"squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's check out the u.s. equity futures. the picture for the markets was mixed yesterday. we have been looking at green arrows this morning. we've seen moderation of those advances as we hear the news that we'll be talking about about president xi planning to present terms to president trump in osaka for what it would take to bring them back to talks. futures have given back some gains. dow futures indicated up by 16 points s&p up by 6.

the nasdaq up by 19. let's look at what happened overnight in asia. the nikkei was up by 1.2%. hang seng was up sharply it was up by 1.4%. the shanghai was up by 0.7%. in europe, the early trading that's taking place there, you will see a mixed picture the cac and the ftse both down by a third of a percentage point. dax is flat. stocks are higher in italy and weaker in spain. then in the treasury market, if you want to check things out, the ten-year actually staying at 2.045% president trump arriving in osaka, japan moments ago just as the "wall street journal" came out with a report suggesting that progress on a trade deal kayla tausche is there on the ground she joins us with the latest this morning >> andrew, it's president trump's third g20 summit as

president. his third visit to japan as president. and perhaps the highest stakes yet as he holds several bilateral meetings, not the least of which with president xi jinping where we learned that the "wall street journal" is reporting according to chinese officials that president xi plans to present terms to possibly settle the trade dispute going on between the two countries for more than a year interesting those headlines hit as president trump is arriving at osaka, stepping off air force one where he's heading to a dinner with australia's prime minister where you can be sure china will come up australia is reliant on business with china but will likely offer a word of caution to president trump as it has tried to become less reliant on china haven't yein recent years that meeting will take place on saturday it will take about 90 minutes. that's how much time is allotted in the schedule for what president trump has called an

extended meeting between the two leaders. here's what else is onthe schedule for president trump at this g20 osaka summit. four working sessions with leaders for all 20 countries he's going to be having eight bilaterals not only with president xi, but with president erdogan of turkey, prime minister abe, chancellor merkel from germany and president putin from russia just to name a few then there's the question about the joint communique the white house says president trump is likely to sign that consensus document though it left some room hope for hopen f change his mind. >> kayla tausche, we'll check back in with her throughout the morning. >> interesting on this "journal" report just out saying here's some of the terms xi will be looking for. they want the punitive tariffs dropped, which is no surprise.

we knew that was coming. they also want huawei inserted into this. they want the ban lifted on huawei that brings up the question we asked question a lot of times, if this is a security issue or not, how do you solve that issue? it's been firmly wrapped up in the trade talks. president trump had referred to this in the past and said it would be on the table potentially. president xi now putting it front and center, which will lead to difficulties when we heard from so many government officials. >> if you end up reversing course, you'll have the entire sort of security complex saying what gives here. >> i should say deeper in the context of this "wall street journal" report is that president xi is not expected to take a confrontational tone. some of these issues being onerous, particularly the huawei ban being lifted the dow futures have dropped down to about 31 points below fair value after being positive earlier this morning i noted just before this came

out futures were up by 45 points or something but he's not expected to take a confrontational tone the "journal" article says china will sketch out areas where they could help the united states, too, including with both north korea and iran that's important to consider the security issues that go with that >> we will see what happens. we are also following a developing story this morning. we want to tell you about boeing during simulator tests last week the company and the faa discovered a new software glitch on the 737 max plane that could keep it grounded for longer. reports say it involves a software glitch related to a procedure that pilots can use in the event of an emergency. nbc news says boeing traced the issue to a microchip and believes it can fix the problem with a software upgrade. but there's a chance that boeing would have to replace the chip in all 500 max planes that have been built or delivered. that could further delay the aircraft's return to service the u.s. airlines including american, united and southwest

pulled that 737 max from their schedules through labor day. let's show you what's going on with boeing shares they are down a little over 1% on that news but perhaps the larger issue is there's some contention between boeing and the faa all over again over this issue. originally boeing effectively telling the faa that the opportunity for something like this or catastrophic and fatal to happen was so minimal that it -- >> good luck with that argument. >> the faa saying no and that creates a trust issue if boeing it pushing back at any point on any of these issues and is not the first one to say we'll fix this before anything goes back into service, that i think creates not just problems with the faa but also with the public >> i would say good for the fa asha for pushing on this, if they had not all the other regulators around the globe who normally follow the fshaa's lead would n

be doing so. >> where was sully -- not our sully -- >> captain sullenberger. >> right he was before congress he said unless you've been in that position where you -- >> a catastrophic situation? >> you have the controls with all these people riding behind you, you have no idea what the feeling of a -- when something appears to be going badly, you can't describe the terror and the panic. and you should not be in a position where that's likely at all where the new engine, wherever you put the engine puts you in a position where that's more likely. >> two unusual catastrophic events happening on this model >> and evidence of it happening more than once you physically have trouble pulling up >> the software glitch or whatever it may be, i think that had similar situations where it was bringing the nose down >> i can't imagine

let's talk about the wild ride in bitcoin in the last 24 hours -- for the last ten days really it soared well above 13,000 yesterday, then news hit that the website of the popular exchange coinbase was down briefly. that sent bitcoin tumbling all the way back down below 12,000 it moved $1700 in 15 minutes it's been in choppy trade every since a coinbase spokesperson told cnbc that the site was down for a short time due to high volume down below 12,000. we'll talk much more about bitcoin at 8:45 with crypto backer mike novogratz. amazon is announcing a partnership with rite-aid. it's called counter it will allow people to pick up amazon packages at stores the program is launching in 100 stores with expansion to 1,500 stores by the end of the year. amazon said there will be no

retail data sharing. shares of rite-aid plunging after the company posted a quarterly loss of 14 cents a share. that was 6 cents worse than the street was expecting we should point out that rite-aid's stock is down more than 80% for the last year it's market cap has fallen below 4$400 million check it out this morning, shares down more than 11%. this deal with amazon sounds similar to the kohl's situation. you can pick up your packages, and with kohl's you can return them there for kohl's, this actually helped customer sales were up about 8% in the stores where they started allowing that. >> before 6:10, we have some early outs lately. >> this is long for this week. this week it's been usually 6:06. coming up, much more on the breaking trade news that crossed the wires. president xi will reportedly present president trump with terms to end the trade war

the potential market impact next. and later, highlights from the democratic debate. we'll show you what candidates said about business, the economy and more a lot of people today just -- there's another one tonight, right? there's other candidates, right? as we head to break a look at the biggest premarket winners and losers in the dow. johnson & johnson is a baby company.

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recapping some news that just broke dow jones reporting that president xi is going to present president trump with terms for a deal and among those conditions lifting the u.s. ban on huawei china also wants the u.s. to remove punitive tariffs and the terms will reportedly be discussed on saturday. i was going to try to start this in spanish i know good day. you saw that part, right >> yeah.

>> did you see the look on some of the other people on the stage? >> cory bookerment. >> did you see cory booker's face and elizabeth warren's face >> i did i did. >> did you -- it was kind of interesting. they didn't know what was happening either did it help beto's cause >> it wasn't aimed at me i wouldn't understand it >> do you think it was just aimed at the spanish -- >> that's what they're trying to do >> what do you think >> he was trying to do it for a specific reason to show he can speak spanish and appeal -- >> he was trying to speak to people who speak spanish as well they had subtitles on the tape i watched this morning re >> really? >> subtitles in english? >> yes which helped me i was -- i'm not going to be able to do this. joining us now to talk about the

market impact of a potential trade deal -- i can't do that -- and we have mike santoli here. what is on your radar today? we hit the top end of things, now i don't know >> kind of sliding sideways here holding near the highs the interesting thing yesterday -- maybe it's a preview -- is just very indeck lev index level boring day all the cyclical stocks were up. semiconductors, transports, and then the safer things like utilities and staples got hit. it seems the market is spring loaded >> that a bet on something getting settled or moving forward with trade talks the sectors you mentioned are tied in with that. >> it's gotten very stretched in

the opposite direction so the defensive quality stocks have done well we're coming to the end of the month and the quarter. it's a natural time to rebalance. you had micron earnings, fedex earnings were excuses to do that i do think even banks did okay it's one day but that was the reaction. i think the market is hungry for a sign that there will be an excuse out of the trade talks to say fine, we can overlook the fact that maybe it will be a sloppy second quarter earnings season >> you, eric, listening to mike, my first question to him, you're there, aren't you, with the high end of something you think fully valued having trouble making advances near-term? >> at the index level. the key message is what's going on beneath the service the market internals are masking huge divergence. from an index level standpoint we're fading this rally into the

g20. we don't think there will be earth shaking news out of this meeting. in fact we think indexes keep going sideways with the volatility we see a lot of opportunity underneath that to take advantage of the shift in the market internals you see the difference between large cap and small cap. s&p is up. russell 2000 is down any time you get that divergence, there's an opportunity to take advantage of that divergence and play more attractively valued stocks that can still benefit from the extension of the cycle >> we had other guests this week say avoid international stocks do you think emerging markets are not to be avoided, but only because they're cheap. >> that's not a good enough reason on its own. however we expect the dollar to soften from here it's been ten years since we experienced a fed cut.

we forgot how impactful that is on certain areas of the market the dollar is off, but pro cyclical currencies are up bitcoin is up. we expect further softening of the dollar that will create interesting opportunities in local currency bonds and em stocks. >> the internationals outperformed the u.s. for the last couple of weeks it's been a very short per iod f time yesterday the china etfs were more than the u.s. index >> can we talk about the instant reaction to this "wall street journal" report. the dow is looking down 90 points, it was up, not a major move, but the knee jerk reaction was he's coming with settlement terms, maybe we get something sooner than later, but you read the terms and it's a high bar to jump over. >> they may be 90% done on a deal but the last 10% is big you think what are the u.s. administration's incentives,

they want to stimulate rate cuts they don't have a lot of incentive to get a deal done before july 31st, the next fed meeting. i think this continues on for a while. the best possible outcome is to delay further tariffs and an agreement to keep talking and hold off on tariffs. a lot of that is priced in >> i wonder if the call off the dogs on huawei is the -- >> that's the stickler if we said it's a national security issue, how do you just turn around and roll over? now that we didn't do that with zte. >> that's the issue. we did it with zte >> given the stance today, it's difficult to see now that you will go there first. >> there's language. it's a nuance. >> it's not all or nothing in the past we've said look, this is a real problem do you think huawei is going out of business and never doing anything again that's probably not going to be the end result >> no, i think you declare something a national security problem -- i could see how it

could be a national security issue. >> you couldn't before but now you think -- you said there's no evidence. >> there is no evidence as of this moment -- >> you shouldn't worry about it. eric -- >> joe -- no don't end the conversation there. you either have to decide -- >> you know the negotiation -- >> tell me what the nuance is. >> it's always been a negotiating tool always been a negotiating tool >> that's terrible >> in a perfect world. >> with a country that people describe as dangerous. the secretary of state sits here next to us, looks you in the eye and says it's a dangerous company and you say it's fine to be a nengsi innegotiating tactic >> i'm saying there's a way to make it less of a security risk. >> tell me how that works. >> i don't know the exact details of how you do that >> we have not found one guest on this show -- i asked that question for the last three weeks, any guest, thread the

needle, show me how you can -- >> you know enough about the details. >> i do. >> you don't think there's any way at this point we can -- >> i think you either declare it a national security problem or not. >> then there will never be a deal >> i don't understand how you can get there. >> there never will be one >> can we look at boeing shares? they're down 6%. that's what's adding the pressure to the dow. >> i saw the dow up 80 at one point. we're looking at boeing shares down trying to look for anything new. there is something hitting the wires talking about how the iata, the airlines, remember forcing their calls for safety regulators to cooperate on returning boeing the international airport transportation association is calling on max pilot training requirements to be added on to this that would add longer to the

timeframe before you could see the 737 max back in the air. this is something to watch closely today too. >> 355 at this point that's -- just do the math we would be up -- we were up 80. now down about 80. >> you could say it's trade talks, but if you look specifically it's boeing >> one easy way to put it in context, s&p futures are flat. that's where we are. >> right >> which is about right. >> eric and mike, thank you both >> thank you. more on "squawk" ahead new details on two activist campaigns, one a major oil company. the other a giant pharmaceutical and chemical company both stocks on the move. we have details after the break.

