 of 22 suppliers now believe that tesla is at financial risk to their companies we're going a lot more on the tesla story next hour when we speak to two tesla analysts. that stock up a little over 1% in the premarket you know, yesterday was not as bad as we thought. remember, yesterday we thought it was coming down, ended up marginally better. also, shares of car rental company hertz global falling in pre-market trading that follows the resignation of chief financial officer, thomas kennedy, who quit to pursue

other interests. jamar jackson has been named to replace kennedy. and russian officials are now denying charges that the country has been plotting to interfere in upcoming elections. this according to diplomatic sources quoted by reuters. this comes after microsoft said earlier that it had shut down websites linked to russian hackers, who are said to have targeted various congressional websites, as long as some belonging to conservative groups a few stocks tonight bill this morning home builder pole brothers reporting a better than expected numbers here, $1.26 versus $1.03 which was the estimate the stock up 10% now and still, you know, not even in th midpoint of its range. so it has, you know, peaked like so many stocks at the end of january and maybe it's on its way back it's up today, anyway. nvidia ceo announcing a new

graphics card at the gamecon conference in colone, germany. the gtx -- rtx 20000 series will be used for more sophisticated video games, which is the company's biggest business the stock rose more than 3% on that news yesterday and it's up, as you can see, almost 1% again this morning all right. this weak, we are taking a look at the market's record run and today, mike santoli is here to tell us about bull market that left wall street behind mike, good morning >> becky, every other bull market you could ever point to or remember, wall street has thrived. the securities industry has gone to more heights, become more profitable, found new ways to make money, that's not the case this time. take a look at a chart of goldman sachs shares and morgan stanley compared to the s&p 500. i dated this to the top of the previous bull market in 2007 basically, this takes away the effect of how depressed these stocks were at the crisis in 2009 the white line is the s&p 500. you see that up 84% from the

previous bull market high. goldman sachs, basically flat. up 4%. morgan stanley down 29%. that's just an emblem of it. of course, wall street is smaller, less lucrative in a lot of different ways. less lucrative for employees, too. if you look at goldman sachs compensation, this is salary and benefits per employee. total compensation divided by the number of employees in 2007, you were at $660,000 now you're at about half that, $323,000 so obviously these firms have had to become leaner it's mostly because the crisis in the aftermath accelerated a lot of trends that were already going on, disrupting the industry of securities brokerage, institutional sales, investment banking and all the rest of it you've had automation that's swept over all of these industries, obviously, regulation as well there's just less leverage these banks can't trade as much as they did. obviously, you have the volcker rule and things like that. and a move towards indexing and lower cost investing techniques. nobody wants to pay commissions, nobody wants to pay for research all of this stuff is really

hollowing out wall street. now, if you do look at the retail side of things, the charles schwabs of the world, the black rocks, they've done very well, because they're just these scaled players it's mostly software and providing cheap access to the markets. >> very quickly, before we jump into this, let me break out kohl's earnings. >> because i want to ask mike questions. i've got some questions for mike >> i'll do this very quickly quarterly earnings for kohl's out. they came out with numbers of 176 on an adjusted basis versus what the street was looking for. their guidance is up from about 5 cent comps up 3.4%. that stock right now off by about 3.6% >> so the second half of your report, you're going to do all the gaming stocks, the video gaming stocks? >> yeah, i think that's where it's gone. >> a little electronic flutter >> you're really not going to -- this has nothing -- that's your music for just a market -- >> that's what we -- >> why not >> cool, right >> it's like computer

calculating. >> okay, all right what was that i just heard >> i don't know. >> atari >> the dj is not lettingmen what's going on right now. >> okay. ♪ >> do we have another one, too, for mike or? >> what does frogger sound like? that's what investing -- >> let's hear it ♪ >> okay. all right, enough! joining us now -- can you hear the people -- ♪ >> we are easily amused. joining us now, linda deucel, she's senior equity strategist and sirott, managing director at douglas c lane and a cnbc contributor. linda, i'll start with you at least the u.s. in terms of globally is probably the best place to be. does that mean that markets everywhere are good?

that this is the best? or that you'll be the least exposed if you invest in the u.s. >> no, i think the u.s. is on its own trajectory now, thanks largely to the huge tax cut we got earlier in the year, and now the animal spirits that you're seeing in businesses and consumers. this is lacking around the world. we lost our global synchronous economic recovery, and that took its way into the second quarter. i've been team usa for ten years now, with a break last year for europe, andwear ba we're back t usa. >> linda, how long do you see that stimulus or whatever you want to call it lasting? because a lot of people say that it's front-end loaded, and when that dissipates, you know, it's going to be long in the tooth. other people -- but you brought up just consumer confidence being higher, business confidence being higher. that would be more long lasting, wouldn't it?

or is this just a couple of quarter phenomenon >> yes, it is longer lasting it's tempting to try to figure out when acceleration will end but we don't know that, because we have to watch and see how businesses do better they've done better and surprised to the upside in the second quarter it looks like the third quarter earnings results will be much better only thing i'm watching and the only thing anyone needs to watch at all is the earnings trajectories, the recession on the horizon, there just isn't, and we need to stay tuned for that and is there an inflation problem, which everyone wants to argue there will be and have been for years and i have said, if we don't get it this year, we're not going to get it, we have no evidence, and it's almost september. it's all establish >> sirott, in a typical scenario that forms a top in the stock market, it's that the economy overheats too much and the fed has to come in to slow things down or interest rates go up can that happen at a really low,

absolute levels of interest rates? can we choke something off if we got to 4% instead of 8 or 9 or 10%, like in the past? >> i don't think so. i think right now, kind of what we're talking about is a scenario where businesses are doing well you look at earnings look at cisco. businesses were doing well look at walmart, consumers really doing well. i don't think we're going to go to an area where because we don't have that inflationary pressure, as you just mentioned, that we're going to get choked off. what you have to be careful about is, do other things across the world really affect us even though we are our own island here, we are affected globally by other things but given what we've seen, we're in the bullish camp. and i think we have a few more earnings left here the question is, we don't know when, as anyone does >> i was going to say, are there any red flags at the end of that, or who would make you say, ohh. >> the credit markets are the biggest things for us. you haven't seen spreads widen out. credit isn't that easily

available. you are seeing companies that are leveraged get hurt in the equity market. >> it's never been made clear to me, santoli, whether it's the absolutely level of interest rates or just moving 100% from a low level. >> how fast they go up >> because don't you use a discounted model of, when you deploy capital into a company, you expect this return and for a bond or for an interest rate to exceed your expected return, i thought the discounted model means it has to be like 10% or something how could 4% be more attractive than giving your money to companies to try to -- >> i don't think it would be the -- >> what about five or six? >> the real yields, the real interest rates, in other words above the level of inflation, which, by the way, basically, real yields are near zero right now. >> does it have to be -- does the yield have to get more attractive than -- >> i don't think it's about on the investor side. i don't think it's about the providers of capital i think it's about the consumers of capital and how stocks are valued right now relative to the level of corporate debt costs and cost of equity

so that to me is the main calculation. >> based on that valuation, where -- >> we're okay right now. but you saw in february, you stretched it, right? you basically got to the most expensive level for stocks relative to where bonds were, when we got to 3% on treasury yields, and a margin above that. >> and it's how fast you get there. i think we can handle higher long-term rates if they're real rates, because that's actually beneficial for the whole economy. you have pricing power and wages going up, but if you get that really quickly and really fast -- >> it's the snap >> it's the snap and the allocation shifts that happen -- >> but it's also the companies that get knocked out of the market along the way when corporate costs go up. >> right, because -- >> and what's happening in the rest of the world, is the dollar going way up >> you get the unintended consequences it's a question of, can you do it slow and steady, it's okay. and i think that's the right way to do it we do need rates to go up over time, but you can't get there really fast. but the problem is, nobody can control that >> linda, i think the fiscal year is over in september and we're going to do like 900

