>> i think people are misinterpreting. we talk about it you can make money on fixed income. it moved up to the 2-year is 260. our big fund is up today where you use and take your fixed income is a big deal today. it's exciting. we're going to do a show on it. >> i don't want any fixed income maybe i'll get some. >> all right thank you. see you on monday! right now time for "squawk on the street." good morning and welcome to "squawk on the street. we get a look at the last trading day of the week. in you case you forgot it was friday we're looking for a higher open

this morning european markets, of course, open for some time generally been pretty positive trend there during the course of the week no exception today, as well. you can see across the board gains for all the major indexes. 10 year note yield around 2.8 or so jackson hole, we'll see what we get out of powell. not too long from now. there we are at 2.842 and crude is up 90 cents this morning. our road map does start with rate watch investors are looking for signals on the future of monetary policy. jerome powell gets set to have a big speech next hour bullish on the economy president trump says it's probably the best the country has ever done. stock futures are pointing to another slightly higher open and trade war impasse. no breakthrough in u.s./china talks as the new tariffs didn't kick in. stocks are poised to open higher

you saw that as investors look ahead to a speech from the fed chairman jerome powell it's about an hour from now. he's going to speak at the economic annual policy symposium in jackson hole, wyoming here is what james bullar told steve liesman earlier on "squawkbox." >> as far as inflation and the u.s., i don't see much inflation pressure and the reason you want to be preemptive would be to shut down inflation, and the market is not seeing that. i'm not seeing it in the market. i'm an inflation hawk but i don't see that developing. if it does develop, i think we could react and react appropriately. >> all of which means what, sara >> i don't know if i'm more excited for the walk, which is a great annual tradition, you know, on the balcony of the jackson lake lodge where the fed chair comes out before or after the speech always interesting to see who he's surrounded by

draghi is not at the meeting we watch the walk and the body language but the speech will be interesting. a few questions i think that investors want to know clarification that the fed will raise interest rates in september. any clues how they're feeling about a december interest rate increase, which is also baked into the market. all though less 100% certain how the fed is looking at the yield curve, which has become a hot topic of discussion. especially after jim bullard, who is not a voting member offered some opinionated views this morning with steve liesman and saying we shouldn't move to invert the curve if that's a recession indicator, which he said it has been so many other times. green span and bernanke got it wrong. he's not voting on policy but his idea is maybe we should be done for raising interest rates. >> the way he characterized it pointing to the prior cycles we try to explain away the fact that the yield curve was flat or

inverted and long-term yields didn't respond to fed tightening efforts. i think it maybe starts to inject suspension. not into september in terms of whether they move or what happens after that how they're going to kind of talk about the road forward because it's interesting you don't want to necessarily have policy makers say there's an indicator there we're going to do everything we cannot to push that indicator into this particular condition of inversion because that, in the past, meant bad things it's interesting the long-term treasury yield, what it's telling you is structurally inflation is not really picking up. structurally growth is going to be lower globally. then you don't want to argue with that too forcefully interesting note, i also think we're going to start to redefine the yield curve. it's going to get more room. the two year has been the thing that has been rising in terms of yield. >> the fundamental question here is when is the economy expected

to slow? is the bond market suggesting it's going to happen in the long-term? when is the long-term? powell is a no-drama kind of fed chair. in previous jackson hole speeches, mostly there hasn't been a ton of drama. 2011 was an exception when ben bernanke signalled operation twist. it was a completely different time so the question is, when does the economy turn look, we got new data on durable goods. pretty strong in terms of the signal for business investment there. that the headline was weaker but that was because of fewer boeing orders the aircraft kind of skews that. if you take out nondefense capital goods, excludeing aircraft, up 1.4%. that was the largest increase since april. >> we talked about the strength of the consumer which has been a preponderance of positive earnings from many of the nation's retailers no signs of wage inflation, really. >> not much. i mean, it's up from the lows but not accelerating

it doesn't seem to affect the extreme tightness you hear people talk about in terms of finding people to work. >> sara, i'm glad you gave the perspective in terms of when we've gotten something that is news worthy. it's been seven years. it's a widely followed speech, correct? >> whenever the fed chairman speaks. >> of course. >> is there an opportunity to talk in ways they typically don't. not on stage but off. >> i have attended it. the fed chairman when he speaks, it's not in front of the camera. >> right. >> so steve liesman, who is there, will get an embargoed citizenship and will share the headlines at 10:00 a.m. eastern time which we'll bring you. it's an opportunity for him -- it's academic. i mean, i hate to be, you know, too disappointing but it's wonky. there's papers that follow and a discussion right now on monopolies. >> yeah. steve had a couple of those guests yesterday

it was interesting to listen to their views in terms of monopolies holding down the ability of workers to get significant raises. >> right and the topic of powell's speech monetary policy in a changing economy. it isn't necessarily here is the road map for the next six or eight months but will he try to say that something changed the economy enough we can go slower? >> the other big question, and i don't expect him to address this, is this is coming after president trump has three times called out the federal reserve and saying i'm not happy with our policy of intere-- raising interest rates it's making it harder. it's strengthing the dollar. the fed projected independence all the regional fed presidents steve has been talking to saying we won't be influenced by policy but it's the elephant in the room. >> yes everybody declaring their independence joining us now washington crossing advisor senior portfolio manager kevin maroon are you watching do you care about what we're

going to hear out of jackson hole >> well, yeah. i don't think you're going to hear much, though. it's been laid out pretty clearly. the economy is growing very well the fed is continuing to raise interest rates we expect to see another one to two rate increases this year as the fed gets back to neutral but you've got a very strong job market you've got booming asset prices. you've got very good things in terms of investment spending here in the united states. capital goods that came out this morning. it's moving toward about 10% growth rate on capital goods you can think of that as investment it's accelerating sharply here at the end i won't say the end of an expansion, but deep into an expansion. it's kind of unusual a lot of good things happening the fed has to address this. >> every so often our market seems to respond to the possibility of a deepening trade war with china no real progress in these lower

level meetings that took place over the last couple of days are you concerned? >> yeah, i think so. it's a very sticky topic because it's really going to be winners and losers and becomes a very an exercise in microeconomics just as much as macro economics. so for us, we're focussing on individual companies trying to understand how they might be exposed one way or the other to trade or a slow down in global trade but certainly nothing that anybody wants to see and very few countries would benefit from. >> chinese currency had a big move overnight we can read into that. never quite explained. it looks like they're going to fight back over what has been a stronger dollar and a weaker chinese currency also, you know, we have the impasse on trade talks with nothing further scheduled. it hits their market, it feels, harder than ours can the global market rally in the face of china's markets