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welcome back boeing shares dropping sharply futures down by 78 points. booing is down so much it would drag the dow down 175 points itself boeing shares down 6.83% phil lebeau joins us from chicago. he has some of the reasons behind this big drop there are a couple >> right first of all, you talked about the new 737 max software issue,

which came out late in the day yesterday. you have to really look at why that came out. why it was leaked out. the fact it was leaked out indicates there's some separation between boeing and the faa as they look towards recertifying this plane, making sure everything is working as it should be on the 737 max that's one issue that started this why this is accelerated, the iata statement regarding when this plane is finally certified by the faa, which everybody expects will eventually happen, then the question becomes what are the requirements for training pilots? internationally there's a feeling not only among airlines but also among regulators that perhaps there should be more stringent testing and training with pilots that may include simulator time the reason that's important is because if you add simulator

time as a requirement for testing and training for pilots of the 737 max, you're talking about tens of millions of dollars. much costlier for airlines much costlier for boeing and it drags out the potential for getting these planes back in the air and the fact this came up at the iata meeting in montreal indicates this is still a potential issue out there that could delay or extend out how long it might take before you see the max getting back in the air. it could be costly not only for airlines but also for boeing >> phil, i know -- i want to go back to the beginning of this, the relationship between the faa and boeing and what seems like a continued left of distrust i think the issue is that that distrust is problematic and could spill over to the public then you have it with the pilots and everybody else >> right the fact is you and i have been in this business long enough to

know these things don't kind of pop up there had to have been some type of discussion between some parties where saying we think this is a big deal and some push back saying don't worry about it we think we can handle this. the fact that this leaked out late in the day ultimately prompted boeing to issue a security filing. they say this was brought to our attention. we're looking to mitigate the issue. you're right this gets right to the heart of that relationship between the faa and boeing and while publicly the acting head of the faa said we're working closely with boeing. it's a close relationship. the way this came out indicates something far different. >> phil, the iata represents 200 carriers how much weight and heft would them calling for pilot training have in this overall picture >> quilt te a bit it's ultimately not just the

airlines that they represent, but the influence that they have on international regulators. whether it's eosa, which is the faa counterpart for europe, the china civil aviation authority, the counterpart for the faa in china or in other countries. it's really china and europe those are the two big ones in terms of regulators internationally who are looking at the max and saying is there enough in terms of training for pilots we sit there and say we have older pilots in the u.s., they know how to handle these situations that's not the case internationally. there's a pilot shortage you have less trained, less experienced pilots who will be flying these planes. >> if i remember correctly part of the reason for boeing's decision in calling this the 737 max, even though it's a different airline, not similar to a -- a lot of changes in this airline versus earlier 737s, part of the reason for still classifying it as that is

because they didn't want to have to go through additional time training and pilot simulators. >> the whole certification process would have been extended if you said 100% brand-new airplane as opposed to saying it's a 737, but we're amending it it's a quicker and more condensed process, similar to airbus when it comes to the, a320, the a321 you don't have to go through the same level of work, if you will and length of time for certifying a new aircraft. >> all right phil, thank you. we appreciate it that stock is down by 5.8% right now. it is having an impact on the dow. we'll continue to watch that when we come back, when activists attack we'll bring you the latest on the campaigns at occidental petroleum and bayer. and much more on the breaking news that crossed near the top of the hour. president xi of china will reportedly present president

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back to "squawk box. carl icahn stepping up his fight against occidental's board let's get it over to brian sullivan he has more on this story. listen, carl icahn doing what carl icahn does he is on the attack. carl icahn owns about 1$1.5 billion of occidental. 4.5% of occidental's stock

he bought derivatives on may 21st and just converted them to common stock a few days ago. he says the anadarko deal was too expensive and lacked in his terms effective corporate governance what he's looking for are two things one, he wants four new directors. we don't know who those directors are that he wants out. the filing list has blank spaces replace blank with blank so it's fill in the blank. he also wants to amend the company's charter to try to make it easier down the road for shoulder how old isholders to effect change you need a majority of shareholders in favor to vote for a change if he gets past that vote, they would set a date to take potential action

back in may the lowest number any board nmember got was 71% icahn has to get a bunchhow old is share holders on board to set a date the oldest board member, spencer abraham joined in 2005, for an oil company, that was whatever, 14 years ago there's a lot of board members on companies that have been there longer occidental responded with we will review the latest materials filed by mr. icahn and look forward to addressing them in our ongoing conversations with occidental shareholders. >> okay. brian sullivan, thank you for that appreciate it. when we come back, more this morning. what is the upside for investors in lyft or uber if uber or lyft

win the race for autonomous vehicles it's a big question mark out there for a lot of invests we'll break it down for you next. and later, bitcoin pulling back overnight, down about 8%. we'll discuss possible reasons for the huge run up in the past few months with mike novogratz you don't want to miss that you're watching "squawk" on cnbc woman: my reputation was trashed online. i felt completely helpless. my entire career and business were in jeopardy. i called reputation defender. they were able to restore my good name. if you are under attack, i recommend calling reputation defender. vo: there's more negativity online than ever. reputation defender ensures that when people check you out, they'll find more of the truth, not trash.

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welcome back to "squawk box. the race for autonomous cars is getting more interesting phil lebeau joins us again with some breaking news >> today is when waymo makes it's vehicles in parts of phoenix metro area, basically chandler, tempe, other areas there, their vehicles will be part of the lyft ride share program out there. so if you are a lyft customer, we were out there over the last

couple of days to see how this would work, if you're a lyft customer within this geofenced area and you call for a vehicle, then you have the option potentially to have a waymo autonomous minivan pick you up as we've been out there, we've seen more and more of these minivans when you're in arizona, they have their vans that they have been testing for some time in the phoenix metro area they also have 1,000 early riders, these are people pre-screened who said i'll get in these vehicles. you have waymo's own ridesharing autonomous ridesharing company the fact they are make some of their vehicles -- were, there's a safety driver there in the driver's seat. they are not driving the vehicle. the fact they're on the lyft platform, as you look at shares of lyft and uber, this is the next step in the discussion about what happens and how far away are we from autonomous

vehicles being a big part of the lyft and uber platforms. we're a long way aways from that, but this is the beginning of we'll see more of this in other cities in the years to come as they expand these opportunities. >> i have three very quick questions for you. first, what i noticed on the screen is it said free >> no, that was because it was a test it was prelaunch so in terms of cost, that's a broader question there in terms of how much different will the cost be that was unclear when we had our discussions. >> there's no discount for being -- being one of the first in to try this >> i assume there will be some type of a discount there >> would you try it? >> i don't know. the second question i have, when you say it's geofenced, it's a small area how small of an area are we talking about? >> we're talking about -- i don't know, 100 square miles

talking about gilbert, chandler, tempe, and it's got to be a ride you're taking within that area in other words, if you're going from your house to the grocery store and it's within the area where waymo has been testing their vehicles, then that's a possibility. if you're saying, hey, i'm going up to -- somewhere way north of phoenix, outside the area, it wouldn't be an option. >> they do it in all weather do they do it in the rain and night too? >> yeah. yeah they have been testing their vehicles in the rain and at night, waymo has been for some time >> thank you for bringing us that news. some instant reaction on this and so much more. michael graham is here, managing director and senior equity analyst at concord is this game changing? >> it's a good step in the direction of autonomous vehicles becoming more important. the key thing is the cost to

operate an internal combustion engine vehicle with a driver on like the lyft or uber networks is over 80 cents per mile. the cost to operated an electric fully autonomous vehicle is under 30 cents per mile. as they can bring autonomous electric vehicles more into the fold and have those take up more of the rides, you can really bring the cost of operating these networks down. a lot of tensions to navigate in the short-term like how do you price a ride with an autonomous vehicle at 30 cents plus a margin and not undercut the drivers out there operating in the network now >> you have a couple things going on here. you will have a test driver. you have to pay the test driver, probably more than a regular driver you have the technology on board. that's an expensive vehicle to be in. >> it's so early now those costs are looking out several years. lyft has said that within ten years it wants to beable to

offer autonomous options for the majority of rides. you have that timeframe to go through. as we go through that timeframe the cost to build these vehicles and operate these vehicles will go down. >> how much are you worried that lyft is being used by waymo. that all these guys will be used by the manufacturer, and once the manufacturer figures out what they're doing, they'll try to get into this business? >> i think the hardware is way more at risk of being commoditized and jeopardized than the network the network is about building a liquidity of riders, bringing in data so you can price the rides, get the car to the right place at the right time. >> you don't think waymo is collecting this? >> waymo has a ton of data as well it's probably a good next step for them to launch a network >> you buy lift and uber at these prices >> definitely. they're in the early days of massively disrupting transportation they'll be leaders for a long time >> great to see you.