billion. i mean, we're at $1 trillion deficit levels does that -- how do you see that -- will an improved economy bring those down in future years? or do we need to do something with the spending side of things >> well, you know, i always say that whether or not trickle-down economics works depends on what side of the aisle you're on. really need to see what happens over time here and i agree with what the gentlemen said you know, this is going to be the longest bull are up in history. it will be the longest economic recovery in history. why does that make sense because we didn't have a boom. without a boom, you don't get a bust and people are always trying to figure out where the next cyclical bear will occur we are in a long-term sec ysecu. i always say, why can't we just

enjoy this >> reporter: yeah, let there be another bull market that i'm not worried the whole time about anyway, thanks, linda, sirott. ♪ >> that is for you >> wow, this is -- >> now we're into mario brothers >> yeah, that is straight-up mario. >> we're good with you now, bauds you o -- because you own this >> it could be worse it has worse. >> all right when we come back this morning, venezuela's massive devaluation has only worsened the crisis in that country now venezuela's neighbors are scrambling to close their borders to deal with the potential refugee crisis that's been building for years. we'll get an update on the situation there with michell crews a cabrera right after this break. is the strategy to try to work out a deal with mexico and bring in canada a little later too risky? we will find out from latin american expert and ceo of monarch global strategies.

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welcome back welcome back to "squawk box. futures right now are up again that would be thursday, friday, monday, tuesday. up 52 this morning the nasdaq indicated up 22 or so and the s&p indicated up about 5 so far this morning. >> venezuela's neighbors are scrambling to close their borders to stop the flow of refugees and venezuela's u.s.-based refinery, citgo, is on the verge of being seized by creditors. michelle caruso-cabrera joins us now with more on this story. michelle, good morning >> good morning, guys. the refugee flow out of venezuela is so large thats neighbors are actually trying to close their borders even though there are treaties that disallow that and historically there hasn't been a need, because it's in a remote jungle-like area

that hasn't been inhabited but they have asked to halt the entry of immigrants. a mob destroyed the tents of the immigrants camped in the street and then there was a big exodus. some 1,200 venezuelas were treated back over the border venezuelans entering ecuador and peru will also soon be required to show hard-to-get passports, and those two countries don't even border venezuela. colombia believes nearly 1 million venezuelans have moved to the country in the last two years. in venezuela corporate news, citgo is on the verge of being seized by creditors. a canadian gold mining company is trying to get the u.s. marshals to seize it and auction it they are fighting that in court. >> what would that mean? >> we have citgos all over the united states for gas stations >> right so that would mean that -- well, so this is a very interesting question because, theoretically, the russians own 50% of the

collateral, as well. so it is incredibly complicated, how they would decide how this thing got divvied up and there's still a fight about whether or not it's actually a product of the venezuelan state or if it's the venezuelan oil company. >> would these gas stations still be open in the meantime? >> so some of them have not been functioning well, because they haven't been able to get the oil out of venezuela to actually run through the refineries so it's a mess of unbelievable proportions. >> that spills over into all kinds of places you may not have considered before. >> yes >> we have some news of our own about michelle michelle caruso-cabrera, who just celebrated 20 years with cnbc -- >> last week >> last week >> and you knew this >> we just found out yesterday, and by the way, on air, when i was reading this yesterday, i found out when sara eisen was sitting here, i got so distracted and i couldn't even talk michelle has some news of her own. >> i am joining the board of directors of a financial services company in texas.

>> called? >> beneficient, and as such, i will become a cnbc contributor so you won't see me as often, but i will be here >> i just want to say, michelle was my very first friend at cnbc, who taught me all kinds of things, because i was a print reporter coming in i remember you told me, michelle, air time is like oxygen was so kind to me when i came in and has been all the way through. i -- you put me up on 9/11 when everything happened, i couldn't get back to brooklyn you are the best reporter i have ever seen. so determined and dogged >> i'm crying, too i guess it's me and santelli, basically. >> pretty much >> i'm all, i'm all -- -- >> i can't even imagine -- >> i'm going to cry now. >> i can't even imagine -- >> you should be happy

>> can i say, she is one of the most talented reporters in the whole business >> i know, i know. >> but she understands adam -- >> understands all sides of it -- >> understands capitalism. >> she has some experience in the real world with business so she comes -- she approaches this with some -- not a journalist knowledge -- >> michelle, as usual, we all managed to make this -- >> turning it into something else >> i don't know. i've got to bone up on -- because i won't have any backup, ever >> right >> and honestly, all of these very conflimplicated stories tht come to us, i can always count on you to explain exactly what's happening behind the scenes. yesterday i ran into you in makeup and i said, please, explain to us what's happening in venezuela >> the time was right, i guess, for you to -- i don't know why you're leaving us, number one. >> you know, i was approached and i've always been in interested in issues of -- >> issues of good, right >> we talk about issues of corporate governance all the time look at the situation with elon musk boards matter and i thought the next stage should be --

>> i remember years ago, i sent you an e-mail about this yesterday, and you said, one day, if i ever leave, i'll go try to be on the board of directors of a company, to be inside -- >> yeah, i want to see what's happening. you know, we've been -- we're observers and i want to be a doer >> what about -- >> i'm glad -- >> would you invest in bitcoin at $200 or something independently wealthy, you can work once a quarter. >> i'm going to work more than once a quarter i'm going to help with messaging and telling the story of the company, right, which is what i do i'm a story teller >> can i just say, however many appearances you're going to be giving to cnbc, we're taking all of them. >> all of them it's always an honor and a pleasure and it's been so great working with all of you guys >> how often can you guest -- and you can say what you really feel now, if you guest host on "squawk box. can you just say, let it all hang out >> i am always very, very rank >> i would be very worried -- >> she already does. >> and how much can you guest

host >> you know, a couple times a month. >> really? >> yeah. >> a couple times a month. >> he's thinking, this is an opportunity for -- >> are these -- these days off for joe, or? >> no, no, no, like be the two of us. watch out. >> michelle, thank you >> congratulations >> i'm excited about this next chapter of corporate governance. >> and when do you start >> september 1, i join the board of benificent out of texas tom hicks, famous for -- >> oh, yeah. >> good man. >> i would have had tears, but i have no tears left, because tomorrow, you know, it goes off to college which i can't believe people do this for a living, where everybody does that? not to change subjects, but i have no tears left because that's -- >> your daughter's going off to college tomorrow >> yeah. >> oh, my god. >> i don't know how that works

>> i remember when he was born >> it's what we've been working for, but now i'm thinking, i don't know >> never mind! >> yeah, a gap year. what about -- i don't know >> all right >> mwah. >> michelle, thank you, you've made us all verklempt. >> you didn't cry. why didn't you cry >> i am crying you interrupted my crying. i was about to get into a whole crying thing >> you don't want to thank -- i mean, you don't want to thank me for keeping you from crying on tv >> thank you i was prepared to cry. >> you want to conjure up -- >> i'm not trying to conjure anything it's natural >> i think that peta story, i saw some tears earlier >> michelle, thank you we're still going to be seeing a lot of michellmichelle we're very, very proud and thrilled for her when we return, a new wave of cash-rich millennials boosting china we have details about that story after the break. and as we head to the break, a

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to talk nafta, trade, and the global markets and then the rise of the gig economy. a new book highlighting a shift in how people work it's called temp and the author will join us in just a bit but right now, as we head to a break, take a look at the u.s. equity futures it's been higher all morning dow futures up by 50 points, s&p up by 5 opini and "squawk box" will be right back imagine traveling hassle-free with your golf clubs.