weakening? >> well, the global market is less -- is less even this year we're seeing things like turkey the devaluation in china remember, that's their tool. they don't have the same latitude that we do in terms of tariffs, but it's still a way of intervening in trade in similar ways, but they're using a different tool to get there. so ultimately, an increase in global disiteration would be the biggest risk to what has been a long running bull market, but we're still not sure how much of this is really posturing and how much actually gets put in place for the long-term. and how much of this is -- we don't know it yet. >> kevin, in terms of the drivers of u.s. stocks, obviously, this year we've seen this huge step up in the level of corporate earnings. tax cuts you have the synchronized growth it's around the time of the year

where next year's earnings forecast, typically, are going to start to erode a little bit it would be a normal kind of downgrade, as we get closer. that's not happening now it seems like 2019 forecasts are holding up for the moment. so does that tell you that at least a support for stocks are there? or, you know, might we get blind sided by a stronger than expected slow down in the first half of next year? >> well, if there's a problem with global trade and global growth fades away, yeah, we'll have a problem to your point about earnings, the earnings forecast jumped right after the tax package. and that reflects the, you know, the tax affect look at revenue growth revenue growth is up almost 10% for the s&p. that's not about taxes that's more of a growth story. so there is a very -- the things that we're seeing, the strength in the u.s. economy, in particular, were things that very few, including ourselves

would have forecast three, four, five or six years ago. it's an extraordinary thing. those fundamental developments are with us. they helped lift the stock market to where it is today. >> kevin, thank you for your insights this morning. i appreciate it. >> thank you stock futures are higher despite no progress in the two-day low-level trade talks between china and the u.s. nafta negotiations are seen running into next week u.s. and mexican officials say progress has been made but a deal is not imminent one thing, david, we've been trying to figure out is whether all of the political drama we saw this week and the legal woes for the president, cohen, manafort, sessions is a distractions away from trade or will make president trump's views more aggressive on trade or might expedite a nafta deal because they want a win. there's a lot of speculation out

there. >> yeah. we've had wilbur ross on on wednesday afternoon. i think he did say, i'm quoting him brokenly on the talks with mexico very likely in the very near term. i believe that's what he said. i'm not sure what he was thinking is near term. but that was wednesday just to put it in perspective. so early next week perhaps. if it drags on beyond that, apparently there's some reports they haven't nailed down automobiles, of course, that's a key part. >> yeah. >> you know you might start to have people wondering whether we're going to get there we've been waiting for months. i can go back any number of months and tell you when they said they thought they had something in hand. only to have to wait. >> yeah. there's no indication that on the china front that there's this effort to try to find common ground and say let's produce something that shows a process underway to get to an agreement. i don't think the market is tuned into every little move. >> i do think as we get closer to september, there's going to be a focus as to whether the next round of tariffs will go

through. on $200 billion of imports that's a big escalation. it's also including a lot of u.s. consumer products. >> you know the chinese may want to wait until the midterms are done it may be moving in their favor in that way. in terms of what it will mean politically. why not just step back away. >> it seems to be their calculation. >> yeah. still to come, the president tweeting about cnbc's interview with target's ceo. we'll fill you in. also, ahead one analyst said nike is experiencing a resurgence since back to school season we'll talk to him after the break. another look at equity futures on this friday morning higher across the board. dow futures up 77. s&p up 7 ♪

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it's a healthy consumer environment. i've been doing this for a long time i think it's the healthiest environment i've ever seen importantly for us, we're building market share in virtually every category target ceo brian cornell expressing optimism about the consumer that was wednesday morning on "squawkbox." this morning president trump tweeted about cornell's comments saying "target's ceo raves about the economy. this is a best consumer environment i've seen in my career a big statement from a top executive but virtually everybody is saying this when our trade deals are made

and cost cutting done, you have haven't seen anything yet. enthusiastic tweet there of course, we spent a lot of this week talking about the strength of the consumer overall. perhaps it's funny the discussions we would have so often about the death of the mall and amazon taking market share from everybody. >> yeah. >>well, we don't have it as much amazon is continuing to do extraordinarily well i mean, look at macy's, for example. we were talking off camera yesterday about that name. >> sure. >> and a number of others when it comes to retail including ones that haven't done as well. >> right it's conspicuous when the companies can't get it done. there seems there's enough to go around at the moment there's enough traffic happening. and, you know, you're in a sweet spot it doesn't change the longer term trends, i guess but the fact that maybe even e commerce people have seen the limits of gaining customers

purely electronically. you're opening up stores and things like that it's a hybrid world. if it's the best ever, i have no idea i feel that's a little bit of we've been in the bunker so long this seems like the best we've ever had. >> yeah. >> most comp store sales numbers were strong. >> sure. >> whether it was target or yesterday what we saw, as well, from a number of other big companies. let's take a closer look at the consumer and retail. bring in jim duffy who put out a note highlighting the resurgence in nike ahead of back to school. jim, there's been a resurgence we've been talking about in a lot of retailers why are you spotlighting nike? >> yeah, sure. consumer spending has been very strong the note we published relates to the annual back to school survey we survey athletic specialty and sporting goods retailing stifel has been doing this survey for over 10 years we're encouraged by what we see

from nike. nike's popularity strong consistent on a year-to-year basis but greater breadth across their styles and encouragingly we're seeing styles just released this spring, which are showing us the most popular and that tends to be a leading indicator for future periods so we feel good about nike's product innovation into this consumer spending environment. their capacity to execute. >> the stock is the best performer in the dow this year up 32% so have they stolen the mantle back from adidas and the north american market after adidas dominated over the last few years. >> yeah. i'm glad you asked that question a year ago, the narrative was that adidas was coming out strong a strong we saw that adidas was gaining share. this year we've seen adidas popularity decline slightly on a year-to-year basis more notedly, however, the styles that are popular from adidas are the same that were a year ago

we think it's lacking newness. consumers in the environment are demanding newness and nike appears to be well positioned with the pipeline. >> i guess the question is, to what degree, you know, the stock built it in. and really, kind of extrapolating a lot of good news it's basically as high as the multiple has been in 20 years. relative to the overall market basically the high for the cycle. how much room is there for future estimates, i guess, to go up to meet that? >> yeah. it's a great question. we continue to like the stock. one of the reasons we're seeing the structure shift, consumers are shopping with strong brands. we're seeing a higher return business we think it's deserving of a higher multiple. >> there are better performing stocks in the space this year,

under armour, for one. lululemon are strong everyone thinks the it is over that's not the case. how do you see it? >> yeah. if the athletic cycle is dead, consumers don't appear to be getting the message. the prevailing trend in fashion is more casual not less casual it's expanding at wearable occasion for the products. each of the company's stocks have outperformed for different reasons. nike based on a turn in fundamentals lululemon on continued momentum and strength in their men's business. >> jim duffy, thank you very much for joining us. >> thank you. >> nike is two words virtual outblow.