>> thanks. when we return, running against the trump economy. can the democrats do it and when we'll debate that next plus much more of the breaking trade news that crossed near the top of the hour president xi will reportedly present president trump with terms to end the trade war one of them includes roveming huawei's ban we'll be right back. r goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

all right, welcome back, everybody. democrats faced off at the debate last night. elan gives us the highlights good morning. >> reporter: good morning, the pundits will argue who won the debate it's clear who lost last night >> that is corporate america almost every candidate took a shot against big business, saying they're too powerful, have too much influence, there is not enough oversight. they promise to change that. >> right now we have a system that pays for access and

outcomes, that's how you explain an economy rigged corporation and the wealthiest. >> i see companies like halliburton and amson and i want to change that >> pharma thinks they own washington they don't own me. >> reporter: several companies got fame checks. corey burton mentioned haliburton and amazon. gm took a hit over its layoffs, purdue pharma got blasted over its role in the opioid epidemic. they mostly downplayed difference on how they would take on big business senator warren has her plan to break up big tax corey booker dodged questions. instead pointing to a bill he has that would prevent

consolidation in the agricultural industry. only one today his experience, that was former maryland john delayy, he called himself a job creator, positioned himself as a pragmatist and only spoke about 6 minutes and 40 seconds >> that's some of the least time of the candidates talking. for more on the debate and how they should run the economy. let's welcome the former new york state director currently with the city of the university of new york and also jessica anderson, vice president of heritage action for america. basil, jessica, thank you both for being here basil, does corporate america need to worry? >> i don't think it needs to worry. that's probably a little strong. i do think the candidates and if a democrat does become president, there will be some changes. you heard all of them talk about nikkei a income and equality and senator

warren got a lot of time if you saw the dynamic, the questions and responses center around her policy proposals. i think a lot of what's been thrown out will be pulled back a little bit if you are someone like a bill de blasio and corey booker, you want businesses to come into cities like newark and new york city so i think some of that rhetoric is useful in the campaign trail. i don't know how much of it actually becomes reality worrying, i don't know that they should worry, but there will be some changes, i'm sure. >> when the question is asked, do you want to get rid of private insurance? elizabeth warren raises her hands. >> and as did bill de blasio the only two to do so it's somewhat surprising because it seems like there are many other candidates that don't have as radical a view of overall healthcare so i think in many ways they are appealing to a general election audience and to be honest, i think that's probably where we

will end up if we have a democratic president. >> we started by saying that big business was the loser do you think -- i don't know i'm not convinced that that's the case necessarily do you think that that really does resonate with most viewers that the enemy i think deblasio said the enemy of everything that's happening is big business >> yeah, it's a mixed bag. a couple weeks ago, there was an economic conference in south carolina dedicated really to african-americans, if you talk to an african-american on the street, we don't hate big business we want to be business leaders also, entrepreneurs, the fastest growing of entrepreneurs is african-american women there is a way to talk that about more than fairness and dismantling everything. >> the government jobs that everything you know that helps with all of the, you know, all the services that government provides, they're paid for from the tax dollars from the private sector jobs that are created and

you tax those employees to pay for it, government jobs don't create the need to pay for themselves. >> i don't know that anybody e anybody was talking about necessarily expanding government but i think the fairness issue is important if the reports are true that i think oxford economics came out with this report by 2030, 20 million jobs across the globe will be lost to automation i wanted the candidates to talk more about that, so the economic safety net, not having to do when titlement programs. >> talking about the xi being not in a place where people would like it to be, is that a winning issue? or does that sound like you are just looking at reality and denying that unemployment is at a 50-year low and african-american employment is at historical lows >> it address i think an ongoing anxiety. there are a lot of people that just don't feel the growth - >> it's starting to feel like --

>> for some. i think we have oto act knowledge where we are >> what do you think of john dulaney my his comments seeming to taken relatively well by the audience in a moresque way. >> it's 3.6% among hayes spanish women and the good story you can't argue that it's bad today. what they should have done is piff otd and said will this good xi hold? and are some of the policies that could be coming out of the trump administration now enough to keep americans hopeful and combat their anxiety about future jobs and i think to the point earlier on automation, that's really what i would have liked to see less of a conversation about free college and more of a conversation about how do we educate and equip today's workers for the jobs

they will need tomorrow. that was absent from everyone across the states last night. >> what do you expect to see tonight, jessica >> well, it will be interesting to see tonight how biden if at all if he reacts to last night's performances or goes forward and looks ahead, i think he has got the best ability to tap into the working class clothe voter across the country hit up those anxieties, what we need to continue the economy and a strong posture, but then also what is needed to take after, to go after donald trump so whether or not biden comes to the stage kind of prepared to fight, i think that will be interesting. i think it will be interesting the president tweets tonight will he tweet directly at biden? >> jacey ka, basil, i want to thank you both tonight good to see you. >> coming up, one of our "squawk" news makers, former white house strategist steve

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with corporate power growing. >> i want to return the government to the people >> that means calming out the names of the monopolists. >> a preview of what to expect tonight is straight ahead. after a three-week rally, bitcoin falling this morning what is driving the move is coming up, as the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business. new york s this this is "squawk box." >> good morning, this is "squawk box. u.s. equity futures at this hour are now flat i think boeing at this point is still weaker so some of the other components in the dow. >> they're the lowest losses right now. the beau is down 175 earlier. >> we can see that reflected in

the other averages where boeing isn't affect aing those nearly as much, s&p up 6 points the fax indicated up just under 20 >> here's what's milwaukeeing headlines at this hour we want to tell you about boeing, shares down sharply following news of a new issue with a grounded 7 learn the max jet. it's software related and separate from the prevention issue that boeing has been fixing it's unclear now how long this might delay the return of the 737 max to service and some consternation about the relationship again this time between the faa and also boeing and trust issues there then also with some of the other airlines around the world. separately, take a look at bitcoin, the latest bitcoin rally coming to a halt at least maybe a pause for now bitcoin falling this morning, this after hitting an 18-month high of 14,000 earlier this week it jumped about 260% since april

and we're going to explain what may have happened overnight as well, because there have been some problems elsewhere. investor carl icahn stepping up his dispute with occidental to buy anadarko petroleum they say the transaction is ill advised and too expensive. president trump landing in osaka earlier this morning as he gets ready to meet g20 leaders kayla joins with us more on what's happening on the ground in japan. >> reporter: hey, becky, it's going to be a busy few days for president trump here with at least fin bilateral meetings, a handful of meetings with all 20 leaders of the g20 countries no meeting is more important or closely watched than the meeting that will take place saturday between president trump and chinese president xi jinping the chinese setting up the

dynamics it gives the president more than a day on whether he can accept chinas a terms or walk away. thigh are citing chinese officials, setting up these terms for a potential truce between the two global economic powers saying china wants a ban on hauwei parts lifted. it also wants the u.s. to lift all tariffs that are in place. president trump says he is willing to relax the hauwei ban and expects it will come up between him and president xi but neither the president nor his advisers has been willing until this point to remove all of the tariffs put in place, before they see that china is willing to actually make good on this deal at some future compliance checkpoint. take a look at the economic advisers who are traveling with the president this week. you will see many of the notable hawkish names. you have ambassador robert light heiser, who has been one of those people who has told the president not to take those tariffs off until china shows it will abide by this deal.

secretary wilbur ross feels the same way secretary mnuchin has supported this view. he will visit the president after his trip to brauvenlt peter navarro, the president's trade adviser, i am told the late edition to this trip as well, he was traveling on air force one, we could get remarks from president trump in a bit. he is currently having a working dinner with the prime minister of australia he made comments about the relationship between the u.s. and australia saying there is no stronger relationship than that one. we'll see if he makes any comments on trade. guys >> kay larks thanks, for more on trump trade agenda and other things, let's welcome chief strategist steve bannon. thanks, for joining us we definitely want to get to talk about president xi and this latest news, where are you are you in sunlands park new mexico at a go fund me portion

of the wall? >> yeah. what you are seeing is right up the crystal ray mountain we are right where all the activity has been with this issue with asylum and illegal immigration right at the corner of el paso, texas, mexico and new mexico, right at mile marker 1, the rio grande being the border it's the border of the united states from here all the way to the pacific. it's all deserts and mountains so a private group the army core of engineers this is private land, said a wall couldn't be built here so we raised money. we build the wall is a private foundation we take donors' money and built a magnificent all the way up this mountain a complete security system, fiber optics, state of the art wall, cameras, all of it to the show this can actually be done to augment what the president is doing the and the army core of engineers is building 800 miles across the deserts and the mountains. we're dealing with those areas

that the army core said is too tough to build. >> it's a little strange some of the city officials you view, take this threat seriously, i don't know the permits work in order. why wouldn't -- it's private funding of something that it seems like it would be in the city's best interest to have why is the city against this being built or they seem to be pushing back on it >> yeah, i don't think the citizens are we've stopped -- this is the cartel this is about stopping the cartels. they've made this human trafficking and drug trafficking into a high cash, high margin business which destroyed juarez mexico is the cartel this para-military operation that just does tracking all the time this wall stops incursions 100% since it's been up we built this entire operation, almost two-thirds the over a mountain over memorial day

weekend. we great beforehand. the owner of this property, he had the permits. we built this wall with private money and american engineering, all american products. the people down here when they come, they said they had 17 paths up in these mountains where the cartels bring in sex trafficking, human trafficking, that's all been shut down 100% >> has there been a c change in recent days, is it a crisis, is it not a crisis? you think this is a lasting change in the way it's viewed maybe in a bipartisan way at this point >> i think if people don't think it's a crisis, they should come down here. crisis of biblical proportions of people coming up from central america. what you have to do, you have to have a wall. it's not a total solution. what it does is forces people to go through ports of entry, the government can sort it out

what you can't have is just this open borders a wall is not a total solution but the wall is a beginning of a solution and particularly, and this is what's changed, is the break the back of these cart else people don't realize i don't think how the cart else have criminalized northern mexico they took a great border town, juarez and made it the most dangerous place in the world it's the tlempth worst in the capital. it wasn't like that for decades, if you ask the citizens here, that i will tell you, these cartels are so dangerous this is right on our border. this is more dangerous than afghanistan. this is what this wall is here to do. we've seen it, it's shut down incursions 100% since got built over memorial day weekend. >> well, you have an interest here also, you are one of the real hawks on china and how to handle this number one is maybe we get a

six-month delay in new tariffs maybe that's been decide we have president xi has a list of things that he'd like to be included in any type of trade deal and you've probably seen the news reports, it would have to be lifting the ban on hauwei. i can't imagine you like either one of these, either the one president trump is willing to do or president xi is asking for. you wouldn't agree to either, would you? >> look. in the headlines when they say it's a trade war, i said as other people agree with this, this is not a trade war, it's the chain war. the ccp, not the chinese people, the radical cadre has been running against the west for 15, 20 years it's broken down into sectors. you have a financial war part of it, a trade and tariff part of it to me what president xi laid out today with everything president trump tried to do, initiating the phone call, saying he would delay it looked like six months,