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good morning, everybody. welcome back toe "squawk box" on cnbc where we are live from the nasdaq market site in times square among the stories that are front and center this morning, retailer kohl's reporting upbeat quarterly reports this morning earnings came in at $1.76 a share. that beat the street's estimates by 12 ecents revenue and comp store sales also topping us. kohl's raising its full-year outlook. however, it only raised its full-year outlook by 5 cents on both the low end and the high end. it beat by 12 cents, so i guess

that has people kind of wondering what happened. and take a look at that chart, it has been a very strong year for the stock. shares are under a little pressure this morning, down by about 2% that stock has doubled over the last 12 months, and is now up more than 40% for the year we're also expecting earnings a little bit later from another retailer, tjx, the parent of marshall's and t.j. maxx the company is expected to post profit of $1.09 a share on revenue of about $9 billion with comparable store sales rising by 2.2% right now ahead of those numbers, that stock up by 1.25%. and 22 states and the district of columbia have asked an appeals court to reinstate net neutrality rules the fcc voted in december to reverse those rules and allow internet service providers to charge for faster internet transmission the new rules took effect in early june despite a slowing economy, trade wars, and tariffs, international global brands are pouring money into the chinese market way? there's a new wave of cash-rich

millennials in china and you can see luxury brands from gucci to louis vuitton throughout major cities. the chinese consumer is about one third of global consumption of luxury goods. so while the trend is not completely new, it's gone from showing off wealth to an expression of taste. and revenue growth and luxury brands in china hit 15 to 20% for the first half of the year versace and other brands are expanding outside shanghai and beijing. and the number of millionaires in china is set to hit a record high this year, more than any other country and sheer numbers tells you what a great market for all of this type of stuff. and it's not penetrated at all at this point. but they better get their trade act together, right? i mean, fept to -- bring them along. bring them along, but they've got to play nice >> always got to play nice

got to figure out how to make them play nice in the meantime, nafta negotiations, talk about playing nice, starting back up mexico's economy minister says things are going so well, the u.s. and mexico could work out bilateral issues sometime this week kayla tausche joins us with more this is better thanexpected news we don't get a lot of that, kayla. it is good news for this bilateral breakthrough, potential, with mexican officials back in washington they've been here most of the month, but an agreement now is expected to be imminent. and talks are down to a single issue. it is unclear, though, what type of agreement could be reached here the approval the white house got from congress last area to reopen talks were explicitly for negotiations with canada and mexico to modernize the three-party nafta. four congressional aids tell cnbc that president trump would need new permission if he wanted to do a bilateral deal, and that could take up to another 180 days

meanwhile, the president is managing expectations for mid-level talks with china this week he's discounting the optimism of his own economic team, telling reuters, he doesn't anticipate much this week and has no deadline for the talks to wrap up sayin s saying, i'm like china, i have a long time horizon. one official says the purpose of the talks is for each other to test each other's boundaries by the time the talks conclude, china and the u.s. will likely have tariffs in place on $50 billion goods on either side with the u.s. holding events on thursday and friday that will only ramp up rhetoric against china. u.s. officials point out that the talks may signal the treasury department's interest in stabilizing the relationship, stabilizing the market, but the tariff tool box is controlled separately it's controlled by the u.s. trade representative and while trump and president xi may meet at apec or the g-20 in november, the president says nothing's been scheduled a lot can happen before then, joe? kayla

we'll continue with our next guest. let's talk trade and communications with michael comingues. good to see you. you were in the obama administration just watching what happened with nafta, where have you -- do you think it needed to be addressed? and are you a supporter of the way it's been addressed and what might findly co finally come ou now that it seems like negotiations with mexico have moved forward a little bit where are you on all of this, michael? >> good morning, it's great to be back with you all clearly, the nafta agreement, as i have said many times, it needed to be updated and given a facelift it went into effect in 1994, before the internet even existed and ecommerce and things even existed. so there's no question that the agreement needed fob updated and i think most would fully support that now, the way that the

administration has gone about it is a totally different matter. and we could probably spend all the time that we have this morning on that. i would say, i guess, based on kayla's prior report, i would sound a little bit more of a cautionary note. i definitely think that a lot of credit is due. it does seem that we are at a new point. perhaps a tipping point in the negotiations, where an agreement might be at hand an agreement in principle on the bilateral issues that relate to the u.s. and mexico. but we are a long way, still, from a final agreement, a trilateral agreement that includes canada. and even with respect to the mexicans, there are some key issues like the so-called sunset provision, that is an absolute non-starter for mexico that hasn't even been addressed yet in these negotiations. so i think it's still a little early to break out the champagne. >> so you saw the election and then you, and you saw the winner and the outcome. when all of a sudden this, i don't know, this relationship would seem much more positive

than we expected between the new president and president trump. were you surprised by that or were you -- were you great fati by it? is it a good thing are both sides just trying to, you know, they're looking at what both sides need in saying this is good for both of us? what's happening here? >> well, i certainly think that president-elect andres manuel obrador has struck a conciliatory tone with the u.s. and that can only be seen as a good thing i think that largely affects that amlo will be very focused on his domestic agenda and domestic priorities and he has a lot of things that he wants to tackle in mexico having this cantankerous relationship with the u.s. is certainly not helpful to that. but, you know, i wouldn't assume that this honeymoon period will continue forever amlo will insist that the united states treat mexico with respect. and certainly, if president trump doesn't get what he thinks

he wants or needs or deserves in these negotiations and resorts to his historical tactics with mexico, things could go south pretty quickly so the jury is a bit out, still. >> do you think he's playing canada against mexico? he's got, now, sort of, it's a good cop/bad cop canada may feel left out, i guess. i don't know if he were to lose mexico, it would be -- he would haven't that advantage with canada >> it's interesting, because, if you go back to the beginning of these negotiations, canada was the good student, the teacher's pet, and next was kind of vilified by trump. now, we've had this election, you've had this reopenness to negotiations, more flexibility towards mexico shown by the united states, and now canada, since the g-7, has been backbenched. i think that's really problematic. and that's one of the concerns i have about the way this agreement and this negotiation is playing out

we've certainly give credit where credit is due. i think the mexicans have hung in there they've shown a lot of resilience and a lot of maturity and flexibility in their negotiating style. and they've been able to bring ambassador light hausser and his team along to a certain point. but sidelining the canadians the way they've been sidelined is not productive the president's comments in his cabinet meeting, again, sort of going out of his way to antagonize the canadians is not helpful. at the end of the day, this has to be a trilateral agreement and, you know, you've got to bring three very distinct parties with very distinct domestic political constraints and needs to the table to get an agreement. trump seems to forget that >> seems like one way to characterize some of these trade negotiations is that we throw -- or we're throwing our wait around a little bit. and we do have certain goals that we want but with china, too, and china

seems to have -- at least what we've read in the last month or so, they're starting to feel the effects domestically, you know, of not having, you know, great relations right now with the united states. their stock market, some of the comments you're hearing, criticism of president xi. so throwing your weight around as the most important economy in the world, is that a viable way to enter trade negotiations? will you get what you want >> is that a softball? look, it's not the approach, i think that -- >> will it work, though? what if it does? will you turn around and say, oh, my god, we could have done this in the obama administration -- we could have done all of these things, we just didn't -- it seemed untoward, it seemed boorish to do that? >> well, here's the important thing. i think we got to unpack this, right? i think there's no question that with respect to china that a tougher approach is required and was needed and is justified.

certainly, china's practices with respect to intellectual property theft and other things are very problematic and there's a lot of tools to deal with that one can reasonably, you know, argue -- reasonable minds can differ whether we were tough enough in the obama era on china with respect to those issues i think we were quite tough. but, you know, reasonable minds can differ on that but what i don't -- where i don't think there is any room for debate is that the united states has for generations been a leader in setting a very high standard for certain trade disciplines that benefit the world economy, that prevent a race to the bottom, and, you know, the way we've been handling ourselves to date, antagonizing our allies, picking facts with our friends isn't reflective of our best self. and i think it's counter productive, ultimately >> all ight, i'll give you a final word there we've got to run, mike, but we appreciate your time and analysis >> great to be back with you >> coming up, a lot more on "squawk box" this morning, working in the gig economy

the author of "temp," louis highman will join us right after the break to discuss it. and we're counting down to the opening bell on wall street. will the bulls' record run continue today take a look at the futures right now. we are in the green. quk"etnsn st a moment