>> and i know what that is it's a good reason to come to work still to come, the road ahead. we'll talk with brad smith stepping down after 11 years on the job. another look at futures.

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we're walking "squawk on the street." the opening bell going to ring more than a minute from now. mike santolli, this is when i say what is the key to the market >> i haven't been up since -- reading the earnings call transcript that came out last night. i think the scene is set for the end of the week. we kind of worked our way in this grinding fashion. the s&p could reach a new all time high for a few seconds by half a point on tuesday. we have fallen back. not a pull back. i think the market feels tired it's late summer but it refused to pull back in a hard way that's where we're at. i think earnings are supportive but now we have the now what moment at least through the fed news today. and then we'll see where yields

go [ applause ] it's been a good week for consumer and energy and technology. >> netflix is having a good quarter. >> netflix got an upgrade today, as well. [ opening bell over at the nasdaq it's xeris. i was mentioning netflix here at the open another 1.8% gain, mike, it's been a good week for a company, when i looked on monday, the market cap was around $137 billion. now we're talking $150 billion nowhere near above disney which

it was sometime long ago. >> netflix down 15% from the high we keep thinking that faang hang in there this is the one it hasn't. they're saying facebook, of course, well that basically that's a buying opportunity. you never say the stock is cheap. you basically say the trends are fine they're kind of deeply entrenched in the user base, and the likes of disney are not going to really, you know, position in any serious way. >> to your point, it trades more on momentum one way or the other. >> yeah. >> after the earnings report, clearly, there were people who were disappointed with the metrics. >> yeah. >> retail has been a big story all week long. few smaller retailers reporting. foot locker is one i think it's going to be a loser today. comp store sales were a miss only half a percent. the street was looking for about .7% on comp store sales but it was indeed five cents

above estimates. revenue beating the company projecting an optimistic view for the second half year it expects the comp store sales to pick up the other one we don't talk about that much is hibbit. it's another store that sells sneakers and gear and clothing it's half a billion dollar company, and it is set to go lower today. surprised q2 loss. disappointing forecast looks like they're spending a lot on marketing to drive traffic. i pointed out, also, it's been a big winner this year up 44% year to date. that's going to cut it in half today. >> yeah. not looking quite as good anymore. >> that's the whole thing. if you can't make it work with this backdrop, you're punished and foot locker, sara, is that where everybody looks toward them being a direct to consumer? is it time to talk about that

yet? >> yeah. we've been making point for awhile most of the growth is coming district to consumer for nike and under armour and build their own websites and focus on their own stores and go through apps what does it mean for foot looker they've hung in there and it trends with the kind of releases these companies get. clothe sales a huge part of their businesses, especially nike that's not where the growth is for now, for sure. >> weird day yesterday for alibaba. in the morning, of course, we were talking about a stock up roughly 3% or so in the early going after delivering a top line number. it went up 61% and they use increased as well by $17 million but then the stock weakened during the course of the day i was hearing various things about after the call there was some conversations that somebody was having with analysts it seems to be perhaps indicating costs would be higher

than maybe anticipated this morning when you look at the challenges of price targets, most are down a bit. very small changes overall $5, $10 here or there. but today alibaba is up. of course, it uses proxy in terms of where things stand between china and the u.s. in the ongoing trade tensions the vice president of the company addressed that on yesterday's call trying to make a point that we aren't as beholdened to tariffs as perhaps the market may think. mike, it was kind of weird yesterday watching that stock sink after what was, at least on the face, a strong run. >> yeah. people were grasping for why, as you said a little bit of chatter but the president saying we're going to take a hard line the stock went down before the comments came out. it's sentiment driven now. it's about flows into and out of the emerging market indexes, china, and this idea that, look, there's a trading like bear

market type stocks now which means that rallies get sold and the recoveries are a little bit fragile the spread between the other massive global kind of faang like tech platform stocks has been tremendous. >> i was going to look at autodesk. >> soaring. >> the biggest gainer last night after the dow. up about 13% also up 40 some percent year to date you know, this is kind of subscription software. it's a lot of those trends that we talk about that are, you know, right in there it's at $35 billion market cap. >> there was a time it's awhile ago. it's a success story, you can argue, in terms of activism. there was some activism there a couple of years back at this point. maybe even more. but, you know, a company that had underperformed in terms of the profit margins people felt like had a strong franchise and it wasn't fully exploiting i'm not sure if they changed out

the ceo or not, mike. >> yeah. >> it's been straight up for two years. >> yeah. it was sideways for years. it clicked into a lot of those trends that, you know, that is working. >> speaking of it. biggest winners are the chip stocks nvidia and amd. >> assuming cramer would be talking about his favorite woman lisa sue. >> right and his dog. >> amt is a move it's up 85% for the year it puts you in mind that vintell is there any shift going on. it's a 20-year-old conversation. >> right amd is smaller these days relative to the big guys in the group that, yeah, it had the amazing move it's been trading at new highs lately while the semiconductor index hasn't it's a $22 billion market value. >> they're not all winners gap is down 9.5%

reporting earnings last night. it's a break down. gap, old navy, banana republic banana republic and old navy are showing positive comps the gap brand isn't. it's falling 5%. it's been a disappointment and one of the biggest losers for the week down for the year, as well elle brands had a tough week down 15% on the week. >> interesting to know it's down yet again today. not to forget whether it was children's place, kohls or tjx or lowe's or target it was a positive week for many of the bigger names but l brands and gap >> we talked about it, you know, with regard to gap last night, sara, it's kind of -- it isn't necessarily the one you want to own to benefit from a consumer boom they're kind of a retailer for bad times. it's basics. it's value

and there's too many stores. and the gap brand, like you said, is the one that acted as this anchor. they focussed on lots of cash flow it's not an expensive stock. but not a lot of growth leverage. >> so beyond some of those movers, everybody is talking about jackson hole we are expecting fed chairman jay powell to speak top of the hour about 20 minutes is the economy is the strength we're seeing durable? because of the fiscal policies stimulus injection we've seen. steve liesman has been having conversations with regional fed presidents all morning here is loretta mester. >> it could be a risk to the forecast that's the way i view it at this point. we don't free judge things we come in looking at what the data is telling us and sort of calibrate our policy to it i don't think we can say now where interest rates will necessarily be a year from now i think we have to look at how the economy evolves.