the second wave of tariffs will happen in early july on the other 300 billion, he was prepared to at least sit down after these guys worked on a deal for six-to-nine months and red lined the entire things on these verticals, which are so important to restructure the chinese economy so it can fit into the world economy, i think the gap between the bid and the ask is getting big it was big and getting bigger. i don't see how president trump can agree any of this. >> that's what i want to ask you. you told the south morning post that hauwei is a major national security threat. not just to the u.s., to the rest of the world, we are going to shut it down. given the view that i think you have which is it is a national security risk, when the president says it's also possible hauwei would be a part of a trade deal, how does that happen is there a what i to thread that needle practically >> i think it's very tough look, my belief is hauwei, i

think this is backed up by the people it's a part of the pla, the people's libation armament it's their 5g rollout one belt, one road hauwei's fight, game, set, match. they control advanced manufacturing, become the center of the manufacture, universe in the 21st century we all become tributary states i don't know how you do it i think hauwei is essentially a dirty bomb inside the zri industrial democracies here's a think i think xichlt shows weakness they know if we have these component sales to hauwei, they can be over. the industrial democracies, particularly the united states, we hold all the cards, in the ft the other day, they said they were so disappointed in the american leadership. they had a great leadership for 20 years that's because they gave them all the capital, whether it's forced technology transfers allow them to steal it and we

basically allowed ourselves to be deindustrialized. look at elizabeth warren, we allowed a manufacturing base to be shipped to china. you seen the global supply chain starting to come back this hauwei thing, i don't know how you square it. i think it's a national security issue for all the industrial democracies. it makes information the new peru tonium. i don't see hoy you square that. i think that's why xi is putting it out there as a pre condition for everything else. he essentially retraded us on the deal we had when they red lined and took automatic provisions out on the verticals. today he basically retraded us all saying, hey, they can't agree to any more purchases to trade the trade barrier, that all trarives have to come on it's a sign what none. -- sine qua non.

>> this may be xi's on sal have a to get to a position what we heard from people behind the scenes is maybe he would relinquish the idea of saying, yes, we will go ahead and buy more things from you, that that's a movable point hauwei is a bicker stricting point. the "wall street journal" is also reporting this morning xi plans to bring up the idea that he could be a big partner in negotiating with both north korea and iran how would you measure that in terms of how big a bargaining chip that is obviously, hauwei is a concern, but, if and iran also front and center right now, too. >> you know, david faber and jim cramer talk about we're a tributary state. there is not enough they buy from us. we are a tributary state we don't really sell any advanced manufacturing to them anymore. this is a huge sticking point. so enforcing the overall deal to move the supply chain back is

everything >> would you be willing to change a hauwei security concern for north korea and iran >> no, absolutely not. here's the reason. their incursion into iran. it's geostrategic. iran is getting to be their partner. we're standing up to iran. but china is the senior partner in this. north korea and iran are the junior partners. if you show are you prepared to bend on hauwei, because hauwei gets you into the heart of the industrial democracy it basically allows you to drive a 5g i don't think you can waiver >> take us in the room or the mind of the president or others when the president says publicly he is willing to put hauwei on the table. at least he's indicated that what is he thinking? >> well, listen, remember, president trump is a master negotiator nobody would ever have envisioned two years ago when the trump administration really

took over from obama how the clinton, bush and obama up administration had been misled they agreed on cyber intrusion, the south china sea, joe biden who should answer these questions tonight and basically china did what they wanted to do now you see trump's got them to the table and has highlighted wherer that weaknesses is. he's a master negotiator look he's 100 times better than i would think to be. inside the room you see the secretary treasury said, hey, we're 90% there on a deal. i don't know what deal he's working on it's certainly not this deal we're not 90% there. i think there is huge gaps i think you have very pragmatic people like mike pompeo, john bolton peter navarro and bob lite hauser people who are real hawks and look at the totality of the picture. both the geostrategic parts of iran and north korea and the south china sea and also the parts dealing with these

fundamental verticals that they have to restructure, state owned industry, intellectual property reform and forced technologies, that i think the facts back up where the hawks are to say we can't waiver we've got these guys, now we got to bring the home. >> steve, do you foresee a trade war continuing right into the november election of 2020? is president trump willing to be in the middle of this or will there be some type of, if you will, watered down temporary sort of an interim agreement with china before the election to say, okay we've got this and you know it's not hurting the economy and let's have the election then maybe return it how do you see it playing out? >> i see it playing out. this is such an important meeting. if they set a process. that's the most you can expect out of osaka they set a process to get back in and start

negotiating. i've said before it may take a year to put this together. you may have something into next year but if we stick to our guns about what's absolutely needed and what's needed to help the chinese people right? and to help the chinese people and to back things like hong kong i think this can take a while. the chinese press are talking all the time how this will be generational now i think we're engaged in this. i don't see any short-term let up on this there could be optics in buying more soy beans, things like this when you talk about the fundamental also, the litehauser deal memo of 175 or 200 pages outlined, that deal, which is the deal that the west has to have. right? and really take on things like hauwei and others, i think that will take a while. i don't think that will be done by 2020. >> what pick up do you think the president would fear the most or you would fear the most from the democrats? what ticket could win, if you

think, if there is one >> i think it's too early to tell last night i didn't see a lot of stage presence up there. if you want to take on donald trump. hillary clinton for as much as the democrats trash her today, she was a very tough candidate i didn't see a lot of stage presence, particularly elizabeth warren for all her talk about economic patriotism and that kind of you know talking about the things we talked about populism, for her to say last night china is not the biggest existential change we v. climate change, shows she is willing to pander to people i didn't see it. if the american people saw anybody on that stage last night that can go into the room if osaka and have meetings with obie, xi and putin and represent america's interests, like trump is doing and start to bring things back to the united states and the industrial democracy, i didn't see it on the stage last night. >> okay. steve bannon, from the border, we appreciate it we appreciate your time today.

thank you. coming up, a lot more on "squawk" this morning. morgan stanley's multi-cultural leaders conference setting kicks off today. we will talk brand building. later, democrats taking on trump economy with a focus on healthcare what you can expect tonight and a wrap-up of who the winners and losers were last night pollster and political strategist is here "squawk box" returns in just a moment moment zplmplts$4.95. it's just $4.95 per online u.s. equity trade.

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. earnings just out from dow component walgreens. profit of $1.47 a share came in better than the street was expecting. revenue above the street forecast and the company says it was able to rebound from previous conditions in the prior quarter. it saw retail sales improve and comps being up in the third quarter, too right now that stock is up by about .4 of a percent. $52.60 for the dow component. coming up, boeing under pressure this morning, following news of the newest grounded 737 in an unbelievable snap back we see it in the dow as well you can see it right there on the screen it was down 22 points at one point. now it's down about 2 and a third percent. the grounded 737 max jet

amazing. >> a dow component. details straight ahead, "squawk box" coming right back >> announcer: nouns time now for the laafc trivia question. who was can's first female prime minister the answer when "squawk box" continues. slime in my motorcycle. no. that's motorcycle insurance. slime everywhere? ughhh nooo, there's no insurance for that. do they help when i have bills health insurance doesn't cover? yeah! that's it! aflac! gross guys. get help with expenses health insurance doesn't cover. get to know us at aflac.com

all right, welcome back. morgan stanley's senior multi-cultural leader's conference joins us today, joining us is one of the main organizers of the conference, carla harris, the vice chairman adviser, carla, thanks for being here >> thanks, for having me again >> the fourth year >> i think it will be one of the best yet the topics this year, geopolitics, generational shift and digital transformation it will be a fun day >> a reminder, why did this start? how has this conference kind of egolfed. >> as we looked in the marketplace, there was nowhere, where the most somebody multiprofessionals in corporate america met together to talk about key business issues that impacted their job in the c suite and where they could network. so we created one. each year it's been sold out starting the conference with a waiting list so we knew we found something in

the marketplace. >> what's happened over time part of this is about building networks, making sure people were getting through who haven't been heard before? how has that changed >> each year we have a millennial council, each year we have people that tapped into the millennial entrepreneurs as customers, found a way to help sail their business. we had professionals from different industries to get together to do transactions, so it has proved over and over to be something of value in the marketplace. >> what is your biggest success stories, following people that got through. >> one of the biggest success stories the our lab company, that has presented at the conference and met other investors, has raised one of the largest series, a transactions in the marketplace for a multi-cultural female founder, one of the top five. >> which is who? >> that's landon who was here

before >> oh, that's great. how did you get to the themes, geopolitics and shifts generationalally >> we have talked to clients, i'm public speaker and had time to sit down with senior c suite folks over the last year, no matter where we went and talk to our clients, everybody is thinking about what's going to happen on the geopolitical front? what's going to happen with the trade talks? what are we talking about if terms of interest rates? with respect to generational shifts, how are we going to serve the millennial and the z customer how often are we going to engage the demands are clearly different and then you think about digital transformation the conversation changes almost yearly around data, privacy, who owns it? how do you monetize it our conclusion was those were three big shifts that itself in every c suite right now across every industry >> how much do you think all these gentlemen opolitical issues impact the entrepreneur

sometimes i talk to entrepreneurs, they're so focused on the business, they say all the stuff is noise to them. >> i got to tell you, i think it impacts them a lot think about it who is investing in these early stage companies, when people start pulling back on risk, when they fear increasing volatility, they tend not to make those innovative investments they tend not to think about those companies that are on the edge, the refrain becomes let's wait and see how you to, these companies obviously need the money now, it impacts their ability to fund raise, no question about it. it also impacts their abilities to have b-to-b sales. >> who is speaking >> we are starting off with the chairman across the different industries around the world and ron kirk back again, the former trade adviser who is going to mediate a policy excuse me a panel around what's happening on the trade front around the world in china we have richard chu, one of our economists in asia, he will talk

about his views in asia and we have two great millennial entrepreneurs one of mavin, and girl plus hair who is going to talk about how they're disrupting the consumer products industry >> carla, good to see you. >> good to see you, thanks for having me again. >> thank you coming up, the winners and losers of last night's presidential debate. a programing note, today on "squawk on the street," don't miss a cnbc exclusive with moroccan stanley and james goreman. you heard of that guy? >> it looks like he is doing the interview from davos. >> it really does. can you put in a good word >> he's doing the interview, we're very proud of. >> beautiful as we head to break, take a look at u.s. equity futures owey're mixed with the dow dn the other two up thank you. thank you. >> for the most important part of you...