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welcome back to "squawk box" this morning our next guest's new book traces the rise of the gig economy and its path towards -- its path forward for all of us. i want to bring in louis hyman, the associate professor of cornell university's industrial relations co s school, now auth "temp," how american work, american business, and american dream became temporary go, big red. i'm a cornellian, so thank you for joining us >> always a pleasure >> help us understand how you decided to write this book >> it seems like history should be useful, right so how do we get into the world in which we live today and that's what this book is all about. how did our work become so insecure and what can we do about it >> the question that i have, you talk about, and it's right in the title, the american dream. do you think the american -- and wave debated this for a very long time, is the american dream

challenged, is the american dream over, is the american dream dead what do you think? >> i think we're at this wonderful cross roads. we have a chance to reclaim the american dream, all of the american dream, going back to jefferson, was autonomy and independence, self-determination -- >> isn't that what the gig kpli is supposed to be all about? >> it's supposed to be all about -- >> but it isn't? >> i said it could be. it is for some people. and we need to figure out ways to make that a reality >> how do we do that >> we need to figure out ways to create a baseline level of support so independent workers can make sure they get paid, to make sure that they have, you know, good benefits and all the like but it is this amazing moment in our history. >> is there any gig economy company or company like an uber-style company that you think is doing it right? >> so, uber is the waste product of the service economy, you know it is something that exists, an alternative to the terrible job, slinging coffee. there are alternatives that do work there's up work, for instance,

which is -- and they have lots of highly skilled -- >> up work is a free lance website. >> it's a free lance website, where they have been able to -- people work remotely all around the world, day get paid pretty well, they do all kinds of stuff. so there are alternatives like that >> can ijust ask, though, this is an evolution, just lake we've seen other evolutions and revolutions before >> that's right. >> there are now the workers who are the gig workers, who are kind of pushing back and demanding more too we saw this in the industrial revolution are you going to see it in the gig economy, too >> i wrote a lot about that in the book it took us 100 years to make the industrial revolution work for regular americans. let's not take 100 years in doing this let's make sure the independent workforce gets its benefits from all of this, as well >> are you a believer that these gig economy jobs, that historically are contract jobs, need to come with what might be skribd as some of the full-time benefits that historically have been bequeathed upon -- i don't want to say bequeathed -- earned

by employees >> i think there's a pretty conservative path we can take here, which is take the 401(k) as a model and try to apply that to all of these independent jobs as we move from gig to gig, from job to job, we're able to bring along all those benefits >> take it with you. >> they encourage you to sign up, but it becomes movable and you take it wherever you go. >> but that's not a radical change >> there's been a challenge to this idea of a gig economy and to suggest that an uber or you name the company is actually -- you are technically -- you really should be considered the employee and all the benefits that should accrue to you. what do you think about that >> i think all of those kinds of laws came out of a particular moment in history, where this would be -- the economy was based around an employer/employee relationship and industrial economy and offices and factories. and we're not working that way anymore. so 94% of net new jobs since 2005 are in this alternative work arrangement kind of situation. >> would it work if you were forced -- if uber and other companies were forced to take these contract employees and make them actual employees

>> it probably wouldn't work, certainly not as well for the investors in those companies i think one of the questions is, can we make it work? but what does it mean to make something work if it's profitable but making people suffer. >> it's not profitable now in a lot of these instances if you were to suddenly put more costs on them, my guess is some of this would go away? >> they would probably go away, but that's part of what capitalism is all about. >> becky's getting to central question of the gig economy. so many of these gig companies, "a," are already losing money. so they're being subsidized effectively by silicon valley. and at the same time -- >> investors >> you have not seen wage growth across the board at all. in fact, you could argue that these gig companies which don't make money have held down wages across the board >> i think the people that are really holding down wages are the walmart and the starbucks and the people who -- the giant retail and service companies that actually employee many more americans. you know, less than 1% of the workforce is working for uber and other kinds of digital companies. so this is a space that, you know, people often point to uber as the problem, when it's really

domino's when it's really these other kind of places -- >> what do you think employment looks like five, ten years from now? >> i think a lot of people will be working in the space and they need to figure out a way to get together and make sure we have policies that support them >> and how do you think about the world of robotics, ai, and the potential for that to -- and machine learning to effectively take so many of these jobs >> just like so many other technologies, it's neutral how do we decide to use technology technology solves for business problems and those business problems can perhaps, you know, the direction of everyone being part of it or excluding lots of people >> okay, louis, you're a full-time employee >> i'm a full-time employee. of those 70% of professors are adjuncts >> adjuncts. and you probably -- do you have additional work? i bet you have some side hustles. >> i have some side gigs >> writes books. >> the book called "temp: how american work, american business, and the american dream became territory." thank you for joining us >> my pleasure >> do they talk about sorkin up

at cornell a lot >> all the time. >> honest to god -- >> we have pictures of him -- >> if you look up, post distinguished alum -- if you look at most distinguished alumni from cornell, andrew comes up in the top five >> is there a statue yet >> no statue you know who our biggest these days, our most famous alumni -- >> bill nye the science guy. >> and another bill as well, the guy that is on the other side of your politics, though, bill maher. go, big red. >> bill is an enigma i never know what he's going to say. >> you see the latest stuff? >> yeah. >> saying he doesn't like him, but he doesn't think he should be silenced. >> we have statues of ezra cornell. >> to be perfectly honest -- >> and a large bear. >> i like bill maher more than bill nye, the junk science guy >> oh, oh! >> fighting words! >> i do. i like -- >> those aren't fighting words >> bill nye's come in here >> i've seen him, believe me i've heard his --

>> all right thank you, good to see you when we come back, we have stocks to watch ahead of the opening on wall street and later, tesla getting a downgrade this morning the analyst making the call joins us in the next hour to talk all about it. "squawk box" will be right back. ♪ i don't care where we go ♪ and i don't care what we do ♪ just take me with you there are roadside attractions. and then there's our world-famous on-road attraction. the 2018 glc. lease the glc300 for just $459 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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it's an exclusive interview that you can get right here on "squawk box" ahead of the company's conference call, which starts at 7:00 a.m. eastern time target's stock, by the way, is up nearly 50% over the last year it's currently sitting near its all-time high, up 28 cents this morning to $83.60. >> take a look at a couple of stocks to watch. for the morning, jm smucker reported a quarterly profit of $1.78 a share. two cents ahead of expectations. however, research fell below estimates and the company also cut its full year outlook based both on lower sales and some business divestitures. and beauty products maker cody beat estimates by a penny, earning 14 cents a share revenue was below forecast year, and sales were impacted in this case by supply chain disruptions. the old -- that's another one in your rolodex >> i do still have a rolodex >> you have a rolodex? >> you know how they made us

clean out our desks? >> i heard i haven't been out there i hope i didn't have -- >> i had 14 boxes of stuff and found some crazy stuff >> did you cry looking through all that stuff, too? >> i found some sweet things, including the book that you and blake did and she did a really incredibly sweet signature to me on it. and i saved that it was one of only a few books that i saved >> we were talking about michelle caruso-cabrera leaving. >> and blake going to college tomorrow which i can't believe. >> and blake going to college. we have a lot more rng.a getting downgraded this we're going to talk to an analyst right after the break.