>> gets back to the question we saw 1% economic growth. things look pretty solid again durable goods today were over all strong gauge of business investment how will it affect the fed's policy when it comes to tightening interest rates? how long were the stimlative tax cuts and deregulation going to last big debate. >> anything we find out about the unwind of the balance sheet at all >> not much news there it's slow and steady as they go. the market is absorbing it pretty well. >> i find it ironic because coming into the year the fed is reducing the balance sheet treasury will issue whatever we're going to be swamped. >> no one is going to buy it. >> right and now people are explaining the low yields in 10 year treasuries say it's a scarcity there's not enough to go around for the long-term buyers of income so, you know, the market kind of dictates the narrative not the other way around. >> all right we'll get to bob he's on the floor.

he's got more on what is moving this morning bob? >> you know, you can gauge the markets' movement this week by watching the dollar. generally the dollar has been weaker this week exception was yesterday when we had tariff discussions, predictably the dollar went up predpli p the industrials we saw emerging markets weak take a look at today what we've got. generally, again, you have the weaker dollar. so all week metal stocks have been doing better. emerging markets doing better. the south african and brazilian etf are higher commodity base of sectors like energy, generally, have been doing better this week and i think the very important component of why we've held up 1.5% or so on the s&p this week is tech. semiconductors are back again this week. that's a big support for the market and we have something a little unusual. retail is not doing as well today as you heard everybody talking about. a little tough day today with

gap missing on the comp store numbers. we had footlocker missing on the comp store numbers ross stores a weaker forecast. but ross at a new high along with nordstrom they've been holding up pretty well buckle overall had pretty good retail numbers mixed for the week target, walmart, williams sonoma pretty good. the market trends, though, overall look, i agree with everybody. no roll over here. we're up half a percent for the week the volatility we're sitting with the vix at 11 right now near 12. the dollar has been weaker generally. retail has been a big leader all though we may have pushed retail as far as we can. semis are back commodity-based stocks are stronger to weak and the laggards are the defensive names. staples and utilities. nobody worries when they're the market laggards. elsewhere, we've got morning stars semiannual report on how stock pickers are doing against the passive guys

it's not a surprise. it's dismal again. it's been a story for many years. here are the numbers 36% only 36% of active fund managers in stock funds outperformed a passive peers in the last 12 months that's the period ending in june that's pretty bad. it's worse because a year ago it was 43%. that was pretty bad. people debate this endlessly about active versus passive stock. there are a number of reasons that are very obvious that make it difficult for them to outperform number one, cash if you have 5% cash on the sidelines in a rising market, that's a performance lag secondly, you could have a wrong mix of investments but the most important reason you get these underperformance is fees. the highest hurdle in active managers face is their own fees and compensation it's very simple if you're charging 1.5% and the competition is charging 0.5%

over time, that is a huge difficult hurdle to overcome here morning star's conclusion, this is not a new one they've been saying for a long time investors would greatly improve their odds of success by favoring low-cost funds, which succeeded far more often than high-cost funds over the long-term. mike, i would note that morning star does not just mean active investors. they're talking about active and passive investors. you finds funds that you believe in and go for the lower cost fund whether it's active or passive and there are studies that indicate clearly the outperformance long-term right now 77% up. >> appreciate it time for a closer look at oil prices been a strong week there jackie deangels.

the support the upside momentum strong this week the market saw a draw down in inventory on wednesday it wasn't expected summer driving is coming to a close, prices haven't been bothered by that the headlines this morning focussing on international supply iran sanctions it's not something we haven't been talking about for some time it's priced into the trade but as november draws closer, the market seems to be rethinking and bracing for the shortfall we could see in the fourth quarter. the dollar is a little weaker on the fed news out of jackson hole that's supportive to crude oil, as well. wti seeing about a 5% jump and brent almost 6%. guys >> jackie, thank you coming up, millions of reasons for tim cook to celebrate as he turns seven years as ceo of apple. we'll have the details straight ahead. as we head to break, take a look at the movement in treasuries this morning.

higher yields across the board rick is off. 10-year note yield 2.85. we'll be right back.

shares of apple soared more than 300% since tim cook became the company's ceo seven years ago. stocks performance has resulted in a massive payday for cook, as well we go to josh lipton in san francisco with a closer look. >> tim cook is about to be $120 million richer today the ceo stands to earn a total of 560,000 shares as part of his compensation plan half of those shares are tied to the company's performance compared with the rest of the market performance criteria that cook requested multiply that 560,000 by the share price that's how you get to roughly $121 million apple is up nearly 35% in the 12

months tim cook at the helm of apple for seven years when he took the reigns, the company was worth about $350 billion this month, a historic milestone. the first u.s. company to reach a market value of $1 trillion. cook has launched new products like the iphone 10 and whole new product categories, too. the watch, air pods, and home pod. and used his company's cash pile on a significant program of buybacks and dividends in all, cook's realized take home pay $702 million. what does he plan to do with the money? cook has made it clear he plans to get most of his wealth to charity. in fact, just this week, cook donated about $5 million of stock, according to an fcc filing back to you. >> thank you it's amazing when you think back to all the angst about tim cook's assumption of this job by

investors and everybody. >> yeah. >> it was not an automatic thing, too some people wondered what he saw there as to pick the manager of operations, which some thought was a more appropriate successor. it's gone pretty well, i think it's fair to say and not a lot of people raising apple's $7 billion plus in compensation >> there are founders, a lot of them, the numbers get so enormous and they didn't have an incentive clause for the trillion-dollar market cap >> it would have to be completely changed if there was a change in control, his employment agreement, one of any number of possibilities. >> he's only 57, and obviously doing a good job, but it's a

subject the company doesn't talk about too much >> no. i wonder how many billionaires have been created who have just been employees it's a fairly small list >> speaking of well known technology executives, stay tuned for our interview with former cisc oro ceo. as we head to break, take a look at the top performing stocks in the early session here of the s&p 500 autodesk is up 20% netflix is right up there, 3% higher "squawk on the street" will be right back great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does.