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breaking news this morning, boeing shares dropped sharply earlier before recovering much of the loss that was more than 20 points. now just over 8. which is significant and a drag on the dow phil lebeau joins us from chicago with some of the reasons. did it look worse initially? what do you think happened initially when it was in free fall, phil >> that was shortly after the

iea report came out. there was a meeting between the airline transport association and boeing executives yesterday. a statement came up saying look, if there is any look for the max. we need to have everybody on board, which raises this question, would there be a greater demand further delaying this that's one part of the season this came out late in the day, they discovered simulator tests by faa flight test pilots. the root cause, maybe a question do they have to go back and replace the 500 planes that have been built that are parked and are now grounded when you look at the 737 max,

guy, remember, there was an expectation that we could see a recertification flight everybody we talked to in boeing, as well as the faa, they were moving in that direction until this latest issue comes up, now it becomes, does that recertification flight get pushed back? again a part of that reason for the drop was the report, they said, look, we want to make sure there are standard when it comes to pilot training and does that include simulator time and can be costly and further delay the max returning to service, look at shares of united. late yesterday, united joined its colleagueing at american and southwest in taking the max off the schedule until early september, so for united, they're not planning on flying

this plane at least until september 3rd, guys, we are getting to the point very soon they will have to make a decision, all three of the u.s. airlines, do we push it back into october, november or the end of the year? >> phil, thank you for that report i want to bring in an analyst to this conversation, help us break this down as well on this boeing move, joining us right now on the "squawk" news line is carter copeland, a founding partner of u.s.ch are good morning to you. as you see these headlines cross, you are thinking what >> i think what is unique about these headlines and the story in the "wall street journal" the faa process to date has not been leaky as all you know the first time we've seen that sort of level of disclosure in a process that has been not leaky, that's what's sort of new here but the question is, is this a part of your normal you know revelation of issues to be fixed? the flight test process and

recertification process are meant to find these things and address them so the question is, is this out of the norm or is there something that's different here >> carter, when you talked about it being leaky when i think about leaky i think about distrust that's the first thing i think when something leaks, it's because there are people in the room who clearly for whatever reason don't trust each other that to seems to me a new front in where we were given how close and often crim critical or criticized that boeing was and the faa was for being as close as they were and now clearly there is some kind of divide go i don't read it that i what. i would say these are engineered, from everything that was disclosed, these are engineering calculations from what the "wall street journal" reported, there was a speed of response that the current software enable the pilots to have and so from an engineering standpoint, it's you want that to be different.

then it requires a different black and white engineering response. >> let's not downplay, there are engineers that clearly thought it was catastrophic. >> we're changing to, you know, a different story line here. but, yes, i mean the characterization of hazardous versus catastrophic. these are all words used in the certification process for you know probabilities associated with you know failures of systems. i think in this particular case and when we're looking at the stock this morning, we're looking at what appears to be a statement by someone at the faa about, you know, what has been uncovered in a very, very lengthy recertification process and that boeing responding to that leak in the news with an aka that says this is a part of the process. we're responding in due course. >> how does this, therefore, play out with all the other regulatory bodies around the world? who are going to be looking at this, asking some of the same

questions i imagine you are and we are this morning? >> yes, so this process has been going on for quite some time boeing has had, the faa had a q&a period that has been opened where all regulatory bodies are coming in, in handfuls, multiple handfuls per day the faa and boeing are responding to per request. it's been our understanding that the numbers of questions and the you know the significance of each question has been getting tighter and tiert as that process has gone along it's not closed until it's closed so you know if this is something discovered that needs to be addressed similar to each and every answer, it's certainly the case you know, ultimately i think what matters is, is the process moving on a trend line towards recertification and the questions we have to ask, is that recertification and the faa and some regional authorities,

or does it include the chinese are the chinese tied up in a trade deal those are broader questions that are tougher to answer. i think what matters is, are you headed down a line of progress that says we are going to return to norm else in some period of time i think we're still heading down that path. >> hey, carter, a part of that huge drop i believe came after headlines and reports reheard out of the iata meeting up in canada, part of what they called for is alignment on additional training requirements on boeing 737 max flight crew. there was immediate speculation that maybe that means more hours training for the pilots and timing simulators. >> that can be an expensive proposition. what do you think of any of that do you think it's likely >> reporter: yeah, i think there are two separate issues there becky that are important one, boeing and airbus to a certain extent don't control the training requirements of you know the pilots. they don't mandate that to

customers. there are some difference around the world. i think this whole process has revealed whether or not there needs to be some standardization among regulatory bodies aided by those and airbus to make sure the pilot proficiency is where it needs to be >> that is an interesting topic. i think it's one an organization like the iata should take up because it's important for passenger safety around the world as it pertains to costs. as we have been talking about for months the costs are irrelevant if it's 500 airplanes and a million dollars per airplane, we're talking a $200 billion stock. 500 million is a drop in the buck if response to this how you think about putting this -- >> in terms of backing it up, correct or no? >> it certainly should bank of america every plane boeing built and doesn't deliver can sit on the balance sheet. you can only put so many on the ground before you need to evaluate where you do the next cut so there is a pitch point

where you have to decide, do we need to lower production again, i think based on what we can see today, we're trending toward not having to go down those scenarios. again, this is a data driven process that we will have to see unfold >> okay. carter copeland, thank you for joining us, especially last minute with these headlines breaking appreciate it. >> no problem. when we return, political pollsters on the trump xi and the winners and losers of last night's democratic debate. then the top of the hour, the g20 kicking off japan, david perdue will join us on what's on the agenda "squawk box" will be right back. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and

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one debate down, one to go, with another ten democratic candidates set to take the stage tonight. ylan mui joins us with more to come. >> joe biden is leading in the polls, in some cases by double digits will the other candidates go after him? last night's debate was fairly cordial. though there was one heated exchange between julian castro and broward county for the most part, they stuck to bread and butter issues like healthcare, there was one pivotal moment when they were asked who would support if getting rid of private insurance? and elizabeth warren and dill

beblassio were the only ones that raised their hands, later on, amy klobuchar had her memorable moment when she talked about president trump's attempts to lower prescription drug prices. >> 2500 drug versus gone up if double digits since he came into office instead, he gave $100 billion if give aways to the pharma companies. for the rest of us, for the rest of america, that's what we call at home all foam and no beer. >> reporter: now, one issue that didn't get a lot of play was trade. it was only referenced obliquely when the candidates were asked what was the biggest view political threat to the country s. four of the candidates rempbsd ohio congressman tim ryan was the most direct. >> china, without a question, they're wiping us around the world economically. >> reporter: guys, we'll see if this issue plays a little more prominent in tonight's debate. obviously, there are the

headlines out of the g20 joe biden formerly supported nasa and the tpp so there might be more room for candidates on this issue tonight. >> thank you for that i want to continue this conversation about the best and worst moments from last night i want to bring in a political strategist e i want to get your sense if you were to poll corporate america what would they say? >> if you want a pay increase, do it right now. we have been testing this, two-thirds of americans would put a limit on how much ceos can make, they cannot make more than 20 times at least a funded employee would make. the democrats are playing into that support for tax increases, go back to 1984 when candidates would not admit they were supporting tax increases they stood up and said, let's hit them, let's hit the rich

if i'm a ceoing i'm a little scared today >> it's a little tongue-in-cheek. anybody that gets a bigday pay day, gets put in the crosshairs. >> it's not thank you in cheek it's real. the idea of income equality. wealth and equality is a bicker issue among democrats than it has ever been. >> i think it's too late >> is it a winning argument? meaning, yes, it's an issue within the democratic party. but is it an issue within the country morebroadly? >> it drops off and goes to independents it's not an issue among republicans, right now they're focused on how they get that nomination and income and equality i was surprised why there is little about the economy, maybe because it's so good. >> who are the twoest winners? >> i got two, elizabeth warren, she clearly knows policy she presented herself so crisp

and so clear and she could respond to anything immediately. and corey booker was the other winner, the passion, the focus, that is his best performance. >> here is the beginning of the debate from elizabeth warren >> it has been far too long that the monopolies have been making the campaign continue bewks, have been funding the super pacs, have been out there making sure their influence is heard and felt in every single decision that gets made in washington, where i want to start this is i want to return government to the people and that means calming out the names of the monopolists and saying i have the courage to go after them >> winning argument? >> absolutely. she's declaring war on big business if you are watching this right now, you have to change your communication strategy you have to look alt your sr approach, how you do you el with

your employees, you are right now in the crosshairs. >> you think you have to do they're respective of what ultimately wins? >> on the democratic side, you are ground zero if you are big business, they want your head. >> why shouldn't this be akin when you had 18 republicans pushing everyone right, to win the nomination almost had to lose the general election? >> because donald trump is unlike any candidate that we've ever had. >> why won't it push -- the eventual winner might be too far left to get elected. >> or the eventual winner have have the ability to communicate in a populist way we haven't seen before. we are becoming more hostile to the wealthy, more hostile to business at the moment that the economy is the strongest >> let me show you another clip from last night. this is corey booker when asked about the debate in the democratic party, about the roam of corporations. >> i will see companies like

haliburton and amazon that pay nothing in taxes we need to change that with an anti-trust law i will appoint judges to enforce it and number two have a doj and federal trade commission that will go through the processes necessary to check this kind of corps concentration. at the end of the day, we have too much of a problem with corporate power growing. >> again, a winning argument to go after amazon. >> i would not have gone after amazon >> by the way, the president attacked amazon. >> am-on-is one of the most popular, credible companies, americans like it, they got cheap services >> if you hear the word amazon, they say, what are you doing >> i think when people hear the word amazon, they think why don't go after facebook rather than amazon. >> let's finally show you a spar of the night between broward county and julian castro. >> some of us on this stage called to end this, someone like

congressman o'rourke have not done that i want to challenge them to do >> i think it's a mistake, i helped to introduce legislation that would ensure we don't criminalize those seeking asylum and refuge alongside everybody else >> i'm still talking about everybody else. >> you are looking at one part of this i'm talking about a comprehensive rewrite of our immigration laws >> okay. who won that debate? a lot of people by the way on google checking out castro, try trying to figure out who he is >> if you asked me to pick a third winner, i would pick castro and a loser, o'rourke, that exchange is why, people don't want to see a food fight they want to see intensity and packs not where it was rude, they would have thought that was rude. >> seriously you have to stand out, right >> you have to stand out >> and by the way, congressman delaney. >> you have that many people on

stage. >> if you sit there and try to interrupt, in the end, they remember you for intrungt, they don't remember anything you said >> given what appears to a successful economy at least thus far, can any of these folks run on the economy. >> what wha they will do a not run on the economy, they will run on ceo pay, on companies being too big. >> that's a winning issue? ultimately, i would argue, to some degree trickle down to the economy. >> why did they spend so much time, two hours, so much time on issues other than the economy? because the economy is weakest for them when all is said and done, if we have a strong economy in 2020, trump is hard to beat. >> people talk about socialism, democratic socialism does that play does that work >> 40% of americans now would choose socialism over capitalism 40%. it's capitalism to the public is failing. capitalism represents wall street, wellment

if you talk about economic freedom. i say this to every corporate ceo and every communicator, if you continue to defend capitalism, you are going to get crushed. if you defend economic freedom that small business. >> economic freedom versus capitalism >> choice matters. you haven't figured that out if you look across the globe, how people communicate is how people see them. >> if i was a person that really wanted to defeat trump and i was trying to figure out who to pick, i have a problem because i see people talk about elizabeth warren that trump would probably beat her very badly. that's just the perception of people that want to defeat trump. they're worried about elizabeth warren they're also worried about joe biden if terms of he's main stream and he's closer to an electable. they don't know if the energy and the passion is there with the voters they need to turn out that are younger are either one of them not elect

and it has to be somebody else >> these debates start to tell us what they are made of they show us when candidates are under pressure i believe that warren is too extreme. i tell you something, bernie sanders has a solid 15 to 18% support. he can raise $25 until in 24 hours. people come out for him. they will stand in the cold to vote for him it's not just about ideology, it's about presentation. >> that may not be a good thing. how many ceos lost their jobs because they couldn't communicate and lost touch with people they represent. >> what do you think they will go for >> i think they will go ever a bind and do more criticisms of donald trump i'm waiting for some candidate who talks about education. if you want to talk about all these issues and the impact that they have. even socialism if off get a good education, socialism is not a problem >> if you want to come on back, we will do this all over again great to see you we appreciate it when we come back, senator

david perdue on the g20, trade, tax, much more than. he is our special guest right after this break. check out the futures this morning, dow down because of pressure on boei srenghas. s&p up by 3.5, the nasdaq up by 14 we'll be right back. >>dointo everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we nee>your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪

. >> create turmoil or a trade truce? president trump is ready for the g20 summit a new report says china has a long list of demands your money, your vote. >> i will talk about companies like amazon to pay nothing in tacks. >> we are supposed to break up bic corporations when they're not serving our democracy. democratic corporations they claim have too much power. and behind the bitcoin volatility digital currency getting hit hard this morning after skyrocketing over the last few weeks. crypto investor will join us to make sense of the recent rise and fall as the final hour of "squawk box" begins right now. announcing nouns live fr--

>> announcer: live from the biggest city in new york this is "squawk box. >> welcome back to "squawk box." live from the nasdaq market site if time's square the futures right now are down 25 points. they have been all over the map today based on being floated around by boeing mostly we were up 80. we were down 80. boeing was down 22 points, if you do the multiplier, that's like 150 or so dow points. now it's paired its losses, it still has the dow diverging from the nasdaq, which is up 18 points and the s&p which is up 5 points treasury yields this morning are not the story. we're kind of in that range between 2.1 and 2.01, really, is where we have been, today we are 2.04, more or less here's the story investors will be talking about today, boeing shares are down, even

though they are the lows of the session, it is putting pressure on overall, boeing shares dropped after a few issue with a grounded 737 max jet it's a software related problem discovered in a simulator test and is separate from the stall prevention issue that boeing has been fixing. it's unclear how much it will delay the return of the 737 max to service also other stories of the iata which represents 200 carriers around the globe, talking how they would like to see standardized issues for pilots >> that has raised questions of what that would mean, if there needs to be simulator hours before the 737 max could be back in the air the stock is down, a decline of 2.8% investor carl isean is stepping up its dispute. icahn called for a special meeting in an attempt to try to win four board seats, isean says the $38 deal is ill advised and two expensive and the government

is out with its final reading of first quarter gdp in just 30 minutes time economists are not expecting a change to the 3.1 growth change reported a month ago >> president trump arriving for the g20 summit kayla taushe joins us what are you hear sock far? >> reporter: becky, the packed schedule is under way with the prime minister of australia. speaking to reporters at the beginning of that dinner, president trump appeared to be laying past qualms with australia aside. >> i think we can say we have been good with our allies, we take care of your allies, generally speaking i have inherited massive trade deficits with our allies. we help our allies militarily. we look at ourselves more positively than ever before.

we also look at our allies i think australia is a good example. >> reporter: president trump's arrival here in osaka earlier this evening coincided with the "wall street journal" reporting president xi of china plans to set forth his plans to settle a trade war with president trump later this week when the two leaders meet president xi will relax a ban on hauwei parts >> that, of course, something that president trump has said he's opened to the journal reporting that china wants the u.s. to remove all tariffs that are currently in place. >> that is something the u.s. so far has not been willing to do president trump has about 36 hours to figure out exactly what his position will be going into this meeting senior administration officials told reporters earlier what the u.s. wants is to figure out if campaign can accept its terms it previously renegged on a month

ago and said the president is okay with any outcome from that meeting. >> thank you very much let's talk about trade tariffs, dealing with china. with our next guest, david perdue from georgia and a sneaker company ceo reebok and a retailer dollar general and a close friend of the president. do you compartmentalize things, senator? i mean, the chamber of commerce is apoplectic. somehow you have come to grips with something that the president has done why? because it de-- the means justify -- the end justifies the means in this case >> joe, i live v live over there -- i live over there i have been dealing with china for years we want them to stop stealing our technology and transferring it into our joint ventures we want them to comply with the wto, something they've never

done we want them to stop the cyber war and we want equal access these are reasonable things the president is asking for. if tariffs gets them to the table, which it did, now we have to find a common ground, look for off ramps and make sure we continue the process the idea that we will wrap up some big trade deal in a ribbon here over the weekend i think is a false hope this is a long-term process. it took a long time to get here. >> so this is going to be an agreement to talk more, is the best outcome >> well, i think what happens is, right now there are several thing they agreed on before the may meeting here, they backed up on some of those things, largely over compliance details, joe i think those can be worked out. now encouraging thing to me today is we hear this story in the "wall street journal" they're coming back to us with a list of their requirement itself and their requests look, we opened this negotiation with our list of requests. that's what we have been dealing with, for the most part.

so now we're into the give and take to find out if we can find common ground. >> senator, there a way to deal with hauwei? we have been trying to grapple this for weeks the president, president trump that is, also, seems to have indicated over the past several weeks, he would consider it a part of a trade deal, yet, we had secretary of state pompeo and the president, himself, has called it a national security issue. >> well, of course, it's a national security issue. there are things you can do, if they correct their behavior. that a part of this negotiation. part of the cyber war. look, they don't separate, their espionage doesn't buy agencies we do. and so you know this is one of the issues with ve in there. there is no question hauwei has been a bad actor. >> how will that work? >> we don't know, what we're trying to do is find out how bad it is, the second thing, there are thing they can do. specifically zte was another perfect example

of where we put onerous sanctions on them, a $2 billion fine we got rid of their board and management and put two overseers inside the company there are things that can be done, hauwei is a much bigger, much more serious issue. >> senator, i think the concern is hauwei, if these devices are installed, the information would have to be handed over to the chinese because that's how companies in china are expected to operate it sounds like a much trickier problem to fix with zte, we know it was a violation of sanctions, this is a differ beast >> biggie, you are exactly right. you look at the information and data in the chinese society. i spent a good time with ali baba and their leadership last year over there, dji and others, and the xfrgs know and the data is -- information flow and the data access is opened. it's totally verticalizet with the pla and the government so it's an entirely different

approach to information and protection of privacy. this is a problem when you have a socialist state like coin. so hauwei is a very serious issue. i don't think this is going to be resolved this weekend. >> senator, i don't know how much of the debate you got to see last night but there is a narrative we hear from people that are pro business, that one of the reasons the economy is doing better now, whether it's the economy, gdp, is that the obama administration, that may be overstating, but had according to rick santelli had their boot on the neck of corporate mortgage that was the eight-year narrative. the boot is row moved. now things are happening like this last night we saw two boots are being proposed to go back on the neck we just had a supposed republican pollster on who said that will resonate with at least

democratic voters. is that a winning issue that if you were a ceo, that a winning issue to go hard against corporate america? that's what they did >> we'll find out. here's the problem, i've never seen so many people out of touch with reality what we saw last night is a dramatic move to the left toward socialism and the only way to win that argument is to defeat the argument that free enterprise and capitalism are working. their number one criticism is, oh, yeah, we have a turn around they say it's not good for everybody. they're out of touch with reality. we've created 5 million jobs not just at the top. we have the highest medianing in in u.s. history right now. the lowest african-american unemployment ever measured the lowest hispanic and asian ever measured. this is probably the best turn around in u.s. history. >> how do you i think you said the economy at least so far isn't that the sort of the way

it looks >> no the economy is doing much better. >> so far kit go any minute. >> two questions is it go him to last >> okay. >> how much dead springs eternal. how much debt have we -- is this going to cost us >> right and there are still major pockets in this country where it's not working i would point out, i used this statistic yesterday, african-americans in boston. the average net worth was reported to be $8. so you look at that, and you say to yourself, there is something wrong here right? >> well, you can find those isolated statistics like that. but if you look overall right now, this is the best economic turn around i can find in u.s. history. i'm a business guy ki tell you for a fact that if you start releasing the onerous regulations that were put forth over eight years, you get a bump in optimism. that's what we saw, ceo, optimism and confidence among consumers right away then we did a tax bill, we're producing more oil and natural

gas than anybody else because of president trump and this agenda. we passed a bipartisan bill that freed up $2 trillion guys that's real money. in total, we've basic ally pulled the government off and freed up potentially as much as $6 trillion of capital to come back into the economy over time. >> for, before you go, i want to ask you about this i was in your home state in atlanta, just a couple weeks ago with tony wrestler and interviewed him, this after the heartbeat abortion law and asked him about that and governor brian kevin, in particular, he said that the decision was political malpractice. we were talking about so many of the median hollywood companies, that basically said we won't do business in the state as a result of it he says, how can you say you are business friendly yet go after your largest employers what's your reaction to that >> it's interesting that the country based on many in the national media end up talking

about that law and forget about the bills put forth in a couple other states a few months earlier. georgia is the best state in the country to do business we know it's been that way in the last six years those reasons are still there, the people love it there the only problem is, we're bringing a lot of socialist concepts from california that have been proven to fail but we're going to stand up to that right now i believe this is going to pass. we're going to have the economy continue to to well in jochlt, though. >> that was andrew, that was ross you can't tell the difference. you can tell with pecky, with me, i think you have to go back and watch that i didn't ask those -- okay. senator. although i would have. >> joe, i was going to complain if you were in georgia and didn't call me, i was going to complain >> you were going to complain about that question. i think that's obviously a legitimate, i back andrew 100%

in all cases and you as well >> save the tape >> what did i miss what just happened >> i don't know, today we're all friends. senator, thank you very much and i do hope to see you i will be down there and i'll try to get in touch with you at some point in august if that will work. >> see you guys, many thanks. >> when we return, a lot more. i don't know what's going on, it is a big day on wall street for biotech. the company behind one of the sector's biggest ipos of the year set to trade on the nasdaq. they will join us live with a look at you he is making money, analyzing our immune systems and partly with microsoft to do it as we head to break, take a look at wall street beating the bottom lines stay tuned you are watching "squawk" on cnbc ♪