the bull market is about to become the longest running in history. but is it running out of steam we will bring you the bear case, straight ahead >> analyst jamie albertine downgrading tesla this morning he'll join us first on cnbc to explain how elon musk's recent behavior factored into that decision and michael jackson has been dethroned. we're going to tell you which band now has two of out of the top three best-selling albums of all time the final hour of "squawk box" begins right now

live from the most powerful city in the world, new york, this is "squawk box. >> the eagles, man the dude welcome back to "squawk box" here on cnbc live from the nasdaq market site, times square we will talk all about the eagles a little bit later. i love them. i love glenn frye, the late, great joe frye i'm joe currnan along with andre and becky quick. people thought cramer was going to get mad at me i'm not talking about the philadelphia eagles. you will see why we're talking about the band, the eagles >> this is a tease >> we may play a couple of clips. >> you know, the gypsy kings did

a version of "hotel california." and john turturo, who is the breakout star in part of "the big lebowski," he dances i don't know the futures. let's get back to the stock market, up 58 points now on the dow. and that would be the fourth straight day of gains after that remember, we thought china was going to be fixed and we had walmart, last thursday, we were up 400 points and have been up every day since. 58, 23 on the nasdaq s&p, as well and then there's the ten-year, 284, as far as treasury yields yesterday, i'm not sure what that was was that trump's comments? >> i think about the fed, right? >> yeah, again >> up 282. >> all right, let's tell you what else is front and center today. russian officials are now denying charges that the country has been plotting to interfere in upcoming elections. that is according to diplomatic sources quoted by reuters. microsoft earlier said that it had shut down websites linked to

russian hackers who are said to have targeted various congressional websites, as well as some belonging to conservative groups, too jpmorgan is about to launch a new brokerage app with a very appealing price tag. free the bank's rolling out a digital investing service next week that's called you invest that's according to a cnbc.com exclusive story. that investing service comes bundled with free or discounted trades anyone who downloads the app or uses the website will get at least 100 free trades in the first year competitor schwab, etrade, and td ameritrade all down sharply on this news td ameritrade down by 7.25%, etrade off 6.8%, and schwab off by just over 5%. and we have a special guest to tell you about target will be reporting quarterly results tomorrow morning. the ceo, brian cornell, will be joining us right here at the nasdaq to talk about quarterly resul results, the retail sector, and much more. it's an exclusive interview tomorrow at 7:00 a.m. eastern time that's ahead of the company's conference call. okay

a few stocks on the move this morning to tell you about. home builder toll brothers reporting an earnings beat revenue of $1.9 billion beating estimates of $1.8 billion. you're looking at the toll brothers now up about 7.5% this morning. also, retailer kohl's reporting profit of $1.76 per share. that beat estimates of 12 cents. revenue in same-store sales also topping forecast and kohl's also raised its full-year guidance. you're looking at that stock down about 1.5%. >> they raised their full-year guidance, but only by 5 cents on the low end and high end, this is a company that just beat by 12 cents, so that has people wondering, why not raise it more and tesla, the story of the week, the storyof the month, could be the story of the year the soap opera continues tesla suppliers are said to be increasingly worried about the company's finances this comes from a private survey seen by "the new york times.

joining us now is collin rush, managing director at oppenheimer. and jamie abeabertine just downgraded there's a lot of questions about where you think this is headed you think it's going lower, why? >> first of all, thanks for having me. it's not lower, it's rangebound. i think the issue is, the fundament also we saw in the second quarter have been improving quite steadily sentiment was improving as it relates to that. and the last really three weeks, we've had, if you will, self-inflicted wounds on the part of, you know, a ceo that we think is going through a founder's dilemma. and he'sclearly stretched too thin and is having a lot of issues from a pr and the optics around his pr are obviously big negatives for the stock. and to invite, effectively, an s.e.c. inquiry here, that's going to be an overhang for at least the near term, you know, we think it's the right time to sort of get on to the sidelines and let that part of it play

out. and perhaps, even, make a bigger call to the board, to management, to find someone to work with elon, as either a co-ceo or a ceo to take some of the pressures maybe off of him and allow him to be what i think he's best at, and a generational, you know, brilliant leader as a visionary. >> jamie, there's two issues here there's one, which is to take private and whether that is even a possibility, whether that's realistic, given the math, frankly, of how that could or could not work and then there's the sort of, i would argue, larger issue, which is, just the going concern question and how much that going concern is worth, whether they can make the numbers work, and whether they can pay -- iyou know, there's a lot of debt coming due and whether they'll be able to make those payments. so the -- i guess my question is, are you focusing on the take private issue or the actual just growing concern issue? >> first of all, i like how you framed that.

i think that's exactly right i don't think the take private probability is very high anymore, particularly, you know, now we're hearing rumors of the saudi investment fund focusing on lucid, right? i think there's a very low probability this goes private. we subscribe a 5% chance out of a 420 opportunity set as it relates to our new target price range. i do believe and i would encourage anyone who hasn't to visit the factory in fremont visit the factory in reno. they have revolutionized the auto manufacturing process we think this stands on its own from a margin perspective, from a marginability, from a cash flow perspective on an ongoing basis. the distraction and side show of which has been relon in the last few weeks, unfortunately, is part and parcel to why the s.e.c., we think, is now inquiring around the funding security and so forth. that's why we're uncomfortable >> which means what? what's the solution you want to see to correct that?

>> we think he is, if you will, maybe stretched too thin and could use a professional coo or professional co-coo to come on and to sort of alleviate some of the stresses on him a communication strategies perspective. >> what do you think the chances are that let's say in the next six to eight weeks, because i think there's not much more than that, that you will see the company announce that kind of person a coo or a president i would imagine most importantly, wherever that -- if an announcement like that would even come, the most important thing you want to hear is that elon trusts that person and almost admires that person, because if it's somebody who's put in next to him that he doesn't want to be there, it's not going to work. >> i think it's really hard to tell this board has really proven to be extremely passive and really let him run the show so it would be a really change of behavior for them to step in and do this. i think it would have to come from elon saying, i need some help and admit that. and if he can grow up enough to

recognize where his limits are, i think it would be tremendous for the stock and actually very good for the company >> what do you think the stock's actually worth >> we have a $385 price target on it. we upgraded after the last quarter, given the guidance around the gross margins we think there's actually a lot of cash generation potential here i would agree with james on that on some level. i'm not convinced that they've completely revolutionized the automotive industry. but i do think they're going to make money on a 55,000 to $60,000 car with the model 3 and as we go forward, there's a lot of risk around the strategy of the company and how much money they're spending and how they're going to generate a r p return on that but from our perspective, they're turned the corner on cash generation and really need to grow the company. >> collin, in terms of the steps they may or may not take, if they were to say he was taking a le leave of absence, even a two or three half week vacation, would

that be considered a positive for the stock or a negative? >> i don't think it would go either way i don't think that's a big enough move. i think they need another presence that can actually counter-balance elon's capabilities in terms of visualizing a new reality for an industry, with someone that can really mine the pennies and nickels and the details of an operation in a way that he can >> and collin, you can weigh in on this, as well you talked about the overhang on this stock as a result of this s.e.c. investigation there's a couple of things going on here, by the way. there's the s.e.c. investigation, there's now a number of class action lawsuits from shareholders, clearly, there were hundreds of millions, if not billions of dollars traded during the time that that first tweet went out and then when the stock was halted, and then, by the way, if you want to measure it from when the second blog post went out, that actually explained the first tweet and i think there's going to be a legal case over when the stock, the clock stops on that, how much is all of that worth? >> that's a fantastic question and look, this is precisely why

we're downgrading. we're not lawyers. it's very difficult for us to assess sort of the legal ramifications here our view is that regardless of how severe, there is likely to be a penalty or afine imposed from at least the s.e.c. part of the investigation, but nevertheless, to be mired now in this, if you will, self-inflicted legal, you know, wound or woes, is totally unnecessary, unnerving, and distracts from the broader vision, the broader case that they were making as of the second quarter call. things were going very well as of that report >> but let me ask, just on that. things did seem to be going very well, we spoke with another analyst yesterday who said, wait a second why would you bring up the idea of going private, unless all of a sudden, you don't think you actually can make some of the commitments you've made on these new production schedules do you think there's merit in that thought >> no, i think it comes back to the point that we've been making and i think collin made it a little bit, as well. it's a founder's dilemma

there's certain ceos, if you look back over time, right, that are incredible visionaries they're able to take companies and break through sort of these traditional notes. a 100-year-old auto industry they're trying to break through, they're not always the right leaders to take to the next stage. they're going through growing pains or a state of mind kind of issue and dilemma that could use, i think, some support from another professional who's worked as a ceo or coo i think that's really what's going on here. that's why the tweets, that's why his frustration born out in that take private tweet. and that's the distraction, unfortunately, because the business to us is near escape velocity so we were very excited about that and -- >> do you have any -- is there any second-guessing now about hitting escape velocity, meaning the attempt to go private was, in part -- and there is a lot of speculation about that, that perhaps they weren't really about to hit escape velocity