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cross. >> a moose or an elk. >> but the title of the speech is monetary policy in a changing economy, so we could potentially have any headlines on inflation, economic outlook always important to monitor what the fed chairman sees so far jay powell has been succinct, he's been direct and he hasn't moved markets a whole lot, because he's been transparent. > >> not to mention his gray hair looks fabulous >> jay powell? you're obsessed with hair. >> waiting for the walk. >> we'll get an in person confirm from liesman from the

jackson hole summit.

welcome back to "squawk on the street." from post 9 at the new york

stock exchange fed chairman powell's speech in just over two minutes. s&p 500 up over .3%. definitely a cyclical bent to today's rally. you've got groups like energy, materials, technology, financials all higher, yeelgiel are higher, the dollar's strength has been a headwind for stocks >> reversing yesterday's defensive tony, but markets kind of comfortable in this range from the s&p 500 in terms of powell, december, in terms of a rate hike probability, there could be some play in that -- could be a headwind for the economic growth, the emerging market

selloff, we saw the decline of turkish lira last time the fed had their meeting. the traditional line has been, we focus on thedomestic economy, unemployment rate below 4%, looks pretty good. gdp, 4.1%, looks pretty good and that really has been the basis of fed policy. we have that breaking news out of jackson hole. steve liesman, what did chairman ja jay powell >> fed chairman jay powell will say that gradual rate hikes will be appropriate, and there does not seem to be a serious risk of overheating in the economy powell says this despite going on to say the u.s. economy has strengthened substantially most people who want jobs can find them and that he expects strong economic performance to continue if that does happen, in other words if the forecast of the federal reserve at this point comes to fruition, gradual

issuance of the funds rate will be appropriate he says the fed will do whatever it takes in quotes, if the inflation becomes unanchored but he goes on to say, there is no clear sign that inflation is accelerating above the fed's 2% target he does see some risks out there to the economy let me go over what those are. he says real wages have grown slowly, the economic mobility has declined and the federal deficit's on an unsustainable path and he did say that it doesn't look like monetary policy will change any of the conditions out there. with with a history of getting certain critical things wrong, like the natural unemployment rate, like the natural interest

rate what does the fed do in that situation, particularly in an environment right now, where people say there's no inflation, why are you raising rates and look how low the funds rate is he said the best thing to do is to raise them slowly and gradually and that endorses the fed's policy right now of raising rates gradually. >> it sounds like it's a lot of topics and headlines that the market cares about, inflation, the economic growth, policy normalization, but not much in terms of the change in expectations >> how policy should go, he has his forecast for the economy, that hasn't changed much, and by the way, as you have heard from several of our fomc guests they're not changing either. despite the stronger growth, there's an expectation of a decline in growth, there might

be a difference between -- powell says he expects strong growth will continue, i will note he does not want put a time or a number on that. but he does change his rate. to me this says, september's on, november's very likely and then there's what happens next year and the neutral rate 2.5% is what the fed is looking for. that means the fed has some work to do after december, but not a whole lot. >> the idea that powell is putting out that that he does expect strong growth to continue, without really imminent risks of overheating, it's not exactly as if he's saying we can pencil in goldie locks forever. and by the old rules, we should

have a lot more inflation than we do. there's some productivity revolution going on, but something about the economy has changed and forcing us to have some humility and flexibility with how we go about setting interest rates. >> the problem is, mike, most people don't know how ridiculously smart you are, michael. the fact that he goes through the mid 90s alan greenspan which is to look inflation in the eye in 1996. despite the conventional wisdom. he mentions that example directly as a potential error for the federal reserve, and i think that's extremely instructive for understanding that powell does not want to go any further which is there's a certain sense to this speech, which says why it may be a good idea to have a

noneconomist as the fed chairman because he takes a step back, he goes to this 30,000 foot view, he goes through the errors of the federal reserve. he sounds as if he doesn't have a dog in the race. my commitment now is not to repeat the errors of the hub huberous that he didn't know so well >> when it comes to inflation, little more than five years ago, when he talked about maintaining the euro >> so, again, david, that's a great point to make. he uses that language, and that

language is pregnant with echoes of the -- sorry to mix the metaphor there, trying to get with the echoes of the financial crisis in the sense that the language he used in a crisis, the same language whatever it takes if inflation expectations become unanchored to the down side or to the up side it's not a whatever it takes saying i'm concerned about a crisis and i'll do whatever it takes, he says this is what will happen if we get inflation pressure either way.

>> i think this notion that doesn't see the risk of overheateding, he's doubling down on the strategy of the federal reserve at the moment. which is to move gradually and despite the strong growth. look, sarah, i believe the great challenge for powell, as every chair and chairman has faced a great challenge, the greenspan challenge in '96, or, say, even the bursting of the tech bubble. powell's great challenge is going to be out to incorporate this wave of fiscal stimulus into the monetary policy at the moment, he's not blinking, and what he's decided to do here, is if he has an inflation program, that's where whatever it takes comes in if the fiscal stimulus moves us to a place where we're concerned about, that's when we'll do things i think you're right, there's a

dovish outlook, despite saying that we have strong growth now and he sees strong growth continues. >> steve liesman, thank you. joining us now is principal investor ceo and market's chief u.s. economist economy looks good, says chairman powell, michelle, and doesn't see an elevated risk of overheating. is this a green light for the markets to keep doing what they're doing, buying stocks, selling treasuries >> here's the thing, i think it's a really important speech, because, you know, the question that we keep asking is, what happens after the funds rate gets to neutral. and ultimately, i think for the markets is the most important question and what we heard from chairman powell today is that this fed is not going to be pre-emptive, in terms of taking monetary policy into restrictive territory,

lifting the funds rate above the neutral rate, unless there is a tangible reason, an actual inflation overshoot that would justify the move i think that's a really important development, getting to neutral is one thing, you stay on this gradual path, but once you get to neutral, i think the fed becomes much more conscious, even if the economy remains strong, i think the fed gets much more cautious about continuing to raise interest rates. >> there's a gradual path of elk or moose. jim, your take away from what powell said? >> you have massive -- increase

in product and service quality and that means that the cap the right on inflation, which is why i think chair powell is right to say that he sees no signs of overheating in the u.s. economy. i think they will and they probably should make another rate hike in september but i think if they do one in december, they're getting into the area of potential policy error. i think they're running the risk of tightening too fast and producing an inverted yield curvi curve, so i would think that the odds are the rates are going down treasury yields going down a little bit, the dollar weakening a little bit, is probably rational to that context but my overlay is the fact that this is under estimated by the fed is what's going on in the microeconomy >> it doesn't seem like in this speech trying to finesse exactly

what rate hikes do to the treasury yield curve, as some policymakers have done directly. not telling us inflation is going to hit escape velocity, how does that play into next year, do you think >> i think it's actually the same sort of ideas, we talk about whether or not you lift rates above neutral. i think that if the fed needs to keep hiking rates, and the consequence, you know, is an inverted curve, if they end up having to raise short-term rates over long-term rates to do so, to go to that extreme level and put potentially the economy at risk. given the historical relationship there needs to be a reason, they're not going to take action that would invert the curve pre-emptively, i think it's the same sort of message, and i would just add on to what steve said and the other guests, in terms of the technology and the