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today the company is going public in one of the biggest ipos it was 20% above the share and expanded the number of shares it will be issuing today. we should mention microsoft invested $45 million in this company, a part of a seven-year partnership to push immunoinnaization. joining us, chad rob benefits, the ceo and co-founder of adaptive technologies, good to see. >> you thank you for having me on the show respect appreciate it. >> thanks, for coming in let's talk a little about what the company does first and we'll talk about the ipo. >> sure. >> and how there is stronger demand for it than had been initially. >> true. let's start with our immune system, which is amazing it's evolved over hundreds of millions of years in response to disease. and adaptive has created technologies that allows us to tap into this information to read the genetics of the immune system to transform how we

diagnose and treat disease >> one of those diagnosis, one of those products that you have is being able to see if someone relapses with blood cancer how does that work >> the product colonoc i, that's for measuring blood cancers. if a patient had a blood cancer, such as leukemia or multimillion milo ma, we are first to determine if it worked and at a molecular level before a patient relapses in the clinic, whether that patient is going to relapse. >> can you tell if someone would have it to begin with? but you wouldn't use that product for everybody? this would be something you would use specifically on people who have shown disease in the past >> so this is not a detection diagnostic we can determine through a genetic fingerprint that specific code in your immune system and we can track that code over time >> you've got a long partnership with microsoft they're an investor in the

company. this is something that's a little broader you are trying to figure out how to map the entire immune system. >> indeed, this is an ambitious goal microsoft has been an incredible partner. essentially what we are doing is mapping how our bodies respond to the disease bythe disease we are creating a map of the immuno then we leverage that map to diagnose disease and the neat thing about it is we can dying foes many diseases all at the same time. instead of going one by one, disease by disease, our immune system detects and treats all diseases in the same way if we can learn to read that information, we can diagnose many diseases at the same time yes, we're making progress if certain disease states already. >> which diseases? >> what we publicly announced so far is if celiac disease and ovarian cancer, are two of the once we've started with. >> you can diagnose that or you are making progress and you

expect to be able to do this with lots of diseases by when? >> so we're expecting a clinical signal by the end of this year that we can bring into clinical validation next year and have products on the markets to diagnose the disease if 2021. >> obviously, that's a lot of promise. >> i like the microsoft aspect of it. i don't know if the convergence is real and happening in early stages but any cancer centers now are a lot of times like at mit, tyler, it's a convergence of all these different ones i.t. and biotechnology are converters there is no other way. it's just so complicated and complex that you need computer power really to make the advances, right? >> absolutely. what microsoft is doing, is they're providing us their machine learning capabilities on top of adaptive itself, chemistry and informatics to essentially film out this map. it's a problem that's a

web-scale like problem it's a very tractable problem. that's where microsoft comes n. we have these specialized cells in the immune system we're looking at how they bind to signals of disease called antogen, microsoft on top of that provides a opinion learning >> the thing i think obviously as to weigh all the different components of the immune system work in an immune response, it's fought just these cells, it's not just an acrofit. it's contraceptives. you can't shut it down when it happens. it's very complex. it's certainly we are 20 years away from understanding everything >> i would say we're away from still understanding everything but we focus specifically. >> right. >> on specialized cells in the immune, t-cells, on the receptor, on the service, they have receptors, we are focused

on understand tack receptor. if we can do that, there is many products that we can build right now so we're not 20 years away >> you are not dealing with hauwei, is is that where you are going? >> for everybody at home thinking whether to invest in this company who should they comp against who do you think of as your competitors. what's a fair way to think about that >> aaron, it's a great question so actually at the core, we've built this new medicine platform that figures out a sequence map and characterizes these receptors so think of thatas a trunk of the tree. no one competes on the trunk of the tree there is no branches in clinical diagnostics and drug discovery you can specify in each one of those areas. no one has put themtogether. >> thanks for coming in today. it's good to see you we'll be watching. >> thank you so much. coming up, president trump is on the ground in japan. we hope he will be able to get

up, getting recalled for the g20 summit and a highly anticipated sit down with china's president. former secretary jack lew is here to talk about whether a trade truce is possible. stay tuned you are kwauching "squawk box" on cnbc. watching "squawk box" o cnbc

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>> i could be ross sorkin. right now, they are volatile this morning as boeing fell and it snapped back. do you moved from green to red nasdaq up 27 points. take a look at boeing off about a2. were back in just a little bit. (osamah) cancer is... the ugliest disease mankind has ever faced. (henry) i thought it was unfair. when-- when you hear those words that you get diagnosed with cancer.

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welcome back we are just second away from the final read on first quarter gdp and the latest jobless claims. jim as the coe >> the first annualized quarter over quarter comes in at 3.1 it's a tiny bit less expected. personal consumption 1.9, a little worse expected. the dp price index, core pce core a tiny bit let's better jobless claims a little better than expected. near historic lows xiens at 1.88 which is worse that 1.665 as well

it seems over the last couple days we go back and forth and it doesn't seem like we will have a decisive move until we see what happens from the g20 the ten year was 2.03 going into it at the end of the day, the market thinks they will ease in a month. nothing is shaking them off with these numbers right now. we got to see what happens in the g20. back to you, becky. >> jim, what do you think of the movements we've seen earlier today? granted these aren't huge swings we seen the futures up by 80 points boeing has added pressure on the dow. where do you think the market stands next? >> i think it's amazing to me how susceptible to the market is with little glimpses of hope or not hope we expect out of the g20. at some point if time, i don't know if they are pushed or what, these knee jerk reactions seems like nonsense to me. i don't think we will have a

decisive move until we get something that's relatively clear. i think the market has to believe agreement is 100%. whatever 90% %, mnuchin said, i think the market wants to put this behind us >> let's focus on the gdp. there are some economists, there is a famous line, it makes waves when you say we are already in a recession. but he says we are already in a recession. you saw the consumer confidence numbers. i mean, i don't know how you'd make that, how you'd say that unless we're owe. >> i think it's ridiculous, nonsense a recession is on the horizon, i say that because a recession is always on the horizon, i don't think there is one now, the data has been a little bit mixed. there is probably a little drag from the trade wars. i think since, let's call at this time '80s, prior to that we used to have recessions every

two-to-four year, now we have recession every nine-to-ten years, the fred comes and and skwashs everything and builds up everything until it explodes i don't think we are near everything exploding or near a recession yet. >> 3.1, that would have to be a lagging indicator. >> amen, 3.1 that's a darn good number in retrospec over the last ten years. >> even a lot of firms that are normalally at 20 or 30%. i don't know what they're seeing the consumer confidence number was weird. maybe they were watching what the economists are saying. >> too, you can talk team into believing certain things, too. i'm hoping it's a one off. i don't see what they're seeing. >> hey, jim, thank you very much. >> thank you let's talk more about the data and economy as well as trade. you know president trump is if japan for the g20 summit meeting. it's probably more likely we see

some extension or continuation of talks joining us to talk about all of this is former treasury secretary jack blu, thank you for being here good to be with you. >> what would you like to talk trade or the numbers >> your choice >> let's talk about the numbers, that itself most recent news what do you think? how is the xi doing right now? >> look, the economy on its own is continuing to joe and slowing down globally and in the united states i think the real risk to the economy is sell infixed. the chaos if trade policy and geopolitical thing has created real fears you see that show up in leading indicators, if business confident. you are seeing it in investment levels and now you are starting to see it in consumer confidence indices. yes, the economy is collective psychology if people start to be worried, it affects behavior. i think a lot of these problems are generated by a misguided sense of how you predict strength in the world.

we're going to need to figure out how to get out of this without creating an economic problem that is bigger than it needs to be. >> let's just talk about the idea that business confidence or at least spending, corporate spending out front, capital expenditures has not been what had been anticipated if we see a trade deal that gets completed with china, maybe not this week, over the coming weeks and months, do you think that clears the way and that businesses will then say, okay, i'm ready to spend it. i know what the rules of the road are >> coming out of a tax cut, you didn't see a real boost in investment there is no indication that it's led to the kind of boom if investment that was supposed to come from it that was kind of before the trade wars you now have this threat of an ongoing rolling set of trade tensions my own view is there will be a path towards a cease-fire with china. it's in nobody's interest to have this boil over and become

full blown trade war full blown conflict it's by no means certain their lots of things that can come off the rails between now and some kind of modest agreement. but we're not done with the trade tension. there will be a decision on autos for europe and japan what we saw a few weeks ago with mexico a chaotic using of trade policy to accomplish almost any end it's paid business very nervous. >> so barry knapp is one of our guests he says there is a revision, there are numbers for intellectual property. it's up. he said a clear indication of software reform in business investment. >> i haven't seen that, you might see one pinpoint where you see only impact. off look across the manufacturing economy, across the broad u.s. economy we haven't seen it there is study after study that shows that the tax cut has gone to buy backs, dividends. you can argue that reflows into

the economy. but that wasn't the argument for this kind of tax reform. i think what we've seen you know is policies that have deepened the core policies, the biggest threat is an internal one, the combination of inequality and the sense the government doesn't work for all the people. we haven't fixed that we've made that worse now the challenge is going to be to fix wit no money in the bank. >> of the candidates you saw in the bedate and tonight, is there anybody you think is interesting? >> look, i think there are a lot of interesting candidates. one of the things that was quite remarkable is they actually talked policy last night you could listen and hear what what they thought. they didn't all agree. they had different approaches. >> private sector is a problem if you are a treasury secretary. you don't sit there and chafe when you see that? >> you hear me and know me it's not the way i talk i've listened to your show to hear people i know ray talio,

marty lipton who raised the same concerns these are not small issues. >> do you think this statement is false is most prosperity comes from the private sector force prosperity comes from the government, right? they don't generate any -- >> joe, i believe we need a free market economy >> you are treasury sblg, of course you do. >> we also feed a combination of policies and business practices that support the social exact, which is the underpinning. >> we do >> of a free market xi >> right. >> that's starting to crumble so we need to solve these problems. frankly, if we don't see business practices start to change, you will see an overreaction in government >> do you think it's already here when they asked a question last night, do you want to see a private insurance sector done away with and two candidates, including the ones leading the polls on that stage last night raised their hands. >> i would focus on the other side >> for insurance >> eight did not raise their hands. >> eight did not. >> i think the idea we go all

the way with doing away with private insurance is not a good one. do we need to make sure there is healthcare for all, yes? do we need to have a public option, yes? there are middle ground consistent with fixing our system as opposed to blowing it up political dismungs made it hard to get the solution. i they debate is good when there is different -- >> don't say let's have the discussion >> the question is where the solution comes this is the beginning of the process, not the end of the process. i'm hope and i'm confident -- >> we should entertain the whackiest of the wackiest ideas? >> i heard some whacky ideas on the other side unfortunately become pain stream. >> like what. >> i think the tax theories are proven wrong by every economist. i hear another side believeing it i don't think the democrats have adopted the policies that don't work. >> a monetary thing works?