>> i don't know if you're asking me or collin, but i'll take that look, i don't think that -- i certainly am stronger, more positive on the fundamentals i don't think the two issues are as related as that i don't believe -- i think this is elon going through personal issues, having his own struggles with the bears very publicly he has a great team behind him in jb straubl. he's got a great team focused on artificial intelligence and the neural net of tesla. he introduced them on the public conference call. i think that part of the business is going very, very well demand, we think, is very strong they're one of the best-selling vehicles already in the country. so, no, i think there's two separate issues. >> we've got to run. collin, one final question from me, which is, this has always been a story stock how do you put the tooth paste back in the tube if, in fact, they don't go private, and how do you -- >> this is really about cash flow at the end of the day for us, our upgrade and our

initial establish stance on this stock from 50 to 250 was really about the potential to generate an awful lot of cash and show operating leverage and we continue to look at that. i don't think escape velocity is the right term here. it's really about a business hitting a meaningful inflection point, where it can start generating cash and be sustainable. the take private deal for us is just a deep distraction from what looked like a company really straining to fulfill some of its promise >> fair enough gentlemen, thank you appreciate the conversation. >> thanks for having us. >> you prefer that >> i prefer what >> tooth paste back in the tube, versus genie back in the bottle, horse out of the barn, humpty dumpty, do you alternate or just -- >> i was trying to get some of the tooth paste back in the tube this morning >> that's impossible easier to get the genie back in the bottle >> i had a little colgate problem. squeezed it too -- >> i think that might be the hardest thing. >> putting humpty dumpty back -- you can't put humpty dumpty back

together again >> we've got to go >> when we come back, the bull market is on a record run, but is it running out of steam dom chu is here to make the bear case for stocks. there's the bear and later, a potential truce in the trade war, we're going to get an update on nafta negotiations and the exact on american business. stay tuned you are watching "squawk box," right here on cnbc you might take something for your heart... or joints. but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials

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when talking about the record run for the bulls, it's almost space invaders. >> i know this one >> we have to get to some of the bears. >> duck hunt dig dug? maybe it's dig dug our bears point of view. dom chuy joins us now with that part of the story. pretty cool yesterday. i'll let you get to your thing but rory and morgan, i think his name was what's hoffman's first name? it was morgan hoffman. rory, and i love the fact that rory remembered the photo that you took

>> and his dad has a lot to do with where he is >> i think that a lot of fathers and mothers and grandparents are part of these golfers' stories we started with dustin thomas, ahead of the pga championship. it was pretty interesting, for sure but golf wise, a lot of stuff going on but we'll talk to our story here with regard to our market wall of worry because markets aren't always a one-way street these are among some of the reasons why the bull run is pretty much ending soon. and this is according to economist david rosenberg at gluskin sheff, whose one of those who doesn't think things are quite as rosy. he's looking at five reasons why the bull market may be ending relatively soon. there aren't enough skilled workers to fill all the open jobs we've got, which means the job market has hit a wall, so to speak. you see what we did there. second, we'll stick with that employment figure. couple that with the idea that price inflation will be there

because of higher tariffs, and you possibly get conditions for tighter monetary policy from the feds so that higher inflation picture could be there as well also, a slowing growth of the money supply ros rosenberg says it looks like real growth rates of m1 and m2 money supplies those rates are consistent with an economy that's downshifting to lower growth rates. and fourth, what looks like a peak in the housing market, at least for now. you can see that kind of playing out in some of the home builder shares we've been watching closely. and the fifth one here is an appearance of a peaking credit cycle. with some of those kind of, at least, you know, cracks evolving, we all know the buy case, the bull argument here, better corporate profits, relatively better economy here in the u.s., fiscal stimulus, but keep an eye on these five factors for signs of a bear market to come back over to you guys. >> all right dom chu, we need that -- we need that perspective because we're doing the other

side series of all day long. >> are you in a back alley >> like a bear market. >> a bear market >> you've got to watch out >> security behind you >> a lot of graffiti behind me >> i don't know what part of town you're in >> i'm in a rough part of englewood cliffs cnbc hq >> your assets are going to get mugged if you hang out there >> just keep my 401(k) safe. >> okay. thanks, dom. >> you got it. >> a lot more to come this morning. talk about the white glove, you know, michael jackson will now be always known as the king of pop, but he no longer has the best-selling album of all time we will tell you who dethroned the king we'll do that next when "squawk" returns.

the reason i asked for that to be played, that's what the dude, as he's going -- he's a big credence fan and the dude in the big lebowski did not like the eagles he had more choice words than that but in music, and i'm going to explain that whole scenario, where that came from, because glenn frye once confronted jeff bridges very angrily, about what

is your problem -- >> with the eagles >> all comes from t. burnett >> he didn't like the eagles >> one of the great scenes in the movie has john tur touuturtn a dance to "hotel california." a gypsy kings version. >> there it is >> this is all -- the eagles' greatest hits has now passed michael jackson. anyway, there is a breakout performance by -- he was so amazing. but this is -- so t-bone couldn't have hated the eagles that much, i don't think, because he put in that version of hotel california. anyway, it used to be "thriller" and andrew is bummed >> i am bummed the best -- >> i'm bummed, too, because i hate the eagles, man the best-selling -- >> you can't hate the eagles >> that's the quote. just a quote from -- i know you probably weren't listening the u.s. best-selling album of

all time when we tabulate the figures for the first time, the recording industry association found that the eagles compilation is certified 38 times platinum. >> it's like a backup. >> it's not that they sold more, it's that they ran the numbers wrong for the past 12 years. >> "thriller" is 33 times platinum >> the eagles hold the number three spot with their album, you just heard it, hotel california, certified 26 times platinum. so in the movie, sorkin, jeff bridges is in malibu he gets beat up by the malibu sheriff and he doesn't have a car, so he put him in a cab, and in the cab, the eagles comes on, and he says, i hate him. but the guy says it's my radio and comes around and pulls him out and throws him on the side of the road and drives off, because he was criticizing the guy. >> i can't believe glenn fry got mad. he got more play out of that >> and actually, they got -- there's other things that are involved the version of the eagles also helped him secure a desired song for the movie that saved him

$150,000 so there's a lot of movie and quintanilla. and you notice that guy's name was jesus quintana and jesus is small quintana. charles is a huge big lebowski fan and we go back and forth there's the dude and i try to abide when, at all possible >> i'm still feeling bad for michael jackson. >> that's the other side of this whole thing. >> yeah. >> there it is >> or -- that's right. you bit on the glove, on the single glove >> i bit on the single dploglov. we have some stuff in charity. wait a sec >> did you see my moonwalk compared to yours? >> i didn't try to do a moonwalk >> that was a spin >> look at this! >> go back and -- >> go show sorkin. because he tried -- >> that's not a moonwalk >> you know, that was --

>> i wouldn't claim that either. >> a mini moonwalk you put your toe in and push coming up, trade war, we're going to talk about the future of nafta and the potential for a deal with -- didn't get the glove, right >> i never got thelo gve, because, the bidding was undone, because the jackson estate tried to get everything -- no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks. whoooo. tripadvisor makes finding your perfect hotel... relaxing. just enter your destination and dates. tripadvisor searches over 200 booking sites to find the hotel you want for the lowest price.