comparisons to the is t1990s anh role of fiscal policy, this is what i think economists are missing as well. the stimulus we have gotten from the administration, has really been focused on the supply side, it has encouraged businesses to invest in technology and investment and that's where you can really see the parallels to the late 1990s >> to what extent, jim, is the market pricing in the fiscal policy boost, and how much do you see that figuring into the corporate earnings momentum we have been seeing >> that's a really interesting question we have had two really interesting quarters for u.s. profits, symbolized by the -- it still hasn't gone up much, why is that? i think it's apprehension about

some of the political things coming, and the elephant in the room has to be tariffs there is a risk here that tariffs or something like it in the geopolitical background turn into something that slows the economy, and that's how you would end up with an inverted yield curve. i give that a very low probability. i still think there's intent on both sides to turn the tariff debate back to free trade, but i still think that is a risk that investors have in mind and that's why the u.s. equity markets haven't gone up as much. >> jim, michelle, thank you both very much for reacting to powell's speech and the markets. guys, just going through the speech right now, it's a thoughtful look at what we debate here every single day on cnbc, and powell says two major risks, we could move too fast and needlessly shorten the expansion or cut it off, versus

moving too slow and risk destabilizing or overheating, and that's why we need to walk this fine line and it's a thoughtful look that the market appears to like on why they're moving gradually, one or two more rate hikes this year. >> he's attempted to present these choices as somewhat common sense based, not doctrine air, it is sort of consistent with that, and it's kind of let's not pretend we want to kind of instruct the market how it should behave, we have to take the signals and the data >> even though this is the first public speech since the criticism, but we'll get into the debate about why they're going at the pace they're going, which is something that trump questioned >> and more characteristic of someone who is not an economist but perhaps participated in the real world in the capital

markets for quite some time, did mr. powell when we come back, trade troubles as talks between the u.s. and china don't really go anywhere for now we're going to discuss what's next for the negotiations and keeping america competitive, former ceo of cisco systems, john chambers. and take a look at three big retail movers in morning, not going down, at all we have a lot more "squawk on the street" after this aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com.

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call it a trade war impasse, as trade talks between the u.s. and china come to a close and nafta negotiations set to continue into next week. here with us to talk about it all, president of the american actions forum, and former he head -- where do you think this leads to the u.s.-china equation, these reputedly low level talks, trying to get some process under way, not really bearing obviousfruit and here we are with successive rounds of tariffs kicking in. >> i think it's going to be a very long and potentially difficult road ahead in terms of where we go with the talks this is the first step, we're engaging and i think we're going to continue to engage. the issue is we have a long-term

investment with china, in terms of the investment relationship with the bush administration, we thought dialogue and talk would help to heal that, but it's clear that additional actions need to be taken and i think that's what this administration is doing and there are additional actions that need to be taken by china. >> not sure how much flexibility they have shown in continuing those things intellectual property, none of which necessarily would help next year's trade deficit to move one way or the other. which seems to be the president's objective. how do you square those things >> it's difficult to square, but i think it's a long-term objective. of course you want to address the trade deficit. i think the way you address that is making sure that china behaves in a fair manner, where it concerns investment policies, where it concerns trade policies and it's a long roadto change their actions and it's going to

be a long raoad to trade balance technology transfer, overcapacity and unfair trade practices. >> doug, does the president need a win on china or some of the other negotiations before the midterms or not? >> i think he needs a win, i do. tariffs are damaging there's no way around that the administration acknowledges it every day when it says this is a good time to be doing this. but the stated reason to self-inflict this damage is to get better trade deals, they need proof of that concept, they needed it in nafta, or they needed it with china, they have yet to be successful in that in every way. the clock is ticking on that, people are nervous about the implications of using these tariffs as a tactic in trade negotiations the fallout on the fed and other

policy decisions is real so i think they do need to get a win. >> nova, another fallout here seems to potentially be in the area of mergers and acquisitions the new law giving sifius broader powers, coupled with china's ability to improve qualcomm's acquisition -- even though it didn't have a lot to do with chandleina, it did haveo with 5g. >> i think the new law is meant to address some of the ip and intellectual property and critical investments that china was making that were not being addressed by the process china has to understand that things are reciprocal, where it concerns trade and investment. look at the investments that our

companies have tried to make, either google, uber, facebook, china needs to balance that equation and needs to address the theft of critical technology and acquiring critical technology companies, i think this will set the rules by which each country will understand how to play by the rules, and investment will not be in the long-term affected >> it will be affected long-term, why not >> well, i think investment is something that is a necessary driver of both economies i think both governments realize that and we're going to continue to see investments. i think it's just addressing the rules of the road and we'll be able to see a continued open investment policy here in the united states and i think china understands that, it just needs to make sure that it addresses it's open investment policy. >> just to put a little bit sharper point on this idea that perhaps the president should

move toward a win. what's the shortest distance to a potential outcome that looks like a victory here? is it just a deal with mexico on nafta or something else? >> i would take being able to move forward with south korea, for example, that was supposedly a deal that got struck, the threat of auto tariffs stopped it in their legislature. mexico is the most obvious target at the moment, bring canada in, so i look forward to seeing what kind of agreement we actually see announced, if it's announced early next week, is it an agreement that you could see going through the congress, or does it contain the kind of poison pill in investment state resolution, or sun sets that would make it a nonstarter is it a real deal? >> everyone what's been involved in this trade stuff for many years says it's a long laborious

process and now we're doing it under hot lights we'll see how it goss. when we come back, jerome powell delivers a major fed speech, saying he expects gradual rate increases as the economy continues to hum along the dollar is a bit weaker, treasury yields are higher, but off the highs after that policy.

applying for some new trademarks like lol, on soap and cleaning products. nelson peltz said he would -- i'm told this is just the exploratory stage, they filed for some trademarks, which they

would need approval to have the exclusivity if they want the marketing or advertising or branding new product they do have a millennium product, because, you know, the kids aren't buying the brands that you've bought all your life, so they need some sort of -- >> if they have a millennial problem, i think they have to trademark certain acronyms that they really need >> nbd. no big deal. >> stock down 10% this year, big cap activism, tough to get done, we look at trying png and zte, hasn't gone the way they hoped >> the strong dollar is not making it any easier, so it's an industry wide phenomenon they did have that viral ads

smell like a man man, for old spice, or maybe something like that and the kids like the tide pods, unfortunately they were eating. >> don't eat tide pods ever. we have got to look at the link between chinese internet stocks. >> omg for those chinese internet stocks. alongside the green we're seeing in certain stock market sectors in the united states, those chinese internet stocks are in the green for today at least, the ticker kweb showed a bounce as the day started chinese e commerce giant alibaba. those shares are starting to

show some signs of gains here. al these chinese stocks have a long way to go to catch up to their u.s. counterparts. if you look at that trade shares, that first dow jones internet etf is up 30% year to date, versus down 13% from that internet fund we just showed you. so when it comes to this divergence, we'll see if there's any kind of narrowing and see if it comes to the down side for those chinese internet stocks. >> we'll see you soon, john, thank you. when we come back, ceo sending a letter to the president warning his immigration policies will ha harm - you always pay your insurance on time.