>> i'm not a fan of modern monetary theory. i got to tell you, after a kind of tax cut that showed that one side doesn't care how much it adds to the debt, there is a desire now. >> you forgot about the 10 trillion that obama had? >> you are forgetting when we reduced the death from 10 to 3% gdp. >> it started out as a financial crisis >> the fact that we were fiscally responsible is being used as a spending limit >> double the total debt from 10 to 20. that's fiscal responsibility >> i think it's much more interesting to talk about the future hand the the past you and i had this debate. i think when we ended the obama administration, the economy was on a good path we are are now in a place there is a violent debate within the parties and between the parties about whether the system works that's a big deal.

and somebody as treasury secretary i care deeply about protecting the system that works. we have to fix the things that are broken to protect it. >> so let's get back to g20 this weekend. you think a deal is eventually carved out. what do you anticipate we will hear it's high stakes right now >> it is high stakes i this i the highly confrontational approach is not one that ultimately is a productive one you know, the results say nothing is agreed to until everything is agreed to in a negotiation. you have to stay with it you have to go with steps forward, steps back. the business of huge threats and humiliation to have agreements i think is a bad negotiating tactic i think that it's not very likely that china will change its system response to any u.s. demands, but it is likely coin will change things that are a source of real problems we got china change its exchange rate policy. you can make progress on

intellectual property and we should be focusing on progress that avoids total conflict inevitable. >> how would you handle hauwei. >> i think hauwei has been handled in a confusing way and a bad way in terms of the integrity of the u.s. position i don't know enough about technology to know if it is a serious national security threat i'm opened to the idea that it is, it's risky you can mitigate it? that's what you need to be asking what i do know is if you undermine your credibility for something in a separate trade negotiation. >> xi put that now on the table flu is need to be clear what your policies are. the united states has been the leader of the world by standing for principles and having integrity. if we say something is a national security issue to our european allies, if you use it, we might cut you off from intelligence sharing we say for something important

to us in a trade negotiation, we say never mind that undermines the united states as much as anything china can do to us. >> secretary lew, thanks for having you with us. >> good to be here. we will talk about the king of crypto getting hit after surging this past few weeks bitcoin is down to about 11,700 right now. what fueled the rally? what is fuelling the sell-off? we will talk about all of it bitcoin mike novogratz will join us and facebook mpg tojuinin the world of digital currencies. you are watching "squawk box" on cnbc eeds to track it all, eeds to track it all, from cincinnati to singapore. ooo! ♪ ♪ and protect it all. customer records, our financials, they better be secured. but i also need easy access, to manage data across my clouds - no matter where it lives. ♪ ♪ so if an auditor shows up, i can be a step ahead. that's the cloud i want. is that to much to ask?

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shares of boeing dropping this morning on reports of a potential new risk to its 737 max jet and phil lebeau joins us now with more. phil, bring us up to speed a lot of volatility in boeing today in the stock >> absolutely. let's roll down two of the stories, first off the 737 issue. this has to do with the run away stabilizer trim. we will not get too technical here this is different than the mcas software situation but it was discovered in a simulator by the faa last week it may involve a processor which raises the question, will they have to replace the microsoftware processor in all

maxes grounded and bill and not delivered around the world also the other stories you take a look at shares of boeing is the international air transport association out with a statement today saying, look, there has to be standardization in terms of training or max pilots around the world and does that training paeshlly have to involve more than laptop computer-based training when it comes to the mcas session one last thing, andrew, you mentioned about whether or not it's significant that the faa leaked this out or someone within the faa leaked out this problem. i think it's very significant. because i think that we have not seen this between the faa and boeing since the max issue began and now you've got somebody leaking out, they found a problem, boeing potentially was resisting making changes i think that is very significant. >> phil, before you go, real quick, there was a headline that ford is going to be eliminating

12,000 jobs in europe and france, a country in the midst of being this whole fiat-renault-nissan situation. what does it mean? >> remember, they laid out this plan to restructure europe about 66 months ago. this is the de-- about six months ago this is the details behind it. they will be shuddering six plants they need to do it europe has been hand-to-hand with auto makers, barely anybody making money at least other than the european auto makers so ford needs to do this in europe. >> thank you right now we want to talk about bitcoin. a wild 24 hours has just taken place. bitcoins surging, crashing, hit a price of nearly $14,000 yesterday. it's now below 12,000, currently trading at 11,800. the cryptocurrency has jumped already, what's behind the

recent bitcoin surge where is it headed next? joining us is michael novogratt. he is here to help us describe what is going on what do you ascribe the run-up so far >> three factors someone facebook's announcement of libra in a simple way, one of the largest companies in the world said we believe in cryptocurrencys, not just facebook, mastercard, visa, uber, paypal joined on to say, hey, this is going to be a part of the financial infrastructure of the world so if you are an substitutional investor who is getting close and still worried abtd investing, it makes you that much more confident so we're seeing institution move into this space and this whole run wasn't an institution, it's people front running them it's also china. a huge amount of the volume of what's going on in bitcoin and other crises is going on in asia and the capital flight in coin,

it is harder to get money out legally if you are chinese they've got an apparatus cracking down. >> you are arguing they are doing it illegally >> oh, yeah. a lot of the money leaving is illegal capital flight via bitcoin? i want to drill down to just ta, but doesn't that represent a problem? if effectively bitcoin is still being used illicitly zsh -- by way, whether you think thoesey should have different laws is another question we've talked about this so many times on this show this week, the idea that historically governments have liked to have control of their currency, and this upends that and why don't we think long-term governments are going to somehow step in and say we can't deal with this. >> we had a whole casino broadly set up to make money out of china and move it offshore so the dollar itself, there are more $100 bills in circulation

than ones because people use it as wealth abroad none of these systems are going to be foolproof, period. >> separately, sounds like you've been selling at this price. >> i sold a little bit yesterday. i wish i sold a lot. listen -- >> a lot because you don't think it's going back to 14,000? >> i think we'll be in a range between 10,000 and 14,000. i think we put in a tradeable top yesterday. it was parabolic it was a frenzy. two of the exchanges couldn't handle thevolume >> i've seen other people look at the entire network, look at a network like amazon, try to figure out what each one is worth. it comes out to 13,000 or 14,000 >> i wish i was that smart i think of this as a proxy for gold as more people adopt bitcoin and

get comfortable with it -- >> why do you see a fee on fiat -- like facebook. it's a fiat currency based on a fiat currency. why do you need to back it with the dollar if you have blockchain >> i think the dollar used to be backed by silver we had silver certificates once people learned to trust it, they pulled the silver away. you'll probably see the same thing. >> they'll pull it away? the whole business model is based on that, isn't it? >> it's based on it until people realize, hey, we trust this thing. currency is about trust. >> bitcoin people already believe that >> bitcoin people do, but bitcoin is not going to be a currency because of its volatility to be a currency, you can't have high volatility and you can't have a fixed supply. it's just too easy >> you've talked about libra and facebook i want to get your thoughts on this mark zuckerberg was at the aspen

ideas festival here's what he said about the new cryptocurrency project >> building a financial system is not the kind of thing that a company can do by itself so that, again, we helped and played a role in helping to stand this up, but the libra association is an independent organization we will have one vote in it. by the time it launches, hopefully we'll have a hundred co-founding companies, and we'll be one of the voices >> let me add one thing to that, which is you just said this is going to get people interested in crypto. all of those companies involved in this haven't effectively said we're going to start accepting bitcoin. they said, we actually don't think we can accept bitcoin, therefore we're going to create our own. what does that say about all this >> this is a step function first they're going to accept libra coin i bet within 18 months, visa, mastercard accept bitcoin as payment. >> really? you just said you don't think it will be a currency >> i don't think a lot of people will use it as a currency. why would you sell your bitcoin

if you think it's going higher >> but it goes back to the illicit idea that if so much of the money is moving from china or other places, until we get to a place where we can actually see custody, there are controls on it, doesn't mastercard or visa say they even want to do business with this company >> there are better and better processes around it. >> kyc being know your customer. >> thank you >> the true bitcoin believer or zealot, one of the most important things is decentralization and the distributed and the peer-to-peer facebook doesn't have any. what got me to be much more of a believer was the things that libra doesn't have you're saying it was just having it become mainstream causes bitcoin to rally again i thought it pointed out the -- to me, it pointed out everything that libra isn't pointed out to me how great bitcoin is. you don't see it that way.

>> listen, i think bitcoin has got a unique spot in that it's the first cryptocurrency it doesn't have to change to fu fulfill its destiny. >> but you want mark zuckerberg and other people at the center of this when the beauty of bitcoin is at its -- >> it's pretty cool. listen, the libra association will have a hundred votes. so it'll be distributed, maybe not decentralized. they plan on decentralizing over time what's tricky is the facebook wallet, right, which is where they'll make their money it will probably be a large part of commerce that's done on that blockchain >> how correlated is bitcoin's price today with the highs in the stock market >> i think there's some correlation based on risk frenzy, tests osterone

people are still short markets rarely triple top. and it looks like a triple top >> are you longer the stock market right now or bitcoin? >> bitcoin bitcoin has had a big run. if you were perfect, you'd have sold a whole bunch yesterday and waiting to buy it back at 10,000, 1,000. >> so you actively trade in it now. >> you know, i don't actively trade that often, but when you go parabolic, you have to. markets don't go straight up like this forever. >> when you send your billionaire guilt check to the u.s. treasury voluntarily, will it be bitcoin or will you use fiat money >> unfortunately, you pay taxes in dollars >> what do you mean unfortunately? that makes it even better. >> unless you sell your bitcoin in some other place. >> every time i get on stage, i say pay your taxes >> i know. we all do. >> thank you for being here this morning. really appreciate it

>> you get a double whammy taxed on it when you sell it rks coming up, we'll check the maetand get you ready for the trading day ahead.

all right. a final check on the markets this morning you're going to see futures are in the green, but just barely for the dow. you're talking up by three points right now s&p futures up by eight. nasdaq up by 35. the one to watch this morning has been boeing. right now boeing shares off by 3.2% we've looked a the that stock

down by about 2.8% dropped pretty precipitously early this morning it was down about 6% anyway, thank you for being with us today, everybody. we look forward to seeing you back here tomorrow right now it's time for "squawk on the street. good morning and welcome to "squawk on the street. i'm david faber along with sara oo eisen and mike santoli we're live from the new york stock exchange let's give you a look at futures as we start trading here on a thursday as you can see, i don't know, i need santoli to explain what's going on there >> santoli >> that's what i