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at what they do is indispensable, and i couldn't ask for a better partner. ♪ good morning welcome back to "squawk box" this morning right here on cnbc. we're live at the nasdaq it medtronic raised its full-year guidance also, some potential trouble out of japan for apple smartphone sales. this according to government source quoted by reuters japan is seeking to force wireless carriers to stop bundling the cost of wireless

carriers they provide phones with no up-front charges as part of fixed long-term contracts. customers are effectively paying for the phones in monthly sblau installments customers may on the for cheaper phones apple's devices account for half the smartphones sold in japan, so that could pose a challenge and we'll keep our united states eyes on that a white house study on whether to impose tariffs on reported autos is being pushed back wa wilbur ross told "the wall street journal" that ongoing trade negotiations are delaying the completion of that report. ross declined to set a new timetable for completion, another thing for us to keep our eyes on. >> okay. got some info, by the way, after this interview, i'm going to share it with you. it's actually on your feed, too. we know who has it we know who has the glove. trade war, let's talk nafta negotiations and the potential for a deal with mexico joining us is miriam spiro

she is now vice chairman of public affairs thanks for joining us. are you optimistic that we get a bilateral -- is that even possible to do or it takes more time, doesn't it, with mexico? >> well, it's shaping up to be a pretty important week on the trade front. what i hear most about from companies are their concerns about increasing uncertainty and higher costs so, the administration has a chance this week with respect to nafta to make a dent in both of those kinds of concerns. >> the concerns at this point are -- still seem like they're being reflected in numbers in the future and there's still time to pull us back from the brink. but we'll have a pretty good

right now. weapon don't know how much investment going in. because of the increasing concerns about the uncertainty of our trade partnership with not just mexico, canada, but with eu, and china, as well. so if the administration can strike a deal with mexico this week, and then bring in canada, it would be big. it would important for a couple of reasons first of all, it would put to rest some of the uncertainty about nafta continuing as you know, the president has made threats to withdrawal from that agreement and in addition, it would show countries, including china, that we do know how to strike a deal, a deal that can work for both sides, when we want to >> right, instead of the zero sum idea that there's going to be a winner and a loser. we've heard that, if we were to do mexico first, that you can't do it, it takes 120 days, but if we had a deal in place, it wouldn't matter, that it gets pushed back. we can still go to canada and say, come on, let's talk >> well, what the administration is trying to do, and it's an ambitious timetable, is wrap up

the talks with mexico in the next week, really. and then bring canada back to the table. canada has time to think about whether it can make an approved offer on dairy, which is important to the administration, but we'll have to see if that will be enough for the administration to then be able to reach a deal with both countries. there's not a lot of time left, as you point out, joe, because any agreement has to be presented to congress three months before the president intends to sign it >> right >> and we have a new mexican president coming in on december 1st. >> so, yeah, so, it's, timing does become an issue if you had to bet money, how far along do you think we'd get in these tariff tranches with china? do we -- do we get to $200 billion? does that ever happen? or is it, is it something -- do we come to some type of agreement before then?

>> well, it's the $200 billion question i think it's good news that there is a chinese delegation visiting, let by vice minister wang and there will be talks at a fairly senior level with the treasury department this week, but not so senior that they can't also get into details. and this is important, because, we're already in a trade war with china $34 billion of tariffs on both sides. and this thursday, another $16 billion are going to kick in, mostly on industrial goods but the next round of potentially $200 billion is going to focus more on consumer products and affect everything from bicycles to wedding dresses, to lots of products that consumers would then see price increases on, at the stores or else companies would have to absorb those costs so either we see higher prices for consumers, or we soon impact on the bottom line neither of which helps the u.s. economy. >> we would see how quickly,

with the $200 billion businesses would almost immediately see, we'd start seeing some effects there, right we don't want to get there, is that,that would be a very bad outcome for the overall economy? you think it would take a point off gdp? half a point what do you think? it's tough to say. >> it's hard to measure the precise economic impact. i can say that we're going to see price increases. we've already seen some. coke has announced coke increases. harley davidson announced it's going to be taking some of its manufacturing overseas and neither result is one intended by the mirpadministratn but that's one of the casualties of a trade war >> the president in terms of talking about this low-level or mid-level delegation didn't seem as positive as some of the people in his administration is that -- does he know something or just lowers expectations or how do you read that it seems like the chinese came back to us, that's got to be sort of a positive sign, no?

>> i think he's lowering expectations and that's a good thing to do now. but as i said, it's also a positive sign that the talks are resuming you obviously can't have a deal if you're not talking to the other side that's a basic point of trade diplomacy 101. so, it's good news that the talks will be starting the challenge, of course, will be to make them constructive can the administration figure out what it really wants now and wl what are the issues on which it can wait and is it willing to engage in a process with china, because i don't think we're going to see results overnight. but again, hopefully we'll be able to start a process that will lead to more constructive outcome than we've seen in the past few months. >> it sounds like it would be a good idea for both canada and china for us to get something done with mexico, to show that we're willing to maybe enter into something where both sides feel like they're getting something. so that's this week and we'll know some of this could be resolved in the near-term then >> exactly there's a lot riding on the next

two weeks. >> and then you got all the other stuff. i read a piece yesterday, these two weeks are crucial for trump! this was that guy at cnn, chris cillizza, whatever his name, you have manafort, you've got cohen. it's crazy, ambassador, it's crazy, but thank you if it works, we'll have you back on and we'll go from there baa thank you, appreciate your time today >> my pleasure, joe. when we come back, gold and currencies both on the move this morning. we're going to tell you how to prepare your portfolio right after this break

welcome back to "squawk box" this morning take a look at futures this morning. we are in the green across the board. dow looks like it would open up about 4 points higher. nasdaq up about 20 points higher and the s&p 500 looking to open about 4 points higher. also, shares of retailer t.j. maxx, they are rising in the pre-market this morning. investors focusing on a 6% increase in comparable store selves compared to consensus estimates of a 2.2% increase earnings came in at $1.17 per share. although, that did not include -- that did, rather,

include, an 18 cents tax reform benefit. revenue also above wall street forecast and tjx also raised its full-year earnings forecast. that stock up a little over 3% right now. we're keeping tabs on gold this morning, which is falling more than 2% just in the last month. joining us right now is bob has been -- habercorn. bob, this move in gold, what's happened why have we seen recent weakness it's almost a guarantee we're going to see in a few weeks and another hike in december, as well it changed last week with the news that that chinese delegation was coming for trade talks here in the u.s. >> why >> risk back on commodities. china is the largest consumers of commodities across the board, they trieded higher. that's had a little bit of crack in the dollar and caused gold to trade higher and then friday, you had the

commitment of traders report the commitment of traders report showed a record short position of speculators by gold that's totally flipped as of recent and that will be something to keep an eye on and i think what you saw, with the news out of china, with the trade delegation, the commitment of the trades report being so heavy to the down side to the shorts that you saw a little bit of a flip over on some unwinding of those shorts, coupled with a glimmer of hope that there's something coming down the pipe here with the chinese on the trade talk >> we may be digging a little deeper into the woods than a lot of viewers might anticipate. you think that really the issue has to come back to the issue with the dollar and what the fed does with interest rate hikes, correct? >> absolutely and this year, it's going to be about the fed, gold, geopolitical flare-ups here or there that happened do drive gold up or down. but at the end of the day, with the environment we're in, it is all about the fed. and the fact that the fed is going to raise rates we'll learn more tomorrow when we get the fed minutes from last