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good morning, everybody, i'm sue herrera. here's your cnbc news upcdate fr this hour. australian prime minister was ousted and scott morrison will become australia's sixth prime minister in just over a decade t-mobile disclosing a potential security breach that was discovered and shut down by the company. email addresses, phone numbers and zip codes may have been exposed, but no financial data, social security numbers or pass words were compromised and i hate to be the bearer of bad news, but forget about

having that cocktail or that glass of wine. there's a new study that finds drinking any amount of alcohol can be hazardous to your help. alcohol kills 2.8 million people worldwide each year, causing cancer, heart disease and road accidents. the study warns that the dangers of alcohol outweigh any potential beneficial effects and on a lighter note, the tv show bewitched is getting a reboot, the updates of the 1960s hit sitcom will feature an interracial couple the series is being created by the creator of "blackish." welcome back, everyone, to "squawk on the street," i'm sarah along with david about an hour into the trading session, we have seen stocks

which were already higher add a little bit to their gains avenue chairman jay powell started speaking at jackson hole dollar weaker, that was the other big take away, dow is up 100, s&p 500 up .4%. he said the economy looks strong, cited strong solid house hold and business confidence rising incomes and fiscal stimulus he said there's good reason to expect that the strong performance will continue, but doesn't see any signs of overheating and therefore, says it's appropriate to go slow and steady doesn't do much to change the outlook on interest rates until the end of the year and the market is celebrating that >> doesn't seem to be. without a doubt. today, apple's tim cook celebrates seven years, the ceo of what is now a trillion dollar

market cap company weighing in on this, john chambers, cisco's chairman emeritus we got a lot to get through, i will mention the crickets, don't you worry. i might even eat one >> i want you outside your comfort zone >> i got the barbecue, i think i had the chocolate last time. let's start with cook, though, i know you're close to him when steve cook appointed this manager of operations, we know that that was probably the best pick he could have made, i assume you request agreagree? >> steve jobs was such a unique leader, and he felt strongly that tim would be his right successor, when you said the

shareholders up to 35 352%, the market cap was $369 billion, it's over a trillion today he's continued to invest in r & d, but what's interesting to me is he's a leader he's a role model for all ceos he moved on dividends and share repurchase that steve may not have done as quickly in his second year or third year into his job, he testified in front of congress about tax reform, et cetera and he was just brilliant he was not hesitant to just always do the right thing, even when it might not be as popular. and his public life and his private life blurred a little bit and he took the tough issues on social issues he's somebody that i would bet my life on in a second and i think he is the ideal ceo.

>> you know, interesting in particular how you point out how he's become more confident, certainly over time and outspoken in the job on that note, of course you and i believe mr. cook of course have rallied against some of the immigration policies of this administration give me your sense of where you think the country is going on immigration and why you think that might be the wrong path >> i think the letter you're referring to is the business round table. that was larger ceos who signed it i agree with the letter, it basically said on green cards, do no harm as you make immigration reform but the nice thing about not being a ceo of a large company i can be very, very direct in ways that perhaps others cannot that's more of a symptom, the symptom is the u.s. is losing it's innovation engine, we're

not number one anymore, we're not in the top 10, our start up tension, we forget during the mid 90s, that number was 700 if we're truly going to create the number of jobs in america, 20 million to 30 million over the next decade, including those jobs destroyed by high-tech and innovation we have to get this engine going much faster. in my 16 startups i'm doing, interesting enough, a lot of the engineering talent, unfortunately, we're just not going to asia and china for this and india. and in france as an example, they have a visa for high-tech immigration into their country that should be the u.s. model. so rather than dealing with the symptom, i.e., do no harm, let's fix our education system, let's

get start ups going once again and let'sbecome the start up nation once more >> you've mentioned this lack of innovation or your concern about it a number of times, and many in the business community might not be aware of it when i go to palo alto or anywhere near your area, i see new people thinking as pioneers. so what is your evidence that we're lacking in startups and is it perhaps in some way a reflection of some of the dominance of the key providers of technology services overall in this country? >> the data on the startups is that we're very close to a 20-year low, and the ipos, as we discussed are kind of the tip of the iceberg, so 700 in the mid 90s, we were generating tens of millions of jobs if you have a really great idea,

money will fall over itself. i have two unicorns in my portfolio, but we don't have the breadth of startups, and it's primarily silicon valley, texas and new york we have got to have a startup engine that steve and others have said, in all 50 states, so we need to literally increase by 50 fold not just the ipos, but the startups and what we need the brilliant engineers. the second part of your question is the large companies are starving for innovation. and they don't move at the speed of a start up, and you see a great company like boeing, suddenly partnering with a spark cognition company in texas of only 200 people, to design the next faa implementation of unmanned aircraft. and what a company of 200 can do

with a brilliant engineering lead by amir, that they can partner with a large company, speaks to the ways that these companies are going to use these startups in ways they haven't before. >> do you think the trump administration is going about it right when it comes to protecting our ideas and innovations from china, expanding the powers of sipius under the u.s. treasure, and also going after china specifically with these u.s. trade negotiations is it tackling the right problem and is it doing it effectively >> like i said, it's fun to be a startup where i can say -- over the last decade, the relationship has moved from a win-win relationship, to it's almost a win-lose and i think we have got to get back to equal

footing on that, so i think the importance of how do we get this relationship back to where both sides win is right, i would like to see us do it a little bit more gentle and i would like to see the two leaders sit down and figure out what to do together i think the more effective model would be what's occurring with india, between congress and the administration and prime minister modi and his team i think that most strategic relationship in the world should be india and i think you're going to see india do over the next decade that we saw china do in the last two. >> john, i know you're particularly concerned with -- in part in terms of your experiences, growing up in virginia, what is the typical lack of perspective that business leaders have when they lose the lead, so to speak, and lose that ability to innovate?

>> you nailed it, david, it's exactly what tim cook has been able to overcome the most important thing is you deal with the world the way it is, not the way you wish it was. you focus on market transitions. the worst thing you can do is to continue to do the right thing just a little bit better you've got to disrupt yourself, you've got to listen to the market, you've got the listen to your critics and every leader will get knocked on their backside. and that's the wayyou build a great leader it's true of what cook has done and what elon musk has done at tesla. i went through that in 2001 and he called me up afterwards and i said boy, it's the worst experience of my life but it made me a better leader and it made cisco a better company. 1,000 high-tech companies,

there's onlyi inone or two today that are in technical -- this has to be inclusive across our whole country, every company in the world would have to be a startup company. if we don't get our universities sta partnering with the business community, our nation will fall behind and we have got to realize, we are behind i think there's kind of a naivety to say that we're going to keep on >> they're good. i think sarah's going to have some too >> i'm not but 6 graham grams of protein t bad. >> john chambers, thank you. >> good to be with you all as we head to a break, take

a look at the nasdaq composite, it's hit a record high the first, since jewuly 25 it is also buffet's 88th birthday that day. you won't want to miss it, next thursday on squawk alley at 11:00 a.m. eastern time. "squawk on the street" will be right back

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the retail rally certainly heating up this summer find out which one is going to be the next to break out more "squawk on the street" coming right up.

news >> news alert on the president >> allan weisulberg, the long time trump organization cfo has now been granted immunity by

u.s. prosecutors in the michael cohen investigation that's according to sources. the president. mr. weisselberg earlier this year was subpoenaed to testify before the grand jury in the michael cohen probe. he has now been granted immunity he is the long time trump organization cfo guys, i'll send it back to you. >> another interesting development. what a week. thank you, sue herera. doesn't look like it is having market impact. we were watching, mike, for potential reaction of the president's legal troubles >> often points. we'll see. >> up higher on powell, lower on this news. jim stewart joining the conversation "new york times" pulitzer prize winning author, columnist, reporter welcome back good to see you. >> thank you good to be here. >> we're seeing the other melt up in stocks nasdaq at a record, index of

small caps set a record. chairman jay powell says the economy looks pretty good. that's set to continue gradual pace of interest rate increases. what do you make of it all >> and we also passed a milestone that this is the longest bull market ever, with an asterisk depending how you measure. a lot of people would ask me how are you reacting to this while the milestones are interesting, i don't think they're cause for any significant reaction because stock prices are based on valuations, future earnings. i think one thing we have seen, maybe why the market is continuing to rise is that earnings since the last peak in january have gone up a lot more than the stock market. this is one of those unusual periods where price earnings ratios at many companies are contracting, even though stock prices have not gone down. only two ways they contract, which is either earnings go up or stock price goes down i think that's actually very

ea encouraging. expected future earnings go down because of recession, interest rates, some combination of the two. i don't see any of that on the horizon. >> you did your share of reporting on law enforcement and legal issues i would like your take on weisselberg being granted immunity and how you see this unfold from your perspective as somebody that has covered that side of the story often. >> yes, many times i mean, this story only has one ending in my experience. when you see this many people cooperating, they don't get immunity because they're nice or promise to tell the truth, they have delivered something concrete and in return they get the immunity you can call it flipping frankly, people that are honest about things deserve credit for that and that's their obligation as a citizen to tell the truth, but the fact is they delivered

something of value to prosecutors, and it is all marching up to the president we're going to have to wait and see, but the pattern is looking ominous to me. >> the president says if he is impeached, the market will crash. do you agree with that >> i doubt that because as i just said, the market is about earnings one thing i love about the market is even i, we all get caught up in some events, oh my god, the market will crash or soar and it doesn't do anything. that's because this doesn't have any immediate effect on what the market should be focused on, is focused on, which is earnings and the economy. >> part of that, confidence levels are high since the president got elected. consumer business, investor. and we have seen that manifest in economic numbers and in corporate numbers. i guess the question is what happens to confidence if that were to come about.

>> we don't know that he will be impeached. >> of course. >> then we would have pence stepping in. he is not going to roll back tax cuts maybe he will do something about tariff wars and ease off that, which i think the market would like i just think it is hazardous i have never made an investment decision based on political considerations and i never regretted that. >> good to get your perspective as always. jim stewart. dow up just off the highs. >> bitcoin prices are as volatile as ever in the documentary, bitcoin, boom or bust, melissa lee looks at the crypto currency look at jordan belford explains why he thinks bitcoin is a scam. >> i was a scammer i was. first to admit i understand the seedy

underbelly. >> jordan belford, the wolf of wall street. if you've seen the film, you know he served nearly two years in prison for securities fraud, money-laundering now he says he is a changed man and is sounding the alarm. >> i say most of my firm was legitimate, but a portion of my firm that wasn't that portion was based on manipulation of stocks and i had it down to a science and it is exactly what's happening with bitcoin. there's two things that dictate manipulation number one, you have to create demand back in the day i had an army of people, all around the country and world, convince people to buy stocks >> what this trade will do is serve as a benchmark for future business. >> now what you have is they create demand by social media,

and that's all fine and well, but the only way to manipulate is to control the supply, and bitcoin especially, very large percent is owned by a small number of accounts we don't know how bad it is. for the average person who is really with a good heart, walks in, saying i do it because i believe in it and the long turn them, [bleep] run. >> going to hear more from the wolf in this documentary watch bitcoin, boom or bust. it premiers monday, august 27th, 6:00 p.m. eastern, 3:00 p.m. pacific. visit cnbc.com/boomorbust for more sneak previews. later on "closing bell" mike and i will be there and cathie wood tesla responds to an open letter she sent asking him to not take the company private. we're going to talk to her about that. up next, the ceo of intuit,

brad smith stepping down from his role at the company. "squawk alley" is next

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good morning it is 9:00 a.m. in jackson hole,

wyoming, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ ♪ whatever it takes because i love the adrenaline in my veins. ♪ i do what it takes because i love how it feels when i break the change ♪ whatever it takes, you take m to the top, i'm ready for whatever it takes ♪ because i love the adrenaline in my veins. >> happy friday. welcome to "squawk alley." jon fortt. morgan brennan, david faber. we have a lot to get to this morning. we begin with the fed summit at jackson hole fed chairman jay powell wrapping up his speech. steve liesman is there live in wyoming, joins us with his reaction good morning, steve. >> reporter: good morning, jon, thanks very much fed chairman jerome powell in his first speech as fed chairman