month's meeting, where they're at, and you have chairman powell later this week speaking from jackson hole there's going to be a lot of clues this week from the fed on gold but ultimately, the fed is what's going to drive gold this year >> what do you think about president trump's comments yesterday, just saying that he doesn't appreciate the fed raising rates, that he would like to get their help during this time. their help with the economy. do you think that has any impact on what the fed ultimately does? >> i don't think it has any impact on what the fed does at all. i think the interview he did with reuters, the comments he had, it did -- the dollar did slip a little bit, with some strength in gold late yesterday and last night but, ultimately, i don't think the comments in that interview are going to have any impact on the fed's monetary policy. >> bob, do you like gold >> i do like gold. i do like gold i like after the fed announcements to look to get long gold. but i think it's going to be hard for gold to sustain a rally this year with the fed, with the fed raising probably doing it two more times this year unless we get a change in some fed speak, we had the atlanta

fed chairman that did say he expects one rate hike this year. if we get more of that from the fed, yeah, gold will go higher this year. but unless there's a change, i don't see a real reason why gold is going to go substantially higher for the remainder of the year >> i don't know if we can call it the ten-year chart. we are approaching the ten-year anniversary of the financial crisis and obviously, that was a time when people flocked to gold. they were so concerned about everything else they saw in the markets. do you anticipate that level of interest in gold again you can see it kind of peaked down in 2011, is that -- are those days that are kind of gone unless you see a major market crash? >> i think you would need a major market crash, which is very possible. i mean, the s&p and stocks being as high as they are, real estate as being as overvalued as it is. did the fed raise in rates spark something in the real estate bubble it's very possible these bubbles seem to come and go so i think it's going to take something like that, something substantial for gold to see a large rise over the next couple

of years i don't know what's going to happen in two years, from a geopolitical standpoint, but it will take something of a bubble pop and some type of extreme market risk, i think, to see a rally in gold, like we saw ten years ago. ten years ago was historic and it's something none of us will forget in the markets and i think right now, we're not at that point in time the economy is doing well, gdp data is trading higher the only thing against gold -- the only thing against gold is the markets. and also, the fed. so, for the short-term, for the next six, seven months >> okay, bob, thanks for your time >> absolutely. thanks, becky. >> the problems on the new york city subway just keep coming and they just keep getting weird, too yesterday, service was briefly delayed by a pair of goats that found their way on to the tracks in brooklyn. in the end, former "daily show" host jon stewart swooped in to take part in the rescue effort, transportinganimals to an

upstate farm sanctuary that's what they've been doing since he retired, they have a sanctuary that he and his wife started. no word on how the goats got on to that track. >> goats are sweet >> they are. >> they don't seem too bright. >> they have, not rescue goats, but support goats that people have >> i've been around them at a specific place where we went every year and just sat right in the middle of them and they're very sweet >> yeah. >> don't seem too smart, though, like i said. but who knows. it's hard to tell. >> animals >> yeah, animals >> in the meantime, when we return, we're going to get down to hear what jim cramer has to say down at the new york stock exchan exchan exchange some animals down there at the exchange we are green across the board. we'll be right back in a moment. 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. that's smart for millions of shipments. in this lab, researchers are working with watson to help them find new treatments. that's smart for medicine. at this bank, the world's most encrypted mainframe is helping prevent cybercrime. that's smart for everyone. and in africa, iot sensors and the ibm cloud are protecting endangered animals. that's smart for rhinos. yeah. rhinos. because smart only really matters, when we put it to work- not just for a few of us, but for all of us. let's put smart to work.

the new york stock exchange with jim cramer joining us now. carl knows what i'm talking about. it's not the eagles football team i'm sort of neutral on the eagles football team

we're talking about the ban the eagles you saw passed thriller as being the biggest selling album of all time. >> i think it's great. >> and they're named after your favorite thing in the world. the philadelphia eagles, maybe. >> wouldn't that be something if they were? by the way, opening night is here on nbc and it's going to be fabulous. >> it is and does anyone else look like -- who do you think the top three teams are this year? you have a feeling already >> yeah, well, actually, i'm fearful of atlanta, i think is going to be very good. that's who we start with i'm worried about them i'm actually not that worried about a lot of other clubs you know, obviously, new england if you face them again they look fantastic. steelers look good no company no team emerging from nowhere. i guess the jaguars but not on the offense. just the defense

colts look bad last night. i was thinking the colts could be there because of andrew luck coming back. i think there's a lot of party this year. maybe the rams will be the one we have to most worry about. >> if i say bengals, that's striki striki striking fear? >> that's running back by committee. you're a couple of players short. >> yeah. a couple of french fries short of a happy meal, as they say i think the rams look good i'm worried about them i think gurley is a great first pick in fantasy. i would take him ahead of le'veon bell. >> we talked about tesla, jim. we had kohls and other stuff nvidia i saw you tweeting about that i saw a lot of your tweets. >> i think nvidia you have to shake out the hands in there there's a lot of people who thought, you know, we're waiting for the quarter. i think you have to be make sure that everybody is out of that stock who is in it for just a quick pop. because you won't get a quick pop.

this is not a quick pop. i know the gaming chips look good i'm interested in something like tjx. people thought it was going to have a 2% comp and it's 6% it's related to apparel. apparel is strong. people just -- this is an extraordinary retail quarter it's the best i've ever seen. >> yep. >> you know we got a possible nafta deal and it's august but, i mean, there are many things coming along here, jim we don't necessarily affect politics but the manafort thing won't go on forever. >> no. what will is the tax reform. >> is it >> yeah. i think people don't get the money is not being just given in dividends. companies are hiring companies want to build. i think that there is a sense that it didn't matter on wall street or results in buybacks. that's complete wrong theory and, you know, they always on any tariff story, they can find five or six small businesses that are hurt. they don't realize there's a larger picture if we can make it

so the chinese stop with the joint ventures, the chinese have no -- get rid of the tariffs if the chinese stop with intellectual property, it's going to be a better world for us i think people don't get that. i wish they did. this is very important. >> jim, the soap opera that is tesla. elon musk, the stock actually not falling the way it appeared to be before maybe even popping a little bit here how do you measure it? what do you do >> i think people are saying wait a second. there's a couple of firms getting restricted that aren't commenting on it maybe there's something going on i always say look they could have taken all that money from saudi arabia and it's wrecked purchase they didn't because they're probably not having that much problem with cash flow look, i think the problem is the medical leave this man deserves. >> can i say quickly there was an alert that came out tesla ceo instagram account appears to be unavailable. that's according to reuters.

>> huh. >> yeah. >> i mean, look -- >> probably something some investors would like to see him go delete that and twitter. we'll see. anyway. >> if you get firms that are restrictive that weren't, i don't think you restrict it because there's something wrong with elon musk because there could be something going on. >> but, also, you'll have goldman sachs will be restricted there's a whole sort of circus around this people were trying to get in. >> circus. >> hoping to take it private, if, in fact, that's a possibility. >> i like the term circus. it applies. >> thank you. >> coming up shares of retail broker ages are getting hit hard this morning. we'll tell you why after the break. we may have touched on it. [phone ringing]

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report this morning that jpmorgan is launching an app

allowing people to trade it comes bundled with free or discounted trades. go to cnbc.com to read about it. by the way, we mentioned this report that elon deleted or suspended his instagram. he has twitter acount bass-- act based on what i'm seeing here. >> okay. this is you. >> i can't see i don't get the top line of the prompter. >> i have a picture. >> hey, we're out of time. we got to go see you tomorrow. >> "squawk on the street" begins now. ♪ good morning welcome to "squawk on the street." i'm david faber along with jim cramer carl quintanilla has the morning off.al